MERCATOR LIMITED

(Incorporated in the Republic of India with limited liability under the laws of India on November 24, 1983 pursuant to the provisions of section 567 of Part IX of the Indian Companies Act, 1956 as Mercator Lines Private Limited.Pursuant to a certificate of incorporation dated April 12, 1984, it was changed to

Mercator Lines Limited and on November 22, 2011 it was changed to Mercator Limited). CIN: L63090MH1983PLC031418, e-mail: mercator@mercator.in, Website: www.mercator.in

US$ 16,000,000 (including an over allotment option of US$ 2,000,000) 4.75 percent Unsecured Foreign Currency Convertible Bonds due 2019 convertible into Shares of Mercator Limited

Issue Price: 100% US$16,000,000 (including an over allotment option of US$ 2,000,000), 4.75 per cent Unsecured Foreign Currency Convertible Bonds due 2019 (the "Bonds") to be issued by Mercator Limited ("Mercator" or the "Company") on or about May 27, 2014 (the "Closing Date"). The Bonds bear interest at the rate of 4.75 per cent per annum of the principal amount of the Bonds from the Closing Date up to May 27, 2019. Payment on the Bonds will be made without deduction for or on account of taxes of India to the extent described under "Terms and Conditions of the Bonds — Taxation".

The issue of the Bonds was authorised by a resolution of the Board of Directors of our Company passed on December 30, 2013 and by a resolution of the shareholders of our Company passed on February 4, 2014. The Bonds will constitute our Company's direct, unconditional, unsecured and unsubordinated obligations, and will mature on May 27, 2019. The Bonds are convertible at any time on and after May 27, 2014 and up to the close of business on April 27, 2019 by holders of the Bonds (the "Bondholders") into newly issued, shares of face value of Re. 1.00 each of our Company (the "Shares") on the terms described herein at the option of the Bondholder, at an initial conversion price of Rs 38.30 per Share with a fixed rate of exchange on conversion of 58.5740 . The conversion price is subject to adjustment in certain circumstances as described herein. For the terms of the conversion rights and adjustments to the conversion price, see "Terms and Conditions of the Bonds — Conversion". The existing issued Shares of our Company are listed on the National Stock Exchange of India Limited ("NSE") and the BSE Limited ("BSE"). The closing price of the Shares on May 23, 2014 on the NSE and on the BSE was Rs. 38.25 per Share. Unless previously converted, redeemed or repurchased and cancelled, the Bonds will be redeemed in US dollars on the Maturity Date at 100 per cent. of their principal amount plus accrued and unpaid interest. The Bonds may be redeemed, in whole but not in part, at any time at the option of our Company, subject to the satisfaction of certain conditions, at 100 per cent. of their principal amount together with accrued but unpaid interest (calculated up to but excluding the date of redemption) at the date fixed for such redemption, if less than 10 per cent. of the aggregate principal amount of the Bonds originally issued is outstanding. The Bonds may be redeemed, in whole but not in part, at the option of the Company at any time on or after May 27, 2017, subject to the satisfaction of certain conditions, at 100 per cent. of their principal amount together with accrued but unpaid interest (calculated up to but excluding the date of redemption) at the date fixed for such redemption, if the Closing Price (as defined herein) of the Shares for each of the 30 consecutive Trading Days (as defined herein) prior to the date upon which such notice for redemption is given was at least 130 per cent. of the Accreted Principal Amount (as defined herein) (translated into U.S. dollars at the fixed exchange rate, on conversion of Rs. 58.5740 = US $ 1.00). The Bonds may also be redeemed in whole, but not in part, at any time at the option of the Company, subject to the satisfaction of certain conditions, at 100 per cent., of their principal amount together with accrued but unpaid interest (calculated up to but excluding the date of redemption) at the date fixed for such redemption, in the event of certain changes relating to taxation in India. Subject to the receipt of regulatory approval, our Company will, at the option of Bondholders, redeem any outstanding Bonds upon the occurrence of a Change of Control or a Non-permitted Conversion Price Adjustment Event or a Delisting (each as defined in the "Terms and Conditions of the Bonds") of the Shares from the BSE or the NSE, at 100 per cent. of their principal amount plus accrued and unpaid interest.For further details see "Terms and Conditions of the Bonds". Prior to this offering there has been no market for the Bonds. The Company has received approval in-principle from the Singapore Exchange Securities Trading Limited (the “SGX-ST”) for the listing of the Bonds on the SGX-ST. The SGX-ST assumes no responsibility for the correctness of any of the statements made or opinions or reports contained in this Offering Circular. Admission of the Bonds to the SGX-ST is not to be taken as an indication of the merits of the Company or the Bonds.The Bonds are proposed to be listed on Singapore Exchange Securities Trading Limited ("SGX-ST"). Our Company has undertaken to apply for the listing on the BSE, and NSE for the Shares issuable upon conversion of the Bonds and has received in-principle approval from such stock exchanges for the listing of such Shares. Neither the NSE nor the BSE assumes any responsibility for the correctness of any of the statements made or opinions or reports contained in this Offering Circular, nor do they take any responsibility for the financial or other soundness of our Company. The Bonds will be issued in registered form in denominations of US$100,000 each and integral multiples thereof. Delivery of the Bonds will be made on or about the Closing Date for the accounts of their respective Bondholders. The Bonds will upon issue be represented by a single Global Certificate (as defined herein) in registered form, which will be deposited with a common depository for, and registered in the name of a nominee of, Euroclear Bank S.A./N. V. ("Euroclear"), and Clearstream Banking, société anonyme ("Clearstream, Luxembourg") on or about the Closing Date for the accounts of their respective Account Holders. The Bonds and the Shares issuable upon conversion of the Bonds have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). The Bonds are being offered and sold in offshore transactions outside the United States in reliance on Regulation S under the Securities Act ("Regulation S"). For a description of certain restrictions on offers, sales and transfers of the Bonds and the Shares to be issued upon conversion of the Bonds and the distribution of this Offering Circular, see "Transfer Restrictions". The Bonds may not be offered or sold directly or indirectly in India or to, or for the account or benefit of, any resident of India. However, subject to compliance with Indian laws, Shares issuable upon conversion of the Bonds may be subsequently sold across the Indian Stock Exchanges. A copy of this document will be delivered to the Registrar of Companies, Mumbai, the Reserve Bank of India, the NSE, BSE and the Securities and Exchange Board of India for the purpose of record. The Bonds are of a specialist nature and should only be bought and traded by investors who are particularly knowledgeable in investment matters. In making an investment decision, prospective investors must rely on their own examination of our Company and the terms of the Offer, including the risks involved. For a discussion of certain risk factors that should be considered in connection with an investment in the Bonds, see, "Risk Factors". All statements regarding the Company should be viewed in light of the Risk Factors. This Offering Circular is dated May 27, 2014

Lead Manager

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NOTICE TO INVESTORS This Offering Circular is being furnished by our Company in connection with the Offering which is exempt from registration under the United States Securities Act of 1933 solely for the purpose of enabling prospective investors to consider the purchase of the Bonds offered hereby. This Offering Circular may only be used for the purpose for which it has been published. Our Company accepts full responsibility for the information contained in this Offering Circular and, having made all reasonable enquiries, confirms that this Offering Circular contains all information with respect to our Company, our Subsidiaries, the Bonds and the Shares into which the Bonds are convertible which is material in the context of the issue and offering of the Bonds. The statements contained in this Offering Circular relating to our Company, our Subsidiaries, the Bonds and the Shares are in every material respect true and accurate and not misleading, the opinions and intentions expressed in this Offering Circular with regard to our Company, our Subsidiaries, the Bonds and the Shares are honestly held, have been reached after considering all relevant circumstances, are based on information presently available to our Company and on reasonable assumptions. There are no other facts in relation to our Company, our Subsidiaries, the Bonds or the Shares, the omission of which would, in the context of the issue and the offering of the Bonds, make any statement in this Offering Circular 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. Where information contained in this Offering Circular includes extracts from or summaries of information and data from various published and private sources, our Company accepts responsibility for accurately reproducing such summaries and data. This Offering Circular does not constitute an offer of, or an invitation by or on behalf of our Company, Athena Capital Partners LLP (the "Lead Manager"), The Bank of New York Mellon, London Branch (the "Trustee"), Principal Paying and Conversion Agent and The Bank of New York, Luxemberg S.A. as the Registrar and Transfer Agent (jointly and severally the "Agents") or the Agents or any of their respective officers or advisors (as defined in the "Terms and Conditions of the Bonds") to subscribe for, or purchase, any Bonds and may not be used for the purpose of an offer to, or a solicitation by, any person in any jurisdiction in which such offer or invitation would be unlawful. The distribution of this Offering Circular and the offering of the Bonds in certain jurisdictions may be restricted by law. Persons into whose possession this Offering Circular comes are required by our Company and the Lead Manager to inform themselves about and to observe any such restrictions. For a description of certain further restrictions on offers and sales of the Bonds and distribution of this Offering Circular, see "Subscription and Sale" and "Transfer Restrictions".Each prospective investor, by accepting delivery of this Offering Circular, agrees to the foregoing and to make no photocopies of this Offering Circular or any documents referred to in this Offering Circular. The Lead Manager is acting for our Company and no one else in connection with the Offering and will not regard any other person as its client in relation to the Offering and will not be responsible to anyone other than our Company for providing advice in relation to the Offering or any transaction or arrangement referred to in this document. Furthermore, no investor shall rely on the due diligence performed by the Lead Manager in making an investment decision on the bonds. None of the Lead Manager, the Trustee, the Agents or any of their respective officers or advisors have separately verified the information contained in this Offering Circular. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by the Lead Manager, the Trustee, the Agents or any of their respective officers or advisors as to the accuracy or completeness of the information contained in this Offering Circular or any other information supplied in connection with the Bonds or the Shares. Each person receiving this Offering Circular acknowledges that such person has not relied on the Lead Manager, the Trustee, the Agents or any of their respective officers or advisors or on any other person affiliated with them 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 merits and risks involved in investing in the Bonds. None of the Company, the Lead Manager, the Trustee, the Agents or any of their respective affiliates or advisors is making any representation for any purchase of the Bonds regarding the legality of an investment by such purchase under applicable law. Prospective investors should not construe anything in this Offering Circular as legal, business or tax advice. Each prospective investor should consult its own advisors as needed to make its investment decisions and determine whether it is legally eligible to purchase the Bonds under applicable laws and regulations. This Offering Circular does not constitute a prospectus for the purposes of EU Directive 2003/71/EC.

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The Bonds and the Shares to be issued upon conversion of the Bonds have not been approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission in the United States or any other U.S. regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Bonds or the accuracy or adequacy of this Offering Circular. Any representation to the contrary is a criminal offence in the United States. No person is authorised to give any information or to make any representation not contained in this Offering Circular and any information or representation not so contained must not be relied upon as having been authorised by or on behalf of our Company, the Lead Manager, the Trustee or the Agents. The delivery of this Offering Circular at any time does not imply that the information contained in it is correct as at any time subsequent to its date. Market data and certain industry forecasts used throughout this Offering Circular have been obtained from market research, publicly available information and industry publications. Industry publications generally state that the information they contain has been obtained from sources believed to be reliable but the accuracy and completeness of that information is not guaranteed. Similarly, internal surveys, industry forecasts and market research, while believed to be reliable, have not been independently verified, and none of our Company, the Lead Manager, the Trustee or the Agents makes any representation as to the accuracy of that information. The Ministry of Finance of India has issued certain amendments that provide that erstwhile Overseas Corporate Bodies, as defined under applicable regulations in India, are not eligible to invest in India, and entities prohibited from buying, selling or dealing in securities by SEBI, shall not be eligible to participate in an offering of foreign currency convertible bonds. Each purchaser of the Bonds is deemed to have acknowledged, represented and agreed that it is eligible to invest in India under applicable law, including under the Issue of Foreign Currency Convertible Bonds and Ordinary shares (Through Depository Receipt Mechanism) Scheme, 1993, as amended from time to time and has not been prohibited by SEBI from buying, selling or dealing in securities.

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

CONVENTIONS In this Offering Circular, unless otherwise specified or the context otherwise requires, all references to "Bondholders" and "holders" are to holders of the Bonds from time to time; all references to "India" are to the Republic of India and its territories and possessions; all references to the "US" and "United States" are references to the United States of America and its territories and possessions; all references to the "United Kingdom" are to the United Kingdom of Great Britain and Northern Ireland and its territories and possessions; all references to the "Indian Government" are to the Government of India and to the "Companies Act" are to the Indian Companies Act, 2013, as amended; and all references to the "Civil Code" are to the Code of Civil Procedure, 1908 of India, as amended. References to the singular also refers to the plural and one gender also refers to any other gender, wherever applicable, and the words "Lakh" or "Lac" mean "100 thousand", the word "million" means "10 lakh", the word "crore" means "10 million" or "100 lakhs" and the word "billion" means "1,000 million" or "100 crores". Our Company publishes its financial statements in Indian Rupees. All references herein to "Indian Rupees" and "`" are to Indian Rupees, all references herein to "US dollars" and "US$" are to United States dollars, all references herein to "GBP" and "£" are to Pound Sterling, all references to "€" or "Eur" are to Euros and all references to "S$" are to Singapore dollars. No representation is made that the Indian Rupee, Euro or United States dollar amounts referred to herein could have been or could be converted into United States dollars, Euros or Indian Rupees, as the case may be, at any particular rate or at all. Certain monetary amounts in this Offering Circular have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them. References in this Offering Circular to a particular "Financial Year" are to the financial year ended on March 31. Our Company prepares its financial statements in accordance with generally accepted accounting principles in India ("Indian GAAP"). Our Company's financial statements included in this Offering Circular include its audited consolidated financial statements as at and for the Financial Years 2013 and 2012 which have all been prepared in accordance with Indian GAAP. Financial Statements The consolidated financial statements of our Company as at and for the year ended March 31, 2013 and March 31,2012 have been presented in accordance with the format prescribed under Schedule VI to the Companies Act, 1956, which was revised pursuant to a Notification S.O. 447(E) dated February 28, 2011 issued by the Ministry of Corporate Affairs, Government of India (the "Audited Financial Statements") were prepared in accordance with Indian GAAP, the Companies Act, 1956 and the Companies (Accounting Standards) Rules, 2006 and were audited by the Auditors in accordance with the applicable generally accepted auditing standards in India prescribed by the ICAI. Our Company’s unaudited and limited reviewed standalone financial statement as at September 30, 2013 and December 31, 2013 (the "Reviewed Financial Statements") were reviewed in accordance with the Standard on Review Engagements (SRE) 2400 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity", issued by the ICAI. Our Company prepares its financial statements in accordance with Indian GAAP and the Companies Act. Our Company has not attempted to quantify the impact of U.S. GAAP or IFRS on the financial data included in this Offering Circular, nor does our Company provide a reconciliation of the financial statements to those of U.S. GAAP or IFRS. Each of U.S. GAAP and IFRS differs in significant respects from Indian GAAP. Accordingly, the degree to which the financial statements prepared in accordance with Indian GAAP included in this Offering Circular will provide meaningful information is entirely dependent on the reader’s level of familiarity with the respective accounting practices. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this Offering Circular should accordingly be limited. See "Risk Factors –– Risks Relating to India - Significant differences exist between Indian GAAP and other accounting principles, such as U.S. GAAP and IFRS", which investors may be more familiar with and may consider material to their assessment of our financial condition.

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In this Offering Circular, certain monetary thresholds have been subject to rounding adjustments; accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them. Unless stated otherwise, the financial data in this Offering Circular is derived from our Financial Statements. Industry and Market Data The section titled ―Industry Overview quotes and otherwise information has been extracted from a report prepared by CARE and dated April 4, 2014 ("CARE Report"), commissioned by us. Except for the CARE Report, market and industry related data, if any, used in this Offering Circular has been obtained or derived from publicly available documents and other industry sources. Industry sources and publications generally state 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. Neither our Company nor the Lead Manager have independently verified this data and do not make any representation regarding accuracy or completeness of such data. Neither our Company nor the Lead Manager accept any responsibility in respect of such information and data and the extent to which the market and industry data presented in this Offering Circular is meaningful depends on the readers’ familiarity with and understanding of methodologies used in compiling such data. Forward-looking Statements All statements contained in this Offering Circular that are not statements of historical fact and based on current expectations, and based on current expectations, assumptions, projections and estimates about our Company and the industry in which we operate constitute "forward looking statements". Investors can generally identify forward-looking statements by terminology such as "aim", "anticipate", "believe", "continue", "estimate", "expect", "intend", "may", "objective", "plan", "potential", "project", "pursue", "shall", "should", "will", "would", 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 expected financial condition and results of operations, business plans, including potential acquisition and prospects are forward-looking statements. These forward-looking statements include statements as to our business strategy, our order book, revenue and profitability, planned projects and other matters discussed in this Offering Circular regarding matters that are not historical facts. These forward looking statements and any other projections contained in this Offering Circular (whether made by us or any third party) are predictions and involve known and unknown risks, uncertainties and other factors that may cause our 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 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 Offering Circular are based on the belief of our management, as well as the assumptions made by, and information currently available to, our 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 materialise, or if any of our 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 written and oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements. Neither our Company nor the Lead Manager assume any obligation to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these forward-looking statements. Enforceability of Civil Liabilities Our Company is a limited liability public company incorporated under the laws of India. A substantial majority of our Company's directors and executive officers are residents of India and certain assets of our Company and all or substantial portions of the assets of 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 jurisdictions outside of India, or to enforce against them

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judgments obtained in courts outside of 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 of India (the "Code"). Under the Code, a court in India shall, 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. Section 44A of the Code provides that where a foreign judgment has been rendered by a superior court in any country or territory outside India which the Indian 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. However, section 44A of the 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. The United States has not been declared by the Indian Government to be a reciprocating territory for the purposes of section 44A of the Code. However, the United Kingdom has been declared by the Indian Government to be a reciprocating territory. 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. 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. Section 13 of the Code provides that a foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon except: (i) where it has not been pronounced by a court of competent jurisdiction; (ii) where it has not been given on the merits of the case; (iii) 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; (iv) where the proceedings in which the judgment was obtained were opposed to natural justice; (v) where it has been obtained by fraud; or (vi) where it sustains a claim founded on a breach of any law 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. Any judgment in a foreign currency would be converted into Indian Rupees on the date of the judgement and not on the date of the payment. Our Company cannot predict whether a suit brought in an Indian court will be disposed off in a timely manner or be subject to considerable delays.

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TABLE OF CONTENTS

DEFINITIONS .............................................................................................................................................. 9 SUMMARY OF THE TERMS OF THE OFFERING ................................................................................. 17 RISK FACTORS ......................................................................................................................................... 24 RECENT DEVELOPMENTS ..................................................................................................................... 54 MARKET PRICE INFORMATION ............................................................................................................ 55 DIVIDENDS AND DIVIDEND POLICY .................................................................................................. 56 CAPITALISATION ..................................................................................................................................... 57 USE OF PROCEEDS .................................................................................................................................. 59 SELECTED FINANCIAL INFORMATION .............................................................................................. 60 EXCHANGE RATES .................................................................................................................................. 68 INDUSTRY OVERVIEW ........................................................................................................................... 69 BUSINESS .................................................................................................................................................. 94 KEY INDUSTRY REGULATIONS .......................................................................................................... 104 SUBSIDIARIES AND JOINT VENTURES ............................................................................................. 105 ORGANISATION CHART ....................................................................................................................... 114 MANAGEMENT AND CORPORATE GOVERNANCE ........................................................................ 115 PRINCIPAL SHAREHOLDERS ............................................................................................................... 122 TERMS AND CONDITIONS OF THE BONDS ...................................................................................... 126 GLOBAL CERTIFICATE ......................................................................................................................... 158 CLEARANCE AND SETTLEMENT OF THE BONDS .......................................................................... 161 DESCRIPTION OF THE SHARES .......................................................................................................... 163 INDIAN GOVERNMENT AND OTHER APPROVALS ......................................................................... 170 TAXATION ............................................................................................................................................... 171 TRANSFER RESTRICTIONS .................................................................................................................. 174 THE SECURITIES MARKET OF INDIA ................................................................................................ 176 FOREIGN INVESTMENT AND EXCHANGE CONTROLS ................................................................. 187 LITIGATION AND DISPUTES ................................................................................................................ 195 SUBSCRIPTION AND SALE .................................................................................................................. 200 GENERAL INFORMATION .................................................................................................................... 204 INDEX TO THE FINANCIAL STATEMENTS ....................................................................................... 206  

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DEFINITIONS In this Offering Circular, unless the context otherwise requires or unless it is otherwise specifically provided, the following terms shall have the meaning set out below: Account Holders each person who is for the time being shown in the records of Euroclear and

Clearstream, Luxembourg as the holder of a particular Principal Amount of such Bonds

Agency Agreement Agency Agreement to be dated on or about the Issue Date and made between our Company, The Bank of New York Mellon, London Branch acting in capacity of the Trustee, Principal Agent and Conversion Agent and The Bank of New York Luxemberg S.A. in its capacity as Registrar and Transfer Agent constituting the Bonds.

Agents the Registrar, the Principal Paying and Conversion Agent, the Paying Agent, the Conversion Agent and the Transfer Agent, respectively, each of which expressions shall include the successors from time to time of the relevant persons in such capacities, under the Agency Agreement

Articles of Association the Articles of Association of our Company

Auditor CNK & Associates LLP

Authorised Officer any director or other senior executive of the Issuer or any other person who has been authorised by the Issuer to sign the certificates received under the Trust Deed on behalf of and so as to bind the Issuer

Board of Directors/ Board

the Board of Directors of our Company or a committee constituted thereof

Bondholder Registered holder of the Bonds or any of them

Bonds US$16,000,000 (including an over allotment option of US$ 2,000,000), 4.75 per cent unsecured Foreign Currency Convertible Bonds due 2019

BSE BSE Limited

Business Day a day (other than a Saturday or Sunday) on which banks are open for general banking business in London, New York City, Luxemborg, Singapore, Mumbai, and the city in which the specified office of the relevant Agent is located and in the case of surrender of certificates, the place where such certificates are surrendered

CARE Credit Analysis & Research Limited

CAGR compounded annual growth rate

Civil Code the Code of Civil Procedure, 1908 of India

Clearing Systems Euroclear and Clearstream, Luxembourg

Clearstream, Luxembourg

Clearstream Banking, société anonyme

Closing Price closing price of Shares on the BSE or NSE as at May 22, 2014

Companies Act Indian Companies Act, 2013 and Companies Act 1956 to the extent applicable

"the company" or "our Company" or "the Issuer"

Mercator Limited

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Conditions terms and conditions of the Bonds

Conversion Notice a duly completed and signed notice of conversion, in the form (for the time being

current) obtainable from the specified office of the Principal Paying and Conversion Agent

Crore 10 million (10,000,000)

Depositories Act Indian Depositories Act, 1996, as amended

Directors directors of our Company, unless specified

EBITDA earnings before interest, tax, depreciation and amortization

ECB Guidelines External Commercial Borrowings Guidelines of the RBI dated August 1, 2005, as amended from time to time

EGM extraordinary general meeting of our Company

ESOP employee stock option plan

Euroclear Euroclear Bank S.A/N.V.

Executive Director a Director who is in the whole time employment of the Company FCCB

foreign currency convertible bond

FDI foreign direct investment

FEMA Foreign Exchange Management Act, 1999, as amended

FERA Foreign Exchange (Regulation) Act, 1973

FII a Foreign Institutional Investor as defined in FEMA

FIIA the Foreign Investment Implementation Authority

FIPB the Foreign Investment Promotion Board

Financial Year period of 12 months ended March 31 of that particular year, unless otherwise stated

FSMA (UK) Financial Services and Markets Act 2000

Global Certificate global certificate that will represent the Bonds

Government or GOI Government of India

Group our Company, our subsidiaries and associate companies

GTP Global Trader Programme

IAS International Accounting Standards

ICAI Institute of Chartered Accountants of India

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IFRS International Financial Reporting Standards

Income Tax Act the Indian Income Tax Act, 1961, as amended

India Republic of India

Indian GAAP Generally Accepted Accounting Principles in India

Indian Stock Exchange

the BSE and/or the NSE and where the context so admits any other stock exchange in India on which the Shares may be traded from time to time

IPO initial public offering

ISIN international security identification number

Issue Date date of closing of the Offering, being May 27, 2014

Issue of Foreign Currency Convertible Bonds and Ordinary Shares Scheme

Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depositary Receipt Mechanism) Scheme, 1993, as amended from time to time

“Lacs” or “Lakhs” 100,000. 10 Lacs equals one million

Lead Manager Athena Capital Partners LLP

LIBOR London interbank offered rate

Listing Agent Colin Ng & Partners LLP

MoA/ Memorandum memorandum of association of our Company

MNC multinational corporation

MOF Ministry of Finance, Government of India

ML or Mercator Mercator Limited

MCS MCS Holdings Pte Limited

MEPL Mercator Energy Pte Limited

MIPL Mercator International Pte Limited

MPL Mercator Petroleum Limited

MLSL Mercator Lines (Singapore) Limited

MOGL Mercator Oil & Gas Limited

MOHPL Mercator Offshore Holdings Pte. Limited

MOL Mercator Offshore Limited

MOPPL Mercator Offshore (P) Pte Limited

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Mumbai City of Mumbai, India (previously named Bombay)

Non-Executive Director a Director who is not an Executive Director

NRIs non Resident Indians, as defined under FEMA

NSE National Stock Exchange of India Limited Offer Price US$ 100,000 per Bond or integral multiples thereof, payable in full on subscription

Offering / Offer/ Issue US$16,000,000 (including an over allotment option of US$ 2,000,000), 4.75 per cent

Unsecured Foreign Currency Convertible Bonds due 2019 offered by our Company to investors outside the United States in reliance on Regulation S and other applicable laws.

Offering Circular or OC this document

OHPL Oorja Holdings Pte Limited

PAT Profit After Tax

PBT Profit Before Tax

Paying, Conversion and Transfer Agency Agreement

the paying, conversion and transfer agency agreement to be dated on or about the Issue Date and made between our Company, the Trustee and the Agents

Principal Paying and Conversion Agent,

The Bank of New York Mellon, London Branch

RBI The Reserve Bank of India

Record Date a date fixed by the Directors or otherwise specified for the purpose of determining entitlements to dividends or other distributions to, or rights of, holders of Shares

Registered Office the registered office of our Company being 3rd Floor, Mittal Tower, B-Wing, Nariman Point, Mumbai-400021, India

Registrar and Transfer Agent

The Bank of New York, Luxemberg, S.A.

Regulation S Regulation S of US Securities Act of 1933

Share Transfer Agent Link Intime India Private Limited having registered office/ place of business at C-13

Pannalal Silk Mills Compound LBS Road, Bhandup (West) Mumbai-400078, India

Reserve Bank of India Act/RBI Act

Reserve Bank of India Act, 1934, as amended from time to time

RoC Registrar of Companies, Mumbai

SCRA Securities Contracts (Regulation) Act, 1956 of India

SEBI Securities and Exchange Board of India

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SEBI Act Securities and Exchange Board of India Act, 1992, as amended

Securities Act United States Securities Act of 1933, as amended

Shareholders registered holders of Shares

SGX-ST the Singapore Stock Exchange Securities Trading Limited

Shares Ordinary equity shares in the capital of our Company with a par value of Re.1 each

SICA Sick Industrial Companies (Special Provisions) Act, 1995

State Governments State Governments of India

Subsidiaries Any company or other business entity of which that person owns or controls (either

directly or through one or more other Subsidiaries) more than 50% of the issued share capital or other ownership interest having ordinary voting power (more than 50%) to elect directors of such company or other business entity or any company or other business entity which at any time has its accounts consolidated with those of that person or which, under Singapore law, regulations or generally accepted accounting principles from time to time, should have its accounts consolidated with those of that person.

Takeover Code SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 of India, as amended

Trading Day a day when any stock exchange on which the Shares of the Issuer are listed, is open for business, but does not include a day when (a) no such last transaction price or closing bid and offered prices is/are reported and (b) (if the Shares are not listed or admitted to trading on such exchange) no such closing bid and offered prices are furnished as aforesaid.

Trust Deed trust deed to be dated on or about the Issue Date and made between our Company and the Trustee, constituting the Bonds

Trustee The Bank of New York Mellon, London Branch

UK or United Kingdom United Kingdom of Great Britain and Northern Ireland

UK GAAP Generally Accepted Accounting Principles in the UK

United States or US United States of America, as defined in Regulation S

US GAAP Generally Accepted Accounting Principles in the US

U.S. dollars, dollars, $, U.S.$

The currency of the United States of America

All references to "we", "our", "us" or words of similar import in this Offering Circular are to Mercator Limited and our Subsidiaries and joint venture companies, unless otherwise specified in this Offering Circular or the relevant context.

TECHNICAL/INDUSTRY RELATED TERMS / BUSINESS RELATED TERMS / ABBREVIATIONS

Terms Description

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ABS American Bureau of Shipping, a United States classification society which has established rules and regulations for the classification of seagoing vessels or equipment.

Aframax Tanker vessel with deadweight tonnage ranging from 80,000 to 124,999 metric tons.

Bareboat Charter A charter under which a customer pays a fixed rate for a fixed period for use of a vessel plus all voyage and vessel expenses.

BOPD Barrels of Oil per Day, a common unit of measuremnet for volume of crude oil.

Bunker A type of marine fuel. Most tankers use heavy fuel oil to power their engines, and lighter fuels, such as diesel or gas-oil, to power the generators that run their lights and other electrical loads.

CAP Conditional Assessment Program for ships.

Chartering Hiring or leasing of transportation.

CIF Cost, Insurance, Freight and refers to the delivered price.

Clean/Dirty The two different tanker markets: The clean sector moves “clean” petroleum products such as gas-oil, naphtha, and gasoline; the dirty one mostly moves crude and fuel oils.

COA Contract of Affreightment, which is an agreement for the transportation of a specific quantity of cargo over a specific period, without designating specific vessels or voyage schedules.

CSD Cutter Suction Dredger

Demurrage Additional revenues for delays experienced in loading and/or unloading cargo, calculated in accordance with specific charter terms.

Dry Bulk Solid cargo such as coal and iron ore.

DWT Dead Weight Tonnage. Refers to the capacity a ship can safely carry when fully loaded, in long tons (1 long ton is equal to approximately 1016 kg.

EPC Engineering; Procurement and Construction.

EPIC Engineering; Procurement; Installation and Commissioning

EPCIC Engineering; Procurement; Construction; Installation and Commissioning

E & P Exploration and Production

EPS Earning Per Share

Fixture The act of chartering a vessel to carry out a particular voyage from one port or area to another.

FOB “Free On Board.” FOB prices exclude all insurance and freight charges. Most oil is sold either FOB (effectively priced at the loading port) or CIF.

FPU Floating Production Unit.

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FPSO Floating Production Storage and Offloading facility.

FSO Floating Storage and Offloading Unit.

FY Financial Year GRT Gross Register Tonnage. Gives the total internal volume of the vessel in units of one

hundred cubic feet (one “Register ton”), less the volume of certain exempted spaces which provide comfort to the crew and ship’s safety.

Handimax Tanker vessel with deadweight tonnage ranging from 40,000 to 59,999 metric tons.

Handysize A Dry Bulk vessel or product tanker with deadweight tonnage ranging from 15,000 to 50,000 metric tons.

ILO International Labour Organisation.

IMO International Maritime Organisation, an agency of the United Nations

Lighterage The activity of transporting cargo from a larger ship to shore using smaller vessels.

LNG LPG

Liquified Natural Gas Liquified Petroleum Gas

LOU Letter of Undertaking

MARPOL International Convention for the Prevention of Pollution from Ships

MOPU Mobile Offshore Production Unit

MMT Million Metric Tonnes

MR Tanker Medium Range Tanker. A crude oil tanker with deadweight ranging from 25,000 to 54,999 metric tons.

MWP or Minimum Work Program

the work program specified in the production sharing contracts entered into in connection with our oil and gas business.

OECD Organisation for Economic Co-operation and Development

ONGC Oil and Natural Gas Corporation Limited

OPEC Organization of the Petroleum Exporting Countries

Panamax Dry Bulk vessel with deadweight tonnage ranging from 50,000 to 79,999 metric tons.

Rupee, Rs., Re. The currency of India

SCI Shipping Corporation of India Limited, a public sector company under the Ministry of Shipping, Government of India

Suezmax Tanker vessel with deadweight tonnage ranging from 125,000 to 199,999 metric tons. TSHD Trailing Suction Hopper Dredger

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Time charter A vessel chartered by a charterer for a certain length of time, rather than for a certain voyage. Charges are based on daily rates.

VLCC Very Large Crude Carrier. A crude oil tanker with deadweight of over 200,000 tons.

VLGC Very Large Gas Carrier, which includes vessels above 60,000 cubic metres of capacity.

Wet Bulk Liquid cargo (usually crude oil and refined products)

WS or Worldscale The tanker industry’s method of calculating freight rates. The non-profit Worldscale Association annually publishes a list of recommended rates (in U.S. dollars) per metric ton (mt) between many ports. These are based upon a typical tanker’s size. If a charterer agrees to pay twice the rate published by Worldscale, then what it pays is described as “Worldscale 200” (the 200 is short for 200 per cent).

WOS Wholly Owned Subsidiary

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SUMMARY OF THE TERMS OF THE OFFERING

The following is a general summary of the terms of the Bonds. This summary is derived from, and should be read in conjunction with, the full text of the "Terms and Conditions of the Bonds" and the Trust Deed constituting the Bonds, which prevail to the extent of any inconsistency with the terms set out in this section. Capitalised terms used herein and

not otherwise defined have the respective meanings given to such terms in the "Terms and Conditions of the Bonds". Accrual of Interest The Bonds bear interest from May 27, 2014 (the “Closing Date”) at the rate of

4.75 per cent. per annum of the principal amount of the Bonds. Interest is payable annually in arrear on May 27 in each year (each an "Interest Payment Date"). Each Bond will cease to bear interest (a) (subject to Condition 6.2.4) from (and including) the Interest Payment Date last preceding its Conversion Date (as defined below) (or if such Conversion Date falls on or before the first Interest Payment Date, from (and including) the Closing Date) subject to conversion of the relevant Bond in accordance with the provisions of Condition 6.2, or (b) from (and including) the due date for redemption thereof unless payment of the full amount due is improperly withheld or refused or default is otherwise made in respect of any such payment. In such event, interest will continue to accrue as provided in Condition 4.3. If interest is required to be calculated for any period which is not an Interest Period, it will be calculated on the basis of a 360-day year of twelve (12) 30-day months and in the case of an incomplete month, the number of days elapsed.

Bonds US$16,000,000 (including an over allotment option of US$ 2,000,000), 4.75per cent Unsecured Foreign Currency Convertible Bonds due 2019 (the "Bonds") convertible into fully-paid ordinary shares with a par value of Re. 1.00 each of our Company. The issue of the Bonds was authorised by a resolution of the Board of Directors of the Company passed on December 30, 2013 and by a resolution of shareholders of February 4, 2014.

Cancellation All Bonds which are redeemed or converted or repurchased by the Issuer or any of its Subsidiaries will forthwith be cancelled. Certificates in respect of all Bonds cancelled will be forwarded to or to the order of the Registrar and such Bonds may not be reissued or resold.

Certain Covenants The covenants made by the Issuer will be in accordance with Condition (C)3 of the Terms and Conditions of the Bonds. See chapter "Terms and Conditions of the Bonds". These covenants include but are not limited to the following: 1. The Issuer shall (a) maintain a listing for all its issued shares on the BSE

and NSE; (b) it will not make any reduction of its ordinary share capital or any uncalled liability in respect thereof or of any share premium account or capital redemption reserve fund (except, in each case, as permitted by law); and

2. The Issuer shall undertake that so long as any FCCBs remains outstanding:(i) it will reserve, free from any other pre-emptive or other similar rights,

out of its authorized but unissued ordinary share capital the full number of shares liable to be issued on conversion of the FCCBs without breaching any foreign ownership restrictions in India applicable to the shares and will ensure that all shares will be duly and validly issued as fully-paid; and

(ii) it will not make any offer, issue or distribute or take any action the

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effect of which would be to reduce the Conversion Price below the par value of the shares of the Issuer.

(iii) It will ensure that all transactions with related parties are conducted on an arm's length basis

3. So long as any Bond remains outstanding (as defined in the Trust Deed) our Company:

(i) it will not create or permit to subsist, any mortgage, charge, pledge,

lien or other form of encumbrance or security interest (“Security”) upon the whole or any part of its undertaking, assets or revenues, present or future, to secure any International Securities (as defined below) of the Issuer;

(ii) it will procure that no other person creates or permits to subsist any

Security upon the whole or any part of the undertaking, assets or revenues present or future of that other person to secure any International Securities of the Issuer;

(iii) it will procure that no other person gives any guarantee of, or

indemnity in respect of, any International Securities of the Issuer, unless, at the same time or prior thereto, the Issuer’s obligations under the Bonds and the Trust Deed (a) are secured equally and rateably therewith to the satisfaction of the Trustee, or (b) have the benefit of such other security, guarantee, indemnity or other arrangement as the Trustee in its absolute discretion shall deem to be not materially less beneficial to the Bondholders or as shall be approved by an Extraordinary Resolution (as defined in the Trust Deed) of the Bondholders.

Clearance The Bonds will be cleared through the Clearing Systems. The Clearing Systems

each hold securities for their customers and facilitate the clearance and settlement of securities transactions by electronic book-entry transfer between their respective account holders.

Closing Date May 27, 2014

Common Code for the Bonds 107243216 Company Mercator Limited

Continuing Disclosures A Shareholder who holds 5 per cent or more of the total equity share capital of

our Company is required under Indian law to make disclosures of his shareholding to our Company. Please see the Chapter on "The Securities Market of India – Takeover Code".

Conversion Price The Conversion Price (as defined in the Conditions) will initially be Rs38.30 per Share with a fixed rate of exchange on conversion of Rs. 58.5740 = U.S.$1.00. The Conversion Price is subject to adjustment in certain circumstances in the manner provided in the Conditions.

Conversion Price Adjustment The Conversion Price of the Bonds will be adjusted in certain events occurring after the Issue Date, including upon (i) free distribution of Shares, (ii) bonus issue of its Shares, (iii) division of outstanding Shares, (iv) consolidation of outstanding Shares into a smaller number of Shares

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Conversion Right Except during certain Closed Periods, previously redeemed, converted, or

repurchased and cancelled, the Bonds are convertible by the Bondholders into fully paid up Shares of the Issuer with full voting rights.

Conversion period Bondholders may convert the Bonds in whole or in part from time to time from May 27, 2014 until April 27, 2019.

Dividends

Dividends, if any, are only payable on the Shares issued after the date of conversion of the Bonds.

Events of Default The Events of Default will be in accordance to Condition (C)10 of the Terms and Conditions of the Bonds. See chapter "Terms and Conditions of the Bonds" Subject to the receipt of regulatory approval and to the extent permitted by applicable law, if an Event of Default occurs, the Trustee may, if so requested by Bondholders holding at least 50 per cent of the principal amount of the Bonds then outstanding, shall give notice to our Company that the Bonds are, and they shall accordingly thereby become, immediately due and repayable at 100 per cent of their principal together with any accrued but unpaid interest.

Exchange rate on Conversion The exchange rate of U.S. Dollars to Rupees is fixed at 58.5740 which is the Reserve Bank of India’s reference rate for one U.S. Dollar to Rupee.

Form, title and Denomination of Bonds

The Bonds will be deliverable only in registered form, in denominations of US$ 100,000 each or integral multiples thereof and shall be represented by a Global Certificate, which on the Issue Date shall be deposited with and registered in the name of a common nominee of Euroclear and Clearstream.

Global Certificate For as long as the Bonds are represented by the Global Certificate and the Global Certificate is held by a Common Depositary, payments of principal and premium in respect of the Bonds represented by the Global Certificate will be made without presentation. The Bonds which are represented by the Global Certificate will be transferable only in accordance with the rules and procedures for the time being of the relevant Clearing System. The Bonds will each be issued in registered form in denominations of US$ 100,000 each or integral multiples thereof. The Bonds will be represented by a global certificate (the "Global Certificate") which on the Issue Date will be deposited with, and registered in the name of a common nominee of the Clearing Systems.

Governing Law The Bonds, the Trust Deed and the Agency Agreement and any non-contractual obligations arising out of or in connection with the Bonds will be governed by, and construed in accordance with, the laws of England.

Indian Government Approvals The Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993, as amended, the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2000, as amended (the "FEM Regulations"), and the RBI Master Circular on External Commercial Borrowings and Trade Credits dated July 2, 2012 issued by the RBI permit Indian companies to issue FCCBs up to US$750 million under the "automatic route" (i.e. without the prior approval of the RBI), subject to compliance with certain conditions specified therein.

Interest The Interest payable on the Bonds will be in accordance with Condition (C)4 of

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the Terms and Conditions of the Bonds. See chapter "Terms and Conditions of the Bonds" The Bonds shall bear interest from May 27, 2014 (the “Closing Date”) at the rate of 4.75 per cent per annum of the principal amount of the Bonds. Interest is payable annually in arrears on May 27 in each year, save that the first payment of interest which will be made on May 27, 2015 in respect of the period from (and including) the Closing Date to (but excluding) May 27, 2019 (and will amount to U.S.$ 4750 per U.S.$ 100,000 principal amount of Bonds).

ISIN for the Bonds XS1072432161 Issue Price of the Bonds US$ 100,000 per Bond at 100 per cent of their principal amount

Market for the Shares, Listing and Share Ownership Restrictions

The outstanding Shares of our Company are listed on the BSE and the NSE. The Shares issued on conversion are expected to be listed on the BSE and NSE and will be tradable on such stock exchanges once listed thereon. There are certain restrictions applicable to investments in shares and other securities of Indian companies, including the Shares, by persons who are not residents of India. See "Foreign Investment and Exchange Controls".

Listing Application will be made for the listing and quotation of the Bonds on theOfficial List of the SGX-ST. The Bonds will be traded on the SGX-ST in a minimum board lot size of US $ 200,000 for so long as the Bonds are listed on the SGX-ST. Application will be made for the listing of the Shares issuable upon conversion of the Bonds on each of the NSE and the BSE.

Maturity Date Unless the Bonds have been previously redeemed, repurchased or converted, our Company will redeem the Bonds on May 27, 2019

Offer and Selling Restrictions There are restrictions on the offer, sale and/or transfer of the Bonds in, among others, the United States, the United Kingdom, European Economic Area, Singapore, Hong Kong, Japan and India. For a description of the selling restrictions on offers, sales and deliveries of the Bonds, see "Subscription and Sale" and "Transfer Restrictions".

Principal Agent The Bank of New York Mellon, London Branch

Principal Amount US$ 100,000 per Bond.

Purchase in the Open Market or by Private Treaty

Subject to applicable law, the Issuer or any of its Subsidiaries and affiliates may at any time purchase Bonds in any manner and at any price in the open market or by private treaty, subject to compliance with all SGX-ST requirements. If purchases are made by tender, the issuer may offer to purchase the Bonds fromone or all of the outstanding Bondholders.

Rating of the Bonds The Bonds are not, and are not expected to be, rated by any rating agency.

RBI Approval Required for Early Redemption

Under current regulations of the RBI applicable to convertible bonds, our Company will require prior approval of the RBI before providing notice for or effecting any redemption or repurchase prior to the Maturity Date, including upon an Event of Default.

Redemption at Maturity Unless the Bonds have been previously redeemed, purchased or converted, our

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Company will redeem the Bonds at its principal amount on the Maturity Date.

Redemption at the Option of our Company

Our Company may redeem all or some of the Bonds on or at any time after May 27, 2017 at the Accreted Principal Amount if the Aggregate Value on each Trading Day for any 30 consecutive Trading Days is at least 130 per cent. of the Accreted Principal Amount, translated into U.S. dollar the fixed exchange rate. Accreted Principal Amount is the sum of principal amount of the Bonds, plus a Yield-to-Put/Maturity less Coupon when paid. See "Terms and Conditions of the Bonds — Redemption And Purchase — Redemption at the Option of the Issuer".

Redemption for Taxation Reasons At any time our Company may, having given not less than 30 nor more than 60 days’ notice to the Bondholders (which notice shall be irrevocable) redeem all, and not some only, of the Bonds at the Early Redemption Amount, if (i) our Company provides the Trustee with an opinion of an independent legal counsel acceptable to the Trustee or the Issuer's auditors immediately prior to the giving of such notice that it has or will become obliged to pay additional amounts as provided or referred to in Condition (C)8 as a result of any change in, or amendment to, the laws or regulations of India or any political subdivision or any authority thereof or therein having power to tax, or any change in the general application or official interpretation of such laws or regulations, which change or amendment becomes effective on or afterMay 27, 2014, which opinion shall specify the relevant change in, or amendment to, such laws or regulations or the relevant change in the general application or interpretation thereof and the additional amounts thereby required to be paid by the Issuer, and (ii) such obligation cannot be avoided by our Company taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than ninety (90) days prior to the earliest date on which the Issuer would be obliged to pay such additional amounts were a payment in respect of the Bonds then due Upon such notice being given, a Bondholder will have the right to elect (a) to retain its Bonds and (b) that the provisions of Condition (C)8 shall not apply in respect of the taxes, duties, assessments or governmental charges then required to be deducted or withheld in respect of any payment of principal or premium to be made in respect of such Bonds which falls due after the date of the aforementioned notice given by our Company, whereupon no additional amounts shall be payable by our Company in respect thereof pursuant to Condition (C)7 and payment of all amounts shall be made subject to the deduction or withholding of such taxes, duties, assessments or governmental charges but without prejudice to the application of Conditions 8.2 and (C)8 to any other taxes duties, assessments or governmental charges required to be deducted or withheld by law. See "Terms and Conditions of the Bonds—Redemption and Purchase-Redemption for Taxation Reasons".

Redemption of Bonds in the Event of Change of Control

Subject to the receipt of regulatory approval and to the extent permitted by applicable law, unless the Bonds have been previously redeemed, cancelled or converted, each Bondholder shall have the right, at such Bondholder’s option, upon the occurrence of certain Change of Control events to require the Issuer to redeem all of such Bondholder’s Bonds at the Early Redemption Amount. See "Terms and Conditions of the Bonds — Redemption of Bonds in the Event of a Change of Control".

Redemption of the Bonds in the event of Delisting

Subject to the receipt of regulatory approval and to the extent permitted by applicable law, unless the Bonds have been previously converted, redeemed or repurchased and cancelled, in the event that the shares cease to be listed or

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admitted to trading on the BSE/NSE (a "Delisting"), each Bondholder shall have the right, at such Bondholder’s option, to require our Company to redeem all or some of such Bondholder’s bonds at 100% of their principal amount together with accrued but unpaid interest (calculated up to but excluding the date of redemption).

Registrar and Transfer Agent The Bank of New York Mellon, Luxemberg, S.A.

Relevant Date Price The Relevant Date Price is the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the two weeks preceding the relevant date; "Relevant date" for determination of the Relevant Date Price shall be arrived at in accordance with the provisions of Issue of Foreign Currency Convertible Bonds and Ordinary Shares Scheme, and other respective applicable guidelines, rules, regulations or directions, if any, of the appropriate Authorities.

Share Ranking Shares issued upon conversion of the Bonds will be fully paid with full voting rights and will rank pari passu with the Shares in issue on the relevant Conversion Date, save that Shares issued on conversion of the Bonds shall not be entitled to any rights the record date for which precedes the relevant Conversion Date. See "Terms and Conditions of the Bonds-Conversion".

Status of the Bonds The Bonds constitute direct, unsecured, unsubordinated and unconditional obligations of the Issuer and shall at all times rank pari passu and without any preference or priority among themselves. The payment obligations of the Issuer under the Bonds shall, save for such exceptions as may be provided by mandatory provisions of applicable law and the Conditions, at all times rank at least equally with all of its other present and future direct, unsecured, unsubordinated and unconditional obligations.

Taxation All payments in respect of the Bonds by the Issuer shall be made without deduction or withholding for, or on account of, any present or future taxes, duties, deductions, withholding liabilities, assessments or governmental charges of whatever nature ("Taxes") imposed or levied by or on behalf of India or any political sub-division of, or any authority in, or of, India having power to tax, unless the withholding or deduction is required by law. See "Taxation". In that event, the Company will pay such additional amounts as may be necessary in order that the net amounts received by the holders of the Bonds after the withholding or deduction shall equal the respective amounts which would have been receivable in respect of the Bonds in the absence of the withholding or deduction. The Bonds will have the benefit of the tax concessions available under the provisions of Section 115AC of the Income Tax Act and The Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depositary Receipt Mechanism) Scheme 1993 promulgated by the Government (the “Depositary Receipt Scheme”). These tax concessions include withholding in respect of interest and premium on the Bonds at a reduced rate of 10 per cent. plus an applicable surcharge on such tax (and education cess as applicable on such tax), for individuals and associations of persons if taxable income exceeds Rs.850,000, and a surcharge of 2.5 per cent. for companies, in respect of interest and premium (if any) on the Bonds. Gains realised on the sale or transfer of such Shares issued upon conversion of Bonds are, subject to certain conditions, exempt from Indian capital gains tax. See “Taxation”. Under current Indian laws, no tax is payable by the recipients of dividends on shares of an Indian company, including the Shares deliverable upon conversion

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of the Bonds. However, the Company will be liable to pay distribution tax on dividends paid on the Shares at a rate of approximately 16.996 per cent. (inclusive of surcharge and education cess).

Trustee The Bank of New York Mellon, London Branch

Voting Rights Bondholders will have no voting rights with respect to the Bonds at a general meeting of our Company. Bondholders will have voting rights at a meeting of Bondholders. Voting rights will be attached to the Shares received upon conversion.

Use of Proceeds Our Company will utilise the net proceeds of approximately USD 15,830,000 in compliance with and as permitted under the applicable laws and regulations, including RBI guidelines or approvals, for purposes including capital expenditure, repayment of debt, investment in overseas subsidiaries and to invest the temporary surplus funds in treasury and / or other permissible purposes.

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RISK FACTORS Prior to making an investment decision with respect to the Bonds offered hereby, all prospective investors and purchasers should carefully consider all of the information contained in this Offering Circular, including the risk factors set out below and the financial statements and related notes thereto. The risks disclosed below are not the only ones relevant to the Company, Bonds or the Shares. Additional risks not presently known to the Company or that it currently deems immaterial may also impair the Company’s business operations and financials.The occurrence of any of the following events could have a material adverse effect on our business, results of operations, financial condition and future prospects and cause the market price of the Shares to fall significantly. Such material adverse effect could also result in payment default under this Issue. Any potential investor in, and purchaser of, the Bonds should pay particular attention to the fact that Mercator Limited is an Indian company and is subject to a legal and regulatory environment which in some respects may be different from that which prevails in other countries. Unless otherwise stated, references in this section to "our Company" are to Mercator Limited, and references to "we", "our" or "us" are to our Company and our Subsidiaries and joint ventures. I. RISKS ASSOCIATED WITH OUR BUSINESSES

1. Our shipping business is subject to fluctuation in freight rates which could have a material adverse effect

on our financial conditions. Our shipping operations are subject to risk arising from fluctuations in freight rates which have a significant impact on us. Shipping is a derived demand which occurs as a result of seaborne trade. Therefore, the demand in a particular sector will subsequently affect the freight rates. For instance, in oil sector, because there is a constant volatility in oil prices, they are affected by these increases and therefore reflect them unto their freight prices. Also, an over-supply of vessel capacity may result in in a reduction of charter rates, vessel hire rates and our overall profitability. The factors affecting the supply and demand of vessels are not within our control. As such, if such a reduction occurs upon the expiration or termination of any of our vessels current contracts, we may be constrained to recharter such vessels at reduced or unprofitable rates or we may not be able to charter our vessels at all. Accordingly, fluctuations in freight rates may be unpredictable and may have a negative impact on the Company’s revenue.

2. Our shipping and dredging business largely depends on the utilisation of our vessels.

Our performance largely depends on the optimum utilisation of our vessels, which contribute to a major part of our revenues. If our Company is unable to operate its vessels profitably, we may be unsuccessful in competing in the highly competitive market, which would negatively affect our financial condition and our ability to expand our business.

3. The repairs, maintenance and drydocking of our vessels could have a more significant adverse impact on our revenues than we anticipate Our fleet consists of tankers, bulkers and dredgers, the average age of which is 12 years, thus increasing the risk of breakdowns and downtime in utilization of the vessels. As a result we may incur substantial maintenance and repair costs or replacement costs of vessels. If our vessels suffer damage; they may need to be repaired at a drydocking facility. The costs of drydock repairs are unpredictable and may be substantial. The loss of revenues while these vessels are being repaired and repositioned, as well as the actual cost of these repairs, may adversely affect our business and financial condition. In addition, space at drydocking facilities is sometimes limited and not all drydocking facilities are conveniently located. The loss of earnings while these vessels are forced to wait for space or to travel or be towed to more distant drydocking facilities may adversely affect our business and financial condition. Further, the total loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator. If we are unable to adequately maintain or safeguard our vessels, we may be unable to prevent any such damage, costs, or loss which could negatively impact our business, financial condition, results of operations and available cash.

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4. The market values of our vessels may decrease, which could cause us to breach covenants in our credit

facilities and adversely affect our operating results.

The market values of tankers, bulkers and dredgers have generally experienced high volatility. For example, the market prices for vessels declined significantly from historically high levels reached in early 2008 and remain at relatively low levels. The market value of our vessels to fluctuate depending on general economic and market conditions affecting the shipping industry and prevailing charterhire rates, competition from other shipping companies and other modes of transportation, types, sizes and ages of vessels, applicable governmental regulations, supply of vessels and new building order book and the cost of newbuildings. A decrease in these values could also cause us to breach certain covenants that are contained in our credit facilities and in future financing agreements that we may enter into from time to time. If the recoverable amounts of our vessels further decline and we do breach such covenants and we are unable to remedy the relevant breach, our lenders could accelerate our debt and foreclose on vessels in our fleet or if the value of our vessels falls below the minimum asset value required to be maintained under our loan agreements, then our lenders may demand us to provide alternate security or deposit margin money which may adversely affect our operational flexibility thereby impacting our operating results. If we sell any vessel at any time when vessel prices have fallen, the sale may be at less than the vessel’s carrying amount on our financial statements, resulting in a loss and a reduction in earnings.

5. Technological innovation could reduce our charterhire income and the value of our vessels.

Charter hire rates and the value and operational life of all our vessels are determined by a number of factors including how technologically advanced the vessel is. If more advanced vessels are designed and built in the future and these new vessels are more efficient or more flexible or have longer physical lives than ours, competition from these more technologically advanced vessels could adversely affect our ability to charter or re-charter our ships and may also lead to a reduction in our charter hire rates. This could also reduce the resale value of our vessels which in turn could adversely affect our revenues and cash flows.

6. The charterer of our Floating Production Unit may exercise right of purchase under its contract Our FPU has been deployed in Nigeria with Afren PLC for a period of nine years from May 2011, which is valid for an initial period of seven years and thereafter extendable annually by Afren for a further period of two years. Under the charter agreement, Afren has the contractual option to buy the vessel at any time during the charter period at a pre-determined price. In the event that a client decides to exercise its option to buy the vessel, we will have to sell it at the price already agreed to in the contract, which may be below the market value of the vessel and also affect our financials adversely.

7. Restrictions on timely availability and volatile prices of vessels for expansion of company’s shipping business may affect the Company’s revenue.

Availability of vessels is constrained due to various factors including the scrapping of older vessels, limited shipyard capacity for building new vessels and high price of plate steel. As freight rates are on an increasing trend, the availability of second-hand vessels is limited. The scrapping of vessels, limited shipyard capacity and high commodity prices have resulted in significant rising trend in vessel prices, which may lead to an increase in capital investment coupled with low returns and also affect our financials adversely.

8. We may not be successful in keeping up with the demands of our customers and industry standards in our dredging business We may not be able to keep up with or adapt our business to customer requirements and new dredging techniques in the dredging business. Success in the dredging business is dependent to a large extent on our ability to keep up with evolving industry standards, changing customer requirements, technological changes

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and new dredging techniques that characterize the dredging industry. We may not be successful in addressing these developments on a timely basis or our operations may not be successful in the market place. In addition, techniques developed by others may make our operations less competitive.

9. Our reported coal reserves and resources are only estimates and our actual production, revenues and expenditure may materially differ from these estimates. There are various factors and assumptions inherent in the estimation of our reserve and resource base and the costs associated with mining such reserves that may materially differ from actual production, revenues and expenditure with respect to revenues. Many of the factors and assumptions involved in the estimation of our reserve and resource base are based on data that are currently available and subject to variations over time. Results of drilling, testing and production, subsequent to the date of such estimate may require revisions in our reserve and resource data. In addition, there can be no assurance that all our reserves can be economically exploited.

10. Our operations may be affected by changes in existing and adoption of new Indonesian Government laws and regulations and/or the changes in interpretation of the Indonesian Government laws and regulations in terms of regulatory ban on coal export in Indonesia. Our mining operations in Indonesia are subject to various laws, rules and regulations related to mining, inland transportation, investment, export, domestic obligations, taxes etc. Our operations may be affected by any changes in existing laws, rules and regulations and / or by change in interpretation of existing laws, rules and regulations and / or introduction of new laws, rules and regulations which is beyond our control. Any change in these laws, rules and regulations may adversely affect our business, operations and financial conditions.

11. We depend on key equipment and machinery to conduct our coal mining operations. Availability of mining equipment and optimal and efficient utilization of such equipment may effect and our operations and profitability. Our business operations depend on certain key plant, equipment and machinery, including fleet of earthmoving equipment and vehicles, coal crushing facilities and other general mine site infrastructure and equipment. There is no assurance that these key plant, equipment and machinery will not suffer damage, machine failure or suffer operational difficulties during the course of our operations. In the event any significant damage, machine failure or operational difficulties occur and we are not able to carry out the necessary rectifications, repairs or replacements in a timely manner or at all due to any reasons, such as lack of adequate funds or lack of supply, such significant damage, machine failure or operational difficulties could have a material and adverse effect on our business operations and financial condition.

12. Our coal mining operations may expose us to various operating risks as also risks associated with future mine acquisitions, joint ventures or other business arrangements Our coal mining operations are subject to various operating risks such as safety, environmental hazards, geological uncertainty, oil price increase which could result in materially increased operating expenses and decreased production levels and could materially and adversely affect our results of operations and our financial performance. Further all mine acquisitions whether completed or prospective involve a number of risks, any of which could cause us not to realize the anticipated benefits. As coal mining is a highly specialized activity, requiring substantial technical and operational expertise and experience, we may look at partnering with other companies having established reputations in this industry, through a joint venture or other business form to undertake such acquisition or expansion activities. We cannot assure you that we will be able to identify such partners in a timely manner, or at all. Additionally, we cannot assure you that such a joint venture or other business arrangement will be successful.

13. Our coal supply contracts require us to supply coal at pre-determined prices

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Our coal supply contracts provide for the supply of coal at specified prices which may not be linked to any global coal price indices. Our contracts further may not contain any provisions for price review or price adjustments during the term of the contract, in line with fluctuations in the market prices. In the event we are unable to procure coal at competitive prices or if the price at which we procure coal is significantly higher than the price at which we supply coal to our customers under the coal supply contract, our financial condition and results of operations may be adversely affected.

14. Significant changes in demand by our major customers or significant reduction in supplies by our major coal suppliers could adversely affect our revenues We may not be able to adjust production volume in a timely or cost-efficient manner in response to changes in demand by our customers. During periods of high demand, our ability to rapidly increase production capacity is limited, which could prevent us from meeting demand for coal. Further our inability to source such coal from third parties from major coal suppliers would further increase our costs and narrow our operating margins. If we are unable to satisfy excess customer demand in this way, we may lose customers. In addition, operating close to full capacity may expose us to higher costs, including demurrage fees due to capacity restraints in our logistics systems. Conversely, operating at significant idle capacity during periods of weak demand may expose us to higher unit production costs since a significant portion of our cost structure is fixed in the short term due to the high capital intensity of mining operations. In addition, efforts to reduce costs during periods of weak demand could be limited.

15. We will have to make payments under our production sharing contracts if Minimum Work programs are not satisfied. In our Oil and gas exploration business we have committed to complete Minimum Work Program in given period as per the production sharing contracts signed by us. We may not be able to complete minimum work programme in given period which may result in making payment for unfinished work commitment as specified under Production Sharing Contract, which may adversely affect our financial condition.

16. Our exploration and development activities may not be commercially successful. Oil and gas exploration is very capital intensive and requires huge gestation periods and involve numerous risks, including the risk that, after substantial expenditures, we may not encounter any reserves or that the reserves encountered may not be commercially viable for production. The cost of drilling, completing and operating wells is often uncertain, and a number of factors can delay or prevent drilling operations or production, including: unexpected drilling conditions; title problems, pressure or irregularities in geologic formations, equipment failures or repairs, fires or other accidents, adverse weather conditions, reduction in fuel prices. Our future drilling activities may not be successful, and our drilling success rates could decline which could result in higher costs without any corresponding revenues. Further there is uncertainty whether the discovered oil and gas could be exploited economically, due to which we may not be able to realize any benefits or returns on our investments, and may further cause us to incur substantial costs and losses and also affect our financials adversely.

17. We may not have adequate operating history in the segment of oil and gas exploration business as an

operator; it is difficult to estimate our future performance. While we do not have any operating history in the exploration business as an operator, on the basis of which our business and future prospects can be evaluated, we have been operating in this business as production asset owners and contractors. We therefore do not have any earnings history from the E&P activities. Any future profitability from the oil and gas exploration business will depend on the success of our Company to extract such reserves, and there can be no assurance that the Company will achieve profitability in this business in the

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near future. Our revenue and profitability estimates may not be indicative of our future results of operations. As a result, we cannot give you any assurance about our future performance or that our business strategy will be successful.

18. Risk of no oil in Afren/ Cambay oil blocks

Our operations in Nigeria could be adversely impacted due to exhaustion of the oil reserves in our customer’s area of operations before the completion of the contract period which may lead to early termination of the contract with Afren. In such an event, our Company could face loss of revenue and profits, and may default with lenders.

Our Company also has oil and gas exploration licenses in India, which are subject to uncertainty regarding the oil and gas reserves in the license area. Further our licenses may require us to incur certain expenditure during the license period which we may not be able to recover if no oil reserves are found.

19. We are subject to a number of contractual and project execution risks as well as risks of increased costs. We face many contractual and project management challenges relating to increasing complexity and technologically demanding specifications, tight schedules and budgets, safety issues and concerns about the impact of these projects on the environment and communities. In addition the inherent uncertainties linked to the oil and gas business, including availability of services including FPSOs and rigs, availability of yard space, technology engineering capacity and skilled workmen, availability of contractors or specialist companies to supply sophisticated and complex equipment, maintaining project schedules and costs as also fiscal, regulatory political and other conditions leading to operational problems and production loss also exposes us to cost inefficiencies, price escalations and project overruns, which in turn could significantly affect our ability to operate profitably.

20. The oil and gas business requires a high level of technical expertise and we may be required to outsource

certain works to technical consultants and professionals in the course of our business Our industry and businesses requires a high level of technical expertise. We may be required to engage the services of or outsource certain works to various technical consultants and professionals in the normal course of our business. In the event we engage or outsource work to these technical consultants and professionals, we are exposed to risks arising from the technical abilities and work quality of these technical consultants and professionals. There is no assurance that we will be able to successfully engage or outsource work to suitable technical consultants and professionals, or if we are able to successfully engage or outsource work, the technical consultants and professionals will be able to deliver on their required work deliverables. Any inability on our part to successfully engage or outsource work to suitable technical consultants and professionals and/or any inability by the relevant technical consultants and professionals to deliver on their work deliverables could have a material adverse effect on our business operations and financial condition.

21. We may not be able to keep pace with the adoption of new technologies in the oil and gas business

Extracting oil and gas from accessible acreage is becoming increasingly difficult, requiring not only the development of new technologies, but also a technically proficient workforce that can operate that technology. If we are unable to have timely access to the latest technologies or recruit qualified technical workforce our profitability and ability to successfully operate in the oil and gas business will be significantly affected.

22. We have oil and gas production assets in Nigeria which are subject to significant risks

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The regulatory environment in the oil and gas sector in Nigeria is subject to significant ongoing change. The Nigerian government exercises significant influence over Nigeria’s oil and gas industry. Further Nigeria’s infrastructure are in a poor state of development and/or deterioration and there are numerous interruptions to power and communication systems. Further as oil and gas assets in these areas may be situated in remote areas and lack infrastructure, we may incur significantly high production costs. Any political and social instability or terrorist incidents or attacks in Nigeria may adversely affect our operations and also affect our financials adversely.

23. A major part of our revenue is derived from a limited number of customers We derive revenues from limited number of customers. The loss of any of these key customers for any reason would result in a significant loss of revenues and could have a material adverse effect on our business, financial condition, results of operations and cash flows.

24. Our earnings and business are subject to the credit risk of our customers and other counterparties.

We enter into various commercial contracts with our customers, under which we may be exposed to credit risk of our customers. The ability and willingness of each of our customers to perform its obligations under a contract with us will depend upon a number of factors that are beyond our control and may include, among other things, general economic conditions and charter hire rates. Additionally, in our coal business we face counterparty risks including risk of payment default (credit risk), failure to accept delivery by our customers and failure to supply and deliver coal by our suppliers. In the event a customer and / or supplier fails to honour agreements or contracts entered into with us then we may sustain significant losses which in turn could have a material adverse effect on our business, financial condition, results of operations and cash flows. Additionally, the actual or perceived credit quality of our clientele, and any defaults by them, may materially affect our ability to obtain the additional capital resources that we will require to expand our operations or may significantly increase our costs of obtaining such capital. Our inability to obtain additional financing at all or at a higher than anticipated cost may materially affect our results of operation and our ability to implement our business strategy.

25. Our business may be adversely affected if we cannot collect our receivables.

We depend on the timely collection of our receivables to generate cash flow, provide working capital and continue our business operations. If our customers fail to pay or delay payments for any reason, our business and financial condition may be materially and adversely affected. If we experience difficulties collecting receivables, it could adversely affect our financial results.

Our Company is currently involved in certain disputes with its customers relating to receivables amounting to Rs 1317.26 million, and our customers have made claims amount to about Rs 4577.36 million against claims of the Company agreegating to about Rs 3850.15 million. We may not be able to receive the outstanding amount and may have to pay the claims made by the customers, which may affect the cashflow and financials of our Company.

Please refer to section titled "Litigation and Disputes" on page 194.

Our Company may not succeed in receiving the outstanding amount and may have to pay the claims made by the customers, which may affect the cashflow and financials of the Company.

26. We may be exposed to liability claims and contractual disputes The nature of the business segments that we operate in are such that, from time to time we have been, and expect to continue to be, subject to legal proceedings and claims in the ordinary course of our business, particularly relating to liability claims and dispute under customer contracts. Such claims, disputes, even if lacking merit, could result in the expenditure of significant financial and managerial resources. Further if any such claim or dispute is finally decided against us, then we may not be able to realize the full value of the claim amount or may alternatively be exposed to huge financial liabilities which in turn may have a material

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impact on our overall business and operations. For more information regarding claims or disputes relating to us please refer to section titled "Litigation and Disputes" on page 194.

27. We may be exposed to risks arising from termination of contracts

As part of our business operations we are required to enter into commercial contracts with various third parties including our customers, suppliers, government bodies and contractors amongst others, who may terminate contracts at their convenience, as well as for default, based on our failure to meet specified performance measurements. Further a number of our contracts can be terminated by the customer at short notice. Termination of, or default under our contracts, may expose us to greater liable for damages resulting from the default or may result in us not being paid for work done under the contract which may in turn also affect our financials adversely.

28. The future growth of the Company may depend on its ability to raise new capital and obtain financing. The Company’s strategy of growth through the optimisation and modernisation of existing facilities and equipment, construction of new facilities, and implementation of build own operate projects, requires substantial investment and is dependent on the Company’s ability to finance these projects and other investments out of retained profits or new capital. If the financial performance of the Company in the future fails to meet the expectations of its lenders and investors, there can be no assurance that it will be able to raise the new capital required to fund its growth or that such financing will be obtained on satisfactory terms or at all. In addition, the Company is subject to a number of risks associated with debt financing, including the risk that cash flow from operations will be insufficient to meet required payments of principal and interest, the risk that, to the extent that the Company maintains floating rate indebtedness, interest rates will fluctuate, and the risk that it may not be possible to obtain refinancing on favourable terms when required. Although the Company anticipates that it be able to repay or refinance existing debt, and any other indebtedness when it matures, there can be no assurance that it will be able to do so. The level of debt could impact us in a downturn, and limit our ability to pursue growth plans, requiring us to dedicate large part of cash flows to debt servicing.

29. Any significant indebtedness in the future could adversely affect our financial condition and results of

operations. We are subject to certain restrictive covenants under our current financing arrangements. As of March 31, 2014, we had total outstanding indebtedness of approximately Rs. 37,146.59 million (considering Rs. 60.0998 = 1 U.S. dollar), and we may incur additional indebtedness in the future. Any significant indebtedness in the future could have several important consequences, including that a portion of our cash flow will be used towards servicing and repayment of our indebtedness, which will reduce the availability of cash flow to fund working capital, capital expenditures, acquisitions and other general corporate requirements. Our current financing agreements also include various conditions and covenants that may require our Company to obtain lender consents prior to carrying out certain activities and entering into certain transactions, including incurring additional debt, issuance of equity, changing the capital structure, increase or modify capital expenditure plans, undertake any expansion, provide additional guarantees, or merge with or acquire other companies, whether or not there is any failure by such entities to comply with the other terms of such agreements. Any failure to comply with the stipulated loan covenants may also result in our lenders calling upon us to provide alternate or additional security or collateral, and may further restrict our ability to pay dividends in terms of certain restrictive covenants under lending agreements. These agreements may also contain cross-default provisions whereby a default under one agreement could result in a default and acceleration of our repayment obligations under other agreements, including those of our subsidiaries. If a cross-default were to occur, we may not be able to pay our debts or borrow sufficient funds to refinance them. Even if new financing were available, it may not be available on acceptable terms.

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Our credit facilities may also contain restrictive covenants that limit the amount of cash that we may use for other corporate activities, which could negatively affect our growth and cause our financial performance to suffer.

30. Our Company has provided corporate / performance guarantees in respect of various contractual obligations of its subsidiaries Our Company has extended corporate guarantees securing the performance by our subsidiaries under various contracts, debs availed and in respect of minimum work programs under Production Sharing Contracts. In the event of any default by our subsidiaries to discharge their payment or performance obligations under these contracts, or if contractual obligations under the minimum work programs are not completed as per scheduled time then the guarantees provided by us may be invoked, thus exposing us to additional and increased financial liabilities, over and above the additional cost overruns and penalties.

31. Our Promoters may be required to pledge their shareholding in our Company Our Promoters may pledge their Shares in the future. Our Promoters had pledged substantial portion of their shareholding in our Company in the past. In the event that our Promoters pledge their Shares in future, and if there is a default in payment to lenders, an invocation of the pledge by the lenders may lead to a substantial fall in our Promoters' shareholding in our Company and may also result in our Promoters losing control over our Company.

32. We have pledged shares of Subsidiaries

In order to secure bank financings, we have pledged whole or part of shares of certain Subsidiaries / Joint Ventures to the lenders. The lenders may invoke the pledge of shares in the event of default and we may stand to lose control over them, which will be detrimental to our Company’s financial results.

33. Our inability to manage our growth or to successfully implement our growth strategy could materially and adversely affect our business, results of operations, financial condition and prospects.

In recent years, our Company has been rapidly expanding its operations. For instance our Company has recently entered into the gas carrier segment within its shipping business. As we grow, we must continue to improve our managerial, technical and operational knowledge and allocation of resources. A principal component of our strategy is to continue to grow by expanding the size and geographical scope of our existing businesses. This growth strategy will place significant demands on our management, financial and other resources. It will require us to continuously develop and improve our operational, financial and internal controls. Continuous expansion increases the challenges involved in financial management, recruitment, training and retaining high quality human resources, preserving our culture, values and entrepreneurial environment and developing and improving our internal administrative infrastructure. An inability to manage such growth could disrupt our business prospects, impact our financial condition and adversely affect our results of operations. There can be no assurance that we will be able to implement or manage any of these growth plans successfully. In order to fund our ongoing operations and future growth, we need to have sufficient internal sources of liquidity or access to additional financing from external sources. Further, we will be required to manage relationships with a greater number of suppliers, service providers, lenders and other third parties and any failure to do so would affect our results of operations and our financials adversely.

34. Our operations are subject to various risks inherent to our business activities. Our business operations involve significant risks and occupational hazards that are inherent to shipping, dredging, oil and gas and mining activities and may not be eliminated through preventive measures. The risk and hazard could result in personal injury, grievous hurt death due to accidents which could result in additional

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litigation, death, destruction of properties, business interruption, environmental damages etc. The occurrence of natural disasters including earthquake, fire, severe weather, floods, power outages and the consequences, damages and disruptions resulting from them may adversely affect our business and operations. In addition, natural disasters or accidents and the presence of hazardous agents or substances can result in increased exposure to hazards such as fires, explosions, environmental damage, equipment failures, casing collapses, discharge of toxic gases or damage or destruction of various facilities. We may become subject to liabilities, including liabilities for environmental or industrial accidents or pollution or other hazards, in addition to compensation payable to personnel affected by any such incidents. For instance in the past, explosions on our vessel Prem Divya, resulted in death and casualties amongst the crew, and extensive damage to the vessel, in respect of which we are currently in dispute with the insurance company for recovery of the balance sum insured amount of Rs. 542.45 million under the policy. For further details of this litigation please refer to section titled "Litigation and Disputes” on page 194. Any such occurrence in the future could result in substantial claims, litigation and loss of revenue.

35. We may not be able to obtain or maintain adequate insurance. Our businesses are generally subject to a number of risks and hazards. The insurance we maintain against risks that are typical in our business may not provide adequate coverage or we may not have insurance at al for certain risks. Insurance against some risks (including liabilities for environmental pollution or certain hazards or interruption of certain business activities) may not be available at a reasonable cost, or at all, or we may not obtain insurance cover for certain risks. Even when it is available, we may self-insure where we determine that it is more cost-effective to do so. As a result, accidents or other negative developments involving our businesses could have a material adverse effect on our operations. Although we insure against the risk of damage to our equipment, employees and third parties, we cannot be sure that actual liabilities will not exceed our insurance coverage. In respect of our coal business we are subject to operating risks common to coal industry which may result in losses or claims against us for which we may not have sufficient insurance coverage. Our mining operations are also subject to various risks inherent to mining activities and we may not have maintained insurance coverage or the insurance coverage maintained by us may not be adequate and in accordance with applicable industry standards. Further some of our operations are subject to risks associated with weather, natural disasters and operating hazards and there is no assurance that such events would be covered by insurance or whether any such insurance coverage would be adequate.

36. We may incur material costs to comply with, or suffer material liabilities or other adverse consequences as a

result of, environmental laws and regulations. Our Company’s operations are subject to extensive environmental and hazardous waste management laws and regulations in India, including an not limited to the Environmental Protection Act, 1986, as amended ("EPA"), Air (Prevention and Control of Pollution) Act, 1981, as amended (the "Air Act"), the Water (Prevention and Control of Pollution) Act, 1974, as amended (the "Water Act") and other regulations promulgated by the Ministry of Environment and Finance ("MoEF") and various statutory and regulatory authorities and agencies of the relevant States in India. Further, the coal and oil and gas industry in particular are subject to increasingly strict regulations with respect to a range of environmental matters including limitations on land use, including forest land; permits and licensing requirements; risks of exploration activities; the storage of coal and associated risks; the storage of oil and coal, treatment and disposal of wastes; remediation of contaminated soil and groundwater; air quality standards; water pollution; protection of human health, plant-life and wildlife and discharge of hazardous materials into the environment. Additionally, the MoEF may adopt a rigorous approach when enforcing applicable laws and regulations and may order the closure of any business unit that fails to comply with orders requiring it to correct or cease

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operations that raise environmental concerns. We are required to comply with extensive domestic and international environmental laws and safety regulations in our business operations, any changes in those laws, regulations and their interpretations could require us to incur additional costs. Further we may also be subject to increased liability, which may adversely affect our insurance coverage and may result in a denial of access to, or detention in, certain ports.

37. Any increase in transportation costs or statutory costs that we are unable to pass on to our customers could

have an adverse effect on our business and results of operations. Transportation costs have been steadily increasing in the recent past. Any increase in transportation costs may have an adverse effect on our business and results of operations. In the event that transportation costs increase and we are unable to pass these additional costs to our customers or if the pre-determined rate which is charged to our customers is lower than what we actually incur, we will incur additional expenses, which may adversely affect our business, financial condition and results of operations. Further if we are unable to pass on to our customers any significant increases in the statutory levies paid on the coal we sell, our results of operations and our financials could be adversely affected.

38. Our Company has entered into a non-competition agreement with MLSL which limits the scope of our business. On December 5, 2007, our Company entered into a non-competition agreement with our subsidiary MLSL where in we are limited to carrying out the business of transportation of dry bulk cargo only through MLSL except for maximum of three vessels. The non-competition agreement shall be applicable so long as our Company’s total direct and indirect shareholding interest in MLSL is 15% and above. Company on its own may not be able to expand in dry bulk business which may restrict our growth in the dry bulk segment.

39. We are subject to intense competition in all aspects of our business, which could negatively affect our ability to maintain or increase our profitability. The markets in which we operate across all facets of our business are both highly competitive and global. We have experienced, and anticipate that we will continue to experience, pricing pressure in many of our core businesses. Our businesses compete with other domestic and international shipping, coal and oil and gas companies. For instance in the coal business segment we encounter competition from other coal companies in all areas of our operations, including the acquisition of licenses for exploratory prospects and new entrants and competitive pressure on our business is likely to continue. Similarly in the shipping business we face competition from other existing shipping companies and potential entrants to the industry in which we operate. Players in this market generally compete with each other on key attributes such as technical competence, optimum use of vessels, pricing and track record. To the extent that one or more of our competitors gains an advantage with respect to any key competitive factor, our business and financials could be adversely affected. We may therefore be forced to operate at margins which are lower than that of our competitors, exposing us to potentially increased downward pricing pressure across our businesses. Many of our competitors, including our competitors in core services, have substantially greater capital resources than we do. We expect that the competition could increase with new entrants coming into the businesses in which we operate. Some of our competitors may have access to significantly greater resources and hence the ability to compete more effectively. The ability of a competitor to offer comparable or improved services or products at a lower price may also negatively affect our ability to maintain or increase our profitability. Additionally pricing pressures as a result of the activities of competitors, customer pricing reviews, and rebids may also result in a reduction in the prices we can charge for our products and services.

40. We are exposed to potentially adverse changes in the tax and royalty regimes of India and other jurisdictions in which we operate.

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Some of our businesses, particularly our oil and gas operations in general is subject to regulation and intervention by governments throughout the world in such matters as the award of exploration and production interests, the imposition of specific drilling obligations, environmental, health and safety controls, controls over the development and decommissioning of a field (including restrictions on production) and, possibly, nationalization, expropriation, cancellation or non-renewal of contract rights. The oil and coal industries are also subject to the payment of royalties and taxation, which tend to be high compared with those payable in respect of other commercial activities, and operates in certain tax jurisdictions that have a degree of uncertainty relating to the interpretation of, and changes to, tax law. Any new or increased government taxes or duties or changes in taxation laws including imposts such as royalties, charges and taxes may affect the level of our coal mining and exploration activities. We remain exposed to changes in the regulatory and legislative environment, such as new laws and regulations (whether imposed by international treaty or by national or local governments in the jurisdictions in which we operate), changes in tax or royalty regimes, price controls, the imposition of trade or other sanctions, government actions to cancel or renegotiate contracts or other factors. Governments are facing greater pressure on public finances, which may increase their motivation to intervene in the fiscal and regulatory frameworks of the oil and gas industry and we remain exposed to increases in amounts payable to governments or government agencies. Such factors could reduce our profitability from operations in certain jurisdictions, limit our opportunities for new access, require us to divest or write-down certain assets or curtail or cease certain operations, or affect the adequacy of our provisions for pensions, tax, environmental and legal liabilities.

41. We have entered into joint ventures with third parties which may not always be successful. We have entered into joint venture / consortium with certain entities in connection with our business and operations. Investments through joint ventures may, under certain circumstances, involve risks as joint venture partners may fail to meet their financial, commercial or other obligations in respect of the joint venture. In addition, joint venture partners may have business interests or goals that differ from our or our shareholders’ business interests or goals. Any disputes that may arise between us and our joint venture partners may cause delays, suspension or abandonment of our projects. Further, under our existing joint venture arrangements, our partners have the right to terminate such joint ventures in the event of breach of any of our contractual obligations.

In addition, as a part of growth strategy, we intend to continue to pursue suitable joint venture and strategic partnership opportunities in India and internationally. We may not be able to identify suitable joint venture or strategic partners or we may not complete transactions on terms commercially acceptable to us, or at all. We cannot assure you that we will be able to successfully form such alliances and ventures or realize the anticipated benefits of such alliances and joint ventures. Any unforeseen costs or losses can adversely affect our business, profitability and financial position.

42. We may be exposed to increased risks due to consortiums, joint ventures or other arrangements

We may seek to partner with other companies for both the financial resources and the technical expertise through joint ventures or other business entities. However, these relationships involve surrendering certain economic and operational rights to such partners. As a result, the Company’s return on assets operated by others depends upon a number of factors that may be outside of the our control, including the timing and amount of capital expenditures, the operator’s expertise and financial resources, the approval of other participants, the selection of technology and risk management practices. We may also get involved in disputes with these parties, including disputes regarding the quality and/or timelines of work performed by these parties. A failure by one or more of our partners to satisfactorily meet on a timely basis the agreed-upon commitments may materially and adversely impact our business, prospects, financial condition and results of operations.

43. We depend on third parties for major part of our business

Our operations are mostly conducted through third party contractors which expose us to various risks including fluctuations in contractor costs. Our businesses could also be negatively affected if we are not able to engage third parties with the necessary capabilities or capacity on reasonable terms, or if those we engage fail to meet

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their obligations (whether due to financial difficulties or other reasons), or make adverse changes in the pricing or other materials terms of our arrangements with them. If a third party contractor fails to perform or terminates a contract or abandons a project or in the event of insolvency or banckruptcy of such third party, our financial performance and operations will be signifincantly affected.

44. Our businesses are subject to conditions or events beyond our control, which could cause our financial results to deteriorate Our business operations are subject to unexpected disruptions and factors beyond our control. These conditions or events may have a significant impact on our operating results including labour disruptions, availability of skilled labour and manpower, fire and accidents, adverse weather conditions, equipment failure or repairs, environmental and regulatory matters.

45. Our business operations are dependent on our ability to maintain satisfactorily relations with local and

indigenous communities in the areas we operate in Some of our current and potential operations are located in or near communities that may regard these operations as being detrimental to them. Our ability to operate successfully is dependent on the strength of our relationships with communities in these areas. Community expectations are typically complex with the potential for multiple views that may be difficult to resolve. Opinion of and acceptance by the community may be subject to many factor such as experience with other related industries, operations of other groups, or local, regional or national events in other places where we operate. These disputes may lead to disruption in our operations and may increase our costs, thereby potentially impacting our revenue and profitability. In the extreme, our operations may be a focus for civil unrest or criminal activity, which can impact our operational and financial performance, as well as our reputation.

46. We require various approvals, licenses and permits and must comply with various statutory and regulatory requirements in connection with our business and operations, and any failure to comply with such requirements in a timely manner may adversely affect our operations. We operate in businesses that require us to maintain a wide range of licenses and permits under central and local and international laws and regulations. Any violation or the loss of or failure to obtain or renew any or all of these approvals, licenses, authorizations, certificates, filings and permits could limit our ability to conduct our business or lead to sanctions including termination of operations.

47. Our businesses may be adversely affected if we are unable to acquire land and associated surface rights to access our coal resources in our concession areas or our oil and gas resources. The successful implementation of our mining plans in our concession areas are subject to many factors The validity and/or ownership of land title and/or land use/occupancy rights within locations, facilities and concession area(s) in which we operate and/or may operate in future can be uncertain and may be contested. Similarly for our oil and gas exploration activities we may encounter restricted access to land necessary for drilling or laying pipelines. Although we will attempt to acquire satisfactory title and/or rights for any concession area(s) or oil and gas exploration sites in which we may operate and/or may operate in future, various risks pertaining to the ownership and/or validity of land title and/or land use/occupancy rights exist, such as restrictions on foreign ownership and compulsory acquisitions by the relevant government authorities. There is no assurance that we will be able to acquire satisfactory title and/or rights in these areas which we presently or may in future operate. In the event we are not able to obtain satisfactory title and/or rights in the relevant areas, we will not be able to carry out coal production operations or drilling operations, which may in turn, materially and adversely affect our business, financial performance, financial condition, results of operations and prospects.

48. The performance of the subsidiaries of our Company and their ability to declare dividends plays a

significant role in the financial position and results of our Company.

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The Company has 5 subsidiaries and 23 step down subsidiaries and 4 joint ventures, and we conduct our business operations through our Subsidiaries as well. The ability of these Subsidiaries/joint ventures to make dividend payments is subject to covenants under our loan documentation, applicable laws and regulations in India as well as the jurisdiction in which they are incorporated. In the event of a bankruptcy, liquidation or reorganization of a Subsidiary, our Company’s claim in the assets of such Subsidiary as a shareholder remains subordinated to the claims of lenders and other creditors. If our Subsidiaries or step down Subsidiaries are not profitable, our financial condition and results of operations may be adversely affected. Further in the event of dilution, the subsidiary may cease to be a subsidiary and its financials will not be consolidated in our financials. Further even though we may lose control or majority stake in our subsdiaries, we may continue to be burdened with various onerous financial obligations under performance guarantees or corporate guarantees extended by us in respect of these companies even after they cease to be our subsidiaries. For further details on our subsidiary and our step down subsidiaries see chapter on "Subsidiaries and Joint Ventures".

49. Our international operations require us to comply with a number of international regulations. We need to comply with a number of international regulations in countries outside of India. We may be additionally required to comply with the Foreign Corrupt Practices Act, 1977 ("FCPA"), which place prohibitions on providing anything of value to a foreign official for the purposes of influencing any act or decision of these individuals in their official capacity to help obtain or retain business, direct business to any person or corporate entity or obtain any unfair advantage. Any failure by us to adopt appropriate compliance procedures and ensure that our employees and agents comply with the FCPA and applicable laws and regulations in foreign jurisdictions could result in substantial penalties or restrictions on our ability to conduct business in certain foreign jurisdictions. The U.S. Department of The Treasury’s Office of Foreign Asset Control ("OFAC"), administers and enforces economic and trade sanctions against targeted foreign countries, entities and individuals based on U.S. foreign policy and national security goals. As a result, we may face restrictions on entering into transactions with certain targeted foreign countries, entities and individuals except as permitted by OFAC which may reduce our future growth and affect our financials adversely.

50. Our businesses are international in nature and we are exposed to the risks of doing business in different countries.

Some of our businesses, such as shipping, coal mining and oil and gas business are international in nature. As a result, we are exposed to risks typically associated with conducting business internationally, many of which are beyond our control. These risks include: • social, political or regulatory developments that may result in an economic slowdown in any • regions that we are currently operating in or intend to operate in future; • legal and contractual uncertainty due to the overlap of different legal regimes, and problems in • asserting contractual or other rights, across international borders or due to other reasons; • potentially adverse tax consequences, such as scrutiny of transfer pricing arrangements by • authorities in the countries in which we operate and increase of withholding and other taxes; • potential tariffs and other trade barriers; • changes in regulatory requirements; • Visa/ work permits for key personnel • the burden and expense of complying with the laws and regulations of various jurisdictions; and • terrorist attacks and other acts of violence or war. The occurrence of any of these events could have an adverse effect on our business, prospects, results of operations and financial condition.

51. Risk of doing business/operating in foreign countries such as Singapore, Indonesia and Nigeria.

We currently operate out of a number of countries globally, including Singapore, Indonesia and Nigeria.

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Typically operating business in foreign countries carries with it certain risks such as exposure to unfamiliar local economic, political, environmental and labour conditions, currency exchange control issues, non-conducive government policies towards foreign owned business, instability in governance etc. We cannot control these risks or predict the effect of any such event in the future on our business and profitability, and also our ability to continue uninterrupted operations in these countries.

52. We are subject to complex laws and regulations, including environmental laws and regulations, which can

adversely affect our business, results of operations, cash flows and financial condition, and our available cash.

Our operations are subject to numerous laws and regulations in the form of international conventions and treaties, national, state and local laws and national and international regulations in force in the jurisdictions in which our vessels operate or are registered, which can significantly affect the ownership and operation of our vessels. These requirements include, but are not limited to, the International Maritime Organization ("IMO"), International Convention on Civil Liability for Oil Pollution Damage of 1969 (as from time to time amended and generally referred to as "CLC"), the IMO International Convention for the Prevention of Pollution from Ships of 1973 (as from time to time amended and generally referred to as "MARPOL"), including designation of Emission Control Areas thereunder, the IMO International Convention for the Safety of Life at Sea of 1974 (as from time to time amended and generally referred to as "SOLAS"), the IMO International Convention on Load Lines of 1966 (as from time to time amended), Maritime Labour Convention ("MLC"). Compliance with such laws and regulations, where applicable, may require installation of costly equipment or operational changes and may affect the resale value or useful lives of our vessels. We may also incur additional costs in order to comply with other existing and future regulatory obligations, including, but not limited to, costs relating to air emissions including greenhouse gases, the management of ballast and bilge waters, maintenance. Our coal mining operations involve using large quantities of relocation of overburden and production of emissions from our coal crushing facilities, any of which could adversely affect the environment if not properly controlled and managed. We are subject to various Indonesian environmental and health and safety laws, regulations which governs aspects of our coal production operations, such as the discharge of substances into the air and water, the management and disposal of hazardous substances and wastes, site cleanup, groundwater quality and availability, plant and wildlife protection and the reclamation and rehabilitation of land after mining is completed. The costs associated with complying with these laws and our environmental standards and procedures affect our production costs.

53. We are subject to stringent labour laws and trade union activity. Our business may be affected due to disputes with our labours/employees. The various geographies in which we operate have stringent labour legislation that protects the interests of workers, including legislation that sets out detailed procedures for discharge of employees and dispute resolution and imposes financial obligations on employers upon employee layoffs. As a result of such stringent labor regulations, it is difficult for us to maintain flexible human resource policies, discharge employees or downsize, which may adversely affect our business, financial condition and results of operations.

In addition to our whole time employees we also employ labour for execution of our projects and the number of contract labourers may vary from time to time depending on the nature and quantum of work involved. Further officers and crew working on board our various vessels are represented by trade unions. We enter into contracts with independent contractors for completion of specified work. We cannot assure you that any disputes, work stoppages or strikes will not arise in the future. Increases in our labour costs and future disputes with our employees could adversely affect our business, financial condition or results of operations.

54. A shortage of skilled manpower could have an adverse effect on our business and financial condition

Our business requires a large number of skilled personnel to conduct operations. Recruiting, training and retaining such employees is critical to being able to continue to meet industry and customer demand and generate increasing revenue. The demand for skilled personnel in the businesses in which we operate is extremely high and we may not be able obtain skilled labour due to a shortage of such skilled workers. A material decrease in

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the supply of technically skilled officers could impair our ability to operate, or increase the cost of crewing our vessels, which would materially adversely affect our business, financial condition and results of operations.

55. We are dependent on our senior management personnel as well as the availability of qualified personnel and our business and operations will be adversely affected if we cannot attract and retain qualified personnel. Our Company is dependent on our senior management personnel, including members of our Board. If we lose the services of any of our key senior management, employees, it may be difficult to find, relocate and integrate adequate replacement personnel into our operations, which could seriously hamper our operations and the growth of our business. We are also dependent on qualified technical employees such as technical ship managers in our shipping business and geologists, and mining engineers for our exploration and mining operations. Moreover, the shortage of qualified, skilled and well trained officers and crew is a significant challenge faced by us in our shipping business, as they are essential to the success and safety of our operations. As such, we could experience difficulties in attracting, recruiting and retaining the appropriate number of specialists for our business needs. As our future performance will depend on the continued services of these specialists, a sudden loss of key personnel or the inability to manage the attrition rate in different employee categories could adversely affect the quality of our services, the growth of our business and result in increased costs.

56. We depend to a significant degree upon third-party managers to provide technical management services for our business operations.

Our shipping and dredging, offshore services and mining businesses require a large number of technicians and crew members for providing technical support in operating and maintaining the ships. These technicians are generally hired through third party recruiting agencies that are primarily appointed and are responsible for providing such personnel to the Company for providing such assistance. Any act of commission, omission or negligence on behalf of such recruiting agencies to provide the Company with such number of personnel required by the Company at a particular time may adversely affect the operations of the Company.

57. We may not be able to complete the work within the specified period in the contracts and may not get extension for the same

Any failure on our part to satisfactorily meet agreed upon commitments under any of the dredging, oil & gas, or EPC contracts within the stipulated time period may expose us to the risk of additional disputes, in the event that we are unable to obtain suitable extension in time lines for completion of the work. We may also have to pay liquidated damages if the work is not completed or if a dispute is decided against us.

58. Changes in demand for coal, oil and gas may adversely affect our business and profitability

The demand for conventional energy sources like coal and oil & gas, may be affected by increased competitiveness of alternative energy sources that have so far generally not been competitive with coal and oil & gas without the benefit of government subsidies or mandates, conservation measures; changes in technology, alternative fuel requirements, increasing consumer demand for alternatives to coal, oil and gas or consumer preferences that alter fuel choices, such as toward alternative fueled vehicles. We cannot predict the impact of changing demand for coal, oil and gas products, and any major changes may have a material adverse effect on our business, financial condition, results of operations and cash flows.

59. A financial crisis or deteriorating economic conditions may have material adverse impact on our businesses

The recent widespread global economic downturn was responsible for many economies experiencing a period of unprecedented turmoil and upheaval characterized by extreme volatility and declines in security prices, severely diminished liquidity and credit availability, inability to access capital markets, collapse or sale of various financial institutions and greater intervention by governments Although we cannot predict the exact impact on us of economic downturn, they could materially adversely affect our business and financial condition. Changes in oil and coal prices or global supply and demand dynamics due to an economic downturn could negatively impact the revenues, margins and profitability of our businesses.

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60. Technological advances affecting energy consumption will have an impact on our oil and gas business

With technological advances, it is likely that more efficient means of consumption will be discovered. The effect of this may be to reduce the overall demand for coal and oil & gas and the price of these products in areas using those technologies which could have a material adverse effect on our future financial performance and condition.

61. Our overseas transactions may be subject to increased scrutiny and control by government agencies

Certain transactions of our Company have been subject to enquiries and scrutiny by the Directorate of Enforcement and the RBI under Indian foreign exchange laws, in view of which the RBI has advised our Company to opt for compounding in respect of certain transactions with our overseas Subsidiaries. Our future overseas transactions may be subject to scrutiny and enquiries by these agencies, and we may further be required to seek approvals for transactions. We cannot assure you that such scrutiny and enquiry will not result in imposition of penalties, or that there will be no delays or denial of approval by government agencies, which may impact our future business operations and our ability to expand or invest in our operations overseas.

62. We are involved in various legal proceedings. Any adverse outcome in such proceedings may have a material adverse effect on our reputation, business, results of operations and financial condition. Our Company and some of our subsidiaries are currently involved in a number of legal proceedings in India. These legal proceedings are pending at different levels of adjudication before various courts and tribunals or arbitration. Unfavourable decisions in such proceedings may have an adverse effect on our business, results of operations and financial condition. For further details of these legal proceedings, please refer to the section titled "Litigation and Disputes" on page 194.

63. Our business depends on the protection of our patents and other intellectual property and may suffer if we are unable to adequately protect such intellectual property. Our success and ability to compete are substantially dependent upon our intellectual property. We rely on trademark and patent laws, trade secret protection and confidentiality or license agreements with our employees, consultants, strategic partners and others to protect our intellectual property rights. However, the steps we take to protect our intellectual property rights may be inadequate. There are events that are outside of our control that pose a threat to our intellectual property rights as well as to our products and services. Further, the efforts we have taken to protect our proprietary rights may not be sufficient or effective. Any impairment of our intellectual property rights could harm our business and our ability to compete. Also, protecting our intellectual property rights is costly and time consuming. Any increase in the unauthorized use of our intellectual property could make it more expensive to do business and harm our operating results.

64. Forward looking statements are subject to uncertainties and contingencies

Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control and many of which are subject to change. These uncertainties and contingencies could cause actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of our Company. Whether or not actual results differ materially from forward-looking statements may depend on numerous foreseeable and unforeseeable developments. Further, it is not possible to assess the impact of all risk factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

65. The interests of our Directors may cause conflicts of interest in the ordinary course of our business.

Approximately 40.22 per cent. of the Shares are owned directly or indirectly by Mr. H. K. Mittal (the Chairman of the Company) and his associates (the "Promoters Group") or entities owned or controlled by or acting in

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concert with the Promoters Group. Consequently, the Promoters Group is likely to have the ability to exercise significant control over most matters requiring approval by shareholders, including the election and removal of Directors and significant corporate transactions. This control could delay, defer or prevent a change in control of the Company, impede a merger, consolidation, takeover or other business combination involving the Company, or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company even if such action was in the best interests of the shareholders as a whole.

66. We have incurred losses in the past

We have incurred losses from operations in the pastmainly attributable to the significant global economic down turn that has affected our operations in the various business segments in which we operate and the high cost debt availed by us, which has also resulted in networth erosion. There is no assurance that we will make profit in future and may incur losses in future, which may affect our financial adversely.

67. Certain subsidiaries have negative networth

Some of our subsidiaries have reported losses and have negative net worth in the past. There is no guarantee that these or other subsidiaries will not incur losses in future. This may impact the financial results of our Company, the ability to pay dividend, service debt and take on further debt in future. This may also result in a breach of the financial covenants under various borrowing agreements, which could result in recall of the loans thereby affecting the operations, profitability, cash flows of our Company.

68. Our contingent liability could adversely affect our financial condition.

As of March 31, 2014, we have given certain guarantees, commitments etc aggregating to Rs.3330 million (Rs. 60.0998 = 1 U.S. dollar), that are outstanding and which may become actual liabilities. These may adversely affect our results of operations, cash flow and financial condition in the future.

69. Terrorist attacks, international hostilities and piracy could adversely affect our business, financial condition,

results of operations and cash flows

Terrorist attacks, such as the attacks on the United States on September 11, 2001 and more recent attacks in other parts of the world, and the threat of future terrorist attacks, continue to cause uncertainty in the world markets and may affect our business, financial condition, results of operations and cash flows, including cash available for distributions to our shareholders. The current turmoil in Iran, Russia and Ukraine, and the continuing hostilities in the Middle East, may lead to additional acts of terrorism, further regional conflicts and other armed actions around the world, which may contribute to further instability in the global economy. In the past, political conflicts have also resulted in attacks on ships, mining of waterways and other efforts to disrupt international shipping. Acts of terrorism and piracy have also affected ships trading in regions such as the South China Sea and the Gulf of Aden. Any terrorist attacks targeted at our ships may in the future negatively materially affect our business, financial condition, results of operations and cash flows and could directly impact our vessels or our customers.

Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Indian Ocean and in the Gulf of Aden. Although the frequency of sea piracy worldwide decreased during 2013, sea piracy incidents continue to occur, particularly in the Gulf of Aden off the coast of Somalia and increasingly in the Gulf of Guinea, with tankers particularly vulnerable to such attacks. If piracy attacks result in regions in which our vessels are deployed being characterized by insurers as "war risk" zones by insurers or Joint War Committee “war and strikes” listed areas, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew costs, including costs which may be incurred to the extent we employ onboard security guards, could increase in such circumstances. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, detention or hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability of insurance for our vessels, could have a material adverse impact on our business, results of

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operations, cash flows and financial condition and may result in loss of revenues, increased costs and decreased cash flows to our customers, which could impair their ability to make payments to us under our charters.

70. We are subject to macroeconomic risks linked to our operations in emerging and developing markets

A major portion of our businesses and projects are situated or operated in emerging market economies which are exposed to macroeconomic risks and are more prone to financial vulnerabilities due to rapid economic growth and substantial changes in their financial systems. Instability in the macroeconomic environment has made emerging market economies more susceptible to boom-bust cycles and to sudden corrections in asset prices, thus leading to higher risk of financial crisis, which in turn could adversely affect our projects and operations in these countries as also our overall profitability and our financials.

71. Our operations are in jurisdictions with inherent risks relating to fraud, bribery and corruption

Our operations are located in India, Indonesia and Africa which are challenging operating environments, and present risks ranging from political instability to fraud, bribery and corruption. For example, transparency within the oil and gas sector in Nigeria, one of Africa’s largest producing countries, has historically been a problem. Government purchases of goods and services and the awarding of lucrative contracts have been vulnerable to alleged corruption. In some cases, companies seeking to win a government contract may not be required to participate in a competitive bid process. Stakes in oil fields have been awarded to companies that may be acting as fronts for government officials. Often, there is little transparency into how or why a company that possesses an opaque ownership structure may receive a lucrative contract. Further the businesses in which we operate may be highly regulated or involve a greater amount of government contracts, and have frequent touch points with government agencies, which are not immune to bribery and corruption. During the past decade, international anti-bribery and corruption statutes have received increased attention. Major developments include an array of enforcement actions by the U.S. Department of Justice and the Securities and Exchange Commission concerning the FCPA, and the U.K. Bribery Act, 2010. We may also require totie up in joint ventures with either state-owned entities or foreign companies. In such instances, we, as well as our officers, may be liable for corrupt payments to foreign officials made by a business partner. Moreover we cannot assure you that our Company’s internal controls and procedures may not be sufficient to prevent fraud and ensure compliance with various anti-bribery and anti-corruption requirements.

72. Our development plans, exploration, appraisal and development of license areas is highly capital intensive, placing significant demands on our Company’s cash resources and funding requirements, if we are unable to obtain the necessary funds for such capital expenditure in a timely manner, our business may be adversely affected We require a significant amount of funds on capital expenditure requirements for our development, exploration, appraisal and development of coal and oil and gas licenses as well as any potential business opportunities which are favourable to our business, prospects and/or growth that we may encounter in future. We may need to use cash from operations, or incur additional borrowings or obtain additional debt or equity financing for the increase in capital expenditures or for the funding of these potential business opportunities. Additional equity financing may lead to a dilution in the interests of our Shareholders and reduce dividends payable (if any) on a per share basis. Should additional borrowings or debt financing be required or if cash from operations is used, our ability to pay dividends (if any) may be restricted due to a reduction in our available cash due to interest payments and/or principal repayments and/or restrictive covenants pertaining to the payment of dividends.

73. Risks associated with coal concessions and oil and gas exploration licenses We operate in the coal and oil and gas businesses under licenses and concessions awarded to us by government authorities. Our ability to conduct our operations successfully will be significantly impaired if we are unable to comply with the terms and conditions or perform our obligations under these licenses/concession, or if these licenses are revoked or cancelled or otherwise not renewed by the concerned authorities.

74. We may be adversely affected by any change in the current taxation regulations in the jurisdiction in which

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we operate

We currently enjoy certain tax benefits in India under the tonnage taxation system, under which income from the operation of all qualifying vessels is exempted from minimum alternate tax. Our ability to avail of tonnage tax benefits in India is subject to compliance of certain conditions, including: • minimum training of trainee officers on board of vessels in accordance with the guidelines of the Directorate

General of Shipping; • the annual transfer of a minimum amount of profit to the tonnage tax reserve account; and • utilisation of tonnage tax reserve fund only for specific purposes as specified in the Income Tax Act;

Failure to comply with any of the aforementioned conditions may adversely affect the availability of the benefits under tonnage tax system. In addition, each tonnage tax certificate is granted for a period of 10 years and we are required to renew our tonnage tax certificates to continue to enjoy the benefits of the scheme. There can be no assurance that we will be able to renew these certificates in a timely manner, or at all. Our Singapore subsidiaries MIPL, MLSL, MOHPL, MOPPL are Approved International Shipping ("AIS") enterprises , and enjoy certain tax exemptions extended under the AIS incentive scheme. The exemption is granted for an initial period of ten years and may be renewed thereafter. Our step down subsidiary MCS Holdings Pte Limited has been granted GTP status in respect of its coal trading business and enjoys concessionary tax rates on qualifying trade income. If we are lose our status as an AIS shipping company, or stop qualifying for benefits under GTP we will lose the benefit of various tax exemptions and concessions. For further details, see "Business" on page 93.

We conduct business operations in a number of countries, and are therefore subject to tax and intercompany pricing laws in multiple jurisdictions, including those relating to the flow of funds between our Company and its subsidiaries. Our effective tax rate in any given financial year reflects a variety of factors that may not be present in succeeding financial years, and may be affected by changes in the tax laws of the jurisdictions in which we operate, or the interpretation of such tax laws. Changes in tax laws, regulations and related interpretations and increased enforcement actions and penalties may alter the environment in which we do business, and tax planning arrangements are frequently scrutinized by tax authorities worldwide.

75. Acquisitions or strategic investments that we may undertake in the future involve a number of risks, any of which could cause us not to realize the anticipated benefits

Acquisitions and investments involve numerous risks, including:

• risk of entering new markets in which we have little or no experience; • potential write-offs of acquired assets or investments; • the potential failure to achieve the expected benefits of the combination or acquisition; • difficulties in and the cost of integrating operations, technologies, services and personnel; • diversion of financial and managerial resources from existing operations; • inability to generate sufficient revenue to offset acquisition or investment costs; • the inability to maintain relationships with customers and partners of the acquired business;

• challenges caused by distance, language and cultural differences

•

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Our failure to address these risks or other problems encountered in connection with our past or future acquisitions and investments could cause us to fail to realize the anticipated benefits of such acquisitions or investments, incur unanticipated liabilities, and harm our business generally.

Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, any of which could harm our financial condition or results. Also, the anticipated benefit of many of our acquisitions or investments may not materialize.

76. Significant differences exist between Indian GAAP and other accounting principles, such as U.S. GAAP and

IFRS, which may be material to investors’ assessments of our financial condition. Our failure to successfully adopt IFRS could have a material adverse effect on our stock price Our financial statements, including the financial statements provided in this Offering Circular are prepared in accordance with Indian GAAP. We have not attempted to quantify the impact of U.S. GAAP or IFRS on the financial data included in this Offering Circular, nor do we provide a reconciliation of our financial statements to those of U.S. GAAP or IFRS. Each of U.S. GAAP and IFRS differs in significant respects from Indian GAAP. Accordingly, the degree to which the Indian GAAP financial statements included in this Offering Circular will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting practices. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this Offering Circular should accordingly be limited. There can be no assurance that our financial condition, results of operations, cash flows or changes in shareholders’ equity will not appear materially worse under IFRS than under Indian GAAP. As we transition to IFRS reporting, we may encounter difficulties in the ongoing process of implementing and enhancing its management information systems. There can be no assurance that our adoption of IFRS will not adversely affect our reported results of operations or financial condition.

77. Any down grading of India's sovereign rating by a credit rating agency could have a negative impact on our business, financial condition and results of operations

Any adverse revisions to India's sovereign credit ratings for domestic and international debt by credit rating agencies may adversely impact the interest rates and other commercial terms at which such financing is available to us. Consequently, if India's sovereign credit rating downgrades, we may not be able to competitively price our loans and, accordingly, we may not be able to maintain the profitability or growth of our business. Additionally, if we are unable to competitively price our loans, we would be subjected to greater levels of prepayments on our loans as borrowers seek loans from our competitors that can offer lower priced loans resulting from their lower cost of capital. Accordingly, any adverse revisions to our credit rating or the India's sovereign credit rating could have a material adverse effect on our business, financial condition and results of operations, our ability to obtain financing for lending operations.

78. We are exposed to risks arising from foreign exchange fluctuations.

Our customer contracts capital expenditure and operating costs are generally denominated in U.S. dollars, and other foreign currencies. However, we report our financial results in Indian Rupees. As a result, our financial results are impacted by foreign currency fluctuations, and in particular fluctuations of the U.S. dollar, against the Indian Rupee which may affect our financial position.

We are also exposed to foreign exchange fluctuations in the event of mismatches between the amounts and timing of receipts and payments in foreign currencies. To the extent there are any such mismatches, a significant fluctuation in the applicable foreign currencies against the Indian Rupee arising from such timing differences, for example in respect of credit terms given to our customers and by our suppliers, we may incur foreign exchange losses.

79. The Company is controlled by certain shareholders and, if they take actions that are not in the Bondholders’ best interests it may harm the value of an investment in the Bonds

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As at March 31, 2014, approximately 40.22 per cent of the Shares are owned directly or indirectly by the Promoters and Promoter Group. Certain Shareholder’s resolutions under Indian law require 75 percent of the shareholders voting on the resolution, and the Promoter and Promoter Group could block the passage of such resolutions, even if that were in the best interests of shareholders or Bondholders as a whole. Further, the Promoters and Promoter Group (acting together) could delay, defer or prevent a change in our control, impede a merger, consolidation, takeover or other business combination involving us, or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain our control even if that were in the best interests of Shareholders or Bondholders as a whole.

80. We may be affected by adverse changes in the political, economic, regulatory or social conditions in the countries in which we operate or into which we intend to expand.

Our financial performance may be significantly affected by general economic, political and social conditions in the markets where we operate, particularly in India, Indonesia and Africa. Many countries in Africa and Asian sub continent have suffered significant economic, political and social crises in the past, and these events may occur again in the future. We cannot predict whether changes in political administrations will result in changes in governmental policy and whether such changes will affect our business. Factors related to economic, political and social conditions that could affect our performance include:

• significant governmental influence over local economies; • substantial fluctuations in economic growth; • high levels of inflation; • changes in currency values; • exchange controls or restrictions on expatriation of earnings; • high domestic interest rates; • changes in governmental economic or tax policies; • unexpected changes in regulation; and • overall political, social and economic instability.

Adverse economic, political and social conditions in these regions may create uncertainty regarding our operating environment or may affect our ability to renew our licenses and concessions, to maintain or increase our market share or profitability and may have an adverse impact on future acquisition efforts, which could have a material adverse effect on our company.

81. Changes in interest rates may affect our results of operations

Currently we have both domestic and also U.S. dollar loans. While our U.S. dollar borrowings are indexed to LIBOR, our rupee loans are indexed to the prime lending rates ("PLR") of banks. Any increase in LIBOR or in the PLR will increase our interest costs which in turn could adversely affect our financials. Reduction in interest rates in a falling interest rate regime may also affect our operations.

82. Most of our businesses are international in nature and we are exposed to international risks which may reduce revenue or increase expenses.

We currently conduct operations in Singapore, Indonesia, Nigeria and Mozambique. Our future operating results in these countries or in other countries or regions throughout the world could be negatively affected by a variety of factors, most of which are beyond our control. These factors include political conditions, including political instability, economic conditions, legal and regulatory constraints, currency regulations, and other matters in any of the countries or regions in which we operate, now or in the future. In addition, foreign currency exchange rates and fluctuations may have an impact on our future costs or on future cash flows from our International operations, and could adversely affect our financial performance. Moreover, the economies of some of the countries in which we have operations have in the past suffered from high rates of inflation and currency

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devaluations, which, if they occurred again, could adversely affect our financial performance. Additional risks inherent in our International operations generally include, among others, the costs and difficulties of managing international operations and adverse tax consequences.

83. Company has not entered into any definitive agreements to utilize the proceeds of issue.

We have not entered into any definitive agreements to utilize the net proceeds of the Issue. The deployment of funds is entirely at the discretion of our Board. Pending utilization of the proceeds, if any, of this Issue, investment in the proceeds of the Issue would be made in accordance with investment policies or investment limits approved of by our Board of Directors from time to time.

84. There may be conflicts of interest between our company and our related parties

Our Subsidiaries and related entities and other ventures may be engaged in a similar line of business as our Company and hence a potential conflict of interest may arise. A conflict of interest may occur between our business and the business of our Subsidiaries which could have an adverse affect on our operations.

II. RISKS ASSOCIATED WITH THE INDUSTRY

85. The operations of the Company are subject to maritime risks.

The operations of the Company may be exposed to piracy, war, sabotage and terrorism risks at sea which could potentially disrupt the operations of the Company. Also, the Company’s vessels are susceptible to arrests by maritime claimants which could result in significant loss for the Company. In times of emergency or wars, the Government could requisition the Company’s vessels without adequate compensation.

86. The demand and supply for Company’s vessels primarily depends on industry conditions.

The Company is engaged in the business of commodity transportation of crude oil, petroleum products, coal, iron-ore etc which involves a high level of dependence on the production of oil and gas. Thus, demand in these sectors will have a direct impact on the business of the Company. A decline in the demand for oil, coal or iron etc will adversely affect the business of the Company. Thus, often, the factors affecting the supply and demand for the vessel are beyond the control of the Company as the nature, timing and degree of changes in the industry conditions cannot be foreseen and are unpredictable.

87. The regulatory framework in Indonesia is evolving, and regulatory changes as and when introduced by the government could have a material adverse effect on our business, financial condition and results of operations.

Our operations in Indonesia are subject to various laws, regulations and governmental agencies, such as Kabupatein Paser Regency, Kutai Kartenegara Regency in Kalimantan, Indonesia. These regulations require us to possess various licenses or approvals from the central government and/or the regional government to carry out our coal mining and coal contracting activities. Mining in forest areas require specific permits to be obtained for utilisation of forestry areas.

We are also required to pay royalty at benchmark rates declared by the Indonesian government from time to time. Further coal trading activities, in particular coal export is subject to strict government regulations and taxes, and is permitted only on fulfillment of certain conditions as stated in such regulations. Any changes in the royalty rates or the method of calculation thereof or increase in tax on exports, or any changes in the Indonesian regulatory framework placing additional restrictions or ban on export of coal from Indonesia may have an impact on our operations and profitability. Further we cannot assure that we will be able to comply with future regulations.

88. Coal prices are subject to significant fluctuations and decine in the price may adversely affect the business of the Company.

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The prices of coal are subject to frequent fluctuations and any significant decline in the prices we receive for our coal could materially and adversely affect our business, financial condition, results of operations and prospects.

89. We are dependent on the offshore oil and gas industry for our offshore services business

As our customers operate mainly in the offshore oil and gas industry, our operations are dependent on the level of activity in the exploration, development and production of oil and gas, including the level of capital spending in the offshore oil and gas industry. Such activities are affected by factors such as volatility in demand for and supply of oil, fluctuations in current and future oil prices, the number, size and locations of oil fields, the demand for the supply of alternative fuels or energy supply, the prices of alternative fuels or energy supply, changes in capital expenditure by customers in the offshore oil and gas industry, and general economic, social and political conditions. These activities are also affected by laws, regulations, policies and directives relating to energy, investment and taxation and other laws and regulations promulgated by the various governments from which we must obtain licences and permits in order to continue to operate.

In the event that there is deterioration in the offshore oil and industry and offshore support services industry, or in global or regional economic conditions, oil and gas companies may defer or reduce their planned E & P expenditure which may reduce the demand for our vessels and services. This may result in a decrease in our business activities, and consequently our results of operations and financial condition may be materially and adversely affected.

90. The oil and gas industry is dependent on international oil demand and oil prices

Oil, gas and product prices and margins can be very volatile, and are subject to international supply and demand. Political developments (including conflict situations), increased supply from the development of new oil and gas sources, technological change, global economic conditions and the influence of OPEC can particularly affect world supply and oil prices. Decreases in oil, gas or product prices are likely to have an adverse effect on revenues, margins and profitability, and a material rapid change, or a sustained change, in oil, gas or product prices may mean investment or other decisions need to be reviewed, assets may be impaired, and the viability of projects may be affected. A prolonged period of low oil prices may impact our cash flow, profit and ability to maintain our long-term investment programme with a consequent effect on our growth rate.

91. The oil and gas industry is highly competitive.

The oil and gas industry in India is highly competitive. We compete with many government-controlled oil and gas exploration and production companies and as well as private sector Indian companies. Many of these competitors have greater financial resources than we do and some of them have greater influence in our highly regulated industry because of their government shareholdings, and therefore may be able to compete more effectively than us.

92. Governments of countries in which we operate exercise significant influence over the crude oil and natural gas industry.

Globally governments of countries, worldwide, exercise significant influence over economic and social policies, including those relating to our industry, and public policy or other considerations which might result in it taking actions which are contrary to the interests of our shareholders. Governments have historically played a key role, and are expected to continue to play a key role, in regulating, reforming and restructuring the oil and natural gas industry. The oil and gas industry worldwide is characterised by relatively frequent changes in economic and fiscal policy by governments depending largely on the prevailing world oil and gas price environment with periods of high prices usually resulting in an increased tax burden for the industry (whether through amendments to legislation or production sharing contracts, changes in

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interpretation of legislative or contractual terms or similar actions). Although the fiscal regime applicable to the Indian oil and gas industry has been relatively stable in the past, there can be no assurance that this stability will continue in the future.

93. The oil and gas industry is subject to a number of government regulations

The extraction and transport of oil and gas at sea is subject to inherent risks, such as blowouts, equipment defects, discharge of pollutants and oil spills, malfunctions, failures and misuses that could cause significant environmental damage, personal injury or loss of life and commercial damage. The offshore oil and gas industry is subject to regulations which aim to limit and control these risks, and to govern the removal and cleanup of pollutants that may harm the environment.

The laws and regulations applicable to the offshore oil and gas industry, including us, have generally become more stringent, and penalties and potential liability have increased and may increase further in the future. Any additional regulations could increase cost of our operations or those of our customers and reduce the area of operations for the offshore oil and gas industry, which could, in turn, materially and adversely affect our business financial condition, results of operation and prospects by reducing demand for our services.

94. Risk of delay in EPC Contracts

The performance of EPC contracts are subject to certain inherent risks and delays such as default by contractors, community unrest and local disputes, fraud by project participants and weather interruptions. These projects are therefore susceptible to delays and large cost overruns, which may also lead to breach of contract and substantial contractual penalties, which in turn may adversely affect our operations.

95. The performance of the Company is related to the growth of Ports in India.

The performance of the Company is heavily linked to the performance of the Indian economy and ports in India. Ports in India witnessed a boom since 2008 with the implementation of the National Maritime Development Program and emergence of new Private Ports. Dredging in India has not grown as estimated and there has been a slump in the industry mainly due to decrease in port traffic and the overall slowdown in the economy. These factors reduce the efficiency of the dredgers drastically by reducing the output and increasing the breakdown and repair time.

Thus, the performance of company largely depends on the encouragement it received from the Government by providing infrastructure and other support measures.

96. Dredging contracts may contain terms that favour the government entities Dredging contracts in Indian ports are generally awarded by the local port trusts, which are government entities. The contracts awarded are structured in a manner beneficial to government entities and may result in significant losses in case of contractual non-performance. In case of non-performance we may be required to pay liquidated damages or our performance guarantees may be invoked.

III. RISKS RELATING TO THE BONDS AND SHARES 97. Certain corporate actions to adjust the Conversion Price of our Bonds may require approval of the Indian

Ministry of Finance.

The Indian Ministry of Finance, through Notifications dated August 31, 2005 and November 2008, amended the FCCB Scheme and prescribed certain pricing guidelines in relation to the conversion of FCCBs. The FCCB Scheme provides, among other things, that the conversion price of FCCBs should not be lower than an "Initial Reference Price" which is calculated with reference to the two weeks immediately preceding the relevant date. The FCCB Scheme applies to the issue of our Bonds.

There can be no assurance that the potential adjustments to the Conversion Price which are provided for under

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the Terms and Conditions of our Bonds would be permitted by the Ministry of Finance if an adjustment resulted in the Conversion Price falling below the "Initial Reference Price" referred to above. There can also be no assurance (i) as to how the Ministry of Finance will apply or interpret the FCCB Scheme or whether the restrictions set forth in the FCCB Scheme would prevent our Company from undertaking certain corporate actions; or (ii) that the Ministry of Finance will not prescribe any further pricing guidelines which would deem any adjustments by way of certain corporate actions (including declaration of dividends, issue of Shares by way of capitalisation of profits or reserves and division of outstanding Shares) to be in contravention of the FCCB Scheme.

In the absence of any clarification from the Ministry of Finance regarding the new rules, there can be no assurance that these rules will not be applied such that the adjustments to the Conversion Price would be limited in a way that would result in the Bondholder not being fully protected against the dilutive events triggering the relevant adjustment. If these rules are applied in this manner, this could have a material adverse effect on the value of the Bonds.

98. Future issues or sale of our Shares may significantly affect the trading price of our Shares and such issues or

sale may not result in an adjustment to the conversion price provisions in the conditions and the Trust Deed.

A future issue of our Shares or the disposal of our Shares by any of our major shareholders, or the perception that such issues or sales may occur, may significantly affect the trading price of our Shares. Other than obtaining of consent from some of our lenders prior to altering our capital structure or use of funds, there is no restriction on our Company's ability to issue Shares or the ability of any of its shareholders to dispose of, encumber or pledge our Shares, and there can be no assurance that our Company will not issue Shares or that such issue will result in an adjustment to the conversion price provisions in the Conditions and the Trust Deed.

99. There are restrictions on daily movements in the price of the Shares, which may adversely affect a

Bondholder's ability to sell, or the price at which it can sell Shares at a particular point in time.

We are subject to a daily circuit breaker imposed by all stock exchanges in India which does not allow transactions beyond a certain level of volatility in the price of our Shares. This circuit breaker operates independently of the index-based market-wide circuit breakers generally imposed by the SEBI on Indian Stock Exchanges. The percentage limit on our Company's circuit breaker is set by the stock exchanges based on the historical volatility in the price and trading volume of our Shares. The stock exchanges do not inform our Company of the percentage limit of the circuit breaker from time to time, and may change it without our Company’s knowledge. This circuit breaker effectively limits the upward and downward movements in the price of our Shares. As a result of this circuit breaker, there can be no assurance regarding the ability of our Shareholders to sell our Shares or the price at which Shareholders may be able to sell their Shares at a particular point in time. In addition limits on trading may be imposed on equity securities in general if certain index based prices are exceeded.

100. Holders of the Bonds may face uncertainties in their ability to convert Bonds into Shares and any conversion

may be subject to delay.

India's restrictions on foreign ownership of Indian companies limit the number of shares that may be owned by foreign investors and, in certain scenarios, require the Government's approval for foreign ownership. Investors who convert Bonds into Shares will be subject to Indian regulatory restrictions on foreign ownership upon such conversion. Similarly, investors who convert Bonds into Shares may be required to make an open offer (public offer) under the Takeover Code if such Shares, together with the existing Shares held by that investor together with "persons acting in concert" exceed the prescribed trigger limits. It is possible that this conversion process may be subject to delays. For a discussion of the legal restrictions triggered by conversion of the Bonds into Shares, see "The Securities Market of India" and "Foreign Investment and Exchange Controls".

101. The ability to sell Shares to a resident of India may be subject to certain pricing restrictions.

A person resident outside India (including an NRI) is generally permitted to transfer by way of sale the shares held by him to any other person resident in India without the prior approval of the RBI or the FIPB. However, the price at which the transfer takes place must comply with the pricing guidelines prescribed by the RBI in its

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Circular dated May 4, 2010. The guidelines stipulate that where the shares of an Indian company are traded on a stock exchange then the sale price shall not be more than the minimum price at which such transfer of shares can be made from a resident to a non-resident. The guidelines further clarify that the sale price for transfer of shares made by a resident to a non-resident shall not be less than the price at which a preferential allotment of shares can be made under the SEBI Guidelines as applicable.

102. Right to receive payment on the Bonds are subordinated to our Company's secured indebtedness.

Our Company on a consolidated basis has secured indebtedness of Rs. 36,648.69 million and unsecured indebtedness of Rs. 497.90 million (Rs. 60.0998 = 1 U.S. dollar) at March 31, 2014. The Bonds will be effectively subordinated to any of our Company's secured obligations with respect to the assets that secure such obligations.

103. The Bondholders will have no voting rights in respect of the Shares.

The Bondholders will acquire voting rights in respect of the Shares only upon the conversion of the Bonds. However, if our Company is unable to pay interest on the Bonds, the Bondholder (in the capacity of a creditor of our Company) can seek the winding-up of our Company in accordance with the provisions of the Companies Act. In the event of any merger or amalgamation or takeover of our Company, the Bondholder shall have voting rights in a creditor's meeting, along with other creditors of our Company, if any, as per the provisions of the Companies Act. Any dues pertaining to the Bonds shall rank pari passu with unsecured creditors.

104. If there is a change in tax regulations, our Company's tax liabilities may increase and thus adversely affect its

financial result.

Various taxes, duties, cess and other levies are imposed by Government, state governments and other local authorities in India that affect he Company. An increase in the rates of these taxes, duties, cess or other levies or the imposition of new taxes, duties, cess or other levies in the future, may have a material adverse effect on our Company.

The central or state governments in India may in the future increase corporate income tax or other taxes that they impose. Any such future increases or amendments may affect the overall tax efficiency of companies operating in India and may result in significant additional taxes becoming payable. Additional tax exposure could have a material adverse effect on our Company's business, financial condition and results of operations.

IV. RISKS RELATING TO INDIA 105. Indian law imposes certain restrictions on our Company's free raising of capital abroad through the issue of

securities.

Indian law imposes certain restrictions on our Company's free raising of capital abroad through the issuance of equity or convertible debt securities. The Government of India has classified the existing business sectors into various categories for automatic approval of foreign direct investment up to certain prescribed passages.

106. A significant change in the Central and State Governments' economic liberalization and deregulation policies

could disrupt our Company's business.

In the recent years, India has been following a course of economic liberalization and deregulation and our Company's business and financial conditions or prospects could be significantly influenced by economic policies adopted by the Government. Since 1991, successive Indian Governments have pursued policies of economic liberalization and financial sector reforms, including significantly relaxed restrictions on the private sector.

The Government has at various times announced its general intention to continue India's current economic and financial liberalization and deregulation policies that have been pursued by previous Governments. However there is no assurance that the liberalisation policies will continue in the future. However, allegations of corruption and protests against privatizations, which have occurred in the past, could slow the pace of liberalization and deregulation. The rate of economic liberalization could change, and specific laws and policies

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affecting foreign investment, currency exchange rates and other matters affecting investment in India could change as well.

The Government has traditionally exercised and continues to exercise influence over many aspects of the economy. Our Company's business and the market price and liquidity of Shares may be affected by interest rates, changes in Government policy, taxation, social and civil unrest and other political, economic or other developments in or affecting India. The current Government is a coalition of several parties. The withdrawal of one or more of these parties could result in political instability. Such instability could delay the reform of the Indian economy and could have a material adverse effect on the market for securities of Indian companies, including the Shares and the Bonds, and on the market for our Company's products.

A change in the policies of the Government in the future could adversely affect business and economic conditions in India and could also adversely affect our Company's financial condition and results of operations. A significant change in India's economic liberalization and deregulation policies could disrupt business and economic conditions in India generally, and specifically those of our Company, as substantially all of our Company's assets are located in India.

107. Financial instability in other countries, particularly countries with emerging markets, could disrupt Indian

markets and our Company's business and cause volatility in our Share prices.

The Indian financial markets and the Indian economy are influenced by economic and market conditions in other countries, particularly emerging market countries in Asia. Although economic conditions are different in each country, investors' reactions to developments in one country can have adverse effects on the securities of companies in other countries, including India. A loss of investor confidence in the financial systems of other emerging markets may cause volatility in Indian financial markets and, indirectly, in the Indian economy in general. Any worldwide financial instability could also have a negative impact on the Indian economy. This in turn could negatively impact the movement of exchange rates and interest rates in India.

Accordingly, any significant financial disruption could have an adverse effect on our Company's business, future financial performance and our Share prices.

108. Terrorist attacks and other acts of violence or war involving India or other countries could adversely affect

the financial markets, result in loss of client confidence, and adversely affect our Company's business, financial condition and results of operations.

India has from time to time experienced hostilities with neighbouring countries, including Pakistan. In recent years, military confrontations between India and Pakistan have occurred along the India-Pakistan border, although the Governments of India and Pakistan have recently engaged in conciliatory efforts. Military activity or terrorist attacks in the future could impact the Indian economy by disrupting communications and making travel more difficult. Such political tensions could create a perception that investments in Indian companies involve a higher degree of risk.

Events of this nature in the future, as well as social and civil unrest, could influence the Indian economy and could have a material adverse effect on the market for securities of Indian companies, including the Bonds or the Shares, and on the business of our Company. In addition, India has from time to time experienced social and civil unrest due to religious strife.

Terrorist attacks and other acts of violence or war involving India, the United States and other countries could adversely affect the financial markets, result in a loss of business confidence and adversely affect our Company's business, results of operations and financial condition.

Terrorist attacks, such as the ones that occurred in New York and Washington D.C on September 11, 2001, in New Delhi on December 13, 2001, in Mumbai on August 25, 2003, in Northeast India in October 2004, in Mumbai on 26/27 November 2008 and other acts of violence or war involving India, the United States and other countries could adversely affect the Indian and other worldwide financial markets, result in a loss of business confidence and adversely affect our Company's business, results of operations or financial conditions.

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109. Natural calamities could have a negative impact on the Indian economy and cause our Company's business to suffer.

India has experienced natural calamities such as earthquakes, floods and drought in the recent past. The extent and severity of these natural disasters determine their impact on the Indian economy. In previous years, many parts of India received significantly less than normal rainfall. As a result, the agricultural sector recorded minimal growth. Prolonged spells of below normal rainfall in the country or other natural calamities could have a negative impact on the Indian economy, affecting its business.

110. Conditions in the Indian securities market may affect the price or liquidity of our Shares.

The Indian securities markets are smaller and may be more volatile than securities markets in certain Organisation for Economic Cooperation and Development ("OECD") member states. 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 the US and Europe. Indian Stock Exchanges have in the past experienced substantial fluctuations in the prices of listed securities. Indian Stock Exchanges have experienced problems that have affected the market price and liquidity of the securities of Indian companies, such as temporary exchange closures, broker defaults, settlement delays and strikes by brokers. In addition, the governing bodies of the Indian Stock Exchanges have from time to time restricted securities from trading, limited price movements and increased margin requirements. Further, disputes have occurred on occasion between listed companies and the Indian Stock Exchanges and other regulatory bodies that, in some cases, have had a negative effect on market sentiment. Similarly, adverse conditions in the global securities market have also adversely affected sentiments in Indian markets. If similar problems occur in the future, the market price and liquidity of the Shares could be adversely affected. Historical trading prices, therefore, may not be indicative of the prices at which the Shares will trade in the future.

There is a lower level of regulation and monitoring of the Indian securities markets and the activities of investors, brokers and other participants than in certain OECD countries. The SEBI received statutory powers in 1992 to assist it in carrying out its responsibility for improving disclosure and other regulatory standards for the Indian securities markets. Subsequently, the SEBI has prescribed certain regulations and guidelines in relation to disclosure requirements, insider dealing and other matters relevant to the Indian securities markets. There may, however, be less publicly available information about Indian companies than is regularly made available by public companies in certain OECD countries.

For more information on the securities market in India, see "The Securities Market of India" in the Offering Circular.

111. There may be less company information available in the Indian securities markets than securities markets in

developed countries.

There may be differences between the level of regulation and monitoring of the Indian securities markets and the activities of investors, brokers and other participants and that of the markets in the United States and other more developed countries. The SEBI is responsible for approving and improving disclosure and other regulatory standards for the Indian securities markets. The SEBI has issued regulations and guidelines on disclosure requirements, insider trading and other matters. There may, however, be less publicly available information about Indian companies than is regularly made available by public companies in more developed countries.

112. Rights of shareholders under Indian law may be more limited than under the laws of other jurisdictions.

The Articles of Association and Indian law govern our Company's corporate affairs. Legal principles relating to these matters and the validity of corporate procedures, Directors' fiduciary duties and liabilities, and shareholders' rights may differ from those that would apply to a company/body corporate 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 a shareholder than as a shareholder of a corporation in another jurisdiction.

113. You may be subject to Indian taxes arising out of capital gains on the sale of the Company’s Shares following

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your exercise of conversion rights.

Sale of the Shares issued on conversion of the Bonds, whether to an Indian resident or to a person resident outside India and whether in India or outside India, would be subject to tax in India. Under applicable Indian laws, a sale of Shares may be chargeable to a transaction tax and/or tax on income by way of capital gains in India. See "Taxation". Investors are advised to consult their own tax advisers and to consider carefully the potential tax consequences of an investment in the Bonds or Shares under the laws of India or any other applicable jurisdiction.

114. Investors may not be able to enforce a judgment of a foreign court against our Company.

Our Company is a limited liability company incorporated under the laws of India. Substantially all of our Company's Directors and executive officers are residents of India and a substantial portion of its assets 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 outside India or to enforce judgments obtained against such parties outside India.

Recognition and enforcement of foreign judgments is provided for under Section 13 and Section 44A of the Civil Code on a statutory basis. Section 13 of the Civil Code provides that foreign judgments shall be conclusive regarding any matter directly adjudicated upon except: (i) where the judgment has not been pronounced by a court of competent jurisdiction; (ii) where the judgment has not been given on the merits of the case; (iii) where it appears on the face of the proceedings that the judgment is founded on an incorrect view of international law or a refusal to recognize the law of India in cases to which such law is applicable; (iv) where the proceedings in which the judgment was obtained were opposed to natural justice; (v) where the judgment has been obtained by fraud; or (vi) where the judgment sustains a claim founded on a breach of any law then in force 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.

India is not a signatory to any international treaty in relation to the recognition or enforcement of foreign judgments. 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. However, Section 44A of the Civil Code is applicable only to monetary decrees which are not of the same nature as amounts payable in respect of taxes, other charges of a like nature or in respect of a fine or other penalties.

For the purposes of this section, foreign judgment means a decree which is defined as a formal expression of an adjudication which, so far as regards the court expressing it, conclusively determines the rights of parties with regard to all or any of the matters in controversy in the suit. The United Kingdom, Singapore and Hong Kong have been declared by the Government to be a reciprocating territory for the purposes of Section 44A of the Civil Code but the United States has not been so declared. A judgment of a court of a country which is not a reciprocating territory may be enforced in India only by a suit upon the judgment under Section 13 of the Civil Code, and not by proceedings in execution. The suit must be brought in India within 3 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 foreign judgments if it viewed the amount of damages awarded as excessive or inconsistent with public policy. 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 and any such amount may be subject to income tax in accordance with applicable laws. It is uncertain whether an Indian court would enforce foreign judgements that would contravene or violate Indian law.

115. Any downgrading of India's sovereign debt rating by an international rating agency could have a negative

impact on our Company's business.

Any adverse revisions to India's credit ratings for domestic and international sovereign debt by international rating agencies may adversely impact our Company's ability to raise additional financing, and the interest rates and other commercial terms at which such additional financing may be available. This could have an adverse

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effect on our Company's business and future financial performance, its ability to obtain financing for capital expenditures and the trading price of the Shares.

116. Foreign investors are subject to foreign investment restrictions under Indian law that limit our Company's ability to attract foreign investors, which may adversely impact the market price of our Shares.

Under the foreign exchange regulations currently in force in India, transfers of existing shares or convertible debentures between non-residents and residents are freely permitted (subject to certain exceptions) if they comply with the pricing guidelines and reporting requirements specified by the RBI. If the transfer of shares is not in compliance with such pricing guidelines or reporting requirements or fall under any of the exceptions referred to above, one must obtain prior approval from RBI. There is no guarantee that in such cases where such approval of RBI is required it will be obtained in a timely manner. Due to possible delays in obtaining requisite approvals investors in Bonds may be prevented from realising gains during periods of price increases or limiting losses during periods of price decrease. Additionally, shareholders who seek to convert the Rupee proceeds from a sale of shares in India into foreign currency and repatriate that foreign currency from India will require a no objection/tax clearance certificate from the income tax authority. Our Company cannot assure investors that any required approval from the RBI or any other Government agency can be obtained on any particular terms or at all.

117. RBI approval is required for repayment of the Bonds prior to maturity.

Under the guidelines on policies and procedures for external commercial borrowings issued by the RBI, any prepayment (except for the buyback/prepayment of FCCBs, which is governed by notification A.P. (DIR Series) Circular No. 39, dated December 8, 2008 as amended by A.P. (DIR Series) Circular No. 58, dated March 13, 2009 which was further amended by A.P. (DIR Series) Circular No. 65 dated April 28, 2009, A. P. (DIR Series) Circular No.75 dated June 30, 2011 and Circular No.1 dated July 5, 2012 (the "FCCB Buyback Guidelines") of an external commercial borrowing prior to its minimum average maturity requires the prior approval of the RBI. Therefore, any repayment of the Bonds prior to maturity as a result of early redemption or acceleration of repayment of the Bonds would require the prior approval of the RBI. There can be no assurance that RBI will grant this approval in a timely manner or at all. Our Company may not be able to redeem all or any of such Bonds or pay all amounts due under the Bonds if we do not receive the RBI approval.

118. Holders of Shares could be restricted in their ability to exercise preemptive rights under the applicable

securities of any relevant jurisdiction and could thereby suffer future dilution of their ownership interest.

Under the Companies Ac, an Indian company proposing to issue further shares must offer holders of its equity shares preemptive rights to subscribe and pay for a proportionate number of shares to maintain their existing ownership percentages prior to the issuance of any new equity shares, unless the pre-emptive rights have been waived by the adoption of a special resolution by holders of three-fourths of the shares voted on such resolution. The Listing Agreement which applies to Indian companies also contains similar provisions. However, if the law of the jurisdiction that you are in does not permit the exercise of such preemptive rights without us filing an offering document with the applicable authority in such jurisdiction, you will be unable to exercise such preemptive rights unless we make such filing. Our Company may elect not to file an offering document in relation to preemptive rights otherwise available by Indian law to you. To the extent that you are unable to exercise preemptive rights granted in respect of the Shares, your proportional interests in us may be reduced.

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RECENT DEVELOPMENTS

Recent material developments since 30th September 2013: • In March 2014, Company has acquired one VLGC, total cost of which is about U.S. $ 35 million.The total

cubic capacity of our VLGC is 76,933 Cub.m. and DWT of 50,400.The acquisition of the VLGC has been part funded by way of foreign currency loan of U.S. $ 30 million.

• Our Company has been sanctioned a ECB facility of U.S. $ 18 million, proceeds of which are to be utilized towards conversion of an existing Tanker vessel into an FSO.

• Our Company has been sanctioned a loan equivalent to U.S. $ 15.50 million proceeds of which are to be partly utilized towards repayment of existing Long-term debt. In March 2014, the Company has availed borrowings of U.S. $ 1.74 million or Rs. 104.67 million (Rs 60.0998 = 1 U.S dollar). Further in April 2014 the Company has availed U.S. $ 2.993 million or Rs. 180 million (Rs 60.14 = 1 U.S dollar),

• In April 2014, MPL, as part of a consortium, has been chosen as the selected candidate by the Ministry of Energy of the Republic of the Union of Myanmar, for two shallow water offshore oil blocks, in the Myanmar Offshore Block Bidding Round – 2013, where MPL’s share is 30%.

• We have entered into an agreement for purchase of an old jack up drilling rig on behalf of ourcustomer for U.S. $ 12 million and have taken the delivery of the same. The jackup will not be utilized for drilling operations.

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MARKET PRICE INFORMATION As at the date of this Offering Circular, 244,892,073 Shares were issued and outstanding. The Shares are listed on the NSE and BSE. However, as the Shares are actively traded on the NSE and BSE, the stock market data has been given separately for each of these stock exchanges. Our Company's shares have been listed on the BSE since February 14, 1994 and subsequently on NSE on June 20, 2005. The following table shows the high/low market prices and the average daily equity share trading volume of our Shares on the BSE and the NSE during the indicated periods.

Calendar period

BSE NSE High

(Rs. per Share)

Low (Rs. per Share)

Share trading volume (Rs. in

million)

High Low Share trading volume (Rs. in million)

2013 April 15.45 13.10 13.73 15.55 13.15 48.38 May 15.75 12.60 20.30 15.75 12.65 76.74 June 13.50 10.51 17.80 13.20 10.50 60.80 July 14.20 9.60 20.67 14.30 9.55 95.22 August 11.25 9.10 10.68 11.40 9.00 40.94 September 15.30 10.25 67.14 15.30 10.25 228.24 October 16.00 12.25 39.20 16.25 12.20 103.07 November 16.05 12.20 55.35 15.95 12.10 91.48 December 21.00 15.90 115.10 21.10 15.85 259.90 2014 January 21.00 17.65 60.54 20.95 17.65 153.17 February 19.65 16.9 30.09 19.70 16.90 61.26 March 25.65 16.9 169.23 25.70 16.90 323.19 April 36.50 24.15 425.75 36.50 24.00 930.99 May (Up to 23rd May)

40.00 27.80 253.73 39.65 28.15 629.64

Source: BSE Website, NSE Website The closing price per Share on the BSE on May 23, 2014 was Rs. 38.25 which at the Rupee/U.S. dollar exchange rate on that date, as quoted by RBI, of Rs. 58.48 = U.S.$1.00, was equivalent to U.S.$ 0.65 The closing price per Share on the NSE on May 23, 2014 was Rs. 38.25 which at the Rupee/U.S. dollar exchange rate on that date, as quoted by RBI, of Rs. 58.48 = U.S.$1.00, was equivalent to U.S.$ 0.65 For as long as the Shares are listed on the BSE and the NSE, the trading and closing price of the Shares will be available on www.bseindia.com and www.nseindia.com.

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DIVIDENDS AND DIVIDEND POLICY

Under the Companies Act, an Indian company pays dividends upon a recommendation by its board of directors and approval by a majority of the shareholders, who have the right to decrease but not to increase the amount of the dividend recommended by the board of directors. Under the Companies Act, dividends may be paid out of profits of a company in the year in which the dividend is declared or out of the undistributed profits or reserves of previous Financial Years or out of both. Our Company does not have a formal dividend policy. The declaration and payment of dividend will be recommended by the Board of Directors and approved by its Shareholders, at their discretion, and will depend on a number of factors, including but not limited to its profits, capital requirements and overall financial condition. Certain loan agreements to which the Company is a party require it to obtain the consent of and/ or give prior notice to lenders before making dividend payments in the event of debt service default. See “Risk Factors – Any significant indebtedness in the future could adversely affect our financial condition and results of operations. We are subject to certain restrictive covenants under our current financing arrangements.”. The following table sets forth the aggregate number of outstanding Shares entitled to dividends, as well as the cash dividends provided on the Shares in respect of each of the financial years indicated. Financial

Year Payment date Equity Share capital Face Value per

shareDividend per

Share Total dividend

(Number of Shares) (Rs.) (Rs.) (in Rs. millions) 2006 (I) October 26, 2005 7,26,97,000 1 1.50 109.04 2006 (F) July 31, 2006 18,92,42,500 1 0.30 56.77 2007 September 26, 2007 18,92,42,500 1 1.00 189.24 2008 July 16, 2008 23,48,95,387 1 1.10 258.38 2009 September 24, 2009 23,59,92,073 1 0.50 117.99 2010 September 7, 2010 23,59,92,073 1 0.20 47.19 The Company has not paid any dividened since the Financial Year of 2011. For information relating to taxes payable on dividends, see "Taxation"on page 170. Under the Companies Act, 2013 as also the Articles of Association the Board has been granted the discretion to declare and pay interim dividends without obtaining Shareholder approval. When dividends are declared, all the Shareholders whose names appear in the share register as at the "Record Date" or "book closure date" are entitled to be paid the dividend declared by our Company. Any Shareholder who ceases to be a Shareholder prior to the Record Date, or who becomes a Shareholder after the Record Date, will not be entitled to the dividend declared by our Company.

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CAPITALISATION The table below sets forth, our unaudited capitalisation and indebtedness as at 30th September 2013, as adjusted to account for the issue of the Bond. Save for such adjustments and for the matters referred to in the notes below, there has been no material change in our capitalisation and indebtedness since 30th September 2013. This table should be read in conjunction with our financial statements and related notes appearing elsewhere in the Offering Circular. As at 30 September 2013 Before FCCB issue After FCCB issue (Rs.) (U.S.$) (Rs.) (U.S.$) (in million) Short-term debt Secured debt 5,621.11 96.12 5,621.11 96.12 Unsecured debt 286.89 4.91 286.89 4.91 Total short-term debt 5,908.00 101.02 5,908.00 101.02 Long-term debt Secured debt 32,014.99 547.42 32,014.99 547.42 Unsecured debt - - - - The Proposed Bonds now being issued - - 935.73 16.00 Total long-term debt 32,014.99 547.42 32,950.72 563.42 Shareholders' funds Issued Share capital: 244.89 Million Shares of Re. 1.0 each fully paid 244.89 4.19 244.89 4.19 Reserves and Surplus 23,699.60 405.24 23,699.60 405.24 Minority Interest 5,364.46 91.73 5,364.46 91.73 Total shareholders' funds 29,308.95 501.15 29,308.95 501.15 Total Capitalisation 67,231.95 1,149.60 68,167.67 1,165.60 Notes:

1. Rupee amounts are translated for convenience into U.S. dollars on the basis of the noon buying rate as provided by RBI on May 23, 2014, for cable transfers in Rupees, of Rs. 58.483 = 1 U.S. dollar.

2. The anticipated gross proceeds of the issue of the Bonds, amounting to U.S. $ 16 million (assuming the full

exercise of the overallotment option of U.S. $ 2 million), are translated into Rupees on the basis of the noon buying rate as provided by the RBI on May 23, 2014, for cable transfers Rupees, of Rs. 58.483 = 1 U.S. $.

3. We have issued various guarantees in the normal course of its business.

4. Secured debt is secured by charges on some of our assets in favour of the secured lenders of the Company.

5. Reserves and surplus includes security premium reserve, a general reserve, a capital reserve, a capital

redemption reserve, a tonnage tax reserve, a debenture redemption reserve, a foreign exchange fluctuation reserve, a foreign exchange currency translation reserve, a foreign currency monetary item translation

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difference account reserve, a hedging reserve and includes profit and loss account (as reviewed upto 30th September 2013).

6. Company’s unaudited consolidated profit after Minority Interest for the quarter ended December 2013

amounting to Rs. 171.56 million has not been included.

7. Apart from the Short-Term debt, since 30th September 2013, we repaid Rs. 45.09 million of Rupee loans and U.S. $ 26.82 millions of foreign currency loans out of the outstanding long-term debts and have taken additional long term debts amounting to U.S. $ 31.74 million or Rs. 1907.66 million (considering Rs. 60.0998 = 1 U.S. dollar), which have not been considered.

8. In April 2014, the Company has availed USD 2.993 million or Rs.180 million (considering Rs. 60.14 = 1 U.S.

dollar) to be utilized for repayment of existing long term debt and has not considered in the above long term debt.

9. Company has taken an approval for issue of ESOP upto 11,800,000 Shares, of which none have been issued and outstanding.

10. Total capitalization consists of long-term debts, short-term debt and total Shareholders’ funds.

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USE OF PROCEEDS

Our Company estimates that the net proceeds from the offering of the Bonds after deduction of fees, commissions and expenses will be approximately US$ 15,830,000 . Our Company will utilise the net proceeds in compliance with and as permitted under the applicable laws and regulations, including RBI guidelines or approvals, for purposes including capital expenditure, repayment of debt, investment in overseas subsidiaries and to invest the temporary surplus funds in treasury and / or other permissible purposes.

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SELECTED FINANCIAL INFORMATION

The following selected consolidated financial information for the years ended 31 March 2012, 2013 and for the half year ended September 2012 and 2013, the profit and loss statement for the nine months ended 31 December 2012 and 2013 should be read in conjunction with the Company’s audited consolidated financial statements and schedules and notes thereto and the Company’s unaudited consolidated financial statements included elsewhere in this Offering Circular. The selected consolidated income statement data and balance sheet data for the years ended 31 March 2012 and 2013 set forth below have been derived from the Company’s audited consolidated financial statements for such years, which have been prepared in accordance with Indian GAAP and have been audited by M/s CNK & Associates LLP, Chartered Accountants, the Company’s independent Statutory Auditor. The selected consolidated income statement data and balance sheet data for the six months ended September 2012 and 2013 and the selected consolidated income statement data for 31 December 2013 set forth below have been derived from the Company’s unaudited consolidated financial statements (see "Index to the Financial Information"), subject as provided in the following paragraph. Neither the information set forth below nor the format in which it is presented should be viewed as comparable to information prepared in accordance with IAS/IFRS or other accounting principles. Indian GAAP differs in certain material respects from IAS and IFRS.

Audited Consolidated Balance Sheet as at March 31, 2013 and March 31, 2012

As at As at Particulars 31. March 2013 31. March 2012

Amount Rs. in

Millions Amount Rs. in

Millions A EQUITY AND LIABILITIES

1 Shareholder's funds

(a) Share capital 244.89 244.89

(b) Reserves and surplus 21,717.60 24,710.11

(c) Money received against share warrants - 259.60

21,962.49 25,214.60 Minority interest 4,290.88 4,277.99

26,253.37 29,492.60 2 Non - current liabilities

(a) Long-term borrowings 25,847.74 27,426.33

(b) Other long term liabilities 78.41 500.79

(c) Long-term provisions 42.89 39.86

25,969.03 27,966.98 3 Current liabilities

(a) Short-term borrowings 4,549.72 3,442.41

(b) Trade payables 5,028.39 2,636.02

(c) Other current liabilities 6,457.88 7,287.10

(d) Short-term provisions 383.25 4.59

16,419.24 13,370.11

Total 68,641.64 70,829.68

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B ASSETS

1 Non- current assets

(a) Fixed assets

(i) Tangible assets 44,814.76 56,996.26

(ii) Assets held for disposal 5,346.25 -

(iii) Capital work in progress 358.80 312.92

50,519.81 57,309.18

Goodwill on consolidation 161.33 151.74

(b) Non-current investments 295.87 289.80

(c) Deferred tax asset 102.90 46.77

(d) Long-term loans and advances 2,107.02 1,387.15

(e) Other non-current assets 276.02 297.71

53,462.96 59,482.35

2 Current assets

(a) Current investments 54.58 117.38

(b) Inventories 351.41 932.28

(c) Trade receivables 6,571.17 5,087.53

(d) Cash and bank balances 3,410.65 2,533.20

(e) Short-term loans and advances 2,877.19 2,459.56

(f) Other current assets 1,913.69 217.38

15,178.69 11,347.33

Total 68,641.64 70,829.68

Audited Consolidated Statement of Profit and Loss for the year ended March 31, 2013 and March 31, 2012

Year Ended Year Ended Particulars 31. March 2013 31. March 2012

Amount Rs. in Millions

Amount Rs. in Millions

INCOME

(a) Revenue from operations 37,333.54 36,999.08

(b) Other income 257.09 651.26

1 Total Revenue 37,590.62 37,650.34

EXPENSES:

(a) Operating expenses 30,722.16 29,978.00

(b) Employee benefit expenses 576.50 477.26

(c) Finance cost 2,450.38 2,129.47

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(d) Depreciation and amortisation expenses 4,474.82 3,824.11

(e) Impairment of assets 879.12 -

(f) Other expenses 1,716.65 717.79

2 Total Expenses 40,819.63 37,126.63

3 Profit/(Loss) before exceptional items and taxes (1 - 2) (3,229.01) 523.70

4 Less: Exceptional items 1,563.96 -

5 Profit/(Loss) before taxes (3 - 4) (4,792.96) 523.70

6 Tax expense:

(a) Current tax (186.00) (249.53)

(b) Short provision of tax for earlier years 0.00 -

(c) Deferred Tax 54.22 27.18

Profit/(Loss) for the year before adjustment for Minority Interest (4,924.74) 301.35

Less: share of profit / loss transferred to Minority Interest 1,203.88 (95.79)

Profit/(Loss) for the period (3,720.87) 205.56

Earnings per share (Equity share of Re. 1/- Each)

Basic and Diluted (In Rupees) (15.19) 0.84

Audited Consolidated Cash Flow Statement for the year ended March 31, 2013 and March 31, 2012

Particulars

31. March 2013 31. March 2012

Amount Rs. in

Millions Amount Rs. in

Millions A Cash Flow from Operating Activities Net Profit / (Loss) Before Tax (4,792.96) 523.70 Adjustment for: Depreciation 4,474.82 3,824.11 Impairment of assets 879.12 - Provision for doubtful debts/advances 313.77 - Gain on derivative transactions (23.96) (1.38) Interest paid 2,450.38 2,129.47 (Profit)/Loss on fixed assets sold (net) 741.36 3.10 (Profit)/Loss on sale of investments (net) (6.86) (28.76) Interest income (55.92) (96.29) Dividend income (8.74) (0.05)

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Bad Debts and other amounts written off/(back) 45.03 172.55 Adjustment for foreign exchange currency translation (1,110.81) (602.02) Adjustments for exchange fluctuation (55.56) 95.40 Operating profit before working capital changes 2,849.67 6,019.82 Adjustment for: Decrease/(Increase) in Long-term loans and advances (235.35) (467.99) Decrease/(Increase) in Other non current assets 23.38 (23.38) Decrease/(Increase) in Inventories 580.87 (305.11) Decrease/(Increase) in Short-term loans and advances 117.94 314.29 Decrease/(Increase) in Other current assets (1,690.39) (214.81) Decrease/(Increase) in Trade Receivables (1,655.58) (1,316.22) (Decrease)/Increase in Other long term liabilities (28.79) 33.65 (Decrease)/Increase in Long term provisions 3.03 15.27 (Decrease)/Increase in Trade Payables 2,392.66 548.40 (Decrease)/Increase in Other current liabilities (114.42) 171.11 (Decrease)/Increase in Short term provisions 378.66 1.13 Net Cash from Operating Activities 2,621.67 4,776.16 Direct taxes paid (638.30) (263.03) Total cash from / (used in) operating activites 1,983.36 4,513.13 B Cash Flow from Investing Activities Acqusition of Fixed Assets including Capital Work in Progress (745.35) (2,744.84) Sale of Fixed Assets 4,867.93 12.16 Net inflow on account of acquisition of subsidiaries - 16.80 (Increase) / Decrease in Short-term loans and advances (1.30) 1.69 (Increase) / Decrease in Capital Advances (39.92) (19.65) (Increase) / Decrease in Current Intercorporate deposits (395.55) (243.11) (Purchase)/sale of Investment 63.59 (93.88) Investment in fixed deposits 56.35 3,018.76 Interest Income 49.71 188.08 Dividend Income 8.74 0.05 Net Cash from Investing Activities 3,864.19 136.07 C Cash Flow from Financing Activities Proceeds from Long term Borrowings (3,889.94) 1,285.71 Proceeds from Short term Borrowings 1,107.32 (5,082.20) Proceeds from issue of shares to minority shareholders 358.69 - Interest paid (2,510.49) (2,158.65) Gain on derivative transaction 23.96 1.38 Net Cash from Financing Activities (4,910.46) (5,953.76)

Net Increase / (decrease) in cash and cash equivalents (A + B + C) 937.09 (1,304.56)

Cash and Cash Equivalents as at beginning of the year 2,211.20 3,503.84

Add: Unrealised Foreign Exchange Fluctuation on cash and cash equivalents 1.04 11.92

Cash and Cash Equivalents as at end of the year 3,149.32 2,211.20 Cash and Cash Equivalents comprise of:

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Cash and Bank Balances 3,149.32 2,211.20

Unaudited Consolidated Balance Sheet as at September 30, 2013 and September 30, 2012

   As at As at    Particulars 30. September 2013 30. September 2012    Amount Rs. in Millions Amount Rs. in Millions A EQUITY AND LIABILITIES

1 Shareholder's funds (a) Share capital 244.89 244.89 (b) Reserves and surplus 23,699.60 25,004.10 (c) Money received against share warrants - -

23,944.49 25,248.99 Minority interest 5,364.46 4,395.28

29,308.95 29,644.28

2 Non - current liabilities (a) Long-term borrowings 28,810.73 27,668.17 (b) Other long term liabilities 143.09 85.55 (c) Long-term provisions 45.64 39.93

28,999.46 27,793.65

3 Current liabilities (a) Short-term borrowings 5,908.00 4,467.49 (b) Trade payables 5,415.05 3,836.55 (c) Other current liabilities 5,536.88 6,052.90 (d) Short-term provisions 408.91 216.22

17,268.84 14,573.16

Total 75,577.25 72,011.09

B ASSETS

1 Non- current assets (a) Fixed assets 54,901.42 54,102.42 (b) Goodwill on consolidation 186.21 156.31 (c) Non-current investments 333.05 299.89 (d) Deferred tax asset 118.62 47.77 (e) Long-term loans and advances 2,994.01 1,577.85 (f) Other non-current assets 328.41 33.75

58,861.72 56,218.00

2 Current assets

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(a) Current investments 62.19 287.67 (b) Inventories 702.58 733.29 (c) Trade receivables 6,736.93 6,345.59 (d) Cash and bank balances 1,905.16 1,405.78 (e) Short-term loans and advances 4,163.44 5,539.21 (f) Other current assets 3,145.23 1,481.55

16,715.53 15,793.09

Total 75,577.25 72,011.09

Unaudited Consolidated Statement of Profit and Loss for the half year ended September 30, 2013 and September 30, 2012

Half Year Ended Half Year Ended Particulars 30. September 2013 30. September 2012

Amount Rs. in Millions

Amount Rs. in Millions

INCOME

(a) Revenue from operations 16,066.24 19,174.60

(b) Other income 178.24 165.49

1 Total Revenue 16,244.48 19,340.09

EXPENSES:

(a) Operating expenses 12,587.03 15,059.72

(b) Employee benefit expenses 275.24 358.53

(c) Finance cost 1,054.04 1,134.71

(d) Depreciation and amortisation expenses 2,035.12 2,205.97

(e) Impairment of assets 60.15 -

(f) Other expenses 339.72 313.40

2 Total Expenses 16,351.29 19,072.33

3 Profit/(Loss) before exceptional items and taxes (1 - 2) (106.81) 267.76

4 Less: Exceptional items - -

5 Profit/(Loss) before taxes (3 - 4) (106.81) 267.76

6 Tax expense:

(a) Current tax (48.24) (59.00)

(b) Short provision of tax for earlier years - -

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(c) Deferred Tax - -

Profit/(Loss) for the year before adjustment for Minority Interest (155.05) 208.76

Less: share of profit / loss transferred to Minority Interest 284.24 14.97

Profit/(Loss) for the period 129.18 223.73

Unaudited Consolidated Statement of Profit and Loss for the nine months ended December 31, 2013 and December 31, 2012

Nine Months Ended Nine Months Ended Particulars 31. December 2013 31. December 2012

Amount Rs. in Millions

Amount Rs. in Millions

INCOME (a) Revenue from operations 25,562.85 27,268.12 (b) Other income 170.03 249.78 1 Total Revenue 25,732.87 27,517.90

EXPENSES: (a) Operating expenses 19,846.20 21,800.63 (b) Employee benefit expenses 406.22 569.65 (c) Finance cost 1,546.22 1,726.88 (d) Depreciation and amortisation expenses 3,272.99 3,388.93 (e) Impairment of assets 91.10 - (f) Other expenses 488.17 1,426.96 2 Total Expenses 25,650.89 28,913.05

3 Profit/(Loss) before exceptional items and taxes (1 - 2) 81.99 (1,395.14)

4 Less: Exceptional items - 1,694.31

5 Profit/(Loss) before taxes (3 - 4) 81.99 (3,089.45)

6 Tax expense: (a) Current tax (149.16) (101.88) (b) Short provision of tax for earlier years - - (c) Deferred Tax - -

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Profit/(Loss) for the year before adjustment for Minority Interest (67.17) (3,191.33)

Less: share of profit / loss transferred to Minority Interest 367.91 1,122.45

Profit/(Loss) for the period 300.74 (2,068.88)

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EXCHANGE RATES

Our Company prepares and publishes its financial statements in Indian Rupees. All references to "Rupees" and "Rs" are to Indian Rupees. All references to "U.S. Dollars" and "US$" are to United States Dollars. The following table sets forth, for the periods indicated, information with respect to the exchange rate between the rupee and the U.S. dollar (in rupees per U.S. dollar). On an average annual basis, the rupee consistently declined against the U.S. dollar from 1980 until 2002. In early July 1991, the Indian Government adjusted the rupee downward by an aggregate of approximately 20% against the U.S. dollar as part of an economic package designed to overcome an external payment crisis. In 1994, the rupee was permitted to float freely for the first time. No representation is made that the rupee amounts actually represent such U.S. dollar amounts or could have been or could be converted into U.S. dollars at the rates indicated, any other rate or at all. (Indian Rupees per US$ 1.00) Year end March 31 Period End

Rate Average High Low

2012 First Quarter 44.72 44.74 45.38 44.04 Second Quarter 48.93 45.76 49.67 43.95 Third Quarter 53.27 51.01 54.24 48.82 Fourth Quarter 51.16 50.31 53.30 48.68 2013 First Quarter 56.31 54.22 57.22 50.56 Second Quarter 52.70 55.24 56.38 52.70 Third Quarter 54.78 54.14 55.70 51.62 Fourth Quarter 54.39 54.16 55.33 52.97 2014 First Quarter 56.31 55.93 57.32 54.70 Second Quarter 62.78 62.25 65.50 60.47 Third Quarter 61.90 62.05 62.80 61.38 Fourth Quarter 60.10 61.78 Not Available Not Availabe * The period end rate refers to the last working date of the quarter for which exchange rates were available on RBI

website (www.rbi.org.in)

Unless otherwise indicated, all conversionsin this Offering Circular from Rupees to U.S. dollars in respect of the year ended or as at 31 March 2013 have been made at the rate of Rs.54.39 = U.S.$1.00, in respect of the year ended or as at 31 March 2012 have been made at the rate of Rs. 51.16 = U.S.$1.00, in respect of the year ended or as at 30 September 2013 have been made at the rate of Rs. 62.78 = U.S.$1.00 and in respect of the year ended or as at 30 September 2012 have been made at the rate of Rs.52.70 = U.S.$1.00 For the purpose of the Profit & Loss Account for the year ended 31 March 2013, the conversions have been made at an average rate of Rs.54.53 = U.S.$1.00 and for the year ended 31 March 2012 at the rate of Rs.48.19 = U.S.$1.00, for the half year ended 30 September 2013 at the rate of Rs.60.15 = U.S.$1.00, for the half year ended 30 September 2012 at the rate of Rs.54.91 = U.S.$1.00, for the nine months ended 31 December 2013 at an average rate of Rs.60.73 to U.S.$1.00 and for nine months ended 31 December 2012 at the rate of Rs.54.77 to U.S.$1.00 as reported by the Reserve Bank of India.

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INDUSTRY OVERVIEW

The "Industry Overview" section quotes and otherwise includes information extracted from a report dated as of April 4, 2014, prepared by CARE, or the CARE Report, that was commissioned by us for purposes of this Offering Circular. CARE has advised us that the CARE Report accurately describes the industries in which we operate, subject to the availability and reliability of the data supporting the statistical and graphical information presented. CARE’s methodologies for collecting information and data, and therefore the information discussed in this section, may differ from those of other sources, and does not reflect all or even necessarily a comprehensive set of the actual transactions occurring in the industries in which we operate. The information and data in this section has not been prepared or independently verified by our Company, the Lead Manager or any of their respective affiliates or advisors. The source of all tables and charts is CARE unless otherwise indicated. Overview of Global and Domestic Economy

1. Global Economy

The global economy continues to be weak in the absence of a significant pick-up in growth. As per the IMF estimates, World GDP in CY2012 grew 3.2%, 0.7% lower than that in 2011, and growth for 2013 is expected to be lower at 3.0%.

Although, growth has been subdued, the dynamics of the global economy have been witness to changes that are noteworthy - economic growth is seen returning to advanced economies while emerging economies have been faced with slowing growth. The slowdown in the emerging and developing economies can be attributed to capacity & structural constraints, inadequate policy support & measures and constrained credit availability following a period of easy credit. Also, tighter global financial conditions have curtailed the flow of foreign funds into emerging economies, resulting in economic and asset quality weakness here.

While, economic activity would continue to pick-up in the advanced economies in the medium term, in case of the emerging and developing economies, the pick-up in activity is likely to be modest. Global economic growth is expected to be led by the advanced economies and the stronger growth here would help drive export demand for emerging and developing economies and increased consumption in emerging economies would lend support to economic output there.

2. Indian Economy

The Indian economy has been one of the economies registering robust growth even in times of economic uncertainty in the world. With the backing of strong economic fundamentals, the country has registered a high growth trajectory averaging over 7% during the last five years i.e. FY08-FY13. In recent times however, the economy has been adversely affected by both spill-over effects of global economic slowdown and rising domestic pressures. With GDP growth settling at 4.5% during FY13, growth has slowed for two consecutive years. This slowdown is likely to be carried forward to FY14 too. The country’s economic growth for FY14 has seen a significant downward revision since the beginning of the financial year. RBI had lowered it from 5.7% to below 5% and the Central Statistical Organisation hadlowered it from 6.4% to 5.3%. Recently, CSO in its advanced estimates release have estimated FY14 GDP to settle at 4.9%, marginally higher than the FY13 growth

A major concern affecting the Indian economy has been inflation. Inflation for most part of FY12 and FY13 maintained an accelerating trend, with headline WPI inflation averaging 7.4% in FY13 and average CPI settling at 10.2% in FY13. While core inflation has moderated considerably, a resurfacing of inflation in primary articles has been observed in FY14. Inflation numbers increased continuously since July 2013 and declined in December’13. The WPI inflation came in at 6.2% for the month of Dec’13 while CPI was at below 10% (9.9%). Persistent high inflation has been the guiding factor for the RBI monetary policy and the high interest rate regime which has been impacting growth.

3. SHIPPING INDUSTRY

Global Outlook

Growth in sea-borne trade is highly correlated to the developments of the world economy and international trade. Globalization of production processes has resulted in increase of merchandise trade which in effect has resulted in growth in trade of intermediate goods & components,extending the global supply chains across countries.

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Since the last couple of years, the shipping industry has been in doldrums due to the effectsof the global financial crises which first surfaced inCY08.With efforts being undertaken by various governments to revive economic growth, world trade picked up pace in the second half of CY13. Additionally, the International Monetary Fund (IMF) expects GDP growth to trend higher in CY14 and CY15, compared to CY13. Buoyed by better prospects in the developed countries especially in theUS and the Euro Area, amid slowing growth in developing regions, IMF has projected an annual world GDP growth of 3.7percent for CY14 and 3.9percent in CY15.In the light of the above circumstances, CARE Research expects the world sea borne trade to increase at a CAGR of 3.4percent during CY13 to CY16.

Total world sea borne trade estimates

Source: CARE Research estimates (P): provisional (E): Estimates

Outlook on the Wet Bulk segment

While incremental demand for oil is expected to emanate from BRIC nations on account of favourable demographics, urbanisation and industrialization in these nations, growth in supply of oil (apart from OPEC) is expected from the Americas with North America accounting for tow-third of the growth.Consequently,CARE Research expects that the sea-borne trade of oil and oil products will grow at a CAGR of 1.4percent during CY13-CY16 owing to movement of oil from surplus to deficit regions.

World: Oil & Gas sea-borne trade

Source: UNCTAD and CARE Research (P): provisional (E): Estimates

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Outlook on the Dry Bulk segment

CARE Research expectsthat the trade volumes in the dry bulk segment will continue to be majorly driven by the Chinese demand for coal and iron-ore. Hence any slowdown witnessed by the Chinese steel manufacturers would adversely affect the trading volumes of the dry bulk fleet globally in-turn impacting the freight rates for the said segment. CARE Research expectsthat the total cargo handled by the dry bulk fleet will increase at a CAGR of 5.1percent during CY12-CY16.

The dry bulk segment can be further sub-divided into two categories: i) Main Dry Bulk ii) Other Dry Bulk

Main Dry Bulk:

The main dry bulk segment consists of five commodities namely iron-ore, coal, bauxite, food-grain and rock phosphate. The global sea-borne trade in iron ore is expected to grow at a CAGR of 3.0percentduring CY12-CY16, in line with the estimated percentage growth in steel production during the same period. China alone would account for 40-45percentof the said trade. The global sea-borne trade in coal is expected to witness a higher CAGR of 5.7percentwhile China continues to account for a major share of the bulk commodity, other developing nations which primarily use coal for electricity generation are also likely to maintain their growth momentum.

The global sea-borne trade in bauxite, which is the primary raw material for production of aluminium, is expected to grow at a CAGR of 4.7percentduring CY12-CY16. The sea-borne trade of bauxite is primarily dependant on the global aluminium production. CARE Research expects, aluminium production will increase at a CAGR of 5percent during CY13 to CY16, an increase of 9 million tonnes in absolute terms. The sea-borne trade of bauxite has seen the highest increase in percentage terms in the major dry bulk segment in the recent past, and as indicated above will continue to grow at a faster pace as compared to its peers in the segment. However, in tonnage terms sea-borne bauxite trade as a percentage of the major dry bulk segment continues to remain lower. The global sea-borne trade of food grains is expected to grow at a CAGR of 3percent during CY12-CY17.

World: main dry bulk trade

Source: Industry and CARE Research (P): provisional (E): Estimates

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Other Dry Bulk

Sea-borne trade of other dry bulk which consists of products such as cements, finished metals etc. has increased at a standard pace over the years. In absolute terms the trade has increased from around 2,000 million tonnes in CY03 to around 2,300 million tonnes in CY12. CARE Research expects trade in the other dry bulk category would increase at a CAGR of 3% during CY12-CY16.The slower growth in this segment is primarily due to the shift of preference internationally towards the deployment of containers.

World: sea-borne dry bulk trade

Source: Industry and CARE Research (P): provisional (E): Estimates

Vessel deliveries to grow at a steady pace

Though undesired from the global shipping industry’s parlance, CARE Research estimates the delivery volumes to remain steady during CY14-CY15. This expectation dwells on the fact that the production capacities of the world’s leading shipyards multiplied significantly during the boom period from CY08 - H1CY09. This, in addition to the trend of re-scheduling of vessel deliveries in the recent past will further add to the volume of vessels to be delivered during CY14 to CY15. CARE Research expects that on an average, 70-80% of the total order-book as on December 31, 2013 (across all vessel segments) is expected to be delivered during the period CY14-CY15.

Expected Delivery schedule of orderbook by Vessel segments – million GT in % Wet Bulk vessels Dry Bulk vessels

Delivery schedule as on December 31, 2013 Source: Clarkson & CARE Research

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The vessel deliveries during CY14 & CY15 are expected to account for 7.9% & 5.6% of the existing fleet size. However, in view of the liquidity constraints faced by the shipowners as well as the shipyards globally, CARE Research expects the trend of re-scheduling of vessel deliveries to continue. Also, the situation of excess fleet availability is expected to play a role. Notably, the re-scheduling of vessel deliveries is expected to remain the highest across the dry bulk vessels, wherein the deliveries during CY14 are expected to account for 10.2% of the existing fleet size.

Global fleet size to expand at a CAGR of 3.3% from CY12-CY14 owing to new vessel deliveries...

CARE Research expectsthe global fleet size to surge from 1,132.1 million GT as on December 31, 2013 to 1,209.8 million GT as on December 31, 2015 implying a CAGR of 3.3%. The said growth in world fleet is expected to be primarily driven by the deliveries in the dry bulk and containership vessel segments. Correspondingly, the global dry bulk fleet is expected to surge from 406.4 million GT during CY13 to 438.0 million GT during CY15 at a CAGR of 3.8%. The containership fleet is expected to grow from 174.7 million GT during CY13 to 196.8 million GT by CY15 at a CAGR of 6.1%.

World fleet size projection

Vessel Segment Order-book as % of existing fleet* Fleet size – million GT

CY13(P)

CY14(E) CY15(E)

World Wet Bulk fleet 11.0 297.1 302.0 305.7 World Dry Bulk fleet 20.3 406.4 423.0 438.0 World Containership fleet 23.0 174.7 184.7 196.8 Others 15.1 253.9 261.2 269.3 Total World fleet 17.1 1132.1 1170.9 1209.8 *order-book as on December 31, 2013#figures of fleet size at end of the year Source: CARE Research estimates

CARE Research expects the over-supply situation across vessel segment to continue in the short to medium term; however the rate at which the net aggregate fleet size is expected to grow is on a decline i.e. 3.4% and 3.3% in CY14 and CY15 respectively. The said trend is a result of two factors, one being the increase in scrapping and the other being the scaling down of the new build deliveries. This would result an immense boost to capacity utilization for vessels except for containers segment which is still registering high fleet addition.

Wet bulk delivery schedule and fleet estimates

The delivery schedule of the order-book as on December 31, 2013 suggests VLCC and Handy vessels together accounting for more than60% of the total deliveries are scheduled to be delivered in CY14. While going ahead in CY15, Aframax and handy vessels would account for more than 60% of the total deliveries.

Delivery schedule of wet bulk vessel segment

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Based on order-book composition Source: Clarkson and CARE Research Figures are estimated based on data provided by Clarkson

CARE Research expects the wet bulk fleet to increase from 297.1 million GT during CY13 to 305.7 million GT in CY15 at a CAGR of 1.4%. Of the same Products vessel segment is expected to grow from 61.4 million GT during CY13 to 65.8 million GT by CY14 growing at a CAGR of 3.5%, while Suezmax vessel segment is expected to grow from 43.3.1 million GT during CY13 to 44.9 million GT by CY14 at a CAGR of 1.8%. VLCC vessels which account for around 36% of total tonnage carried capacity in wet bulk vessel will witness minimal growth in fleet size due to higher scrapping of vessel by shipowners.

Wet bulk fleet estimates

Source: Clarkson and CARE Research(P): Provisional (E): Estimated

Dry bulk delivery schedule and fleet estimates

The delivery schedule of the order-book as on December 31, 2013 suggests Capesize and Panamax vessels together accounting for about 62.7% of the total deliveries are scheduled to be delivered in CY14. While going ahead in CY15, the said vessels would account for 57.1% of the total deliveries.

Delivery schedule of dry bulk vessel segment

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Source: Clarkson and CARE ResearchFigures are estimated based on data provided by Clarkson

Correspondingly this gross addition in Capesize and Panamax vessel segments will remain the major driver in the growth of dry bulk fleet size, further worsening the oversupply situation. However it is evident that shipowners will resort to scrapping in order to tame down the oversupply of vessels in the market.

Dry bulk fleet estimates

Source: Clarkson and CARE Research(P): Provisional (E): Estimated

CARE Research expects the dry bulk fleet to increase from 406.4 million GT during CY13 to 438.0 million GT in CY15 at a CAGR of 3.8%. Of the same Capesize vessel segment is expected to grow from 164.0 million GT during CY13 to 174.2 million GT by CY15 growing at a CAGR of 3.0%, while Panamax vessel segment is expected to grow from 103.9 million GT during CY13 to 113.3 million GT by CY15 at a CAGR of 4.4%.

State of the IndustryGlobal Maritime Trade- Trend Analysis

Post the financial crises, global economic condition witnessed a sharp rebound in Calendar Year (CY) 10 and CY11. The macroeconomic stimulus measures helped push economic indicators of most of the major economies across the world on an upward journey, thereby encouraging improvement in global trade. During CY11, world GDP registered a stable growth of 3.1 percent, while the sea-borne trading volumes posted a marginally higher growth of 4.5 percent on Y-o-Y basis, aggregating to 8.7 billion tonnes of cargo loaded during CY11. However, as the effects of global stimulus

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started to fade and with uncertainties about reoccurrence of the European debt crises, global economic indicators recorded a dreary growth.

As the slowdown continued throughout CY12 and into the first half CY13, the global GDP grew by just 3.1 percent in CY12 and 3.0 percent in CY13 on Y-o-Y basis. However, the second half of CY13, witnessed better than expected economic indicators, mainly owing to a significant improvement from the advanced economies lead by United States of America (US) and the major European economies. The global sea-borne trade performed better than the world economy as volumes registered a growth of approximately 4.3 percent on Y-o-Y basis in CY13, aggregating 9.5 billion tonnes. Strong increase in dry cargo remained the foundation of growth in sea-borne trade CY12 and CY13.

World economic growth and growth in sea-borne trade

Source: International Monetary Fund and UNCTAD Maritime Report – 2013 P: Provisional

The volume of exports of goods has been on a rise in numerical terms over the last decade (with the exception of CY09) however, the rate of growth has slowed down considerably post the financial crisis of CY09. Although the exports of the advanced economies are higher in absolute terms, the emerging economies are outpacing them in the recent past in terms of growth. For E.g. the exports from developing Asia has increased at an average pace of 6.1 percent over the last three years (CY11-CY13), whereas, the exports from the advanced economies have increased at an average of 3.3 percent during the same period. The table below summarises the Y-o-Y percentage growth of exports for the different regions of the world.

Region-wise export growth in percent terms

Source: International Monitory Fund (world economic outlook database)

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Post CY09, the increase in volume of import of goods globally in CY10 is attributed to the low base effect and the augment in demand following the financial crisis. However, in tandem with the world exports, growth in world merchandise imports by volume has also progressively lost momentum post the financial crisis. In CY11 total world imports expanded by 6.8 percent compared to 15 percent in CY10 on a Y-o-Y basis. Constrained by slew of austerity measures and rising unemployment, demand in Europe contracted whereas demand in USA and other developed economies remained subdued. Even tough, the global activity and world trade picked up in the second half of CY13, growth in world import volumes has remained flat at around 2.6 percent per annum in CY13.

Region-wise import growth in percent terms

Source: International Monetary Fund (world economic outlook database)

Developing countries garner the highest share in the world sea-borne trade. In CY12, off the total maritime volumes traded, developing countries garnered a share of 60 percent in total goods loaded and 58 percent share in the goods unloaded. On a geographical basis, Asia dominates the global sea-borne trade. Additionally, China’s domestic demand as well as increased intra-Asian trade, has provided a fresh imputes to international seaborne trade.

Trend in developing countries sea-borne trade share World sea-borne trade by geographical region (CY12)

Source: UNCTAD Maritime Report – 2013

World fleet and cargo break-up

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Owing to the shift in global trading patterns and the mix of products traded, world fleet composition has undergone significant changes since the last decade. With increasing preference for containerisation as opposed to transportation in the form of break-bulk, the share of containership in total world fleet size has increased to 13.2 percent during CY13 as against 10 percent in CY2000. In terms of deadweight tonnage (dwt) trade through containerships increased from 969 million tonnes loaded to 1,578 million tonnes loaded. However, the total dry bulk trade (including containership) continues to remain the major constituent of the international trade garnering two third of total volume.

On the back of increasing manufacturing activity, especially in the BRICS countries, demand for the main bulk (containing commodities such iron ore, coal, grain, bauxite/alumina and phosphate rock) has recorded a robust growth in recent years. The share of main dry bulk vessels increased from 22 percent (dwt 1,295 million tonnes) in CY2000 to 29 percent (dwt 2,786 million tonnes) during CY13, adding more than a million tonnes of volume to the world sea-borne trade.

The oil & gas trade which once consumed 50 percent of world trade has gradually lost its share. As the volume of oil & gas trade increased at a slower rate compared to the dry bulk, its share dropped from 36 percent in CY2000 to 30 percent in CY13.

Break-up of cargo (tonnes) carried by world fleet – CY00

Break-up of cargo (tonnes) carried by world fleet – CY13(P)

*Main bulk includes Iron ore, grain, coal, bauxite/alumina and phosphate Source: UNCTAD Maritime Report – 2013 (P): provisional The total number of ships in service has seen a steady increase over the years. The share of dry-bulk vessels in the total world fleet size has increased from 34 percent in CY2000 to 42 percent at the beginning of CY13 witnessing a major growth. On the other hand, share of general-cargo vessel (which are also know as break-bulk vessel) has declined from 13 percent in CY2000 to 5 percent in CY13 majorly owing to the cannibalization effect of containership (as goods transported by break bulk were shipped through containers).

Even though the fleet-size of in oil & gas vessels has witnessed an increase in the past decade (from dwt 283 million tonnes in CY2000 to 491 million tonnes in beginning of CY13), its share in total fleet size has declined from 36 percent in CY2000 to 30 percent in CY13 owing to more than proportionate increase in dry-bulk vessels segment.

Break-up of world fleet (dwt) by ship types – CY2000

Break-up of world fleet (dwt) by ship types – CY13

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Source: UNCTAD Maritime Report – 2013 The operational efficiency of a ship is reflected by tonnes carried per dwt and also by tonne-miles performed per dwt of vessel. This in turn depends upon factors such as total tonnage carrying capacity of ships (supply-side factor) and volume of sea-borne trade (demand-side factor). Owing to the overcapacity situation across vessel segments (wet bulk, dry bulk and containerships), the tonnes of cargo carried per dwt of vessel has been gradually decreasing. During CY13, the sea-borne trading volumes increased by 4.4 percent on a Y-o-Y basis, while the cargo carried per dwt of vessels increased marginally by approximately 1.0 percent during the year. However, dry bulk and tankers carriers remains exception, with the tonnes carried per dwt declining by 4.9 percent and 2.0 percent, respectively on a Y-o-Y basis during CY13, primarily due to oversupply of vessels.

World fleet – tonnes carried per dwt of tankers, dry bulk carriers and all other dry cargo

Source: UNCTAD Maritime Report – 2013 Note: numbers indicate cumulative tons carried per dwt

Wet bulk vessel

Global wet bulk fleet: an Overview

Growth in global sea-borne trading volumes of oil & oil products has resulted in growth of the world wet bulk fleet, recording a CAGR of 3.8 percent during CY09-CY13 from 256 million gross tonnages (GT) at the end of CY09 to an estimated 297.1 million GT as on December 31, 2013. However on a Y-o-Y basis, the new addition of vessels in the

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entire segment has seen the lowest growth in past five year; as in CY13, wet bulk total fleet size registered an increase of 1.9 percent on a Y-o-Y basis. In the sub-segment, Suezmax with vessel size in the range of (60-80’000 million dwt), recorded the highest CAGR of 6.6 percent during the period CY09-CY13, whereas VLCC posted the slowed growth of 4.5 percent during the same period. Trend in growth of global wet bulk fleet

Source: Clarkson research services Ltd (P): provisional

With the movement of oil and oil products comprising approximately 20 percent& 11 percent of the global sea-borne trade during CY12, the wet bulk segment represents an important constituent of shipping globally. Despite the growing volumes, the share of crude oil movement in the total sea-borne trading volumes has been decreasing consistently over the years owing to greater flow of commodities in the dry bulk and the Containerships segments.

World sea-borne trade of Oil & Oil Products

CY06 CY07 CY08 CY09 CY10 CY11 CY12

Crude Oil* 1,783 1,813 1,785 1,711 1,787 1,760 1,785

Y-o-Y growth % - 1.7 -1.6 -4.2 4.3 -1.6 1.5

% of total sea-borne trade 23.2 22.6 21.7 21.8 21.3 20.0 19.5

Products* 914.8 933.5 957 931.1 983.8 1,033 1,051

Y-o-Y growth % - 2 2.5 -2.7 3.9 5.1 1.6

% of total sea-borne trade 11.9 11.6 11.6 11.8 11.5 11.8 11.5

Total sea- borne trade* 7,700 8,034 8,229 7,858 8,408 8,785 9,165

Source: UNCTAD Maritime Report-2013 *Figures in million tones The imports of crude oil, as provided in the chart below, indicate that Asian economies (China, India, Japan, Singapore) led the global crude imports during CY12 aggregating 13.6 mb/d (million barrels per day) followed by European nations at 9.5 mb/d. In the North American region, US imports of crude oil aggregated 8.4 mb/d. However, on a Y-o-Y basis crude import by US declined by 5 percent in CY12 reflecting increased production in the country. Other regions which contribute toward high imports are Australasian & Other Asia-Pacific countries at 6.7 mb/d and 4.1 mb/d.

Keycrude oil imports countries/regions (CY12)

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Source: BP Statistical Review-2013

The Middle East and the African regions predominantly remained crude oil exporters in CY12 with the exports aggregating 17.6 mb/d and 6.5 mb/d. In Northern America, Canada remained the net exporter of crude oil, exporting around 2.4 mb/d.

Keycrude oil exporting countries/regions (CY12)

Source: BP Statistical Review-2013

Imports & Exports: Oil Products

With respect to trade of oil products, the economies of Europe, Other Asia Pacific and the South & Central American regions remained the major drivers with imports volumes of 2.9 mb/d, 2.5 & 1.4 mb/d during CY12.

Keyoil products importing countries/regions (CY12)

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Source: BP Statistical Review-2013

In case of exports, the Former Soviet Union (FSU) surpasses Middle East in the exports of oil products. The FSU product exports aggregated 2.5 mb/d increasing by 12 percent on a Y-o-Y basis during CY12. However, the product exports of Middle East aggregating 2.0 mb/d declined by 1.8 percent on a Y-o-Y basis during CY12.

Keyoil products exporting countries/regions (CY12)

Source: BP Statistical Review-2013

In the American continent, while Canada remained a net exporter of both crude oil and oil products, Mexico remained a net exporter of crude oil, however it remained a net-importer of oil products.

In Asian context, China remains the largest products as well as crude oil importer, followed by Japan. However, while India continues to import crude oil, it is one of the largest exporters of oil products globally. The Indian oil product exports aggregated 1.3 mb/d during CY12.

Global dry bulk fleet: an overview

The global dry bulk fleet expanded considerably from 261 million GT in CY09 to 406.4 million GT during CY13, implying a CAGR of 11.7 percent on the back drop of increase in sea-borne trading activity for iron-ore and coking coal globally. However, despite the increasing preference for containerisation of commodities such as consumer goods, fertilisers, retail products, etc, dry bulk transportation globally has seen a consistent increase.

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Trend in growth of global dry bulk fleet

Source: Clarkson research services Ltd (P): provisional

Global iron-ore market

Iron ore production in the world is concentrated with only handful of countries which are blessed with the resource. The five largest iron ore producing countries together accounted for almost 77 percent of the global iron ore production in CY12. Globally, Australia has been one of the dominant producers of iron ore. Its contribution in total global iron ore production has increased from approximately 18 percent in CY03 to around 28 percent in CY12.

Iron Ore: World Production: CY03-CY12

Source: World Steel Association & CARE Research

Global Iron ore trade

International trade of iron ore has continued to soar as imports increased for the tenth year in a row reaching about 1,200 million tonnes in CY12, recording CAGR of 8.4 percent during the last decade (CY02-CY12). On account of rapid growth in industrialization and infrastructure activities especially in the Asian economies, their appetite for steel products has increased by leaps and bounds leading to higher demand for iron ore from these regions. China, Japan, and South Korea put together are the largest importers of iron ore in the world whereas; Australia and Brazil continue to remain the largest exporters.

Owing to a strong growth in imports by China, the Chinese share in global iron ore imports has increased from about 25 percent in CY03 to around 60 percent in CY12.

With respect to exports, two nations globally viz, Australia and Brazil together contribute to approximately 70 percent of total iron ore exports in CY12. During the same period, Australia remained the largest iron ore exporter garnering a share of 43 percent in the global iron ore exports market.

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Major Iron-ore Exporters during CY12 Major Iron-ore Importers during CY12

Source: ‘Steel Statistical Yearbook-2013’ – World Steel Association

Global Steel market

Demand in the world steel market has witnessed a paradigm shift over the last few years. The consumption and the production centres of steel are witnessing a gradual shift to developing countries even as significant proportion of production capacity in developed economies remains idle. This can be attributed to the EU debt crisis and the issue of the US national debt in particular which continue to have a negative influence on global economic growth and the market for steel. On the contrast, economic growth in developing countries which is majorly reliant on fixed capital investment has partially compensated the stagnating demand for steel in a number of developed nations.

Post the financial crises, global demand for steel witnessed a swift recovery with steel demand recording a robust Y-o-Y (Year-on-Year) double digit growth of about 15 per cent and 6 per cent respectively during CY10 and CY1. The emerging economies, predominantly took the lead in reviving the global steel industry from one of its worst ever crises. However, since the start of CY12, global steel industry has witnessed a rather significant shift in momentum as the industry faces the pressure of increasing over capacity and slowing demand situation especially from the emerging economies like China and India.

In CY12, the international steel markets corresponded to the changes occurring in the global economy. In H1CY12, demand for steel products continued to grow; however, in the second half, the worsening global economy led to a slowdown in the growth rate of industrial production. As a consequence, capacity utilization decreased, triggering a fall in production. At the end of the year, crude steel production marginally increased by 0.5 percent on a Y-o-Y basis to reach 1,545 million tonnes in CY12.

China accounted for around 46 percent of total global crude steel production in CY12, higher from that of 44 percent in CY10, while Japan’s share over the same period declined from 8 percent to 7 percent. South Korea achieved an impressive growth of around 17 per cent in CY11 by producing 68 million tonnes of steel, accounting for 5 percent of the total world steel production. However in CY12, South Korea registered a flat growth of 0.8 percent on a Y-o-Y basis to produce about 69 million tonnes of crude steel.

World steel production capacity-utilization rate (Monthly)

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Source: International Iron and Steel Institute (IISI), CARE Research

In CY13, world crude steel production increased by around 3.5 percent on a Y-o-Y basis to reach 1,607 million tonnes. Most of the boost in production was provided by China and other Asian steelmakers, as the west reduced production, especially in the first part of the year. Asia as a whole posted 6 percent growth in CY13 whereas, crude steel production in EU and North America declined by 1.8 percent and 1.9 percent respectively.

Steel Trade

In terms of the semi-finished and finished steel EXIM trade, Asian nations viz China, Japan and South Korea together accounted for about 30 percent of the world’s semi-finished and finished steel exports during CY12. The majority of said exports were diverted towards the USA and the European nations. Of the total imports of semi-finished and finished steel products, the USA accounted for 13 percent, while the European nations accounting for 40 percent of the imports. Of the same, countries such as Germany and Italy remained the highest importers of semi-finished and finished steel accounting for a share of 10 and 4 percent, respectively, during CY12.

Major Semi-finished & Finished Steel Exporters during CY12

Major Semi-Finished & Finished Steel Importers during CY12

Source: ‘Steel Statistical Yearbook-2013’ Container trade overview

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Despite a slowdown in the global economies, the rising containerisation usage for transportation of different commodities, helped increase the sea-borne containership trade by 6.6 percent during CY13.

Global natural gas fleet: an overview

As countries across the world have started to use natural gas to satisfy the gap in their domestic energy requirement, global sea-borne trading volumes have witnessed a recent spurt in demand. Few countries such as Japan and South Korea depend on import of LNG to meet their entire gas needs. As a result world LNG fleet-size increased by a CAGR of 4 percent during CY09-CY13 from 36 million GT at the end of CY09 to an estimated 42 million GT as on December 31, 2013. However, of the total gas trade in the world around two third is transported by pipeline. Growth in global LNG fleet

Source: Clarksons and CARE Research On the back of growing demand from advanced as well as emerging economies, total gas trade across the world has witnessed a CAGR of 6.1 percent from 814 billion cubic meters (bcm) in CY08 to 1,033 bcm in CY12. This trade figure includes gas traffic through pipeline and in form of Liquefied Natural Gas (LNG). World gas trade through pipelines increased at a CAGR of 4.6 percent from 587.2 bcm during CY08 to 705.5 bcm in CY12, whereas trade via ships (LNG) increased at a higher CAGR of 9.6 percent from 226.5 bcm in CY08 to 327.9 bcm in CY12. LNG trade increased at a higher rate during the period CY08 to CY12 as eight new counties (Brazil, Canada, Chile, Kuwait, Indonesia, Netherlands, Thailand and UAE) have started importing LNG.

However during CY12, LNG trade declined marginally by 0.6 percent on a Y-o-Y basis mainly due to supply side constrained faced by Indonesia, Malaysia and political challenges in Middle East North Africa region. Global gas trade

Pipeline LNG

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Source: BP Statistical Review-2013 In the pipeline segment, Russia is the largest exporter of gas accounting for around 26 percent of total world exports followed by Norway constituting 15 percent of the exports. European countries accounts for 70 percent and 100 percent of exports from Russia and Norway, respectively. The third largest exporter, Canada, which contributes 12 percent of total trade sell all of its gas to the US.

On the import front, Europe is the largest gas consuming region in the world with a share of around 53 percent of total import. Country wise, Germany (at 12 percent) is the largest importer of gas through pipeline followed by USA (12 percent) and Italy (at 9 percent).

Major natural gas trading countries through pipeline during CY12 Importers Exporters

Source: BP Statistical Review-2013

During CY12 five counties (Qatar, Malaysia, Australia, Nigeria and Indonesia) contributed to around 70 percent of total LNG exports of the world. Qatar is the largest LNG supplier to the world. Country-wise, Japan, India, South Korea and United Kingdom were the major markets for LNG from Qatar.

On the import front, Japan and Korea are the world’s largest LNG importers consuming around 50 percent of LNG supplied in the market. In recent years Japan has increased consumption of LNG as most of the nuclear reactors in the country are offline following earthquake in CY11. India is the fourth largest importer of LNG in the world. In CY12, India imported 20.5 bcm of LNG. Around 79 percent of total imports of LNG in India are from Qatar.

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Major LNG trading countriesduring CY12 Importers Exporters

Source: BP Statistical Review-2013

Indian Maritime Trade - Trend Analysis

The Indian fleet size aggregated 10.2 million GT as on April 1, 2013, with a gross reduction of 0.8 million GT during the year, however, in terms of a number of vessels, there was a net addition of 29 vessels, as the fleet size stood at 1,164 vessels compared with 1,135 vessels at the end of CY12. The Indian fleet comprises of two segments viz, overseas and coastal. The Indian overseas fleet accounted for 89.5 percent of the total fleet aggregating to 9.1 million GT, whereas, the coastal fleet accounted for a minuscule share of 10.5 percent of the total Indian fleet aggregating to 1.1 million GT.

Growth of Indian fleet

Source: Ministry of Shipping, CARE Research

In spite of the growing Indian fleet in the recent years with the exception of FY12, the participation of Indian vessels in the country’s overseas trade has declined considerably from 31.5 percent in FY2000 to 10.87 percent in FY12.

Participation of Indian ships in India’s overseas trade

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Source: Ministry of Shipping and CARE Research Global coal overview: Coal is the world’s most prevalent and widely distributed fossil fuel, accounting for 64% of global economically recoverable fossil resources compared to 19% for oil and 17% for natural resources. Coal’s abundance and distribution, coupled with its relatively low and stable price pattern, set the stage for a reliable supply of energy. In many countries, coal based generation is one of the first sources to be dispatched throughout the electric grid. Coal’s characteristics make it a very attractive base-load fuel. Thus, coal plays an essential role in global energy mix, particularly for power generation.

Global Coal Reserves and Resources Coal reserves generally include what is considered as economically recoverable at any given time, taking into account available mining technology and costs. Coal resources, on the other hand, include all potential coal deposits. Coal resources are ~17 times larger than coal reserves and account for over two-thirds of all non-renewable energy sources, including conventional and non-conventional hydrocarbons, such as oil and gas. Coal is simply the world’s most abundant non-renewable energy fuel. There are two internationally recognized methods for assessing world coal reserves. The first is from the German Federal Institute for Geosciences and Natural Resources (BGR) and is used by the International Energy Agency (IEA) as the main source of information about coal reserves. The second one is from the World Energy Council (WEC) and is used by the BP Statistical Review of World Energy. According to BGR there were 1004 billion tonnes (BT) of coal reserves left, equivalent to 130 years of global coal output in CY11. Coal reserves reported by WEC are much lower ~861BT, equivalent to 112 years of coal output as shown below.

Global coal proved reserves at CY12-end

Million tonnes Anthracite & Bituminous Sub-bituminous and Lignite R/P ratio1

US 108501 128794 239 Kazakhstan 21500 12100 290 Russian Federation 49088 107922 471 Ukraine 15351 18522 390 South Africa 30156 - 118 Australia 37100 39300 184 China 62200 52300 33 India 56100 4500 103

1 R/P ratio i.e. Reserves-to-production ratio is used in forecasting the future availability of a resource to determine project life, future income, employment, etc., and to determine whether more exploration must be undertaken to ensure continued supply of the resource.

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Indonesia 1520 4009 17 Total World 404762 456176 112 Source: World Energy Council; CARE Research

Global Coal demand and Production World coal demand rose at 3.6% CAGR during CY08-12 to reach 7.6BT in CY12, which is primarily led by coal demand growth by US, China and India. However, as per IEA’s International Energy Outlook 2013, the longer term growth in coal demand is expected to decelerate as policy and regulations encourage use of cleaner resources, natural gas become more competitive as a result of development of shale gas resources and growth in industrial use of coal slows largely as a result of industrial slowdown in China. During the five years, the global coal consumption share of the three countries viz. US, China and India increased from 66% in CY08 to 70% in CY12. There are two divergent trends in this increase, declining coal consumption by US due to emergence of shale gas, whose share reduced from 17% in CY08 to 12% in CY12 and rapidly rising coal demand from two countries i.e. China and India (increase from 49% to 58% due to increasing dependence on imported coal led by matching increase in power/industry demand) during the same period.

World coal consumption and major consuming countries (Mtoe)

Source: BP Statistical Review 2013, CARE Research World coal production parallels the coal consumption trend rising from ~6822MT in CY08 to 7864MT by CY12-end. Global coal production is concentrated among five countries - China, United States, India and Australia and Indonesia. The share of these countries rose from 73.7% in CY08 to 76.2% in CY12.

World coal production and major producing countries (MT)

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Source: BP Statistical Review 2013, CARE Research

Global coal trade World coal trade has seen a rapid growth in the last decade. According to IEA, themarket for internationally traded coal grew by 122MT (up 12% YoY) to 1164MT in CY12. The bulk share (i.e. ~93%) of coal trade is seaborne hard coal trade with the remainder being cross-border trade. The seaborne hard coal trade market grew 11% YoY i.e. by almost 104MT, to 1082MT in CY12 and internal trade even increased by 28% or 18MT to reach 82MT in CY12. While, the seaborne steam coal market grew by 12% YoY to 826MT in CY12, the coking coal market growth remain muted to 6.6% YoY (rise of 17MT) to 256MT due to stagnant world steel demand during the same year. The increase in cross-border trade is primarily attributable to exports from Mongolia to China and from Kazakhstan to Russia.

Global coal trade composition in CY12

Source: IEA, CARE Research

Major coal exporting countries Indonesia had emerged as the largest coal exporter replacing Australia in CY11 by exporting 309MT. Since the turn of the 21st century, Indonesian coal exports increased on average by 18.4% per year. Due to abundant reserves, cost competitiveness, transport infrastructure availability and, in particular, its proximity to coal importing countries in Asia, Indonesia has accounted for almost half of the total seaborne coal market growth over the last 11 years.

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Australia is the fourth largest coal producer and constituted ~5.4% of the global coal production in CY12. Australia is the world’s second largest coal exporter with 336MT exported in CY13. New South Wales and Queensland account for 97% of the total production. Majority of Australia’s metallurgical (coking) coal is produced in Queensland, while production in New South Wales is largely thermal (steam) coal.

Major countries exporting hard Coal (MT) Country CY10 CY11 CY12 Indonesia 162 309 383 Australia 298 285 302 Russian Federation 89 99 103 Colombia 68 76 82 South Africa 68 70 72 United States 57 85 106 Kazakhstan 33 34 32 Canada 24 24 25 Vietnam 21 23 18 Mongolia 17 22 22 Others 19 14 23 Total 856 1041 1168 Source: IEA, CARE Research

Major coal importing countries China’s rapid industrialization and soaring economic growth has been fueled by coal-fired power plants, with majority of coal sourced domestically. It is producing almost 4BT of coal each year but is now the world’s largest importer of thermal coal. China has been the world's leading coal producer and consumer in recent years and accounted for close to half of the global coal consumption. In CY11, China has taken over Japan as world’s largest coal consumer with coal imports of 177MT. In CY12, the country’s imports further increased to 287MT driven primarily by rising thermal coal imports from Indonesia. According to MoC, Indian coal imports increased at a 22.6% CAGR from 73MT in FY10 to 135MT in FY13. The country imported 97MT of thermal coal alongwith 32.2MT of coking coal. In India, the domestic coal supply lagged coal consumption with Coal India, a large PSU miner unable to meet the domestic coal demand. Indonesia is the largest coal supplier to India by shipping 77.5MT (up 40% YoY) in FY13.

Major countries importing hard coal (MT) Country CY10 CY11 CY12 Japan 187 175 184 China 157 177 278 Korea 119 129 126 India 88 101 158 Chinese Taipei 63 66 65 Germany 45 41 45 Turkey 27 24 29 UK 26 32 44 Italy 22 23 24 Malaysia 19 21 22 Others 196 213 213 Total 949 1002 1188 Source: IEA, CARE Research

Trend in global indices

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Major coal indices (i.e. Richard Bay of South Africa, HBA from Indonesia and Newcastle from Australia) have corrected by 20-29% YoY to US $80-88/tonne till Dec-13. The price correction is primarily driven by China and India. China is the largest coal importer and imported ~290MT (59% growth YoY) of coal in CY12. China's 40% of coal imports were from Australia and 34% were from Indonesia. The Chinese coal imports have significantly slowed down on account of overall economic slowdown.

Trend in global coal indices

Sources: World Bank, IMF, Coalspot, CARE Research

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BUSINESS

(Unless otherwise stated, references in this section to “our Company" are to Mercator Limited, and references to "we", "our" or "us" are to our Company, our Subsidiaries and the joint venture companies, on a consolidated basis). Overview We are one of the largest shipping companies in the private sector in India. We commenced our business in 1984 with one mini-bulk carrier to operate on the Indian coast. Mr. H. K. Mittal and his family, took over our Company in 1988 pursuant to the acquisition of the entire share capital of the Company from the then existing shareholders. We made our maiden public issue of shares in 1993. The shares of our Company are currently listed on the BSE and NSE. Over the years, from being a traditional tanker company, we have diversified and forayed into different business segments, and today have a presence in bulk shipping, tanker shipping, dredging, offshore oil exploration, EPCIC and coal mining, trading and logistics. The main business interests of our Company are given bellow:

SHIPPING In the shipping segment, our Company has a presence in cargo shipping (dry, wet and gas) and dredging. As on 1st April, 2014 we run a fleet of 28 vessels which consists of tankers, a gas carrier, Dredgers and bulk carriers, including VLCC, Product Carriers, VLGC, Panamax, Kamsarmax and Post Panamax. Cargo/Commodities Shipping As on 1st April, 2014 we run a fleet of 22 vessels which consists of tankers, a gas carrier and bulk carriers, including VLCC, Product Carriers, VLGC, Panamax, Kamsarmax and Post Panamax. We have a presence in the energy transportation segment and offer complete logistics solutions and transport services for dry cargo to our clients in India as also in international jurisdictions. Today, we are amongst the largest private sector shipping Company in India in terms of tonnage. We provide transportation of wet bulk cargo, such as petroleum and crude oil which accounts for a significant percentage of seaborne trade globally. Our wet bulk services commenced in 1998, pursuant to the acquisition of our first wet bulk vessel M. T. Richa (9,750 DWT). In 2003, we also forayed into crude oil transportation. As on April 1, 2014, we own 6 tankers aggregating to 576,391 DWT. In March 2014, we acquired 1 VLGC 1992 built, marking our foray into gas transportation. Our gas carrier can be utilised for sea borne transportation of LPG, which consists of propane and butane butane-propane mixture. The total cubic capacity of our VLGC is 76,933 Cub.m. and DWT of 50,400.

MERCATOR LIMITED

SHIPPING

COAL LOGISTICS

OIL & GAS

WET BULK

DREDGING DRY BULK

COMPLETE SOLUTIONS

LIGHTERAGE E & P

COAL MINING AND TRADING

EPCIC GAS CARRIER

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Dry bulk carriers are vessels specially designed for the transportation of dry bulk cargo usually coal, iron ore and grains. We forayed into the dry bulk segment in the financial year 2005 –2006, and currently transport coal, grain and iron ore amongst other dry bulk commodities to and from various countries such as China, India, Australia, Indonesia, America and South Africa. As on 1st April, 2014, we own 14 dry bulk carriers aggregating to 1,061,558 DWT and one chartered-in vessel of 91,945 DWT. We offer our fleet as a mix of single-voyage, spot contracts and fixed-term charter contracts depending on the specific needs of our clients. Dredging is underwater excavation of soil, and is usually associated with deepening of channels in ports; construction of new ports; reclamation of land; beach nourishment; sand mining; shore protection including maintaining the shipping channel depths ; trenching – pipeline laying; dredging canals and rivers; and intake water column for power plants. We provide integrated dredging services to various ports in the form of maintenance dredging and capital dredging. As on 1st April, 2014, we own and operate 5 THSD dredgers and 1 CSD with cumulative DWT of 33,595 tonnes. For FY 2012-13, revenue from the shipping segment was Rs 1,117 crores, representing 29.75% of our gross revenue. For the nine months ended 31st December 2013, revenue from this segment was Rs. 674 crores.

COAL MINING AND TRADING We currently operate under 3 coal mine concessions in Indonesia. All these mines are open cast, and are operational. The coal produced from these mines is steaming/thermal coal. As on 1st April, 2014, the total estimated coal resources are approximately 56 MMT out of which our share of resources is about 28.50 MMT. We also have one prospective license in Mozambique which is under litigation. We have established ourselves as a coal procurement and logistics provider and are considered as a preferred and reliable coal supplier from Indonesia. As on 1st April, 2014 we have already sold over 28 MMT of coal. Our customers include large coal end use consumers as well as coal stockiest intermediaries, based in India and other Asian markets like China, Pakistan, Thailand, Philippines and Sri Lanka. The total cargo volume and value of coal sold by us in FY 2013 was about 7.63 MMT and U.S. $ 359 million respectively and for the nine months ended 31st December 2013 is about 4.79 MMT and U.S. $ 208 million respectively.

OIL & GAS - EPCIC We are offshore service providers to companies in the oil and gas industry. Our services in this segment includes construction, production and operation and eventually decommissioning, which are provided through our offshore assets in the oil and gas segment. We currently provide offshore services via 2 assets i.e MOPU and FSO in offshore Nigeria. For FY 2013, revenue from the oil and gas segment accounted for approximately Rs 269 crores, which represents 7% of our gross revenue. For the nine months ended 31st December 2013, revenue from this segment stood at approximately Rs. 232 crores. We have also entered into an agreement to provide FSO in India, for which we propose to convert our tanker, Prem Pride to an FSO.

We also have an in-house EPC unit that provides support to business units and develops customised solutions for specific projects. We presently have the capability to execute turnkey projects engineering, designing, construction, conversion, installation and commissioning. In November 2011 we have been awarded an EPC contract by Oil and Natural Gas Corporation Limited (ONGC), as part of a consortium, to convert the Mobile Offshore Drilling Unit (MODU), Sagar Samrat to a Mobile Offshore Production Unit (MOPU) on turnkey basis. For FY 2013, revenue from this segment accounted of about Rs 341 crores, representing 9% of our gross revenue. For the nine months ended 31st December 2013, revenues from this segment were Rs. 351 crores.

Oil & Gas - E&P

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We have entered into a Production Sharing Contract with the Indian government, for exploration of two on-shore petroleum exploration licenses in Cambay Basin, Western India under the Seventh New Exploration Licensing Policy round (NELP-VII). We, in consortium, have been chosen as the selected candidate by the Ministry of Energy of the Republic of the Union of Myanmar, for two shallow water offshore oil blocks, in the Myanmar Offshore Block Bidding Round – 2013, for which the consortium will enter into Production Sharing Contract for these blocks with Ministry of Energy of the Republic of the Union of Myanmar. We have a 30% share in the consortium. Complete Logistics Solutions We have expertise in providing complete logistics solutions for coal i.e. transportation of coal from the foreign load port until its final destination. Our services include stevedoring on mother vessels, lighterage by barges/tugs, transportation of cargo through road/rail to the stockyard and from thereon to the final place of usage. Most of these activities are carried out by chartered vessels/equipments. Our diversification over a period is as under:

Our Shipping Asset Profile

Asset Type Nos. Ownership DWT Name of the company Tankers 5 Owned 277,156 ML

1 Owned 299,235 MOHPL Total 6 576,391

Dry Bulk 13 Owned 992,272 MLSL 1 Owned 69,286 ML 1 Chartered In 91,945 MLSL

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Total 15 1,153,503 Gas Carriers 1 Owned 50,400 ML

Dredgers Cutter

5 1

Owned Owned

33,595 ML ML

Total 6 33,595

Our Other Assets Profile Asset Type Nos. Type of Ownership Capacity Name of the companyMOPU 1 Owned 50,000 BOPD MOPPL FSO 1 Owned 1.2 mn barrel

storage capacity MOPPL

Coal Licenses 3

Operational

Our share of estimated

resources 28.50 MMT

OHPL through its subsidiaries

1 Exploration N.A*

Petroleum Exploration Licenses**

2 Production Sharing Contract

N.A MPL

(*Currently under litigation ** In addition to this, we have been chosen as the selected candidate for two shallow water offshore oil blocks, in the Myanmar Offshore Block in which we have 30% share) Strengths

− Experienced management team with an established track record − Diversified in various business verticals − Customized solutions provider; − Long-term contracts ensuring revenue visibility; − Strong relationships with reputable customers; and − Strong execution capabilities, with in-house expertise throughout the value chain

Contribution to Revenue and Net Profit Allocation by Segment The following table sets out our segmental performance for the preceding three years:

(Rs. in million) FY 2011 FY 2012 FY 2013 9 mth to

December 2013 Particulars Amt. % Amt. % Amt. % Amt. %

Segment Revenue Shipping 12990 46.20 11850 31.56 11166 29.75 6740 26.27 Offshore 1198 4.26 1987 5.29 2686 7.15 2317 9.03 Coal & Logistics 13881 49.37 23162 61.68 20069 53.47 13000 50.66 Other 47 0.17 552 1.47 3614 9.63 3602 14.04 Total 28116 100.00 37551 100.00 37535 100.00 25659 100.00 Segment Results - Profit Shipping 1338 42.53 112 4.38 (4321) 180.19 (324) (20.92) Offshore 835 26.54 494 19.32 756 (31.52) 654 42.22 Coal & Logistics 956 30.39 1396 54.60 833 (34.74) 910 58.75 Other 17 0.54 555 21.70 334 (13.93) 309 19.95 Total 3146 100.00 2557 100.00 (2398) 100.00 1549 100.00

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Note: 1) The segmental profits disclosed above do not include the other un-allocable expenditure, interest cost and the

provision for tax as well as provision for deferred tax. 2) Other includes revenue from EPC business & other income.

Our Fleet Our fleet profile as on 1st April 2014 Vessel Type of Vessels Year of

BuiltDWT GRT Yard Built

Oil Tankers – Owned Prem Mala MR Product

Tanker 2000 47,044 28,522 Onomichi Dockyard, Japan

Prem Pride* Aframax 1999 109,610 61,764 Dalian New Shipyard , china Harsha Prem MR Product

Tanker 1993 42,235 25,644 Minami Nippon Shipbuilding Company

Ltd., Usuki, Japan Vedika Prem MR Product

Tanker 1993 42,235 25,644 Minami Nippon Shipbuilding Company

Ltd., Usuki, Japan Hansa Prem MR Product

Tanker 2001 36,032 23,680 daedong Shipbuilding South Korea

Kamakshi Prem

VLCC 2006 299,235 159,407 Nantong Cosco, KHI, China

Gas Carriers – Owned Sisouli Prem VLGC 1992 50,400 44,704 Mitsubishi Shipyard, Nagasaki,, Japan Dredger – Owned Darshani Prem TSHD 2006 8,538 7,277 Zhejiang Dongpeng Shipbuilding &

Repairing Co.Ltd. China Tridevi Prem TSHD 2006 7,059 4,992 Zhoushan Qifang Shipyard Co.Ltd., China Bhagwati Prem

TSHD 2007 8,556 7,256 Zhejiang Hong Guan Shipbuilding co, Ltd, China

Omkara Prem TSHD 2008 6,292 4,607 Zhejiang Fusen Shipbuilding Co. Ltd., Daishan, China

Uma Prem TSHD 2004 3,150 2,389 Linhai Jiajghai Shipbuilding Co.Ltd. Yukti Prem CSD 2011 N. A. N.A Qingzhou Y.D.M.Co.Ltd. Dry Bulk – Owned Sri Prem Poorva

Geared Panamax 1994 69,286 36,708 Hashihama

Sri Prem Aparna

Geared Panamax 2001 73,461 38,678 Tsuneishi Corporation, Japan

Garima Prem Gearless Panamax 2007 74,456 40,488 Hudong, China Garv Prem Gearless Panamax 2006 74,444 40,485 Hudong, China Gaurav Prem Gearless Panamax 2005 73,901 40,230 Jiangnan, China Kalpana Prem Geared Panamax 2000 73,652 38,906 Imabari, Japan Kesari Prem Geared Panamax 1997 69,186 36,698 Tsuneishi Corporation, Japan Kanak Prem Geared Panamax 1997 69,221 36,698 Tsuneishi Corporation,Japan Sri Prem Varsha

Geared Kamsarmax

2006 82,379 43,288 Tsuneishi Corporation, Japan

Sri Prem Veena

Gearless Kamsarmax

2007 82,459 43,158 Tsuneishi Corporation, Japan

Sri Prem Vidya

Geared Kamsarmax

2006 82,273 43,288 Tsuneishi Corporation, Japan

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Gauri Prem Gearless Panamax 2007 74,483 40,488 Hudong; China Aarti Prem Gearless Panamax 1994 69,087 35,889 Imabari Shipbuilding Co., Ltd., Marugame

Japan Chitra Prem Gearless Post

Panamax 2009 93,270 51,255 Jiangsu New Yangzi Shipbuilding Co. Ltd.,

China Dry Bulk – Chartered-in Maria Laura Prem

Post Panamax 2010 91,945 55,000 Sungdong Shipyard; South Korea

(*Proposed to be converted into an FSO)

Vessel Vessel Type DWT/ Capacity

Year of refurbishment

Yard Refurbished

Virini Prem FSO 1.2 mn barrel storage capacity 2010 Yiu Lion Dockyards, China Veer Prem MOPU Oil processing system: 50K BOPD 2010 Gulf Copper, Galveston, USA

In addition to the above, our Company, at times, hires outside vessels on a charter basis, to service its contractual obligations. Fleet on Order We do not have any fleet on order as on date of this Offering Circular. Clientele Our clientele across various business segment in which we operate, includes oil majors such as IOCL, Mangalore Refinery & Petrochemicals Limited, Shell Inc., B.G Explorations & Production India Limited, BPCL Limited, Afren Plc, ONGC Limited, steel and power plant utilities in India and China, commodity trading houses such as Vitol, Glencore, Cargill, SAIL, TATA Power, Arcelor Mittal Group, Marubeni, JSW Power, Essar Oil, Simhapuri Energy, Welspun Group and ports such as Paradip Port Trust, Jaigadh Portand New Mangalore Port. Capital Expenditure For FY 2013, our capital expenditure was Rs. 699 million (approximately U.S.$ 13 million, (considering Rs. 54.3893 = 1 U.S. dollar) respectively principally related to the mining equipments & cost, vessel related cost etc and was financed by a mixture of debt and internal accruals. Since 1st April 2013, we have acquired 1 MR Product Tanker at a total cost of about Rs. 692 million (approximately U.S. $ 12.35 million, (considering Rs. 56.011 = 1 U.S. dollar) and 1 VLGC at a total cost of approximately U.S. $ 35 million. The purchase of both vessels was funded by means of debt and equity. Insurance We maintain aggregate insurance coverage for the hull value of all our vessels. We are also insured for third party risks, including environmental risks, Navigation Policy, Port Risk Policy and War Risk Policy etc. Typically, each tanker vessels is insured generally to cover cargo claims, crew claims and third party claims environmental and pollution claims. We have also availed of Mortgagees Interest Insurance for certain vessels in relation to the bank financing. In respect of EPC, turn-key contracts we generally procure cargo transit insurance, contractor’s all risk Insurance, voyage insurance, contractor’s constructional plant and equipment insurance. Policies cover both property damage and third party liability. Our coal mines are open-pit mines which have relatively lower level of risk as compared to underground mines. We maintain insurance which covers the project and assets including plant equipment arising from fire, earthquakes, including transit insurance for transport of our equipment, product inventory and slimes. However we do not have

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adequate insurance covering other potential risks associated with our operations. We do not maintian insurance for certain types of environmental hazards, such as pollution or other hazards arising from our disposals of waste product. We believe that our insurance coverage is commensurate to the size, nature and diversity of our business operations Employees and Outsourcing of Crew As on 31st March 2014, we had 210 full-time employees involved in management and administration functions. We do not have any part-time employees. We outsource our crewing and manning requirements from a fleet management company. We also outsource contractors for our mining activities. Apart from the above there are certain crew members on board of the vessels, work force for mining which are employed by the Company. We do not maintain a pension policy. We provide for gratuity, bonus and leave payments, as applicable, outstanding at the end of every year, which are charged to the revenue account. There is no trade union for the Company’s full-time employees. However officers and crew working on board our various vessels are represented by trade unions. Negotiations are held periodically with these unions by the Indian National Ship Owners Association of which the Company is a member, and agreements reached are binding on the Company. While we have outsourced most of our crew sourcing and technical management requirements to ship management companies, we still remains liable for adherence to these negotiated agreements. Manpower in respect of our offshore facilities and services located in Nigeria, consists of a combination of expatriates and locals. Local manpower is outsourced. There are trade unions in relation to Nigerian workforce. Safety, Quality and Maintenance We share responsibility for Quality, Health, Safety, Security and Environment protection; not only for ourselves but also for our colleagues and for society at large. Our fleet maintains good safety records, and our vessels operate in compliance with international pollution prevention protocols and with strict regard for national pollution prevention and response regulations. Our shipboard employees are well trained in all the requisite systems and procedures and are provided training over and above the mandatory requirements. We adhere to the IMO’s aim of achieving safe shipping across cleaner oceans. We maintain all our vessels in good working condition in order to satisfy the statutory flag state requirements as well as the international operating standards. We regularly offer our tankers for SIRE inspection held under the Oil Companies International Forum (OCIMF) umbrella. Similarly we also offer our bulk carriers for third party audits from reputed agencies. Our dredgers are ISO 9000 compliant. Our offshore marine assets adhere to local, industry and client standards. We carry out regular maintenance of our fleet, including a mandatory annual survey of each of our vessels (which takes them out of service for two to three days on average) and a mandatory dry-docking twice in a period of 5 years (which takes two to three weeks on average). Most of the vessels are dry-docked in reputed shipyards. Crew members are responsible for carrying out routine maintenance onboard the vessels and where necessary additional crew members are added to perform specific maintenance and upgrading tasks during voyages. For our mining operations, to minimise the risk of accidents, injuries and illness to our employees by improving health and safety standards and we closely monitor our operations. We have a comprehensive safety management system for the safe operation of our mines, which includes safety management plans, rules, codes of practice, manuals and procedures with which our employees are required to comply. We also conduct internal safety checks on a regular basis to ensure compliance from our staff. We have safety officers stationed on-site at each of our mining sites to oversee the safety aspect of our coal production operations. We believe our emphasis on worker health and safety is demonstrated by the relatively low level of worker accidents at our mines.

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For our offshore services, we have developed and implemented HSSE and Asset Integrity Management systems to document our policies and best business practices to satisfy the requirements and expectations of our customers. We have prepared emergency plans to mitigate residual risks and conduct regular drills to ensure readiness at all times. Environment and Pollution It is mandatory for us to comply with various environmental measures prescribed by various regulatory authorities. We follow a Health Safety and Environment Policy which has the approval of our major customers. Our technical managers have an approved manual which lists procedures whereby compliance to various regulations are ensured in addition to enhancing our commitment to safety of life, ship, cargo and the environment. All vessels have mandatory and approved pollution prevention manual on board. We have implemented a Planned Maintenance System ("PMS") onboard our vessels whereby all equipment is routinely checked and maintained as prescribed by manufacturers and good industry practices. Further a requisite amount of spares of critical machinery are kept on board at all times. We endeavour to practice sound environmental management of the mines which we operate, and we have formulated comprehensive post-mining reclamation and rehabilitation plans to manage the environment in which we carry out our mining operations. Our strategies take into account the geological characteristics of our mining sites in order to better manage the environment, and mitigate risks attached thereto. Our land reclamation activities require the deposit of the overburden onto mined out areas. Our rehabilitation activities require the spreading of topsoil over the surface of the overburden deposited and the planting of native plants. Licenses There are no governmental controls between different countries in relation to pricing, wages, foreign exchange transactions, imports and exports, regulation of our Company’s industry, environmental protection or other areas of our Company’s operations which are required for the businesses owned and operated by our Company. There are certain licences, such as that required under section 406 of the Merchant Shipping Act (which is required for ships to operate on the Indian coast) as well as licences relating to radio frequency and uses of software for which the Company has all the proper authorisations. We are required to obtain and maintain various approvals under Work Programmes for the oil blocks allocated to us under the Production Sharing Contract by the Govt of India which includes necessary approvals, permits, consents, authorisations, visas, work permits, licenses and leases, right of way, easement, surface rights and security protection at the contractor's cost. We have also obtained required licenses and approvals in connection with our mining operations in Indonesia. Our coal mining activities located in Indonesia are strictly regulated under various regulations laws, and governments’ agencies, which require us to maintain various licenses or approvals from the central Government and/or the regional government to carry out coal mining and coal contracting. Additionally, where mining operations are carried out in forest areas, permits for utilisation of such areas are also necessary. Tax Incentives Globally, shipping companies pay taxes on a “tonnage tax” basis, whereby taxes are computed on a notional income calculated at a fixed rate based on the Net Registered Tonnage (“NRT”) of the company. Tonnage Tax The Tonnage tax regime was introduced in India on 10 September 2004 pursuant the Finance (No. 2) Act, 2004. The regime was part of an initiative by the Government to promote Indian shipping and to ensure that shipping companies are not forced to ‘flag out’ their ships to other countries operating at relatively low levels of taxation, based on total tonnage of ships. It is a scheme of presumptive taxation whereby the notional income arising from the operation of a ship is determined based on the tonnage of the ship which is than taxed at the normal corporate rate applicable for the year.

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AIS Scheme In Singapore, income from all ships operating under the Singapore flag is tax free. Income from all ships operating under foreign flag is taxable @17%. Shipping income of an “Approved International Shipping Enterprise” (AIS Enterprise) by the Maritime and Port Authority of Singapore (MPA) is exempt from tax. To be eligible for the AIS Scheme, a Singapore incorporated company whether owning and/or operating the foreign ships for the purposes as mentioned above, must be a significant operator of a fleet of ships and have an acceptable level of business spending in Singapore. Strategic and commercial management of the company’s operations must be conducted in Singapore with sufficient headcount located in Singapore to perform these functions. Mercator International Private Ltd (MIPL) was awarded the AIS status under the MPA Scheme from February 2008 to 31 October 2015. MIPL’s subsidiaries are also eligible to be covered under the AIS with MIPL as an AIS Parent, which is subject to independently satisfy the conditions. The award of AIS status to other MIPL subsidiaries is pegged to the MIPL AIS status which ends on 31 October 2015 and which is further extendable upon government approval. Our coal trading arm in Singapore, MCS Holdings Pte Ltd has been awarded a status of Global trading programme (GTP) which is valid for a period of 5 years starting from 1st April 2013 and enjoy’s concessionary tax rate of 10% on income derived from qualifying transactions in approved commodities. Taxation in Indonesia Corporate Tax: Companies in Indonesia are taxed at a rate of 25%, for both domestic and international sourced income. Resident Indonesian companies are required to withhold tax at a rate of 20% from payments to foreign companies. Value Added Tax: A VAT is levied at the rate of approx 10% at point of sale, by major vendors. Sales and services tax are exempt from cottage economies and industries. Taxation in Nigeria Under current Nigerian law, taxation is enforced by the 3 tiers of Government, i.e. Federal, State, and Local Government with each having its sphere clearly spelt out in the Taxes and Levies (approved list for Collection) Decree, 1998. Of importance at this juncture however are tax regulations pertaining to investors both foreign and Local. Value Added Tax (VAT): VAT at a flat rate of 5% of all invoiced amounts of taxable goods and services. Companies Income Tax: Tax is payable for each year of assessment of the profits of any company at a rate of 30%. These include profits accruing in, derived form brought into or received from a trade, business or investment. Generally in Nigeria company dividends or other company distribution whether or not of a capital nature made by a Nigerian company is liable to tax at source of 10%, Related Party Transaction From time to time, we enter into transactions with affiliates or related parties, principally with our associate companies. We follow a policy of entering all such transactions on a strictly arm’s length basis, on terms no less favourable than those if such transactions were carried out with unaffiliated third parties. Full details of related party transactions are set out in the Notes to the Company’s financial statements included in this Offering Circular. Information Technology Our Company has in place various off the shelf IT systems relating in particular to communications. Neither the purchase nor the maintenance of these systems involves any significant cost to our Company. Property

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Other than our fleet and our Mumbai office premises, land in Ahmedabad, land in Indonesia for mining and residential property in Jakarta, we own no other significant property. We have also taken certain premises on lease for office and residential purposes. Litigation We are involved in various legal proceedings and disputes, details of material legal proceedings and disputes which are disclosed in the section "Litigation And Disputes" on page 194 of this Offering Circular: Competition We operate in markets that are highly competitive. We compete for charters on the basis of the price, location, size, age and condition of our vessels, our reputation, the reputation of our vessel operators, logistics solution provided and whether there is an existing relationship between us and the charterer. We arrange charters both directly with end-users, as well as through brokers. Our main competitors are Indian as well as international shipping companies such as IMC Shipping Company Private. Limited, Great Eastern Shipping, Precious Shipping. Our Company’s tankers and dredgers are employed in domestic trade as well as foreign trade. Typically Indian shipping companies have a definite advantage over global players since chartering is carried out through the Indian oil industry and in accordance with Government policies and directives. Indian owned and flagged ships get preferential rights in relation to Indian cargo provided that the contract matches the commercial terms offered by foreign vessels. While we face significant competition in relation to our coal mining operations in Indonesia, we believe we are able to compete against other Indonesian producers on the basis of several factors, including our established reputation as a reliable supplier, the characteristics and consistent quality of our coal, our competitive pricing, our significant expertise / experience in logistics and our relationships with existing customers.

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KEY INDUSTRY REGULATIONS

1. SHIPPING

Shipping in India is a Central subject and is dealt with by the Ministry of Shipping. The Indian shipping industry is mainly governed by the following Acts:

• The Merchant Shipping Act, 1958 • The Inland Vessels Act, 1917 • The Coasting Vessels Act, 1838 • The Multi-modal Transportation of Goods Act, 1993

The Shipping Ministry is also responsible for administering the following main Acts;

• The Indian Ports Act, 1908 • The Dock Workers (Regulation of Employment) Act, 1948 • The Major Ports Trust Act, 1963 • The Seamen’s Provident Fund Act, 1966 • The Inland Waterways Authority of India Act, 1985

The Ministry regulates the functioning of the Shipping industry through its various subordinate offices, autonomous bodies, societies, associations and public sector undertakings, some of which are listed below.

The National Shipping Board, a statutory body, advises the central government on shipping matters. The Directorate General of Shipping is the main administrative authority which issues orders and notifications on the various aspects of shipping. The Mercantile Marine Department, which comes under the administrative control of the Directorate General of Shipping, deals with the registration and survey of ships. Transchart is a wing of the Ministry responsible for making shipping arrangements for import cargo under the control of the Government / PSUs. The Indian Register of Shipping is a classification society.

As per section 406 of the Merchant Shipping Act, no ship can be taken to sea from a port or a place within or outside India without a license granted by the Director General of Shipping. Coastal trade is reserved for Indian flag vessels and is governed by section 407 of such Act. To operate a foreign flag vessel on the Indian coast, permission is required from Directorate General of Shipping.

Indian shipping companies are also required to comply with the rules and regulations issued by the Ministry of Finance and Department of Company Affairs as well as the Ministry of Commerce. Apart from the Indian regulations, the Indian shipping industry is also governed by the various IMO/ILO instruments (Conventions & Protocols) ratified by the Government of India.

2. COAL MINING

Our Group’s business activities located in Indonesia are subject to regulation by various laws, regulations and governments’ agencies, such as Kabupatein Paser Regency, Kutai Kartenegara Regency in Kalimantan, Indonesia. These regulations require us to possess various licenses or approvals from the Central Government and/or the Regional Government to carry out our coal mining and coal contracting activities. Permits have to be obtained for utilisation of forestry areas only if mining operations are carried out within these forestry areas. As at the Latest Practicable Date, our Group does carry out mining operations within forestry areas and we have obtained/ in process of obtaining the permits for utilisation of forestry areas.

3. OIL AND GAS

The Petroleum (Drilling and Production) Amendment Regulations 1988, the Director of Petroleum Resources has the mandate to formulate Regulations/Guidelines as desirable for the smooth and safe operations in the Oil and Gas Industry. No company shall render or be engaged to render technical services to the Oil Industry without first being registered and issued a permit to carry out such services by the Director of Petroleum Resources.

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SUBSIDIARIES AND JOINT VENTURES The Company has 5 direct subsidiaries and 23 step down subsidiaries and 4 joint ventures which are held through Subsidiaries/step-down Subsidiaries ("Joint Ventures"). Some of the subsidiaries of the Issuer have negative networth. Some of our Subsidiaries and Joint Venutres have become sick companies and are not under winding up. The information provided in this section is as of the date of the Offering Circular. Interest of the Subsidiaries in the Company None of the Subsidiaries hold any Equity Shares in the Company, Other than the various transactions carried out at "arms length" between our Company and our Subsidiaries, in the ordinary course of business, the Subsidiaries do not have any other interest in our Company’s business. Details of these transactions are set out in the Notes to the Company’s financial statements included in this Offering Circular in the section titled "Index to Financial Statements" on page 204. Common Pursuits Except as disclosed in this Offering Circular, the Promoter does not have any interest in any venture that is involved in any activities similar to those conducted by the Company. The Company will adopt the necessary procedures and practices as permitted by law to address any conflict situation as and when they arise. SUBSIDIARIES The Company has the following Subsidiaries, including step-down Subsidiaries as of the date of this Offering Circular: Incorporated in India 1. Mercator Oil and Gas Limited; 2. Mercator Petroleum Limited; 3. Oorja Resources India Private Limited; 4. Mercator FPSO Pvt. Limited; Incorporated in Singapore 1. Mercator International Pte Limited; 2. Mercator Lines (Singapore) Limited; 3. Oorja Holdings Pte. Limited; 4. Mercator Energy Pte. Ltd.; 5. Mercator Offshore (P) Pte. Limited; 6. Mercator Offshore Holdings Pte Limited; 7. Chitra Prem Pte Limited; 8. Oorja (Batua) Pte. Limited; 9. MCS Holdings Pte Limited; 10. Oorja 1 Pte Limited; 11. Oorja 2 Pte Limited; 12. Oorja 3 Pte Limited; 13. Mercator Offshore Assets Holding Pte. Ltd.; 14. Mercator Okwok FPU Pte.Ltd.; 15. Mercator Okoro FPU Pte.Ltd. Incorporated in Indonesia

1. Oorja Indo Petangis Three; 2. Oorja Indo Petangis Four; 3. Oorja Indo KGS;

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4. PT Mincon Indo Resources Incorporated in Mozambique

1. Oorja Mozambique (Lda); 2. Broadtec Mozambique Minas Lda Incorporated in Panama

1. Mercator Lines Panama Inc; 2. Vidya Varsha Inc; Incorporated in Nigeria

1. Ivorene Oil Services Nigeria Limited The Company has the following Joint Ventures, as of the date of this Circular:

Incorporated in Indonesia 1. PT Karya Putra Borneo; 2. PT Bima Gema Permata; 3. PT Nuansa Sakti Kencana; 4. PT Indo Perkasa

Following is a summary of the operations of certain key Subsidiaries. Other than these Subsidiaries, all our Subsidiaries are holding companies and as such do not have any substantial operations.

1. Mercator International Pte Limited ("MIPL")

Corporate Information:

MIPL was incorporated on January 16, 2007 in Singapore. MIPL is the holding company for all foreign companies of the Company. MIPL is in the business of ship owning, ship chartering, shipping operation & investment in coal mining, through its subsidiaries. MIPL is situated at Singapore

The board of directors of MIPL is presently comprised as under:

Name of the Director Nature of Directorship

Mr. Adip Mittal Director Mr. Shalabh Mittal Director Mr. Rajagopal Iyervenkataraman Director Mr. Pushpatraj Shivlal Shah Director

Capital Structure of MIPL:

Particulars No of equity shares Issued, subscribed and paid-up capital 100000

Shareholding Pattern:

Sr. No.

Name of the Shareholder No of equity shares Percentage of equity holding (%)

1. Mercator Limited 100000 100.00 Total 100.00

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Audited Financial Information for year ended March 31, 2013

Particulars Rs in Millions

(On a consolidated basis)

Issued Capital 3.26 Reserves 15,300.51

Profit / (Loss) after tax, after minority interest for the last financial year (2,280.87)

Value at which the issuer shows shares held in its accounts 2.88

Amount still to be paid up on shares held -

Amount of dividends received in the course of last financial year (2012-2013) in respect of shares held -

Amounts owed to the Issuer with regard to the Subsidiary 1,104.81

Amounts owed by the Issuer with regard to the Subsidiary -

2. Mercator Lines (Singapore) Limited ("MLSL")

Corporate Information: MLSL was initially incorporated as a private limited company on May 26, 2005. On December 14, 2007, MLSL is listed on the Main Board of Singapore Exchange Securities Trading Limited. MLSL is in the business of dry bulk carriers. The board of directors of MLSL is presently comprised as under:

Name of the Director Nature of Directorship Harish Kumar Mittal Chairman Shalabh Mittal Managing Director & CEO Pushpatraj Shivlal Shah Director Atul Agarwal Director Huang Yuan Chiang Director John Walter Sinders Jr Director Arul Chandran Director Maria Helena Dieleman Director

Capital Structure of MLSL: Following is the capital structure of MLSL as on March 31, 2013

Particulars No of equity shares Issued, subscribed and paid-up capital 1,361,435,003

Shareholding Pattern: Following is the shareholding pattern of MLSL as on March 31, 2013

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Sr. No.

Name of the Shareholder No of equity shares held Percentage of equity holding (%)

1. Mercator International Pte. Ltd.

900,850,000 66.17*

2. Corporations 270,547,549 19.87 3. Individuals 189,847,482 13.95 4. Director 189,972 00.01 Total 1,361,435,003 100.00

*MLSL has subscribed to U.S. $ 19 million convertible bonds issued by MLSL due FY18. Considering MIPL opts to convert the whole convertible bonds into shares, MIPL’s shareholding in MLSL will increase to 69.41 % Audited Financial Information for year ended March 31, 2014

Particulars Rs in Millions

(On a consolidated basis)

Issued Capital 12,842.99 Reserves 5,406.53

Profit / (Loss) after tax, for the last financial year (1,386.72)*

Value at which the issuer shows shares held in its accounts -

Amount still to be paid up on shares held -

Amount of dividends received in the course of last financial year (2013-2014) in respect of shares held -

Amounts owed to the Issuer with regard to the Subsidiary -

Amounts owed by the Issuer with regard to the Subsidiary 86.03

*(considering average exchange rate of Rs. 60.9359 = 1 US dollar)

3. Oorja Holdings Pte. Limited ("OHPL") Corporate Information: OHPL was incorporated on July 4, 2007 in Singapore. OHPL is the holding company carrying on the business of coal mining and coal trading, through its subsidiaries. There are multiple subsidiaries under OHPL. The board of directors of OHPL is presently comprised as under:

Name of the Director Nature of Directorship Mr. Shalabh Mittal Director Mr. Kirtipal Singh Raheja Director

Capital Structure:

Particulars No of equity shares Issued, subscribed and paid-up capital 2

Shareholding Pattern of OHPL:

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Sr. No.

Name of the Shareholder No of equity shares held Percentage of equity holding (%)

1. Mercator International Pte. Ltd.

2

Total 2 100.00 Audited Financial Information for year ended March 31, 2013

Particulars Rs in Millions

(On a consolidated basis)

Issued Capital 0.00 Reserves 953.37 Profit / (Loss) after tax, after minority interest for the last financial year 404.30

Value at which the issuer shows shares held in its accounts -

Amount still to be paid up on shares held -

Amount of dividends received in the course of last financial year (2012-2013) in respect of shares held -

Amounts owed to the Issuer with regard to the Subsidiary 17.12

Amounts owed by the Issuer with regard to the Subsidiary -

4. Mercator Energy Pte. Limited ("MEPL") MEPL is incorporated on February 2, 2014 in Singapore. MEPL is the holding company for all the E&P, EPCIC and EPIC companies of our Company. MEPL is involved in the business of petroleum, mining and prospecting services & service activities incidental to oil and gas extraction (excluding surveying). The board of directors of MEPL is presently comprised as under:

Name of the Director Nature of Directorship Mr. Shalabh Mittal Director

Capital Structure of MEPL:

Particulars No of equity shares Issued, subscribed and paid-up capital 2

Shareholding Pattern of MEPL:

Sr. No.

Name of the Shareholder No of equity shares Percentage of equity holding (%)

1. Mercator International Pte. Limited 2

100

Total 2 100

Audited Financial Information for year ended March 31, 2013 MEPL was formed on February 2, 2014 and therefore there is no financial information.

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5. Mercator Oil & Gas Limited ("MOGL")

Corporate Information: MOGL was incorporated under the Companies Act, 1956 on 16th June 2005, in India as Ivory Shipping Limted. The name of the company was subsequently changed to Ivory Oil and Gas Limited on 19th January 2006 and further to MOGL on 8th Septemeber 2006. MOGL is carrying on the business of providing oil and gas services. MOGL is currently executing an EPC contract awarded to it by ONGC Ltd. for conversion of their Mobile Offshore Drilling Unit ‘Sagar Samrat’ into a Mobile Offshore Production Unit in consortium with Mercator Offshore (P) Pte. Ltd. and Abu Dhabi based shipyard viz. Gulf Piping Company. The board of directors of MOGL is presently comprised as under:

Name of the Director Nature of Directorship Mr. H. K. Mittal Director Mr. Atul Agarwal Director Mr. Kapil Garg Director

Capital Structure of MOGL:

Particulars No of equity shares of Rs 10 each Authorised Capital 5,00,000 Issued, subscribed and paid-up capital 1,50,000

Shareholding Pattern:

Sr. No.

Name of the Shareholders No of equity shares Percentage of equity holding (%)

1. Mercator Limited 1,49,994 99.99 2. Harish Kumar Mittal* 1 0.00 3. Archana Mittal* 1 0.00 4. Adip Mittal* 1 0.00 5. AHM Investments Pvt.

Limited*. 1 0.00

6. Aayush Agarwal* 1 0.00 7. Manjuli Agarwal* 1 0.00 Total 1,50,000 100.00

*Nominee of Mercator Limited

Audited Financial Information for year ended March 31, 2013

Particulars Rs in Millions

Issued Capital 1.50 Reserves 66.79

Profit / (Loss) after tax for the last financial year 79.07

Value at which the issuer shows shares held in its accounts 1.50

Amount still to be paid up on shares held -

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Particulars Rs in Millions

Amount of dividends received in the course of last financial year (2012-2013) in respect of shares held -

Amounts owed to the Issuer with regard to the Subsidiary 63.14

Amounts owed by the Issuer with regard to the Subsidiary -

6. Mercator Offshore (P) Pte. Limited ("MOPPL")

MOPPL was incorporated on December 15, 2009 in Singapore. The main business activities of MOPPL are oil and gas exploration and related services. MOPPL owns an FPU which has been successfully commissioned on 1st May 2011 and is deployed in EBOK field at the offshore of Nigeria for a period of nine years. Afren Resources Limited is the designated operator of the EBOK field. The board of directors of MOPPL is presently comprised as under:

Name of the Director Nature of Directorship Mr. Shalabh Mittal Director Mr. Atul Agarwal Director

Capital Structure of MOPPL:

Particulars No of equity shares Issued, subscribed and paid-up capital 279840

Shareholding Pattern of MOPPL:

Sr. No.

Name of the Shareholder No of equity shares Percentage of equity holding (%)

1. Mercator International Pte. Ltd. 265848 95.00 2. Mercator Limited 13992 5.00 Total 279840 100.00

Audited Financial Information for year ended March 31, 2013

Particulars Rs in Millions

Issued Capital 10.88 Reserves 349.70

Profit / (Loss) after tax, for the last financial year 406

Value at which the issuer shows shares held in its accounts -

Amount still to be paid up on shares held -

Amount of dividends received in the course of last financial year (2012-2013) in respect of shares held 17.32

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Particulars Rs in Millions

Amounts owed to the Issuer with regard to the Subsidiary 35.32

Amounts owed by the Issuer with regard to the Subsidiary -

7. Mercator Petroleum Limited ("MPL")

Corporate Information: MPL was incorporated in May 4, 2007 in India as Mercator Petroleum Private Limited. It was converted into a public company on July 29, 2010. MPL has entered into a Production Sharing Contract with the Indian government, for exploration of two on-shore petroleum exploration licenses in Cambay Basin, Western India under the Seventh New Exploration Licensing Policy round (NELP-VII). The “S-Type” blocks are situated onshore in the prolific Cambay Basin, Gujarat, India. The board of directors of MPL is presently comprised as under:

Name of the Director Nature of Directorship Mr. H. K. Mittal Director Mr. Atul Agarwal Director Mr. Kapil Garg Director

Capital Structure of MPL:

Particulars No of equity shares of Rs 10 each Authorised Capital 1,00,000 Issued, subscribed and paid-up capital 1,00,000

Shareholding Pattern of MPL:

Sr. No.

Name of the Shareholder No of equity shares Percentage of equity holding (%)

1. Mercator Limited 99994 99.99 2. Harish Kumar Mittal* 1 0.00 3. Archana Mittal* 1 0.00 4. Kapil Garg* 1 0.00 5. Atul Agarwal* 1 0.00 6. Deepak Dalvi* 1 0.00 7. Manjuli Agarwal* 1 0.00 Total 100,000 100.00

(*As nominee of Mercator Limited) Audited Financial Information for year ended March 31, 2013

Particulars Rs in Millions

Issued Capital 1.00 Reserves (4.58)

Profit / (Loss) after tax, for the last financial year (0.57)

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Particulars Rs in Millions

Value at which the issuer shows shares held in its accounts 1.00

Amount still to be paid up on shares held -

Amount of dividends received in the course of last financial year (2012-2013) in respect of shares held -

Amounts owed to the Issuer with regard to the Subsidiary 246.55

Amounts owed by the Issuer with regard to the Subsidiary -

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ORGANISATION CHART

Executive Chairman

Managing Director

VP – Tankers

VP -HR

VP - Technical

VP - Dredgers

President – Shipping & Dredging

President– Coal

Handling

CFO

Secretarial& Legal

GM – Finance & Accounts

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MANAGEMENT AND CORPORATE GOVERNANCE The Board is responsible for the management and administration of the affairs of the Company and the Board (and any committee which it appoints for the purpose) is generally vested with all the powers required for such management and administration. The Articles provide for a Board of not less than three (3) and not more than fifteen (15) Directors, excluding debenture and technical or expert Directors. The Board is currently made up of six directors, two of whom are Executive Directors. Other than as may be provided in the Companies Act, every Director is required to be appointed by the Shareholders during a general meeting. An appointment by the Board shall be subject to approval by resolution of shareholders at next general meeting. . The Board may appoint any eligible person to be an Executive Director of the Company. The Board may appoint any person as an additional Director, or a Director to fill a casual vacancy on the Board for the remaining tenure of his predecessor. The appointment of any additional Director by the Board shall be valid only up to the next annual general meeting of the Company, at which the shareholders may appoint him as a Director liable to retire by rotation. If authorized by the Articles of Association of the Company or by shareholders resolution, the Board may appoint a person not holding any alternate directorship for any other director in the company, to act as an alternate director for a director during his absence from India for a period of at least not less than three months. Such an alternate director shall not hold office for a period longer than that permissible to the director in whose place he has been appointed and shall vacate the office if and when the director in whose place he has been appointed returns to India. An ordinary resolution of shareholders at a general meeting is required to remove any Director from the Board, except for any nominee Directors or any Director appointed by the Government. Subject to limits prescribed under the Companies Act at least two-thirds of the total number of Directors in office, not including nominee Directors or Managing Directors, are required to retire by rotation. Of those Directors, one-third must retire at each annual general meeting. If eligible, they may offer themselves for re-election. Vacancies caused by the retirement of Directors by rotation are generally filled by a vote of shareholders at the annual general meeting. The Board of Directors meets as and when required, subject to requirements of the Companies Act and the Listing Agreements with the relevant Stock Exchange(s), to consider various business placed before it including major policy and business matters and to review the performance of the Company. The Board of Directors met 5 times in the financial year ended March 31, 2014. Board of Directors The following table sets forth details regarding our Company's Board of Directors and their shareholdings as at March 31, 2014. Name Position Address Date of

Appointment Number of shares held

Shareholding (%)

Mr. Harish Kumar Mittal

Executive Chairman

214, NCPA Apartment, Nariman point, Mumbai - 400021

May 23, 1988

46654200 19.05

Mr. Atul J. Agarwal Managing Director Flat No. 2802, Vivarea, Tower ‘A’ Sane Guruji Marg, Near Jacob Circle, Mahalaxmi, Mumbai - 400 011.

April 15, 1988 5460966 2.23

Mr. Manohar Bidaye Independent Director

1901/02 A Wing Oberoi Gardens, Thakur Village, Kandivali (East), Mumbai- 400101

May 26, 1994 97500 0.04

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Name Position Address Date of Appointment

Number of shares held

Shareholding (%)

Mr. K. R. Bharat Independent Director

Flat 6AB/7AB Mona Co op Hsg. Society, 46-F, B.D.Road, Mumbai- 400026

July 30, 2007 Nil Nil

Mr. Kapil Garg Non-Independent Director

Apartment no. 3, 5th & 6th floor, Raheja Regale,84, Napeansea Road,, Mumbai, 400006

January 30, 2010

Nil Nil

Mr. M. M. Agrawal IndependentDirector 1204/1205, "C" wing Tower 1, 12th floor, Ashoka Garden, Sewree, Mumbai, 400015

August 12, 2011

Nil Nil

On May 18, 2013, Mr. H. K. Mittal, was re-appointed as the Managing Director of the Company for a period of three (3) years, and was designated as Executive Chairman. His appointment is valid up to July 31, 2016 and can be terminated by either party giving six months’ written notice. On May 18, 2013, Mr. Atul Agarwal, was re-appointed as the Managing Director for a period of three (3) years. His appointment is valid up to July 31, 2016 and can be terminated by either party giving six (6) months’ written notice. Mr. H.K. Mittal and Mr. Atul J. Agarwal are Executive Directors. All other Directors are Non-Executive Directors out of which three (3) are Independent Directors. As at March 31, 2014, the Promoter Directors (together with their relatives/ associate company) held 40.22 per cent. of the total paid-up equity shares of the Company. The Non-promoter Directors (alongwith their relatives) held 0.15 percent. There were no outstanding loans (including interest accrued) to the Directors and their relatives from the Company as at March 31, 2014. Changes in Board of Directors during past three years: Name Date of Change Particulars Mr. M.M Agrawal August 12, 2011 Appointed as an Additional Director Mr. Anil Khanna September 22, 2011 Retired by rotation Mr. M.G.Ramkrishna August 29, 2012 Retired by rotation Brief Biography of our Company's Directors Mr. Harish Kumar Mittal, aged 64 years has completed his Masters in Technology from Indian Institute of Technology, Roorkee. He has close to thirty years of business experience. Mr. Mittal started his career in 1975 when he set up his first venture in the chemical industry for production of sulphuric acid and ferric alum, which has over the years successfully expanded. Mr. Mittal acquired our Company in 1988 and has been responsible for our growth and diversification into multiple segments including shipping, mining and oil and gas. His vision and strong entrepreneurial acumen have been the driving force behind our Company’s expansions, success and growth. He is also the Chairman of the Board of Mercator Lines (Singapore) Limited, Mercator Oil & Gas Limited, Mercator FPSO Private Limited and Mercator Petroleum Limited. Mr. Atul J. Agarwal, aged 56 years is a Fellow Member of the Institute of Chartered Accountants of India, with over 30 years of professional experience. He has been associated with our Company since its inception. He is responsible for overseeing planning and implementation of the financial and strategic interests of our Company. He is also responsible

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for managing our Company’s day-to-day operations and has been instrumental in the successful implementation of several projects by our Company. Mr. Agarwal has been accredited with memberships of various committees formed by the Government for shipping reforms. He is on the Board of Directors of the Indian National Shipowners’ Association (INSA), Indian Register of Shipping (IRS); North of England P&I Association Limited, AAAM Properties Private Limited; Mercator Petroleum Limited, Mercator Oil & Gas Limited and our other Subsidiaries. Mr. Manohar Bidaye, , aged 50 years is an Independent Director of our Company, and has a Masters of Commerce Degree (M.Com) and a degree in Law (LLB)) from the University of Mumbai. He is also a Senior Member of The Institute of Company Secretaries of India. He has extensive experience in corporate planning, strategy formulation, corporate laws and taxation, finance and related areas. He has been honoured with the Yashashree 2008 Award and Marathi Udyog Bhushan Award, in recognition of his achievements across various industry segments. Mr. Bidaye is a Promoter and the Chairman of Zicom Electronic Security Systems Limited and actively steers overseas ventures of Zicom. He is a Director of various other companies. Mr. K. R. Bharat, aged 52 years, is an Independent Director of our Company, and holds a Masters in Business Administration from Indian Institute of Management. Mr. Bharat has been associated with various areas of the capital markets for more than 30 years, such as merchant banking, equities and investment banking, risk management and research, among others. He has previously also served as Managing Director of Credit Suisse First Boston Securities (CSFB), India and has also worked in Citi Bank for over a decade. Mr Bharat had also been a member of the Market Advisory Committee of the Bombay Stock Exchange. He is on the board of directors of many other companies. Mr. Kapil Garg, aged 48 years, holds a Bachelor’s degree in chemical engineering from the Indian Institute of Technology, Roorkee. Mr. Garg has over 21 years of extensive management experience in both upstream and downstream businesses with several companies in India and abroad. He is also on the Board of other companies including our Subsidiaries- Mercator Petroleum Limited, Mercator Oil & Gas Limited, Ivorene Oil Services Nigeria Limited, Mercator FPSO Private Limited. Mr. M. M. Agrawal, aged 64 years, is an Independent Director of our Company and holds a Bachelor's degree in Engineering from Nagpur University. He has over 35 years of experience in the banking and finance industry, and has previously worked with State Bank of Bikaner & Jaipur and Axis Bank Ltd as Deputy Managing Director. He is on the Board of many companies including Essar Power Limited, Bombay Rayon Fashion Limited, Srei Mutual Fund Asset Management Private Limited and Essar Power (Jharkhand) Limited. Nominee Directors Nominee Directors may be appointed by financial institutions as lenders on the happening of certain events. The power to appoint them must be contained in contractual arrangements between the Company and such financial institution. Nominee Directors may be nominated to the Board and hold office only for so long as the Company owes any money to the relevant institution or for so long as the relevant institution holds a substantial interest in the share capital of the Company. As at the date of this Offering Circular, there is no nominee Director on the Board. Executive Management As at March 31, 2014, the Company was managed primarily by the following personnel, under the guidance and supervision of Board of Directors, all of whom are also Directors of the Company:

Name Position Date of Appointment Educational Qualification

Mr. Harish Kumar Mittal Executive Chairman 23 May 1988 M. Tech. Mr. Atul J. Agarwal Managing Director 15 April 1988 F.C.A

Compensation of Directors Our Company’s non-executive Directors are each paid sitting fees as detailed in the following table for attending each

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Board and Audit Committee meeting for the year ended March 31, 2014

Name of the Director Board Meeting Committee meeting Total (Rs) Mr. Manohar Bidaye 80000 80000 160000 Mr. K. R. Bharat 100000 80000 180000 Mr. Kapil Garg 80000 N.A. 80000 Mr. M. M. Agrawal 80000 N.A. 80000

Currently our executive directors, Mr. Harish Kumar Mittal and Mr. Atul J Agarwal are paid annual remuneration of Rs. 48,00,000 each. Committees The following are the committees constituted under the supervision, guidance and control of the Board and their functions. Audit Committee The Audit Committee comprises the following members as at March 31, 2014:

Name of the Director Nature of Directorship Designation in the Committee

Mr. Manohar Bidaye Non Executive and Independent Director

Chairman

Mr. K. R. Bharat Non Executive and Independent Director

Vice Chairman/Member

Mr. Atul J. Agarwal Executive Director Member All the members of the Audit Committee have a sound accounting and financial background. The functions of the Audit Committee include:

• reviewing the Company’s financial reporting process and disclosure of its financial information, the financial statements and financial and risk management policies;

• reviewing the adequacy of internal control systems and major accounting policies;

• recommending the appointment and removal of the statutory auditors and fixing the statutory auditors’ fee; and

• ensuring compliance with accounting standards and stock exchange listing agreements Expansion Committee The Company has an Expansion Committee comprising of following members:

Name of the Director Nature of Directorship Designation in the Committee Mr. Harish Kumar Mittal Executive Director Chairman Mr. Atul J. Agarwal Executive Director Member Mr. K.R. Bharat Non Executive and Independent

Director Member

The Expansion Committee is authorised to assess the business opportunities and take the decisions from time on expansion/modernization/diversification projects; means of finance and other related matters, within the limits sanctioned by the Board. Remuneration-cum-Selection Committee The Company has a Remuneration Committee comprising of the following members:

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Name of the Director Nature of Directorship Designation in the Committee Mr. Manohar Bidaye Non Executive and Independent

Director Chairman

Mr. K. R. Bharat Non Executive and Independent Director

Member

Mr. M. M. Agrawal Non Executive and Independent Director

Member

The Remuneration Committee recommends to the Board the remuneration payable to the Executive Directors and Senior Management personnel, within the scope of the remuneration policy of the Company. Shareholders’/Investors’ Grievance and Share Transfer Committee The Company has constituted a Shareholder Transfer Committee comprising of the following members:

Name of the Director Nature of Directorship Designation in the Committee

Mr. Manohar Bidaye Non Executive and Independent Director

Chairman

Mr. Atul J. Agarwal Executive Director Member Mr. K. R. Bharat Non Executive and Independent

Director Member

The Committee looks into the shareholder & investor grievances that are not settled at the level of the Company Secretary/Compliance Officer and helps to expedite share transfers & related matters. The committee has delegated power of transfer/transmission; dematerialisation/ rematerialisation of shares; issue of duplicate/split/consolidated certificates to the Share Transfer Agent to expedite relative process. ESOP Compensation Committee The Company has ESOP Compensation Committee of Directors comprising of following members:

Name of the Director Nature of Directorship Designation in the Committee

Mr. Harish Kumar Mittal Executive Director Chairman Mr. Atul J. Agarwal Executive Director Member Mr. Manohar Bidaye Non Executive and Independent

Director Member

The Committee is authorized to formulate Employee Stock Option scheme; to carry out process of determining eligibility criteria; to issue and allot the shares and to do all acts, deeds, things, matters as may be required in this regard, in accordance with the provisions of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. Shareholders have approved issue of 1,18,00,000 ESOPs vide their special resolution passed on October 28, 2010. However no ESOPs wereoutstanding till the date of this offering circular. Management Committee: The Board of Directors has constituted Management Committee at the Board meeting dated January 31, 2014 comprising of Mr. H. K. Mittal, Mr. Atul Agarwal and Mr. Kapil Garg. The Committee is vested with the power to decide on day to day routine matters such as giving authority to deal with banks, statutory authorities, court of law, bidding tenders; issuing power of attorney and allied matters. Main Objects The following are the main objects of our Company, as set out in the Memorandum of Association:

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1) To establish, maintain and operate shipping transport services either public and / or private or both and /or

ancillary services and for this purpose or as an independent undertaking to purchase, take in exchange, charter, hire, build, construct or otherwise acquire and to own, employ, operate in carriage of passengers, mails and merchandise of all kinds, and to work, manage and trade with steam sailing, motor and otherwise ships, trawlers, tankers, refrigerated vessels, floating dry - docks, tugboats, barges, powered or otherwise drifters, bulk-carriers, ore or oilcarriers, liquid petroleum gas carriers, liquid natural gas carriers, vessels for offshore oil and gas operations such as jack up rigs, drill ships, semi submersibles, platforms or any other offshore installations / structure, survey vessels, supply vessels, crew vessels, helicopter, underwater inspection, NDT inspection, repairs of sub-sea structures/installation, diving and all other related activities, commercial submarines, catamarines, hydrofoil, hover-croft, containerized vessels and any specialized carriers, ships or vessels or otherwise ships and vessels of every descriptions, air-crafts, helicopter and motor and other vehicles, transport and conveyances of every discriptions, propelled or capable of being propelled or capable of being worked by steam, electricity, petrol, oil, gas, or any other motive power, or power producing substance with all necessary and convenient equipments and engines, car, furniture and stores or any share or interest in ships, vessels, motor and other vehicles, transport and conveyances of every descriptions and to maintain, repairs, fit out, re-fit, improve, insure, alter, sell, exchange or let out on hire or hire purchase or charter or otherwise deal with and dispose of any of the ships, vessels, aircrafts, helicopters and other transport and conveyances or any of the engines or furniture or store or any shares or interest in ships, vessels, motor and other vehicles, transport and conveyances of every descriptions and to maintain, repairs, fit-out, re-fit, improve, insure, alter, sell, exchange or let-out on hire or hire purchase or charter or otherwise deal with and dispose off any of the ships, vessels, and other transparts and conveyances or any of the engines or furniture or equipment or stores of the Company.

2) To carry on or undertake in India or abroad, the business of developing, owning, giving or taking on hire, lease, rent or otherwise acquiring or disposing off any rights in any oil, gas or hydrocarbon fields or mines, and to do the business of mining, exploring, drilling, manufacturing, producing, processing, refining, distributing, trading, importing, exporting, storing, and transporting of all kinds and types of oil, gas and other hydro carbons products or substances; drilling platforms, rigs, specialized vessels, ships, equipments, machinery, ancillaries, spares, stores or any other items essentials to undertake such activities/services successfully; to undertake contract for seismic activties or surveys, data collection and interpretation in petroleum and other mining industries and all other technical, nontechnical or specialized services, in the field.

3) To undertake and carry on in India and abroad, the business of builders, makers, manufacturers, producers,

suppliers, buyers, sellers, dealers, traders, importers, exporters, owners, repairers, re-fitters, fabricators, designers, of all kinds and types of ships, vessels, carriers, barges, lighters, pontoons, tugs, launches, dredgers, fishing and other trawlers, offshore structures, rigs, platforms, towers, drillings structures, and all other types of inland, harbour and sea going crafts, aircrafts, helicopters, vehicles, and structures with or without steam, sail, motors, or other means of propulsion, and to carry on the business as designers, engineers, manufacturers, assemblers, operators of various mechnical, structural, electrical and electronic equipments, engines, boilers, tacklers, fittings, pipings, cabling, refrigeration, ventilation, air-conditioning, instrumentation, machineries, equipments, hardware, accessories, tools, stores, spares, parts, required for marine, offshore harbour, ports and ancillary services, and to build, construct, acquire, make, own, provide, operate and maintain houses, garages, shops, workshops, aerodromes, airstrips, helipads, docks, dry-docks, floating docks, ship yards, ports, jetties, and accomodation for or in relation to ocean, water, aerial, rail, or road conveniences.

Main Provisions of the Articles of Association The following is a summary of important provisions as contained in our Articles of Association. Borrowing Powers Subject to the provisions of Sections 292 and 293 of the Companies Act, 1956 and of these Articles, the Board, from time to time at its discretion, by a resolution passed at a meeting of the Board, may and generally raise or borrow or secure the payment of any sum or sums of moneys for the purposes of the Company, provided, however, where the moneys to be borrowed together with the moneys already borrowed (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business) exceed the aggregate of the paid-up capital of the Company and

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its free reserves (not being reserves set apart for any specific purpose) the Board shall not borrow such moneys without the consent of the Company in General Meeting Quorum of General Meeting Five Members present in person shall be a quorum for a General Meeting. A body corporate being a Member shall be deemed to be personally present if it is represented in accordance with Section 187 of the Act. Directors may act notwithstanding vacancy The continuing Director may act notwithstanding any vacancy in their body, but if; and so long as, their number is reduced below the minimum number fixed by Article 106, the continuing Directors not being less than two may act for the purpose of increasing the number of Directors to that number or of summoning a General Meeting but for no other purpose. Quorum for a meeting of the Board The quorum for a meeting of the Board shall be as provided by Section 287 of the Act & the provisions of Section 288 of the Act shall apply where a meeting is adjourned for want of a quorum Appointment of Alternate Director The Board may appoint an alternate director who is recommended for such appointment by the Director (hereinafter called the "Original Director") to act for the Original Director during his absence for a period of not less than three (3) months from the state in which meetings of the Board are ordinarily held. If the term of office of the original director is determined before he so returns to the said state any provision in the Act or in these Articles for the automatic reappointment of retiring director in default of another appointment shall apply to the original Director and not to alternate Director. Note: The Ministry of Corporate Affairs has notified 282 sections of the new Companies Act, 2013, and rules which have replaced the corresponding provisions in the old Companies Act, 1956. While 98 sections were notified and made effective September 12, 2013, the remaining 183 sections have been made effective from April 1, 2014. Certain provisions under the newly notified sections may require us to modify our Articles of Association to suitably reflect the position under the new Companies Act, 2013.

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PRINCIPAL SHAREHOLDERS

The shareholding pattern of our Company as at March 31, 2014 is as follows:

Category of Shareholder

No. of Shareholders

Total No. of Shares

Total No. of Shares held in Dematerialized

Form

Total Shareholding as a % of total No. of

Shares

Shares pledged or otherwise encumbered

As a % of

(A+B)

As a % of (A+B+C)

Number of shares

As a % of Total No. of Shares

(A) Shareholding of Promoter and Promoter Group

1. Indian (a) Individuals /

Hindu Undivided Family

9 80077816 80077816 32.70 32.70 0 0

(b) Central Government / State Government(s)

0 0 0 0.00 0.00 0 0

(c) Bodies Corporate 1 18406250 18406250 7.52 7.52 0 0 (d) Financial

Institutions / Banks

0 0 0 0.00 0.00 0 0

(e) Any Other (specify)

0 0 0 0.00 0.00 0 0

Sub Total (A) (1) 10 98484066 98484066 40.22 40.22 0 0.00 2. Foreign (a) Individuals

(Non-Residents Individuals / Foreign Individuals)

0 0 0 0 0 0 0

(b) Bodies Corporate

0 0 0 0 0 0 0

(c) Institutions 0 0 0 0 0 0 0 (d) Any Others

(Specify) 0 0 0 0 0 0 0

Sub total (A) (2) 0 0 0 0.00 0.00 0 0 Total Shareholding of Promoter and Promoter Group (A) = (A)(1)+(A)(2)

10 98484066 98484066 40.22 40.22 0 0.00

(B) Public

Shareholding

1. Institutions (a) Mutual Funds /

UTI 2 77849 2849 0.03 0.03 0 0

(b) Financial Institutions / Banks

3 2008860 2008860 0.82 0.82 0 0

(c) Central Government / State

2 2500 2500 0.00 0.00 0 0

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Category of Shareholder

No. of Shareholders

Total No. of Shares

Total No. of Shares held in Dematerialized

Form

Total Shareholding as a % of total No. of

Shares

Shares pledged or otherwise encumbered

As a % of

(A+B)

As a % of (A+B+C)

Number of shares

As a % of Total No. of Shares

Governments (d) Venture Capital

Funds 0 0 0 0 0 0 0

(e) Insurance Companies

0 0 0 0 0 0 0

(f) Foreign Institutional Investors

24 37445619 37440619 15.29 15.29 0 0

(g) Foreign Venture Capital Investors

0 0 0 0 0 0 0

(h) Any Other (Specify)

0 0 0 0 0 0 0

Sub Total (B) (1) 31 39534828 39454828 16.14 16.14 0 0

2. Non-Institutions (a) Bodies Corporate 1046 16310487 16280987 6.66 6.66 0 0 (b) Individuals

i. Individuals – Individual shareholders holding nominal share capital up to Rs. 1 lakh

89834 69192969 66856388 28.25 28.25 0 0

ii. Individuals – Individual shareholders holding nominal share capital in excess of Rs. 1 lakh

45 15203574 15203574 6.21 6.21 0 0

(c) Any Other (Specify)

0 0 0 0 0 0 0

(c-i) Clearing Member

413 2137407 2137407 0.87 0.87 0 0

(c-ii) Office Bearers 10 338100 338100 0.14 0.14 0 0 (c-iii)Foreign

Nationals 0 0 0 0 0 0 0

(c-iv)Non Residents Indians (REPAT)

1004 2709882 2613382 1.11 1.11 0 0

(c-v) Non Residents Indians (NON REPAT)

256 606974 606974 0.25 0.25 0 0

(c-vi) Directors / Relatives

4 369250 369250 0.15 0.15 0 0

(c-vii) Trusts 3 4536 4536 0.00 0.00 0 0 Sub Total (B) (2) 92615 106873179 104410598 43.64 43.64 0 0 (B) Total Public shareholding (B) = (B)(1) + (B)(2)

92646 146408007 143865426 59.78 59.78 0 0

Total (A)+(B) 92656 244892073 242349492 100 100 0 0 (C) Shares held by

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Category of Shareholder

No. of Shareholders

Total No. of Shares

Total No. of Shares held in Dematerialized

Form

Total Shareholding as a % of total No. of

Shares

Shares pledged or otherwise encumbered

As a % of

(A+B)

As a % of (A+B+C)

Number of shares

As a % of Total No. of Shares

Custodians and against which Depository Receipts have been issued

1. Promoter and Promoter Group

0 0 0 0 0.00 0 0

2. Public 0 0 0 0 0.00 0 0 Sub Total (C) 0 0 0 0 0 0 0 Grand Total (A)+(B)+(C)

92656 244892073 242349492 100 100.00 0 0.00

Details of the shareholding of the Promoters and Promoter Group and directors in our Company as at March 31, 2014 are as follows: No. Name of the Shareholder Total Shares held Shares pledged or otherwise

encumbered Number As a % of

grand total (A)+(B)+(C)

Number % of Total shares held

As a % of grand total (A)+(B)+(C)

1 Harish Kumar Mittal 46654200 19.05 0 0 0 2 Archana Mittal 26327400 10.75 0 0 0

3 AHM Investment Private Limited

18406250 7.52 0 0 0

4 Atul J Agarwal 5460966 2.23 0 0 0 5 Manjuli Agarwal 559000 0.23 0 0 0 6 Shalabh Mittal 361250 0.15 0 0 0 7 Aayush Agarwal 317500 0.13 0 0 0 8 Arooshi Agarwal 317500 0.13 0 0 0 9 Adip Mittal 80000 0.03 0 0 0 Total 98484066 40.22 0 0 0

Shareholding belonging to the category "Public" and holding more than 1% of the Total No.of Shares as at March 31, 2014 are as follows: No. Name of the Shareholder No. of Shares Shares as % of Total No. of Shares

1 Lotus Global Investment Limited 14,229,669 5.81 2 Kotak Mahindra (International Limited) 7980427 3.26 3 Cresta Fund Limited 5650000 2.31 4 Albula Investment Fund Limited 5175644 2.11

Total 33035740 13.49 Details of Locked-in Shares as at March 31, 2014 are as follows:* No. Name of the Shareholder No. of Shares Locked-in Shares as % of Total No.

of Shares 1. Nil Nil Nil Total 0 0 -

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Details of Depository Receipts (DRs) as at March 31, 2014 are as follows:

No. Type of outstanding DR (ADRs, GDRs, SDRs, etc)

No. of outstanding DRs

No. of shares underlying outstanding DRs

Shares underlying outstanding DRs as % of total no. of shares

1. NIL NIL NIL NIL Total - - -

Details of Depository Receipts (DRs) where underlying shares are in excess of 1% of the total no. of shares as at March 31, 2014 are as follows:

No. Type of outstanding DR (ADRs, GDRs, SDRs, etc)

No. of outstanding DRs

No. of shares underlying outstanding DRs

Shares underlying outstanding DRs as % of total no. of shares

1. NIL NIL NIL NIL Total - - -

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TERMS AND CONDITIONS OF THE BONDS The following words, other than the words in italics, is the text of the Terms and Conditions of the Bonds substantially as they will appear on the reverse of each definitive certificate evidencing the Bonds:

The issue of up to US$16,000,000 (including an over allotment option of US$ 2,000,000) 4.75 per cent. Unsecured Foreign Currency Convertible Bonds due 2019 (the "Bonds") of Mercator Limited, a company incorporated under the provisions of the Companies Act, 1956 (the "Issuer"), are constituted by, and authorised by resolutions of the Board of Directors and shareholders of the Issuer dated December 30, 2013 and February 4, 2014 respectively. The Bonds are constituted by a trust deed (as amended or supplemented from time to time) (the "Trust Deed") to be dated on or about May 23, 2014 and made between the Issuer and The Bank of New York Mellon, London Branch as trustee (the "Trustee", which term includes any successor trustee under the Trust Deed) to hold the Bonds. The Issuer has entered into a paying and conversion agency agreement (the "Agency Agreement") to be dated on or about May 23, 2014 with the Trustee, The Bank of New York Mellon, London Branch as Principal Paying, Conversion AgentThe Bank of New York, Luxemborg S.A. as Registrar and Transfer Agent (together the "Agents" which expression shall include any additional paying, conversion or transfer agents appointed from time to time in relation to the Bonds) in relation to the Bonds. The registrar, principal paying and conversion agent, paying agents, conversion agents and transfer agents are referred to below as the "Registrar"(which expression shall include any successor registrar appointed from time to time in relation to the Bonds), the "Principal Agent"(which expression shall include any successor principal paying and conversion agent appointed from time to time in relation to the Bonds), the "Paying Agents" (which expression shall include the Principal Agent and any successor or additional paying agents appointed from time to time in relation to the Bonds), the "Conversion Agents" (which expression shall include the Principal Agent and any successor or additional conversion agent appointed from time to time in relation to the Bonds) and the "Transfer Agents" (which expression shall include the Principal Agent and any successor or additional transfer agent appointed from time to time in relation to the Bonds), respectively. The statements in these terms and conditions ("these Conditions") include summaries of, and are subject to, the detailed provisions of the Trust Deed and the Agency Agreement. Copies of the Trust Deed and the Agency Agreement are available for inspection during normal business hours at the specified office of the Trustee, being The Bank of New York Mellon, London Branch, One Canada Square, London E14 5AL, United Kingdom and at the specified office of each of the Agents. The Bondholders are entitled to the benefit of the Trust Deed and are bound by, and are deemed to have notice of, all the provisions of the Trust Deed and the Agency Agreement. Certain terms not otherwise defined in the text hereof have the same meaning as defined in the Trust Deed. 1. Status

The Bonds constitute direct, unsecured, unconditional and unsubordinated obligations of the Issuer and will rank pari passu, without any preference or priority among themselves and with all other outstanding direct, unsecured, unconditional and unsubordinated obligations of the Issuer, present and future, subject to any obligations preferred by mandatory provisions of applicable law.

2. Form, Register and Transfer of Bonds 2.1 Bonds to be in Registered Form

The Bonds are issued in registered form in the denomination of US$ 100,000 each or integral multiples thereof (the "Authorised Denomination"). A bond certificate will be issued to each Bondholder in respect of its total registered holding of Bonds (each a "Certificate"). Each Bond and each Certificate will be numbered serially with an identifying number, which will be recorded on the relevant Certificate and in the Register (as herein defined) (to be kept in accordance with Condition 2.2. The Bonds will initially be represented by a global certificate (the "Global Certificate") deposited with, and registered in the name of a nominee for the Common Depositary for Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream, Luxembourg") and interests therein will be credited to the securities clearance accounts of the relevant Bondholders with Euroclear and Clearstream, Luxembourg. Except in the limited circumstances described in the Global Certificate, owners of interests in Bonds

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represented by the Global Certificate will not be entitled to receive definitive Certificates in respect of their individual holdings of Bonds. The Bonds are not issuable in bearer form.

2.2 Register of Bondholders

The Issuer shall at all times keep or cause to be kept at the specified office of the Registrar in accordance with the terms of the Agency Agreement, a register (the "Register") showing the nominal amount of the Bonds, the date of issue and all subsequent transfers and changes of ownership thereof and the names and addresses of the Bondholders. The Bondholders or any of them and any person authorised by any such person, may at all reasonable times, during office hours, inspect the Register and take copies of or extracts from it at their own expense. The Register may be closed by the Issuer for such periods and at such times (not exceeding in whole, thirty (30) days in any one year) as it may think fit provided that notice should be given to the Bondholders, in accordance with Condition 14, and notice in writing to the Trustee and Agents, in both cases, simultaneously with giving of notice to the Indian stock exchanges at least twenty one (21) days prior to the closure of the Register.

2.3 Title to the Bonds 3.3.1. Title to the Bonds passes only by transfer and registration in the Register. The registered holder of any Bond

will (except as otherwise required by law) be treated as the absolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any interest in it or any writing on, or the theft or loss of, the Certificate issued in respect of it) and no person shall be liable for so treating the holder.

3.3.2. In these Conditions, "Bondholder" and (in relation to a Bond) "holder" means the person in whose name a

Bond is registered in the Register. 3.3.3. The receipt of the Bondholder, or in the case of joint Bondholders, the receipt of any of them, of any moneys

payable on the Bond shall be a good discharge to the Issuer, notwithstanding any notice it may have, whether express or otherwise, of the right, title, interest or claim of any other person to or in such Bond or moneys. No notice of any trust, charge, encumbrance or dispute, express, implied or constructive shall be entered on the Register in respect of any Bond.

2.4 Bondholders to be Recognised free from Set-Off or Counter-claim

Every Bondholder will be recognised by the Issuer as entitled to his Bonds free from any equity, set-off or counter-claim on the part of the Issuer against the original or any intermediate holder of the Bond.

2.5 Transfer of Bonds

A Bond may be transferred by delivering the Certificate issued in respect of that Bond, with the form of transfer on the back duly completed and signed, to the specified office of the Registrar or Transfer Agent. No transfer of title to any Bond will be effective unless and until entered in the Register. Transfers of interests in the Bonds evidenced by the Global Certificate will be effected in accordance with the rules of the relevant clearing systems.

2.6 Transfer Restrictions

The Bonds are not transferable to US persons (as defined in the United States Securities Act of 1933 (as amended) (the "Securities Act)) nor to persons resident in India and the Registrar may refuse to register any such person as the holder of a Bond but the Registrar is under no obligation to enquire as to the residency or tax status of a holder or potential holder and shall not be liable for any failure to do so.

2.7 Instruments of Transfer to be signed by Transferor

Every instrument of transfer must be signed by the transferor and, where jointly held, by all joint holders (or where the transferor is a corporation given under its common seal) and the transferor shall be deemed to

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remain the owner of the Bond to be transferred until the name of the transferee is entered in the Register in respect of that Bond.

2.8 Instruments of Transfer to be Deposited at Specified Office of Registrar or Transfer Agent

Every instrument of transfer must be deposited at the specified office of the Registrar Transfer Agent, accompanied by the Certificate for the Bond to be transferred and, if the instrument is executed by some other person on his behalf, the authority of that person to do so.

2.9 Instruments of Transfer to be Retained by Registrar

All instruments of transfer which shall be registered will be retained by the Registrar and all records of transfer shall be maintained by the Registrar.

2.10 Delivery of New Certificates 2.10.1 Each new Certificate to be issued upon transfer of the Bonds will, within five (5) Business Days of receipt by

the Registrar Transfer Agent of the duly completed form of transfer, be mailed by uninsured mail at the expense of the Issuer and at the risk of the holder entitled to the Bond to the address specified in the form of transfer. Where some, but not all the Bonds, in respect of which a Certificate is issued are to be transferred, converted or repurchased, a new Certificate in respect of the Bonds not so transferred, converted or repurchased, will within five (5) Business Days of deposit or surrender of the original Certificate with or to the Registrar or Transfer Agent, be mailed by uninsured mail at the expense of the Issuer and at the risk of the holder of the Bonds not so transferred, converted or repurchased to the address of such holder appearing on the Register.

2.10.2 For the purposes of these Conditions, "Business Day" means each Monday, Tuesday, Wednesday, Thursday

and Friday on which banking institutions in Mumbai (India), London (England) and New York City (USA) are not authorised or obliged by law, regulation or executive order to close.

2.11 Formalities free of charge

Registration and transfer of the Bonds and issuance of new Certificates will be effected without charge by or on behalf of the Issuer or any of the Agents, subject to payment by the Bondholder (or the giving of such indemnity as any Agent may require) in respect of any tax or other governmental charges which may be imposed in relation to such transfer.

2.12 No transfer periods (Closed Period)

No Bondholder may require the transfer of a Bond to be registered (i) during the period of fifteen (15) days ending on (and including) the due date for any payment of principal on such Bond; (ii) during period of seven (7) days ending on (and including) the dates for redemption pursuant to Condition 7; (iii) after a Bondholder Purchase Notice as defined in Condition 7.7.1.9 in respect of such Bond has been delivered; and (iv) after the Certificate in respect of such Bond has been deposited for conversion pursuant to Condition 6.

2.13 Deceased Bondholders

The executors or administrators of a deceased Bondholder (not being one of several joint Bondholders) and, in the case of the death of one or more of several joint holders, the survivor or survivors of such joint Bondholders, shall be the only persons recognised by the Issuer as having any title to such Bond.

2.14 Persons Becoming Entitled to Bonds

Any eligible person becoming entitled to a Bond in consequence of the death or bankruptcy of the holder of such Bonds may, on producing such evidence of such entitlement or of his title as the Issuer shall think sufficient, be registered himself as the holder of such Bond, or subject to the preceding paragraphs, as to transfer may transfer such Bonds.

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2.15 Transfer Subject to Agency Agreement

All transfers of the Bonds and entries on the Register will be made subject to the detailed regulations concerning transfer of the Bonds set forth in the Agency Agreement. The regulations may be changed by the Issuer, with prior written approval (but is not obliged to do so) of the Trustee and the Registrar. In providing approval the Trustee and Registrar may rely on external expert opinion.A copy of the current regulations will be mailed (at the Issuer's expense) by the Registrar to any Bondholder who asks for one.

3. Covenants

The Issuer covenants that, so long as any Bonds are outstanding: 3.1. Continuing Existence; Control; Consolidation or Merger 3.1.1. The Issuer will do or cause to be done all things necessary to preserve and keep in full force and effect its

corporate existence, rights (charter and statutory) and franchises of the Issuer; and provided, further, that nothing contained in this Condition 3.1.1 shall prohibit any transaction permitted by Condition 3.4 herein;

3.1.2. There shall be no change in the management control of the Issuer 3.1.3. The Issuer will reserve, free from any other pre-emptive or other similar rights, out of its authorized but

unissued ordinary share capital the total number of Shares liable to be issued on conversion of the Bonds without breaching any restrictions under Indian foreign investment laws applicable to the Shares, and will ensure that all shares will be duly and validly issued as fully-paid; and

3.1.4. upon any consolidation of the Issuer with or merger of the Issuer with or into any other Person or any

conveyance, transfer or lease of the Assets of the Issuer substantially as an entirety to any Person, whether in a single transaction or a series of related transactions, the successor Person formed by such consolidation or into which the Issuer is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under these Conditions with the same effect as if such successor Person had been named as the Issuer herein, and in the event of any such conveyance or transfer, the Issuer, except in the case of a lease, shall be discharged of all obligations and covenants under the Bonds and may be dissolved and liquidated.

3.2. Continuous Listing and changes in capital structure

So long as any Bond remains outstanding, the Issuer shall ensure that

(a) all its issued Shares are listed on the BSE and NSE; (b) it will not make any offer, issue or distribute or take any action, other than in accordance with these Conditions, the effect of which would be to reduce the Conversion Price below the par value of the shares of the Issuer;

(c) it will not make any reduction of its ordinary share capital or any uncalled liability in respect thereof or of any share premium account or capital redemption reserve fund (except, in each case, as permitted by law)

3.3. Related Party Transactions

All business and transactions between the Issuer and "Related Parties" shall be conducted at arm’s length.

3.4. Negative Pledge 3.4.1. So long as any Bond remains outstanding (as defined in the Trust Deed):

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3.4.1.1. the Issuer will not create or permit to subsist, any mortgage, charge, pledge, lien or other form of encumbrance or security interest (“Security”) upon the whole or any part of its undertaking, assets or revenues, present or future, to secure any International Securities (as defined below) of the Issuer;

3.4.1.2. the Issuer will procure that no other person creates or permits to subsist any Security upon the whole or

any part of the undertaking, assets or revenues present or future of that other person to secure any International Securities of the Issuer;

3.4.1.3. the Issuer will procure that no other person gives any guarantee of, or indemnity in respect of, any

International Securities of the Issuer,

unless, at the same time or prior thereto, the Issuer’s obligations under the Bonds and the Trust Deed (a) are secured equally and rateably therewith to the satisfaction of the Trustee, or (b) have the benefit of such other security, guarantee, indemnity or other arrangement as the Trustee in its absolute discretion shall deem to be not materially less beneficial to the Bondholders or as shall be approved by an Extraordinary Resolution (as defined in the Trust Deed) of the Bondholders.

3.4.2. For the purposes of these Conditions, “International Securities” means any present or future indebtedness

in the form of, or represented by, bonds, debentures, notes or other investment securities which are for the time being, or are intended to be or capable of being, quoted, listed, ordinarily dealt in or traded on any stock exchange or over the counter or other securities market which is denominated in or which is or may (at the option of any party) be payable in or by reference to any currency other than the lawful currency (INR) for the time being of India.

Potential investors should be aware that the provisions of Condition 3.4 do not apply, inter alia, to security in respect of instruments which do not constitute International Securities (including loan agreements in any currency). 3.5. Event of Default

The Issuer shall immediately notify the Bondholder’s through the Trustee of any actual Event of Default, or breach of any of the conditions relating to the Bonds.

4. Interest and Default Interest 4.1. The Bonds bear interest from May 27, 2014 (the “Closing Date”) at the rate of 4.75 per cent. per annum of the

principal amount of the Bonds. Interest is payable annually in arrear on May 27 in each year (each an "Interest Payment Date"). Each Bond will cease to bear interest (a) (subject to Condition 6.2.4) from (and including) the Interest Payment Date last preceding its Conversion Date (as defined below) (or if such Conversion Date falls on or before the first Interest Payment Date, from (and including) the Closing Date) subject to conversion of the relevant Bond in accordance with the provisions of Condition 6.2, or (b) from (and including) the due date for redemption thereof unless payment of the full amount due is improperly withheld or refused or default is otherwise made in respect of any such payment. In such event, interest will continue to accrue as provided in Condition 4.3. If interest is required to be calculated for any period which is not an Interest Period, it will be calculated on the basis of a 360-day year of twelve (12) 30-day months and in the case of an incomplete month, the number of days elapsed.

4.2. “Interest Period” means the period beginning on (and including) the Closing Date and ending on (but excluding) May 27 of the suceeding year (being the first Interest Payment Date) and each successive period beginning on (and including) an Interest Payment Date and ending on (but excluding) the next succeeding Interest Payment Date.

4.3. Subject to applicable laws, any sums which are due to be paid on a particular date, if not paid on such date

shall, without prejudice to other rights of the Bondholders, accrue and be paid an interest of 2.0% per annum in addition to the interest rate described above and caluculated from the date of default / delay till the date the amounts are paid in full to the relevant Bondholders.

5. Payments

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5.1. Payments of Principal and Premium

5.1.1. Payment of any principal and any premium and accrued interest payable on the redemption of the Bonds (other

than payment of interest due on an Interest Payment Date) will be made by transfer to the registered account of the Bondholder or by US Dollar cheque drawn on a bank in New York City mailed at the expense of the Issuer to the registered address of the Bondholder. Such payment will only be made upon surrender of the relevant Certificate at the specified office of any of the Agents.

5.1.2. For these purposes, a Bondholder's "registered account" means the US Dollar account maintained by or on

behalf of it with a bank in New York City details of which appear on the register of Bondholders at the close of business on the date 15 calendar days before the due date for payment, a Bondholder's "registered address" means its address appearing on the register of Bondholders at that time.

5.2. Interest

5.2.1. Interest on Bonds due on an Interest Payment Date will be paid on the due date for the payment of interest to

the holder shown on the Register at the close of business on the fifteenth day before the due date for the payment of interest (the “Interest Record Date”). Payments of interest on each Bond will be made by transfer to the registered account of the Bondholder or to the first named of joint holders or by U.S. dollar cheque drawn on a bank in New York City mailed to the registered address of the Bondholder if it does not have a registered account.

5.3. Payment not Made in Full

If the amount of principal or premium which is due on the Bonds on any date is not paid in full, the Registrar will annotate the Register and any Certificates surrendered for payment with a record of the amount or principal or premium in fact paid and the date of such payment.

5.4. Payments Subject to Fiscal Laws

All payments in respect of the Bonds are subject in all cases to any applicable fiscal or other laws and regulations, but without prejudice to the provisions of Condition 8. No commissions or expenses shall be charged to the Bondholders in respect of such payments by the Issuer or its agents.

5.5. Payment Instructions

Where payment is to be made by transfer to a registered account, payment instructions (for value on the due date or, if that date is not a Business Day, for value on the following Business Day) will be initiated and, where payment is to be made by cheque, the cheque will be mailed (at the risk and expense of the holder) on the later of, (i) the Business Day on which the relevant Certificate is surrendered at the specified office of any of the Agents(in the case of payment of the principal) and (ii) the due date for payment (or if it is not a Business Day,the next Business Day following the due date for payment).

When making payments to Bondholders, fractions of one cent will be rounded down to the nearest whole cent.

5.6. Delay after Due Date

Bondholders will not be entitled to any interest or other payment for any delay after the due date for payment in receiving the amount due if the due date is not a Business Day, if the Bondholder is late in surrendering the Certificate (if required pursuant to these Conditions) or if a cheque mailed in accordance with this Condition arrives or is cleared after the due date for payment.

5.7. Commissions

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No commission or expenses shall be charged to the Bondholders in respect of any payments made in accordance with this Condition.

6. Conversion 6.1. Conversion by the Bondholders; Conversion Period and Price 6.1.1. Each Bondholder has the right, subject as provided herein and to any applicable laws and regulations, to

require the Issuer to convert all or any of their Bonds at their principal amount into equity shares of Re. 1 each ("Shares") (credited as fully paid) at any time during the conversion period ("Conversion Right"). The Conversion Right attaching to any Bond may be exercised, at the option of the Bondholder, at any time (subject to Condition 6.1.2) during the conversion period ("Conversion Period") which begins on and from May 27, 2014 and will end at the close of business on April 27, 2019 - 30 days prior to the Maturity Date at the place where the certificate is deposited for Conversion. If a Bond is called for redemption by the Issuer under Condition 7, the Conversion Period for that Bond ends at the close of business on the 15th business day in Mumbai, India before the date fixed for redemption (unless the Issuer defaults in making payment on the date fixed for redemption in which case the Conversion Period will continue until the earlier of the day on which payment is made to the Bondholder or the day on which the Trustee gives notice that it or the Principal Agent has received payment of the amount due in respect of all Bonds to be redeemed) or, if earlier, May 27, 2019.

6.1.2. The number of Shares to be issued upon conversion of a Bond will be determined by dividing the principal amount of the Bond (translated in to Rupees at the fixed rate referred to in Condition 6.1.8) by the Conversion Price in effect at the Conversion Date. The Shares so issued shall be delivered to the converting Bondholder. Conversion Rights may not be exercised in relation to any Bond prior to May 28, 2014 or during the period (a "Closed Period") commencing on (i) the date falling twenty (20) days prior to the date of the Issuer's annual general shareholders' meeting and ending on the date of that meeting; (ii) the date falling thirty (30) days prior to an extraordinary shareholders' meeting and ending on the date of that meeting; (iii) the date that the Issuer notifies the BSE, the NSE of the record date for determination of the shareholders entitled to receipt of dividends, rights and benefits; or (iv) on such date and for such period as determined by Indian law applicable from time to time that the Issuer is required to close its stock transfer books.

6.1.3. Neither the Trustee, the Agents nor the Lead Manager shall be responsible for determining the number of Shares to be issued on conversion of a Bond or for verifying the Issuer’s determination of such number of Shares and neither shall be responsible or liable to the Bondholders or any other person for any erroneous determination by the Issuer or any delay or failure of the Issuer in making such determination.

6.1.4. The Issuer shall procure that the Trustee, the Bondholders and the Conversion Agent are given notice of any

Closed Period simultaneously when the Issuer informs the Indian stock exchanges and not less than seven (7) days before such Closed Period.

6.1.5. A Conversion Right may only be exercised in respect of the Authorised Denomination or integral multiples

thereof of Bonds. If more than one Bond is converted at any one time by the same Bondholder, the number of Shares to be issued upon such conversion will be calculated on the basis of the aggregate principal amount of the Bonds to be converted. Fractions of Shares will not be issued on conversion and no cash adjustments will be made in respect thereof.

6.1.6. The price at which Shares will be issued upon the exercise of a Conversion Right initially will be Rs. 38.30,

(the initial "Conversion Price"). The Conversion Price will be subject to adjustment in accordance with the manner provided in Condition 6.3. The Issuer shall give notice of any adjustment of the Conversion Price to the Trustee, the Paying Agent and the Conversion Agent as soon as practicable after the determination thereof and to the Bondholders in accordance with Condition 14. Notwithstanding the provisions of this Condition, the Company covenants that the Conversion Price shall not be reduced below such price as may be prescribed by the applicable laws and regulations for the time being in force.

6.1.7. Notwithstanding the provisions of Condition 6.1.1 if (a) the Issuer shall default in making payment in full in

respect of any Bond on the date fixed for redemption thereof, (b) any Bond has become due and payable prior to May 27, 2019 (the "Maturity Date") by reason of the occurrence of any of the events under Condition 10,

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or (c) any Bond is not redeemed on the Maturity Date in accordance with Condition 7.1 the Conversion Right attaching to such Bond will revive and/or will continue to be exercisable up to, and including, the close of business (at the place where the Certificate evidencing such Bond is deposited for conversion) on the date upon which the full amount of the moneys payable in respect of such Bond has been duly received by the Principal Agent or the Trustee and notice of such receipt has been duly given to the Trustee and the Bondholders by the Issuer. Any Bond in respect of which the Certificate and Conversion Notice are deposited for conversion prior to such date shall be converted on the relevant Conversion Date (as defined below) notwithstanding that the full amount of the moneys payable in respect of such Bond shall have been received by the Principal Agent or the Trustee before such Conversion Date or that the Conversion Period may have expired before such Conversion Date.

6.1.8. The Shares issued upon conversion of the Bonds are expected to be listed on the NSE, the BSE and any other stock exchanges in India on which the Shares are listed from time to time, and will be tradeable on such stock exchanges once listed thereon, which is expected to occur within thirty (30) days after the issuance of such Shares, or, if later, such other times as may be required by applicable laws and regulations and appropriate authorities.

6.1.9. For the purposes of Condition 6, the exchange rate of US dollars to INR will be the RBI's reference rate for US

dollar to INR fixed on the day prior to the Issue Date. 6.2. Procedure for Conversion 6.2.1. To exercise the Conversion Right attaching to any Bond, the Bondholder thereof must complete, execute and

deposit at his own expense between 9.00am and 3.00pm (local time on any Business Day) at the specified office of the Conversion Agent, a notice of conversion (a "Conversion Notice") in duplicate in the form for the time being currently obtainable from the specified office of such Conversion Agent, together with the representation by the Bondholder, in the Conversion Notice, that it is not a US person or located in the United States (within the meaning of Regulation S under the Securities Act of 1933 of the United States, as amended) and any certificates and other documents as may be required under the laws of the Republic of India and the jurisdiction in which the specified office of such Conversion Agent shall be located.

6.2.2. The Conversion Agent and/or the Issuer may reject any incomplete or incorrect Conversion Notice or any

Conversion Notice that is not accompanied by any relevant Certificates in respect thereof. 6.2.3. The Issuer will pay to the relevant authorities all stamp, issue, registration or similar taxes and duties ("Taxes")

(if any) arising on allotment and the issue and delivery of Shares following the conversion, and all expenses arising in India on the issue of Shares on conversion of the Bonds, and the Bondholder will not be liable for the same(other than any such stamp, issue, registration excise and similar taxes or duties and transfer costs (if any) payable with respect to the conversion of Bonds which will be payable by the Bondholders). The Issuer will also pay all other expenses arising on the issue of Shares on conversion of the Bonds and all charges of the Agents and the Share Transfer Agent in connection with conversion. A Bondholder exercising its Conversion Right for Shares will be required to open a depository account with a depository participant under the Depositories Act, 1996, for the purposes of receiving the Shares. The date on which any Certificate and the Conversion Notice (in duplicate) relating to a Bond to be converted are deposited with a Conversion Agent and all conditions precedent to conversion of the Bond are fulfilled is called in these Conditions the "Conversion Date" of that Bond and must fall on a date during the Conversion Period. A Conversion Notice and the relevant Certificate or Certificates once deposited may not be withdrawn without the consent in writing of the Issuer, such consent to be notified to the Conversion Agent.

6.2.4. Bondholders that deposit a Conversion Notice during a Closed Period will not be permitted to convert their

Bonds into Shares until the next Business Day following the last day of that Closed Period, which (if all other conditions to conversion have been fulfilled) will be the Conversion Date for such Bonds. The price at which such Bonds will be converted will be the Conversion Price in effect on the Conversion Date. Bondholders that deposit a Conversion Notice outside the hours of 9.00am to 3.00pm, local time, or on a day which is not a Business Day at the specified office of the Conversion Agent, shall for all purposes be deemed to have deposited the Conversion Notice on the next following Business Day.

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6.2.5. Upon exercise by a Bondholder of its Conversion Right for Shares, the Issuer will, as soon as practicable, and in any event not later than forty (40) days after the Conversion Date cause the relevant securities account of the Bondholder exercising his Conversion Right for Shares or of his/their nominee, to be credited with such number of relevant Shares to be issued upon conversion (notwithstanding any retroactive adjustment of the Conversion Price referred to below prior to the time it takes effect) and shall further cause the name of the concerned Bondholder or its nominee to be registered accordingly, in the record of the depositors, maintained by the depositary registered under the Depositories Act, 1996 with whom the Issuer has entered into a depositary agreement and, subject to any applicable limitations then imposed by Indian laws and regulations, shall procure the Share Transfer Agent to, as soon as practicable, and in any event within forty (40) days of the Conversion Date, despatch or cause to be despatched to the order of the person named for that purpose in the relevant Conversion Notice at the place and in the manner specified in the relevant Conversion Notice at the expense of the Issuer (uninsured and the risk of delivery at any such place being that of the converting Bondholder), a US dollar cheque drawn on a branch of a bank in New York City in respect of any cash payable pursuant to Condition 6.2.1 required to be delivered on conversion and such assignments and other documents (if any) as required by law to effect the transfer thereof.

6.2.6. If the Conversion Date in relation to any Bond is on or after a date from which an adjustment to the

Conversion Price takes retroactive effect pursuant to any of the provisions referred to in Condition 6.3 and in Clause 8 of the Trust Deed and the relevant Conversion Date falls on a date when the relevant adjustment has not yet been reflected in the then current Conversion Price, the Issuer will procure that the provisions of this Condition 6.2.6 shall be applied, with appropriate alterations, to such number of Shares ("Additional Shares") as is equal to the excess number of Shares which would have been required to be issued on conversion of such Bond if the relevant retroactive adjustment had been made as at the said Conversion Date and in such event and in respect of such Additional Shares references in this Condition 6.2.6 to the Conversion Date shall be deemed to refer to the date upon which such retroactive adjustment becomes effective (notwithstanding that the date upon which it becomes effective falls after the end of the Conversion Period).

6.2.7. The Shares issued upon conversion of the Bonds will in all respects rank pari passu with the Shares in issue on

the relevant Conversion Date (except for any right excluded by mandatory provisions of applicable law) and such Shares shall be entitled to all rights the record date for which falls on or after such Conversion Date to the same extent as all other fully-paid and non-assessable Shares of the Issuer in issue as if such Shares had been in issue throughout the period to which such rights relate. A holder of Shares issued on conversion of Bonds (including the Depositary) shall not be entitled to any rights the record date for which precedes the relevant Conversion Date.

6.3. Adjustment of Conversion Price

The Conversion Price will be subject to adjustment as follows:

6.3.1. Free distribution, bonus issue, sub-division, consolidation and re-classification of Shares: 6.3.1.1. Adjustment: If the Issuer shall (a) make a free distribution of Shares, (b) make a bonus issue of its Shares, (c)

divide its outstanding Shares, or (d) consolidate its outstanding Shares into a smaller number of Shares,of the Issuer, then the Conversion Price shall be appropriately adjusted so that the holder of any Bond, the Conversion Date in respect of which occurs after the coming into effect of the adjustment described in this Condition 6.3.2.16.3.1 shall be entitled to receive the number of Shares and/or other securities of the Issuer which he would have held or have been entitled to receive after the happening of any of the events described above had such Bond been converted immediately prior to the happening of such event (or, if the Issuer has fixed a prior record date for the determination of Shareholders entitled to receive any such free distribution or bonus issue of Shares or other securities issued upon any such sub-division, consolidation or re-classification, immediately prior to such record date), but without prejudice to the effect of any other adjustment to the Conversion Price made with effect from the date of the happening of such event (or such record date) or any time thereafter.

6.3.1.2. Effective date of adjustment: An adjustment made pursuant to this Condition 6.3.1 above shall become effective immediately on the relevant event referred to above becoming effective or, if a record date is fixed therefor, immediately after such record date; provided that in the case of a free distribution or bonus issue of

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Shares which must, under applicable laws of India, be submitted for approval to a general meeting of Shareholders or be approved by a meeting of the Board of Directors before being legally paid or made, and which is so approved after the record date fixed for the determination of Shareholders entitled to receive such distribution or issue, such adjustment shall, immediately upon such approval being given by such meeting, become effective retroactively to immediately after such record date.

6.3.2. Declaration of dividend in Shares: 6.3.2.1. If the Issuer shall issue Shares as a dividend in Shares or make a distribution of Shares which is treated as a

capitalisation issue for accounting purposes under Indian GAAP (including but not limited to capitalisation of capital reserves and employee stock bonus), then the Conversion Price in effect when such dividend and/or distribution is declared (or, if the Issuer has fixed a prior record date for the determination of Shareholders entitled to receive such dividend and/or distribution, on such record date) shall be adjusted in accordance with the following formula:

NCP = OCP x [N/(N + n)]

where:

NCP = the Conversion Price after such adjustment.

OCP = the Conversion Price before such adjustment.

N = the number of Shares outstanding, at the time of issuance of such dividend and/or distribution.

n = the number of Shares to be distributed to the Shareholders as a dividend and/or distribution.

6.3.3. Concurrent adjustment events: 6.3.3.1. If the Issuer shall declare a dividend in, or make a free distribution or bonus issue of, Shares which dividend,

issue or distribution is to be paid or made to Shareholders as of a record date that is also:

A. the record date for the issue of any rights or warrants which requires an adjustment of the Conversion Price pursuant to Conditions 6.3.5, 6.3.6, 6.3.7 or 6.3.8.

B. the day immediately before the date of issue of any Shares which requires an adjustment of the Conversion Price pursuant to Condition 6.3.9 or, if applicable, the record date for determination of stock dividend entitlement as referred to in Condition 6.3.9.

C. the day immediately before the date of issue of any rights, options or warrants which requires an

adjustment of the Conversion Price pursuant to Condition 6.3.10 or

D. determined by the Issuer and notified by the Issuer to the Conversion Agent in writing to be the relevant date for an event or circumstance which requires an adjustment to the Conversion Price pursuant to Condition 6.3.13

then (except where such dividend, bonus issue or free distribution gives rise to a retroactive adjustment of the Conversion Price under Conditions 0 and 6.3.2 no adjustment of the Conversion Price in respect of such dividend, bonus issue or free distribution shall be made under this Condition 6.3 but in lieu thereof an adjustment shall be made under Conditions 6.3.5, 6.3.6, 6.3.7, 6.3.10 (as the case may require) by including in the denominator of the fraction described therein the aggregate number of Shares to be issued pursuant to such dividend, bonus issue or free distribution.

6.3.4. Extraordinary Cash Dividends: 6.3.4.1. In case the Issuer shall, by dividend or otherwise, distribute cash (excluding any dividend or distribution that is

not an Extraordinary Cash Dividend (as defined below)) to all holders of Shares then, in such case, the

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Conversion Price shall be adjusted (with such adjustment to be effective on the record date for the determination of Shareholders entitled to receive such distribution) in accordance with the following formula:

NCP = OCP x [(M – C)/M]

where:

NCP and OCP have the meanings ascribed thereto in Condition 6.3.5 below.

M = the Market Price per Share on such record date.

C = the amount of cash so distributed (and not excluded as provided for above) in respect of one Share.

Market Price = closing price of the Shares on the BSE or the NSE on the relevant Stock Exchange Trading Day.

If such dividend or distribution is not so paid or made, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such dividend or distribution had not been approved.

For purposes of this Condition 6.3.4 an Extraordinary Cash Dividend occurs if, at the effective date, the total amount of:

(A) any cash dividends paid or declared by the Issuer on the Shares, prior to deduction of any withholding

tax plus any corporate tax attributable to that dividend; and (B) all other cash dividends paid or declared on the Shares in the 182 consecutive day period prior to the

effective date (other than any dividend or portion thereof previously deemed to be an Extraordinary Cash Dividend) (the "previous dividends''), (except that where the date of announcement for dividends for two different fiscal years has occurred in such 182 day period, such dividends relating to the earlier fiscal year will be disregarded for the purpose of determining the previous dividend ((A) and (B) together being the "total current dividend''),

exceeds on a per Share basis two per cent. of the average Market Price of the Shares for a period of 182 days preceding the date of declaration of the relevant dividend. For the avoidance of doubt, all amounts are on a per Share basis.

6.3.5. Rights Issues to Shareholders and others: 6.3.5.1. Adjustment: If the Issuer shall grant, issue or offer to the holders of Shares rights entitling them to subscribe for

or purchase Shares, which expression shall include those Shares that are required to be offered to employees and persons other than Shareholders in connection with such grant, issue or offer:

(A) at a consideration per Share receivable by the Issuer (determined as provided in Condition 6.3.16)

which is fixed on or prior to the record date mentioned below and is less than the Market Price per Share at such record date; or

(B) at a consideration per Share receivable by the Issuer which is fixed after the record date mentioned below and is less than the Market Price per Share on the date the Issuer fixes the said consideration,

then the Conversion Price in effect (in a case within (A) above) on the record date for the determination of Shareholders entitled to receive such rights or (in a case within (B) above) on the date the Issuer fixes the said consideration shall be adjusted in accordance with the following formula:

NCP = OCP x [(N + v)/(N + n)] where:

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NCP = the Conversion Price after such adjustment.

OCP = the Conversion Price before such adjustment.

N = the number of Shares outstanding (having regard to Condition 6.3.16 at the close of business in India (in a case within (A) above) on such record date or (in a case within (B) above) on the date the Issuer fixes the said consideration.

n = the number of Shares initially to be issued upon exercise of such rights at the said consideration being (aa) the number of Shares which underwriters have agreed to underwrite as referred to below or, as the case may be, (bb) the number of Shares for which applications are received from Shareholders as referred to below save to the extent already adjusted for under (aa).

v = the number of Shares which the aggregate consideration receivable by the Issuer (determined as provided in Condition 6.3.16 would purchase at such Market Price per Share specified in (A) or, as the case may be, (B) above.

6.3.5.2. Effective date of adjustment: Subject as provided below, such adjustment shall become effective

immediately after the latest date for the submission of applications for such Shares by Shareholders entitled to the same pursuant to such rights or (if later) immediately after the Issuer fixes the said consideration but retroactively to immediately after the record date mentioned above.

6.3.5.3. Rights not taken up by Shareholders: If, in connection with a grant, issue or offer to the holders of Shares of

rights entitling them to subscribe for or purchase Shares, any Shares which are not subscribed for or purchased by the persons entitled thereto are underwritten by other persons prior to the latest date for the submission of applications for such Shares, an adjustment shall be made to the Conversion Price in accordance with the above provisions which shall become effective immediately after the date the underwriters agree to underwrite the same or (if later) immediately after the Issuer fixes the said consideration but retroactively to immediately after the record date mentioned above.

If, in connection with a grant, issue or offer to the holders of Shares of rights entitling them to subscribe for or purchase Shares, any such Shares which are not subscribed for or purchased by the underwriters who have agreed to underwrite as referred to above or by the Shareholders entitled thereto (or persons to whom Shareholders have transferred such rights) who have submitted applications for such Shares as referred to above are offered to and/or subscribed by others, no further adjustment shall be made to the Conversion Price by reason of such offer and/ or subscription.

6.3.6. Warrants issued to Shareholders: 6.3.6.1. Adjustment: Other than in the case of warrants issued under an employee share scheme specified in

Condition 0 if the Issuer shall grant, issue or offer to the holders of Shares warrants entitling them to subscribe for or purchase Shares:

(A) at a consideration per Share receivable by the Issuer (determined as provided in Condition 6.3.16)

which is fixed on or prior to the record date for the determination of Shareholders entitled to receive such warrants and is less than the Market Price per Share at such record date; or

(B) at a consideration per Share receivable by the Issuer which is fixed after the record date mentioned above and is less than the Market Price per Share on the date the Issuer fixes the said consideration, then the Conversion Price in effect (in a case within (A) above) on the record date for the determination of Shareholders entitled to receive such warrants or (in a case within (B) above) on the date the Issuer fixes the said consideration shall be adjusted in accordance with the following formula:

NCP = OCP x [(N + v)/N + n)]

where:

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NCP and OCP have the meanings ascribed thereto in Condition 6.3.2

N = the number of Shares outstanding (having regard to Condition 6.3.17) at the close of business in India (in a case within (A) above) on such record date or (in a case within (B) above) on the date the Issuer fixes the said consideration.

n = the number of Shares to be issued upon exercise of such warrants at the said consideration which, where no applications by Shareholders entitled to such warrants are required, shall be based on the number of warrants issued. Where applications by Shareholders entitled to such warrants are required, the number of such Shares shall be calculated based upon (aa) the number of warrants which underwriters have agreed to underwrite as referred to below or, as the case may be, (bb) the number of warrants for which applications are received from Shareholders as referred to below save to the extent already adjusted for under (aa).

v = the number of Shares which the aggregate consideration receivable by the Issuer (determined as provided in Condition 6.3.16) would purchase at such Market Price per Share specified in (A) or, as the case may be, (B) above.

6.3.6.2. Effective date of adjustment: Subject as provided below, such adjustment shall become effective (i) where no

applications for such warrants are required from Shareholders entitled to the same, upon their issue and (ii) where applications by Shareholders entitled to the same are required as aforesaid, immediately after the latest date for the submission of such applications or (if later) immediately after the Issuer fixes the said consideration but in all cases retroactively to immediately after the record date mentioned above.

6.3.6.3. Warrants not subscribed for by Shareholders: If, in connection with a grant, issue or offer to the holders of

Shares of warrants entitling them to subscribe for or purchase Shares in the circumstances described in (A) and (B) of this Condition 6.3.6, any warrants which are not subscribed for or purchased by the Shareholders entitled thereto are underwritten by others prior to the latest date for the submission of applications for such warrants, an adjustment shall be made to the Conversion Price in accordance with the above provisions which shall become effective immediately after the date the underwriters agree to underwrite the same or (if later) immediately after the Issuer fixes the said consideration but retroactively to immediately after the record date mentioned above.

6.3.6.4. If, in connection with a grant, issue or offer to the holders of Shares of warrants entitling them to subscribe for

or purchase Shares, any warrants which are not subscribed for or purchased by the underwriters who have agreed to underwrite as referred to above or by the Shareholders entitled thereto (or persons to whom Shareholders have transferred the right to purchase such warrants) who have submitted applications for such warrants as referred to above are offered to and/or subscribed by others, no further adjustment shall be made to the Conversion Price by reason of such offer and/or subscription.

6.3.7. Issues of rights or warrants for equity related securities to Shareholders: 6.3.7.1. Adjustment: If the Issuer shall grant, issue or offer to the holders of Shares rights or warrants entitling them to

subscribe for or purchase any securities convertible into or exchangeable for Shares:

(A) at a consideration per Share receivable by the Issuer (determined as provided in Condition 6.3.16) which is fixed on or prior to the record date mentioned below and is less than the Market Price per Share at such record date; or

(B) at a consideration per Share receivable by the Issuer (determined as aforesaid) which is fixed after the

record date mentioned below and is less than the Market Price per Share on the date the Issuer fixes the said consideration, then the Conversion Price in effect (in a case within (A) above) on the record date for the determination of Shareholders entitled to receive such rights or warrants or (in a case within (B) above) on the date the Issuer fixes the said consideration shall be adjusted in accordance with the following formula:

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NCP = OCP x [(N + v)/(N + n)]

where:

NCP and OCP have the meanings ascribed thereto in Condition 6.3.2 N = the number of Shares outstanding (having regard to 6.3.16) at the close of business in India (in a case within (A) above) on such record date or (in a case within (B) above) on the date the Issuer fixes the said consideration. n = the number of Shares initially to be issued upon exercise of such rights or warrants and conversion or exchange of such convertible or exchangeable securities at the said consideration being, in the case of rights, (aa) the number of Shares initially to be issued upon conversion or exchange of the number of such convertible or exchangeable securities which the underwriters have agreed to underwrite as referred to below or, as the case may be, (bb) the number of Shares initially to be issued upon conversion or exchange of the number of such convertible or exchangeable securities for which applications are received from Shareholders as referred to below save to the extent already adjusted for under (aa) and which, in the case of warrants, where no applications by Shareholders entitled to such warrants are required, shall be based on the number of warrants issued. Where applications by Shareholders entitled to such warrants are required, the number of such Shares shall be calculated based upon (aa) the number of warrants which underwriters have agreed to underwrite as referred to below or, as the case may be, (bb) the number of warrants for which applications are received from Shareholders as referred to below save to the extent already adjusted for under (aa). v = the number of Shares which the aggregate consideration receivable by the Issuer (determined as provided in Condition 6.3.16) would purchase at such Market Price per Share specified in (A) or, as the case may be, (B) above.

6.3.7.2. Effective date of adjustment: Subject as provided below, such adjustment shall become effective (a) where

no applications for such warrants are required from Shareholders entitled to the same, upon their issue and (b) where applications by Shareholders entitled to the warrants are required as aforesaid and in the case of convertible or exchangeable securities by Shareholders entitled to the same pursuant to such rights, immediately after the latest date for the submission of such applications or (if later) immediately after the Issuer fixes the said consideration; but in all cases retroactively to immediately after the record date mentioned above.

6.3.7.3. Rights or warrants not taken up by Shareholders: If, in connection with a grant, issue or offer to the

holders of Shares of rights or warrants entitling them to subscribe for or purchase securities convertible into or exchangeable for Shares in the circumstances described in this Condition 6.3.7., any convertible or exchangeable securities or warrants which are not subscribed for or purchased by the Shareholders entitled thereto are underwritten by others prior to the latest date for the submission of applications for such convertible or exchangeable securities or warrants, an adjustment shall be made to the Conversion Price in accordance with the above provisions which shall become effective immediately after the date the underwriters agree to underwrite the same or (if later) immediately after the Issuer fixes the said consideration but retroactively to immediately after the record date mentioned above.

6.3.7.4. If, in connection with a grant, issue or offer to the holders of Shares of rights or warrants entitling them to

subscribe for or purchase securities convertible into or exchangeable for Shares, any convertible or exchangeable securities or warrants which are not subscribed for or purchased by the underwriters who have agreed to underwrite as referred to above or by the Shareholders entitled thereto (or persons to whom Shareholders have transferred such rights or the right to purchase such warrants) who have submitted applications for such convertible or exchangeable securities or warrants as referred to above are offered to and/or subscribed by others, no further adjustment shall be made to the Conversion Price by reason of such offer and/ or subscription.

6.3.8. Other distributions to Shareholders:

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6.3.8.1. Adjustment: If the Issuer shall distribute to the holders of Shares evidences of its indebtedness, or shares of capital stock of the Issuer (other than Shares), assets (including any dividends in cash) or rights or warrants to subscribe for or purchase Shares or securities (excluding those rights and warrants referred to in Conditions 6.3.5, 6.3.6 6.3.7 and 6.3.8 above), then the Conversion Price in effect on the record date for the determination of Shareholders entitled to receive such distribution shall be adjusted in accordance with the following formula:

NCP = OCP x [(MP – fmv)/(MP)] where: NCP and OCP have the meanings ascribed thereto in Condition 6.3.2 MP = the Market Price per Share on the record date for the determination of Shareholders entitled to receive such distribution. fmv = the fair market value (as determined by the Issuer and notified in writing to the Conversion Agent or, if pursuant to applicable law of India such determination is to be made by application to a court of competent jurisdiction, as determined by such court or by an appraiser appointed by such court) of the portion of the evidences of indebtedness, equity share capital shares of capital stock, Assets (including cash), rights or warrants so distributed applicable to one Share less any consideration payable for the same by the relevant Shareholder.

In making a determination of the fair market value of any such evidences of indebtedness, shares of capital stock, Assets (other than cash), rights or warrants, the Issuer shall consult an independent securities company or bank of international repute in India selected by the Issuer and shall take fully into account the advice received from such company or bank.

6.3.8.2. Effective date of adjustment: Such adjustment shall become effective immediately after the record date for

the determination of Shareholders entitled to receive such distribution, provided that (a) in the case of such a distribution which must, under applicable law of India, be submitted for approval to a general meeting of Shareholders or be approved by a meeting of the Board of Directors before such distribution may legally be made and is so approved after the record date fixed for the determination of Shareholders entitled to receive such distribution, such adjustment shall, immediately upon such approval being given by such meeting, become effective retroactively to immediately after such record date and (b) if the fair market value of the evidences of indebtedness, shares of capital stock, Assets, rights or warrants so distributed cannot be determined until after the record date fixed for the determination of Shareholders entitled to receive such distribution, such adjustment shall, immediately upon such fair market value being determined, become effective retroactively to immediately after such record date.

6.3.9. Issue of convertible or exchangeable securities other than to Shareholders or on exercise of warrants: 6.3.9.1. Adjustment: If the Issuer shall issue any securities convertible into or exchangeable for Shares (other than the

Bonds, or in any of the circumstances described in Condition 6.3.7 and Condition 6.3.11) or grant such rights in respect of any existing securities and the consideration per Share receivable by the Issuer (determined as provided in Condition 6.3.16) shall be less than the Market Price per Share on the date in India on which the Issuer fixes the said consideration (or, if the issue of such securities is subject to approval by a general meeting of Shareholders, on the date on which the Board of Directors fixes the consideration to be recommended at such meeting), then the Conversion Price in effect immediately prior to the date of issue of such convertible or exchangeable securities shall be adjusted in accordance with the following formula: NCP = OCP x [(N + v)/(N + n)] where: NCP and OCP have the meanings ascribed thereto in Condition 6.3.2

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N = the number of Shares outstanding (having regard to Condition 6.3.17) at the close of business in India on the day immediately prior to the date of such issue. n = the number of Shares to be issued upon conversion or exchange of such convertible or exchangeable securities at the initial conversion or exchange price or rate. v = the number of Shares which the aggregate consideration receivable by the Issuer would purchase at such Market Price per Share. Effective date of adjustment: Such adjustment shall become effective as of the day in India corresponding to the day at the place of issue on which such convertible or exchangeable securities are issued.

6.3.10. Other issues of Shares: 6.3.10.1. Adjustment: If the Issuer shall issue any Shares (other than Shares issued upon conversion or exchange of any

convertible or exchangeable securities (including the Bonds) issued by the Issuer or upon exercise of any rights or warrants granted, offered or issued by the Issuer or in any of the circumstances described in Conditions 0and 6.3.2 or issued to shareholders of any company which merges with the Issuer in proportion to their shareholdings in such company immediately prior to such merger, upon such merger but including Shares issued under any employee dividend or profit-sharing arrangements) for a consideration per Share receivable by the Issuer (determined as provided in Condition 6.3.16) less than the Market Price per Share on the date in India on which the Issuer fixes the said consideration (or, if the issue of such Shares is subject to approval by a general meeting of Shareholders, on the date on which the Board of Directors fixes the consideration to be recommended at such meeting), then the Conversion Price in effect immediately prior to the issue of such additional Shares shall be adjusted in accordance with the following formula:

NCP = OCP x [(N + v)/(N + n)] where: NCP and OCP have the meanings ascribed thereto in Condition 6.3.2 N = the number of Shares outstanding (having regard to Condition 6.3.17) at the close of business in India on the day immediately prior to the date of issue of such additional Shares. n = the number of additional Shares issued as aforesaid. v = the number of Shares which the aggregate consideration receivable by the Issuer (determined as provided in Condition 6.3.16 would purchase at such Market Price per Share.

Effective date of adjustment: Such adjustment shall become effective as of the day in India of the issue of such additional Shares.

6.3.11. Issue of equity related Securities: 6.3.11.1. Adjustment: If the Issuer shall grant, issue or offer options, warrants or rights (excluding those rights and

warrants referred to in Conditions 6.3.5, 6.3.6, 6.3.7 and 6.3.8) to subscribe for or purchase Shares or securities convertible into or exchangeable for Shares and the consideration per Share receivable by the Issuer (determined as provided in Condition 6.3.16) shall be less than the Market Price per Share on the date in India on which the Issuer fixes the said consideration (or, if the offer, grant or issue of such rights, options or warrants is subject to approval by a general meeting of Shareholders, on the date on which the Board of Directors fixes the consideration to be recommended at such meeting), then the Conversion Price in effect immediately prior to the date of the offer, grant or issue of such rights, options or warrants shall be adjusted in accordance with the following formula:

NCP = OCP x [(N + v)/(N + n)]

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where: NCP and OCP have the meanings ascribed thereto in Condition 6.3.2 N = the number of Shares outstanding (having regard to Condition 6.3.16) at the close of business in India on the day immediately prior to the date of such issue. n = the number of Shares to be issued on exercise of such rights or warrants and (if applicable) conversion or exchange of such convertible or exchangeable securities at the said consideration. v = the number of Shares which the aggregate consideration receivable by the Issuer (determined as provided in Condition 6.3.16) would purchase at such Market Price per Share. Effective date of adjustment: Such adjustment shall become effective as of the day in India corresponding to the day at the place of issue on which such rights or warrants are issued.

6.3.12. Preferential allotments of Shares or equity related securities: 6.3.12.1. Adjustment: Other than in the case of warrants issued under an employee share scheme specified in Condition

0 if the Issuer shall make any preferential allotment or issue of any Shares or options, warrants or rights (excluding any allotment or issue leading to an adjustment of the Conversion Price pursuant to Condition 6.3.10 or 6.3.9 and excluding those rights and warrants referred to in Conditions 6.3.5, 6.3.6, 6.3.7 and 6.3.8) to subscribe for or purchase Shares or securities convertible into or exchangeable for Shares and the consideration per Share receivable by the Issuer (determined as provided in Condition 6.3.16 shall be less than the Conversion Price on the date in India on which the Issuer fixes the said consideration (or, if the allotment, issue, offer, grant or issue of such Shares or rights, options or warrants is subject to approval by a general meeting of Shareholders, on the date on which the Board of Directors fixes the consideration to be recommended at such meeting), then the Conversion Price in effect immediately prior to the date of the allotment, issue, offer, grant or issue of such rights, options or warrants shall be adjusted in accordance with the following formula:

NCP = OCP x [(N + v)/(N + n)] where: NCP and OCP have the meanings ascribed thereto in Condition 6.3.2 N = the number of Shares outstanding (having regard to Condition 6.3.16) at the close of business in India on the day immediately prior to the date of such issue. n = the number of Shares to be issued pursuant to the preferential allotment or issue, or to be issued on exercise of such rights or warrants and (if applicable) conversion or exchange of such convertible or exchangeable securities at the said consideration. v = the number of Shares which the aggregate consideration receivable by the Issuer (determined as provided in Condition 6.3.16) would purchase at such Conversion Price. Effective date of adjustment: Such adjustment shall become effective as of the day in India on which the preferential allotment takes place, or corresponding to the day at the place of issue on which such rights or warrants are issued.

6.3.13. Tender or Exchange Offer:

In case a tender or exchange offer made by the Issuer for all or any portion of the Shares shall expire and such tender or exchange offer shall involve the payment by the Issuer of consideration per Share having a Fair Market Value (as defined below) (as determined by the Board of Directors, whose determination shall, if made in good faith, be conclusive) at the last time (the "Expiration Date'') tenders or exchanges could have been

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made pursuant to such tender or exchange offer (as it shall have been amended) that exceeds the Market Price per Share, as of the Expiration Date, the Conversion Price shall be adjusted in accordance with the following formula: NCP = OCP x [(N x M) / (a+[(N–n) x M])] where: NCP and OCP have the meanings ascribed thereto in Condition 6.3.2 above. N = the number of Shares outstanding (including any tendered or exchanged Shares) on the Expiration Date. M = Market Price per Share as of the Expiration Date. a = the Fair Market Value of the aggregate consideration payable to the holders of Shares based on the acceptance (up to a maximum specified in terms of the tender or exchange offer) of all Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the Shares deemed so accepted up to any such maximum, being referred to as the "Purchased Shares''). n = the number of Purchased Shares. Effective date of adjustment: Such adjustment shall become retroactively effective immediately prior to the opening of business on the day following the Expiration Date. If the Issuer is obligated to purchase Shares pursuant to any such tender or exchange offer, but the Issuer is permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if such tender or exchange offer had not been made. "Fair Market Value'' means the price that could be negotiated in an arm's length free market transaction for cash between a willing buyer and a willing seller neither of which is under pressure or compulsion to complete the transaction.

6.3.14. Analogous events and modifications:

If (a) the rights of conversion or exchange, purchase or subscription attaching to any options, rights or warrants to subscribe for or purchase Shares or any securities convertible into or exchangeable for, or which carry rights to subscribe for or purchase shares are modified (other than pursuant to and as provided in the terms and conditions of such options, rights, warrants or securities) or (b) the Issuer determines that any other event or circumstance has occurred which has or would have an effect on the position of the Bondholders as a class compared with the position of the holders of all the securities (and options and rights relating thereto) of the Issuer, taken as a class which is analogous to any of the events referred to in Conditions 0 to 6.3.13 then, in any such case, the Issuer shall promptly notify the Trustee thereof in writing and the Issuer shall consult with an independent securities company or bank of international repute in India selected by the Issuer as to what adjustment, if any, should be made to the Conversion Price to preserve the value of the Conversion Right of Bondholders and will make any such adjustment.

6.3.15. Simultaneous issues of different classes of Shares:

In the event of simultaneous issues of two or more classes of share capital comprising Shares or rights or warrants in respect of, or securities convertible into or exchangeable for, two or more classes of share capital comprising Shares, then, for the purposes of this Condition, the formula:

NCP = OCP x [(N + v)/(N + n)] shall be restated as:

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NCP = OCP x [(N + v1 + v2 + v3)/(N + n1 + n2 + n3)] where v1 and n1 shall have the same meanings as "v'' and "n'' but by reference to one class of Shares, v2 and n2 shall have the same meanings as "v'' and "n'' but by reference to a second class of Shares, v3 and n3 shall have the same meanings as "v'' and "n'' but by reference to a third class of Shares and so on.

6.3.16. Consideration receivable by the Issuer: 6.3.16.1. For the purposes of any calculation of the consideration receivable by the Issuer pursuant to Conditions 6.3.5,

6.3.6, 6.3.7, 6.3.9, 6.3.10 and 6.3.11 above, the following provisions shall be applicable:

(A) in the case of the issue of Shares for cash, the consideration shall be the amount of such cash, provided that in no such case shall any deduction be made for any commissions or any expenses paid or incurred by the Issuer for any underwriting of the issue or otherwise in connection therewith;

(B) in the case of the issue of Shares for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair value thereof as determined by the Issuer (and in making such determination the Issuer shall consult an independent securities company or bank of international repute in India selected by the Issuer and shall take fully into account the advice received from such company or bank) or, if pursuant to applicable law of India such determination is to be made by application to a court of competent jurisdiction, as determined by such court or an appraiser appointed by such court, irrespective of the accounting treatment thereof;

(C) in the case of the issue (whether initially or upon the exercise of rights or warrants) of securities

convertible into or exchangeable for Shares, the aggregate consideration receivable by the Issuer shall be deemed to be the consideration received by the Issuer for such securities and (if applicable) rights or warrants plus the additional consideration (if any) to be received by the Issuer upon (and assuming) the conversion or exchange of such securities at the initial conversion or exchange price or rate and (if applicable) the exercise of such rights or warrants at the initial subscription or purchase price (the consideration in each case to be determined in the same manner as provided in this Condition 6.3.17 and the consideration per Share receivable by the Issuer shall be such aggregate consideration divided by the number of Shares to be issued upon (and assuming) such conversion or exchange at the initial conversion or exchange price or rate and (if applicable) the exercise of such rights or warrants at the initial subscription or purchase price;

(D) in the case of the issue of rights or warrants to subscribe for or purchase Shares, the aggregate

consideration receivable by the Issuer shall be deemed to be the consideration received by the Issuer for any such rights or warrants plus the additional consideration to be received by the Issuer upon (and assuming) the exercise of such rights or warrants at the initial subscription or purchase price (the consideration in each case to be determined in the same manner as provided in this Condition 6.3.17 and the consideration per Share receivable by the Issuer shall be such aggregate consideration divided by the number of Shares to be issued upon (and assuming) the exercise of such rights or warrants at the initial subscription or purchase price; and

(E) in the case of the issue of Shares (including, without limitation, to employees under any employee

bonus or profit sharing arrangements) credited as fully paid out of retained earnings or capitalisation of reserves at their par value, the aggregate consideration receivable by the Issuer shall be deemed to be zero (and accordingly the number of Shares which such aggregate consideration receivable by the Issuer could purchase at the relevant Market Price per Share shall also be deemed to be zero).

6.3.17. Cumulative adjustments:

If, at the time of computing an adjustment (the "later adjustment'') of the Conversion Price pursuant to any of Conditions 6.3.2, 6.3.5, 6.3.6, 6.3.9, 6.3.10 and 6.3.12 above, the Conversion Price already incorporates an adjustment made (or taken or to be taken into account pursuant to Condition 6.3.17) to reflect an issue of Shares or of securities convertible into or exchangeable for Shares or of rights or warrants to subscribe for or purchase Shares or securities, to the extent that the number of such Shares or securities taken into account for

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the purposes of calculating such adjustment exceeds the number of such Shares in issue at the time relevant for ascertaining the number of outstanding Shares for the purposes of computing the later adjustment, such excess Shares shall be deemed to be outstanding for the purposes of making such computation.

6.3.18. Minor adjustments:

No adjustment of the Conversion Price shall be required if the adjustment would be less than 1 per cent of the Conversion Price then in effect; provided that any adjustment which by reason of this Condition 6.3.18 is not required to be made shall be carried forward and taken into account (as if such adjustment had been made at the time when it would have been made but for the provisions of this Condition 6.3.18 in any subsequent adjustment. All calculations under this Condition 6.3 shall be made to the nearest Re. 1.

6.3.19. Minimum Conversion Price:

Notwithstanding the provisions of this Offering Circular, the Company covenants that Conversion Price shall not be reduced below the minimum price that may be prescribed by the applicable laws and regulations in India for the time being in force.

6.3.20. Employee share scheme/existing warrants:

No adjustment shall be required to the Conversion Price where Shares or other securities or options, rights or warrants for shares or other securities, are issued, offered, allotted, appropriated, modified or granted to employees (including directors) or former employees of the Issuer or persons related to such employees (including directors) or former employees, directly or indirectly, pursuant to any employee share scheme generally or as required by law (for the avoidance of doubt, no adjustment to the Conversion Price shall be required on the exercise of any of the options outstanding either at the Issue Date and at any future date).

6.3.21. Reference to "fixed":

Any references herein to the date on which a consideration is "fixed" shall, where the consideration is originally expressed by reference to a formula which cannot be expressed as an actual cash amount until a later date, be construed as a reference to the first day on which such actual cash amount can be ascertained.

6.3.22. Notice of Adjustments of Conversion Price:

Whenever the Conversion Price is adjusted as herein provided the Issuer shall compute the adjusted Conversion Price in accordance with this Condition 6.3 and shall prepare a certificate signed by a director of the Issuer setting forth the adjusted Conversion Price and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be delivered to the Trustee and will be notified to Bondholders, and where possible, at least ten (10) Business Days in advance of the effective date of such adjustment.

6.3.23. Trustee and Agents no duty to monitor:

The Trustee and the Agents shall not be under any duty to monitor whether any event or circumstance has happened or exists which may require an adjustment to be made to the Conversion Price and shall assume that no such event has occurred until it has express written notice from the Issuer of such event and will not be responsible or liable to the Bondholders or any other person for any loss arising from any failure to do so.

The Conversion Price will be subject to adjustment in accordance with the provisions of this Condition 6.3. If the Issuer fails to notify the Agents of the Conversion Price or any adjustments to it in accordance with Condition 6.3.22, the Principal Paying and Conversion Agent shall have no duty to apply the adjusted Conversion Price or to convert the Bonds and shall not be liable to any person for such failure to do so. Unless ordered to do so by a court of competent jurisdiction neither the Trustee, the Agents nor the Lead Manager shall be required to disclose to any holder of the Bonds any confidential financial or other information made available to the Trustee, the Agents or the Lead Manager by the Issuer or any other person in

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connection with the trusts of the Trust Deed and no holder of the Bonds shall be entitled to take any action to obtain from the Trustee such information.

6.3.24. Trustee, Agents and Lead Manager Not Liable

Neither the Trustee, the Agents nor the Lead Manager shall not be responsible or liable for any failure of the Issuer to make such payment or to issue, transfer or deliver any shares or other securities or property upon the surrender of any Bond for conversion and neither the Trustee, the Agents nor the Lead Manager shall be responsible for or liable to Bondholders or any other person for any failure of the Issuer to comply with any of the Issuer’s covenants in relation to conversion.

6.3.25. Approval of Trustee The Issuer shall send the Trustee a certificate setting out particulars relating to each adjustment of the Conversion Price. The Issuer shall also cause a notice containing the same information to be given to Bondholders, such notice to be given to the Trustee before it is given to Bondholders.

6.3.26. Purchase of Shares

The Issuer may purchase its Shares to the extent permitted by law. 6.4. Notice of Certain Events

In case of the occurrence of one or more of the events that are listed in this Condition 6.4 the Issuer shall cause a notice to be mailed to the specified office of the Trustee and the Paying Agent and to be sent to Bondholders in accordance with Condition 14 hereof as promptly as practicable and in any event within fifteen (15) Business Days after the date on which notice is sent to the holders of the Shares. Such events are: (i) the Issuer shall declare a dividend (or any other distribution) on its Shares payable (1) otherwise than exclusively in cash, or (2) exclusively in cash in an amount that would require a Conversion Price adjustment pursuant to Condition 6.3; or (ii) the Issuer shall authorise the granting to the holders of its Shares of rights, warrants or options to subscribe for or purchase any shares of capital stock of any class or of any other rights (excluding employee stock options); or (iii) of any reclassification of the Shares (other than a sub-division or combination of its outstanding Shares), or of any consolidation or merger to which the Issuer is a party and for which approval of any stockholders of the Issuer is required, or of the sale or transfer of all or substantially all of the Assets of the Issuer; or (iv) of the voluntary or involuntary dissolution, liquidation or winding up of the Issuer; or (v) the Issuer shall commence a tender or exchange offer for all or a portion of the Issuer's outstanding Shares (or shall amend any such tender or exchange offer) or (vi) for so long as the Bonds are listed on the SGX-ST, any other event of development the occurrence of which requires notice to be given under the rules and regulations of the SGX-ST. The notice shall state (i) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights, warrants or options or, if a record is not to be taken, the date as of which the holders of Shares of record to be entitled to such dividend, distribution, rights, warrants or options are to be determined, or (ii) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Shares of record shall be entitled to exchange their Shares for securities, cash or other Assets deliverable upon such re-classification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up, or (iii) the date on which such tender offer commenced, the date on which such tender offer is scheduled to expire unless extended, the consideration offered and the other material terms thereof (or the material terms of any amendment thereto), or (iv) any other information required by the rules and regulations of the SGX-ST.

6.5. Consolidation, Amalgamation or Merger

In the event that the Issuer shall be a party to any transaction, including without limitation any (i) recapitalisation or reclassification of the Shares (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a sub-division or combination of the Shares), (ii) any consolidation of the Issuer with, or merger of the Issuer into, any other person, any merger of another person

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into the Issuer (other than a merger which does not result in a reclassification, conversion, exchange or cancellation of all of the outstanding Shares), (iii) any sale or transfer of all or substantially all of the Assets of the Issuer, or (iv) any compulsory share exchange pursuant to which the Shares are converted into the right to receive other securities, cash or other Assets, the Issuer will forthwith notify the Trustee and the Bondholders of such event in accordance with Condition 14 and lawful provision shall be made as part of the terms of such transaction whereby the holder of each Bond then outstanding shall have the right (during the period in which such Bond is convertible) to convert such Bond into the class and amount of shares and other securities and Assets receivable upon such transaction by a holder of such number of Shares which would have been liable to be issued upon conversion of such Bond immediately prior to the transaction. So far as legally possible, the Issuer shall cause the Person formed by such consolidation or resulting from such merger or which acquired such Assets or which acquired the Shares, as the case may be, to execute and deliver to the Trustee in form and substance satisfactory to the Trustee an amendment to these Terms and Conditions. Such amendment shall provide for adjustments that, for events subsequent to the effective date of such amendment, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Condition. The Trustee shall be entitled to require from the Issuer such certificate signed by two directors of the Issuer, opinions, consents, documents and other matters at the expense of the Issuer in connection with the foregoing as it may consider appropriate but shall have no responsibility for the terms of any such consolidations, amalgamations or mergers, sales or transfers or effect thereof upon the Bondholders or Conversion Right. The above provisions of this Condition 6.5 shall similarly apply to successive transactions of the foregoing type.

7. Redemption and Purchase

7.1. Redemption at Maturity 7.1.1. Unless previously redeemed, converted or purchased and cancelled as provided herein, the Issuer will redeem

the Bonds at 100 per cent of their principal amount on the Maturity Date subject to applicable laws. 7.2. Redemption at the Option of the Issuer 7.2.1. On or at any time after May 27, 2017 the Issuer may, having given not less than 30 nor more than 60 days’

notice to the Bondholders, the Trustee and the Principal Agent (which notice will be irrevocable), redeem the Bonds in whole but not in part at 100 per cent. of their principal amount together with any accrued but unpaid interest (calculated up to but excluding the date of redemption) on the date fixed for redemption, provided that the Issuer is satisfied that no such redemption may be made unless the Closing Price of the Shares (translated into U.S. dollars at the Prevailing Rate) for each of the 30 consecutive Trading Days prior to the date upon which notice of such redemption is given pursuant to Condition 14, was at least 130 per cent. of the Accreted Principal Amount (translated into U.S. dollars at the fixed exchange rate.

7.2.2. If at any time the aggregate principal amount of the Bonds outstanding is less than 90 per cent of the aggregate

principal amount originally issued, the Issuer shall have the option to redeem such outstanding Bonds in whole but not in part at 100 per cent of their principal amount together with any accrued but unpaid interest (calculated up to but excluding the date of redemption) on the date fixed for redemption. The Issuer will give at least 30 days' but not more than 60 days' prior notice to the holders, the Trustee and the Principal Agent for such redemption (which notice will be irrevocable).

RBI regulations at the time of redemption may require the Issuer to obtain the prior approval of the RBI before providing notice for or effecting such a redemption prior to the Maturity Date. Such approval may or may not be forthcoming.

7.3. Redemption for Taxation Reasons 7.3.1. To the extent permitted by applicable law and regulations, and subject as provided below, the Issuer may at

any time, having given not less than thirty (30) nor more than sixty (60) days' notice to the Bondholders (which notice shall be irrevocable) in accordance with Condition 14 and written notice to the Trustee, redeem all but not some of the Bonds at the applicable Early Redemption Amount (as defined below), if (i) the Issuer provides the Trustee with an opinion of an independent legal counsel acceptable to the Trustee or the Issuer's auditors immediately prior to the giving of such notice that it has or will become obliged to pay additional

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amounts as provided or referred to in Condition 8 as a result of any change in, or amendment to, the laws or regulations of India or any political subdivision or any authority thereof or therein having power to tax, or any change in the general application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after May 28, 2014, which opinion shall specify the relevant change in, or amendment to, such laws or regulations or the relevant change in the general application or interpretation thereof and the additional amounts thereby required to be paid by the Issuer, and (ii) such obligation cannot be avoided by the Issuer taking reasonable measures available to it, provided that no such notice of redemption shall be given earlier than ninety (90) days prior to the earliest date on which the Issuer would be obliged to pay such additional amounts were a payment in respect of the Bonds then due.

7.3.2. Prior to the giving of any notice of redemption pursuant to this Condition 7.3, the Issuer shall deliver to the Trustee the opinion of an independent legal counsel or the Issuer's auditors mentioned above and a certificate signed by an Authorised Officer (as defined below) of the Issuer stating that the obligation referred to in 7.3.1.(i) above cannot be avoided by the Issuer taking reasonable measures available to it and the Trustee shall be entitled to accept without further enquiry and without liability to any party such certificate as sufficient and conclusive evidence of the satisfaction of the condition precedent set out in (ii) above in which event it shall be conclusive and binding on the Bondholders.

7.3.3. Having received notice of redemption in accordance with this Condition 7.3.3, a Bondholder may, by

depositing a duly completed and signed counter-notice (in the form for the time being current, available from the specified office of any Paying Agent) at the specified office of any Paying Agent within twenty (20) days of receipt of the notice of redemption, elect (a) to retain its Bonds and (b) that the provisions of Condition 8 shall not apply in respect of the taxes, duties, assessments or governmental charges then required to be deducted or withheld in respect of any payment of principal or premium to be made in respect of such Bonds which falls due after the date of the aforementioned notice given by the Issuer, whereupon no additional amounts shall be payable by the Issuer in respect thereof pursuant to Condition 7 and payment of all amounts shall be made subject to the deduction or withholding of such taxes, duties, assessments or governmental charges but without prejudice to the application of this Condition 7.3.3 and Condition 8 to any other taxes duties, assessments or governmental charges required to be deducted or withheld by law. For the avoidance of doubt, any additional amounts which had been payable by the Issuer in respect of the Bonds as a result of the laws or regulations of the Government of India or any authority thereof or therein having the power to tax prior to the Issue Date, will continue to be payable to the Bondholders.

In these Conditions:

"Early Redemption Amount" means an amount equal to 100 per cent of the principal amount of the Bonds redeemed plus the Redemption Premium to be calculated by the Issuer. "Redemption Premium" means an amount that is determined by the Issuer so that such Redemption Premium represents for each Bondholder, for each Authorised Denomination of the Bonds held by that Bondholder, a gross yield of 4.75 per cent per annum (which is identical to the gross yield in the case of redemption at maturity), calculated on an annual basis. The applicable Early Redemption Amount for each Authorised Denomination of the Bonds is calculated in accordance with the following formula, rounded (if necessary) to two decimal places with 0.005 being rounded upwards (provided that if the date fixed for redemption is an Annual Date (as set out below, each a "Annual Date"), such Early Redemption Amount shall be as set out in the table below in respect of such Annual Date):

Early Redemption Amount = Previous Redemption Amount x (1 + r)

Where Previous Redemption Amount = Early Redemption Amount for each Authorised Denomination of the Bonds on the Annual Date immediately preceding the date fixed for redemption as set out below (or if the Bonds are to be redeemed prior to May 27, 2019, US$100,000).

Annual Date Early Redemption Amount (US$)

May 27, 2015 104,750.00

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Annual Date Early Redemption Amount (US$)

May 27, 2016 104,750.00

May 27, 2017 104,750.00

May 27, 2018 104,750.00

May 27, 2019 104,750.00

r = 4.75% expressed as a fraction.

d = number of days from and including the immediately preceding Annual Date as set out in the table above (or if the Bonds are to be redeemed on or before May 27, 2019 from and including the date of issue of the Bonds) to, but excluding, the date fixed for redemption, calculated on the basis of a three hundred and sixty (360) day year consisting of 12 months of 30 days each and in case of an incomplete month, and the actual number of days elapsed.

Under current regulations of the Reserve Bank of India applicable to convertible bonds, the Issuer would require the prior approval of the Reserve Bank of India before providing notice for or effecting such a redemption, which approval may or may not be forthcoming.

7.4. Repurchase of Bonds in the Event of Delisting 7.4.1. To the extent permitted by applicable law and regulations, in the event that the Shares cease to be listed or

admitted to trading on both the NSE and the BSE (a "Delisting"), the Issuer shall, within ten (10) Business Days after the Delisting, notify the Bondholders and the Trustee of such Delisting, and each Bondholder shall have the right (the "Delisting Repurchase Right"), at such Bondholder's option, to require the Issuer to repurchase all (or any portion of the principal amount thereof which is US$100,000 or any integral multiple thereof) of such Bondholder's Bonds at the applicable Early Redemption Amount (the "Delisting Repurchase Price") on the date set by the Issuer for such repurchase (the "Delisting Repurchase Date"), which shall be not less than thirty (30) days nor more than sixty (60) days following the date on which the Issuer notifies the Bondholders of the Delisting.

Under current regulations of the RBI applicable to convertible bonds, the Issuer would require the prior approval of the RBI for or effecting such a repurchase prior to the Maturity Date, which approval may or may not be forthcoming.

7.5. Repurchase of Bonds in the Event of Change of Control 7.5.1. To the extent permitted by applicable law and regulations, if a Change of Control, as defined below, occurs

with respect to the Issuer, each Bondholder shall have the right (the "Change of Control Repurchase Right"), at such Bondholder's option, to require the Issuer to repurchase all (or any portion of the principal amount thereof which is US$100,000 or any integral multiple thereof) of such Bondholder's Bonds on the date set by the Issuer for such repurchase (the "Change of Control Repurchase Date"), which shall be not less than thirty (30) days nor more than sixty (60) days following the date on which the Issuer notifies the Bondholders and the Trustee of the Change of Control which notice shall be delivered not less than ten (10) Business Days after the Issuer becomes aware of a Change of Control, at the applicable Early Redemption Amount on the Change of Control Repurchase Date (the "Change of Control Repurchase Price"). Under current regulations of the RBI applicable to convertible bonds, the Issuer would require the prior approval of the RBI before providing notice for or effecting such a redemption prior to the Maturity Date, such approval may or may not be forthcoming. The definitions of certain terms used in this Condition are listed below:

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The term "Control" shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner e. A "Change of Control" occurs when: (a) any person or persons (as defined below) acting together acquires Control of the Issuer if such person

or persons does not or do not have, and would not be deemed to have, Control of the Issuer on the Issue Date;

(b) the Issuer consolidates with or merges into or sells or transfers all or substantially all of the Issuer's

Assets to any other person, unless the consolidation, merger, sale or transfer will not result in the other person or persons acquiring Control over the Issuer or the successor entity; or

(c) one or more other persons acquires the legal or beneficial ownership of all or substantially all of the

Issuer's Voting Stock (as defined below).

7.5.2. However, a Change of Control will not be deemed to have occurred solely as a result of the issuance or transfer, with the Issuer's co-operation, of any preferred shares in the Issuer's capital. For the purposes of the Change of Control Repurchase Right, a "person" includes any individual, company, corporation, firm, partnership, joint venture, undertaking, association, organisation, trust, state or agency of a state, in each case whether or not being a separate legal entity. A "person" does not include the Board of Directors or any other governing board. For the purposes of these Conditions: "Capital Stock" means, with respect to any person, any and all shares, ownership interests, participation or other equivalents (however designated), including all common or ordinary stock and all Preferred Stock, of such person. "Voting Stock" means any class or classes of capital stock pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect members of the Board of Directors, managers or trustees of any person (irrespective of whether or not, at the time, stock of any other class or classes will have, or might have, voting power by reason of the happening of any contingency).

7.6. Redemption where less than 10 per cent of the Bonds remain outstanding

Subject to applicable law, if at any time more than 90 per cent. in principal amount of the Bonds has been previously converted, redeemed or repurchased and cancelled, the Issuer may, having given not less than thirty (30) nor more than sixty (60) days' notice to the Bondholders (which notice shall be irrevocable) in accordance with Condition 14 and written notice to the Trustee, redeem and/or convert all (but not some only) of the remaining Bonds outstanding at the applicable Early Redemption Amount.

7.7. Repurchase Procedures 7.7.1. Promptly after becoming aware of, and in any event within ten (10) Business Days after, a Delisting or a

Change of Control or Repurchase of Bonds on or before May 27, 2015, the Issuer will deliver to each Bondholder, a notice regarding such Delisting Repurchase Right or Change of Control Repurchase Right, as the case may be, which notice shall state, as appropriate:

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7.7.1.1. the Delisting Repurchase Date or the Change of Control Repurchase Date, as the case may be (each, a "Purchase Date") which shall not be less than thirty (30) days nor more than sixty (60) days following the date on which the Issuer notifies the Bondholders of the Delisting or Change of Control;

7.7.1.2. in the case of a Delisting, the date of such Delisting and, briefly, the events causing such Delisting; 7.7.1.3. in the case of a Change of Control, the date of such Change of Control and, briefly, the events causing such

Change of Control;

7.7.1.4. the date by which the Bondholder Purchase Notice (as defined below) must be given;

7.7.1.5. the Delisting Repurchase Price or the Change of Control Repurchase Price, as the case may be, and the method by which such amount will be paid;

7.7.1.6. the names and specified offices of all Agents;

7.7.1.7. the current Conversion Price;

7.7.1.8. the procedures that Bondholders must follow and the requirements that Bondholders must satisfy in order to exercise the Delisting Repurchase Right or Change of Control Repurchase Right, as the case may be, or the Conversion Right; and

7.7.1.9. that a Bondholder Purchase Notice, once validly given, may not be withdrawn. To exercise its right to require the Issuer to purchase its Bonds, pursuant to the Delisting Repurchase Right or the Change of Control Repurchase Right, as the case may be, the Bondholder must deliver a written irrevocable notice of the exercise of such right (a "Bondholder Purchase Notice") to any Paying Agent on any Business Day prior to the close of business at the location of such Paying Agent on such day and which day is not less than twenty (20) Business Days prior to the Purchase Date.

Payment of the Delisting Repurchase Price upon exercise of the Delisting Repurchase Right or payment of the Change of Control Repurchase Price upon exercise of the Change of Control Repurchase Right, for any Bond for which a Bondholder Purchase Notice has been delivered is conditional upon (i) the Issuer obtaining all approvals required by applicable law and (ii) delivery of the Certificate relating to such Bond (together with any necessary endorsements) during usual business hours to the specified office of any Paying Agent on any Business Day together with the delivery of such Bondholder Purchase Notice and will be made promptly following the later of the Purchase Date and the time of delivery of such Certificate. If the Paying Agent holds on the Purchase Date sufficient money to pay the Delisting Repurchase Price or the Change of Control Repurchase Price, as the case may be, of Bonds for which Bondholder Purchase Notices have been delivered in accordance with the provisions of the Agency Agreement, then, whether or not such Bonds are delivered to the Paying Agent, on and after such Purchase Date, (i) such Bonds will cease to be outstanding; (ii) such Bonds will be deemed paid; and (iii) all other rights of the Bondholder shall terminate (other than the right to receive the Delisting Repurchase Price or the Change of Control Repurchase Price, as the case may be).

7.8. Purchase in the Open Market or by Private Treaty 7.8.1. Subject to applicable law, the Issuer or any of its Subsidiaries and Affiliates may at any time purchase Bonds

in any manner and at any price in the open market or by private treaty, subject to compliance with all SGX-ST requirements. If purchases are made by tender, the issuer may offer to purchase the Bonds from one or all of the outstanding Bondholders.

7.8.2. For the purposes of these Conditions:

"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person and the terms "controlling" and "controlled" have corresponding meanings.

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7.9. No Re-issue

Bonds which have been redeemed or converted or purchased by the Issuer or its Subsidiaries or Affiliates may not be re-issued or resold.

7.10. Redemption Notices

All notices to Bondholders given by or on behalf of the Issuer pursuant to this Condition will specify the date fixed for redemption, the redemption amount, the Conversion Price as at the date of the relevant notice, the closing price of the Shares and the aggregate principal amount of the Bonds outstanding, in each case, as at the latest practicable date prior to the publication of the notice, all in accordance with Condition 14. The Company shall not be permitted to issue a redemption notice during the Closed Period nor fix the Redemption Date during the Closed Period. Neither the Trustee, any Agent nor the Lead Manager shall be under any duty to ascertain whether the requisite approval has been obtained.

7.11. Trustee and Agents Have no Duty to Monitor

The Trustee and the Agents shall not be under any duty to monitor whether a Delisting or Change of Control has occurred or is likely to occur, and may assume no such event occurred until the Trustee receives express written notice from the Issuer to the contrary, and shall not be liable to any person for any failure by it to monitor so.

8. Taxation 8.1. All payments in respect of the Bonds by the Issuer shall be made without deduction or withholding for, or on

account of, any present or future taxes, duties, deductions, withholding liabilities, assessments or governmental charges of whatever nature ("Taxes") imposed or levied by or on behalf of India or any political sub-division of, or any authority in, or of, India having power to tax, unless the withholding or deduction is required by law. In that event, the Company will pay such additional amounts as may be necessary in order that the net amounts received by the holders of the Bonds after the withholding or deduction shall equal the respective amounts which would have been receivable in respect of the Bonds in the absence of the withholding or deduction; except that no additional amounts shall be payable in relation to any payment in respect of any Bond: 8.1.1. presented for payment by or on behalf of a holder who is liable to the taxes in respect of the Bond by

reason of his having some connection with India other than the mere holding of the Bond; 8.1.2. presented for payment by or on behalf of a holder of such Bond who, at the time of such presentation,

is able to avoid such withholding or deduction by making a declaration of non-residence or other similar claim for exemption and does not make such declaration or claim; or

8.1.3. where such withholding or deduction is imposed on a payment to an individual and is required to be

made pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced in order to conform to, such directive; or

8.1.4. presented for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant Bond to another Paying Agent in a Member State of the European Union; or

8.1.5. presented for payment more than 30 days after the payment first becomes due, except to the extent that a holder would have been entitled to additional amounts on presenting the same for payment on the last day of the period of thirty (30) days assuming (whether or not such is in fact the case) that day to have been a Business Day.

8.2. The Bonds will have the benefit of the tax concessions available under the provisions of Section 115AC of the Income Tax Act and The Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depositary Receipt Mechanism) Scheme 1993 promulgated by the Government (the “Depositary Receipt

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Scheme”). These tax concessions include withholding in respect of interest and premium on the Bonds at a reduced rate of 10 per cent. plus an applicable surcharge on such tax (and education cess as applicable on such tax), for individuals and associations of persons if taxable income exceeds Rs.850,000, and a surcharge of 2.5 per cent. for companies, in respect of interest and premium (if any) on the Bonds. Gains realised on the sale or transfer of such Shares issued upon conversion of Bonds are, subject to certain conditions, exempt from Indian capital gains tax. See “Taxation”.

8.3. Under current Indian laws, no tax is payable by the recipients of dividends on shares of an Indian company, including the Shares deliverable upon conversion of the Bonds. However, the Company will be liable to pay distribution tax on dividends paid on the Shares at a rate of approximately 16.995 per cent. (inclusive of surcharge and education cess).

9. Prescription

Bonds will become void unless presented for payment (in the case of principal and premium) within a period of ten (10) years from the date on which payment in respect of the Bonds, subject to the provisions of Condition 5, becomes due. Neither the Trustee, the Agents nor the Lead Manager shall have any responsibility, obligations or liability with respect to any Bondholder for any amounts so prescribed.

10. Events of Default and Enforcement 10.1. Event of Default

The Bonds shall forthwith become immediately due and repayable at the applicable Early Redemption Amount if any of the following events ("Events of Default") shall occur:

(1) Non-payment: Default is made for a period of seven (7) days or more in the payment of any

principal, premium or interest due in respect of the Bonds or any of them; or

(2) Breach of obligations or covenants: The Issuer fails to perform or observe any of its other obligations, covenants, conditions or provisions under the Bonds or these Terms and Conditions or under the Trust Deed or if any event occurs or any action is taken or fails to be taken which is (or but for the provisions of any applicable law would be) a material breach of any of the covenants referred to in Conditions 3 or 8, and in any such case, and (if capable of remedy) such failure continues for a period of thirty (30) calendar days next following the service by the Trustee (acting at the written direction of the Bondholders holding not less that 50 per cent. of the principal amount of the Bonds then outstanding) on the Issuer of notice requiring the same to be remedied; or

(3) Cross-default: (i) any other Indebtedness of the Issuer becomes due and payable prior to its maturity

date by reason of an event of default (howsoever defined) or (ii) any such Indebtedness of the Issuer is not paid when due or, as the case may be, within any applicable grace period or (iii) the Issuer fails to pay when due (or, as the case may be, within any applicable grace period) any amount payable by it under any present or future guarantee for, or indemnity in respect of, any Indebtedness of any Person or (iv) any security given by the Issuerfor any Indebtedness of any Person or any guarantee or indemnity of Indebtedness of any Person becomes enforceable by reason of default in relation thereto and steps are taken to enforce such security save in any such case where there is a bona fide dispute as to whether the relevant Indebtedness or any such guarantee or indemnity as aforesaid shall be due and payable (following any applicable grace period); provided, however, that in each such case the Indebtedness exceeds in the aggregate US$ 5 million (or its equivalent in any other currency) and in each such case such event continues unremedied for a period of thirty (30) calendar days; or

(4) The Issuer or any Subsidiary is (or is, or could be, deemed by law or a court to be) insolvent or

bankrupt or unable to pay its debts, stops, suspends or threatens to stop or suspend, payment of all or substantially all of (or of a particular type of) its debts, proposes or makes any agreement for the deferral, rescheduling or other readjustment of all or substantially all of (or all of a particular type of) its debts (or of any part which it will or might otherwise be unable to pay when due), proposes or makes a general assignment or an arrangement or composition with or for the benefit of the relevant

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creditors in respect of any of such debts or a moratorium is agreed or declared or comes into effect in respect of or affecting all or any part of (or of a particular type of) the debts of the Issuer or any of its Subsidiaries, except for the purpose of and followed by a Merger on terms approved by an Extraordinary Resolution of the Bondholders;

(5) Enforcement proceedings: a receiver, administrative receiver, administrator or other similar official shall be appointed in relation to the Issuer or in relation to the whole or a substantial part its undertaking or assets or a distress, attachment, execution or other process shall be levied or enforced upon or sued out or put in force against, or an encumbrancer shall take possession of, the whole or a substantial part of the assets or any of them and in any of the foregoing cases is not paid out, removed or discharged within forty five (45) calendar days; or

(6) Voluntary insolvency: the Issuer institutes proceedings to be adjudicated voluntary bankrupt, or shall

consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking organisation under the insolvency laws of India or any similar applicable Indian law, or shall consent to the filing of any such petition, or shall consent to the appointment of a receiver or liquidator or trustee or assignee (or other similar official) in bankruptcy or insolvency of it or its property, or shall make a conveyance or an assignment for the benefit of, or enters into any composition or other arrangement with, its creditors generally, or shall admit in writing its inability to pay its debts generally as they come due; or

(7) Insolvency by decree: a decree or order by a court having jurisdiction shall have been entered

adjudging the Issuer bankrupt or insolvent, or approving as properly filed a petition seeking the reorganisation of the Issuer under the Indian insolvency laws or any other similar applicable Indian law, for the purposes of insolvency or bankruptcy and such decree or order shall have continued undischarged or unstayed for a period of thirty (30) calendar days; or a decree or order of a court having jurisdiction in the premise for the appointment of a receiver or liquidator or trustee or assignee (or other similar official) in bankruptcy or insolvency of the Issuer or of all or substantially all of its property, or for the winding up or liquidation of its affairs, shall have been entered, and such decree or order shall have continued undischarged and unstayed for a period of thirty (30) calendar days; or

(8) Breach of warranty: a warranty, representation, or other statement made by or on behalf of the

Issuer contained herein or any certificate or other agreement furnished in compliance herewith is false in any material respect when made and (if capable of remedy) such falsity continues for a period of thirty (30) calendar days next following the service by one or more of the Bondholders on the Issuer of notice requiring the same to be remedied; or

(9) Illegality: (i) it is or will become unlawful for the Issuer to perform or comply with any one or more

of its respective payment or conversion obligations under the Bonds, or (ii) the validity of the Bonds is contested by the Issuer or the Issuer denies any of its obligations under the Bonds, or (iii) any one or more of such obligations becomes unenforceable or invalid; or

(10) Expropriation: (i) all or any material part of the undertaking, Assets and revenues of the Issuer is

condemned, seized, compulsorily acquired or otherwise appropriated by any person acting under the authority of any national, regional or local government or any political sub-division thereof or (ii) the Issuer is prevented by any such person from exercising control over all or any material part of its undertakings, Assets and revenues; or

(11) Delivery of Shares: Failure by the Issuer to deliver underlying shares on conversion of the Bonds;

(12) Legislative Changes: Change in any legislation / regulation substantially affecting the revenues of

the Issuer

(13) Analogous events: any other event or circumstance which under the laws of the relevant jurisdiction would have an analogous effect to any of the events mentioned in (1) to (14) above.

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10.2. Where an Event of Default has occurred and is continuing, the Trustee may (but shall not be required to) and if so requested in writing by the holders of not less than 50 per cent in principal amount of the Bonds then outstanding or as directed by an Extraordinary Resolution (but subject to being indemnified and/or provided with security to its satisfaction), give notice to the Issuer that the Bonds are, and they shall immediately become due and payable. "Extraordinary Resolution" for the purposes of these Conditions has the definition set out in the Trust Deed.

11. Enforcement

The Trustee may, at its discretion and without further notice, institute such proceedings against the Issuer as it may think fit to enforce repayment of the Bonds together with premium (if any) at any time after the Bonds have become due and payable or otherwise at any time and from time to time to enforce the terms of the Trust Deed, but it will not be bound to take any such proceedings unless (i) it shall have been so directed by an Extraordinary Resolution or so requested in writing by the Bondholders holding not less than 25 per cent. of the principal amount of the Bonds outstanding and (ii) it shall have been indemnified and/or secured to its satisfaction. No Bondholder may proceed directly against the Issuer unless the Trustee, having become bound to proceed, fails to do so and such failure shall have continued for a period of sixty (60) days and no direction inconsistent with such written request or Extraordinary Resolution has been given to the Trustee during such sixty (60) day period by the holders of a majority in principal amount of the outstanding Bonds.

12. Replacement of Bond Certificates

Should any Certificate be lost, stolen, mutilated, defaced or destroyed, it may be replaced at the specified office of the Principal Agent, subject to all applicable laws and stock exchange requirements, upon payment by the claimant of the expenses incurred in connection with the replacement and on such terms as to evidence indemnity and security as the Issuer and the Principal Agent may require. Mutilated or defaced Certificates must be surrendered before replacements will be issued.

13. Agents

The initial Agents and Registrar and their initial specified offices are listed below. Subject to the terms of the Agency Agreement, the Issuer reserves the right at any time with the prior written approval of the Trustee to vary or terminate the appointment of any Agent, the Registrar or the Share Transfer Agent and appoint additional or other Agents or a replacement Registrar or Share Transfer Agent, provided that the Issuer will maintain (i) a Principal Agent, (ii) a Registrar outside the United Kingdom, (iii) an Agent in a European Union member state that will not be obliged to deduct tax pursuant to European Union Directive 2003/48/EC or any other Directive implementing the decisions of the ECOFIN Council meeting of 26-27 November 2000 on the taxation of savings or any law implementing or complying with, or introduced in order to conform to such Directive, (iv) an Agent having a specified office in London (v) a Share Transfer Agent having a specified office in India, and (vi) a paying agent and transfer agent in Singapore upon the issue of the Bonds in definitive form (as long as the Bonds are listed on the SGX-ST and the rules of that exchange so require) to whom Bonds may be presented or surrendered for payment or redemption. Notice of any change in the Agents, the Registrar or the Share Transfer Agent or their specified offices will promptly be given to the Bondholders in accordance with Condition 14.

Subject to the terms of the Agency Agreement, in acting hereunder and in connection with the Bonds, the Agents shall act solely as agents of the Issuer and will not thereby assume any obligations towards, or relationships of agency or trust for, any of the Bondholders.

14. Notices

All notices to Bondholders shall be validly given if mailed to them at their respective addresses in the Register maintained by the Registrar or, so long as the Bonds are listed on the SGX-ST and the rules of that exchange so require, published in a leading newspaper having general circulation in Singapore (which is expected to be in the Financial Times, Asian Edition) or, if such publication shall not be practicable, in an English language

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newspaper of general circulation in Asia. Any such notice shall be deemed to have been given on the earlier of such publication and the seventh (7th) day after being so mailed.

Meetings of Bondholders; Modification and Waiver 15.1. Meetings of Bondholders

The Trust Deed contains provisions for convening meetings of Bondholders to consider matters affecting their interest, including the modification of any of these Conditions or any provisions of the Trust Deed. Any such modification may be made if sanctioned by an Extraordinary Resolution (as defined in the Trust Deed). The quorum for any meeting convened to consider an Extraordinary Resolution will be two or more persons holding or representing over 50 per cent. in principal amount of the Bonds for the time being outstanding, or at any adjourned meeting two or more persons being or representing Bondholders whatever the principal amount of the Bonds held or represented, unless the business of such meeting includes consideration of proposals, inter alia, (i) to modify the maturity of the Bonds (ii) to reduce or cancel the principal amount of or premium on the Bonds, (iii) to change the currency of payment of the Bonds, (iv) to modify or cancel the Conversion Right or shorten the Conversion Period, or (v) to modify the provisions concerning the quorum required at any meeting of Bondholders or the majority required to pass an Extraordinary Resolution, in which case the necessary quorum will be two or more persons holding or representing not less than two-thirds, or at any adjourned meeting two or more persons holding or representing not less than one-third, in principal amount of the Bonds for the time being outstanding. Any Extraordinary Resolution duly passed shall be binding on Bondholders whether or not they were present at the meeting at which such resolution was passed and will be conclusive and binding on all future Bondholders. The Trust Deed provides that a written resolution signed by or on behalf of the holders of not less than two-thirds of the aggregate principal amount of Bonds outstanding shall be as valid and effective as a duly passed Extraordinary Resolution.

15.2. Other Modifications and Waiver

The Trustee may (but shall not be obliged to) agree, without the consent of the Bondholders, to (i) any modification of any of the provisions of the Bonds, the Trust Deed or the Agency Agreement which is of a formal, minor or technical nature or is made to correct a manifest error which is proven to the Trustee's sole satisfaction or to comply with mandatory provisions of law, and (ii) any other modification (except as mentioned in the Trust Deed), and any waiver or authorisation of any breach or proposed breach, of any of the provisions of the Bonds, the Trust Deed or the Agency Agreement which is in the opinion of the Trustee not materially prejudicial to the interests of the Bondholders. Any such modification, authorisation, or waiver shall be binding on the Bondholders and, if the Trustee so requires, shall be notified to the Bondholders as soon as practicable. The Trustee's agreement may be subject to any condition that the Trustee requires, including but not limited to obtaining, at the sole expense of the Issuer, an opinion of any investment bank or legal or other expert and being indemnified, pre-funded and/or secured to its satisfaction. Any such modification, waiver or authorisation shall be notified by the Issuer to the holders of the Bonds as soon as practicable thereafter in accordance with Condition 14 and for so long as the Bonds are listed on the SGX-ST and the rules of that exchange so require, to theSGX-ST.

15.3. Entitlement of the Trustee

In connection with the exercise of its functions (including but not limited to those in relation to any proposed modification, authorisation or waiver) the Trustee shall have regard to the interests of the Bondholders as a class and shall not have regard to the consequences of such exercise for individual Bondholders and the Trustee shall not be entitled to require, nor shall any Bondholder be entitled to claim from the Issuer any indemnification or payment in respect of any tax consequences of any such individual Bondholders.

15. Effect of Amendments

Upon entering into an amendment to these Conditions pursuant to the terms hereof, these Conditions shall be modified in accordance therewith, and the amendment shall form a part of these Conditions for all purposes;

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and every Bondholder therefore or thereafter delivered hereunder shall be bound thereby. The Issuer shall promptly send to the specified office of the Trustee notice of any amendment of the Terms and Conditions.

16. Indemnification of the Trustee 17.1. The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility

including provision relieving it from taking proceedings and certain actions, unless indemnified and/or provided with security to its satisfaction. The Trustee is entitled to enter into business transactions with the Issuer and any of its Subsidiaries and Affiliates without accounting for any profits.

17.2. The Trustee may rely without liability to Bondholders on any certificate prepared by the directors or

Authorised Officers of the Issuer and accompanied by a certificate or report prepared by the auditors of the Issuer or an internationally recognised firm of accountants pursuant to the Conditions and/or the Trust Deed, whether or not addressed to the Trustee and whether or not the auditors of the Issuer or the internationally recognised firm of accountants’ liability in respect thereof is limited by a monetary cap or otherwise limited or excluded and shall be obliged to do so where the certificate or report is delivered pursuant to the obligation of the Issuer to procure such delivery under these Conditions; any certificate or report shall be conclusive and binding on the Issuer, the Trustee and the Bondholders.

17. Governing Law

The Bonds, the Trust Deed and the Agency Agreement and any non-contractual obligations arising out of them are governed by, and shall be construed in accordance with, laws of England. In relation to any legal action or proceedings arising out of or in connection with the Trust Deed and the Bonds, the Issuer has in the Trust Deed irrevocably submitted to the jurisdiction of the courts of England and in relation thereto and in relation thereto has appointed SH Process Agents Limited, having its office at 1 Finsbury Circus, London, EC2M 7SH as its agent for service of process in England.

18. Contracts (Rights of Third Parties) Act 1999

No person shall have any right to enforce any term or condition of the Bonds under the Contracts (Rights of Third Parties) Act 1999, but this does not affect any right or remedy of any person which exists or is available apart from that Act.

Bondholders should note that the exercise of the Conversion Right is subject not only to the provisions of the Trust Deed and the Terms and Conditions, but also to applicable Indian laws and regulations.

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GLOBAL CERTIFICATE The Global Certificate contains provisions which apply to the Bonds in respect of which the Global Certificate is issued, some of which modify the effect of the Conditions set out in this Offering Circular. Terms defined in the Conditions have the same respective meanings in the paragraphs below. The following is a summary of those provisions: MEETINGS The registered holder of the Global Certificate will be treated as being two persons for the purposes of any quorum requirements of a meeting of the holders of the Bonds and, at any such meeting, as having one vote in respect of each US$ 100,000 principal amount of Bonds. The Trustee may allow any Account Holder (or the representative of such person) of a clearing system entitled to Bonds in respect of which the Global Certificate has been issued to attend and speak (but not to vote) at a meeting of Bondholders on appropriateconfirmation of entitlement and proof of his identity. CANCELLATION Cancellation of any Bonds following their redemption, conversion or purchase by the Issuer will be effected by a reduction in the principal amount of the Bonds in the register of holders of the Bonds. CONVERSION Subject to the requirements of Euroclear Bank S.A./N.V., as operator of Euroclear and Clearstream, Luxembourg or any alternative clearing system ("Alternative Clearing System"), the Conversion Right attaching to the Bonds in respect of which the Global Certificate is issued may be exercised by the presentation of one or more Conversion Notices (which may be by facsimile while the Bonds are represented by the Global Certificate), duly completed by or on behalf of a holder of a book-entry interest in such Bonds. Deposit of the Global Certificate with the Principal Paying and Conversion Agent together with the relevant Conversion Notice shall not be required. The exercise of the Conversion Right shall be notified by the Conversion Agent to the Registrar and the holder of the Global Certificate. PAYMENTS Payments of principal, interest and premium (if any) in respect of Bonds represented by the Global Certificate will be made without presentation, or if no further payment is to be made in respect of the Bonds, against presentation and surrender of the Global Certificate to or to the order of the Principal Agent or such other Paying Agent as shall have been notified to the Bondholders for such purpose. NOTICES So long as the Bonds are represented by the Global Certificate and the Global Certificate is held on behalf of Euroclear and Clearstream, or any Alternative Clearing System, notices to Bondholders may be given by delivery of the relevant notice to Euroclear, Clearstream or the Alternative Clearing System, for communication by them to entitled accountholders in substitution for notification as required by the Conditions. REPURCHASE OF THE BONDS AND THE OPTION OF THE BONDHOLDERS The Bondholders' options in Conditions 7.4and7.5 of the Conditions may be exercised by the holder of the Global Certificate giving written notice to any Principal Paying and Conversion Agent of the principal amount of Bonds in respect of which the option is exercised and presenting the Global Certificate for endorsement or exercise in the form specified by, and within the time limits specified in, the Conditions. EXCHANGE AND REGISTRATION OF TITLE In circumstances where the Bondholders are entitled to receive definitive Certificates, the Issuer will make arrangements for the exchange of interests in the Global Certificate in whole but not in part for definitive Certificates and will cause sufficient individual definitive Certificates to be executed and delivered to the Registrar in sufficient quantities for completion, authentication and dispatch to the relevant Bondholders. A person exchanging interests in the Global Certificate for one or more of the definitive Certificates must provide to the Registrar, through the relevant

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clearing system, a written order containing instructions and such other information as the Issuer and the Registrar may require to complete, execute and deliver such individual definitive Certificates. Any definitive Certificates delivered in exchange for the Global Certificate or beneficial interests therein will be registered in the names requested, and issued in any denominations approved, by the relevant clearing system. TRANSFERS Transfers of interests in the Bonds will be effected through the records of Euroclear and Clearstream and their respective participants in accordance with the rules and procedures of Euroclear and Clearstream and their respective direct and indirect participants. Transfers of interests in the Bonds with respect to which this Global Certificate is issued shall be effected through the records of Euroclear, Clearstream, Luxembourg or an Alternative Clearing System and their respective participants in accordance with the rules and procedures of Euroclear, Clearstream, Luxembourg or an Alternative Clearing System and their respective direct and indirect participants. The laws of certain jurisdictions require that certain purchasers of the Bonds take physical delivery of such Bonds in definitive form. Accordingly, the ability of beneficial owners to own, transfer or pledge beneficial interest in the Global Certificate may be limited by such laws. Conversion through participants in Euroclear, Clearstream, Luxembourg or an Alternative Clearing System will be effected in the ordinary way in accordance with their respective rules and operating procedures. None of the Company, the Lead Manager, the Trustee, the Agents, any custodian, any transfer agent, any registrar or any other agent of our Company will have a responsibility for the performance by Euroclear or Clearstorm, Luxembourg or their respective participants, indirect participants or account holders, of their respective obligations under the rules and procedures governing their operations. TRUSTEE’S POWERS In considering the interests of the holders of the Bonds while the Global Certificate is registered in the name of a nominee for clearing system, the Trustee may, to the extent it considers it appropriate to do so in the circumstances: 1. have regard to such information as may have been made available to it by or on behalf of the relevant clearing

system or its operator as to the identity of its accountholders; and 2. consider such interests on the basis that such accountholders were the holders of the Bonds in respect of which

the Global Certificate is issued. ENFORCEMENT For the purposes of enforcement of the provisions of the Trust Deed against the Company, the persons named in a certificate of the holder of the Bonds in respect of which the Global Certificate is issued shall be recognised as the beneficiaries of the trusts set out in the Trust Deed, to the extent of the principal amount of their interest in the Bonds set out in the certificate of the holder, as if they were themselves the holders of the Bonds in such principal amounts. ACCOUNT HOLDERS For so long as any of the Bonds are represented by the Global Certificate and such Global Certificate is held on behalf of Euroclear and/or Clearstream. Luxembourg, each person who is for the time being shown in the records of Euroclear or Clearstream as the holder of a particular principal amount of such Bonds (each an "Accountholder") (in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the principal amount of such Bonds standing to the account of any person shall be conclusive and binding for all purposes) shall be treated as the holder of such principal amount of such Bonds for all purposes (including for the purposes of any quorum requirements of, or in the right to demand a poll at, meetings of the Bondholders) other than with respect to the payment of principal and premium on such Bonds, the right to which shall be vested, as against the Issuer, solely in the holder of the Global Certificate in accordance with and subject to its terms and the terms of the Trust Deed. Each Accountholder must look solely to Euroclear or Clearstream, as the case may be, for itsshare of each payment made to the holder of the Global Certificate.

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DEFINITIVE CERTIFICATE Owners of interests in the Bonds in respect of which the Global Certificate is issued will be entitled to have title to the Bonds registered in their names and to receive individual definitive Certificates if either:

(i) the Common Depository or any successor to the Common Depository notifies the Issuer in writing that it is at

any time unwilling or unable to continue to act as a depository and a successor depository is not appointed by the Issuer within ninety (90) days, or

(ii) Euroclear or Clearstream, Luxembourg or the Alternate Clearing System is closed for business for a continuous period of fourteen (14) days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so.

In the case of definitive Certificates issued in exchange for any Global Certificate, such definitive Certificates will bear, and be subject to, such legends, as the Issuer requires in order to assure compliance with any applicable law. The holder of such restricted definitive Certificates may transfer the Bonds represented by such definitive Certificates, subject to compliance with the provisions of such legend. Upon the transfer, exchange or replacement of definitive Certificates bearing the legend, or upon specific request for removal of the legend on a definitive Certificate, the Issuer will deliver only definitive Certificates that bear such legend, or will refuse to remove such legend, as the case may be, unless there is delivered to the Issuer such satisfactory evidence, which may include an opinion of counsel, as may reasonably be required by the Issuer that neither the legend nor the restrictions on transfer set forth therein are required to ensure compliance with the provisions of the Securities Act.

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CLEARANCE AND SETTLEMENT OF THE BONDS The information set out below is subject to any change in or reinterpretation of the rules, regulations and procedures of the Clearing Systems currently in effect. The information in this section concerning the Clearing Systems has been obtained from sources that our Company believes to be reliable, but none of our Company, the Lead Manager, the Trustee or any of the Agents takes any responsibility for the accuracy of this section. Investors wishing to use the facilities of any of the Clearing Systems are advised to confirm the continued applicability of the rules, regulations and procedures of the relevant Clearing System. Neither our Company nor any other party to the Agency Agreement will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the Bonds held through the facilities of any Clearing System or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Custodial and depositary links have been established with Euroclear and Clearstream, Luxembourg to facilitate the initial issue of the Bonds and transfers of the Bonds associated with secondary market trading. The Clearing Systems Euroclear and Clearstream, Luxembourg Euroclear and Clearstream, Luxembourg each hold securities for participating organisations and facilitate the clearance and settlement of securities transactions between their respective participants through electronic book-entry of changes in the accounts of their participants. Euroclear and Clearstream, Luxembourg provide their respective participants with, inter alia, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Euroclear and Clearstream, Luxembourg participants are financial institutions throughout the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organisations. Indirect access to Euroclear or Clearstream, Luxembourg is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Euroclear or Clearstream, Luxembourg participant, either directly or indirectly. Distributions of principal with respect to book-entry interests in the Bonds held through Euroclear or Clearstream, Luxembourg will be credited, to the extent received by the Paying Agent (as defined in the Terms and Conditions of the Bonds), to the cash accounts of Euroclear or Clearstream, Luxembourg participants in accordance with the relevant system’s rules and procedures. Registration and form Book-entry interests in the Bonds held through Euroclear and Clearstream, Luxembourg will be evidenced by the Global Certificate, registered in the name of a nominee of the common depositary of Euroclear and Clearstream, Luxembourg. The Global Certificate will be held by a common depositary for Euroclear and Clearstream, Luxembourg. Beneficial ownership in the Bonds will be held through financial institutions as direct and indirect participants in Euroclear and Clearstream, Luxembourg. The aggregate holdings of book-entry interests in the Bonds in Euroclear and Clearstream, Luxembourg will be reflected in the book-entry accounts of each such institution. Euroclear and Clearstream, Luxembourg, as the case may be, and every other intermediate holder in the chain to the beneficial owner of book-entry interests in the Bonds, will be responsible for establishing and maintaining accounts for their participants and customers having interests in the book-entry interest in the Bonds. The Paying Agent will be responsible for ensuring that payments received by it from our Company for holders of interests in the Bonds holding through Euroclear and Clearstream, Luxembourg are credited to Euroclear or Clearstream, Luxembourg, as the case may be. The Issuer will not impose any fees in respect of the Bonds. However, holders of book-entry interests in the Bonds may incur fees normally payable in respect of the maintenance and operation of accounts in Euroclear and Clearstream, Luxembourg. Global Clearance and Settlement Procedures

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Initial settlement Interests in the Bonds will be in uncertificated book-entry form. Purchasers electing to hold book-entry interests in the Bonds through Euroclear and Clearstream, Luxembourg accounts will follow the settlement procedures applicable to conventional Eurobonds. Book-entry interests in the Bonds will be credited to Euroclear and Clearstream, Luxembourg participants’ securities clearance accounts on the business day following the Issue Date against payment (for value on the Issue Date). Secondary market trading Secondary market sales of book-entry interests in the Bonds held through Euroclear or Clearstream, Luxembourg to purchasers of book-entry interests in the Bonds through Euroclear or Clearstream, Luxembourg will be conducted in accordance with the normal rules and operating procedures of Euroclear and Clearstream, Luxembourg and will be settled using the procedures applicable to conventional participants. General Although the foregoing sets out the procedures of Euroclear and Clearstream, Luxembourg in order to facilitate the transfers of interests in the Bonds among participants of Euroclear and Clearstream, Luxembourg, neither Euroclear nor Clearstream, Luxembourg is under any obligation to perform or continue to perform such procedures and such procedures may be discontinued at any time. None of our Company, the Lead Manager, the Trustee, the Agents or any of their agents will have any responsibility for the performance by Euroclear or Clearstream, Luxembourg or their respective participants of their respective obligations under the rules and procedures governing their operations.

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DESCRIPTION OF THE SHARES Set forth below is certain information relating to our Company's share capital, including brief summaries of certain provisions of the Memorandum and Articles of Association of our Company, the Companies Act, the Securities Contracts (Regulation) Act, 1956 and certain related legislation of India, all as currently in effect relating to the rights attached to the Shares. The Ministry of Corporate Affairs has notified 283 sections of the new Companies Act, 2013, and rules which have replaced the corresponding provisions in the old Companies Act, 1956. While 98 sections were notified and made effective September 12, 2013, the remaining 183 sections have been made effective from April 1, 2014. All disclosures of provisions of the Companies Act in this section refer to the newly notified provisions under the Companies Act, 2013 unless specifically stated. General The Authorised Share Capital of our Company is Rs.2,350,000,000 comprising of 350,000,000 equity Shares of Re. 1 each each and 20,000,000 preference shares of Rs. 100 each. As on the date of the Offering Circular, the issued and paid up share capital of our Company was Rs. 244,892,073 comprising of 244,892,073 equity shares of Re. 1 each Dividends Under the Companies Act, unless the board of directors recommends payment of a dividend, the shareholders at a general meeting have no power to declare any dividend. Subject to certain conditions laid down by Section 123 of the Companies Act, 2013 no dividend can be declared or paid by a company for any financial year except out of the profits of our Company calculated in accordance with the provisions of the Companies Act or out of the profits of our Company for any previous financial year(s) remaining undistributed and arrived at as laid down by the Companies Act. Subject to certain conditions contained in the Companies Act, dividend may also be payable out of moneys provided by the central or state government for payment of dividend in pursuance of a guarantee given by the Government. Under the Articles of Association, the Shareholders at a general meeting may declare a lower, but not higher, dividend than that recommended by the Board. Dividends are generally declared as a percentage of the par value. The dividend recommended by the Board and approved by the Shareholders at a general meeting is distributed and paid to shareholders in proportion to the paid-up value of their Shares as on the Record Date for which such dividend is payable. In addition, as is permitted by the Companies Act, 2013 and the Articles of Association, the Board may declare and pay interim dividends. Under the Companies Act, dividends can only be paid in cash to shareholders listed on the register of shareholders on the date which is specified as the "book closure date" or "Record Date". No shareholder is entitled to dividend while any lien in respect of unpaid calls on any of his/her shares is outstanding. The Shares to be issued upon the conversion of the Bonds will be fully paid up when delivered. The Shares issued upon conversion of the Bonds will rank pari passu, subject to listing, with the existing Shares of our Company in all respects including entitlement to dividends declared, where the Record Date falls on or after the Conversion Date. Any dividend declared must be deposited in a separate bank account within five days from the date of the declaration of such dividend. Dividend must be paid within 30 days from the date of declaration and any dividend which remains unpaid or unclaimed after that period must be transferred within seven days to a special unpaid dividend account held at a scheduled bank. Any money which remains unpaid or unclaimed for seven years from the date of such transfer must be transferred by our Company to the Investor Education and Protection Fund ("Fund") established by the Indian Government. Any shares in respect of which dividend is transferred to this Fund are also required to be transferred to the Fund. Any claimant of shares transferred above shall be entitled to claim the transfer of shares from Investor Education and Protection Fund in accordance with such procedure and on submission of such documents as may be prescribed. Similarly any person claiming to be entitiled to the money transferred to the Fund, may apply for claiming payment of the money from the Fund on following the required procedures and submission of necessary documents. Directors may be held criminally liable for any default of the aforementioned provisions. Under the Companies Act, in the event of inadequacy or absence of profits in any year, our Company may pay dividend out of its accumulated profits of previous years, transferred to its reserves and subject to and the balance of reserves not

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falling below fifteen per cent of its paid up share capital. The Companies Act further provides that, if the profit for a year is inadequate or absent, the dividend for that year may be declared out of the accumulated profits earned in previous years and transferred to reserves, subject to the following conditions: (i) the rate of dividend to be declared may not exceed the average of the rates at which dividend was declared by it in the three years immediately preceding that year; (ii) the total amount to be drawn from accumulated profits from previous years and transferred to reserves may not exceed one-tenth of its paid-up share capital and free reserves,and the amount so drawn is first to be used to set off the losses incurred in the financial year before any dividend in respect of preference or equity shares is declared; and (iii) the balance of reserves after withdrawals must not be below 15% of paid-up share capital. Capitalisation of Reserves and Issue of Bonus Shares Our Company's Articles of Association permit a resolution of the shareholders in a general meeting to resolve, in certain circumstances, that certain amounts standing to the credit of any reserves or the profit and loss account or otherwise available for distribution can be capitalised and distributed by way of bonus shares. Bonus issues must be issued pro rata to the amount of capital paid up on existing shareholdings. Any issue of bonus shares would be subject to the guidelines issued by SEBI in this regard and the provisions of the Companies Act. Under section 63 of the Companies Act, 2013, our Company may issue fully paid-up bonus shares out of its free reserves or the securities premium account or the capital redemption reserve account, subject to compliance with certain conditions such as authorisation by the articles and shareholders approval. A company which has once announced the decision of its Board recommending a bonus issue, cannot not subsequently withdraw the same. The relevant SEBI Guidelines prescribe that no company shall, pending conversion of convertible securities, issue any shares by way of bonus unless similar benefit is extended to the holders of such convertible securities, through reservation of shares in proportion to such convertible part of the convertible securities falling due for conversion. The bonus issue cannot be made unless the partly-paid shares, if any, are made fully paid up. Further, for the issuance of such bonus shares a company should not have defaulted in the payment of interest or principal in respect of fixed deposits, interest on existing debentures/bonds or principal on redemption of such debentures/bonds and it has not defaulted in respect of the payment of statutory dues of its employees, such as contributions to provident fund, gratuities and/or bonuses. The declaration of bonus shares in lieu of dividend cannot be made.. The issuance of bonus shares must be approved by the shareholders of the Company and must be implemented within 60 days from the date of the meeting of the Board where the issue was announced. Pre-emptive Rights and Alteration of Share Capital Subject to the provisions of the Companies Act, our Company may increase its share capital by issuing new Shares. In accordance with the provisions of Section 62 of the Companies Act, these new Shares shall be offered to existing Shareholders listed on the members' register or the records of the Depository on the Record Date in proportion to the amount paid up on those Shares at that date. The offer shall be made by notice specifying the number of Shares offered and the date (being not less than 15 days and not exceeding 30 days from the date of the offer) after which the offer, if not accepted, will be deemed to have been declined. After such date, the Board of Directors may dispose of the Shares offered in respect of which no acceptance has been received in such manner as the Board of Directors may consider to be most beneficial to our Company. The offer is deemed to include a right exercisable by the person concerned to renounce the Shares offered to him/her in favour of any other person. Under the provisions of the Companies Act, new shares may be offered to any persons (whether or not those persons include existing shareholders) for cash or for consideration other than cash, if a special resolution to that effect is passed by the shareholders of a company in a general meeting and if the price of the shares is determined by the valuation report of a registered valuer subject to conditions as may be prescribed.. The issuance of the Shares upon conversion of the Bonds has been duly approved by a special resolution of the Shareholders who are deemed to have waived their pre-emptive rights with respect to such Shares. Our Company's issued share capital may be, inter alia, increased by the exercise of warrants attached to any securities of our Company, or individually issued, entitling the holder to subscribe for our Company's Shares, or upon the conversion of convertible debentures issued. The issue of any convertible debentures or the taking of any convertible loans, other than from the Indian Government and financial institutions, requires the approval of a special resolution of Shareholders. Where any debentures have been issued or loans have been obtained from any Government by a

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company, such Government may convert such debentures or loans or any part thereof into shares in the company on such terms and conditions as may appear reasonable to the Government even if terms of the issue of such debentures or the raising of such loans do not include a term for providing for an option for such conversion: Our Company can also alter its share capital by way of a reduction of capital or by undertaking a buyback of Shares under the Companies Act and the prescribed SEBI regulations. The Articles provide that our Company, may in a general meeting, from time to time, increase its capital by the creation of new Shares, consolidate or subdivide its share capital, convert all or any of its fully paid-up Shares into stock and reconvert that stock into fully paid-up Shares and cancel Shares which have not been taken up by any person. Our Company may also from time to time by special resolution reduce its capital. The Articles also provide that if at any time its share capital is divided into different classes of Shares, the rights attached to any one class (unless otherwise provided by the terms of issue of the Shares of that class) may be varied with the consent in writing of the holders of three-fourths of the issued Shares of that class, or with the sanction of a special resolution passed at a separate meeting of the holders of the Shares of that class. General Meetings of Shareholders There are two types of general meetings of shareholders: (i) annual general meetings; and

(ii) extraordinary general meetings. Our Company must hold its annual general meeting each year within 15 months of the previous annual general meeting and in any event not later than six months from the close of the financial year unless extended by the Registrar of Companies, at our Company's request for any special reason for a period not exceeding three months. The Board of Directors may in accordance with the Articles of Association convene an extraordinary general meeting of shareholders when necessary or at the request of a shareholder or shareholders holding in the aggregate not less than 10 per cent of the paid-up capital of our Company (carrying a right to vote in respect of the relevant matter on the date of the deposit of the requisition). A general meeting of the Shareholders is generally convenedin accordance with a resolution of the Board, by the Secretary of our Company under the supervision of the Board. Written notices convening a meeting setting out the date, place and agenda of the meeting must be given to members at least 21 clear days (excluding the days of mailing, and receipt, and such service shall be deemed to have been effected on the expiry of 48 hours after the same is posted) prior to the date of the proposed meeting. A general meeting may be called after giving shorter notice if consent is received from shareholders holding not less than 95 per cent of the paid-up capital of our Company. Currently, our Company gives written notices to all members and, in addition, gives public notice of general meetings of shareholders in a daily newspaper of general circulation in the region of the registered office of our Company. Annual general meetings are required to be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate. An extraordinary general meeting can be held at such time and place as is specified in the notice calling for the meeting. The quorum for a general meeting under the Companies Act is 30 members. A company intending to pass a resolution relating to matters such as, but not limited to, the amendment of the objects clause of the memorandum of association, alteration of articles of association in order to constitute it a private company, change in objects for which a company has raised money from the public and there is still unutilized monies, election of directors under section. 151 of the Companies Act, the issuing of shares with different voting or dividend rights, a variation of the rights attached to a class of shares or debentures or other securities, a buyback of shares under the Companies Act or the giving of loans or the extending of guarantees in excess of limits prescribed under the Companies Act and guidelines issued thereunder, including change in place of registered office out side local limits of any city town or village as specified under the provisions of the Companies Act; sale of whole or substantially the whole of undertaking of a company; is required to have the resolution passed by means of a postal ballot instead of

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transacting the business in the general meeting of our Company. A notice to all shareholders shall be sent along with a draft resolution explaining the reasons therefor and requesting each shareholder to send his/her assent or dissent in writing on a postal ballot within a period of 30 days from the date of posting the letter. Postal ballot includes voting by electronic mode. Voting Rights At a general meeting upon a show of hands, every member holding Shares and entitled to vote and present in person has one vote. Upon a poll, the voting rights of each shareholder entitled to vote and present in person or by proxy are in the same proportion as the capital paid up on each Share held by such shareholder bears to the total paid-up capital of our Company. Voting is by a show of hands, unless a poll is ordered by the chairman of the meeting demanded by a shareholder or shareholders holding at least 10 per cent of the voting rights in respect of the resolution or by those holding Shares in respect of which an aggregate sum of not less than Rs.500,000 has been paid up. Unless otherwise specified in the Articles, the chairman of the meeting has a casting vote. Bondholders will have no voting rights or other direct rights of a shareholder with respect to the Shares underlying the Bonds. Ordinary resolutions may be passed by simple majority of those present and voting. Special resolutions require that the votes cast in favour of the resolution by those present and voting must be at least three times the votes cast against the resolution. Under the Companies Act, matters that require special resolution include change in the registered office of the Company outside local limits, change in the name of the Company amendments to the articles of association, member's voluntary winding-up, dissolution, merger or consolidation, variation in terms of contract or objects in prospectus, issue of depository receipts, issue of sweat equity., reduction in share capital, issue of debentures with an option to convert such debentures, and the issue of shares to persons other than existing shareholders. Furthermore, under the Companies Act, the approval of a scheme of compromise or arrangement requires the approval of a majority of at least 75 per cent in value of the shareholders or creditors present and voting, A shareholder may exercise his voting rights by proxy to be given in the form required in the form prescribed under the Companies Act, 2013. The instrument appointing a proxy is required to be lodged with our Company at least 48 hours before the time of the meeting. A shareholder may, by a single power of attorney, grant a general power of representation regarding several general meetings of shareholders. Any shareholder of our Company may appoint a proxy. A corporate shareholder is also entitled to nominate a representative to attend and vote on its behalf at general meetings, subject to the necessary resolution having been passed by the corporate shareholder. A proxy may not vote except on a poll and does not have a right to speak at meetings. A shareholder which is a legal entity may appoint an authorised representative who can vote in all respects as if a member both by a show of hands and by a poll. Listed companies, and companies having more than thousand (1000) members are also required to provide its members facility to exercise their right to vote at general meetings by electronic means. Such company is required to provide necessary facilities to its members to facilitate such e-voting, and must be conducted in accordance with the prescribed rules. The Companies Act allows for a company to issue shares with differential rights as to dividends, voting or otherwise, subject to certain conditions prescribed under applicable law and rules.. Convertible Securities and Warrants Our Company, in accordance with the provisions of applicable law, may from time to time issue debt instruments that are partly and fully convertible into Shares and warrants to purchase Shares. Register of Shareholders and Record Dates Our Company is obliged to maintain a register of shareholders at its registered office or, with the approval of its shareholders by way of a special resolution and with prior intimation to the Registrar of Companies, at some other place in the same city. The register and index of beneficial owners maintained by a depositary under the Depositories Act is deemed to be an index of members and register and index of debenture holders. Our Company recognises as shareholders only those persons who (i) appear on its register of shareholders, (ii)persons whose names are entered as

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holder of beneficial interest in shares in the records of a depository, and (iii) persons who holds or acquire a beneficial interest in the shares of the company, and a declaration has been made by such person as also the registered holder of the shares, to the effect that the beneficial interest in the shares of the Company are held by the former, and it cannot recognise any person holding any Share or part of it upon any trust, express, implied or constructive, except as permitted by law. In case of Shares held in physical form, our Company, through its registrar and share transfer agent, registers transfers of Shares on the register of shareholders upon lodgement of the duly stamped share transfer form executed by or on behalf of the transferor and by or on behalf of the transferee and duly completed in all respects, accompanied by a share certificate or, if there is no certificate, the letter of allotment in respect of Shares transferred. In respect of the transfer of Shares in dematerialised form, the depositary transfers Shares by entering the name of the purchaser in its books as the beneficial owner of the Shares. In turn, our Company enters the name of the depositary in its records as the registered owner of the Shares. The beneficial owner is entitled to all the rights and benefits, as well as the liabilities, attached to the Shares that are held by the depositary. Transfer of beneficial ownership through a depositary is exempt from any stamp duty but each depositary participant may be subject to certain charges. A transfer of shares by way of share transfer form attracts stamp duty at the rate of 0.25 per cent of the transfer price. For the purpose of determining the shareholders, our Company may, after giving not less than seven days' previous notice by advertisement in a newspaper circulating in the district where the registered office of our Company is situated, close the register for periods not exceeding in the aggregate 45 days in any one year or 30 days at any one time. As required under the Listing Agreement, our Company keeps the register of shareholders closed for approximately 5 days, generally before the annual general meeting. Under the listing regulations of the stock exchanges on which our Company's outstanding Shares are listed, our Company may, upon at least 7 days' advance notice to such stock exchanges, set a Record Date and/or close the register of shareholders in order to ascertain the identity of shareholders. The trading of Shares and the delivery of certificates in respect thereof may continue while the register of Shareholders is closed. Under the Companies Act, our Company is also required to maintain a register of debenture holders. Annual Reports and Financial Results From fiscal 2015, our Company's audited financial statements, and consolidated audited financial statements of our Company and all its subsidiaries (as defined under the Companies Act, 2013) for the relevant Financial Year, the directors' report and the auditors' report (collectively the "Annual Report"), must be laid before the annual general meeting. This also includes certain other financial information of our Company, a corporate governance section and management's discussion and analysis, extract of the annual return, Director’s Responsibility Statement, a statement on declaration given by independent directors under sub-section (6) of section 149, company’s policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director, the details about the policy developed and implemented by the company on corporate social responsibility initiatives taken during the year; and other matters) and are made available for inspection at our Company's registered office during normal working hours for twenty one (21) days prior to the annual general meeting. Under the Companies Act, our Company must file its Annual Report with the RoC within 30 days from the date of the relevant annual general meeting. Under the Listing Agreements, six copies are required to be simultaneously sent to the BSE/NSE. Our Company must file an Annual Return which includes a list of the Shareholders, debenture holders, its indebtedness and other information within 60 days of the conclusion of its annual general meeting. Under the Listing Agrrement, our Company must also publish its financial results in at least one English language daily newspaper circulating in the whole or substantially the whole of India and also in a newspaper published in the language of the region where our Company's registered office is situated. Our Company files certain information online, including its annual report, interim financial statements, report on corporate governance, shareholding pattern statement, and such other statements, information or reports as may be specified by SEBI or under the Companies Act, from time to time or in accordance with the requirements of its Listing Agreements. Transfer of Shares

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Following the introduction of the Depositories Act and the repeal of erstwhile Section 22A of the Securities Contract Regulation Act, the equity shares of a public company became freely transferable, subject only to the provisions of Section 58 of the Companies Act. We are a public listed company and subject to section 58(2) of the Companies Act our Shares are freely transferable. . The Board may refuse to register a transfer of Shares within thirty days from the date on which the instrument of transfer or intimation of transfer, as the case may be, is delivered to our Company, if it has sufficient cause to do so. Any contract or arrangement between two or more persons in respect of transfer of our securities are enforceable as a contract. If the Board refuses to register a transfer of Shares without sufficient cause, the Shareholder wishing to transfer his, her or its Shares may file an appeal with the National Company Law Tribunal ("Tribunal"), within 60 or 90 days, as the case may be, and the Tribunal can direct our Company to register such transfer. Pursuant to its Listing Agreements, in the event that our Company has not effected the transfer of Shares within one month, or where our Company has failed to communicate to the transferee any valid objection to the transfer within the stipulated time period of one month, it is required to compensate the aggrieved party for the loss of opportunity caused by the delay. The Companies Act provides that the shares or debentures of a public listed company (such as our Company) shall be freely transferable. Shares held through depositaries are transferred in the form of book-entries or in electronic form in accordance with the regulations laid down by SEBI. These regulations provide the regime for the functioning of the depositaries and the participants, and set out the manner in which the records are to be kept and maintained, and the safeguards to be followed in this system. Transfers of beneficial ownership of shares held through a depositary are exempt from stamp duty. Our Company has entered into an agreement for such depositary services with National Securities Depository Limited and Central Depository Services (India) Limited. SEBI requires that, for trading and settlement purposes, our Company's Shares be in book entry form for all investors, except for transactions that are not made on a stock exchange and transactions that are not required to be reported to the stock exchange (see "The Securities Market of India — Depositories"), . The requirement to hold Shares in book-entry form will apply to Bondholders when they acquire Shares upon conversion. In order to trade in our Company's Shares in the Indian market, the converting Bondholder will be required to comply with the procedures above. Acquisition by our Company of its own Shares Our Company is prohibited from acquiring its own Shares unless the consequent reduction of capital is effected by a special resolution of its Shareholders voting on the matter in accordance with the Companies Act and is also sanctioned by the Tribunal. Moreover, other than in certain exceptions, our Company is prohibited from giving, whether directly or indirectly and whether by means of a loan, guarantee, the 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 of or for any Shares in our Company or its holding company. Under section 68 of the Companies Act, a company has been empowered to purchase its own shares or other specified securities out of its free reserves, the securities premium account or the proceeds of any shares or other specified securities (other than the kind of shares or other specified securities proposed to be bought back), subject to certain conditions, including: (i) the buyback should be authorised by the articles of association of our Company; (ii) a special resolution should have been passed in a general meeting of our company authorising the buyback; (iii) the buyback is for less than 25 per cent of the total paid-up capital and free reserves, provided that the buyback

of equity shares in any financial year shall not exceed 25 per cent of the total paid-up equity share capital in that year;

(iv) the ratio of the debt (including all amounts of unsecured and secured debt) owed by our company after buyback is not more than twice the capital and free reserves after such buyback;

(v) all the shares or other specified securities for buyback are fully paid up; and (vi) the buyback is in accordance with the Securities and Exchange Board of India (Buyback of Securities)

Regulations, 1998. The second condition mentioned above would not be applicable if the buyback is for less than 10 per cent of the total paid-up equity capital and free reserves of our Company and provided that such buyback has been authorised by the board of directors of our Company. Further, a company, after buying back its securities, is not permitted to buy back any securities for a period of 365 days from the buyback or to issue new securities for six months from the buyback date except by way of bonus issue or the conversion of warrants, sweat equity, stock option schemes, preference shares

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or debentures into equity shares. Each buyback has to be completed within a period of 12 months from the date of the passing of the special resolution or the resolution of the board of directors, as the case may be. A company buying back its securities is required to extinguish and physically destroy the securities bought back within seven days of the last date of completion of the buyback. A company is also prohibited from purchasing its own shares or specified securities (i) through any subsidiary company, or (ii) through any investment company or group of investment companies (other than a purchase of shares in accordance with a scheme that is in compliance with the SEBI (Employee Stock Option Schemes and Employee Stock Purchase Schemes) Guidelines, 1999 and clause 35C of the Listing Agreement, for the purchase or subscription of shares by trustees of, or for shares to be held by or for the benefit of employees of our Company) (iii) or if our Company is defaulting on the repayment of deposit or interest, redemption of debentures or preference shares or payment of dividend to a shareholder or repayment of any term loan or interest payable thereon to any financial institution or bank. if our Company is listed and wishes to buy back its shares or specified securities for the purpose of delisting its shares or specified securities or in the event of non-compliance with certain other provisions of the Companies Act. The buyback of securities can be from existing security holders on a proportionate basis or from the open market or from odd lots or by purchasing securities issued to the employees of our Company pursuant to a scheme of stock option or sweat equity. Disclosure of Ownership Interest The provisions of the Companies Act generally require beneficial owners of shares of Indian companies that are not holders on record to declare to our Company details of the holder on record and the holder on record to declare the details of the beneficial owner. Any person who fails to make the required declaration within 30 days from the date beneficial interest in the shares is acquired may be liable for a fine of up to Rs. 50,000 for each day the declaration is not made and in case of a continuing failure for a further fine of up to Rs. 1000 each day thereafter. Any charge, promissory note or other collateral agreement created, executed or entered into with respect to any share by the registered owner thereof, or any hypothecation or any additional rights in relation to any share held by the registered owner of any share pursuant to which a declaration is required to be made under Section 89 of the Companies Act, shall not be enforceable by the beneficial owner or any person claiming through the beneficial owner if such declaration has not been made. Failure to comply with Section 89 of the Companies Act will, inter alia, not affect the obligation of our Company to register a transfer of equity shares or to pay any dividends to the registered holder of any equity shares in respect of which this declaration has not been made. Liquidation Rights Subject to the provisions of the Companies Act (including the rights of employees, the requirement to pay statutory dues and the rights of creditors) and the rights of the holders of any other shares entitled by their terms of issue to preferential repayment over the Shares, in the event of our Company's winding-up, the holders of the Shares are entitled to be repaid the amounts of capital paid up or credited as paid up on such Shares or, in case of a shortfall, proportionately. All surplus assets after payments due to workmen, statutory creditors, and secured and unsecured creditors, and preference shareholders belong to the holders of the equity shares in proportion to the amount paid up or credited as paid up on such shares respectively at the commencement of the winding-up.

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INDIAN GOVERNMENT AND OTHER APPROVALS This offering is being made entirely outside India. This Offering Circular may not be distributed directly or indirectly in India or to residents of India and the Bonds are not being offered or sold and may not be offered or sold directly or indirectly in India or to, or for the account or benefit of, any resident of India. Each purchaser of the Bonds will be deemed to represent that it is neither located in India nor a resident of India and that it is not purchasing for, or for the account or benefit of, any such person, and understands that the Bonds may not be offered, sold, pledged or otherwise transferred to any person located in India, to any resident of India or to, or for the account of such persons, unless our Company may determine otherwise in compliance with applicable law. The Shares issued on conversion of the Bonds will be listed on the Indian stock exchanges on which the Shares are now listed. Our Company undertakes to apply to have the Shares issuable on conversion of the Bonds approved for listing on the BSE, the NSE and on any other stock exchange in India on which the Shares are listed from time to time. Our Company also undertakes that upon the request of the Trustee in writing (acting upon the instructions of the Bondholders), it will make an application for listing and quotation of the Bonds on the Official List of the Singapore Exchange Securities Trading Limited (the "SGX-ST"); Pricing of an FCCB Issue Pursuant to a circular dated November 28, 2008 issued by the Ministry of Finance, the pricing guidelines set forth in the FCCB Scheme have been amended. Pursuant to the above circular, the issue price of FCCBs should be not less than the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the two weeks preceding the "relevant date", where the "relevant date" means the date of the meeting in which the board of directors or the committee of directors, duly authorised by the board of directors, decides to open the proposed issue of FCCBs Reporting Requirements The Issuer is required to furnish a statement, in the prescribed form, to the Foreign Exchange Department of the RBI, within 30 days from the date of closing of this Issue, providing full particulars of the Issue including our equity capital structure, the number of FCCBs issued, listing arrangements, total proceeds of the Issue, any proceeds of the Issue retained abroad and other relevant details relating to the launching and initial trading of the FCCBs. The Issuer should also furnish a quarterly return, to the Reserve Bank within 15 days of the close of the calendar quarter. The quarterly return has to be submitted till the entire amount raised is either repatriated to India or utilized abroad as per the extant RBI guidelines. Filing This Offering Circular will be filed with the RBI, the BSE, the NSE, SEBI and the Registrar of Companies, Mumbai. Eligibility In terms of the Ministry of Finance notification dated August 31, 2005, an Indian company, which is not eligible to raise funds from the Indian capital markets, including a company which has been restrained from accessing the securities market by SEBI, will not be eligible to issue FCCBs. Our Company is eligible to raise funds from the Indian capital markets and has not been restrained from accessing the securities markets by SEBI.

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TAXATION

The following is a summary of the principal Indian tax consequences for non-resident investors of the Bonds and the Shares issuable on conversion of the Bonds. The summary is based on the taxation law and practice in force at the time of this Offering Circular and is subject to change. Further, it only addresses the tax consequences for persons who are non-resident as defined in the Income Tax Act, who acquire Bonds or Shares (upon conversion) pursuant to this Offering Circular and who hold such Bonds or Shares (upon conversion) as capital assets, and does not address the tax consequences which may be relevant to other classes of non-resident investors, including dealers. The summary proceeds on the basis that the person continues to remain a non-resident when the income by way of interest, dividends and capital gains is earned. The Income Tax Act is the law relating to taxes on income in India. The Income Tax Act provides for the taxation of persons resident in India on global income and persons not resident in India on income received, accruing or arising in India or deemed to have been received, accrued or arisen in India. The following discussion describes the material Indian income tax consequences of the purchase, ownership and disposal of the Bonds and the Shares. The summary is based on the provisions of the Income Tax Act, without reference to any double taxation avoidance agreements. The rates mentioned below are as per the Finance Act 2013 and are as applicable for the financial year 2013-2014. This summary is not intended to constitute a complete analysis of the tax consequences or a legal opinion under Indian law for the acquisition, ownership and sale of the Bonds or Shares by nonresident investors. Potential investors should, therefore, consult their own tax advisers on the consequences of such acquisition, ownership and sale including specifically tax consequences under Indian law, the laws of the jurisdiction of their residence and any tax treaty between India and their country of residence, as applicable. Taxation of Interest, Distribution of Additional Shares and Issue of Right Shares As per the provisions of the Income Tax Act, payment of interest, if any, on the Bonds paid to non-resident holders of the Bonds will be chargeable to tax at a rate of 5 per cent., 10 per cent.or 20 per cent. or any other tax as may be applicable, (plus applicable surcharge and education cess), depending upon certain conditions. Such tax, to the extent applicable, will be required to be withheld by our Company. If such withholding tax is payable, our Company will pay such additional amounts as may be necessary, in order that the net amounts received by the holders of the Bonds after the withholding shall equal the respective amounts which would have been receivable in respect of the Bonds in the absence of the withholding, subject to certain exceptions. However, in terms of Section 195(7) of the Income Tax Act, the Central Board of Direct Taxes may notify a specific class of persons or cases, whereby the person responsible for paying to a non-resident, not being a company, or to a foreign company, any sum, whether or not chargeable under the Income Tax Act, shall be required to make an application to the Assessing Officer to determine, by general or special order, the appropriate proportion of sum chargeable, and upon such determination, tax shall be deducted on that proportion of the sum which is so chargeable. Distribution to non-residents of additional shares without any consideration ("Bonus") is not liable to Indian tax at the time of issuance. Similarly, a right to subscribe for additional shares ("Rights") offered with respect to existing shares is not subject to Indian tax at the time of subscription by the holder. However, on sale of such bonus shares, the cost of bonus shares will be nil. Taxation on Acquisition of Shares upon Conversion of Bonds The acquisition by a non-resident holder of shares upon conversion of bonds does not constitute a taxable event under the Income Tax Act. Taxation of Dividends Dividends are not taxable in the hands of the recipient and hence dividends, if any, paid to the potential investor will not be liable to tax. However, our Company will be required to pay dividend distribution tax at the rate of 16.995 per cent. (including surcharge and education cess) on the total amount distributed as dividends.

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"Residence" for the Purpose of the Income Tax Act A company is resident in India in any year ended March 31 if it is an Indian company or if, during that year, control and management of its affairs is situated wholly in India. An Indian company means a company formed and registered under the Companies Act and includes a company formed and registered under any law relating to companies formerly in force in India or a corporation established by or under any central, state or provincial Act of India or an institution, association or a body declared by the Central Board of Direct Taxes of India to be a company for the purpose of the Income Tax Act, provided that the registered office or, as the case may be, the principal office of our company, corporation, institution, association or body is situated in India. Taxation on the Sale of Shares Currently, any gain realised on the sale of the Shares which have been held for a period exceeding 12 months to an Indian resident, or to a non-resident investor in India, will not be subject to Indian capital gains tax if Securities Transaction Tax ("STT") has been paid on the transaction. Such transactions are subject to STT of 0.1 per cent. depending on the nature of the securities. No surcharge or education cess is payable on STT. STT is collected by the relevant stock exchange and is paid to the government. Any long-term capital gain realised on the sale of Shares to an Indian resident whether in India or to a nonresident in India on which no STT has been paid, will be subject to Indian capital gains tax, if any, at the rate of 10.0 per cent. plus the applicable surcharge on income tax and education cess. For the purpose of computing capital gains tax on the sale of the Shares under the Income Tax Act, the cost of the acquisition of the Shares will be the cost at which the Shares are acquired in the Offering. Capital gains realised in respect of Shares held (calculated in the manner set forth in the prior paragraph) for 12 months or less (a short-term capital gain) on which STT is paid in the manner and at the rates set out above are subject to tax at the rate of 15.0 per cent. plus the applicable surcharge on income tax and an education cess. In the event that no STT is paid, a short-term capital gain is subject to tax at variable rates with a maximum rate of 40.0 per cent. plus the applicable rate of surcharge on income tax and education cess. The actual rate of tax on a short-term capital gain depends on a number of factors, including the legal status of the non-resident holder. In general terms, losses arising from a transfer of a capital asset in India can only be set-off against capital gains. A long-term capital loss can be set-off only against a long-term capital gain. A short-term capital loss can be set-off against both long-term capital gains and short-term capital gains. To the extent that losses are not absorbed in the year of transfer, they may be carried forward for a period of eight assessment years immediately succeeding the assessment year in which the loss arises and may be set-off against the capital gains of subsequent assessment years. If investors are covered by the STT regime, any loss arising from the transfer of long-term capital assets may not be available for set-off against long-term capital gains. As per the provisions of Sections 196D(2) of the Income Tax Act, no withholding tax is required to be deducted from any income by way of capital gains arising to FIIs from securities as defined in Section 115AD of the Income Tax Act). Tax Treaties The provisions of the Agreement for Avoidance of Double Taxation entered into by the Central Government with the country of residence of the non-resident investor will be applicable to the extent that it is more beneficial to the non-resident investor. This will be applicable to all the existing provisions of the Income Tax Act set out in this section. Disclosure of Information as to Subscribers to the Issue According to section 94A of the Income Tax Act, the Indian Government has power to notify any country or territory outside India, having regard to the lack of effective exchange of information by it with India, as a notified jurisdictional area. In the case of Bondholders belonging to such notified jurisdictional areas, certain compliance requirements as per the following details shall be applicable: (a) transfer pricing regulations shall apply to any transaction where one of the parties to the transaction is a person

located in a notified jurisdictional area; (b) deduction in respect of any payment made to any financial institution shall be allowed only if the assessee

authorises the income tax authority to seek relevant information from the said financial institution; (c) deduction in respect of any other expenditure or allowance (including depreciation) arising from a transaction

with a person located in a notified jurisdictional area shall be allowed only if he maintains documents and

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information as may be prescribed; (d) the onus is on the assessee to satisfactorily explain the source of any sum received from a person located in the

notified jurisdictional area and, in case of his failure to do so, the amount shall be deemed to be the income of the assessee; and

(e) any payment made to a person located in the notified jurisdictional area shall be liable to deduction of tax at the higher of the rates specified in the relevant provision of the Income Tax Act or rate or rates in force or a rate of 30 per cent.

In view of the aforesaid, each Bondholder shall be required to furnish such information and explanation which may be deemed necessary to our Company from time to time. Direct Tax Code The Direct Tax Code, or DTC, proposes to replace the Income Tax Act and other direct tax laws, with a view to simplify and rationalise the tax provisions into one unified code. The DTC is proposed to come into effect in the near future. Various proposals related to the DTC are subject to review by the Indian parliament and as such their impact, if any, is not quantifiable at this stage.

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TRANSFER RESTRICTIONS

Prospective Subscribers for the Bonds are advised to consult legal counsel prior to making any offer, resale, pledge or transfer of Bonds. Each purchaser of the Bonds, by accepting delivery of this Offering Circular, will be deemed to have acknowledged and represented and agreed as follows: (1) This offering is made pursuant to Regulation S under the Securities Act. The Bonds and Shares issuable upon

conversion of the Bonds have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state of the United States and are subject to restrictions on transfer, within the United States or to or for the account or benefit of any U.S. person (as such person is defined under Regulation S), except (i) in compliance with the registration requirements of the Securities Act and all other applicable securities laws or (ii) pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws.

(2) It is understood that the Bonds are being offered in a transaction not involving any public offering in the United States within the meaning of the Securities Act, that the Bonds and the Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or jurisdiction of the United States and that if it decides to offer, resell, pledge or otherwise transfer any of the Bonds or the Shares, such Bonds or Shares can be offered, resold, pledged or otherwise transferred only (i) outside the United States in a transaction complying with the provisions of Rule 903 or Rule 904 of Regulation S under the Securities Act, (ii) inside the United States to a qualified institutional buyer in a transaction complying with Rule 144A of the Securities Act, (iii) pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws, (iv) to the Issuer, or (v) pursuant to an effective registration statement under the Securities Act, in each of cases (i) through (v) in accordance with any applicable securities laws of any States of the United States, and that it will, and each subsequent holder is required to, notify any subsequent purchaser of such Bonds or the Shares from it of the resale restrictions referred to above.

(3) It understands that to exercise its right to convert the Bonds, it must make the representations, warranties and undertakings, including with respect to certain restrictions on transfer which may apply to the Shares received upon conversion, contained in the Conversion Notice described under "Terms and Conditions of the Bonds – Conversion".

(4) The Issuer, the Registrar, the Lead Manager and its affiliates, and others will rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements.

(5) It agrees to notify any transferee to whom it subsequently re-offers, resells, pledges or otherwise transfers the Bonds or the Shares of the foregoing restrictions on transfer.

(6) It understand that the Bonds may not be offered or sold directly or indirectly in India, to residents of India, or to or for the account or benefit of such persons in connection with the Offering or at any time thereafter, save in accordance with the provisions of Indian laws.

(7) It is not located in India, is not a resident of India and is not purchasing for, or for the account or benefit of, such a person.

(8) It acknowledges that the Bonds may not be offered, sold, pledged or otherwise transferred to any person located in India, to residents of India, or to, or for the account or benefit of, such persons.

(9) It is not an "Overseas Corporate Body" as defined in the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003 who is not eligible to invest in India through the portfolio route.

(10) It is not prohibited to buy, sell or deal in securities by the SEBI.

(11) It is not relying on any representations or warranties or agreement by the Lead Manager or any director, employee or agent of the Lead Manager.

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(12) The Issuer and the Lead Manager have the absolute right at their discretion to reject all or part of any

application for the Bonds.

(13) Neither it, its affiliates, nor any persons acting on its or their behalf have engaged or will engage in any directed selling efforts (as defined in Regulation S under the Securities Act) with respect to the Bonds or the Shares.

(14) It is entitled to subscribe for the Bonds offered to it under the laws of all jurisdictions which apply to it and that it has fully observed such laws and have obtained all required consents and completed all necessary formalities.

(15) It was outside the United States at the time its acceptance was originated, it is not and it is not acting on behalf of a U.S. person (as defined in Regulation S under the Securities Act) or a person resident in or at an address in the United States.

(16) It understands that no action has been or will be taken in any country or jurisdiction by the Issuer that would permit a public offering of the Bonds or the Shares, or possession or distribution of this Offering Circular or any other offering or publicity material relating to the Bonds or the Shares, where action for that purpose is required or where such offerings or distributions would be in any way unlawful.

(17) If it is a person in the UK, it is either (i) an investment professional within the meaning of Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 of the UK (the "Order"); (ii) a high net worth company within the meaning of Article 49 of the Order; or (iii) a sophisticated investor within the meaning of Article 50 of the Order.

(18) It is purchasing the Bonds for its own account and not with a view to, or for sale in connection with, any distribution of the Bonds or the Shares in contravention of any of the transfer restrictions set out herein.

(19) Its financial situation is such that it can afford to bear the economic risk of holding the Bonds and the Shares for an indefinite period of time, and it can afford to suffer the complete loss of the investment Bonds and the Shares.

(20) Its knowledge and experience in financial and business matters are such that it is capable of evaluating the merits and risks of the investment in the Bonds and the Shares or it has been advised by a representative possessing such knowledge and experience.

(21) It and its representatives, including to the extent is deems appropriate its professional, tax, financial and other advisors, have reviewed all documents provided to them in connection with the investment in the Bonds and the Shares, and it understands and is aware of the risks related to such investment.

(22) It and its representative have been given the opportunity to examine all documents and to ask questions of, and to receive answers from, the Issuer and its representatives concerning the terms and conditions of the subscription in the Bonds and related matters and to obtain all additional information which such investor or its representative deem necessary.

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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 from the SEBI, the BSE, and the NSE, and has not been prepared or independently verified by our Company or the 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. Stock Exchange Regulations Indian stock exchanges are regulated primarily by SEBI, as well as by the Government acting through the Ministry of Finance, Capital Markets Division, under the SCRA, and, the SCRR. On June 20, 2012, SEBI, in exercise of its powers under the SCRA and the SEBI Act, notified the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 (the "SCR (SECC) Rules"). 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 of the stock exchanges. The SEBI Act, granted powers to SEBI to regulate the Indian securities markets, including stock exchanges and other intermediaries in capital markets, 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. SEBI has also issued guidelines and regulations concerning minimum disclosure requirements by public companies, rules and regulations concerning investor protection, insider trading, substantial acquisitions of shares and takeovers of companies, buy-backs of securities, delisting of securities, employee stock option schemes, stockbrokers, merchant bankers, underwriters, mutual funds, FIIs, credit rating agencies and other capital markets participants. The SEBI has the powers to amend the listing agreements and bye-laws of stock exchanges in India. Any amendment of the bye-laws of the stock exchanges in India requires the prior approval of SEBI. The Companies (Amendment) Act, 2000, amended the Companies Act, 1956 and incorporated significant provisions relating to securities, options in securities and equity shares with differential rights. SEBI is empowered under the Companies Act, to administer certain provisions of the Companies Act in so far as they relate to the issue and transfer of securities and non payment of dividends by listed public companies as well as companies intending to list their securities on any recognized stock exchange in India, and to conduct inspection of a company’s records in respect of matters relating to the issue and transfer of securities. The power to prosecute defaulting companies in compliance with the said matter has also been vested with SEBI. In order to keep with the evolving corporate and business environment, and to revamp thelegislation governing Indian companies, the Companies Act 2013 was enacted on August 29, 2013. The new Act which is more comprehensive than the Indian Companies Act, has 470 sections and will eventually replace the six decade old Indian Companies Act, and is intended to promote self regulation, investor protection and transparency. The Ministry of Corporate Affairs has as on date notified 282 sections of the new Companies Act, 2013, and rules which have replaced the corresponding provisions in the old Companies Act, 1956. While 98 sections were notified and made effective September 12, 2013, the remaining 184 sections have been made effective from April 1, 2014. Listing The listing of securities on recognised Stock Exchanges is regulated by the Companies Act, the SCRA, the SCRR, the SEBI Act and the listing agreement of the respective stock exchanges. Further, under the SCRR, the governing body of each stock exchange is empowered to suspend trading of or dealing in a listed security for breach of our Company’s obligations under such agreement, subject to our Company receiving prior notice of the intent of the stock exchange. In the event that a suspension of a company’s securities continues for a period in excess of three months, the company may appeal to set aside the suspension, to the Securities Appellate Tribunal, established under the SEBI Act. SEBI has the power to veto stock exchange decisions in this regard. SEBI also has the power to amend such Listing Agreements and the bye-laws of the stock exchanges in India. Clause 49 of the Listing Agreement introduced by SEBI encompasses the framework of Corporate Governance for all

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listed companies. Every company that wants to list its shares on the stock exchanges in India must enter into a listing agreement with the concerned stock exchange. Clause 49 inter-alia provides that: • Our Board shall have an optimum combination of executive and non-executive directors with not less than

fifty percent of the board of directors comprising of non-executive directors. • Where the Chairman of the board is a non-executive director, at least one-third of the board should comprise of

independent directors and in case he is an executive director, at least half of the Board should comprise of independent director However where the non-executive Chairman is a promoter of the company or is related to any promoter or person occupying management positions at the Board level or at one level below the Board, at least one-half of the Board of the company shall consist of independent directors.

Any non-compliance with the terms and conditions of the Listing Agreements with the Stock Exchanges may entail the delisting of the Issuer’s Shares from such stock exchanges, which will affect future trading of those Shares. Minimum Level of Public Shareholding The minimum public shareholding norms have been amended twice by the Securities Contracts (Regulation) (Amendment) Rules, 2010 (the "2010 Rules") and Securities Contracts (Regulation) (Second Amendment) Rules, 2010. The said rules inter alia provide as follows: • At least 25 per cent. of each class of equity shares or debentures convertible into equity shares issued by a

company should have been offered and allotted to the public. • Existing listed companies having less than 25 per cent. public holding have to reach the prescribed minimum

level within a period of three years from the date of the commencement of the 2010 Rules. • Companies which have a post issue capital (when calculated at the offer price) of more than `40,000 million

are required to offer at least 10 per cent. of each class or kind of equity shares or debenture convertible into equity shares to the public. Such companies are required to increase their public shareholding to at least 25 per cent by increasing its public shareholding by atleast 5% annually within a period of three years from the date of listing of the securities.

• If the public shareholding in a listed company falls below 25 per cent. at any time, such company shall bring the public shareholding to 25 per cent. within a maximum period of 12 months from the date of such reduction.

• Every listed public sector company shall maintain public shareholding of at least 10 per cent. • Existing listed public sector companies having less than 10 per cent. public shareholding have to reach the

prescribed minimum level within a period of three years from the date of the commencement of Securities Contracts (Regulation) (Second Amendment) Rules, 2010.

• If the public shareholding in a listed public sector company falls below 10 per cent. at any time, such company shall bring the public shareholding to 10 per cent. within a maximum period of 12 months from the date of such reduction.

Clause 40A of the listing agreement of stock exchanges prescribes methods to raise the public shareholding as envisaged in 2010 Rules. Earlier, only four methods were prescribed to achieving minimum public shareholding i.e. issuance of shares to public through prospectus; or offer for sale of shares held by promoters to public through prospectus; or sale of shares held by promoters through the secondary market; or Institutional Placement Programme in terms of Chapter VIIIA of SEBI ICDR Regulations. SEBI vide its recent circular CIR/CFD/DIL/11/2012 dated August 29, 2012 has allowed additional methods for achieving minimum public shareholding. These methods are: (i) Rights Issues to public shareholders, with promoters/promoter group shareholders forgoing their rights entitlement; and (ii) Bonus issues to public shareholders, with promoters/promoter group shareholders forgoing their bonus entitlement. Further, SEBI has also given the option of using any other method to achieve the minimum public shareholding requirements, as approved by SEBI on case to case basis. Such requests would be considered by SEBI based on merit. Delisting The equity shares of a listed company can be delisted under the provisions of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 ("Delisting Regulations"), which govern voluntary and compulsory delisting of equity shares of Indian companies from the stock exchanges where they are listed. No company can apply for permission to de-list: (i) pursuant to a buy back of equity shares or preferential allotment made by a company or (ii) unless a period of three (3) years has elapsed since the listing of that class of equity shares on any

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recognized stock exchange or (iii), if any instruments issued by the company which are convertible into the same class of equity shares that are sought to be delisted are outstanding. A company may be delisted through a voluntary delisting sought by the shareholders of the said company or a compulsory delisting by the stock exchange. However, a company is not permitted to delist its equity shares if any instruments issued by the company which are convertible into the same class of equity shares as are also sought to be delisted are outstanding. A company may voluntarily delist its equity shares from the stock exchanges where its equity shares are listed provided that an exit opportunity has been given to the investors at an exit price to be determined in accordance with a book-built method prescribed under the Delisting Regulations, subject to a minimum price to be determined in accordance with a specified formula specified in the Delisting Regulations. The procedure for compulsory delisting requires appointment of an independent valuer by the stock exchange to determine the fair value of the equity shares proposed to be delisted. For a voluntary delisting, prior approval of the shareholders of the company is required to be obtained by a special resolution passed through postal ballot, where the votes cast by public shareholders in favour of the resolution should be at least two times the number of votes cast by the public shareholders against the resolution. A voluntary delisting offer would be successful if post the offer, the shareholding of the promoter (along with persons acting in concert with the promoter) taken together with the shares accepted in the offer reaches the higher of: (a) 90 per cent. of the total issued shares of that class, excluding the shares which are held by a custodian and against which depository receipts have been issued overseas; or (b) the aggregate percentage of the pre-offer promoter shareholding (along with persons acting in concert with him) and 50 per cent. of the offer size. A delisting proposal also requires (i) a public notice to be given in accordance with the Delisting Regulations; (ii) application for in-principle approval to the stock exchanges; and (iii) final application to the stock exchange to be made within one year of the special resolution approving the delisting. A company is not permitted to list the equity shares that have been voluntarily delisted for a period of five years from delisting. In respect of equity shares that have been compulsorily delisted, a company is not permitted to list the equity shares for a period of ten years from the delisting. Circuit Breakers To restrict abnormal price volatility, SEBI has instructed the stock exchanges in India to apply the following price bands calculated at the previous day’s closing price (there are no restrictions on price movements of index stocks): Market Wide Circuit Breakers In order to restrict abnormal price volatility in any particular stock, SEBI has instructed the stock exchanges to apply daily circuit breakers, which do not allow transactions beyond certain price volatility. An index based market-wide (equity and equity derivatives) circuit breaker system has been implemented and the circuit breakers are applied to the market for movement by 5 per cent., 10 per cent., 15 per cent. and 20 per cent. For two prescribed market indices: the BSE Sensex for BSE and the Nifty for the NSE (the "NSE Nifty"), whichever is earlier. These circuit breakers, when triggered, bring about a coordinated trading halt in all equity and equity derivative markets nationwide. Price Bands Price bands are circuit filters of 2 per cent., 5 per cent or 20 per cent. movements either up or down, and are applied to most securities traded in the markets, excluding securities included in the BSE Sensex and the NSE Nifty and derivatives products. The stock exchanges can also exercise the power to suspend trading during periods of market volatility. At the discretion of the stock exchanges and under instructions from SEBI, the stock exchanges can also impose ad hoc margins on the stockbrokers, for specific stocks in the event of extreme volatility in price movements. Disclosures under the Companies Act and Securities Regulations Under the Companies Act, a public issue of equity securities in India must be made by means of a prospectus, which must contain information specified in the Companies Act, and the SEBI ICDR Regulations. The prospectus must be

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filed with the Registrar of Companies having jurisdiction over the place where a company’s registered office is situated, which in the case of our Company is the Registrar of Companies located at Mumbai, Maharashtra. A company’s directors, and other officers are subject to civil and criminal liability for misstatements/misrepresentations in a prospectus. The Companies Act also sets forth procedures for the acceptance of subscriptions and the allotment of securities among subscribers and regulates and imposes restrictions in connection with the payment of commissions in relation to the subscription of and/or the sale of securities of an Indian company. The SEBI has issued detailed guidelines through the SEBI Regulations concerning disclosures by public companies and investor protection. All companies, including public limited companies are required under the Companies Act to prepare, file with the registrar of companies and circulate to their shareholders audited annual accounts, which comply with the disclosure requirements specified in the Companies Act. Under section 93 of the Companies Act a listed company is required to file a return with respect to change in the number of shares held by promoters and top ten shareholders of such company, within fifteen days of such change. In addition, a listed company is subject to continuing disclosure requirements pursuant to the terms of its Listing Agreements with the stock exchanges and SEBI regulatory requirements. The companies are also required to publish unaudited reviewed financial statements (subject to a limited review by Auditors), on a quarterly basis and are required to inform stock exchanges immediately regarding any price sensitive information, which includes but is not restricted to: a) issue of any class of securities; b) acquisition, merger, de-merger, amalgamation, restructuring, scheme of arrangement, spin off or selling

divisions of the company; c) change in market lot of the company’ shares, sub-division of equity shares of the company; d) voluntary delisting by the company from the stock exchanges; e) forfeiture of shares; f) any action which will result in alteration in, the terms regarding redemption/cancellation/ retirement in whole

or in part of any securities issued by the company; g) information regarding opening, closing of status of ADR/GDR or any other class of securities to be issued

abroad; and h) cancellation of dividend/rights/bonus etc. Further under the listing agreement our Company is required to

(i) intimate the stock exchanges of any Board meeting at which proposal for buy back, declaration of dividend or

issue of convertible debentures,

(ii) recommend or declare all dividend and/or cash bonuses at least five days before commencement of the closure of its transfer books or the record date fixed for the purpose.

(iii) in case of a further public offer to be made through the fixed price route, the company shall notify the stock exchange, at least 48 hours in advance, of the proposed meeting of its Board of Directors convened for determination of issue price.

The above information is required to be made public. The ICAI and the SEBI have implemented changes which require Indian companies to account for deferred taxation, consolidate their accounts with subsidiaries, categorise reporting and to increase their disclosure of related party transactions from April 1, 2001 and accounting for investments in associated companies and joint ventures in consolidated accounts and interim financial reporting from April 1, 2002. As of April 1, 2003, accounting of intangible assets is also regulated by accounting standards set by the ICAI and as of April 1, 2004, accounting standards regulate accounting for impairment of assets. On November 4, 2010, the Ministry of Corporate Affairs, Government has released a roadmap for phase wise implementation of Indian Accounting Standards converged with International Financial Reporting Standards (IFRS). The Ministry of Corporate Affairs, Government is yet to notify the roadmap for the phase wise implementation. Rights Issues by companies which have outstanding fully or partly convertible debt instruments In relation to listed companies proposing to make rights issues, the relevant regulations issued by SEBI require that no

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company may make a rights issue of equity shares if it has outstanding fully or partly convertible debt instruments at the time of making rights issue, unless it has made reservation of equity shares of the same class in favour of the holders of such outstanding convertible debt instruments in proportion to the convertible part thereof. The equity shares reserved for the holders of fully or partially convertible debt instruments are required to be issued at the time of conversion of such convertible debt instruments on the same terms on which the equity shares offered in the rights issue were issued. Indian Stock Exchanges As on May 05, 2014, SEBI has provided a list of 18 active stock exchanges in India. Most of the stock exchanges have their governing board for self-regulation. The BSE and the NSE hold prominent positions among the stock exchanges in terms of number of listed companies, market capitalisation and trading activity. BSE The BSE, established in 1875, is the oldest stock exchange in India. It is the first stock exchange in India to have obtained permanent recognition in 1956 from the Government under the SCRA. It has evolved over the years into its present status as one of the leading stock exchanges of India. Pursuant to the BSE (Corporatisation and Demutualization) Scheme 2005 of SEBI, with effect from August 20, 2005, the BSE has been corporatised and demutualised and is now a company under the Companies Act. Recently, pursuant to a press release dated July 11, 2011, BSE announced a change in its name from the Bombay Stock Exchange Limited to BSE Limited. Derivatives trading commenced on the BSE in 2000. The BSE also has wholesale and retail debt trading segments. The retail trading in Government securities commenced in June 2003. As on date of this Offering Circular there were 14,053 scrips traded on the BSE and the estimated equity market capitalization on the BSE as at April 30, 2014 was Rs 7,549,288,880 million. (Source: www.bseindia.com.) NSE The NSE was established by financial institutions and banks to serve as a national exchange and 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 exchange of India. The NSE was recognised as a stock exchange in April 1993 and commenced operations in the wholesale debt market segment in June 1994. The NSE launched the NSE 50 index, now known as S&P CNX NIFTY, on April 22, 1996 and the Mid-cap Index on January 1, 1996. NSE has a wide network in major metropolitan cities, screen based trading and a central monitoring system. The NSE introduced, for the first time in India, fully automated screen-based trading. It uses a modern, fully computerised trading system designed to offer investors across the length and breadth of the country a safe and easy way to invest. The NSE trading system called "National Exchange for Automated Trading" (NEAT) is a fully automated screen-based trading system, which adopts the principle of an order driven market. As on May 08, 2014, the daily traded value of the equities market segment was Rs. 113,828.20 million. As on date of this Offering Circular, there were more than 1300 listed companies trading on the NSE.. (Source: www.nseindia.com.) 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 IST (excluding the 15 minutes pre-open session from 9.00 a.m. to 9.15 a.m. introduced recently). The NSE also has a post closing session of 20 minutes from 3.40. pm to 4.00 pm for normal market session. The BSE and the NSE are closed on public holidays. Pursuant to a circular dated October 23, 2009, the recognised 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. Stock Market Indices

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S&P CNX Nifty is a diversified 50 stock index accounting for 21 sectors of the economy. It is used for a variety of purposes such as benchmarking fund portfolios, index based derivatives and index funds. S&P CNX Nifty is owned and managed by India Index Services and Products Limited (IISL), which is a joint venture between the NSE and CRISIL. The two indices which are generally used in tracking the aggregate price movements on the BSE are SENSEX and BSE 100 Index. The BSE Sensitive Index, or the Sensex, consists of listed shares of 30 large market capitalisation companies. The companies are selected on the basis of market capitalisation, liquidity and industry representation. Sensex was first compiled in 1986 in the Financial Year ended March 31, 1979. The BSE 100 Index (formerly the BSE National Index) contains listed shares of 100 companies including the 30 in Sensex with 1983-1984 as the base year. Trading Procedure In order to facilitate smooth transactions, in 1995, BSE replaced its open outcry system with BSE On-line Trading, ("BOLT"), facility in 1995. BOLT is an automated screen based trading system for trading in securities, which 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. Internet-Based Securities Trading and Services SEBI approved internet trading in January 2000. Internet trading takes place through order routing systems, which route client orders to exchange trading systems for execution. This permits clients 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 minimum conditions stipulated by SEBI. Takeover Code Vide a notification dated September 23, 2011, SEBI notified the new SEBI TakeoverCode which has replaced the existing Takeover (SAST) Regulations, 1997. The new SEBI Takeover Code came into force on the 30th day from the date of their publication in the Official Gazette i.e. with effect from October 22, 2011, any acquisition or sale of shares of Listed Company shall be governed by provisions of SEBI Takeover Code. Salient features of the new Takeover Code are as follows: 1. A person who (along with persons acting in concert with him), holds more than 25 per cent. of the shares or

voting rights in any company is required to make an annual disclosure of his holdings to that company and every stock exchange where the equity shares of the company are listed within seven working days from the end of the financial year on 31st March. Further, a person who together with persons acting in concert with him, aggregating to 5 per cent or more of the shares of such target company, shall disclose such aggregate shareholding and voting rights in such company, is required to disclose any purchase or sale representing 2 per cent. or more of the shares (including convertible instruments) or voting rights of that company (together with the aggregate shareholding after such acquisition or sale) to that company and the stock exchanges on which the company’s shares are listed within two working days of the purchase or sale.

2. Promoters or persons in control of a company are also required to make annual disclosure of their holding in a specified manner as on 31st March of the respective year to each of the stock exchanges on which its equity shares are listed and the company at its registered office. The Takeover Code requires the promoters and promoter group of listed companies to disclose the details of any invocation or release of encumbrance on the equity shares held by such persons within seven working days of the creation, or invocation, or release of the encumbrance.

3. An acquirer cannot acquire equity shares or voting rights (taken together with the existing equity shares or voting rights, if any, held by him or by persons acting in concert with him) which would entitle such acquirer to exercise 25 per cent. or more of the voting rights in a company, unless such acquirer makes a public announcement offering to acquire a further minimum of 26 per cent. of the equity shares of the company at a price not lower than the price determined in accordance with the Takeover Code. Such offer has to be made to all public shareholders of the company. A copy of the public announcement is required to be delivered, within one working day of the date of the public announcement the stock exchanges on which the company’s equity shares are listed, and also to SEBI and the target company. Pursuant to the public announcement, a detailed

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public statement shall be published by the acquirer through the manager to the open offer, within five working days of the public announcement.

4. An acquirer shall not be entitled to acquire or enter into any agreement to acquire shares or voting rights exceeding such number of shares as would take the aggregate shareholding pursuant to the acquisition above the maximum permissible non-public shareholding.

5. An acquirer (taken together persons acting in concert with him) holding with the existing equity shares or voting rights, if any, held by him or by) which would entitle such acquirer to exercise 25 per cent. or more of the voting rights in a company, shares or voting rights, but less than the maximum permissible non-public shareholding, may voluntarily make a public announcement of an open offer of a minimumof 10 per cent. However, an acquirer may acquire, together with persons acting in concert with him additional shares or voting rights entitling him to up to 5 per cent. of shares or voting rights within any financial year in a company without making an open offer.

6. An increase in the shares or voting rights pursuant to a buy-back of shares by the target company would be exempt from the applicability of the provisions of the Takeover Code if such shareholder has not voted in favour of the resolution authorising the buy-back of securities under section 68 of the Companies Act, in the case of a shareholder resolution, voting is by way of postal ballot and the increase in voting rights does not result in an acquisition of control by such shareholder over the company. An increase in voting rights in a target company of any shareholder beyond the limit attracting an obligation to make an open offer under sub-regulation (1) of regulation 3, pursuant to buy-back of shares shall be exempt from the obligation to make an open offer provided such shareholder reduces his shareholding such that his voting rights fall to below the threshold referred to in sub-regulation (1) of regulation 3 within ninety days from the date on which the voting rights so increase)

7. Regardless of whether there has been any acquisition of equity shares or voting rights in a company, an acquirer cannot directly or indirectly acquire control over a company (for example, by way of acquiring the right to appoint a majority of the directors or to control the management or the policy decisions of the company) unless such acquirer makes a public announcement offering to acquire a minimum of 26 per cent. of the voting equity shares of the company.

8. The Takeover Code sets out the contents of the required public announcements as well as the minimum offer price. The minimum offer price depends on whether the shares of the company are direct or indirect acquisitions under the Takeover Code.

9. In case of indirect acquisitions as provided in Regulation 5(2) where a) the proportionate net asset value of the target company as a percentage of the consolidated net asset

value of the entity or business being acquired; b) the proportionate sales turnover of the target company as a percentage of the consolidated sales

turnover of the entity or business being acquired; or c) the proportionate market capitalisation of the target company as a percentage of the enterprise value

for the entity or business being acquired; is in excess of 80 per cent., on the basis of the most recent audited annual financial statements, such indirect acquisition shall be regarded as a direct acquisition of the target company for all purposes of these regulations including without limitation, the obligations relating to timing, pricing and other compliance requirements for the open offer are met.

10. In case of direct acquisitions of shares or voting rights in, or control over the target company, and indirect acquisition of shares or voting rights in, or control over the target company where the parameters referred to in sub-regulation (2) of regulation 5 are met, the offer price shall be the highest of: a) the highest negotiated price per share of the company for any acquisition under an agreement

attracting the obligation to make a public announcement of an open offer;

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b) the volume-weighted average price paid or payable for acquisitions, whether by the acquirer or by any person acting in concert with him, during the fifty-two weeks immediately preceding the date of the public announcement;

c) the highest price paid or payable for any acquisition, whether by the acquirer or by any person acting in concert with him, during the twenty six weeks immediately preceding the date of the public announcement;

d) the volume-weighted average market price of such shares for a period of sixty trading days immediately preceding the date of the public announcement as traded on the stock exchange where the maximum volume of trading in the shares of the target company are recorded during such period, provided such shares are frequently traded;

e) where the shares are not frequently traded, the price determined by the acquirer and the manager to the open offer taking into account valuation parameters including, book value, comparable trading multiples, and such other parameters as are customary for valuation of shares of such companies; and

f) the per share value computed as calculated under Regulation 5(2) of the Takeover Code, if applicable.

11. In the case of an indirect acquisition of shares or voting rights in, or control over the target company, where the parameters referred to in sub-regulation (2) of regulation 5 are not met, the offer price shall be the highest of: a) the highest negotiated price per share, if any, of the target company for any acquisition under the

agreement attracting the obligation to make a public announcement of an open offer; b) the volume-weighted average price paid or payable for any acquisition, whether by the acquirer or by

any person acting in concert with him, during the fifty-two weeks immediately preceding the earlier of, the date on which the primary acquisition is contracted, and the date on which the intention or the decision to make the primary acquisition is announced in the public domain;

c) the highest price paid or payable for any acquisition, whether by the acquirer or by any person acting in concert with him, during the twenty-six weeks immediately preceding the earlier of, the date on which the primary acquisition is contracted, and the date on which the intention or the decision to make the primary acquisition is announced in the public domain;

d) the highest price paid or payable for any acquisition, whether by the acquirer or by any person acting in concert with him, between the earlier of, the date on which the primary acquisition is contracted, and the date on which the intention or the decision to make the primary acquisition is announced in the public domain, and the date of the public announcement of the open offer for shares of the target company made under the Takeover Code;

e) the volume-weighted average market price of the shares for a period of sixty trading days immediately preceding the earlier of, the date on which the primary acquisition is contracted, and the date on which the intention or the decision to make the primary acquisition is announced in the public domain, as traded on the stock exchange where the maximum volume of trading in the shares of the target company are recorded during such period, provided such shares are frequently traded; and

f) the per share value computed under Regulation 5(2) of the Takeover Code.

12. The Takeover Code permits conditional offers that may be made conditional upon a minimum level of acceptance of the open offer. The agreement pursuant to which the open offer is being made shall contain a condition to the effect that in the event this desired level of acceptance is not received, the acquirer shall not acquire any shares under the open offer and the agreement attracting the obligation to make the open offer shall stand rescinded.

13. Acquirers making a public offer are also required to deposit in an escrow account, not later than 2 working days prior to the date of detailed public statement of the open offer for acquiring shares towards security for performance of obligations under the Takeover Code, and deposit in escrow account such aggregate amount as specified, which amount may be forfeited, either in part or in full, in the event that the acquirer does not fulfill his obligations.

14. The general requirements to make such a public announcement do not, however, apply to certain cases including the following: a) inter se transfer of shares amongst qualifying persons (as defined under the Takeover Code) b) acquisition pursuant to the provisions of the Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002; c) acquisition pursuant to the provisions of the Securities and Exchange Board of India (Delisting of

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Equity Shares) Regulations, 2009; d) acquisition by way of transmission, succession or inheritance; e) acquisition of voting rights or preference shares carrying voting; f) acquisition in the ordinary course of business by an underwriter, a stock broker, a merchant banker,

any person acquiring shares pursuant to a scheme of safety net in terms of Regulation 44 of SEBI (Issue of Capital and Disclosure Requirement) Regulations 2009, a registered market-maker of a stock exchange and a scheduled commercial bank, acting as an escrow agent;

g) acquisitions at subsequent stages, by an acquirer who has made a public announcement of an open offer for acquiring shares pursuant to an agreement of disinvestment;

h) acquisition pursuant to a scheme (i) under section 18 of the SICA; (ii) of arrangement involving the target company as a transferor company or as a transferee company, or reconstruction of the target company, including amalgamation, merger or demerger, pursuant to an order of a competent authority; (iii) of arrangement not directly involving the target company as a transferor company or as a transferee company, or reconstruction not involving the target company’s undertaking, including amalgamation, merger or demerger, pursuant to an order of a competent authority subject to certain conditions provided under the Takeover Code.

15. The public offer provisions of the Takeover Code (subject to certain specified conditions), do not apply, inter alia, to certain specified acquisitions, including the acquisition of shares: a) by allotment in a rights issue, up to his entitlement and in excess of his entitlement subject to the

fulfilment of certain conditions; b) pursuant to buy-back of shares provided that such shareholder reduces his shareholding such that his

voting rights fall to below the prescribed threshold within ninety days from the date of the closure of the said buy-back offer;

c) in a company by any person in exchange for shares of another company tendered pursuant to an open offer for acquiring shares;

d) in a target company from state-level financial institutions or their subsidiaries by promoters of the target company pursuant to an agreement between such transferors and such promoter;

e) in a target company from a venture capital fund or a foreign venture capital investor, by their respective promoters pursuant to an agreement between such venture capital fund or foreign venture capital investor and such promoters.

Insider Trading Regulations The SEBI (Prohibition of Insider Trading) Regulations 1992, as amended ("Insider Trading Regulations"), have been notified by SEBI to prohibit and penalise insider trading in India. The Insider Trading Regulations prohibit an ‘insider’ from dealings in the securities of a listed company on the basis of "unpublished price sensitive information" communication of such information or the counsel or procurement of any other person to deal in securities on the basis of such information. The term ‘insider’ was defined as any person who is or was connected with the company or is deemed to have been connected with the company and who is reasonably expected to have access to unpublished price sensitive information in respect of securities of a company. Pursuant to amendments to the Insider Trading Regulations issued on November 19, 2008, the definition of the term ‘insider’ has been broadened to include any person who has received or has had access to unpublished price sensitive information of the company. The insider is also prohibited from communicating, counselling or procuring, directly or indirectly, any unpublished price-sensitive information to any other person who while in possession of such unpublished price sensitive information is prohibited from dealing in securities. The prohibition under the Insider Trading Regulations extends to all persons, including a company dealing in the securities of another company listed on any stock exchange or associate of that other company, while in the possession of unpublished price-sensitive information. Pursuant to amendments to the Insider Trading Regulations, the definition of the term insider has been broadened to include any person who has received or has had access to unpublished price sensitive information of the company. The Insider Trading Regulations require any person who holds more than 5 per cent. shares or voting rights in any listed company to disclose to the company, the number of shares or voting rights held by such person and any change in the shareholding or voting rights, on becoming such holder, within two working days of (1) the receipt of intimation of allotment of shares; or (2) the acquisition or the sale of the shares or voting rights, as the case may be.

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In terms of amendment made in Insider Trading Regulations vide August 16, 2012 by SEBI, any person who is a promoter or part of promoter group of a listed company shall disclose to the company, the number of shares or voting rights held by such person, within two working days of becoming such promoter or person belonging to promoter group. Further, any person who is a promoter or part of promoter group of a listed company, shall disclose to the company and the stock exchange, where the securities are listed, the total number of shares or voting rights held and change in shareholding or voting rights, if there has been a change in such holdings of such person from the last disclosure made under Listing Agreement or under the relevant regulation of Insider Trading Regulations, and the change exceeds Rs.500,000 in value or 25,000 shares or 1 per cent of total shareholding or voting rights, whichever is lower. On a continuing basis, any person who holds more than 5 per cent. shares or voting rights in any listed company is required to disclose to the company, the number of shares or voting rights held by him and change in shareholding or voting rights, even if such change results in shareholding falling below 5 per cent., if there has been change in such holdings from the last disclosure made, provided such change exceeds 2 per cent. of total shareholding or voting rights in the company. Such disclosure is required to be made within two working days of (i) the receipt of intimation of allotment of shares; or (ii) the acquisition or sale of shares or voting rights, as the case may be. The Insider Trading Regulations make it compulsory for listed companies and certain other entities associated with the securities market to establish an internal code of conduct to prevent insider trading deals and also to regulate disclosure of unpublished price-sensitive information within such entities so as to minimise misuse thereof. The Insider Trading Regulations specify a model code of corporate disclosure practices to prevent insider trading, which is to be implemented by all listed companies and other such entities. Pursuant to amendments to the Insider Trading Regulations issued on November 19, 2008, listed companies are required to establish an internal code of conduct without diluting in any manner the model code specified in the Insider Trading Regulations. The recent amendments also amend certain provisions of the model code of conduct contained in the Insider Trading Regulations to prohibit all directors/officers/designated employees who buy or sell any number of shares of the company from entering into an opposite transaction i.e. sell or buy any number of shares during the next six months following the prior transaction. All directors/officers/designated employees have also been prohibited from taking positions in derivative transactions in shares of the company at any time. In relation to subscription in the primary market (initial public offers) the aforesaid persons are required to hold their investments for a minimum period of 30 days. The holding period would commence when the securities are actually allotted. Further, certain provisions of the model code have been also extended to dependants of directors/officers/designated employees of the company. Derivatives (Futures and Options) Trading in derivatives in India is governed by the SCRA, the SCRR and the SEBI Act. The SCRA was amended by the Securities Laws (Amendment) Act, 1999, with effect from February 22, 2000 and derivative contracts were included within the term "securities" as defined in the SCRA. Trading in derivatives in India takes place either on separate and independent derivatives exchanges or on separate segments of an existing stock exchange. The derivative exchange or derivative segment of a stock exchange functions as a self-regulatory organisation under the supervision of the SEBI. Derivatives products were introduced in four phases in India, starting with futures contracts in June 2000 and index options, stock options and stock futures in June 2000, July 2001 and November 2001, respectively. Depositories In August 1996, the Indian Parliament enacted the Depositories Act, 1996 which provides a legal framework for the establishment of depositaries to record ownership details and effect transfers in electronic book-entry form. SEBI framed the SEBI (Depositories and Participants) Rules and Regulations, 1996 which provide for the formation of such depositaries and the registration of participants as well as the formation of the rights and obligations of the depositaries, participants, beneficial owners and issuers. The depositary system has significantly improved the operation of the Indian securities markets. The Depositories Act requires that every person subscribing to securities offered by an issuer has the option either to receive the security certificate or hold the securities with a depository. The National Securities Depository Limited and the Central Depository Services Limited are two depositories that provide electronic depository facilities for the trading of equity and debt securities in India.

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Trading of securities in book-entry form commenced in December 1996. In order to encourage "dematerialisation" of securities, SEBI has set up a working group on dematerialisation of securities comprising FIIs, custodians, stock exchanges, mutual funds and the National Securities Depository Limited to review the progress of securities and trading in dematerialised form and to recommend scrips for compulsory, dematerialised trading in a phased manner. In January 1998, SEBI notified of various companies for compulsory dematerialised trading by certain categories of investors such as FIIs and other institutional investors and also notified compulsory dematerialised trading in specified scrips for all retail investors. Subsequently, SEBI has significantly increased the number of scrips in which dematerialised trading is compulsory for all investors. Under the Depositories Act and guidelines issued by SEBI, our Company shall give the option to subscribers/shareholders to receive the security certificates and hold securities in dematerialised form with a depositary. However, even in the case of scrips notified for compulsory dematerialised trading, investors, other than institutional investors, are permitted to trade in physical shares on transactions outside the stock exchange where there are no requirements of reporting such transactions to the stock exchange and on transactions on the stock exchange involving lots of less than 500 securities. Transfers of shares in book-entry form require both the seller and the purchaser of the equity shares to establish accounts with depositary participants registered with the depositaries established under the Depositories Act, 1996. Charges for opening an account with a depository participant, transaction charges for each trade and custodian charges for securities held in each account vary depending upon the practice of each depository participant and have to be borne by the accountholder. Upon delivery, the shares shall be registered in the name of the relevant depositary on the company’s books and this depositary shall enter the name of the investor in its records as the beneficial owner, thus effecting the transfer of beneficial ownership. The beneficial owner shall be entitled to all rights and benefits and be subject to all liabilities in respect of his/her securities held by a depositary. Every person holding equity share capital of the company and whose name is entered as a beneficial owner in the records of the depository is deemed to be a member of the concerned company. The Companies Act requires that Indian companies making any initial public issue of securities for or in excess of `100 million should issue such securities in dematerialised form. Derivatives 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. The derivative exchange or derivative segment of a stock exchange functions as a self regulatory organisation under the supervision of SEBI. Derivatives products have been introduced in a phased manner in India starting with future contracts in June 2000 and index options, stock options and stock futures in June 2000, July 2001 and November 2001, respectively.

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FOREIGN INVESTMENT AND EXCHANGE CONTROLS General Prior to June 1, 2000, foreign investment in Indian securities, including the acquisition, sale and transfer of securities of Indian companies, was regulated by the Foreign Exchange (Regulation) Act, 1973, as amended ("FERA"), and the notifications issued by the RBI thereunder. With effect from June 1, 2000, FERA was replaced by the FEMA, and thereafter foreign investment in Indian securities was regulated by FEMA and the rules, regulations and notifications issued by the RBI under FEMA and the Department of Industrial Policy and Promotion ("DIPP"). A person resident outside India can transfer any security of an Indian company or any other security to an Indian resident only in accordance with the terms and conditions specified in FEMA and the rules and regulations made thereunder or as permitted by the RBI. The FEM Transfer Regulations regulate the issue of Indian securities, including global depositary receipts, to persons resident outside India and the transfer of Indian securities by or to persons resident outside India.The FEM Transfer Regulations provide that an Indian entity may issue securities to a person resident outside India or record in its books any transfer of security from or to such person only in the manner set forth in FEMA and the rules and regulations made thereunder or as permitted by the RBI. Foreign Direct Investment The Government, pursuant to its liberalisation policy, set up the FIPB under the Ministry of Finance, Government of India ("MOF") to regulate all investments by way of subscription and/or purchase and/or gift of securities of an Indian company by a person resident outside India or FDI into India. The following investments also require the prior permission of the FIPB for investments in excess of specified sectoral caps or in sectors in which FDI is not permitted or in sectors which specifically require prior approval of the FIPB or in proposals for investments in real estate business, atomic energy, railway transport, manufacture of items reserved for production in micro and small enterprises. The Government has indicated that in all cases where FDI is allowed on an automatic basis without FIPB approval, the RBI would continue to be the primary agency for the purposes of monitoring and regulating foreign investment. The prescribed applicable norms with respect to determining the price at which shares may be issued by an Indian company to a non resident investor and the price at which shares may be sold by a resident to a non-resident or by a non-resident to a resident would need to be complied with and a declaration in the prescribed form, is required to be filed with the RBI once the issuance/transfer of shares of the Indian company is complete. The Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India has recently released updated consolidated FDI policy dated April 10, 2012 which inter alia set out detailed guidelines for calculation of total foreign investment (direct and indirect) in Indian companies. The Government has set up the Foreign Investment Implementation Authority (the "FIIA") in the Department of Industrial Policy and Promotion. The FIIA has been mandated to (i) translate FDI approvals into implementation, (ii) provide a pro-active one stop after care service to foreign investors by helping them obtain necessary approvals, (iii) deal with operational problems, and (iv) meet with various Government agencies to find solutions to foreign investment problems, and maximize opportunities through a partnership approach. Investment by Foreign Institutional Investors In terms of the Foreign Institutional Investor Regulations, the following may register with the SEBI as FIIs: (i) pension funds, mutual funds, investment trusts, insurance companies or reinsurance companies, established or incorporated outside India, (ii) international or multilateral organisations or agencies thereof, foreign governmental agencies, sovereign wealth funds, foreign central banks, (iii) endowments, university funds, foundations or charitable trusts or charitable societies, (iv) asset management companies, investment managers or advisors, banks, institutional portfolio managers, established or incorporated outside India and proposing to invest in India, on behalf of "broad based" funds and proprietary funds if any; and (v) trustees of trusts established outside India and proposing to invest in India, on behalf of "broad based" funds and proprietary funds if any(subject to certain conditions specified in the FII

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Regulations). Investments made by FIIs are governed by the Portfolio Investment Scheme under the Security Regulations. As per the Portfolio Investment Scheme, FIIs registered with the SEBI may buy or sell shares or convertible debentures of Indian companies on stock exchanges in India through registered stock brokers. FIIs are also permitted to purchase shares and convertible debentures of an Indian company, subject to the percentage limits specified either through (a) a public offer, where the price of the shares to be issued is not less than the price at which the shares are issued to Indian residents; or (b) a private placement, where the issue price should be determined as per the relevant provisions of the FDI Scheme. Foreign investors are not necessarily required to register with SEBI as FIIs and may invest in securities of Indian companies pursuant to the FDI route under the Security Regulations (as discussed above). Foreign investors wishing to generally invest and trade in Indian securities in India as a Foreign Institutional Investor are required to register with SEBI and obtain a general permission from the RBI. FIIs who are registered with SEBI are required to comply with the provisions of the FII Regulations. A registered Foreign Institutional Investor may, subject to the pricing, ownership and other restrictions discussed below, freely buy and sell securities issued by any Indian company, realise capital gains on investments made through the initial amount invested in India, appoint a domestic custodian for custody of investments made and repatriate the capital, capital gains and dividends that they may receive or make. Subject to the terms and conditions set out in the FII Regulations, and subject to any sectoral restrictions that may be applicable to FIIs under the foreign investment regime in India, a registered Foreign Institutional Investor or a sub-account of a FII may buy or sell equity shares or debentures of Indian companies through stock exchanges in India at the ruling market price and also buy or sell shares or debentures of listed or unlisted companies other than on a stock exchange in compliance with the applicable SEBI/RBI pricing norms. A Foreign Institutional Investor is not permitted to hold more than 10 per cent. Of the total issued capital of an Indian company and a corporate or individual sub-account of the Foreign Institutional Investor is not permitted to hold more than 5 per cent of the total issued capital of an Indian company. The total holding of all FIIs in an Indian company is subject to a cap of 24 per cent. of the total issued capital of the company which may be increased up to the percentage of sectoral cap on FDI in respect of the said company with the passing of a board of directors’ resolution followed by the passing of a special resolution by the shareholders of the company in a general meeting, to that effect. Furthermore, requisite compliance with the provisions of the recent circular of the RBI dated March 19, 2012 is to be ensured. FIIs are permitted to issue or otherwise deal in off-shore derivative instruments against underlying securities, listed or proposed to be listed on any stock exchange in India subject to the satisfaction of the following conditions: • the off-shore derivative instruments are issued only to persons who are regulated by an appropriate foreign

regulatory authority; and • the off-shore derivative instruments are issued after compliance with "know your client" norms. In terms of the FII Regulations, on and from May 22, 2008, no sub account of an FII is permitted to, directly or indirectly, issue off-shore derivative instruments. Investment by Qualified Foreign Investor ("QFI") QFIs include individuals, groups or associations, resident in a country that is a member of Financial Action Task Force (FATF) or a country that is a member of a group which is a member of FATF and resident in a country that is a signatory to IOSCO’s MMOU (Appendix A Signatories) or a signatory of a bilateral MOU with Securities and Exchange Board of India (SEBI). FIIs/Sub accounts/ Foreign Venture Capital Investor are not QFIs. QFIs are eligible to: 1. invest in units of a mutual fund, equity shares in public issues, to be listed on recognised stock exchange(s) and

listed equity shares through SEBI registered stock brokers, on recognized stock exchanges in India. 2. Redemp mutual fund units purchased/subscribed through direct and indirect route 3. Sell of equity shares in dematerialized form through SEBI registered stock brokers. 4. Subscribe to equity shares issued on a rights basis. 5. Receive bonus shares, shares on stock split/ consolidation. equity shares due to amalgamation, demerger or such

other corporate actions, subject to the investment limits.

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6. Tender equity shares in open offer in accordance with SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

7. Tender equity shares in open offer in accordance with SEBI (Delisting of Equity Shares) Regulations, 2009. 8. Tender equity shares in case of buy-back by listed companies in accordance with SEBI (Buyback of Securities)

Regulations, 1998 9. Purchase and sale of corporate debt securities listed on recognized stock exchange(s); 10. Sale of corporate debt securities by way of buyback or redemption by the issuer; 11. Purchase and sale of units of debt schemes of Indian mutual funds Investment by Foreign Portfolio Investors ("FPI") Under the Sebi Foreign Portfolio Investors Regulations, 2014 FPIs can seek registration under one of the three categories: 12. Category I FPI: includes government and government related investors such as central banks, governmental

agencies, sovereign wealth funds and international or multilateral organizations or agencies.

13. Category II FPI: includes mutual funds, investment trusts, insurance/reinsurance companies; banks, asset management companies, investment managers/ advisors, portfolio managers, and university funds, pension funds, university related endowments already registered with Sebi as foreign institutional investors or sub-accounts.

14. Category III FPI: include all others not eligible under Category I and II foreign portfolio investors such as

endowments, charitable societies, charitable trusts, foundations, corporate bodies, trusts, individuals and families Further RBI in A.P. (DIR Series) Circular No.112 dated March 25, 2014 has notified the Foreign Portfolio Investment’ Scheme, the salient features of which are as follows:

• Portfolio Investors registered in accordance with SEBI guidelines shall be called ‘Registered Foreign Portfolio Investor ("RFPI")’. The existing portfolio investor class, namely, Foreign Institutional Investor (FII) and Qualified Foreign Investor (QFI) registered with SEBI shall be subsumed under RFPI;

• RFPI may purchase and sell shares and convertible debentures of Indian company through registered broker on recognised stock exchanges in India as well as purchases shares and convertible debentures which are offered to public in terms of relevant SEBI guidelines/ regulations.

• RFPI may sell shares or convertible debentures so acquired

(i) in open offer in accordance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; or

(ii) in an open offer in accordance with the SEBI (Delisting of Equity shares) Regulations, 2009; or

(iii) through buyback of shares by a listed Indian company in accordance with the SEBI (Buy-back of securities) Regulations, 1998

• RFPI may also acquire shares or convertible debentures:

(i) in any bid for, or acquisition of, securities in response to an offer for disinvestment of shares made by

the Central Government or any State Government; or

(ii) in any transaction in securities pursuant to an agreement entered into with merchant banker in the process of market making or subscribing to unsubscribed portion of the issue in accordance with Chapter XB of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

(iii) The individual and aggregate investment limits for RFPIs shall be below 10% (per cent) or 24% (per

cent) respectively of the total paid-up equity capital or 10% (per cent) or 24% (per cent) respectively

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of the paid-up value of each series of convertible debentures issued by an Indian company. Further, where there is composite sectoral cap under FDI policy, these limits for RFPI investment shall also be within such overall FDI sectoral caps;

• RFPIs shall be eligible to open a Special Non-Resident Rupee ("SNRR") account and a foreign currency

account with Authorised Dealer bank and to transfer sums from foreign currency account to SNRR account at the prevailing market rate for making genuine investments in securities. The Authorised Dealer bank may transfer repatriable proceeds (after payment of applicable taxes) from SNRR account to foreign currency account ;

• RFPIs shall be eligible to invest in government securities and corporate debt subject to limits specified by the RBI and SEBI from time to time;

• The investment by RFPIs will be made subject to the SEBI (FPI) Regulations 2014, modified by SEBI/Government of India from time to time;

• RFPIs shall be permitted to trade in all exchange traded derivative contracts on the stock exchanges in India subject to the position limits as specified by SEBI from time to time;

• RFPIs may offer cash or foreign sovereign securities with AAA rating or corporate bonds or domestic

Government Securities, as collateral to the recognized Stock Exchanges for their transactions in the cash as well as derivative segment of the market.

• Any FII who holds a valid certificate of registration from SEBI shall be deemed to be a registered foreign

portfolio investor (RFPI) till 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. A QFI may continue to buy, sell or otherwise deal in securities subject to the SEBI (FPI) Regulations, 2014 for a period of one year from the date of commencement of these regulations, or until he obtains a certificate of registration as foreign portfolio investor, whichever is earlier.

• However, all investments made by that FII/QFI in accordance with the regulations prior to registration as RFPI shall continue to be valid and taken into account for computation of aggregate limit.

• RFPI shall report the transaction to RBI as being reported by FII in LEC Form as per extant practice. Note: SEBI has notified the Sebi Foreign Portfolio Investors Regulations, 2014 on January 07, 2014, under which FIIs, sub accounts and QFI categories have all been merged as FPIs, to be effective from June 30, 2014. Portfolio Investment by Non-Resident Indians A variety of methods for investing in shares of Indian companies is available to Non-Resident Indians. These methods allow Non-Resident Indians to make portfolio investments in shares and/or convertible debentures of Indian companies on a basis not generally available to other foreign investors. In addition to portfolio investments in Indian companies, the Non-Resident Indians may also make investments in Indian companies pursuant to the FDI route discussed above. The FEM Transfer Regulations enable NRIs to make portfolio investments in shares/ convertible debentures of an Indian company through a registered broker on a recognised stock exchange in India. Under the portfolio investment scheme, each NRI can purchase up to 5% of the paid-up share capital of an Indian company (both on a re-patriation and non re-patriation basis), subject to the condition that the aggregate paid-up share capital of an Indian company purchased by all NRIs through portfolio investments cannot exceed 10% (both on a re-patriation and non re-patriation basis). The 10% limit may be raised to 24% of the paid-up share capital (both on a re-patriation and non re-patriation basis) if a special resolution is adopted by the shareholders of the company. OCBs, at least 60% of which are owned by the Non-Resident Indians, OCBs, were allowed to invest by way of portfolio investments until 2001, when the RBI prohibited such investments. Further, pursuant to circulars dated September 16, 2003, and, December 18, 2003, the RBI no longer recognises OCBs as a separate category of investor. In this connection, the RBI has issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies) Regulations, 2003, notified vide Notification No. FEMA 101/2003-RB dated October 3, 2003, pursuant to which, with effect from September 16,

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2003, the facilities for OCBs under various FEMA notifications and the rules issued by the RBI thereunder were withdrawn. Transfer of shares and convertible debentures of an Indian company by a person resident outside India Subject to what is stated below, a person resident outside India may transfer the shares held by him in an Indian company in accordance with the Security Regulations. A person resident outside India (other than NRI and OCB), is generally permitted to transfer by way of sale or gift the shares held by him to any other person resident outside India (including NRIs but excluding OCBs) without the prior approval of the RBI. NRIs and erstwhile OCBs are generally permitted to transfer by way of sale or gift the shares held by them to other NRIs without the prior approval of the RBI. A person resident outside India is generally permitted to transfer any security held by him in an Indian company to a person resident in India by way of a gift. A person resident outside India is also generally permitted to sell the shares of an Indian company held by him on a recognised stock exchange in India through a registered broker. Further, RBI’s master circular dated July 2, 2012 on Foreign Investment in India, provides for general permission for the transfer of shares by a person resident outside India to a person resident in India, subject to compliance with certain terms, conditions and reporting requirements. Furthermore, a person resident in India can transfer by way of sale, shares / convertible debentures (including transfer of subscriber’s shares), of an Indian company under private arrangement to a person resident outside India, subject to the following conditions along with certain other conditions pertaining to pricing, reporting etc.: a) where the transfer of shares requires the prior approval of the FIPB as per extant FDI policy provided that the

requisite FIPB approval has been obtained and the transfer of share adheres with the pricing guidelines and documentation requirements as specified by the RBI from time to time

b) where SEBI Takeover Code are attracted, subject to adherence with the pricing guidelines and documentation requirements as specified by the RBI from time to time.

c) where the pricing guidelines under FEMA are not met provided that the resultant FDI is incompliance with the extant FDI policy and FEMA regulations in terms of sectoral caps, conditionalities (such as minimum capitalization etc.),reporting requirements, documentation, etc., the pricing for the transaction is compliant with specific/explicit, extant and relevant SEBI regulations (such as IPO, book building, block deals, delisting, open/ exit offer, substantial acquisition/ SEBI Takeover Code, and chartered accountant certificate to the effect that compliance with relevant SEBI regulations as indicated above is attached to the Form FC-TRS to be filed with the authorised dealer bank.

d) where the investee company is in the financial services sector provided that no objection certificates (NOCs) are obtained from the respective regulators/regulators of the investee company as well as the transferor and transferee entities and such NOCs are filed along with Form FC-TRS with the authorised dealer bank and guidelines pertaining to sectoral caps, conditionalities (such as minimum capitalization, etc.), reporting requirements, documentation etc., are complied with.

It may also be noted that the above general permission also covers transfer of shares / convertible debentures of an Indian company by a resident to a non-resident, engaged in an activity earlier covered under the Government route but now falling under automatic route of RBI, as well as transfer of shares by anon-resident to an Indian company under buyback and / or capital reduction scheme of the company. However, this general permission would not be available for the above transactions if they are not meeting the pricing guidelines or in case of transfer of shares / debentures by way of gift from a resident to anon-resident / non-resident Indian. Any transfer of shares of companies engaged in sector falling under the Government approval route, from residents to non-residents by way of sale or otherwise, requires prior Government approval. Furthermore, in case any transfer of shares result in foreign investments in the Indian company breaching the stipulated sectoral caps, the same would also require prior Government approval. Furthermore, prior approval of RBI would also be required: (a) in case of transfer of shares or convertible debentures from residents to non-residents by way of sale where the non-resident acquirer proposes deferment of payment of the amount of consideration; (b) transfers which do not conform to the pricing guidelines of RBI; and (c) in case of transfer of shares from non-resident Indian to non- resident. A person resident outside India is not permitted to purchase shares of an Indian company on a stock exchange without the prior approval of the RBI, unless such person is registered as an FII. The RBI and the SEBI by their circulars dated

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January 13, 2012 have allowed non-resident investors (other than the SEBI registered FIIs and the SEBI registered foreign venture capital investors) who meet the ‘know your customer’ requirements of SEBI, called Qualified Foreign Investors ("QFIs") to purchase shares of an Indian company on the stock exchange, in the manner specified by the RBI and the SEBI. A QFI is not permitted to hold more than 5% of the paid-up capital of the Indian company, and the aggregate investment by all QFIs must not exceed 10% of the paid-up capital of the company. The limits specified above are over and above the FII and NRI investment ceilings prescribed under the portfolio investment scheme for foreign investment in India. Further, whenever there are composite sectoral caps, under the extant FDI policy, these aforesaid limits for QFI investments in equity shares shall also be within such overall FDI sectoral caps. Any person resident outside India seeking to sell Shares issued to them pursuant to conversion of the Bonds or otherwise transfer such Shares, whether or not through a stock exchange, should seek advice of their Indian legal advisers as to the applicable requirements. Issue of Foreign Currency Convertible Bonds ("FCCBs") The Ministry of Finance, though the Depositary Receipt Mechanism Scheme, allowed Indian corporates to issue FCCBs. This Scheme has been amended from time to time by the Ministry of Finance ("MOF") and certain relaxations in the guidelines have also been notified by the RBI. The relevant regulations provide that an Indian company may issue FCCBs to person's resident outside India subject to the approval of the RBI in certain cases. Any Indian company issuing such FCCBs is required to comply with certain reporting requirements prescribed by the RBI. The relevant regulations read with the Master Circular on External Commercial Borrowings and Trade Credits dated July 2, 2012 issued by the RBI, from time to time are also applicable to FCCBs. Indian Corporate in real sector-industrial sector-infrastructure sector can avail of ECB up to US$ 750 million or equivalent per financial year under the automatic route These limits are also applicable to FCCBs under the External Commercial Borrowings Guidelines and Indian companies may issue FCCBs subject to, inter alia, the following conditions: (i) FCCBs up to US$20 million or equivalent are required to have a minimum average maturity period of three

years and FCCBs above US$20 million and up to US$750 million or equivalent are required to have a minimum average maturity of five years. The RBI has issued a circular dated December 8, 2008, listing various conditions pursuant to which Indian companies may buyback/prepay their outstanding FCCBs. See "FCCB Buyback Guidelines";

(ii) the issue of FCCBs shall be subject to the foreign direct investment sectoral caps prescribed by the MOF; (iii) public issues of FCCBs are to be made through reputable lead managers; (iv) FCCBs cannot be issued with attached warrants; (v) the "all in cost" interest rate ceiling for the issue of FCCBs, having a minimum average maturity period of

three years up to five years, should not exceed six-month LIBOR plus 3.5 per cent and, in the case of FCCBs having a minimum average maturity period of more than five years, should not exceed six-month LIBOR plus 5.0 per cent.

(vi) FCCB proceeds are to be used for investment purposes (such as the import of capital goods, new projects and modernisation/expansion of existing production units) in the real sector-industrial sector including small and medium enterprises and the infrastructure sector in India and may also be used in the first stage acquisition of shares in a disinvestment process or in the mandatory second stage offer to the public under the Indian Government's disinvestment programme for shares of a public sector undertaking, overseas direct investment in joint ventures, wholly-owned subsidiaries or the expansion of existing joint ventures or wholly-owned subsidiaries. FCCB proceeds are not permitted to be used for working capital purposes, general corporate purposes or for repayment of existing Rupee loans;

(vii) FCCB proceeds may not be used for on-lending and investment in stock markets and real estate (other than permitted development of integrated townships), or acquiring a company (or part thereof) in India by a corporate;

(viii) proceeds from the issue of the FCCBs after deduction of the amounts equal to the commissions, fees and expenses of the arranger (provided that such amounts do not exceed the ceiling as may be approved by the MOF) are to be parked overseas until actually required in India;

(ix) private placement shall be with banks, multilateral and bilateral financial institutions, foreign collaborators or foreign equity holders having a minimum holding of 5 per cent of the paid up capital of the issuing company. The private placement of FCCBs with unrecognised sources is prohibited;

(x) issue-related expenses shall not exceed 4.0 per cent of issue size for public issues and 2.0 per cent. for private

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placements; and (xi) FCCBs issued under the automatic approval route for meeting Rupee expenditure are required to be hedged

unless there is a natural hedge in the form of uncovered foreign exchange receivables. MOF notification dated August 31, 2005 The MOF issued a notification dated 31 August 2005 amending the FCCB scheme. The following are aspects which are pertinent to the Offering: (1) The issuer must be eligible to raise funds from Indian capital markets and should not have been restrained from

accessing the securities market by the SEBI. (2) Overseas Corporate Bodies who are not eligible to invest in India through the portfolio route and entities that

are prohibited from buying, selling or dealing in securities by the SEBI are not eligible to subscribe to the FCCBs.

(3) The MOF has issued a notification dated November 21, 2008 amending the pricing norms for FCCB issues. The pricing of FCCBs is now as follows: "The pricing of the FCCBs should not be less than the average of the weekly high and low of the closing prices of the shares quoted on the stock exchanges during the two weeks preceding the relevant date. The "relevant date" is the date of the meeting in which the board of directors of the company or a committee of directors duly authorised by the board of directors of the company decides to open the proposed issue."

The Board of Directors at its meeting held on December 30, 2013 decided to issue FCCBs. Pursuant there to, the Board of Directors at its meeting held on May 08, 2014 decided to issue Bonds aggregating to US$16,000,000 (including an over allotment option of US$ 2,000,000). The Initial Reference Price calculated as aforesaid is Rs. 31.53. FCCB Buyback Guidelines The RBI has, by its circular dated June 30, 2011, ("FCCB Buy Back Circular"), permitted Indian companies to buyback/prepay their outstanding FCCBs for a period until March 31, 2012, both under the automatic and approval route subject to complying with the conditions prescribed in the FCCB Buy Back Circular and any subsequent modifications thereto. Automatic Route Indian companies may prematurely buyback FCCBs subject to compliance with the following terms and conditions: (1) the buyback value of the FCCB shall be at a minimum discount of 8 per cent on the book value; (2) the funds used for the buyback shall be out of existing foreign currency funds held either in India (including

funds held in the EEFC account) or abroad and / or out of fresh ECB raised in conformity with the current ECB norms; and

(3) where the fresh ECB is co-terminus with the outstanding maturity of the original FCCB and is for less than three years the all-in-cost ceiling should not exceed 6 months Libor plus 200 bps as applicable to short term borrowings

Approval Route: Companies may be permitted to buyback FCCBs up to US$ 100 million of the redemption value per company, out of their internal accruals with the prior approval of the Reserve Bank, subject to: (1) minimum discount of 10 per cent of book value for redemption value up to US$ 50 million; (2) minimum discount of 15 per cent of book value for the redemption value over US$ 50 million and up to US$

75 million; and (3) minimum discount of 20 per cent of book value for the redemption value of over US$ 75 million and up to

US$ 100 million. Companies complying with the above conditions may be submitted, together with the supporting documents, through the designated AD Category - I bank, to the Chief General Manager-in-Charge, Reserve Bank of India, Foreign Exchange Department, ECB Division, Central Office, 11th Floor, Central Office Building, Shahid Bhagat Singh Road, Mumbai-400 001 for consideration.

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The entire process of the buyback should be completed by March 31, 2012. Redemption of FCCB The RBI has, by its circular dated July 4, 2011, ("FCCB Redemption Circular") (The directions contained in FCCB Redemption Circular have been issued under sections 10 (4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.), permitted Indian companies to restructure or redeem their outstanding FCCBs, both under the automatic and approval route subject to complying with the conditions prescribed in the FCCB Redemption Circular and any subsequent modifications thereto. RBI provided a window to facilitate refinancing of FCCBs by the Indian companies who may be facing difficulty in meeting the redemption obligations. Therefore RBI has authorised designated AD Category - I banks to allow Indian companies to refinance their outstanding FCCBs, subject to compliance with the terms and conditions set out hereunder: - 1. Fresh ECBs/ FCCBs shall be raised with the stipulated average maturity period and applicable all-in-cost being

as per the extant ECB guidelines; 2. The amount of fresh ECB/FCCB shall not exceed the outstanding redemption value at maturity of the

outstanding FCCBs; 3. The fresh ECB/FCCB shall not be raised six months prior to the maturity date of the outstanding FCCBs; 4. The purpose of ECB/FCCB shall be clearly mentioned as ‘Redemption of outstanding FCCBs’ in Form 83 at

the time of obtaining Loan Registration Number from the Reserve Bank; 5. The designated AD - Category I bank should monitor the end-use of funds; 6. All other aspects of ECB policy under the automatic route, such as, eligible borrower, recognised lender, end-

use, prepayment, refinancing of existing ECB and reporting arrangements shall remain unchanged; 7. ECB / FCCB beyond US$ 500 million for the purpose of redemption of the existing FCCB will be considered

under the approval route; and 8. ECB / FCCB availed of for the purpose of refinancing the existing outstanding FCCB will be reckoned as part

of the limit of US$ 750 million available under the automatic route as per the extant norms. 9. RBI further restricted restructuring of FCCBs involving change in the existing conversion price. But any

proposal for restructuring of FCCBs not involving change in conversion price will, however, be considered under the approval route depending on the merits of the proposal. This policy will be subject to review at an appropriate time depending upon evolving macroeconomic conditions and other relevant factors.

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LITIGATION AND DISPUTES The following are the details of material litigations and disputes involving our Company and our Subsidiaries:

A. FEMA Matters 1. RBI Compounding Application

In September 2007 Directorate of Enforcement (DOE) had made enquiries under the provisions of FEMA with respect to certain transactions of the Company. The Company has submitted all the required information and till date no Show Cause notice has been issued by DOE. In view of the above, the RBI has considered the Company to be under investigation of DOE and advised the Company to opt for compounding in respect of the following transactions, between September 2007 and June 2009, under the Automatic route instead of Approval route:

investment of U.S. $ 82.77 million and remittance of U.S. $ 10 million to our Subsidiary MIL, which were made beyond the approved validity period;

Investment of U.S. $ 17.31 million in our Subsidiary MOL Investment of U.S. $ 100,000 in our Subsidiary MOHPL; and disinvestment in our Subsidiary MOL

Our Company is in the process of filing the addendum to the original compounding applications in respect of all the aforementioned transactions as advised by RBI.

B. Commercial Matters

1. Chennai Port Trust and the Company Our Company has sent a legal notice to Chennai Port Trust for illegal contract termination and invocation of bank guarantee in respect of to deepening of eastern side of Dr.Ambedkar Dock Basin including alongside berths of Second Container Terminal, Jawahar Dock Basin and Berths and Maintenance Dredging at entrance Channel in Chennai under Letter of Acceptance dated August 10, 2011. In its legal notice our Company has also demanded recovery of the bank guarantee amounts encashed by Chennai Port Trust and has claimed damages for return of amounts under the bank guarantee invoked by Chennai Port Trust for alleged non commencement of work on the project by our Company.Our Company has further claimed that there was a delay of 6 days in terminating the contract and the liquidated damages payable would include only the damages payable under the contract, including the difference in getting the project done by someone else and the liquidated damages for the delay in the completion of the project, which can be set off against the bank guarantee already encashed by Chennai Port Trust. Our Company has claimed Rs. 60,817,263 and Chennai Port Trust has claimed Rs. 825,625,775. A settlement meeting took place on October 22, 2012 between the concerned parties. Thematter is pending.

2. The Company v. Dredging Corporation Of India Limited (DCI)

Our Company has invoked arbitration proceedings against DCI for termination and wrongful invocation of performance bank guarantee by DCI and for recovery of outstanding hire payments under the charter party agreement dated September 23, 2009 in respect of project for deepening of approach channel at Paradip Port. Our Company has filed its statement of claims to which DCI has filed a counter claim stating that the work to be conducted by the Company was part of a larger contract handed over by Paradip Port Trust to DCI, and has alleged that it has incurred additional expenditure of Rs. 590,000,000 - due to our Company’s failure to carry out dredging activities. Our Company has in its response to DCI’s allegation stated that the delay in commencement of dredging was due to delay caused by DCI as a result of its uncertainty in the survey launch, and also due to adverse weather conditions such as cyclones which damaged the dredgers. Despite such circumstances our Company had dredged the initial section with limited delay but without receiving any payments from DCI. It is only after submission of multiple invoices thereafter than DCI cleared the first invoice.Our Company has made a claim for Rs.379,553,815and the DCI has made a counter claim for Rs.454,572,417. The arbitration is currently pending.

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3. The Company v. DCI

Our Company has invoked arbitration proceedings against DCI in relation to three separate disputes under the Sethusamudram Ship Channel Project (SSCP) project, and in connection with the following dredgers (1)TSHD "BanwariPrem" (Present Name "DarshaniPrem"), (2) TSHD "Tridevi Prem" & (3) TSHD "BhagwatiPrem". The arbitration proceedings are with respect to disputes with DCI arising out of the charter party Agreements dated October 12, 2007, August 23, 2007 and April 24, 2008 respectively, under which our Company was appointed for carrying out dredging on insitu basis in the Palk Strait area for the Sethusamudram Ship Channel Project (SSCP). Our Company has referred these disputes to arbitration seeking payment from DCI of unpaid outstanding hire/dues and damages aggregating to an amount of Rs. 14,44,986,083 on account of wrongful and early termination of the contract by DCI. The arbitrations are currently pending.

4. The Company v Cochin Port Trust ("CoPT")

Our Company has invoked arbitration proceedings against CoPT for fraudulent encashment of performance bank guarantee and unpaid outstanding dues and other costs, expenses arising out of Agreement dated May 27, 2011 between the parties for capital dredging by our Company of basin in front of the international container transhipment terminal at Vallarpadam, Cochin port. We have claimed damages for return of bank guarantee that has been encashed by CoPT due to alleged breach of the terms of the Agreement and the delay by our Company in completion of the project. Our Company in its defense has stated that the delay was effected due to the inability of CoPT to maintain the designed depths of the adjacent channels and non payment of the valid dues which resulted in the delay of completion of the work. It has sought for repayment of dues and the bank guarantee. Our Company has claimed Rs. 1,416,577,973 whereas the Cochin Port Trust has presented a counter claim of Rs. 3,297,163,531. The arbitration is currently pending.

5. Writ Petition filed by The Company v. CoPT

Cochin Port Trust by its letter dated September 11, 2012, intimated us that with effect from August 2012, the Company was debarred from participating in any future contracts of Cochin Port Trust for a period of five years. We have challenged this letter order in the High Court of Kerala by way of a writ petition on the grounds that the same is inter alia arbitrary and has been issued without affording our Company an opportunity to present its case. The Kerala High Court has passed an interim order dated December 12, 2012 in effect clarifying that our Company may participate in contracts with institutions other than the CoPT. The Writ Petition is currently pending.

6. The Company v New India Assurance Co Ltd

Our Company has filed a consumer case before the National Consumer Dispute Redressal Commission against New India Assurance for recovery of Rs.54.24 crores. Our Company had signed Discharge Vouchers and accepted a settlement of Rs.147 Crores towards full and final settlement of its claim towards constructive total loss with respect to Prem Divya (explosion). Our Company is claiming deficiency of services provided by New India Assurance and has filed for recovery of the balance Rs.54.24 Crores due and payable to it under the H&M cover. The matter is pending.

7. MLSL and Ceylon Shipping Corporation Limited ("CSCL")

MLSL has made a reference to arbitration with respect to a purported breach by it of Shipping and Lightering Agreement entered into by it with CSCL. MLSL had claimed U.S. $ 3,904,190 whereas CSCL has claimed and amount of U.S. $ 173,000. Though CSCL has challenged MLSL’ entitlement to refer the matter to arbitration, both the parties have nominated one arbitrator each.

8. Dispute with respect to GarvPrem

MLSL has made a claim from Louis Dreyfus Commodities Suisse SA for (i) a sum of US $ 1,247,182.31 from arising out of the hire and use of the vessel GarvPremand (ii) a sum of 440,311 Euros as additional port costs incurred as a result of dangerous cargo. MLSL has decided to proceed with arbitration and has appointed an arbitrator to settle the dispute.

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9. Dispute with respect to GauriPrem

MLSL has claimed a sum of US$ 964,102.52 from Fratelli D’Amato SPA of Italy for hire and use of GauriPrem out of which a sum of US$ 331,420 has been remitted while US$ 647,925 is pending. The matter has been referred to arbitration.

10. Dispute with North China Shipping ("NCS")/ChitraPrem MLSL entered into a charterparty dated January 7, 2011 with NCS, whereby NCS chartered the vessel ChitraPrem upto Dec 2016. The vessel was redelivered on December 4, 2013. Hence an amount of approximately U.S. $ 11,000,000 has been claimed by MLSL towards outstanding charter hire amount of U.S. $ 4,000,000 and damagesof U.S. $ 7,000,000 for premature redelivery by NCS. Arbitration has been invoked on January 23, 2014 under the London Maritime Arbitrators Association (LMAA) and is pending for appointment of arbitrator by NCS.

11. Royal Global Exports Private Limited (Royal) v. MCS

Royal has initiated arbitration against MCS, claiming that MCS has failed to carry out a shipment of coal under an alleged Agreement dated December 8, 2009. MCS had submitted that, originally negotiations were conducted for two contracts of which one materialized and was executed. It is the contention of MCS that the second contract, which is the subject matter of the arbitration was never concluded or executed. The question of whether there was a concluded contract and if there was one whether there was any breach was the subject matter of a preliminary hearing whichwas concluded in November 21, 2013 and the preliminary award is awaited. Royal has claimed damages in the sum of U.S. $ 706,750, which claim for damages will be argued on its merits should the Arbitral Tribunal come to the conclusion that there was a concluded agreement in its preliminary award.

12. Hindustan Zinc Limited ("HZL") v. MCS MCS and HZL entered into a contract for supply of 200,000 MT of coal by MCS, to be supplied in four shipments of 50,000 MT each. MCS has alleged that it was unable to deliver the fourth and last shipment due to force majeure resulting in frustration of the contract. However HZL en-cashed the bank guarantee and invoked arbitration to recover its risk purchase cost. MCS in its defense has claimed that it had not been paid by HZL for the invoices that were raised and they had delayed in supplying the fourth installment of the barge shipment due to force majeure circumstances in spite of which the bank guarantee was invoked. MCS has also made a counter claim for reimbursement of the bank guarantee and the part payment to be made by HZL. HZL has claimed U.S. $1,084,618.44, which is the amount receivable from MCS after adjustment of amounts payable to MCS and encashment of Bank Guarantee while MCS has made a counter claim of U.S. $ 448,517.94 towards outstanding invoices along with U.S. $ 620,000.00 towards the illegal encashment of bank guarantee both aggregating to U.S. $ 1,068,517.94. The Counter Claim filed by MCS for the outstanding invoices is admitted by HZL. The dispute is presently pending before an arbitral tribunal at the stage of cross examination of MCS’s representative. The next date of hearing is still to be fixed.

13. DAMPSKIBSSELSKABET Norden (D.S Norden) v MCS Pursuant to Charter Party Agreement dated December 18, 2013 between the MCS and D.S. Norden, D/S Norden was required to provide M V Aenous(Vessel) on charter to MCS for carriage of bulk coal from Indonesia to Krishnapatnam, India. During these operations, the barges which were along side were tied on the Master’s instructions to the aft of the Vessel during the New Years period when no loading operation was being carried out made contact with the Vessel causing some damage to the Vessel’s hull, which was subsequentlyrepaired by the D/S Norden. D/S Norden is claiming repair cost of U.S. $ 325,000 and an amount of approx. U.S. $ 700,000 towards delays and bunker cost. Recently arbitration has been invoked and arbitrators have been appointed by both parties.

14. MCS v. Mining Resources Private Limited

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Arbitration proceedings have been invoked by MCS for claiming an amount of U.S. $ 410,685 in respect of dispute with respect to agreement dated June 21, 2012 entered between MCS and Mining Resources for sale and purchase of 100,000 MT of coal in two tranches of approximately 50,000 MT each. The dispute has arisen due to failure by Mining Resourcesto perform its obligations under the second tranche, as a result of which MCS terminated the agreement by its notice dated January 28, 2013. The matter is presently pending appointment of Sole Arbitrator.

15. MCS V. Rashmi Cements Limited

MCS has served notice under section 434 of the Companies Act, 1956 for winding up of Rashmi Cements for claiming an amount of U.S. $ 101,071.35. The said notice has been issued in connection with Sale and Purchase Agreement dated March 20, 2012 read with Addendum dated May 14, 2012 between the parties, pursuant to which MCS shipped the entire contract quantity of 27,500 MT coal to Rashmi Cements against which Rashmi Cements is yet to pay 5% of the contract price, which MCS has been unable to encash due to expiry of the LC.Rashmi Cements has in its reply dated October 31, 2013 to the notice, denied all allegations made by MCS.

16. Broadtec v/s National Director of Mines of Ministry of Natural Resources, Mozambique:

National Director of Mines of Ministry of Natural Resources, Mozambique has revoked mining, prospecting and research license no. 833L granted to Broadtec. Broadtec has challenged the illegal termination before the Administrative Court-First Section, Mozambique. The Administrative Court has held revocation letter as null and void.

C. Income Tax Matters The Income Tax Department has made certain additions to total income on account of inter alia of transfer pricing related items such as loans to associate enterprises, corporate guarantees and letters of comfort for loans availed by Subsidiaries and step down Subsidiaries and raised the demands for various Assessment Years, particulars of which are given below, in respect of which our Company is in appeal at various forums. The matters are currently pending. Assessment Year Demand raised(Rs in Millions) Forum at which appeal is

pending 2007-08 37.59 ITAT 2008-09 15.68 ITAT 2009-10 739.31 CIT (A) 2010-11 12.79 CIT(A)

D. Service Tax Matters

The Service Tax Department has issued show cause notice for various years in respect of service tax on various expenditures incurred in foreign currency, outside India. Company has replied to the show cause notice and claimed that these are not taxable services the matter is pending before Commissioner of Income Tax.The details are given below:

Financial Year Demand raised(Rs in Millions)

2006-07 148.59 2007-08 43.21 2008-09 234.20 2009-10 254.94 2010-11 64.32 2011-12 55.16 2012-13 17.30

E. Company Law Matters

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Our Company is in receipt of the following show cause notices ("SCNs") issued by the Registrar of Companies,

Mumbai ("RoC") at the end of April 2014 for alleged violation of certain sections of the Companies Act 1956:

Sr No Particulars

1. SCN under Section 301(1) of the Companies Act, on grounds of alleged

discrepancies in our Company’s register of contracts, companies and firms in which

directors are interested, for FY 2010-2011.

2. SCN under Section 628 of the Companies Act, on grounds of alleged non-distinct

disclosure of profit on sale of assets in the profit and loss account during FY 2010

3. SCN under Section 68 of the Companies Act in relation to utilization of proceeds of

issue of 2,77,80,000 warrants to Promoters on preferential basis and the

consequential conversion of eighty nine lakh warrants into equity shares. It has been

alleged that our Company has not utilized the proceeds of the said issue for the

purpose for which money was raised.

4. Notice under Section 234 of the Companies Act directing our Company to provide

informa (Power of Registrar to call for information or explanation)

ROC in response to the Company’s reply has called for additional details.

Our Company has responded to the aforestated SCNs and has provided explanations/submissions denying the

allegations, and has further requested that the SCNs be withdrawn against the Company.

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SUBSCRIPTION AND SALE

In connection with this offering, the Lead Manager (or its affiliates) may, for its own accounts, enter into asset swaps, credit derivatives or other derivative transactions relating to the Bonds or the Shares at the same time as the offer and sale of the Bonds or in secondary market transactions. As a result of such transactions, the Lead Manager (or their affiliates) may hold long or short positions in such Bonds or the underlying Shares. These transactions may comprise a substantial portion of the offering and no disclosure will be made of such positions other than as required by applicable laws and directives. The Lead Manager may, from time to time, engage in transactions with and perform services for the Issuer and/or its Subsidiaries in the ordinary course of its business. The Lead Manager may, to the extent permitted by applicable laws, over-allot and effect transactions in any over-the-counter market or otherwise in connection with the distribution of the Bonds with a view to supporting the market price of the Bonds at levels higher than those which might otherwise prevail in the open market. There is no obligation on the Lead Manager to do this. Such stabilising, if commenced, may be discontinued at any time, and must be brought to an end after a limited period. On 30 March 2004, the European Parliament approved the draft Transparency Directive as part of the EU Financial Market Action Plan. The current draft of the Transparency Directive contains potentially onerous provisions on both EU and non-EU issuers where such issuers have securities admitted to trading on an EU regulated market, for example Luxembourg. In particular, the Issuer may be required to publish financial statements in the EU which are prepared in accordance with, or reconciled to, International Financial Reporting Standards. Where the Transparency Directive is implemented in Luxembourg in a manner that is burdensome on the Issuer, the Issuer may seek an alternative listing for the Bonds on a stock exchange outside the EU approved by the Trustee, provided that the Trustee is satisfied that the interests of the holders of the Bonds would not be thereby materially prejudiced. GENERAL The Bonds will be offered and sold by the Issuer and the Lead Manager solely on a private placement basis pursuant to the laws of all relevant jurisdictions. No action has been or will be taken by the Issuer or the Lead Manager that would permit a public offering, or any other offering under circumstances not permitted by applicable law, of the Bonds or the Shares issuable upon conversion of the Bonds, or possession or distribution of this Offering Circular or any other offering or publicity material relating to the Bonds or the Shares issuable upon conversion of the Bonds, in any country or jurisdiction where action for that purpose is required. Neither the Bonds nor any Shares issuable upon conversion of the Bonds may be offered or sold, directly or indirectly, and neither this Offering Circular nor any other offering material or advertisements in connection with the Bonds or the Shares issuable upon conversion of the Bonds may be distributed or published by the Issuer or the Lead Manager in or from any country or jurisdiction, except in compliance with all applicable rules and regulations of any such country or jurisdiction. United States The Bonds and the Shares issuable upon conversion of the Bonds have not been and will not be registered under 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. The Lead Manager has represented and agreed that it has not offered or sold, and agrees that it will not offer or sell any Bonds or the Shares issuable upon conversion of the Bonds constituting part of its allotment within the United States. Accordingly, neither it, its affiliates nor any persons acting on its or their behalf have engaged or will engage in any directed selling efforts with respect to the Bonds or the Shares issuable upon conversion of the Bonds. The Bonds will be offered and sold outside India and the United States in reliance upon on exemption provided by Regulation S. Terms used in this section have the meanings given to them by Regulation S. United Kingdom The Lead Manager has represented and agreed with the Company that: (i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the "FSMA")) received by it in connection with the issue or sale of any Bonds in

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circumstances in which section 21(1) of the FSMA does not apply to the Issuer and (ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Bonds in, from or otherwise involving the United Kingdom. European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State") an offer to the public of any Bonds may not be made in that Relevant Member State except that an offer to the public in that Relevant State of any Bonds may be made at any time under the following exemptions from the Prospectus Directive, if they have been implemented in the Relevant Member State:

(i) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

(ii) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover of more than €50,000,000 as show in its last annual or consolidated accounts; or

(iii) in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of the Bonds shall require the Company or the Lead Manager to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article of the Prospectus Directive.

For the purposes of this provision, the expression an offer of Bonds to the public in relation to any Bonds 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 Bonds to be offered so as to enable an investor to decide to purchase or subscribe for the Bonds, as the meaning may be varied in that Member State by an measure implementing the Prospectus Directive in that Member State. The expression Prospectus Directive means the Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

India The Lead Manager has represented and agreed that that this Offering Circular has not been and will not be registered as a prospectus with the Registrar of Companies and that the Bonds will not be offered or sold in India, nor has it circulated or distributed nor will it circulate or distribute the Offering Circular or any other offering document or material relating to the Bonds, directly or indirectly, to the public or any members of the public in India. Hong Kong The Lead Manager has represented and agreed that (i) it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any Bonds other than to persons whose ordinary business is to buy or sell shares or debentures, whether as principal or agent, or in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32) of Hong Kong and (ii) it has not issued and will not issue any advertisement, invitation or document relating to the Bonds, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Bonds which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made thereunder. Japan The Lead Manager has represented and agreed that the Bonds have not been and will not be registered under the Securities and Exchange Law of Japan and that the Bonds which it subscribes will be subscribed by it as principal and that, in connection with the initial offering of the Bonds, it will not, directly or indirectly, offer or sell any Bonds in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan), except pursuant to an exemption from the

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registration requirements of, and otherwise in compliance with, the Securities and Exchange Law of Japan and other applicable laws and regulations of Japan. Singapore The Lead Manager has acknowledged that this Offering Circular has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the Lead Manager has represented, warranted and agreed that it has not offered or sold and will not offer or sell any Bonds or cause such Bonds to be made the subject of an invitation for subscription or purchase, nor has it circulated or distributed nor will it circulate or distribute this Offering Circular and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of such Bonds, whether directly or indirectly, to the public or any member of the public in Singapore other than (i) to an institutional investor or other person specified in Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a sophisticated investor, and in accordance with the conditions, specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Notice to Investors The Bonds may not be offered or sold directly or indirectly in India. The Bonds and the Shares issuable upon conversion of the Bonds have not been registered under the Securities Act and the Bonds may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Therefore, the Bonds are being offered and sold outside the United States in accordance with Rule 903 or Rule 904 of Regulation S under the Securities Act. Except in certain limited circumstances, interests in the Bonds may only be held through interests in the Global Certificate. Such interests in the Global Certificate will be shown on, and transfers thereof will be effected only through, records maintained by Euroclear and Clearstream, Luxembourg and their respective direct and indirect participants. Each purchaser of the Bonds, by accepting delivery of such Bonds, will be deemed to have acknowledged and represented to and agreed as follows (terms used herein that are defined in Regulation S are used as defined therein): 1) The Bonds and the Shares issuable upon conversion of the Bonds have not been and are not expected to be

registered under the Securities Act or with any securities regulatory authority of any state of the United States and are subject to significant restrictions on transfer.

2) Each owner purchasing prior to the expiration of 40 days after the later of the commencement of the offering of the Bonds and the last related closing date (the "Distribution Compliance Period") is purchasing the Bonds in an offshore transaction meeting the requirements of Rule 903 or Rule 904 of Regulation S.

3) The Bonds and the Shares issuable upon conversion of the Bonds may not be sold, pledged or transferred to, or for the account or benefit of, any U.S. person during the Distribution Compliance Period.

4) Such owner will not offer, sell, pledge or otherwise transfer any interest in the Bonds or the Shares issuable upon conversion of the Bonds except as permitted by the applicable legend set forth in paragraph (5) below.

5) The Bonds will bear legends to the following effect, unless the Issuer determines otherwise in compliance with applicable law, and that it will observe the restrictions contained therein:

THE BONDS ("BONDS") EVIDENCED HEREBY AND THE SHARES OF MERCATOR LIMITED ISSUABLE UPON CONVERSION OF THE BONDS HAVE NOT BEEN AND ARE NOT EXPECTED TO BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND PRIOR TO THE EXPIRATION OF 40 DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING OF THE BONDS AND THE LAST RELATED CLOSING DATE

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(THE "DISTRIBUTION COMPLIANCE PERIOD"), SUCH BONDS AND SHARES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO ANY U.S. PERSON. EACH HOLDER AND BENEFICIAL OWNER, BY ITS ACCEPTANCE OF THE BONDS, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING AND FOLLOWING RESTRICTIONS. UPON THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD, THIS LEGEND (BUT NOT THE LEGEND SET OUT IN THE IMMEDIATELY FOLLOWING PARAGRAPH) SHOULD BE REMOVED AND THE BONDS AND THE SHARES ISSUABLE UPON CONVERSION OF THE BONDS SHALL NO LONGER BE SUBJECT TO THE RESTRICTIONS PROVIDED IN THIS LEGEND, PROVIDED THAT AT SUCH TIME AND THEREAFTER THE OFFER OR SALE OF THE BONDS AND THE SHARES ISSUABLE UPON CONVERSION OF THE BONDS WOULD NOT BE RESTRICTED UNDER ANY APPLICABLE SECURITIES LAWS OF THE UNITED STATES OR OF THE STATES OR TERRITORIES OF THE UNITED STATES. EACH HOLDER AND BENEFICIAL OWNER, BY ITS ACCEPTANCE OF THE BONDS , REPRESENTS THAT IT UNDERSTANDS AND AGREES THAT (I) IT IS NOT LOCATED IN INDIA, (II) IT IS NOT A RESIDENT OF INDIA AND (III) IT IS NOT PURCHASING FOR, OR FOR THE ACCOUNT OR BENEFIT OF, ANY SUCH PERSON THE BONDS OR THE SHARES OF MERCATOR LIMITED ISSUABLE UPON CONVERSION OF THE BONDS AND UNLESS, IN ANY SUCH CASE, THE ISSUER DETERMINES OTHERWISE, IN COMPLIANCE WITH APPLICABLE LAW, THE BONDS MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO ANY PERSON LOCATED IN INDIA, TO ANY RESIDENT OF INDIA OR TO, OR FOR THE ACCOUNT OF, ANY SUCH PERSON.

6) The Issuer has the absolute right at its discretion to reject all or part of any application for the Bonds and return

the subscription monies accordingly without interest.

7) Such owner is entitled to subscribe for the Bonds under the laws of all jurisdictions, which apply to it and it has fully observed such laws and has obtained all necessary consents and completed all necessary formalities.

8) The Company and the Lead Manager and their respective affiliates and others will rely on the truth and accuracy of the foregoing acknowledgements, representations and agreements.

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GENERAL INFORMATION

(1) Our Company is incorporated in India under the Corporate Identity Number (CIN)

L63090MH1983PLC031418. Our Company's registered office is situated at 3rd Floor, Mittal Tower, B-Wing, Nariman Point, Mumbai-400021, India

(2) The issue of the Bonds and the Shares issuable on conversion of the Bonds was authorised by resolution of the Shareholders of our Company on February 4, 2014. The offering and the issue of the Bonds were approved by resolution of the Board passed on December 30, 2013. The Management Committee at its meeting dated May 21, 2014 decided to open the issue of Bonds. The Relevant Date Price for the conversion of the Bonds is Rs. 31.53.

(3) Our Company has received in-principle approvals from BSE and NSE dated May 14, 2014 and May 13, 2014, respectively, for listing of the Shares issuable upon conversion of the Bonds.

(4) The Company has undertaken to have the Shares issuable upon conversion of the Bonds approved for listing

on the NSE and the BSE (following such listing). The BSE and the NSE have given in-principle approval for listing of the Shares issuable upon conversion of the Bonds. The BSE and NSE do not in any manner (i) warrant, certify or endorse the correctness or completeness of any of the contents of this Offering Circular; (ii) warrant that the Company’s securities will be listed or will continue to be listed on the BSE or NSE; or (iii) take any responsibility for the financial or other soundness of the Company, its promoters, itsmanagement or any scheme or project of the Company. Accordingly, it should not for any reason be deemed or construed that this Offering Circular has been cleared or approved by the BSE or the NSE. Every person who desires to apply for or otherwise acquires any securities of the Company should make its own independent inquiry, investigation and analysis and shall not have any claim against the BSE or the NSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription or acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.

(5) In principle approval has been received for the listing of Bonds on the SGX-ST. So long as the Bonds are

listed on the SGX-ST and the rules of the SGX-ST so require, the Company shall appoint and maintain a paying agent in Singapore, where the Bonds may be presented or surrendered for payment or redemption, in the event that the Global Certificate is exchanged for Certificates in definitive form. In addition, in the event that the Global Certificate is exchanged for Certificates in definitive form, announcement of such exchange shall be made through the SGX-ST and such announcement will include all material information with respect to the delivery of the Certificates in definitive form, including details of the paying agent in Singapore.

(6) Copies of the Memorandum and Articles of Association of our Company, the Trust Deed, the Agency

Agreement and and the published financial statements will be available for inspection during usual business hours on any weekday (except Saturdays and public holidays) at our Company's registered office and at the specified office of the Principal Agent.

(7) Our Company's audited financial statements as at and for the Financial Years 2012 and 2013 have been audited by CNK & Associates LLP (formerly Contractor, Nayak & Kishnadwala), Chartered Accountants as stated in their review report. The financial statements of our Company as of and for the nine-month periods ended December 31, 2013 and December 31, 2012 as set out in this Offering Circular have been reviewed by CNK & Associates LLP (formerly Contractor, Nayak & Kishnadwala), Chartered Accountants, as stated in their review report appearing herein. Copies in English of our Company's audited financial statements as at and for the Financial Years 2013 and 2012 and the limited reviewed (nine months) financial statements prepared in accordance with Indian GAAP, may be obtained during usual business hours at the office of the Principal Agent subject to provision of such financial statements by our Company to the Principal Agent.

(8) The Bonds have been accepted for clearance through Euroclear and Clearstream, Luxembourg. The Bonds have a Common Code of 107243216 . The International Securities Identification Number for the Bonds is XS1072432161.

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(9) Other than as otherwise stated in this Offering Circular, our Company has obtained all consents, approvals and authorisations in India required to be obtained at this stage in connection with the issue and performance of the Bonds.

(10) Other than as otherwise stated in this Offering Circular, there has been no significant change in the financial or trading position of our Company since December 31, 2013 and no material adverse change in our financial position or prospects since December 31, 2013

(11) Other than as otherwise stated in this Offering Circular, our Company is not involved in any litigation or arbitration proceedings or any regulatory investigations relating to claims or amounts which are material in the context of the issue of the Bonds or to our Company's results of operations nor, so far as our Company is aware, is any such litigation or arbitration pending or threatened.

(12) Subject to the relevant provisions of the Civil Code, (i) submission by the Company to the jurisdiction of the

English courts, and the appointment of an agent for service of process, are valid and binding under Indian law and (ii) the choice of English law as the governing law of the Bonds, under the laws of India, is a valid choice of law and should be honoured by the courts of India, subject to proof thereof and considerations of public policy.

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INDEX TO THE FINANCIAL STATEMENTS

Independent Auditors’ Report on Consolidated Financial Statements To the Board of Directors of Mercator Limited, We have audited the attached consolidated balance sheet of Mercator Limited (formerly known as Mercator Lines Limited) (‘the Company’) and its subsidiaries (together referred to as ‘the Group’) as at March 31, 2013, the consolidated statement of profit and loss and the consolidated cash flow statement for the year ended on that date, annexed thereto, 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 on the basis of separate financial statements and other financial information of the subsidiary companiesthat give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Company in accordance with accounting principles generally accepted in India. This 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. Auditor’s 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 auditor’s 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 Company’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 theconsolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Basis for Qualified Opinion For the purpose of consolidation, the unaudited financial statements of 7 (seven) subsidiaries have been considered by the management. We have solely relied on such financial statements as approved by the management of these subsidiaries where in the Group’s share of Net Assets of Rs.17388.75 millions as at March 31, 2013, Revenues of Rs. 5927.48millions and Loss for the year of Rs. 4236.85 millions for the year ended on that date in the Consolidated Financial Statements.Accordingly, our assurance on the Statement in so far as it relates to the amounts included in respect of these subsidiaries is based solely on the reports of the management of these subsidiaries which have been furnished to us. Opinion In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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a. in the case of the consolidated balance sheet, of the state of affairs of the Mercator Group as at March 31, 2013; b. in the case of the consolidated statement of profit and loss, of the loss of the Mercator 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 Mercator Group for the year ended on

that date. Other Matter We did not audit the financial statements of twenty two subsidiaries, whose financial statements, prepared under generally accepted accounting principles (‘GAAPs’) accepted in the respective countries, reflect in relation to the amounts considered in the consolidated financial statements, total assets (net) ofRs. 2099.55 millions as at 31st March, 2013, total revenues of Rs.22450.46 millions and net profit Rs.1407.39 of millions for the year ended on that date. These financial statements and other financial information have been audited by other auditors, who have submitted their audit opinions, prepared under generally accepted auditing standards of their respective countries, to the shareholders / Board of Directors of the respective companies, copies of which have been provided to us by the Company. The management of the Company has converted these audited financial statements of the Company’s subsidiaries to accounting principles generally accepted in India, for the purpose of preparation of the Company’s consolidated financial statements under accounting principles generally accepted in India. Our opinion, thus, insofar it relates to amounts included in respect of these subsidiaries, is based solely on the reports of the other auditors under the aforementioned GAAPs in respective countries and conversion undertaken by the management and examined by us on a test basis. For and on behalf of Contractor Nayak&Kishnadwala Chartered Accountants Firm Registration No. 101961W

HimanshuKishnadwala Partner M. No 37391 Mumbai, dated 18th May 2013

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Audited Consolidated Balance Sheet as at March 31, 2013 and March 31, 2012

   As at As at    Particulars Note 31. March 2013 31. March 2012

   Amount Rs. in

Millions Amount Rs. in

Millions A EQUITY AND LIABILITIES

1 Shareholder's funds (a) Share capital 2.1 244.89 244.89 (b) Reserves and surplus 2.2 21,717.60 24,710.11 (c) Money received against share warrants 2.3 - 259.60

21,962.49 25,214.60 Minority interest 4,290.88 4,277.99

26,253.37 29,492.60 2 Non - current liabilities (a) Long-term borrowings 2.4 25,847.74 27,426.33 (b) Other long term liabilities 2.5 78.41 500.79 (c) Long-term provisions 2.6 42.89 39.86

25,969.03 27,966.98 3 Current liabilities (a) Short-term borrowings 2.7 4,549.72 3,442.41 (b) Trade payables 5,028.39 2,636.02 (c) Other current liabilities 2.8 6,457.88 7,287.10 (d) Short-term provisions 2.9 383.25 4.59

16,419.24 13,370.11

Total 68,641.64 70,829.68

B ASSETS

1 Non- current assets (a) Fixed assets (i) Tangible assets 2.10 44,814.76 56,996.26 (ii) Assets held for disposal 5,346.25 -

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(iii) Capital work in progress 358.80 312.92

50,519.81 57,309.18 Goodwill on consolidation 161.33 151.74 (b) Non-current investments 2.11 295.87 289.80 (c) Deferred tax asset 102.90 46.77 (d) Long-term loans and advances 2.12 2,107.02 1,387.15 (e) Other non-current assets 2.13 276.02 297.71

53,462.96 59,482.35

2 Current assets

(a) Current investments 2.11 54.58 117.38 (b) Inventories 2.14 351.41 932.28 (c) Trade receivables 2.15 6,571.17 5,087.53 (d) Cash and bank balances 2.16 3,410.65 2,533.20 (e) Short-term loans and advances 2.17 2,877.19 2,459.56 (f) Other current assets 2.18 1,913.69 217.38

15,178.69 11,347.33

Total 68,641.64 70,829.68

Significant Accounting Policies 1 Notes forming part of the financial statements 2 to 6

Audited Consolidated Statement of Profit and Loss for the year ended March 31, 2013 and March 31, 2012

Year Ended Year Ended Particulars Note 31. March 2013 31. March 2012

Amount Rs. in Millions

Amount Rs. in Millions

INCOME (a) Revenue from operations 2.19 37,333.54 36,999.08 (b) Other income 2.20 257.09 651.26

1 Total Revenue 37,590.62 37,650.34

EXPENSES: (a) Operating expenses 2.21 30,722.16 29,978.00 (b) Employee benefit expenses 2.22 576.50 477.26 (c) Finance cost 2.23 2,450.38 2,129.47 (d) Depreciation and amortisation expenses 4,474.82 3,824.11

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(e) Impairment of assets 879.12 - (f) Other expenses 2.24 1,716.65 717.79

2 Total Expenses 40,819.63 37,126.63

3 Profit/(Loss) before exceptional items and taxes (1 - 2) (3,229.01) 523.70

4 Less: Exceptional items 1,563.96 -

5 Profit/(Loss) before taxes (3 - 4) (4,792.96) 523.70

6 Tax expense: (a) Current tax (186.00) (249.53) (b) Short provision of tax for earlier years 0.00 - (c) Deferred Tax 54.22 27.18

Profit/(Loss) for the year before adjustment for Minority Interest (4,924.74) 301.35

Less: share of profit / loss transferred to Minority Interest 1,203.88 (95.79)

Profit/(Loss) for the period (3,720.87) 205.56

Earnings per share (Equity share of Re. 1/- Each) Basic and Diluted (In Rupees) 4.7 (15.19) 0.84 Significant Accounting Policies 1 Notes forming part of the financial statements 2 to 6

Consolidated Cash Flow Statement for the year ended March 31, 2013, and March 31, 2012

Particulars 31. March 2013 31. March 2012

Amount Rs. in

Millions Amount Rs. in

Millions A Cash Flow from Operating Activities Net Profit / (Loss) Before Tax (4,792.96) 523.70 Adjustment for: Depreciation 4,474.82 3,824.11 Impairment of assets 879.12 - Provision for doubtful debts/advances 313.77 - Gain on derivative transactions (23.96) (1.38) Interest paid 2,450.38 2,129.47

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(Profit)/Loss on fixed assets sold (net) 741.36 3.10 (Profit)/Loss on sale of investments (net) (6.86) (28.76) Interest income (55.92) (96.29) Dividend income (8.74) (0.05) Bad Debts and other amounts written off/(back) 45.03 172.55 Adjustment for foreign exchange currency translation (1,110.81) (602.02) Adjustments for exchange fluctuation (55.56) 95.40 Operating profit before working capital changes 2,849.67 6,019.82 Adjustment for: Decrease/(Increase) in Long-term loans and advances (235.35) (467.99) Decrease/(Increase) in Other non current assets 23.38 (23.38) Decrease/(Increase) in Inventories 580.87 (305.11) Decrease/(Increase) in Short-term loans and advances 117.94 314.29 Decrease/(Increase) in Other current assets (1,690.39) (214.81) Decrease/(Increase) in Trade Receivables (1,655.58) (1,316.22) (Decrease)/Increase in Other long term liabilities (28.79) 33.65 (Decrease)/Increase in Long term provisions 3.03 15.27 (Decrease)/Increase in Trade Payables 2,392.66 548.40 (Decrease)/Increase in Other current liabilities (114.42) 171.11 (Decrease)/Increase in Short term provisions 378.66 1.13 Net Cash from Operating Activities 2,621.67 4,776.16 Direct taxes paid (638.30) (263.03) Total cash from / (used in) operating activites 1,983.36 4,513.13 B Cash Flow from Investing Activities Acqusition of Fixed Assets including Capital Work in Progress (745.35) (2,744.84) Sale of Fixed Assets 4,867.93 12.16 Net inflow on account of acquisition of subsidiaries - 16.80 (Increase) / Decrease in Short-term loans and advances (1.30) 1.69 (Increase) / Decrease in Capital Advances (39.92) (19.65) (Increase) / Decrease in Current Intercorporate deposits (395.55) (243.11) (Purchase)/sale of Investment 63.59 (93.88) Investment in fixed deposits 56.35 3,018.76 Interest Income 49.71 188.08 Dividend Income 8.74 0.05 Net Cash from Investing Activities 3,864.19 136.07 C Cash Flow from Financing Activities Proceeds from Long term Borrowings (3,889.94) 1,285.71 Proceeds from Short term Borrowings 1,107.32 (5,082.20) Proceeds from issue of shares to minority shareholders 358.69 - Interest paid (2,510.49) (2,158.65) Gain on derivative transaction 23.96 1.38 Net Cash from Financing Activities (4,910.46) (5,953.76) Net Increase / (decrease) in cash and cash equivalents (A + B + C) 937.09 (1,304.56)

Cash and Cash Equivalents as at beginning of the year (Refer Note 2.16) 2,211.20 3,503.84

Add: Unrealised Foreign Exchange Fluctuation on cash and cash 1.04 11.92

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equivalents Cash and Cash Equivalents as at end of the year (Refer Note 2.16) 3,149.32 2,211.20 Cash and Cash Equivalents comprise of: Cash and Bank Balances ( Refer Note 2.16) 3,149.32 2,211.20 Notes: 1) Figures in bracket represent outflows. 2) Cash and cash equivalents include Unclaimed dividend accounts of Rs. 5.13millions (P.Y. Rs. 6.81 millions) which are not available for use by the company. 3) Previous Year's figures have been regrouped wherever necessary to confirm to the current year's classification.

Notes forming part of the consolidated financial statements

2.1 Share Capital Amount Rs.in

Millions

Particulars As at As at

31. March 2013 31. March 2012

Authorised 35,00,00,000 Equity shares of Re 1/- par value. 350.00 350.00 200,00,000 Preference shares of Rs 100/- par value. 2,000.00 2,000.00 2,350.00 2,350.00 Issued Capital 24,48,92,073 (24,48,92,073) Equity shares of Re. 1/- each fully paid up 244.89 244.89 244.89 244.89 Subscribed and Fully Paid Up Capital 24,48,92,073 (24,48,92,073) Equity shares of Re. 1/- each fully paid up. 244.89 244.89 244.89 244.89

Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period Equity Shares Particulars As at As at

March 31,2013 March 31,2012 Number of shares at the beginning 244,892,073 244,892,073 Add: Shares issued during the year - - Number of shares at the end 244,892,073 244,892,073

Terms/Rights attached to Equity shares The company has two class of shares referred to as equity shares having a par value of Re.1/- and preference shares having a par value of Rs.100/-. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferetial amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

For the period of five years immediately preceding the date as at which the balance sheet is prepared: (i) No shares were allotted pursuant to contracts without payment being received in cash. (ii) No bonus shares were issued. (iii) No shares were bought back. Details of shareholders holding more than 5 percent equity shares in the company:

Name of the shareholder As at March 31,2013 As at March 31,2012 Equity shares of Re. 1 each fully paid No of shares % of holding No of shares % of holding H. K. Mittal 46,654,200 19.05 46,654,200 19.05 Archana Mittal 26,327,400 10.75 26,327,400 10.75 AHM Investments Private Limited 18,406,250 7.52 18,406,250 7.52 Lotus Global Investments Limited 14,229,669 5.81 14,229,669 5.81

2.2 Reserves and Surplus

Amount Rs.in

Millions

Particulars As at As at

31. March 2013 31. March 2012

Capital Reserve As per last Financial Statements 169.35 169.35 Add: Transfer from Share Warrant Application money on forfeiture of Warrants during the year 259.60 - 428.95 169.35 Capital Redempetion Reserve As per last Financial Statements 400.00 400.00 Securities Premium Account As per last Financial Statements 3,637.49 3,645.66 Less: Premium on redemption of Unsecured debentures - (8.17) 3,637.49 3,637.49 Tonnage Tax Reserve (Utilised) As per last Financial Statements 1,752.48 1,752.48 Debenture Redemption Reserve As per last Financial Statements 2,556.25 2,133.25 Add/(Less):Transferred to/from General Reserve (1,531.25) 423.00 1,025.00 2,556.25 General Reserve As per last Financial Statements 916.43 1,339.43 Add/(Less) : Transferred from/to Debenture Redemption Reserve 1,531.25 (423.00)

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2,447.68 916.43 Capital Reserve on Consolidation 6,853.27 6,962.59 Foreign Exchange Currency Translation Reserve 1,778.79 1,078.73 Foreign Exchange Fluctuation Reserve As per last Financial Statements 100.45 123.56 Add/Less: Exchange fluctuation on Long Term Loans in relation to non integral foreign operations (Net) 34.26 595.59 Add/Less: Transfer to Statement of Profit and Loss on repayment of Long Term Loans in relation to non integral foreign operations (137.46) (618.70) (2.75) 100.45 Foreign Currency Monetary Item Translation Difference Account (Refer Note 4.3) - - As per last Financial Statements 10.39 - Add/Less: For the year 10.39 - Hedging Reserve As per last Financial Statements (49.84) - Add/Less: For the year (29.17) (49.84) (79.00) (49.84) Surplus As per last Financial Statements 7,186.17 6,980.61 Net Profit/(Loss) after tax transferred from Statement of Profit and Loss (3,720.87) 205.56 3,465.31 7,186.17 21,717.60 24,710.11

2.3 Money received against share warrants

Amount Rs.in

Millions

Particulars As at As at

31. March 2013 31. March 2012

Warrants against share capital 1,88,80,000 warrants of face value of Rs. 13.75 each - 259.60 During the year ended 31.03.2011 2,77,80,000 warrants (each warrant carrying option / entitlement to subscribe 1 number of equity share of Re. 1/- each on or before May 2012 at a price of Rs. 55/- per share) were allotted on preferential basis. Out of these, options for conversion of 89,00,000 warrants was excercised during the year 2010-11, 1,67,70,000 warrants lapsed on 8th May 2012 and 21,10,000 warrants lapsed on 12th May 2012 for non exercise of option.

- 259.60

2.4 Long term borrowings

Amount Rs.in

Millions

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Particulars As at As at 31. March 2013 31. March 2012 Rs Rs Secured (A) Debentures 4,000.00 4,500.00 (B) Foreign Currency Loans 19,859.54 19,235.28 (C) Term loans from banks 1,988.20 3,691.05 25,847.74 27,426.33 Notes: Security details a) Debentures referred in (A) above are secured by first mortgage on specified vessels of the company on pari-passu basis with other lenders and first pari- passu charge on the specified immovable property.

b) Foreign Currency Loan referred in (B) above are secured by, wherever applicable (i) By way of exclusive charge on specified vessels (ii) By way of pari-passu charge on specified vessels (iii) By way of exlusive charge on specified mining assets (iv) Corporate guarantees (v) Personal guarantees (vi) Charge on loan provided to subsidiary (vii) Assigment of contract(s); earnings; insurance (viii) Charge on shares; deposits & accounts

c) External Commercial Borrowings referred in (B) above are secured by exclusive charge on specified vessels of the company of which Rs. 265.15millions (P.Y. Rs 255.78 millions) additonally secured by charge on loan extended to subsidiary as well as charge on cash flows of specified vessels.

d) Term Loan refered in (C) above are secured by first charge on specified vessels, on paripassu basis with other lenders and includes Rs. 1305.05millions (P.Y. Rs. 1350.0 millions) additonally secured by charge on loan extended to subsidiary as well as charge on cash flows of specified vessels.

2.5 Other long term liabilities

Amount Rs.in

Millions

Particulars As at As at

31. March 2013 31. March 2012

Trade payable 4.86 8.07 Acceptances - 418.97 Others Due to Related Party - 25.58 Liability towards cash flow hedges 73.55 48.18

78.41 500.79

2.6 Long term provisions

Amount Rs.in

Millions

Particulars As at As at 31. March 2013 31. March 2012

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Provision for employee benefits Gratuity 38.78 33.51 Compensated absences 4.11 6.35

42.89 39.86

2.7 Short term borrowings

Amount Rs.in

Millions

Particulars As at As at

31. March 2013 31. March 2012

Secured Loans repayable on demand Working capital facilities from banks* 4,353.60 3,244.78 Unsecured Working capital facilities from banks 196.12 197.62

4,549.72 3,442.41 Note: * Working capital facilities from Banks are secured by 1st charge on all receivables and other current assets of the company on pari-passu basis and second charge on specified vessels; and further by way of Corporate Guarantees, wherever applicable.

2.8 Other current liabilities

Amount Rs.in

Millions

Particulars As at As at

31. March 2013 31. March 2012

Current maturities of long-term debt 1) Debentures (Refer Note 2.4 (a)) 100.00 612.50 2) Foreign Currency Loan (Refer Note 2.4 (b) & (c)) 3,809.35 2,704.41 3) Term loans from banks (Refer Note 2.4 (d)) 347.63 1,595.63 Interest accrued but not due on borrowings 213.28 274.57 Interest accrued and due on borrowings 8.71 10.44 Income received in advance 1,296.64 1,458.97 Unpaid dividend* 5.12 6.81 For Other liabilities Salaries & wages payable 15.25 37.89 Statutory dues payables 89.90 60.12 Liability towards cash flow hedges 5.45 1.66 Advance from customer 16.66 0.02 Other payables** 549.90 524.09

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6,457.88 7,287.10

* There is no amount, due and outstanding, to be credited to Investor Education and Protection Fund. ** Other payables include incomplete voyages (net off income) accrued but not due.

2.9 Short term provisions

Amount Rs.in

Millions

Particulars As at As at

31. March 2013 31. March 2012

Provision for employee benefits Gratuity 2.33 2.47 Compensated absences 2.33 2.12 Provision for onerous contracts 378.60 -

383.25 4.59

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2.10 Fixed Assets Amount Rs.in

Millions

Original Cost Depreciation/Amortization Net Book

Value Net Book Value

Particulars As at

April 1, 2012

Translation /

Adjustment

Addition for the year

Deduction

for the year

As at March

31, 2013

Upto March

31, 2012

Translation

/ Adjustment

Depreciation For the

year

Impairmen

t For the year

Adjustment in respect of Assets

Sold / Discarded / held for disposal

Upto March

31, 2013

As at March 31, 2013

As at March 31, 2012

Tangible Assets

Land 26.25 273.53 72.10 - 371.89 4.22 0.25 4.47 - - 8.94 362.94 22.04

Road and Bridges 36.02 2.28 - - 38.29 16.98 1.06 5.83 - - 23.88 14.42 19.03

Office Premises (Refer Note 1 , 2) 58.66 1.53 16.15 0.01 76.32 29.36 0.98 5.20 - 0.01 35.52 40.80 29.30

Vessels (Refer Note 3) 69,354.1

8 3,552.00 393.37 16,019.78 57,279.77 13,391.50 84.12 4,411.20 811.80 4,748.75 13,949.8

7 43,329.90 55,962.68 Furniture and Fixtures (Refer Note 4) 62.95 1.99 5.11 - 70.05 38.59 0.56 2.64 - - 41.79 28.26 24.36

Vehicles (Refer Note 5) 86.89 3.99 6.55 1.86 95.58 44.77 1.80 15.56 - 1.72 60.40 35.18 42.13

Office Equipments 29.60 4.49 4.39 0.09 38.39 15.10 3.71 10.89 - 0.04 29.66 8.73 14.49

Computer Equipments 16.29 0.22 1.87 - 18.38 12.53 0.13 1.72 - - 14.39 3.99 3.77

Mines 819.88 (220.13) - - 599.75 - - - 49.21 - 49.21 550.55 819.88

Mining Equipments 162.19 223.42 199.94 - 585.54 103.60 6.53 17.30 18.11 - 145.54 440.00 58.59

Grand Total 70,652.9

0 3,843.32 699.47 16,021.73 59,173.96 13,656.63 99.14 4,474.82 879.12 4,750.52 14,359.1

9 44,814.76 56,996.26

Note

1) Includes cost of 10 shares of Rs. 50/- each fully paid in Mittal Tower Premises Co-op. Society Ltd.

2) Office premises having gross value Rs. 34.32 millions (P.Y. Rs. 34.32 millions) and accumulated depreciation Rs. 14.73 millions (P.Y. Rs.13.70 /- millions) are given on operating Lease. 3) Translation/Adjustments include exchange fluctation loss on Long term foreign currency Loans Rs. 140.47 millions (P.Y. Rs.231.70 /- millions)

4) Depreciation on furniture and fixtures for the year includes reversal of excess depreciation charged in earlier years.

5) Vehicles having net book value of Rs. 10.37 millions (P.Y. Rs. 13.58 millions) are on finance lease.

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2.10 Fixed Assets Amount Rs.in

Millions

Original Cost Depreciation/Amortization Net Book

Value Net Book Value

Particulars As at April 1, 2011

Translatio

n / Adjustme

nt

Addition for the year

Deduction for the year

As at March

31, 2012

Upto March

31, 2011

Translatio

n / Adjustme

nt

For the year

Adjustment in respect of Assets

Sold / Discarded /

held for disposal

Upto March

31, 2012

As at March 31, 2012

As at March 31, 2011

Tangible Assets

Land 23.06 3.20 - - 26.25 1.48 0.36 2.37 - 4.22 22.04 21.58 Road and Bridges 31.44 4.58 - - 36.02 9.45 1.73 5.80 - 16.98 19.03 21.99 Office Premises (Refer Note 1 , 2) 58.45 3.50 7.96 11.25 58.66 27.60 2.09 4.71 5.04 29.36 29.30 30.85

Vessels (Refer Note 3) 53,285.88 5,643.41 10,424.89 0.00 69,354.1

8 8,652.62 980.47 3,758.4

0 - 13,391.5

0 55,962.68 44,633.25 Furniture and Fixtures 46.86 2.24 13.85 - 62.95 29.24 0.89 8.46 - 38.59 24.36 17.62 Vehicles 64.62 5.62 17.83 1.18 86.89 27.03 2.56 15.91 0.73 44.77 42.13 37.60 Office Equipments 15.15 0.19 14.26 - 29.60 7.43 0.68 6.99 - 15.10 14.49 7.71 Computer Equipments 14.13 0.38 1.90 0.11 16.29 10.68 0.23 1.67 0.05 12.53 3.77 3.45 Mines 715.61 104.27 - - 819.88 - - - - - 819.88 715.61 Mining Equipments 152.48 22.47 1.71 14.47 162.19 77.61 12.13 19.80 5.95 103.60 58.59 74.87

Grand Total 54,407.66 5,789.86 10,482.38 27.02 70,652.9

0 8,843.14 1,001.15 3,824.1

1 11.76 13,656.6

3 56,996.26 45,564.53

Note 1) Includes cost of 10 shares of Rs. 50/- each fully paid in Mittal Tower Premises Co-op. Society Ltd. 2) Office premises having gross value Rs. 34.32 millions (P.Y. Rs. 34.32 millions) and accumulated depreciation Rs. 13.70 millions (P.Y. Rs.12.61/- millions) are given on operating Lease. 3) Translation/Adjustments include exchange fluctation loss on Long term foreign currency Loans Rs. 231.70 millions (P.Y. Exchange Fluctuation Gain Rs.38.55/- millions) 4) Vehicles having net book value of Rs. 13.58 millions (P.Y. Rs. 3.94 millions) are on finance lease.

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2.11 Investments

Amount Rs.in

Millions Particulars As at As at

Nos 31. March 2013 Nos 31. March 2012

Non Current Investments - At cost Trade investments (Unquoted) Investment in Equity Shares MargSwarnabhoomi Port Private Limited 1,250 0.01 1,250 0.01 Others - 266.51 - 253.33 Non trade investments (Unquoted) Investment in Others Units of Indian Real Opportunity Venture Capital Fund 29,348 29.35 36,459 36.46 Aggregate amount of Unquoted investments 295.87 289.80 Current Investments - at the lower of cost and fair value Quoted Investments in Mutual Funds Axis Equity Fund 500,000 5.00 500,000 5.00 Axis Infra Bond - 49.07 - 111.88 (Market value of current investments on 31.3.13 Rs. 54.53 millions (P.Y. Rs. 117.07 millions) Aggregate amount of Quoted investments 54.07 116.88 Unquoted Investment in Shares - 0.52 - 0.50 Aggregate amount of Unquoted investments 0.52 0.50 Aggregate amount of Current investments 54.58 117.38

Terms of repayment and interest are as follows:

Amount Rs.in Millions

Loan from ROI*

Balance installments

as on 31.03.2013

Year of maturity

F.Y. ending

Amount outstanding

Amount outstanding

31.03.2013 31.03.2012 Debentures - - 2013 - 112.50 Debentures 9.50% 2 2015 1,600.00 2,500.00 Debentures 9.50% 1 2015 1,000.00 1,000.00 Debentures 12.40% 3 2019 1,500.00 1,500.00 Indian Banks - - 2016 - 1,600.00 Indian Banks - - 2013 - 249.92

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Indian Banks 12.65% 10 2018 773.36 800.00 Indian Banks - - 2013 - 750.00 Indian Banks - - 2013 - 124.96 Indian Banks 12.85% 10 2018 531.69 550.00 Indian Banks 6.76% 8 2017 1,030.79 1,211.80 Indian Banks 3.73% 6 2016 829.44 1,010.34 Indian Banks 5.31% 12 2019 265.15 255.78 Indian Banks Libor +4.25% 2 2015 759.17 714.04 Indian Banks Libor +6.0% 1 2018 791.44 - Indian Banks Libor +3.80% 40 2023 2,875.56 - Indian Banks Libor +4.30% 20 2017 1,060.59 1,023.12 Indian Banks Libor +6.0% 20 2019 1,015.56 - Indian Banks Libor +3.75% 20 2018 5,717.68 6,234.64 Indian Banks Libor +4.75% 11 2019 1,038.84 1,007.77 Indian Banks Libor +1.5% 10 2018 3,611.34 5,401.20 Foreign Banks Libor +2.50% 27 2020 2,143.88 2,160.57 Foreign Banks Libor +1.5% 4 2015 513.87 690.61 Foreign Banks Libor +2.25% 12 2016 324.46 423.07 Foreign Banks Libor +2.35% 21 2019 978.98 1,148.27 Foreign Banks Libor +2.25% 94 2021 1,579.77 1,602.99 Indian Banks 2.10% 1 2013 - 255.78 Indian Banks Libor+5.25% 1 2014 163.17 -

30,104.70 32,327.36 Less: Shown in current maturities of long term debt 4,256.98 4,901.04 Balance shown as above 25,847.73 27,426.32

* Applicable Rate of Interest as on 31.03.2013

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2.12 Long term loans and advances

Amount Rs.in

Millions

Particulars As at As at

31. March 2013 31. March 2012

Unsecured Considered good Capital Advances 153.57 113.65 Capital Advances to related parties* 420.00 420.00 Deposits Deposits with government and semi government bodies 0.35 1.80 Other deposits 65.81 77.73 Other deposits to related parties** 50.00 50.00 Exploration and development expenses recoverable 242.36 205.31 Deffered exploration and development of mine 316.43 215.19 Other loans and advances Advances Recoverable 145.99 37.11 Advance payment of tax (net of provisions) 573.22 104.89 Unamortized finance charges 19.80 26.98 MAT credit available 119.50 134.50

2,107.02 1,387.15

* Capital Advances to related parties Vaitarna Marine Infrastructure Private Limited 420.00 420.00

420.00 420.00

** Other deposits to related parties MLL Logistics Private Limited 50.00 50.00

50.00 50.00

2.13 Other noncurrent assets

Amount Rs.in

Millions

Particulars As at As at

31. March 2013 31. March 2012

Assets not in use - 23.38 Prepaid Tax - 2.93 Fixed Deposits with bank with maturity more than 12 months 275.67 271.35 Accrued interest on fixed deposit with banks 0.35 0.05

276.02 297.71

2.14 Inventories

Amount Rs.in

Millions

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Particulars As at As at

31. March 2013 31. March 2012

At Cost (Valued at lower of cost and net realisable value) Coal 120.90 301.20 Bunker and lubes 230.50 631.08

351.41 932.28

2.15 Trade receivables

Amount Rs.in

Millions

Particulars As at As at

31. March 2013 31. March 2012

Unsecured Debts outstanding for a period exceeding six months from the due date of payment Considered good (net of provision for doubtful debts Rs 40.0 millions) 1,991.86 1,226.87 Others debts Considered good 4,579.31 3,860.66

6,571.17 5,087.53

2.16 Cash and bank balances

Amount Rs.in

Millions

Particulars As at As at

31. March 2013 31. March 2012

Cash and cash equivalents Cash in hand 3.80 9.57 Balances with banks 3,145.53 2,048.07 Deposits with banks with 3 months maturity - 153.56 3,149.32 2,211.20 Others Fixed Deposits with bank with maturity more than 3 months but less than 12 months 261.33 322.00 3,410.65 2,533.20 Balances with banks in unpaid dividend accounts 5.13 6.81 Balances with banks includes amount in escrow account 0.49 0.49 Balances with banks held as margin money deposits against guarantees 29.69 36.03

2.17 Short term loans and advances

Amount Rs.in

Millions

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Particulars As at As at

31. March 2013 31. March 2012

Unsecured, Considered Good Loans and advances to related parties* 33.61 32.31 Deposits 54.23 3.08 Others Advance to employees 16.91 16.13 Advance to suppliers 846.72 1,196.09 Advances recoverable 430.94 394.46 Inter corporate deposits to related parties** 557.50 185.00 Inter corporate deposits to others 109.31 183.45 Indirect Tax receivable 29.87 16.49 Insurance receivable 618.14 181.03 Unamortized finance charges 17.69 13.43 Prepaid expenses 162.29 238.09 Considered doubtful Inter corporate deposits to others 97.20 - Advance to suppliers 71.46 - 168.65 - Less: Provision for doubtful advances (168.65) - - -

2,877.19 2,459.56

*Loans and advances to related parties MLL Logistics Private Limited 33.61 32.31

33.61 32.31

** Inter corporate deposits to related parties MLL Logistics Private Limited 557.50 185.00

557.50 185.00

2.18 Other current assets

Amount Rs.in

Millions

Particulars As at As at

31. March 2013 31. March 2012

Accrued interest on fixed deposit with banks 3.30 2.57 Interest accrued and due 5.19 - Statutory Dues - 0.61 Contract work in progress 1,905.20 94.77 Income accrued but not due * - 119.44

1,913.69 217.38

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* Includes incomplete voyages

2.19 Revenue from operations

Amount Rs.in

Millions

Particulars Year Ended Year Ended 31. March 2013 31. March 2012

Freight 6,246.94 6,062.12 Charter hire 7,320.66 7,530.43 Dispatch and demurrage 251.90 78.02 Ship management fees 31.82 - Sale of Coal 19,626.83 22,423.58 Cargo handling services 442.24 904.91 Income from project related activities 3,413.15 -

37,333.54 36,999.08

2.20 Other income

Amount Rs.in

Millions

Particulars Year Ended Year Ended 31. March 2013 31. March 2012

Dividend received on current investments 8.74 0.05 Rent received 1.26 9.37 Net gain on foreign currency transactions/transalation 157.94 476.37 Net gain on derivatives transactions 23.96 1.38 Interest income 55.92 96.29 Gain on sale of current investments (net) 5.19 28.76 Gain on sale of non-current investments 1.67 - Insurance claims received - 13.72 Miscellaneous income 2.41 25.31

257.09 651.26

2.21 Operating expenses

Amount Rs.in

Millions

Particulars Year Ended Year Ended 31. March 2013 31. March 2012

Purchase of Coal 12,926.42 15,310.37 Coal Mining and Logistics expenses 5,363.94 5,319.02 Designing and other technical charges 1,205.72 - Procurement of equipments for project related activities 1,544.30 - Bunker consumed 2,178.73 1,970.48 Vessel /Equipment hire expenses 2,404.47 2,641.08 Technical services 2,091.32 1,641.82 Agency, Professional and service expenses 226.24 162.66 Communication expenses 16.79 47.66

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Miscellaneous expenses 218.82 77.82 Commission 166.12 208.45 Insurance 402.73 223.54 Port expenses 412.75 386.65 Repairs and maintenance 1,285.69 1,622.63 Stevedoring, transport and freight 278.15 365.81

30,722.16 29,978.00

2.22 Employee benefits expenses

Amount Rs.in

Millions

Particulars Year Ended Year Ended 31. March 2013 31. March 2012

Salaries, wages, bonus, etc. 543.07 439.98 Contribution to provident and other funds 17.94 17.10 Employee welfare expenses 15.50 20.18

576.50 477.26

2.23 Finance cost

Amount Rs.in

Millions

Particulars Year Ended Year Ended 31. March 2013 31. March 2012

Interest expense 2,228.98 2,010.75 Other borrowing costs 221.41 108.75 Loss on foreign currency transactions/translation - 9.97

2,450.38 2,129.47

2.24 Other expenses

Amount Rs.in

Millions

Particulars Year Ended Year Ended 31. March 2013 31. March 2012

Rent 68.87 83.50 Payment to auditors As auditors 15.31 9.86 For other services 2.07 1.81 Repairs and maintenance (office premises and premises acquired on lease) 19.45 9.64 Insurance 7.03 6.18 Net loss on foreign currency transaction/transalation 0.00 3.02 Legal, Professional and consultancy expenses 234.28 127.70 Donation 1.82 1.93 Communication expenses 9.46 12.55 Conveyance, car hire and travelling 100.03 113.24 Advertisement 1.26 1.51 Loss on sale of assets (net) 741.36 3.10

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Bad Debts and other amounts written off/back 45.03 172.55 Provision for doubtful debts/advances 313.77 - Miscellaneous expenses* 156.91 171.23

1,716.65 717.79

* Miscellaneous expenses includes prior period expenses of Rs. 11.56 millions.

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SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR YEAR ENDED MARCH 31, 2013

CORPORATE INFORMATION Mercator Limited was incorporated on 24th November 1983 as private limited company with name as Mercator Lines Private Limited. It was converted into limited company vide ROC approval dated 12th April 1984. The name was changed to Mercator Limited vide ROC approval dated 22nd November 2011. The Consolidated Financial Statements relate to Mercator Limited (the company) and its subsidiary companies. The Company and its subsidiaries constitute the Group. The group has diversified business verticals viz. Shipping (tankers and dry bulkers), Dredging, Oil and Gas (EPCIC and E & P), Coal (Mining, Procurement and Logistics).

• SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of Preparation

1. The financial statements of the subsidiary companies used in the consolidation are drawn upto the same

reporting date as of the Company i.e. year ended 31st March, 2013.

2. The financial statements of the Group have been prepared in accordance with the principles and procedures required for the preparation and presentation of consolidated financial statements as laid down under the Accounting Standard 21 “Consolidated Financial Statements” as notified by the Companies (Accounting Standards) Rules, 2006.

1.2 Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on a going basis. Any revision to accounting estimates is recognized prospectively in the current and future periods.

1.3 Principles of consolidation

The consolidated financial statements include the financial statements of Mercator Limited (the company), the parent company and all of its subsidiaries (collectively referred to as the group), in which the company has more than one-half of the voting power of an enterprise or where the company controls the composition of the board of directors. The following subsidiary companies are considered in the Consolidated Financial Statements:

Name of the Subsidiary Company Country of

incorporation % of holding either directly or through subsidiary as at March 31, 2013

% of holding either directly or through subsidiary as at March 31, 2012

Mercator International Pte. Ltd. Singapore 100 100 Mercator Oil & Gas Ltd India 100 100 Mercator Petroleum Ltd. India 100 89 Mercator FPSO Pvt. Ltd. India 100 100 Oorja Resources India Pvt. Ltd. India 100 100 Mercator Offshore Holdings Pte. Ltd. Singapore 100 100 Mercator Offshore (P) Pte Ltd Singapore 100 100

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Oorja Holdings Pte. Ltd Singapore 100 100 Mercator Lines (Singapore) Ltd Singapore 68.44 71.95 Mercator Offshore Ltd Singapore 100 100 Varsha Marine Pte. Ltd Singapore - 100 Vidya Marine Pte. Ltd Singapore - 100 Mercator Lines (Panama) Inc Panama 100 100 Oorja 1 Pte. Ltd. Singapore 100 100 Oorja 2 Pte. Ltd. Singapore 100 100 Oorja 3 Pte. Ltd. Singapore 100 100 OorjaMozambique Minas, Limitada Mozambique 100 100 MCS Holdings Pte. Ltd. Singapore 100 100 PtOorja Indo Petangis Four Indonesia 100 100 PtOorja Indo Petangis Three Indonesia 100 100 PtOorja Indo KGS Indonesia 100 100 BroadtecMozambique Minas, Lda Mozambique 85 85 PT Mincon Indo Resources Indonesia 100 100 Target Ship Management Pte. Ltd Singapore - 100 ChitraPrem Pte. Ltd Singapore 100 100 VidyaVarsha Inc. Panama 100 100 BimaGemaPermata PT Jakarta 100 100 Nuansa Sakti Kenca PT Jakarta 100 100 Ivorene Oil Services Nigeria Ltd Singapore 100 100 Oorja (Batua) Pte Ltd Singapore 100 100 P.T. Karya Putra Borneo Indonesia 50 50 P.T. Indo Pekasa Indonesia 51 51

The consolidated financial statements have been prepared on the following basis:

1. The Financial statements of the Company and its subsidiary companies have been combined on a line by line basis by adding together book values of similar items of assets, liabilities income and expenses. The intra-group balances and intra-group transactions have been fully eliminated.

2. The difference between the cost of investments in the subsidiaries, over the net assets at the time of acquisition of shares in the subsidiaries is recognized in the financial statements as Goodwill or Capital Reserve, as the case may be.

3. Minority Interest in the net assets of consolidated subsidiaries consists of the amount of equity attributable to the minority shareholders at the date on which investments are made by the company in the subsidiary companies and further movements in their share in equity, subsequent to the date of the investment as stated above.

4. Consolidated Financial Statements are prepared by applying uniform accounting policies to the extent possible, in use at the group.

5. Indian Rupee is the reporting currency for the Group. However, the reporting currencies of non-integral overseas subsidiaries are different from the reporting currency of the Group. The translation of those currencies into Indian Rupee is performed for assets and liabilities, using the exchange rate as at the balance sheet date, and for revenues, costs and expenses using average exchange rate during the reporting period. Resultant currency translation exchange gain/loss is carried as Foreign Currency Translation Reserve under Reserves and Surplus.

1.4 Tangible fixed assets and depreciation

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a) Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost includes cost of acquisition or construction including attributable borrowing cost, duties and other incidental expenses related to the acquisition of the asset.

b) Exchange differences arising on repayment of foreign currency loans and year end translation of foreign currency loans relating to acquisition of depreciable assets are, following option given by notification of Ministry of Corporate Affairs (MCA) dated31st March 2009/29th December 2011, adjusted to carrying cost of the respective fixed assets.

c) Depreciation on Vessels and on fixed assets held outside India is provided using straight line method based on estimated useful life or on the basis of depreciation rates prescribed under respective local laws.

d) Depreciation on all assets other than vessels is computed on the Written Down Value method in the manner and at the rates prescribed under schedule XIV of the Companies Act, 1956.

e) Depreciation on additions/disposals during the year is provided on pro-rata basis.

f) Depreciation on assets acquired under lease is spread over the lease period.

g) Assets which are retired from active use and are held for disposal are stated at the lower of their net book value or net releasable value.

h) Dry docking expenses, comprising cost of materials and services deployed during the dry docking, are capitalised and depreciated over the period to the next scheduled dry docking, which approximates 2.5 years. If the vessel is disposed before the next dry docking, the carrying amount of dry docking expenses is included in determining the gain or loss on disposal of the vessel and taken to profit or loss. If the period to the next dry docking is shorter than expected, the unamortised balance of the deferred dry docking cost is charged immediately as an expense before the next dry docking.

1.5 Goodwill

Goodwill arising on the acquisition of subsidiaries is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.

1.6 Impairment of assets The carrying amounts of all assets/CGU are reviewed at each balance sheet date. If there is any indication of impairment based on internal/external factors, where they are recorded in excess of their recoverable amounts, and where carrying values exceed this estimated recoverable amount, assets are written down to their recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use determined asset wise. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions are identified, and appropriate valuation model is used.

1.7 Capital work in progress All expenditure and borrowings cost incurred during the asset acquisition period, are accumulated and shown under this head till the asset is put to commercial use.

1.8 Exploration and evaluation expenditure Exploration Asset - Exploration activity involves the search for mineral resources, the determination of technical feasibility and the assessment of the commercial viability of an identified resource. Exploration expenditure are capitalised in respect of each area of interest for which the rights to tenure are current and where: • The exploration expenditures are expected to be recouped through successful development and

exploitation of the area of interest; or

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• Exploration activities in the area of interest have not reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the areas of interest are continuing.

Exploration asset is reviewed at each reporting date as to whether an indication of impairment exists. If any such indication exists, the recoverable amount of the exploration asset is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years. Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable and where a decision is made to proceed with development, the exploration asset attributable to that area of interest are first tested for impairment and then reclassified to mining property within property, plant and equipment.

1.9 Inventories

Bunker and Lubes on vessels are valued at lower of cost and net realisable value ascertained on first in first out basis. Inventory of coal is valued at the lower of cost and net realizable value. Cost is determined based on the weighted average cost incurred during the period and includes an appropriate portion of fixed and variable overheads. Net realizable value is the estimated sales amount in the ordinary course of business less the costs of completion and selling expense.

1.10 Oil and Gas Assets:

The Successful Efforts method is followed for accounting for oil and gas as per the Guidance Note issued by the Institute of Chartered Accountants of India on “Accounting for Oil and Gas producing activities”. Expenditure incurred on the acquisition of a licence interest is initially capitalised on a licence by licence basis. Costs are held, undepleted, within exploratory and development wells-in-progress until the exploration phase relating to the licence area is complete or commercial oil and gas reserves have been discovered.

1.11 Investments

a) Investments are classified into long-term and current investments.

b) Investments which are readily realizable and intended to be held for not more than 12 months are classified

as current investments. All other investments are classified as long term investments.

c) Long-term Investments are stated at cost of acquisition and related expenses. Provision for diminution, if any, in the value of such investments is made to recognise a decline, other than of a temporary nature.

d) Current Investments are stated at cost of acquisition including incidental / related expenses or at fair value as at 31st March 2013, whichever is less and the resultant decline, if any, is charged to revenue.

1.12 Incomplete Voyages

Incomplete voyages represent freight received and direct operating expenses on voyages which are not complete as at the balance sheet date.

1.13 Borrowing Costs

Borrowing costs include interest, ancillary costs, incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an

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adjustment to the interest cost. Borrowing costs that are directly attributable to the acquisition/construction of the qualifying assets are capitalized as part of the cost of the asset, up to the date of acquisition/completion of construction. All other borrowing costs are expenses in the period they occur.

1.14 Revenue Recognition

a) Income on account of freight is recognised in all cases where loading of the cargo is completed before the close of the year. All corresponding direct expenses are also provided.

b) Where loading of the cargo is not completed before the close of the year, revenue is not recognised and the corresponding expenses are carried forward to the next accounting year.

c) Income from charter hire and demurrage earnings is recognised on accrual basis as per the terms of agreement.

d) Income from services is accounted on accrual basis as per the terms of the relevant agreement.

e) Dividend on investments is recognised when the right to receive the same is established by the balance sheet date.

f) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

g) Claims including insurance claims are accounted when there is a reasonable certainty of the realisability of the claim amount.

h) Revenue from coal mining and trading is recognized on transfer of risk, reward and ownership of the goods, and is recorded net of returns, trade allowance, and government duties.

i) In case of a subsidiary, revenue from long-term construction contracts is recognised at cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date, to the total estimated contract costs.

1.15 Foreign Exchange Transactions

a) Monetary transactions in foreign currency are recorded at standard exchange rates determined monthly.

b) Monetary items denominated in foreign currency outstanding at the end of the year are valued at the rates

prevalent on that date.

c) Exchange differences arising on translation of Long Term Foreign Currency Monetary (LTFCM) items are, following option given by notification of MCA dated31st March 2009/ 29th December 2011, treated in the following manner: - In respect of borrowings relating to or utilized for acquisition of depreciable capital assets, the same is

adjusted to the cost of the relevant capital asset and depreciated over the balance life of the said capital asset.

- In other cases, the same is accumulated in a ‘Foreign Currency Monetary Item Translation Difference Account’. The amount so accumulated in this account is amortized over the balance period of such assets / liabilities or 31st March 2020, whichever is earlier.

\ d) Differences in translation of other monetary items and realised gains and losses on foreign currency

transactions are recognised in the statement of profit and loss.

e) Exchange difference arising on translation of long term foreign currency loans given to entities classified as non integral foreign operations is accumulated in Foreign Currency Fluctuation Reserve. On disposal of investment, the balance in the said reserve is transferred to the statement of profit and loss.

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1.16 Employees Benefits a) Short – term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, performance incentives, etc. are recognised at actual amounts due in the period in which the employee renders the related service.

b) Post – employment benefits

i. Defined Contribution Plans Payments made to defined contribution plans such as Provident Fund are charged as an expense as they fall due. ii. Defined Benefit Plans The cost of providing benefit i.e. gratuity is determined using the Projected Unit Credit Method, with actuarial valuation carried out as at the balance sheet date. Actuarial gains and losses are recognised immediately in the statement of profit and loss.

c) Other Long – term employee benefits

i. Other Long – term employee benefit viz. leave encashment is recognised as an expense in the statement of profit and loss as and when it accrues. The company determines the liability using the Projected Unit Credit Method, with actuarial valuation carried out as at the balance sheet date. The actuarial gains and losses in respect of such benefit are charged to the statement of profit and loss.

1.17 Lease Accounting

a) Leases where the lessor effectively retains substantially all the risks and benefits of the ownership of the

lease term are classified as operating lease.

b) In respect of operating lease agreements entered into as a lessee, the lease payments are recognised as expense in the statement of profit and loss over the lease term.

c) In respect of operating lease agreement entered into as a lessor, the initial direct costs are recognised as expenses in the year in which they are incurred.

d) At the beginning of the lease period, the finance lease is capitalised based on the fair value of leased assets or based on the present value of a minimum lease payment, if the present value is lower than the fair value. The minimum lease payment is bifurcated between the financial cost and the payment obligation so as to produce a constant periodical interest rate for the obligation. Lease expense is recorded in the statement of profit and loss. Leased assets under finance lease are recorded in the fixed assets account and depreciated based on the useful lives of the assets or the lease period, whichever is shorter.

1.18 Earning per share:

The basic earnings per share is computed by dividing the net profit after tax for year by weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profit after tax for the year and weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.19 Provision for Taxation :

a) Provision for current income tax is made on the basis of the assessable income under the Income tax Act,

1961. Income from shipping activities is assessed on the basis of deemed tonnage income of the company under section 115VG(3) of Chapter XII-G of the Income Tax Act, 1961.

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b) In respect of subsidiary companies, provision for taxation is made as per the applicable local laws of the

respective countries.

c) Deferred income tax is recognized on timing differences, between taxable income and accounting income which originate in one period and are capable of reversal in one or more subsequent periods only in respect of the non shipping activities of the company. The tax effect is calculated on the accumulated timing differences at the year end based on tax rates and laws, enacted or substantially enacted as of the balance sheet date.

d) Minimum Alternate Tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period.

1.20 Provisions and Contingent Liabilities:

Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or its subsidiary companies.

1.21 Derivative instruments and hedge accounting

The Group uses foreign currency forward contracts; forward freight agreements, options on forward freight agreements and currency options to hedge its risks associated with foreign currency fluctuations and fluctuations in freight rates relating to certain firm commitments and forecasted transactions. The Company has designated these hedging instruments as cash flow hedges or economic hedges applying the recognition and measurement principles set out in the Accounting Standard 30 “Financial Instruments : Recognition and Measurement” (AS – 30). The use of hedging instruments is governed by the Company’s policies approved by the board of directors, which provide principles on the use of such financial derivatives consistent with the Company’s risk management strategy. Derivatives are initially recognised at fair value at the dates the derivative contracts are entered into and are subsequently re-measured to their fair values at each balance sheet date. The resulting gain or loss is recognised in the statement of profit and loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in the statement of profit and loss depends on the nature of the hedge relationship. Hedge accounting Hedges which include derivatives, embedded derivatives and non-derivatives in respect of price risk, are designated as either hedges of fair value of recognised assets or liabilities or fair commitments (fair value hedges) or hedges of highly probable forecast transactions (cash flow hedges). At the inception of the hedge relationship, the relationship between the hedging instrument and hedged item is determined, along with its risk management objectives and the strategy for undertaking the hedge. At the inception of the hedge and on a quarterly basis, the effectiveness of the hedging relationship in offsetting changes in fair values or cash flows of the hedged item is determined. Fair value hedge Changes in the fair value of derivatives that are designated and qualify as fair value hedges will be recorded in the statement of profit and loss immediately, together with any changes in the fair value of the hedged item that is attributable to the hedged risk.

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Hedge accounting will be discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. The adjustment to the carrying amount of the hedged item arising from the hedged risk will be amortised to the statement of profit and loss from that date. Cash flow hedge The effective portion of changes in the fair value of derivatives that are designated as and qualify as cash flow hedges are deferred in equity. The gain or loss relating to the ineffective portion of the hedge, if any, is recognised immediately in the statement of profit and loss. Amounts deferred in equity will be recycled in the profit or loss in the periods when the hedged item is recognised in the statement of profit and loss. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously deferred in equity will be transferred from equity and included in the initial measurement of the cost of the asset or liability. Hedge accounting will be discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss deferred in equity at that time will remain in equity and will be recognised when the forecast transaction is ultimately recognised in the statement of profit and loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that had been deferred in equity will be recognised immediately in the statement of profit and loss.

1.22 Cash and Cash equivalents

Cash and cash equivalents for the purpose of the cash flow statement comprise cash in hand and at bank in current and foreign currency accounts. Term deposits having maturities of three months or less are considered as cash equivalents.

3. ADDITIONAL DISCLOSURES AS PER REVISED SCHEDULE VI

3.1 Contingent Liabilities not provided for Current Year

(Rs in Millions.) Previous Year

(Rs in Millions) Counter guarantees issued by the Company for guarantees obtained from the bank (net of margin).

419.11 580.91

Counter guarantees issued by the Company for guarantees obtained from bank on behalf of subsidiaries

62.65 25.60

Corporate guarantees issued for performance by the company

2160.79 2032.76

TOTAL 2642.55 2639.27

3.2 Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advances) as at March 31, 2013 Rs. 1326.56Millions (Rs. 1247.71Millions).

3.3 Estimated amount of commitments outstanding towards contributions to funds are Rs. 96.05 Millions (Rs. 96.99 Millions).

3.4 No provision has been made in respect of disputed demands from Income-tax Authorities to the extent of Rs. 572.53Millions (Rs. 569.75 Millions), since the company has reasons to believe that it would get relief at the

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appellate stage as the said demands are excessive and erroneous. Against the above, the company has already paid Rs. 184.18 Millions (Rs. 154.18Millions).

4. DISCLOSURES AS PER ACCOUNTING STANDARDS NOTIFIED BY THE COMPANIES (ACCOUNTING STANDARDS) RULES, 2006.

4.1 Change in accounting policy The company has changed its accounting policy with respect to a subsidiary for accounting of dry dock expenses. Hitherto, the entire dry dock expenses were written off to the statement of profit and loss which from this financial year has been capitalized as per the regular accounting policy followed by the subsidiary. On account of the same, the loss for the year is reduced by Rs. 247.44 Millions.

4.2 Details of contract revenue and costs as per Accounting Standard 7 (Rs. In Millions)

Particulars For the year ended 31 March, 2013

For the year ended 31 March, 2012

Contract revenue recognised during the year 3413 Nil Aggregate of contract costs incurred and recognised profits (less recognised losses) upto the reporting date

3311 147

Advances received for contracts in progress Nil Nil Retention money for contracts in progress Nil Nil Gross amount due from customers for contract work (asset)

2201 95

Gross amount due to customers for contract work (liability)

Nil Nil

4.3 The company has opted for accounting the exchange differences arising on reporting of long term foreign currency monetary items in line with the notification of Ministry of Corporate Affairs (MCA) dated 31st March 2009/29th December 2011 on Accounting Standard (AS)-11. In line with the above notification, gains / losses arising during the year from the effect of changes in foreign exchange rates on foreign currency loans relating to acquisition of depreciable capital assets, are adjusted to the cost of the fixed assets. The addition to fixed assets on account of the same is Rs. 140.47 Millions (P.Y Rs. 231.70 Millions). Exchange Fluctuation on restatement of foreign currency loan initially taken for acquisition of fixed asset has been transferred to “Foreign Currency Monetary Item Translation Difference Account” (FCMITD) since subsequently the said fixed asset was disposed off. The exchange gain (net) transferred to FCMITD for the same is Rs 19.00 Millions. The balance amount outstanding in FCMITD as on 31st March, 2013 is Rs 10.39Millions.

4.4 Disclosure in accordance with Accounting Standard 17 on "Segment Reporting".

Primary Segments: The group has identified Business Segment as the primary segment. Segments have been identified taking into account the nature of the services / products, the differing risks and returns, the organisation structure and internal reporting system. The group’s operations predominantly relate to a) Shipping b) Offshore c) Coal Mining, Trading and Logistics. Secondary Segment:

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The shipping activities are managed from India and Singapore. The Off Shore activities are managed from Singapore. The Coal Mining, Coal Trading and logistics are managed from India, Singapore and Indonesia. Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis. The expenses, which are not directly attributable to the business segment, are shown as others. Assets and Liabilities that cannot be allocated between the segments are shown as a part of unallocated corporate assets and liabilities respectively.

There are no Inter Segment transfers.

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Segment Revenue Shipping Offshore Coal Mining, Trading and Logistics

Others Unallocated Total Total

2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12

Revenue 11,165.33 11,850.09 2,685.98 1,987.16 20,069.07 23,161.83 3,614.32 551.87 - - 37,534.70 37,550.94

Results

Profit / (Loss) before tax and interest (4,320.87) 112.21 755.87 494.00 833.02 1,395.59 333.81 555.08 - - (2,398.50) 2,556.88

Less :Interest

(2,394.46) (2,033.18)

Total Profit Before Tax

(4,792.96) 523.70

Provision for Taxation

Current Tax

(186.00) (249.53)

Deferred Tax

54.22 27.18

Minimum Alternate Tax

- -

Net Profit

(4,924.74) 301.35

Other Information

Assets 48,307.35 53,418.45 9,272.46 10,018.11 7,339.69 6,648.74 3,722.14 744.39 - - 68,641.64 70,829.68

Liabilities 2,996.70 2,508.84 1,419.67 1,728.46 708.21 772.40 2,609.26 126.97 34,654.44 36,200.38 42,388.27 41,337.05

Capital Expenditure 364.15 299.41 4.18 10,365.09 299.89 49.58 0.68 -

668.90 10,714.09

Depreciation 3,249.47 2,833.48 1,169.62 941.60 55.60 49.03 0.13 -

4,474.82 3,824.11

Impairment 811.80 - - - 67.32 - - -

879.12 -

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4.5 Related Party Disclosures as per Accounting Standard 18 on “Related Party Disclosures”

A List of Related Parties

I Key Management Personnel

1 H.K Mittal 2 A.J. Agarwal 3 Shalabh Mittal 4 K.S.Raheja 5 Shruti Mittal 6 HandokoSoeseno 7 Taufik Surya Darma

II Enterprises over which Key Management Personnel exercise significant control

1 AAAM Properties Pvt Ltd 2 Ankur Fertilizers Private Limited 3 AHM Investments Private Limited. 4 Mercator Healthcare Limited

III Enterprises over which Directors/Relative of Directors/Key Management Personnel/Relative of Key Management Personnel exercise significant influence.

1 MLL Logistics Private Limited 2 Zicom Electronic Security Systems Ltd 3 Vaitarna Marine Infrastructure Private Limited. 4 Rishi Holding Private Limited 5 Oilmax Energy Pvt Ltd 6 PT United Coal Indonesia

V Relative of Key Management Personnel

1 Adip Mittal

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B Details of Transactions with above parties

Name of the Transaction Key Management

Personnel

Enterprises over which Key Management Personnel exercise significant control

Enterprises over which Directors/Relative of

Directors/Key Management

Personnel/Relative of Key Management Personnel

exercise significant influence. Total

2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12

Interest Income - - - - 34.21 2.41 34.21 2.41 Interest Expense - - - - 0.41 - 0.41 - Services Received - - - - 161.61 25.70 161.61 25.70 Reimbursments of Expenses Paid - - 0.43 3.10 2.62 3.04 3.05 6.14 Reimbursments of Expenses Received - - 0.33 13.40 - 0.17 0.33 13.58 Inter Corporate Deposits Inter Corporate Deposits given during the year - - - - 372.50 185.00 372.50 185.00 Inter Corporate Deposits received during the year - - - - 35.00 15.75 35.00 15.75 Inter Corporate Deposits repaid during the year - - - - 35.00 15.75 35.00 15.75 Advances Advances Given During the Year 12.84 - - - 1.30 2.04 14.14 2.04 Outstanding balances as on 31.03.2013 Advances and Receivables Advances 83.74 96.63 - - 33.61 33.87 117.35 130.50

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Capital Advances - - - - 420.00 420.00 420.00 420.00 Outstanding Balances of Trade and Other Receivables & Other Payables as on 31.03.2013 Trade & Other Receivables - - - - 126.07 109.18 126.07 109.18 Trade & Other Payables - 25.58 - 1.96 46.02 5.25 46.02 32.79 Inter Corporate Deposit Balance as on 31.03.2013 - - - - 557.50 185.00 557.50 185.00 Deposit Balance as on 31.03.2013 - - - - 56.50 56.50 56.50 56.50 Remuneration paid to Key Management Personnel 46.51 42.37 Remuneration paid to Relative of Key Management Personnel 1.68 1.66

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Partywise details of material transactions

Name of the Transaction Key Management Personnel

Enterprises over which Key Management Personnel exercise

significant control

Enterprises over which Directors/Relative of Directors/Key Management Personnel/Relative of

Key Management Personnel exercise significant influence. Total

2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 Interest Income MLL Logistics Private Limited - - - - 34.21 2.41 34.21 2.41

Total - - - - 34.21 2.41 34.21 2.41

Interest Expenses Zicom Electronic Security Systems Ltd - - - - 0.41 - 0.41 -

Total - - - - 0.41 - 0.41 -

Services Received Vaitarna Marine Infrastructure Pvt Ltd - - - - 46.60 3.06 46.60 3.06 Oilmax Energy Pvt Ltd - - - - 113.71 22.64 113.71 22.64

Total - - - - 160.31 25.70 160.31 25.70

Reimbursments of Expenses Paid Ankur Fertilizers Private Limited - - 0.43 0.76 - - 0.43 0.76 MLL Logistics Pvt Limited - - - - - 0.32 - 0.32 OMCI Ship Management Pvt Limited - - - 2.34 - - - 2.34 Oilmax Energy Pvt Ltd - - - - 2.62 2.72 2.62 2.72

Total - - 0.43 3.10 2.62 3.04 3.05 6.14

Reimbursments of Expenses Received Ankur Fertilizers Private Limited - - 0.33 - - - 0.33 - Vaitarna Marine Infrastructure Pvt Ltd - - - - - 0.17 - 0.17 OMCI Ship Management Pvt Limited - - - 12.94 - - - 12.94

Total - - 0.33 12.94 - 0.17 0.33 13.12

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Inter Corporate Deposits Inter Corporate Deposits given during the year MLL Logistics Private Limited - - - - 372.50 185.00 372.50 185.00

Total - - - - 372.50 185.00 372.50 185.00

Inter Corporate Deposits received during the year Zicom Electronic Security Systems Ltd - - - - 35.00 15.75 35.00 15.75

Total - - - - 35.00 15.75 35.00 15.75

Inter Corporate Deposits repaid during the year Zicom Electronic Security Systems Ltd - - - - 35.00 15.75 35.00 15.75

Total - - - - 35.00 15.75 35.00 15.75

Advances Advances Given During the Year MLL Logistics Pvt Ltd - - - - 1.30 0.50 1.30 0.50 Vaitarna Marine Infrastructure Pvt Ltd - - - - - 1.54 - 1.54 Handoko Soeseno 12.84 - - - - - 12.84 -

Total 12.84 - - - 1.30 2.04 14.14 2.04 Outstanding balances as on 31.03.2013 Advances and Receivables Advances MLL Logistics Pvt Ltd - - - - 33.61 32.31 33.61 32.31 Handoko Soeseno 83.74 96.63 - - - - 83.74 96.63

Total 83.74 96.63 - - 33.61 32.31 117.35 128.94 Capital Advances Vaitarna Marine Infrastructure Pvt Ltd - - - - 420.00 420.00 420.00 420.00

Total - - - - 420.00 420.00 420.00 420.00

Outstanding Balances of Trade and Other Receivables & Other Payables as on 31.03.2013 Trade and Other Receivables MLL Logistics Private Limited - - - - 126.07 92.44 126.07 92.44

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PT United Coal Indonesia - - - - - 16.75 - 16.75 Total - - - - 126.07 109.18 126.07 109.18

Trade and Other Payables OMCI Ship Management Pvt Limited - - - 1.96 - - - 1.96 Oilmax Energy Pvt Ltd - - - - 44.27 5.25 44.27 5.25 Handoko Soeseno - 25.58 - - - - - 25.58

Total - 25.58 - 1.96 44.27 5.25 44.27 32.79 Inter Corporate Deposit Balance as on 31.03.2013 MLL Logistics Private Limited - - - - 557.50 185.00 557.50 185.00

Total - - - - 557.50 185.00 557.50 185.00 Deposit Balance as on 31.03.2013 MLL Logistics Private Limited - - - - 50.00 50.00 50.00 50.00

Total - - - - 50.00 50.00 50.00 50.00 Remuneration paid to Key Management Personnel 46.51 42.37 Remuneration paid to Relative of Key Management Personnel 1.68 1.66

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4.6 Disclosure in respect of Leases as per AS 19:

(A) Disclosure in respect of operating lease (as Lessee):

Year Ended 31st March, 2013

Year ended 31st March,

2012 Rs (In Millions) Rs. (In

Millions) (a) Operating Leases Disclosures in respect of cancelable agreements for office

premises taken on lease

(i) Lease payments recognized in the Statement of Profit and Loss

54.03 56.09

(ii) Significant leasing arrangements The Company has given refundable interest free

security deposits under the agreements.

The lease agreements are upto 24 to 60 months. These agreements also provided for increase in

rent.

These agreements are non cancellable by both the parties for 12–24 months except in certain exceptional circumstances.

(iii) Future minimum lease payments under non-cancellable agreements

Not later than one year 31.60 45.99 Later than one year and not later than five years 26.76 15.97 Later than five years NIL NIL

(B) Disclosure in respect of operating lease (as Lessor):

Year Ended 31st March,

2013

Year ended 31st March,

2012 Rs (In Millions) Rs. (In

Millions) (a) Operating Leases Disclosures in respect of cancellable agreements for

office given on lease

(i) Lease receipt recognized in the Statement of Profit and Loss

1.26 9.37

(ii) Significant leasing arrangements - The new lease agreements are for a period of 36

months.

(iii) Future minimum lease receivable under non-cancellable agreements

- Not later than one year NIL NIL - Later than one year and not later than five years NIL NIL - Later than five years NIL NIL

General description of leasing arrangement:

i. Leased Assets: Office premises, Godown And Vehicle ii. Future Lease rentals are determined on the basis of agreed terms.

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(C) Disclosure in respect of finance lease (as Lessee): (Rs. In Millions) Total Minimum Lease Payments outstanding

As at 31st March 2013 As at 31st March 2012

Within 1 year 8.26 11.70

Later than 1 year and not later than 5 years 3.73 10.19

Later than 5 years Nil Nil

Total 11.99 21.89

Less: Interest 1.21 2.33

Present Value of Minimum Lease Payments

10.78 19.56

4.7 Earning Per Share as per AS 20

Particulars

Year Ended 31/03/2013

Rs. Amount in Millions

Year Ended 31/3/2012

Rs. Amount in Millions

Net Profit after Tax, Minority interest- Basic and Diluted (3720.87) 205.56

Number of Shares used in computing Earning Per Share - Basic and Diluted 244,892,073 244,892,073Earning per share (equity shares of face value Re 1/-) - Basic and Diluted (in Rs.) (15.19) 0.84

4.8 Derivative Instruments (A) Details of outstanding Hedging Contracts

Rs. In Millions

Derivative contracts

Amount in foreign currency

Equivalent Indian rupee

Amount in foreign currency

Equivalent Indian rupee

31st March, 2013

31st March, 2013

31st March, 2012

31st March, 2012

USD/INR 3.82 193.34 3.95 200.00

USD/INR 2.14 96.67 2.21 100.00

USD/INR 2.15 96.67 2.22 100.00

(B) Foreign Currency Exposures The year end exposure in currencies other than the financial currency of the Company that were not hedged by a derivative instrument or otherwise are given below:

2012-13 2011-12 Rs. Millions Fx.Million Rs. Millions Fx.Million Account Receivable 572.78 USD 10.53

401.97 USD 4.65

IDR 27,811.22

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Balance in Bank 701.91 USD 11.17

IDR 16,568.77 0.03 SGD

86.38 USD 0.33 IDR 12,438.32

Fixed Deposit with foreign Bank NIL

NIL

20.07

USD 0.19

IDR 1,836.00 Loan & Advances 1543.57 USD 24.03

AED 0.02 EURO 2.47

IDR 12,768.90

1532.71 USD 28.91 SGD 0.08

EURO 0.24 JPY 0.02

IDR 6,813.12 Advance from Customers 9.45 USD 0.67

SGD 0.63 - -

Accounts Payable/Acceptance (including capital commitments made but not provided for)

6,59.27 USD 7.73 SGD 0.90 JPY 1.82

AED 0.01 IDR 33,313.01

573.07 USD 4.45 SGD 1.06

EURO 0.04 JPY 2.84

AED 0.13 GBP 0.01

IDR 50,541.08 Borrowings 2125.37 USD 39.08 2896.89 USD 56.63

5 All assets and liabilities are classified as current or non-current as per the Company’s normal operating

cycle and other criteria set out in Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, 12 months has been considered by the Company for the purpose of current – noncurrent classification of assets and liabilities.

6 PREVIOUS YEAR FIGURES Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

As per our report of even date For and on behalf of the Board For Contractor, Nayak&Kishnadwala Chartered Accountants H. K. Mittal A. J. Agarwal Executive Chairman Managing Director HimanshuKishnadwala ManoharBidaye KapilGarg Partner Director Director Dated: 18th May 2013 Place: Mumbai K. R. Bharat Priya Vishwanathan Director Company Secretery

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Dated: 18th May 2013 Place: Mumbai

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REGISTERED OFFICE OF THE COMPANY

3rd Floor, Mittal Tower B-wing, Nariman Point, Mumbai 400021, India

CIN: L63090MH1983PLC031418 Telephone No. +91 22 66373333

Fax No. +91 22 66373344 e-mail: mercator@mercator.in

Website: www.mercator.in

LEAD MANAGER

Athena Capital Partners LLP 57 Gloucester Place London W1U 8JH

REGISTRAR AND TRANSFER AGENT

The Bank of New York Mellon (Luxembourg) S.A.

Vertigo Building - Polaris 2-4 rue Eugène Ruppert

L-2453 Luxembourg

TRUSTEE

The Bank of New York Mellon, London Branch One Canada Square London E14 5AL United Kingdom

PRINCIPAL PAYING AND CONVERSION AGENT, PAYING AND CONVERSION AGENT

The Bank of New York Mellon, London Branch

One Canada Square London E14 5AL United Kingdom

LEGAL ADVISERS

To the Company as to Indian Law

Rajani, Singhania & Partners 204-207 Krishna Chambers

59 New Marine Lines Churchgate, Mumbai 400020

To the Lead Manager

Clyde & Co LLP The St Botolph Building

138 Houndsditch London EC3A 7AR

UK

To the Trustee as to English Law

Norton Rose Fulbright (Asia) LLP

One Raffles Quay 34-02 North Tower Singapore 048583

AUDITORS

CNK & Associates LLP,

3rd Floor, Jash Chambers, 7-A, Sir P.M.Road,

Fort, Mumbai – 400001

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