DRAFT RED HERRING PROSPECTUS
Please read Section 60B of the Companies Act, 1956
Dated February 7, 2013
Book Building Issue
MOBME WIRELESS SOLUTIONS LIMITED
Our Company was incorporated as MobME Wireless Solutions Private Limited on December 12, 2006. The name of our Company was changed to MobME
Wireless Solutions Limited pursuant to a fresh certificate of incorporation dated January 15, 2013 issued by the Registrar of Companies, Kerala and
Lakshadweep. For further details of incorporation, corporate structure, changes of name and in registered office of our Company, please see “History and
Certain Corporate Matters” on page 83 of the Draft Red Herring Prospectus. Registered Office: 41/3197, 4th Floor, Bhagheeratha Square, Kacherippady, Kochi 682018; Tel: +91 484 6492646; Fax: +91 484 4019035;
Contact Person: Ms. Smitha Varma, Company Secretary and Compliance Officer; Tel: +91 484 6492646; Fax: +91 484 4019035;
E-mail: [email protected]; Website: www.mobme.in
PROMOTERS OF OUR COMPANY : MR. SANJAY VIJAYAKUMAR, MR. SONY JOY, MR. VIVEK STEVE FRANCIS AND MR. JOSE THOMAS PATTARA
PUBLIC ISSUE OF 705,600 EQUITY SHARES OF FACE VALUE OF ` 10 EACH FOR CASH AT A PRICE OF ` [] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF `
[] PER EQUITY SHARE) AGGREGATING UPTO ` [] LACS (THE “ISSUE”) BY OUR COMPANY, OF WHICH 35,400 EQUITY SHARES OF `10 EACH WILL BE RESERVED FOR
SUBSCRIPTION BY MARKET MAKERS TO THE ISSUE (“MARKET MAKER RESERVATION PORTION”). THE ISSUE LESS THE MARKET MAKER RESERVATION PORTION I.E.
ISSUE OF 35,400 EQUITY SHARES OF `10 EACH IS HEREINAFTER REFERRED TO AS THE “NET ISSUE”. THE ISSUE AND THE NET ISSUE WILL CONSTITUTE 25% AND
23.75%, RESPECTIVELY OF THE POST ISSUE PAID UP EQUITY SHARE CAPITAL OF OUR COMPANY.
In case of revision in the Price Band, the Bidding/Issue Period shall be extended for three additional Working Days after such revision of the Price Band, subject to the
Bidding/Issue Period not exceeding 10 Working Days. Any revision in the Price Band, and the revised Bidding/Issue Period, if applicable, shall be widely disseminated
by notification to the National Stock Exchange of India Limited (“NSE”) and by issuing a press release and also by indicating the change on the website of the Book
Running Lead Manager and at the terminals of the Syndicates. The Issue is being made through a Book Building Process in accordance with Chapter XB of the
Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended.
RISKS IN RELATION TO THE FIRST ISSUE
This being the first issue of Equity Shares of our Company, there has been no formal market for the Equity Shares of our Company. The face value of the
Equity Shares is `10 and the Issue Price is [] times the face value. The Issue Price (as determined and justified by our Company and the book running lead
manager (“BRLM”) as stated under the section titled “Basis for Issue Price” on page 45 of the Draft Red Herring Prospectus) should not be taken to be
indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading
in the Equity Shares of our Company or regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISKS
Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to
take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this Issue. For taking
an investment decision, investors must rely on their own examination of our Company and the Issue including the risks involved. The Equity Shares offered
in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or
adequacy of the Draft Red Herring Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” on page xi of the Draft Red
Herring Prospectus.
ISSUER’S ABSOLUTE RESPONSIBILITY
Our Company having made all reasonable inquiries, accepts responsibility for and confirms that the Draft Red Herring Prospectus contains all information
with regard to our Company and the Issue, which is material in the context of this Issue; that the information contained in the Draft Red Herring Prospectus
is true and correct in all material aspects and is not misleading in any material respect; that the opinions and intentions expressed herein are honestly held
and that there are no other facts, the omission of which makes the Draft Red Herring Prospectus as a whole or any of such information or the expression of
any such opinions or intentions misleading in any material respect.
IPO GRADING
The Issue has been graded by [●] and has been assigned [●], indicating [●] through its letter dated [●]. For further details see “General Information” on
page 15 of the Draft Red Herring Prospectus.
LISTING
The Equity Shares offered through the Draft Red Herring Prospectus are proposed to be listed on the SME Platform of NSE. In-principle approval from NSE,
for listing the Equity Shares has been received pursuant to letter no. [] dated [].
BOOK RUNNING LEAD MANAGER REGISTRAR TO THE ISSUE
IDBI Capital Market Services Limited
3rd Floor, Mafatlal Centre, Nariman Point, Mumbai 400 021
Tel: +91 22 4322 1212 | Fax: +91 22 2285 0785
Email: [email protected]
Investor Grievance Email: [email protected]
Website: www.idbicapital.com
Contact Person: Mr. Keyur Desai
SEBI Registration No.: INM000010866
Bigshare Services Private Limited
E/2, Ansa Industrial Estate, Sakivihar Road, Sakinaka, Andheri (East) ,Mumbai-72
Tel: +91 22 404 30 200 | Fax: +91 22 2847 5207
Email: [email protected]
Investor Grievance ID: [email protected]
Website: www.bigshareonline.com
Contact Person: Mr. Ashok Shetty
SEBI Registration No.: INR000001385
BID/ISSUE PROGRAMME*
BID/ISSUE OPENS ON: [], 2013** BID/ISSUE CLOSES ON: [], 2013**
*The Company may, in consultation with the BRLM, consider participation by Anchor Investors. The anchor investors shall bid on the Anchor Investor Bidding Date.
** The Company may, in consultation with the BRLM, consider closing the Bid/Issue Period for QIBs, other than anchor investors, one Working Day prior to the
Bid/Issue Closing Date.
Contents
SECTION I – GENERAL ........................................................................................................................................ i DEFINITIONS AND ABBREVIATIONS ..................................................................................................................... i CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND CURRENCY OF
PRESENTATION .................................................................................................................................................. ix FORWARD-LOOKING STATEMENTS .................................................................................................................... x
SECTION II - RISK FACTORS .............................................................................................................................. xi SECTION III – INTRODUCTION .......................................................................................................................... 1
SUMMARY OF INDUSTRY .................................................................................................................................... 1 SUMMARY OF BUSINESS ..................................................................................................................................... 4 SUMMARY FINANCIAL INFORMATION ............................................................................................................... 7 THE ISSUE .......................................................................................................................................................... 14 GENERAL INFORMATION .................................................................................................................................. 15 CAPITAL STRUCTURE ......................................................................................................................................... 24 OBJECTS OF THE ISSUE ...................................................................................................................................... 39 BASIS FOR ISSUE PRICE ..................................................................................................................................... 45 STATEMENT OF TAX BENEFITS .......................................................................................................................... 48
SECTION IV- ABOUT US .................................................................................................................................. 58 INDUSTRY OVERVIEW ....................................................................................................................................... 58 OUR BUSINESS .................................................................................................................................................. 67 REGULATIONS AND POLICIES IN INDIA ............................................................................................................. 76 HISTORY AND CERTAIN CORPORATE MATTERS ................................................................................................ 83 OUR MANAGEMENT ......................................................................................................................................... 88 OUR PROMOTERS AND GROUP ENTITIES ....................................................................................................... 100 DIVIDEND POLICY ............................................................................................................................................ 123
SECTION V – FINANCIAL INFORMATION ....................................................................................................... 124 FINANCIAL STATEMENTS ................................................................................................................................ 124 FINANCIAL INDEBTEDNESS ............................................................................................................................. 195 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS .. 199
SECTION VI – LEGAL AND OTHER INFORMATION ......................................................................................... 225 OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ....................................................................... 225 GOVERNMENT AND OTHER APPROVALS ........................................................................................................ 232 OTHER REGULATORY AND STATUTORY DISCLOSURES ................................................................................... 236
SECTION VII – ISSUE RELATED INFORMATION .............................................................................................. 245 ISSUE STRUCTURE ........................................................................................................................................... 245 TERMS OF THE ISSUE ...................................................................................................................................... 252 ISSUE PROCEDURE .......................................................................................................................................... 257
SECTION VIII - MAIN PROVISIONS OF ARTICLES OF ASSOCIATION OF OUR COMPANY ................................. 300 SECTION IX – OTHER INFORMATION ............................................................................................................ 341
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ........................................................................ 341 DECLARATION ................................................................................................................................................. 343 ANNEXURE I .................................................................................................................................................... 344
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SECTION I – GENERAL
DEFINITIONS AND ABBREVIATIONS
Unless the context otherwise requires, in the Draft Red Herring Prospectus, all references to “MobME”, “Issuer”,
“we”, “us”, “our”, “our Company”, as described in the Draft Red Herring Prospectus are to MobME Wireless Solutions
Limited.
Company Related Terms
Term Description
“Our Company” or “the
Company” or to “MobME”
or “we” or “us” or “our”
Unless the context otherwise requires, refers to MobME Wireless Solutions Limited, as
described in the Draft Red Herring Prospectus having its Registered Office at 41/3197,
Fourth Floor, Bhagheeratha Square, Banerji Road, Kacherippady, Kochi 682018, India
AoA/Articles/Articles of
Association
Articles of Association of our Company, as amended from time to time, unless the
context otherwise specifies
Audit Committee The audit committee of the Board. For details, please see “Our Management” on page 88
of the Draft Red Herring Prospectus
Auditor or Statutory
Auditor The statutory auditor of our Company, Sivaprasad and Associates, Chartered Accountants
Board/Board of Directors The board of directors of our Company or a committee constituted thereof, unless the
context otherwise specifies
Director(s) Unless the context requires otherwise, the director(s) on our Board.
Equity Shares Equity shares of our Company of face value of `10 each, fully paid up, unless otherwise
specified in the context thereof
Group Companies
Companies, firms and ventures promoted by our Promoters, irrespective of whether such
entities are covered under section 370(1)(B) of the Companies Act, for details on group
companies please see the chapter titled “Our Promoters and Group Entities” beginning
on page 100 of the Draft Red Herring Prospectus
Key Management
Personnel/KMP Key management personnel of the Company as per the SEBI ICDR Regulations
Memorandum /
Memorandum of
Association /MoA
The memorandum of association of our Company, unless the context otherwise specified
Promoters
The promoters of our Company, i.e. Mr. Sanjay Vijayakumar, Mr. Sony Joy, Mr. Vivek
Steve Francis And Mr. Thomas Jose Pattara. For details, please see “Our Promoters and
Group Entities” beginning on page 100 of the Draft Red Herring Prospectus
Promoter Group
Unless the context otherwise requires, refers to such persons and entities constituting
the promoter group of our Company in terms of Regulation 2(1)(zb) of the SEBI ICDR
Regulations and disclosed in the section “Our Promoters and Group Entities” on page 100
of the Draft Red Herring Prospectus
Registered Office 41/3197, 4th
Floor, Bhagheeratha Square, Banerji Road, Kacherippady, Kochi 682018
Subsidiaries
The subsidiaries of the Company, namely Forward Media Private Limited and Getz
Shoppe & Exim Private Limited. For details, please see “History and Certain Corporate
Matters” on page 83 of the Draft Red Herring Prospectus
Issue Related Terms
Term Description
Allotment/Allot/Allotted Unless the context otherwise requires, means the allotment of Equity Shares pursuant to
this Issue to successful Bidders
Allotment Advice
The note or advice or intimation of Allotment, sent to each successful Bidder who has
been or is to be Allotted the Equity Shares after the Basis of Allotment has been
approved by the NSE.
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Term Description
Allottee A successful Bidder to whom the Equity Shares are Allotted
Anchor Investor A Qualified Institutional Buyer, who applies under the Anchor Investor Portion with a
minimum Bid of ` 100 million
Anchor Investor Bidding
Date
The date one Working Day prior to the Bid/Issue Opening Date on which Bids by Anchor
Investors shall be submitted and allocation to Anchor Investors shall be completed.
Anchor Investors are not permitted to withdraw their bids after the Anchor Investor
Bidding Date
Anchor Investor Issue
Price
The final price at which Equity Shares will be issued and Allotted to Anchor Investors
under the Anchor Investor Portion in terms of the Red Herring Prospectus and the
Prospectus, which price will be a price equal to or higher than the Issue Price but not
higher than the Cap Price. The Anchor Investor Issue Price will be decided by our
Company in consultation with the BRLM.
Anchor Investor Portion
Up to 30% of the QIB Portion, consisting of up to 100,800 Equity Shares, which may be
allocated to Anchor Investors, by our Company, in consultation with the BRLMs, on a
discretionary basis. One third of the Anchor Investor Portion shall be reserved for
domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds
at or above the Anchor Investor Issue Price.
Application Supported by
Blocked Amount/ASBA
An application, whether physical or electronic, used compulsorily by QIBs (except Anchor
Investors) and Non-Institutional Bidders and optionally by Retail Individual Bidders to
make a Bid authorizing a SCSB, either directly or through the Syndicate Members, to
block the Bid Amount in their specified bank account maintained with the SCSB
ASBA Account
Account maintained with a SCSB which will be blocked by such SCSB to the extent of the
appropriate Bid Amount in relation to a Bid by an ASBA Bidder, as specified in the Bid
Cum Application Form
ASBA Bidder(s) Prospective investors (other than Anchor Investors) in this Issue who intend to Bid/apply
through the ASBA process
Banker(s) to the
Issue/Escrow Collection
Bank(s)
The banks which are clearing members and registered with SEBI as Banker to the Issue
with whom the Escrow Account will be opened and in this case []
Basis of Allotment
The basis on which Equity Shares will be Allotted to Bidders under the Issue and which is
described under “Issue Procedure – Basis of Allotment” on page 290 of the Draft Red
Herring Prospectus
Bid cum Application Form The form used by a Bidder (including an ASBA Bidder) to make a Bid in terms of the Red
Herring Prospectus and which will be considered as an application for Allotment
Bid(s)
An indication to make an offer during the Bid/Issue Period by a Bidder, pursuant to
submission of Bid cum Application Form, or during the Anchor Investor Bid/Issue Period
by the Anchor Investors, to subscribe to the Equity Shares of our Company at a price
within the Price Band, including all revisions and modifications thereto
Bid Amount The highest value of the optional Bids indicated in the Bid cum Application Form and
payable by a Bidder on submission of a Bid in the Issue
Bid/Issue Closing Date
Except in relation to any Bids received from Anchor Investors, the date after which the
members of the Syndicate and the designated branches of the SCSBs shall not accept any
Bids for the Issue, which shall be the date notified in an English national newspaper, a
Hindi national newspaper and a Tamil newspaper, each with wide circulation, and in case
of any revision, the extended Bid/ Issue Closing Date also to be notified on the website
and terminals of the Syndicate and SCSBs, as required under the SEBI ICDR Regulations
Bid/Issue Opening Date
Except in relation to any Bids received from Anchor Investors, the date on which the
Syndicate and the SCSBs shall start accepting Bids for the Issue, which shall be notified in
an English national daily newspaper, a Hindi national daily newspaper and a Malayalam
newspaper, each with wide circulation
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Term Description
Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red Herring
Prospectus and the Bid cum Application Form including an ASBA Bidder
Bid/Issue Period
Except in relation to Anchor Investors, the period between the Bid/Issue Opening Date
and the Bid/Issue Closing Date, inclusive of both days, during which prospective Bidders
and the ASBA Bidders can submit their Bids, including any revisions thereof
Bid Lot 300 Equity Shares
Book Building
Process/Method
The book building route as provided under Schedule XI of the SEBI ICDR Regulations, in
terms of which this Issue is being made
Broker Centre Locations where Bid cum Application Form can be submitted and which are part of the
nationwide broker network of the Stock Exchange and where there is a presence of the
brokers’ terminals, an updated list of which is available on the website of the Stock
Exchange.
BRLM/Book Running Lead
Manager
Book running lead manager to the Issue, in this case being IDBI Capital Market Services
Limited
Business Day Any day on which commercial banks in Mumbai are open for business
CAN/Confirmation
Allocation Note
The note or advice or intimation of Allocation of Equity Shares sent to Anchor Investors
who have been Allocated Equity Shares after the Anchor Investor Bid Period and after
the discovery of the Anchor Investor Issue Price
Cap Price The higher end of the Price Band above which the Issue Price will not be finalized and
above which no Bids will be accepted
Client ID Client identification number of the Bidder’s beneficiary account
Controlling Branch
Such branches of the SCSBs which coordinate under this Issue by the ASBA Bidders with
the BRLM, the Registrar to the Issue and the Stock Exchange, a list of which is available at
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1355898148848.html updated from
time to time
Cut-off Price
Any price within the Price Band finalized by our Company in consultation with the Book
Running Lead Manager. A Bid submitted at Cut-Off Price is a valid price at all levels within
the Price Band. Only Retail Individual Bidders are entitled to Bid at the Cut-off Price, for a
Bid Amount not exceeding `200,000. No other category of Bidders are entitled to Bid at
the Cut-off Price
Demographic Details The demographic details of the Bidders such as their address, occupation and bank
account details as maintained by their respective Depository Participants
Designated Branch
Such branches of the SCSBs which shall collect the Bid cum Application Form used by
ASBA Bidders and a list of which is available at http://www.sebi.gov.in/cms/
sebi_data/attachdocs/1355898148848.html updated from time to time
Designated Date
The date on which funds are transferred from the Escrow Account to the Issue Account
or the Refund Account, as appropriate, or the amount blocked by the SCSB is transferred
from the bank account of the ASBA Bidder to the Public Issue Account, as the case may
be, after the Draft Red Herring Prospectus is filed with the RoC, following which the
Board of Directors shall Allot Equity Shares to successful Bidders
Designated Stock
Exchange National Stock Exchange of India Limited
Draft Red Herring
Prospectus/DRHP
This draft red herring prospectus dated February 4, 2013 filed with the National Stock
Exchange of India Limited issued in accordance with Section 60B of the Companies Act
and the SEBI Regulations, which does not contain complete particulars of the Issue
Eligible NRIs
NRIs from jurisdictions outside India where it is not unlawful to make an issue or
invitation under the Issue and in relation to whom the Red Herring Prospectus
constitutes an invitation to subscribe to the Equity Shares offered herein
Escrow Account Account opened with the Escrow Collection Bank(s) for the Issue and in whose favour the
Bidder will issue cheques or drafts in respect of the Bid Amount when submitting a Bid
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Term Description
Escrow Agreement
Agreement to be entered into by our Company, the Registrar to the Issue, BRLM, the
Syndicate Members and the Escrow Collection Bank(s) for collection of the Bid Amounts
and where applicable, refunds of the amounts collected to the Bidders on the terms and
conditions thereof
First/Sole Bidder The Bidder whose name appears first in the Bid cum Application Form or Revision Form
Floor Price The lower end of the Price Band, at or above which the Issue Price will be finalized and
below which no Bids will be accepted, including revisions thereof
Issue This public issue of 705,600 Equity Shares at the Issue Price aggregating to `[] lacs by
our Company
Issue Agreement The agreement dated January 29, 2013 entered into between our Company and the
BRLM, pursuant to which certain arrangements are agreed to in relation to the Issue
Issue Price
The final price at which the Equity Shares will be issued and allotted in terms of the Draft
Red Herring Prospectus. The Issue Price will be decided by our Company in consultation
with the Book Running Lead Manager on the Pricing Date
Issue Proceeds The gross proceeds of the Issue that would be available to our Company after the final
listing and trading approvals are received
Market Maker
IDBI Capital Market Services Limited will act as the market maker and has agreed to
receive or deliver the specified securities in the market making process for a period of
three years from the date of listing of our Equity Shares or for a period as may be
notified by amendment to SEBI ICDR Regulations
Market Maker
Reservation Portion 35,400 Equity Shares of face value of `10 each, reserved for the Market Maker
Mutual Funds A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996
Mutual Fund Portion 5% of the QIB Portion (excluding the Anchor Investor Portion), or 11,700 Equity Shares
available for allocation to Mutual Funds, out of the QIB Portion
Net Issue The Issue less the number of the Equity Shares allocated to the Market Maker
Net Proceeds
The Issue Proceeds less the Issue related expenses. For further information about use of
the Issue Proceeds and the Issue expenses, see “Objects of the Issue” on page 39 of the
Draft Red Herring Prospectus
Net QIB Portion The QIB Portion less the number of the Equity Shares allocated to the Anchor Investors
Non-Institutional Bidders All Bidders that are not QIBs or Retail Individual Bidders and who have Bid for Equity
Shares for an amount more than ` 2 lacs (but not including NRIs other than Eligible NRIs)
Non-Institutional Portion The portion of the Issue being not less than 100,800 Equity Shares available for allocation
to Non-Institutional Bidders on a proportionate basis
Non-Resident Indian or
NRI/ Eligible NRI(s)
A person resident outside India, as defined under FEMA and includes a non-resident
Indian, A non-resident Indian, resident in a jurisdiction outside India where it is not
unlawful to make an offer or invitation under the Issue and in relation to whom the Red
Herring Prospectus constitutes an invitation to subscribe for the Equity Shares
Pay-in-Period For Bidder the period commencing on the Bid Opening Date and continuing till the Bid
Closing Date
NSE The National Stock Exchange of India Limited
Price Band
Price band of a minimum price (Floor Price) of `[] and the maximum price (Cap Price) of
`[] and includes revisions thereof, with the relevant financial ratios calculated at the
Floor Price and at the Cap Price. The Price Band and the minimum Bid lot size for the
Issue will be advertised at least five working days prior to the Bid/ Issue Opening Date, in
an English daily national newspaper, a Hindi daily national newspaper and a Malayalam
newspaper each with wide circulation
Pricing Date The date on which our Company in consultation with the BRLM finalizes the Issue Price
Prospectus The Prospectus to be filed with the RoC in accordance with Section 60 of the Companies
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Term Description
Act, containing, inter alia, the Issue Price that is determined at the end of the Book
Building process, the size of the Issue and certain other information
Public Issue Account
The bank account opened under Section 73 of the Companies Act with the Banker to the
Issue to receive money from the Escrow Accounts on the Designated Date and where the
funds transferred by the SCSBs from the ASBA Accounts shall be received
Qualified Foreign
Investors or QFIs / Eligible
QFI(s)
Non-resident investors, other than SEBI registered FIIs or sub-accounts or SEBI registered
FVCIs, who meet ‘know your client’ requirements prescribed by SEBI and are resident in
a country which is (i) a member of Financial Action Task Force or a member of a group
which is a member of Financial Action Task Force; and (ii) a signatory to the International
Organisation of Securities Commission’s Multilateral Memorandum of Understanding or
a signatory of a bilateral memorandum of understanding with SEBI.
Provided that such non-resident investor shall not be resident in a country which is listed
in the public statements issued by Financial Action Task Force from time to time on: (i)
jurisdictions having a strategic anti-money laundering/combating the financing of
terrorism deficiencies to which counter measures apply; and (ii) jurisdictions that have
not made sufficient progress in addressing the deficiencies or have not committed to an
action plan developed with the Financial Action Task Force to address the deficiencies.
QIB Portion The portion of the Issue, being 50% of the Net Issue or 335,100 Equity Shares, available
for allocation to QIBs on a proportionate basis (including Anchor Investors)
Qualified Institutional
Buyers or QIBs
Public financial institutions as specified in Section 4A of the Companies Act, scheduled
commercial banks, mutual fund registered with SEBI, FII and sub account registered with
SEBI, other than a Sub-Account which is a foreign corporate or foreign individual,
multilateral and bilateral development financial institution, VCF, FVCIs, state industrial
development corporation, insurance company registered with Insurance Development
Regulatory Authority, provident fund with minimum corpus of `250 million, pension fund
with minimum corpus of `250 million and National Investment Fund set up by
Government of India and insurance funds set up and managed by army, navy or air force
of the Union of India and the insurance funds set up and managed by the Department of
Posts, India
Red Herring Prospectus
The red herring prospectus issued in accordance with Section 60B of the Companies Act,
which does not have complete particulars of the price at which the Equity Shares are
offered and the size of the Issue. The Red Herring Prospectus is to be filed with the RoC
at least three days before the Bid/Issue Opening Date and will become a Prospectus
upon filing with the RoC after the Pricing Date
Refund Account The account opened with Escrow Collection Bank(s), from which refunds (excluding to
the ASBA Bidders), if any, of the whole or part of the Bid Amount shall be made
Refund Bank []
Refunds through
electronic transfer of
funds
Refunds through electronic transfer of funds means refunds through ECS / NECS, Direct
Credit, NEFT, RTGS or the ASBA process, as applicable
Registrar to the Issue Registrar to this Issue, in this case being Bigshare Services Private Limited
Retail Individual
Bidders/Retail Investors
Individual investors who have applied for Equity Shares for an amount not more than `2
lacs (including HUFs applying through their Karta)
Revision Form The form used by the Bidders to modify the quantity of Equity Shares or the Bid Price in
any of their Bid cum Application Forms or any previous Revision Form(s)
SEBI ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009 as amended from time to time
Self-Certified Syndicate
Banks/SCSBs
The banks which are registered with SEBI under the SEBI (Bankers to an Issue)
Regulations, 1994 and offer services of ASBA, including blocking of an ASBA account in
accordance with SEBI ICDR Regulations, a list of which is available on
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Term Description
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1355898148848.html or any such
other webpage as may be prescribed by SEBI from time to time
SME Equity Listing
Agreement
The equity listing agreement entered into by our Company with the Designated Stock
Exchange, including all amendments made thereto from time to time
SME Platform of NSE
The SME Platform of NSE which was approved by SEBI as an SME Exchange on October
14, 2011 for listing of equity shares offered under Chapter XB of the SEBI ICDR
Regulations
Stock Exchange The NSE
Sub Syndicate Member A SEBI Registered member of NSE appointed by the BRLM and / or Syndicate Member to
act as a Sub Syndicate Member in the Issue
Syndicate Includes the BRLM, Syndicate Members and Sub-Syndicate Members
Syndicate Members IDBI Capital Market Services Limited and []
Syndicate Agreement The agreement dated [] entered into among our Company, the BRLM and the Syndicate
Members, in relation to the collection of Bids in this Issue
Syndicate ASBA Bidding
Locations
Bidding Centres where an ASBA Bidder can submit their Bid in accordance with
applicable laws.
Transaction Registration
Slip/TRS
The slip or document issued by member of the Syndicate or the SCSB, as the case may
be, to the Bidder as proof of registration of the Bid
Underwriters []
Underwriting Agreement The agreement among the Underwriters and our Company to be entered into on or after
the Pricing Date
Working Day(s)
All days other than a Sunday or a public holiday (except during the Bid/Issue Period
where a working day means all days other than a Saturday, Sunday or a public holiday),
on which commercial banks in Mumbai are open for business
Technical/Industry Related Terms /Abbreviations
Term Description
Crypto SIM Card A Java based SIM card with cryptographic capabilities
Consumer VAS Consumer division of the VAS segment
Enterprise Solution Enterprise solution segment of our Company
GSMA A worldwide association of mobile operators and related support companies
ID Server Identity Server used in the Mobile Digital Signature service delivery mechanism
M-Governance Mobile Governance
Messaging Server Messaging server used for SMS delivery
Mobile Digital Signature A digital signature on mobile phone
Mobile Express Mobile Digital Signature Solution product of our Company
NDNC Registry National Do not Call registry
Network VAS Network VAS division of VAS
Picture Post Airtel picture post
PIN Personal identification number
R&D Research & Development
SD Card(s) Secure Digital Card(s)
Secure Elements Encrypted tamper proof smart card chip
Signature Server Signature server used for generating Mobile Digital Signature
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Term Description
SIM Subscriber Identity Module
SMS Short Messaging Service
TSP Telecom Service Provider
USB Universal Serial Bus
USSD Unstructured Supplementary Service Data
VAS Value added services segment of our Company
Valimo Valimo Wireless Oy
Conventional and General Terms/ Abbreviations
Term Description
Act or Companies Act The Companies Act, 1956, as amended from time to time
AGM Annual general meeting
AS Accounting Standards
AY Assessment Year
BAN Bank Account Number
BPLR Bank Prime Lending Rate
BIFR Board for Industrial and Financial Reconstruction
CAGR Compounded Annual Growth Rate
CIN Corporate Identification Number
CDSL Central Depository Services (India) Limited
Depositories NSDL and CDSL
Depositories Act The Depositories Act, 1996 as amended from time to time
DP/Depository Participant A depository participant as defined under the Depositories Act, 1996
DP ID Depository Participant’s Identity
EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation
ECS Electronic Clearing Service
EGM Extraordinary General Meeting
EPS Earnings Per Share i.e., profit after tax for a Financial year divided by the weighted
average outstanding number of Equity Shares at the end of that Financial year
FBT Fringe Benefit Tax
FCNR Foreign Currency Non-Resident
FDI Foreign Direct Investment
FEMA Foreign Exchange Management Act, 1999, as amended, together with rules and
regulations thereunder
FEMA Regulations FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations 2000
and amendments thereto
FII Foreign institutional investors (as defined under the Securities and Exchange Board of
India (Foreign Institutional Investors) Regulations, 1995) registered with SEBI
Financial Year/Fiscal/FY Period of twelve months ended March 31 of that particular year, unless otherwise stated
FPO Follow on Public Offer
FVCI Foreign Venture Capital Investors under the Securities and Exchange Board of India
(Foreign Venture Capital Investor) Regulations, 2000
GDP Gross Domestic Product
GIR General Index Register
GoI/Government/Central
Government Government of India
HUF Hindu Undivided Family
ICAI Institute of Chartered Accountants of India
- viii -
Term Description
IFRS International Financial Reporting Standards
Indian GAAP Generally Accepted Accounting Principles in India
IPO Initial Public Offering
MAT Minimum Alternative Tax
MCA Ministry of Corporate Affairs
N.A. Not applicable
NAV
Net Asset Value being paid up equity share capital plus free reserves (excluding reserves
created out of revaluation) less deferred expenditure not written off (including
miscellaneous expenses not written off) and debit balance of Profit and Loss account,
divided by number of issued Equity Shares
NECS National Electronic Clearing Services
NEFT National Electronic Fund Transfer
NR Non Resident
NRE Non Resident External
NRO Non Resident Ordinary
NSDL National Securities Depository Limited
OCB/Overseas Corporate
Body
A company, partnership, society or other corporate body owned directly or indirectly to
the extent of at least 60% by NRIs including overseas trusts, in which not less than 60% of
beneficial interest is irrevocably held by NRIs directly or indirectly and which was in
existence on October 3, 2003 and immediately before such date had taken benefits
under the general permission granted to OCBs under the FEMA. OCBs are not permitted
to invest in the Issue, except with the specific permission of the RBI
p.a. Per annum
PAN Permanent Account Number allotted under the Income Tax Act, 1961
PAT Profit after tax
RBI The Reserve Bank of India
RoC Registrar of Companies, Kerala at Ernakulam
` Indian Rupees
RTGS Real Time Gross Settlement
SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time
SEBI Takeover Regulations Securities and Exchange Board of India Act (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011
State Government The government of a state of the Union of India
SME Small and medium enterprise
Technology Development
Board / TDB
Technology Development Board as defined under the Technology Development Board
Act, 1995
US GAAP Generally Accepted Accounting Principles in United States of America
VCF Venture capital funds as defined in and registered with SEBI under the SEBI (Venture
Capital Fund) Regulations, 1996
WDV Method Written Down Value Method for calculation of depreciation
The words and expression used but not defined in this Draft Red Herring Prospectus will have the same meaning as
assigned to such terms under the Companies Act, SEBI Act, the SCRA, the Depositories Act and the rules and
regulations made thereunder.
Notwithstanding the foregoing, terms in “Main Provisions of Articles of Association of our Company”, “Statement of
Tax Benefits”, “Regulations and Policies in India” and “Financial Statements” on pages 300, 48, 76 and 124,
respectively, shall have the meanings given to such terms in these respective sections
- ix -
CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND CURRENCY OF PRESENTATION
Certain Conventions
Unless otherwise specified or the context otherwise requires, all references to “India” in the Draft Red Herring
Prospectus are to the Republic of India, together with its territories and possessions.
Financial Data
Unless stated otherwise, the financial data in the Draft Red Herring Prospectus is derived from our restated
unconsolidated and consolidated financial statements in accordance with Indian GAAP and the Companies Act, and
restated in accordance with the SEBI ICDR Regulations and Indian GAAP which are included in the Draft Red Herring
Prospectus, and set out in “Financial Information” on page 124 of the Draft Red Herring Prospectus. Our Company’s
financial year commences on April 1 and ends on March 31 of the next year, so all references to a particular Fiscal Year
or Financial Year or FY are to the twelve-month period ended March 31 of that year.
In the Draft Red Herring Prospectus, any discrepancies in any table between the total and the sum of the amounts
listed are due to rounding off.
We prepare our financial statements in accordance with Indian GAAP, which differs in certain material respects from
IFRS and U.S. GAAP. Accordingly, the degree to which the Indian GAAP financial statements included in this DRHP will
provide meaningful information is entirely dependent on the reader’s level of familiarity with the Companies Act,
Indian GAAP and the SEBI ICDR Regulations. Any reliance by persons not familiar with Indian accounting practices on
the financial disclosures presented in the Draft Red Herring Prospectus should accordingly be limited. We have not
attempted to quantify the impact of IFRS or U.S. GAAP on the financial data included in the DRHP, nor do we provide a
reconciliation of our financial statements to those under U.S. GAAP or IFRS and we urge you to consult your own
advisors regarding such differences and their impact on our financial data. For details in connection with risks
involving difference between Indian GAAP and IFRS, please see “Risk Factors- significant differences exist between
Indian GAAP used throughout our Company’s financial information and other accounting principles, such as U.S. GAAP
and IFRS, with which investors may be more familiar” on page xxiii of the Draft Red Herring Prospectus.
Currency of Presentation
All references to “Rupees” or “`” or “INR” or “Rs.” are to Indian Rupees, the official currency of the Republic of India.
Industry and Market Data
Unless stated otherwise, industry and market data used throughout the Draft Red Herring Prospectus has been
obtained from publications (including websites) available in public domain and our internal reports. These industry
publications generally state that the information contained in those publications has been obtained from sources
believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be
assured. Although we believe market data used in the Draft Red Herring Prospectus is reliable, neither we nor the
BRLM has independently verified such information or ascertained the underlying economic assumptions contained
therein. The data used from these sources may have been reclassified by us for purposes of presentation. Data from
various market sources may not be comparable. The extent to which the market and industry data is presented in the
Draft Red Herring Prospectus is meaningful depends upon the reader's familiarity with and understanding of the
methodologies used in compiling such data. There are no standard data gathering methodologies in the industry in
which we conduct our business, and methodologies and assumptions may vary widely among different market and
industry sources.
- x -
FORWARD-LOOKING STATEMENTS
All statements contained in the Draft Red Herring Prospectus that are not statements of historical fact constitute
“forward looking statements”. All statements regarding our expected financial condition and results of operations,
business, plans and prospects are forward-looking statements. These forward looking statements include statements
as to our business strategy, our revenue and profitability, planned projects and other matters discussed in the Draft
Red Herring Prospectus regarding matters that are not historical facts. These forward looking statements and any
other projections contained in the Draft Red Herring Prospectus (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.
These forward looking statements generally can be identified by words or phrases such as “aim”, “anticipate”,
“believe”, “expect”, “estimate”, “intend”, “objective”, “plan”, “project”, “shall”, “will”, “will continue”, “will pursue”
or other words or phrases of similar import. Similarly, statements that describe our strategies, objectives, plans or
goals are also forward looking statements. All forward looking statements are subject to risks, uncertainties and
assumptions about us that could cause actual results and property valuations to differ materially from those
contemplated by the relevant statement.
Actual results may differ materially from those suggested by the forward looking statements due to risks or
uncertainties associated with our expectations with respect to, but not limited to, regulatory changes pertaining to
the industries in India in which we have our businesses and our ability to respond to them, our ability to successfully
implement our strategy, our growth and expansion, technological changes, our exposure to market risks, general
economic and political conditions in India and which have an impact on our business activities or investments, the
monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange
rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in
domestic laws, regulations and taxes and changes in competition in our industry. Important factors that could cause
actual results to differ materially from our expectations include, among others:
Our ability to successfully implement our strategy, growth and expansion plans
Changes in government policies and regulatory actions that apply to or affect our business
Inability to adequately keep up pace with rapid changes in information technology, industry standards and
customer preference, which may adversely impact our competitiveness
Developments affecting the Indian economy
For further discussion of factors that could cause our actual results to differ from our expectations, see “Risk Factors”,
“Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on
pages xi, 67 and 199 of the Draft Red Herring Prospectus respectively.
By their nature, certain market risk disclosures are only estimates and could be materially different from what actually
occurs in the future. As a result, actual future gains or losses could materially differ from those that have been
estimated. Forward looking statements speak only as of the date of the Draft Red Herring Prospectus. Neither our
Company, our Directors and officers, the Book Running Lead Manager or any of the members of the Syndicate nor any
of their respective affiliates has any obligation to, and do not intend to, update or otherwise revise any statements
reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the
underlying assumptions do not come to fruition. In accordance with SEBI requirements, our Company and the Book
Running Lead Manager will ensure that investors in India are informed of material developments until the time of the
grant of listing and trading approvals by the Stock Exchange.
- xi -
SECTION II - RISK FACTORS
An investment in equity shares involves a high degree of risk. You should carefully consider all the information in this
Draft Red Herring Prospectus, including the risks and uncertainties described below, before making an investment in
our Equity Shares. To obtain a complete understanding of our Company, you should read this section in conjunction
with “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on
pages 67 and 199 of the Draft Red Herring Prospectus respectively as well as the other financial and statistical
information contained in this Draft Red Herring Prospectus. The risks and uncertainties described in this section are not
the only risks and uncertainties we currently face. Additional risks and uncertainties not known to our Company or that
we currently deem immaterial may also have an adverse effect on our business, financial condition and results of
operations. If any of the following risks, or other risks that are not currently known or are now deemed immaterial,
actually occur, our business, financial condition and results of operations could suffer, the price of our Equity Shares
could decline, and you may lose all or part of your investment. The financial and other related implications of risks
concerned, wherever quantifiable, have been disclosed in the risk factors mentioned below. However, there are risks
where the effect is not quantifiable and hence has not been disclosed in the applicable risk factors.
Unless otherwise stated, the financial information used in this section is derived from our restated and audited
consolidated financial statements prepared under Indian GAAP. For further details see “Financial Statements” on page
124 of the Draft Red Herring Prospectus.
INTERNAL RISKS
Risks relating to our Business
1. Our Promoters and our Group Companies are involved in a number of legal and regulatory proceedings and any
adverse decision in such proceedings may have a material adverse effect on our business, result of operations
and financial condition
There are certain outstanding legal proceedings against our Promoters and our Group Companies pending at various
levels of adjudication before various courts, tribunals, authorities and appellate bodies in India. Should any new
developments arise, such as change in applicable laws or rulings against our Company by the appellate courts or
tribunals, we may need to make provisions in our financial statements, which may increase our expenses and current
liabilities. We cannot give you any assurance that these legal proceedings will be decided in our favour. Any adverse
outcome may have a significant effect on our business and financial condition and our results of operations. Details of
the proceedings that have been initiated against our Promoters and our Group Companies and the amounts claimed
against our Company in these proceedings, to the extent ascertainable, are set forth below:
Litigation against our Promoters:
Sr. No. Nature of the litigation Number of outstanding
litigations
Aggregate amount involved
( ` in lacs)
1. Tax proceedings 3 121.94
2. Criminal Proceedings 1 N.A
Total 4 121.94
Litigation against our Group Companies:
Sr. No. Nature of the litigation Number of outstanding litigations Aggregate amount involved
( ` in lacs)
1. Tax proceedings 2 12.25
Total 2 12.25
For further details of the legal proceedings, please see “Outstanding Litigation and Material Developments” on page
225 of the Draft Red Herring Prospectus.
- xii -
2. One of our Subsidiaries and several of our Group Companies have incurred losses during the last three Financial
years, which may adversely affect our results of operations.
For the Financial year ending March 31, 2012, one of our Subsidiaries Forward Media Private Limited has incurred
losses of `31.20 lacs. In the event that the aforementioned Subsidiary continues to incur losses or if our other
Subsidiary incurs losses, our Company’s consolidated results of operations and financial condition will be adversely
affected.
Further, several of our Group Companies have incurred losses during the last three financial years, immediately
preceding the date of filing of the Draft Red Herring Prospectus. For details of profits/ (losses) after tax of these
companies in the preceding three Financial years please see “Group Companies - Loss making Group Companies” on
page 119 of the Draft Red Herring Prospectus. There is no assurance that our subsidiaries or any of our Group
Companies will not incur losses in future periods or that there will not be an adverse effect on our Company's
reputation or business as a result of such losses.
3. We intend to utilize majority of the Issue proceeds for deployment of Mobile Digital Signature technology but
due to our lack of experience in this technology and other variables, we are susceptible to various risks which
may adversely affect our business, financials and result of operations.
Majority of the Issue Proceeds will be utilised for deploying Mobile Digital Signature technology for our customers.
Our Company has no prior experience in implementing this technology and has not derived any revenues through this
technology in the past years. Our lack of experience in this technology may, inter alia, reduce our ability to
successfully implement this technology in India for our customers. Our Company expects the competition to intensify
in the Mobile Digital Signature technology segment in India and there may also be increasing competition from global
players. Further, competing technologies may make the adoption of the Mobile Digital Signature technology difficult.
Therefore, our success of implementing the Mobile Digital Signature technology in India depends on a variety of
factors and our ability to manage risks such as technology, business and financial risks. If such risks materialize, this
may adversely affect our business, financials and result of operations.
4. We require several registrations, licenses and approvals for carrying out our business. If our Company is unable
to obtain the required registrations, licenses and approvals in a timely manner or at all, this may adversely
affect our results of operations.
Our Company requires a number of approvals, licenses, registrations and permits for developing and operating our
business. If we fail to obtain new or retain any applicable approvals, licenses, registrations and permits, or renewals
thereof, in a timely manner or at all, it could affect our business, results of operations and financial condition.
5. There has been a delay in filing of certain forms with the RoC. Though the same have been filed along with
additional fees, there is a possibility that action may be taken against our Company in future by the RoC. In the
event an adverse action is taken by the RoC, our business, financial condition and results of operations could be
adversely affected.
There has been a delay in filing of the following forms with the RoC:
Details of form Nature Due date Date of filing
Form 2 Return of allotment February 2, 2008 February 13, 2008
Form 2 Return of allotment February 15, 2008 February 27, 2008
Form 2 Return of allotment March 3, 2008 March 17, 2008
Form 2 Return of allotment April 15, 2010 December 2, 2010
Form 2 Return of allotment* May 26, 2012 November 30, 2012
Form 32 For appointment of Mr. George Brody and
Mr. Sony Joy as additional Directors April 20, 2008 May 17, 2008
Form 32 For change in designation of Mr. Sanjay
Vijayakumar and Mr. Sony Joy May 1, 2010 April 12, 2012
Form 8 For creation of charge August 30, 2012 September 7, 2012
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* Our Company had made an allotment of 400,000 Equity Shares comprising of 270,146 Equity Shares to three of our
promoters and 129,854 Equity Shares to some of our employees on April 27, 2012 at a price of ` 10 per Equity Share
for consideration otherwise than for cash. Subsequently, through a special resolution passed in the EGM on December
31, 2012, our Company has, based on the Auditor’s view, re-characterized the allotment of 270,146 Equity Shares for
consideration otherwise than in cash at a price of ` 10 per Equity Share and the allotment price of 129,854 Equity
Shares to ` 42.73 per Equity Shares, being the fair value based on the valuation report obtained by our Company.
Consequently, our Company filed the requisite form 23 with the RoC on February 7, 2013. The filing of the said form
was delayed due to technical problems on the e-filing website www.mca.gov.in/mca21. For further details, see “Capital
Structure” on page 24 of the Draft Red Herring Prospectus.
Although the forms as tabulated above have been filed along with the requisite additional fees for late filing of these
forms, it does not absolve our Company from penalty which the RoC may impose for the said late filing in the future. If
the RoC imposes penalties on our Company, it may harm our reputation and consequently, our business, financial
condition and results of operations could be adversely affected.
6. We have experienced negative cash flows in the past and any negative cash flows in the future could adversely
affect our financial conditions and results of operations.
We have experienced negative cash flows on an unconsolidated basis in the recent past, the details of which are as
follows:
(` in lacs)
Particulars
Six months period
ending September
30, 2012
For the Financial year ending on
March 31,
2012
March 31,
2011
March 31,
2010
Net cash from/(used in) operating activities 44.26 (11.50) 331.80 40.51
Net cash from/(used in) investing activities (121.36) (142.64) (173.52) (63.54)
Net cash from/(used in) financing activities 85.84 214.03 4.85 62.31
Negative cash flows over extended periods, or significant negative cash flows in the short term, could materially
impact our ability to operate our business and implement our growth plans. If our Company experiences negative cash
flows in the future, this may have a material adverse effect on our business, results of operations and financial
condition. For further details, please see “Financial Statements” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” on page 124 and page 199 of the Draft Red Herring Prospectus
respectively.
7. Our Statutory Auditor in its audit report has made certain qualifications and thus our financial statements may
not present an accurate estimate of our financial position or performance.
Our Statutory Auditor in its audit report for the Financial year ending March 31, 2012 has made certain qualifications
which were not given effect to in our restated financial information. The extract in relevant part of the qualifications is
as follows:
“Attention drawn to Notes No-2.37 regarding entering into transactions with parties covered u/s. 297 of the
Companies Act, 1956 without obtaining prior permission from the central government, the effect of the same is not
ascertainable.”
“In our opinion and according to the information and explanations given to us, the transactions made in pursuance of
contracts or arrangements entered in the Registers maintained under Section 301 and exceeding the value of five lakhs
rupees in respect of any party during the year have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time. However, the company has not obtained prior permission from the
Central Government for the same. The company is in the process of filing application before the Company Law Board
for regularizing the same.”
We cannot assure you that these qualifications will not have a material adverse effect on our result of operations and
financial condition.
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8. We have issued Equity Shares during the last one year at a price which is lower than the Issue Price.
Our Company has, in the last twelve months prior to filing this Draft Red Hearing Prospectus, issued Equity Shares at a
price that could be lower than the Issue Price. The price at which these Equity Shares have been issued in the last one
year is not indicative of the price at which further Equity Shares will be issued or traded. For further details regarding
such issuances of equity shares see “Capital Structure” on page 24 of the Draft Red Herring Prospectus.
9. Our Company has entered into an exclusive license agreement and also a services agreement with Valimo
Wireless Oy for use of Mobile Digital Signature technology. If we are unable to adhere to the terms of these
agreements or fail in paying the requisite fees, Valimo Wireless Oy can terminate these agreements which
could adversely affect our business strategy, financial conditions and results of operations.
Valimo Wireless Oy, a Finnish company has developed a Mobile Digital Signature technology. Our Company has
entered into an exclusive license agreement dated August 8, 2012 with Valimo Wireless Oy for three years for use of
this technology. Further, our Company has also entered into a services agreement dated August 8, 2012 with Valimo
Wireless Oy for maintenance services and support services for the said technology. The license agreement and the
service agreement are both valid until August 7, 2015 and there is no guarantee that it will be renewed on terms
acceptable to our Company. Under the terms of these agreements, our Company is required to pay fees to Valimo
Wireless Oy. If we are unable to make the requisite payment of fees under the said agreements, Valimo Wireless Oy
can terminate the agreements. Further, we or Valimo Wireless Oy are entitled to terminate the agreements with
immediate effect upon specified grounds. These agreements are important to our strategy of creating a mobile
identity ecosystem through Mobile Express which will be critical to our operations going forward. Further, one of the
objects of the Issue is to pay fees due to Valimo Wireless Oy pursuant to these agreements and for use of its Mobile
Digital Signature technology. If we are unable to adhere to the terms of these agreements or fail in paying the
requisite fees, Valimo Wireless Oy can terminate these agreements which could adversely affect our business
strategy, financial conditions and results of operations.For further details, see “Objects of the Issue” on page 39 of the
Draft Red Herring Prospectus.
10. We have given unsecured advances to related parties that give us lower yields which may affect our results of
operations.
Our Company has given unsecured loans of ` 53.03 lacs and ` 135.50 lacs at zero percent interest rate to our
Subsidiaries viz. Forward Media Private Limited and Getz Shoppe &Exim Private Limited respectively. The surplus
funds utilised for this might have given us better yields had we invested it at market rate. Further, this is an
investment in unsecured debt instruments carrying interest rates lower than the market value, which could adversely
affect our business, results of operations and financial condition.For further details, see “Financial Indebtedness” on
page 195 of the Draft Red Herring Prospectus.
11. Several of our Company’s products and services sold to TSPs are based on per-transaction pricing basis or on a
revenue share basis. These do not provide a guaranteed amount of revenue which could adversely affect our
results of operations and financial condition.
Several of our Company’s products and services sold to TSPs are on a per-transaction basis or on a revenue share
basis, rather than on a license fee basis. The sale of products and services on a per transaction basis does not provide
a guaranteed amount of revenue unlike the sale of such products and services on a license fee basis. In addition, our
Company installs specialized equipment at the place of operation of the relevant TSPs and if the sales from our
products and services sold on a per-transaction basis are lower than required to recoup our capital expenditure and
operating expenditure for such products, services and equipment, our Company’s results of operations and financial
condition could be adversely affected. For further details, see “Our Business” on page 67 of the Draft Red Herring
Prospectus.
12. Some of the terms of the agreements entered into with the TSPs have certain onerous conditions, which could
result in circumstances that could adversely affect our business, results of operations and financial condition.
Most of our agreements with the TSPs are for tenure ranging between one to two years wherein the TSPs have the
option of not renewing the agreements upon their expiry. Further, these agreements give TSPs the right of unilateral
- xv -
termination. Moreover, some of the agreements with the TSPs require our Company to provide specific products and
services on an exclusive basis. As a result, these circumstances could adversely affect our business, results of
operations and financial condition.For further details, also see risk factor titled “Several of our Company’s products
and services sold to TSPs are based on per-transaction pricing basis or on a revenue share basis, which do not provide a
guaranteed amount of revenue and could adversely affect our results of operations and financial condition” on page
xiv of the Draft Red Herring Prospectus.
13. The liability arising from Customer Preference Regulations, 2010 issued by TRAI in the context of the national
do not call (“NDNC”) registry, could adversely affect our business, results of operations and financial condition.
As part of our VAS business, one of the services we provide is telemarketing services for TSPs and corporates. The TRAI
has issued the Customer Preference Regulations, 2010 which provides inter alia that if subscribers to TSPs’ services do
not wish to receive unsolicited commercial communication on their telephones, it will be the TSPs’ responsibility to
register its subscribers’ numbers with the NDNC registry. Therefore, telemarketers, like our Company, can call only
those numbers that do not appear on the NDNC registry since TRAI may levy penalties on telemarketers which may
include a monetary penalty.
On continuous default, such telemarketer is black listed and if the name of such telemarketer continues to be black
listed for a period of two years, then the registration of the telemarketer is cancelled by TRAI under the provisions of
the Customer Preference Regulations, 2010. Though our Company has a process in place which monitors compliance
with the Customer Preference Regulations, 2010 there may be an event in which our Company is found to be in
violation of the Customer Preference Regulations, 2010. If such an event occurs, our business, results of operations
and financial condition could be adversely affected. For further details, see “Regulations and Policies in India” on page
76 of the Draft Red Herring Prospectus.
14. Our Company’s agreements with TSP for services do not obligate them to market or promote our products and
services to their subscribers, which could adversely affect our results of operations and financial condition.
Our agreements for products and services with the TSPs do not obligate them to market or promote any of our
products or services to their subscribers, including new products and services that are offered to existing subscribers
from time to time. Without the appropriate marketing and promotion of the services that our Company provides
through the TSPs, their subscribers may not be aware of, or may cease to use or decrease usage of, our products and
services. If the TSPs display our products and services less prominently or our products and services are less accessible
to their subscribers, our products and services would become more difficult for subscribers to discover and access and
could, therefore, result in a decline in sales of our products and services. This could adversely affect the income
generated from our products and services, and thus our overall results of operations and financial condition.
15. Our Company operates in a competitive business environment. Competition from existing players and new
entrants and consequent competitive pressures may adversely affect our business, financial condition and
results of operations.
Our Company operates in a competitive business environment. Growing competition from existing players and new
entrants in the market we operate may have a material adverse effect on our revenues. We presently compete with
various companies, including OnMobile Global Limited, One97Communications Limited and Spice Digital Limited. Also
some of our competitors may also be able to quickly replicate our products and services. Such replicated services and
products would compete with our products and services. Competition with replications of our services and products
could have an adverse effect on our results of operations.
Further, some of our competitors have greater experience in various facets of the business as compared to us and
may be able to develop or acquire technology or partner with innovators or customers at terms which are not
presently feasible for us due to our current scale of operations. Our company may be unable to compete with such
companies for complex, high-value contracts as well as contracts and tenders that are of comparatively lesser value.
There can be no assurance that our Company can continue to effectively compete with our competitors in the future,
and failure to compete effectively may have an adverse effect on our business, financial condition and results of
operations. For further details on our competition, please see “Our Business” on page 67 of the Draft Red Herring
Prospectus.
- xvi -
16. We may not be able to keep pace with the rapid changes in information technology, industry standards and
customer preference, which may adversely impact our competitiveness affecting our results of operation and
financial conditions.
The industry in which we operate is characterised by rapid technological changes, evolving industry standards,
changing customer preferences and new product and service introductions. Our future success will depend on our
ability to anticipate these advances and develop new service offerings to meet customer needs. We may fail to
anticipate or respond to advances in technology or changes in customer preferences or industry standards in a timely
or cost-effective manner or, if we do respond, the technologies we develop may fail in the market. As an example, as
part of our strategy, we would also be investing a substantial portion of our Issue proceeds in the deployment of
Mobile Digital Signature technology in India and develop an ecosystem around it. The success of this depends on
various factors and would entail participation of various entities. In the event solutions or technologies that are
developed by our competitors prove to be better or find wider acceptance, this may render our solutions less
competitive or obsolete. Furthermore, our competitors may respond faster than we do to changes in technology,
industry standards and customer preferences. Any one or a combination of these circumstances could have a material
adverse effect on our ability to obtain and successfully complete customer requirements and thereby have a material
adverse effect on our competitiveness and adversely affect our business, financial condition and results of operations.
17. Failure to develop and introduce new products and services that achieve market acceptance could have an
adverse effect on our results of operations and financial condition.
Our business depends on developing and providing innovative products and services for our customers. Development
of new products and services is subject to unpredictable and volatile factors beyond our control, including customer
preferences and competition. Moreover, customer preferences are subject to rapid change, but we may not be able to
adapt rapidly to changes in their preferences. In addition, due to the competitive nature of the markets in which we
operate, we update various products on an on-going basis and release new versions from time to time. We need to
continuously invest in research and development to develop new and differentiated products and services for our
customers.
Our products and services could also be rapidly rendered obsolete by the introduction of newer technologies as
outlined in the risk factor titled “We may not be able to keep pace with the rapid changes in information technology,
industry standards and customer preference, which may adversely impact our competitiveness” on page xvi of the
Draft Red Herring Prospectus. Unexpected technical, operational, deployment, distribution or other problems could
delay or prevent the timely introduction of new products and services, which could result in a loss of market
opportunities. Our growth could also suffer if our products and services are not responsive to the needs of TSPs, the
technological advancements of mobile networks or the preferences of the subscribers. This change could impact our
addressable market, competition and our objective setting and strategies, as well as the need to consider risks to
achieve our set objectives. If any of such events were to occur, some or all of such products and services may not
provide adequate returns commensurate with our capital investments and it could have an adverse effect on our
results of operations and financial condition.
18. We cannot be sure that the products and services that we develop and create for our customers do not infringe
the intellectual property rights of third parties and infringement claims may be asserted against us or our
customers or business associates which may have an adverse effect on our business, financial condition and
results of operations.
We believe that our products and services do not infringe on the intellectual property rights of others. However, there
can be no assurance that infringement claims will not be asserted against us in the future. For example, we may be
unaware of intellectual property registrations or applications that purport to our products and services, which could
give rise to potential infringement claims against our Company. The parties making infringement claims may be able
to obtain an injunction to prevent our Company from delivering our products and services or using technology
containing the allegedly infringing intellectual property. These claims may harm our reputation, distract management,
increase costs and prevent us from offering some of our products and services to our customers.
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Subject to certain limitations, under our indemnity obligations to our customers, we may also have to provide refunds
to our customers to the extent that we must require them to cease using an infringing products and services, if we are
unable to provide an alternative solution or acquire a license to use of the infringing intellectual property that we had
provided to our customers. If we are obligated to make any such refunds or dedicate time to provide alternatives or
acquire a license to the infringing intellectual property, our business, financial condition and results of operations
could be adversely affected.
In addition, some of our agreements contain broad indemnity clauses in favour of our customers and therefore if any
third party infringement claims related to our goods and/or services are made to our customers then we are required
to provide specific indemnities. The amount of these indemnities could be greater than the income we receive from
the customer. If we become liable to third parties for infringing their intellectual property rights, we could be required
to pay a substantial damage award. In addition, as a result of intellectual property litigation, we may be required to
stop selling, incorporating or using products and services that use or incorporate the infringing intellectual property.
We may be required to obtain a license or pay a royalty to make, sell or use the relevant technology from the owner
of the infringed intellectual property. Such licenses or royalties may not be available on commercially reasonable
terms or at all. Furthermore, we may be forced to develop non-infringing technologies or obtain a license to provide
those products and services that are deemed infringing intellectual property. Our Company may be unable to develop
non-infringing processes, methods or technologies or to obtain a license on commercially reasonable terms or at all.
We may also be required to alter our processes or methodologies so as not to infringe others’ intellectual property,
which may not be technically or commercially feasible and may cause us to expend significant resources.
As the number of patents, copyrights and other intellectual property rights in our industry increases, we believe that
companies in our industry will face more frequent infringement claims. Any claims or litigation in this area, whether
we ultimately win or lose, could be time-consuming and costly and could damage our reputation. Defending against
these claims, even if the claims have no merit, may not be covered by or could exceed the protection offered by our
insurance and could divert management‘s attention and resources from operating our company all of which may have
an adverse effect on our business, financial condition and results of operations.
19. We have not placed orders for Computer Peripherals, Crypto SIM cards, Mobile Digital Signature certificates
and mobile phones which will be funded from the Issue Proceeds. Further, there may be a delay in delivery of
the above items which in turn could adversely affect our business, financial condition and results of operation.
We have not placed orders for Computer Peripherals, Crypto SIM cards, mobile digital signatures certificates and
mobile phones which are being funded from the Issue Proceeds. As a result, at the time of placing the orders, the
price of these items may vary from the price as quoted in “Objects of the Issue” on page 39 of the Draft Red Herring
Prospectus and hence the total fund requirement may increase. Further, there is no assurance that these items for
which the order would be placed will be delivered according to the implementation schedule, and this may have a
material adverse effect on our financial condition, results of operation and liquidity position.
20. We may not be able to sustain effective implementation of our business and growth strategies and any such
failure could adversely affect our business and results of operations.
The success of our business will depend greatly on our ability to effectively implement our business and growth
strategies. We cannot assure you that we may be able to execute our strategies in the future. Further, our growth
strategies could place significant demand on our management team and other resources and would require our
Company to continuously develop and improve our operational, financial and other controls, none of which can be
assured. Any failure on our part to scale up our infrastructure and management could cause disruptions to our
business and could be detrimental to our long-term business outlook. For further details on our company’s strategy,
please see “Our Business” on page 67 of the Draft Red Herring Prospectus.
21. We are highly dependent on members of our core management team which includes our key management
personnel and loss of any of the core management team member may adversely affect our business
performance.
Our business is dependent upon our core management team which oversees the day-to-day operations, strategy and
growth of our business. Our success is largely dependent on the core management team which ensures the
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implementation of our strategy. If one or more members of our core management team are unable or unwilling to
continue in their present positions, such persons may be difficult to replace and our business, prospects, financial
condition and results of operations could be adversely affected. In addition, our success in expanding our business will
also depend, in part, on our ability to attract, retain and motivate appropriately qualified personnel. Our failure to
successfully manage our personnel needs could materially adversely affect our business, prospects, financial condition
and results of operations. If we are unable to address these risks, our business, financial condition and results of
operations could be adversely affected. For further details on our core management team, see “Our Management-
Management Organization Structure” and “Our Management- Key Management Personnel” on pages 97 and 97 of the
Draft Red Herring Prospectus respectively.
22. We have entered into a number of related party transactions.
We have entered into a number of related party transactions. Such transactions or any future transactions with
related parties may potentially involve conflicts of interest and impose certain liabilities on our Company. Further,
there can be no assurance that such transactions, individually or in aggregate, will not have an adverse effect on our
business, prospects, results of operations, and financial condition, resulting from potential conflicts of interest or
otherwise. For further details, see “Financial Statements” on page 124 of the Draft Red Herring Prospectus.
23. We may be liable if we inappropriately disclose confidential information relating to our customers or business
associates. This may adversely affect our business, financials and result of operations.
We cannot assure you that we will adequately address the risks created by the regulations to which we may be
contractually obligated to abide. In the event of any breach or alleged breach of our confidentiality agreements with
our customers or business associates, these parties may terminate their engagements with us or sue us for breach of
contract, resulting in the associated loss of income and increased costs. As a result, if our customer’s or business
associates proprietary rights are misappropriated by us or our employees, our customers or business associates may
consider us liable for such act and seek damages and compensation from us in addition to seeking termination of the
contract. Assertions of infringement of intellectual property or misappropriation of confidential information against
us, if successful, could have a material adverse effect on our business, financial condition and results of operations.
Even if such assertions against us are unsuccessful, they may cause us to incur reputational harm and substantial legal
fees. Our Company and management may also be subject to civil or criminal liability if we are deemed to have violated
applicable regulations. Any such acts could also cause us to lose existing and future business and damage our
reputation in our specific industry in India.
24. Our infrastructure and equipment could fail which would limit our ability to provide guaranteed levels of service
and could result in significant operating losses.
To provide our customers with guaranteed levels of service, we must operate our infrastructure on a 24-hour-a-day,
seven-day-a-week basis without interruption. In order to operate in this manner, we must protect our infrastructure,
equipment and customer files against damage from human error, natural disasters, unexpected equipment failure,
software malfunction, power loss or telecommunications failures, virus attacks, sabotage, hacking or other intentional
acts of vandalism. We are also subject to the risk of strikes or other work stoppages by our employees or by other
persons, which may, in turn, disrupt our operations.
Even if we take precautions, the occurrence of a natural disaster, equipment failure or other unanticipated problem at
one or more of our infrastructure locations could result in interruptions in products and services that we provide to
our customers. We cannot assure you that our Company will be able to address all, or even most, of the problems
which we may encounter in the event of such a disaster, which could result in lost income and increased operating
costs.
25. We rely on telecommunications and information technology systems, networks and infrastructure to operate
our business and any interruption or breakdown in such systems, networks or infrastructure or our technical
systems could impair our ability to effectively provide our products and services which may have an adverse
impact on our results of operations.
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Our business operations and quality of our service depend on the efficient and uninterrupted operation and reliability
of our telecommunications and information technology systems and networks and related infrastructure, both
internal and external. Our systems are vulnerable to damage or interruption as a result of natural disasters, power
loss, telecommunications failure, technical failures, undetected errors or viruses in our software, computer viruses,
corruption or loss of electronically stored data, disruption in communications access or infrastructure, electronic
intrusion attempts, break-ins, sabotage, vandalism and other similar events. We cannot assure that our back-up and
disaster recovery measures and business continuity planning would effectively eliminate or alleviate the risks arising
from the above contingencies. In addition, as most of our systems and software are developed internally, it may
contain undetected errors, defects or bugs, which we may not be able to detect and repair, in time or in a cost-
effective manner, or at all. In such circumstances, we may be liable for all costs and damages, as we would not be
entitled to any indemnification or warranty which we may have been provided if we had obtained such systems or
software from third party professional providers. Any damage to or failure of our systems could lead to loss of data or
interruptions or delays, thereby impairing our ability to effectively provide our services, which may have an adverse
impact on our results of operations.
26. Our Promoters and Promoter Group will continue to hold a majority of our Equity Shares after the Issue and can
significantly influence our corporate actions.
As of date, our Promoters and Promoter Group own an aggregate of 73.63 % of our Company’s issued and paid-up
equity share capital. Following the completion of the Issue, our Promoters and Promoter Group will continue to own a
substantial portion of our Company’s issued and paid-up equity share capital. The Promoters and Promoter Group
have, and will continue to have, considerable influence over our business and may take actions that do not reflect the
will or best interests of the other shareholders. Our Promoters and Promoter Group have the ability to control our
business including matters relating to any sale of all or substantially all of its assets, the timing and distribution of
dividends and the election or termination or appointment of our Company’s officers and directors. By virtue of their
shareholding, the Promoters and Promoter Group can exercise substantial influence over the Board and over matters
that are put to a shareholder vote. This control could delay, defer or prevent a change in control of our Company,
impede a merger, consolidation, takeover or other business combination involving our Company, or discourage a
potential acquirer from making an open offer or otherwise attempting to obtain control of our Company even if it is in
the best interest of our Company’s shareholders.
27. Our Objects of the Issue have not been appraised.
None of the Objects have been appraised by any bank or financial institution or any other independent third party
organisation. The funding requirements of our Company and the deployment of the Net Proceeds of the Issue are
currently based on management estimates. The funding requirements of our Company are dependent on a number of
factors which may not be in the control of our management, including variations in interest rate structures, changes in
our financial condition and current commercial conditions and are subject to change in light of changes in external
circumstances or in our financial condition, business or strategy. For further details on the use of the Issue Proceeds,
please see "Objects of the Issue" on page 39 of the Draft Red Herring Prospectus.
28. We may require further funding which may be financed through debt instruments or equity issuance, which
may lead to leverage, dilution of equity and may affect the market price of our Equity Shares.
We may need other sources of financing to meet our business needs which may include entering into new debt
facilities with lending institutions or raising additional debt in the capital markets. We may also need to raise
additional capital from time to time, depending on our business requirements. Any fresh issue of shares or convertible
securities would dilute the stake of the existing shareholders, and such issuance may not be done at terms and
conditions, which are favourable to the then existing shareholders of our Company.
If we decide to raise additional funds through the incurrence of debt, our interest obligations will increase, and we
may be subject to additional covenants, which could further limit our ability to access cash flows from our operations.
Such financings could cause our debt to equity ratio to increase or require our Company to create charges or liens on
our assets in favour of lenders. We cannot assure you that we will be able to secure adequate financing in the future
on acceptable terms, in time, or at all. Our failure to obtain sufficient financing could result in the delay or
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abandonment of our expansion plans. Our business and future results of operations may be adversely affected if we
are unable to implement our expansion strategy and may affect the market price of our Equity Shares.
29. We have made applications for registration of our intellectual property rights, which are currently pending.
We rely primarily on the intellectual property rights which include patents, trademarks, trade secrets, copyright laws
and restrictions on access to protect our proprietary rights. Our agreements grant customers a right to use our
services and also contain terms and conditions prohibiting its unauthorized use or transfer of intellectual property
rights. In particular, we have applied to register MobME logo with the trademarks registry in Chennai, India. The
application for the same is pending before the trademarks registry. We have also two patent applications, which are
pending before relevant authorities.For more information, see “Our Business” and “Government and Other Approvals”
on pages 67 and 232 of the Draft Red Herring Prospectus respectively. We cannot assure you that the pending
applications for registration of such intellectual properties will be granted by the relevant authorities. In the event of
our failure to obtain registration of the intellectual properties for which we have applied, we may lose protection of
the intellectual property associated with our products and services. This may provide opportunities to competitors to
compete with our products and services, which could adversely affect our business, results of operations and financial
condition.
30. Conflicts of interest may arise out of common business objects shared by our Company and certain of our Group
Companies. There can be no assurance that such Group Companies will not compete with our existing business
or any future business that we may undertake or that their interests will not conflict with ours which may have
an adverse effect on results of our operations.
The objects in the memorandums of association of two of our Group Companies, Mobile Express Private Limited and
Mobshare Mobile Systems India Private Limited are similar or related to our business, which could lead to potential
conflicts of interest. Although neither of these companies has current operations similar or related to our business, we
cannot assure that these companies will not provide comparable services, expand their presence or acquire interests
in competing ventures in the locations in which we operate. As a result, a conflict of interest may occur between our
business and the business of our Group Companies which could have an adverse effect on results of our operations.
31. Several properties used by our Company for the purposes of its operations are not owned by our Company.
Several properties used by our Company for the purposes of its operations are not owned by our Company and has
been taken on lease. Any termination of the lease agreements in connection with such properties or our failure to
renew the same could adversely affect our business, results of operations and financial condition. Currently, 14
properties used by our Company for the purposes of our operations are not owned by our Company. For further
details, please see the “Our Business” on page 67 of the Draft Red Herring Prospectus. We cannot assure you that our
Company will own or have the right to occupy such properties in the future or that our Company will be able to
continue with the uninterrupted use of such properties. Any termination of the lease agreements in connection with
such properties which are not owned by our Company or our failure to renew the same, on favourable conditions, in a
timely manner, or at all, could adversely affect our business, results of operations and financial condition. Further, one
of the objects of the Issue is to construct a software production unit and facilitation centre at Kochi which we intend
to set up on land taken on lease. For further details, please see the “Objects of the Issue” on page 39 of the Draft Red
Herring Prospectus.
32. We have not entered into any definitive agreements to monitor the utilization of the Issue Proceeds and the
deployment of Issue Proceeds is entirely at the discretion of our Company.
Our estimated fund requirements are based on our current business plan and strategy. However, we operate in a
highly competitive and dynamic industry, and as such, we may have to revise our business and capital outlay plans
from time to time. Accordingly, prospective investors will need to rely upon the judgment of our management with
respect to the use of the proceeds of the Issue. Our allocation of the proceeds of the Issue is based on current plans
and business conditions. The amounts and timing of any expenditure will vary depending on the amount of funds
generated by our operations, competitive, market as well as technological developments. Accordingly, our
management will have considerable discretion in the application of the proceeds of the Issue. Our management’s
judgment will have to be relied upon regarding the application of the Issue proceeds.Further, as per the SEBI ICDR
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Regulation, appointment of monitoring agency is required only for Issue size above `50,000lacs. Since our Issue size is
not expected to be greater than ` 50,000 lacs, we would not be required to appoint any monitoring agency and the
deployment of Net Proceeds as stated in “Objects of the Issue” on page 39 of the Draft Red Herring Prospectus will not
be subject to monitoring by any independent agency. Hence, the deployment of Issue proceeds will be at the
discretion of our Company and will not be subject to monitoring by any independent agency. We cannot assure you
that we will be able to conduct our affairs in a manner similar to that of a business that is subject to monitoring by an
independent agency.
33. Third party statistical and financial data in this Draft Red Herring Prospectus may be incomplete or unreliable.
We have not independently verified the data in this Draft Red Herring Prospectus derived from industry publications
and other third party sources and therefore we cannot assure you that they are complete or reliable. Such data may
also be produced on different bases from those used in other countries. Therefore, in discussions of matters relating
to India, its economy and our industry in this Draft Red Herring Prospectus, the statistical and other data upon which
such discussions are based may be incomplete or unreliable. In addition, internal company reports have not been
verified by independent sources and may be incomplete or unreliable.
34. The insurance coverage taken by us may not be adequate to protect against certain business risks. This may
adversely affect our financial condition and result of operations.
Operating and managing a business involves many risks that may adversely affect our operations and the availability
of insurance is therefore important to our operations. We believe that our insurance coverage is adequate to cover us.
However, to the extent that any uninsured risks materialize or if it fails to effectively cover any risks, we could be
exposed to substantial costs and losses that would adversely affect our financial condition. In addition, we cannot be
certain that the coverage will be available in sufficient amounts to cover one or more large claims or that our insurers
will not disclaim coverage as to any particular claim or claims. A successful assertion of one or more large claims
against our Company that exceeds our available insurance coverage or that leads to adverse changes in our insurance
policies, including premium increases or the imposition of a large deductible or coinsurance requirement, could
adversely affect our financial condition and results of operations. For further details, please see “Our Business -
Insurance” on page 67 of the Draft Red Herring Prospectus.
EXTERNAL RISKS
Risks relating to our Industry
35. We may be adversely affected by future government regulations implemented for the telecommunications
value added services industry in which we operate.
Currently, the telecommunications value added services industry is not subject to any specific government
regulations. However, there can be no assurance that the Government of India will not implement new regulations
and policies that would require our Company to obtain approvals and licenses from the Government of India and
other regulatory bodies or impose onerous requirements and conditions on our operations. Any such changes and the
related uncertainties with respect to the implementation of the new regulations, or our inability to obtain these
approvals and licenses or perform such requirements and conditions on time or at all, may have an adverse effect on
our business and results of operations.
36. TSPs network congestion, failures or a shortage of a sufficient amount of network infrastructure could reduce
our revenues, increase costs or result in a loss of income.
We rely on the TSPs networks to deliver our products and services and telecom applications to their subscribers.
Congestion on, failures of, technical problems with or a shortage of TSPs delivery systems or communications
networks could result in the inability of the subscribers to use our applications. If any of these systems fail, including
as a result of an interruption in the supply of power, an earthquake, fire, flood or other natural disaster, an act of war
or terrorism, or a lack of compliance with local laws (e.g., the deployment of telecommunications infrastructure
without proper permissions), TSPs subscribers may be unable to access our applications. Any failure of, or technical
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problem with, TSP networks could result in a loss of income and have an adverse effect on our business, results of
operations and financial condition.
37. Concerns about health risks relating to the use of mobile handsets may adversely affect our prospects.
In recent years, media and other research reports have linked radio frequency emissions from mobile handsets to
various health concerns, including cancer, and also interference with various electronic medical devices, including
hearing aids and pacemakers. As research and studies are ongoing, we cannot assure you that further research and
studies will not demonstrate a link between radio frequency emissions and health concerns, which could have an
adverse effect on our business, results of operations and financial condition.
Risks Relating to India
38. Political instability or changes in the Indian central government could adversely affect economic conditions in
India and consequently, our business.
Our Company is incorporated in India and currently derives substantially all of its revenues from operations in India
and all of its assets are located in India. Consequently, our performance and the market price of the Equity Shares may
be affected by interest rates, government policies, taxation, social and ethnic instability and other political and
economic developments affecting India. The Government of India has traditionally exercised, and continues to
exercise, a significant influence over many aspects of the economy. The current government has announced that its
general intention is to continue India’s current economic and financial sector liberalisation and deregulation of
policies. However, there can be no assurance that such policies will be continued, and a significant change in the
government’s policies could affect business and economic conditions in India, and could also adversely affect our
financial condition and results of operations.
Political instability or changes in the government could delay further liberalisation of the Indian economy and
adversely affect economic conditions in India generally, which could have a material adverse effect on our business,
prospects, results of operations, cash flows and financial condition.
39. Hostilities, terrorist attacks, civil unrest, breaches of law and order and other acts of violence may adversely
affect our business and the trading price of the Equity Shares.
Terrorist attacks, civil unrest and other acts of violence or war within India and the surrounding region may adversely
affect worldwide financial markets and may result in a loss of consumer confidence, which in turn may adversely
affect our business, prospects, results of operations, cash flows and financial condition. Further, political tensions may
create a perception that any investment into an Indian company involves a higher degree of risk and may have an
adverse impact on our Company’s business operations and the price of the Equity Shares.
40. India is vulnerable to natural disasters that could severely disrupt the normal operation of our business.
India has experienced natural calamities, such as tsunamis, floods, droughts and earthquakes in the past few years.
The extent and severity of these natural disasters determines their impact on the Indian economy. For example, the
erratic progress of the monsoon in 2004 and 2009 affected sowing operations for certain crops. Such unforeseen
circumstances of below normal rainfall and other natural calamities could have a negative impact on the Indian
economy. Because our operations are located in India, our business and operations could be interrupted as a result of
a natural disaster in India, which could affect our business, financial condition, results of operations and the price of
the Equity Shares.
41. An outbreak of an infectious disease or any other serious public health concerns in Asia or elsewhere could
adversely affect our business.
The outbreak of an infectious disease in Asia or elsewhere or any other serious public health concern, such as swine
influenza, could have a negative impact on the global economy, financial markets and business activities worldwide,
which could adversely affect our business, financial condition, results of operations and the price of the Equity Shares.
Although, we have not been adversely affected by such outbreaks in the past, we can give you no assurance that a
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future outbreak of an infectious disease among humans or animals or any other serious public health concerns will not
have a material adverse effect on our business, financial condition, results of operations and the price of the Equity
Shares.
42. Significant differences exist between Indian GAAP used throughout our Company’s financial information and
other accounting principles, such as U.S. GAAP and IFRS, with which investors may be more familiar.
Our Company’s financial statements are currently prepared in conformity with Indian GAAP. Indian GAAP differs in
certain significant respects from IFRS, U.S. GAAP and other accounting principles and standards. Substantial
differences exist between our Company’s results of operations, cash flows and financial position in its financial
statements prepared under each of Indian GAAP.
In addition, if our Company was to prepare its financial statements in accordance with any other accounting
principles, such as U.S. GAAP, its results of operations, cash flows and financial position may be substantially different.
The significant accounting policies applied in the preparation of our Company’s Indian GAAP financial statements are
set forth in the notes to its restated and audited consolidated financial statements included in the Draft Red Herring
Prospectus. Prospective investors should review the accounting policies applied in the preparation of our Company’s
financial statements, and consult their own professional advisors for an understanding of the differences between
these accounting principles and those with which they may be more familiar.
43. Public companies in India, including our Company, may be required to prepare financial statements under IFRS
or a variation thereof. The transition to IFRS or a variation thereof in India is still unclear and we may be
negatively affected by such transition.
Our Company currently prepares its annual and interim financial statements under Indian GAAP.
Public companies in India, including our Company, may be required to prepare annual and interim financial
statements under a variation of IFRS. Recently, the ICAI has released a near-final version of the Indian Accounting
Standards 101 “First-time Adoption of Indian Accounting Standards” (“AS 101”). The Ministry of Corporate Affairs of
the Government, on February 25, 2011, has notified that AS 101 will be implemented in a phased manner and the
date of such implementation will be notified at a later date. As at the date of the Draft Red Herring Prospectus, the
MCA has not yet notified the date of implementation of AS 101. There is not yet a significant body of established
practice on which to draw in forming judgments regarding its implementation and application. Additionally, AS 101
has fundamental differences with IFRS and therefore financial statements prepared under AS 101 may be substantially
different from financial statements prepared under IFRS. There can be no assurance that our financial condition,
results of operations, cash flow or changes in shareholders’ equity will not appear materially different under AS 101
than under Indian GAAP or IFRS. As we adopt AS 101 reporting, we may encounter difficulties in the on-going process
of implementing and enhancing our management information systems. There can be no assurance that our adoption
of AS 101 will not adversely affect our reported results of operations or financial condition and any failure to
successfully adopt AS 101 in accordance with the prescribed timelines may have a material adverse effect on our
financial position and results of operations.
44. Our business and activities may be regulated by the Competition Act, 2002.
The Competition Act, 2002 (the "Competition Act") seeks to prevent business practices that have a material adverse
effect on competition in India. Under the Competition Act, any arrangement, understanding or action in concert
between enterprises, whether formal or informal, which causes or is likely to cause a material adverse effect on
competition in India is void and attracts substantial monetary penalties. Any agreement that directly or indirectly
determines purchase or sale prices, limits or controls production, shares the market by way of geographical area,
market, or number of customers in the market is presumed to have a material adverse effect on competition.
Provisions of the Competition Act relating to the regulation of certain acquisitions, mergers or amalgamations which
have a material adverse effect on competition and regulations with respect to notification requirements for such
combinations came into force on June 1, 2011. The effect of the Competition Act on the business environment in India
is unclear. If we are affected, directly or indirectly, by the application or interpretation of any provision of the
Competition Act, or any enforcement proceedings initiated by the Competition Commission of India, or any adverse
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publicity that may be generated due to scrutiny or prosecution by the Competition Commission of India, it may have a
material adverse effect on our business, prospects, results of operations, cash flows and financial condition.
45. Our Company’s ability to raise foreign capital may be constrained by Indian law.
As an Indian company, our Company is subject to exchange controls that regulate borrowing in foreign currencies.
Such regulatory restrictions limit our Company’s financing sources for ongoing expansion plans or acquisitions and
other strategic transactions, and hence could constrain its ability to obtain financing on competitive terms and
refinance existing indebtedness. In addition, our Company cannot assure investors that the required approvals will be
granted to it without onerous conditions, or at all. Limitations on foreign debt may have a material adverse effect on
our Company’s business, prospects, results of operations, cash flows and financial condition.
46. Rights of shareholders under Indian law may be more limited than under the laws of other jurisdictions.
The Articles of Association, regulations of its Board of Directors and Indian law govern the corporate affairs of our
Company. Legal principles relating to these matters and the validity of corporate procedures, directors’ fiduciary
duties and liabilities, and shareholders’ rights may differ from those that would apply to a company in another
jurisdiction. Shareholders’ rights under Indian law may not be as extensive as shareholders’ rights under the laws of
other countries or jurisdictions. Investors may have more difficulty in asserting their rights as shareholders of our
Company than as shareholders of a corporation in another jurisdiction.
47. Investors may have difficulty enforcing foreign judgments against our Company or its management.
Our Company is a limited liability company incorporated under the laws of India. A substantial portion of our
Company’s assets and the assets of the directors and executive officers resident in India are located in India. As a
result, it may be difficult for investors to affect service of process upon our Company or such persons outside India or
to enforce judgments obtained against our Company or such parties outside 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 or if the judgments are in breach of or contrary to Indian law.
In addition, a party seeking to enforce a foreign judgment in India is required to obtain approval from RBI to execute
such a judgment or to repatriate outside India any amount recovered.
48. Any downgrading of India’s debt rating by a domestic or international rating agency could adversely affect our
business.
Any adverse revisions to India’s credit ratings for domestic and international debt by domestic or international rating
agencies may adversely affect our ability to raise additional financing, and the interest rates and other commercial
terms at which such additional financing is available. This could harm our business and financial performance, ability
to obtain financing for capital expenditures and the price of the Equity Shares.
49. Unfavourable changes in legislation, including tax legislation, or policies applicable to our Company could
adversely affect our results of operations.
The Finance Minister has presented the Direct Tax Code Bill, 2010 (“DTC Bill”) on August 30, 2010, which is proposed
to be effective from April 1, 2013. On the finalisation of the DTC Bill and on obtaining the approval of the Indian union
council of ministers, the DTC Bill will be placed before the Indian Parliament for its approval and notification as an Act
of Parliament. Accordingly, it is currently unclear what effect the Direct Tax Code would have on our financial
statements. If the DTC Bill is passed in its entirety and we are affected, directly or indirectly, by any provision of the
Direct Taxes Code, or its application or interpretation, including any enforcement proceedings initiated under it and
any adverse publicity that may be generated due to scrutiny or prosecution under the Direct Taxes Code, it may have
a material adverse effect on our business, financial condition and results of operations.
In addition, upon the passing of the Companies Bill 2011 by the Indian legislature the regulatory framework may
undergo a change which may affect our operations.
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50. Companies operating in India are subject to a variety of central and state government taxes and surcharges.
Tax and other levies imposed by the Central Government and State Governments in India that affect our tax liability
include: central and state taxes and other levies, income tax, value added tax, turnover tax, service tax, stamp duty
and other special taxes and surcharges which are introduced on a temporary or permanent basis from time to time.
Moreover, the central and state tax scheme in India is extensive and subject to change from time to time. For
example, there is a proposal to introduce a new goods and services tax, effective April 1, 2013, and the scope of the
service tax is proposed to be enlarged. The Central Government or State Governments may in the future increase the
corporate income tax and other taxes 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 adversely affect our business and results of operations.
51. Investors may be adversely affected due to retrospective tax law changes by the Indian government affecting
our Company.
Certain recent changes to the Income Tax Act provide that income arising directly or indirectly through the sale of a
capital asset of an offshore company, including shares, will be subject to tax in India, if such shares derive indirectly or
directly their value substantially from assets located in India. The term “substantially” has not been defined under the
Income Tax Act and therefore, the applicability and implications of these changes are largely unclear. Due to these
recent changes, investors may be subject to Indian income taxes on the income arising directly or indirectly through
the sale of the Equity Shares. In the past, there have been instances where changes in the Income Tax Act have been
made retrospectively and to that extent, there cannot be an assurance that such retrospective changes will not
happen again.
Risks relating to the Issue and the Equity Shares
52. Any future issuance of Equity Share may dilute your shareholding and sales of the Equity Share by the Promoter
may adversely affect the trading price of the Equity Shares.
Any future equity issuances by our Company, including a primary offering, may lead to the dilution of investors’
shareholdings in it. Any future equity issuances by our Company or sale of the Equity Shares by the Promoters may
adversely affect the trading price of the Equity Shares, which may lead to other adverse consequences for our
Company, including difficulty in raising debt financing. In addition, any perception by investors that such issuances or
sale might occur may also affect the trading price of the Equity Shares.
53. Our Company cannot assure payment of dividends on the Equity Shares in the future.
While our Company’s dividend policy is as set out in “Dividend Policy” on page 123 of the Draft Red Herring
Prospectus, the amount of future dividend payments by our Company, if any, will depend upon our Company’s future
earnings, financial condition, cash flows, working capital requirements, capital expenditures, applicable Indian legal
restrictions and other factors. Our Company may decide to retain all of its earnings to finance the development and
expansion of its business and therefore, our Company may not declare dividends on the Equity Shares. Additionally,
our Company may in the future be restricted by the terms of its loan agreements, including loan agreements of its
subsidiaries and joint ventures, to make any dividend payments unless otherwise agreed with the lenders.
54. There is no existing market for our Equity Shares, and we do not know if one will develop to provide investors
with adequate liquidity.
If the stock price of our Equity Shares fluctuates after the Issue, investors could lose a significant part of their
investment. As at the date of the Draft Red Herring Prospectus, there is no market for our Equity Shares. Following the
Issue, our Equity Shares are expected to trade on the NSE under the SME exchange. There can be no assurance that
active trading in our Equity Shares will develop after the Issue or, if such trading develops, that it will continue.
Investors might not be able to rapidly sell the Equity Shares at the quoted price if there is no active trading in the
Equity Shares.
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The IPO price will be determined by the Book Building Process and may not be indicative of prices that will prevail in
the open market following the Issue. The market price of our Equity Shares may be influenced by many factors, some
of which are beyond our control, including:
(i) the failure of security analysts to cover the Equity Shares after the Issue, or changes in the estimates of our
performance by analysts;
(ii) the activities of competitors and suppliers;
(iii) future sales of the Equity Shares by our Company or its shareholders;
(iv) investor perception of our Company and the industry in which we operate;
(v) our quarterly or annual earnings or those of our competitors;
(vi) developments affecting financial, industrial or environmental regulations;
(vii) the public’s reaction to our press releases and adverse media reports; and
(viii) general economic conditions.
As a result of these factors, investors may not be able to resell their Equity Shares at or above the IPO price. In
addition, the stock market often experiences price and volume fluctuations that are unrelated or disproportionate to
the operating performance of a particular company. These broad market fluctuations and industry factors may
materially reduce the market price of the Equity Shares, regardless of our Company’s operating performance.
55. Investors may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.
Under current Indian tax laws and regulations, capital gains arising from the sale of equity shares in an Indian
company are generally taxable in India. Any gain realised on the sale of listed equity shares on a stock exchange held
for more than 12 months as a capital asset will not be subject to capital gains tax in India if Securities Transaction Tax
(“STT”) has been paid on the transaction. STT will be levied on and collected by a domestic stock exchange on which
the equity shares are sold. Any gain realised on the sale of equity shares held for more than 12 months to an Indian
resident, which are sold other than on a recognised stock exchange and on which no STT has been paid, will be subject
to long-term capital gains tax in India. Further, any gain realised on the sale of listed equity shares held for a period of
12 months or less will be subject to short term capital gains tax in India. Capital gains arising from the sale of the
equity shares will be exempt from taxation in India in cases where the exemption from taxation in India is provided for
under a treaty between India and the country of which the seller is resident. Generally, Indian tax treaties do not limit
India’s ability to impose tax on capital gains. As a result, residents of other countries may be liable for tax in India as
well as in their own jurisdiction on a gain upon the sale of the Equity Shares. For further details see “Statement of Tax
Benefits” on page 48 of the Draft Red Herring Prospectus.
56. There are restrictions on daily movements in the price of the equity share, which may adversely affect investors’
ability to sell Equity Shares or the price at which Equity Shares can be sold at a particular point in time.
Subsequent to listing, our Equity Shares will be subject to a daily circuit breaker imposed on listed companies by all
stock exchanges in India, which does not allow transactions beyond certain volatility in the price of the Equity Shares.
This circuit breaker operates independently of the index-based market-wide circuit breakers generally imposed by
SEBI on Indian stock exchanges. The percentage limit on the Equity Shares’ circuit breaker will be set by the stock
exchanges based on historical volatility in the price and trading volume of the Equity Shares. The stock exchanges are
not required to inform our Company of the percentage limit of the circuit breaker and they may change the limit
without our knowledge. This circuit breaker would effectively limit the upward and downward movements in the price
of the Equity Shares. As a result of the circuit breaker, there can be no assurance regarding the ability of investors to
sell Equity Shares or the price at which investors may be able to sell their Equity Shares.
57. Foreign investors are subject to foreign investment restrictions under Indian law that limits our ability to attract
foreign investors, which may adversely affect the market price of the Equity Shares.
Foreign investment in Indian securities is subject to regulation by Indian regulatory authorities. Under the
Consolidated Foreign Direct Investment Policy notified under Circular No. 1 of 2012 effective from April 10, 2012 (the
“FDI Policy”) issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry,
Government of India, foreign direct investment in our Company is permitted up to 49% under the automatic route.
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Foreign direct investment above 49% and up to 74% would require the prior approval of the Foreign Investment
Promotion Board.
Also, under the foreign exchange regulations currently in force in India, transfers of shares between non-residents and
residents are permitted (subject to certain exceptions) if they comply with, among other things, the pricing guidelines
and reporting requirements specified by the RBI. If the transfer of shares does not comply with such pricing guidelines
or reporting requirements, or falls under any of the exceptions referred to above, then prior approval of the RBI will
be required.
Additionally, shareholders who seek to convert the Rupee proceeds from a sale of shares in India into foreign currency
and repatriate any such foreign currency from India will require a no objection or a 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.
58. Fluctuations in the exchange rate of the Rupee and other currencies could have a material adverse effect on the
value of the Equity Shares, independent of our financial results.
The Equity Shares will be quoted in Rupees on the NSE. Any dividends in respect of the Equity Shares will be paid in
Rupees and subsequently converted into appropriate foreign currency for repatriation. Any adverse movement in
exchange rates during the time it takes to undertake such conversion may reduce the net dividend to investors. In
addition, any adverse movement in exchange rates during a delay in repatriating the proceeds from a sale of Equity
Shares outside India, for example, because of a delay in regulatory approvals that may be required for the sale of
Equity Shares, may reduce the net proceeds received by shareholders.
The exchange rate of the Rupee has changed substantially in the last two decades and could fluctuate substantially in
the future, which may have a material adverse effect on the value of the Equity Shares and returns from the Equity
Shares, independent of our operating results.
59. A third party could be prevented from acquiring control of our Company because of anti-takeover provisions
under Indian law.
There are provisions in Indian law that may delay, deter or prevent a future takeover or change in control of our
Company, even if a change in control would result in the purchase of your Equity Shares at a premium to the market
price or would otherwise be beneficial to you. These provisions may discourage or prevent certain types of
transactions involving actual or threatened change in control of our Company.
Although these provisions have been formulated to ensure that interests of investors and shareholders are protected,
these provisions may discourage a third party from attempting to take control of our Company. Consequently, even if
a potential takeover of our Company would result in the purchase of the Equity Shares at a premium to their market
price or would otherwise be beneficial to its stakeholders, it is possible that such a takeover would not be attempted
or consummated because of SEBI Takeover Regulations.
60. We cannot assure you that the Equity Shares will be listed on the NSE in a timely manner or at all, which may
restrict your ability to dispose of the Equity Shares.
In accordance with Indian law and practice, permission for listing of the Equity Shares will not be granted until after
the Equity Shares offered in the Issue have been allotted. Approval will require all other relevant documents
authorizing the issuing of the Equity Shares to be submitted. There could be a failure or delay in listing the Equity
Shares on the NSE. Any failure or delay in obtaining such approval would restrict your ability to dispose of your Equity
Shares.
Further, pursuant to Indian regulations, certain actions must be completed before the Equity Shares can be listed and
trading may commence. Trading in the Equity Shares is expected to commence within 12 Working Days from the
Bid/Issue Closing Date.
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However, we cannot assure you that the trading in the Equity Shares will commence in a timely manner or at all. Any
failure or delay in obtaining the approvals would restrict your ability to dispose your Equity Shares.
61. The requirements of being a listed company may strain our resources and distract management.
We have no experience as a listed company and have not been subjected to the increased scrutiny of our affairs by
shareholders, regulators and the public at large that is associated with being a listed company. As a listed company,
we will incur significant legal, accounting, corporate governance and other expenses that we did not incur as an
unlisted company. We will be subject to the listing agreements with the Stock Exchanges which requires our Company
to file audited annual and unaudited quarterly reports with respect to our business and financial condition. If we
experience any delays, we may fail to satisfy our reporting obligations and/or we may not be able to readily determine
and accordingly report any changes in our results of operations as timely as other listed companies.
As a listed company, we will need to maintain and improve the effectiveness of our disclosure controls and
procedures and internal control over financial reporting, including keeping adequate records of daily transactions to
support the existence of effective disclosure controls and procedures and internal control over financial reporting. In
order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over
financial reporting, significant resources and management oversight will be required. As a result, management’s
attention may be diverted from other business concerns, which could adversely affect our business, prospects,
financial condition and results of operations. In addition, we may need to hire additional legal and accounting staff
with appropriate listed company experience and technical accounting knowledge and we cannot assure you that we
will be able to do so in a timely manner.
62. There may be press coverage about the Issue. You should read the Draft Red Herring Prospectus carefully and
we strongly caution you not to place any reliance on any information contained in press articles, including, in
particular, any financial projections, valuations or other forward-looking information.
There may be press coverage about our Company and the Issue, primarily in India, that included certain projections,
valuations and other forward-looking information. We wish to emphasise to potential investors that we do not accept
any responsibility for the accuracy or completeness of such press articles and that such press articles were not
prepared or approved by our Company. We make no representation as to the appropriateness, accuracy,
completeness or reliability of any of the projections, valuations or other forward-looking information, or of any
assumptions underlying such projections, valuations or other forward-looking information, included in or referred to
by the media. Any such statements may be inconsistent with, or conflict with, the information contained in the Draft
Red Herring Prospectus. Accordingly, you should only make your decision as to whether to purchase the Equity Shares
by relying only on the financial, operational and other information contained in the Draft Red Herring Prospectus.
Prominent Notes
Public issue of 705,600 Equity Shares for cash at a price of [●] per Equity Share (including a share premium of [●]
per Equity Share) aggregating to `[●] lacs.
Our Company may allocate up to 30% of the QIB Portion to Anchor Investors at the Anchor Investor Price on a
discretionary basis, out of which at least one-third will be available for allocation to domestic mutual funds only.
In the event of under-subscription or non-allotment in the Anchor Investor Portion, the balance Equity Shares
shall be added to the Net QIB Portion. 5% of the Net QIB Portion shall be available for allocation on a
proportionate basis to Mutual Funds only. The remainder of the Net QIB Portion shall be available for allocation
on a proportionate basis to QIBs, subject to valid Bids being received from them at or above the Issue Price.
However, if the aggregate demand from mutual funds is less than 11,700 Equity Shares, the balance Equity Shares
available for allocation in the mutual fund portion will be added to the Net QIB Portion and allocated
proportionately to the QIBs in proportion to their Bids.
As of September 30, 2012, the net worth of our Company was `1,725.46 lacs in accordance with the restated and
audited consolidated financial statements and `1,790.48 lacs in accordance with the restated unconsolidated
financial statements.
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As of September 30, 2012, the net asset value per Equity Share was `86.27 in accordance with the restated and
audited consolidated financial statements and `89.52 in accordance with the restated unconsolidated financial
statements.
The average cost of acquisition of Equity Shares of our Company by each of its Promoters is as tabulated below:
For details of acquisition of Equity Shares by the Promoter, please see “Capital Structure” on page 24 of the Draft Red
Herring Prospectus.
None of our Promoters, Promoter Group, Directors or their immediate relatives have purchased or sold any
Equity Shares within the six months preceding the date of filing of the Draft Red Herring Prospectus.
Except as disclosed in “Capital Structure” on page 24 of the Draft Red Herring Prospectus, our Company has not
issued any Equity Shares for consideration other than cash.
Except as disclosed in risk factor titled “We have issued Equity Shares during the last one year at a price that may
be below the Issue Price”on page xiv of the Draft Red Herring Prospectus, our Company has not issued Equity
Shares at a price which may be less than the Issue Price during the last one year.
Except for Mobile Express Private Limited and Mobshare Mobile Systems India Private Limited, Our Company has
not entered into any related party transactions except as disclosed in “Related Party Transactions” on page 151 of
the Draft Red Herring Prospectus.
There has been no financing arrangement whereby the Promoters, Promoter Group, the Directors, and their
relatives have financed the purchase by any other person of securities of our Company during the period from six
months immediately preceding the date of filing of the Draft Red Herring Prospectus with SEBI.
Investors may contact the BRLM who would be submitting a due diligence certificate to SEBI at the time of filing
the Prospectus, for any complaint pertaining to the Issue.
Trading in Equity Shares for all investors shall be in dematerialized form only.
Promoter Cost of acquisition ( ` per equity share of face value `10)
Mr. Sanjay Vijayakumar 11.88
Mr. Sony Joy 12.48
Mr. Vivek Steve Francis 14.92
Mr. Jose Thomas Pattara 10.00
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SECTION III – INTRODUCTION
SUMMARY OF INDUSTRY
OVERVIEW OF THE INDIAN ECONOMY
India, with a gross domestic product purchasing power parity of $5058 billion at the end of 2013 estimated, is the
fourth largest economy in the world after the United States, China and Japan. Source: Data for use of Deputy
Chairman, Planning Commission, December 5, 2012 Barring fiscal year 2009, the economy has registered a growth of
8% and above during the period from fiscal year 2006 to fiscal year 2011. Growth of 6.53% has been achieved as on
December 1, 2012(at constant 2004-05 prices). Source: Data for use of Deputy Chairman, Planning Commission,
December 5, 2012.
THE INDIAN TELECOMMUNICATION SECTOR – AN OVERVIEW
The Indian telecommunication sector maintained the growth rate during the fiscal year 2012-2013 with quarter ended
June 2012. There were 965.52 million connections at the end of June 2012 with 934.09 million wireless connections
and is the one of the largest network in the world. The one billion mark also appears to be achievable. The penetration
of internet and broadband has also improved with 23.01 million internet subscribers and 14.57 million broadband
subscribers across the country. Source: The Indian Telecom Services Performance Indicators, April-June 2012
The telecom sector has witnessed a continuous rising trend in the total number of telephone subscribers. From 22.81
million telephone subscribers in 1999, the number increased to 951.34 million at the end of March, 2012. The total
number of telephones stands at 965.52 million at the end of June 2012 showing an addition of 14.18 million during
the period from March to June 2012. Wireless telephone connections have contributed to this growth as their number
went up from 165.09 million in March 2007 to 919.17 million at the end of March 2012 and at the end of June 2012 it
is 934.09. The wireline connections have however, declined from 40.77 million in March 2007 to 32.17 million in
March 2012 and 31.43 million in June 2012. Source: Annual Report 2012, DOT & The Indian Telecom Services
Performance Indicators, January- March 2012, April-June 2012
MOBILE VALUE ADDED SERVICES (“MVAS”) – AN OVERVIEW
Telecommunications had traditionally been a voice communication service enabling two or more people to connect
with one another. Any additional service enabling the subscriber to use the mobile phone for a host of purposes like
sending short messages, pictures, play games, listen to music, read news headlines, astrology, get flight information,
surf internet, mobile banking including mobile payments etc. Offered on telecom networks are value added services
offered by value added service providers (“MVAS Providers”). In addition to benefiting consumers MVAS is likely to
become a tool for additional revenue, service differentiation, and customer retention for service providers. Source:
The TRAI consultation paper on MVAS July 21, 2011
The mobile value added services such as m-banking, m-governance, location based services etc., has assumed
significance in recent times due to the rapid growth in wireless subscriber base. Consequently, the mobile phones
have transformed into a persuasive medium to deliver information services spanning various usage areas such as
governance, commerce, education and banking. Thus, m-powering is playing an instrumental role in bringing about
empowerment to all strata of society by their delivery of services. Source: Annual Report 2012, DOT
Mobile banking
Mobile phones as a medium for extending banking services have off late been attaining greater significance. The rapid
growth in users and wider coverage of mobile phone networks have made this medium an important platform for
extending banking services to customers. With the rapid growth in the number of mobile phone subscribers in India,
banks have been exploring the feasibility of using mobile phones as an alternative channel of delivery of banking
services. Some banks have started offering information based services like balance enquiry, stop payment instruction
of cheques, transactions enquiry, and location of the nearest automatic teller machine/branch etc. Banks offering
mobile banking service must ensure that customers having mobile phones of any network operator is in a position to
avail of the service. The reserve bank of India has recognised the role of another important stakeholder the mobile
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network operator as technology service provider in the process of encouraging mobile banking in India. The mobile
network operators are expected to play the role of a technology service provider while banks are expected to provide
banking services. The USSD platform offers a common gateway to customers of all banks to easily access and use
mobile banking services. The major advantage of USSD is that the interbank mobile payment system could become
accessible even through low end handsets. Source: ‘Mobile banking transactions in India - Operative Guidelines for
Banks’, RBI accessed on January 8, 2012
Mobile governance
A strategy and its implementation to leverage available wireless and new media technology platforms, mobile phone
devices and applications for delivery of public information and services to citizens and businesses. The mobile
governance framework of Government of India aims to utilize the massive reach of mobile phones and harness the
potential of mobile applications to enable easy and round-the-clock access to public services, especially in the rural
areas. The framework aims to create unique infrastructure as well as application development ecosystem for m-
Governance in the country. Source: The Gazette of India, Framework for mobile governance, Ministry of
Communications & Information Technology January 2012. Various channels, such as voice, text (e-mail and SMS),
general packet radio service, USSD, SIM toolkit, cell broadcast, and multimedia messaging service will be incorporated
to ensure that all users are able to access and use the mobile based services. Bihar government has leveraged mobile
technology in state which utilizes the omnibus features of mobiles for the reporting and monitoring of public service
delivery on the ground level by using a simple SMS. Source:
http://bpsm.bih.nic.in/bpsmnewweb/webpages/home.htm, accessed on January 08, 2013. The m-governance project
being implemented by the Kerala state information technology mission involves the utilization of all kinds of wireless
and mobile technology services, applications and devices for governance. The M-Governance project in Kerala is a
comprehensive mobile governance project aimed at enabling the 90 government departments and m-powering the
people. The mobile governance service delivery platform of Kerala has the following components (a) e-SMS (b)
multimedia messaging service gateway (c) out bound voice diallers (d) Bluetooth kiosks (Source:
http://www.itmission.kerala.gov.in/ accessed on January 08, 2013)
Numerous of mobile governance program has been launched by varied department of government of India through
mobile applications. For the effective implementation of these program government has established mobile electronic
governance service delivery gateway (“MSDG”).The purpose of setting up the MSDG is to provide a one-stop
ecosystem for enabling the delivery of various electronic government services through mobile devices in an efficient
manner with minimum effort for the participating government departments and agencies. MSDG will also help in
enhancing the interoperability of mobile-based services among various government departments and reduce the total
cost of development and deployment of applications for m-Governance services. MSDG provides an integrated
platform for delivery of government services to citizen over mobile devices using SMS, USSD, LBS, or mobile
applications installed on the mobile phones.
Location based services (“LBS”)
Location based services refer to a broad range of service that utilize the knowledge of the geographical position of a
mobile device, in order to provide service based on that information. It allows consumers to receive services and
advertising based on their geographic location. Such services can be provided in response to a consumer’s manual
input of his or her location information into the handset or by using a technology to track the location of the
consumer automatically. Through LBS information about traffic, restaurants, retail stores, travel arrangements, routes,
vehicle tracking etc. can be provided. In addition LBS can also help in law enforcement and emergency services. LBS
include tracking, information, navigation, gaming, communication, advertising, billing etc. (Source: Technology Digest,
August 2012, TRAI)
As per market forecast 2011-2015 the global location based services market is experiencing strong growth. Revenue is
expected to reach US$ 10.3bn in 2015, up from US$ 2.8bn in 2010. Some of the key factors in the recent fast uptake of
the LBS are the simplicity of the services, increasing GPS enabled handsets and smartphone adoption, success of new
business models, continued growth of mobile advertising, wider coverage and higher speed of mobile networks,
availability of the application on multiple bearers including USSD and the service reaching subscribers even with the
most basic mobile handsets. (Source: Technology Digest, August 2012, TRAI) Location based services (“LBS”)
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Location based services refer to a broad range of service that utilize the knowledge of the geographical position of a
mobile device, in order to provide service based on that information. It allows consumers to receive services and
advertising based on their geographic location. Such services can be provided in response to a consumer’s manual
input of his or her location information into the handset or by using a technology to track the location of the
consumer automatically. Through LBS information about traffic, restaurants, retail stores, travel arrangements, routes,
vehicle tracking etc. can be provided. In addition LBS can also help in law enforcement and emergency services. LBS
include tracking, information, navigation, gaming, communication, advertising, billing etc. (Source: Technology Digest,
August 2012, TRAI)
As per market forecast 2011-2015 the global location based services market is experiencing strong growth. Revenue is
expected to reach US$ 10.3bn in 2015, up from US$ 2.8bn in 2010. Some of the key factors in the recent fast uptake of
the LBS are the simplicity of the services, increasing GPS enabled handsets and smartphone adoption, success of new
business models, continued growth of mobile advertising, wider coverage and higher speed of mobile networks,
availability of the application on multiple bearers including USSD and the service reaching subscribers even with the
most basic mobile handsets. (Source: Technology Digest, August 2012, TRAI)
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SUMMARY OF BUSINESS
Overview
We are a telecom solutions company specializing in providing customized products and services using mobile
communications technology. We offer our products and services to TSPs, State Governments, enterprises and
financial institutions across India. Our products and services are classified into (i) VAS segment providing solutions
over text, voice and data to TSPs and their subscribers; and (ii) Enterprise Solution segment providing customized
products and services to government departments, public sector companies, enterprises and financial institutions
including implementation of M-Governance projects for various State Governments. In addition, we have two
subsidiaries Getz Shoppe & Exim Private Limited and Forward Media Private Limited. Getz Shoppe & Exim Private
Limited operates in the trading of consumer durable goods whereas Forward Media Private Limited operates in the
print and digital media industry.
In the VAS segment, our products and services are classified into two parts- (i) Consumer VAS and (ii) Network VAS.
Consumer VAS includes services which are targeted at subscribers of TSPs and network VAS includes managed services
for TSPs.
In the Enterprise solutions segment, we provide hosted solutions and technology consulting ranging from general
information technology (“IT”) consulting to specialized telecom consulting to enterprises and various government
departments. Further, we are one of the major companies in India operating in the M-Governance space having
deployed M-Governance solutions for three State Governments, namely Kerala, Goa and Nagaland. Our M-
Governance initiatives in the State of Kerala has been recognized in a World Bank report titled ‘Maximizing Mobile’ in
the year 2012
Further, with the synergies of our experience and expertise in the VAS Solution, we are currently putting together a
mobile identity ecosystem, Mobile Express, which uses Mobile Digital Signatures to allow its users to digitally
authenticate numerous transactions thereby allowing the mass adoption of Mobile Digital Signature technology in
India. We have recently enrolled as a GSMA associate-member and also as a mobile identity working group member.
Our unconsolidated total income was ` 2,310.10 lacs for the Financial year ended March 31, 2012 and has grown at a
CAGR of 185.75% over our total income of ` 34.65 lacs for the period ending March 31, 2008. Our unconsolidated net
profit was ` 559.74 lacs for the Financial year ended March 31, 2012 as compared to ` (106.07) lacs for the period
ending March 31, 2008.
Our Competitive Strengths
We believe the following are our key competitive strengths:
Innovation and thought leadership
We have always put emphasis on process and product innovation and have strongly imbibed it into our work culture.
We believe that our flagship product Zero User Latch On alerts (“ZULO”), which is a usage and retention tool, is the
first of its kind in the industry and has helped TSPs sustain and grow revenues despite the tough competition present
in the Indian market.
We believe that we are the pioneers of M-Governance initiatives in India and we work closely with State
Governments, central departments, nodal agencies, TSPs and regulatory bodies for providing services that enable the
consumers to avail government services on their mobile handsets. We have entered into three comprehensive M-
Governance implementation projects in India with the State Governments of Kerala, Goa and Nagaland.
We also believe that we will be the first company to launch Mobile Digital Signature technology in India and to this
effect we have signed an exclusive agreement with Valimo, a Finland based Mobile Digital Signature Company.
Long-standing relationships with TSPs and government agencies
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We have long-standing relationships with our TSPs through whom and also to whom we provide services. Our
customer contracts for VAS generally take the form of master contracts that allow us to add new products and
services rapidly with essentially the same terms and conditions as the original contract. Since our inception in
December 2006, we have not lost any major customers. We have been able to hold onto our customers because of
scalability, flexibility and constant innovation of our products and services.
Also, service deployments with our network customers involve complex hardware systems and software applications
deeply embedded within the network’s infrastructure and integrated into the network’s billing, provisioning, service
management, customer care and other core systems. In order to manage, maintain and operate the software
applications provided to our customers and integrate them into our joint product planning and new service
deployment processes, we maintain a high level of interaction and close working relationships with each of our TSP
clients.
We have also been providing services to various government agencies since the past three years and these initiatives
have been recognized by several of these government agencies.
Efficient and scalable business model
We use open source platforms to build our solutions which bring down our cost of services. In the open source
platforms, software is made available with an open source licence and the copyright holder provides the rights to
study; change and distribute the software. The use of open source platforms provides us with an advantage over
many of our competitors who use proprietary hardware and software. The use of open source platforms would also
help us keep pace with the rapid changes in technology as the development is generally available to a wide network of
people and communities who constantly provide inputs and methods to upgrade these platforms, making them more
efficient and updated. Due to these factors, use of open source platforms brings in a significant amount of flexibility
and scalability to our solutions.
Wide spread presence across India
We have servers deployed across twenty one telecom circles in India and also have local points of presence in most of
these telecom circles which help us to serve our existing customers more effectively and also generate new
customers. Further, we have also partnered with the State Governments of Kerala, Goa and Nagaland in the
implementation of the comprehensive M-Governance projects in their respective States on account of which our
implementation and support teams further strengthens our presence in these states.
Our Strategy
We aim to be a thought leader in the mobile identity domain and continue to build on our existing business. We
intend to achieve this through the following strategies:
Create a mobile identity ecosystem by using Mobile Digital Signature technology and make it available to the
masses in India
We intend to create a mobile identity ecosystem by using Mobile Digital Signature technology in India. We have
signed an exclusive license agreement with Valimo, a Finland based company having the proprietary rights to SIM
based Mobile Digital Signature technology. Further, we intend to provide this Mobile Digital Signature technology
through various other modes including SD Cards, audio jack devices, handset based secure elements, etc. Through the
proceeds of this Issue, we intend to start our pilot mobile identity project with customers of a leading financial
institution. This project would aim to provide digital authorization and authentication capabilities to these customers.
We believe that it will empower these customers to manage their financial and banking needs from the convenience
of their mobile phones. Once we have successfully completed this pilot project, we intend to scale the operation on a
national level by partnering with more enterprises, governments and financial institutions. Further, by use of this
technology, we intend to increase the number of use cases so that the number of people and the frequency of the
digital signature used by them becomes very high. Once this technology becomes main stream, we expect to become
one of the largest companies in the mobile identity space in the world in terms of the number of users.
- 6 -
Take advantage of the opportunities that the Mobile Digital Signature technology would provide for enhancing
security in the enterprise space
Large enterprises having high number of employees have particular needs with respect to employee and data security.
These enterprises generally use public key infrastructure (“PKI”) based tokens as a means to control access and prove
employee identity. We believe that the Mobile Digital Signature (wireless PKI) technology would provide a more
secure, convenient and cost effective mode of managing their employees’ digital identity. As a result of this, we
expect to garner additional revenues from enterprise clients and gain end-users in bulk in a relatively short period of
time.
Continue to innovate and develop our VAS and Enterprise Solutions in alignment with the changes in the industry
Our aim in the consumer VAS domain is to create a large number of new and innovative solutions which would be in
line with fast changing user preferences. We also intend to enable TSPs in India to enhance their subscribers’ network
VAS experiences and to enable them to manage and monitor subscribers’ needs using lifecycle management solutions.
Going forward, with respect to the Enterprise Solutions segment, we intend to develop new products and services on
an ongoing basis that appeal to enterprises, specifically banks and financial institutions, which we would bundle with
our mobile identity offerings.
Set up reseller networks for better leverage of our products and solutions across verticals and partner with experts
as consultants
We intend to set up reseller networks wherein we would partner with corporates and other entities to sell our
products and services. This network would more specifically help us with Mobile Express, our mobile identity solution,
once we are successful in implementing our pilot project in Kerala. The reseller network would be used to offer our
customers with all our products and services under various business segments including that of Mobile Express. This
network would be in addition to our existing channels of marketing.
Further, we intend to bring on board experts from banking, telecom and various government sectors as consultants in
order to align ourselves to the customer expectations. We believe that this will also help us make timely upgrade and
modification to our products and services based on the changing industry dynamics and the customer preferences.
Strengthening our Research and Development capabilities
In the industry we operate in, R&D plays a very important role and is often the differentiator between leaders and
followers. We intend to continue to invest in R&D so that our R&D capabilities become one of the best in the industry
and set a benchmark. We believe that the products of our R&D activities will continue to differentiate us from our
competitors and position us well for obtaining contracts for complex and critical projects. We also intend to file a
number of patents to strengthen our IPRs.
Continue to attract, train and retain skilled employees and focus on building our brand
We intend to further develop our employee retention strategy and place special emphasis on attracting and retaining
highly skilled employees. We will continue to invest in the career development and training of our employees, with
the objective of further enhancing their technical skills and leadership capabilities.
Further, we intend to invest in developing the “MobME” brand in India. We seek to achieve this by developing new
products and moreover, by exploring avenues in which our products and services could be used, especially in the
mobile identity segment. We believe that a strong brand will contribute in attracting and retaining talented
manpower and enhancing our business operations and customer acquisition.
- 7 -
SUMMARY FINANCIAL INFORMATION
The following tables set forth the summary financial statements derived from our unconsolidated restated financial
statements as of and for the six months ended September 30, 2012 and the Financial years 2012, 2011, 2010, 2009
and 2008 and our consolidated restated financial statements as of and for the six months ended September 30, 2012
and the Financial year 2012. These restated financial statements have been prepared in accordance with Indian GAAP
and the Companies Act and restated in accordance with the SEBI ICDR Regulations and are presented in “Financial
Statements” on page 124. The summary financial statements presented below should be read in conjunction with our
restated financial statements, the notes and annexures thereto and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” on page 199.
SUMMARY UNCONSOLIDATED FINANCIAL INFORMATION
Summary Unconsolidated statement of assets and liabilities, as restated
(All amounts are in Indian rupees lacs, except share data and where otherwise stated)
Particulars
As at 31 March As at
30
September
2012 2008 2009 2010 2011 2012
Non-current assets
Fixed assets
Tangible assets 33.94 43.34 69.14 170.01 254.96 306.27
Intangible assets 0.70 8.14 20.01 13.02 9.62 8.30
Deferred tax asset, net - 0.01 - - - -
Non-current investments - - - - 100.80 120.80
Long-term loans and advances 1.48 5.50 17.93 48.44 93.08 101.47
Other non-current assets - 1.06 5.99 21.82 19.09 21.09
Total 36.12 58.05 113.07 253.29 477.55 557.93
Current assets
Current investments - - - 44.95 - -
Trade receivables 14.09 49.86 153.76 545.21 729.94 814.46
Cash and bank balances 27.11 33.66 72.94 236.07 295.96 304.70
Short-term loans and advances 10.35 14.10 14.38 51.62 348.71 368.36
Other current assets - - - 167.45 207.11 209.61
Total 51.55 97.62 241.08 1,045.30 1,581.72 1,697.13
Non-current liabilities
Long-term borrowings - - 3.41 2.00 186.72 205.50
Deferred tax liability, net 1.46 - 3.59 73.55 62.70 5.73
Long-term provisions 0.37 0.74 1.93 7.17 12.53 14.93
Total 1.83 0.74 8.93 82.72 261.95 226.16
Current liabilities
Short-term borrowings - - - - 30.00 30.00
Trade payables 0.36 3.27 35.57 83.61 141.54 98.17
Other current liabilities 11.43 26.07 50.41 162.33 119.13 110.25
Short-term provisions 1.16 0.76 - 23.02 - -
Total 12.95 30.10 85.98 268.96 290.67 238.42
Net worth 72.89 124.83 259.24 946.91 1,506.65 1,790.48
Net worth represented by
- 8 -
Particulars
As at 31 March As at
30
September
2012 2008 2009 2010 2011 2012
Share capital 122.96 136.11 144.91 160.00 160.00 200.00
Share application money pending allotment 40.00 15.00 64.00 - - -
Reserves and surplus (90.07) (26.28) 50.33 786.91 1,346.65 1,590.48
Net worth 72.89 124.83 259.24 946.91 1,506.65 1,790.48
Note: The above statement should be necessarily read with the notes to the restated unconsolidated summary
statements and the significant accounting policies as appearing in Annexure IV to the restated unconsolidated
financial information beginning on page 125 of this DRHP.
Summary Unconsolidated statement of profit and loss, as restated
(All amounts are in Indian rupees lacs, except share data and where otherwise stated)
Particulars
For the period from
12 December 2006
to 31 March 2008
For the year ended 31 March
For the period
from
1 April 2012 to
30 September
2012 2009 2010 2011 2012
Income
Income from services 34.24 133.36 373.39 1,932.75 2,252.87 1,049.74
Other income 0.41 0.07 0.50 2.44 57.22 1.37
Total 34.65 133.43 373.89 1,935.19 2,310.09 1,051.11
Expenditure
Employee benefits 70.83 53.10 116.25 364.89 711.55 411.55
Other expenses 55.73 71.89 140.93 536.28 752.91 306.54
Finance charges 0.13 0.52 0.16 5.78 5.13 7.00
Depreciation/ amortisation 11.34 11.90 25.87 37.42 62.23 52.73
Total 138.03 137.41 283.21 944.37 1,531.82 777.82
Net profit before tax (103.38) (3.98) 90.68 990.82 778.27 273.29
Less: Provision for tax
Current tax / minimum
alternate tax - - (10.47) (245.08) (229.38) (116.30)
Fringe benefit tax (1.23) (0.76) - - - -
Deferred tax (charge) /
benefit (1.46) 1.47 (3.60) (69.96) 10.85 56.97
Total provision for tax (2.69) 0.71 (14.07) (315.04) (218.53) (59.33)
Net profit after tax, as
restated (106.07) (3.27) 76.61 675.78 559.74 213.96
Note: The above statement should be necessarily read with the notes to the restated unconsolidated summary
statements and the significant accounting policies as appearing in Annexure IV to the restated unconsolidated
financial information beginning on page 125 of this DRHP.
- 9 -
Summary Unconsolidated statement of cash flows, as restated
(All amounts are in Indian rupees lacs, except share data and where otherwise stated)
Particulars
For the period
from
12 December
2006
to 31 March
2008
For the year ended 31 March
For the period from
1 April 2012 to
30 September 2012 2009 2010 2011 2012
Cash flows from operating
activities
Net profit/(loss) before tax,
as restated -103.38 -3.98 90.68 990.82 778.27 273.29
Adjustments for:
Depreciation/ amortisation 11.34 11.90 25.87 37.42 62.23 52.73
Finance charges 0.13 0.52 0.16 5.78 5.13 7.00
Interest income 0.00 -0.06 -0.24 -2.44 -12.75 -1.37
Provision for bad and
doubtful debts 0.00 0.00 0.00 0.00 0.00 27.09
Profit on sale of investments 0.00 0.00 0.00 0.00 -44.05 0.00
Profit on sale of fixed assets 0.00 0.00 0.00 0.00 -0.18 0.00
Operating cash flows before
working capital changes -91.91 8.38 116.47 1,031.58 788.65 358.74
Decrease / (increase) in trade
receivables -14.09 -35.77 -103.90 -391.45 -184.73 -111.61
Decrease / (increase) in loans
and advances and other
current assets
-10.40 -4.87 -7.59 -266.47 -369.44 -19.99
Increase /(decrease) in
liabilities and provisions 12.16 17.92 56.57 165.06 15.64 -54.03
Cash generated from / (used
in) operating activities before
taxes
-104.24 -14.34 61.55 538.72 250.12 173.11
Income taxes paid -1.50 -5.06 -21.04 -206.92 -261.62 -128.85
Net cash generated from /
(used in) operating activities
[A]
-105.74 -19.40 40.51 331.80 -11.50 44.26
Cash flows from investing
activities
Purchase of fixed assets -45.98 -29.06 -63.54 -131.31 -145.49 -102.73
Proceeds from sale of fixed
assets 0.00 0.32 0.00 0.00 1.90 0.00
Purchase of investments 0.00 0.00 0.00 -44.95 -100.80 -20.00
Sale of investments 0.00 0.00 0.00 0.00 89.00 0.00
Interest received 0.00 0.00 0.00 2.74 12.75 1.37
Net cash used in investing
activities [B] -45.98 -28.74 -63.54 -173.52 -142.64 -121.36
Cash flows from financing
activities:
Proceeds from issue of share
capital 178.96 55.21 57.80 11.89 0.00 69.87
Proceeds from secured loans,
net 0.00 0.00 4.67 -1.26 216.01 18.43
Interest paid -0.13 -0.52 -0.16 -5.78 -1.98 -2.46
- 10 -
Particulars
For the period
from
12 December
2006
to 31 March
2008
For the year ended 31 March
For the period from
1 April 2012 to
30 September 2012 2009 2010 2011 2012
Net cash generated from /
(used in) financing activities
[C]
178.83 54.69 62.31 4.85 214.03 85.84
Net increase / (decrease) in
cash and cash equivalents
[A+B+C]
27.11 6.55 39.28 163.13 59.89 8.74
Cash and cash equivalents at
the beginning of the year /
period
0.00 27.11 33.66 72.94 236.07 295.96
Cash and cash equivalents at
the end of the year / period 27.11 33.66 72.94 236.07 295.96 304.70
Components of cash and
cash equivalents
Cash in hand 0.04 0.06 0.06 0.03 0.01 0.01
Balance with scheduled bank
in current accounts 27.07 32.00 70.28 67.71 120.09 204.14
in deposit accounts - 1.60 2.60 168.33 175.86 100.55
27.11 33.66 72.94 236.07 295.96 304.70
Note:
1. The cash flow statement has been prepared under the indirect method as set out in Accounting Standard - 3 on Cash Flow
Statements as prescribed by the Companies (Accounting Standards) Rules, 2006.
2. Note: The above statement should be necessarily read with the notes to the restated unconsolidated summary
statements and the significant accounting policies as appearing in Annexure IV to the restated unconsolidated
financial information beginning on page 125 of this DRHP.
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
Summary Consolidated statement of assets and liabilities, as restated
(All amounts are in Indian rupees lacs, except share data and where otherwise stated)
Particulars As at
31 March 2012
As at
30 September 2012
Non-current assets
Fixed assets
Tangible assets 266.74 320.67
Intangible assets 9.62 8.30
Goodwill on consolidation 48.85 48.85
Non-current investments - 20.00
Long-term loans and advances 93.08 101.77
Other non-current assets 19.09 21.09
Total 437.38 520.68
Current assets
Inventory 96.51 236.78
Trade receivables 944.38 1,110.13
Cash and bank balances 302.50 306.03
- 11 -
Particulars As at
31 March 2012
As at
30 September 2012
Short-term loans and advances 171.86 134.95
Other current assets 207.11 209.61
Total 1,722.36 1,997.50
Non-current liabilities
Long-term borrowings 187.80 207.54
Deferred tax liability, net 63.62 6.65
Long-term provisions 12.53 15.94
Total 263.95 230.13
Current liabilities
Short-term borrowings 77.29 235.21
Trade payables 211.81 177.67
Other current liabilities 127.28 136.75
Short-term provisions 5.79 0.14
Total 422.17 549.77
Minority interest 12.79 12.82
Net worth 1,460.83 1,725.46
Net worth represented by
Share capital 160.00 200.00
Reserves and surplus 1,300.83 1,525.46
Net worth 1,460.83 1,725.46
Note:
The above statement should be necessarily read with the notes to the restated consolidated summary statements and
the significant accounting policies as appearing in Annexure IV to the restated consolidated financial information
beginning on page 160 of this DRHP.
Summary Consolidated statement of profit and loss, as restated
(All amounts are in Indian rupees lacs, except share data and where otherwise stated)
Particulars For the year ended
31 March 2012
For the period from
1 April 2012 to
30 September 2012
Income
Income from services 2,257.23 1,070.48
Income from sale of goods - 1,214.12
Other income 57.22 1.37
Total 2,314.45 2,285.97
Expenditure
Cost of goods sold - 1,126.93
Employee benefits 718.59 447.13
Other expenses 771.75 388.00
Finance charges 5.13 16.04
Depreciation, amortisation and impairment 79.23 53.61
- 12 -
Particulars For the year ended
31 March 2012
For the period from
1 April 2012 to
30 September 2012
Total 1,574.70 2,031.71
Net profit before tax 739.75 254.26
Less: Provision for tax
Current tax (229.38) (116.44)
Deferred tax benefit 3.55 56.97
Total provision for tax (225.83) (59.47)
Net profit after tax before minority interest 513.92 194.79
Share of minority interest - 0.03
Net profit after tax, as restated 513.92 194.76
Note:
The above statement should be necessarily read with the notes to the restated consolidated summary statements and
the significant accounting policies as appearing in Annexure IV to the restated consolidated financial information
beginning on page 160 of this DRHP.
Summary Consolidated statement of cash flows, as restated
(All amounts are in Indian rupees lacs, except share data and where otherwise stated)
Particulars For the year ended
31 March 2012
For the period from
1 April 2012 to
30 September 2012
Cash flows from operating activities
Net profit before tax as restated 739.75 254.26
Adjustment on account of consolidation - -
Adjustments for:
Depreciation/ amortisation/ impairment 79.23 53.61
Finance charges 5.13 16.04
Interest income (12.75) (1.37)
Profit on sale of fixed assets (0.18) -
Profit on sale of investments (44.05) -
Provision for bad and doubtful debts - 27.09
Operating cash flows before working capital changes 767.13 349.63
Decrease / (increase) in inventories (96.51) (140.27)
Decrease / (increase) in trade receivables (399.17) (192.84)
Decrease / (increase) in loans and advances and other current assets (166.14) 26.47
Increase /(decrease) in liabilities and provisions 92.05 (23.42)
Cash generated from operating activities before taxes 197.36 19.57
Income taxes paid (255.83) (134.64)
Net cash generated from operating activities [A] (58.47) (115.07)
- 13 -
Particulars For the year ended
31 March 2012
For the period from
1 April 2012 to
30 September 2012
Cash flows from investing activities
Purchase of fixed assets (200.72) (96.42)
Proceeds from sale of fixed assets 1.90 -
Purchase of investments - (20.00)
Sale of investments 89.00 -
Payments for net assets acquired of subsidiaries, net of cash (42.46) -
Interest received 12.75 1.37
Net cash used in investing activities [B] (139.53) (115.05)
Cash flows from financing activities:
Proceeds from issue of share capital - 69.87
Proceeds from secured loans, net 266.41 175.28
Interest paid (1.98) (11.50)
Net cash generated from financing activities [C] 264.43 233.65
Net increase in cash and cash equivalents [A+B+C] 66.43 3.53
Cash and cash equivalents at the beginning of the year / period 236.07 302.50
Cash and cash equivalents at the end of the year / period 302.50 306.03
Components of cash and cash equivalents
Cash on hand 1.71 0.23
Balance with scheduled bank
in current accounts 124.93 204.74
in deposit accounts 175.86 101.06
302.50 306.03
Note:
1. The cash flow statement has been prepared under the indirect method as set out in Accounting Standard - 3
on Cash Flow Statements as prescribed by the Companies (Accounting Standards) Rules, 2006.
2. The above statement should be necessarily read with the notes to the restated consolidated summary
statements and the significant accounting policies as appearing in Annexure IV to the restated consolidated
financial information beginning on page 160 of this DRHP.
- 14 -
THE ISSUE
The following table summarizes the Issue details:
Issue(1)
Issue of up to 705,600 Equity Shares, aggregating up to `[] lacs
Issue reserved for the Marker
Makers
35,400 Equity Shares of ` 10 each for cash at a price of ` [] per share
aggregating to `[] lacs
Net Issue 670,200 Equity Shares
Of which:
(A) QIB Portion(1)(2) (3)
335,100 Equity Shares
Of which:
Mutual Fund Portion 11,700 Equity Shares
Balance for all QIBs including
Mutual Funds 222,600 Equity Shares
(B) Non-Institutional Portion(1)
Not less than 100,800 Equity Shares
(C) Retail Portion(1)
Not less than 234,300 Equity Shares
Equity Shares outstanding prior to
the Issue 2,116,416 Equity Shares
Equity Shares outstanding after the
Issue 2,822,016 Equity Shares
Use of proceeds of the Issue See “Objects of the Issue” on page 39 of the Draft Red Herring Prospectus.
(1)
In the event of over-subscription, Allotment shall be made on a proportionate basis, subject to valid Bids being
received at or above the Issue Price. In the event of under-subscription, if any, in the Non-Institutional Portion, and
Retail Portion would be allowed to be met with spill-over from other categories or a combination of categories at the
discretion of our Company, in consultation with the BRLM and the Designated Stock Exchange. However, under-
subscription, if any, in the QIB Portion will not be allowed to be met with spill-over from other categories or a
combination of categories.
(2) Our Company, in consultation with the BRLM, may allocate up to 30% of the QIB Portion, consisting of 100,800
Equity Shares, to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations. One third of
the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from
domestic Mutual Funds at or above the Anchor Investor Issue Price. In case of under subscription in the Anchor
Investor Portion, the remaining Equity Shares will be added back to the QIB Portion. For further details, see “ Issue
Procedure” on page 257 of the Draft Red Herring Prospectus.
(3)
Such number of Equity Shares representing 5% of the QIB Portion shall be available for allocation on a proportionate
basis to Mutual Funds only. The remainder of the QIB Portion shall be available for allocation on a proportionate basis
to QIBs, subject to valid Bids being received from them at or above the Issue Price. In the event that the demand from
Mutual Funds is greater than 11,700 Equity Shares, allocation shall be made to Mutual Funds proportionately, to the
extent of the Mutual Fund Portion. The remaining demand by the Mutual Funds shall, as part of the aggregate
demand by QIBs, be available for allocation proportionately out of the remainder of the QIB Portion, after excluding
the allocation in the Mutual Fund Portion. However, in the event of under-subscription in the Mutual Fund Portion,
the balance Equity Shares in the Mutual Fund Portion will be added to the QIB Portion and allocated to QIBs (including
Mutual Funds) on a proportionate basis, subject to valid Bids at or above Issue Price.
- 15 -
GENERAL INFORMATION
Our Company was incorporated on December 12, 2006 as MobME Wireless Solutions Private Limited as a private
limited company under the Companies Act and name of our Company was subsequently changed to MobME Wireless
Solutions Limited vide a fresh certificate of incorporation dated January 15, 2013. For further details, see “History and
Certain Corporate Matters” on page 83 of the Draft Red Herring Prospectus.
Registered Office of our Company
MobME Wireless Solutions Limited
41/3197, 4th
Floor
Bhagheeratha Square
Banerji Road
Kacherippady
Kochi 682018
Kerala
Tel: +91 484 6492646
Fax: +91 484 4019035
CIN: U64203KL2006PLC020093
Website: www.mobme.com
Address of the RoC
Our Company is registered with the RoC, situated at the following address:
Registrar of Companies
Company Law Bhavan
BMC Road, Thrikkakara
Kochi 682021
Kerala
Tel: +91 484 2421626
Fax: +91 484 2422327
Email: [email protected]
Board of Directors
The Board of our Company comprises the following:
SNo Full Name Address Designation DIN
1. Mr. George Brody
204, High Canyon Court, Richardson, Texas,
75080, USA
Chairman, Non-Executive and
Independent Director
02014824
2. Mr. Jose Thomas
Pattara
Door No 423, Pattara Puthenveedu,
Thanneermukom, South Muhamma Post
Office, Alappuzha 688525
Non-Executive and Non-
Independent Director
00061511
3. Mr. Sanjay
Vijayakumar
Sarovaram, KP-I/864, Convent Road,
Muttada Post Office, Trivandrum 695025
Executive and Non-
Independent Director
00595475
4. Mr. Sony Joy 9/347, IMA Lane, Mission Quarters,
Thrissur 680001
Executive and Non-
Independent Director
01876554
5. Mr. Aynampudi
Subbarao
E-43, Nivedita Kui, Sector X, RK Puram, New
Delhi 110022
Non-Executive and
Independent Director
03518681
For further details of the Directors, see “Our Management” on page 88 of the Draft Red Herring Prospectus.
- 16 -
Compliance Officer
Our Company has appointed Ms. Smitha Varma, as its Compliance Officer. Her contact details are as follows:
Ms. Smitha Varma
41/3197, 4th Floor
Bhagheeratha Square
Banerji Road
Kacherippady
Kochi 682018
Kerala
Tel: +91 484 6492646
Fax: +91 484 4019035
E-mail: [email protected]
Investors can contact the Compliance Officer, the BRLM or the Registrar to the Issue in case of any pre-Issue or
post-Issue related problems, such as non-receipt of Allotment Advice, credit of Allotted shares in the respective
beneficiary account or refund orders.
All grievances pertaining to the Issue may be addressed to the Registrar to the Issue quoting the full name of the sole
or first Bidder, Bid cum Application Form number, Bidders’ DP ID, Client ID, PAN, number of Equity Shares applied for,
date of Bid cum Application Form, name and address of the Syndicate Member where the Bid was submitted and
cheque or draft number and issuing bank thereof.
All grievances relating to the ASBA process may be addressed to the Registrar to the Issue, with a copy to the relevant
SCSB or Broker Centre or the member of the Syndicate if the Bid was submitted to a member of the Syndicate at any
of the Syndicate ASBA Bidding Locations or Broker Centre, as the case may be, quoting the full name of the sole or first
Bidder, Bid cum Application Form number, Bidders’ DP ID, Client ID, PAN, number of Equity Shares applied for, date of
Bid cum Application Form, name and address of the member of the Syndicate or the Designated Branch, as the case
may be, where the ASBA Bid was submitted and ASBA Account number in which the amount equivalent to the Bid
Amount was blocked.
Book Running Lead Manager
IDBI Capital Market Services Limited
3rd
Floor, Mafatlal Centre
Nariman Point
Mumbai 400021, India
Tel: +91 22 4322 1212
Fax: +91 22 2285 0785
Email: [email protected]
Website: www.idbicapital.com
Contact Person: Mr. Keyur Desai
Domestic Legal Counsel to the Issue
Desai & Diwanji
Lentin Chambers
Dalal Street, Fort
Mumbai 400001, India
Tel: +91 22 3984 1000
Fax: +91 22 2265 8245
Registrar to the Issue
- 17 -
Bigshare Services Private Limited
E/2, Ansa Industrial Estate
Sakivihar Road
Sakinaka, Andheri (East)
Mumbai 400072, India
Tel: +91 22 404 30 200
Fax: +91 22 2847 5207
Email: [email protected]
Investor Grievance ID: [email protected]
Website: www.bigshareonline.com
Contact Person: Mr. Ashok Shetty
SEBI Registration No.: INR000001385
Statutory Auditor to our Company
Sivaprasad and Associates
Chartered Accountants
KC-IV-24C, Aswathy
Y’s Men Colony
Vadakkevila P. O.
Madanada, Kollam 691010
Contact Person: Ms. R. Suja Sathish
Advisors to the Issue
GMA Capital Partners
2nd
Floor, #42/2411-B1, Power House Road
Cochin – 682018
Tel: +91 484 6400101
Email: [email protected]
Website: www.gyanmagnus.com
Contact Person: Mr. Praveen Das
Bankers to the Issue/Escrow Collection Banks
[]
Self-Certified Syndicate Banks
Please note that in accordance with the provisions of SEBI circular bearing number CIR/CFD/DIL/1/2011 dated April
29, 2011, all applicants who are QIBs, Non-Institutional Investors who comply with the conditions for being an ASBA
Investor shall mandatorily make use of ASBA facility. The equity shareholders are required to fill the CAF and
submit the same to their SCSB which in turn will block the amount as per the authority contained in the CAF and
undertake other tasks as per the specified procedure. Further, in terms of the SEBI circular CIR/CFD/DIL/1/2013
dated January 2, 2013; it is clarified that for making applications by banks on own account using ASBA facility, SCSBs
should have a separate account in own name with any other SEBI registered SCSB/s. Such account shall be used
solely for the purpose of making application in public issues and clear demarcated funds should be available in such
account for ASBA applications.
The list of banks that have been notified by SEBI to act as SCSBs for the ASBA process is provided at the website of the
SEBI at http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries. For details on Designated
Branches of SCSBs collecting the Bid cum Application Forms submitted by ASBA Bidders, refer to the above-mentioned
link.
- 18 -
Syndicate Members
[]
Syndicate SCSB Branches
In relation to ASBA Bids submitted to a member of the Syndicate, the list of branches of the SCSBs at the Syndicate
ASBA Bidding Locations named by the respective SCSBs to receive deposits of Bid cum Application Forms from the
members of the Syndicate is available on the website of the SEBI (www.sebi.gov.in) and updated from time to time.
For more information on such branches collecting Bid cum Application Forms from the members of the Syndicate at
Syndicate ASBA Bidding Locations, see the website of the SEBI.
Refund Banks
[]
Bankers to our Company
Federal Bank Limited
Ernakulam North Branch, P.B. No. 1927
Banerji Road, Ernakulam
Kochi 682018
Tel: +91 9961197418
Fax: +91 0484 2374738
Email: [email protected]
Website: www.federalbank.co.in
Contact Person: Jose Mathew. K
ICICI Bank Limited
Kowdiar Branch, Nackolackai Chambers
TTC Junction, Kowdiar
Trivandrum 695003
Tel: +91 0471 3075356
Fax: +91 04712312081
Email: [email protected]
Website: www.icicibank.com
Contact Person: Arun Rex Bob
IDBI Bank Limited
Samrudhi Magnet
Opposite Government Women’s College
Vazhuthacaud, Trivandrum
Tel: +91 0471 6450422
Fax: +91 0471 2331167
Email: [email protected]
Website: www.idbi.com
Contact Person: Mr. Shiju Varghese
Induslnd Bank Limited
Janvilla City Centre, Vellayambalam, Sasthamangalam
Road, Sasthamangalam Post Office
Thiruvananthapuram 695010
Tel: +91 9846741702
Fax: +91 0471 4100839
Email: [email protected]
Website: www.indusind.com
Contact Person: Sandeep R Krishnan
Credit Rating
As this is an Issue comprising only Equity Shares, credit rating is not required for the Issue.
SME IPO Grading and Rationale
The Issue has been graded by [] and assigned the [] indicating [] in comparison to other SMEs in India through its
report dated [].
Monitoring Agency
Pursuant to Regulation 16 of the SEBI ICDR Regulations, there is no requirement to appoint a monitoring agency for
the Issue.
Trustees
As this is an Issue of Equity Shares, the appointment of trustees is not required.
- 19 -
Experts
Except for the reports provided by the IPO grading agency furnishing the rationale for its grading of the Issue and the
report of the Statutory Auditor on the restated financial statements and the statement of tax benefits’, included in the
Draft Red Herring Prospectus, we have not obtained any other expert opinions.
Our Company has received consent from Sivaprasad and Associates, Chartered Accountants to include their name as
an expert under Section 58 of the Companies Act in the Draft Red Herring Prospectus and for inclusion of their report
dated February 6, 2013 on the restated financial statements of MobMe Wireless Solutions Limited included in the
Draft Red Herring Prospectus, and such consent has not been withdrawn as of the date of the Draft Red Herring
Prospectus.
Appraising Entity
No appraising entity has been appointed in respect of any project of our Company. The objects of this Issue and
means of finance are based on internal estimates of our Company.
Market Maker
As per Regulation 106(P) of the SEBI ICDR Regulations, IDBI Capital Market Services Limited, as the BRLM, will ensure
compulsory market making in the manner specified by SEBI for a minimum period of three years from the date of
listing of the Equity Shares of our Company.
Nominated Investor
There is no nominated investor for the Issue.
Inter se allocation of responsibilities
Since IDBI Capital Market Services Limited is the sole Book Running Lead Manager, all the responsibilities of the Issue
will be managed by IDBI Capital Market Services Limited.
Book Building Process
The Book Building Process, with reference to the Issue, refers to the process of collection of Bids on the basis of the
Red Herring Prospectus within the Price Band. The Price Band and the minimum Bid lot size will be decided by our
Company in consultation with the BRLM and in accordance with the SEBI ICDR Regulations, and advertised in []
edition of [] (a widely circulated English national newspaper), [] edition of [] (a widely circulated Hindi national
newspaper) and [] edition of [] (a widely circulated Malayalam newspaper) and shall be made available on the
website of the Stock Exchange, at least five Working Days prior to the Bid/Issue Opening Date. The Issue Price is
finalized after the Bid/Issue Closing Date. The principal parties involved in the Book Building Process are:
our Company;
the BRLM;
the Syndicate Members who are intermediaries registered with the SEBI or registered as brokers with the
NSE and eligible to act as underwriters;
the Registrar to the Issue;
the Escrow Collection Banks; and
the SCSBs.
The SEBI ICDR Regulations have permitted the Issue of securities to the public through the Book Building Process,
wherein 50% of the Issue shall be available for allocation on a proportionate basis to QIBs, of which 5% shall be
reserved for Mutual Funds. Further, not less than 15% of the Issue shall be available for allocation on a proportionate
basis to Non Institutional Bidders and not less than 35% of the Issue shall be available for allocation on a
proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price.
- 20 -
Under-subscription, if any, in any category barring the QIB category, would be allowed to be met with spill-over from
any other category or combination of categories at the discretion of the Company, in accordance with the SEBI ICDR
Regulations, and in consultation with the BRLM and the Designated Stock Exchange. Our Company will comply with
the SEBI ICDR Regulations for the Issue. In this regard, our Company has appointed the Book Running Lead Manager to
procure subscriptions to the Issue.
In accordance with the SEBI ICDR Regulations, QIBs bidding in the QIBs portion are not allowed to withdraw their
Bid(s) after the Bid/Issue Closing Date. For further details, please refer “Terms of the Issue” on page 252 of the Draft
Red Herring Prospectus.
QIBs and Non-Institutional Bidders shall compulsorily submit their Bids under the “ASBA Process”, which would entail
blocking of funds in the investor’s bank account rather than immediate transfer of funds to the respective Escrow
Accounts. Retail Individual Bidders have the option of submitting their Bids under the ASBA Process or through
cheques/demand drafts.
We will comply with the SEBI ICDR Regulations and any other ancillary directions issued by SEBI for this Issue. In this
regard, we have appointed IDBI Capital Market Services Limited as the Book Running Lead Manager to manage the
Issue and procure subscriptions to the Issue.
The process of Book Building under the SEBI ICDR Regulations is subject to change from time to time and the investors
are advised to make their own judgment about investment through this process prior to making a Bid or application in
the Issue.
Retail Individual Bidders are advised to make their own judgment about investment through the ASBA process prior
to submitting a Bid cum Application Form.
Illustration of Book Building and Price Discovery Process (Investors should note that this example is solely for
illustrative purposes and is not specific to the Issue; and also excludes bidding by Anchor Investors or under the ASBA
Process)
Bidders can bid at any price within the Price Band. For instance, assume a price band of ` 20 to ` 24 per equity share,
issue size of 3,000 equity shares and receipt of five bids from bidders, details of which are shown in the table below. A
graphical representation of the consolidated demand and price would be made available at the bidding centres during
the bidding period. The illustrative book below shows the demand for the equity shares of the issuer company at
various prices and is collated from bids received from various investors.
Bid Quantity Bid Amount ( `) Cumulative Quantity Subscription (%)
500 24 500 16.70
1,000 23 1,500 50.00
1,500 22 3,000 100.00
2,000 21 5,000 166.70
2,500 20 7,500 250.00
The price discovery is a function of demand at various prices. The highest price at which the issuer is able to issue the
desired number of shares is the price at which the book cuts off, i.e., ` 22 in the above example. The issuer, in
consultation with the book running lead managers will, finalize the issue price at or below such cut-off price, i.e., at or
below ` 22. All bids at or above this issue price are valid bids and are considered for allocation in the respective
categories.
Steps to be taken by the Bidders for Bidding
1. Check eligibility for making a Bid (For further details, see “Issue Procedure - Who Can Bid” on page 260 of the
Draft Red Herring Prospectus).
2. Ensure that you have a demat account and the demat account details are correctly mentioned in the Bid cum
Application Form, as applicable.
- 21 -
3. Ensure correctness of your PAN, DP ID and Client ID mentioned in the. Based on these parameters, the
Registrar will obtain the Demographic Details of the Bidders from the Depositories.
4. Except for Bids on behalf of the Central or State Government officials, residents of Sikkim and the officials
appointed by the courts, who may be exempt from specifying their PAN for transacting in the securities
market, for Bids of all values ensure that you have mentioned your PAN allotted under the I.T. Act in the Bid
cum Application Form (see “Issue Procedure –‘PAN’ or ‘GIR’ Number” on page 287 of the Draft Red Herring
Prospectus). The exemption for Central or State Governments and officials appointed by the courts and for
investors residing in Sikkim is subject to the Depositary Participant’s verification of the veracity of such claims
of the investors by collecting sufficient documentary evidence in support of their claims.
5. Ensure that the Bid cum Application Form is duly completed as per instructions given in the Red Herring
Prospectus and in the Bid cum Application Form.
6. Bids by ASBA Bidders will have to be submitted to the designated branches of the SCSBs or to the members
of the Syndicate at the Syndicate ASBA Bidding Locations or the Broker Centre. Ensure that the SCSB where
the ASBA Account (as specified in the Bid cum Application Form) is maintained has named at least one branch
at that location for the members of the Syndicate to deposit Bid cum Application Forms (a list of such
branches is available at the website of the SEBI at www.sebi.gov.in).
7. Bids by ASBA Bidders may be submitted in the physical mode to the Syndicate at the Syndicate ASBA Bidding
Locations or the Broker Centre and either in physical or electronic mode, to the SCSBs with whom the ASBA
Account is maintained. ASBA Bidders should ensure that the ASBA Accounts have adequate credit balance at
the time of submission to the SCSB to ensure that the Bid cum Application Form is not rejected.
8. Bidders may also submit their Bids to the Broker Centre at locations covered under the nationwide network
of the Stock Exchange, an updated list of which is available on the website of the Stock Exchange. Bidders can
view the status of their Bids on the websites of Stock Exchanges.
Withdrawal of the Issue
Our Company, in consultation with the Book Running Lead Manager, reserves the right not to proceed with the Issue
at any time after the Bid Opening Date but before the Board meeting for Allotment, without assigning any reason
thereof. In such an event our Company would issue a public notice in the newspapers, in which the pre-issue
advertisements were published, within two days of the closure of the Issue, providing reasons for not proceeding with
the Issue. The BRLM, through the Registrar to the Issue, shall notify the SCSBs to unblock the bank accounts of the
ASBA Bidders within one day of receipt of such notification. Our Company shall also promptly inform the Stock
Exchange on which the Equity Shares were proposed to be listed.
If our Company withdraws the Issue after the Bid Closing Date, our Company shall state the reasons thereof in a public
notice within two days of the closure of the Issue. The public notice shall be issued in the same newspapers where the
pre-issue advertisement had appeared. The Stock Exchange shall also be informed of such withdrawal.
Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final listing and trading approvals of the
Stock Exchange, which our Company shall apply for after Allotment, and (ii) the final RoC approval of the Draft Red
Herring Prospectus after it is filed with the Stock Exchange.
Bid/Issue Programme
BID/ISSUE OPENS ON [], 2013
BID/ISSUE CLOSES ON [], 2013
Bids and any revision in Bids shall be accepted only between 10.00 a.m. and 5.00 p.m. (Indian Standard Time) during
the Bidding Period as mentioned above at the bidding centers mentioned in the Bid cum Application Form or, in case
- 22 -
of Bids submitted through ASBA, the Designated Branches of the SCSBs and the Syndicate ASBA Bidding Locations or
the Broker Centre, On the Bid/Issue Closing Date, Bids (excluding ASBA Bidders) shall be uploaded until (i) 4.00 p.m. in
case of Bids by QIB Bidders and Non-Institutional Bidders; and (ii) until 5.00 p.m. or until such time as permitted by
NSE in case of Bids by Retail Individual Bidders. It is clarified that Bids not uploaded in the book, would be rejected.
Bids by ASBA Bidders shall be uploaded by the SCSB in the electronic system to be provided by NSE.
In case of discrepancy of data between the Stock Exchange and the Designated Branches of the SCSBs, the decision of
the Registrar to the Issue, in consultation with the BRLM, our Company and the Designated Stock Exchange, based on
the physical/electronic records, as the case may be, of the Bid cum Application Forms shall be final and binding on all
concerned. Further, the Registrar to the Issue may ask for rectified data from the SCSB.
Due to limitation of time available for uploading the Bids on the Bid/Issue Closing Date, the Bidders are advised to
submit their Bids one day prior to the Bid Closing Date and, in any case, no later than 1.00 p.m. (Indian Standard Time)
on the Bid Closing Date. Bidders are cautioned that in the event a large number of Bids are received on the Bid Closing
Date, which may lead to some Bids not being uploaded due to lack of sufficient time to upload, such Bids that cannot
be uploaded will not be considered for allocation in the Issue. If such Bids are not uploaded, our Company, the BRLM
and the Syndicate Members shall not be responsible. Bids will be accepted only on working days, i.e. Monday to Friday
(excluding any public holiday).
On the Bid/Issue Closing Date, extension of time will be granted by the Stock Exchange only for uploading the Bids
received from Retail Individual Bidders, after taking into account the total number of Bids received up to the closure of
timings for acceptance of Bid cum Application Forms as stated herein and reported by the BRLM to the Stock
Exchange within half an hour of such closure.
Our Company, in consultation with the BRLM, reserves the right to revise the Price Band during the Bidding Period in
accordance with the SEBI ICDR Regulations. The Cap Price shall be less than or equal to 120% of the Floor Price.
Subject to compliance with the immediately preceding sentence, the Floor Price can be revised up or down to a
maximum of 20% of the Floor Price as originally disclosed at least two working days prior to the Bid/Issue Opening
Date and the Cap Price will be revised accordingly.
In case of revision in the Price Band, the Bidding Period will be extended for three additional Working Days after
revision of the Price Band subject to the Bidding Period not exceeding 10 Working Days. Any revision in the Price
Band and the revised Bidding Period, if applicable, will be widely disseminated by notification to the Stock
Exchange, by issuing a press release, and also by indicating the change on the website of the BRLM and at the
terminals of the members of the Syndicate.
Underwriting Agreement
Our Company has entered into an Underwriting Agreement dated [] with the Underwriter for the Equity Shares
proposed to be offered through the Issue. It is proposed that pursuant to the terms of the Underwriting Agreement,
the BRLM shall be responsible for bringing in the amount devolved in the event that the Syndicate Members do not
fulfill their underwriting obligations. Pursuant to the terms of the Underwriting Agreement, the obligations of the
Underwriter are several and are subject to certain conditions, as specified therein. The Issue has been 100%
underwritten.
The Underwriter has indicated its intention to underwrite the following number of Equity Shares:
This portion has been intentionally left blank and will be filled in before filing of the Draft Red Herring Prospectus with
the RoC
Name, Address, Telephone, Fax, and Email
of the Underwriter
Indicated Number of Equity Shares to
be Underwritten
Amount Underwritten
(in lacs)
[] [] []
In the opinion of our Board of Directors (based on a certificate given by the Underwriter), the resources of the above
mentioned Underwriter is sufficient to enable them to discharge their respective underwriting obligations in full. The
- 23 -
abovementioned Underwriter is registered with SEBI under Section 12(1) of the SEBI Act or registered as brokers with
the Stock Exchange(s).
Notwithstanding the above table, the BRLM and the Syndicate Member(s) shall be responsible for ensuring payment
with respect to Equity Shares allocated to investors procured by them. In the event of any default in payment, the
respective Underwriter, in addition to other obligations defined in the underwriting agreement, will also be required
to procure/subscribe to Equity Shares to the extent of the defaulted amount. If the Syndicate Member(s) fails to fulfill
its underwriting obligations as set out in the Underwriting Agreement, the BRLM shall fulfill the underwriting
obligations in accordance with the provisions of the Underwriting Agreement.
The underwriting agreement shall list out the role and obligations of each Underwriter.
Market Making Arrangement
IDBI Capital Market Services Limited will act as the Market Maker and has agreed to receive or deliver the specified
securities in the market making process for a period of three years from the date of listing of our Equity Shares or for a
period as may be notified by amendment to SEBI ICDR Regulations.
The Market Maker shall fulfill the applicable obligations and conditions as specified in the SEBI ICDR Regulations, and
its amendments from time to time and the circulars issued by NSE and SEBI regarding this matter from time to time.
Following is a summary of the key details pertaining to the Market Making arrangement:
1. The Market Maker shall be required to provide a 2-way quote for 75% of the time in a day. The same
shall be monitored by the Stock Exchange. The spread (difference between the sell and the buy quote)
shall not be more than 10% or as specified by the Stock Exchange. Further, the Market Maker(s) shall
inform the exchange in advance for each and every black out period when the quotes are not being
offered by the Market Maker(s).
2. The minimum depth of the quote shall be 300 shares. However, the investors with holdings less than 300
shares shall be allowed to offer their holding to the Market Maker in that scrip provided that he sells his
entire holding in that scrip in one lot along with a declaration to the effect to the selling broker.
3. Execution of the order at the quoted price and quantity must be guaranteed by the Market Maker for
the quotes given by him.
4. There would not be more than five Market Makers for a script at any point of time and the Market
Makers may compete with other Market Makers for better quotes to the investors.
5. The Market Maker(s) shall have the right to terminate its services by giving a three months’ notice or on
mutually acceptable terms to the BRLM, who shall then be responsible to appoint are placement Market
Maker(s).
In case of termination of services of the above mentioned Market Maker prior to the completion of the compulsory
Market Making period, it shall be the responsibility of the Lead Manager to arrange for another Market Maker in
replacement during the term of the notice period being served by the Market Maker but prior to the date of releasing
the existing Market Maker from its duties in order to ensure compliance with the requirements of regulation 106V of
the SEBI ICDR Regulations. Further our Company and the BRLM reserve the right to appoint other Market Makers
either as a replacement of the current Market Maker or as an additional Market Maker subject to the total number of
Designated Market Makers not exceeding five or as specified by the relevant laws and regulations applicable at that
particulars point of time.
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CAPITAL STRUCTURE
The equity share capital as of the date of the Draft Red Herring Prospectus is set forth below:
(In ` except share data)
Sr.
No. Particulars Nominal Value
Aggregate value at
Issue Price#
(A) AUTHORISED SHARE CAPITAL
4,000,000 Equity Shares 40,000,000 []
(B) ISSUED, SUBSCRIBED AND PAID UP CAPITAL BEFORE THE
ISSUE
2,116,416 Equity Shares 21,164,160 []
(C) PRESENT ISSUE IN TERMS OF THE DRAFT RED HERRING
PROSPECTUS*
Issue of 705,600 Equity Shares 7,056,000 []
Which comprises
35,400 Equity Shares reserved as Market Maker Reservation
Portion 354,000
Net Issue of 670,200 Equity Shares 6,702,000
(D) SECURITIES PREMIUM ACCOUNT
Before the Issue 38,462,062
After the Issue# []
(E) ISSUED, SUBSCRIBED AND PAID UP EQUITY CAPITAL AFTER
THE ISSUE
2,822,016 Equity Shares 28,220,160 [] *
the Issue has been authorised by the Board at its meeting held on November 15, 2012, and by the shareholders of our
Company at their meeting held on December 10, 2012. #
Post finalisation of the Issue Price.
Changes to the authorised share capital since incorporation
Since incorporation, our authorised share capital has been altered as follows:
Sr.
No.
Particulars of change Date of Shareholders’
resolution
AGM/EGM
1. Increase in authorised share capital from `16,000,000 to `20,000,000 June 29, 2007 EGM
2. Increase in authorised share capital from `20,000,000 to `40,000,000 November 30, 2012 EGM
Notes to Capital Structure
1. Equity share capital history of our Company
i. The history of equity share capital of our Company is provided in the following table:
Date of
Allotment
No. of
Equity
Shares
Face
value
( `)
Issue
price (
`)
Nature of
consideratio
n (cash/other
than cash)
Nature of
Allotment
Cumulative
number of
Equity Shares
Cumulative
paid up capital
( `)
Cumulative
Securities
Premium ( `)
November 22,
2006 100 1,000 1,000 Cash
Initial
subscription to
the MoA(1)
100 100,000 Nil
December 20,
2007 1,175,600 10
(2) 10 Cash
Preferential
Allotment(3)
1,185,600 11,856,000 Nil
- 25 -
Date of
Allotment
No. of
Equity
Shares
Face
value
( `)
Issue
price (
`)
Nature of
consideratio
n (cash/other
than cash)
Nature of
Allotment
Cumulative
number of
Equity Shares
Cumulative
paid up capital
( `)
Cumulative
Securities
Premium ( `)
January 5, 2008 12,000 10 10 Cash Preferential
Allotment(4)
1,197,600 11,976,000 Nil
January 15,
2008 16,000 10 40 Cash
Preferential
Allotment(5)
1,213,600 12,136,000 480,000
February 9,
2008 16,000 10 80 Cash
Preferential
Allotment(6)
1,229,600 12,296,000
1,600,000
July 29, 2008 19,500 10 10 Cash Preferential
Allotment(7)
1,249,100 12,491,000
1,600,000
October 1, 2008 88 10 80 Cash Preferential
Allotment(8)
1,249,188 12,491,880 1,606,160
October 1, 2008 22,112 10 10 Other than
cash
Preferential
Allotment(9)
1,271,300 12,713,000 1,606,160
November 18,
2008 9,800 10 10 Cash
Preferential
Allotment(10)
1,281,100 12,811,000 1,606,160
November 18,
2008 80,000 10 93.75 Cash
Preferential
Allotment(11)
1,361,100 13,611,000 8,306,160
April 1, 2009 68,000 10 10 Cash Preferential
Allotment(12)
1,429,100 14,291,000 8,306,160
March 15, 2010 20,000 10 10 Cash Preferential
Allotment(13)
1,449,100 14,491,000 8,306,160
November 29,
2010 32,000 10 200 Cash
Preferential
Allotment(14)
1,481,100 14,811,000 14,386,160
November 29,
2010 118,900 10 10 Cash
Preferential
Allotment(15)
1,600,000 16,000,000 14,386,160
April 27, 2012 270,146 10 10 Cash Preferential
Allotment(16)
1,870,146 18,701,460 14,386,160
April 27, 2012 129,854 10 42.73 Other than
Cash
Preferential
Allotment(17)
2,000,000 20,000,000 18,671,342
December 6,
2012 116,416 10 180 Cash
Preferential
Allotment(18)
2,116,416 21,164,160 38,462,062
(1)
Initial allotment of 50 Equity Shares each to Mr. Sanjay Vijayakumar and Mr. Jose Thomas. (2)
Split of one Equity Share of face value of ` 1,000 each into 100 Equity Shares of face value of ` 10 each vide
the shareholders’ resolution dated June 29, 2007. (3)
Allotment of 38,400 Equity Shares each to Mr. Sanjay Vijayakumar, Mr. Sony Joy, Mr. Sijo Kuruvilla, Mr.
Ashwin Ramachandran, Mr. Kenny Jacob, Mr. Manoj V.K., Mr. Sajith M.R., Mr. Sanil S. and Mr. Sarath D.R and
790,000 Equity Shares and 40,000 Equity Shares respectively to Mr. Jose Thomas Pattara and Mr. M.B. Sanil
Kumar. (4)
Allotment of 1,000 Equity Shares each to Mr. Murali Gopalan, Mr. Ramesh Chandra Dutt, Mr. P.I. Mohammed
Kutty and CEO of Technopark and 8,000 Equity Shares to Mr. Manu Joseph Scaria. (5)
Allotment of 8,000 Equity Shares each to Mr. Anil Kumar Thikkovil and Mr. Sunil Jose. (6)
Allotment of 16,000 Equity Shares to Mr. George Brody. (7)
Allotment of 19,500 Equity Shares to Mr. Vivek Steve Francis. (8)
Allotment of 88 Equity Shares to Mr. George Brody. (9)
Allotment of 22,112 Equity Shares to Mr. George Brody for consideration other than cash for Professional and
consultancy services rendered by him. (10)
Allotment of 9,800 Equity Shares to Mr. George Brody. (11)
Allotment of 80,000 Equity Shares to Mr. Kunju Kutty Aniyan Kunju. (12)
Allotment of 20,000 Equity Shares each to Mr. Sanjay Vijayakumar, Mr. Sony Joy and Mr. Vivek Steve Francis
and 8,000 Equity Shares to Mr. Manu Joseph Scaria. (13)
Allotment of 20,000 Equity Shares to Mr. Vivek Steve Francis. (14)
Allotment of 32,000 Equity Shares to Mr. Kunju Kutty Aniyan Kunju. (15)
Allotment of 46,400 Equity Shares, 44,000 Equity Shares, 20,500 Equity Shares and 8000 Equity Shares,
respectively to Mr. Sanjay Vijayakumar, Mr. Sony Joy, Mr. Vivek Steve Francis and Mr. Manu Joseph Scaria.
- 26 -
(16) Allotment of 165,664 Equity Shares, 77,683 Equity Shares, 26,799 Equity Shares to Mr. Sanjay Vijayakumar,
Mr. Sony Joy and Mr. Vivek Steve Francis respectively. (17)
Allotment of 38,400 Equity Shares each to Mr. Lishoy Bhaskar and Mr. Vishnu Gopal and 14,400 Equity Shares
to Mr. Manu Joseph Scaria and 2,761 Equity Shares each to Mr. Anoop Sankar, Mr. Abe Sam Thomas, Mr.
Sajith MR, Mr. Nanda Sankaran, Mr. Febin Wilson, Mr. Jinson Abraham, Mr. Jacob Rohan Joseph, Mr. Thomas
Antony, Mr. Nithyan Martin, Mr. Gautham, Mr. Gokul Krishnan, Mr. Sijo Kuruvilla and Mr. Sarath D.R all being
employees of our Company. The allotment of Equity Shares is made for consideration other than cash in
respect to performance incentives to some of the employees of our Company. For further details, see risk
factor no. 5 on page xi of the Draft Red Herring Prospectus (18)
Allotment of 116,416 Equity Shares to Technology Development Board pursuant to conversion into Equity
Shares of the total outstanding amount of the project loan given by Technology Development Board.
ii. As on the date of the Draft Red Herring Prospectus, our Company does not have any preference share capital.
iii. All the Equity Shares were fully paid-up at the time of allotment by our Company.
2. Equity Shares issued for consideration other than cash
The details of the Equity Shares allotted for consideration other than cash are provided in the following table:
Date of
Allotment
Name of the
Allottee
No. of
shares
Face
Value
(`)
Issue Price
(`)
Reasons Whether any
benefits accrued
to the Company
October 1, 2008 Mr. George Brody 22,112 10 10 Professional and
consultancy services
Yes
April 27, 2012 Mr. Manu Joseph
Scaria
14,400 10 42.73 Performance incentive Yes
April 27, 2012 Mr. Lishoy Bhaskar 38,400 10 42.73 Performance incentive Yes
April 27, 2012 Mr. Vishnu Gopal 38,400 10 42.73 Performance incentive Yes
April 27, 2012 Mr. Anoop Sankar 2,761 10 42.73 Performance incentive Yes
April 27, 2012 Mr. Abe Sam
Thomas
2,761 10 42.73 Performance incentive Yes
April 27, 2012 Mr. Sajith MR 2,761 10 42.73 Performance incentive Yes
April 27, 2012 Mr. Nanda
Sankaran
2,761 10 42.73 Performance incentive Yes
April 27, 2012 Mr. Febin Wilson 2,761 10 42.73 Performance incentive
April 27, 2012 Mr. Jinson
Abraham
2,761 10 42.73 Performance incentive Yes
April 27, 2012 Mr. Jacob Rohan
Joseph
2,761 10 42.73 Performance incentive Yes
April 27, 2012 Mr. Thomas
Antony
2,761 10 42.73 Performance incentive Yes
April 27, 2012 Mr. Nithyan Martin 2,761 10 42.73 Performance incentive Yes
April 27, 2012 Mr. Gautham 2,761 10 42.73 Performance incentive Yes
April 27, 2012 Mr. Gokul Krishnan 2,761 10 42.73 Performance incentive Yes
April 27, 2012 Mr. Sijo Kuruvilla 2,761 10 42.73 Performance incentive Yes
April 27, 2012 Mr. Sarath DR 2,761 10 42.73 Performance incentive Yes
3. Our Company has not issued or allotted any Equity Shares in terms of scheme approved under sections 391-394
of the Companies Act.
4. Since incorporation, our Company has not revalued its fixed assets.
- 27 -
5. History of Equity Shares held by the Promoters and Promoter Group
(A) Build-up of the Promoters and Promoter Group shareholding in our Company
The table below presents the details of the build-up of shareholding of the Promoters and Promoter Group:
i. Mr. Sanjay Vijayakumar
Sr.
No.
Date of Allotment/
transfer
Number
of Equity
Shares
Face
Value (
`)
Issue/
acquisition
price per Equity
Share ( `)
Nature of the
transaction (Cash,
consideration
other than cash)
Nature of
transaction
% of pre-
Issue
capital
% of post-
Issue capital
1. November 22, 2006 50 1,000* 1,000* Cash
Initial
subscription to
the MoA
0.24* 0.18*
2. December 20, 2007 38,400 10 10 Cash Preferential
Allotment 1.81 1.36
3. December 20, 2007 5,000 10 10 Cash
Transfer to Mr.
Jose Thomas
Pattara
0.24 0.18
4. April 1, 2009 20,000 10 10 Cash Preferential
Allotment 0.94 0.71
5. June 17, 2009 38,400 10 10 Cash Transfer from
Mr. Sajith M R 1.81 1.36
6. December 1, 2009 19,200 10 10 Cash Transfer from
Mr. Sarath D R 0.91 0.68
7. November 29, 2010 46,400 10 10 Cash Preferential
Allotment 2.19 1.64
8. November 30, 2010 106,558 10 10 Cash
Transfer from
Mr. Jose
Thomas Pattara
5.03 3.78
9. April 27, 2012 165,664 10 10 Cash Preferential
Allotment 7.83 5.87
10. July 4, 2012 71,551 10 23.29 Cash
Transfer from
Mr. Jose
Thomas Pattara
3.38 2.54
* Split of 50 Equity Shares, amongst others, of face value of `1,000 each into 5,000 Equity Shares of face value of `10 each vide the
shareholders’ resolution dated June 29, 2007
ii. Mr. Sony Joy
Sr.
No.
Date of
Allotment/
transfer
Number of
Equity Shares
Face
Value (
`)
Issue/
acquisition
price per Equity
Share ( `)
Nature of the
transaction (Cash,
consideration
other than cash)
Nature of
transaction
% of pre-
Issue
capital
% of post-
Issue capital
1. December 20,
2007 38,400 10 10 Cash
Preferential
Allotment 1.81 1.36
2. April 1, 2009 20,000 10 10 Cash Preferential
Allotment 0.94 0.71
3. June 17, 2009 38,400 10 10 Cash
Transfer from
Mr. Sijo
Kuruvilla
1.81 1.36
4. December 1,
2009 19,200 10 10 Cash
Transfer from
Mr. Sarath D R 0.91 0.68
5. November 29,
2010 44,000 10 10 Cash
Preferential
Allotment 2.08 1.56
- 28 -
Sr.
No.
Date of
Allotment/
transfer
Number of
Equity Shares
Face
Value (
`)
Issue/
acquisition
price per Equity
Share ( `)
Nature of the
transaction (Cash,
consideration
other than cash)
Nature of
transaction
% of pre-
Issue
capital
% of post-
Issue capital
6. November 30,
2010 77,316 10 10 Cash
Transfer from
Mr. Jose
Thomas
Pattara
3.65 2.74
7. April 27, 2012 77,683 10 10 Cash Preferential
Allotment 3.67 2.75
8. July 4, 2012 71,550 10 23.39 Cash
Transfer from
Mr. Jose
Thomas
Pattara
3.38 2.54
iii. Mr. Vivek Steve Francis
Sr.
No.
Date of
Allotment/
transfer
Number of
Equity
Shares
Face
Value (
`)
Issue/
acquisition
price per
Equity Share
( `)
Nature of the
transaction
(Cash,
consideration
other than
cash)
Nature of
transaction
% of pre-
Issue
capital
% of post-
Issue
capital
1. July 29, 2008 19,500 10 10 Cash Preferential
Allotment 0.92 0.69
2.
April 1, 2009 20,000 10 10 Cash
Preferential
Allotment 0.94 0.71
3. March 15, 2010 20,000 10 10 Cash Preferential
Allotment 0.94 0.71
4. November 29,
2010 20,500 10 10 Cash
Preferential
Allotment 0.97 0.73
5. November 30,
2010 14,926 10 10 Cash
Transfer from
Mr. Jose
Thomas
Pattara
0.71 0.53
6. April 27, 2012 26,799 10 10 Cash Preferential
Allotment 1.27 0.95
7. July 4, 2012 71,550 10 23.29 Cash
Transfer from
Mr. Jose
Thomas
Pattara
3.38 2.54
iv. Mr. Jose Thomas Pattara
Sr.
No.
Date of
Allotment/
transfer
Number of
Equity Shares
Face
Value ( `)
Issue/
acquisition
price per
Equity Share (
`)
Nature of the
transaction
(Cash,
consideration
other than cash)
Nature of
transaction
% of pre-
Issue capital
% of post-
Issue capital
1. November 22,
2006 50 1,000* 1000* Cash
Initial
subscription to
the MoA
0.24* 0.18*
2. December 20,
2007 790,000 10 10 Cash
Preferential
Allotment 37.33 27.99
3. December 20,
2007 5,000 10 10 Cash
Transfer from
Mr. Sanjay
Vijayakumar
0.24 0.18
- 29 -
Sr.
No.
Date of
Allotment/
transfer
Number of
Equity Shares
Face
Value ( `)
Issue/
acquisition
price per
Equity Share (
`)
Nature of the
transaction
(Cash,
consideration
other than cash)
Nature of
transaction
% of pre-
Issue capital
% of post-
Issue capital
4. November 30,
2010 106,558 10 10 Cash
Transfer to Mr.
Sanjay
Vijayakumar
5.03 3.78
5. November 30,
2010 77,316 10 10 Cash
Transfer to Mr.
Sony Joy 3.65 2.74
6. November 30,
2010 14,926 10 10 Cash
Transfer to Mr.
Vivek Steve
Francis
0.71 0.53
7. July 4, 2012 71,551 10 23.29 Cash
Transfer to Mr.
Sanjay
Vijayakumar
3.38 2.54
8. July 4, 2012 71,550 10 23.29 Cash Transfer to Mr.
Sony Joy 3.38 2.54
9. July 4, 2012 71,550 10 23.29 Cash
Transfer to Mr.
Vivek Steve
Francis
3.38 2.54
* Split of 50 Equity Shares, amongst others, of face value of `1,000 each into 5,000 Equity Shares of face value of `10 each vide the
shareholders’ resolution dated June 29, 2007.
6. Details of Promoters contribution locked in for three years
The Equity Shares which are being locked-in are eligible for computation of promoters’ contribution in accordance
with the provisions of the SEBI ICDR Regulations.
Pursuant to the SEBI ICDR Regulations, an aggregate of 20% of the fully diluted post-Issue paid up capital of our
Company held by the Promoters shall be locked in for a period of three years from the date of Allotment of Equity
Shares in the Issue.
i. The details of such lock-in are set forth in the table below:
Sr.
No.
Date of Transaction
and when made
fully paid-up
Nature of transaction Number of
Equity Shares
Face Value (
`)
Issue/
Acquisition
price per
Equity Share (
`)
% of post
Issue capital
1. Mr. Sanjay Vijayakumar
November 22, 2006 Initial subscription to the MoA 5,000* 10* 10* 0.18*
December 20, 2007 Preferential Allotment 38,400 10 10 1.36
April 1, 2009 Preferential Allotment 20,000 10 10 0.71
June 17, 2009 Transfer from Mr. Sajith M R 38,400 10 10 1.36
December 1, 2009 Transfer from Mr. Sarath D R 19,200 10 10 0.68
November 29, 2010 Preferential Allotment 35,543 10 10 1.26
2. Mr. Sony Joy
December 20, 2007 Preferential Allotment 38,400 10 10 1.36
April 1, 2009 Preferential Allotment 20,000 10 10 0.71
June 17, 2009 Transfer from Mr. Sijo Kuruvilla 38,400 10 10 1.36
December 1, 2009 Transfer from Mr. Sarath D R 19,200 10 10 0.68
November 29, 2010 Preferential Allotment 40,493 10 10 1.43
- 30 -
Sr.
No.
Date of Transaction
and when made
fully paid-up
Nature of transaction Number of
Equity Shares
Face Value (
`)
Issue/
Acquisition
price per
Equity Share (
`)
% of post
Issue capital
3. Mr. Vivek Steve Francis
July 29, 2008 Preferential Allotment 19,500 10 10 0.69
April 1, 2009 Preferential Allotment 20,000 10 10 0.71
March 15, 2010 Preferential Allotment 20,000 10 10 0.71
November 29, 2010 Preferential Allotment 20,500 10 10 0.73
November 30, 2010
Transfer from Mr. Jose Thomas
Pattara 14,926 10 10 0.53
4. Mr. Jose Thomas Pattara
November 22, 2006 Initial subscription to the MoA 5,000* 10* 10* 0.18*
December 20, 2007 Preferential Allotment 151,492 10 10 3.6
Total 564,404 20.00
* Split of 50 Equity Shares, amongst others, of face value of `1,000 each into 5,000 Equity Shares of face value of `10 each vide the
shareholders’ resolution dated June 29, 2007.
ii. The Equity Shares that are being locked-in are not ineligible for computation of Promoters’ contribution under
Regulation 33 of the SEBI ICDR Regulations. In this connection, we confirm the following:
a. The Equity Shares offered for minimum 20% Promoters’ contribution have not been acquired in the last
three years for consideration other than cash and revaluation of assets or capitalization of intangible assets
or bonus shares out of revaluation reserves, or unrealized profits of our Company or from a bonus issue
against Equity Shares which are otherwise ineligible for computation of Promoters’ contribution;
b. The Equity Shares offered for minimum 20% Promoters’ contribution do not include any Equity Shares
acquired during the preceding one year at a price lower than the price at which the Equity Shares are being
offered to the public in the Issue;
c. The Equity Shares offered for minimum 20% Promoters’ contribution were not issued to the Promoters
upon conversion of a partnership firm;
d. The Equity Shares offered for minimum 20% Promoters’ contribution are not subject to any pledge; and
e. The minimum Promoters’ contribution has been brought to the extent of not less than the specified
minimum lot and from persons defined as Promoter under the SEBI ICDR Regulations. Our Company has
obtained a consent dated January 20, 2013 from our Promoters’ to include such number of Equity Shares
held by them as may constitute 20% of the post-Issue equity share capital of our Company, held by them,
for three years from the date of Allotment and for lock-in of the balance pre-Issue equity share capital of
our Company, held by them, for a period of one year from the date of Allotment. Equity Shares offered by
the Promoter for the minimum Promoters’ contribution are not subject to pledge.
7. Details of the equity share capital locked in for one year
In terms of the SEBI ICDR Regulations, other than 20% of the post-Issue shareholding held by the Promoters which are
locked in for three years as specified above, the entire pre-Issue equity share capital will be locked-in for a period of
one year from the date of Allotment.
8. Lock-in of Equity Shares to be Allotted, if any, to the Anchor Investor
Any Equity Shares allotted to Anchor Investor Portion shall be locked-in for a period of 30 days from the date of
Allotment.
- 31 -
9. Other requirements in respect of lock-in
Under Regulation 39 (a) of the SEBI ICDR Regulations, the locked-in Equity Shares held by the Promoters can be
pledged only with scheduled commercial banks or public financial institutions as collateral security for loans granted
by such banks or financial institutions provided that the pledge of the Equity Shares is one of the terms of the sanction
of the loan. Further, under Regulation 39(b) of the SEBI ICDR Regulations, the Equity Shares constituting 20% of the
fully diluted post-Issue capital of our Company held by the Promoters that are locked in for a period of three years
from the date of Allotment of Equity Shares in the Issue, may be pledged only if, in addition to complying with the
aforesaid condition, the loan has been granted by the banks or financial institutions for the purpose of financing one
or more Objects of the Issue.
Under Regulation 40 of the SEBI ICDR Regulations, the Equity Shares held by persons other than the Promoters prior
to the Issue may be transferred to any other person holding the Equity Shares which are locked-in subject to
continuation of the lock-in in the hands of the transferees for the remaining period and compliance with the SEBI
Takeover Regulations, as applicable. Further, Equity Shares held by the Promoters may be transferred to and among
the Promoter Group or to a new promoter or persons in control of our Company subject to continuation of the lock-in
in the hands of the transferees for the remaining period and compliance with the SEBI Takeover Regulations, as
applicable.
In addition, the Equity Shares held by persons other than our Promoters and locked-in for a period of one year from
the date of allotment in the Issue may be transferred to any other person holding Equity Shares which are locked-in,
subject to the continuation of the lock-in in the hands of transferees for the remaining period and compliance with the
SEBI Takeover Regulations, as amended from time to time.
The Promoters’ contribution has been brought in to the extent of not less than the specified minimum and from the
persons defined as Promoters under the SEBI Takeover Regulations.
10. Details of the shareholding of our Company
The table below presents the current shareholding pattern of our Company as per clause 37 of the SME Equity Listing
Agreement
Catego
ry
code
Category of
Shareholder
Number of
Share-
holders
(Pre Issue)
Total
number
of Equity
Shares (Pre
Issue)
Number of
Equity
Shares held
in
demateriali
zed form
Total shareholding as a
percentage of total
number of Equity
Shares (Pre Issue)
Equity Shares pledged
or otherwise
encumbered
Total shareholding as
a percentage of total
number of Equity
Shares (Post Issue)
As a
percentage
of (A+B)
As a
percent
age of
(A+B+C)
Number
of
Equity
Shares
As a
percentag
e
As a
percentag
e of (A+B)
As a
percent
age of
(A+B+C)
(A)
Shareholding
of Promoter
and Promoter
Group
1 Indian
(a)
Individuals/
Hindu
Undivided
Family
4 1,472,546 Nil 69.58 69.58 Nil Nil [] []
(b)
Central
Government/
State
Government(s
)
(c) Bodies
Corporate
(d)
Financial
Institutions/
Banks
(e) Any Others
(Specify)
- 32 -
Catego
ry
code
Category of
Shareholder
Number of
Share-
holders
(Pre Issue)
Total
number
of Equity
Shares (Pre
Issue)
Number of
Equity
Shares held
in
demateriali
zed form
Total shareholding as a
percentage of total
number of Equity
Shares (Pre Issue)
Equity Shares pledged
or otherwise
encumbered
Total shareholding as
a percentage of total
number of Equity
Shares (Post Issue)
As a
percentage
of (A+B)
As a
percent
age of
(A+B+C)
Number
of
Equity
Shares
As a
percentag
e
As a
percentag
e of (A+B)
As a
percent
age of
(A+B+C)
Trust
Any Other
Total
Sub
Total(A)(1) 4 1,472,54 Nil 69.58 69.58 Nil Nil [] []
2 Foreign Nil Nil Nil Nil Nil Nil Nil [] []
A
Individuals
(Non-
Residents
Individuals/
Foreign
Individuals)
B Bodies
Corporate
C Institutions
D
Any
Others(Specif
y)
Sub
Total(A)(2) Nil Nil Nil Nil Nil Nil Nil [] []
Total
Shareholding
of Promoters
and
Promoters
Group (A)=
(A)(1)+(A)(2)
4 1,472,546 Nil 69.58 69.58 Nil Nil [] []
(B) Public
shareholding
B 1 Institutions Nil Nil Nil Nil Nil Nil Nil [] []
(a) Mutual
Funds/ UTI [] []
(b)
Financial
Institutions /
Banks
[] []
(c)
Central
Government/
State
Government(s
)
[] []
(d) Venture
Capital Funds [] []
(e) Insurance
Companies [] []
(f)
Foreign
Institutional
Investors
[] []
(g)
Foreign
Venture
Capital
Investors
[] []
(h)
Nominated
investors (as
defined in
Chapter XB of
the SEBI ICDR
Regulations)
[] []
(i) Market
Makers [] []
(j) Any Other
(specify) [] []
- 33 -
Catego
ry
code
Category of
Shareholder
Number of
Share-
holders
(Pre Issue)
Total
number
of Equity
Shares (Pre
Issue)
Number of
Equity
Shares held
in
demateriali
zed form
Total shareholding as a
percentage of total
number of Equity
Shares (Pre Issue)
Equity Shares pledged
or otherwise
encumbered
Total shareholding as
a percentage of total
number of Equity
Shares (Post Issue)
As a
percentage
of (A+B)
As a
percent
age of
(A+B+C)
Number
of
Equity
Shares
As a
percentag
e
As a
percentag
e of (A+B)
As a
percent
age of
(A+B+C)
Sub-Total
(B)(1) Nil Nil Nil Nil Nil Nil Nil [] []
B 2 Non-
institutions [] []
(a) Bodies
Corporate 1 116,416 Nil 5.50 5.50 Nil Nil [] []
(b) Individuals [] []
I
Individual
shareholders
holding
nominal share
capital up to `
1 lac
20 58,654 Nil 2.77 2.77 Nil Nil [] []
II
Individual
shareholders
holding
nominal share
capital in
excess of `1
lac.
10 468,800 Nil 22.15 22.15 Nil Nil [] []
(c) Any Other
(specify) Nil Nil Nil Nil Nil Nil Nil [] []
Sub-Total
(B)(2) 31 643,870 Nil 30.42 30.42 Nil Nil [] []
(B)
Total Public
Shareholding 31 643,870 Nil 30.42 30.42 Nil Nil [] []
(B) =
(B)(1)+(B) (2)
TOTAL (A)+(B) 35 2,116,416 Nil 100 100 Nil Nil [] []
(C)
Equity Shares
held by
Custodians
and against
which
Depository
Receipts have
been issued
Nil Nil Nil Nil Nil Nil Nil [] []
GRAND
TOTAL
(A)+(B)+(C)
35 2,116,416 Nil 100 100 Nil Nil [] []
11. Shareholding of persons belonging to the Promoters and Promoter Group
Sr.
No
.
Name of the shareholder
Total Equity shares held Equity Shares pledged or otherwise
encumbered
No. of Equity
Shares
As a % of grand total
(A)+(B)+(C) above
No. of Equity
shares
As a % of grand total
(A)+(B)+(C) above
1. Mr. Sanjay Vijayakumar 506,173 23.91 Nil Nil
2. Mr. Sony Joy 386,549 18.26 Nil Nil
3. Mr. Jose Thomas Pattara 386,549 18.26 Nil Nil
4. Mr. Vivek Steve Francis 193,275 9.13 Nil Nil
12. Shareholding of persons belonging to the category ‘Public’ and holding more than 1% of our Equity Shares
Sr.
No.
Name of the shareholder Total Equity
Shares held
Equity Shares as a percentage of total number of
Equity Shares (i.e. grand total (A)+(B)+(C) indicated
as above)
- 34 -
Sr.
No.
Name of the shareholder Total Equity
Shares held
Equity Shares as a percentage of total number of
Equity Shares (i.e. grand total (A)+(B)+(C) indicated
as above)
1. Technology Development Board 116,416 5.50
2. Mr. Kunju Kutty Aniyan Kunju 112,000 5.29
3. Mr. George Brody 48,000 2.27
4. Mr. M.B. Sanil Kumar 40,000 1.90
5. Mr. Ashwin Ramachandran 38,400 1.81
6. Mr. Kenny Jacob 38,400 1.81
7. Mr. Manoj V.K 38,400 1.81
8. Mr. Sanil S 38,400 1.81
9. Mr. Manu Joseph Scaria 38,400 1.81
10. Mr. Lishoy Bhaskar 38,400 1.81
11. Mr. Vishnu Gopal 38,400 1.81
TOTAL 585,216 27.63
13. Statement showing details of Depository Receipts (DRs) : NIL
14. Statement showing holding of Depository Receipts (DRs), where underlying Equity shares are in excess of 1% of
the total number of Equity shares : NIL
15. Statement showing the voting pattern of shareholders, if more than one class of share/securities is issued by the
Issuer : NIL
16. Details about the shareholders and other confirmations
1. The Equity Shares held by top ten shareholders are as under:
i. As on the date of the Draft Red Herring Prospectus.
Sr.
No. Name of the shareholder No. of Equity Shares
Percentage of the total pre
issue equity share capital
1. Mr. Sanjay Vijayakumar 506,173 23.91
2. Mr. Sony Joy 386,549 18.26
3. Mr. Jose Thomas Pattara 386,549 18.26
4. Mr. Vivek Steve Francis 193,275 9.13
5. Technology Development Board 116,416 5.50
6. Mr. Kunju Kutty Aniyan Kunju 112,000 5.29
7. Mr. George Brody 48,000 2.27
8. Mr. M.B. Sanil Kumar 40,000 1.90
9.
Mr. Ashwin Ramachandran 38,400 1.81
Mr. Kenny Jacob 38,400 1.81
Mr. Manoj. V.K 38,400 1.81
Mr. Sanil. S 38,400 1.81
Mr. Manu Joseph Scaria 38,400 1.81
Mr. Lishoy Bhaskar 38,400 1.81
Mr. Vishnu Gopal 38,400 1.81
10.
Mr. Anoop Sankar 2,761 0.13
Mr. Abe Sam Thomas 2,761 0.13
Mr. Sajith MR 2,761 0.13
- 35 -
Sr.
No. Name of the shareholder No. of Equity Shares
Percentage of the total pre
issue equity share capital
Mr. Nanda Sankaran 2,761 0.13
Mr. Febin Wilson 2,761 0.13
Mr. Jinson Abraham 2,761 0.13
Mr. Jacob Rohan Joseph 2,761 0.13
Mr. Thomas Antony 2,761 0.13
Mr. Nithyan Martin 2,761 0.13
Mr. Gautham 2,761 0.13
Mr. Gokul Krishnan 2,761 0.13
Mr. Sijo Kuruvilla 2,761 0.13
Mr. Sarath DR 2,761 0.13
Total 2,093,655 98.88
ii. As of ten days prior to the date of the Draft Red Herring Prospectus.
Sr.
No. Name of the shareholder No. of Equity Shares
Percentage of the total pre
issue equity share capital
1. Mr. Sanjay Vijayakumar 506,173 23.91
2. Mr. Sony Joy 386,549 18.26
3. Mr. Jose Thomas Pattara 386,549 18.26
4. Mr. Vivek Steve Francis 193,275 9.13
5. Technology Development Board 116,416 5.50
6. Mr. Kunju Kutty Aniyan Kunju 112,000 5.29
7. Mr. George Brody 48,000 2.27
8. Mr. M.B. Sanil Kumar 40,000 1.90
9.
Mr. Ashwin Ramachandran 38,400 1.81
Mr. Kenny Jacob 38,400 1.81
Mr. Manoj V.K 38,400 1.81
Mr. Sanil S. 38,400 1.81
Mr. Manu Joseph Scaria 38,400 1.81
Mr. Lishoy Bhaskar 38,400 1.81
Mr. Vishnu Gopal 38,400 1.81
10.
Mr. Anoop Sankar 2,761 0.13
Mr. Abe Sam Thomas 2,761 0.13
Mr. Sajith MR 2,761 0.13
Mr. Nanda Sankaran 2,761 0.13
Mr. Febin Wilson 2,761 0.13
Mr. Jinson Abraham 2,761 0.13
Mr. Jacob Rohan Joseph 2,761 0.13
Mr. Thomas Antony 2,761 0.13
Mr. Nithyan Martin 2,761 0.13
Mr. Gautham 2,761 0.13
Mr. Gokul Krishnan 2,761 0.13
Mr. Sijo Kuruvilla 2,761 0.13
Mr. Sarath DR 2,761 0.13
Total 2,093,655 98.88
iii. As of two years prior to the date of filing the Draft Red Herring Prospectus.
- 36 -
Sr.
No. Name of the shareholder No. of Equity Shares
Percentage of the total pre
issue equity share capital
1. Mr. Jose Thomas Pattara 601,200 37.57
2. Mr. Sanjay Vijayakumar 268,958 16.80
3. Mr. Sony Joy 237,316 14.80
4. Mr. Kunju Kutty Aniyan Kunju 112,000 7.00
5. Mr. Vivek Steve Francis 94,926 5.93
6. Mr. George Brody 48,000 3.00
7. Mr. M.B. Sanil Kumar 40,000 2.50
8.
Mr. Ashwin Ramachandran 38,400 2.40
Mr. Kenny Jacob 38,400 2.40
Mr. Manoj V.K 38,400 2.40
Mr. Sanil S. 38,400 2.40
9. Mr. Manu Joseph Scaria 24,000 1.50
10.
Mr. P.I. Mohammad Kutty 1,000 0.06
Mr. Ramesh Chandra Dutt 1,000 0.06
Mr. Murali Gopalan 1,000 0.06
Total 1,583,000 98.88
17. Other than as set out below, no Equity Shares have been issued at a price, which may be lower than the Issue
Price during the year prior to the date of the Draft Red Herring Prospectus:
Date of Allotment No. of Equity Shares Issue price per Equity Share (in `)
April 27, 2012 400,000* 10
December 6, 2012 116,416** 180
* Allotment of 165,664 Equity Shares, 77,683 Equity Shares, 26,799 Equity Shares to Mr. Sanjay Vijayakumar, Mr. Sony
Joy and Mr. Vivek Steve Francis respectively for cash. Allotment of 38,400 Equity Shares each to Mr. Lishoy Bhaskar
and Mr. Vishnu Gopal and 14,400 Equity Shares to Mr. Manu Joseph Scaria and 2,761 Equity Shares each to Mr. Anoop
Sankar, Mr. Abe Sam Thomas, Mr. Sajith MR, Mr. Nanda Sankaran, Mr. Febin Wilson, Mr. Jinson Abraham, Mr. Jacob
Rohan Joseph, Mr. Thomas Antony, Mr. Nithyan Martin, Mr. Gautham, Mr. Gokul Krishnan, Mr. Sijo Kuruvilla and Mr.
Sarath D.R all being employees of our Company for consideration other than cash.
** Allotment of 116,416 Equity Shares to the Technology Development Board pursuant to conversion into Equity
Shares of the total outstanding amount of the project loan given by the Technology Development Board.
18. The Equity Shares, which are subject to lock-in, shall carry the inscription “non-transferable” and the non-
transferability details shall be informed to the depository. The details of lock-in shall also be provided to the Stock
Exchange before the listing of the Equity Shares.
19. Neither, our Company nor our Directors or the Promoters or the BRLM has entered into any buyback and/or
standby arrangements for the purchase of our Equity Shares other than the arrangements, if any, as permitted by
the SEBI ICDR Regulations.
20. Our Company does not have any scheme of employee stock option or employee stock purchase as on the date of
the Draft Red Herring Prospectus.
21. An over-subscription to the extent of 10% of the Issue can be retained for the purpose of rounding off to the
nearer multiple of minimum allotment lot while finalizing the allotment, subject to minimum allotment being
equal to 300 Equity Shares, which is the minimum Bid size in this Issue. Consequently, the actual allotment may
go up by a maximum of 10% of the Issue as a result of which the post-Issue paid up capital after the Issue would
also increase by the excess amount of allotments so made. In such an event, the Equity Shares held by the
Promoters and subject to lock-in shall be suitably increased so as to ensure that 20% of the post-Issue paid up
capital is locked-in.
- 37 -
22. Our Company shall allocate 50% of the Issue to QIBs on a proportionate basis. 5% of the QIB Portion (excluding
Anchor Investor Portion) shall be available for allocation to Mutual Funds only and the remaining QIB Portion shall
be available for allocation to the QIB Bidders including Mutual Funds subject to valid Bids being received at or
above the Issue Price. Further, not less than 15% of the Issue will be available for allocation on a proportionate
basis to Non-Institutional Bidders and not less than 35% of the Issue will be available for allocation to Retail
Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being received from them at
or above the Issue Price. Under-subscription, if any, in any category, except in the QIB Portion, would be allowed
to be met with spill over from any other category or a combination of categories at the discretion of our
Company, in consultation with the BRLM and the Designated Stock Exchange.
23. During the past six months there have been no transactions in our Equity Shares, which have been purchased/
(sold) by our Promoters, their relatives and associates, persons in Promoter Group or the Directors of our
Company.
24. Except for the Issue our Company presently does not intend or propose any further issue of capital whether by
way of issue of Equity Shares or by way of issue of bonus issue, preferential allotment, rights issue or in any other
manner during the period commencing from submission of the Draft Red Herring Prospectus to SEBI until the
Equity Shares issued/ to be issued pursuant to the Issue have been listed.
25. The Promoter Group, the Directors of our Company and their relatives have not financed the purchase by any
other person of securities of the Issuer other than in the normal course of the business of any such
entity/individual or otherwise during the period of six months immediately preceding the date of the Draft Red
Herring Prospectus.
26. As on the date of the Draft Red Herring Prospectus, neither the BRLM nor their associates hold any Equity Shares
except for those Equity Shares bid for in the Issue towards subscribing to the Market Maker Reservation Portion
by IDBI Capital Market Services Limited and allotted in order to satisfy its role as Market Maker.
27. We have not raised any bridge loans against the proceeds of the Issue.
28. There are no outstanding warrants, financial instruments or any rights, which would entitle the Promoters or the
Shareholders or any other person any option to acquire any of the Equity Shares after the Issue.
29. The Equity Shares are fully paid-up and there are no partly paid-up Equity Shares as on date of the Draft Red
Herring Prospectus.
30. The Equity Shares issued pursuant to this Issue shall be fully paid-up.
31. Apart from the institution of a SEBI-complaint structure for employee stock options, we presently do not have any
intention or proposal, neither have entered into negotiations nor are considering to alter our capital structure for
a period of six months from the date of opening of the Issue, by way of split or consolidation of the denomination
of Equity Shares or further issue of equity (including issue of securities convertible into or exchangeable for,
directly or indirectly, for our Equity Shares) whether on a preferential basis or otherwise, except that if we acquire
companies, business or enter into joint venture(s), we may consider additional capital to fund such activities or to
use Equity Shares as a currency for acquisitions or participation in such joint ventures.
32. Our Promoters and members of the Promoter Group will not participate in the Issue.
33. Our Company, Directors, Promoters or Promoter Group shall not make any payments direct or indirect, discounts,
commissions, allowances or otherwise under this Issue except as disclosed in the Draft Red Herring Prospectus.
34. As per the RBI regulations, OCBs are not allowed to participate in this Issue, except with the specific permission of
the RBI.
35. As on the date of the Draft Red Herring Prospectus, the total number of holders of Equity Shares is 35.
- 38 -
36. There shall be only one denomination of the Equity Shares, unless otherwise permitted by law. We shall comply
with such disclosure and accounting norms as may be specified by SEBI from time to time.
37. There are restrictive covenants in the agreements entered into by our Company with certain lenders for short-
term and long-term borrowing. For further details, please see “Financial Indebtedness” on page 195 of the Draft
Red Herring Prospectus.
38. A Bidder cannot make a Bid for more than the number of Equity Shares offered through the Issue, subject to the
maximum limit of investment prescribed under relevant laws applicable to each category of Bidder.
39. Our Company shall ensure that transactions in the Equity Shares by the Promoters and the Promoter Group
between the date of registering the Draft Red Herring Prospectus with the RoC and the Bid/Issue Closing Date
shall be reported to the Stock Exchange within twenty-four hours of such transaction.
- 39 -
OBJECTS OF THE ISSUE
The objects of the Issue are to finance our expansion plans and achieve the benefits of listing on the Stock Exchange.
We believe that listing will enhance our corporate image and brand name.
We intend to utilize the Issue Proceeds for the following objects:
1. Acquisition of land and construction of software production unit and facilitation centre;
2. Procuring computers, peripherals and other infrastructure for our software production unit and facilitation
centre;
3. Procurement of Crypto SIM cards from Gemalto Digital Security Pvt. Ltd. to be deployed in the pilot project
using Mobile Digital Signature technology;
4. License fee to Valimo Wireless Oy for use of its Mobile Digital Signature technology;
5. Procurement of Mobile Digital Signature certificates from an authorized certifying authority;
6. Procurement of 4,000 mobile phones; and
7. General corporate purposes.
Issue Proceeds
The details of the Issue Proceeds are summarized in the following table:
(` in lacs)
Particulars Amount
Gross proceeds of the Issue []
Issue expenses* []
Net proceeds of the Issue (gross proceeds of the Issue less Issue expenses, or “Net Proceeds”) []
* To be finalized upon determination of Issue Price
Schedule of implementation and deployment, use of Net Proceeds, requirement of funds and means of finance
We intend to utilize the Net Proceeds towards the objects, in accordance with the estimated schedule of
implementation and deployment of funds set forth in the table below.
(` in lacs)
Sr.
No.
Particulars Estimated amount to
be utilized from Net
Proceeds
Amount to
be deployed
in FY13
Amount to
be deployed
in FY14
Amount to
be deployed
in FY15
1. Acquisition of land and construction of our
software production unit and facilitation centre 567.84 149.80 418.20 Nil
2. Procuring computers, peripherals and other
infrastructure for our software production unit
and facilitation centre
121.97 Nil 121.97 Nil
3. Procurement of Crypto SIM cards from Gemalto
Digital Security Pvt. Ltd. to be deployed in the
pilot project using Mobile Digital Signature
technology
262.87 21.88 240.99 Nil
4. License fee to Valimo Wireless Oy for use of its
Mobile Digital Signature technology 354.94 71.56 105.91 177.47
5. Procurement of Mobile Digital Signature
certificates from an authorized certifying
authority
515.00 115.00 400.00 Nil
6. Procurement of 4,000 mobile phones 262.08 Nil 262.08 Nil
7. General corporate purposes* [] [] [] []
- 40 -
Sr.
No.
Particulars Estimated amount to
be utilized from Net
Proceeds
Amount to
be deployed
in FY13
Amount to
be deployed
in FY14
Amount to
be deployed
in FY15
Total [] [] [] []
* to be finalized upon determination of Issue Price
The main object clauses of the Memorandum of Association of our Company and objects incidental to the main
objects enable us to undertake our existing activities and the activities for which funds are being raised by us through
this Issue.
The fund requirements and deployment, as discussed above, are based on internal management estimates in light of
the current requirements of our business and are subject to change in light of changes in external circumstances or
costs, or in our financial condition, business or strategy, as discussed below. Our management, in response to the
competitive and dynamic nature of the industry, will have the discretion to revise its business plan and estimates from
time to time and consequently our funding requirements and deployment of funds may also change. This may also
include rescheduling the proposed utilization of Net Proceeds and increasing or decreasing expenditure for a
particular object vis-à-vis the utilization of Net Proceeds, subject to compliance with applicable law.
In view of the competitive environment of the industry in which we operate, we may have to revise our business plan
from time to time and consequently our capital and operational expenditure requirements may also change. Our
Company’s historical capital deployment and operational expenditure may not be reflective of our future expenditure
plans. We may have to revise our outlay of costs, fund allocation and fund requirements owing to factors such as
economic and business conditions, increased competition and other external factors which may not be within the
control of our management. This may entail rescheduling or revising the planned expenditure and funding
requirements, including the expenditure for a particular purpose at the discretion of our management. See, “Risk
Factors – We have not entered into any definitive agreements to monitor the utilization of the Issue Proceeds and
the deployment of Issue Proceeds is entirely at the discretion of our Company” on page xx of the Draft Red Herring
Prospectus.
In case of any increase in the actual utilisation of funds earmarked for the objects of the Issue, such additional funds
for a particular activity will be met by way of means available to our Company, including from internal accruals and
any additional equity and/or debt arrangements. If the actual utilisation towards any of the objects is lower than the
proposed deployment such balance will be used for future growth opportunities including funding the other objects of
the Issue, if required including general corporate purposes. However, any change in the objects of the Issue, other
than those specified herein, post-listing of the Equity Shares shall be subject to compliance with the Companies Act
and such regulatory and other approvals and disclosures, as may be applicable.
Means of finance
We propose to fund the requirements of the objects detailed above entirely from the Net Proceeds. Accordingly, we
confirm that there is no requirement to make firm arrangements of finance under Regulation 4(2)(g) of the SEBI ICDR
Regulations through verifiable means towards at least 75% of the stated means of finance, excluding the amount to be
raised through the Issue.
Details of the objects of the Issue
The Net Proceeds of this Issue will not be used to meet our working capital requirements. We propose to deploy the
Net Proceeds towards such identified activities as per the scheduled of implementation outlined in the table above.
A detailed explanation of the utilisation of the objects of the Issue is as described below.
1. Acquisition of land and construction of a software production unit and facilitation centre
- 41 -
Our Company requires 1 acre of land which we are proposing to acquire from Kerala Industrial Infrastructure
Development Corporation. The outlay for the said land is estimated to be ` 165.84 lacs and would be located at
KINFRA Hi-tech Park, Kalamassery, Kerala. Further, on this land, we propose to set up a software production unit and
facilitation centre spreading over 10,000 square feet with a seating capacity for around 100 employees. In the
software production unit and facilitation centre we intend to house our core functions such as technical teams for all
product lines, operations department and research & development department of our Company. The outlay for
setting up the software production unit and facilitation centre is estimated at ` 402.00 lacs. The break-up of the outlay
required for this object is outlined in the table below:
(` in lacs)
Sr. No. Particulars Estimated amount
1. Acquisition of land 165.84
2. Construction of the software production unit and facilitation centre 402.00
Total 567.84
Based on the quotation dated January 18, 2013 received from M/s Kumar Group, whom our Company is proposing to
appoint for constructing our software production unit and facilitation centre, the break-up of the construction costs as
given above is outlined below:
(` in lacs)
Sr. No. Particulars of construction costs Estimated amount
1. Steel and glass structure 187.50
2. Interior works 125.00
3. Air conditioning 37.50
4. Electrification 31.25
5. Water supply and sanitation 18.75
6. Stationeries and artifacts 2.00
Total 402.00
2. Procuring computers, peripherals and other infrastructure for our software production unit and facilitation
centre
We estimate to incur a total outlay of funds of ` 121.97 lacs for the procurement of computers, peripherals and other
infrastructure costs required in our software production unit and facilitation centre which is to be located at KINFRA
Hi-tech Park, Kalamassery, Kerala based on the quotation received the costs are set forth in the table below:
(` in lacs)
Particulars Supplier Date of quotation Estimated amount
Computers, peripherals and other infrastructure Sun Microsystems December 21, 2012 121.97
3. Procurement of Crypto SIM cards from Gemalto Digital Security Private Limited to be deployed in the pilot
project using Mobile Digital Signature technology
Our Company intends to initiate a pilot project for use of Mobile Digital Signature technology in Kerala for which we
would need Crypto SIM cards. We intend to procure the Crypto SIM cards from Gemalto Digital Security Private
Limited. We expect, based on the quote received, the estimated cost for the procurement of the Crypto SIM cards is
as under:
(` in lacs)
Particulars Supplier Date of quotation Estimated amount
Crypto SIM cards Gemalto Digital Security Private Limited December 10, 2012 262.50
4. License fee to Valimo Wireless Oy for use of its Mobile Digital Signature technology
- 42 -
Valimo Wireless Oy, a Finnish company has developed a Mobile Digital Signature technology. Our Company has
entered into an exclusive license agreement dated August 8, 2012 with Valimo Wireless Oy for three years for use of
this technology. Further, our Company has also entered into services agreement dated August 8, 2012 with Valimo
Wireless Oy for maintenance and support services for the said technology. Towards this our Company is to pay fees to
Valimo Wireless Oy which is determined as per terms of the respective agreements entered into with them.
As per the terms of the license agreement, our Company is to make payments to Valimo Wireless Oy based on the
number of actual active end users and a share of net revenue from the said technology subject to a minimum annual
license fee. During the term of the said agreement, our Company will have to pay Valimo Wireless Oy a minimum
license fee totaling to € 300,000 (` 216.87 lacs) over a period of three years. The minimum license fee of € 300,000 is
required to be paid by our Company in years two and three of the license agreement of € 100,000 and € 200,000
respectively.
As per the terms of the services agreement, an installation fee is to be paid to Valimo Wireless Oy based on four
milestones of €25,000 totaling to €100,000 (`71.56 lacs). Further, the fee for support services is to be paid by our
Company after delivery of the software installation at €4,000 (`2.86 lacs) payable per calendar month up to an agreed
number of users. As of the date of this Draft Red Herring Prospectus, in terms of the services agreement, our
Company has already paid the two milestones of €25,000 each totaling to € 50,000 (`39.52 lacs) to Valimo Wireless Oy
out of its internal accruals. Further, our Company estimates that € 146,000 (`104.48 lacs) would have to be paid to
Valimo Wireless Oy as per the terms of the services agreement. After this period, our Company believes that we
would have reached a sufficient scale of operations so that we would be able to meet these expenses out of internal
accruals.
5. Procurement of Mobile Digital Signature certificates from an authorized certifying authority
As part of the pilot project for use of Mobile Digital Signature technology in Kerala, our Company intends to procure
the mobile digital signatures from an authorized certifying authority. As per the quotation dated January 3, 2013
received by our Company the total estimated cost for procuring the digital signatures is ` 515.00 lacs. Further, the
authorized certifying authority would supply class 3 individual (two years validity) digital signatures to our Company.
The mobile digital signatures procured would be used in the pilot project using Mobile Digital Signature technology to
target end users which includes high net worth individuals and retail traders in Kerala. Our Company intends to
develop customized solutions/applications for such end users to enable them to transact by using the Mobile Digital
Signature technology.
6. Procurement of 4,000 mobile phones
Our Company intends to procure 4,000 mobile phones for an estimated cost of ` 262.08 lacs. The mobile phones are
to be utilized for the pilot project for use of Mobile Digital Signature technology in Kerala. The mobile phones
procured are to be leased out to the end users of Mobile Digital Signature technology. Through the pilot project our
Company would be testing the Mobile Digital Signature technology in these mobile phones where critical and core
solutions/applications are to be developed by our Company on the mobile phone platform for early adoption by such
end users.
7. General corporate purposes
We intend to use a part of the Net Proceeds, approximately ` [●] lacs, for general corporate purposes, as may be
approved by our Board of Directors or any duly authorized committee thereof. This may include and is not limited to
investments by way of strategic initiatives, initial development costs for projects other than the aforementioned
projects, acquisition of fixed assets, repayment of debt, brand building exercises, strengthening of our marketing
capabilities, meeting exigencies, which we may face in the ordinary course of business, or any other purposes as may
be approved by our Board of Directors. We confirm that the funds to be used towards general corporate purposes
shall not exceed 25% of the Net Proceeds and shall exclude payments towards expenses of the Issue.
- 43 -
Bridge financing facilities
Our Company has not raised any bridge loans from any bank or financial institution as on the date of this Draft Red
Herring Prospectus, which are proposed to be repaid from the Net Proceeds.
Issue expenses
The details of the estimated Issue expenses are set forth below:
(` in lacs)
Particulars Amounts* As a % of total expenses As a % of Issue size
Issue management fees (including fee to the BRLM,
underwriting commission, market making expenses,
brokerage and selling commission)
[] [] []
Registrar to the Issue [] [] []
Advisor to the Issue [] [] []
Bankers to the Issue [] [] []
IPO Grading Agency
Others:
- Printing and stationery [] [] []
- Listing fees [] [] []
- Postage, Advertising and marketing expenses [] [] []
- Miscellaneous [] [] []
Total estimated Issue expenses [] [] []
* to be finalized upon determination of Issue Price
Funds deployed till date
The details of the amount spent by our Company as on February 6, 2013 on the objects of the Issue are provided in
the table below:
(` in lacs)
Particulars* Amount*
Funds deployed
Payment to Valimo Wireless Oy in terms of the services agreement dated August 8, 2012 39.52
Total funds deployed 39.52
Sources of funds
Internal accruals 39.52
* Certified by our statutory auditor Sivaprasad and Associates, vide certificate dated February 6, 2013
Shortfall of Net Proceeds
In case of any shortfall of Net Proceeds, we intend to meet the same through internal accruals. In the event that
estimated utilization out of the Net Proceeds in a Financial year is not completely met, the same shall be utilized in the
next Financial year.
Appraisal of the objects of the Issue
None of the objects for which the Net Proceeds are proposed to be utilised have been financially appraised. The
estimates of the cost of the objects mentioned above are based on internal estimates of the Company and quotations
received from certain vendors.
- 44 -
Interim use of funds
Our management, in accordance with the policies established by the Board of Directors, will have flexibility in
deploying the Net Proceeds. Pending utilisation for the purposes described above, we intend to temporarily invest the
funds in high quality interest/dividend bearing liquid instruments including deposits with banks, investments in mutual
funds and other financial products and investment grade interest bearing securities, for the necessary duration. Such
investments would be in accordance with the investment policies approved by our Board of Directors from time to
time. Our Company confirms that pending utilisation of the Net Proceeds it shall not use the funds for any
investments in the equity markets.
Monitoring of utilisation of the Net Proceeds
In terms of Regulation 16(1) of the SEBI ICDR Regulations, we are not required to appoint a monitoring agency for the
purposes of this Issue. As required under the SME Equity Listing Agreement, the Audit Committee appointed by our
Board will monitor the utilization of the Issue proceeds. We will disclose the utilization of the proceeds of the Issue,
including interim use, under a separate head in our quarterly/half yearly financial disclosures and annual audited
financial statements until the Issue Proceeds remain unutilized, to the extent required under the applicable law and
regulation. We will indicate investments, if any, of unutilized proceeds of the Issue in the balance sheet of our
Company for the relevant Financial years subsequent to our listing.
Pursuant to clause 52 of the SME Equity Listing Agreement, our Company shall on a half yearly basis disclose to the
Audit Committee the uses and applications of the Net Proceeds of the Issue. On an annual basis, our Company shall
prepare a statement of funds utilised for purposes other than those stated in the Draft Red Herring Prospectus and
place it before the Audit Committee. Such disclosure shall be made only until such time that all the Net Proceeds of
the Issue have been utilised in full. The statement shall be certified by the statutory auditor of our Company.
Our Company shall inform material deviations in the utilisation of the Net Proceeds to the Stock Exchanges and shall
also be required to simultaneously make the material deviations/adverse comments of the Audit
committee/monitoring agency public through advertisement in newspapers/website.
Other confirmations
No part of the proceeds from the Issue will be paid by us as consideration to our Promoters, Promoter Group, our
Directors, Group Companies or Key Managerial Personnel, except in the normal course of our business.
For risks associated with respect to the objects of this Issue, please see "Risk Factors" beginning on page xi of the Draft
Red Herring Prospectus.
- 45 -
BASIS FOR ISSUE PRICE
The Issue Price will be determined by our Company, in consultation with the BRLMs on the basis of assessment of
market demand for the equity shares though the book-building process and on the basis of the following qualitative
and quantitative factors for the Equity Shares. The face value of the Equity Shares is ` 10 each and the Issue Price is []
times the face value at the lower end of the Price Band and [] times the face value at the higher end of the Price
Band.
Qualitative Factors
We believe the following business strengths allow us to successfully compete in the industry:
1. Innovation and thought leadership
2. Long-standing relationships with TSPs and government agencies
3. Efficient and scalable business model
4. Wide spread presence across India
For a detailed discussion on the qualitative factors, which form the basis for computing the price, see “Our Business –
Our Competitive Strengths” and “Risk Factors” on pages 67 and xi, respectively of the Draft Red Herring Prospectus.
Quantitative Factors
Information presented in this section is derived from our Company’s restated financial statements prepared in
accordance with Indian GAAP, Companies Act and the SEBI Regulations. Some of the quantitative factors, which form
the basis for computing the price, are as follows:
1. Earnings Per Share (EPS)
a. Basic EPS & Diluted EPS on a unconsolidated basis
Year ended Basic Diluted
EPS (in `) Weight EPS (in `) Weight
March 31, 2010 5.36 1 5.27 1
March 31, 2011 45.05 2 44.43 2
March 31, 2012 34.98 3 34.98 3
Weighted Average 33.40 33.18
Six months ended September 30, 2012# 11.01 NA* 11.01 NA
# Not Annualised
Notes:
i. The figures disclosed above are based on the unconsolidated restated summary statements of the Company
ii. The face value of each Equity Share is ` 10.
iii. Earnings Per Share has been calculated in accordance with Accounting Standard 20 - Earnings Per Share
issued by the Institute of Chartered Accountants of India.
iv. The above statement should be read with Significant Accounting Policies and the Notes to the Restated
Summary Statements as appearing in Annexure IV.
b. Basic EPS & Diluted EPS on a consolidated basis
Year ended Basic Diluted
EPS (in `) Weight EPS (in `) Weight
March 31, 2012 32.12 NA 32.12 NA
Six months ended September 30, 2012# 10.02 NA 10.02 NA
# Not Annualised
- 46 -
2. Price Earning (P/E) Ratio in relation to the Issue Price of ` [●] per Equity Share of ` 10 each
S.No
. Particulars
P/E on an
unconsolidated
Basis
P/E on an
Consolidated Basis
1 P/E ratio on the Basic EPS for the year ended March 31, 2012 at the
Floor Price [] []
2 P/E ratio on the Diluted EPS for the year ended March 31, 2012 at
the Floor Price [] []
3 P/E ratio on the Basic EPS for the year ended March 31, 2012 at the
Cap Price [] []
4 P/E ratio on the Diluted EPS for the year ended March 31, 2012 at
the Cap Price [] []
3. Peer Group P/ E: We believe that none of the listed companies are engaged in our line of business.
4. Return on Net Worth (RONW)*
Particulars Unconsolidated Weight Consolidated Weight
March 31, 2010 29.55% 1 NA 1
March 31, 2011 71.37% 2 NA 2
March 31, 2012 37.15% 3 35.18% 3
Weighted Average 47.29% 35.18%
Six months ended September 30, 2012# 11.95% - 11.29% -
* Please refer to Annexure XVI - Unconsolidated statement of accounting ratios and Annexure XVI - Consolidated
statement of accounting ratios on pages 156and 191 respectively, of this Draft Red Herring Prospectus # Not Annualised
5. Minimum Return on Net Worth after Issue to maintain Pre-Issue EPS for Financial Year 2012:
a. Based on Basic EPS on a unconsolidated basis:
At the Floor Price – [] based on the restated financial statements.
At the Cap Price – [] based on the restated financial statements.
b. Based on Diluted EPS on a unconsolidated basis:
At the Floor Price – [] based on the restated financial statements.
At the Cap Price – [] based on the restated financial statements.
c. Based on Basic EPS on a consolidated basis:
At the Floor Price – [] based on the restated financial statements.
At the Cap Price – [] based on the restated financial statements.
d. Based on Diluted EPS on a consolidated basis:
At the Floor Price – [] based on the restated financial statements.
At the Cap Price – [] based on the restated financial statements.
6. Net Asset Value per Equity Share
Particulars Unconsolidated ( `) Consolidated ( `)
March 31, 2010 17.89 NA
March 31, 2011 59.18 NA
March 31, 2012 94.17 91.30
- 47 -
Particulars Unconsolidated ( `) Consolidated ( `)
NAV After the Issue [] []
Issue Price* [] []
* Issue Price per Equity Share will be determined on conclusion of the Book Building Process.
7. Comparison with Industry Peers
As our Company is one of the few players that operate in the mobile communications technology space providing
services to consumers, enterprises and State Governments, there are no figures of comparable listed companies
available with us. Therefore, details on the comparison of accounting ratios of our Company with other listed entities
has not been given as our Company offers a diverse suite of services and there are no listed peers in the same line of
business.
For further details and to have a more informed view, please review the entire Draft Red Herring Prospectus including
in particular the sections titled “Risk Factors”, “Our Business” and “Financial Statements” on pages xi, 67 and 124,
respectively of the Draft Red Herring Prospectus. The face value of the Equity Shares is ` 10 each and the Issue price
will be [●] times the face value of Equity Shares. The Issue Price of `[] has been determined by us, in consultation
with the BRLMs on the basis of the demand from investors for the Equity Shares through the Book-Building Process
and is justified in view of the above qualitative and quantitative factors.
- 48 -
STATEMENT OF TAX BENEFITS
The Board of Directors
MobMe Wireless Solutions Limited,
Kacheripady,
Kochi – 682 018
Kerala
Re: Statement of possible tax benefits available to MobMe Wireless Solutions Limited and its Shareholders
We hereby report that the enclosed statement, prepared by the Company, states the possible tax benefits /
consequences available to MobMe Wireless Solutions Limited (‘the Company’) and its shareholders under the Income
Tax Act, 1961 and other Direct tax laws presently in force in India as on the date of preparation of this statement.
Several of these tax benefits/consequences are dependent on the Company or the Shareholders fulfilling the
conditions prescribed under the relevant tax laws. Hence, the ability of the Company or the Shareholders to derive tax
benefits is dependent upon fulfilling such conditions, which are based on business imperatives the Company may face
in the future, and accordingly, the Company may or may not choose to fulfill. No assurance is given that the revenue
authorities will concur with the views expressed herein.
The benefits disclosed in the enclosed annexure are not exhaustive in nature. The enclosed statement is only intended
to provide general information to the Company and is neither designed nor intended to be a substitute for
professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws, each
investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of
their participation in the issue.
We do not express any opinion or provide any assurance as to whether:
the Company or its shareholders will continue to obtain these benefits in future; and
the conditions prescribed for availing the benefits, where applicable have been/would be met with.
The contents of the enclosed statement, prepared by the Company are examined by us based on information,
explanations and representations obtained from the management of the Company. Further our examination is based
on our understanding of the business activities and operations of the Company and is also based on an interpretation
of the current tax laws in force in India as on the date of preparation of this statement which are subject to change
from time to time. We do not assume any obligation or responsibility to update the views consequent to these
changes. The Company takes the full and exclusive responsibility for preparing the Statement. Our responsibility is to
report on the Statement.
The Direct Taxes Code (“Code”) has been presented in the Parliament for approval and once approved would be
enacted as a law effective from the date of implementation. The enclosed statement does not incorporate the effect
of the same on the Company and its shareholders, as the Code has not yet been approved.
The enclosed statement is intended solely for your information and for inclusion in the offer document in connection
with the proposed rights issue of shares and is not to be used, referred to or distributed for any other purpose without
our prior written consent.
for Sivaprasad & Associates,
Chartered Accountants
Firm Registration No: 116231W
Partner
Membership No: 203491
Place: Kollam
Date: February 6, 2013
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STATEMENT OF TAX BENEFITS AVAILABLE TO MobME WIRELESS SOLUTIONS LIMITED (“THE COMPANY”) AND ITS
SHAREHOLDERS
A (i) Special tax benefits available to the Company under the Income Tax Act, 1961
1. The Company has a research unit duly approved by the Department of Scientific and Industrial Research
(“DSIR”). Under the provisions of Section 35 (2AB) of the Income Tax Act, 1961 (“the Act”) where a Company
engaged in the manufacture or production of any article or thing not being any article or thing specified in the
Eleventh Schedule, incurs any expenditure on scientific research on in house research approved by the DSIR,
the Company is eligible to claim an enhanced deduction of two hundred percent on such expenditure incurred.
In this regard, the Company has also currently applied to the DSIR for availing an enhanced deduction under
Section 35 (2AB) of the Act and is currently awaiting approval from the DSIR. The approval if received would
make the Company eligible for claiming enhanced deduction on scientific research expenditure applying the
provisions of section 35 (2AB) of the Act.
Tax benefits mentioned below in A (ii) are general tax benefits available to all the companies subject to
fulfillment of specified conditions.
A (ii) General Benefits available to the Company under the Income Tax Act, 1961:
1. Under section 10(34) of the Act, any income by way of dividends referred to in section 115-O received by the
Company from another domestic Company/ Companies is exempt from income-tax.
However, in view of the provisions of section 14A of Act, no deduction is allowed in respect of any
expenditure incurred in relation to earning such dividend income. The quantum of such expenditure liable for
disallowance is to be computed in accordance with the provisions contained therein.
Also, section 94(7) of the Act provides that losses arising from the sale/ transfer of shares or units purchased
within a period of three months prior to the record date and sold/ transferred within three months (in case of
shares) or nine months (in case of units) respectively after such date, will be ignored to the extent dividend
income on such shares or units is claimed as tax exempt.
2. Further, as per section 94(8) of the Act, if an investor purchases units within three months prior to the record
date for entitlement of bonus, and is allotted bonus units without any payment on the basis of holding
original units on the record date and such person sells/redeems the original units within nine months of the
record date, then the loss arising from sale/ redemption of the original units will be ignored for the purpose
of computing income chargeable to tax and the amount of loss ignored shall be regarded as the cost of
acquisition of the bonus units.
3. By virtue of section 10(35) of the Act, the following income shall be exempt in the hands of the company:
(a) Income received in respect of the units of a Mutual Fund specified under clause (23D) of section 10; or
(b) Income received is respect of units from the Administrator of the “specified undertaking”; or
(c) Income received in respect of units from the “specified company”.
Provided that this exemption does not apply to any income arising from transfer of units of the
Administrator of the specified undertaking or of the specified company or of a mutual fund, as the case
may be. For this purpose:
i. “Administrator” means the Administrator as referred to in clause (a) of section 2 of the Unit Trust of
India (Transfer of Undertaking and Repeal) Act, 2002.
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ii. “Specified Company” means a company as referred to in clause (h) of section 2 of the Unit Trust of
India (Transfer of Undertaking and Repeal) Act, 2002;
4. As per the provisions of section 10 (38) of the Act, the long term capital gains (gain arising on transfer of long
term capital asset) arising to the Company from the transfer of shares or a unit of an equity oriented fund,
where the transaction of sale of such share or unit is entered into in a recognized stock exchange in India on
or after October 1, 2004 and chargeable to Securities Transaction Tax, will be exempt from tax in the hands of
the Company. The equity shares or units of an equity oriented fund are treated as long term assets if it is held
for a period of more than 12 months prior to the date of transfer.
Provided that the income by way of long-term capital gain of a company shall be taken into account in
computing the book profit and income-tax payable under section 115JB of the Act.
For this purpose ‘Equity Oriented Fund’ means a fund:
i. where the investible funds are invested by way of equity shares in domestic companies to the extent
of more than sixty-five per cent of the total proceeds of such fund; and
ii. which has been set up under a scheme of Mutual Fund specified under clause (23D) of section 10.
Provided that percentage of equity share holding shall be computed with reference to the annual
average of the monthly averages of the opening and closing figures.
5. Under section 32 of the Act, the Company is entitled to claim depreciation including additional depreciation,
subject to conditions specified therein, at the prescribed rate on its specified assets used for its business.
6. Under section 48 of the Act, if the investments in shares are sold after being held for not less than twelve
months, the gains, if any, will be treated as long-term capital gains and the gains will be calculated by
deducting from the gross consideration, the indexed cost of acquisition and indexed cost of improvement.
The indexed cost of acquisition / improvement refers to the cost of acquisition / improvement adjusted by
the cost of inflation index, as prescribed from time to time.
7. As per section 54EC of the Act and subject to the conditions and to the extent specified therein, long-term
capital gains (in cases not covered under section 10(38) of the Act) arising on the transfer of a long-term
capital asset will be exempt from tax subject to the limit of ` 50 lakhs in a year if the capital gains are
invested in a “long term specified asset” within a period of six months after the date of such transfer.
For the above purposes a “long term specified asset” inter-alia means any bond, redeemable after three
years and issued on or after the first day of April 2007 by the National Highways Authority of India
constituted under section 3 of the National Highways Authority of India Act, 1988, or by the Rural
Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956.
8. As per the provisions of section 111A of the Act the short term capital gains arising from the transfer of
equity shares or unit of an equity oriented fund, where the transaction of sale of such share/ unit is entered
into in a recognized stock exchange in India and chargeable to Securities Transaction Tax will be chargeable
to tax at the rate of 15% (plus applicable surcharge and education cess).
Where the gross total income includes short term capital gains referred to above, the deduction under
Chapter VI-A shall be allowed from the gross total income as reduced by such short term capital gains.
For the purpose of this section, ‘equity oriented fund’ shall have meaning as assigned to it in explanation to
section 10(38).
9. Under section 112 of the Act, and other relevant provisions of the Act, long term capital gains (In case not
covered under section 10(38) of the Act), arising on transfer of shares/ units, shall be taxed at a rate of 20%
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(plus applicable surcharge and education cess). The tax shall however, not exceed 10% (plus applicable
surcharge and education cess) without indexation, if the transfer is made of a listed security.
The long term capital gains not covered under paragraph 3 and 8 above shall be chargeable to tax at the rate
of 20 percent (plus applicable surcharge and education cess) of the capital gains computed after indexing the
cost of acquisition /improvement.
10. The amount of tax paid under section 115JB by the Company for any assessment year commencing from 01
April 2006 and any subsequent assessment year, will be available as credit to the extent specified in section
115JAA for ten years succeeding the assessment year in which MAT credit becomes allowable in accordance
with the provisions of Section 115JAA of the Act.
11. As per section 74 of the Act, short-term capital loss can be set-off against short-term as well as long-term
capital gains of the said year. Balance loss, if any, could be carried forward for eight years for claiming set-off
against subsequent years’ short term as well as long term capital gains. Long term capital loss suffered during
the year can be set-off only against long-term capital gains. Balance loss, if any, could be carried forward for
eight years for claiming set-off against subsequent years’ long - term capital gains
12. Under section 35D of the Act, the Company will be entitled to a deduction equal to 1/5th of the expenditure
incurred of the nature specified in the said section, including expenditure incurred on present issue, such as
underwriting commission, brokerage and other charges, as specified in the provision, by way of amortisation
over a period of 5 successive years, beginning with the previous year in which the business commences or
after the commencement of its business in connection with the extension of its industrial undertaking or in
connection with setting up a new industrial unit, subject to the stipulated limits
13. Section 72 of the Act provides that the business loss shall be carried forward to the following assessment year
to be set off against the profits and gains of business and profession and the balance shall be allowed to be
carried forward for next 8 assessment years subject to the provisions of the Act. Unabsorbed depreciation, if
any, for any assessment year can be carried forward and set off against any source of income of subsequent
assessment years as per section 32 of the Act.
14. Under Section 115BBD of the Act where the total income of an assessee, being an Indian Company, for the
previous year includes any income by way of dividends declared, distributed or paid by a specified foreign
company, the income tax payable on the income earned by way of such dividends would be 15 percent.
B General Benefits available to the shareholders of the Company under the Income Tax Act, 1961:
B (i) General Benefits to Resident Shareholders
15. Under section 10(34) of the Act, any income by way of dividends referred to in section 115-O received from a
domestic company is exempt from income tax.
However, in view of the provisions of section 14A of Act, no deduction is allowed in respect of any
expenditure incurred in relation to earning such dividend income. The quantum of such expenditure liable for
disallowance is to be computed in accordance with the provisions contained therein.
Also, section 94(7) of the Act provides that losses arising from the sale/ transfer of shares purchases within a
period of three months prior to the record date and sold/ transferred within three months after such date,
will be ignored to the extent dividend income on such shares is claimed as tax exempt.
16. As per the provisions of section 10 (38) of the Act any Long Term Capital Gains arising from the transfer of
shares, where the transaction of sale of such shares is entered into in a recognized stock exchange in India on
or after October 1, 2004 and chargeable to Securities Transaction Tax, will be exempt from tax. The equity
shares or units of an equity oriented fund are treated as long term assets if it is held for a period of more
than 12 months prior to the date of transfer.
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Provided that the income by way of Long-term Capital Gain of a company shall be taken into account in
computing the book profit and Income-tax payable under section 115JB of the Act.
17. Under section 48 of the Act, if the investments in shares are sold after being held for not less than twelve
months, the gains, if any, will be treated as long-term capital gains and the gains will be calculated by
deducting from the gross consideration, the indexed cost of acquisition and indexed cost of improvement.
The indexed cost of acquisition / improvement refers to the cost of acquisition / improvement adjusted by
the cost of inflation index, as prescribed from time to time.
18. Under section 112 of the Act, and other relevant provisions of the Act, long term capital gains (In case not
covered under section 10(38) of the Act), arising on transfer of shares/ units, shall be taxed at a rate of 20%
(plus applicable surcharge and education cess). The tax shall however, not exceed 10% (plus applicable
surcharge and education cess) without indexation, if the transfer is made of a listed security.
19. In case of an individual or a Hindu Undivided Family, where the total taxable income as reduced by the long
term capital gains is less than the basic exemption limit, the long term capital gains will be reduced to the
extent of the shortfall and only the balance long term capital gains will be subject to tax in accordance with
the proviso to sub section (1) of section 112 of the Act.
20. As per section 54EC of the Act and subject to the conditions and to the extent specified therein, long-term
capital gains (in cases not covered under section 10(38) of the Act) arising on the transfer of a long-term
capital asset will be exempt from tax subject to the limit of ` 50 lakhs in a year if the capital gains are
invested in a “long term specified asset” within a period of six months after the date of such transfer.
For the above purposes a “long term specified asset” inter-alia means any bond, redeemable after three
years and issued on or after the first day of April 2007 by the National Highways Authority of India
constituted under section 3 of the National Highways Authority of India Act, 1988, or by the Rural
Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956.
21. As per the provisions of section 54F of the Act, long term capital gains (in cases not covered under section
10(38)) arising on the transfer of the shares of the Company held by an individual or Hindu Undivided Family
will be exempt from tax if the net consideration is utilized, with in a period of one year before, or two years
after the date of transfer, in the purchase of a residential house, or for construction of a residential house
within three years.
22. Short-term capital gains arising on transfer of the shares (i.e. held for less than 12 months) of the Company
will be chargeable to tax at the rate of 15% (plus applicable surcharge and education cess) as per the
provisions of section 111A of the Act, if securities transaction tax is chargeable on such transaction. In case of
an individual or Hindu Undivided Family, where the total taxable income as reduced by short-term capital
gains is below the basic exemption limit, the short-term capital gains will be reduced to the extent of the
shortfall and only the balance short-term capital gains will be subjected to such tax in accordance with the
proviso to sub-section (1) of section 111A of the Act.
23. The short-term capital gains accruing to the shareholders of the Company from the transfer of the shares of
the Company otherwise than as mentioned in Paragraph 20 above shall be chargeable to the capital gains tax
at the normal tax rate applicable.
24. The short-term capital gains accruing to the shareholders of the Company from the transfer of the shares of
the Company otherwise than as mentioned in the Paragraph above shall be chargeable to the capital gains
tax at the normal tax rate applicable.
25. As per section 74 of the Act, Short Term Capital Loss suffered during the year is allowed to be set-off against
short term as well as Long Term Capital Gain of the said year. Balance loss, if any, could be carried forward
for eight years for claiming set-off against subsequent years’ short term as well as long term capital gains.
Long Term Capital Loss suffered during the year is allowed to be set-off against Long Term Capital Gains only.
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Balance loss, if any, could be carried forward for eight years for claiming set-off against subsequent years’
Long Term Capital Gains only.
26. Where the business income of an assessee includes profits and gains of business arising from transactions on
which securities transaction tax has been charged, such securities transaction tax shall be deductible expense
from business income as per the provisions of section 36(1)(xv) of the Income-Tax Act,1961.
B (ii) Special Tax Benefits to Resident Shareholders
There are no special tax benefits available to the resident members of the Company (including domestic
companies).
B (iii) General Benefits to Non-resident Indians / Nonresident shareholders (Other than FIIs)
27. Under section 10(34) of the Act, any income by way of dividends referred to in section 115-O received from a
domestic company is exempt from income tax.
However, in view of the provisions of section 14A of Act, no deduction is allowed in respect of any
expenditure incurred in relation to earning such dividend income. The quantum of such expenditure liable for
disallowance is to be computed in accordance with the provisions contained therein.
Also, section 94(7) of the Act provides that losses arising from the sale/ transfer of shares purchases within a
period of three months prior to the record date and sold/ transferred within three months after such date,
will be ignored to the extent dividend income on such shares is claimed as tax exempt.
28. As per section 10(38) of the Act, long term capital gains arising to the shareholder from the transfer of a long
term capital asset being an equity share in a company or a unit of an equity oriented fund, where such
transaction is chargeable to securities transaction tax, will be exempt in the hands of shareholders. However,
the said exemption will not be available to a member being a company while computing the book profit and
the tax payable under section 115JB of the Act.
29. In accordance with, and subject to section 48 of the Income-Tax Act, capital gains arising on transfer of shares
of the Company which are acquired in convertible foreign exchange and not covered under Paragraph above
shall be computed by converting the cost of acquisition, expenditure in connection with such transfer and full
value of the consideration received or accruing as a result of the transfer into the same foreign currency as
was initially utilised in the purchase of shares and the capital gains computed in such foreign currency shall
be reconverted into Indian currency, such that the aforesaid manner of computation of capital gains shall be
applicable in respect of capital gains accruing / arising from every reinvestment thereafter and sale of shares
of the Company.
30. The long-term capital gains accruing to the shareholders of the Company from the transfer of the shares of
the Company otherwise than as mentioned in Paragraphs 26 and 27 above shall be chargeable to tax at the
rate of 20% (plus applicable surcharge and education cess) of the capital gains computed after indexing the
cost of acquisition or at the rate of 10% (plus applicable surcharge and education cess) of the capital gains
computed before indexing the cost of acquisition, whichever is lower.
31. As per section 111A of the Act, short term capital gains arising from the sale of equity shares or units of an
equity oriented mutual fund, will be chargeable to tax at the rate of 15% (plus applicable surcharge and
education cess), if securities transaction tax is chargeable on such transaction.
32. As per section 54EC of the Act and subject to the conditions and to the extent specified therein, long-term
capital gains (in cases not covered under section 10(38) of the Act) arising on the transfer of a long-term
capital asset will be exempt from tax subject to the limit of ` 50 lakhs in a year if the capital gains are
invested in a “long term specified asset” within a period of six months after the date of such transfer.
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For the above purposes a “long term specified asset” inter-alia means any bond, redeemable after three
years and issued on or after the first day of April 2007 by the National Highways Authority of India
constituted under section 3 of the National Highways Authority of India Act, 1988, or by the Rural
Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956.
33. As per the provisions of section 54F of the Act, long term capital gains (in cases not covered under section
10(38)) arising on the transfer of the shares of the Company held by an individual or Hindu Undivided Family
will be exempt from tax if the net consideration is utilised, with in a period of one year before, or two years
after the date of transfer, in the purchase of a residential house, or for construction of a residential house
within three years.
34. Where the business income of an assessee includes profits and gains of business arising from transactions on
which securities transaction tax has been charged, such securities transaction tax shall be a deductible
expense from business income as per the provisions of section 36(1)(xv) of the Income-Tax Act.
35. As per Section 74 of the Act, short-term capital loss suffered during the year is allowed to be set-off against
short-term as well as long-term capital gains of the said year. Balance loss, if any, could be carried forward for
eight years for claiming set-off against subsequent years’ short-term as well as long-term capital gains. Long-
term capital loss suffered during the year is allowed to be set-off against long-term capital gains. Balance loss,
if any, could be carried forward for eight years for claiming set- off against subsequent years’ long term
capital gains.
B (iv) Special Benefits to Non-resident Indians / Non-resident shareholders (Other than FIIs)
36. The tax rates and consequent taxation mentioned below will be further subject to any benefits available
under the Tax Treaty, if any, between India and the country in which the non-resident has fiscal domicile. As
per the provisions of section 90(2) of the Act, the provisions of the Act would prevail over the provisions of
the Double Taxation Avoidance Agreement (“DTAA”) to the extent they are more beneficial to the non-
resident.
37. Besides the above benefits available to non-residents, Non-Resident Indians (NRIs) have the option of being
governed by the provisions of Chapter XII-A of the Income-Tax Act which inter alia entitles them to certain
benefits in respect of income from shares of an Indian Company acquired, purchased or subscribed to in
convertible foreign exchange.
38. As per section 115A of the Act, where the total income of a Non-resident (not being a company) or of a
foreign company includes dividends (other than dividends referred to in section 115O of the Act), tax payable
on such income shall be aggregate of amount of income-tax calculated on the amount of income by way of
dividends included in the total income, at the rate of 20 per cent (plus applicable surcharge and education
cess).
39. In accordance with section 115E of the Act, income from investment or income from long- term capital gains
on transfer of assets other than specified asset shall be taxable at the rate of 20% (plus applicable surcharge
and education cess). Income by way of long term capital gains in respect of a specified asset (as defined in
section 115C (f) of the act), shall be chargeable at 10% (plus applicable surcharge and education cess).
40. In accordance with section 115F of the Act, subject to the conditions and to the extent specified therein,
long-term capital gain arising from transfer of shares of the company acquired out of convertible foreign
exchange, and on which securities transaction tax is not chargeable, shall be exempt from capital gains tax, if
the net consideration is invested within six months of the date of transfer in any specified asset.
41. In accordance with section 115G of the Act, it is not necessary for a Non-resident Indian to file a return of
income under section 139(1), if his total income consists only of investment income earned on shares of the
company acquired out of convertible foreign exchange or income by way of long term capital gains earned on
transfer of shares of the company acquired out of convertible foreign exchange or both, and the tax has been
deducted at source from such income under the provisions of Chapter XVII-B of the Act.
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42. As per section 115H of the Act, where a non-resident Indian becomes assessable as a resident in India, he
may furnish a declaration in writing to the Assessing Officer, along with his return of income for that year
under section 139 of the Act to the effect that the provisions of Chapter XII-A shall continue to apply to him in
relation to such investment income derived from the specified assets for that year and subsequent
assessment years until such assets are transferred or converted into money.
43. In accordance with section 115-I, where a Non Resident Indian opts not to be governed by the provision of
chapter XII-A for any assessment year, his total income for that assessment year (including income arising
from investment in the company) will be computed and tax will be charged according to the other provisions
of the Income-tax Act.
C. Benefits to Foreign Institutional Investors (FIIs)
44. Under section 10(34) of the Act, any income by way of dividends referred to in section 115-O received from a
domestic company is exempt from income tax.
However, in view of the provisions of section 14A of Act, no deduction is allowed in respect of any
expenditure incurred in relation to earning such dividend income. The quantum of such expenditure liable for
disallowance is to be computed in accordance with the provisions contained therein.
Also, section 94(7) of the Act provides that losses arising from the sale/ transfer of shares purchases within a
period of three months prior to the record date and sold/ transferred within three months after such date,
will be ignored to the extent dividend income on such shares is claimed as tax exempt.
45. As per section 10(38) of the Act, long term capital gains arising from the transfer of a long term capital asset
being an equity share in a company or a unit of an equity oriented fund, where such transaction is chargeable
to securities transaction tax, will be exempt.
46. Under section 115AD(1)(b)(iii) of the Income-Tax Act, income by way of long-term capital gains arising from
the transfer of shares held in the Company not covered under Paragraph 43 above will be chargeable to tax
at the rate of 10% (plus applicable surcharge and education cess) without indexation benefit.
47. As per section 115AD read with section 111A of the Act, short term capital gains arising from the sale of
equity shares of the Company transacted through a recognized stock exchange in India, where such
transaction is chargeable to securities transaction tax, will be taxable at the rate of 15% (plus applicable
surcharge and education cess).
48. Under section 115AD(1)(b)(ii) of the Income-Tax Act, income by way of short- term capital gains arising from
the transfer of shares held in the Company not covered under Paragraph (iv) above will be chargeable to tax
at the rate of 30% (plus applicable surcharge and education cess).
49. The tax rates and consequent taxation mentioned above will be further subject to any benefits available
under the Tax Treaty, if any between India and the country in which the FII has fiscal domicile. As per the
provisions of section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the Tax
Treaty to the extent they are more beneficial to the FII.
50. As per Section 74 of the Act, short-term capital loss suffered during the year is allowed to be set-off against
short-term as well as long-term capital gains of the said year. Balance loss, if any, could be carried forward for
eight years for claiming set-off against subsequent years’ short-term as well as long-term capital gains. Long-
term capital loss suffered during the year is allowed to be set-off against long-term capital gains. Balance loss,
if any, could be carried forward for eight years for claiming set-off against subsequent years’ long-term
capital gains.
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51. Where the business income of an assessee includes profits and gains of business arising from transactions on
which securities transaction tax has been charged, such securities transaction tax shall be a deductible
expense from business income as per the provisions of section 36(1) (xv).
52. As per section 54EC of the Act and subject to the conditions and to the extent specified therein, long-term
capital gains (in cases not covered under section 10(38) of the Act) arising on the transfer of a long-term
capital asset will be exempt from tax subject to the limit of ` 50 lakhs in a year if the capital gains are
invested in a “long term specified asset” within a period of six months after the date of such transfer.
For the above purposes a “long term specified asset” inter-alia means any bond, redeemable after three
years and issued on or after the first day of April 2007 by the National Highways Authority of India
constituted under section 3 of the National Highways Authority of India Act, 1988, or by the Rural
Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956.
D. Benefits to Mutual Funds
53. In view of the provisions of section 14A of Act, no deduction is allowed in respect of any expenditure incurred
in relation to earning such dividend income. The quantum of such expenditure liable for disallowance is to be
computed in accordance with the provisions contained therein.
54. Also, section 94(7) of the Act provides that losses arising from the sale/ transfer of shares purchases within a
period of three months prior to the record date and sold/ transferred within three months after such date,
will be ignored to the extent dividend income on such shares is claimed as tax exempt.
55. Under section 10(23D) of the Act, any income of:
a. A Mutual Fund registered under the Securities and Exchange Board of India Act, 1992 or regulations
made there under;
b. Such other Mutual Fund set up by a public sector bank or a public financial institution or authorized
by the Reserve Bank of India and subject to such conditions as the Central Government may, by
notification in the Official Gazette, specify in this behalf will be exempt from income-tax.
E. Benefits available to Venture Capital Companies / Funds:
Any income received by venture capital companies or venture capital funds set up to raise funds for
investment in a venture capital undertaking registered with the Securities and Exchange Board of India,
subject to conditions specified in section 10(23FB) of the Act, is eligible for exemption from income-tax.
However, the income distributed by the Venture Capital Companies/ Funds to its investors would be taxable
in the hands of the recipient. As per Section 14A, no deduction shall be allowed in respect of expenditure
incurred by the assessee in relation to income which does not form part of the total income under this Act.
Also, Section 94(7) of the Act provides that losses arising from the sale/ transfer of shares or units purchases
within a period of three months prior to the record date and sold/ transferred within three months or nine
months respectively after such date, will be ignored to the extent dividend income on such shares or units is
claimed as tax exempt.
F. Benefits available to the shareholders of the Company under the Wealth Tax Act, 1957:
56. Shares of the company held by the shareholders will not be treated as an asset within the meaning of section
2 (ea) of the Wealth Tax Act, 1957. Hence, shares are not liable to wealth tax.
G. Benefits available to the shareholders of the Company under the Gift Tax Act, 1958:
57. Gift tax is not leviable in respect of any gifts made on or after October 1, 1998. Therefore, any gift of shares
will not attract gift tax under the Gift Tax Act, 1958. However, as per section 56(1)(vii)(c) of the Act, gift of
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shares to an individual or Hindu undivided family would be taxable in the hands of the donee as “Income
From Other Sources” subject to the provisions of the Act.
Notes:
1. The above statement of Possible Direct Tax Benefits sets out the possible tax benefits available to the
Company and its shareholders under the current tax laws presently in force in India as on the date of
preparation of this statement. Several of these benefits are dependent on the company or its shareholders
fulfilling the conditions prescribed under the relevant tax laws.
2. The above Statement of possible tax benefits sets out the provisions of law in a summary manner only and is
not a complete analysis or list of all potential tax consequences and the tax benefits listed above are not
exhaustive.
3. The stated benefits will be available only to the sole/first named holder in case the shares are held by joint
holders.
4. In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further
subject to any benefits available under the Double Taxation Avoidance Agreements, if any, between India and
the country in which the non-resident has fiscal domicile.
5. In view of the individual nature of tax consequences, each investor is advised to consult his/her/its own tax
advisor with respect to specific tax consequences of his/her/its participation in the scheme.
for MobME Wireless Solutions Limited
Director
Place: Kochi
Date: February 6, 2013
- 58 -
SECTION IV- ABOUT US
INDUSTRY OVERVIEW
The information in this section has been obtained or derived from various sources including government publications
and other public sources. Neither we, nor the BRLM nor any other person connected with the Issue or their respective
legal, financial or other advisors have verified information provided in this section. Industry sources and publications
generally state that the information contained therein has been obtained from sources and publications 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.
OVERVIEW OF THE INDIAN ECONOMY
India, with a gross domestic product purchasing power parity of $5058 billion at the end of 2013 estimated, is the
fourth largest economy in the world after the United States, China and Japan. (Source: Data for use of Deputy
Chairman, Planning Commission, December 5, 2012) Barring fiscal year 2009, the economy has registered a growth of
8% and above during the period from fiscal year 2006 to fiscal year 2011. Growth of 6.53% has been achieved as on
December 1, 2012(at constant 2004-05 prices). (Source: Data for use of Deputy Chairman, Planning Commission,
December 5, 2012)
Real gross domestic product growth is expected to reach 5.37% in 2013. (Source: Data for use of Deputy Chairman,
Planning Commission, December 5, 2012) India’s economic growth, reflected in increasing per capita income and a
growing middle class population with greater disposable income, is helping in increasing the spend on mobile phones
and entertainment and other value added services (“VAS”):
The figure below shows the per capita income of India on yearly basis from 2006 onwards:
(Source: Economic Survey 2011-12)
THE INDIAN TELECOMMUNICATION SECTOR – AN OVERVIEW
The Indian telecommunication sector maintained the growth rate during the fiscal year 2012-2013 with quarter ended
June 2012. There were 965.52 million connections at the end of June 2012 with 934.09 million wireless connections
and is the one of the largest network in the world. The one billion mark also appears to be achievable. The penetration
of internet and broadband has also improved with 23.01 million internet subscribers and 14.57 million broadband
subscribers across the country. (Source: The Indian Telecom Services Performance Indicators, April-June 2012)
31,206
35,825
40,775
46,117
53,331
60,972
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
Per Capita Income (@ Factor Prices in INR)
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Wireline 3.53%
Wireless 96.47%
%age share of Wireline and Wireless Phones in June 2012
The telecom sector has witnessed a continuous rising trend in the total number of telephone subscribers. From 22.81
million telephone subscribers in 1999, the number increased to 951.34 million at the end of March, 2012. The total
number of telephones stands at 965.52 million at the end of June 2012 showing an addition of 14.18 million during
the period from March to June 2012. Wireless telephone connections have contributed to this growth as their number
went up from 165.09 million in March 2007 to 919.17 million at the end of March 2012 and at the end of June 2012 it
is 934.09. The wireline connections have however, declined from 40.77 million in March 2007 to 32.17 million in
March 2012 and 31.43 million in June 2012. (Source: Annual Report 2012, DOT & The Indian Telecom Services
Performance Indicators, January- March 2012, April-June 2012)
The table below shows the growth of wireline and wireless subscriber on yearly basis from March 2007 to June 2012:
Type March’07 March’08 March’09 March’10 March’11 March ‘12 June ‘12
Wireline 40.77 39.41 37.97 36.96 34.73 32.17 31.43
Wireless 165.09 261.08 391.76 584.32 811.6 919.17 934.09
Total 205.87 300.49 429.73 621.28 846.33 951.34 965.09
Annual Growth (%) 44.88% 45.96% 43.01% 44.58% 36.22% 12.40% 1.44%
(Source: Annual Report 2012, DOT & The Indian Telecom Services Performance Indicators, January- March 2012, April-
June 2012)
Wireline vs. Wireless
The growth of wireless services has been substantial, with wireless subscribers growing at a CAGR of 42.7% since
2007. Wireless has overtaken wire lines. The share of wireless phones has increased from 80.19% in 2007 to 96.74% in
June 2012.
On the other hand, the share of wire line has steadily declined from 19.81% in 2007 to 3.26 % in June 2012. The pie
chart below shows the ratio of wire line and wireless subscribers:
(Source: Annual Report 2012, DOT & The Indian Telecom Services Performance Indicators, April-June 2012)
Tele-density, which is an important indicator of telecom penetration, increased from 18.22% in March 2007 to 70.89%
in March 2011 and 76.86% in December 2011. With the introduction of wireless phones in rural areas, there is
increasing trend in rural tele-density. The Government is taking various measures under universal service obligation
fund for expansion of mobile network in remote and rural areas. As the urban areas have got largely saturated, private
service providers are also looking for further opportunities in rural areas. (Source: Annual Report 2012, DOT)
Wireline 19.83%
Wireless 80.17%
%age share of Wireline and Wireless Phones in March 2007
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The table below shows the tele-density on yearly basis from March 2007 to June 2012:
(Source: Annual Report 2012, DOT & The Indian Telecom Services Performance Indicators, January- March 2012& April-
June 2012)
The number of telephone subscribers in India increased from 951.34 million at the end of March 2012 to 965.52
million at the end of June 2012, registering a growth of 1.49% over the previous quarter as against 2.68% during the
quarter ended March 2012. This reflects year-on-year (“Y-o-Y”) growth of 8.98% over the same quarter of last year.
The overall tele-density in India has reached 79.58 as on June 30, 2012. Subscription in urban areas grew from 620.53
million at the end of March2012 to 621.76 million at the end of June 2012; however urban tele-density slightly
declined from 169.55 to 169.03. Rural subscription increased from 330.82 million to 343.76 million, and rural tele-
density increased from 39.22 to 40.66. Share of subscription in rural areas out of total subscription increased from
34.77% at the end of March 2012 to 35.60% at the end of June 2012. (Source: The Indian Telecom Services
Performance Indicators, April-June2012).
Monthly average revenue per user (“ARPU”) for GSM service declined by 1.94%, from `97 in quarter ended March
2012 to `95 in quarter ended June 2012, with Y-o-Y decrease of 2.11% minutes of usage (“MOU”) per subscriber per
month for GSM service remained almost at the same level as in the previous quarter i.e. 346. The outgoing MOUs
(167) increased by 0.04% whereas incoming MOUs (178) declined by 0.19%. Monthly ARPU for CDMA full mobility
service has been slightly declined by 0.50%, from `75.3 in quarter ended March 2012 to INR 74.9 in quarter ended
June 2012. ARPU for CDMA has increased by 16.31% on Y-O-Y basis. (Source: The Indian Telecom Services Performance
Indicators, April-June 2012)
The table below shows key trends for GSM and CDMA operators on quarterly basis from June 2010 to June 2012:
Details Jun-10 Sep-10 Dec-10 Mar- 11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12
GSM
Subscriber base (million) 527.62 578.49 641.73 698.37 737.33 761.20 785.97 814.06 831.86
Pre-paid (% to total base) 96.16 96.43 96.65 96.81 96.65 96.91 96.95 96.87 96.84
ARPU (INR)* 120.00 144.00 110.00 100.00 98.00 93.00 96.00 97.00 95.00
MOU* 411.00 368.00 359.00 349.00 344.00 331.00 332.00 346.00 346.00
SMS per month* 40.00 44.00 46.00 44.60 45.00 45.00 36.00 37.00 38.00
CDMA
Subscriber base (million) 107.88 109.22 110.46 113.22 114.36 112.42 107.88 105.11 102.24
Pre-paid (% to total base) 93.90 94.05 93.97 94.03 94.01 93.81 93.50 93.10 92.90
ARPU (INR)* 74.00 73.00 68.00 66.00 64.00 71.00 73.00 75.00 75.00
48.1
66.39
88.84
119.45
156.94 169.55 169.03
5.89 9.46
15.11
24.31 33.83 39.22 40.66
18.22 26.22
36.98
57.74 70.89
78.66 79.58
FY '07 FY '08 FY '09 FY '10 FY '11 FY '12 Jun '12
Urban Tele-Density Rural Tele-Density Total Tele-Density
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Details Jun-10 Sep-10 Dec-10 Mar- 11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12
MOU* 300.00 283.00 270.00 263.00 238.00 230.00 226.00 229.00 229.00
SMS per month* 13.00 15.00 29.00 33.00 15.00 15.00 14.00 16.00 22.00
(Source: The Indian Telecom Services Performance Indicators, April-June 2012, January-March 2012, October-
December 2011, July-September-2011, April-June 2011, January-March 2011, October-December 2010, July-September
2010, April-June 2010)
* Figures pertain to per user per month.
The table below shows the number of wireless subscribers in India (GSM+CDMA) and subscriber of data services, as of
June 30, 2012:
Operator Number of Subscribers (million)
Bharti 187.30
BSNL 98.28
Vodafone 153.71
Unitech 45.58
Idea 117.16
Aircel 64.88
Reliance 154.60
Tata 80.23
Sistema 16.55
Videocon 5.58
Loop 3.15
MTNL 5.57
Etisalat 0.00
S Tel 0.00
HFCL 1.49
Total 934.08
(Source: Annual Report 2012, DOT & The Indian Telecom Services Performance Indicators, April-June 2012)
MOBILE VALUE ADDED SERVICES (“MVAS”) – AN OVERVIEW
Telecommunications had traditionally been a voice communication service enabling two or more people to connect
with one another. Any additional service enabling the subscriber to use the mobile phone for a host of purposes like
sending short messages, pictures, play games, listen to music, read news headlines, astrology, get flight information,
surf internet, mobile banking including mobile payments etc. Offered on telecom networks are value added services
offered by value added service providers (“MVAS Providers”). In addition to benefiting consumers MVAS is likely to
become a tool for additional revenue, service differentiation, and customer retention for service providers. (Source:
The TRAI consultation paper on MVAS July 21, 2011)
The mobile value added services such as m-banking, m-governance, location based services etc., has assumed
significance in recent times due to the rapid growth in wireless subscriber base. Consequently, the mobile phones
have transformed into a persuasive medium to deliver information services spanning various usage areas such as
governance, commerce, education and banking. Thus, m-powering is playing an instrumental role in bringing about
empowerment to all strata of society by their delivery of services. (Source: Annual Report 2012, DOT)
346.67
373.84
431.37
448.89
460.84
0 100 200 300 400 500
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
- 62 -
While the computer and internet empowered urban India, it is the mobile which is impacting common man including
in rural areas. Mobile phones are bridging the digital divide and make it possible medium for delivering a variety of
services and content. The mobile platforms, world over, are being used to provide financial and banking services, tele-
education and government services. Increasing proliferation of mobile services has also created a unique opportunity
to deliver all kinds of utility MVAS to the masses through innovative applications. (Source: The TRAI consultation paper
on MVAS July 21, 2011)
The MVAS ecosystem
The following are the broad stake-holder groups in this ecosystem:
Content owner, application provider and mobile advertisers
Technology enablers and content aggregator
Telecom service providers
Content delivery bodies: carriers and handset vendors
Content consumers: subscribers/end users
MVAS can be delivered either on-deck or through the off-deck mode. In the on-deck mode, MVAS providers undertake
the branding, marketing and selling of content/application through contractual agreements. These agreements are
not governed by any policy framework. In the off-deck model, MVAS Providers sell contents directly to the
subscribers. The content can be provided either through the operators’ portal or through their short code. MVAS
Provider needs to integrate with multiple operators to be able to use the same short code to provide services to
subscribers across carriers. However, carriers still often serve as the billing interface. (Source: The TRAI consultation
paper on MVAS July 21, 2011)
MVAS market size and growth
Market size of MVAS is estimated to reach at ` 482 billion by the year 2015 from ` 28 billion at the end of the year
2006. MVAS is considered to be important tool for empowering the common man in India. Innovative and value added
services like m-banking, m-education, m-governance, location based services etc., will be delivered to the common
man, even in the remotest corners of the country.
The graph below shows the estimated market size of MVAS:
*Estimated
28 47
75 98
122
214
482
2006 2007 2008 2009 2010 2012 2015*
- 63 -
(Source: The TRAI recommendation on Application Services May 14, 2012 & Press release dated December 07, 2011
India Telecom 2011 “M-Powering India” Press Information Bureau, accessed on January 08, 2013)
In India, SMS, ringtones and caller ring back tones constitute bulk of the value added services provided by mobile
telecom service providers presently. There are innumerable value added services like gaming, video and audio
streaming, stock quotes, news, cricket, tele-voting, chatting, astrology, which add value to the basic telecom services.
Each service differs in content, cost and demand and is customised for different segment of consumers. (Source: The
TRAI consultation paper on MVAS July 21, 2011)
Application Service
Presently, the application services market in India is centred on entertainment, music and sports (mainly cricket).The
socio-economic structure is changing with enhanced emphasis on newer applications and networking. Apart from
simple applications like e-mail, instant messaging, educational information, text chat etc., the focus is shifting to
applications like video download, advertisements, gaming, video chat, e-education, e-health, e-governance, and social
networking. (Source: TRAI Recommendations on Application Services, May 14, 2012)
Many advanced applications were not possible due to lower speed offered by 2G networks. With the proliferation of
3G and BWA services, users are getting abundance of application services developed by independent ASPs with
plethora of business models and technical implementations. Accessing the internet on mobile devices, downloading
music, video, pictures, playing games and even sending multimedia messages is extensively used by the customers.
Service convergence such as voice with mobile television, device convergence at the user end and network
convergence at core will also facilitate the rapid adoption of application services by the consumers. (Source: TRAI
Recommendations on Application Services, May 14, 2012)
The chart below shows the comparison between the growth of wireless subscribers and revenue of telecom service
providers:
(Source: TRAI Recommendations on Application Services, May 14, 2012)
Presently many new and innovative application services are being offered on wireline and these services continue to
evolve with changing technologies. There is a need to define the term application services, which was earlier termed
as value added services. According to some stakeholders the definition of application services or value added service
in existing licences is flexible and allows the access service provider to innovate and launch new applications and
services. (Source: TRAI Recommendations on Application Services, May 14, 2012)
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A typical value chain of the application services, provided through telecommunications platform, encompasses
content creators/providers, mobile advertisers, aggregators, technology enablers, telecom service providers and end
users or subscribers. Content, application aggregation and provision of technology platform is usually performed by a
single entity. It is also to be noted here that in the value chain of application services, telecom service providers are
very big entities in comparison to the content and application providers, content aggregators most of whom are
essentially small and medium sector enterprises. Mobile handset manufacturers have also started playing an
important role in the application services value chain. Advertisers are also looking for higher delivery of marketing
activities through applications platform. (Source: TRAI Recommendations on Application Services, May 14, 2012)
The figure below shows the application service value chain:
(Source: TRAI Recommendations on Application Services, May 14, 2012)
Mobile banking
Mobile phones as a medium for extending banking services have off late been attaining greater significance. The rapid
growth in users and wider coverage of mobile phone networks have made this medium an important platform for
extending banking services to customers. With the rapid growth in the number of mobile phone subscribers in India,
banks have been exploring the feasibility of using mobile phones as an alternative channel of delivery of banking
services. Some banks have started offering information based services like balance enquiry, stop payment instruction
of cheques, transactions enquiry, and location of the nearest automatic teller machine/branch etc. Banks offering
mobile banking service must ensure that customers having mobile phones of any network operator is in a position to
avail of the service. The reserve bank of India has recognised the role of another important stakeholder the mobile
network operator as technology service provider in the process of encouraging mobile banking in India. The mobile
network operators are expected to play the role of a technology service provider while banks are expected to provide
banking services. The USSD platform offers a common gateway to customers of all banks to easily access and use
mobile banking services. The major advantage of USSD is that the interbank mobile payment system could become
accessible even through low end handsets. (Source: ‘Mobile banking transactions in India - Operative Guidelines for
Banks’, RBI accessed on January 8, 2012)
The table below provides the bank wise data of volume in mobile banking transactions from June 2012 to November
2012:
Banks June ’12 July ’12 August ’12 September ’12 October ’12 November ’12
State Bank of India 2577383 2,762,262 2,748,885 2,751,449 3,001,041 3,087,845
ICICI Bank Ltd. 311,745 340,167 358,688 429,771 561,339 671,739
Axis Bank Ltd. 230,112 265,777 323,038 336,143 406,109 445,778
Content owner/ Application provider Mobile advertisers
Aggregator Technology enabler Telecom
service provider
End user
Mobile
handset manufacturer
- 65 -
Banks June ’12 July ’12 August ’12 September ’12 October ’12 November ’12
CITI Bank 67,980 53,497 50,593 67,734 133,614 167,527
HDFC Bank Ltd. 58,333 52,667 49,870 52,319 60,748 61,077
Bank of Baroda 20,304 23,291 26,872 26,515 28,644 29,950
Canara Bank 1,929 1,882 20,295 3,817 3,532 5,800
Other Banks 169,288 206,147 389,985 229,866 242,178 251,155
(Source: Bank wise volumes in mobile transactionsJune-2012, July-2012, August-2012, September-2012, October-
2012, November-2012, RBI)
The table below provides the bank wise data of value in mobile banking transactions from June 2012 to November
2012:
(` in lacs)
Banks June ’12 July ’12 August ’12 September ’12 October ’12 November ’12
ICICI Bank Ltd. 11,503.14 12,515.50 12,591.13 14,853.00 17,306.24 20,001.67
State Bank of India 11,283.00 11,992.97 12,174.66 14,772.17 18,157.87 18,065.89
Axis Bank Ltd. 2,415.01 3,575.34 4,479.09 5,037.19 5,697.26 6,167.29
CITI Bank 3,131.24 2,956.54 3,493.38 3,386.76 5,044.58 5,814.47
Bank of Baroda 307.13 351.75 388.31 469.67 566.29 597.12
HDFC Bank Ltd. 305.58 293.92 232.89 179.99 190.61 142.46
Canara Bank 103.27 81.34 111.64 96.92 110.85 172.77
Other Banks 1,622.70 2,029.79 2,015.18 2,249.49 2,691.03 2,933.81
(Source: Bank wise volumes in mobile transactions June-2012, July-2012, August-2012, September-2012, October-
2012, November-2012, RBI)
Mobile governance
A strategy and its implementation to leverage available wireless and new media technology platforms, mobile phone
devices and applications for delivery of public information and services to citizens and businesses. The mobile
governance framework of Government of India aims to utilize the massive reach of mobile phones and harness the
potential of mobile applications to enable easy and round-the-clock access to public services, especially in the rural
areas. The framework aims to create unique infrastructure as well as application development ecosystem for m-
Governance in the country. (Source: The Gazette of India, Framework for mobile governance, Ministry of
Communications & Information Technology January 2012). Various channels, such as voice, text (e-mail and SMS),
general packet radio service, USSD, SIM toolkit, cell broadcast, and multimedia messaging service will be incorporated
to ensure that all users are able to access and use the mobile based services. Bihar government has leveraged mobile
technology in state which utilizes the omnibus features of mobiles for the reporting and monitoring of public service
delivery on the ground level by using a simple SMS. (Source:
http://bpsm.bih.nic.in/bpsmnewweb/webpages/home.htm, accessed on January 08, 2013) The m-governance project
being implemented by the Kerala state information technology mission involves the utilization of all kinds of wireless
and mobile technology services, applications and devices for governance. The M-Governance project in Kerala is a
comprehensive mobile governance project aimed at enabling the 90 government departments and m-powering the
people. The mobile governance service delivery platform of Kerala has the following components (a) e-SMS (b)
multimedia messaging service gateway (c) out bound voice diallers (d) Bluetooth kiosks (Source:
http://www.itmission.kerala.gov.in/ accessed on January 08, 2013)
Numerous mobile governance programs have been launched by varied departments of government of India through
mobile applications. For the effective implementation of these program government has established mobile electronic
governance service delivery gateway (“MSDG”).The purpose of setting up the MSDG is to provide a one-stop
ecosystem for enabling the delivery of various electronic government services through mobile devices in an efficient
manner with minimum effort for the participating government departments and agencies. MSDG will also help in
enhancing the interoperability of mobile-based services among various government departments and reduce the total
- 66 -
cost of development and deployment of applications for m-Governance services. MSDG provides an integrated
platform for delivery of government services to citizen over mobile devices using SMS, USSD, LBS, or mobile
applications installed on the mobile phones.
(Source: http://mgov.gov.in/ accessed on January 8, 2012)
Location based services (“LBS”)
Location based services refer to a broad range of service that utilize the knowledge of the geographical position of a
mobile device, in order to provide service based on that information. It allows consumers to receive services and
advertising based on their geographic location. Such services can be provided in response to a consumer’s manual
input of his or her location information into the handset or by using a technology to track the location of the
consumer automatically. Through LBS information about traffic, restaurants, retail stores, travel arrangements, routes,
vehicle tracking etc. can be provided. In addition LBS can also help in law enforcement and emergency services. LBS
include tracking, information, navigation, gaming, communication, advertising, billing etc. (Source: Technology Digest,
August 2012, TRAI)
As per market forecast 2011-2015 the global location based services market is experiencing strong growth. Revenue is
expected to reach US$ 10.3bn in 2015, up from US$ 2.8bn in 2010. Some of the key factors in the recent fast uptake of
the LBS are the simplicity of the services, increasing GPS enabled handsets and smartphone adoption, success of new
business models, continued growth of mobile advertising, wider coverage and higher speed of mobile networks,
availability of the application on multiple bearers including USSD and the service reaching subscribers even with the
most basic mobile handsets. (Source: Technology Digest, August 2012, TRAI)
- 67 -
OUR BUSINESS
Overview
We are a telecom solutions company specializing in providing customized products and services using mobile
communications technology. We offer our products and services to TSPs, State Governments, enterprises and
financial institutions across India. Our products and services are classified into (i) VAS segment providing solutions
over text, voice and data to TSPs and their subscribers; and (ii) Enterprise Solutions segment providing customized
products and services to government departments, public sector companies, enterprises and financial institutions
including implementation of M-Governance projects for various State Governments. In addition, we have two
subsidiaries Getz Shoppe & Exim Private Limited and Forward Media Private Limited. Getz Shoppe & Exim Private
Limited operates in the trading of consumer durable goods whereas Forward Media Private Limited operates in the
print and digital media industry.
In the VAS segment, our products and services are classified into two parts- (i) Network VAS and (ii) Consumer VAS.
Consumer VAS includes services which are targeted at subscribers of TSPs and network VAS includes managed services
for TSPs.
In the Enterprise Solutions segment, we provide hosted solutions and technology consulting ranging from general
information technology (“IT”) consulting to specialized telecom consulting to enterprises and various government
departments. Further, we are one of the major companies in India operating in the M-Governance space having
deployed M-Governance solutions for three State Governments, namely Kerala, Goa and Nagaland. Our M-
Governance initiatives in the State of Kerala has been recognized in a World Bank report titled ‘Maximizing Mobile’ in
the year 2012
Further, with the synergies of our experience and expertise in the VAS and Enterprise domains, we are currently
putting together a mobile identity ecosystem, Mobile Express, which uses mobile digital signatures to allow its users
to digitally authenticate numerous transactions thereby allowing the mass adoption of Mobile Digital Signature
technology in India. We have recently enrolled as a GSMA associate-member and also as a mobile identity working
group member.
Our unconsolidated total income was `2,310.10 lacs for the Financial year ended March 31, 2012 and has grown at a
CAGR of 185.75% over our total income of ` 34.65 lacs for the period ending March 31, 2008. Our unconsolidated net
profit was ` 559.74 lacs for the Financial year ended March 31, 2012 as compared to ` (106.07) lacs for the period
ending March 31, 2008.
Our Competitive Strengths
We believe the following are our key competitive strengths:
Innovation and thought leadership
We have always put emphasis on process and product innovation and have strongly imbibed it into our work culture.
We believe that our flagship product ZULO, which is a usage and retention tool, is the first of its kind in the industry
and has helped TSPs sustain and grow revenues despite the tough competition present in the Indian market.
We believe that we are the pioneers of M-Governance initiatives in India and we work closely with State
Governments, central departments, nodal agencies, TSPs and regulatory bodies for providing services that enable the
consumers to avail government services on their mobile handsets. We have entered into three comprehensive M-
Governance implementation projects in India with the State Governments of Kerala, Goa and Nagaland.
We also believe that we will be the first company to launch Mobile Digital Signature technology in India and to this
effect we have signed an exclusive agreement with Valimo, a Finland based Mobile Digital Signature Company.
Long-standing relationships with TSPs and government agencies
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We have long-standing relationships with our TSPs through whom and also to whom we provide services. Our
customer contracts for VAS generally take the form of master contracts that allow us to add new products and
services rapidly with essentially the same terms and conditions as the original contract. Since our inception in
December 2006, we have not lost any major customers. We have been able to hold onto our customers because of
scalability, flexibility and constant innovation of our products and services.
Also, service deployments with our network customers involve complex hardware systems and software applications
deeply embedded within the network’s infrastructure and integrated into the network’s billing, provisioning, service
management, customer care and other core systems. In order to manage, maintain and operate the software
applications provided to our customers and integrate them into our joint product planning and new service
deployment processes, we maintain a high level of interaction and close working relationships with each of our TSP
clients.
We have also been providing services to various government agencies since the past three years and these initiatives
have been recognized by several of these government agencies.
Efficient and scalable business model
We use open source platforms to build our solutions which bring down our cost of services. In the open source
platforms, software is made available with an open source licence and the copyright holder provides the rights to
study, change and distribute the software. The use of open source platforms provides us with an advantage over many
of our competitors who use proprietary hardware and software. The use of open source platforms would also help us
keep pace with the rapid changes in technology as the development is generally available to a wide network of people
and communities who constantly provide inputs and methods to upgrade these platforms, making them more
efficient and updated. Due to these factors, use of open source platforms brings in a significant amount of flexibility
and scalability to our solutions.
Wide spread presence across India
We have servers deployed across twenty one telecom circles in India and also have local points of presence in most of
these telecom circles which help us to serve our existing customers more effectively and also generate new
customers. Further, we have also partnered with the State Governments of Kerala, Goa and Nagaland in the
implementation of the comprehensive M-Governance projects in their respective States on account of which our
implementation and support teams further strengthens our presence in these states.
Our Strategy
We aim to be a thought leader in the mobile identity domain and continue to build on our existing business. We
intend to achieve this through the following strategies:
Create a mobile identity ecosystem by using Mobile Digital Signature technology and make it available to the
masses in India
We intend to create a mobile identity ecosystem by using Mobile Digital Signature technology in India. We have
signed an exclusive license agreement with Valimo, a Finland based company having the proprietary rights to SIM
based Mobile Digital Signature technology. Further, we intend to provide this Mobile Digital Signature technology
through various other modes including SD Cards, audio jack devices, handset based secure elements, etc. Through the
proceeds of this Issue, we intend to start our pilot mobile identity project with customers of a leading financial
institution. This project would aim to provide digital authorization and authentication capabilities to these customers.
We believe that it will empower these customers to manage their financial and banking needs from the convenience
of their mobile phones. Once we have successfully completed this pilot project, we intend to scale the operation on a
national level by partnering with more enterprises, governments and financial institutions. Further, by use of this
technology, we intend to increase the number of use cases so that the number of people and the frequency of the
digital signature used by them becomes very high. Once this technology becomes main stream, we expect to become
one of the largest companies in the mobile identity space in the world in terms of the number of users.
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Take advantage of the opportunities that the Mobile Digital Signature technology would provide for enhancing
security in the enterprise space
Large enterprises having high number of employees have particular needs with respect to employee and data security.
These enterprises generally use PKI based tokens as a means to control access and prove employee identity. We
believe that the Mobile Digital Signature (wireless PKI) technology would provide a more secure, convenient and cost
effective mode of managing their employees’ digital identity. As a result of this, we expect to garner additional
revenues from enterprise clients and gain end-users in bulk in a relatively short period of time.
Continue to innovate and develop our VAS and Enterprise Solutions offerings in alignment with the changes in the
industry
Our aim in the consumer VAS domain is to create a large number of new and innovative solutions which would be in
line with fast changing user preferences. We also intend to enable TSPs in India to enhance their subscribers’ network
VAS experiences and to enable them to manage and monitor subscribers’ needs using lifecycle management solutions.
Going forward, with respect to the Enterprise Solutions segment, we intend to develop new products and services on
an ongoing basis that appeal to enterprises, specifically banks and financial institutions, which we would bundle with
our mobile identity offerings.
Set up reseller networks for better leverage of our products and solutions across verticals and partner with experts
as consultants
We intend to set up reseller networks wherein we would partner with corporates and other entities to sell our
products and services. This network would more specifically help us with Mobile Express, our mobile identity solution,
once we are successful in implementing our pilot project in Kerala. The reseller network would be used to offer our
customers with all our products and services under various business segments including that of Mobile Express. This
network would be in addition to our existing channels of marketing.
Further, we intend to bring on board experts from banking, telecom and various government sectors as consultants in
order to align ourselves to the customer expectations. We believe that this will also help us make timely upgrade and
modification to our products and services based on the changing industry dynamics and the customer preferences.
Strengthening our Research and Development capabilities
In the industry we operate in, R&D plays a very important role and is often the differentiator between leaders and
followers. We intend to continue to invest in R&D so that our R&D capabilities become one of the best in the industry
and set a benchmark. We believe that the products of our R&D activities will continue to differentiate us from our
competitors and position us well for obtaining contracts for complex and critical projects. We also intend to file a
number of patents to strengthen our IPRs.
Continue to attract, train and retain skilled employees and focus on building our brand
We intend to further develop our employee retention strategy and place special emphasis on attracting and retaining
highly skilled employees. We will continue to invest in the career development and training of our employees, with
the objective of further enhancing their technical skills and leadership capabilities.
Further, we intend to invest in developing the “MobME” brand in India. We seek to achieve this by developing new
products and moreover, by exploring avenues in which our products and services could be used, especially in the
mobile identity segment. We believe that a strong brand will contribute in attracting and retaining talented
manpower and enhancing our business operations and customer acquisition.
Business Description
VAS
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We are a key player in the mobile VAS space. In the VAS segment, we offer our products and services under two sub-
segments- (i) Network VAS and (ii) Consumer VAS. We serve leading TSPs in the country with our wide range of
innovative platforms, effective solutions and managed services.
Our products have always been designed keeping in mind effectiveness, pricing models and flexibility. We have over
five years of expertise in powering and managing the following: SMS centre (“SMSC”), which is an element forming
part of the mobile telephone network responsible for delivering SMS, USSD platform, which provides a direct way of
communication between mobile phones and the telecom operators’ computers, interactive voice response (“IVR”)
systems and out bound dialer (“OBD”) platform, which serves as a core communication tool for telecom operators to
reach out to their customers. Our flagship product ZULO, which we believe is an industry first, helps telecom
operators sustain and grow revenues despite the tough competition present in the cluttered Indian market.
Network VAS
Our network VAS product portfolio includes:
1. ZULO: ZULO, our flagship product, has been deployed nationally across the networks of two leading TSPs in
India. We have also deployed ZULO for one of the leading TSPs in Tanzania. ZULO is a usage and retention
tool that targets the low balance, low usage customers to effectively send communications to them when
they latch on to the network. ZULO consists of SMSC, OBD and a campaign management tool combined into
one box having the capability to keep watch of when the user latches back on to the network. The inbuilt
SMSC and OBD in ZULO have the capacity to process huge volumes and our delivery rates have been
estimated to be 35% more than the conventional SMSCs.
2. SMSC: Our SMSC solution is a scalable carrier grade messaging platform that provides telecom operators an
effective means of SMS communication to customers. For mobile network operators, SMS is the primary
mode of communication to its customers which warrants new players to have SMS platforms and established
players to increase their capacity to meet demand. Our SMSC solution supports their needs for high
availability and business control. The web user interface provides effective tools for campaign management
and enhanced reporting modules provide detailed analysis.
3. USSD gateways: Our USSD platforms deployed in the southern telecom circles provide state of art innovative
self-help platforms and solutions. Applications are also provided to facilitate instant messaging, balance
enquiries, self-care portals and location service on a USSD interface. USSD is a highly interactive, user
intuitive communication medium which is compatible with all handsets and is seven times faster than SMS.
The key features of our USSD platform is to include the ability to adopt client specific changes with minimum
turnaround time, detailed reporting, stack and micro level monitoring through both manual and automated
systems. The range of services provided over the USSD platform include USSD based offer activations, USSD
menu based self-help platforms, revenue oriented pre-paid services, for example call me back, balance
transfer etc. and a USSD application suite including USSD based mobile games like ‘Tic Tac Toe’, ‘Hangman’,
etc.
4. Campaign manager solution: Our campaign manager solution is a closed loop marketing tool designed to give
an end to end solution for managing the lifecycle of marketing campaigns. The campaign manager enables
the service provider to respond to changing market environments with marketing initiatives that push highly
targeted messages to niche customer segments. Tightly integrated with the ZULO platform, the campaign
manager provides an end-to-end solution, thereby saving on network resources.
5. IVR: Our IVR solutions have been deployed in southern circles of Kerala, Chennai and Tamil Nadu for a leading
TSP. Our IVR platforms give customers the flexibility to receive and update account information, subscribe to
best-fit plans, provide feedback, seek personal care and provision new value added services. It is also used as
a self-care solution for customers to self-provision suitable tariff offers, VAS schemes and subscription
services being offered by the mobile service provider from time to time.
6. OBD: Our OBD platform is an automated voice dialler application that automates the functionality of
outbound call operations. In situations where outbound calls need to be made with relatively lower levels of
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interaction except passing the campaign message, the OBD serves as an effective and efficient mode of
campaigning.
Contracts for network VAS:
Most of our contracts for Network VAS are based on transaction model in which we derive revenue on a per
transaction basis. These are typically master contracts that allow our new services to be quickly deployed under the
contract’s existing terms and conditions by using an addendum or an amendment without the need to enter into and
negotiate a new contract.
Consumer VAS
We were the first in India to offer Multimedia Messaging Service (“MMS”) based content sharing platform. We deliver
entertainment and information to over eighty lac people across five major telecom operators in India and abroad. Our
VAS products are powered by content from industry leaders in Entertainment and News. Our solutions serve premium
content across all varieties of mobile handsets ranging from entry level handsets to smart phones, using SMS, Wireless
Application Protocol and USSD platforms.
Our products in the consumer VAS space comprise of:
1. Picture Post/Photo Alerts/ Mobile Magazine: We run alert services for some of the leading TSPs in India and
abroad which uses mobile internet to distribute premium content on topics like Bollywood, news, sports,
travel, jokes, recipes, etc. This is a WAP based service delivering rich media content to the subscriber by
means of SMS containing WAP links. It also provides an interactive platform for subscribers to discuss and
comment on posts and also share it online over social networking sites. The service also has live chat rooms
for subscribers to discuss stories of their choice.
2. Video blogs: Powered by exclusive content from a leading media and entertainment company, we deliver to
the subscribers’ daily exclusive video alerts on various topics like Bollywood, fashion, cricket, etc. Video blogs
also enables users to share their favourite videos to their friends through social networking sites.
3. Funzone/USSD application suit: It is a self-help USSD portal that provides host of highly interactive
applications and games to a mobile user. Subscribers can also access specific information like entertainment,
sports, news, etc. through it.
4. Sports on demand: Sports on demand is an easy and convenient way to stay updated on live scores, news,
fixtures, results, etc., even without an internet connection. Sports on demand covers a range of sports
including cricket, football, golf, tennis and Formula 1.
Contracts with TSPs:
Most of our contracts with TSPs for consumer VAS are on a revenue sharing basis pursuant to which we receive a fixed
percentage of the net revenue generated by these services. Further, most of our contracts with TSPs for consumer
VAS are typically master contracts that allow our new products and services to be quickly deployed under the
contracts' existing terms and conditions by using an addendum or an amendment, without the need to enter into and
negotiate a new contract.
ENTERPRISE SOLUTION
Our Enterprise Solutions’ vertical serves a diverse client-base including enterprises, banks and government bodies
with technology-consulting to fulfil their evolving technology needs. The services offered range from general IT-
consulting to specialized telecom-consulting. The specialized telecom-offerings by our Enterprise Solution vertical
encapsulate all channels of mobile communications i.e. SMS, voice, USSD and data.
Our enterprise services include:
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‘Fastalerts’:
Fastalerts is an enterprise bulk messaging solution used by corporates and other customers for their promotional
activities. Along with SMS solutions we also offer couple of other services such as long code and short code services
and additionally a customer relationship management tool for the client to monitor and track his promotional
activities. Fastalerts also undertakes managed SMS campaigns wherein we manage end-to-end activities from
scheduling to reports and analytics. In ‘Fastalerts’, we also offer application programming interface (“API”) integration
where the client wants to integrate our messaging solutions with its own product. We also provide round the clock
technical support with manual and automated monitoring systems. Fastalerts also has a reseller network where we
offer white label solutions to our clients who are interested in becoming our reseller, thereby offering a rebranded
version of our solutions.
M-Governance:
M-Governance can be broadly defined as the delivery of governance related services via mobile communication
devices. M-Governance serves as a tool to facilitate citizen to citizen, citizen to government and government to citizen
interactions, which can be leveraged to ensure good governance and quicker resolution of citizen’s pressing problems.
We believe that we are the pioneers in the field of M-Governance in India having been awarded the first
comprehensive M-Governance project launched by the State of Kerala in 2009. The project covered over 90
government departments and was envisaged to become the primary reference for future M-governance
implementations in India. Subsequently, we have built on our strengths and have implemented M-Governance
projects in two more states, Goa and Nagaland. We work closely with State Governments, central departments, nodal
agencies, telecom operators and regulatory bodies to provide services that empower citizens.
As a measure of the effectiveness and uniqueness of our solutions, we have received several international accolades
/references for our efforts, as described below:
The request for expressions of interest for individual consultant, for design of service delivery platform for M-
Governance services in Afghanistan, published in December 2010 by the Ministry of Communications and
Information Technology, Government of India, referred to the Kerala model of M-Governance which we
implemented.
A case study on the M-Governance project in the state of Kerala which mentions our efforts has been
published in chapter 6 of the World Bank report titled ‘Maximizing Mobile’ in the year 2012, which highlights
the latest trends and best practices in information and communication technologies for development.
The Co-Chief Executive Officer of our Company had the unique opportunity of presenting a paper on Kerala
M-Governance at the international conference, “World Wide Web Technology, Standards and
Internationalization Conference” in 2010. The conference was hosted by the Department of Information
Technology, Government of India and World Wide Web Consortium (W3C). This paper has been referred to in
the document titled “Mobile Technologies and Empowerment: Enhancing human development through
participation and innovation” published by the United Nations Development Programme in 2012.
In the states of Kerala, Goa and Nagaland, we have established an M-Governance service delivery platform (“SDP”).
The M-Governance SDP is the touch-point of various channels of mobile communication like SMS, voice, USSD and
data across various TSPs. It forms the core infrastructure using which various citizen centric services are provided on
behalf of various government departments. In Kerala, Goa and Nagaland, Government officials can now conduct intra
and inter-departmental communication using the official bulk SMS platform called the e-SMS.
MOBILE EXPRESS
With the synergies of our experience and expertise in the VAS and Enterprise Solutions domain, we are currently
putting together a mobile identity ecosystem, Mobile Express, which uses Mobile Digital Signature to allow its users to
digitally authenticate numerous transactions and thereby allow for the mass adoption of Mobile Digital Signature
technology in India.
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Digital signature is a cryptographic method for demonstrating the authenticity of a digital message or document,
commonly used for software distribution and financial transactions. Currently in India, digital signature is available to
users as a preinstalled program or on a USB stick/ pen drive. To use that digital signature, one needs a computer,
working internet connection, digital signature software pre-installed on the computer and a username and password.
The requirement for the above infrastructure elements restricts the wide spread usage and adoption of the digital
signature technology. We intend to get around this limiting factor by embedding the digital signature on a mobile
device.
Using this technology, we intend to set up the world’s largest mobile payment ecosystem in Kerala, initially and pan
India, later. Further, in order to deploy this technology in India, we have signed an exclusive agreement with Valimo; a
Finland based global digital security company, who has the sole rights to this technology. For this technology to gain
mass acceptance and achieve its true potential, we require support from various bodies such as banks, financial
institutions, TSPs, Digital Signature Certifying Authorities, etc.
We are currently in talks with some of the leading financial institutions, TSPs and certifying authorities for piloting this
technology in the State of Kerala. Using the proceeds of this issue, we intend to set up the basic infrastructure for the
pilot project in Kerala which can be scaled nationally at a later stage. The operation of the Mobile Digital Signature is
based on the wireless PKI technology.
Digital signature as per the Information Technology Act, 2000 are a valid and legally recognised equivalent to normal,
everyday signatures, and anything that you can authorise in real life using your signature can now be signed through
your mobile phone. Digital signatures are a legal standard that works on an industry standard PKI. Public keys, when
implemented correctly, provide a safe and secure mechanism for validating your identity. Public keys are one half of a
"keypair" generated using a mature security solution called public key encryption. The other half is called a private key
and is kept private known only to the signer. Anything that is signed by the private key can only be decrypted by the
public key, thus providing identity validation. In a mobile digital signature, this keypair is generated during the
registration process directly on the Crypto SIM, and in addition, the private key never leaves the SIM, making the
solution extremely secure.
A user gives his or her phone number or some other unique identifier to the online service, such as online banking.
This identifier is first checked by an ID Server. The ID Server then asks the Signature Server to send an authentication
or signing request via a Messaging Server to his or her mobile via an encrypted SMS. A security client on the user’s
mobile then informs him or her about the transaction that is now being conducted, asks them to approve it, and then
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asks them to verify that the mobile is in the hands of rightful owner by requesting that the user enter their own PIN.
Once the correct PIN is entered, the security client signs the transaction and sends it via the Messaging Server to the
Signature Server for validation. The Signature Server then sends the signature to the ID Server for validation and to
grant or deny access to the service or to accept the secured transaction.
Therefore, this technology makes the process simple and intuitive. Say a user wishes to confirm a payment transaction
on his or her bank’s website. He or she simply presses the ‘authorize’ button on the website of the bank and then in
seconds a message appears on his or her mobile's screen stating the details of the transaction for their verification. If
correct, the user presses ’OK’, enters the PIN code when prompted and then after a few seconds, the bank’s website
tells the user that the confirmation is ‘OK’ and he or she also receives a confirmation message on their mobile.
This technology removes the need to remember unsecure passwords or carry extra devices. The Mobile Digital
Signature works for all services, all channels and has legal validity. Very simply, the Mobile Digital Signature
technology combines high level of security and user convenience.
The benefits of this technology are that, it is:
I. Safe:
a. It uses a PKI based digital signature
i. It guarantees signer authenticity, data integrity & non-repudiation of signed documents
b. It is embedded on the Secure Element
i. This protects it from virus attacks and other ways of tampering with the operating system
of a computer or a mobile
c. No passwords are sent or saved in a separate location
i. The PIN is stored locally on the Secure Element
II. Simple
a. Unlike internet banking which requires various passwords at different levels of access, this enables
the transaction to be executed by entering just one PIN on the mobile
III. Convenient
a. It can be used anytime and anywhere and does not require internet access as it uses the SMS
functionality of the mobile.
SALES AND MARKETING
Our sales and marketing strategy is targeted at increasing market awareness of our brand and services, gaining new
business from target customers, bundling different services and providing them to existing customers and promoting
repeat business from existing customers. Our executive management team is actively involved in business
development and the management of our customer relationships. We have people in each of our operating markets
focusing on existing and prospective customer. Each customer or account is assigned an accounts manager, who is
responsible for daily interaction with the customer in conjunction with service delivery teams. We believe that our
close interaction with customers enables us to actively identify and target new areas of business.
COMPETITION
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Our Company primarily faces competition from telecom service companies like OnMobile Global Limited, One97
Communications Limited, Spice Digital Limited, Comviva Technologies Limited in the VAS segment and ValueFirst
Digital Media Private Limited and Spice Digital Limited in the enterprise segment, amongst others.
INTELLECTUAL PROPERTY RIGHTS
We have 21 trademark registrations and have filed for two patent applications, one each in U.S. and India. For more
details, please see “Government and Other Approvals” at page 232 of the Draft Red Herring Prospectus.
EMPLOYEES
As on December 31, 2012, we had 126 permanent employees. Our Company ensures that our employees are up-to-
date with current trends in our industry and accomplishes this by providing professional training to employees at all
levels. Our employees are not unionized and we have never experienced any work stoppages. We believe that our
employee relations are good.
INSURANCE
The following table sets out the insurance policies that we maintain for our assets, all of which is in effect until
October 13, 2013:
Sr.
No. Type of Policy Insurer Issue Date Expiry Date
Sum Insured
(in `)
1. Burglary The Oriental Insurance
Company Limited
October 14, 2012 October 13, 2013 1,24,64,024
2. Standard fire and
special peril
The Oriental Insurance
Company Limited
October 14, 2012 October 13, 2013 1,24,64,024
PROPERTIES
Our Registered Office is located at 41/3197, E&E2, 4th Floor, Bhagheeratha Residency, Banerji Road, Kacherippady,
Kochi 682018. Details of the other properties that we currently own, lease or licence in India are set forth in the table
below:
Purpose Location Owned, Leased
or Licensed
Guest house Bhagheeratha Residency, Apartment No - 7A, 41/3197-J, Banerji Road, Ernakulam, Kochi-682
018 Owned
Guest house Flat No. B3 - Flamingo, Green Acres, Tatapuram, Ernakulam, Kochi - 682018 Owned
Guest house Bhagheeratha Residency 41/3197-A, Ground Floor, Banerji Road, Kacheripady, Cochin -
682018 Leased
Registered
Office
41/3197 E & E2,Bhageerata Residency Fourth Floor, Banerji Road, Kacheripady, Cochin -
682018 Leased
Guest House 41/3197 D-2, 3rd Floor Bhagheeratha Square, Banerji Road, Ernakulam, Kochi-682 018 Leased
Guest house Flat no: C12A, First Floor, Tata Housing Development Company Limited., Green Acres,
Ernakulam - Kochi - 682018 Leased
Guest house House No. A-2-Fire Crest, Ground Floor, Tata Housing Development Company Limited., Green
Acres, Ernakulam, Kochi - 682018 Leased
Guest house Flat No. C-1, Pelican Gardens, Green Acres, Tatapuram, Ernakulam, Kochi - 682018 Leased
Guest house 1B in the first floor, Yasoram Sowparnika Apartments, T. D. Road, Ernakulam, Cochin –
682035 Leased
Guest house No. 202, Ujwal Bhavishya Complex, Premises No. 6-3-1219/24, Uma Nagar, Kundan Bagh,
Begumpet, Hyderabad - 500016, AP Leased
Guest house Flat 2 SS Prayag apartment No 4 ,Puran Prakash Rd Balaji Nagar, Royapettah, Chennai 600014 Leased
Guest house Flat No-IC1/406, Ivory Court, Essel Tower, M.G. Road, Gurgaon, Haryana, 122009 Haryana Leased
Guest house MobME Wireless Solutions Limited, Flat No:7, 4th Floor, Dhanush Kutti Co-op Housing Society
15th Road, Bandra West 400050,Mumbai Leave & Licensed
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REGULATIONS AND POLICIES IN INDIA
The following description is a summary of certain sector specific laws and regulations in India, which are applicable to
our Company and Subsidiaries. The information detailed in this section has been obtained from publications available
in the public domain. The regulations set out below may not be exhaustive, and are only intended to provide general
information to the investors and are neither designed nor intended to be a substitute for professional legal advice.
The Information Technology Act, 2000
The Information Technology Act, 2000 (“IT Act”) was enacted with the purpose of providing legal recognition to
electronic transactions and facilitating electronic filing of documents. In addition to providing for the recognition of
electronic records, creating a mechanism for the authentication of electronic documentation through
electronic/digital signatures, the IT Act also provides for electronic governance and further it also provides for civil and
criminal liability including fines and imprisonment for various computer related offenses. These include offences
relating to unauthorized access to computer systems, modifying the contents of such computer systems without
authorization, damaging computer systems, the unauthorized disclosure of confidential information and computer
fraud. Penalties are provided for cyber-crimes which include tampering with computer source document and sending
offensive message through communication device, in addition to provision of compensation in certain cases.
National Telecom Policy, 2012
The National Telecom Policy, 2012 (“NTP 2012”) was approved by the Government on May 31, 2012. The policy
envisions providing secure, reliable, affordable and high quality converged telecommunication services anytime,
anywhere. The NTP 2012 lists various strategies in relation to mobile technology which include, inter alia: (i) to
reposition the mobile device as an instrument of socio-economic empowerment of citizens ; (ii) reposition the mobile
phone from a mere communication device to an instrument of empowerment that combines communication with
proof of identity, fully secure financial and other transaction capability, multi-lingual services and a whole range of
other capabilities that ride on them and transcend the literacy barrier ; (iii) to leverage the mobile device and
subscriber identity module card with enhanced features for enabling secure transactional services including online
authentication of identity and financial services ; and (iv) to facilitate establishment of a national mobile property
registry for addressing security, theft and other concerns including reprogramming of mobile handsets . Further, one
of the objectives of NTP 2012 is to enable citizens to participate in and contribute to electronic governance in key
sectors like health, education, skill development, employment, governance, banking etc. to ensure equitable and
inclusive growth. Additionally, NTP 2012 aims to optimize delivery of services to consumers irrespective of their
devices or locations by fixed mobile convergence thus making available valuable spectrum for other wireless services. .
The NTP 2012 will be made operational by bringing out detailed guidelines, as may be considered appropriate, from
time to time.
Mobile banking transactions in India
Mobile phones as a medium for providing banking services have been attaining greater importance. In order to ensure
a level playing field and considering that the technology is relatively new, reserve bank of India has brought out a set
of operating guidelines in the year 2008 for adoption by banks. Information security is most critical to the business of
mobile banking services and its underlying operations. Therefore, technology used for mobile banking must be secure
and should ensure confidentiality, integrity, authenticity and non-repudiability.
Foreign Direct Investment
In terms of the consolidated FDI policy circular 1 of 2012 (effective from April 10, 2012), issued by the Department of
Industrial Policy and Promotion, 100% foreign direct investment in Information Technology sector is permitted.
The Micro, Small and Medium Enterprises Development Act, 2006
The Micro, Small and Medium Enterprises Development Act, 2006 (“MSME Act”) was enacted with the purpose of
facilitating the promotion and development and enhancing the competitiveness of micro, small and medium
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enterprises. The MSME Act provide guidelines or instruction to micro, small and medium enterprises for development
of skills in the employees, management and entrepreneurs; provisioning for technological upgradation; providing
marketing assistance or infrastructure facilities. The government through the MSME Act, issue guidelines or
instructions from time to time for smooth flow of credit to such enterprises, minimize the incidence of sickness among
and enhance the competitiveness of such enterprises.
Intellectual Property Rights
The nature of our business involves the generation and use of intellectual property for the protection of which we rely
on the legal regime governing the acquisition and protection of intellectual property in India. Such laws are briefly
summarised below:
Patents
Patent is a statutory right for the intellectual property relating to an invention, for a limited period granted by the
Government to the patentee in exchange of full disclosure of his invention.
Patent registration and protection in India is governed by the Patents Act, 1970 as amended, and the Patents
(Amendment) Rules, 2006. The invention to be patentable should satisfy the criterion of novelty, inventive step and
industrial application. As per Section 2 (ja) of the Patents Act, 1970 “inventive step” means a feature of an invention
that involves technical advance as compared to existing knowledge or having economic significance or both and that
makes the invention not obvious to person skilled in the art. The Patents Act, 1970 excludes certain inventions from
the purview of patentability. Such inventions inter alia include:
(a) Frivolous or contrary to well-established natural laws;
(b) Contrary to public order or morality or which causes serious prejudice to human, plant or animal life, health
or environment;
(c) Scientific principle, abstract theory or discovery of any living thing or non-living substance occurring in
nature;
(d) A method of agriculture or horticulture;
(e) A mere scheme, rule or method of performing mental act or playing games;
(f) A presentation of information; and
(g) Topography of integrated circuits etc.
The grant of a patent involves various stages which are:
(a) Making an application;
(b) Publication and examination of the patent application;
(c) Term of the patent granted under the Patents Act, 1970 is 20 years from the date of filing of application for
the patent, subject to payment of renewal fee; and
(d) Opposition
International Patent Protection Mechanisms
The extent of patent protection granted by any national patent law is limited to the jurisdiction of the country of
registration of the said patent. Therefore, the protection of patents on an international scale ordinarily requires that
patent applications be filed and granted in multiple jurisdictions. In order to avoid multiplicity of applications,
mechanisms under various international treaties have evolved providing for the effective filing of simultaneous patent
applications in multiple jurisdictions by filing of a single international application. The Patent Co-operation Treaty,
1970, (“PCT”) creates one such mechanism whereby filing an application under the PCT results in the effective filing of
a separate application in each of several designated countries under the PCT. India is a signatory to the PCT.
Copyright Protection
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The Copyright Act, 1957 (“Copyright Act”) governs copyright protection in India. Under the Copyright Act, copyright
may subsist in original literary, dramatic, musical or artistic works, cinematograph films, and sound recordings.
Software, both in source and object code, constitutes a literary work under Indian law and is afforded copyright
protection. Following the issuance of the International Copyright Order, 1999, subject to certain exceptions, the
provisions of the Copyright Act apply to nationals of all member states of the World Trade Organisation. While
copyright registration is not a prerequisite for acquiring or enforcing a copyright in an otherwise copyrightable work,
registration constitutes prima facie evidence of the particulars entered therein and creates a rebuttable presumption
savouring the ownership of the copyright by the registered owner. Copyright registration may expedite infringement
proceedings and reduce delay caused due to evidentiary considerations. Once registered, the copyright protection of
a work lasts for a 60-year period following the death of the author. Reproduction of a copyrighted work for sale or
hire, issuing of copies to the public, performance or exhibition in public, making a translation of the work, making an
adaptation of the work and making a cinematograph film of the work without consent of the owner of copyright are
all acts which expressly amount to an infringement of copyright. With respect to computer software, in addition to the
above, any unauthorised sale and commercial rental of software also amount to infringement of copyright. The
Copyright Act also prescribes certain fair use exceptions which permit certain acts which are otherwise considered
copyright infringement. In respect of computer software, these fair use exceptions would include:
(a) the making of copies or adaptations of a computer program by the lawful possessor of a copy of such
computer program in order that it may be utilised for the purposes for which it was supplied;
(b) the right of the lawful possessor to obtain any other essential information for interoperability of an
independently created computer program, if that information is not otherwise readily available;
(c) the observation, study, or test of functioning of the computer program in order to determine the ideas and
principle which underline any elements of the program while performing such acts necessary for the
functions for which the computer program is supplied; and
(d) the making of copies or adapting the computer program from a personal legally obtained copy for any non-
commercial personal use.
The remedies available in the event of infringement of copyright under the Copyright Act include civil proceedings for
damages, account of profits, injunction and the delivery of the infringing copies to the copyright owner. The Copyright
Act also provides for criminal remedies including imprisonment of the accused and the imposition of fines and
seizures of infringing copies. A third set of remedies are administrative or quasi-judicial remedies which are
prosecuted before the Registrar of Copyright to ban the import of infringing copies into India and the confiscation of
infringing copies.
International Treaties for Copyright Protection
India is a signatory to the Convention of International Union for the Protection of Literary and Artistic Works (“Berne
Convention”), the Universal Copyright Convention, 1952, (“UCC”) the Rome Convention for the Protection of
Performers, Producers of Phonograms and Broadcasting Organisations, 1961 and as a member of the World Trade
Organisation is a signatory to the Agreement on Trade Related aspects of Intellectual Property Rights (“TRIPS
Agreement”). The TRIPS Agreement embodies a set of minimum standards that all signatories have to adhere to in
respect of all forms of intellectual property protection, including copyright.
The Berne Convention requires that the signatory countries provide the same rights to foreigners from other member
countries as to their own nationals and mandates automatic protection not subject to procedural formalities. It also
provides for minimum substantive standards of protection, dealing with the duration of copyright and the exclusive
rights which the author shall hold. While the Berne Convention does not prescribe what works are required to be
protected under it, computer software has been brought under its purview by means of Article 10 of the TRIPS
Agreement.
The UCC provides for similar protection, including national treatment and minimum substantive rights to be granted
to copyright holders. The substantive provisions include the right of foreign national of a signatory country whose
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work was first published outside a signatory state to claim copyright protection in that signatory state under the UCC
upon the printing of a copyright symbol and certain other information.
Trademarks
The Trade Marks Act, 1999 (“Trade Marks Act”) governs the statutory protection of trademarks in India. In India,
trademarks enjoy protection under both statutory and common law. Indian trademarks law permits the registration of
trademarks for goods and services. Certification trademarks and collective marks are also registered under the Trade
Marks Act. An application for trademark registration may be made by any person claiming to be the proprietor of a
trademark and can be made on the basis of either current use or intention to use a trademark in the future. The
registration of certain types of trademarks is absolutely prohibited, including trademarks that are not distinctive and
which indicate the kind or quality of the goods. Applications for a trademark registration may be made for in one or
more international classes. Once granted, trademark registration is valid for ten years unless cancelled. If not renewed
after ten years, the mark lapses and the registration for such mark have to be obtained afresh. While both registered
and unregistered trademarks are protected under Indian law, the registration of trademarks offers significant
advantages to the registered owner, particularly with respect to proving infringement. Registered trademarks may be
protected by means of an action for infringement, whereas unregistered trademarks may only be protected by means
of the common law remedy of passing off. In case of the latter, the plaintiff must, prior to proving passing off, first
prove that he is the owner of the trademark concerned. In contrast, the owner of a registered trademark is prima facie
regarded as the owner of the mark by virtue of the registration obtained.
Labour Law Legislations
Some of the labour laws applicable to our Company and its workforce have been discussed below:
Employees (Provident Fund and Miscellaneous Provisions) Act, 1952
The Employees (Provident Fund and Miscellaneous Provisions) Act, 1952, as amended (“EPF Act”) applies to
establishments employing over 20 employees and such other establishments and industrial undertakings as notified
by the government of India from time to time. It requires all such establishments to be registered with the State
provident fund commissioner and requires such employers and their employees to contribute in equal proportion to
the employees’ provident fund the prescribed percentage of basic wages and dearness and other allowances payable
to employees. The EPF Act also requires the employer to maintain registers and submit a monthly return to the State
provident fund commissioner.
Employees State Insurance Act, 1948
The Employees State Insurance Act, 1948, as amended (“ESI Act”) provides for certain benefits to employees in case of
sickness, maternity and employment injury. All employees in establishments covered by the ESI Act are required to be
insured, with an obligation imposed on the employer to make certain contributions in relation thereto. In addition,
the employer is also required to register itself under the ESI Act and maintain prescribed records and registers.
Payment of Gratuity Act, 1972
The Payment of Gratuity Act, 1972 provides for payment of gratuity to employees employed in factories, shops and
other establishments in which ten or more persons are employed or were employed on any day of the preceding
twelve months and in such other establishments in which ten or more employees are employed or were employed on
any day of the preceding twelve months, who have put in a continuous service of 5 years, in the event of their
superannuation, retirement, resignation, death or disablement due to accidents or diseases, as notified by the Central
Government from time to time. The rule of ‘5 year continuous service’ is however relaxed in case of death or
disablement of an employee. Gratuity is calculated at the rate of 15 days wages for every completed year of service
with the employer. Presently, an employer is obliged for a maximum gratuity pay out of ` 1 million for an employee.
Penalties are prescribed for non-compliance with statutory provisions.
The Minimum Wages Act, 1948
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The Minimum Wages Act, 1948, as amended, provides a framework for State governments to stipulate the minimum
wage applicable to a particular industry. The minimum wage may consist of a basic rate of wages and a special
allowance; or a basic rate of wages and the cash value of the concessions in respect of supplies of essential
commodities; or an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the
concessions, if any. Workmen are to be paid for overtime at overtime rates stipulated by the appropriate government.
Contravention of the provisions of this legislation may result in imprisonment for a term up to six months or a fine up
to ` 500 or both.
The Payment of Wages Act, 1936
The Payment of Wages Act, 1936 is enacted to regulate the period and payment of wages, overtime wages and
deductions from wages and also to regulate the working hours, overtime, weekly holidays of certain classes of
employed persons. The Payment of Wages Act, 1936 contains provisions as to the minimum wages that are to be fixed
by the appropriate governments for the employees, entitlement of bonus of the employees, fixing the payment of
wages to workers and ensuring that such payments are disbursed by the employers within the stipulated time frame
and without any unauthorized deductions.
The Payment of Bonus Act, 1965
The Payment of Bonus Act, 1965, as amended provides for payment of minimum bonus to factory employees and
every other establishment in which 20 or more persons are employed and requires maintenance of certain books and
registers and filing of monthly returns showing computation of allocable surplus, set on and set off of allocable surplus
and bonus due.
The Contract Labour (Regulation and Abolition) Act, 1970
The purpose of the Contract Labour (Regulation and Abolition) Act, 1970 is to regulate the employment and protect
the interests of labourers who are hired on the basis of individual contracts. In the event that any aspect of the activity
is outsourced and is carried out by labourers hired on a contractual basis, then compliance with the Contract Labour
(Regulation and Abolition) Act, 1970 will also be necessary.
The Maternity Benefit Act, 1961
The purpose of the Maternity Benefit Act, 1961 is to regulate the employment of pregnant women and to ensure that
they get paid leave for a specified period during and after their pregnancy. It provides, inter alia, for payment of
maternity benefits, medical bonus and enacts prohibitions on dismissal, reduction of wages paid to pregnant women,
etc.
Environmental Legislations
The major statutes in India which seek to regulate and protect the environment against pollution related activities in
India include the Water (Prevention and Control of Pollution) Act 1974, the Air (Prevention and Control of Pollution)
Act, 1981 and the Environment Protection Act, 1986. The basic purpose of these statutes is to control, abate and
prevent pollution. In order to achieve these objectives, Pollution Control Boards (“PCBs”), which are vested with
diverse powers to deal with water and air pollution, have been set up in each state. The PCBs are responsible for
setting the standards for maintenance of clean air and water, directing the installation of pollution control devices in
industries and undertaking inspection to ensure that industries are functioning in compliance with the standards
prescribed. These authorities also have the power of search, seizure and investigation if the authorities are aware of
or suspect pollution that is not in accordance with such regulations.
Other Legislations
The Indian Contract Act, 1872
The Indian Contract Act, 1872 (“Contract Act”) codifies the way in which a contract may be entered into, executed,
implementation of the provisions of a contract and effects of breach of a contract. A person is free to contract on any
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terms he chooses. The Contract Act consists of limiting factors subject to which contract may be entered into,
executed and the breach enforced. It provides a framework of rules and regulations that govern formation and
performance of contract. The contracting parties themselves decide the rights and duties of parties and terms of
agreement.
The Specific Relief Act, 1963
The Specific Relief Act, 1963 is complimentary to the provisions of the Contract Act and the Transfer of Property Act,
as the Act applies both to movable property and immovable property. The Act applies in cases where the Court can
order specific performance of a contract. Specific relief can be granted only for purpose of enforcing individual civil
rights and not for the mere purpose of enforcing a civil law. ‘Specific performance’ means Court will order the party to
perform his part of agreement, instead of imposing on him any monetary liability to pay damages to other party.
Consumer Protection Act, 1986
The Consumer Protection Act, 1986 seeks to provide better protection of interests of the consumers and for that
purpose to make provision for establishment of consumer councils and other authorities for the settlement of
consumer’s disputes and for matters connected therewith. It seeks to promote and protect the rights of consumers.
To provide steady and simple redressal to consumers’ disputes, a quasi-judicial machinery is sought to be set up at the
district, state and central levels. The quasi-judicial bodies will observe the principles of natural justices and have been
empowered to give relieves of a specific nature and to award wherever appropriate compensation to consumers.
Penalties for non-compliance of the orders given by the quasi-judicial bodies have also been provided.
The Companies Act, 1956
The Companies Act, 1956 deals with laws relating to companies and certain other associations. It was enacted by the
parliament in 1956. The Companies Act primarily regulates the formation, financing, functioning and winding up of
companies. The Act prescribes regulatory mechanism regarding all relevant aspects, including organizational, financial
and managerial aspects of companies. Regulation of the financial and management aspects constitutes the main focus
of the Companies Act. In the functioning of the corporate sector, although freedom of companies is important,
protection of the investors and shareholders, on whose funds they flourish, is equally important. The Companies Act
plays the balancing role between these two competing factors, namely, management autonomy and investor
protection.
Shops and Commercial Establishments Act
The state-wise applicable shops and establishments acts deals with shops and establishments. As per these acts, any
shop or commercial establishment has to obtain a certificate of registration from the supervising inspector and has to
comply with certain rules laid down therein. These statutes and rules and regulations framed thereunder regulate the
opening and closing hours of shops and commercial establishments, daily and weekly work hours, closing dates and
holidays, health and safety of persons working in shops and commercial establishments, payment of wages,
maintenance of records and registers by the employers, among others.
Transfer of Property Act, 1882
The transfer of property, including immovable property, between living persons, as opposed to the transfer of
property by the operation of law, is governed by the Transfer of Property Act, 1882 (“T.P. Act”). The T.P. Act
establishes the general principles relating to the transfer of property, including, among other things, identifying the
categories of property that are capable of being transferred, the persons competent to transfer property, the validity
of restrictions and conditions imposed on the transfer and the creation of contingent and vested interest in the
property.
Registration Act, 1908
The Registration Act, 1908 (“Registration Act”) has been enacted with the object of providing public notice of the
execution of documents affecting the transfer of an interest in immoveable property. The purpose of the Registration
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Act is the conservation of evidence, assurances, title, and publication of documents and prevention of fraud. It details
the formalities for registering an instrument. Section 17 of the Registration Act identifies documents for which
registration is compulsory and includes, among other things, any non-testamentary instrument which purports or
operates to create, declare, assign, limit or extinguish, whether in the present or in future, any right, title or interest,
whether vested or contingent, in immovable property of the value of ` 100 or more, and a lease of immovable
property for any term exceeding one year or reserving a yearly rent. A document will not affect the property
comprised in it, nor be treated as evidence of any transaction affecting such property (except as evidence of a
contract in a suit for specific performance or as evidence of part performance under the T.P. Act or as collateral),
unless it has been registered.
Stamp Act
Stamp duty needs to be paid on all documents specified under the applicable stamp act and at the rates specified in
the Schedules there under. The rate of stamp duty varies from state to state. The stamp duty is payable on
instruments at the rates specified in the applicable stamp act. The applicable rates for stamp duty on these
instruments, including those relating to conveyance, are prescribed by state legislation. Instruments chargeable to
duty under the stamp act which are not duly stamped are incapable of being admitted in court as evidence of the
transaction contained therein. The stamp act also provides for impounding of instruments which are not sufficiently
stamped or not stamped at all.
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HISTORY AND CERTAIN CORPORATE MATTERS
Our Company was incorporated on December 12, 2006 in Kerala under the Companies Act as a private limited
company under the name ‘MobME Wireless Solutions Private Limited’ with the RoC and was subsequently changed to
‘MobME Wireless Solutions Limited’ vide a fresh certificate of incorporation dated January 15, 2013. The registered
office of our Company was changed from the Alappuzha to Kochi vide board resolution dated July 28, 2011.
For details in relation to our activities, services, products, our growth, technology, market, managerial competence
and capacity built-up, our standing with reference to our prominent competitors, major suppliers and customers,
please see “Our Business” and “Industry Overview” on pages 67 and 58, respectively of the Draft Red Herring
Prospectus.
Our Company has 35 equity shareholders as on the date of filing of the Draft Red Herring Prospectus. For further
information, see “Capital Structure” on page 24 of the Draft Red Herring Prospectus.
The Registered Office is located at 41/3197, 4th
Floor, Bhagheeratha Square, Banerji Road, Kacherippady, Kochi
682018.
Main Objects of our Company
The main objects contained in the Memorandum of Association of our Company are as follows:
1. “To carry on the business of mobile media Content aggregator and mobile marketing.
2. To carry out the business of acting as a mobile signature service provider in the territory of India including
development or licensing or import of all technology required for undertaking the said business of mobile
signature services based on use of mobiles, computers and business machines of all kinds including all types of
information processing equipment such as electronic telephone or other communication systems related to
data and information and processing and to furnish to the users the system know how, programming and
other software relating to the use of mobile signatures and to develop software and hardware for acting as a
mobile signature service provider for both industrial and commercial purposes and to act as a certifying
authority, registration authority and carry out all kinds of data collection, data processing, generating of
reports including acting as advisors for making effective use of the software required for providing the service
as a mobile signature service provider and to advise and assist in all aspects relating to the above mentioned
services.”
The main objects as contained in the Memorandum of Association enable our Company to carry on the business
presently being carried out.
Changes in the Memorandum of Association
Since our incorporation, the following changes have been made to our Memorandum of Association:
Date of Amendment/ Shareholders
Resolution Amendment
June 29, 2007 Increase in authorised share capital from ` 16,000,000 to `
20,000,000.
Sub-division of the Equity Shares from every Equity Shares of ` 1000
each to 100 equity shares of ` 10 each.
July 28, 2011 Change of registered office.
October 22, 2012 Amending the object clause to include the business of acting as a mobile
signature service provider in the territory of India.
November 30, 2012 Increase in authorised share capital from ` 20,000,000 to ` 40,000,000.
December 10, 2012 Conversion from private to public company.
Awards, Certifications and Recognitions
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Over the years we have received the following, awards, certifications and recognitions:
Recognition by NASSCOM as “NASSCOM EMERGE 50: The League of Ten” (2011)
Recognition by NASSCOM for being the runner up in the market facing innovation process category (2011)
Recognition of our Company’s in house research and development unit by the Government of India, Ministry
of Science and Technology (2011)
Bloomberg UTV CXO Awards – Best Innovative Use of IT (SME) (2011)
Recognition by NASSCOM EMERGE Forum for outstanding work in the ‘EMERGE 50 Innovation Category’
(2011)
Certification by NASSCOM EMERGE Forum for being short listed in the “EMERGE Services category” (2009)
ISO 9001 certification by QSCert for providing telecom value added services (2010)
Recognition by Wall Street Journal-Mint as “One of the Ten Start-ups to Watch Out For in the New Year”
(2008)
‘Indian STEPS and Business Incubators Associations’ Entrepreneurship Award (2008)
Recognition by NASSCOM for being the finalist in the NASSCOM Innovation Award (2008)
Awarded “100 IT Innovators” by NASSCOM (2007)
Major Events
The table below sets forth some of the major events in the history of our Company:
Event
2006 Launched our first product ‘Fastalerts’, a bulk messaging platform for enterprises. This product now has
over 30 resellers and 300 clients and generates about one hundred lacs in revenue annually.
2007 Set up our first OBD and IVR services for a leading TSP in Kerala.
2008 Set up our first SMSC and USSD services for a leading TSP in Kerala.
2009 Set up our first flagship product of our Network VAS division ‘ZULO’.
2009 Entered into a national deal with a leading TSP for launch our Consumer VAS division’s first product called
‘Picture Posts’. This product contributed over six hundred lacs in revenue for our Company in the last
Financial year.
2009 Won Kerala government’s M-Governance project contract in an open bid.
2010 Bagged M-Governance project contract of for the State Government of Goa.
2011 Bagged M-governance project contract for the State Government of Nagaland.
Injunction or restraining order, if any, with possible implications
Our Company is not operating under any injunction or restraining order.
Capital raising activities through equity and debt
Except as disclosed in the section “Capital Structure” on page 24 of the Draft Red Herring Prospectus, our Company
has not raised capital through equity.
For details of our Company’s debt facilities, see “Financial Indebtedness” on page 195 of the Draft Red Herring
Prospectus.
Technology and Market Competence
For details on the technology and market competence of our Company, please see “Our Business” on page 67 of the
Draft Red Herring Prospectus.
Competition
For details on competition faced by our Company, please refer to chapter titled “Our Business- Competition” on page
67 of the Draft Red Herring Prospectus.
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Defaults or rescheduling of borrowings with financial institutions/banks
There have been no defaults or rescheduling of borrowings with the financial institutions/banks. Further, none of our
loans other than the loan availed from TDB has been converted into Equity Shares.
Revaluation of assets
Our Company has not revalued its assets since incorporation.
Schemes of Arrangement
Our Company has not entered into any scheme of arrangement since incorporation.
Changes in the activities of our Company during the last five years
There have been no changes in the activities of our Company during the last five years which may have had a material
effect on the profits and loss account of our Company including discontinuance of line of business, loss of agencies or
markets and similar factors.
Lock out, strikes etc.
There have been no strikes or lock outs affecting our Company.
Time and cost overruns
There have been no time and cost overruns affecting our Company.
Our Subsidiaries
We do not have any holding company. The details of our Subsidiaries are as follows:
(i) Forward Media Private Limited; and
(ii) Getz Shoppe & Exim Private Limited.
Forward Media Private Limited
Corporate Information
Forward Media Private Limited was originally incorporated as Pukkattupady Realtors and Hospitality Private Limited
on June 16, 2008 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Kerala. The name
of the Company subsequently changed to Forward Media Private Limited with effect from June 8, 2011. The main
business of Forward Media Private Limited is printing and publishing of magazines, holding of media events and other
entertainment shows.
Capital Structure
The capital structure of Forward Media Private Limited is as follows:
Particulars No. of Equity Shares of ` 10 each
Authorised capital 2,500,000
Issued, subscribed and paid-up capital 1,000,00
Shareholding Pattern
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The shareholding pattern of Forward Media Private Limited is as follows:
S.No. Name of the Shareholder No. of Equity Shares Percentage of total
equity holding (%)
1. MobME Wireless Solutions Limited 8,000 80.00
2. Mr. Arun Balachandran 2,000 20.00
Total 10,000 100
Financial Performance
The summary audited financial information is as follows:
(in `)
S.No. Particulars For the Financial year ended
March 31, 2012
1. Equity capital (par value ` 10 per equity share) 1,000,00
2. Reserves (excluding revaluation reserves) and surplus (3,206,429)
3. Sales 9,139,25
4. Profit/(Loss) after tax (3,120,335)
5. Earnings per share (basic and diluted) (312.03)
6. Net worth (3,106,429)
7. Net asset value per share (310.64)
Forward Media Private Limited became the subsidiary of our Company on October 10, 2011.
Getz Shoppe and Exim Private Limited
Corporate Information
Getz Shoppe and Exim Private Limited was incorporated on May 8, 2009 under the provisions of the Companies Act,
1956 with the Registrar of Companies, Kerala. The main business of Getz Shoppe and Exim Private Limited is trading
and distribution of consumer durables.
Capital Structure
The capital structure of Getz Shoppe and Exim Private Limited is as follows:
Particulars No. of Equity Shares of ` 100 each
Authorised capital 5,000,000
Issued, subscribed and paid-up capital 5,000,000
Shareholding Pattern
The shareholding pattern of Getz Shoppe and Exim Private Limited is as follows:
S.No. Name of the Shareholder No. of Equity Shares Percentage of total equity
holding (%)
1. MobME Wireless Solutions Limited 40,000 80.00
2. Mr. Jose Thomas Pattara 5,100 10.20
3. Mr. Santosh Kumar K. 4,900 9.80
Total 50,000 100
Financial Performance
The summary audited financial information is as follows:
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(in `)
S.No. Particulars
For the Financial year
ended
March 31, 2012
1. Equity capital (par value ` 100 per equity share) 5,000,000
2. Reserves (excluding revaluation reserves) and surplus 1,394,337
3. Sales 1,599,953,87
4. Profit/(Loss) after tax 1,228,884
5. Earnings per share (basic and diluted) 92.75
6. Net worth 6,394,337
7. Net asset value per share 127.89
Getz Shoppe and Exim Private Limited became the subsidiary of our Company on March 31, 2012.
Interest of the Subsidiaries in our Company
The Subsidiaries do not hold any Equity Shares in our Company. Our Company has not entered into any business
contracts and arrangements with the subsidiaries. For details, see “Related Party Transactions” on page 152 of the
Draft Red Herring Prospectus.
Collaboration Agreements
As on the date of the Draft Red Herring Prospectus, our Company is not a party to any collaboration agreements.
Shareholders’ Agreements
Share purchase agreement dated February 25, 2012
Our Company and Waybeo Technologies Solutions Private Limited entered into a share purchase agreement dated
February 25, 2012. Pursuant to the share purchase agreement, our Company purchased 115,000 equity shares of
Waybeo Technologies Solutions Private Limited of face value of ` 1 each at a premium of ` 16.39 each per share, for a
total consideration of ` 20 lacs
Other Material Agreements
Except as described in this section, we have not entered into any material contract, not being a contract entered into
in the ordinary course of the business carried out on or intended to be carried on by us or a contract entered into
more than two years before the filing of the Draft Red Herring Prospectus.
Strategic and Financial Partners
As on the date of the Draft Red Herring Prospectus, our Company does not have any strategic or financial partners.
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OUR MANAGEMENT
Our Articles of Association require us to have not less than three and not more than twelve Directors. We presently
have five Directors.
The following table sets forth details of our Board as on the date of filing of the Draft Red Herring Prospectus:
Name, Father’s Name, Designation, Address,
Occupation, Experience, Term and DIN
Age
(years) Nationality
Other Directorships/
Partnerships/Trusteeships
Mr. George Brody
Father’s Name: Mr. George Philix
Designation: Chairman, Non-Executive and
Independent Director
Experience: 32 years
Address: 204, High Canyon court, Richardson,
Texas, 75080, USA
DIN: 02014824
Occupation: Business
Term: Liable to retire by rotation
64
United
States of
America
GlobeRanger Corporation, USA
Mr. Jose Thomas Pattara
Father’s Name: Late Mr. P.V. Thomas
Designation: Non Executive and Non-
Independent Director
Experience: 30 years
Address: Door No 423, Pattara Puthenveedu,
Thanneermukom, South Muhamma post office,
Alappuzha - 688525
DIN: 00061511
Occupation: Business
Term: Liable to retire by rotation
54 India
1. Achu Realtors and Hospitality
Private Limited
2. Airapuram Real Estates and
Hospitality Private Limited
3. Bhagheeratha Builders Limited
4. Canbo Electronics Private Limited
5. Chettichira Real Estates and
Hospitality Private Limited
6. East Venice Builders and Realtors
Private Limited
7. East Venice Property Developers
Private Limited
8. Elamakkara Realtors and Hospitality
Private Limited
9. Forward Media Private Limited
10. Getz Shoppe and Exim Private
Limited
11. Gogreen hospitality Solutions
Private Limited
12. High Tide Farms & Properties
Private Limited
13. Jayem Farms And Properties India
Private Limited
14. Jayem Greenfields and Estates
Private Limited
15. Joed Farms and Properties Private
Limited
16. JTP Realtors and Hospitality Private
Limited
17. Kayal Property Developers and
- 89 -
Name, Father’s Name, Designation, Address,
Occupation, Experience, Term and DIN
Age
(years) Nationality
Other Directorships/
Partnerships/Trusteeships
Hospitality Private Limited
18. Kuttanad Property Developers and
Hospitality Private Limited
19. Mekkalady Real Estates and
Hospitality Private Limited
20. MobSHARE Mobile Systems India
Private Limited
21. Morakkala Real Estates and
Hospitality Private Limited
22. Muhamma Property Developers and
Hospitality Private Limited
23. Muhamma Real Estates and
Hospitality Private Limited
24. Nedungapra Realtors and
Hospitality Private Limited
25. Pattara Business Ventures Private
Limited
26. Pattara Power Projects Private
Limited
27. PEE CEE Real Estates and Hospitality
Private Limited
28. Perfect Square Hospitality and
Realty Private Limited
29. PVT Realtors and Hospitality Private
Limited
30. Q & R Constructions and Marketing
Private Limited
31. Q & R Warehousing and Logistics
Private Limited
32. Rajshri Hospitalities Private Limited
33. Save Pharmacy (India) Private
Limited
34. Senai Real Estates and Hospitality
Private Limited
35. Vembanad Real Estates and
Hospitality Private Limited
36. Bell Chit Funds
Mr. Sanjay Vijayakumar
Father’s Name: Mr. Chellapan Vijayakumar
Designation: Co-Chief Executive Officer,
Executive and Non-Independent Director
Experience: Six years
Address: Sarovaram, KP-I/864 Convent Road,
Mottada post office, Thiruvananthapuram
695025
DIN: 00595475
Occupation: Business
28 India
1. Andra Technologies & Consulting
LLP
2. Code Blue Technology Services
Private Limited
3. Dimensions Mobile Solutions
Private Limited
4. Evangelia Consulting LLP
5. Mobile Express Private Limited
6. MobSHARE Mobile Systems India
Private Limited
7. Odysseus Engineering Private
Limited
8. Red Splash Media Solutions Private
Limited
9. Torque Technology Solutions Private
Limited
10. 4TRANZ4 Consulting LLP
- 90 -
Name, Father’s Name, Designation, Address,
Occupation, Experience, Term and DIN
Age
(years) Nationality
Other Directorships/
Partnerships/Trusteeships
Term: Five years from January 7, 2013
11. Indian Telecom Innovation Hub-
Technology Business Incubator
Mr. Sony Joy
Father’s Name: Mr. Maliakkal Palu Joy Franco
Designation: Co-Chief Executive Officer,
Executive and Non-Independent Director
Experience: Six years
Address: 9/347, IMA Lane, Mission Quarters,
Thrissur
DIN: 01876554
Occupation: Business
Term: Five years from January 7, 2013
27 Indian
1. Andra Technologies & Consulting
LLP
2. Code Blue Technology Services
Private Limited
3. Evangelia Consulting LLP
4. Forward Media Private Limited
5. Getz Shoppe And Exim Private
Limited
6. Mobile Express Private Limited
7. MobSHARE Mobile Systems India
Private Limited
8. Odysseus Engineering Private
Limited
9. Red Splash Media Solutions Private
Limited
10. Startup Village Business Incubation
Services LLP
11. Startup Village Business
Management Services LLP
12. Torque Technology Solutions Private
Limited
13. ZeroGravity Technologies LLP
14. 4TRANZ4 Consulting LLP
15. Indian Telecom Innovation Hub-
Technology Business Incubator
Mr. Aynampudi Subbarao
Father’s Name: Mr. Aynampudi Lakshmi
Narayana
Designation: Non-Executive and Independent
Director
Experience: 35 years
Address: E-43, Nivedita Kui, Sec-X, RK Puram,
New Delhi - 110022
DIN: 03518681
Occupation: Service
Term: Liable to retire by rotation
63
Indian
1. Skyquest Technology Private
Limited
Relationship between Directors
None of the Directors are related to each other.
- 91 -
Brief profile of the Directors
Mr. George Brody
Mr. George Brody is the Chairman, Non-Executive and Independent Director of our Company. He is also the founder
and chief executive officer at GlobeRanger Corporation, USA. Prior to co-founding GlobeRanger Corporation in 1999,
he served as the vice-president and general manager of Nortel Network’s Wireless Network Solutions division where
he managed a series of entrepreneurial startups including satellite network solutions, wireless intelligent networks
and wireless new business ventures. During his tenure at Nortel Inc. as vice-president of wireless technology, he was
responsible for its global wireless product development programs and the management of the Bell-Northern Research
Laboratory in Richardson, a research and development organization that employed more than 2,500 professionals.
Mr. Jose Thomas Pattara
Mr. Jose Thomas Pattara is one of the Promoters of our Company. He is a Non Executive and Non-Independent
Director of our Company. In the year 1999 he jointly took over the management of Rashtra Deepika Limited. He was
the managing director of Rashtra Deepika from 1999 to December of 2005. He also served as the managing director of
Kumarakom Lake Resorts Private Limited during the same period. He has also served as the regional chairman of the
Indian Newspaper Society from 2002 to 2005.
Mr. Sanjay Vijayakumar
Mr. Sanjay Vijayakumar is one of the Promoters of our Company. He is an Executive and Non-Independent Director of
our Company and he also holds the post of Co-Chief Executive Officer in our Company. He holds a bachelor of
technology degree from the College of Engineering, Trivandrum. He also serves as a member of the board of
governors of Technopark Technology Business Incubator (TBI) and on the board of governors of Indian Telecom
Innovation Hub TBI (ITIH - TBI) as chairman. ITIH – TBI has been branded as Startup Village Private Limited and is
India's first public private partnership model technology business incubator promoted in partnership with Department
of Science and Technology, Government of India. He was awarded the Star Entrepreneurship Award at the 3rd
International India Innovation Summit, 2010.
Mr. Sony Joy
Mr. Sony Joy is one of the Promoters of our Company. He is an Executive and Non-Independent Director of our
Company. He is also the Co-Chief Executive Officer of our Company. He scored 99.9 percentile in the Kerala
Engineering Entrance and graduated from College of Engineering, Trivandrum with a bachelor of technology degree in
electronics and communication.
Mr. Aynampudi Subbarao
Mr. Aynampudi Subbarao is a Non-Executive and Independent Director on the Board of our Company. He is a former
advisor of the Department of Scientific and Industrial Research and is currently working in the capacity of
advisor/consultant/board member of Centre for Innovation Incubation and Entrepreneurship, Foundation for MSME
Clusters and SkyQuest Technology Group. Previously, he worked as the president of Indian Innovators Association
providing mentoring and lobbying support to Indian innovators.
Terms and conditions of employment of our Executive Directors
Our Executive Directors have been appointed for the term of five years from January 7, 2013 with a provision for
extension of the period of employment on mutual agreement. Our Executive Directors are eligible to receive a
monthly salary of ` 2,50,000 in addition to perquisites such as leave and encashment of leave, gratuity and
reimbursement of expenses. The Board may also grant performance incentives to our Executive Directors who also
are the Whole-time Directors of our Company subject to overall limits laid down in section 198 and 309 of the
Companies Act.
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Borrowing Powers of the Board of Directors of our Company
Pursuant to a resolution passed by the shareholders on December 10, 2012, in accordance with provisions of the
Companies Act and the Articles of Association, the Board has been authorised to borrow sums of money for the
purpose of the Company upon such terms and conditions as the Board may think fit, provided that the aggregate
monies borrowed by the Company shall not exceed, at any time, ` 10,000 lacs.
Further Confirmations
None of the Directors are or were a director of any listed company during the last five years preceding the date of the
Draft Red Herring Prospectus, whose shares have been or were suspended from being traded on the BSE or the NSE,
during the term of their directorship in such company.
Details of Service Contracts
We have not entered into any service contracts with the present Board of Directors.
Remuneration of the Directors
(` in lacs)
Name of the Director Remuneration (including sitting fees) paid in the Financial
Year ended March 31, 2012 `
Mr. Sanjay Vijayakumar 85.0
Mr. Sony Joy 85.0
Mr. Jose Thomas Pattara 16.5
Corporate Governance
The provisions of the SME Equity Listing Agreement to be entered into with the Stock Exchange with respect to
corporate governance will be applicable to us immediately upon the listing of the Equity Shares with the Stock
Exchange. As of the date of the Draft Red Herring Prospectus, our Company has taken steps to comply with the
provisions of Clause 52 of the SME Equity Listing Agreement, including with respect to the appointment of
independent directors, the constitution of the Audit Committee, Shareholders/Investors Grievance Committee and
Remuneration committee. We believe we are in compliance with the requirements of the applicable regulations,
including the SME Equity Listing Agreements with the Stock Exchange and the SEBI ICDR Regulations, in respect of
corporate governance including constitution of the Board and committees thereof. The corporate governance
framework is based on an effective independent Board, separation of the Board’s supervisory role from the executive
management team and constitution of the Board Committees, as required under law.
We have a Board constituted in compliance with the Companies Act and listing agreement to be entered into with the
Stock Exchange. The Board functions either on own or through various committees constituted to oversee specific
operational areas.
As on date, the Board comprises five Directors, of which two are Independent Directors.
Committees of the Board
In accordance with Clause 52 of the SME Equity Listing Agreement our Company has constituted the following Board
committees for compliance with corporate governance requirements:
Audit Committee
The Audit Committee was constituted by our Board of Directors at their meeting held on December 10, 2012. It
comprises of:
Name of Directors Status
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Name of Directors Status
Mr. George Brody Chairman, Non-Executive and Independent Director*
Mr. Sanjay Vijayakumar Executive and Non-Independent Director
Mr. Aynampudi Subbarao Non-Executive and Independent Director
* Mr. George Brody has been selected by the members as the chairman of the Audit Committee.
The scope and function of the Audit Committee is in accordance with Section 292A of the Companies Act and clause
52 of the SME Equity Listing Agreements and its terms of reference are as follows:
1. Oversight of the Company’s financial reporting process and the disclosure of its financial information to
ensure that the financial statements are correct, sufficient and credible;
2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal
of the statutory auditor and the fixation of audit fees;
3. Approval of payment to Statutory Auditor for any other services rendered by the Statutory Auditor;
4. Reviewing, with the management, the annual financial statements before submission to the Board for
approval, with particular reference to:
(a) Matters required to be included in the Director’s Responsibility Statement to be included in the
Board’s report in terms of clause (2AA) of Section 217 of the Companies Act;
(b) Changes, if any, in accounting policies and practices and reasons for the same;
(c) Major accounting entries involving estimates based on the exercise of judgment by management.
(d) Significant adjustments made in the financial statements arising out of audit findings;
(e) Compliance with listing and other legal requirements relating to financial statements;
(f) Disclosure of any related party transactions; and
(g) Qualifications in the draft audit report.
5. Reviewing, with the management, the quarterly financial statements before submission to the Board for
approval;
6. Reviewing, with the management, the statement of uses/application of funds raised through an issue (public
issue, rights issue, preferential issue, etc.), the statement of funds utilised for purposes other than those
stated in the offer document/prospectus/notice and the report submitted by the monitoring agency
monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations
to the Board to take up steps in this matter;
7. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the
internal control systems;
8. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit
department, staffing and seniority of the official heading the department, reporting structure coverage and
frequency of internal audit;
9. Discussion with internal auditors any significant findings and follow up there on;
10. Reviewing the findings of any internal investigations by the internal auditors into matters where there is
suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the
matter to the Board;
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11. Discussion with Statutory Auditor before the audit commences, about the nature and scope of audit as well
as post-audit discussion to ascertain any area of concern;
12. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of nonpayment of declared dividends) and creditors;
13. Reviewing the functioning of the whistle blower mechanism, in case the same is existing;
14. Approving the appointment of the chief financial officer (i.e. the whole time finance director or any other
person heading the finance function) after assessing the qualifications, experience and background, etc., of
the candidate; and
15. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
Shareholders/Investors Grievance Committee
The Shareholders/Investors Grievance Committee was constituted at the Board meeting held on December 10, 2012.
This committee is responsible for the redressal of shareholder grievances. The Shareholders/Investors Grievances
Committee comprises of:
Name of Directors Status
Mr. George Brody Chairman, Non-Executive and Independent Director*
Mr. Sanjay Vijayakumar Executive and Non-Independent Director
Mr. Sony Joy Executive and Non-Independent Director
* Mr. George Brody has been selected by the members as the chairman of the Shareholders/Investors Grievance
Committee.
The terms of reference of the Shareholders/Investors Grievance Committee of our Company include the following:
1. Redressal of shareholders’/investors’ complaints;
2. Approve requests for share transfers and transmission and those pertaining to rematerialisation of
shares/subdivision/consolidation/issue of renewed and duplicate share certificates, among others;
3. Investor relations and redressal of shareholders grievances in general and relating to non receipt of
dividends, interest and non receipt of balance sheet, among others;
4. Carrying out any other function as prescribed under the SME Equity Listing Agreement or such other matters
as may from time to time be required by any statutory, contractual or other regulatory requirements to be
attended to by such committee; and
5. Any other actions that may be incidental thereto.
Remuneration Committee
The Remuneration Committee was constituted at the Board meeting held on December 10, 2012. This committee is
responsible to take all necessary steps, decisions required in connection with fixation of managerial remuneration of
the Directors of the Company. The Remuneration committee comprises of:
Name of Directors Status*
Mr. Sanjay Vijayakumar Executive and Non-Independent Director
Mr. Jose Thomas Pattara Non-Executive and Non-Independent Director
Mr. Aynampudi Subbarao Non-Executive and Independent Director
Mr. George Brody Non-Executive and Independent Director
* The members will decide among themselves to appoint chairman of the remuneration committee.
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The terms of reference of the Remuneration Committee of our Company include the following:
1. To take all necessary steps, decisions required in connection with fixation of managerial remuneration of the
Directors of the Company and to delegate all or any of the power hereby conferred; and
2. To do all such acts, deeds and things which may be necessary for giving effect to the resolution of our
Company dated December 10, 2012.
IPO Committee
This Committee is responsible for dealing with all matters in relation to the initial public offering of our Company.
Pursuant to this, the Committee has been authorized by the Board pursuant to a resolution dated December 10, 2012,
to carry out and decide upon all activities in connection with the Issue. The IPO Committee comprises of:
Name of Directors Status
Mr. Sanjay Vijayakumar Chairman, Executive and Non-Independent Director*
Mr. Sony Joy Executive and Non-Independent Director
Mr. Jose Thomas Pattara Non-Executive and Non-Independent Director
* Mr. Sanjay Vijayakumar has been selected by the members as the chairman of the IPO Committee
Scope and terms of reference: The IPO Committee shall take all steps and to do all acts, deeds, matters and things and
to sign all documents, agreements, contracts, deeds, documents, declarations, affidavits, undertakings, appointment
letters, applications, forms and papers, amongst others, and also to take decisions and issue clarifications on all issues
and matters in connection with the Issue including but not limited to the following:
1. Positioning of the IPO including appointing all intermediaries for the Issue including BRLM, legal counsel, IPO
grading agency, Registrar to the Issue, escrow collection banks, printers, advertising agency and underwriters,
among others, and approval of expenses related thereto;
2. Finalizing the time-lines for the Issue in consultation with the BRLM and other concerned intermediaries;
3. Ensuring and finalizing all disclosures to be made in this DRHP, the RHP, and the Prospectus to be filed with
SEBI and the RoC as per the requirements of the SEBI ICDR Regulations, Companies Act and other applicable
laws;
4. Deciding the capital structure of the Company including the size of the Issue, composition of the Issue in
consultation with the BRLM, among others;
5. Deciding the objects of the Issue, the use of the Issue Proceeds and the deployment of funds raised in the
Issue and changes therein, if any, among others;
6. Deciding the Price Band and other terms of the Issue in consultation with the BRLM;
7. Finalizing and approving the Issue expenses in consultation with the BRLM;
8. Deciding the stock exchanges on which Equity Shares in the Issue will be listed, filing of applications to the
stock exchanges for obtaining “in-principle approval” and listing of the shares, among others. and ensuring
compliance with the Listing Agreement including constituting the various committees under clause 52 of the
SME Listing Agreement with the Stock Exchanges; and
9. Taking decisions on and resolving all such questions, difficulties on all matters in relation to the proposed
Issue and offer for sale, issuing explanations and clarifications to the stock exchanges, SEBI, the RBI, the RoC,
and all other regulatory authorities and government offices, among others, in connection with any matter
relating to disclosures in this DRHP, the RHP, and the Prospectus, or any other matter, issue and grievance
related to or incidental with the Issue or listing of the shares of the Company, among others.
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Policy on Disclosures and Internal Procedure for Prevention of Insider Trading
We will comply with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 1992 after listing of the
Company’s shares on the Stock Exchange. Ms. Smitha Varma, Company Secretary and Compliance Officer, is
responsible for setting forth policies, procedures, monitoring and adhering to the rules for the prevention of
dissemination of price sensitive information and the implementation of the code of conduct under the overall
supervision of the Board.
Shareholding of Directors in our Company
Our Articles of Association do not require our Directors to hold any qualification shares in our Company. Except as
disclosed below, as on date of filing of the Draft Red Herring Prospectus, none of the Directors hold any Equity Shares.
Sr.No. Name of the Directors Number of Equity Shares held
1. Mr. Sanjay Vijayakumar 506,173
1. Mr. Sony Joy 386,549
2. Mr. Jose Thomas Pattara 386,549
3. Mr. George Brody 48,000
Interest of our Directors
All of our Directors may be deemed to be interested to the extent of fees payable to them for attending meetings of
the Board or a committee thereof as well as to the extent of other remuneration and reimbursement of expenses
payable to them under our Articles of Association, and to the extent of remuneration paid to them for services
rendered as our officer or employee. Some of the Directors may be deemed to be interested to the extent of
consideration received/paid or any loan or advances provided to anybody corporate including companies and firms
and trusts, in which they are interested as directors, members, partners or trustees.
There are no service contracts between us and any of the Directors for payment of benefit upon termination of
employment.
Our Directors may also be regarded as interested in the Equity Shares, if any, held by them or that may be subscribed
by and allotted to the companies, firms, and trusts, if any, in which they are interested as directors, members,
promoters, and /or trustees pursuant to the Issue.
Except as stated in the section titled “Related Party Transactions” on page 152 of the Draft Red Herring Prospectus,
our Directors do not have any other interest in our business.
Our Directors have no interest in any property acquired by us within two years of the date of the Draft Red Herring
Prospectus, except Bhagheeratha Residency, apartment No. - 7A, 41/3197-J, Banerji Road, Ernakulam, Kochi-682 018.
Our Directors are not interested in the appointment of or acting as Registrar and Bankers to the Issue or any such
intermediaries registered with SEBI.
Bonus or profit sharing plan for our Directors
We do not have a performance linked bonus or a profit sharing plan for our Directors.
Properties acquired by our Company from Directors in the last two years
Our Directors have no interest in any property acquired by us within two years of the date of the Draft Red Herring
Prospectus or proposed to be purchased by our Company, except Bhagheeratha Residency, apartment No. - 7A,
41/3197-J, Banerji Road, Ernakulam, Kochi-682 018.
Changes in our Board of Directors during the last three years
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The changes in the Board of Directors during the last three years are as follows:
Name of Director Date of Change/Appointment Reason
Mr. Aynampudi Subbarao May 26, 2011 Appointment
Management Organization Structure
Key Management Personnel
The details of the Key Management Personnel, as of the date of the Draft Red Herring Prospectus, are as follows:
Mr. Vivek Steve Francis, aged 28 years, is one of the Promoters of our Company. He is also the chief operating officer
of our Company. He holds a bachelors’ degree in engineering (electronics and communication engineering) from
University of Kerala and a Post Graduate Diploma in Business Management from International Management Institute,
New Delhi. He has over six years of experience in the telecom industry. He joined our Company in December 12, 2006.
In our Company, he is responsible for productively leveraging the limited resources, as set out by the Co- chief
executive officers of our Company with the aim of creating maximum value for our Company's stakeholders and focus
on generating recurring and incremental revenues by encouraging a culture of innovation and allocating resources
judiciously across business units. He is directly responsible for operations and financial performance of our Company.
The gross compensation paid to him during the Financial Year ended March 31, 2012 was ` 85 lacs.
Mr. Vishnu Gopal, aged 28 years, is the chief technology officer of our Company. He holds a masters’ degree in human
computer interaction from University College London, London and a bachelors’ degree in engineering (computer
technology and engineering) from University of Kerala. He has over four years of experience in software development
and coding. He joined our Company in December 1, 2010. He has been instrumental in moulding the engineering
division of our Company from a raw startup environment into a mature and coherent team. He is a key player in
envisioning the long-term technology roadmap of our Company ensuring that the engineering unit is always in touch
with the latest in the industry. The gross compensation paid to him during the Financial Year ended March 31, 2012
was ` 14.7 lacs.
Mr. Manu Joseph Scaria, aged 29 years, is the senior vice president - operations of our Company. He holds a
bachelors’ degree in engineering (mechanical engineering) from University of Kerala. He has over six years of
experience in operations and business development. He joined our Company in December 12, 2006. He is responsible
for day to day operations across the two primary business verticals of our Company. He also plays a key role in
developing business relations with the telecommunication companies and identifying growth opportunities. The gross
compensation paid to him during the Financial Year ended March 31, 2012 was ` 12 lacs.
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Mr. Ashwin Ramachandran, aged 33 years, is the vice president - business management in our Company. He holds a
bachelors’ degree in engineering (civil engineering) from Karnataka University, Dharwad. He has over 10 years of
experience in marketing and sales. He joined our Company in December 12, 2006. In our Company, he heads the bulk
short messaging services business under the enterprise division and is responsible for the creation of distribution
channels for our small business solutions offerings. His additional focus is on strategic direct sales efforts with
industry verticals looking to provide individual short messaging services to brokers, franchisees, telecommunication
companies and more. The gross compensation paid to him during the Financial Year ended March 31, 2012 was ` 10.8
lacs.
Mr. Anoop Sankar, aged 28 years, is the vice-president – ‘engineering’ of our Company. He holds a bachelors’ degree
in engineering (computer technology and engineering) from University of Kerala. He has over 10 years of hands-on
programming experience. He joined our Company in March 1, 2010. In our Company, he is responsible for business
analytics, engineering strategy, improving business understanding and translating the drive and vision of upper
management into usable and reliable products. The gross compensation paid to him during the Financial Year ended
March 31, 2012 was ` 9.3 lacs.
Mr. Lishoy Bhaskar, aged 28 years, is the senior vice president government business of our Company. He holds a
bachelors’ degree in engineering (electronics and communication engineering) from University of Kerala. He has over
three years of experience in liaising with the government and in implementation of M-Governance projects. He joined
our Company in March 6, 2009. In our Company, he is directly responsible for the revenues in our enterprise division.
Under his leadership, the ‘enterprise business’ division of our Company created a niche for itself in the M-Governance
space in the country. The government of Kerala entrusted our Company with the first comprehensive M-Governance
project in the country in 2009. The gross compensation paid to him during the Financial Year ended March 31, 2012
was ` 9.3 lacs.
Mr. Arun Ramakrishnan Nair, aged 39, is chief manager - finance, of our Company and leads the finance and accounts
functions. Arun has over eighteen years of experience in finance and accounts and has handled almost all the
functions in finance and accounts including secretarial compliances during his career and was also on the board of
various group entities during his previous employments. As chief manager finance, Arun has looked after the entire
day today finance and accounts functions including treasury activities of our Company over the past two years. He is
also involved in business planning such as budgeting, reporting and analysis. The gross compensation paid to him
during the Financial Year ended 2012 was ` 5.1 lacs.
Shareholding of the Key Management Personnel
Except as stated below none of the Key Management Personnel hold any Equity Shares:
S.No. Name of the Key Management Personnel Number of Equity Shares held
1. Mr. Vivek Steve Francis 1,93,275
2. Mr. Vishnu Gopal 38,400
3. Mr. Manu Joseph Scaria 38,400
4. Mr. Ashwin Ramachandran 38,400
5. Mr. Lishoy Bhaskar 38,400
6. Mr. Anoop Sankar 2,761
7. Mr. Arun Ramakrishnan Nair Nil
Bonus or profit sharing plan for our Key Management Personnel
We do not have a performance linked bonus or a profit sharing plan for our Directors and Key Managerial Personnel.
Interest of Key Management Personnel
None of the Key Managerial Personnel have any interest in our Company other than to the extent of the remuneration
or benefits to which they are entitled to as per their terms of appointment and reimbursement of expenses incurred
by them during the ordinary course of business and to the extent of Equity Shares held by them in our Company.
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Changes in Key Management Personnel in the last three years
The changes in the Key Management Personnel during the last three years are as follows:
Name of Key Management Personnel Date of change/joining Reason
Mr. Vishnu Gopal December 1, 2010 Appointment
Mr. Anoop Sankar March 1, 2010 Appointment
Mr. Arun Ramakrishnan Nair March 21, 2011 Appointment
Payment or Benefit to officers of our Company
Except as stated otherwise in the Draft Red Herring Prospectus, or statutory payments made by our Company, no
amount or benefit has been paid, in the last two preceding years, or given or is intended to be paid or given to any of
our Company’s officers except remuneration for services rendered as Directors, officers or employees of our
Company.
Except statutory benefits upon termination of their employment in our Company or superannuation, no officer of our
Company is entitled to any benefit upon termination of such officer’s employment in our Company. Contributions are
made by our Company towards provident fund, gratuity fund and employee state insurance.
Except as stated in the “Financial Statements–Unconsolidated Statement of long-term and short-term Loans and
Advances, as restated”, “Financial Statements –Unconsolidated Statement of Trade Receivables, as restated” on page
141 and 140, respectively of the Draft Red Herring Prospectus, none of the beneficiaries of loans and advances and
sundry debtors are related to our Company, the Directors or our Promoters.
Arrangements and understanding with major shareholders
None of our Key Managerial Personnel or Directors has been appointed pursuant to any arrangement or
understanding with our major shareholders, customers, suppliers or others.
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OUR PROMOTERS AND GROUP ENTITIES
Our Promoters are Mr. Sanjay Vijayakumar, Mr. Sony Joy, Mr. Vivek Steve Francis and Mr. Jose Thomas Pattara.
As on date of the Draft Red Herring Prospectus, our Promoters hold, in aggregate, 1,472,546 Equity Shares,
representing 69.58% of the issued and paid-up equity share capital of our Company.
Mr. Sanjay Vijayakumar
Mr.Sanjay Vijayakumar, aged 28 years, is an Executive and Non-Independent Director
of our Company. He is an Indian national.
For details of Mr. Sanjay Vijayakumar, see “Our Management” on page 88 of the Draft
Red Herring Prospectus.
Address: Sarovaram, KP-I/864, Convent Road, Muttada PO, Trivandrum, Kerala.
Passport number: F6491200
Voter ID number: HVX1970144
Driving license number : 1/4873/2002
Mr. Sony Joy
Mr.Sony Joy, aged 27 years, is an Executive and Non-Independent Director of our
Company. He is an Indian national.
For details of Mr. Sony Joy, see “Our Management” on page 88 of the Draft Red
Herring Prospectus.
Address: 9/347, IMA Lane, Mission Quarters, Thrissur, Kerala.
Passport number: E4359660
Voter ID number: LJL1824200
Driving license number: 8/2739/2004
Mr. Vivek Steve Francis
Mr.Vivek Steve Francis, aged 28 years. He is an Indian national.
For details of Mr. Vivek Steve Francis, see “Our Management” on page 88 of the Draft
Red Herring Prospectus.
Address: Annray, TC-13/620, Varambassery, Kunnukuzhi, P.O., Trivandrum.
Passport number: E8828813
Voter ID number: MKG1251636
Driving license number: 1/7591/2004
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Mr. Jose Thomas Pattara
Mr. Jose Thomas Pattara, aged 54 years, is a Non-Executive and Non-Independent
Director of our Company. He is an Indian national.
For details of Mr. Jose Thomas Pattara, see “Our Management” on page 88 of the
Draft Red Herring Prospectus.
Address: Door No 423, Pattara Puthenveedu, Thanneermukom, South Muhamma PO,
Alappuzha - 688525
Passport number: H5184863
Voter ID number: KL/15/099/357528
Driving license number: A/2810/53
We confirm that the PAN, bank account number and passport number of our Promoters will be submitted to the Stock
Exchange, at the time of filing the Draft Red Herring Prospectus with the Stock Exchange.
Relationship amongst the Promoters
None of the Promoters are related to each other.
Change in the management and control
There has not been any change in the management or control of our Company.
Interests of our Promoters and Group Companies
Our Promoters are interested in our Company to the extent of their shareholding in our Company, any dividend
distribution which may be made by our Company in future. For details pertaining to our Promoters’ shareholding, see
“Capital Structure” on page 24 of the Draft Red Herring Prospectus. Further, some of our Promoters are Directors of
our Company and may be deemed to be interested to the extent of fees, if any, payable to them for attending
meetings of the Board or committee thereof as well as to the extent of other remuneration, reimbursement of
expenses payable to them under the Articles of Association. For further details see “Our Management” on page 88 of
the Draft Red Herring Prospectus.
Further, some of our Promoters are also directors on the boards, or are members, or are partners, of certain Promoter
Group Companies and firms and may be deemed to be interested to the extent of the payments made by our
Company, if any, to these Promoter Group Companies. For the payments that are made by our Company to certain
Group Companies, see “Related Party Transactions” on page 152 of the Draft Red Herring Prospectus.
Our Promoters, Promoter Groups and Group Companies confirm that they have no interest in any property acquired
by our Company, during the two years preceding the date of filing of the Draft Red Herring Prospectus or any property
proposed to be acquired by our Company or in any transaction in the acquisition of land, construction of building or
supply of machinery, except Bhagheeratha Residency, apartment No. - 7A, 41/3197-j, Banerji Road, Ernakulam, Kochi-
682018. For details, see “Our Business- Properties” at page 67 of the Draft Red Herring Prospectus.
None of our Promoters are interested as a member of a firm or company, and no sum has been paid or agreed to be
paid to our Promoters or to the firm or company in cash or shares or otherwise by any person either to induce any of
our Promoters to become, or to qualify such Promoters as, a director, or otherwise for services rendered by such
Promoters or by the firm or company, in connection with the promotion or formation of our Company.
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Further, our Promoters who are also the Directors, employees and the directors of the Subsidiaries may be deemed to
be interested to the extent of fees, if any, payable to them for attending meetings of our Board or a committee
thereof as well as to the extent of other remuneration, reimbursement of expenses payable to them. For further
details see “Our Management” on page 88 of the Draft Red Herring Prospectus.
None of our Group Companies or Subsidiaries have or/and proposes to have business interests in our Company.
Except as disclosed in “Related Party Transaction” on page 152 of the Draft Red Herring Prospectus
Promoter Group
In addition to our Promoters, the following natural persons (being the immediate relatives of our Promoters), HUFs,
partnerships, companies and other entities shall form part of our Promoter Group:
a) Immediate Relatives of our Promoters
Name of our Promoter Name of the Relative Relationship with our Promoter
Mr. Sanjay Vijayakumar Nil Spouse
Mr. Chellappan Vijayakumar Father
Mrs. Leela B. Mother
Mr. Karthik Vijayakumar Brother
Nil Sister
Nil Son
Nil Daughter
Nil Father in law
Nil Mother in law
Nil Brother in law
Nil Sister in law
Name of our Promoter Name of the Relative Relationship with our Promoter
Mr. Sony Joy Nil Spouse
Mr. Joy Franco Father
Mrs. Geetha Joy Mother
Nil Brother
Sumi Lonney Sister
Nil Son
Nil Daughter
Nil Father in law
Nil Mother in law
Mr. Lonney Joy Brother in law
Nil Sister in law
Name of our Promoter Name of the Relative Relationship with our Promoter
Mr. Vivek Steve Francis Nil Spouse
Mr. Francis Roy Lean Father
Mrs. Aleyamma Roy Lean Mother
Mr. Vishak Issac Francis Brother
Ms. Sairah Lily Francis Sister
Nil Son
Nil Daughter
Nil Father in law
Nil Mother in law
Nil Brother in law
Nil Sister in law
Name of our Promoter Name of the Relative Relationship with our Promoter
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Name of our Promoter Name of the Relative Relationship with our Promoter
Mr. Jose Thomas Pattara Mrs. Mercy Jose Pattara Spouse
Mr. Varghese P.T. Brother
Ms. Rani Thomas
Ms. Alice Thomas
Ms. Annie Antony
Ms. Tessy Jose
Sister
Mr. Thomas Jose Son
Ms. Ann Jose Daughter
Ms. Santhi Martin
Mr. KT Joseph Father in law
Mrs. Annakutty Joseph Mother in law
Mr. Tomy Joseph Brother in law
Mr. Jimmy Joseph
Mr. Santosh Joseph
Sister Celin Joseph Sister in law
Sister Anitha Joseph
Mrs. Valsamma Varghese
Companies, firms and HUFs forming part of our Promoter Group
The following companies form part of our Promoter Group:
1. Achu Realtors and Hospitality Private Limited
2. Airapuram Real Estates and Hospitality Private Limited
3. Al Awael Building Contracting Company L.L.C.
4. Andra Technology & Consulting LLP
5. Arva Investments Limited
6. Back to Nature Frames and Structure (India) Private Limited
7. Back to Nature Property Developers Private Limited
8. Back to Nature Tourism Management Private Limited
9. Bell Chit Funds
10. Bhagheeratha Builders Limited
11. BTN Resorts and Hotels Private Limited
12. Canbo Electronics Private Limited
13. Chevron Builders & Realtors Private Limited
14. Chevron Mercantile Private Limited
15. Chettichira Real Estates and Hospitality Private Limited
16. Code Blue Technology Services Private Limited
17. Evangelia Consulting LLP
18. East Venice Builders and Realtors Private Limited
19. East Venice Property Developers Private Limited
20. Elamakkara Realtors and Hospitality Private Limited
21. Gogreen Hospitality Solutions Private Limited
22. High Tide Farms & Properties Private Limited
23. Jayem Farms & Properties India Private Limited
24. Jayem Greenfields and Estates Private Limited
25. Joed Farms and Properties Private Limited
26. JTP Realtors and Hospitality Private Limited
27. Kayal Property Developers and Hospitality Private Limited
28. Kuttanad Property Developers and Hospitality Private Limited
29. Mekkalady Real Estates and Hospitality Private Limited
30. Mobile Express Private Limited
31. MobSHARE Mobile Systems India Private Limited
32. Morakkala Real Estates and Hospitality Private Limited
33. Muhamma Property Developers and Hospitality Private Limited
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34. Muhamma Real Estates and Hospitality Private Limited
35. Nedungapra Realtors and Hospitality Private Limited
36. Odysseus Engineering Private Limited
37. Orange Net International General Trading LLC
38. Pattara Business Ventures Private Limited
39. Pattara Power Projects Private Limited
40. PEE CEE Real Estates and Hospitality Private Limited
41. PVT Realtors and Hospitality Private Limited
42. Q&R Warehousing and Logistics Private Limited
43. Rajshri Hospitalities Private Limited
44. Red Splash Media Solutions Private Limited
45. Save Pharmacy (India) Private Limited
46. Senai Real Estates and Hospitality Private Limited
47. Startup Village Business Incubation Services LLP
48. Startup Village Business Management Services LLP
49. Torque Technology Solutions Private Limited
50. Vembanad Real Estates and Hospitality Private Limited
51. ZeroGravity Technologies LLP
52. 4TRANZ4 Consulting LLP
The following firms form part of our Promoter Group:
1. Bell Investments
2. Fatima Clinic
The following society form part of our Promoter Group
1. Indian Telecom Innovation Hub – Technology Business Incubator
GROUP COMPANIES
Companies forming part of Group Companies
Unless otherwise stated, none of the companies forming part of our Group Companies is a sick company under the
meaning of SICA and none of the companies are in the process of winding up. Further, all our Group Companies are
unlisted companies and they have not made any public issue of securities in the preceding three years.
Our Group Companies
1. Canbo Electronics Private Limited
2. MobSHARE Mobile Systems India Private Limited
3. Bhagheeratha Builders Limited
4. Chettichira Real Estates and Hospitality Private Limited
5. Red Splash Media Solutions Private Limited
6. East Venice Property Developers Private Limited
7. East Venice Builders and Realtors Private Limited
8. Jayem Greenfields and Estates Private Limited
9. Q&R Warehousing and Logistics Private Limited
10. Morakkala Real Estates and Hospitality Private Limited
11. Airapuram Real Estates and Hospitality Private Limited
12. Mekkalady Real Estates and Hospitality Private Limited
13. Pattara Business Ventures Private Limited
14. Save Pharmacy (India) Private Limited
15. Torque Technology Solutions Private Limited
16. Odysseus Engineering Private Limited
17. Mobile Express Private Limited
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18. Nedungapra Realtors and Hospitality Private Limited
19. Gogreen Hospitality Solutions Private Limited
20. JTP Realtors and Hospitality Private Limited
21. Kayal Property Developers and Hospitality Private Limited
22. Muhamma Real Estates and Hospitality Private Limited
23. Pattara Power Projects Private Limited
24. PEE CEE Real Estates and Hospitality Private Limited
25. PVT Realtors and Hospitality Private Limited
26. Senai Real Estates and Hospitality Private Limited
27. Vembanad Real Estates and Hospitality Private Limited
28. Kuttanad Property Developers and Hospitality Private Limited
29. Achu Realtors and Hospitality Private Limited
30. Elamakkara Realtors and Hospitality Private Limited
31. Code Blue Technology Services Private Limited
32. Jayem Farms & Properties India Private Limited
33. Rajshri Hospitalities Private Limited
34. Joed Farms and Properties Private Limited
35. High Tide Farms & Properties Private Limited
36. Muhamma Property Developers and Hospitality Private Limited
37. Bell Chit Funds
38. Startup Village Business Management Services LLP
39. Evangelia Consulting LLP
40. 4TRANZ4 Consulting LLP
41. Andra Technology & Consulting LLP
42. Startup Village Business Incubation Services LLP
43. ZeroGravity Technologies LLP
The details of our Group Companies are set forth below:
A. Top five Group Companies (based on turnover)
The details of our top five Group Companies (based on turnover) are provided below:
1. Canbo Electronics Private Limited (“Canbo”)
Canbo was incorporated on December 5, 2006 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. The registered office of Canbo is at 41/3197-B, Bhagheeratha Residency, Banerji Road, Kochi –
682018. Canbo is engaged in the business of procuring and trading electronic goods.
Our Promoters are interested to the extent of their shareholding in Canbo. The details of Canbo’s shareholding
pattern as on the date of the Draft Red Herring Prospectus are as follows:
S.No. Name of the shareholder No. of shares held %
1. Mr. Jose Thomas Pattara 1,275 51
2. Mr. Santhosh Kumar K. 1,225 49
Total 2,500 100.00
Financial Information
The summary audited financial statements of Canbo for the last three Financial Years are as follows:
(in `)
Particulars For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Equity share capital (par value ` 1000 per equity share) 2,500,000 2,500,000 2,500,000
Reserves and surplus (excluding revaluation reserve if any) 9,169,864 8,392,100 7,065,197
Sales 103,531,826 79,553,146 30,728,604
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Particulars For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Profit/(Loss) after tax 4,107,199 (777,764) (1,326,902.89)
Earnings per share (basic and diluted) 13,691 (311.11) (530.76)
Networth 11,669,864 10,892,100 9,565,197
Net asset value per share 4668 4356.8 3826.08
Canbo does not have any interest, including any business or other interest, in our Company. Further, it has no interest
in our promotion.
Canbo does not have any interest in any property acquired by our Company within the last two years from the date of
the Draft Red Herring Prospectus or proposed to be acquired by our Company.
2. MobSHARE Mobile Systems India Private Limited (“MobSHARE”)
MobSHARE was incorporated on June 2, 2008 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. The registered office of MobSHARE is at 9/2053 Gopika Kochar Road, Sasthamangalam, P.O.
Trivandrum, Kerala – 695010. MobSHARE is engaged in the business of mobile media content aggregator, mobile
software marketing, mobile content sharing services and web solutions.
Our Promoters are interested to the extent of their shareholding in MobSHARE. The details of MobSHARE’s
shareholding pattern as on the date of the Draft Red Herring Prospectus are as follows:
S.No. Name of the shareholder No. of shares held %
1. Mr. Sanjay Vijayakumar 5,000 50.00
2. Mr. Sanil Subash Chandra Bose 5,000 50.00
Total 10000 100.00
Financial Information
The summary audited financial statements of MobSHARE for the last three Financial Years are as follows:
(in `)
Particulars For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Equity share capital (par value ` 10 per equity share) 1,00,000 1,00,000 1,00,000
Reserves and surplus (excluding revaluation reserve if any) (9,25,558) (3,819,951) (2,444,458)
Sales - - 2,689,571
Profit/(Loss) after tax (9,19,656) (2,894,393) 1,375,493
Earnings per share (basic and diluted) (91.96) (289.44) 137.55
Networth (8,25,558) (3,719,951) (2,344,458)
Net asset value per share (82.6) (372) (234.46)
MobSHARE does not have any interest, including any business or other interest in our Company, except as disclosed in
the section titled “Related Party Transactions” on page 152 of the Draft Red Herring Prospectus. It has no interest in
our promotion.
MobSHARE does not have any interest in any property acquired by our Company within the last two years from the
date of the Draft Red Herring Prospectus or proposed to be acquired by our Company.
3. Bhagheeratha Builders Limited (“Bhagheeratha”)
Bhagheeratha was incorporated on December 14, 1989 under the provisions of the Companies Act, 1956 with the
Registrar of Companies, Kerala. The registered office of Bhagheeratha is at Bhagheeratha Residency, 4th
Floor, Banerji
Road, Ernakulam, Kerala, India, 682018. Bhagheeratha is engaged in the business of construction of commercial and
residential real estate projects.
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Our Promoters are interested to the extent of their shareholding in Bhagheeratha. The details of Bhagheeratha’s
shareholding pattern as on the date of the Draft Red Herring Prospectus are as follows:
Sr. No. Name of the shareholder* No. of shares held %
1. Jose Thomas Pattara 26358 25.39
2. Mercy Jose Pattara 25553 24.61
3. Tisu Sunny 7182 6.92
4. Kuttanad Credit & Investments Private Limited. 12770 12.3
Total 71863 69.2
* Name of the Shareholders reflecting holds 5% or more share of the Company.
Financial Information
The summary audited financial statements of Bhagheeratha for the last three Financial Years are as follows:
(in `)
Particulars
For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Equity share capital (par value ` 100 per equity share) 10208000 10382200 10382200
Reserves and surplus (excluding revaluation reserve if any) 6832636 6751396 5582705
Sales 327640 614940 973578
Profit/(Loss) after tax (61414) (81240) (1168691)
Earnings per share (basic and diluted) (0.60) (0.78) (11.26)
Networth 11040636 17133596 15964905
Net asset value per share 106.34 165.03 153.78
Bhagheeratha does not have any interest, including any business or other interest, in our Company. Further, it has no
interest in our promotion.
Bhagheeratha does not have any interest in any property acquired by our Company within the last two years from the
date of the Draft Red Herring Prospectus or proposed to be acquired by our Company.
3. Chettichira Real Estates and Hospitality Private Limited (“Chettichira”)
Chettichira was incorporated on May 6, 2008, under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. The registered office of Chettichira is at Pattara Puthenveedu, Muhamma P.O., Cherthala Thaluk,
Alleppey, Kerala – 688525. Chettichira is engaged in the business of real estate and tourism.
Our Promoters are interested to the extent of their shareholding in Chettichira. The details of Chettichira’s
shareholding pattern as on the date of the Draft Red Herring Prospectus are as follows:
S.No. Name of the shareholder No. of shares held %
1. Mr. Jose Thomas Pattara 5,000 50
2. Ms. Mercy Jose Pattara 5,000 50
Total 10,000 100.00
Financial Information
The summary audited financial statements of Chettichira for the last three Financial Years are as follows:
(in `)
Particulars
For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Equity share capital (par value ` 10 per equity share) 100,000 100,000 100,000
Reserves and surplus (excluding revaluation reserve if any) (79,594) (91,594) (102,594)
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Particulars
For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Sales 830,154 830,154 830,154
Profit/(Loss) after tax (13,524) (12,000) (11,000)
Earnings per share (basic and diluted) (1.35) (1.20) (1.10)
Networth 20,406 8,406 (2,594)
Net asset value per share 2.04 0.84 (0.26)
Chettichira does not have any interest, including any business or other interest, in our Company. Further, it has no
interest in our promotion.
Chettichira does not have any interest in any property acquired by our Company within the last two years from the
date of the Draft Red Herring Prospectus or proposed to be acquired by our Company.
4. Red Splash Media Solutions Private Limited (“Red Splash”)
Red Splash was incorporated on August 16, 2011 under the provisions of the Companies Act, 1956 with the Registrar
of Companies, Kerala. The registered office of Red Splash is at TC 26/1283 (8), 3M Centre, Panavila Ootukuzy Road,
GPO, Thiruvanthpuram, Kerala - 695001. Red Splash is engaged in the business of indoor and outdoor advertising.
Our Promoters are interested to the extent of their shareholding in Red Splash. The details of Red Splash’s
shareholding pattern, as on the date of the Draft Red Herring Prospectus are as follows:
Sr. No. Name of the shareholder No. of shares held %
1. Sanjay Vijayakumar 2200 22
2. Sony Joy 2200 22
3. Nimish Sasidhar 3400 34
4. Vivek Steve Francis 2200 22
Total 10,000 100.00
Financial Information
The summary audited financial statements of Red Splash for the last Financial Year is as follow:
(in `)
Particulars
For the Financial Year ended
March 31, 2012
Equity share capital par value `10 per equity share) 1,00,000
Reserves and surplus (excluding revaluation reserve if any) (29,502)
Sales 7,40,063
Profit/(Loss) after tax (29,502)
Earnings per share (basic and diluted) (2.95)
Networth 70,498
Net asset value per share 7.04
Red Splash does not have any interest, including any business or other interest, in our Company. Further, it has no
interest in our promotion.
Red Splash does not have any interest in any property acquired by our Company within the last two years from the
date of the Draft Red Herring Prospectus or proposed to be acquired by our Company.
B. Group Companies with negative net-worth:
The details of our Group Companies with negative net-worth are provided below:
1. MobSHARE Mobile Systems India Private Limited (“MobSHARE”)
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MobSHARE was incorporated on June 2, 2008 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. The registered office of MobSHARE is at 9/2053 Gopika Kochar Road, Sasthamangalam, P.O.
Trivandrum, Kerala – 695010. MobSHARE is engaged in the business of mobile media content aggregator and mobile
software marketing and mobile content sharing services and web solutions.
Our Promoters are interested to the extent of their shareholding in MobSHARE. The details of MobSHARE’s
shareholding pattern as on the date of the Draft Red Herring Prospectus are as follows:
S.No. Name of the shareholder No. of shares held %
1. Mr. Sanjay Vijayakumar 5,000 50.00
2. Mr. Sanil Subash Chandra Bose 5,000 50.00
Total 10,000 100.00
Financial Information
The summary audited financial statements of MobSHARE for the last three Financial Years are as follows:
(in `)
Particulars For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Equity share capital (par value ` 10 per equity share) 1,00,000 1,00,000 1,00,000
Reserves and surplus (excluding revaluation reserve if any) (9,25,558) (3,819,951) (2,444,458)
Sales - - 2,689,571
Profit/(Loss) after tax (9,19,656) (2,894,393) 1,375,493
Earnings per share (basic and diluted) (91.96) (289.44) 137.55
Networth (8,25,558) (3,719,951) (2,344,458)
Net asset value per share (82.56) (371.99) (234.44)
MobSHARE does not have any interest, including any business or other interest, in our Company, except as disclosed
in the section titled “Related Party Transactions” on page 152 of the Draft Red Herring Prospectus. It has no interest in
our promotion.
MobSHARE does not have any interest in any property acquired by our Company within the last two years from the
date of the Draft Red Herring Prospectus or proposed to be acquired by our Company.
2. East Venice Property Developers Private Limited (“East Venice”)
East Venice was incorporated on May 12, 2006, under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. The registered office of East Venice is at Pattara Puthenveedu, Muhamma P.O., Cherthala Thaluk,
Alleppey, Kerala – 688525. East Venice is engaged in the business of real estate & tourism.
Our Promoters are interested to the extent of their shareholding in East Venice. The details of East Venice’s
shareholding pattern as on the date of the Draft Red Herring Prospectus are as follows:
S.No. Name of the shareholder No. of shares held %
1. Mr. Jose Thomas Pattara 50 50
2. Ms. Mercy Jose Pattara 50 50
Total 100 100.00
Financial Information
The summary audited financial statements of East Venice for the last three Financial Years are as follows:
(in `)
Particulars For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
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Particulars For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Equity share capital (par value ` 1000 per equity share) 100,000 100,000 100,000
Reserves and surplus (excluding revaluation reserve if any) (794,411) (871,195) (986,848)
Sales - - -
Profit/(Loss) after tax (60,580) (76,784) (115,653)
Earnings per share (basic and diluted) (605) (768) (1156.53)
Networth (694,411) (771,195) (886,848)
Net asset value per share (6944.11) (7711.95) (8868.48)
East Venice does not have any interest, including any business or other interest, in our Company. Further, it has no
interest in our promotion.
East Venice does not have any interest in any property acquired by our Company within the last two years from the
date of the Draft Red Herring Prospectus or proposed to be acquired by our Company.
3. East Venice Builders and Realtors Private Limited (“East Venice Builders”)
East Venice Builders was incorporated on September 25, 2006, under the provisions of the Companies Act, 1956 with
the Registrar of Companies, Kerala. The registered office of East Venice Builders is at Door No. 356, Thannikkal,
Muhamma P.O., Alleppey, Kerala – 688525.East Venice Builders is engaged in the business of real estate and tourism.
Our Promoters are interested to the extent of their shareholding in East Venice Builders. The details of East Venice
Builders’ shareholding pattern as on the date of the Draft Red Herring Prospectus are as follows:
S.No. Name of the shareholder No. of shares held %
1. Mr. Jose Thomas Pattara 50 50
2. Mr. Jose Kuttan 50 50
Total 100 100.00
Financial Information
The summary audited financial statements of East Venice Builders for the last three Financial Years are as follows:
(in `)
Particulars
For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Equity share capital (par value ` 1000 per equity share) 100,000 100,000 100,000
Reserves and surplus (excluding revaluation reserve if any) (268,800) (479,658) (641,497)
Sales 82,918 70,495 62,951
Profit/(Loss) after tax (170,370) (210,857) (161,839)
Earnings per share (basic and diluted) (1704) (2108.57) (1618.39)
Networth (168,800) (379,658) (541,497)
Net asset value per share (1688) (3796.58) (5414.97)
East Venice Builders does not have any interest, including any business or other interest, in our Company. Further, it
has no interest in our promotion.
East Venice Builders does not have any interest in any property acquired by our Company within the last two years
from the date of the Draft Red Herring Prospectus or proposed to be acquired by our Company.
4. Jayem Greenfields and Estates Private Limited (“Jayem Greenfields”)
Jayem Greenfields was incorporated on April 20, 2006, under the provisions of the Companies Act, 1956 with the
Registrar of Companies, Kerala. The registered office of Jayem Greenfields is at Pattara Puthenveedu, Muhamma P.O.,
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Cherthala Thaluk, Alleppey, Kerala – 688525. Jayem Greenfields is engaged in the business of planting, growing and
processing of rubber, tea, coffee, spices and other agricultural and forest products.
Our Promoters are interested to the extent of their shareholding in Jayem Greenfields. The details of Jayem
Greenfields’ shareholding pattern as on the date of the Draft Red Herring Prospectus are as follows:
S.No. Name of the shareholder No. of shares held %
1. Mr. Jose Thomas Pattara 50 50
2. Ms. Mercy Jose Pattara 50 50
Total 100 100.00
Financial Information
The summary audited financial statements of Jayem Greenfields for the last three Financial Years are as follows:
(in `)
Particulars For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Equity share capital (par value ` 1000 per equity share) 100,000 100,000 100,000
Reserves and surplus (excluding revaluation reserve if any) (136,138) (232,406) (250,266)
Sales - - -
Profit/(Loss) after tax (44,750) (96,268) (17,860)
Earnings per share (basic and diluted) (448) (963) (179)
Networth (132,406) (36,138) (150,266)
Net asset value per share (1324.06) (361.38) (1502.66)
Jayem Greenfields does not have any interest, including any business or other interest, in our Company. Further, it has
no interest in our promotion.
Jayem Greenfields does not have any interest in any property acquired by our Company within the last two years from
the date of the Draft Red Herring Prospectus or proposed to be acquired by our Company.
5. Q&R Warehousing and Logistics Private Limited (“Q&R Warehousing”)
Q&R Warehousing was initially incorporated as Vazhakkala Realtors and Hospitality Private Limited on May 12, 2008
and on March 03, 2011 the name was subsequently changed to Q&R Warehousing under the provisions of the
Companies Act, 1956 with the Registrar of Companies, Kerala. The registered office of Q&R Warehousing is at Pattara
Puthenveedu, Muhamma P.O., CherthalaThaluk, Alleppey, Kerala – 688525. Q&R Warehousing is engaged in the
business of building, constructing, repairing, maintaining and owning warehouses, godowns, storage places and
buildings and to give it on lease or rent or to sell the same. Q&R Warehousing also provides logistics services including
stocking, warehousing, bailing, kitting, packing, transportation and related activities .
Our Promoters are interested to the extent of their shareholding in Q & R Warehousing. The details of Q&R
Warehousing’s shareholding pattern as on the date of the Draft Red Herring Prospectus are as follows:
S.No. Name of the shareholder No. of shares held %
1. Mr. Jose Thomas Pattara 5,000 50
2. Ms. Mercy Jose Pattara 5,000 50
Total 10,000 100.00
Financial Information
The summary audited financial statements of Q&R Warehousing for the last three Financial Years are as follows:
(in `)
Particulars
For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
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Particulars
For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Equity share capital (par value ` 10 per equity share) 100,000 100,000 100,000
Reserves and surplus (excluding revaluation reserve if any) (75,094) (96,594) (109,594)
Sales - - -
Profit/(Loss) after tax (9,024) (21,500) (13,000)
Earnings per share (basic and diluted) (0.90) (2.15) (1.30)
Networth 24,906 3,406 (9,594)
Net asset value per share 2.49 0.34 (0.96)
Q&R Warehousing does not have any interest, including any business or other interest, in our Company. Further, it has
no interest in our promotion.
Q&R Warehousing does not have any interest in any property acquired by our Company within the last two years from
the date of the Draft Red Herring Prospectus or proposed to be acquired by our Company.
6. Morakkala Real Estates and Hospitality Private Limited (“Morakkala”)
Morakkala was incorporated on 21 May 2008 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. The registered office of Morakkala is at Pattara Puthenveedu, Muhamma P.O., Cherthala Thaluk,
Alleppey, Kerala – 688525. Morakkala is engaged in the business of real estate and tourism.
Our Promoters are interested to the extent of their shareholding in Morakkala. The details of Morakkala’s
shareholding pattern as on the date of the Draft Red Herring Prospectus are as follows:
S.No.. Name of the shareholder No. of shares held %
1. Mr. Jose Thomas Pattara 5,000 50
2. Ms. Mercy Jose Pattara 5,000 50
Total 10,000 100.00
Financial Information
The summary audited financial statements of Morakkala for the last three Financial Years are as follows:
(in `)
Particulars For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Equity share capital (par value ` 10 per equity share) 100,000 100,000 100,000
Reserves and surplus (excluding revaluation reserve if any) (75,094) (90,094) (108,094)
Sales - - -
Profit/(Loss) after tax (9,024) (15,000) (18,000)
Earnings per share (basic and diluted) (0.90) (1.50) (1.80)
Networth 24,906 9,906 (8,094)
Net asset value per share 2.49 0.99 (0.81)
Morakkala does not have any interest, including any business or other interest, in our Company. Further, it has no
interest in our promotion.
Morakkala does not have any interest in any property acquired by our Company within the last two years from the
date of the Draft Red Herring Prospectus or proposed to be acquired by our Company.
7. Airapuram Real Estates and Hospitality Private Limited (“Airapuram”)
Airapuram was incorporated on June 16, 2008 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. The registered office of Airapuram is at Pattara Puthenveedu, Muhamma P.O., Cherthala Thaluk,
Alleppey, Kerala – 688525. Airapuram is engaged in the business of real estate and tourism.
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Our Promoters are interested to the extent of their shareholding in Airapuram. The details of Airapuram’s
shareholding pattern as on the date of the Draft Red Herring Prospectus are as follows:
S.No. Name of the shareholder No. of shares held %
1. Mr. Jose Thomas Pattara 5,000 50
2. Mr. Mercy Jose Pattara 5,000 50
Total 10,000 100.00
Financial Information
The summary audited financial statements of Airapuram for the last three Financial Years are as follows:
(in `)
Particulars For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Equity share capital (par value ` 10 per equity share) 100,000 100,000 100,000
Reserves and surplus (excluding revaluation reserve if any) (74,594) (96,779) (107,779)
Sales - - -
Profit/(Loss) after tax (8,524) (22,185) (11,000)
Earnings per share (basic and diluted) (0.85) (2.22) (1.10)
Networth 25,406 3,221 (7,779)
Net asset value per share 2.54 0.32 (0.78)
Airapuram does not have any interest, including any business or other interest, in our Company. Further, it has no
interest in our promotion.
Airapuram does not have any interest in any property acquired by our Company within the last two years from the
date of the Draft Red Herring Prospectus or proposed to be acquired by our Company.
8. Mekkalady Real Estates and Hospitality Private Limited (“Mekkalady”)
Mekkalady was incorporated on May 21, 2008, under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. The registered office of Mekkalady is at Pattara Puthenveedu, Muhamma P.O., Cherthala Thaluk,
Alleppey, Kerala – 688525. Mekkalady is engaged in the business of real estate and tourism.
Our Promoters are interested to the extent of their shareholding in Mekkalady. The details of Mekkalady’s
shareholding pattern as on the date of the Draft Red Herring Prospectus are as follows:
S.No. Name of the shareholder No. of shares held %
1. Mr. Jose Thomas Pattara 5,000 50
2. Ms. Mercy Jose Pattara 5,000 50
Total 10,000 100.00
Financial Information
The summary audited financial statements of Mekkalady for the last three Financial Years are as follows:
(in`)
Particulars
For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Equity share capital (par value `10 per equity share) 100,000 100,000 100,000
Reserves and surplus (excluding revaluation reserve if any) (74,594) (86,594) (104,794)
Sales - - -
Profit/(Loss) after tax (8,524) (12,000) (18,200)
Earnings per share (basic and diluted) (0.85) (1.20) (1.82)
Networth 25,406 13,406 (4,794)
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Net asset value per share 2.54 1.34 (0.48)
Mekkalady does not have any interest, including any business or other interest, in our Company. Further, it has no
interest in our promotion.
Mekkalady does not have any interest in any property acquired by our Company within the last two years from the
date of the Draft Red Herring Prospectus or proposed to be acquired by our Company.
9. Chettichira Real Estates and Hospitality Private Limited (“Chettichira”)
Chettichira was incorporated on May 6, 2008, under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. The registered office of Chettichira is at Pattara Puthenveedu, Muhamma P.O., Cherthala Thaluk,
Alleppey, Kerala – 688525. Chettichira is engaged in the business of real estate and tourism.
Our Promoters are interested to the extent of their shareholding in Chettichira. The details of Chettichira’s
shareholding pattern as on the date of the Draft Red Herring Prospectus are as follows:
S.No. Name of the shareholder No. of shares held %
1. Mr. Jose Thomas Pattara 5,000 50
2. Ms. Mercy Jose Pattara 5,000 50
Total 10,000 100.00
Financial Information
The summary audited financial statements of Chettichira for the last three Financial Years are as follows:
(in `)
Particulars
For the Financial Year ended
March 31, 2010 March 31, 2011 March 31, 2012
Equity share capital (par value ` 10 per equity share) 100,000 100,000 100,000
Reserves and surplus (excluding revaluation reserve if any) (79,594) (91,594) (102,594)
Sales 830,154 830,154 830,154
Profit/(Loss) after tax (13,524) (12,000) (11,000)
Earnings per share (basic and diluted) (1.35) (1.20) (1.10)
Networth 20,406 8,406 (2,594)
Net asset value per share 2.04 0.84 (0.26)
Chettichira does not have any interest, including any business or other interest, in our Company. Further, it has no
interest in our promotion.
Chettichira does not have any interest in any property acquired by our Company within the last two years from the
date of the Draft Red Herring Prospectus or proposed to be acquired by our Company.
C. Other Group Companies
The details of the rest of our Group Companies are provided below:
1. Pattara Business Ventures Private Limited (“Pattara Business Venture”)
Pattara Business Venture was incorporated on December 4, 2006 under the provisions of the Companies Act, 1956
with the Registrar of Companies, Kerala. Pattara Business Venture is engaged in the business of trading real estate and
property development.
Our Promoters hold 50% of the issued, subscribed and paid up capital of Pattara Business Venture as on the date of
the Draft Red Herring Prospectus.
- 115 -
2. Save Pharmacy (India) Private Limited (“Save”)
Save was incorporated on July 15, 2009 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Karnataka. Save is engaged in the business to undertake manufacture, processing and retail trading of
drugs, medicines and chemicals.
Our Promoters hold 51% of the issued, subscribed and paid up capital of Save as on the date of the Draft Red Herring
Prospectus.
3. Torque Technology Solutions Private Limited (“Torque”)
Torque was incorporated on January 4, 2007 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. Torque is engaged in the business of design development, sale, import and export of systems and
applications hardware/software either for own use or on behalf of manufacturers/vendors.
Our Promoters hold 50% of the issued, subscribed and paid up capital of Torque as on the date of the Draft Red
Herring Prospectus.
4. Odysseus Engineering Private Limited (“Odysseus”)
Odysseus was incorporated on August 20, 2011 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Maharashtra. Odysseus is engaged in the business of Construction, building, operating, managing roads,
bridges, highways, ports, industrial and software parks, sewage and drainage systems, building and operating hotels
and resorts, generation and distribution of power.
Our Promoters hold 100% of the issued, subscribed and paid up capital of Odysseus as on the date of the Draft Red
Herring Prospectus.
5. Mobile Express Private Limited (“Mobile Express”)
Mobile Express was incorporated on September 06, 2012 under the provisions of the Companies Act, 1956 with the
Registrar of Companies, Kerala. Mobile Express is engaged in the business of acting as a Mobile Signature Service
Provider in the territory of India including development or licensing or import of all related technology.
Our Promoters hold 100% of the issued, subscribed and paid up capital of Mobile Express as on the date of the Draft
Red Herring Prospectus.
6. Nedungapra Realtors and Hospitality Private Limited (“Nedungapra”)
Nedungapra was incorporated on May 21, 2008 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. Nedungapara is engaged in the business of real estate and tourism.
Our Promoters hold 50% of the issued, subscribed and paid up capital of Nedungapara as on the date of the Draft Red
Herring Prospectus.
7. Gogreen Hospitality Solutions Private Limited (“Gogreen”)
Gogreen was initially incorporated as Kottappady Property Developers and Hospitality Private Limited on May 12,
2008 and on June 15, 2011 the name was subsequently changed to Gogreen, under the provisions of the Companies
Act, 1956 with the Registrar of Companies, Kerala. Gogreen is engaged in the business of providing tour operator
services and provides travel, transport and accommodation services by running hotels, motels, restaurants, rest
places, home stay services and other related services in India and abroad.
Our Promoters hold 50% of the issued, subscribed and paid up capital of Gogreen as on the date of the Draft Red
Herring Prospectus.
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8. JTP Realtors and Hospitality Private Limited (“JTP Realtors”)
JTP Realtors was incorporated on February 5, 2012, under the provisions of the Companies Act, 1956 with the
Registrar of Companies, Kerala. JTP Realtors is engaged in the business of real estate and tourism.
Our Promoters hold 50% of the issued, subscribed and paid up capital of JTP Realtors as on the date of the Draft Red
Herring Prospectus.
9. Kayal Property Developers and Hospitality Private Limited (“Kayal”)
Kayal was incorporated on March 10, 2008, under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. Kayal is engaged in the business of real estate and tourism.
Our Promoters hold 50% of the issued, subscribed and paid up capital of Kayal as on the date of the Draft Red Herring
Prospectus.
10. Muhamma Real Estates and Hospitality Private Limited (“Muhamma”)
Muhamma was incorporated on February 5, 2008, under the provisions of the Companies Act, 1956 with the Registrar
of Companies, Kerala. Muhamma is engaged in the business of real estate and tourism related activities.
Our Promoters hold 50% of the issued, subscribed and paid up capital of Muhamma as on the date of the Draft Red
Herring Prospectus.
11. Pattara Power Projects Private Limited (“Pattara Power”)
Pattara Power was initially incorporated as Palachuvadu Real Estate and Hospitality Private Limited on May 12, 2008
and on June 25, 2012 the name was subsequently changed to Pattara Power under the provisons of the Companies
Act 1956 with the Registrar of Companies, Kerala.Pattara Power is engaged in the business of production, sale and
distribution of renewal energy.
Our Promoters hold 64% of the issued, subscribed and paid up capital Pattara Power as on the date of the Draft Red
Herring Prospectus.
12. PEE CEE Real Estates and Hospitality Private Limited (“PEE CEE”)
PEE CEE was incorporated on March 10, 2008 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. PEE CEE is engaged in the business of real estate and tourism.
Our Promoters hold 50% of the issued, subscribed and paid up capital of PEE CEE as on the date of the Draft Red
Herring Prospectus.
13. PVT Realtors and Hospitality Private Limited (“PVT”)
PVT was incorporated on March 10, 2008 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. PVT is engaged in the business of real estate and tourism.
Our Promoters hold 50% of the issued, subscribed and paid up capital of PVT as on the date of the Draft Red Herring
Prospectus.
14. Senai Real Estates and Hospitality Private Limited (“Senai”)
Senai was incorporated on March 10, 2008 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. Senai is engaged in the business of real estate and tourism.
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Our Promoters hold 50% of the issued, subscribed and paid up capital of Senai as on the date of the Draft Red Herring
Prospectus.
15. Vembanad Real Estates and Hospitality Private Limited (“Vembanad”)
Vembanad was incorporated on February 5, 2008 under the provisions of the Companies Act, 1956 with the Registrar
of Companies, Kerala. Vembanad is engaged in the business of real estate and tourism.
Our Promoters hold 50% of the issued, subscribed and paid up capital of Vembanad as on the date of the Draft Red
Herring Prospectus.
16. Kuttanad Property Developers and Hospitality Private Limited (“Kuttanad”)
Kuttanad was incorporated on March 10, 2008, under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. Kuttanad is engaged in the business of real estate and tourism.
Our Promoters hold 50% of the issued, subscribed and paid up capital of Kuttanad as on the date of the Draft Red
Herring Prospectus.
17. Achu Realtors and Hospitality Private Limited (“Achu”)
Achu was incorporated on February 6, 2008 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. Achu is engaged in the business of real estate and tourism.
Our Promoters hold 50% of the issued, subscribed and paid up capital of Achu as on the date of the Draft Red Herring
Prospectus.
18. Elamakkara Realtors and Hospitality Private Limited (“Elamakkara”)
Elamakkara was incorporated on May 6, 2008, under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. Elamakkara is engaged in the business of real estate and tourism.
Our Promoters hold 50% of the issued, subscribed and paid up capital of Elamakkara as on the date of the Draft Red
Herring Prospectus.
19. Code Blue Technology Services Private Limited (“Code Blue”)
Code Blue was incorporated on June 30, 2011 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. Code Blue is engaged in the business of developing software platforms, providing telecom
solutions, digital marketing and branding solutions and call centre management.
Our Promoters hold 20% of the issued, subscribed and paid up capital of Code Blue as on the date of the Draft Red
Herring Prospectus.
20. Jayem Farms & Properties India Private Limited(“Jayem Farm”)
Jayem Farm was incorporated on December 23, 2005, under the provisions of the Companies Act, 1956 with the
Registrar of Companies, Kerala. Jayem Farm is engaged in the business of farming and processing of rubber, tea,
coffee and spices.
Our Promoters hold 50% of the issued, subscribed and paid up capital of Jayem Farm as on the date of the Draft Red
Herring Prospectus.
21. Rajshri Hospitalities Private Limited (“Rajshri”)
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Rajshri was incorporated on June 28, 2000 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. Rajshri is engaged in the business of setting up and maintaining hotels, resorts and other
hospitality projects.
Our Promoters hold 25% of the issued, subscribed and paid up capital of Rajshri as on the date of the Draft Red
Herring Prospectus.
22. Joed Farms and Properties Private Limited (“Joed”)
Joed was incorporated on November 14, 2005 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. Joed is engaged in the business of farming and to purchase, take on lease, let on hire or otherwise
set up, provide, develop farms and properties or to sell, exchange or deal in such farms and properties.
Our Promoters hold 50% of the issued, subscribed and paid up capital of Joed as on the date of the Draft Red Herring
Prospectus.
23. High Tide Farms & Properties Private Limited (“High Tide”)
High Tide was incorporated on January 16, 2006 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kerala. High Tide is engaged in the business of of all kinds of farming and to purchase, take on lease, let on
hire or otherwise set up, provide, develop farms and properties.
Our Promoters hold 50% of the issued, subscribed and paid up capital of High Tide as on the date of the Draft Red
Herring Prospectus.
24. Muhamma Property Developers and Hospitality Private Limited (“Muhamma Property Developers”)
Muhamma Property Developers was incorporated on March 10, 2008 under the provisions of the Companies Act,
1956 with the Registrar of Companies, Kerala and Lakshadweep. Muhamma Property Developers is engaged in the
business of establishing hotels, resorts, restaurants, motels, holiday camps and to purchase, hire or lease yachts, ships
or cruise vessels.
Our Promoters hold 50% of the issued, subscribed and paid up capital ofMuhamma Property Developers as on the
date of the Draft Red Herring Prospectus.
25. Bell Chit Funds
Bell Chit Funds is a partnership firm formed in the year 1993 under the povisons of Indian Partnership Act, 1932. Bell
Chit Funds is engaged in the activities of chitties.
Our Promoters hold 50% of the capital of Bell Chit Funds as on the date of the Draft Red Herring Prospectus.
26. Startup Village Business Management Services LLP (“Startup Village Business Management”)
Startup Village Business Management was registered as an LLP on August 09, 2012 bearing LLP identification number
AAB-0586, under the provisions of Limited Liability Partnership Act, 2008 with the Registrar of Companies, Kerala.
Startup Village Business Management is engaged in the business of providing management services to business
incubators and incubatee units including but not limited to logistics, accounting services, business support services
and so on.
Our Promoters hold 100% capital of Startup Village Business Management as on the date of the Draft Red Herring
Prospectus.
27. Evangelia Consulting LLP (“Evangelia”)
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Evangelia was registered as an LLP on August 13, 2012 bearing LLP identification number AAB-0938, under the
provisions of Limited Liability Partnership Act, 2008 with the Registrar of Companies, Kerala. Evangelia is engaged in
the business of undertaking on its own or in association with any Indian or foreign agency, individuals, firms,
companies or Governments either in India or abroad activities such as electronic information technology
development, upgradation, manufacturing, processing and upgradation of hardware, software, website, webpage,
internet, e-mail, online electronic communication systems, data processing, manufacturing and dealing in all types of
computer hardware and software development centers and training centers.
Our Promoters hold 66% capital of Evangelia as on the date of the Draft Red Herring Prospectus.
28. 4TRANZ4 Consulting LLP (“4TRANZ4”)
4TRANZ4 was registered as an LLP on August 17, 2012 bearing LLP identification number AAB-0716, under the
provisions of Limited Liability Partnership Act, 2008 with the Registrar of Companies, Kerala. 4TRANZ4 is engaged in
the business of consulting, sourcing, buying, selling, stocking, trading, servicing, importing and exporting of health
related and allied products, infrastructure, equipment, pharmaceuticals, software and services.
Our Promoters hold 100% capital of 4TRANZ4 as on the date of the Draft Red Herring Prospectus.
29. Andra Technology & Consulting LLP (“Andra Technology”)
Andra Technology was registered as an LLP on August 03, 2012 bearing LLP identification number AAB-0506, under
the provisions of Limited Liability Partnership Act, 2008 with the Registrar of Companies, Kerala. Andra Technology is
engaged in the business of undertaking on its own or in association with any Indian or foreign agency, individuals,
firms, companies or Government activities such as electronic information technology development, upgradation,
manufacturing, processing and upgradation of hardware, software, website, webpage, internet, e-mail, online
electronic communication systems, data processing and to run and operate computer hardware and software
development services.
Our Promoters hold 60% capital of Andra Technology as on the date of the Draft Red Herring Prospectus.
30. Startup Village Business Incubation Services LLP (“Startup Village Business Incubation”)
Startup Village Business Incubation was registered as an LLP on March 06, 2012 bearing LLP identification number
AAA-8248, under the provisions of Limited Liability Partnership Act, 2008 with the Registrar of Companies, Kerala.
Startup Village Business Incubation is engaged in the business of ensuring the prominence and originality of the brand
“Startup Village”, timely registration of the brand whether inside or outside India, right employment of the brand
according to law and reasonable investment for advertisement and the inviolable patent rights of the brand.
Our Promoters hold 100% capital of Startup Village Business Incubation as on the date of the Draft Red Herring
Prospectus.
31. ZeroGravity Technologies LLP (“ZeroGravity”)
ZeroGravity was registered as an LLP on February 28, 2012 bearing LLP identification number AAA-8146, under the
provisions of Limited Liability Partnership Act, 2008 with the Registrar of Companies, Kerala. ZeroGravity is engaged in
the business of design and development of mobile applications, designing of brand identity, printing designs,
production of animation videos, software development, web development, support solutions, design solutions,
software sales, user interface designing, design consulting and branding consulting.
Our Promoters hold 50% capital of ZeroGravity as on the date of the Draft Red Herring Prospectus.
Loss making Group Companies:
The following table sets forth the details of our Group Companies which have incurred loss in the last three Financial
Years:
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(in `)
Sno. Name of the company
For the Financial Year ended,
March 31,
2010
March 31,
2011
March 31,
2012
1. Achu Realtors and Hospitality Private Limited (14,524) (12,000) (11,000)
2. Airapuram Real Estates and Hospitality Private Limited (8,524) (22,185) (11,000)
3. Bell Chit Funds 56,000 13,000 (1,20,000)
4. Bhagheeratha Builders Limited (61,414) (81,240) (1,168,691)
5. Canbo Electronics Private Limited 4,107,199 (777,764) (1,326,903)
6. Chettichira Real Estates and Hospitality Private Limited (13,524) (12,000) (11,000)
7. East Venice Builders and Realtors Private Limited (170,370) (210,857) (161,839)
8. East Venice Property Developers Private Limited (60,580) (76,784) (115,653)
9. Elamakkara Realtors and Hospitality Private Limited (9,024) (12,000) (11,500)
10. Gogreen Hospitality Solutions Private Limited (9,024) (12,000) (11,000)
11. Jayem Farms & Properties India Private Limited - (53,150) (15,100)
12. Jayem Greenfields and Estates Private Limited (136,138) (232,406) (250,266)
13. JTP Realtors and Hospitality Private Limited (14,524) (12,000) (11,000)
14. Kayal Property Developers and Hospitality Private Limited (13,524) (12,000) (11,000)
15. Kuttanad Property Developers and Hospitality Private
Limited (13,524) (12,000) (11,000)
16. Mekkalady Real Estates and Hospitality Private Limited (8,524) (12,000) (18,200)
17. MobSHARE Mobile Systems India Private Limited (9,19,656) (2,894,393) 1,375,493
18. Morakkala Real Estates and Hospitality Private Limited (9,024) (15,000) (18,000)
19. Muhamma Property Developers and Hospitality Private
Limited (13,524) (12,000) (11,000)
20. Muhamma Real Estates and Hospitality Private Limited (14,524) (12,000) (11,000)
21. Nedungapra Realtors and Hospitality Private Limited (8,524) (12,000) (11,000)
22. Odysseus Engineering Private Limited - - (28,360)
23. Pattara Business Ventures Private Limited (35,745) (58,296) (18,139)
24. Pattara Power Projects Private Limited (9,024) (11,500) (11,000)
25. PEE CEE Real Estates and Hospitality Private Limited (13,524) (12,000) (11,000)
26. PVT Realtors and Hospitality Private Limited (13,524) (12,000) (11,000)
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Sno. Name of the company
For the Financial Year ended,
March 31,
2010
March 31,
2011
March 31,
2012
27. Q&R Warehousing and Logistics Private Limited (9,024) (21,500) (13,000)
28. Rajshri Hospitalities Private Limited (2,875) (123,964) (55,100)
29. Red Splash Media Solutions Private Limited - - (29,502)
30. Save Pharmacy (India) Private Limited (39,000) (4,000) (3,500)
31. Senai Real Estates and Hospitality Private Limited (13,524) (12,000) (11,000)
32. Torque Technology Solutions Private Limited (30,887) (29,107) (35,676)
33. Vembanad Real Estates and Hospitality Private Limited (14,524) (12,000) (11,000)
Nature and extent of interest of Group Companies in the Promotion of our Company
None of our Group Companies have any interest in the promotion of our Company.
Payment or Benefits to Promoters and Group Companies
Except as stated above under “Interests of our Promoters and Group Companies” and “Financial Statements –
Annexure XIV – Related Party Transactions” on pages 101 and 152 of the Draft Red Herring Prospectus, respectively,
there has been no payment of benefits to our Promoters and Group Companies during the Financial Year 2012 and
2011.
Other Confirmations
Further, our Promoters and Group Companies have confirmed that they have not been debarred from accessing the
capital markets by SEBI. Our Promoters have also confirmed that they have not been declared as willful defaulters by
the RBI or any other government authority and there are no violations of securities laws (in India or overseas)
committed by our Promoters and Group Companies in the past or are pending against them.
Common Pursuits
None of our Group Companies are engaged in any activities similar to those conducted by us, except Mobile Express
Private Limited and MobSHARE Mobile Systems India Private Limited. As and when such conflict may arise, we will
examine viable solutions as per applicable law and as determined by our Board.
Sick or Defunct Companies
None of the companies forming part of our Group Companies have become sick companies within the meaning of Sick
Industrial Companies (Special Provisions) Act, 1985 and none of them is under winding up.
Additionally, none of our Group Companies have become defunct in the five years preceding the date of filing of the
Draft Red Herring Prospectus and no application has been made, in respect of any of the Group Companies, to the
relevant Registrar of Companies for striking off their names except the following.
S.No. Name of the Company Date Pending Litigations
1. Green Leaf Food Company Private Limited August 29, 2010* Nil
2. Zeuss Home Foodz Private Limited. April 1, 2011** Nil
*date of application
**date on which it is struck off
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Litigation
For details relating to legal proceedings involving our Promoters and Group Companies, see “Outstanding Litigation
and Material Developments” on page 225 of the Draft Red Herring Prospectus.
Related party transactions
For details of related party transactions, see “Financial Statements– Related Party Transactions” on page 152 of the
Draft Red Herring Prospectus.
Public issue or rights issue
None of our Group Companies has made any public or rights issue in the last three years preceding the date of filing
the Draft Red Herring Prospectus. Further, none of our Group Companies are listed on any stock exchanges.
Companies with which our Promoters have disassociated in the last three years
Our Promoters have disassociated with following companies in the last three years preceding the date of the Draft
Red Herring Prospectus. The details of disassociation are as follows:
Name of Company Relationship Date of
Disassociation
Reason for and circumstances
leading to Disassociation
Green Leaf Food Company
Private Limited Promoter/Shareholder May 19, 2011 Dissolution of the entity
Backwater Media Private
Limited Managing Director November 14, 2012 Cessation as director
Firms with which our Promoters have disassociated in the last three years
Our Promoters have not disassociated with any of the firms in the last three years.
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DIVIDEND POLICY
The declaration and payment of dividends, if any, will be recommended by our Board of Directors and approved by
our shareholders at their discretion, subject to the provision of the Articles of Association and the Companies Act. The
dividends, if any, will depend on a number of factors, including but not limited to the earnings, capital requirements
and overall financial position of our Company. In addition, our ability to pay dividends may be impacted by a number
of other factors, including, restrictive covenants under the loan or financing documents we may enter into from time
to time. For further details on restrictive covenants, see “Financial Indebtedness” on page 195 of the Draft Red Herring
Prospectus. Our Company has no formal dividend policy. Our Board may also, from time to time, pay interim
dividends.
Our Company has not declared any dividends during the last five Financial years.
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SECTION V – FINANCIAL INFORMATION
FINANCIAL STATEMENTS
Details Page Number
Unconsolidated Restated Financial Statements for period ended September 30, 2012 and years
ended March 31 2012, 2011, 2010, 2009 and 2008 125
Consolidated Restated Financial Statements for period ended September 30, 2012 and years ended
March 31 2012, 2011, 2010, 2009 and 2008 160
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RESTATED UNCONSOLIDATED FINANCIAL INFORMATION
The Board of Directors
MobME Wireless Solutions Limited
41/3197, 4th
floor
Bhageeratha Square
Kacheripady, Cochin North
Ernakulam 682 018
India
Dear Sirs
We have examined the attached restated unconsolidated statement of assets and liabilities as at
30 September 2012, 31 March 2012, 2011, 2010, 2009, 2008 and restated statement of profit and loss and cash flows
for the six months ended 30 September 2012 , for years ended 31 March 2012, 2011, 2010, 2009 and the period from
12 December 2006 to 31 March 2008 of MobME Wireless Solutions Limited (“the Company”) as approved by the
Board of Directors of the Company, prepared in terms of the requirements of Paragraph B, Part II of Schedule II to the
Companies Act, 1956, as amended ('the Act') and the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009, as amended (the ‘SEBI Regulations’), the Guidance note on “Reports in
Company’s Prospectus (Revised)” issued by the Institute of Chartered Accountants of India (‘ICAI’), to the extent
applicable (‘Guidance Note’) and in terms of our engagement agreed upon with you in accordance with our
engagement letter dated October 25, 2012 in connection with the proposed issue of Equity Shares of the Company.
The restated unconsolidated financial information has been compiled by the management from:
a) the audited unconsolidated financial statements of the Company for the year ended 31 March 2012 and for
the six months period ended 30 September 2012 which have been audited by us; and
b) the audited unconsolidated financial statements of the Company for the year ended 31 March 2011, 2010,
2009 and 2008 which have been audited by the Company’s previous auditor R. Vinod Kumar & Associates,
and whose auditors’ reports have been relied upon by us for the said years;
In accordance with the requirements of Paragraph B, Part II of Schedule II to the Act, the SEBI Regulations and terms
of our engagement agreed with you, we further report that:
a) The Restated unconsolidated Summary Statement of Assets and Liabilities as at 31 March 2008, 2009, 2010,
2011, 2012 and 30 September 2012, examined by us, as set out in Annexure I to this report read with the
significant accounting policies in Annexure IV (1) are after making such adjustments and regrouping as in our
opinion were appropriate and more fully described in the Notes to the Restated Unconsolidated Financial
Statements enclosed as Annexure IV (2) and (3) to this report.
b) The restated summary statement of profit and losses of the Company for the period ended
31 March 2008; for the Financial year from 12 December 2006 to 31 March 2009, 2010, 2011, 2012 and for
the six months period ended 30 September 2012 are as set out in Annexures II to this report read with the
significant accounting policies in Annexure IV (1) are after making such adjustments and regrouping as in our
opinion were appropriate and more fully described in the Notes to the Restated Unconsolidated Financial
Information enclosed as Annexure IV (2) and (3) to this report.
1 Based on the above and reliance placed by us on the financial statements audited by the previous auditors R.
Vinod Kumar & Associates, we are of the opinion that the Restated Unconsolidated Financial Statements have
been made after incorporating:
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i) adjustments for the changes in accounting policies retrospectively in respective Financial years / period
to reflect the same accounting treatment as per the changed accounting policy for all the reporting
periods;
ii) adjustments for prior period and other material amounts in the respective Financial years / period to
which they relate; and
iii) there are no extra-ordinary items that need to be disclosed separately in the Restated Unconsolidated
Financial Information and no qualifications requiring adjustments.
2 We have also examined the following Restated Unconsolidated Financial Information as set out in the Annexures
prepared by the management and approved by the Board of Directors relating to the Company for the period
from 12 December 2006 to 31 March 2008 and Financial years ended 31 March 2009, 2010, 2011, 2012 and for
the six months period ended 30 September 2012.
i) Unconsolidated statement of cash flows, as restated, included in Annexure III
ii) Unconsolidated details of current and non-current investments, as restated, included in Annexure V
iii) Unconsolidated statement of trade receivables, as restated, included in Annexure VI
iv) Unconsolidated long-term and short-term loans and advances and other non-current and current assets, as
restated, included in Annexure VII
v) Unconsolidated statement of long-term and short-term borrowings, as restated, included in Annexure VIII
vi) Unconsolidated statement of current and non-current liabilities and long term and short term provisions, as
restated, included in Annexure IX
vii) Unconsolidated statement of share capital, as restated, included in Annexure X
viii) Unconsolidated statement of reserves and surplus, as restated, included in Annexure XI
ix) Unconsolidated details of other income, as restated, included in Annexure XII
x) Unconsolidated statement of dividends paid, included in Annexure XIII
xi) Unconsolidated statement containing details of related party transactions and balances outstanding with
related parties included in Annexure XIV
xii) Capitalization statement as at 30 September 2012 included in Annexure XV
xiii) Unconsolidated statement of accounting ratios, as restated, included in Annexure XVI
xiv) Unconsolidated statement of other expenses, as restated, included in Annexure XVII
xv) Unconsolidated statement of tax shelter included in Annexure XVIII
3 The report should not in any way be construed as a re-issuance or re-dating of any of the previous audit reports
issued by us.
4 We have no responsibility to update our report for events and circumstances occurring after the date of the
report.
- 127 -
5 In our opinion, the above unconsolidated financial information contained in Annexures I to XVIII of this report
read along with the significant accounting policies (Refer Annexure IV (1)) and Notes to the Restated
Unconsolidated Summary Statements (Refer Annexure IV (2) and IV (3)) are prepared after making adjustments
and regrouping as considered appropriate and have been prepared in accordance with Paragraph B, Part II of
Schedule II of the Act and the SEBI Regulations.
Our report is intended solely for use of the management and for inclusion in the offer document in connection with
the proposed issue of Equity Shares of the Company. Our report should not be used, referred to or distributed for any
other purpose except with our consent in writing.
for Sivaprasad & Associates
Chartered Accountants
Registration No: 007619S
R Suja Sathish
Partner
Membership No.: 212089
Place: Kollam
Date: February 5, 2013
- 128 -
Annexure I
Unconsolidated statement of assets and liabilities, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars
As at 31 March As at
30
September
2012 2008 2009 2010 2011 2012
Non-current assets
Fixed assets
Tangible assets 33.94 43.34 69.14 170.01 254.96 306.27
Intangible assets 0.70 8.14 20.01 13.02 9.62 8.30
Deferred tax asset, net - 0.01 - - - -
Non-current investments - - - - 100.80 120.80
Long-term loans and advances 1.48 5.50 17.93 48.44 93.08 101.47
Other non-current assets - 1.06 5.99 21.82 19.09 21.09
Total 36.12 58.05 113.07 253.29 477.55 557.93
Current assets
Current investments - - - 44.95 - -
Trade receivables 14.09 49.86 153.76 545.21 729.94 814.46
Cash and bank balances 27.11 33.66 72.94 236.07 295.96 304.70
Short-term loans and advances 10.35 14.10 14.38 51.62 348.71 368.36
Other current assets - - - 167.45 207.11 209.61
Total 51.55 97.62 241.08 1,045.30 1,581.72 1,697.13
Non-current liabilities
Long-term borrowings - - 3.41 2.00 186.72 205.50
Deferred tax liability, net 1.46 - 3.59 73.55 62.70 5.73
Long-term provisions 0.37 0.74 1.93 7.17 12.53 14.93
Total 1.83 0.74 8.93 82.72 261.95 226.16
Current liabilities
Short-term borrowings - - - - 30.00 30.00
Trade payables 0.36 3.27 35.57 83.61 141.54 98.17
Other current liabilities 11.43 26.07 50.41 162.33 119.13 110.25
Short-term provisions 1.16 0.76 - 23.02 - -
Total 12.95 30.10 85.98 268.96 290.67 238.42
Net worth 72.89 124.83 259.24 946.91 1,506.65 1,790.48
Net worth represented by
Share capital 122.96 136.11 144.91 160.00 160.00 200.00
Share application money pending allotment 40.00 15.00 64.00 - - -
Reserves and surplus (90.07) (26.28) 50.33 786.91 1,346.65 1,590.48
Net worth 72.89 124.83 259.24 946.91 1,506.65 1,790.48
Note: The above statement should be necessarily read with the notes to the restated unconsolidated summary
statements and the significant accounting policies as appearing in Annexure IV.
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Annexure II
Unconsolidated statement of profit and loss, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars
For the period from
12 December 2006
to 31 March 2008
For the year ended 31 March
For the period
from
1 April 2012 to
30 September
2012 2009 2010 2011 2012
Income
Income from services 34.24 133.36 373.39 1,932.75 2,252.87 1,049.74
Other income 0.41 0.07 0.50 2.44 57.22 1.37
Total 34.65 133.43 373.89 1,935.19 2,310.09 1,051.11
Expenditure
Employee benefits 70.83 53.10 116.25 364.89 711.55 411.55
Other expenses 55.73 71.89 140.93 536.28 752.91 306.54
Finance charges 0.13 0.52 0.16 5.78 5.13 7.00
Depreciation/ amortisation 11.34 11.90 25.87 37.42 62.23 52.73
Total 138.03 137.41 283.21 944.37 1,531.82 777.82
Net profit before tax (103.38) (3.98) 90.68 990.82 778.27 273.29
Less: Provision for tax
Current tax / minimum
alternate tax - - (10.47) (245.08) (229.38) (116.30)
Fringe benefit tax (1.23) (0.76) - - - -
Deferred tax (charge) /
benefit (1.46) 1.47 (3.60) (69.96) 10.85 56.97
Total provision for tax (2.69) 0.71 (14.07) (315.04) (218.53) (59.33)
Net profit after tax, as
restated (106.07) (3.27) 76.61 675.78 559.74 213.96
Note 1: The above statement should be necessarily read with the notes to the restated unconsolidated summary
statements and the significant accounting policies as appearing in Annexure IV.
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Annexure III
Unconsolidated statement of cash flows, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars
For the period
from
12 December
2006
to 31 March
2008
For the year ended 31 March
For the period from
1 April 2012 to
30 September 2012 2009 2010 2011 2012
Cash flows from operating
activities
Net profit/(loss) before tax,
as restated (103.38) (3.98) 90.68 990.82 778.27 273.29
Adjustments for:
Depreciation/ amortisation 11.34 11.90 25.87 37.42 62.23 52.73
Finance charges 0.13 0.52 0.16 5.78 5.13 7.00
Interest income 0.00 (0.06) (0.24) (2.44) (12.75) (1.37)
Provision for bad and
doubtful debts 0.00 0.00 0.00 0.00 0.00 27.09
Profit on sale of investments 0.00 0.00 0.00 0.00 (44.05) 0.00
Profit on sale of fixed assets 0.00 0.00 0.00 0.00 (0.18) 0.00
Operating cash flows before
working capital changes (91.91) 8.38 116.47 1,031.58 788.65 358.74
Decrease / (increase) in trade
receivables (14.09) (35.77) (103.90) (391.45) (184.73) (111.61)
Decrease / (increase) in loans
and advances and other
current assets
(10.40) (4.87) (7.59) (266.47) (369.44) (19.99)
Increase /(decrease) in
liabilities and provisions 12.16 17.92 56.57 165.06 15.64 (54.03)
Cash generated from / (used
in) operating activities before
taxes
(104.24) (14.34) 61.55 538.72 250.12 173.11
Income taxes paid (1.50) (5.06) (21.04) (206.92) (261.62) (128.85)
Net cash generated from /
(used in) operating activities
[A]
(105.74) (19.40) 40.51 331.80 (11.50) 44.26
Cash flows from investing
activities Purchase of fixed assets (45.98) (29.06) (63.54) (131.31) (145.49) (102.73)
Proceeds from sale of fixed
assets 0.00 0.32 0.00 0.00 1.90 0.00
Purchase of investments 0.00 0.00 0.00 (44.95) (100.80) (20.00)
Sale of investments 0.00 0.00 0.00 0.00 89.00 0.00
Interest received 0.00 0.00 0.00 2.74 12.75 1.37
Net cash used in investing
activities [B] (45.98) (28.74) (63.54) (173.52) (142.64) (121.36)
Cash flows from financing
activities: Proceeds from issue of share
capital 178.96 55.21 57.80 11.89 0.00 69.87
Proceeds from secured loans,
net 0.00 0.00 4.67 (1.26) 216.01 18.43
- 131 -
Particulars
For the period
from
12 December
2006
to 31 March
2008
For the year ended 31 March
For the period from
1 April 2012 to
30 September 2012 2009 2010 2011 2012
Interest paid (0.13) (0.52) (0.16) (5.78) (1.98) (2.46)
Net cash generated from /
(used in) financing activities
[C]
178.83 54.69 62.31 4.85 214.03 85.84
Net increase / (decrease) in
cash and cash equivalents
[A+B+C]
27.11 6.55 39.28 163.13 59.89 8.74
Cash and cash equivalents at
the beginning of the year /
period
0.00 27.11 33.66 72.94 236.07 295.96
Cash and cash equivalents at
the end of the year / period 27.11 33.66 72.94 236.07 295.96 304.70
Components of cash and
cash equivalents Cash in hand 0.04 0.06 0.06 0.03 0.01 0.01
Balance with scheduled bank
in current accounts 27.07 32.00 70.28 67.71 120.09 204.14
in deposit accounts - 1.60 2.60 168.33 175.86 100.55
27.11 33.66 72.94 236.07 295.96 304.70
Note:
1. The cash flow statement has been prepared under the indirect method as set out in Accounting Standard - 3 on Cash Flow
Statements as prescribed by the Companies (Accounting Standards) Rules, 2006.
2. The above statement should be necessarily read with the notes to the restated unconsolidated summary statements and the
significant accounting policies as appearing in Annexure IV.
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Annexure IV
1. Significant accounting policies
1.1 Background
MobME Wireless Solutions Limited (‘the Company’) was incorporated on 12 December 2006 as a private limited
company. The registered office of the Company is located at Trivandrum, Kerala, India. The Company has been
converted into a public limited company on 10 December 2012. The Company is primarily engaged in the business of
providing value added services for mobile phone network operators and enterprise solutions to various corporate and
governmental agencies.
The restated financial statements relate to the Company and have been specifically prepared for inclusion in the
document to be filed by the Company with the Securities and Exchange Board of India (“SEBI”) and Stock Exchanges’
in connection with its proposed Initial Public Offering. The restated financial statements consist of the restated
summary statement of assets and liabilities of the Company as at 31 March 2008, 2009, 2010, 2011, 2012 and 30
September 2012, the related restated summary statement of profit and loss for the period ended 31 March 2008, for
the years ended 31 March 2009, 2010, 2011, 2012 and the six months period from 1 April 2012 to 30 September 2012
and the related restated summary statement of cash flow for the period ended 31 March 2008, for the years ended 31
March 2009, 2010, 2011, 2012 and for the six months period from 1 April 2012 to 30 September 2012 (these restated
financial statements hereinafter are collectively referred to as “Restated Summary Statements”).
The Restated Summary Statements have been prepared to comply in all material respects with the requirements of
Schedule II to the Companies Act, 1956 (the “Act”) and the Securities and Exchange Board of India (Issue of Capital
and Disclosure Requirements) Regulations,2009 (the “SEBI Regulations”) notified by SEBI on August 26, 2009, as
amended from time to time. The Act and the SEBI Regulations require the information in respect of the assets and
liabilities and profits and losses of the Company for each of the five years / periods immediately preceding the issue of
the Prospectus.
1.2 Basis for preparation
The Restated Summary Statements have been prepared in accordance with generally accepted accounting principles
in India and presented under the historical cost convention, on the accrual basis of accounting and comply with the
mandatory Accounting Standards prescribed in the Companies (Accounting Standard) Rules 2006 and other
pronouncements of the Institute of Chartered Accountants of India (“ICAI”). The Restated Summary Statements are
presented in Indian rupees.
1.3 Use of estimates
The preparation of Restated Summary Statements in conformity with generally accepted accounting principles in India
(“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent liabilities on the date of the financial statements and the results of
operations during the reporting year end. Actual results could differ from those estimates. Any revision to accounting
estimates is recognised prospectively in current and future periods.
1.4 Tangible and intangible fixed assets
Fixed assets are carried at cost of acquisition or construction less accumulated depreciation and provision for
impairment, if any. Cost comprises the purchase price and includes freight, duties, taxes and any attributable cost of
bringing the asset to its working condition for its intended use. Borrowing costs directly attributable to acquisition or
construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended
use are also included to the extent they relate to the period till such assets are ready to be put to use.
Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date and the cost of the fixed
asset not ready for their intended use before such date, are disclosed under capital work-in-progress.
Intangible assets are stated at historical cost less accumulated amortisation and impairment.
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1.5 Depreciation and amortisation
Depreciation is provided on all fixed assets on written down value method at the rates of depreciation prescribed in
Schedule XIV to the Companies Act, 1956 or based on the estimated useful life of the assets, whichever is higher.
Based on an evaluation of the useful lives of fixed assets carried out by the Management, Management has
determined that the depreciation rates specified in Schedule XIV to the Companies Act, 1956 reflect the appropriate
useful life of the assets.
Pro-rata depreciation is provided on all fixed assets purchased and sold during the year. Assets individually costing `
5,000 or less are depreciated at the rate of 100% in the period of purchase.
Intangible assets comprise computer software and are amortised over their estimated useful lives, which is three
years to ten years, respectively, from the date such assets are available for use.
1.6 Impairment
The Company assesses at each balance sheet date whether there is any indication that an asset forming part of its
cash generating units may be impaired. If any such indications exist, the Company estimates the recoverable amount
of the asset or the group of asset comprising, a cash generating unit. For an asset or a group of assets that does not
generate largely independent cash flows, the recoverable amount is determined for the cash generating unit to which
the asset belongs. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to
which the assets belongs is less than the carrying amount, the carrying amount is reduced to its recoverable amount.
The recoverable amount is the greater of the assets net selling price and value in use. In assessing the value in use, the
estimated future cash flows are discounted to their present value at the weighted average cost of capital. The
reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet
date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount. An impairment loss is reversed only to the extent
that the carrying amount of the asset does not exceed the book value that would have been determined; if no
impairment loss has been recognized.
1.7 Investments
Long- term investments are carried out at cost less any other-than-temporary diminution in value, determined
separately for each individual investment. Current investments are carried at the lower of cost and fair value. The
comparison of cost and fair value is done separately in respect of each category of investments.
1.8 Revenue recognition
Revenue from networking and value added services is recognized as the related services are provided, when
arrangements are on a time and material basis. Revenue from fixed price contracts are recognized using the
percentage of completion method, which is determined based on the costs incurred to date in relation to the total
estimated costs to complete the contract. Provision for estimated losses, if any, on incomplete fixed price contracts
are recorded in the year in which such losses become probable based on the current contract estimates.
Unbilled revenue represents earnings in excess of billings while unearned income represents billings in excess of
earnings.
Revenues are stated net of discounts, expenses billed to customers and any applicable duties or taxes. Excise duty in
not applicable to the activities of the Company.
Interest on deployment of surplus funds is recognized using the time proportionate method, based on the
transactional interest rates.
1.9 Foreign currency transactions
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Foreign currency transactions are recorded using the exchange rates prevailing on the dates of the respective
transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognised in
the statement of profit and loss for the year.
Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the
closing exchange rates on that date and the resultant exchange differences are recognised in the statement of profit
and loss. Non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are
reported using the exchange rate at the date of the transaction.
1.10 Employee benefits
Contributions payable to the recognized provident fund, which is a defined contribution scheme, is made monthly at
predetermined rates to the appropriate authorities and charged to the statement of profit and loss on an accrual
basis.
Gratuity, a defined benefit scheme, is accrued based on an actuarial valuation at the balance-sheet date, carried out
by an independent actuary. The present value of the obligation under such defined benefit plan is determined based
on an actuarial valuation using the Projected Unit Credit Method, which recognises each and period of service as
giving rise to an additional units of employee benefit entitlement and measures each unit separately to build up the
final obligation.
The rules of the Company do not permit encashment or carry forward of unutilised leave.
Actuarial gain/losses are immediately taken to the statement of profit and loss and are not deferred.
1.11 Taxation
The current income tax charge is determined in accordance with the relevant tax regulations applicable to the
Company in India. Minimum Alternative Tax (MAT) paid in accordance with the tax laws, which give rise to future
economic benefits in the form of tax credit against future income tax liability, is recognised in the balance sheet if
there is convincing evidence that the Company will pay normal tax in subsequent years and the resultant assets can be
measured reliably.
The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax
rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised
only to the extent there is reasonable certainty that the assets can be realised in future; however, where there is
unabsorbed depreciation or carried forward business loss under taxation laws, deferred tax assets are recognised only
if there is virtual certainty of realisation of such assets. Deferred tax assets/ liabilities are reviewed at each balance
sheet date and written down or written-up to reflect the amount that is reasonably/ virtually certain (as the case may
be) to be realised.
Assets and liabilities representing current and deferred tax are disclosed on a net basis when there is a legally
enforceable right to set - off and management intends to settle the asset and liability on a net basis.
Tax expense also comprises Fringe Benefit Tax (FBT) for the period until 31 March 2009. Provision for FBT until 31
March 2009 is made in accordance with the provisions of Income-tax Act, 1961 and the Guidance Note on FBT issued
by ICAI. Effective 1 April 2009, the provisions of FBT have been withdrawn.
1.12 Earnings per share
The basic and diluted earnings or loss per share is computed by dividing the net profit or loss attributable to equity
shareholders for the year/period by the weighted average number of equity shares outstanding during the year.
1.13 Leases
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Leases where the lessor effectively retains substantially all the risks and rewards of ownership of the leased item are
classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and
loss on a straight-line basis over the lease term.
1.14 Provisions and contingent liabilities
The Company recognises a provision when there is a present obligation as a result of a past event that probably
requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for
a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. When the likelihood of outflow of resources, in case of a possible obligation or a
present obligation is remote no provision or disclosure is made.
Provision for onerous contracts i.e. contracts where the expected unavoidable cost of meeting the obligations under
the contract exceed the economic benefits expected to be received under it, are recognised when it is possible that an
outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an
obligating event, based on a reliable estimate of such obligation.
1.15 Cash flow statement
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and
items of income or expenses associated with investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated.
2. Impact of material adjustments
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars
For the
period from
12 December
2006 to 31
March 2008
For the year ended 31 March For the period
from 1 April 2012
to 30 September
2012 2009 2010 2011 2012
Net profit after tax as per audited
statement of profit and loss (105.91) (1.43) 74.51 544.89 588.57 316.12
Adjustments on account of: (refer
Note 3 (I))
a) Income from operations - - - 196.39 (15.23) (152.22)
b) Selling, general and administrative
expenses 1.89 - 3.91 6.10 - -
c) Preliminary expenses written off (1.68) 0.42 0.42 0.42 0.42 -
d) Provision for gratuity (0.37) (0.37) (1.19) (5.24) 7.17 -
e) Prior period items adjusted to
respective years - (1.89) - (3.91) (35.04) -
Total impact of the adjustments (0.16) (1.84) 3.14 193.76 (42.68) (152.22)
Tax impact on adjustments - - (1.04) (62.87) 13.85 50.06
Total adjustments (0.16) (1.84) 2.10 130.89 (28.83) (102.16)
Net profit after tax, as restated (106.07) (3.27) 76.61 675.78 559.74 213.96
3. Notes on adjustments to the restated unconsolidated summary statements and other disclosures
1. Other material adjustments
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1) Income from operations: During the year ended 31 March 2012 and period ended 30 September 2012, the
Company has recorded certain revenue from operations pertaining to the earlier years. The effect of such
income has been appropriately adjusted in income from operations of the respective years.
2) Preliminary expenses: The preliminary expenses amortised in the books over the period of five years have
been appropriately accounted in the period ended 31 March 2008 during which the same was incurred.
3) Provision for gratuity : Provision for gratuity which had not been accounted for earlier, has now been
accounted appropriately as per actuarial valuation for the year 31 March 2008, 2009, 2010, 2011 and 2012.
4) Prior period items / selling, general and administrative expenses: The Company had recorded certain
income / expenses as prior period items in the financial statements for the years ended March 31, 2009, 2011
and 2012. For the purpose of this statement, the effects of these items have been appropriately adjusted /
recomputed for earlier periods and accordingly adjusted in the respective years.
5) Tax impact of adjustments: Tax impacts of adjustments relating to effect on adjustments made in respect of
restatement of the financial statements have been adjusted in the respective years. The current taxes
provided in the year ended March 31, 2010, 2011, 2012 and period ended 30 September 2012 on an
estimated basis.
2. Audit qualification
The following qualifications were made in the financial statements for the year ended 31 March 2012
1) The transactions made in pursuance of contracts or arrangements entered in the register maintained under
section 301 and exceeding the value of five lakh rupees in respect of any party during the year have been
made at prices which are reasonable having regard to prevailing market prices at the relevant time. However,
the company has not obtained prior permission from the Central Government for the same. The Company is
in the process of filing application before the Company Law Board for regularizing the same.
3. Regrouping
Figures have been regrouped / recast for the consistency of presentation
4. Contingent liabilities and commitments
a. Contingent Liabilities
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at 31 March As at
30 September 2012 2008 2009 2010 2011 2012
Bank guarantees - 1.00 5.69 21.02 16.72 21.09
b. Commitments
Particulars As at 31 March As at 30
September 2012 2008 2009 2010 2011 2012
Corporate guarantee given to Getz
Shoppe and Exim Private Limited for
cash credit facility availed from
Federal Bank Limited
- - - - - 200.00
- 137 -
5. Gratuity
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is
eligible for gratuity on departure at 15 days salary (last drawn basic salary and dearness allowance) for each
completed year of service or part thereof in excess of six months. These benefits are unfunded.
Particulars
For the period
from
12 December
2006 to 31
March 2008
For the year ended 31 March For the period
from
1 April 2012 to
30 September
2012
2009 2010 2011 2012
Obligations at beginning of the year / period - 0.37 0.74 1.93 7.17 12.53
Current service cost 0.37 0.44 0.97 2.94 4.70 0.28
Interest cost on defined benefit obligation - 0.05 0.10 0.27 0.81 0.32
Benefits paid - - - - - -
Net actuarial (gain) / loss for the year / period - (0.12) 0.12 2.03 (0.15) 1.80
Obligations at end of the year / period 0.37 0.74 1.93 7.17 12.53 14.93
Reconciliation of present value of the
obligation and the fair value of the plan
assets:
Closing obligations 0.37 0.74 1.93 7.17 12.53 14.93
Closing fair value of plan assets - - - - - -
Liability recognized in the balance sheet 0.37 0.74 1.93 7.17 12.53 14.93
Gratuity cost for the year / period
Current service cost 0.37 0.44 0.97 2.94 4.70 0.28
Interest cost on defined benefit obligation - 0.05 0.10 0.27 0.81 0.32
Expected return on plan assets - - - - - -
Net actuarial (gain) / loss for the year / period - (0.12) 0.12 2.03 (0.15) 1.80
Net gratuity cost 0.37 0.37 1.19 5.24 5.36 2.40
Assumptions
Discount rate 8% 8% 8% 8% 8.5% 8.5%
Salary increase 5% 5% 5% 5% 5% 5%
Attrition rate Modified q(x) values under Indian Assured Lives Mortality (1994-1996) Ultimate –
Table
Retirement age 58 58 58 58 58 58
6. Segment reporting
Business segments: The Company has organized its operations into two businesses: value added services for mobile
phone network operators ('VAS') and enterprise solutions to various corporate and governmental agencies
('Enterprise').
Geographic segments: The Company does not have any reportable geographical segment.
The accounting principles used in the preparation of the financial statements are also consistently applied to record
income and expenditure in individual segments. Income and direct expenses in relation to segments are categorised
based on items that are individually identifiable to that segment. Other expenses are not specifically allocable to the
individual segments as these expenses are common in nature. The Company therefore believes that it is not
practicable to provide segment disclosure relating to such expenses and accordingly such expenses are separately
disclosed as unallocated and directly charged against total income.
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Certain segment assets and liabilities are directly attributable to the segment. Segment assets include all operating
assets used by the segment and consist principally of fixed assets, inventories, sundry debtors and loans and advances.
Segment liabilities include trade creditors, creditors for expenses and other operating liabilities and provisions. Certain
assets and liabilities that are not specifically allocable to the individual segments have been separately disclosed as
unallocated.
Particulars
For the period
from 12
December
2006 to 31
March 2008
For the year ended 31 March For the period
from 1 April 2012
to 30 September
2012
2009 2010 2011 2012
Segment revenues
VAS 22.70 82.67 267.17 1,617.88 1,913.61 962.74
Enterprise 11.54 50.69 106.22 314.87 339.26 87.00
34.24 133.36 373.39 1,932.75 2,252.87 1,049.74
Segment results
VAS 12.60 76.10 223.73 1,348.07 1,553.64 913.77
Enterprise 10.32 31.74 63.46 176.54 148.59 52.55
22.92 107.84 287.19 1,524.61 1,702.23 966.32
Other unallocable expenditure, net of
unallocable income (126.58) (111.37) (196.85) (530.45) (976.04) (687.40)
Operating profits (103.66) (3.53) 90.34 994.16 726.19 278.92
Interest income - 0.06 0.24 2.44 12.75 1.37
Other income 0.41 0.01 0.26 - 44.47 -
Finance cost (0.13) (0.52) (0.16) (5.78) (5.13) (7.00)
Taxation (2.69) 0.71 (14.07) (315.04) (218.53) (59.33)
Net profit, as restated (106.07) (3.27) 76.61 675.78 559.75 213.96
Segment assets
VAS 12.62 43.22 150.34 434.88 645.05 754.29
Enterprise 1.47 6.64 3.42 110.33 84.89 60.17
Corporate - unallocated 73.58 105.81 200.39 753.39 1,329.33 1,440.60
87.67 155.67 354.15 1,298.60 2,059.27 2,255.06
Segment liabilities
VAS 2.58 3.10 31.05 60.45 84.41 71.34
Enterprise 0.45 0.47 - 7.35 1.48 1.40
Corporate - unallocated 11.75 27.27 63.86 283.88 466.73 391.84
14.78 30.84 94.91 351.68 552.62 464.58
7. Subsequent events
(a) Conversion of Technology Development Board (TDB) loan to equity
The Company has converted the loan of ` 2,09,54,726 from TDB in to 1,16,416 Number of equity shares on 6
December 2012 at a price of ` 180
(b) Conversion of status from Private Limited to a Public Limited Company
Pursuant to the necessary approvals received from the Registrar of Companies, the Company has been converted into
a public limited company with effect from 10 December 2012
- 139 -
Annexure V
Details of current and non-current investments, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at 31 March As at
30 September
2012 2008 2009 2010 2011 2012
Non-current investments
Non Trade, unquoted - at cost
Investment in equity shares of subsidiary
companies:
Getz Shoppe and Exim Private Limited - - - - 100.00 100.00
Forward Media Private Limited - - - - 0.80 0.80
Investment in equity shares of others - - - - - 20.00
- - - - 100.80 120.80
Current investments
Non Trade, unquoted - at cost
Investment in equity instruments - - - 44.95 - -
- - - 44.95 - -
Total - - - 44.95 100.80 120.80
Note:
1. The figures disclosed above are based on the restated unconsolidated financial information of MobME
Wireless Solutions Limited.
- 140 -
Annexure VI
Unconsolidated statement of trade receivables, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at 31 March As at
30 September
2012 2008 2009 2010 2011 2012
Unsecured, considered good
Debts outstanding for a period
exceeding six months from
- Promoters and group companies of
Promoters - - - - - -
- Directors - - - - - -
- Others 0.07 0.02 9.37 10.55 116.20 175.20
Total (A) 0.07 0.02 9.37 10.55 116.20 175.20
Other debts from
- Promoters and group companies of
Promoters - - - - - -
- Directors - - - - - -
- Others 14.02 49.84 144.39 534.66 613.74 612.17
Total (B) 14.02 49.84 144.39 534.66 613.74 612.17
Unsecured, considered doubtful
Debts outstanding for a period
exceeding six months from
- Promoters and group companies of
Promoters - - - - - -
- Directors - - - - - -
- Others - - - - - 27.09
- - - - - 27.09
TOTAL (A+B) 14.09 49.86 153.76 545.21 729.94 814.46
Note:
1. The figures disclosed above are based on the restated unconsolidated financial information of MobME
Wireless Solutions Limited.
2. The list of persons/entities classified as 'Promoters' and 'Group Companies of Promoters' has been
determined by the Management and relied upon by auditors. The auditors have not performed any
procedures to determine whether this list is accurate or complete.
- 141 -
Annexure VII
Unconsolidated statement of long-term and short-term loans and advances and other non-current and current
assets, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars
As at 31 March As at
30
September
2012 2008 2009 2010 2011 2012
Long-term loans and advances
(Unsecured, considered good)
Advances for capital goods - - - - 26.44 16.64
Rental deposits
- Subsidiaries - - - - - -
- Promoters and group companies of
Promoters - - - - - -
- Directors - - - - - -
- Others - - 1.10 11.73 12.52 13.50
Other long-term advances 0.05 0.17 0.67 31.90 40.40 37.96
Other long-term deposits - - 1.02 4.81 4.50 11.60
Advance tax and tax deducted at source
(net of provision for tax) 1.43 5.33 15.14 - 9.22 21.77
Total (A) 1.48 5.50 17.93 48.44 93.08 101.47
Other non-current assets
Balance in banks for margin money - 1.00 5.69 21.82 19.09 21.09
Interest accrued from fixed deposits with
banks - 0.06 0.30 - - -
Total (B) - 1.06 5.99 21.82 19.09 21.09
Short-term loans and advances
Advances for supply of goods and
rendering of services
- Subsidiaries - - - - 188.53 257.53
- Promoters and group companies of
Promoters - 0.92 6.80 17.47 22.55 35.54
- Directors - 1.08 - 15.20 8.74 8.74
- Others 10.35 12.10 7.58 18.95 128.89 66.55
Total (C) 10.35 14.10 14.38 51.62 348.71 368.36
Other current assets
Unbilled revenue - - - 167.45 207.11 209.61
Total (D) - - - 167.45 207.11 209.61
Total (A+B+C+D) 11.83 20.66 38.30 289.33 667.99 700.53
Note:
1. The figures disclosed above are based on the restated unconsolidated financial information of MobME Wireless
Solutions Limited.
2. The list of persons/entities classified as 'Promoters' and 'Group Companies of Promoters' has been determined
by the Management and relied upon by auditors. The auditors have not performed any procedures to determine
whether this list is accurate or complete.
- 142 -
Annexure VIII
Unconsolidated statement of long-term and short-term borrowings, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at 31 March As at
30 September
2012 2008 2009 2010 2011 2012
Long term borrowings
- from banks and financial institutions - - 3.41 2.00 6.72 5.50
- from Technology Development Board
(Refer note 2) - - - - 180.00 200.00
- from promoters and group companies of
promoters - - - - - -
- - 3.41 2.00 186.72 205.50
Short term borrowings
- from banks - - - - 30.00 30.00
- from promoters and group companies of
promoters - - - - - -
- - - - 30.00 30.00
Current maturities of long term
borrowings - - 1.26 1.41 2.70 2.35
Total - - 4.67 3.41 219.42 237.85
Note:
1. The figures disclosed above are based on the restated unconsolidated financial information of MobME
Wireless Solutions Limited.
2. The loan has been subsequently converted into equity on 6 December 2012
- 143 -
Annexure - VIII (continued)
Details of long-term and short-term borrowings outstanding as at 30 September 2012
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated) SI.
No
.
Name of the
lender
Nature of
borrowin
g
Amount
sanctione
d
Amount
outstandin
g
Rate of
Interes
t
Date of
sanctio
n
Repaymen
t terms
Prepaymen
t charges
Default
charges Security
1 ICICI Bank
Limited
Vehicle
loan
3.80 3.30 11.75% 24-Mar-
12
48 monthly
instalment
s of `
9,865 from
15 April
2012 to 15
February
2016
Charges
fixed by the
bank from
time to
time are
binding as
advised by
the bank.
The bank is
entitled to
take
repossession
of the
hypothecate
d vehicles.
Secured by way of
hypothecation of
vehicles acquired
out of the loan
proceeds.
3.80 3.31 11.75% 24-Mar-
12
48 monthly
instalment
s of `
9,865 from
15 April
2012 to
15
February
2016
2 TATA Motors
Finance Ltd.
Vehicle
loan 2.92 1.24 13.00%
16-Jul-
09
60
instalment
s of EMI `
6,660
starting
from
16 July
2009 to
15 June
2014
Charges
fixed by the
bank from
time to
time are
binding as
advised by
the bank.
The lender is
entitled to
take
repossession
of the
hypothecate
d vehicles.
Secured by way of
hypothecation of
vehicles acquired
out of the loan
proceeds.
- 144 -
SI.
No
.
Name of the
lender
Nature of
borrowin
g
Amount
sanctione
d
Amount
outstandin
g
Rate of
Interes
t
Date of
sanctio
n
Repaymen
t terms
Prepaymen
t charges
Default
charges Security
3
Technology
Developmen
t Board
Term loan 200.00 200.00 5.00% 24-May-
11
9 half
yearly
instalment
s starting
from 1
October
2013 to 1
October
2017
The
Borrower
shall have
an option
to prepay
the entire
outstanding
principal
amount
along with
interest and
other
charges.
In the event
of any
default, over
and above
the
prescribed
rate of
interest, 10%
p.a will be
charged.
a) The movable
assets of the
Borrower Company
including movable
plant and
machinery,
equipment situated
at, 603, Wing B
Shivalaya heights,
Azad nagar road 2,
Off-Veeradesai
road, Andheri West,
Mumbai.
b) The movable
assets of the
Borrower Company
including movable
plant and machinery
situated at,
41/3197, 4th floor,
Bhageeratha
Residency, Near
Town Hall,
Kacherippadi,Cochin
-682 018, Kerala.
c) The whole
movable assets of
the Borrower
Company including
movable plant and
machinery situated
at, Suite 1006, Ivory
Court-1,Essel
Towers, MG Road,
Gurgaon, HARYANA,
PIN-122002
d) The Directors
Sanjay Vijayakumar
and Sony Joy of the
company has
pledged a total of
1,15,200 shares as
collateral towards
the loan.
e) Corporate
guarantee of the
company
f) Irrevocable and
unconditional
personal guarantees
of promoters and
directors namely
Sanjay Vijayakumar
and Sony Joy
4 IDBI Bank
Ltd.
Overdraft
against
fixed
deposit
30.00 30.00 11.50% 17-Jun-
11
Repayable
on demand
Charges
fixed by the
bank from
time to
time are
In the event
of any
default, the
bank may
recover from
On security of fixed
deposit of ` 50 lakhs
- 145 -
SI.
No
.
Name of the
lender
Nature of
borrowin
g
Amount
sanctione
d
Amount
outstandin
g
Rate of
Interes
t
Date of
sanctio
n
Repaymen
t terms
Prepaymen
t charges
Default
charges Security
binding as
advised by
the bank.
the
underlying
deposits.
237.85
- 146 -
Annexure IX
Unconsolidated statement of current and non-current liabilities and long term and short term provisions, as
restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at 31 March As at
30 September
2012 2008 2009 2010 2011 2012
Non-current liabilities
Long-term provisions
Gratuity 0.37 0.74 1.93 7.17 12.53 14.93
Total (A) 0.37 0.74 1.93 7.17 12.53 14.93
Current Liabilities
Trade payables
Dues to micro and small enterprises - - - - - -
Dues to others 0.36 3.27 35.57 83.61 141.54 98.17
Total (B) 0.36 3.27 35.57 83.61 141.54 98.17
Other current liabilities
Current maturities of borrowings - - 1.26 1.41 2.70 2.35
Employee benefits payable 5.24 10.17 - 4.31 16.68 17.09
Withholding and other taxes payable 3.17 7.24 38.62 144.15 87.00 71.88
Interest accrued but not due on
borrowings - - - - 3.15 7.69
Other payables 3.02 8.66 10.53 12.46 9.60 11.24
Total (C) 11.43 26.07 50.41 162.33 119.13 110.25
Short-term provisions
Provision for income tax (net of
advance tax) - - - 23.02 - -
Provision for fringe benefit tax (net of
advance tax) 1.16 0.76 - - - -
Total (D) 1.16 0.76 - 23.02 - -
TOTAL (A+B+C+D) 13.32 30.84 87.91 276.13 273.20 223.35
Note:
1. The figures disclosed above are based on the restated unconsolidated financial information of MobME
Wireless Solutions Limited.
- 147 -
Annexure X
Unconsolidated statement of share capital, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars
For the period
from
12 December
2006 to
31 March 2008
For the year ended 31 March For the
period
from 1
April 2012
to 30
Septembe
r 2012
2009 2010 2011 2012
Equity shares (fully paid)
Authorised 200.00 200.00 200.00 200.00 200.00 200.00
Issued, subscribed and paid-up 122.96 136.11 144.91 160.00 160.00 200.00
Reconciliation of number of shares:
Number of shares at the beginning of
the year / period - 1,229,600 1,361,100 1,449,100 1,600,000 1,600,000
Add: Shares issued during the year /
period
In cash 1,229,600 109,378 88,000 150,900 - 270,146
Other than cash - 22,122 - - - 129,854
Number of shares at the closing of the
year / period 1,229,600 1,361,100 1,449,100 1,600,000 1,600,000 2,000,000
Note:
1) The figures disclosed above are based on the restated unconsolidated financial information of MobME
Wireless Solutions Limited.
- 148 -
Annexure XI
Unconsolidated statement of reserves and surplus, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars
For the period
from
12 December
2006 to
31 March 2008
For the year ended 31 March For the
period from
1 April 2012
to
30
September
2012
2009 2010 2011 2012
Shares premium account (A)
Opening balance - 16.00 83.06 83.06 143.86 143.86
Add: Received during the year /
period 16.00 67.06 - 60.80 - 29.87
Less: Utilized for issue of bonus
shares - - - - - -
Total (A) 16.00 83.06 83.06 143.86 143.86 173.73
Surplus: statement of profit and
loss (B)
Opening balance - (106.07) (109.34) (32.73) 643.05 1,202.79
Add: Net profit after tax transferred
from
statement of profit and loss
(106.07) (3.27) 76.61 675.78 559.74 213.96
Amount available for appropriation (106.07) (109.34) (32.73) 643.05 1,202.79 1,416.75
Less: Utilized for issue of bonus
shares - - - - - -
Less: dividend - - - - - -
Total (B) (106.07) (109.34) (32.73) 643.05 1,202.79 1,416.75
Total (A+B) (90.07) (26.28) 50.33 786.91 1,346.65 1,590.48
Note:
1) The figures disclosed above are based on the restated unconsolidated financial information of MobME
Wireless Solutions Limited.
- 149 -
Annexure XII
Details of other income, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars
For the period
from
12 December
2006 to 31
March 2008
For the year ended 31 March For the
period from 1
April 2012 to
30 September
2012 2009 2010 2011 2012
Other income, as restated 0.41 0.07 0.50 2.44 57.22 1.37
Net profit before tax, as restated (103.38) (3.98) 90.68 990.82 778.27 273.29
Percentage (0.40%) (1.76%) 0.55% 0.25% 7.35% 0.50%
Sources of other income
Recurring
Interest - from banks - 0.06 0.24 2.44 12.75 1.37
Non-recurring
Profit on sale of fixed assets, net - - - - 0.18 -
Discount received 0.41 - - - - -
Profit on sale of investments (Refer
Note 2) - - - - 44.05 -
Miscellaneous income - 0.01 0.26 - 0.24 -
Total 0.41 0.07 0.50 2.44 57.22 1.37
Note:
1. The figures disclosed above are based on the restated unconsolidated financial information of MobME Wireless
Solutions Limited.
2. Includes profit on sale of investments in Innoz Technologies Private Limited - ` 35.67 lakhs and in
Commonwealth Inclusive Growth Services Limited - ` 8.38 lakhs.
- 150 -
Annexure XIII
Unconsolidated statement of dividend paid
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars
For the period
from
12 December
2006 to 31
March 2008
For the year ended 31 March For the period
from
1 April 2012 to
30 September
2012
2009 2010 2011 2012
Number of fully paid
equity shares 1,229,600 1,361,100 1,449,100 1,600,000 1,600,000 2,000,000
Equity share capital 122.96 136.11 144.91 160.00 160.00 200.00
Face value (`) 10.00 10.00 10.00 10.00 10.00 10.00
Rate of dividend % - - - - - -
Amount of dividend - - - - - -
Note:
1. The figures disclosed above are based on the restated unconsolidated financial information of MobME
Wireless Solution Limited.
- 151 -
Annexure XIV
Details of the list of related parties and nature of relationships
Particulars
For the period
from
12 December
2006 to
31 March 2008
Year ended
31 March 2009
Year ended
31 March 2010
Year ended
31 March 2011
Year ended
31 March 2012
For the period
from 1 April
2012 to
30 September
2012
Subsidiary
Not applicable Not applicable Not applicable Not applicable Forward Media
Private Limited
Forward Media
Private Limited
Not applicable Not applicable Not applicable Not applicable
Getz Shoppe
and Exim
Private Limited
Getz Shoppe
and Exim
Private Limited
Key
management
personnel
Jose Thomas
Pattara-
Director
Jose Thomas
Pattara-
Director
Jose Thomas
Pattara-
Director
Jose Thomas
Pattara-
Director
Jose Thomas
Pattara-
Director
Jose Thomas
Pattara-
Director
Sanjay Vijaya
Kumar -
Director
Sanjay Vijaya
Kumar -
Director
Sanjay Vijaya
Kumar-
Whole time
director
Sanjay Vijaya
Kumar-
Whole time
director
Sanjay Vijaya
Kumar-
Whole time
director
Sanjay Vijaya
Kumar-
Whole time
director
Sony Joy -
Director
Sony Joy -
Director
Sony Joy -
Whole time
director
Sony Joy -
Whole time
director
Sony Joy - Chief
Executive
Officer
Sony Joy - Chief
Executive
Officer
George Brody -
Director
George Brody -
Director
George Brody -
Director
George Brody -
Director
George Brody -
Director
George Brody -
Director
Relatives of key
management
personnel
Not applicable Not applicable Not applicable
Thomas
Varghese
Pattara
Thomas
Varghese
Pattara
Not applicable
Companies over
which the key
managerial
personnel and
relatives have
control/
significant
influence
(associates)
Not applicable
Mobshare
Mobile Systems
India Private
Limited
Mobshare
Mobile Systems
India Private
Limited
Mobshare
Mobile Systems
India Private
Limited
Mobshare
Mobile Systems
India Private
Limited
Mobshare
Mobile Systems
India Private
Limited
Not applicable Not applicable Not applicable Not applicable Not applicable Mobile Express
Private Limited
Canbo
Electronics
Private Limited
Canbo
Electronics
Private Limited
Not applicable Not applicable Not applicable Not applicable
Not applicable
Torque
Technology
Solutions
Private Limited
Torque
Technology
Solutions
Private Limited
Torque
Technology
Solutions
Private Limited
Torque
Technology
Solutions
Private Limited
Torque
Technology
Solutions
Private Limited
Not applicable Not applicable Indian Telecom
Innovation Hub
Indian Telecom
Innovation Hub
Indian Telecom
Innovation Hub
Indian Telecom
Innovation Hub
Not applicable Not applicable Not applicable Not applicable
Odysseus
Engineering
Private Limited
Odysseus
Engineering
Private Limited
Not applicable Not applicable
Dimensions
Mobile
Solutions
Private Limited
Dimensions
Mobile
Solutions
Private Limited
Dimensions
Mobile
Solutions
Private Limited
Dimensions
Mobile
Solutions
Private Limited
Notes:
1. 1. The figures disclosed above are based on the restated unconsolidated financial information of MobME
Wireless Solutions Limited.
2. Above disclosures are made in accordance with Accounting Standard (AS) 18 "Related Parties" prescribed by
the Companies (Accounting Standards) Rules, 2006.
- 152 -
Annexure XIV (continued)
Disclosures of significant transactions with related parties
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars Entity
For the period
from
12 December
2006 to 31
March 2008
For the year ended 31 March For the
period from
1 April 2012
to
30
September
2012
2009 2010 2011 2012
Purchase of goods Getz Shoppe and
Exim Private Limited - - - - - 1.17
Reimbursement of
expenses
Torque Technology
Solutions Private
Limited
- 0.14 - - - -
Canbo Electronics
Private Limited 1.32 - - - - -
Enterprise expenses
Mobshare Mobile
Systems India
Private Limited
- 6.52 5.18 - 26.37 -
Income from
enterprise
Mobshare Mobile
Systems India
Private Limited
- 6.93 2.72 18.13 - -
Consultancy charges George Brody - 3.20 - - - -
Subscription to
shares Sanjay Vijaya Kumar - - - - - 16.57
Sony Joy - - - - - 7.77
Managerial
remuneration Sanjay Vijaya Kumar 0.74 1.97 2.96 36.00 85.00 45.13
Sony Joy 0.94 1.97 2.99 36.00 85.00 27.54
Jose Thomas Pattara - - - - 16.50 9.00
Investments in
subsidiaries
Forward Media
Private Limited - - - - 0.80 -
Getz Shoppe and
Exim Private Limited - - - - 100.00 -
Advances given /
received Jose Thomas Pattara - - - 0.20 8.54 -
Sanjay Vijaya Kumar - 1.08 (1.08) - - -
Thomas Varghese
Pattara - - - 15.00 (15.00) -
Forward Media
Private Limited - - - - 53.03 24.50
Getz Shoppe and
Exim Private Limited - - - - 135.50 44.50
Mobshare Mobile
Systems India
Private Limited
- 0.92 5.42 10.50 26.09 11.02
Mobile Express
Private Limited - - - - - 0.29
Torque Technology
Solutions Private
Limited
- - 0.16 0.17 0.09 -
Indian Telecom
Innovation Hub - - 0.20 - 5.02 1.93
Odysseus
Engineering Private - - - - 0.25 (0.25)
- 153 -
Particulars Entity
For the period
from
12 December
2006 to 31
March 2008
For the year ended 31 March For the
period from
1 April 2012
to
30
September
2012
2009 2010 2011 2012
Limited
Dimensions Mobile
Solutions Private
Limited
- - 0.10 - - -
Notes:
1) The figures disclosed above are based on the restated unconsolidated financial information of MobME
Wireless Solutions Limited.
2) Above disclosures are made in accordance with Accounting Standard (AS) 18 "Related Parties" prescribed by
the Companies (Accounting Standards) Rules, 2006.
- 154 -
Annexure XIV (continued)
Details of related parties outstanding balances
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars Entity As at 31 March
As at 30
Septem
ber
2012 2008 2009 2010 2011 2012
Current liabilities
Torque Technology Solutions
Private Limited - 0.14 0.14 0.14 0.14 0.14
Canbo Electronics Private Limited 1.32 - - - - -
Managerial
remuneration
payable
Sanjay Vijaya Kumar - - - - 5.89 5.89
Sony Joy - - - - 5.39 5.39
Investments in
subsidiaries
Forward Media Private Limited - - - - 0.80 0.80
Getz Shoppe and Exim Private
Limited - - - - 100.00 100.00
Short term loans
and advances
Jose Thomas Pattara - - - 0.20 8.74 8.74
Sanjay Vijaya Kumar - 1.08 - - - -
Thomas Varghese Pattara - - - 15.00 - -
Forward Media Private Limited - - - - 53.03 77.53
Getz Shoppe and Exim Private
Limited - - - - 135.50 180.00
Mobshare Mobile Systems India
Private Limited - 0.92 6.34 16.84 16.56 27.58
Mobile Express Private Limited - - - - - 0.29
Torque Technology Solutions
Private Limited - - 0.16 0.33 0.42 0.42
Indian Telecom Innovation Hub - - 0.20 0.20 5.22 7.15
Odysseus Engineering Private
Limited - - - - 0.25 -
Dimensions Mobile Solutions
Private Limited - - 0.10 0.10 0.10 0.10
Note:
1) The figures disclosed above are based on the restated unconsolidated financial information of MobME
Wireless Solutions Limited.
2) Above disclosures are made in accordance with Accounting Standard (AS) 18 "Related Parties" prescribed by
the Companies (Accounting Standards) Rules, 2006.
- 155 -
Annexure XV
Capitalisation statement
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars Pre-issue as at
30 September 2012
Post issue
(refer note 2)
Short term debt 30.00 []
Long term debt (A) 205.50 []
Current maturities of long term borrowings 2.35 []
Total debt (B) 237.85 []
Shareholders’ funds
Share capital 200.00 []
Reserves and surplus 1,590.48 []
Total shareholders’ funds (C) 1,790.48 []
Long term debt/ shareholders’ funds (A/C) 0.11 []
Total debt/ shareholders’ funds (A/C) 0.13 []
Note:
1) The figures disclosed above are based on the restated unconsolidated financial information of MobME
Wireless Solutions Limited.
2) The company has converted the loan from Technology Development Board (TDB) to equity shares on 6
December 2012
- 156 -
Annexure XVI
Unconsolidated statement of accounting ratios
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars
As at and for
the period
from
12 December
2006
to 31 March
2008
As at and for the year ended 31 March As at and for the
period from
1 April 2012 to
30 September
2012
2009 2010 2011 2012
Net worth, as restated
(A) 72.89 124.83 259.24 946.91 1,506.65 1,790.48
Net profit after tax, as
restated (B) (106.07) (3.27) 76.61 675.78 559.74 213.96
Weighted average
number of equity shares
outstanding during the
year / period
For basic earnings per
share (C) 348,616 1,297,910 1,430,032 1,499,951 1,600,000 1,943,169
For diluted earnings per
share (D) 359,955 1,331,707 1,452,826 1,521,168 1,600,000 1,943,169
Earnings per share ` 10
each (refer note 4)
Basic earnings per share (
`) (E = B/C) (30.43) (0.25) 5.36 45.05 34.98 11.01
Diluted earnings per
share ( `) (F = B/D) (29.47) (0.25) 5.27 44.43 34.98 11.01
Return on net worth (%)
(G = B/A) (refer note 4) (145.52%) (2.62%) 29.55% 71.37% 37.15% 11.95%
Number of shares
outstanding at the end of
the year / period (H)
1,229,600 1,361,100 1,449,100 1,600,000 1,600,000 2,000,000
Net assets value per
share of `10 each (I =
A/H)
5.93 9.17 17.89 59.18 94.17 89.52
Face value ( `) 10 10 10 10 10 10
Notes:
1) The above ratios are calculated as under:
a) Earnings per share = Net profit after tax, as restated / weighted average number of shares outstanding
during the year/ period.
b) Return on net worth (%) = Net profit after tax, as restated / net worth as restated as at the end of year /
period.
c) Net asset value ( `) = Net worth as restated / Number of equity shares as at the end of year / period.
2) The figures disclosed above are based on the restated unconsolidated financial information of MobME
Wireless Solutions Limited.
3) Earning per shares (EPS) calculation is in accordance with Accounting Standard 20 "Earnings per share"
prescribed by the Companies (Accounting Standards) Rules, 2006.
4) The EPS and return on net worth for the three months period ended 30 September 2012 are not annualised.
- 157 -
Annexure XVII
Unconsolidated statement of other expenses
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at 31 March As at
30 September
2012 2008 2009 2010 2011 2012
Enterprise expenses 0.32 12.43 31.48 36.44 74.41 34.45
Content Licensing Fee - - 27.40 107.32 165.83 32.98
Server hosting charges 0.81 4.89 12.64 37.67 77.43 27.13
Software licence fee - - - 109.17 115.84 12.23
Other miscellaneous expenses 54.60 54.57 69.41 245.68 319.40 199.75
55.73 71.89 140.93 536.28 752.91 306.54
Note:
1) The figures disclosed above are based on the restated unconsolidated financial information of MobME
Wireless Solutions Limited.
- 158 -
Annexure - XVIII
Unconsolidated statement of tax shelter
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars
For the period
12 December 2006
to
31 March 2008
For the year ended 31 March For the period
from
1 April 2012 to
30 September
2012
2009 2010 2011 2012
A
Profit (loss) before
tax (103.38) (3.98) 90.68 990.82 778.27 273.29
Less: long term capital
gains considered
separately
- - - - (35.66) -
Profit eligible for
normal income tax
rates
(103.38) (3.98) 90.68 990.82 742.61 273.29
B
Tax rates
(excluding surcharge
and education cess)
Income tax rates 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Minimum Alternate
Tax ('MAT') 10.00% 10.00% 15.00% 18.00% 18.50% 18.50%
Special tax rate on
long term capital gain
(before indexing)
- - - - 20.00% -
C Tax at notional rates
Chargeable at normal
rate (31.01) (1.19) 27.20 297.25 222.78 81.99
Notional capital gains
tax - - - - 7.13 -
Total (31.01) (1.19) 27.20 297.25 229.91 81.99
D
Permanent
differences
Deduction under
section 35(2AB) of the
Income Tax Act, 1961
('the Act')
- - - - (122.83) (85.98)
Disallowance under
section 37 of the Act - - 0.04 - - 0.03
Others - - - - - -
Total permanent
differences - - 0.04 - (122.83) (85.95)
E Timing differences
Difference between
book depreciation and
tax depreciation
(4.74) (3.70) (8.26) (22.92) 7.89 15.71
Preliminary expense - - 0.42 0.42 0.42 -
Deduction under
section 43B of the Act - - - - 12.63 3.14
Expenses allowable
under section 40 (a) of
the Act
1.23 0.90 - - - -
(Profit) / loss on sale
of assets - - - - (0.18) -
- 159 -
Particulars
For the period
12 December 2006
to
31 March 2008
For the year ended 31 March For the period
from
1 April 2012 to
30 September
2012
2009 2010 2011 2012
Set off of business
losses / unabsorbed
depreciation
- - (79.75) (34.05) - -
Others - - - 11.96 (0.02) (2.02)
Total timing
differences (3.51) (2.80) (87.59) (44.59) 20.74 16.83
F
Total differences
(D+E) (3.51) (2.80) (87.55) (44.59) (102.09) (69.12)
G
Tax expenses /
(saving) thereon (F X
B )
(1.05) (0.84) (26.27) (13.38) (30.63) (20.74)
MAT credit availed - - - (10.17) - -
H Total Tax (C+G) - - 0.93 273.70 199.28 61.25
I
Minimum alternate
tax
Book profit (103.38) (3.98) 90.68 990.82 778.27 273.29
Adjustment for
unabsorbed
depreciation/business
loss
- - (16.62) - - -
Others - - 0.45 - - -
Adjusted book profit
for MAT (103.38) (3.98) 74.51 990.82 778.27 273.29
Tax liability as per
MAT - - 11.17 178.35 143.98 50.56
J
Tax liability being
higher of H or I - - 11.17 273.70 199.28 61.25
Surcharge and cess - - 0.34 29.36 16.24 4.99
Interest under Sec
234B & C - - - 4.89 - -
K
Tax effect on
restatements - - (1.04) (62.87) 13.85 50.06
Provision for current
tax as per books of
accounts (J+K)
- - 10.47 245.08 229.37 116.30
Notes
1. The aforesaid unconsolidated statement of tax shelters is based on the profits / (loss) as per the Restated
Unconsolidated Summary Statement.
2. The above tax adjustments have been considered based on the information from income tax returns for the
previous years, i.e. 2007-08, 2008-09, 2009-10, 2010-11, 2011-12. The figures for the six months period ended 30
September 2012 are based on the provisional computation of total income prepared by the Company and are
subject to any changes that may be considered at the time of final filing of the return of income for the previous
year ending 31 March 2013.
- 160 -
RESTATED CONSOLIDATED FINANCIAL INFORMATION
The Board of Directors
MobME Wireless Solutions Limited
41/3197, 4th
floor
Bhageeratha Square
Kacheripady, Cochin North
Ernakulam 682 018
India
Dear Sirs
1 We have examined the attached consolidated restated financial information of MobME Wireless Solutions Limited
(“the Company”) and its subsidiaries (together referred to as the “Group”) as approved by the Board of Directors
of the Company, prepared in terms of the requirements of Paragraph B, Part II of Schedule II to the Companies
Act, 1956, as amended ('the Act') and the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009, as amended (the ‘SEBI Regulations’), the Guidance note on “Reports in
Company’s Prospectus (Revised)” issued by the Institute of Chartered Accountants of India (‘ICAI’), to the extent
applicable (‘Guidance Note’) and in terms of our engagement agreed upon with you in accordance with our
engagement letter dated October 25, 2012 in connection with the proposed issue of Equity Shares of the
Company.
2 The restated consolidated financial information has been compiled by the management from the audited
consolidated financial statements of the Company for the year ended 31 March 2012 and for the six months
period ended 30 September 2012 which have been audited by us. The financial information of the subsidiaries i.e.
Getz Shoppe and Exim Private Limited and Forward Media Private Limited for the year ended 31 March 2012 and
period ended 30 September 2012 are based on the financial statements of those companies, which have been
audited by M/s P.C.Varghese & Co., Chartered Accountants, and on which we have placed reliance.
3 In accordance with the requirements of Paragraph B, Part II of Schedule II to the Act, the SEBI Regulations and
terms of our engagement agreed with you, we further report that:
c) The Consolidated Restated Summary Statement of Assets and Liabilities as at 31 March 2012 and 30
September 2012, examined by us, as set out in Annexure I to this report read with the significant accounting
policies in Annexure IV (1) are after making such adjustments and regrouping as in our opinion were
appropriate and more fully described in the Notes to the restated consolidated financial information as
Annexure IV (2) and (3) to this report.
d) The Consolidated Restated Summary Statement of profit and losses of the Company for the year ended 31
March 2012 and for the six months period ended 30 September 2012 are as set out in Annexures II to this
report read with the significant accounting policies in Annexure IV (1) are after making such adjustments and
regrouping as in our opinion were appropriate and more fully described in the Notes to the restated
consolidated financial information enclosed as Annexure IV (2) and (3) to this report.
4 Based on the above, we are of the opinion that the restated consolidated financial information have been made
after incorporating:
iv) adjustments for the changes in accounting policies retrospectively in respective Financial years / period
to reflect the same accounting treatment as per the changed accounting policy for all the reporting
periods;
v) adjustments for prior period and other material amounts in the respective Financial years / period to
which they relate; and
vi) there are no extra-ordinary items that need to be disclosed separately in the Restated Consolidated
Financial Information and no qualifications requiring adjustments.
- 161 -
5 We have also examined the following restated consolidated financial information as set out in the Annexures
prepared by the management and approved by the Board of Directors relating to the Company for the year ended
31 March 2012 and for the six months period ended 30 September 2012.
xvi) Consolidated statement of cash flows, as restated, included in Annexure III
xvii) Consolidated details of current and non-current investments, as restated, included in Annexure V
xviii) Consolidated statement of trade receivables, as restated, included in Annexure VI
xix) Consolidated long-term and short-term loans and advances and other non-current and current assets, as
restated, included in Annexure VII
xx) Consolidated statement of long-term and short-term borrowings, as restated, included in Annexure VIII
xxi) Consolidated statement of current and non-current liabilities and long-term and short-term provisions, as
restated, included in Annexure IX
xxii) Consolidated statement of share capital, as restated, included in Annexure X
xxiii) Consolidated statement of reserves and surplus, as restated, included in Annexure XI
xxiv) Consolidated details of other income, as restated, included in Annexure XII
xxv) Consolidated statement of dividends paid, included in Annexure XIII
xxvi) Consolidated statement containing details of related party transactions and balances outstanding with
related parties included in Annexure XIV
xxvii) Capitalization statement as at 30 September 2012 included in Annexure XV
xxviii) Consolidated statement of accounting ratios, as restated, included in Annexure XVI
xxix) Consolidated statement of other expenses, as restated, included in Annexure XVII
xxx) Consolidated statement of tax shelter included in Annexure XVIII
6 The report should not in any way be construed as a re-issuance or re-dating of any of the previous audit reports
issued by us.
7 We have not audited any financial statements of the Group as of any date or for any period subsequent to 30
September 2012. Accordingly, we express no opinion on the financial position, results of operations or cash flows
of the Group as of any date or for any period subsequent to 30 September 2012
8 In our opinion, the above financial information contained in Annexures I to XVIII of this report read along with the
significant accounting policies (Refer Annexure IV (1)) and Notes to the restated consolidated financial
information (Refer Annexure IV (2) and IV (3)) are prepared after making adjustments and regrouping as
considered appropriate and have been prepared in accordance with Paragraph B, Part II of Schedule II of the Act
and the SEBI Regulations.
9 We have no responsibility to update our report for events and circumstances occurring after the date of the
report.
- 162 -
10 Our report is intended solely for use of the management and for inclusion in the offer document in connection
with the proposed issue of Equity Shares of the Company. Our report should not be used, referred to or
distributed for any other purpose except with our consent in writing.
for Sivaprasad & Associates
Chartered Accountants
Registration No: 007619S
R Suja Sathish
Partner
Membership No.: 212089
Place: Kollam
Date: February 5, 2013
- 163 -
Annexure I
Consolidated statement of assets and liabilities, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at
31 March 2012
As at
30 September 2012
Non-current assets
Fixed assets
Tangible assets 266.74 320.67
Intangible assets 9.62 8.30
Goodwill on consolidation 48.85 48.85
Non-current investments - 20.00
Long-term loans and advances 93.08 101.77
Other non-current assets 19.09 21.09
Total 437.38 520.68
Current assets
Inventory 96.51 236.78
Trade receivables 944.38 1,110.13
Cash and bank balances 302.50 306.03
Short-term loans and advances 171.86 134.95
Other current assets 207.11 209.61
Total 1,722.36 1,997.50
Non-current liabilities
Long-term borrowings 187.80 207.54
Deferred tax liability, net 63.62 6.65
Long-term provisions 12.53 15.94
Total 263.95 230.13
Current liabilities
Short-term borrowings 77.29 235.21
Trade payables 211.81 177.67
Other current liabilities 127.28 136.75
Short-term provisions 5.79 0.14
Total 422.17 549.77
Minority interest 12.79 12.82
Net worth 1,460.83 1,725.46
Net worth represented by
Share capital 160.00 200.00
Reserves and surplus 1,300.83 1,525.46
Net worth 1,460.83 1,725.46
Note:
The above statement should be necessarily read with the notes to the restated consolidated summary statements and
the significant accounting policies as appearing in Annexure IV.
- 164 -
Annexure II
Consolidated statement of profit and loss, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars For the year ended
31 March 2012
For the period from
1 April 2012 to
30 September 2012
Income
Income from services 2,257.23 1,070.48
Income from sale of goods - 1,214.12
Other income 57.22 1.37
Total 2,314.45 2,285.97
Expenditure
Cost of goods sold - 1,126.93
Employee benefits 718.59 447.13
Other expenses 771.75 388.00
Finance charges 5.13 16.04
Depreciation, amortisation and impairment 79.23 53.61
Total 1,574.70 2,031.71
Net profit before tax 739.75 254.26
Less: Provision for tax
Current tax (229.38) (116.44)
Deferred tax benefit 3.55 56.97
Total provision for tax (225.83) (59.47)
Net profit after tax before minority interest 513.92 194.79
Share of minority interest - 0.03
Net profit after tax, as restated 513.92 194.76
Note:
The above statement should be necessarily read with the notes to the restated consolidated summary statements and
the significant accounting policies as appearing in Annexure IV.
- 165 -
Annexure III
Consolidated statement of cash flows, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars For the year ended
31 March 2012
For the period from
1 April 2012 to
30 September 2012
Cash flows from operating activities
Net profit before tax as restated 739.75 254.26
Adjustment on account of consolidation - -
Adjustments for:
Depreciation/ amortisation/ impairment 79.23 53.61
Finance charges 5.13 16.04
Interest income (12.75) (1.37)
Profit on sale of fixed assets (0.18) -
Profit on sale of investments (44.05) -
Provision for bad and doubtful debts - 27.09
Operating cash flows before working capital changes 767.13 349.63
Decrease / (increase) in inventories (96.51) (140.27)
Decrease / (increase) in trade receivables (399.17) (192.84)
Decrease / (increase) in loans and advances and other current assets (166.14) 26.47
Increase /(decrease) in liabilities and provisions 92.05 (23.42)
Cash generated from operating activities before taxes 197.36 19.57
Income taxes paid (255.83) (134.64)
Net cash generated from operating activities [A] (58.47) (115.07)
Cash flows from investing activities
Purchase of fixed assets (200.72) (96.42)
Proceeds from sale of fixed assets 1.90 -
Purchase of investments - (20.00)
Sale of investments 89.00 -
Payments for net assets acquired of subsidiaries, net of cash (42.46) -
Interest received 12.75 1.37
Net cash used in investing activities [B] (139.53) (115.05)
Cash flows from financing activities:
Proceeds from issue of share capital - 69.87
Proceeds from secured loans, net 266.41 175.28
Interest paid (1.98) (11.50)
Net cash generated from financing activities [C] 264.43 233.65
Net increase in cash and cash equivalents [A+B+C] 66.43 3.53
Cash and cash equivalents at the beginning of the year / period 236.07 302.50
Cash and cash equivalents at the end of the year / period 302.50 306.03
- 166 -
Particulars For the year ended
31 March 2012
For the period from
1 April 2012 to
30 September 2012
Components of cash and cash equivalents
Cash on hand 1.71 0.23
Balance with scheduled bank
in current accounts 124.93 204.74
in deposit accounts 175.86 101.06
302.50 306.03
Note:
1. The cash flow statement has been prepared under the indirect method as set out in Accounting Standard - 3
on Cash Flow Statements as prescribed by the Companies (Accounting Standards) Rules, 2006.
2. The above statement should be necessarily read with the notes to the consolidated restated summary
statements and the significant accounting policies as appearing in Annexure IV.
- 167 -
Annexure IV
1. Significant accounting policies
1.1 Background
MobME Wireless Solutions Limited (‘the Company’) was incorporated on 12 December 2006 as a private limited
company. The registered office of the Company is located at Trivandrum, Kerala, India. The Company has been
converted into a public limited company on 10 December 2012. The Company is primarily engaged in the business of
providing value added services for mobile phone network operators and enterprise solutions to various corporate and
governmental agencies.
The consolidated restated financial statements relate to the Company and have been specifically prepared for
inclusion in the document to be filed by the Company with the Securities and Exchange Board of India (“SEBI”) and
Stock Exchanges’ in connection with its proposed Initial Public Offering. The consolidated restated financial
statements consist of the consolidated restated summary statement of assets and liabilities of the Company as at 31
March 2012 and 30 September 2012, the related consolidated restated summary statement of profit and loss for the
year ended 31 March 2012 and the six months period from 1 April 2012 to 30 September 2012 and the related
consolidated restated summary statement of cash flow for the year ended 31 March 2012 and for the six months
period from 1 April 2012 to 30 September 2012 (these restated financial statements hereinafter are collectively
referred to as “Consolidated Restated Summary Statements”).
The Consolidated Restated Summary Statements have been prepared to comply in all material respects with the
requirements of Schedule II to the Companies Act, 1956 (the “Act”) and the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2009 (the “SEBI Regulations”) notified by SEBI on August
26, 2009, as amended from time to time. The Act and the SEBI Regulations require the information in respect of the
assets and liabilities and profits and losses of the Company for each of the five years / periods immediately preceding
the issue of the Prospectus.
1.2 Basis for preparation
The consolidated financial statements include the financial statements of MobME and its subsidiaries, Forward Media
Private Limited and Getz Shoppe & Exim Private Limited. The financial statements of the parent company and its
majority owned/controlled subsidiaries have been combined on a line by line basis by adding together the book values
of all items of assets, liabilities, incomes and expenditures after eliminating all inter-company balances/transactions
and resulting unrealised gain/loss. In case of subsidiaries acquired during the year, the balances of income and
expenses are consolidated from the date of acquisition. The consolidated financial statements are prepared using
uniform accounting policies for similar transactions and other events in similar circumstances.
The consolidated financial statements have been prepared under the historical cost convention on the accrual basis of
accounting and comply with the Accounting Standards (‘AS’) Rules 2006 (to the extent applicable) and in accordance
with the generally accepted accounting principles (‘GAAP’) and the provisions of the Companies Act 1956 (‘the Act’),
to the extent applicable. The financial statements of subsidiary company used in the consolidation are drawn up to
the same reporting date as that of the Parent Company.
1.3 Principles of consolidation
The consolidated financial statements have been prepared in accordance with AS-21 – Consolidated Financial
Statements issued by the Companies (Accounting Standard) Rules, 2006 (‘the Rules’)on the following basis:
a) The financial statements of the Parent Company and its subsidiary are combined on line-by-line basis by
adding together the book values of like items of the assets, liabilities, income and expenses, after
elimination of intra group balances, intra group transactions and unrealized profits or losses on balances
remaining within the Group. These financial statements have been prepared using uniform accounting
policies for like transactions and other events in similar circumstances.
- 168 -
b) The difference between the costs of investment in the subsidiaries, over the share of equity in the
subsidiaries, on acquisition date, is recognized in the financial statements as goodwill or capital reserve, as
the case may be.
Note on consolidated financial information for 31 March 2011:
The Parent Company did not have any subsidiary as at 31 March 2008, 31 March 2009, 31 March 2010 and 31 March
2011 and accordingly no consolidated financial statements were prepared by the Company for the said years.
1.4 Use of estimates
The preparation of Financial Statements in conformity with generally accepted accounting principles in India (“GAAP”)
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and the disclosure of contingent liabilities on the date of the financial statements and the results of operations during
the reporting year end. Actual results could differ from those estimates. Any revision to accounting estimates is
recognised prospectively in current and future periods.
1.5 Tangible and intangible fixed assets
Fixed assets are carried at cost of acquisition or construction less accumulated depreciation and provision for
impairment, if any. Cost comprises the purchase price and includes freight, duties, taxes and any attributable cost of
bringing the asset to its working condition for its intended use. Borrowing costs directly attributable to acquisition or
construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended
use are also included to the extent they relate to the period till such assets are ready to be put to use.
Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date and the cost of the fixed
asset not ready for their intended use before such date, are disclosed under capital work-in-progress.
Intangible assets are stated at historical cost less accumulated amortisation and impairment.
1.6 Depreciation and amortisation
Depreciation is provided on all fixed assets on written down value method at the rates of depreciation prescribed in
Schedule XIV to the Companies Act, 1956 or based on the estimated useful life of the assets, whichever is higher.
Based on an evaluation of the useful lives of fixed assets carried out by the Management, Management has
determined that the depreciation rates specified in Schedule XIV to the Companies Act, 1956 reflect the appropriate
useful life of the assets.
Pro-rata depreciation is provided on all fixed assets purchased and sold during the year. Assets individually costing Rs.
5,000 or less are depreciated at the rate of 100% in the period of purchase.
Intangible assets comprise computer software and are amortised over their estimated useful lives, which is three
years to ten years, respectively, from the date such assets are available for use.
1.7 Impairment
The Company assesses at each balance sheet date whether there is any indication that an asset forming part of its
cash generating units may be impaired. If any such indications exist, the Company estimates the recoverable amount
of the asset or the group of asset comprising, a cash generating unit. For an asset or a group of assets that does not
generate largely independent cash flows, the recoverable amount is determined for the cash generating unit to which
the asset belongs. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to
which the assets belongs is less than the carrying amount, the carrying amount is reduced to its recoverable amount.
The recoverable amount is the greater of the assets net selling price and value in use. In assessing the value in use, the
estimated future cash flows are discounted to their present value at the weighted average cost of capital. The
reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet
date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount. An impairment loss is reversed only to the extent
that the carrying amount of the asset does not exceed the book value that would have been determined; if no
impairment loss has been recognized.
- 169 -
1.8 Inventories
Inventories are carried at the lower of cost and net realizable value. Cost comprises purchase price and other costs
incurred in bringing the inventory to its present location and condition. The cost is calculated on weighted average
cost method. The comparison of cost and net realizable value of inventory is made on an item by item basis.
The provision for inventory obsolescence is assessed annually and is provided as considered necessary.
1.9 Investments
Long- term investments are carried out at cost less any other-than-temporary diminution in value, determined
separately for each individual investment. Current investments are carried at the lower of cost and fair value. The
comparison of cost and fair value is done separately in respect of each category of investments.
1.10 Revenue recognition
Revenue from networking and value added services is recognized as the related services are provided, when
arrangements are on a time and material basis. Revenue from fixed price contracts are recognized using the
percentage of completion method, which is determined based on the costs incurred to date in relation to the total
estimated costs to complete the contract. Provision for estimated losses, if any, on incomplete fixed price contracts
are recorded in the year in which such losses become probable based on the current contract estimates. Revenues are
stated net of discounts, expenses billed to customers and any applicable duties or taxes.
Revenue from sale of goods is recognised on transfer of all significant risks and rewards of ownership to the buyer.
The amount recognised as sale is net of sales tax and sales returns.
Unbilled revenue represents earnings in excess of billings while unearned income represents billings in excess of
earnings.
Interest on deployment of surplus funds is recognized using the time proportionate method, based on the
transactional interest rates.
1.11 Foreign currency transactions
Foreign currency transactions are recorded using the exchange rates prevailing on the dates of the respective
transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognised in
the statement of profit and loss for the year.
Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the
closing exchange rates on that date and the resultant exchange differences are recognised in the statement of profit
and loss. Non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are
reported using the exchange rate at the date of the transaction.
1.12 Employee benefits
Contributions payable to the recognized provident fund, which is a defined contribution scheme, is made monthly at
predetermined rates to the appropriate authorities and charged to the statement of profit and loss on an accrual
basis.
Gratuity, a defined benefit scheme, is accrued based on an actuarial valuation at the balance-sheet date, carried out
by an independent actuary. The present value of the obligation under such defined benefit plan is determined based
on an actuarial valuation using the Projected Unit Credit Method, which recognises each and period of service as
giving rise to an additional units of employee benefit entitlement and measures each unit separately to build up the
final obligation.
The rules of the Company do not permit encashment or carry forward of unutilised leave.
- 170 -
Actuarial gain/losses are immediately taken to the statement of profit and loss and are not deferred.
1.13 Taxation
The current income tax charge is determined in accordance with the relevant tax regulations applicable to the
Company in India.
The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax
rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised
only to the extent there is reasonable certainty that the assets can be realised in future; however, where there is
unabsorbed depreciation or carried forward business loss under taxation laws, deferred tax assets are recognised only
if there is virtual certainty of realisation of such assets. Deferred tax assets/ liabilities are reviewed at each balance
sheet date and written down or written-up to reflect the amount that is reasonably/ virtually certain (as the case may
be) to be realised.
Assets and liabilities representing current and deferred tax are disclosed on a net basis when there is a legally
enforceable right to set - off and management intends to settle the asset and liability on a net basis.
1.14 Earnings per share
The basic and diluted earnings or loss per share is computed by dividing the net profit or loss attributable to equity
shareholders for the year by the weighted average number of equity shares outstanding during the year.
1.15 Leases
Leases where the lessor effectively retains substantially all the risks and rewards of ownership of the leased item are
classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and
loss on a straight-line basis over the lease term.
1.16 Provisions and contingent liabilities
The Company recognises a provision when there is a present obligation as a result of a past event that probably
requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for
a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. When the likelihood of outflow of resources, in case of a possible obligation or a
present obligation is remote no provision or disclosure is made.
Provision for onerous contracts i.e. contracts where the expected unavoidable cost of meeting the obligations under
the contract exceed the economic benefits expected to be received under it, are recognised when it is possible that an
outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an
obligating event, based on a reliable estimate of such obligation.
1.17 Cash flow statement
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and
items of income or expenses associated with investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated.
2. Impact of material adjustments
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars For the year ended
31 March 2012
For the period from 1
April 2012 to 30
September 2012
- 171 -
Particulars For the year ended
31 March 2012
For the period from 1
April 2012 to 30
September 2012
Net profit after tax as per audited statement of profit and loss 542.75 296.92
- -
Adjustments on account of: (refer Note 3 (1))
a) Income from operations (15.23) (152.22)
b) Preliminary expenses written-off 0.42 -
c) Provision for gratuity 7.17 -
d) Prior period items adjusted to respective years (35.04) -
Total impact of the adjustments (42.68) (152.22)
Tax impact on adjustments 13.85 50.06
Total adjustments (28.83) (102.16)
Net profit after tax, as restated 513.92 194.76
3. Notes on adjustments to the restated consolidated summary statements and other disclosures
1. Other material adjustments
(i) Income from operations: During the year ended 31 March 2012 and period ended 30 September
2012, the Company has recorded certain revenue from operations pertaining to the earlier year’s.
The effect of such income has been appropriately adjusted in income from operations of the
respective years.
(ii) Preliminary expenses: The preliminary expenses amortised in the books over the period of five
years have been appropriately accounted in the period ended 31 March 2008 during which the same
was incurred.
(iii) Provision for gratuity: Provision for gratuity which had not been accounted for earlier has been
accounted appropriately as per actuarial valuation.
(iv) Prior period items / selling, general and administrative expenses: The Company had recorded
certain income / expenses as prior period items in the financial statements for the years ended
March 31, 2010, 2011 and 2012. For the purpose of this statement, the effects of these items have
been appropriately adjusted / recomputed for earlier periods and accordingly adjusted in the
respective years.
(v) Tax impact of adjustments: Tax impacts of adjustments relating to effect on adjustments made in
respect of restatement of the financial statements have been adjusted in the respective years. The
current taxes provided in the year ended March 31, 2010, 2011, 2012 and period ended 30
September 2012 on an estimated basis.
2. Non-adjusting items - audit qualifications
The following qualifications were made in the financial statements for the year ended 31 March 2012
1. The transactions made in pursuance of contracts or arrangements entered in the register
maintained under section 301 and exceeding the value of five lakh rupees in respect of any party
during the year have been made at prices which are reasonable having regard to prevailing market
prices at the relevant time. However, the Company has not obtained prior permission from the
Central Government for the same. The Company is in the process of filing application before the
Company Law Board for regularizing the same.
- 172 -
3. Regrouping
Figures have been regrouped / recast for the consistency of presentation
1. Contingent liabilities
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at
31 March 2012
As at
30 September 2012
Bank guarantees 16.72 21.09
2. Gratuity
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is
eligible for gratuity on departure at 15 days salary (last drawn basic salary and dearness allowance) for each
completed year of service or part thereof in excess of six months. These benefits are unfunded.
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars For the year ended
31 March 2012
For the period
1 April 2012 to
30 September 2012
Obligations at beginning of the year / period 7.17 12.53
Current service cost 4.70 1.17
Interest cost on defined benefit obligation 0.81 0.39
Benefits paid - -
Net actuarial (gain) / loss for the year / period (0.15) 1.85
Obligations at end of the year / period 12.53 15.94
Reconciliation of present value of the obligation and the
fair value of the plan assets:
Closing obligations 12.53 15.94
Closing fair value of plan assets - -
(Asset)/ liability recognized in the balance sheet 12.53 15.94
Gratuity cost for the year / period
Current service cost 4.70 1.17
Interest cost on defined benefit obligation 0.81 0.39
Expected return on plan assets - -
Net actuarial (gain) / loss for the year / period (0.15) 1.85
Net gratuity cost 5.36 3.41
Assumptions
Discount rate 8.5%pa 8.5%pa
Salary increase 5%pa 5%pa
Attrition rate Modified q(x) values under Indian Assured Lives
Mortality (1994-1996) Ultimate – Table
Retirement age 58 58
3. Segment reporting
Business segments: The Company has organized its operations into three businesses: value added services for mobile
phone network operators ('VAS'), enterprise solutions to various corporate and governmental agencies ('Enterprise')
and sale of consumer durables.
Geographic segments: All of the company's operations are carried out in India. The Company does not have any
reportable geographical segment.
- 173 -
The accounting principles used in the preparation of the financial statements are also consistently applied to record
income and expenditure in individual segments. Income and direct expenses in relation to segments are categorised
based on items that are individually identifiable to that segment. Other expenses are not specifically allocable to the
individual segments as these expenses are common in nature. The Company therefore believes that it is not
practicable to provide segment disclosure relating to such expenses and accordingly such expenses are separately
disclosed as unallocated and directly charged against total income.
Certain segment assets and liabilities are directly attributable to the segment. Segment assets include all operating
assets used by the segment and consist principally of fixed assets, inventories, sundry debtors and loans and advances.
Segment liabilities include trade creditors, creditors for expenses and other operating liabilities and provisions. Certain
assets and liabilities that are not specifically allocable to the individual segments have been separately disclosed as
unallocated.
Particulars For the year ended
31 March 2012
For the period from
1 April 2012 to
30 September 2012
Segment revenues
VAS 1,913.61 962.74
Enterprise 339.26 87.00
Sale of goods - 1,214.12
Others 4.36 20.74
2,257.23 2,284.60
Segment result
VAS 1,553.64 913.77
Enterprise 148.59 52.55
Sale of goods - 10.18
Others (21.51) (20.46)
1,680.73 956.04
Other unallocable expenditure (993.07) (687.14)
Operating profits 687.66 268.90
Interest income 12.75 1.37
Other income 44.47 -
Finance cost (5.13) (16.04)
Taxation (225.83) (59.47)
Net profit, as restated 513.92 194.76
Particulars As at
31 March 2012
As at
30 September 2012
Segment assets
VAS 645.04 754.29
Enterprise 84.89 60.17
Sale of products 327.46 316.42
Others 13.49 19.44
Corporate - unallocated 1,088.86 1,367.86
2,159.74 2,518.18
Segment liabilities
VAS 84.41 71.34
Enterprise 1.48 1.40
Sale of products 122.23 306.90
Others 5.48 7.42
Corporate - unallocated 472.52 392.84
686.12 779.90
4. Subsequent events
- 174 -
(c) Conversion of Technology Development Board (TDB) loan to equity
The Company has converted the loan of ` 2,09,54,726 from TDB in to 1,16,416 Equity Shares on 6 December 2012 at a
price of ` 180
(d) Conversion of status from Private Limited to a Public Limited Company
Pursuant to the necessary approvals received from the Registrar of Companies, the Company has been converted into
a public limited company with effect from 10 December 2012
- 175 -
Annexure V
Details of current and non-current investments, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at
31 March 2012
As at
30 September 2012
Non-current investments
Non Trade, unquoted - at cost
Investment in equity shares - 20.00
Total - 20.00
Note:
1. The figures disclosed above are based on the restated consolidated financial information of MobME Wireless
Solutions Limited
- 176 -
Annexure VI
Consolidated statement of trade receivables, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at
31 March 2012
As at
30 September 2012
Unsecured, considered good
Debts outstanding for a period exceeding six months from
- From promoters and group companies of promoters - -
- Directors - -
- Others 119.59 1,083.04
Total (A) 119.59 1,083.04
Other debts
- From promoters and group companies of promoters - -
- Directors - -
- Others 824.79 -
Total (B) 824.79 -
Unsecured, considered doubtful
Debts outstanding for a period exceeding six months from
- Promoters and group companies of promoters - -
- Directors - -
- Others - 27.09
Less: provision for doubtful debts
(27.09)
Total (C) - -
TOTAL (A+B+C) 944.38 1,083.04
Note:
1. The figures disclosed above are based on the restated consolidated financial information of MobME Wireless
Solutions Limited
2. Above disclosures are made in accordance with Accounting Standard (AS) 18 "Related Parties" prescribed by the
Companies (Accounting Standards) Rules, 2006.
- 177 -
Annexure VII
Consolidated statement of long-term and short-term loans and advances and other current and non-current assets,
as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at
31 March 2012
As at
30 September
2012
Long-term loans and advances (Unsecured, considered good)
Advances for capital goods 26.44 16.64
Rental deposits
- Promoters and group companies of promoters - -
- Directors - -
- Others 12.52 13.80
Other long-term advances 40.40 37.96
Other long-term deposits 4.50 11.60
Advance tax and tax deducted at source (net of provision for tax) 9.22 21.77
Total (A) 93.08 101.77
Other non-current assets
Balance in banks for margin money 19.09 21.09
Interest accrued from fixed deposits with banks - -
Total (B) 19.09 21.09
Short-term loans and advances (Unsecured, considered good)
Advances for supply of goods and rendering of services
- Promoters and group companies of promoters 22.55 35.54
- Directors 8.74 8.74
- Others 139.28 76.89
Other deposits
- Promoters and group companies of promoters - -
- Directors - -
- Others 1.29 13.78
Total (C) 171.86 134.95
-
Other current assets
Unbilled revenue 207.11 209.61
Total (D) 207.11 209.61
Total (A+B+C+D) 491.14 467.42
Note:
1. The figures disclosed above are based on the restated consolidated financial information of MobME Wireless
Solutions Limited
2. The list of persons/entities classified as 'Promoters' and 'Group Companies of Promoters' has been
determined by the Management and relied upon by auditors. The auditors have not performed any
procedures to determine whether this list is accurate or complete.
- 178 -
Annexure VIII
Consolidated statement of long-term and short-term borrowings, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at
31 March 2012
As at
30 September
2012
Long-term borrowings
- from banks and financial institutions 7.80 7.54
- from Technology Development Board (Refer note 2) 180.00 200.00
-from promoters and group companies of promoters - -
187.80 207.54
Short-term borrowings
- from banks and financial institutions 77.29 235.21
-from promoters and group companies of promoters - -
77.29 235.21
Current maturities of long term borrowings 4.73 2.35
Total 269.82 445.10
Note:
1. The figures disclosed above are based on the restated consolidated financial information of MobME Wireless
Solutions Limited.
2. The loan has been subsequently converted into equity on 6 December 2012
- 179 -
Annexure VIII (continued)
Details of secured borrowings outstanding as at 30 September 2012
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
SI.
No.
Name of the
lender
Nature of
borrowing
Amount
sanctioned
Amount
outstanding
Rate of
Interest
Date of
sanction
Repayment
terms
Prepayment
charges
Default
charges Security
1
Technology
Development
Board
Term loan 200.00 200.00 5.00% 24-May-
11
9 half yearly
instalments
The
Borrower
shall have
an option to
prepay the
entire
outstanding
principal
amount
along with
interest and
other
charges.
In the event
of any
default, over
and above
the
prescribed
rate of
interest, 10%
p.a will be
charged.
Hypothecation
of the movable
assets created
under the
project by way
of first
charge;
Corporate
Guarantee of
the company;
Irrevocable and
unconditional
personal
guarantees of
promoters and
directors
namely Sanjay
Vijayakumar and
Sony Joy;
Pledging of I
lakh equity
shares together
by the
company's
promoters and
directors namely
Sanjay
Vijayakumar and
Sony Joy in
favour of TDB.
2
Kotak
Mahindra
Bank
Vehicle
loan 5.75 2.04 BPLR
28-Feb-
11
36 unequal
monthly
instalments
maturing on
20
January2014
Charges
fixed by the
bank from
time to
time.
The bank is
entitled to
take
repossession
of the
hypothecated
vehicles.
Secured by way
of
hypothecation
of vehicle
acquired out of
the loan
proceeds.
3 ICICI Bank
Limited
Vehicle
loan
3.80 3.30 11.76% 24-Mar-
12
48 monthly
instalments
of ` 9,866
from 15
April 2012
to 15
February
2016
Charges
fixed by the
bank from
time to time
are binding
as advised
by the bank.
The bank is
entitled to
take
repossession
of the
hypothecated
vehicles.
Secured by way
of
hypothecation
of vehicles
acquired out of
the loan
proceeds.
3.80 3.30 11.75% 24-Mar-
12
48 monthly
instalments
of ` 9,866
from
15 April
2012 to
15 February
2016
- 180 -
SI.
No.
Name of the
lender
Nature of
borrowing
Amount
sanctioned
Amount
outstanding
Rate of
Interest
Date of
sanction
Repayment
terms
Prepayment
charges
Default
charges Security
4 TATA Motors
Finance Ltd.
Vehicle
loan 2.92 1.24 13.00%
16-Jul-
09
60
instalments
of EMI `
6,660
starting
from
16 July 2009
to
15 June
2014
Charges
fixed by the
bank from
time to time
are binding
as advised
by the bank.
The lender is
entitled to
take
repossession
of the
hypothecated
vehicles.
Secured by way
of
hypothecation
of vehicles
acquired out of
the loan
proceeds.
5
The Federal
Bank Limited
(Cash credit)
Cash
credit 200.00 197.67
Base
rate +
5.5%
27-Aug-
10 On demand
Not
specified in
the
agreement
Penal interest
as stipulated
by the bank
from time to
time will be
charged in
case of
default in
payment of
interest, non
submission of
stock
statements/
prescribed
returns or
defaults in
observing
any of the
terms and
conditions of
the advance
sanction.
1.
Hypothecation
of stock of
home/ kitchen
appliances and
book debts.
2. Equitable
mortgage of
1200 Sq.ft. at 7
A, 8th Floor,
Bhageeratha
Square,
Kacheripady,
Cochin ·18 in the
name of MobME
Wireless
Solution Pvt Ltd.
3. Additional
charge on
equitable
mortgage of
landed property
(95.44 Ares and
235.832 cents)
in Mararikulam
Village,
Alappuzha.
4) Guarantee of
Jose Thomas
Pattara,
Santhosh Kumar
K, East Venice
Developers Pvt
Ltd and MobME
Wireless
Solutions Pvt
Ltd.
- 181 -
SI.
No.
Name of the
lender
Nature of
borrowing
Amount
sanctioned
Amount
outstanding
Rate of
Interest
Date of
sanction
Repayment
terms
Prepayment
charges
Default
charges Security
6
State Bank of
India (Cash
credit)
Cash
credit 20.00 7.55
Base
rate +
3.5%
18-Aug-
11 On demand
Not
specified in
the
agreement
Penal interest
as stipulated
by the bank
from time to
time will be
charged in
case of
default in
payment of
interest, non
submission of
stock
statements/
prescribed
returns or
defaults in
observing
any of the
terms and
conditions of
the advance
sanction.
1.
Hypothecation
of stocks and
receivables.
2. Personal
guarantee of
Jose Thomas
Pattara and
Santhosh Kumar
K
7 IDBI
(Overdraft)
Overdraft
against
fixed
deposit
30.00 30.00 11.50% 17-Jun-
11
Repayable
on demand
Charges
fixed by the
bank from
time to time
are binding
as advised
by the bank.
In the event
of any
default, the
bank may
recover from
the
underlying
deposits.
On security of
fixed deposit of
` 50 lakhs
445.10
- 182 -
Annexure IX
Consolidated statement of current and non-current liabilities and long term and short term provisions, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at
31 March 2012
As at
30 September 2012
Non-current liabilities
Long-term provisions
Gratuity 12.53 15.94
Total (A) 12.53 15.94
Current liabilities
Trade payables
Dues to micro and small enterprises - -
Dues to others 211.81 177.67
Total (B) 211.81 177.67
Other current liabilities and provisions
Current maturities of borrowings 4.73 2.35
Employee benefits payable 16.68 19.69
Withholding and other taxes payable 87.00 72.02
Interest accrued but not due on borrowings 3.15 7.69
Provision for expenses 5.83 22.89
Other payables 9.89 12.11
Total (C) 127.28 136.75
Short term provisions
Provision for income tax (net of advance tax) 5.79 0.14
Total (D) 5.79 0.14
TOTAL (A+B+C+D) 357.41 330.50
Note:
1. The figures disclosed above are based on the consolidated restated financial information of MobME Wireless
Solutions Limited.
- 183 -
Annexure X
Consolidated statement of share capital, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at
31 March 2012
As at
30 September 2012
Equity shares (Fully Paid)
Authorised 2,000,000 2,000,000
Issued, subscribed and paid-up 1,600,000 2,000,000
Reconciliation of number of shares:
Number of shares at the beginning of the year / period 1,600,000 1,600,000
Add: shares issued during the year / period
In cash - 270,146
Other than cash - 129,854
Number of shares at the closing of the year / period 1,600,000 2,000,000
Note:
1. The figures disclosed above are based on the restated consolidated financial information of MobME Wireless
Solutions Limited.
- 184 -
Annexure XI
Consolidated statement of reserves and surplus, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at
31 March 2012
As at
30 September 2012
Shares premium account (A)
Opening balance 143.86 143.86
Add: Received during the year / period - 29.87
Less: Utilized for issue of bonus shares - -
Total (A) 143.86 173.73
Surplus: statement of profit and loss (B)
Opening balance 643.05 1,156.97
Add: Net profit after tax transferred from
statement of profit and loss 513.92 194.76
Amount available for appropriation 1,156.97 1,351.73
Less: Utilized for issue of bonus shares - -
Less: Dividend - -
Less: Dividend distribution tax - -
Total (B) 1,156.97 1,351.73
Total (A+B) 1,300.83 1,525.46
Note:
1. The figures disclosed above are based on the restated consolidated financial information of MobME Wireless
Solutions Limited.
- 185 -
Annexure XII
Details of other income, as restated
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars For the year ended
31 March 2012
For the period from
1 April 2012 to
30 September 2012
Other income, as restated 57.22 1.37
Net profit before tax, as restated 739.75 254.26
Percentage 7.74% 0.54%
Sources of other income
Recurring
Interest - from banks 12.75 1.37
- -
Non-recurring - -
Profit on sale of fixed assets, net 0.18 -
Discount received - -
Profit on sale of investments (Refer Note 2) 44.05 -
Miscellaneous income 0.24 -
Total 57.22 1.37
Note:
1. The figures disclosed above are based on the restated consolidated financial information of MobME Wireless
Solutions Limited.
2. Includes profit on sale of investments in Innoz Technologies Private Limited - ` 35.67 lakhs and in
Commonwealth Inclusive Growth Services Limited - ` 8.38 lakhs .
- 186 -
Annexure XIII
Consolidated statement of dividend paid
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars For the year ended
31 March2012
For the period from
1 April 2012 to
30 September 2012
Number of fully paid equity shares 1,600,000 2,000,000
Equity share capital 160.00 200.00
Face value (`) 10 10
Rate of dividend % - -
Amount of dividend - -
Note:
1. The figures disclosed above are based on the restated consolidated financial information of MobME
Wireless Solutions Limited.
- 187 -
Annexure XIV
Details of the list of related parties and nature of relationships
Particulars For the year ended
31 March 2012
For the period from
1 April 2012 to
30 September 2012
Subsidiary Forward Media Private Limited Forward Media Private Limited
Getz Shoppe and Exim Private
Limited
Getz Shoppe and Exim Private
Limited
Key management personnel Jose Thomas Pattara-
Director
Jose Thomas Pattara-
Director
Sanjay Vijaya Kumar-
Whole time director
Sanjay Vijaya Kumar-
Whole time director
Sony Joy - Chief Executive Officer Sony Joy - Chief Executive Officer
George Brody - Director George Brody - Director
Relatives of key management personnel Thomas Varghese Pattara Not applicable
Companies over which the key managerial
personnel and relatives have control/
significant influence (associates)
Canbo Electronics Private Limited Canbo Electronics Private Limited
Mobshare Mobile Systems India
Private Limited
Mobshare Mobile Systems India
Private Limited
Torque Technology Solutions
Private Limited
Torque Technology Solutions
Private Limited
Indian Telecom Innovation Hub Indian Telecom Innovation Hub
Odysseus Engineering Private
Limited
Odysseus Engineering Private
Limited
Dimensions Mobile Solutions
Private Limited
Dimensions Mobile Solutions
Private Limited
Note:
1. The figures disclosed above are based on the restated consolidated financial information of MobME
Wireless Solutions Limited.
2. Above disclosures are made in accordance with Accounting Standard (AS) 18 "Related Parties" prescribed by
the Companies (Accounting Standards) Rules, 2006.
- 188 -
Annexure XIV (continued)
Disclosures of significant transactions with related parties
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars Entity
For the year
ended 31
March 2012
For the
period from
1 April 2012
to 30
September
2012
Purchase of goods Canbo Electronics Private Limited 93.40 89.86
Enterprise expenses Mobshare Mobile Systems India Private Limited 26.37 -
Subscription to shares Sanjay Vijaya Kumar - 16.57
Sony Joy - 7.77
Managerial remuneration Sanjay Vijaya Kumar 85.00 45.13
Sony Joy 85.00 27.54
Jose Thomas Pattara 16.50 9.00
- -
Advances given/(received) Jose Thomas Pattara 8.54 -
Thomas Varghese Pattara (15.00) -
Mobshare Mobile Systems India Private Limited 26.09 11.02
Mobile Express Private Limited - 0.29
Torque Technology Solutions Private Limited 0.09 -
Indian Telecom Innovation Hub 5.02 1.93
Odysseus Engineering Private Limited 0.25 (0.25)
- -
Loan repaid Jose Thomas Pattara 12.50 -
Notes:
1. The figures disclosed above are based on the restated consolidated financial information of MobME Wireless
Solutions Limited.
2. Above disclosures are made in accordance with Accounting Standard (AS) 18 "Related Parties" prescribed by the
Companies (Accounting Standards) Rules, 2006.
- 189 -
Annexure XIV (continued)
Details of related parties outstanding balances
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars Entity As at
31 March 2012
As at
30 September
2012
Current liabilities Canbo Electronics Private Limited 62.36 51.07
Torque Technology Solutions Private Limited 0.14 0.14
- -
Managerial remuneration
payable Sanjay Vijaya Kumar 5.89 5.89
Sony Joy 5.39 5.39
- -
Short term loans and
advances Jose Thomas Pattara 8.74 8.74
Mobshare Mobile Systems India Private
Limited 16.56 27.58
Mobile Express Private Limited - 0.29
Torque Technology Solutions Private Limited 0.42 0.42
Indian Telecom Innovation Hub 5.22 7.15
Odysseus Engineering Private Limited 0.25 -
Dimensions Mobile Solutions Private Limited 0.10 0.10
Note
1. The figures disclosed above are based on the restated consolidated financial information of MobME Wireless
Solutions Limited.
2. Above disclosures are made in accordance with Accounting Standard (AS) 18 "Related Parties" prescribed by the
Companies (Accounting Standards) Rules, 2006.
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Annexure XV
Capitalisation statement
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars Pre-issue as at
30 September 2012 Post issue (refer note 2)
Short term debt 235.21 []
Long term debt (A) 207.54 []
Current maturities of long term borrowings 2.35 []
Total debt (B) 445.10 []
Shareholders’ funds
Share capital 200.00 []
Reserves and surplus 1,525.46 []
Total shareholders’ funds (C) 1,725.46 []
Long term debt/ shareholders’ funds (A/C) 0.12 []
Total debt/ shareholders’ funds (A/C) 0.26 []
Note
1. The figures disclosed above are based on the restated consolidated financial information of MobME Wireless
Solutions Limited.
2. The Company has converted the loan of ` 2,09,54,726 from TDB in to 1,16,416 Equity Shares on 6 December 2012
at a price of ` 180
- 191 -
Annexure XVI
Consolidated statement of accounting ratios
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at and for the year ended
31 March 2012
As at and for the period from
1 April 2012 to
30 September 2012
Net worth (A) 1,460.83 1,725.46
Net profit after tax, as restated (B) 513.92 194.76
Weighted average number of equity shares
outstanding during the year / period
For basic earnings per share (C) 1,600,000 1,943,169
For diluted earnings per share (D) 1,600,000 1,943,169
Earnings Per Share ` 10 each (refer note 4)
Basic earnings per share (`) (E = B/C) 32.12 10.02
Diluted earnings per share (`) (F = B/D) 32.12 10.02
Return on net worth (%) (G = B/A) (refer note 4) 35.18% 11.29%
Number of shares outstanding at the end of the year
/ period (H) 1,600,000 2,000,000
Net assets value per share of `10 each 91.30 86.27
Face value (`) 10 10
Notes:
1) The above ratios are calculated as under:
a) Earnings per share = Net profit after tax, as restated / weighted average number of shares outstanding
during the year/ period.
b) Return on net worth (%) = Net profit after tax, as restated / net worth as restated as at the end of year /
period.
c) Net asset value ( `) = Net worth as restated / Number of equity shares as at the end of year / period.
2) The figures disclosed above are based on the restated consolidated financial information of MobME Wireless
Solutions Limited.
3) Earning per shares (EPS) calculation is in accordance with Accounting Standard 20 "Earnings per share"
prescribed by the Companies (Accounting Standards) Rules, 2006.
4) The EPS and return on net worth for the three months period ended 30 September 2012 are not annualised.
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Annexure XVII
Consolidated statement of other expenses
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars As at
31 March 2012
As at
30 September 2012
Enterprise expenses 74.41 34.45
Content Licensing Fee 165.83 32.98
Server hosting charges 77.43 27.13
Software licence fee 115.84 12.23
Other Expenses 338.24 281.21
771.75 388.00
Note:
1. The figures disclosed above are based on the restated consolidated financial information of MobME Wireless
Solutions Limited.
- 193 -
Annexure - XVII
Consolidated statement of tax shelter
(All amounts are in Indian rupees lakhs, except share data and where otherwise stated)
Particulars For the year ended 31
March 2012
For the period from 1
April 2012 to 30
September 2012
A Profit before tax 739.75 254.26
Less: long term capital gains considered separately (35.66) -
Profit eligible for normal income tax rates 704.09 254.26
B Tax rates (including surcharge and education cess) applicable
Income tax rates 30.00% 30.00%
Minimum Alternate Tax 18.50% 18.50%
Special tax rate on long term capital gain (before indexing) 20.00% -
C Tax at notional rates
Chargeable at Normal Rate 211.23 76.28
Notional capital gains tax 7.13 -
Total 218.36 76.28
D Permanent differences
Deduction under section 35(2AB) for R & D Expenditure (122.83) (85.98)
Disallowance under section 37 of Income Tax Act 1961 - 0.03
Total Permanent differences (122.83) (85.95)
E Temporary differences
Difference between book depreciation and tax depreciation 24.89 14.83
Preliminary expense 0.42 -
Deduction under section 43B of the Income Tax Act, 1961 12.63 4.15
(Profit) / loss on sale of assets (0.18) -
Loss of subsidiary 38.52 20.51
Disallowance of loss making subsidiary (17.00) 0.01
Others (0.02) (3.20)
Total Temporary differences 59.26 36.30
F Total differences (D+E) (63.57) (49.65)
G Tax Expenses / (Saving) thereon (F X B ) (19.07) (14.90)
H Total Tax (C+G) 199.29 61.38
I Minimum Alternate Tax
Book Profit 739.75 254.26
Adjustment for unabsorbed depreciation/business loss - -
- 194 -
Particulars For the year ended 31
March 2012
For the period from 1
April 2012 to 30
September 2012
Adjustment for loss making subsidiary 38.52 20.51
Adjusted book profit for MAT 778.27 274.77
Tax liability as per MAT 143.98 50.83
J Tax liability being higher of H or I 199.29 61.38
Surcharge & Cess 16.24 5.00
Interest under Sec 234B & C - -
K Tax effect on restatements 13.85 50.06
Provision for current tax as per books of accounts (J+K) 229.38 116.44
Notes
1. The aforesaid consolidated statement of tax shelters is based on the profits/loss as per the Restated
consolidated Summary Statement.
2. The above tax adjustments have been considered based on the information from Income tax computations
filed with the tax returns for the previous year 2007-08, 2008-09, 2009-10, 2010-11, 2011-12. The figures for
the six months period ended 30 September 2012 are based on the provisional computation of total income
prepared by the Company and are subject to any changes that may be considered at the time of final filing of
the return of income for the year ending 31 March 2013.
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FINANCIAL INDEBTEDNESS
As on January 15, 2013, our Company and its Subsidiaries have outstanding secured and unsecured borrowings of
approximately ` 454.69 lacs. A summary of such outstanding secured and unsecured borrowings together with a brief
description of certain significant terms of such financing arrangements are as under:
Set forth below is a brief summary of the outstanding secured and unsecured borrowings of our Company:
Name of
the
lender
Nature and date of the
agreement
Amount
sanctioned
(In `)
Amount
outstanding on
January
15,2013
(In `)
Security
Repayment
terms and
prepayment
charges
Rate of
interest
Working Capital Loans
IDBI Bank
Limited
Overdraft facility through
sanction letter dated
November 20, 2012
30 lacs 30.58 lacs Fixed deposit account
no. 0046106000042112
Repayment
terms:
Repayable on
demand
Prepayment
charges:
Charges fixed by
the bank from
time to time is
binding as
advised by the
bank.
11.50%
Vehicle Loans
ICICI Bank
Limited
Acknowledgement form
dated March 24, 2012 for
grant of vehicle loan
applied through
application form no.
19179586
3.80 lacs 3.30 lacs Hypothecation on
vehicle acquired out of
loan proceeds
Repayment
terms:
Repayable in
one advance
installment and
forty seven
monthly
installments of `
.9865 lacs each
Prepayment
charges:
Charges fixed by
the bank from
time to time is
binding as
advised by the
bank.
11.75%
ICICI Bank
Limited
Acknowledgement form
dated March 24, 2012 for
grant of vehicle loan
applied through
application form no.
19179848
3.80 lacs 3.30 lacs Hypothecation on
vehicle acquired out of
loan proceeds
Repayment
terms:
Repayable in
one advance
installment and
forty seven
monthly
installments of `
.9865 lacs each
11.75%
- 196 -
Name of
the
lender
Nature and date of the
agreement
Amount
sanctioned
(In `)
Amount
outstanding on
January
15,2013
(In `)
Security
Repayment
terms and
prepayment
charges
Rate of
interest
Prepayment
charges:
Charges fixed by
the bank from
time to time is
binding as
advised by the
bank.
Tata
Motors
Finance
Limited
Loan cum hypothecation
cum guarantee
agreement dated July 16,
2009
2.92 lacs 1.24 lacs Hypothecation on
vehicle acquired out of
loan proceeds
Repayment
terms:
Repayable in 60
monthly
installments of `
6660 each
Prepayment
charges:
Charges fixed by
the bank from
time to time is
binding as
advised by the
bank.
13.00%
Details of outstanding secured and unsecured borrowings availed by the Subsidiaries
Name of the
lender
Nature and date
of the agreement
Amount
sanctioned
(In `)
Amount
outstanding on
January 15,
2013 (In `)
Security
Repayment
terms and
prepayment
charges
Rate of
interest
(a) Forward Media Private Limited
Mobme
Wireless
Limited
As per Board
minutes dated
December 14,
2012
88.96 lacs 88.96 lacs N.A. Repayment
terms:
N.A.
Prepayment
charges:
N.A.
0.00%
(b) Getz Shoppe and Exim Private Limited
Mobme
Wireless
Solutions
Limited
As per Board
minutes dated
December 14,
2012
190.00 lacs 190.00 lacs N.A. Repayment
terms:
N.A.
Prepayment
charges:
N.A.
0.00%
State Bank of
India
Cash credit
facility,
12.00 lacs 4.60 lacs Primary security-
Repayment
terms:
13.50%
- 197 -
Name of the
lender
Nature and date
of the agreement
Amount
sanctioned
(In `)
Amount
outstanding on
January 15,
2013 (In `)
Security
Repayment
terms and
prepayment
charges
Rate of
interest
August 18, 2011 100% hypothecation of
stocks and receivables
Collateral security-
Personal guarantee of
Mr. Jose Thomas
Pattara and Mr. Santosh
Kumar K.
Repayable on
demand
Prepayment
charges:
N.A.
State Bank of
India
Cash credit
facility,
August 18, 2011
8.00 lacs 1.99 lacs as on
January 11,
2013
Primary security-
100% hypothecation of
stocks and receivables
Collateral security-
Personal guarantee of
Mr. Jose Thomas
Pattara and Mr. Santosh
Kumar K.
Repayment
terms:
Repayable on
demand
Prepayment
charges:
N.A.
13.50%
Federal Bank
Limited
Cash credit
Cash credit
facility,
July 27, 2012
200 lacs 129.39 lacs Primary security
Hypothecation of stock
of home/ kitchen
appliance and book
debts.
Collateral security
Additional charge on
equated mortgage of
95.44 acres landed
property in
Mararikulam village,
Cherthallataluk,
Aplappuzha district in
the name of East Venice
Property Developers
Private Limited, already
charged to the credit
facilities sanctioned to
Canbo Electronics
Private Limited
Equated mortgage of
1200 square feet at 7A,
8th
floor, Bhagheeratha
Square, Banerji Road,
Kacheripady, Kochi 18 in
the name of Our
Company
Repayment
terms:
Repayable on
demand
Prepayment
charges:
N.A.
15.95%
- 198 -
Name of the
lender
Nature and date
of the agreement
Amount
sanctioned
(In `)
Amount
outstanding on
January 15,
2013 (In `)
Security
Repayment
terms and
prepayment
charges
Rate of
interest
Vehicle Loan(s)
Kotak
Mahindra
Commercial
vehicle loan cum
guarantee
agreement dated
February 28, 2011
vide agreement
no. CV- 2241057
5.75lacs, 1.33 lacs Hypothecation and
charge on the vehicle
Repayable in 36
monthly
instalments of `
23760 each
BPLR
- 199 -
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations is based upon, and should be
read in conjunction with, our restated unconsolidated financial statements for the Financial Years 2009, 2010, 2011
and 2012 and the six months period ended September 30, 2012 and our restated consolidated financial statements for
the Financial Year 2012 and the six months period ended September 30, 2012, including the notes thereto and the
reports thereon, on page 124 of the Draft Red Herring Prospectus. These financial statements are based on our audited
unconsolidated and audited consolidated financial statements and are restated in accordance with paragraph B(1) of
Part II of Schedule II of the Companies Act and the SEBI ICDR Regulations. Our restated unconsolidated and restated
consolidated financial statements are prepared in accordance with Indian GAAP, as issued by ICAI and the relevant
provisions of the Companies Act. Our Financial Year ends on March 31 of each year. Accordingly, all references to a
particular Financial Year are to the twelve months period ended March 31 of that year. Results for the six months
period ended September 30, 2012 are not representative of results for the full year.
These restated financial statements have been prepared on a basis that differs in certain material respects from
generally accepted accounting principles in other jurisdictions, including U.S. GAAP and IFRS. We have not attempted
to quantify the impact of IFRS or U.S. GAAP on the financial data included in the Draft Red Herring Prospectus, nor do
we provide a reconciliation of our financial statements to those of U.S. GAAP or IFRS. Accordingly, the degree to which
the Indian GAAP financial statements included in the Draft Red Herring Prospectus will provide meaningful information
is entirely dependent on the reader’s level of familiarity with Indian GAAP, the Companies Act, and the SEBI ICDR
Regulations.
The following discussion and analysis contains forward-looking statements and reflects our management’s current
view with respect to future events that involve risks and uncertainties. Actual results may differ materially from those
anticipated in the sections titled “Forward Looking Statements” and “Risk Factors” on page xi and page x, respectively
of the Draft Red Herring Prospectus.
Forward Media Private Limited and Getz Shoppe & Exim Private Limited were not subsidiaries of our Company as of
March 31, 2011, March 31, 2010 and March 31, 2009 respectively. On October 10, 2011 our Company acquired 8,000
equity shares of ` 10 each invested in Forward Media Private Limited and on March 31, 2012 our Company acquired
40,000 equity shares of ` 100 each in Getz Shoppe & Exim Private Limited. Pursuant to this allotment, the
shareholding of our Company was at 80% of the paid-up capital of the respective companies, as a result, Forward
Media Private Limited and Getz Shoppe & Exim Private Limited became the subsidiaries of our Company. Accordingly,
the Company has consolidated its financial statements with its subsidiaries for the year ended March 31, 2012 and for
the six months period ended September 30, 2012.
OVERVIEW1
We are a telecom solutions company specializing in providing customized products and services using mobile
communications technology. We offer our products and services to TSPs, State Governments, enterprises and
financial institutions across India. Our products and services are classified into (i) VAS segment providing solutions
over text, voice and data to TSPs and their subscribers; and (ii) Enterprise solutions segment providing customized
products and services to government departments, public sector companies, enterprises and financial institutions
including implementation of M-Governance projects for various State Governments. In addition, we have two
subsidiaries Getz Shoppe & Exim Private Limited and Forward Media Private Limited. Getz Shoppe &Exim Private
Limited operates in the trading of consumer durable goods whereas Forward Media Private Limited operates in the
print and digital media industry.
In the VAS segment, our products and services are classified into two parts- (i) network VAS and (ii) consumer VAS.
Consumer VAS includes services which are targeted at subscribers of TSPs and network VAS includes managed services
for TSPs.
In the Enterprise solutions segment, we provide hosted solutions and technology consulting ranging from general
information technology (“IT”) consulting to specialized telecom consulting to enterprises and various government
1 Overview taken from ‘Our Business’ chapter of the DRHP, which was sent today (Jan 28, 2013)
- 200 -
departments. Further, we are one of the major companies in India operating in the M-Governance space having
deployed M-Governance solutions for three State Governments, namely Kerala, Goa and Nagaland. Our M-
Governance initiatives in the State of Kerala has been recognized in a World Bank report titled ‘Maximizing Mobile’ in
the year 2012
Further, with the synergies of our experience and expertise in the VAS and Enterprise domains, we are currently
putting together a mobile identity ecosystem, Mobile Express, which uses mobile digital signatures to allow its users
to digitally authenticate numerous transactions thereby allowing the mass adoption of Mobile Digital Signature
technology in India. We have recently enrolled as a GSM associate-member and also as a mobile identity working
group member.
Our unconsolidated total income was `2,310.09 lacs for the Financial year ended March 31, 2012 and has grown at a
CAGR of 185.75% over our total income of ` 34.65 lacs for the period ending March 31, 2008. Our unconsolidated net
profit was ` 559.74 lacs for the Financial year ended March 31, 2012 as compared to ` (106.07) lacs for the period
ending March 31, 2008.
SIGNIFICANT FACTORS AFFECTING OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following factors have a significant effect on our financial condition and results of operations:
Our ability to retain skilled personnel
The results of our operations depend to a large extent on our core management team which oversees the day to day
operations, strategy and growth of our business. Our ability to hire and retain the continued service of our skilled
technical personnel who have specific product knowledge, understand the services we offer and can perform
continued improvements and innovation to the products we offer our clients. In view of our continuous efforts to
grow our business and maintain client relationships, our core team formulates and operationalizes an integral part of
our strategy. If one or more members of our core team are unable or unwilling to continue in their present positions,
such persons may be difficult to replace and our business, prospects, financial condition and results of operations
could be adversely affected. There is significant competition for management and other skilled personnel in our
industry.
Operating expenses
Our business operations are labour-intensive and employee benefits expenses comprise our largest expense. The
specialised skills we require can be difficult and time consuming to acquire, train and develop and, as a result, these
skills are often in short supply. We had 126 employees as of December 31, 2012 and our employee benefits expenses
were 39.80%, 31.09%, 18.86%, 30.8% and 39.15% of our total income for Financial Years ended 2009, 2010, 2011,
2012 and the six months period ending September 30, 2012 respectively.. Our success in retaining and hiring
employees to suit our business needs, implementation of other productivity measures in relation to employees and
managing the inflation in employees’ wages affects our results of operations. Please see “Our Business – Employees”
on page 67, of the Draft Red Herring Prospectus for further details. We expect our employee benefit expenses to
increase in the future as we hire additional employees and increase our expenditure on staff welfare and other
benefits.
Change in technology and our ability to innovate and develop new products, services and deliverables
Our business depends on developing and providing innovative products and solutions for our consumers and
enterprise customers. Our business is a human skill and technology driven business. Furthermore, some of our
products are aimed at providing our customers with a secure environment to conduct their transactions online, either
through the mobile or via the internet. While the technology we deploy uses varied measures to ensure that the
security of our customers is not compromised, we may not be able to stop all threats that may be made. In addition,
due to the nature of the market in which we operate, we are required to update our products on an ongoing basis and
release new versions from time to time. We need to continuously invest in research and development to develop
differentiated products and solutions for our customers. Our products and solutions could also be rapidly rendered
obsolete by the introduction of newer technologies. Unexpected technical, operational, deployment, distribution or
- 201 -
other problems could delay or prevent the timely introduction of new products and solutions, which could result in a
loss of market opportunities.
Competition
Our Company primarily faces competition from telecom service companies like OnMobile Global Limited, One97
Communications Limited, Spice Digital Limited, Comviva Technologies Limited in the VAS segment and ValueFirst
Digital Media Private Limited, Spice Digital Limited in the enterprise segment, amongst others.
CRITICAL ACCOUNTING POLICIES
Only our key accounting policies that are relevant and specific to our business and operations are described below.
For details on our significant accounting policies, see “Financial Statements– Statement of Significant Accounting
Policies” on page 167 of the Draft Red Herring Prospectus.
Basis of preparation
The restated summary statements have been prepared in accordance with GAAP in India and presented under the
historical cost convention, on the accrual basis of accounting and comply with the mandatory AS prescribed in the
Companies (Accounting Standard) Rules 2006 and other pronouncements of the ICAI. The restated summary
statements are presented in Indian rupees.
Use of estimates
The preparation of restated summary statements in conformity GAAP in India requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent
liabilities on the date of the financial statements and the results of operations during the reporting year end. Actual
results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current
and future periods.
Tangible and intangible fixed assets
Fixed assets are carried at cost of acquisition or construction less accumulated depreciation and provision for
impairment, if any. Cost comprises the purchase price and includes freight, duties, taxes and any attributable cost of
bringing the asset to its working condition for its intended use. Borrowing costs directly attributable to acquisition or
construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended
use are also included to the extent they relate to the period till such assets are ready to be put to use.
Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date and the cost of the fixed
asset not ready for their intended use before such date, are disclosed under capital work-in-progress.
Intangible assets are stated at historical cost less accumulated amortisation and impairment.
Depreciation and amortisation
Depreciation is provided on all fixed assets on written down value method at the rates of depreciation prescribed in
Schedule XIV to the Companies Act, 1956 or based on the estimated useful life of the assets, whichever is higher.
Based on an evaluation of the useful lives of fixed assets carried out by the management, management has
determined that the depreciation rates specified in Schedule XIV to the Companies Act reflect the appropriate useful
life of the assets.
Pro-rata depreciation is provided on all fixed assets purchased and sold during the year. Assets individually costing `
5,000 or less are depreciated at the rate of 100% in the period of purchase.
Intangible assets comprise computer software and are amortised over their estimated useful lives, which is three
years to ten years, respectively, from the date such assets are available for use.
- 202 -
Impairment
The Company assesses at each balance sheet date whether there is any indication that an asset forming part of its
cash generating units may be impaired. If any such indications exist, the Company estimates the recoverable amount
of the asset or the group of asset comprising, a cash generating unit. For an asset or a group of assets that does not
generate largely independent cash flows, the recoverable amount is determined for the cash generating unit to which
the asset belongs. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to
which the assets belongs is less than the carrying amount, the carrying amount is reduced to its recoverable amount.
The recoverable amount is the greater of the assets net selling price and value in use. In assessing the value in use, the
estimated future cash flows are discounted to their present value at the weighted average cost of capital. The
reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet
date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount. An impairment loss is reversed only to the extent
that the carrying amount of the asset does not exceed the book value that would have been determined; if no
impairment loss has been recognized.
Investments
Long term investments are carried out at cost less any other than temporary diminution in value, determined
separately for each individual investment. Current investments are carried at the lower of cost and fair value. The
comparison of cost and fair value is done separately in respect of each category of investments.
Revenue recognition
Revenue from networking and value added services is recognized as the related services are provided, when
arrangements are on a time and material basis. Revenue from fixed price contracts are recognized using the
percentage of completion method, which is determined based on the costs incurred to date in relation to the total
estimated costs to complete the contract. Provision for estimated losses, if any, on incomplete fixed price contracts
are recorded in the year in which such losses become probable based on the current contract estimates.
Unbilled revenue represents earnings in excess of billings while unearned income represents billings in excess of
earnings.
Revenues are stated net of discounts, expenses billed to customers and any applicable duties or taxes. Excise duty in
not applicable to the activities of the Company.
Interest on deployment of surplus funds is recognized using the time proportionate method, based on the
transactional interest rates.
Foreign currency transactions
Foreign currency transactions are recorded using the exchange rates prevailing on the dates of the respective
transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognised in
the statement of profit and loss for the year.
Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated at the
closing exchange rates on that date and the resultant exchange differences are recognised in the statement of profit
and loss. Non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are
reported using the exchange rate at the date of the transaction.
Employee benefits
Contributions payable to the recognized provident fund, which is a defined contribution scheme, is made monthly at
predetermined rates to the appropriate authorities and charged to the statement of profit and loss on an accrual
basis.
- 203 -
Gratuity, a defined benefit scheme, is accrued based on an actuarial valuation at the balance sheet date, carried out
by an independent actuary. The present value of the obligation under such defined benefit plan is determined based
on an actuarial valuation using the projected unit credit method, which recognises each and period of service as giving
rise to an additional units of employee benefit entitlement and measures each unit separately to build up the final
obligation.
The rules of the Company do not permit encashment or carry forward of unutilised leave.
Actuarial gain/losses are immediately taken to the statement of profit and loss and are not deferred.
Taxation
The current income tax charge is determined in accordance with the relevant tax regulations applicable to the
Company in India. MAT paid in accordance with the tax laws, which give rise to future economic benefits in the form
of tax credit against future income tax liability, is recognised in the balance sheet if there is convincing evidence that
the Company will pay normal tax in subsequent years and the resultant assets can be measured reliably.
The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax
rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised
only to the extent there is reasonable certainty that the assets can be realised in future; however, where there is
unabsorbed depreciation or carried forward business loss under taxation laws, deferred tax assets are recognised only
if there is virtual certainty of realisation of such assets. Deferred tax assets/liabilities are reviewed at each balance
sheet date and written down or written-up to reflect the amount that is reasonably/virtually certain (as the case may
be) to be realised.
Assets and liabilities representing current and deferred tax are disclosed on a net basis when there is a legally
enforceable right to setoff and management intends to settle the asset and liability on a net basis.
Tax expense also comprises FBT for the period until March 31, 2009. Provision for FBT until March 31, 2009 is made in
accordance with the provisions of Income Tax Act, 1961 and the guidance note on FBT issued by ICAI. Effective April 1,
2009, the provisions of FBT have been withdrawn.
Earnings per share
The basic and diluted earnings or loss per share is computed by dividing the net profit or loss attributable to equity
shareholders for the year/period by the weighted average number of equity shares outstanding during the year.
Leases
Lease where the lessor effectively retains substantially all the risks and rewards of ownership of the leased item, are
classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and
loss on a straight-line basis over the lease term.
Provisions and contingent liabilities
The Company recognises a provision when there is a present obligation as a result of a past event that probably
requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for
a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. When the likelihood of outflow of resources, in case of a possible obligation or a
present obligation is remote no provision or disclosure is made.
Provision for onerous contracts i.e. contracts where the expected unavoidable cost of meeting the obligations under
the contract exceed the economic benefits expected to be received under it, are recognised when it is possible that an
outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an
obligating event, based on a reliable estimate of such obligation.
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Cash flow statement
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and
items of income or expenses associated with investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated.
DESCRIPTION OF PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE AND RESULTS OF OPERATIONS
For the Financial Years ended March 31, 2009, 2010, 2011 and 2012 and the six months period ended September 30,
2012 our restated unconsolidated net profit/loss after tax was a loss of 2.45%, and profit of 20.49%, 34.92%, 24.23%
and 20.23% respectively; and for the Financial Year ended March 31, 2012 and the six months period ended
September 30, 2012, our restated consolidated profit after tax was 22.20% and 8.52% respectively. For the Financial
Years ended March 31, 2009, 2010, 2011 and 2012 and the six months period ended September 30, 2012 our restated
unconsolidated net profit/loss before tax on total income was a loss of 2.98)%, and profit of 24.25%, 51.20%, 33.69%
and 26% respectively; and for the Financial Year ended March 31, 2012 and the six months period ended September
30, 2012 our restated consolidated net profit before tax on total income was 11.12% and 31.96% respectively. For the
Financial Years ended March 31, 2009, 2010, 2011 and 2012 and the six months period ended September 30, 2012 our
restated unconsolidated return on equity was (2.62%), and profits of 29.55%, 71.37%, 37.15% and 11.95%
respectively; and for the Financial Year ended March 31, 2012 and the six months period ended September 30, 2012,
our restated consolidated return on equity was 35.18% and 11.29% respectively.
Income and Expenses
Income
Our total income comprises income from operations and other income.
The following table sets forth Income data from our restated unconsolidated financial statement for the Financial
Years ended March 31, 2009, 2010, 2011 and 2012 and for the six months period ended September 30, 2012, the
components of which are also expressed as a percentage of total income for such periods.
(Unconsolidated) (` lacs)
Particulars
For the six months period ended September 30, For the Financial Year ended March 31
2012 2012 2011 2010 2009
Amount
% of
total
income
Amount
% of
total
Income
Amount
% of
total
income
Amount
% of
total
income
Amount
% of
total
Income
Income
Income from services 1049.74 99.87 2252.87 97.53 1932.75 99.87 373.39 99.87 133.36 99.95
Other income 1.37 0.13 57.22 2.47 2.44 0.13 0.50 0.13 0.07 0.05
Total income (A) 1051.11 100 2310.09 100 1935.19 100 373.89 100 133.43 100
The following table sets forth income data from our restated consolidated financial statement for the Financial Year
ended March 31, 2012 and for the six months period ended September 30, 2012, the components of which are also
expressed as a percentage of total income for such periods.
(Consolidated (`lacs)
Particulars
For the six months period ended September
30, 2012
For the Financial Year ended March
31, 2012
Amount % of total Income Amount % of total Income
Income
Income from services and sale of goods 2284.60 99.94 2257.23 97.53
Other income 1.37 0.06 57.22 2.47
Total income (A) 2285.97 100 2314.45 100
Income
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Our income consists of income from operations and other income.
A. Income from operations
Our consolidated income from operations comprises income from (i) VAS; (ii) enterprise; and (iii) sale of goods. VAS
primarily includes income from our platform “Zulo”, “Picture Post” and “India Tweets”. Enterprise income primarily
includes income from “M-Governance Projects”, “Fastalerts” and “Bulk Voice”. Sale of goods income comprises
income from the trading operations of our subsidiary, Getz Shoppe & Exim Private Limited.
B. Other income
Other income consists of income from (i) interest on fixed deposits; (ii) sale of fixed assets; and (iii) sale of
investments.
Expenses
The following table sets forth expenses and tax data from our restated unconsolidated financial statement for the
Financial Years ended March 31, 2009, 2010, 2011, 2012 and for the six months period ended September 30, 2012,
the components of which are also expressed as a percentage of total expenses and tax for such periods.
(Unconsolidated) (`lacs)
Particulars
For the six
months period
ended
September 30,
For the Financial Year ended March 31,
2012 2012 2011 2010 2009
Amount
% of
total
income
Amount
% of
total
income
Amount
% of
total
income
Amount
% of
total
income
Amount
%of
total
Income
Expenditure
Employee benefits 411.55 39.15 711.55 30.80 364.89 18.86 116.25 31.09 53.10 39.80
Other expenses 306.54 29.16 752.91 32.59 536.28 27.71 140.93 37.69 71.89 53.88
Finance charges 7.00 0.67 5.13 0.22 5.78 0.30 0.16 0.04 0.52 0.39
Depreciation and amortisation 52.73 5.02 62.23 2.69 37.42 1.93 25.87 6.92 11.90 8.92
Total expenditure (B) 777.82 74.00 1531.82 66.31 944.37 48.80 283.21 75.75 137.41 102.98
Net profit before tax (C) =(A) –(B) 273.29 26.00 778.27 33.69 990.82 51.20 90.68 24.25 (3.98) (2.98)
Provision for tax
Current tax/MAT (116.30) (11.06) (229.38) (9.93) (245.08) (12.66) (10.47) (2.80) - -
FBT - - - - - - - - (0.76) (0.57)
Deferred tax (charge)/ benefit 56.97 5.42 10.85 0.47 (69.96) (3.62) (3.60) (0.96) 1.47 1.10
Total provision for tax (59.33) (5.64) (218.53) (9.46) (315.04) (16.28) (14.07) (3.76) 0.71 0.53
Restated net profit after tax 213.96 20.36 559.74 24.23 675.78 34.92 76.61 20.49 (3.27) (2.45)
The following table sets forth expenses and tax data from our restated consolidated financial statement for Financial
Year ended March 31, 2012 and for the six months period ended September 30, 2012, the components of which are
also expressed as a percentage of total expenses and tax for such periods.
(Consolidated) (`lacs)
Particulars
For the six months period
ended September 30, 2012
For the Financial Year
ended March 31, 2012
Amount % of total
Income Amount
% of total
Income
Expenditure
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Particulars
For the six months period
ended September 30, 2012
For the Financial Year
ended March 31, 2012
Amount % of total
Income Amount
% of total
Income
Cost of goods sold 1126.93 49.30 - -
Employee benefits 447.13 19.56 718.59 31.05
Other expenses 388.00 16.97 771.75 33.35
Finance charges 16.04 0.70 5.13 0.22
Depreciation, amortisation and impairment expenses 53.61 2.35 79.23 3.42
Total expenditure (B) 2031.71 88.88 1574.70 68.04
Net profit before tax (C) = (A) – (B) 254.26 11.12 739.75 31.96
Provision for tax
Current tax (116.44) (5.09) (229.38) (10.09)
Deferred tax expense 56.97 2.49 3.55 0.15
Total provision for tax (59.47) (2.60) (225.83) (9.76)
Net profit after tax before minority interest 194.79 8.52 513.92 22.20
Share of minority interest 0.03 0.00 - -
Restated net profit after tax 194.76 8.52 513.92 22.20
Expenses
Cost of goods sold
Cost of goods sold primarily comprises expenses from the trading operations of our subsidiary, Getz Shoppe & Exim
Private Limited.
Employees benefit
Employees’ benefit primarily includes expenses from provisions for employees’ salaries, incentives, contribution to
provident and other funds, gratuity and superannuation.
Other expenses
Other expenses primarily includes enterprise-related expenses, VAS-related expenses, “M-Governance”-related
expenses, “Picture Post”-related expenses, “Fastalerts” expenses, server hosting charges, Software License Fees,
electricity, power and fuel, rent, repair and maintenance, rates and taxes and other expenses.
Finance charges
Finance charges primarily include interest on loans, and charges levied by the scheduled commercial banks and public
financial institutions.
Depreciation, amortisation and impairment
Depreciation is provided at WDV Method at the rates specified in Schedule VI of the Companies Act. Leasehold
premises are amortized over the unexpired lease period.
The intangible assets are amortised using the straight line method over their respective estimated useful lives.
Taxation
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Our Company’s provision for taxation comprises current tax/minimum alternate tax, FBT and deferred tax. For further
details, please see “Statement of Tax Benefits” on page 48 of the Draft Red Herring Prospectus.
Results of Operations
Six months period ended September 30, 2012 (Consolidated)
We have provided our consolidated results of operations for the six months period ended September 30, 2012
without including the corresponding period in the prior year’s financial statements or analysis, and such interim
financial information may therefore be of limited use.
Our results of operations for the six months period ended September 30, 2012 were particularly affected by the
following factors:
General downturn in the telecom industry;
Increase penetration in the mobile internet, which reduced the demand for existing consumer VAS products;
Company’s implementation of its strategy to diversify into the development of Mobile Digital Signature
technology; and
Getz Shoppe & Exim Private Limited, a trading company became our subsidiary on March 31, 2012.
Total income: Our total income was ` 2285.97 lacs for the six months period ended September 30, 2012 consisting of
income from operations and other income.
Income from operations: Our income from operation was ` 2284.60 lacs for the six month period ended September
30, 2012, primarily consisting of (i) income from sale of goods of Getz Shoppe & Exim Private Limited ` 1214.12 lacs;
(ii) income from VAS of ` 962.74 lacs; and (iii) income from enterprise of ` 87 lacs.
Other income: Our other income was ` 1.37 lacs for the six months period ended September 30, 2012.
Total expenditure: Our total expenditure was ` 2031.71 lacs for the six months period ended September 30, 2012,
consisting of cost of goods sold, employee benefit expenses, other expenses, finance charges and depreciation,
amortization and impairment.
Cost of goods sold: Our cost of goods sold was ` 1126.93 lacs for the six months period ended September 30, 2012,
primarily consisting of purchase of goods by our subsidiary Getz Shoppe & Exim Private Limited.
Employee benefits: Our employee benefit expenses were ` 447.13 lacs for the six months period ended September 30,
2012, consisting of salaries, provident fund, gratuity and other expenses.
Other expenses: Our other expenses were ` 388.00 lacs for the six months period ended September 30, 2012,
primarily consisting of enterprise expenses of ` 34.45 lacs, expense of ` 32.98 lacs for “Airtel Picture Post”, server
hosting charges of ` 27.13 lacs, in connection with the use of the server related software owned by Net-Force ApS
(“Software License Fee”) of `12.23 lacs and other expenses of `281.21 lacs.
Finance charges: Our finance charges were ` 16.04 lacs for the six months period ended September 30, 2012,
primarily as a result of interest on loan taken by Getz Shoppe & Exim Private Limited and interest on working capital
loan taken by our Company.
Depreciation, amortisation and impairment: Our depreciation, amortisaton and impairment expenses were ` 53.61
lacs for the six months period ended September 30, 2012 primarily due to depreciation charge on tangible and
intangible assets.
Provision for tax: Our provision for taxation was ` 59.47 lacs for the six months period ended September 30, 2012,
primarily as a result of a provision for current tax of ` 116.44 lacs and a deferred tax benefit of ` 56.97 lacs. Our
provision for taxation for the six months period ended September 30, 2012 constituted 2.60% of our total income as
compared with 9.76 % of our total income for the Financial Year ended March 31, 2012.
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Adjustment on account of restatement: Our adjustment on account of restatement was `102.16 lacs for the six
months period ended September 30, 2012, represents, reversal of certain income from operations pertaining to the
earlier year’s accounted during the period.
Net profit after tax, as restated: As a result of the above, our net profit after taxation was `194.76 lacs, representing
8.52% of our total income from operations, for the six months period ended September 30, 2012.
Financial Year 2012 (Consolidated)
Our result of operations for the Financial Year ended march 31, 2012 was particularly affected by the following
factors:
Venturing into several new telecom circles in VAS across India; and
Increase in range of product offerings including “India Tweets”, “Photo Alerts”, “Fun Zone”, video blogs and
“Cricket on Demand”.
Total income: Our total income was `2314.45 lacs for the Financial Year ended March 31, 2012 consisting of income
from operations and other income.
Income from operations: Our income from operation was ` 2257.23 lacs for the Financial Year ended March 31, 2012,
primarily consisting of (i) income from VAS of ` 1913.61 lacs primarily consisting of “Picture Post” and “India Tweets”
contributing 36% and 22% of total VAS income respectively; and (iii) income from enterprise of ` 339.26 lacs.
Other income: Our other income was `57.22 lacs, for the Financial Year ended March 31, 2012, primarily as a result of
sale of investments in Commonwealth Inclusive Growth Services Limited and Innoz Technologies Private limited,
which was 76.98% of other income and interest on fixed deposit which was 22.28% of other income for the Financial
Year ended March 31, 2012.
Total expenditure: Our total expenditure was ` 1574.70 lacs, for the Financial Year ended March 31, 2012 consisting
of employee benefit expenses, other expenses, finance charges and depreciation, amortization and impairment.
Employee benefits: Our employee benefit expenses were ` 718.59 lacs for the Financial Year ended March 31, 2012,
consisting of salaries, incentives, provident fund, gratuity and other expenses.
Other expenses: Our other expenses were ` 771.75 lacs for the Financial Year ended March 31, 2012, primarily
consisting of “Picture Post” expenses of ` 165.83 lacs, Software License Fee of ` 115.84 lacs, server hosting charges of
` 77.43 lacs, enterprise expenses of ` 74.41 lacs and other expenses of ` 338.24 lacs.
Finance charges. Our finance charges were ` 5.13 lacs for the Financial Year ended March 31, 2012, primarily as a
result of interest on working capital loan taken by our Company.
Depreciation, amortisation and impairment: Our depreciation, amortisaton and impairment expenses were ` 79.23
lacs for the Financial Year ended March 31, 2012, primarily due to depreciation charge on tangible and intangible
assets and impairment of assets.
Provision for tax: Our provision for taxation was ` 225.83 lacs for the Financial Year ended March 31, 2012, primarily
as a result of a provision for current tax of ` 229.38 lacs and a deferred tax benefit of ` 3.55 lacs. Our provision for
taxation for the Financial Year ended March 31, 2012 constituted 9.76 % of our total income for the Financial Year
ended March 31, 2012.
Adjustment on account of restatement: Our adjustment on account of restatement was ` 28.83 lacs for the Financial
Year ended March 31, 2012, consisting of adjustments made on account of unbilled income from operations, non-
inclusion pre-operating expenses for the fifteen months period ended March 31, 2008, gratuity which had not been
accounted for prior years as per actuarial valuation and non-inclusion of prior income for accounting in the Financial
Year ended, March 31, 2012.
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Net profit after tax, as restated: As a result of the above, our net profit after taxation was ` 513.92 lacs, representing
22.20 % of our total income from operations, for the Financial Year ended March 31, 2012.
Six months period ended September 30, 2012 (Unconsolidated)
We have provided our unconsolidated results of operations for the six months period ended September 30, 2012
without including the corresponding period in the prior year’s financial statements or analysis, and such interim
financial information may therefore be of limited use.
Our results of operations for the six months period ended September 30, 2012 were particularly affected by the
following factors:
General downturn in the telecom industry;
Increase penetration in the mobile internet, which reduced the demand for existing consumer VAS products;
and
Company’s implementation of its strategy to diversify into the development of mobile digital signature.
Total income: Our total income was ` 1051.11 lacs for the six months period ended September 30, 2012 consisting of
income from operations and other income.
Income from operations: Our income from operation was ` 1,049.74 lacs for the six month period ended September
30, 2012, primarily consisting of (i) income from VAS of ` 962.74 lacs; and (ii) income from enterprise of ` 87 lacs.
Other income: Our other income was `1.37 lacs for the six months period ended September 30, 2012.
Total expenditure: Our total expenditure was `777.82 lacs for the six months period ended September 30, 2012,
consisting of employee benefit expenses, other expenses, finance charges and depreciation and amortization.
Employee benefits: Our employee benefit expenses were ` 411.55 lacs for the six months period ended September 30,
2012, consisting of salaries, provident fund, gratuity and other expenses.
Other expenses: Our other expenses were `306.54 lacs for the six months period ended September 30, 2012, primarily
consisting of (i) enterprise expenses; (ii) “Picture Post” expense; and (iii) Software License Fee.
Finance charges: Our finance charges were `7.00 lacs for the six months period ended September 30, 2012, primarily
as a result of interest on working capital loan taken by our Company.
Depreciation and amortisation: Our depreciation and amortisaton expenses were `52.73 lacs for the six months
period ended September 30, 2012, primarily due to depreciation on tangible and intangible assets.
Provision for tax: Our provision for taxation was ` 59.33 lacs for the six months period ended September 30, 2012,
primarily as a result of a provision for current tax of ` 116.3 lacs and deferred tax benefit of ` 56.97 lacs. Our provision
for taxation for the six months period ended September 30, 2012 constituted 5.64 % of our total income as compared
with 9.46 % of our total income for the Financial Year ended March 31, 2012.
Adjustment on account of restatement: Our adjustment on account of restatement was `102.16 lacs for the six
months period ended September 30, 2012, represents, reversal of certain income from operations pertaining to the
earlier year`s accounted during the period.
Net profit after tax, as restated: As a result of the above, our net profit after taxation was ` 213.96 lacs, representing
20.36% of our total income, for the six months period ended September 30, 2012.
Financial Year 2012 compared to Financial Year 2011(Unconsolidated)
Our results of operations for the Financial Year ended March 31, 2012 were particularly affected by the following
factors:
Venturing into several new telecom circles in VAS across India; and
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Increase in range of products for TSPs including “India Tweets”, “Photo Alerts”, “Fun Zone”, video blogs and
“Cricket on demand.”
Total income: Our total income increased by 19.37% to ` 2310.09 lacs for the Financial Year ended March 31, 2012
from ` 1935.19 lacs in comparison to the Financial Year ended March 31, 2011, as a result of an increase in both
income from operations and other income.
Income from operations: Our income from operations increased by 16.56% to ‘ 2252.87 lacs for the Financial Year
ended March 31, 2012 from ` 1932.75 lacs in comparison to the Financial Year ended March 31, 2011, as a result of
increase in the income from VAS by 18.28 % to ` 1913.61 lacs primarily consisting of “Picture Post” and “India Tweets”
contributing 36% and 22% of total VAS income respectively for the Financial Year ended March 31, 2012 from `
1617.88 lacs in comparison to the Financial Year ended March 31, 2011 and income from enterprise increased by 7.75
% to ` 339.26 lacs for the Financial Year ended March 31, 2012 from ` 314.87 lacs in comparison to the Financial Year
ended March 31, 2011.
Other income: Our other income increased by 2245.08% to `57.22 lacs for the Financial Year ended March 31, 2012
from `2.44 lacs in comparison to the Financial Year ended March 31, 2011, primarily as a result of sale of investments
of Commonwealth Inclusive Growth Services Limited and Innoz Technologies Private Limited, which was 76.98% of
other income and interest on fixed deposit which was 22.28% of other income for the Financial Year ended March 31,
2012.
Total expenditure: Our total expenditure increased by 62.21% to ` 1531.82 lacs for the Financial Year ended March
31, 2012 from ` 944.37 lacs in comparison to the Financial Year ended March 31, 2011, as a result of increase in the
employee benefit expenses, other expenses and depreciation and amortization.
Employee benefits: Our employee benefit expenses increased by 95.01% to` 711.55 lacs for the Financial Year ended
March 31, 2012 from `364.89 lacs in comparison to the Financial Year ended March 31, 2011, as a result of increase
in salaries by 50.66% to `430.08 lacs for the Financial Year ended March 31, 2012 from ` 285.45 lacs in comparison to
the Financial Year ended March 31, 2011 and an increase in incentives by 221.45% to `192.38 lacs for the Financial
Year ended March 31, 2012 from ` 59.85 lacs in comparison to the Financial Year ended March 31, 2011.
Other expenses: Our other expenses increased by 40.40% to `752.91 lacs for the Financial Year ended March 31, 2012
from ` 536.28 lacs in comparison to the Financial Year ended March 31, 2011, as a result of an increase in the expense
of “Picture Post” by 54.52% to `165.83 lacs for the Financial Year ended March 31, 2012 from ` 107.32 lacs in
comparison to the Financial Year ended March 31, 2011, server hosting charges by 105.55% to `77.43 lacs for the
Financial Year ended March 31, 2012 from ` 37.67 lacs in comparison to the Financial Year ended March 31, 2011 and
an increase in enterprises expenses by 104.20% to `74.41 lacs for the Financial Year ended March 31, 2012 from `
36.44 lacs in comparison to the Financial Year ended March 31, 2011.
Finance charges: Our finance charges decreased by 11.25% to `5.13 lacs for the Financial Year ended March 31, 2012
in comparison to `5.78 lacs for the Financial Year ended March 31, 2011.
Depreciation and amortization: Our depreciation and amortization expenses increased by 66.30% to `62.23 lacs for
the Financial Year ended March 31, 2012 in comparison to `37.42 lacs for the Financial Year ended March 31, 2011
primarily due to depreciation on tangible and intangible assets of `62.23 lacs and nil Goodwill impairment during the
year as a result of acquisition of 80% equity shares of Forward Media Private Limited.
Provision for Tax: Our provision for taxation decreased by 30.63% to ` 218.53 lacs for the Financial Year ended March
31, 2012 from ` 315.04 lacs for the Financial Year ended March 31, 2011. This was primarily as a result of an decrease
in current tax/minimum alternate tax to ` 229.38 lacs for the Financial Year ended March 31, 2012 from ` 245.08 lacs
for the Financial Year ended March 31, 2011 and an increase in deferred tax benefit to ` 10.85 lacs for the Financial
Year ended March 31, 2012 from deferred tax charge of ` 69.96 lacs for the Financial Year ended March 31, 2011. Our
effective rate of taxation for the Financial Year ended March 31, 2012 decreased to 9.46 % from 16.28 % for the
Financial Year ended March 31, 2011, primarily on account of creation of deferred tax charge on accrued revenue. For
details, see “Financial Statements – Notes to Restated Unconsolidated Financial Statements – Annexure IV” on page
132 of the Draft Red Herring Prospectus.
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Adjustment on account of restatement: Our adjustment on account of restatement was `28.83 lacs for the Financial
Year ended March 31, 2012, consisting of adjustments made on account of unbilled income from operations in respect
of accounting of unbilled invoices, non-inclusion of pre-operating expenses in the for the fifteen months period ended
March 31, 2008, gratuity which had not been accounted for prior years as per actuarial valuation and non-inclusion of
prior income for accounting in the Financial Year ended, March 31, 2012.
Net profit after tax, as restated: For the reasons stated above, our net profit after tax, as restated decreased by
17.17% to` 559.74 lacs for the Financial Year ended March 31, 2012 from `675.78 lacs for the Financial Year ended
March 31, 2011.
Financial Year 2011 compared to Financial Year 2010 (Unconsolidated)
Our results of operations for the Financial Year ended March 31, 2011 were particularly affected by the following
factors:
Venturing into several new telecom circles across India for providing “Zulo” services;
Increase in the income on account of wide market coverage; and
Awarding of “M-Governance Project” by the Government of Goa and Nagaland.
Total income: Our total income increased by 417.58% to ` 1935.19 lacs for the Financial Year ended March 31, 2011
from ` 373.89 lacs in comparison to the Financial Year ended March 31, 2010, as a result of an increase in both
income from operations and other income.
Income from operations: Our income from operations increased by 417.62% to ‘ 1932.75 lacs for the Financial Year
ended March 31, 2011 from ` 373.39 lacs in comparison to the Financial Year ended March 31, 2010, as a result of
increase in the income from VAS by 505.56 % to ` 1617.88 lacs for the Financial Year ended March 31, 2011 from `
267.17 lacs in comparison to the Financial Year ended March 31, 2010 and income from enterprise increased by
196.43 % to ` 314.87 lacs primarily consisting of “Fastalerts” Income and “M-Governance Project” contributing 36%
and 20% of total Enterprise income respectively for the Financial Year ended March 31, 2011 from ` 106.22 lacs in
comparison to the Financial Year ended March 31, 2010.
Other income: Our other income increased by 388% to ` 2.44 lacs for the Financial Year ended March 31, 2011 from `
0.50 lacs in comparison to the Financial Year ended March 31, 2010. This increase was on account of receipt of
interest on fixed deposit on account of deployment of excess fund.
Total expenditure: Our total expenditure increased by 233.45% to ` 944.37 lacs for the Financial Year ended March
31, 2011 from ` 283.21 lacs in comparison to the Financial Year ended March 31, 2010. This was as a result of increase
in the employee benefit expenses, other expenses, finance charges and depreciation and amortization.
Employee benefits: Our employee benefit expenses increased by 213.88% to` 364.89 lacs for the Financial Year ended
March 31, 2011 from ` 116.25 lacs in comparison to the Financial Year ended March 31, 2010. This was primarily as a
result of increase in salaries by 154.48% to ` 285.45 lacs for the Financial Year ended March 31, 2011 from ` 112.17
lacs in comparison to the Financial Year ended March 31, 2010 and declaration of incentives to employees in the
Financial Year ended March 31, 2011.
Other expenses: Our other expenses increased by 280.53% to ` 536.28 lacs for the Financial Year ended March 31,
2011 from ` 140.93 lacs in comparison to the Financial Year ended March 31, 2010, as a result of an increase in (i) an
increase in administrative expenses by 255.1 % to ` 179.40 lacs for the Financial Year ended March 31, 2011 from `
50.52 lacs in comparison to the Financial Year ended March 31, 2010; (ii) the expense of “Picture Post” by 291.68% to
` 107.32 lacs for the Financial Year ended March 31, 2011 from ` 27.40 lacs in comparison to the Financial Year ended
March 31, 2010; (iii) an increase in server hosting charges to 198% to ` 37.67 lacs for the Financial Year ended March
31, 2011 from ` 12.64 lacs in comparison to the Financial Year ended March 31, 2010; (iv) an increase in Software
License Fees.
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Finance charges: Our finance charges increased by 3512.5% to ` 5.78 lacs for the Financial Year ended March 31, 2011
in comparison to ` 0.16 lacs for the Financial Year ended March 31, 2010. 22.13% of this was on account of bank
charges and 77.87% was on foreign exchange loss on account of licensing fee of Net-Force ApS in USD.
Depreciation and amortization: Our depreciation and amortization expenses increased by 44.65 % to ` 37.42 lacs for
the Financial Year ended March 31, 2011 in comparison to ` 25.87 lacs for the Financial Year ended March 31, 2010,
primarily due to depreciation on tangible and intangible assets.
Provision for Tax: Our provision for taxation increased by 2139.1% to ` 315.04 lacs for the Financial Year ended March
31, 2011 from ` 14.07 lacs for the Financial Year ended March 31, 2010. This was primarily as a result of an increase in
current tax/minimum alternate tax to ` 245.08 lacs for the Financial Year ended March 31, 2011 from ` 10.47 lacs for
the Financial Year ended March 31, 2010 and an increase in deferred tax charge to ` 69.96 lacs for the Financial Year
ended March 31, 2011 from `3.6 lacs for the Financial Year ended March 31, 2010. Our effective rate of taxation for
the Financial Year ended March 31, 2011 increased to 16.28% from 3.76 % for the Financial Year ended March 31,
2010, primarily on account of increase in profit. For details, see “Financial Statements – Notes to Restated
Unconsolidated Financial Statements – Annexure IV” on page 132 of the Draft Red Herring Prospectus.
Adjustment on account of restatement: Our adjustment on account of restatement was ` 130.89 lacs for the Financial
Year ended March 31, 2011, consisting of adjustments made on account of unbilled income from operations in respect
of accounting of unbilled invoices, adjustments made in selling general and administrative expenses during the prior
years, non-inclusion of pre-operating expenses in the for the fifteen months period ended March 31, 2008, gratuity
which had not been accounted for prior years as per actuarial valuation and non-inclusion of prior income for
accounting in the Financial Year ended, March 31, 2011.
Net profit after tax, as restated: For the reasons stated above, our net profit after tax, as restated increased by
782.1% to` 675.78 lacs for the Financial Year ended March 31, 2011 from `76.61 lacs for the Financial Year ended
March 31, 2010.
Financial Year 2010 compared to Financial Year 2009 (Unconsolidated)
Our results of operations for the Financial Year ended March 31, 2010 were particularly affected by the following
factors:
Awarded “M-Governance Project” by the Government of Kerala; and
Launch of “Zulo” and “Picture Post.”
Total income: Our total income increased by 180.21% to ` 373.89 lacs for the Financial Year ended March 31, 2010
from ` 133.43 lacs in comparison to the Financial Year ended March 31, 2009, as a result of an increase in both
income from operations and other income.
Income from operations: Our income from operations increased by 179.99% to ` 373.39 lacs for the Financial Year
ended March 31, 2010 from ` 133.36 lacs in comparison to the Financial Year ended March 31, 2009, as a result of
increase in the income from VAS by 223.18 % to ` 267.17 lacs primarily consisting of an increase in revenue from
“Picture Post” and “Zulo Income” contributing 31% and 17% of total VAS income respectively for the Financial Year
ended March 31, 2010 from ` 82.67 lacs in comparison to the Financial Year ended March 31, 2009 and income from
enterprise increased by 109.55 % to ` 106.22 lacs for the Financial Year ended March 31, 2010 from ` 50.69 lacs in
comparison to the Financial Year ended March 31, 2009.
Other income: Our other income increased by 614.29% to ` 0.50 lacs for the Financial Year ended March 31, 2010
from ` 0.07 lacs in comparison to the Financial Year ended March 31, 2009. 48% of this increase was on account of
receipt of interest on fixed deposit on account of deployment of excess fund.
Total expenditure: Our total expenditure increased by 106.10% to ` 283.21 lacs for the Financial Year ended March
31, 2010 from ` 137.41 lacs in comparison to the Financial Year ended March 31, 2009. This was primarily as a result
of increase in the employee benefit expenses, other expenses, and depreciation and amortization.
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Employee benefits: Our employee benefit expenses increased by 118.93% to` 116.25 lacs for the Financial Year ended
March 31, 2010 from ` 53.10 lacs in comparison to the Financial Year ended March 31, 2009. This was primarily as a
result of increase in salaries by 119% to ` 112.17 lacs for the Financial Year ended March 31, 2010 from ` 51.15 lacs in
comparison to the Financial Year ended March 31, 2009.
Other expenses: Our other expenses increased by 96.04% to ` 140.93 lacs for the Financial Year ended March 31, 2010
from ` 71.89 lacs in comparison to the Financial Year ended March 31, 2009, as a result of an increase in (i) an
increase in administrative expenses by 49.89 % to ` 50.52 lacs for the Financial Year ended March 31, 2010 from `
33.71 lacs in comparison to the Financial Year ended March 31, 2009; (ii) an increase in “Fastalerts” expenses by
153.3% to ` 31.48 lacs for the Financial Year ended March 31, 2010 from ` 12.43 lacs in comparison to the Financial
Year ended March 31, 2009;(iii) an increase in server hosting charges by 158.49% to ` 12.64 lacs for the Financial Year
ended March 31, 2010 from ` 4.89 lacs in comparison to the Financial Year ended March 31, 2009; (iv) an increase in
interactive voice response expenses by 2284.62% to ` 3.10 lacs for the Financial Year ended March 31, 2010 from `
0.13 lacs in comparison to the Financial Year ended March 31, 2009; (v) increase in expense in “Picture Post”; (vi) an
increase in Software License Fees.
Finance charges: Our finance charges decreased by 69.23% to ` 0.16 lacs for the Financial Year ended March 31, 2010
in comparison to ` 0.52 lacs for the Financial Year ended March 31, 2009.
Depreciation and amortization: Our depreciation and amortization expenses increased by 117.39 % to ` 25.87 lacs for
the Financial Year ended March 31, 2010 in comparison to ` 11.90 lacs for the Financial Year ended March 31,
2009,primarily due to depreciation on tangible and intangible assets.
Provision for Tax: Our provision for taxation increased by 2081.7% to ` 14.07 lacs for the Financial Year ended March
31, 2010 from ` .71 lacs for the Financial Year ended March 31, 2009. This was primarily as a result of current
tax/minimum alternate tax of ` 10.47 lacs for the Financial Year ended March 31, 2010 and an increase in deferred tax
charge to `3.6 lacs for the Financial Year ended March 31, 2010 from deferred tax benefit of ` 1.47 lacs for the
Financial Year ended March 31, 2009. Our effective rate of taxation for the Financial Year ended March 31, 2010
increased by 3.76% to (0.53%) for the Financial Year ended March 31, 2009, primarily on account of increase in
income. For details, see “Financial Statements – Notes to Restated Unconsolidated Financial Statements – Annexure
IV” on page 132 of the Draft Red Herring Prospectus.
Adjustment on account of restatement: Our adjustment on account of restatement was ` 2.10 lacs for the Financial
Year ended March 31, 2010, consisting of adjustments made in selling general and administrative expenses during the
prior years, non-inclusion of pre-operating expenses for the fifteen months period ended March 31, 2008 and gratuity
which had not been accounted for prior years as per actuarial valuation.
Net profit after tax, as restated: For the reasons stated above, our net profit after tax, as restated increased by
2442.81% to` 76.61 lacs for the Financial Year ended March 31, 2010 from loss of `3.27 lacs for the Financial Year
ended March 31, 2009.
FINANCIAL CONDITION
Total Assets
The following table sets forth the principal components of our restated unconsolidated total assets as at September
30, 2012, March 31, 2012, March 31, 2011, March 31, 2010 and March 31, 2009.
(Unconsolidated) (` in lacs)
Particulars As at September
30, 2012
As at March
31, 2012
As at March
31, 2011
As at March
31, 2010
As at
March 31,
2009
Total fixed assets (net block) 314.57 264.58 183.03 89.15 51.48
Investments 120.80 100.80 44.95 - -
Current assets, non- current
assets, loans and advances 1819.69 1693.89 1070.61 265.00 104.19
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Particulars As at September
30, 2012
As at March
31, 2012
As at March
31, 2011
As at March
31, 2010
As at
March 31,
2009
Total assets 2255.06 2059.27 1298.59 354.15 155.67
The following table sets forth the principal components of our restated consolidated total assets as at September 30,
2012 and March 31, 2012.
(Consolidated) (` in lacs)
Particulars As at September 30, 2012 As at March 31, 2012
Total fixed assets (net block) 328.97 276.36
Investments 20.00 -
Current assets, non- current assets, loans and advances 2169.21 1883.38
Total assets 2518.18 2159.74
Total assets as at September 30, 2012 (Consolidated)
Total fixed assets: Our total fixed assets were ` 328.97 lacs as at September 30, 2012 consisting of 13.06% of total
assets primarily as a result of purchase of a flat in Kochi for ` 62.99 lacs to be used by visiting employees of the
Company.
Investments: Our investment was ` 20 lacs, consisting of 0.79% of total assets as at September 30, 2012, as a result of
investment in 10% equity shares of Waybeo Technologies Private Limited.
Current assets, non- current assets, loans and advances: Our current assets, non- current assets, loans and advances
were ‘ 2169.21 lacs as at September 30, 2012 consisting of 86.14% of total assets primarily as a result of (i) long term
loans and advances primarily including ` 16.64 lacs for advances for capital goods, ` 37.96 lacs for other long term
advances to telecom operators, ` 21.77 lacs for advance tax and tax deducted at source (net of provision for tax); (ii)
other non-current assets primarily including ` 21.09 lacs balance in banks for margin money; (iii) short term loans,
advances primarily including ` 76.89 lacs for advances for supply of goods and rendering of services given to others
such as deposits submitted to TSPs and advances given to the staff of our Company; (iv) other current assets of `
209.61 lacs for unbilled revenue of ` 209.61 lacs; and (v) trade receivables primarily including ` 1083.04 lacs of
unsecured debts.
Total assets as at March 31, 2012 (Consolidated)
Total fixed assets: Our total fixed assets were ` 276.36 lacs consisting of 12.80% as at March 31, 2012, primarily as a
result of purchase of a flat in Kochi for ` 49 lacs and vehicles worth ` 30 lacs.
Current assets, non- current assets, loans and advances: Our current assets, non- current assets, loans and advances
was ` 1883.38 lacs consisting of 87.20% of total assets as at March 31, 2012, primarily as a result of (i) long term loans
and advances primarily including ` 26.44 lacs for advances for capital goods and ` 40.40 lacs for other long term
advances to telecom operators; (ii) other non-current assets primarily including ` 19.09 lacs balance in banks for
margin money; (iii) short term loans and advances primarily including ` 139.28 lacs for advances for supply of goods
and rendering of services given to others such as deposits submitted to TSPs and advances given to the staff of our
Company, (iv) other current assets of ` 207.11 lacs for unbilled revenue primarily from TSPs; and (v) trade receivables
primarily including ` 944.38 lacs of unsecured debts.
Total assets as at September 30, 2012 (Unconsolidated)
Total fixed assets: Our total fixed assets were ` 314.57 lacs as at September 30, 2012 consisting of 13.95% of total
assets, primarily as a result of purchase of a flat in Kochi for ` 62.99 lacs to be used by visiting employees of the
Company.
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Investments: Our investment was ` 120.80 lacs as at September 30, 2012 consisting of 5.36% of total assets primarily
as a result of ` 100 lacs investment in equity shares of our subsidiary Getz Shoppe & Exim Private Limited and ` 20 lacs
investment in 10% equity shares of Waybeo Technologies Private Limited.
Current assets, non- current assets, loans and advances: Our current assets, non- current assets, loans and advances
was ‘ 1819.69 lacs as at September 30, 2012 consisting of 80.69% of total assets primarily as a result of the (i) long
term loans and advances primarily including ` 37.96 lacs for other long term advances as a result of advances to
telecom operators; (ii) short term loans and advances primarily including advance of ` 257.53 lacs to the Subsidiaries
for supply of goods and ` 66.55 lacs to others such as deposits submitted to TSPs and advances given to the staff of
our Company; (iii) other current assets including ` 209.61 lacs for unbilled revenue consisting of ` 209.61 lacs; and (iv)
trade receivables primarily including ` 814.46 lacs for unsecured debts.
Total assets as at March 31, 2012 compared to total assets as at March 31, 2011(Unconsolidated)
Total fixed assets: Our total fixed assets increased by 44.56% to ` 264.58 lacs as at March 31, 2012 from ` 183.03 lacs
as at March 31, 2011, primarily as a result of purchase of assets which includes vehicles, computers and accessories,
flats and access control system.
Investments: Our investment increased by 124.25% to ` 100.80 lacs as at March 31, 2012 from ` 44.95 lacs as at
March 31, 2011, primarily as a result of ` 100 lacs investment in equity shares of our subsidiary Getz Shoppe & Exim
Private Limited.
Current assets, non- current assets, loans and advances: Our current assets, non- current assets, loans and advances
increased by 58.22% to ` 1,693.89 lacs as at March 31, 2012 from ` 1070.61 lacs as at March 31, 2011, primarily as a
result of an increase in (i) long term loans and advances primarily including ` 40.40 lacs for other long term advances
as a result of advances to telecom operators; (ii) short term loans and advances primarily including advance of `
188.53 lacs to the Subsidiaries for supply of goods and ` 128.89 lacs to others such as deposits submitted to TSPs for
supply of goods and rendering of services, respectively; (iii) other current assets including ` 207.11 lacs for unbilled
revenue primarily from Vodafone India Limited, Bharti Airtel and Aircel ; and (iv) trade receivables primarily including
` 729.94 lacs of unsecured debts.
Total assets as at March 31, 2011 compared to total assets as at March 31, 2010 (Unconsolidated)
Total fixed assets: Our total fixed assets increased by 105.31% to ` 183.03 lacs as at March 31, 2011 from ` 89.15 lacs
as at March 31, 2010, primarily as a result of purchase of some assets including vehicles and computer and
accessories.
Investments: Our investment was ` 44.95 lacs as at March 31, 2011 primarily as a result of the ` 24.95 lacs and ` 8 lacs
investments in equity sharess of Commonwealth Inclusive Growth Services Limited and Innoz Technologies Private
Limited respectively, in comparison to our investment as at March 31, 2010 wherein it was nil.
Current assets, non- current assets, loans and advances: Our current assets, non- current assets, loans and advances
increased by 304.00 % to ` 1,070.61 lacs as at March 31, 2011 from ` 265.00 lacs as at March 31, 2010, primarily as a
result of an increase in (i) long term loans and advances primarily including ` 31.90 lacs for other long term advances
as a result of deposits given to TSPs; (ii) other current assets including ` 167.45 lacs for unbilled revenue primarily
from Vodafone India Limited, Bharti Airtel and Aircel; and (iii) trade receivables primarily including ` 545.21 lacs of
unsecured debts.
Total assets as at March 31, 2010 compared to total assets as at March 31, 2009 (Unconsolidated)
Total fixed assets: Our total fixed assets increased by 73.17% to ` 89.15 lacs as at March 31, 2010 from ` 51.48 lacs as
at March 31, 2009, primarily as a result of purchase of computer and accessories, vehicles and telephony hardware
and trademark expenses.
Investments: There was no investment by our Company as at March 31, 2010 and March 31, 2009.
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Current assets, non- current assets, loans and advances: Our current assets, non- current assets, loans and advances
increased by 154.34 % to ` 265.00 as at March 31, 2010 from ` 104.19 lacs as at March 31, 2009, primarily as a result
of (i) long term loans and advances primarily including ` 15.14 lacs of advance tax and tax deducted at source (net of
provision for tax) ; (ii) short term loans and advances primarily including ` 6.80 lacs and ` 7.58 lacs advance given to
our Promoters and Group Companies of Promoters and advance salaries to employees, respectively and (iii) trade
receivables primarily including ` 153.76 lacs of unsecured debts.
Total Liabilities
The following table sets forth the principal components of our restated unconsolidated total liabilities as at September
30, 2012, March 31, 2012, March 31, 2011, March 31, March 31, 2010 and March 31, 2009.
(Unconsolidated) (` in lacs)
Particulars As at September
30, 2012
As at March
31, 2012
As at March
31, 2011
As at March
31, 2010
As at March
31, 2009
Secured and unsecured
loans 235.50 216.72 2.00 3.41 -
Current liabilities and
provisions 223.35 273.20 276.13 87.91 30.84
Deferred tax liability 5.73 62.70 73.55 3.59 -
Total Liabilities 464.58 552.62 351.68 94.91 30.84
The following table sets forth the principal components of our restated consolidated total liabilities as of the six
months period ended September 30, 2012 and March 31, 2012.
(Consolidated) (` in lacs)
Particulars As at September 30, 2012 As at March 31, 2012
Secured and unsecured loans 442.75 265.09
Current liabilities and provisions 330.50 357.41
Deferred tax liability 6.65 63.62
Total Liabilities 779.90 686.12
Total liabilities as at September 30, 2012 (Consolidated)
Secured and unsecured loans: Our secured and unsecured loans were` 442.75 lacs as at September 30, 2012
consisting of 56.77% of total liabilities primarily as a result of (i) long term borrowings primarily including ` 200 lacs
from TDB, though it was subsequently converted into 116,416 Equity Shares on December 6, 2012; and (ii) short term
borrowing of ` 235.21 lacs from ICICI Bank, IDBI Bank and Tata Motor Finance Limited.
Current liabilities and provisions: Our current liabilities and provisions was ` 330.50 lacs as at September 30, 2012
consisting of 42.38% of total liabilities primarily as a result of (i) long term provisions of ` 15.94 lacs for gratuity; (ii)
trade payables of ` 177.67 lacs primarily consisting of ` 8.40 lacs to Santabanta.com, ` 18.89 lacs to Net-Force Aps, `
18.20 lacs to Admob Google Inc., ` 6.80 lacs to rediff.com India Limited and rest to the creditors of Getz Shoppe &
Exim Private Limited primarily consisting of Canbo Electronics Private Limited and components and devices; and (iii)
other current liabilities including ` 19.69 lacs for employee benefits payable and ` 72.02 lacs for withholding and
other taxes payable.
Deferred tax liability: Our deferred tax liability was`6.65 lacs as at September 30, 2012 consisting of 0.85% of total
liabilities primarily as a result of difference of timing between taxable assets and book assets.
Total liabilities as at March 31, 2012 (Consolidated)
Secured and unsecured loans: Our secured and unsecured loans were `265.09 lacs consisting of 38.64% of our total
liabilities as at March 31, 2012, primarily as a result of (i) long term borrowings primarily including loan of ` 180 lacs
from TDB, though it was subsequently converted into 116,416 Equity Shares on December 6, 2012; and (ii) short term
borrowing of ` 77.29 lacs from IDBI Bank, ICICI Bank and Tata Motor Finance Limited.
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Current liabilities and provisions: Our current liabilities and provisions was`357.41 lacs consisting of 52.09% of our
total liabilities as at March 31, 2012, primarily as a result of (i) long term provisions of ` 12.53 lacs for gratuity; (ii)
trade payables of ` 211.81 lacs primarily consisting of ` 45.43 lacs to Net-Force ApS, ` 10.55 lacs to Santabanta.com
and ` 10.27 lacs to Web18 Software; and (iii) other current liabilities including ` 16.68 lacs for employee benefits
payable and ` 87 lacs for withholding and other taxes payable.
Deferred tax liability: Our deferred tax liability was`63.62 lacs consisting of 9.27% of our total liabilities as at March
31, 2012, primarily as a result of difference of timing between taxable assets and book assets.
Total liabilities as at September 30, 2012 (Unconsolidated)
Secured and unsecured loans: Our secured and unsecured loans were ` 235.50 lacs as at September 30, 2012
consisting of 50.69% of total liabilities primarily as a result of (i) long term borrowing of ` 200 lacs from TDB, though it
was subsequently converted into 116,416 Equity Shares on December 6, 2012; and (ii) short term borrowing of ` 30
lacs from IDBI bank.
Current liabilities and provisions: Our current liabilities and provisions were `223.35 lacs as at September 30, 2012
consisting of 48.07% of total liabilities primarily as a result of (i) long term provisions of ` 14.93 lacs for gratuity; (ii)
trade payables of ` 98.17 lacs primarily consisting of ` 8.40 lacs to Santabanta.com, ` 18.89 lacs to Net-Force ApS, `
18.20 lacs to Admob Google Inc. and ` 6.80 lacs to rediff.com India Limited; and (iii) other current liabilities including
` 17.09 lacs for employee benefits payable and ` 71.88 lacs for withholding and other taxes payable.
Deferred tax liability: Our deferred tax liability was ` 5.73 lacs as at September 30, 2012 consisting of 1.23% of total
liabilities primarily as a result of difference of timing between taxable assets and book assets.
Total liabilities as at March 31, 2012 compared to total liabilities as at March 31, 2011(Unconsolidated)
Secured and unsecured loans: Our secured and unsecured loans increased by 10,736% to ̀ 216.72 lacs as at March 31,
2012 from ` 2 lacs as at March 31, 2011, primarily as a result of (i) long term borrowing of ` 180 lacs from TDB, though
it was subsequently converted into 116,416 Equity Shares on December 6, 2012; and (ii) short term borrowing in form
of cash-credit facility of ` 30 lacs from IDBI Bank.
Current liabilities and provisions: Our current liabilities and provisions decreased by 1.06% to` 273.20 lacs as at March
31, 2012 from ` 276.13 lacs as at March 31, 2011, primarily as a result of (i) long term provisions of ` 12.53 lacs for
gratuity; (ii) trade payables of ` 141.54 lacs primarily consisting of ` 10.55 lacs to Santabanta.com, ` 45.43 lacs to Net-
Force ApS, and ` 10.27 lacs to Web18 Software; and (iii) other current liabilities including ` 16.68 lacs for employee
benefits payable and ` 87 lacs for withholding and other taxes payable..
Deferred tax liability: Our deferred tax liability decreased by 14.75% to ` 62.70 lacs as at March 31, 2012 from ` 73.55
lacs as at March 31, 2011, primarily as a result of decrease in bonus arising from timing difference in respect of
retirement benefits.
Total liabilities as at March 31, 2011 compared to total liabilities as at March 31, 2010(Unconsolidated)
Secured and unsecured loans: Our secured and unsecured loans decreased by 41.35% to` 2 lacs as at March 31, 2011
from ` 3.41 lacs as at March 31, 2010, as a result of decrease in long term borrowings primarily including vehicle loans
from ICICI Bank and, TATA Motor Finance Limited.
Current liabilities and provisions: Our current liabilities and provisions increased by 214.10% to ` 276.13 lacs as at
March 31, 2011 from ` 87.91 lacs as at March 31, 2010, primarily as a result of (i) long term provisions of ` 7.17 lacs
for gratuity; (ii) trade payables of ` 83.61 lacs primarily consisting of ` 22.54 lacs for Riyada Consulting LLP, ` 16.67
lacs for Net-Force Aps, ` 8.82 lacs for Web18 Software and ` 7.35 lacs for Sun Microsystems Ltd.; and (iii) other
current liabilities including ` 144.15 lacs for withholding and other taxes payable.
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Deferred tax liability: Our deferred tax liability increased by 1948.75% to ` 73.55 lacs as at March 31, 2011 from ` 3.59
lacs as at March 31, 2010, primarily as a result of increase in the restated accrued revenue.
Total liabilities as at March 31, 2010 compared to total liabilities as at March 31, 2009(Unconsolidated)
Secured and unsecured loans: Our secured and unsecured loans was ` 3.41 lacs as at March 31, 2010 in comparison to
our secured and unsecured loans as at March 31, 2009 wherein it was nil, primarily as a result of increase in the long
term borrowings primarily including vehicle loans from ICICI Bank and, TATA Motor Finance Limited.
Current liabilities and provisions: Our current liabilities and provisions increased by 185.05% to `87.91 lacs as at March
31, 2010 from ` 30.84 lacs as at March 31, 2009, primarily as a result of (i) trade payables of ` 35.57 lacs primarily
consisting of ` 17.33 lacs for Santabanta.com, ` 5.54 lacs for Stardust Entertainment LLC and ` 4.42 lacs for I Media
Corporation Limited; and (iii) other current liabilities including ` 38.62 lacs for withholding and other taxes payable.
Deferred tax liability: Our deferred tax liability was ` 3.59 lacs as at March 31, 2010, primarily as a result of difference
of timing between taxable assets and book assets.
Shareholders’ Funds
Shareholders’ funds comprises of share capital, reserves and surplus and share application money pending allotment.
The following table sets out the shareholders funds of our Company as of the six months period ended September 30,
2012.
(` in lacs)
Particulars As at September 30, 2012
Share capital 200
Reserve and surplus 1590.48
Total shareholders fund 1790.48
LIQUIDITY AND CAPITAL RESOURCES
In the past, we have funded our liquidity and capital requirements primarily through funds generated from
operations. We have historically borrowed money from the promoters to operate or grow our business. We maintain
cash balance to fund our daily cash requirements.
CASH FLOWS
The following table summarises our restated unconsolidated statements of cash flows for the six months period
ended September 30, 2012 and the Financial Years ended March 31, 2012, 2011, 2010 and 2009.
(Unconsolidated) (in ` lacs)
Particulars For the six months period
ended September 30, 2012
For the Financial Year ended March 31
2012 2011 2010 2009
Net cash generated from / (used in)
operating activities 44.26 (11.50) 331.80 40.51 (19.40)
Net cash generated from / (used in)
financing activities 85.84 214.03 4.85 62.31 54.69
Net cash generated from / (used in)
investing activities (121.36) (142.64) (173.52) (63.54) (28.74)
Net increase / (decrease) in cash and
cash equivalents 8.74 59.89 163.13 39.28 6.55
Cash and cash equivalents at the
beginning of the year 295.96 236.07 72.94 33.66 27.11
Cash and cash equivalents at the end
of the year 304.70 295.96 236.07 72.94 33.66
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The following table summarises our restated consolidated statements of cash flows for the six months period ended
September 30, 2012 and the Financial Years ended March 31, 2012, 2011, 2010 and 2009.
(Consolidated) (in ` lacs)
Particulars For the Financial Year ended March
31, 2012
For the six months period ended
September 30, 2012
Net cash generated from / (used in)
operating activities (58.47) (115.07)
Net cash generated from / (used in)
financing activities 264.43 233.65
Net cash generated from / (used in)
investing activities (139.53) (115.05)
Net Increase / (Decrease) in cash and
cash equivalents 66.43 3.53
Cash and cash equivalents at the
beginning of the year 236.07 302.50
Cash and cash equivalents at the end of
the year 302.50 306.03
Six months period ended September 30, 2012 (Consolidated)
Operating Activities
For the six months period ended September 30, 2012, our net cash used in operating activities was `115.07 lacs
primarily as a result of profit and reflecting an increase in inventories, loan and advances and decrease in current
liabilities.
Financing Activities
For the six months period ended September 30, 2012, our net cash generated from financing activities, was `233.65
lacs primarily due to proceeds from availment of loan.
Investing Activities
For the six months period ended September 30, 2012, our net cash used in investing activities was `115.05 lacs
primarily as a result of procurement of fixed assets and on account of investment in 10% equity shares of Waybeo
Technologies Private Limited.
Financial Year 2012 (Consolidated)
Operating Activities
For the Financial Year ended March 31, 2012, our net cash used in operating activities was `58.47 lacs, primarily as a
result of profit and reflecting an increase in trade receivable, inventory and loans and advances.
Financing Activities
For the Financial Year ended March 31, 2012, our net cash generated from financing activities was ` 264.43 lacs due
to availment of working capital loan from The Federal Bank Limited., State Bank of India and IDBI Bank.
Investing Activities
For the Financial Year ended March 31, 2012, our net cash used in investing activities was `139.53 lacs primarily as a
result of procurement of fixed assets.
Six months period ended September 30, 2012 (Unconsolidated)
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Operating Activities
For the six months period ended September 30, 2012, net cash generated from our operating activities was ` 44.26
lacs primarily as a result of profit off setted by increase in trade receivable and decrease in liability.
Financing Activities
For the six months period ended September 30, 2012, net cash generated from financing activities was ` 85.84 lacs
primarily as a result of proceeds from issue of share capital and availment of loan from TDB.
Investing Activities
For the six months period ended September 30, 2012, net cash used in investing activities was ` 121.36 lacs primarily
as a result of procurement of fixed assets including flat in Kochi and investment in the 10% equity shares of Waybeo
Technologies Private Limited.
Financial Year 2012 (Unconsolidated)
Operating Activities
For the Financial Year ended March 31, 2012, our net cash used in operating activities was ` 11.50 lacs primarily as a
result of profit offset by increase in trade receivable and increase in loans and advances.
Financing Activities
For the Financial Year ended March 31, 2012, our net cash generated from financing activities was ` 214.03 lacs due
to availment of loan from TDB.
Investing Activities
For the Financial Year ended March 31, 2012, our net cash used in investing activities ` 142.64 lacs primarily as a
result of procurement of fixed assets including flat in Kochi and investment in the 80% equity shares of Forward Media
Private Limited and Getz Shoppe & Exim Private Limited respectively.
Financial Year 2011 (Unconsolidated)
Operating Activities
For the Financial Year ended March 31, 2011, our net cash generated from our operating activities was ` 331.80 lacs
primarily as a result of profit, decrease in current liabilities, increase in trade receivables and loan and advances.
Financing Activities
For the Financial Year ended March 31, 2011, our net cash generated from financing activities was ` 4.85 lacs on
account of proceeds from issue of share capital.
Investing Activities
For the Financial Year ended March 31, 2011, our net cash used in investing activities was ` 173.52 lacs primarily as a
result of procurement of fixed assets, computers and network equipments and investment in equity shares of
Commonwealth Inclusive Growth Services Limited and Innoz Technologies Private Limited respectively.
Financial Year 2010 (Unconsolidated)
Operating Activities
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For the Financial Year ended March 31, 2010, our net cash generated from operating activities was ` 40.51 lacs
primarily as a result of profit, increase in liabilities, trade receivables and loans and advances.
Financing Activities
For the Financial Year ended March 31, 2010, our net cash generated from financing activities was ` 62.31 lacs on
account on proceeds from issue of share capital.
Investing Activities
For the Financial Year ended March 31, 2010, our net cash used in investing activities was ` 63.54 lacs on an account
of procurement of fixed assets primarily comprising of computers and softwares.
Financial Year 2009 (Unconsolidated)
Operating Activities
For the Financial Year ended March 31, 2009, our net cash used in operating activities was ` 19.40 lacs primarily as a
result of profit reflecting, an increase in current liabilities which is off setted by an increase in trade receivables and
increase in loans and advances.
Financing Activities
For the Financial Year ended March 31, 2009, our net cash generated from financing activities was ` 54.69 lacs on an
account of proceeds from issue of share capital.
Investing Activities
For the Financial Year ended March 31, 2009, our net cash used in investing activities was ` 28.74 lacs on an account
of procurement of fixed assets.
CONTINGENT LIABILITIES
The following table summarises our restated unconsolidated financial statements of contingent liabilities for the six
months period ended September 30, 2012 and the Financial Years ended March 31, 2012, 2011, 2010 and 2009
.(in ` lacs)
Particulars For the six months period
ended September 30, 2012
For the Financial Year ended March 31
2012 2011 2010 2009
Bank guarantee 21.09 16.72 21.02 5.69 1.00
INVESTMENTS
Investments of our surplus funds are in accordance with our investment policy, as approved by our Board of Directors
from time to time. As per our current investment policy, we can invest, inter alia, in fixed deposits with banks and
startups.
Our total investments as of the dates indicated are set forth below:
(in ` lacs)
Particulars For the six months period
ended September 30, 2012
For the Financial Year ended March 31
2012 2011 2010 2009
Equity instruments 120.80 100.80 44.95 - -
CAPITAL EXPENDITURES
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Our business has not in the past required substantial capital expenditure. Our capital expenditures are principally on
purchase of fixed assets, furniture and fixtures, computers and other office equipment. One of the objects of this Issue
is to invest in the construction of our office premises.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off balance sheet arrangements or other relationships with unconsolidated entities or financial
partnerships that would have been established for the purpose of facilitating off balance sheet arrangements.
RELATED PARTY TRANSACTIONS
We have engaged in the past, and may engage in the future in transactions with related parties on an arm’s lengths
basis. Such transactions could be for provision of services, lease of assets or property, sale or purchase of equity
shares or entail incurrence of indebtedness. For details of our related party transactions, see “Financial Statement-
Related Party Transactions” on page 152 of the Draft Red Herring Prospectus.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Exchange Rate Risk
Although our functional currency is the Indian Rupee, there are some receipts and payments in foreign currency. For
instance, the payment of an annual Software License Fee by our Company is made in Euros. Our exchange rate risk
primarily arises from our foreign currency receivables and payables. The exchange rate between the Indian Rupee and
other currencies especially with respect to the USD, EURO, AED and Dinar, has changed in recent years and may
fluctuate substantially in the future. Therefore, changes in the exchange rate between the Indian Rupee and other
currencies, especially with respect to the USD, EURO AED and Dinar, may have an adverse effect on our revenues,
other income, personnel expenses, operating and other expenses, which may in turn have a negative impact on our
business, operating results and financial condition.
Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents,
accounts receivable from related parties, accounts receivables from others and bank deposits. By their nature, all such
financial instruments involve risk including the credit risk of non-performance by counterparties. Our cash equivalents,
bank deposits and restricted cash are invested with banks with high investment grade credit ratings. Accounts
receivable are typically unsecured and are derived from income earned from our customers in the
telecommunications industry. We believe there is no significant risk of loss in the event of non-performance of the
counter parties to these consolidated financial instruments, other than the amounts already provided for in our
financial statements.
Interest Rate Risk
We do not have, and do not currently intend to take, any loans subject to floating interest rates. Nevertheless, we
may take loans in the future that are subject to floating interest rates, which would expose us to market risk as a
result of changes in interest rates. Upward fluctuations in interest rates would increase the cost of new debt and
interest cost of outstanding variable rate borrowings. In addition, any increase in the interest rates could adversely
affect our ability to service long-term debt, which would in turn adversely affect our results of operations.
ANALYSIS OF CERTAIN CHANGES
Unusual or infrequent events or transactions
Other than as described in the Draft Red Herring Prospectus, there have been no transactions or events that would be
considered unusual or infrequent.
Significant economic changes that materially affected or are likely to affect income from continuing operations
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There have been no significant economic changes that have materially affected or are likely to affect our income.
Known trends or uncertainties
Other than as described in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” on pages xi and 199, respectively, of the Draft Red Herring Prospectus, there are no known
trends or uncertainties that have or had or are expected to have a material adverse impact on our income from
continuing operations.
Future changes in relationship between costs and incomes
Other than as described in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” on pages xi and 199, respectively, of the Draft Red Herring Prospectus, there are no known
factors that might affect the future relationship between cost and income.
Increase in income
Reasons for the changes in net income during the last four Financial Years and six months period ended September 30,
2012 are explained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
beginning on page 199 of the Draft Red Herring Prospectus.
Inflation
Inflation has not had a material impact on our business and results of operations.
New products or business segment
Other than as described in the section titled “Our Business” on page 67 of the Draft Red Herring Prospectus, there are
no new products or business segments in which we operate.
Seasonality of business
There are no material seasonal or cyclical trends in our business.
Significant dependence on a single or few suppliers or customers
Our top five customers contributed approximately 37%, 29%, 29%, 3% and 2% of our operating income for the six
months ended September 30, 2012.
Competitive conditions
Please see “Our Business - Competition”, “Industry Overview” and “Risk Factors” on pages 67, 58 and xi, respectively,
of the Draft Red Herring Prospectus for discussions regarding competition.
RECENT DEVELOPMENTS
Listed below are recent developments since September 30, 2012:
Conversion of TDB loan into equity
Allotment of 116,416 Equity Shares to TDB pursuant to conversion of the project loan given by TDB to our Company of
` 200 lacs. For further information, see “Capital Structure” on page 24 of the Draft Red Herring Prospectus.
Except as stated elsewhere in the Draft Red Herring Prospectus, to our knowledge no circumstances have arisen since
September 30, 2012, which is the date of the last restated financial information as disclosed in the Draft Red Herring
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Prospectus, which materially and adversely or are likely to affect, the trading, profitability and financial condition of
our Company or the value of our assets or ability to pay our liabilities.
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SECTION VI – LEGAL AND OTHER INFORMATION
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS
Except as stated below, there are no outstanding litigation, suits, criminal or civil prosecutions, arbitration, or any
other statutory or legal proceedings, including those for economic offences, tax liabilities, show cause notices against
our Company, our Promoters, our Directors, our Subsidiaries or our Group Companies, whose outcome would have a
material adverse effect on our business and there are no defaults, non-payment or overdues of statutory dues,
institutional or bank dues or dues payable to holders of any debentures, bonds and fixed deposits or arrears on
cumulative preference shares, any other proceedings including the ones initiated for economic / civil or any other
offences including past cases where penalties may or may not have been awarded and irrespective of whether they
are specified under paragraph (I) of Part 1 of Schedule XIII of the Companies Act, that would have a material adverse
effect on our business other than unclaimed liabilities against us and our Directors as of the date of this Draft Red
Herring Prospectus.
Except as described below, there are no proceedings initiated for economic offences or civil offences, or any
disciplinary action taken by SEBI or any stock exchange, penalties imposed by any authorities against our Company
and our Directors and no adverse findings in respect of our Company as regards compliance with securities laws.
Further, except as described below, there are no instances where our Company or our Directors have been found
guilty in suits or criminal or civil prosecutions, or proceedings initiated for economic offences or civil offences, or any
disciplinary action taken by SEBI or any stock exchange, proceedings or tax liabilities.
I. Litigation involving our company
1. Litigation against our Company
A. Criminal Complaints: NIL
B. Civil Cases: NIL
C. Negotiable Instrument Act Cases: NIL
D. Consumer Complaints: NIL
E. Arbitration Proceedings: NIL
F. Labour Matters: NIL
G. Tax Cases: NIL
H. Economic Offences: NIL
I. Potential Litigation: NIL
2. Litigation against other companies having material adverse effect on our Company
NIL
3. Adverse findings by SEBI against our Company
NIL
4. Notices against our Company
A. Income Tax:
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(i) A show cause notice dated September 21, 2012 has been issued to our Company by the Assistant Director of
Income Tax (International Taxation) Thiruvananthapuram under the Income Tax Act, 1961. The notice inter-alia
states that no deduction of tax was made under section 195 of the Income Tax Act, 1961 for payments made to
non-residents for purchase of software during the Financial year 2012-13 by our Company. Further, the notice has
alleged that the tax not deducted by our company under section 195 of the Income Tax Act, 1961 amounts to
`19,19,096. The notice requires our Company to file objections for treating our Company as an assessee in default
and the matter was posted for October 3, 2012. Subsequently, our company vide its letter dated December 8,
2012 filed a reply to the said notice.
(ii) A show cause notice dated September 21, 2012 has been issued to our Company by the Assistant Director of
Income Tax (International Taxation) Thiruvananthapuram under the Income Tax Act, 1961. The notice inter-alia
states that no deduction of tax was made under section 195 of the Income Tax Act, 1961 for payments made to
non-residents for purchase of software during the Financial year 2011-12 by our Company. Further, the notice has
alleged that the tax not deducted by our company under section 195 of the Income Tax Act, 1961 amounts to
`8,99,450. The notice requires our Company to file objections for treating our Company as an assessee in default
and the matter was posted for October 3, 2012. Subsequently, our company had vide its letter dated December 8,
2012 filed a reply to the notice.
B. Service Tax: NIL
5. Litigation by our Company
A. Criminal Complaints: NIL
B. Civil Cases: NIL
C. Negotiable Instrument Act Cases: NIL
D. Consumer Complaints: NIL
E. Arbitration Proceedings: NIL
F. Labour Matters: NIL
G. Tax Cases: NIL
H. Economic Offences: NIL
I. Potential Litigation: NIL
6. Past penalties imposed on our Company:
(i) The Additional Commissioner of Central Excise, Customs and Service Tax, Cochin Commissionerate vide its order
no. 116/2012 dated June 5, 2012 inter-alia
(a) confirmed the demand of service tax amounting to `28,62,705 imposed on our Company for the period from
April 1, 2007 to March 31, 2010 under the category “Development & Supply of Content for use in
Telecommunication Service”, under Section 73(2) of the Finance Act 1994; and
(b) ordered and amount of ` 198,282 towards interest. Our Company has paid the requisite Service tax demand
and interest to the relevant authority.
7. Amount owed to Small Scale Undertakings/Creditors
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Except as provided below, our Company does not owe any amounts aggregating to ` 1 lac or more to any micro, small
and medium enterprises or other creditors which is outstanding for more than 30 days:
(i) Admob GoogleInc; (ii) NDTV Convergence Limited; (iii) Netfors Aps; (iv) Netmagic Solutions Private Limited; (v)
Rainbow Nation (vi) Rediff.com India Limited (vii) Riyada Consultancy Co.W.L.L; (viii) SantaBanta.Com Ltd. (ix) Sun
Microsystems Ltd. (x) Network 18 Media & Investment Limited.
8. Litigation involving the Subsidiaries
I. Litigation against Getz Shoppe and Exim Private Limited:
A. Criminal Complaints: NIL
B. Civil Cases: NIL
C. Negotiable Instrument Act Cases: NIL
D. Consumer Complaints: NIL
E. Arbitration Proceedings: NIL
F. Labour Matters: NIL
G. Tax Cases: NIL
H. Economic Offences: NIL
I. Potential Litigation: NIL
II. Litigation by Getz Shoppe and Exim Private Limited:
A. Criminal Complaints: NIL
B. Civil Cases: NIL
C. Negotiable Instrument Act Cases: NIL
D. Consumer Complaints: NIL
E. Arbitration Proceedings: NIL
F. Labour Matters: NIL
G. Tax Cases: NIL
H. Economic Offences: NIL
I. Potential Litigation: NIL
III. Past penalties imposed on Getz Shoppe and Exim Private Limited: NIL
IV. Litigation against Forward Media Private Limited:
A. Criminal Complaints: NIL
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B. Civil Cases: NIL
C. Negotiable Instrument Act Cases: NIL
D. Consumer Complaints: NIL
E. Arbitration Proceedings: NIL
F. Labour Matters: NIL
G. Tax Cases: NIL
H. Economic Offences: NIL
I. Potential Litigation: NIL
V. Litigation by Forward Media Private Limited:
A. Criminal Complaints: NIL
B. Civil Cases: NIL
C. Negotiable Instrument Act Cases: NIL
D. Consumer Complaints: NIL
E. Arbitration Proceedings: NIL
F. Labour Matters: NIL
G. Tax Cases: NIL
H. Economic Offences: NIL
I. Potential Litigation: NIL
VI. Past Penalties imposed on Forward Media Private Limited:
NIL
9. Litigation involving our Promoters
Outstanding Litigation and Material Developments/Proceedings against our Promoters:
1. Mr.Sanjay Vijayakumar: NIL
2. Mr. Sony Joy: NIL
3. Mr. Vivek Steve Francis: NIL
4. Mr. Jose Thomas Pattara:
Except as mentioned below, there is no litigation pending against Mr. Jose Thomas Pattara by the authorities
concerned.
Proceedings initiated against the Promoters for economic offences
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Except as mentioned above there are no proceedings initiated against our Promoters for any economic offences.
Details of past penalties imposed on our Promoters by the authorities concerned
NIL
Litigations against our Promoters involving violation of statutory regulations or alleging criminal offence
Except as mentioned below there are no litigations against our Promoters involving violation of statutory regulations
or alleging criminal offence.
1. Mr.Sanjay Vijayakumar: NIL
2. Mr. Sony Joy: NIL
3. Mr. Vivek Steve Francis: NIL
4. Mr. Jose Thomas Pattara:
i. Criminal appeal No. 625/10 pending before the principal sessions court, Thrissur filed by Mr. Jose Thomas
Pattara against the judgment of the judicial first class magistrate court, Kunnamkulam. The case was filed by
Mr. Abdul Karim against Mr. Jose Thomas Pattara as the managing editor of Rashtra Deepika news paper. The
case was taken on the file as CC.1280/07 under section 500 of the Indian Penal Code. The case is pending;
and
ii. Criminal Case no 285/04 is pending before the Judicial First Class Court II, Cherthala. Mr. Jose Thomas Pattara
is included in the private complaint filed by Mr. M.V. Gopi, being the complainant. The complainant in the
private complaint has alleged that a defamatory news item was published in the newspaper “Rashtriya
Deepika” where Mr. Jose Thomas Pattara was the Managing Director. The case is pending before the court.
Criminal/civil cases against our promoters towards tax liabilities
Except as mentioned below, there are no criminal/ civil cases against our Promoters towards tax liabilities.
The Customs & Central Excise Settlement Commission vide its order no. 30/2012 dated November 6, 2012 inter-alia
imposed a penalty on Mr. Jose Thomas Pattara for `50,000 as he was the Managing Director of Canbo Electronics (P)
Ltd. against whom a show cause notice was issued in the matter of the alleged under-valuation of goods under import
for payment of custom duties. The order also granted immunity to Mr. Jose Thomas Pattara from prosecution under
the Customs Act, 1962. Thereafter the Customs & Central Excise Settlement Commission vide its order dated
November 22, 2012 granted extension of time for deposit of fine and penalty by a period of 90 days. The status of the
case is pending.
10. Litigation involving the Group Companies of our Company
Except as mentioned below, there are no litigation proceedings involving our Group Companies.
Litigation against Canbo Electronics Private Limited:
A. Criminal Complaints: NIL
B. Civil Cases: NIL
C. Negotiable Instrument Act Cases: NIL
D. Consumer Complaints: NIL
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E. Arbitration Proceedings: NIL
F. Labour Matters: NIL
G. Tax Cases:
Except as mentioned below there are no litigations pending against Canbo Electronics Private Limited.
(i) The Customs & Central Excise Settlement Commission vide its order no. 30/2012 dated November 6, 2012
inter-alia settled the differential customs duty and interest thereon and also imposed a penalty on Canbo
Electronics Private Limited for `200,000 against which a show cause notice was issued in the matter of the
alleged under-valuation of goods under import for payment of custom duties. The order also imposes a fine
of ` 1,000,000 in terms of a bond in lieu of confiscation of goods released provisionally. Canbo Electronics
Private Limited is required to pay this amount within 15 days of the date of the order. The order also granted
immunity to Canbo Electronics Private Limited from prosecution under the Customs Act, 1962. Thereafter the
Customs & Central Excise Settlement Commission vide its order dated November 22, 2012 granted extension
of time for deposit of fine and penalty by a period of 90 days.
(ii) The Customs & Central Excise Settlement Commission vide its order no. 31/2012 dated November 6, 2012
inter-alia settled the differential customs duty and interest thereon and also imposed a penalty on Canbo
Electronics Private Limited for `25,000 against which a show cause notice was issued in the matter of the
alleged under-valuation of goods under import for payment of custom duties. The order also granted
immunity to Canbo Electronics Private Limited from prosecution under the Customs Act, 1962. Thereafter the
Customs & Central Excise Settlement Commission vide its order dated November 22, 2012 granted extension
of time for deposit of fine and penalty by a period of 90 days.
H. Economic offences: NIL
I. Potential Litigation: NIL
Litigation by Canbo Electronics Private Limited:
A. Criminal Complaints: NIL
B. Civil Cases: NIL
C. Negotiable Instrument Act Cases: NIL
D. Consumer Complaints: NIL
E. Arbitration Proceedings: NIL
F. Labour Matters: NIL
G. Tax Cases: NIL
H. Economic offences: NIL
I. Potential Litigation: NIL
Past Penalties imposed on Canbo Electronics Private Limited: NIL
11. Litigation involving the Directors of our Company
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Outstanding Litigation and Material Developments/Proceedings against the Directors of our Company
Except as disclosed herein, there are no outstanding litigation involving our Directors including criminal prosecutions
or civil proceedings involving our Directors, and there are no material defaults, non-payment of statutory dues, over
dues to banks/financial institutions or defaults against banks/financial institutions by our Directors (including disputed
tax liabilities, past cases where penalties may or may not have been awarded and irrespective of whether they are
specified under paragraph (i) of part 1 of Schedule XIII of the Companies Act). However, incidental to the business of
our Company, parties may from time to time file suits impleading our Company through or along its respective officers
and Directors in their official capacity.
1. Mr. Sanjay Vijayakumar: NIL
2. Mr. Sony Joy: NIL
3. Mr. Aynampudi Subbarao: NIL
4. Mr. Jose Thomas Pattara:
The Commissioner of Central Excise & Customs Kochi, vide its order 14/2011 dated September 30, 2011, has directed
Mr. Jose Thomas Pattara to pay service tax (including cess) amounting to `1,21,33,999 payable for the period from
February 2006 to September 2007 in relation to the services undertaken by Mr. Jose Thomas Pattara as a Real Estate
Agent. Additionally, vide the said order the following penalties have been imposed on Mr. Jose Thomas Pattara:
(i) under section 76 of the Finance Act, 1994, a penalty of `200 per day or 2% per month (whichever is higher)
till the date of actual payment of the outstanding amount of service tax subject to a maximum of
`1,21,33,999;
(ii) under section 77 of the Finance Act, 1994, a penalty of `5,000; and
(iii) under section 78 of the Finance Act, 1994, a penalty of `1,21,33,999.
Subsequently, Mr. Jose Thomas Pattara has challenged the aforementioned order before the Customs, Excise and
Service Tax Appellate Tribunal’s Bangalore bench through an appeal dated March 6, 2012.
Outstanding Litigation and Material Developments/Proceedings filed by our Directors: NIL
Proceedings initiated against our Directors for economic offences: NIL
Details of past penalties imposed on our Directors by the authorities concerned: NIL
Litigations against our Directors involving violation of statutory regulations or alleging criminal offence: NIL
Criminal/ civil cases against our Directors towards tax liabilities: NIL
Material Developments
Except as stated in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent
Developments” on page 199 of the Draft Red Herring Prospectus, there have not arisen, since the date of the last
financial information disclosed in this Draft Red Herring Prospectus, any circumstances which materially and adversely
affect or are likely to affect our profitability taken as a whole or the value of our consolidated assets or our ability to
pay our liabilities within the next 12 months.
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GOVERNMENT AND OTHER APPROVALS
We have received the necessary consents, licenses, permissions and approvals from the Government of India and
various governmental agencies required for our present business and except as disclosed in this Draft Red Herring
Prospectus, no further material approvals are required for carrying on our present business operations.
The main objects clause of the Memorandum of Association and objects incidental to the main objects enable our
Company to undertake its existing activities.
1. Incorporation details of our Company
(a) Corporate Identification Number: U64203KL2006PLC020093
(b) Certificate of incorporation dated December 12, 2006 issued by the RoC.
(c) Fresh certificate of incorporation in relation to change of name of our Company from “MobME Wireless
Solutions Private Limited” to “MobME Wireless Solutions Limited” dated January 15, 2013, issued by the RoC.
2. Approvals for the Issue
Corporate Approvals
(a) The Board has, pursuant to its resolution dated November 15, 2012, authorized the Issue, subject to the
approval by the shareholders of our Company under Section 81(1A) of the Companies Act.
(b) The shareholders of our Company have, pursuant to their resolution dated December 10, 2012 under Section
81(1A) of the Companies Act, authorised the Issue.
In-principle listing approval
In-principle approval from the NSE dated [].
3. Approvals relating to our business and operations
Our Company has received the following significant approvals pertaining to our business:
a) Approvals in relation to intellectual property rights
S.No. Approval Granted Trademark Class Authority
Reference
/Registration
Number
Date of
issue
Expiry
Date
1.
Certificate of
registration of
Trademark
Mobme 35 Registrar of Trademarks 1522930 January
19, 2007
Valid until
cancelled
2.
Certificate of
registration of
Trademark
Mobme 38 Registrar of Trademarks 1522931 January
19, 2007
Valid until
cancelled
3.
Certificate of
registration of
Trademark
Mobme 9 Registrar of Trademarks 1522929 January
19, 2007
Valid until
cancelled
4.
Certificate of
registration of
Trademark
Mobme 41 Registrar of Trademarks 1522931 January
19, 2007
Valid until
cancelled
5. Certificate of
registration of BLUEZONE 41 Registrar of Trademarks 1543509
March
26, 2007
Valid until
cancelled
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S.No. Approval Granted Trademark Class Authority
Reference
/Registration
Number
Date of
issue
Expiry
Date
Trademark
6.
Certificate of
registration of
Trademark
‘BLUEZONE’
BLUEZONE 9 Registrar of Trademarks 1543507 March
26, 2007
Valid until
cancelled
7.
Certificate of
registration of
Trademark
Mobme 42 Registrar of Trademarks 15229333 January
19, 2007
Valid until
cancelled
8.
Certificate of
registration of
Trademark
BLUE
Messenger 9 Registrar of Trademarks 1584341
July 25,
2007
Valid until
cancelled
9.
Certificate of
registration of
Trademark
BLUE
Messenger 35 Registrar of Trademarks 1584342
July 25,
2007
Valid until
cancelled
10.
Certificate of
registration of
Trademark
BLUE
Messenger 42 Registrar of Trademarks 1584345
July 25,
2007
Valid until
cancelled
11.
Certificate of
registration of
Trademark
BLUE
Messenger 41 Registrar of Trademarks 1584344
July 25,
2007
Valid until
cancelled
12.
Certificate of
registration of
Trademark
Fast alerts 35 Registrar of Trademarks 1584347 July 25,
2007
Valid until
cancelled
13.
Certificate of
registration of
Trademark
Fast alerts 9 Registrar of Trademarks 1584346 July 25,
2007
Valid until
cancelled
14.
Certificate of
registration of
Trademark
Fast alerts 41 Registrar of Trademarks 1584349 July 25,
2007
Valid until
cancelled
15.
Certificate of
registration of
Trademark
Fast alerts 38 Registrar of Trademarks 1584348 July 25,
2007
Valid until
cancelled
16.
Certificate of
registration of
Trademark
Mobshare.in
Mobme |
Torque
9 Registrar of Trademarks 1595617 August
28, 2007
Valid until
cancelled
17.
Certificate of
registration of
Trademark
Fast alerts 42 Registrar of Trademarks 1584350 July 25,
2007
Valid until
cancelled
18.
Certificate of
registration of
Trademark
Mobshare.in
Mobme |
Torque
38 Registrar of Trademarks 1595618 August
28, 2007
Valid until
cancelled
19.
Certificate of
registration of
Trademark
Mobshare.in
Mobme |
Torque
35 Registrar of Trademarks 1595618 August
28, 2007
Valid until
cancelled
20.
Certificate of
registration of
Trademark
Mobshare.in
Mobme |
Torque
41 Registrar of Trademarks 1595620 August
28, 2007
Valid until
cancelled
21.
Certificate of
registration of
Trademark
BLUEZONE 42 Registrar of Trademarks 1543510 March
26, 2007
Valid until
cancelled
b) Approvals in relation to shops & establishments acts
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S.No. Approval Granted Authority Reference/Registration
Number Date of issue Validity
1. Registration as
commercial
establishment under
the Kerala Shops &
Commercial
Establishment Act,
1960
for 41/3197, 4th
Floor,
Bhageeratha Square,
Banerji Road
Kacherippady, Kochi
682018
Assistant labour
officer
BJR-637 January 1, 2013 December 31,
2013
c) Labour related registrations
S.No. Approval
Granted Authority
Reference/Registration
Number
Date of
issue Validity
1.
Registration
under Employees’
Provident Funds
& Miscellaneous
Provisions Act,
1952
Assistant
provident fund
commissioner
of sub regional
office Kaloor,
Kochi.
KR/27326/EnjI(5)/2010/118262 July 02,
2007 Valid until cancelled
2.
Registration
under Employees’
State Insurance
Corporation
Deputy
Director
(INSPN)
47000570900001010 April 11,
2011 Valid until cancelled
d) Taxation related registrations
We have received the following major taxation related registrations:
S.No. Approval
Granted Authority
Reference/Registration
Number Date of issue Validity
1.
Value added
tax certificate
of registration
Commercial tax officer,
KVAT circle, Ernakulam 32071523837C
January 14,
2011 Valid until cancelled
2.
Service tax
certificate of
registration
Superintendent, Service
Tax A range AAECM9072DST001
January 14,
2011 Valid until cancelled
3. TAN Income tax department TVDM00915F January 24,
2007 Valid until cancelled
4. PAN Income tax department,
ITO WD-1, Alappuzha AAECM9072D NA Valid until cancelled
e) Other registrations and recognitions
S.No. Description / Activity Issuing Authority Reference /
License No.
Issue / Renewal
Date
Validity
1. Importer Exporter
Code
Joint Director General
of Foreign Trade ,
1009012177 February 4, 2010 Valid until
cancelled
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S.No. Description / Activity Issuing Authority Reference /
License No.
Issue / Renewal
Date
Validity
Ministry of
Commerce,
Government of India
2.
Recognition of our
Company’s in house
research and
development unit
Government of India,
Ministry of Science
and Technology
TU/IV-
RD/3271/2011
September 23, 2011 Valid until
cancelled
3.
ISO 9001 certification
for providing telecom
value added services
QSCert Management
Systems Certifications
Body
Q-4465/10 March 30, 2010 March,
2013
f) Other pending approvals
S.No. Description / Activity Issuing Authority Reference / License No. Filing Date
1. Patent application
U.S. department of
commerce, patent and
trademark office
13/490,652 June 6, 2012
2. Patent application Indian patent office 3001/CHE/2011 August 8, 2011
- 236 -
OTHER REGULATORY AND STATUTORY DISCLOSURES
Authority for the Issue
The Issue has been authorised by a resolution passed by our Board of Directors at their meeting held on November 15,
2012, subject to the approval of shareholders of our Company through a special resolution to be passed pursuant to
Section 81 (1A) of the Companies Act.
The shareholders of our Company have authorised the Issue by a special resolution pursuant to Section 81(1A) of the
Companies Act, passed at the EGM of our Company held on December 10, 2012.
IN-PRINCIPLE LISTING APPROVAL
We have received an in-principle approval from the NSE for the listing of our Equity Shares pursuant to a letter dated
[], 2013. NSE is the Designated Stock Exchange.
PROHIBITION BY THE SEBI OR OTHER GOVERNMENTAL AUTHORITIES
Our Company, our Promoters, our Promoter Group, our Directors, our Group Companies, persons in control of our
Company and natural persons in control of our Promoter have not been prohibited from accessing or operating in the
capital market or restrained from buying, selling or dealing in securities under any order or direction passed by the
SEBI or any other governmental authorities. The listing of any securities of our Company has never been refused at
anytime by any of the stock exchanges in India.
The companies, with which any of our Promoters, Directors or persons in control of our Company are or were
associated as promoters, directors or persons in control, have not been prohibited from accessing or operating in
capital market under any order or direction passed by SEBI or any other governmental authorities.
None of our Directors are in any manner associated with the securities market and there has been no action taken by
the SEBI against our Directors or any entity in which our Directors are involved in as promoters or directors.
PROHIBITION BY RBI
Neither our Company, nor our Promoters, nor Group Companies, nor our Directors, nor the relatives (as per the
Companies Act) of our Promoters have been detained as wilful defaulters by the RBI. For further details, see “Risk
Factors” and “Our Promoters and Group Entities” on pages xi and 100, respectively of the Draft Red Herring
Prospectus.
ELIGIBILITY FOR THIS ISSUE
Our Company is eligible for the Issue in accordance with Regulation 106M(1) and other provisions of Chapter XB of the
SEBI (ICDR) Regulations as the post issue face value capital does not exceed ` 10 crore.
We confirm that:
1. In accordance with Regulation 106P of the SEBI (ICDR) Regulations, this Issue has been hundred percent
underwritten and that the BRLM has underwritten more than 15% of the Issue size on their own account. For
further details pertaining to said underwriting see chapter titled “General Information” on page 15 of the Draft
Red Herring Prospectus.
2. In accordance with Regulation 106O of the SEBI ICDR Regulations, our Company will not filed any Draft Red
Herring Prospectus with SEBI nor will SEBI issued any observations on our Draft Red Herring Prospectus. Also,
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we shall ensure that the BRLM submits a copy of the Draft Red Herring Prospectus along with a due diligence
certificate including additional confirmations as required by SEBI at the time of filing the Draft Red Herring
Prospectus with Stock Exchange and the Registrar of Companies.
3. In accordance with Regulation 106V of the SEBI ICDR Regulations, our Company has entered into an agreement
with IDBI Capital Market Services Limited as the BRLM and will enter into an agreement with IDBI Capital
Market Services Limited for Market Making to ensure compulsory market making for a minimum period of
three years from the date of listing of Equity Shares offered in this issue. For further details of the market
making arrangement see chapter titled “General Information” on page 15 of the Draft Red Herring Prospectus.
4. In accordance with Regulation 106Q of the SEBI ICDR Regulations, the minimum application size in terms of
number of Equity Shares will not be less than ` one lac per application.
5. In accordance with Regulation 106P of the SEBI ICDR Regulations, the Underwriter other than the BRLM and
the Nominated Investors shall not subscribe to the Issue, in any manner except for fulfilling their obligations
under their respective agreements with the BRLM in this regard.
6. In accordance with Regulation 106P of the SEBI ICDR Regulations, all the underwriting and subscription
agreements made by the BRLM shall be disclosed in the Draft Red Herring Prospectus.
7. In accordance with Regulation 106V of the SEBI ICDR Regulations, our Company shall disclose the details of
arrangement of market making in the Draft Red Herring Prospectus.
Further, in accordance with Regulation 106R of the SEBI ICDR Regulations, our Company shall ensure that the number
of Allottees in the Issue shall be at least 50. Otherwise the entire application money shall be refunded forthwith. In
case of delay, if any, in refund, our Company shall pay interest on the application money at the rate of 15% p.a. for the
period of delay.
DISCLAIMER CLAUSE OF SEBI
THERE IS NO SUBMISSION OF DRAFT RED HERRING PROSPECTUS BY COMPANIES ISSUING SHARES PURSUANT TO
CHAPTER XB OF THE SEBI ICDR REGULATIONS WITH SEBI BY VIRTUE OF REGULATION 106(O) OF THE SEBI ICDR
REGULATIONS.
IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE COMPANY IS PRIMARILY RESPONSIBLE FOR THE
CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT RED HERRING
PROSPECTUS, THE BOOK RUNNING LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT
THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE
BOOK RUNNING LEAD MANAGER, IDBI CAPITAL MARKET SERVICES LIMITED WILL FURNISH TO SEBI, A DUE
DILIGENCE CERTIFICATE DATED [●], 2013.
AS PER REGULATION 106(O) OF THE SEBI ICDR REGULATIONS, ONLY THE PROSPECTUS HAS TO BE FILED WITH SEBI
ALONGWITH A DUE DILIGENCE CERTIFICATE AS PER FORM A AND FORM H OF SCHEDULE VI OF THE SEBI ICDR
REGULATIONS BY THE BRLM. ACCORDINGLY, THIS SECTION WILL BE UPDATED AT THE TIME OF FILING THE
PROSPECTUS WITH STOCK EXCHANGE AND ROC AND PROSPECTUS AND DUE DILIGENCE CERTIFICATE AS PER FORM
A AND FORM H OF SCHEDULE VI OF THE SEBI ICDR REGULATIONS WITH SEBI.
The filing of the Draft Red Herring Prospectus does not, however, absolve our Company from any liabilities under
section 63 or section 68 of the Companies Act, 1956 or from the requirement of obtaining such statutory and/or
other clearances as may be required for the purpose of the proposed Issue. SEBI further reserves the right to take
up, at any point of time, with the Book Running Lead Manager any irregularities or lapses in the Draft Red Herring
Prospectus.
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All legal requirements pertaining to the issue will complied with at the time of filing of the Red Herring Prospectus
with the Registrar of Companies, Kerala, in terms of Section 56, Section 60 and Section 60B of the Companies Act.
All legal requirements pertaining to the Issue will be complied with at the time of registration of the Draft Red
Herring Prospectus with the RoC in terms of Sections 56, 60 and 60B of the Companies Act.
DISCLAIMER STATEMENT OF OUR COMPANY, OUR DIRECTORS, AND THE BOOK RUNNING LEAD MANAGER
Our Company, our Directors and the Book Running Lead Manager accept no responsibility for statements made
otherwise than in this Draft Red Herring Prospectus or in the advertisement or any other material issued by or at the
instance of our Company and that anyone placing reliance on any other source of information, including our
Company’s website www.mobme.in would be doing so at his or her own risk.
The BRLM accepts no responsibility, save to the limited extent as provided in the Issue Agreement entered into
between the BRLM and our Company, the Underwriting Agreement entered into between the Underwriters and our
Company.
All information shall be made available by our Company and the BRLM to the public and investors at large and no
selective or additional information would be available for a section of the investors in any manner whatsoever
including at road show presentations, in research or sales reports, at bidding centers or elsewhere.
Neither our Company, nor our Directors and officers, nor any member of the Syndicate are liable for any failure in
downloading the Bids due to faults in any software/hardware system or otherwise.
The BRLM and their respective associates and affiliates may engage in transactions with, and perform services for, our
Company our Group Companies, affiliates or associates or third parties in the ordinary course of business and have
engaged, or may in future engage, in commercial banking and investment banking transactions with our Company, our
Group Companies, affiliates or associates or third parties, for which they have received, and may in future receive,
compensation.
CAUTION
Investors that Bid in this Issue will be required to confirm and will be deemed to have represented to our Company,
the BRLM and the Underwriters and their respective directors, officers, agents, affiliates and representatives that they
are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares and will not
offer, sell, pledge or transfer the Equity Shares to any person who is not eligible under any applicable laws, rules,
regulations, guidelines and approvals to acquire Equity Shares. Our Company, the BRLM and their respective directors,
officers, agents, affiliates and representatives accept no responsibility or liability for advising any investor on whether
such investor is eligible to acquire Equity Shares in the Issue.
JURISDICTION
Exclusive jurisdiction for the purpose of this Issue is with competent courts/authorities in Kochi, Kerala, India.
DISCLAIMER IN RESPECT OF JURISDICTION
This Issue is made in India to persons resident in India including Indian nationals resident in India who are not minors,
HUFs, companies, corporate bodies and societies registered under the applicable laws in India and authorized to
invest in equity shares, Indian Mutual Funds registered with the SEBI, Indian financial institutions, commercial banks
and regional rural banks, co-operative banks (subject to RBI permission), trusts (registered under Societies
Registration Act, 1860, or any other trust law and are authorized under their constitution to hold and invest in equity
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shares) and to eligible NRIs and FIIs as defined under the Indian laws and other eligible foreign investors. This Draft
Red Herring Prospectus does not, however, constitute an offer to sell or an invitation to subscribe to equity shares
issued hereby in any jurisdiction other than India, to any person to whom it is unlawful to make an offer or invitation
in such jurisdiction. Any person into whose possession this Draft Red Herring Prospectus comes is required to inform
himself or herself about and to observe any such restrictions.
Any disputes arising out of this Issue will be subject to the jurisdiction of courts in Kerala, only. No action has been or
will be taken to permit a public offering in any jurisdiction where action would be required for that purpose, except
that the Draft Red Herring Prospectus has been submitted to the Stock Exchange. Accordingly, the Equity Shares,
represented thereby may not be offered or sold, directly or indirectly, and the Draft Red Herring Prospectus may not
be distributed in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction.
Neither the delivery of the Draft Red Herring Prospectus nor any sale hereunder shall, under any circumstances create
any implication that there has been no change in the affairs of our Company since the date hereof or that the
information contained herein is correct as of any time subsequent to this date.
The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (“U.S.
Securities Act”) or any state securities laws in the United States and may not be offered or sold within the United
States or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S), except pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and
applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered and sold only outside the
United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act and the applicable
laws of the jurisdiction where those offers and sales occur.
The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction
outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except
in compliance with the applicable laws of such jurisdiction.
Each purchaser that is acquiring the Equity Shares issued pursuant to this Issue, by its acceptance of the Draft Red
Herring Prospectus and of the Equity Shares issued pursuant to this Issue, will be deemed to have acknowledged,
represented to and agreed with our Company, the BRLM that it has received a copy of the Draft Red Herring
Prospectus and such other information as it deems necessary to make an informed investment decision and that:
1. the purchaser is authorized to consummate the purchase of the Equity Shares issued pursuant to this Issue in
compliance with all applicable laws and regulations;
2. the purchaser acknowledges that the Equity Shares issued pursuant to this Issue have not been and will not be
registered under the U.S. Securities Act or with any securities regulatory authority of any state of the United
States and are subject to restrictions on transfer;
3. the purchaser is purchasing the Equity Shares issued pursuant to this Issue in an offshore transaction meeting the
requirements of Rule 903 of Regulation S under the U.S. Securities Act;
4. the purchaser and the person, if any, for whose account or benefit the purchaser is acquiring the Equity Shares
issued pursuant to this Issue, was located outside the United States at the time the buy order for such Equity
Shares was originated and continues to be located outside the United States and has not purchased such Equity
Shares for the account or benefit of any person in the United Sates or entered into any arrangement for the
transfer of such Equity Shares or any economic interest therein to any person in the United States;
5. the purchaser is not an affiliate of our Company or a person acting on behalf of an affiliate;
6. if, in the future, the purchaser decides to offer, resell, pledge or otherwise transfer such Equity Shares, or any
economic interest therein, such Equity Shares or any economic interest therein may be offered, sold, pledged or
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otherwise transferred only in accordance with all applicable laws, including the securities laws of the States of the
United States;
7. the purchaser understands that such Equity Shares (to the extent they are in certificated form), unless the
Company determine otherwise in accordance with applicable law, will bear a legend substantially to the following
effect:
THE EQUITY SHARES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY
AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR
RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
8. the Company will not recognize any offer, sale, pledge or other transfer of such Equity Shares made other than in
compliance with the above-stated restrictions; and the purchaser acknowledges that the Company, the BRLM,
their respective affiliates and others will rely upon the truth and accuracy of the foregoing acknowledgements,
representations and agreements and agrees that, if any of such acknowledgements, representations and
agreements deemed to have been made by virtue of its purchase of such Equity Shares are no longer accurate, it
will promptly notify the Company, and if it is acquiring any of such Equity Shares as a fiduciary or agent for one or
more accounts, it represents that it has sole investment discretion with respect to each such account and that it
has full power to make the foregoing acknowledgements, representations and agreements on behalf of such
account.
DISCLAIMER CLAUSE OF THE SME PLATFORM OF THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED (NSE)
As required, a copy of this Draft Red Herring Prospectus has been submitted to National Stock Exchange of India
Limited (hereinafter referred to as NSE). NSE has given vide its letter ref.: [] dated [], 2013 permission to our
Company to use the Exchange’s name in this Draft Red Herring Prospectus as one of the stock exchanges on which our
Company’s securities are proposed to be listed. The Exchange has scrutinized this Draft Red Herring Prospectus for its
limited internal purpose of deciding on the matter of granting the aforesaid permission to our Company. It is to be
distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or construed that
the Draft Red Herring Prospectus has been cleared or approved by NSE; nor does it in any manner warrant, certify or
endorse the correctness or completeness of any of the contents of this Draft Red Herring Prospectus, nor does it
warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; nor does it take any
responsibility for the financial or other soundness of our Company, its promoters, its management or any scheme or
project of this Company.
Every person who desires to apply for or otherwise acquire any of our Company’s securities may do so pursuant to
independent inquiry, investigation and analysis and shall not have any claim against the NSE whatsoever by reason of
any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition
whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.
FILING
A copy of the Draft Red Herring Prospectus and the Red Herring Prospectus shall not be filed with SEBI, nor will SEBI
issue any observation on the offer document in term of Regulations 106(M)(3) and 106(O) of the SEBI ICDR
Regulations. However, a copy of the Prospectus will be filed with SEBI at Corporation Finance Department, Plot No
C4-A, ‘G’ Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 while filing the Prospectus with the NSE and
RoC.
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A copy of the Red Herring Prospectus, along with documents will be filed under Section 60B of the Act, and a copy of
the Prospectus to be filed under Section 60 of the Companies Act would be delivered for registration to the RoC.
LISTING
The Equity Shares issued through this Draft Red Herring Prospectus are proposed to be listed on the SME platform of
the NSE. Initial listing applications have been made to the NSE for permission to list the Equity Shares and for an
official quotation of the Equity Shares of our Company. The NSE shall be the Designated Stock Exchange. In case the
permission for listing of the Equity Shares is not granted by the NSE, our Company shall forthwith repay, without
interest, all moneys received from the applicants in pursuance of this Draft Red Herring Prospectus. If such money is
not repaid within 8 days after the day from which our Company becomes liable to repay it (i.e. from the date of
refusal or within twelve working days from the Bid/Issue Closing Date, whichever is earlier) then our Company and
every director of our Company who is an officer in default shall, on and from expiry of 8 days, be jointly and severally
liable to repay that money with interest, at 15% per annum on the application monies as prescribed under Section 73
of the Companies Act.
Our Company with the assistance of the Book Running Lead Manager shall ensure that all steps for the completion of
the necessary formalities for listing and commencement of trading on the SME platform of the NSE where the Equity
Shares are proposed to be listed are taken within twelve Working Days of Bid/Issue Closing Date.
IMPERSONATION
Attention of the Bidders is specifically drawn to the provisions of Sub-Section (1) of Section 68A of the Companies Act
which is reproduced below:
“Any person who-
a. makes in a fictitious name, an application to a company for acquiring, or subscribing for, any shares
therein, or
b. otherwise induces a company to allot, or register any transfer of shares, therein to him, or any other
person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five
years.”
CONSENTS
Consents in writing of: (a) our Directors, the Company Secretary and Compliance Officer, the Auditor, the legal
advisors, the advisor, the Banker(s) to the Issue, the Banker(s) to our Company, and (b) the Book Running Lead
Manager, the Syndicate Members*, the Escrow Collection Banks*, Refund Bank(s) and the Registrar to the Issue to act
in their respective capacities, have been obtained and will be filed along with a copy of the Prospectus with the RoC
and have agreed that such consents have not been withdrawn upto the time of registration, as required under
Sections 60 and 60B of the Companies Act.
*The aforesaid will be appointed prior to filing of the Red Herring Prospectus with RoC and their consents as above
would be obtained prior to the filing of the Red Herring Prospectus with NSE.
Sivaprasad and Associates, Chartered Accountants, our Statutory Auditor have given their written consent to the
inclusion of their report dated February 6, 2013 in the form and context in which it appears in the Draft Red Herring
Prospectus and such consent and report will not be withdrawn upto the time of delivery of the Prospectus for
registration to the Registrar of Companies.
Sivaprasad and Associates, Chartered Accountants, our Statutory Auditor have given their written consent to the
statement of tax benefits dated February 6, 2013 accruing to our Company and its members in the form and context
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in which it appears in the Draft Red Herring Prospectus and will not withdraw such consent upto the time of delivery
of the Prospectus for registration with the Registrar of Companies.
EXPERT OPINION
Except for the IPO grading agency and Statutory Auditor, our Company has not obtained any other expert opinion.
EXPENSES OF THE ISSUE
The total expenses of the Issue are estimated to be approximately ` [] lacs. The expenses of the Issue payable by our
Company includes, among others, brokerage, fee payable to the Book Running Lead Manager to the Issue and
Registrar to the Issue, lead management fees, underwriting and selling commission, advertisement and marketing
expenses, printing and distribution expenses, legal fees, bidding software expenses, depository charges and listing
fees of the Stock Exchange and other miscellaneous expenses estimated as follows:
Activity Amount
(` in lacs)
% of the Issue
Expenses
% of total
Issue Size
Lead management fees (including, underwriting
commission, market making fees, brokerage and selling
commission)*
[●] [●] [●]
Registrar to the Issue* [●] [●] [●]
Advisor* [●] [●] [●]
Banker(s) to the Issue* [●] [●] [●]
Others:* [●] [●] [●]
- Printing and stationery* [●] [●] [●]
- Listing fees* [●] [●] [●]
- Advertising and marketing expenses* [●] [●] [●]
- Others* [●] [●] [●]
Total estimated Issue expenses [●] [●] [●]
* Would be incorporated post finalization of Issue Price.
FEES PAYABLE TO THE BOOK RUNNING LEAD MANAGER
The total fees payable to the Book Running Lead Manager will be as per the Issue Agreement, a copy of which is
available for inspection at the Registered Office.
FEES PAYABLE TO THE REGISTRAR TO THE ISSUE
The fees payable to the Registrar to the Issue including fees for processing of Bid cum Application Forms, data entry,
printing of Allotment Advice, refund order, preparation of refund data on magnetic tape, printing of bulk mailing
register will be as per the agreement dated December 10, 2012, signed among our Company and the Registrar to the
Issue, a copy of which is available for inspection at our Registered Office.
The Registrar to the Issue will also be reimbursed for all out-of-pocket expenses including cost of stationery, postage,
stamp duty and communication expenses. Adequate funds will be provided to the Registrar to the Issue to enable
them to send refund orders or Allotment Advice by registered post/speed post (subject to postal rules).
PARTICULARS REGARDING PUBLIC OR RIGHTS ISSUES DURING THE LAST FIVE YEARS
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There have been no public or rights issues undertaken by our Company during the five years preceding the date of this
Draft Red Herring Prospectus.
PREVIOUS ISSUES OTHERWISE THAN FOR CASH
Except as disclosed in the chapter “Capital Structure” on page 24 Our Company has not issued any Equity Shares for
consideration otherwise than for cash.
COMMISSION OR BROKERAGE ON PREVIOUS ISSUES
Since this is the IPO of the Equity Shares of our Company, no sum has been paid or has been payable as commission or
brokerage for subscribing to or procuring or agreeing to procure subscription for any of Equity Shares since our
Company’s inception.
CAPITAL ISSUES IN THE PRECEDING THREE YEARS
Except as disclosed in “Capital Structure” and “Our Promoters and Group Entities” on pages 24 and 100 of the DRHP
respectively, our Company and our Group Companies and any of its affiliate or associates have not made any capital
issues during the three years preceding the date of this Draft Red Herring Prospectus.
PERFORMANCE VIS-À-VIS OBJECTS
Our Company has not completed any public or rights issue in the 10 years preceding the date of the Draft Red Herring
Prospectus.
PERFORMANCE VIS-S-VIS OBJECTS: LAST ISSUE OF GROUP ENTITIES OR ASSOCIATE COMPANIES
Except as stated in “Our Promoters and Group Entities” on page 100 of the DRHP, none of our Group Companies have
made any public or rights issues in the 10 years preceding the date of this Draft Red Herring Prospectus.
OUTSTANDING DEBENTURES, BONDS OR REDEEMABLE PREFERENCE SHARES
As on the date of the Draft Red Herring Prospectus, our Company does not have any outstanding debentures, bonds
or redeemable preference shares.
PARTLY PAID-UP SHARES
As on the date of this Draft Red Herring Prospectus, there are no partly paid-up Equity Shares of our Company.
STOCK MARKET DATA OF THE EQUITY SHARES
This being the IPO of the Equity Shares of our Company, the Equity Shares of our Company are not listed on any stock
exchange and hence no stock market data is available.
MECHANISM FOR REDRESSAL OF INVESTOR GRIEVANCES BY OUR COMPANY
The agreement dated December 10, 2012 between the Registrar to the Issue and our Company, provides for retention
of records with the Registrar to the Issue for a minimum period of three years from the last date of dispatch of letters
of Allotment, demat credit and making refunds as per the modes disclosed to enable the investors to approach the
Registrar to the Issue for redressal of their grievances.
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All grievances relating to the Issue may be addressed to the Registrar to the Issue quoting the full details such as name
of the sole or first Bidder, Bid cum Application Form number, Bidders’ DP ID, Client ID, PAN, number of Equity Shares
applied for, date of Bid cum Application Form, name and address of the member of the Syndicate, Broker Centre, as
the case may be, where the Bid was submitted and cheque or draft number and issuing bank thereof.
All grievances relating to the ASBA process may be addressed to the Registrar to the Issue, with a copy to the relevant
SCSBs or the member of the Syndicate if the Bid was submitted to a member of the Syndicate at any of the Syndicate
ASBA Bidding Locations, Broker Centre, as the case may be, quoting full details such as name of the sole or first Bidder,
Bid cum Application Form number, Bidders’ DP ID, client ID, PAN, number of Equity Shares applied for, date of Bid cum
Application Form, name and address of the member of the Syndicate or the Designated Branch, as the case may be,
where the ASBA Bid was submitted and ASBA Account number in which the amount equivalent to the Bid Amount was
blocked.
DISPOSAL OF INVESTOR GRIEVANCES BY OUR COMPANY
We estimate that the average time required by our Company or the Registrar to the Issue for the redressal of routine
investor grievances shall be seven Working Days from the date of receipt of the complaint. In case of complaints that
are not-routine and complaints where external agencies are involved, our Company will seek to redress these
complaints as expeditiously as possible.
Our Company has appointed Ms. Smitha Varma, Company Secretary, as the Compliance Officer and he may be
contacted in case of any pre-Issue or post-Issue related problems, at the following address:
Ms. Smitha Varma
41/3197, 4th Floor
Bhagheeratha Square
Banerji Road
Kacherippady
Kochi 682018
Kerala
Tel: +91 484 6492646
Fax: +91 484 4019035
E-mail: [email protected]
CHANGES IN THE AUDITOR DURING THE LAST THREE YEARS AND REASONS, THEREOF
There has been no change in our Auditor during the three years preceding the date of this Draft Red Herring
Prospectus except as stated below:
Name of the Auditors Appointment date/Resignation Date
Sivaprasad and Associates September 30, 2011 (Appointment)
R. Vinod Kumar & Associates September 9, 2011 (Resignation)
CAPITALISATION OF RESERVES OR PROFITS DURING THE LAST FIVE YEARS
Our Company has not capitalised its reserves or profits at any time during the five years preceding the date of this
Draft Red Herring Prospectus.
REVALUATION OF ASSETS DURING THE LAST FIVE YEARS
Our Company has not revalued its assets in the last five years.
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SECTION VII – ISSUE RELATED INFORMATION
ISSUE STRUCTURE
Public issue of 705,600 Equity Shares for cash at a price of `[●] per Equity Share (including a share premium of `[●]
per Equity Share) aggregating to `[●] lacs by our Company of which 35,400 Equity Shares will be reserved for
subscription by Market Makers to the Issue. The Issue and the Net Issue will constitute 25% and 23.75%, respectively
of the post Issue paid-up equity share capital of our Company. The Issue is being made through the book building
process:
Particulars Qualified Institutional
Bidders
Non-Institutional
Bidders
Retail Individual
Bidders
Market Maker
Reservation Portion
Number of Equity
Shares* 335,100 Equity Shares
Not less than
100,800 Equity
Shares shall be
available for
allocation or Net
Issue less allocation
to Qualified
Institutional Bidders
and Retail Individual
Bidders
Not less than
234,300 Equity
Shares shall be
available for
allocation or Net
Issue less allocation
to Qualified
Institutional Bidders
and Non-
Institutional Bidders
35,400 Equity Shares
Percentage of the
Issue Size available
for allocation
50% of the Net Issue
shall be allocated to
QIBs.
However, not less than
5% of the Net QIB
Portion shall be
available for allocation
proportionately to
Mutual Funds only
Not less than 15% of
the Net Issue shall be
available for
allocation or Net
Issue less allocation
to Qualified
Institutional Bidders
and Retail Individual
Bidders
Not less than 35% of
the Net Issue shall be
available for
allocation or Net
Issue less allocation
to Qualified
Institutional Bidders
and Non-Institutional
Bidders
5 % of the Issue
Basis of Allocation, if
respective category
is oversubscribed
Proportionate, subject
to minimum allotment
of 335,100 Equity
Shares and further
allotment in multiples
of 300 Equity Shares
each, as follows:
(a) 11,700 Equity
Shares,
constituting 5% of
the QIB portion,
shall be available
for allocation on a
proportionate
basis to Mutual
Funds;
(b) 323,400 Equity
Shares shall be
Proportionate Proportionate Firm Allotment
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Particulars Qualified Institutional
Bidders
Non-Institutional
Bidders
Retail Individual
Bidders
Market Maker
Reservation Portion
allotted on a
proportionate
basis to all QIBs
including Mutual
Funds receiving
allocation as per
(a) above
Minimum Bid
Such number of Equity
Shares that the Bid
Amount exceeds
`2,00,000 and in
multiples of 300 Equity
Shares thereafter
Such number of
Equity Shares that
the Bid Amount
exceeds `2,00,000
and in multiples of
300 Equity Shares
thereafter
300 Equity Shares
and in multiples of
300 Equity Shares
thereafter
35,400 Equity Shares
Maximum Bid
Not exceeding the size
of the Issue subject to
regulations as
applicable to the
Bidder
Not exceeding the
size of the Issue
Such number of
Equity Shares so as
to ensure that the
Bid Amount does not
exceed `2,00,000
35,400 Equity Shares
Mode of Allotment Compulsorily in
dematerialized form
Compulsorily in
dematerialized form
Compulsorily in
dematerialized form
Compulsorily in
dematerialized form
Bid Lot***
300 Equity Shares and
in multiples of 300
Equity Shares
thereafter
300 Equity Shares
and in multiples of
300 Equity Shares
thereafter
300 Equity Shares
and in multiples of
300 Equity Shares
thereafter
300 Equity Shares
Allotment Lot
300 Equity Shares and
in multiples of 300
Equity Shares
thereafter
300 Equity Shares
and in multiples of
300 Equity Shares
thereafter
300 Equity Shares
and in multiples of
300 Equity Shares
thereafter
300 Equity Shares
Trading Lot
300 Equity Shares,
however the Market
Makers may accept
odd lots if any in the
market as required
under the SEBI ICDR
Regulations, 2009.
300 Equity Shares,
however the Market
Makers may accept
odd lots if any in the
market as required
under the SEBI ICDR
Regulations, 2009.
300 Equity Shares,
however the Market
Makers may accept
odd lots if any in the
market as required
under the SEBI ICDR
Regulations,
2009.
300 Equity Shares
Who can Apply **
Public financial
institutions, as
specified in Section 4A
of the Companies Act:
scheduled commercial
banks, mutual funds,
foreign institutional
investor registered
with SEBI, multilateral
and bilateral
development financial
institutions, venture
Resident Indian
individuals, Eligible
NRIs, HUFs (applying
through the Karta),
companies,
corporate bodies,
scientific
institutions, societies
trusts, sub accounts
of FIIs registered
with SEBI which are
foreign corporate or
Resident Indian
individuals, Eligible
NRIs, HUF (applying
through the Karta),
applying for Equity
Shares such that the
Bid Amount does not
exceed `2,00,000 in
value.
Market maker
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Particulars Qualified Institutional
Bidders
Non-Institutional
Bidders
Retail Individual
Bidders
Market Maker
Reservation Portion
capital funds
registered with SEBI,
foreign venture capital
investors registered
with SEBI, Alternative
Investment Funds
registered with SEBI,
state industrial
development
corporations,
permitted insurance
companies registered
with the Insurance
Regulatory and
Development
Authority, provident
funds, (subject to
applicable laws) with
minimum corpus of
`2,500 lacs and
pension funds with
minimum corpus of
`2,500 lacs in
accordance with
applicable law,
National Investment
Fund set up by
Government of India,
insurance funds set up
and managed by the
army, navy and air
force of the Union of
India and insurance
funds set up and
managed by the
Department of Posts,
India, Nominated
Investor(s)
foreign individuals.
Terms of Payment
****
Full Bid Amount On
Bidding through the
ASBA Process
Full Bid Amount on
bidding through the
ASBA Process
Full Bid Amount on
bidding
Full Bid Amount on
bidding through the
ASBA process
* Subject to valid Bids being received at or above the Issue Price, under-subscription, if any, in Non-Institutional
and Retail Individual categories would be allowed to be met with spill over inter-se from any other categories, at the
sole discretion of our Company, the BRLM, the Designated Stock Exchange and subject to applicable provisions of SEBI
ICDR Regulations.
Our Company may, in consultation with the BRLM, allocate up to 30% of the QIB Portion to Anchor Investors
on a discretionary basis. One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds,
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subject to valid Bids being received from domestic Mutual Funds at or above the price at which allocation is being
done to other Anchor Investors. For details, see “Issue Procedure” on page 257 of the Draft Red Herring Prospectus.
** In case the Bid Cum Application Form is submitted in joint names, the investors should ensure that the demat
account is also held in the same joint names and in the same sequence in which they appear in the Bid Cum
Application Form.
*** SEBI vide circular CIR/MRD/DSA/06/2012 dated February 21, 2012 (the “Circular”) standardized the lot size
for Initial Public Offer proposing to list on SME exchange/platform and for the secondary market trading on such
exchange/platform, as under
Price Band (in `) Lot Size (No of shares)
Upto 14 10,000
more than 14 upto 18 8,000
more than 18 upto 25 6,000
more than 25 upto 35 4,000
more than 35 upto 50 3,000
more than 50 upto 70 2,000
more than 70 upto 90 1,600
more than 90 upto 120 1.200
more than 120 upto 150 1,000
more than 150 upto 180 800
more than 180 upto 250 600
more than 250 upto 350 400
more than 350 upto 500 300
more than 500 upto 600 240
more than 600 upto 750 200
More than 750 upto 1000 160
above 1000 100
Further to the Circular, at the Initial Public Offer stage, the Registrar to Issue, in consultation with BRLM, our Company
and NSE shall ensure to finalize the basis of allotment in minimum lots and in multiples of minimum lot size, as per the
above given table. The secondary market trading lot size to be the same, as shall be the IPO lot size at the
application/allotment stage, facilitating secondary market trading. At the initial public offering stage if the price band
decided, falls within two different price bands than the minimum application lot size will be decided based on the
price band in which the higher price falls into. For example: if the proposed price band is at 24-28 then the lot size
shall be 4,000 shares. The lot size cannot be reduced by NSE to below the initial lot size if the trading price is below
the IPO issue price. NSE can review the lot size once in every 6 months / wherever warranted, by giving an advance
notice of at least one month to the market. However, as far as possible the stock exchange shall ensure that odd lots
are not created. Further, NSE shall ensure that the lot size shall be the same for securities traded across the Stock
Exchange. In case of oversubscription, if the option to retain ten percent of the net offer to public for the purpose of
making allotment in minimum lots is exercised, then it shall be ensured by the Issuer/Stock Exchange/ BRLM that the
post issue paid up capital of the issuer does not go beyond `2,500 lacs.
Further, vide SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2012 dated
October 12, 2012, the allotment of equity shares to each Retail Individual Bidder shall not be less than the minimum
bid lot, subject to availability of shares in Retail Individual Bidder category, and the remaining available shares, if any,
shall be allotted on a proportionate basis.
**** In case of ASBA Bidders, SCSBs will be authorized to block funds equivalent to the Bid Amount in the relevant
ASBA Account as detailed in the Bid cum Application Form.
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Further, in terms of the SEBI circular CIR/CFD/DIL/1/2013 dated January 2, 2013 it is clarified that for making
applications by banks on own account using ASBA facility, SCSBs should have a separate account in own name with
any other SEBI registered SCSB(s). Such account is used solely for the purpose of making application in public issues
and clear demarcated funds should be available in such account for ASBA applications.
Anchor Investor shall pay the entire Bid Amount at the time of submission of the Anchor Investor Bid. Provided, that
any difference between the Issue Price and Anchor Investor Allocation Price, shall be payable by the Anchor Investor
Pay-in Date. If the Issue Price is lower than the Anchor Investor Allocation Price, the Allotment to Anchor Investors
shall be at the Anchor Investor Allocation Price.
Withdrawal of the Issue
In accordance with the SEBI ICDR Regulations, our Company in consultation with the BRLM, reserves the right not to
proceed with the Issue at anytime including after the Bid/ Issue Opening Date but before the Allotment of Equity
Shares, without assigning the reasons thereof. Provided, if our Company withdraws the Issue after the Bid/ Issue
Closing Date, our Company will give the reason thereof within two days of the Bid/ Issue Closing Date by way of a
public notice in the same newspapers where the pre-Issue advertisement had appeared. The Stock Exchange is to be
informed promptly and the BRLM, through the Registrar to the Issue, shall notify the SCSBs to unblock the bank
accounts of the ASBA Bidders within one Working Day from the date of receipt of such notification.
Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final listing and trading approvals of the
Stock Exchange, which our Company shall apply for after Allotment and (ii) the final RoC approval of the Prospectus.
In terms of the SEBI ICDR Regulations, QIBs bidding in the Net QIB Portion and Non-Institutional Investors are not
allowed to withdraw nor lower the size of their Bids after bidding.
In the event of withdrawal of the Issue anytime after the Bid/Issue Opening Date, our Company will forthwith repay,
without interest, all monies received from the applicants in pursuance of the Draft Red Herring Prospectus. If such
money is not repaid within eight days after our Company becomes liable to repay it, i.e. from the date of withdrawal,
then our Company, on and from such expiry of eight days, be liable to repay the money, with such interest as
prescribed under Section 73 of the Companies Act.
Letters of Allotment, refund orders or instructions to SCSBs
Our Company shall credit the Equity Shares to the valid beneficiary account with its Depository Participants within 12
Working Days from the Bid Closing Date to all successful Allottees.
Please note that only Bidders having a bank account at any of the 68 centres where the clearing houses for the NECS
as notified by the RBI are eligible to receive refunds or payment through electronic transfer of funds. For all other
Bidders, including Bidders having bank accounts in the said 68 centres who have not updated their bank particulars
along with the nine-digit MICR code, the refund orders shall be dispatched within 12 Working Days of the Bid Closing
Date through speed post or registered post.
In case of ASBA Bidders, the Registrar to the Issue shall instruct the SCSBs to unblock the funds in the relevant ASBA
Account to the extent of the Bid Amount specified in the Bid Cum Application Form for withdrawn, rejected or
unsuccessful or partially successful ASBAs within 12 Working Days from the Bid Closing Date.
Interest in case of delay in dispatch of refund orders or instructions to SCSBs
In accordance with the Companies Act, the requirements of the Stock Exchange and SEBI ICDR Regulations, our
Company undertakes that:
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Allotment shall be made only in dematerialised form within 12 Working Days from the Bid Closing Date;
Dispatch of refund orders, except for Bidders who can receive refunds through Direct Credit, NEFT, RTGS or NECS,
shall be done within 12 Working Days from the Bid Closing Date;
Instructions to SCSBs to unblock the funds in the relevant ASBA Account for withdrawn rejected or unsuccessful
Bids shall be made within 12 Working Days from the Bid Closing Date;
It shall pay interest at 15% p.a. if the refund orders have not been dispatched to the Bidders or if, in a case where
the refund or portion thereof is made in electronic manner through Direct Credit, NEFT, RTGS or NECS, the refund
instructions have not been given to the clearing system in the disclosed manner within 12 Working Days from the
Bid Closing Date or if instructions to SCSBs to unblock funds in the ASBA Accounts are not given within 12 Working
Days of the Bid Closing Date; and
If such money is not repaid within 8 days from our Company becoming liable to repay, our Company and every
Director of our Company who is an officer in default shall be jointly and severally liable to repay the money with
interest as prescribed under sub-section (2) and (2A) of Section 73 of the Companies Act;
Our Company will provide adequate funds required for dispatch of refund orders or CAN to the Registrar to the Issue.
Refunds will be made by cheques, pay orders or demand drafts drawn on any one or more of the Refund Banker(s)
and payable at par at places where Bids are received. Bank charges, if any, for encashing such cheques, pay orders or
demand drafts at other centres will be payable by the Bidders.
In case of ASBA Bidders, the SCSBs will unblock funds in the ASBA Accounts to the extent of the refund to be made
based on instructions received from the Registrar to the Issue.
Bid/Issue Programme*
BID OPENING DATE [●]
BID CLOSING DATE [●]
* Our Company may in consultation with the BRLM consider participation by Anchor Investors. Anchor Investor shall
Bid on Anchor Investor Bidding Date.
Except in relation to the Bids received from the Anchor Investors, Bids and any revision in Bids shall be accepted only
between 10:00 a.m. and 5:00 p.m. (Indian Standard Time) during the Bidding Period at the Bidding Centres mentioned
on the Bid cum Application Form or, in case of Bids submitted by the ASBA Bidders, the Designated Branches and the
Syndicate ASBA Bidding Locations or Broker Centre except that:
(i) in case of Bids by QIBs under the QIB Portion, the Bids shall be accepted only between 10:00 a.m. and 3:00
p.m. (Indian Standard Time) and uploaded until 4:00 p.m. on the Bid Closing Date;
(ii) in case of Bids by Non-Institutional Bidders, the Bids shall be accepted only between 10:00 a.m. and 3:00 p.m.
(Indian Standard Time) and uploaded until 4:00 p.m. on the Bid Closing Date; and
(iii) in case of Bids by Retail Individual Bidders, the Bids shall be accepted only between 10:00 a.m. and 3:00 p.m.
(Indian Standard Time) and uploaded until 5:00 p.m. on the Bid Closing Date, which may be extended up to
such time as deemed fit by the Stock Exchange after taking into account the total number of applications
received up to the closure of timings and reported by BRLM to the Stock Exchange within half an hour of such
closure.
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In case of discrepancy in the data entered in the electronic book vis-à-vis the data contained in the physical Bid cum
Application Form, for a particular Bidder, the details as per the Bid file received from the Stock Exchange may be taken
as the final data for the purpose of allotment. In case of discrepancy in the data entered in the electronic book vis-à-
vis the data contained in the physical or electronic Bid cum Application Form, for a particular ASBA Bidder, the
Registrar to the Issue shall ask the relevant SCSB or the member of the Syndicate for rectified data.
QIB Bidders and Non-Institutional bidders may note that only upward revision is permitted with respect to the
quantity and/or price of the Equity Shares, in any option, for which a Bid has been submitted. Further, QIB Bidders
and Non-Institutional bidders are not allowed to withdraw their bids once they have been bid.
Our Company, in consultation with the BRLM, reserves the right to revise the Price Band during the Bidding Period in
accordance with the SEBI ICDR Regulations. The cap shall not be more than 120% of the floor of the Price Band.
Subject to compliance with the immediately preceding sentence, the floor of the Price Band can move up or down to
the extent of 20% of the floor of the Price Band.
In case of revision in the Price Band, the Bidding Period shall be extended for at least three additional Working Days
after such revision, subject to the total Bidding Period not exceeding 10 Working Days. Any revision in the Price Band,
and the revised Bidding Period, if applicable, shall be widely disseminated by notification to the Stock Exchange, by
issuing a press release and also by indicating the change on the websites of the BRLM and the terminals of the other
members of the Syndicate.
Indicative dates of Bid closing, finalization of Basis of Allotment, credit of Equity Shares to successful Bidder’s demat
account, initiation of refunds and commencement of trading of Equity Shares:
Activity Indicative dates
Bid Closing Date [●]
Finalisation of Basis of Allotment [●]
Credit of Equity Shares [●]
Initiation of refunds [●]
Commencement of trading of Equity Shares [●]
The above timetable is indicative and does not constitute any obligation on the Company or the BRLM. Whilst the
Company shall ensure that all steps for the completion of the necessary formalities for the listing and the
commencement of trading of the Equity Shares on the Stock Exchange are taken within 12 Working Days of the
Bid/Issue Closing Date, the timetable may change due to various factors, such as extension of the Bid/Issue Period
by the Company, revision of the Price Band or any delays in receiving the final listing and trading approval from the
Stock Exchange. The commencement of trading of the Equity Shares will be entirely at the discretion of the Stock
Exchange and in accordance with the applicable law.
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TERMS OF THE ISSUE
The Equity Shares being issued are subject to the provisions of the Companies Act, the Memorandum and Articles of
Association of our Company, conditions of RBI approval, if any, the Listing Agreement to be entered with the NSE, the
terms of this Draft Red Herring Prospectus, Red Herring Prospectus and Prospectus, Bid cum Application Form, the
Revision Form, the Confirmation of Allocation Note and other terms and conditions as may be incorporated in the
Allotment Advice, and other documents/certificates that may be executed in respect of the Issue. The Equity Shares
shall also be subject to laws as applicable, guidelines, rules, notifications and regulations relating to the issue of capital
and listing and trading of securities issued from time to time by SEBI, Government of India, Stock Exchange, RBI, RoC
and / or other authorities, as in force on the date of the Issue and to the extent applicable.
Ranking of Equity Shares
The Equity Shares being offered shall be subject to the provisions of the Companies act and of the Memorandum and
Articles of Association and shall rank paripassu in all respects with the other existing shares of our Company including
in respect of the rights to receive dividends. The Allottees of the Equity Shares in this Issue shall be entitled to
dividends and other corporate benefits, if any, declared by our Company after the date of Allotment. For further
details, see “Main Provisions of the Articles of Association” on page 300 of the Draft Red Herring Prospectus.
Mode of payment of dividend
We shall pay dividend to our shareholders as per the provisions of the Companies Act, the Articles of Association and
the Listing Agreements.
Face Value and Issue Price
The face value of each Equity Share is `10. The Floor Price of Equity Shares is ` [●] per Equity Share and the Cap Price
is ` [●] per Equity Share. At any given point of time there shall be only one denomination of Equity Shares, subject to
applicable law.
Compliance with Regulations issued by SEBI
Our Company shall comply with all applicable disclosure and accounting norms as specified by SEBI from time to time.
Rights of the Equity Shareholder
Subject to applicable laws, rules, regulations and guidelines and the provisions of our Articles, the equity shareholders
of our Company shall have the following rights:
Right to receive dividend, if declared;
Right to attend general meetings and exercise voting powers, unless prohibited by law;
Right to vote on a poll either in person or by proxy;
Right to receive offers for rights shares and be allotted bonus shares, if announced;
Right to receive surplus on liquidation subject to any statutory and other preferential claims being satisfied;
Right of free transferability subject to applicable law, including any RBI rules and regulations and
Such other rights, as may be available to a shareholder of a listed public company under the Companies Act
the terms of the listing agreements executed with the Stock Exchange, and the Memorandum and Articles of
Association of our Company.
- 253 -
For a detailed description of the main provisions of the Articles of Association such as those dealing with voting rights,
dividend, forfeiture and lien, transfer and transmission and / or consolidation / splitting, please see “Main Provisions
of the Articles of Association” on page 300 of this Draft Red Herring Prospectus.
Market Lot, Trading Lot and Minimum Application Value
Under Section 68B of the Companies Act, the Equity Shares shall be allotted only in dematerialized form. In terms of
existing SEBI ICDR Regulations, the trading in the Equity Shares shall only be in dematerialized form for all investors.
The trading of Equity Shares will happen with the minimum lot size of 300 equity shares and the same may be
modified by the SME Platform of NSE from time to time by giving prior notice to investors at large. The trading lot is
300 Equity Shares. Allocation and allotment of Equity Shares through this Issue will be done only in electronic form, in
multiple of 300 Equity Share, subject to a minimum allotment of 300 Equity Shares. For further details of allocation
and allotment, see “Issue Procedure” on page 257 of this Draft Red Herring Prospectus.
Joint Holders
Subject to provisions contained in our Articles of Association, where two or more persons are registered as the
holders of any Equity Share, they shall be deemed to hold the same as joint tenants with benefits of survivorship.
Jurisdiction
Exclusive jurisdiction for the purpose of this Issue is with the competent courts in Kerala .
The Equity Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws
in the United States and may not be offered or sold within the United States or to, or for the account or benefit of,
“U.S. persons” (as defined in Regulation S), except pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Accordingly, the
Equity Shares are being offered and sold only outside the United States in offshore transactions in reliance on
Regulation S under the U.S. Securities Act and the applicable laws of the jurisdiction where those offers and sales
occur.
The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction
outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except
in compliance with the applicable laws of such jurisdiction.
Nomination Facility to the Investor
In accordance with Section 109A of the Companies Act, the sole or first bidder, along with other joint bidder, may
nominate any one person in whom, in the event of the death of sole bidder or in case of joint bidders, death of all the
bidders, as the case may be, the Equity Shares allotted, if any, shall vest. A person, being a nominee, entitled to the
Equity Shares by reason of the death of the original holder(s), shall in accordance with Section 109A of the Companies
Act, be entitled to the same advantages to which he or she would be entitled if he or she were the registered holder
of the Equity Share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the
prescribed manner, any person to become entitled to equity share(s) in the event of his or her death during the
minority. A nomination shall stand rescinded upon a sale/ transfer/ alienation of equity share(s) by the person
nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be
made only on the prescribed form available on request at our Company’s registered office or to our Registrar and
Transfer Agents.
In accordance with Section 109B of the Companies Act, any person who becomes a nominee by virtue of the
provisions of Section 109A of the Companies Act, shall upon the production of such evidence as may be required by
the Board, elect either:
1. to register himself or herself as the holder of the Equity Shares; or
2. to make such allotment of the Equity Shares, as the deceased holder could have made.
- 254 -
Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself or
herself or to allot the Equity Shares, and if the notice is not complied with within a period of ninety days, the Board
may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the Equity Shares,
until the requirements of the notice have been complied with.
Since the allotment of Equity Shares in the Issue will be made only in dematerialized mode, there is no need to
make a separate nomination with us. Nominations registered with respective depository participant of the
applicant would prevail. If the investors require changing the nomination, they are requested to inform their
respective depository participant.
Minimum Subscription
This Issue is not restricted to any minimum subscription level. This Issue is 100% underwritten. If our Company does
not receive the subscription of 100% of the Issue through this offer document including devolvement of Underwriters
within sixty days from the date of closure of the issue, the issuer shall forthwith refund the entire subscription amount
received. If there is a delay beyond eight days after the issuer becomes liable to pay the amount, the issuer shall pay
interest prescribed under section 73 of the Companies Act, 1956.
Migration to Main Board
Our company may migrate to the main board of NSE from the SME Exchange at a later date subject to the following:
a) If the Paid up Capital of our Company is likely to increase above `25 crore by virtue of any further issue of
capital by way of rights, preferential issue, bonus issue etc. (which has been approved by a special resolution
through postal ballot wherein the votes cast by the shareholders other than the Promoters in favour of the
proposal amount to at least two times the number of votes cast by shareholders other than promoter
shareholders against the proposal and for which our Company has obtained in-principal approval from the
main board), our Company shall apply to NSE for listing of its shares on its Main Board subject to the
fulfillment of the eligibility criteria for listing of specified securities laid down by the Main Board.
OR
b) If the Paid up Capital of our company is more than ` 10 crore but below ` 25 crore, our Company may still
apply for migration to the main board if the same has been approved by a special resolution through postal
ballot wherein the votes cast by the shareholders other than the Promoters in favour of the proposal amount
to at least two times the number of votes cast by shareholders other than promoter shareholders against the
proposal.
Market Making
The shares offered though this issue are proposed to be listed on the SME Platform of NSE and traded in the SME Call
auction market, wherein the BRLM shall ensure compulsory market making through registered market makers of the
SME Exchange for a minimum period of three years from the date of listing of shares offered though this Draft Red
Herring Prospectus. For further details of the Market Making arrangement see “General Information” on page 15 of
this Draft Red Herring Prospectus.
Arrangement for disposal of odd lot
The trading of the equity shares will happen in the minimum contract size of 300 shares. However, the market maker
shall buy the entire shareholding of a shareholder in one lot, where value of such shareholding is less than the
minimum contract size allowed for trading on the SME Exchange.
- 255 -
Bid/Issue Period
BID OPENS ON [●]
BID CLOSES ON [●]
Bids and any revision in Bids shall be accepted only between 10:00 a.m. and 5:00 p.m. (Indian Standard Time) during
the Bidding Period as mentioned above at the bidding centres mentioned in the Bid Cum Application Form, or, in case
of Bids submitted through ASBA, the Designated Branches of the SCSBs, except on the Bid/ issue Closing Date. For
further details see “General Information” on page 15 of the Draft Red Herring Prospectus.
Application by Eligible NRIs, FIIs and Foreign Venture Capital Funds registered with SEBI
As per the extant policy of the Government of India, OCBs cannot participate in this Issue. The RBI has however
clarified in its circular, A.P. (DIR Series) Circular No. 44, dated December 8, 2003 that OCBs which are incorporated
and are not under the adverse notice of the RBI are permitted to undertake fresh investments as incorporated non-
resident entities in terms of Regulation 5(1) of RBI Notification No.20/2000-RB dated May 3, 2000 under FDI
Scheme with the prior approval of Government if the investment is through Government Route and with the prior
approval of RBI if the investment is through Automatic Route on case by case basis. OCBs may invest in this Issue
provided it obtains a prior approval from the RBI. On submission of such approval along with the Bid cum
Application Form, the OCB shall be eligible to be considered for share allocation.
The current provisions of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident
outside India) Regulations, 2000, there exists a general permission for NRIs, FIIs and foreign venture capital investors
registered with SEBI to invest in shares of Indian companies by way of subscription in an initial public offering.
However, such investments would be subject to other investment restrictions under the Foreign Exchange
Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, RBI and/or SEBI
regulations as may be applicable to such investors. It is to be distinctly understood that there is no reservation for
NRIs, FIIs or FVCIs registered with SEBI, applicants will be treated on the same basis with other categories for the
purpose of allocation.
The allotment of Equity Shares to Non-Residents shall be subject to the conditions, if any, as may be prescribed by the
Government of India/RBI while granting such approvals.
The above information is given for the benefit of the Bidders. The Bidders are advised to make their own enquiries
about the limits applicable to them. Our Company and the BRLM do not accept any responsibility for the
completeness and accuracy of the information stated hereinabove. Our Company and the BRLM are not liable to
inform the investors of any amendments or modifications or changes in applicable laws or regulations, which may
occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make their independent
investigations and ensure that the number of Equity Shares Bid for do not exceed the applicable limits under laws
or regulations.
Restriction on transfer of Equity Shares
Except for lock-in as detailed in “Capital Structure” beginning on page 24 of the Draft Red Herring Prospectus, and
except as provided in the Articles of Association, there are no restrictions on transfers of Equity Shares. There are no
restrictions on transmission of Equity Shares and on their consolidation/ splitting except as provided in the Articles of
Association. Please see “Main Provisions of the Articles of Association” beginning on page 300 of the Draft Red Herring
Prospectus.
Withdrawal of the Issue
Our Company, in consultation with the BRLM, reserves the right not to proceed with the Issue any time after the Bid
Opening Date but before the Allotment. In such an event, our Company would issue a public notice in the newspapers,
in which the pre-Issue advertisements were published, within two days, providing reasons for not proceeding with the
Issue. Our Company shall also inform the same to the National Stock Exchange and the BRLM through the Registrar
shall notify the SCSBs to unblock the ASBA Account within one Working Day from the date of such notification.
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In the event of withdrawal of the Issue any time after the Bid/Issue Opening Date, our Company will forthwith repay,
without interest, all monies received from the applicants in pursuance of the Draft Red Herring Prospectus. If such
money is not repaid within eight days after our Company becomes liable to repay it, i.e. from the date of withdrawal,
then our Company, on and from the expiry of eight days, be liable to repay the money, with such interest at the rate
prescribed under Section 73 of the Companies Act.
Any further issue of Equity Shares by our Company shall be in compliance with applicable laws.
If our Company withdraws the Issue after the Bid Closing Date, our Company shall be required to file a fresh Red
Herring Prospectus.
Notwithstanding the foregoing, this Issue is also subject to obtaining the final listing and trading approvals of the Stock
Exchange, which our Company shall apply for after Allotment, and the final RoC approval of the Prospectus
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ISSUE PROCEDURE
This section applies to all Bidders. Please note that all Bidders can participate in the Issue through the ASBA process.
The SEBI Circular no.CIR/CFD/DIL/1/2011 dated April 29, 2011 (“Circular”) has made applications by QIBs(excluding
those bidding under the Anchor Investor Portion) and Non-Institutional Bidders compulsorily through the ASBA process.
Only Retail Individual Bidders can also participate in the Issue through the non ASBA process. ASBA Bidders should note
that the ASBA process involves application procedures that are different from the procedure applicable to Bidders
other than the ASBA Bidders. Bidders applying through the ASBA process should carefully read the provisions
applicable to such applications before making their application through the ASBA process. ASBA Bidders may also
apply electronically through the internet banking facility wherever provided for by the SCSB. Bidders other than ASBA
Bidders are required to submit their Bids to the Syndicate.
Please note that all Bidders are required to make the full Bid Amount or instruct the relevant SCSB to block the full Bid
Amount along with the application.
Further, please note that pursuant to the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) (Fourth Amendment) Regulations, 2012, certain aspects, such as withdrawal and revision of Bids,
manner of allocation to Retail Individual Bidders and announcement of Price Band, have been modified. Please note
that such modifications have come into effect from October 12, 2012 and all Bidders are advised to read this section
carefully before participating in the Issue.
Further, please note that pursuant to the SEBI Circular no. CIR/CFD/14/2012 dated October 04, 2012, submission of Bid
cum Application Forms can now be made through the nationwide broker network of the Stock Exchanges. Please note
that such modifications have come into effect from January 01, 2012 and all Bidders are advised to read this section
carefully before participating in the Issue.
Bidders are advised to make their independent investigations and ensure that their Bids do not exceed the investment
limits or maximum number of Equity Shares that can be held by them under applicable law or as specified in this Draft
Red Herring Prospectus.
Book Building Procedure
The Issue is being made through the Book Building Process wherein 50% of the Issue shall be available for allocation to
Qualified Institutional Buyers on a proportionate basis. Provided that our Company may in consultation with the BRLM
allocate up to 30% of the QIB Portion to Anchor Investors at Anchor Investor Allocation Price on a discretionary basis
out of which one-third shall be reserved for domestic Mutual Funds only. In the event of under-subscription in the
Anchor Investor Portion, the remaining Equity Shares shall be added to the Net QIB Portion. Out of the Net QIB
Portion, 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be
available for Allotment on a proportionate basis to QIBs and Mutual Funds, subject to valid bids being received from
them at or above the Issue Price. The remaining demand by the Mutual Funds shall, as part of the aggregate demand
by QIBs, be available for allocation proportionately out of the remainder of the Net QIB Portion, after excluding the
allocation in the Mutual Fund Portion. However, if the aggregate demand from Mutual Funds is less than 5% of the
QIB Portion, the balance Equity Shares in the Mutual Fund Portion will be added to the Net QIB Portion and allocated
to QIBs on a proportionate basis, subject to valid Bids being received at or above the Issue Price.
Further, not less than 15% of the Issue would be available for allocation to Non-Institutional Bidders and not less than
35% of the Issue would be available for allocation to Retail Individual Bidders on a proportionate basis, subject to valid
bids being received from them at or above the Issue Price.
All Retail Individual Bidders applying through cheques or demand drafts are required to submit their Bids through the
Syndicate.
All QIBs (other than Anchor Investors) and Non Institutional Bidders compulsorily have to apply in this Issue through
the ASBA process. Retail Individual Bidders have the option of applying in this Issue through the ASBA process ASBA
Bidders are required to submit their Bids to the SCSBs or to the Syndicate (at Syndicate ASBA Bidding Locations) or
Broker Centres.
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Investors should note that the Equity Shares will be allotted to all successful Bidders only in dematerialised form.
The Bid cum Application Forms which do not have the details of the Bidders’ depository account, including the DP
ID numbers and the beneficiary account number, shall be treated as incomplete and rejected. Bid cum Application
Forms which do not have the details of the Bidders’ PAN, (other than Bids made on behalf of the Central and the
State Governments, residents of the state of Sikkim and official appointed by the courts) shall be treated as
incomplete and are liable to be rejected. Bidders will not have the option of being allotted Equity Shares in physical
form. The Equity Shares on allotment shall be traded only in the dematerialised segment of the Stock Exchange.
Bid cum Application Form
Pursuant to SEBI circular CIR/CFD/DIL/4/2011 dated September 27, 2011, Bid cum Application Forms have been
standardized and it has been decided that henceforth there would only be a single form for ASBA and non-ASBA
Bidders. It has also been decided that the Bid cum Application Form (accompanied with abridged prospectus) would
be printed in a booklet form of A4 size paper.
Pursuant to SEBI circular no. CIR/CFD/14/2012 dated October 04, 2012, Bid cum Application Form shall be available
for download from the website of NSE and their broker terminals which also include pre-filled information relating
to the Price Band.
Retail Individual Bidders may Bid through the ASBA process at their discretion. However, QIBs (other than Anchor
Investors) and Non-Institutional Bidders must compulsorily use the ASBA process to participate in the Issue.
Retail Individual Bidders through the non-ASBA process
In the event of bidding through the non-ASBA process, the Retail Individual Bidders shall only use a Bid cum
Application Form bearing the stamp of a member of the Syndicate. The Bid cum Application Form will be available
with the members of the Syndicate and at our Registered Office of our Company or can be downloaded from the
website of the Stock Exchange.
Retail Individual Bidders shall have the option to make a maximum of three Bids (in terms of number of Equity Shares
and respective Bid Amount) on a single Bid cum Application Form and such options shall not be considered as multiple
Bids. The Bid cum Application Form shall be serially numbered and date and time stamped at the Bidding Centres and
such form shall be issued in duplicate signed by the Retail Bidder and countersigned by the relevant member of the
Syndicate.
Upon completing and submitting the Bid cum Application Form to a member of the Syndicate or Broker Centre, Retail
Individual Bidders are deemed to have authorized our Company to make the necessary changes in the Draft Red
Herring Prospectus and the Bid cum Application Form as would be required for filing the Prospectus with the RoC and
as would be required by the RoC after such filing, without prior or subsequent notice of such changes to the relevant
Retail Individual Bidder. Upon determination of the Issue Price and filing of the Prospectus with the RoC, the Bid cum
Application Form shall be considered as the Application form.
Retail Individual Bidders, QIBs (other than Anchor Investors) and Non-Institutional Bidders Bidding through the ASBA
process
ASBA Bidders can submit their Bids by submitting Bid cum Application Forms, either in physical or electronic mode, to
the SCSB with whom the ASBA Account is maintained or in physical form to the members of Syndicate at the Syndicate
ASBA Bidding Locations or the Broker Centre. The physical Bid cum Application Forms will be available with the
Designated Branches, members of the Syndicate at the Syndicate ASBA Bidding Locations or to the Broker Centres and
at our Registered Office. The Bid cum Application Forms will also be available for download on the websites of the
Stock Exchange at least one day prior to the Bid/Issue Opening Date. In the event the Bid cum Application Form
downloaded from the websites of the Stock Exchange is submitted with a member of Syndicate at the Syndicate ASBA
Bidding Locations or the Broker Centre, the relevant member of the Syndicate or a Broker Centre should stamp it
before uploading the details of the Bid cum Application Form on to the electronic Bidding system of the Stock
Exchange. Bid cum Application Forms (except Bids submitted through electronic mode) shall be serially numbered.
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In case of application in physical mode, the ASBA Bidder shall submit the Bid cum Application Form bearing the stamp
of the SCSB and/or Designated Branch and/or the member of the Syndicate, as the case may be, at the relevant
Designated Branch or to the members of the Syndicate at the Syndicate ASBA Bidding Locations, respectively. In case
of ASBA Bidder submitting the physical Bid cum Application Form to the Broker Centre, the relevant Broker Centre
shall stamp and forward a schedule along with the Bid cum Application Form to the relevant branch of the SCSB where
the ASBA account is maintained for blocking of funds. The Bid cum Application Form shall be serially numbered, and
the date and time shall be stamped at the Bidding center.
ASBA Bidders bidding directly through the SCSBs should ensure that the Bid cum Application Form is submitted to a
Designated Branch of the SCSB where the ASBA Account is maintained. ASBA Bidders bidding through a member of
the Syndicate should ensure that the Bid cum Application Form is submitted to a member of the Syndicate only at
the Syndicate ASBA Bidding Locations located in the cities of Mumbai, Chennai, Kolkata, Delhi, Ahmedabad, Rajkot,
Jaipur, Bengaluru, Hyderabad, Pune, Vadodara and Surat. Kindly note that Bid cum Application Forms submitted to
the members of the Syndicate at the Syndicate ASBA Bidding Locations will not be accepted if the SCSB where the
ASBA Account, as specified in the Bid cum Application Form, is maintained has not named at least one branch at
that location for the members of the Syndicate to deposit Bid cum Application Forms (A list of such branches is
available at http://www.sebi.gov.in/cms/sebi_data/attachdocs/1359346050389.html)
In case of application in electronic form, the ASBA Bidder shall submit the Bid cum Application Form either through
the internet banking facility available with the SCSB or the Broker Centre, or such other electronically enabled
mechanism for bidding and blocking funds in the ASBA Account held with SCSB, and accordingly registering such Bids.
Upon completing and submitting the Bid cum Application Form to the SCSB or to the member of the Syndicate at the
Syndicate ASBA Bidding Locations or the Broker Centre, the ASBA Bidder is deemed to have authorized our Company
to make the necessary changes in the Draft Red Herring Prospectus and the Bid cum Application Form, as would be
required for filing the Prospectus with the RoC and as would be required by RoC after such filing, without prior or
subsequent notice of such changes to the ASBA Bidder.
To supplement the foregoing, the mode and manner of bidding is illustrated in the following chart.
Category of
bidder
Mode of bidding Application form to
be used for bidding
To whom the application form has to be submitted
Retail
Individual
Bidders
Either (i) ASBA or (ii)
Non-ASBA
Bid cum Application
Form
In case of an ASBA Bidder:
(i) If using physical Bid cum Application Form:
(a) to the members of the Syndicate only at
Syndicate ASBA Bidding Locations; or
(b) to the Designated Branches of the SCSBs
where the ASBA account is maintained; or
(ii) If using electronic Bid cum Application Form, to
the SCSBs, electronically through internet banking
facility, where the ASBA account is maintained; or
(iii) to the Broker Centre; or
In case of non-ASBA Bidder:
(i) If using physical Bid cum Application Form, to the
members of the Syndicate at the Bidding Centres
as stated in the Bid cum Application Form.
(ii) to the Broker Centre as stated in the Bid cum
Application Form; or
(iii) If using electronic Bid cum application Form,
electronically through internet banking facility.
Non-
Institutional
Bidders and
QIBs (other
ASBA (Kindly note
that ASBA is
mandatory and no
other mode of
Bid cum Application
Form
(i) If using physical Bid cum Application Form:
(a) to the members of the Syndicate only at
Syndicate ASBA Bidding Locations; or
(b) to the Designated Branches of the SCSBs
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than Anchor
Investors)
bidding is permitted) where the ASBA account is maintained;
(c) the Broker Centre; or
(ii) If using electronic Form, to the SCSBs,
electronically through internet banking facility,
where the ASBA account is maintained.
Anchor
Investors
Non- ASBA Bid cum Application
Form
To the BRLM.
Please note that there is a common Bid cum Application Form for ASBA Bidders (submitted to SCSBs or to the
Syndicate in Syndicate ASBA Bidding Locations or the Broker Centre) as well as for non-ASBA Bidders. The prescribed
colour of the Bid cum Application Form for the various categories is as follows:
Category Colour of Bid cum Application Form
Resident Indians and Eligible NRIs applying on a non-repatriation basis White
Eligible NRIs, FIIs or Foreign Venture Capital Funds, registered Multilateral and
Bilateral Development Financial Institutions applying on a repatriation basis Blue
* Bid cum Application forms for Anchor Investors shall be made available at the offices of the BRLM
Who can Bid?
1. Indian nationals resident in India, who are competent to contract under the Indian Contract Act, 1872, as
amended, in single or joint names (not more than three). Based on the information provided by the Depositories,
our Company shall have the right to either accept or reject Bids belonging to an account for the benefit of a
minor (under guardianship);
2. HUFs, in the individual name of the Karta. The Bidder should specify that the Bid is being made in the name of
the HUF in the Bid cum Application Form as follows:
Name of Sole or First Bidder: “XYZ Hindu Undivided Family applying through the Karta XYZ”, where XYZ is the
name of the Karta. Bids by HUFs would be considered at par with those from individuals;
3. Companies, corporate bodies, limited liability partnerships and societies registered under the applicable laws in
India and authorized to invest in equity shares under their respective constitutional or charter documents;
4. Mutual Funds registered with SEBI;
5. Eligible NRIs (whether on a repatriation basis or on a non-repatriation basis), subject to applicable law; NRIs
other than Eligible NRIs are not permitted to participate in this Issue;
6. Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI
regulations and SEBI regulations, as applicable);
7. Multilateral and bilateral development financial institution;
8. Venture capital funds and Alternative Investment Funds registered with SEBI;
9. Foreign venture capital investors registered with SEBI subject to compliance with applicable laws, rules,
regulations, guidelines and approvals in the Issue;
10. FIIs and sub-accounts registered with SEBI other than a sub-account which is a foreign corporate or foreign
individual subject to compliance with applicable laws, rules, regulations, guidelines and approvals in the Issue;
11. Sub-accounts of FIIs registered with SEBI, which are foreign corporates or foreign individuals only under the Non-
Institutional Bidders category;
12. Eligible QFIs;
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13. State Industrial Development Corporations;
14. Insurance companies registered with the Insurance Regulatory and Development Authority;
15. Provident funds with a minimum corpus of `2,500 lacs and who are authorized under their constitution to hold
and invest in equity shares;
16. Pension funds with a minimum corpus of `2,500 lacs and who are authorized under their constitution to hold
and invest in equity shares;
17. National Investment Fund set up by resolution F. No. 2/3/2005-DDII dated November 23, 2005 of Government of
India published in the Gazette of India;
18. Trusts/societies registered under the Societies Registration Act, 1860, as amended, or under any other law
relating to trusts and who are authorized under their respective constitutions to hold and invest in equity shares;
19. Scientific and/or industrial research organizations authorized under their constitution to invest in equity shares;
20. Insurance funds set up and managed by army, navy or air force of the Union of India;
21. Limited liability partnerships;
22. Insurance funds set up and managed by the Department of Posts, India;
23. Any other QIBs permitted to invest, subject to compliance with applicable laws, rules, regulations, guidelines and
approvals in the Issue;
24. Nominated Investor and Market Makers; and
25. Any other person eligible to Bid in this Issue, under the laws, rules, regulations, guidelines and polices applicable
to them.
As per the existing regulations, OCBs are not eligible to participate in this Issue. The RBI has however clarified in its
circular, A.P. (DIR Series) Circular No. 44, dated December 8, 2003 that OCBs which are incorporated and are not
under the adverse notice of the RBI are permitted to undertake fresh investments as incorporated non-resident
entities in terms of Regulation 5(1) of RBI Notification No.20/2000-RB dated May 3, 2000 under FDI Scheme with
the prior approval of Government if the investment is through Government Route and with the prior approval of
RBI if the investment is through Automatic Route on case by case basis. OCBs may invest in this Issue provided it
obtains a prior approval from the RBI. On submission of such approval along with the Bid cum Application Form, the
OCB shall be eligible to be considered for share allocation.
BIDDERS ARE ADVISED TO ENSURE THAT ANY SINGLE BID FROM THEM DOES NOT EXCEED THE INVESTMENT LIMITS
OR MAXIMUM NUMBER OF EQUITY SHARES THAT CAN BE HELD BY THEM UNDER APPLICABLE LAW.
Anchor Investor Portion
Our Company may, in consultation with the BRLM, consider participation by Anchor Investors in the Net Issue for up
to 30% of the QIB Portion in accordance with the SEBI ICDR Regulations. The QIB Portion shall be reduced to the
extent of allocation under the Anchor Investor Portion. In accordance with the SEBI ICDR Regulations, the key terms
for participation in the Anchor Investor Portion are as follows:
(a) Only QIBs as defined in Regulation 2(1)(zd) of the SEBI ICDR Regulations and not otherwise excluded pursuant to
Schedule XI of the SEBI ICDR Regulations are eligible to invest in the Anchor Investor Portion. In the event of
under subscription in the Anchor Investor Portion, the balance Equity Shares will be added to the Net QIB
Portion.
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(b) The Anchor Investor Bid must be for a minimum of such number of Equity Shares so that the Anchor Investor Bid
Amount exceeds `1,000 lacs and in multiples of 300 Equity Shares thereafter. An Anchor Investor Bid cannot be
submitted for more than the Anchor Investor Portion.
(c) 33,600 Equity Shares out of the Anchor Investor Portion shall be reserved for allocation to domestic Mutual
Funds. Bids by various schemes of a Mutual Fund shall be clubbed to calculate the Bid Amount.
(d) The bidding for Anchor Investors shall open one Working Day before the Bid Opening Date and shall be
completed on the same day. Anchor Investor shall Bid on the Anchor Investor Bidding Date. Anchor Investor shall
not permitted to Bid in this Issue through the ASBA process.
(e) Our Company in consultation with the BRLM shall finalise allocation to the Anchor Investors on a discretionary
basis, provided that the minimum number of Allottees in the Anchor Investor Portion will not be less than:
(i) Maximum of 2 Anchor Investors for allocation upto ` 1,000 lacs.
(ii) Minimum of 2 and maximum of 15 Anchor Investors for allocation above ` 1,000 lacs and upto ` 25,000
lacs, subject to minimum allotment of ` 500 lacs per such investor.
(iii) Minimum of 5 and maximum of 25 Anchor Investors for allocation above ` 25,000 lacs, subject to minimum
allotment of ` 500 lacs per such investor.
(f) Allocation to Anchor Investors will be completed on the Anchor Investor Bidding Date. The number of Equity
Shares allocated to the Anchor Investors and the Anchor Investor Allocation Price, shall be made available in the
public domain by the BRLM before the Bid Opening Date.
(g) Anchor Investors shall pay the entire Bid Amount at the time of submission of the Anchor Investor Bid. In case
the Issue Price is greater than Anchor Investor Allocation Price, the additional amount being the difference shall
be paid by the Anchor Investors by the Pay-in Date. In the event the Issue Price is lower than the Anchor Investor
Allocation Price, the Allotment to Anchor Investors shall be at Anchor Investor Allocation Price.
(h) Anchor Investors cannot withdraw their Bid after submission of the Bid.
(i) The Equity Shares allotted in the Anchor Investor Portion shall be locked-in for a period of 30 days from the date
of Allotment.
(j) Bids made by QIBs under both the Anchor Investor Portion and the Net QIB Portion shall not be considered as
multiple Bids.
(k) The payment instruments for payment into the Escrow Account should be drawn in favour of:
In case of Resident Anchor Investors: ““Escrow Account – MobME Wireless Solutions Limited - Initial Public
Offer - Anchor Investor - R”
In case of Non-Resident Anchor Investors: “Escrow Account - MobME Wireless Solutions Limited - Initial
Public Offer - Anchor Investor - NR”
Participation by associates and affiliates of BRLM and Syndicate Member
The BRLM and the Syndicate Member shall not be entitled to subscribe to this Issue in any manner except towards
fulfilling their underwriting or market making obligations. Associates and affiliates of the BRLM and the Syndicate
Member may subscribe for Equity Shares in the Issue, including in the QIB Portion and Non-Institutional Portion as
may be applicable to such Bidder, where the allocation is on a proportionate basis. Such bidding and subscription may
be on their own account or their clients. All categories of investors, including associates or affiliates of BRLM and
Syndicate Members, shall be treated equally for the purpose of allocation to be made on a proportionate basis.
The BRLM, the Syndicate Members, the Promoters, the Promoter Group and any persons related to them cannot
apply in the Issue under the Anchor Investor Portion.
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Bids by Mutual Funds
As per the current regulations, the following restrictions are applicable for investments by Mutual Funds:
As per the SEBI ICDR Regulations, at least one third of the Anchor Investor Portion will be available for allocation on a
discretionary basis to domestic Mutual Funds and 5% of the Net QIB Portion is reserved for allocation to Mutual Funds
on a proportionate basis. An eligible Bid by a Mutual Fund shall first be considered for allocation proportionately in
the Mutual Fund Portion. In the event that the demand is greater than 11,700 Equity Shares, allocation shall be made
to Mutual Funds proportionately, to the extent of the Mutual Fund Portion. The remaining demand by the Mutual
Funds shall, as part of the aggregate demand by QIBs, be available for allocation proportionately out of the remainder
of the QIB Portion, after excluding the allocation in the Mutual Fund Portion.
The Bids made by the asset management companies or custodians of Mutual Funds shall specifically state the names
of the concerned schemes for which the Bids are made.
With respect to Bids by Mutual Funds, a certified copy of their SEBI registration certificate must be lodged with the Bid
cum Application Form. Failing this, our Company reserves the right to accept or reject any Bid in whole or in part, in
either case, without assigning any reason thereof.
In case of a Mutual Fund, a separate Bid can be made in respect of each scheme of the Mutual Fund registered with
SEBI and such Bids in respect of more than one scheme of the Mutual Fund will not be treated as multiple Bids
provided that the Bids clearly indicate the scheme concerned for which the Bid has been made.
No Mutual Fund scheme shall invest more than 10% of its net asset value in the equity shares or equity related
instruments of any company provided that the limit of 10% shall not be applicable for investments in index funds or
sector or industry specific funds. No Mutual Fund under all its schemes should own more than 10% of any
company’s paid-up share capital carrying voting rights. These limits would have to be adhered to by the Mutual
Funds for investment in this Issue.
Bids by Eligible NRIs
Only Bids accompanied by payment in Indian Rupees or freely convertible foreign exchange will be considered for
Allotment. Eligible NRIs bidding on a repatriation basis may make payments by inward remittance in foreign exchange
through normal banking channels or by debits to their Non-Resident External (“NRE”) or Foreign Currency Non-
Resident (“FCNR”) accounts maintained with authorized dealers registered with the RBI. Eligible NRIs bidding on a
repatriation basis are advised to use the Bid cum Application Form meant for Non-Residents (Blue in colour),
accompanied by a bank certificate confirming that the payment has been made by debiting to the NRE or FCNR
account, as the case may be.
Eligible NRIs bidding on a non-repatriation basis may make payments by inward remittance in foreign exchange
through normal banking channels or by debits to NRE/FCNR accounts as well as NRO accounts. Eligible NRIs bidding on
a non-repatriation basis are advised to use the Bid cum Application Form meant for Resident (White in colour). Bids by
Eligible NRIs for a Bid Amount of up to `200,000 would be considered under the Retail Portion for the purposes of
allocation and Bids for a Bid Amount of more than `200,000 would be considered under Non-Institutional Portion for
the purposes of allocation. Eligible NRIs bidding under the Non-Institutional Portion are required to utilise the ASBA
facility to submit their Bids.
Bids by FIIs
As per the current regulations, the following restrictions are applicable for investments by FIIs:
The Issue of Equity Shares to a single FII should not exceed 10% of the post-Issue paid-up share capital of our
Company. In respect of a FII investing in Equity Shares of our Company on behalf of its sub-accounts, the investment
on behalf of each sub-account shall not exceed 10% of the total issued share capital of our Company or 5% of our total
issued capital in case such sub-account is a foreign corporate or foreign individual.
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A sub account of a FII which is a foreign corporate or foreign individual shall not be considered to be a Qualified
Institutional Buyer, as defined under the SEBI ICDR Regulations, for this Issue.
The total holdings of all FIIs and sub-accounts cannot exceed 24% of the post-Issue paid up Equity Share capital of our
Company. The said 24% limit can be increased up to the applicable sectoral cap by passing a resolution by our Board
of Directors followed by passing a special resolution to that effect by the shareholders of our Company and prior
approval of the RBI. Our Company has not obtained board or shareholders’ approval to increase the FII limit to more
than 24%. Thus as of now, the aggregate FII holding in our Company cannot exceed 24% of the total issued and paid-
up Equity Share capital of our Company.
Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of
regulation 15A(1) of the Securities Exchange Board of India (Foreign Institutional Investors) Regulations, 1995, as
amended (“SEBI FII Regulations”), an FII or its sub-account may issue, deal or hold, offshore derivative instruments
(defined under the SEBI FII Regulations as any instrument, by whatever name called, which is issued overseas by an FII
against securities held by it that are listed or proposed to be listed on any recognised stock exchange in India, as its
underlying) directly or indirectly, only in the event (i) such offshore derivative instruments are issued only to persons
who are regulated by an appropriate regulatory authority; and (ii) such offshore derivative instruments are issued
after compliance with ‘know your client’ norms. The FII or sub-account is also required to ensure that no further issue
or transfer of any offshore derivative instrument is made by or on behalf of it to any persons that are not regulated by
an appropriate foreign regulatory authority as defined under the SEBI FII Regulations. Associates and affiliates of the
underwriters including the BRLM and the Syndicate Member that are FIIs may issue offshore derivative instruments
against Equity Shares Allotted to them in the Issue. Any such offshore derivative instrument does not constitute any
obligation of, claim on or an interest in our Company or the BRLM.
Bids by SEBI registered Venture Capital Funds, Foreign Venture Capital Investors and Alternative Investment Funds
The SEBI (Venture Capital) Regulations, 1996,the SEBI (Foreign Venture Capital Investor) Regulations, 2000 and the
SEBI (Alternative investment Funds) Regulations, 2012 inter alia prescribe investment restrictions on venture capital
funds, foreign venture capital investors and alternative investment funds registered with SEBI respectively.
Accordingly, the holding by any individual venture capital fund registered with SEBI should not exceed 25% of its
corpus. However, venture capital funds or foreign venture capital investors may invest not more than 33.33% of their
respective investible funds in various prescribed instruments, including in initial public offers.
The category I and II alternative investment funds cannot invest more than 25% of the corpus in one investee
company. A category III alternative investment funds cannot invest more than 10% of the corpus in one investee
company. A venture capital fund registered as a category I alternative investment fund, as defined in the SEBI
(Alternative Investment Funds) Regulations, 2012, cannot invest more than 1/3rd of its corpus by way of subscription
to an initial public offering of a venture capital undertaking. Additionally, the VCFs which have not re-registered as an
AIF under the SEBI (Alternative investment Funds) Regulations, 2012 shall continue to be regulated by the SEBI
(Venture Capital) Regulations, 1996.
Pursuant to the SEBI ICDR Regulations, the shareholding of SEBI registered VCFs held in a company prior to making an
initial public offering would be exempt from lock-in requirements only if the shares have been held by them for at
least one year prior to the time of filing the draft red herring prospectus with SEBI / Stock Exchange.
Refunds, dividends and other distributions, if any, will be payable in Indian rupees only at the rate of exchange
prevailing at the time of remittance and net of bank charges and/or commission. In case of Bidders who remit
money through Indian Rupee drafts purchased abroad, such payments in Indian rupees will be converted into USD
or any other freely convertible currency as may be permitted by the RBI at the rate of exchange prevailing at the
time of remittance and will be dispatched by registered post or if the Bidders so desire, will be credited to their NRE
Accounts, details of which should be furnished in the space provided for this purpose in the Bid cum Application
Form. Our Company will not be responsible for loss, if any, incurred by the Bidder on account of conversion of
foreign currency.
Bids by limited liability partnerships
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In case of Bids made by limited liability partnerships registered under the Limited Liability Partnership Act, 2008, as
amended (“LLP Act”) a certified copy of certificate of registration issued under the LLP Act must be attached to the Bid
cum Application Form. Failing this, our Company reserves the right to reject any Bid without assigning any reason
thereof. Limited liability partnerships can participate in the Issue only through the ASBA process.
Bids by QFIs
In terms of circulars dated January 13, 2012, SEBI and RBI have permitted investment by QFIs in Indian equity issues,
including in rights issues. A QFI can invest in the Issue through its depository participant with whom it has opened a
demat account. No single QFI can hold more than five percent of paid up equity capital of our Company at any point of
time. Further, aggregate shareholding of all QFIs shall not exceed ten percent of the paid up equity capital of our
Company at any point of time.
QFIs shall be eligible to Bid under the Non-Institutional Bidders category. Further, SEBI in its circular dated January 13,
2012 has specified, amongst other things, eligible transactions for eligible QFIs (which includes investment in equity
shares in public issues to be listed on recognised stock exchange and sale of equity shares held by eligible QFIs in their
demat account through SEBI registered brokers), manner of operation of demat accounts by eligible QFIs, transaction
processes and investment restrictions. SEBI has specified that transactions by eligible QFIs shall be treated at par with
those made by Indian non-institutional investors in various respects including, margins, voting rights, public issues etc.
Eligible QFIs shall open a single noninterest bearing Rupee account with an AD category-I bank in India for routing the
payment for transactions relating to purchase of equity shares (including investment in equity shares in public issues)
subject to the conditions as may be prescribed by the RBI from time to time.
Eligible QFIs who wish to participate in the Issue are advised to use the Bid cum Application Form meant for Non-
Residents (Blue in colour). Eligible QFIs shall compulsorily Bid through the ASBA process to participate in the Issue.
Eligible QFIs are not permitted to issue off-shore derivative instruments or participatory notes.
Bids by insurance companies
In case of Bids made by insurance companies registered with the IRDA, a certified copy of certificate of registration
issued by IRDA must be attached to the Bid cum Application Form. Failing this, our Company reserves the right to
reject any Bid without assigning any reason thereof.
The exposure norms for insurers, prescribed under the Insurance Regulatory and Development Authority (Investment)
Regulations, 2000 (the “IRDA Investment Regulations”), are broadly set forth below:
(i) equity shares of a company: the least of 10% of the investee company’s subscribed capital (face value) or 10% of
the respective fund in case of life insurer or 10% of investment assets in case of general insurer or reinsurer;
(ii) the entire group of the investee company: the least of 10% of the respective fund in case of a life insurer or 10%
of investment assets in case of a general insurer or reinsurer (25% in case of Unit Linked Insurance Plans
(“ULIPs”) ; and
(iii) The industry sector in which the investee company operates: 10% of the insurer’s total investment exposure to
the industry sector (25% in case of ULIPs).
Bids by provident funds/pension funds
In case of Bids made by provident funds/pension funds, subject to applicable laws, with minimum corpus of `2,500
lacs, a certified copy of certificate from a chartered accountant certifying the corpus of the provident fund/pension
fund must be attached to the Bid cum Application Form. Failing this, our Company reserves the right to reject any Bid,
without assigning any reason thereof. Provident funds/pension funds can participate in the Issue only through the
ASBA process.
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Bids by banking companies
The investment limit for banking companies as per the Banking Regulation Act, 1949, as amended, is 30% of the paid-
up share capital of the investee company or 30% of the banks’ own paid-up share capital and reserves, whichever is
less (except in case of certain specified exceptions, such as setting up or investing in a subsidiary company, which
requires RBI approval). Additionally, any investment by a bank in the Equity Shares must be approved by such bank’s
investment committee set up to ensure compliance with the applicable prudential norms for classification, valuation
and operation of investment portfolio of banks (currently reflected in the RBI Master Circular of July 2, 2012). Banking
companies can participate in the Issue only through the ASBA process.
Further, in terms of the SEBI circular CIR/CFD/DIL/1/2013 dated January 2, 2013 it is clarified that for making
applications by banks on own account using ASBA facility, SCSBs should have a separate account in own name with
any other SEBI registered SCSB(s). Such account is used solely for the purpose of making application in public issues
and clear demarcated funds should be available in such account for ASBA applications.
Bids under power of attorney
In case of Bids made pursuant to a power of attorney by limited companies, corporate bodies, registered societies,
FIIs, Mutual Funds, insurance companies and provident funds with minimum corpus of `2,500 lacs (subject to
applicable law) and pension funds with a minimum corpus of `2,500 lacs, a certified copy of the power of attorney or
the relevant resolution or authority, as the case may be, along with a certified copy of the memorandum of
association and articles of association and/or SEBI registration certificate (as applicable) and/or bye laws must be
lodged with the Bid cum Application Form. With respect to Bids made by limited liability partnerships registered under
the Limited Liability Partnership Act, 2008, a certified copy of certificate of registration issued under the Limited
Liability Partnership Act, 2008, must be attached to the Bid cum Application Form. Failing this, our Company reserves
the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason therefore.
In addition to the above, certain additional documents are required to be submitted by the following entities:
(i) With respect to Bids by VCFs, FIIs and Mutual Funds, a certified copy of their SEBI registration certificate must be
lodged along with the Bid cum Application Form, as applicable. Failing this, our Company reserves the right to accept
or reject any Bid, in whole or in part, in either case without assigning any reasons thereof.
(ii) With respect to Bids by insurance companies registered with the Insurance Regulatory and Development
Authority, in addition to the above, a certified copy of the certificate of registration issued by the Insurance Regulatory
and Development Authority must be lodged with the Bid cum Application Form. Failing this, our Company reserves the
right to accept or reject any Bid, in whole or in part, in either case without assigning any reasons thereof.
(iii) With respect to Bids made by provident funds with minimum corpus of `2,500 lacs (subject to applicable law) and
pension funds with a minimum corpus of `2,500 lacs, a certified copy of a certificate from a chartered accountant
certifying the corpus of the provident fund/pension fund must be lodged along with the Bid cum Application Form.
Failing this, our Company reserves the right to accept or reject such Bid, in whole or in part, in either case without
assigning any reasons thereof.
(iv) With respect to Bids made by limited liability partnerships registered under the Limited Liability Partnership Act,
2008, a certified copy of certificate of registration issued under the Limited Liability Partnership Act, 2008, must be
attached to the Bid cum Application Form.
Maximum and Minimum Bid Size
For Retail Individual Bidders
The Bid must be for a minimum of 300 Equity Shares and in multiples of 300 Equity Shares thereafter, so as to ensure
that the Bid Amount payable by the Bidder does not exceed `200,000. In case of revision of Bids, the Retail Individual
Bidders have to ensure that the Bid Amount does not exceed `200,000. Where the Bid Amount is over `200,000 due
to a revision in the Bid or a revision in the Price Band or upon exercise of the option to bid at Cut-off Price, the Bid
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would be considered for allocation under the Non-Institutional Portion. The Cut-off Price option is given only to Retail
Individual Bidders indicating their agreement to Bid and to acquire the Equity Shares at the Issue Price as determined
at the end of the Book Building Process. Under the SEBI ICDR Regulations, theRetail Individual Bidders may either
withdraw or revise their bids until finalization of allotment.
For Non-Institutional Bidders and QIB Bidders
The Bid must be for a minimum of such Equity Shares such that the Bid Amount exceeds `200,000 and in multiples of
300 Equity Shares thereafter. A Bid cannot be submitted for more than the size of the Issue. However, the maximum
Bid by a QIB should not exceed the investment limits prescribed for them by the regulatory or statutory authorities
governing them. Under the SEBI ICDR Regulations, a Non-Institutional Bidder and QIB Bidder cannot withdraw or
lower the size of their Bid after they have been bid and QIB Bidders, Non - Institutional Bidders are required to pay,
mandatorily through the ASBA process, the entire Bid Amount upon submission of Bid.
In case of revision in Bids, the Non-Institutional Bidders, who are individuals, have to ensure that the Bid Amount is
greater than `200,000 to be considered for allocation in the Non-Institutional Portion. In case the Bid Amount reduces
to `200,000 or less due to a revision in the Bids or a revision in the Price Band, Bids by Non-Institutional Bidders who
are eligible for allocation in the Non-Institutional Portion would be considered for allocation under the Retail Portion.
Non-Institutional Bidders and QIB Bidders are not allowed to Bid at Cut-off Price. Please note that QIBs and Non-
Institutional Bidders can participate in the Issue only through the ASBA process.
For Bidders in the Anchor Investor Portion
The Bid by an Anchor Investor must be for a minimum of such number of Equity Shares such that the Bid Amount is
equal to or more than `1000 lacs. Bids by Anchor Investors under the Anchor Investor Portion and the Net QIB Portion
shall not be considered as multiple Bids. Under the Anchor Investor Portion, a Bid cannot be submitted for more than
30% of the QIB Portion. Anchor Investors cannot withdraw their Bids after the Anchor Investor Bidding Date. Anchor
Investor shall pay the entire Bid Amount at the time of submission of the Anchor Investor Bid. Provided, that any
difference between the Issue Price and Anchor Investor Allocation Price, shall be payable by the Anchor Investor Pay-
in Date. If the Issue Price is lower than the Anchor Investor Allocation Price, the Allotment to Anchor Investors shall be
at the Anchor Investor Allocation Price.
The maximum and minimum Bid size applicable to a QIB (other than Anchor investors), Retail Individual Bidder or a
Non-Institutional Bidder shall be applicable to an ASBA Bidder in accordance with the category that such ASBA Bidder
falls under.
Bidders are advised to make independent enquiries and ensure that any single Bid from them does not exceed the
investment limits or maximum number of Equity Shares that can be held by them under applicable law or regulation
or as specified in this Draft Red Herring Prospectus.
Information for Bidders
1. Our Company and the BRLM shall publish the Bid/Issue Opening Date and the Bid/Issue Closing Date in two
national daily newspapers (one each in English and Hindi) and in one regional daily newspaper (Malayalam) with
vide circulation, where the Registered Office of our Company is situated. This advertisement shall be in the
prescribed format.
2. Our Company will file and register the Red Herring Prospectus with the RoC at least three days prior to the Bid/
Issue Opening Date.
3. Copies of the Bid cum Application Form and copies of the Red Herring Prospectus will be available with the
Syndicate and the SCSBs, as applicable. The SCSBs shall ensure that the abridged prospectus is made available on
their websites. Copies of the Bid cum Application Form and copies of the Red Herring Prospectus for Anchor
Investors can be obtained from the BRLM.
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4. Any Bidder (who is eligible to invest in our Equity Shares) who would like to obtain the Red Herring Prospectus
and / or the Bid cum Application Form can obtain the same from our Registered Office or from the members of
the Syndicate or the SCSBs.
5. Eligible Bidders who are interested in subscribing the Equity Shares should approach the members of the
Syndicate or the SCSBs (as applicable) to register their Bid. Bidders can also approach the Designated Branch of
the SCSBs to register their Bids under the ASBA process.
6. The Bids should be submitted on the prescribed Bid cum Application Form only. Bid cum Application Forms
should bear the stamp of the BRLM or Syndicate Member otherwise they are liable to be rejected. ASBA Bidders
may submit the Bid cum Application Form to the Designated Branches of SCSBs directly or through a member of
the Syndicate at Syndicate ASBA Bidding Locations or to the Broker Centre.
7. Please ensure that in the event the Bid cum Application form is submitted at the terminals of the Syndicate
Members and the payment is proposed to be made through the ASBA process, the SCSB with whom the payment
is to be blocked has a branch at any of the bidding centres referred to in the Circular.
8. The beneficiary accounts of Bidders for whom PAN details have not been verified will be suspended for credit,
and no credit of Equity Shares pursuant to the Issue will be made in the accounts of such Bidders.
9. For ASBA Bidders, copies of the Bid Cum Application Form will be available for all categories of Bidders, with the
Designated Branches, members of the Syndicate (in the Syndicate ASBA Bidding Locations or the Broker Centre)
and at our Registered Office. Electronic Bid Cum Application Form will be available on the websites of the SCSBs
and on the websites of the Stock Exchange at least one Working Day prior to the Bid/Issue Opening Date. Copies
of the Bid Cum Application Form will be available for the Retail Bidders with the members of the Syndicate and at
our registered office.
Bidders are advised not to submit the Bid cum Application Form directly to Escrow Collection Banks and the same
will be rejected in such cases and the Bidders will not be entitled to any compensation whatsoever.
Additional information specific to ASBA Bidders
1. Bid Cum Application Form in physical form will be available with the Designated Branches, members of the
Syndicate at the Syndicate ASBA Bidding Locations or the Broker Centre and at our registered office. Electronic
Bid Cum Application Form will be available on the websites of the SCSBs and on the website of the Stock
Exchange at least one Working Day prior to the Bid/ Issue Opening Date. Further, the SCSBs will ensure that a
soft copy of the abridged Prospectus is made available on their websites. The BRLM shall ensure that adequate
arrangements are made to circulate copies of the abridged Prospectus and Bid Cum Application Form to the
SCSBs and the Syndicate at the Syndicate ASBA Bidding Locations or the Broker Centre.
2. The ASBA Bids should be submitted in the physical mode to the Syndicate on the prescribed Bid Cum Application
Form at the Syndicate ASBA Bidding Locations or to the Broker Centre and either in physical or electronic mode,
to the SCSBs with whom the ASBA Account is maintained. Bid cum Application Form in electronic mode can be
submitted only to the SCSBs with whom the ASBA Account is maintained and not to the members of
Syndicate. SCSBs may provide the electronic mode of bidding either through an internet enabled bidding and
banking facility or such other secured, electronically enabled mechanism for bidding and blocking funds in the
ASBA Account.
ASBA Bidders bidding through a member of the Syndicate should ensure that the Bid Cum Application Form is
submitted to a member of the Syndicate at the Syndicate ASBA Bidding Locations and that the SCSB where the
ASBA Account is maintained as specified in the Bid Cum Application Form, has named at-least one branch in
the relevant Syndicate ASBA Bidding Locations for the members of the Syndicate to deposit Bid Cum
Application Form, as displayed on the website of SEBI (http://www.sebi.gov.in/cms/sebi_data/attachdocs/
1359346050389.html). ASBA Bidders Bidding directly through the SCSBs should ensure that the Bid Cum
Application Form is submitted to a Designated Branch where the ASBA Account is maintained
(http://www.sebi.gov.in/cms/sebi_data/attachdocs/1355898148848.html).
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3. For ASBA Bids submitted to the members of the Syndicate at the Syndicate ASBA Bidding Locations, the members
of the Syndicate shall upload the ASBA Bid on to the electronic Bidding system of the Stock Exchange and deposit
the Bid Cum Application Form with the relevant branch of the SCSB at the relevant Syndicate ASBA Bidding
Locations authorized to accept such Bid Cum Application Form from the members of the Syndicate as displayed
on the website of SEBI (http://www.sebi.gov.in/cms/sebi_data/attachdocs/1359346050389.html). Bids may also
be submitted to the Broker Centre, details of which are available on the website of the Stock Exchange. The
relevant branch of the SCSB shall block an amount in the ASBA Account equal to the Bid Amount specified in the
Bid Cum Application Form. For ASBA Bids submitted directly to the SCSBs, the relevant SCSB shall block an
amount in the ASBA Account equal to the Bid Amount specified in the Bid Cum Application Form, before entering
the ASBA Bid into the electronic bidding system.
ASBA Bidders should ensure that they have funds equal to the Bid Amount in the ASBA Account before
submitting the Bid cum Application Form to the members of the Syndicate at the Syndicate ASBA Bidding
Locations or the respective Designated Branch or the Broker Centre. An ASBA Bid where the corresponding
ASBA Account does not have sufficient funds equal to the Bid Amount at the time of blocking the ASBA
Account is liable to be rejected.
4. SCSBs applying on own account using ASBA facility must have a separate bank account in their name with any
other SCSB which is solely for the purposes of making such ASBA application and having clear demarcated funds
blocked for the same. SCSBs applying using an ASBA account held with themselves are liable to be rejected.
5. The members of the Syndicate at the Syndicate ASBA Bidding Locations and the SCSBs shall accept ASBA Bids
only during the Bid/Issue Period and only from the ASBA Bidders. The SCSB shall not accept any Bid Cum
Application Form after the closing time of acceptance of Bids on the Bid/ Issue Closing Date.
6. The Bid Cum Application Form shall bear the stamp of the SCSBs and/or the Designated Branch, member of the
Syndicate at the Syndicate ASBA Bidding Locations as displayed on the website of SEBI
(http://www.sebi.gov.in/pmd/scsb-asba.html), if not, the same shall be rejected.
7. Bids may also be submitted may submit the application indicating the mode of payment to any registered broker
of the Stock Exchange having its office in any of the broker centre of the Stock Exchange.
Bidders may note that in case the DP ID, BAN and PAN mentioned in the Bid Cum Application Form, as the case
may be and entered into the electronic Bidding system of the Stock Exchange by the members of the Syndicate
and the SCSBs, as the case may be, do not match with the DP ID, BAN and PAN available in the Depository
database, the Bid Cum Application Form is liable to be rejected and our Company and the members of the
Syndicate shall not be liable for losses, if any.
For Bid Cum Application Form, the basis of allotment will be based on the Registrar’s validation of the electronic
Bid details with the Depository records, and the complete reconciliation of the final certificates received from the
Escrow Collection Banks with the electronic Bid details in terms of the SEBI circular CIR/CFD/DIL/3/2010 dated
April 22, 2010 and the SEBI circular CIR/CFD/DIL/1/2011 dated April 29, 2011. The Registrar to the Issue will
undertake technical rejections based on the electronic Bid details and the Depository database. In case of any
discrepancy between the electronic Bid data and the Depository records, our Company in consultation with the
Designated Stock Exchange, the BRLM, the Registrar and our Company, reserves the right to proceed as per the
Depository records or treat such Bid as rejected.
For ASBA Bids submitted to the SCSBs, in terms of the SEBI circular CIR/CFD/DIL/3/2010 dated April 22, 2010, the
Registrar to the Issue will reconcile the compiled data received from the Stock Exchange and all SCSBs, and
match the same with the Depository database for correctness of DP ID, BAN and PAN. In cases where any DP ID,
BAN and PAN mentioned in the Bid file for an ASBA Bidder does not match the one available in the Depository
database, our Company in consultation with the Designated Stock Exchange, the BRLM, the Registrar, reserves
the right to proceed as per the depository records on such ASBA Bids or treat such ASBA Bids as rejected. The
Registrar to the Issue will reject multiple ASBA Bids based on common PAN as available on the records of the
Depositories.
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For ASBA Bids submitted to the members of the Syndicate at the Syndicate ASBA Bidding Locations or the Broker
Centre, the basis of allotment will be based on the Registrar’s validation of the electronic Bid details with the
depository records, and the complete reconciliation of the final certificates received from the SCSBs with the
electronic Bid details in terms of the SEBI circular CIR/CFD/DIL/1/2011 dated April 29, 2011. The Registrar to the
Issue will undertake technical rejections based on the electronic Bid details and the depository database. In case
of any discrepancy between the electronic Bid data and the depository records, our Company in consultation
with the Designated Stock Exchange, the BRLM, the Registrar and our Company, reserves the right to proceed as
per the depository records or treat such Bid as rejected.
Based on the information provided by the Depositories, our Company shall have the right to accept or reject Bids
belonging to an account for the benefit of a minor (under guardianship).
Method and Process of bidding
1. The details of the Price Band and the minimum Bid lot size shall be advertised in one English national daily
newspaper, one Hindi national daily newspaper and one Malayalam newspaper with wide circulation at least five
Working Days prior to the Bid/ Issue Opening Date. This advertisement, subject to the provisions of Section 66 of
the Companies Act, shall be in the format prescribed in Schedule XIII of the SEBI ICDR Regulations. The Syndicate
and the SCSBs shall accept Bids from the Bidders during the Bid/Issue Period.
2. The Bid/Issue Period shall be a minimum of three Working Days and not exceeding twelve Working Days
(including the days for which the Issue is open in case of revision in Price Band). In case the Price Band is revised,
the revised Price Band and Bidding Period will be published in one English national daily, one Hindi national daily
and one Malayalam daily newspaper with wide circulation and the Bid/Issue Period may be extended, if required,
by an additional three Working Days, subject to the total Bid/Issue Period not exceeding twelve Working Days.
Any revision in the Price Band and the revised Bid/ Issue Period, if applicable, will be published in two national
newspapers (one each in English and Hindi) and one Malayalam daily newspaper with wide circulation, and also
by indicating the change on the website of the BRLM and at the terminals of the members of the Syndicate.
3. Each Bid cum Application Form will give the Bidder the choice to bid for upto three optional prices (for details
refer to the paragraph entitled “Bids at Different Price Levels” below) and specify the demand (i.e. the number of
Equity Shares bid for) in each option. The price and demand options submitted by the Bidder in the Bid cum
Application Form will be treated as optional demands from the Bidder and will not be cumulated. After
determination of the Issue Price, the maximum number of Equity Shares bid for by a Bidder at or above the Issue
Price will be considered for allocation and the rest of the Bid(s), irrespective of the Bid Price, will become
automatically invalid.
4. The Bidder cannot Bid on another Bid cum Application Form after his or her Bid on one Bid cum Application Form
have been submitted to any member of the Syndicate or the SCSBs. Submission of a second Bid cum Application
Form to either the same or to another member of the Syndicate or SCSBs will be treated as multiple Bids and is
liable to be rejected either before entering the Bid into the electronic bidding system, or at any point of time
prior to the allocation or Allotment of Equity Shares in this Issue. However, the Bidder can revise the Bid through
the Revision Form, the procedure for which is detailed under the paragraph titled “Buildup of the Book and
Revision of Bids”.
5. Except in relation to Bids received from the Anchor Investors, the members of the Syndicate/SCSBs will enter
each Bid option into the electronic bidding system as a separate Bid and generate a Transaction Registration Slip
(TRS) which would mention each price and demand option and give the same to the Bidder. Therefore, a Bidder
can receive a TRSs with upto three price and demand option for each Bid cum Application Form.
6. The BRLM shall accept Bids from the Anchor Investors during the Anchor Investor Bidding Date i.e. one Working
Day prior to the Bid Opening Date. Bids by Anchor Investors under the Anchor Investor Portion and the Net QIB
Portion shall not be considered as multiple Bids.
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7. During the Bid/Issue Period, Bidders may approach any member of the Syndicate to submit their Bid. The
member of the Syndicate shall accept Bids from all the Bidders and shall have the right to vet the Bids in
accordance with the terms of the Syndicate Agreement and the Draft Red Herring Prospectus. Bidders who wish
to use the ASBA process should approach the members of Syndicate at Syndicate ASBA Bidding Locations or the
Broker Centre or the Designated Branches of the SCSBs to register their Bids.
8. Along with the Bid cum Application Form, all Bidders will make payment in the manner described under the
paragraph ‘Issue Procedure - Payment Instructions’ on page 284 of the Draft Red Herring Prospectus.
9. Upon receipt of the Bid cum Application Form, submitted whether in physical or electronic mode, the Designated
Branch of the SCSB shall verify if sufficient funds equal to the Bid Amount are available in the ASBA Account, as
mentioned in the Bid cum Application Form, prior to uploading such Bids with the Stock Exchange.
10. If sufficient funds are not available in the ASBA Account, the Designated Branch of the SCSB shall reject such Bids
and shall not upload such Bids with the Stock Exchange.
11. If sufficient funds are available in the ASBA Account, the SCSB shall block an amount equivalent to the Bid
Amount mentioned in the Bid cum Application Form and will enter each Bid option into the electronic bidding
system as a separate Bid and generate a TRS for each price and demand option. The TRS shall be furnished to the
ASBA Bidder on request.
12. The Bid Amount shall remain blocked in the ASBA Account until approval of the Basis of Allotment and
consequent transfer of the Bid Amount against the Allotted Equity Shares to the Public Issue Account, or until
withdrawal/rejection of the Bid cum Application Form, as the case may be. Once the Basis of Allotment is
approved, the Registrar to the Issue shall send an appropriate request to the Controlling Branch of the SCSB for
unblocking the relevant ASBA Accounts and for transferring the amount allocable to the successful ASBA Bidders
to the Public Issue Account. In case of withdrawal/failure of the Issue, the blocked amount shall be unblocked on
receipt of such information from the Registrar to the Issue.
Please note that QIBs and Non-Institutional Bidders shall mandatorily submit their Bids through the ASBA process.
INVESTORS ARE ADVISED NOT TO SUBMIT THE BID CUM APPLICATION FORMS TO THE ESCROW COLLECTION
BANKS. BIDS SUBMITTED TO THE ESCROW COLLECTION BANKS SHALL BE REJECTED AND SUCH BIDDERS SHALL NOT
BE ENTITLED TO ANY COMPENSATION ON ACCOUNT OF SUCH REJECTION
Bids at Different Price Levels and Revision of Bids
The Bidders can Bid at any price within the Price Band, in multiples of 300 equity shares. The Price Band and the
minimum Bid Lot Size for the Issue shall be advertised in three daily newspapers (one in English, one in Hindi, and in
one Malayalam daily newspaper, with wide circulation, at least five Working Days prior to the Bid/Issue Opening Date.
1. In accordance with SEBI ICDR Regulations, our Company, in consultation with the BRLM, reserves the right to
revise the Price Band during the Bid/Issue Period, provided the Cap Price shall be less than or equal to 120% of
the Floor Price and the Floor Price shall not be less than the face value of the Equity Shares. The revision in Price
Band shall not exceed 20% on the either side i.e. the Floor Price can move up or down to the extent of 20% of the
Floor Price disclosed at least five Working Days prior to the Bid/ Issue Opening Date and the Cap Price will be
revised accordingly.
2. Our Company in consultation with the BRLM can finalise the Issue Price within the Price Band in accordance with
this clause, without the prior approval of, or intimation, to the Bidders.
3. Our Company, in consultation with the BRLM, can finalise the Anchor Investor Issue Price within the Price Band,
without prior approval of, or intimation to the Anchor Investors.
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4. Bidders can bid at any price within the Price Band. Bidders have to Bid for the desired number of Equity Shares at
a specific price. However, bidding at Cut-off Price is prohibited for QIBs and Non-Institutional Bidders and such
Bids from QIBs and Non-Institutional Bidders shall be rejected.
5. Retail Individual Bidders who Bid at the Cut-off Price agree that they shall acquire the Equity Shares at any price
within the Price Band. Retail Individual Bidders bidding at Cut-off Price shall deposit the Bid Amount based on the
Cap Price. In the event the Bid Amount is higher than the subscription amount payable by the Retail Individual
Bidders who Bid at Cut-off Price (i.e. the total number of Equity Shares allocated in the Issue multiplied by the
Issue Price), the Retail Individual Bidders, who Bid at Cut-off Price, shall receive the refund of the excess amounts
from the Refund Account(s). In case of ASBA Bidder bidding at Cut-off Price, the ASBA Bidders shall instruct the
SCSBs to block amount based on the Cap Price.
6. In case of an upward revision in the Price Band announced as above, Retail Individual Bidders who had bid at Cut-
Off Price could either (i) revise their Bid or (ii) make additional payment based on the cap of the revised Price
Band, with the members of the Syndicate or the SCSBs to whom the original Bid was submitted. In case the total
amount (i.e. original Bid Amount plus additional payment) exceeds `200,000, the Bid will be considered for
allocation under the Non Institutional Bidders category in terms of the Red Herring Prospectus. If, however, the
Bidder does not either revise the Bid or make additional payment and the Issue Price is higher than the cap of
the Price Band prior to revision, the number of Equity Shares Bid for shall be adjusted for the purpose of
allocation, such that no additional payment would be required from the Bidder and the Bidder is deemed to have
approved such revised Bid at Cut-off.
7. In case of a downward revision in the Price Band, Retail Individual Bidders who have bid at Cut-off Price could
either revise their Bid or the excess amount paid at the time of bidding would be refunded from the Refund
Account(s) or unblocked by the SCSBs, as applicable.
8. Our Company, in consultation with the BRLM, shall decide the minimum number of Equity Shares for each Bid to
ensure that the minimum application value is greater than `100,000.
IN ACCORDANCE WITH THE SEBI ICDR REGULATIONS, EQUITY SHARES WILL BE ISSUED, TRANSFERRED AND
ALLOTMENT SHALL BE MADE ONLY IN THE DEMATERIALISED FORM TO THE ALLOTTEES. ALLOTTEES WILL HAVE THE
OPTION TO RE-MATERIALISE THE EQUITY SHARES, IF THEY SO DESIRE, AS PER THE PROVISIONS OF THE COMPANIES
ACT AND THE DEPOSITORIES ACT. IT IS MANDATORY FOR ALL THE BIDDERS TO GET THEIR EQUITY SHARES IN
DEMATERIALISED FORM. ALL BIDDERS SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY
PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE BID CUM APPLICATION
FORM. INVESTORS MUST ENSURE THAT THE NAME GIVEN IN THE BID CUM APPLICATION FORM IS EXACTLY THE
SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE BID CUM APPLICATION FORM IS
SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME
JOINT NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE BID CUM APPLICATION FORM.
The trading of the Equity Shares of our Company would be in dematerialised form only for all investors in the demat
segment of the Stock Exchange. Bidders are advised to ensure that any single Bid from them does not exceed the
investment limits or maximum number of Equity Shares that can be held by them under the relevant laws, rules,
regulations, guidelines and approvals.
Escrow mechanism, terms of payment and payment into the Escrow Accounts
For details of the escrow mechanism and payment instructions, see “Issue Procedure – Payment Instructions” on page
284 of the Draft Red Herring Prospectus.
Electronic registration of bids
1. The members of the Syndicate and the SCSBs will register the Bids using the online facilities of the Stock
Exchange. There will be at least one online connectivity to each city where a stock exchange is located in India
and where the Bids are being accepted. The BRLM, our Company and the Registrar to the Issue are not
responsible for any acts, mistakes or errors or omission and commissions in relation to, (i) the Bids accepted by
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the members of the Syndicate and the SCSBs, (ii) the Bids uploaded by the members of the Syndicate and the
SCSBs, (iii) the Bids accepted but not uploaded by the members of the Syndicate and the SCSBs or (iv) with
respect to ASBA Bids, Bids accepted and uploaded without blocking funds in the ASBA Accounts. However, the
respective member of the Syndicate and / or the SCSBs shall be responsible for any errors in the Bid details
uploaded by them. It shall be presumed that for the Bids uploaded by the SCSBs, the Bid Amount has been
blocked in the relevant ASBA Account.
2. The Stock Exchange will offer a screen-based facility for registering Bids for the Issue. This facility will be available
on the terminals of the members of the Syndicate, their authorized agents and the SCSBs during the Bid/Issue
Period. The Syndicate Member and the Designated Branches can also set up facilities for off-line electronic
registration of Bids subject to the condition that they will subsequently download the off-line data file into the
online facilities for book building on a regular basis. On the Bid/Issue Closing Date, the members of the Syndicate
and the Designated Branches of the SCSBs shall upload the Bids till such time as may be permitted by the Stock
Exchange. This information will be available with the BRLM on a regular basis. Bidders are cautioned that a high
inflow of bids typically experienced on the last day of the bidding may lead to some Bids received on the last day
not being uploaded due to lack of sufficient uploading time, and such bids that could not be uploaded will not be
considered for allocation. Bids will only be accepted on working days, i.e., Monday to Friday (excluding any public
holiday).
3. The aggregate demand and price for Bids registered on the electronic facilities of NSE will be downloaded on a
regular basis, consolidated and displayed online at all bidding centers. A graphical representation of the
consolidated demand and price would be made available at the bidding centers and the website of the Stock
Exchange during the Bid/Issue Period along with category wise details.
4. At the time of registering each Bid, the member of the Syndicate shall enter the following details of the Bidder in
the online system:
Name of the Bidder(s): Bidders should ensure that the name given in the Bid cum Application Form is
exactly the same as the name in which the Depository Account is held. In case the Bid cum Application
Form is submitted in joint names, Bidders should ensure that the Depository Account is also held in the
same joint names and are in the same sequence in which they appear in the Bid cum Application Form;
Investor Category and sub category;
Numbers of Equity Shares Bid for;
Bid Amount;
Price option;
Cheque or Demand Draft Amount;
Cheque or Demand Number;
Bid cum Application Form number;
Depository Participant Identification Number and Client Identification Number of the Demat Account of
the Bidder; and
PAN, except for Bids on behalf of the Central and State Governments, residents of the state of Sikkim and
officials appointed by the courts
With respect to ASBA Bids, at the time of registering each Bid, the Designated Branches of the SCSBs or members of
the Syndicate at Syndicate ASBA Locations or Broker Centre, as applicable shall enter the following information as
applicable pertaining to the Bidder into the electronic bidding system:
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Bid cum Application Form number
PAN (of the First Bidder, in case of more than one Bidder)
Investor Category and sub-category as outlined below
DP ID
Client ID
Number of Equity Shares Bid for
Price per Equity Share (price option) and Bid Amount
Bank Account Number of the ASBA Bidder or the person whose account is being used to apply for the
ASBA processs
Bank code for the SCSB where the ASBA Account is maintained
Location of Syndicate ASBA Bidding Locations
Sub Categories:
Retail Non-institutional QIBs
(No sub category)
- Individual
- Corporate
- Other
- Mutual Funds
- Financial Institutions
- Insurance companies
- Foreign Institutional Investors other than corporate and individual
- Sub- accounts
- Other
5. A system generated TRS will be given to the Bidder as a proof of the registration of each of the bidding options. It
is the Bidder’s responsibility to request and obtain the TRS from the member of the Syndicate or the Designated
Branches of the SCSBs. The registration of the Bid by the member of the Syndicate or the Designated Braches of
the SCSBs does not guarantee that the Equity Shares shall be allocated either by the BRLM or the Syndicate
Member or our Company.
6. Such TRS will be non-negotiable and by itself will not create any obligation of any kind.
7. In case of QIB Bidders, bidding in the QIB Portion, the BRLM or Syndicate Members can reject the Bids at the time
of accepting the Bid provided that the reason for such rejection is provided in writing. Bids under the Non-
Institutional Portion and Bids under the Retail Individual Portion would not be rejected except on the technical
grounds listed in the Draft Red Herring Prospectus. The members of the Syndicate may also reject Bids if all the
information required is not provided and the Bid cum Application Form is incomplete in any respect. The SCSB shall
have no right to reject Bids except on technical grounds.
8. It is to be distinctly understood that the permission given by the Stock Exchange to use their network and software
of the Online IPO system should not in any way be deemed or construed to mean that the compliance with various
statutory and other requirements by our Company and the BRLM are cleared or approved by the Stock Exchange;
nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the compliance
with the statutory and other requirements nor does it take any responsibility for the financial or other soundness
of our Company, our Promoters, our management or any scheme or project of our Company; nor does it in any
manner warrant, certify or endorse the correctness or completeness of any of the contents of the Draft Red
Herring Prospectus; nor does it warrant that the Equity Shares will be listed or will continue to be listed on the
Stock Exchange.
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9. Only Bids that are uploaded on the online IPO system of the Stock Exchange shall be considered for allocation/
Allotment. The members of the Syndicate will be given upto one day after the Bid/Issue Closing Date to verify DP
ID and Client ID uploaded in the online IPO system during the Bid/Issue Period after which the data will be sent to
the Registrar to the Issue for reconciliation and Allotment of Equity Shares. In case of discrepancy of data between
NSE and the members of the Syndicate or the Designated Branches of the SCSBs, the decision of our Company, in
consultation with the BRLM and the Registrar to the Issue, shall be final and binding on all concerned.
10. Details of Bids in the Anchor Investor Portion will not be registered on the on-line facilities of electronic facilities of
the Stock Exchange.
Buildup of the book and revision of bids
1. The bidding process shall be only through an electronically linked transparent bidding facility provided by the
Stock Exchange. Bids registered by various Bidders (other than Anchor Investors) through the members of the
Syndicate and SCSBs shall be electronically transmitted to the NSE mainframe on a regular basis.
2. The book gets built up at various price levels. This information will be available with the BRLM on a regular basis
at the end of each day of the Bid/Issue Period. It will also be available on the website of the NSE at
www.nseindia.com.
3. During the bidding Period, any Bidder who has registered his or her interest in the Equity Shares at a particular
price level is free to revise his or her Bid within the price band using the printed Revision Form, which is a part of
the Bid cum Application Form.
4. Revisions can be made in both the desired number of Equity Shares and the Bid Amount by using the Revision
Form. Apart from mentioning the revised options in the Revision Form, the Bidder must also mention the details
of all the options in his or her Bid cum Application Form or earlier Revision Form. For example, if a Bidder has bid
for three options in the Bid cum Application Form and he is changing only one of the options in the Revision
Form, he must still fill the details of the other two options that are not being changed, in the Revision Form.
Incomplete or inaccurate Revision Forms will not be accepted by the members of the Syndicate and the
Designated Branches of the SCSBs.
5. The Bidder can make this revision any number of times during the bidding Period. However, for any revision(s) of
the Bid, the Bidders will have to use the services of the same members of the Syndicate or the SCSB through
whom the Bidder had placed the original Bid. Bidders are advised to retain copies of the blank Revision Form and
the revised Bid must be made only in such Revision Form or copies thereof. QIB Bidders and Non-Institutional
Bidders may revise their Bids upwards (in terms of quantity of Equity Shares or Bid Amount) during the Bidding
Period. Such upward revision must be made using the Revision Form.
6. In case of an upward revision in the Price Band announced as above, Retail Individual Bidders who had Bid at Cut-
off Price could either (i) revise their Bid or (ii) shall make additional payment based on the cap of the revised
Price Band (such that the total amount i.e., original Bid Amount plus additional payment does not exceed
`2,00,000 if the Bidder wants to continue to Bid at Cut-off Price), with the members of the Syndicate to whom
the original Bid was submitted. In case the total amount (i.e., original Bid Amount plus additional payment)
exceeds `2,00,000, the Bid will be considered for allocation under the Non-Institutional Portion in terms of the
Draft Red Herring Prospectus. If, however, the Bidder does not either revise the Bid or make additional payment
and the Issue Price is higher than the cap of the Price Band prior to revision, the number of Equity Shares Bid for
shall be adjusted downwards for the purpose of allocation, such that no additional payment would be required
from the Bidder and the Bidder is deemed to have approved such revised Bid at Cut-off Price.
7. In case of a downward revision in the Price Band, announced as above, Retail Individual Bidders, who have bid at
Cut-off Price could either revise their Bid or the excess amount paid at the time of bidding would be refunded
from the Refund Account.
8. Any revision of the Bid shall be accompanied by payment in the form of cheque or demand draft for the
incremental amount, if any, to be paid on account of the upward revision of the Bid. The excess amount, if any,
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resulting from downward revision of the Bid would be returned to the Bidder at the time of refund in accordance
with the terms of the Red Herring Prospectus. With respect to the ASBA Bids, if revision of the Bids results in an
incremental amount, the relevant SCSB shall block the additional Bid amount. In case of Bids, other than ASBA
Bids, the members of the Syndicate shall collect the payment in the form of cheque or demand draft, as
applicable, to be paid on account of upward revision of the Bid at the time of one or more revisions. In such
cases, the members of the Syndicate will revise the earlier Bid details with the revised Bid and provide the
cheque or demand draft number of the new payment instrument in the electronic book. The Registrar to the
Issue will reconcile the Bid data and consider the revised Bid data for preparing the Basis of Allotment.
9. When a Bidder revises his or her Bid, he or she shall surrender the earlier TRS and get a revised TRS from the
member of the Syndicate or SCSBs, as applicable. It is the responsibility of the Bidder to request for and obtain
the revised TRS, which will act as proof of his or her having revised the previous Bid.
10. The Syndicate Members may modify selected fields (viz. DP ID and Client ID) in the Bid details already uploaded
upto one day post the Bid/Issue Closing Date.
Price discovery and allocation
After the Bid/Issue Closing Date, the BRLM will analyze the demand generated at various price levels and discuss
pricing strategy with our Company. Our Company, in consultation with BRLM, shall finalise the Issue Price and Anchor
Investor Allocation Price, the number of Equity Shares to be allotted and the allocation to successful Bidders.
1. 50% of the Issue (including 5% of QIB Portion specifically reserved for Mutual Funds) would be available for
allocation on a proportionate basis to QIBs (other than Anchor Investors) after consultation with Designated
Stock Exchange, subject to valid Bids being received at or above the Issue Price.
2. Not less than 15% and not less than 35% of the Issue, would be available for allocation on a proportionate basis
to Non-Institutional Bidders and Retail Individual Bidders, respectively, in consultation with Designated Stock
Exchange, subject to valid Bids being received at or above the Issue Price.
3. Under subscription, if any, in any category would be allowed to be met with spill over from any of the other
categories at the discretion of our Company in consultation with the BRLM. However, if the aggregate demand
by Mutual Funds is less than 11,700 Equity Shares, the balance Equity Shares available for allocation in the
Mutual Fund Portion will first be added to the QIB Portion and be allocated proportionately to the QIB Bidders.
4. Allocation to eligible NRIs or FIIs or Foreign Venture Capital Investor registered with SEBI, Multilateral and
Bilateral Development Financial Institutions applying on repatriation basis will be subject to applicable laws,
rules, regulations, guidelines and approvals.
5. Our Company reserves the right to withdraw the Issue any time after the Bid/Issue Closing Date but before
Allotment and the reasons thereof shall be given as a public notice within two days of the Bid/Issue Closing Date.
The public notice will be issued in the same newspapers where the statutory pre-Issue advertisements had
appeared. Further the Stock Exchange will also be informed promptly.
6. In terms of SEBI ICDR Regulations, QIB bidders bidding in the QIB Portion and Non-Institutional bidders shall not
be allowed to withdraw nor lower the size of their Bid at any stage. Further, the Anchor Investors shall not be
allowed to withdraw their Bids after the Anchor Investor Bidding Date.
7. Allocation to Anchor Investors shall be at the discretion of our Company in consultation with the BRLM, subject
to compliance with the SEBI ICDR Regulations.
8. The Basis of Allotment details shall be put up on the website of the Registrar to the Issue.
Signing of underwriting agreement and RoC filing
1. Our Company, the BRLM and the Syndicate Member have entered into an Underwriting Agreement on [●].
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2. For terms of the Underwriting Agreement please see “General Information” on page 15 of the Draft Red Herring
Prospectus.
Filing with the RoC
We will file a copy of the Red Herring Prospectus and Prospectus with the RoC in terms of Section 56, Section 60 and
Section 60B of the Companies Act.
Pre-Issue advertisement
Subject to Section 66 of the Companies Act, our Company shall, after registering the Red Herring Prospectus with the
RoC, publish a pre-Issue advertisement, in the form prescribed by the SEBI ICDR Regulations, in one English language
national daily newspaper, one Hindi language national daily newspaper and one Malayalam language newspaper with
wide circulation.
Advertisement regarding Issue Price and Prospectus
A statutory advertisement will be issued by our Company after the filing of the Prospectus with the RoC in an English
national daily newspaper, a Hindi national daily newspaper and a Malayalam daily newspaper, each with wide
circulation. This advertisement, in addition to the information that has to be set out in the statutory advertisement,
shall indicate the Issue Price and Anchor Investor Issue Price, in the event Anchor Investors participate in this Issue.
Any material updates between the Red Herring Prospectus and the Prospectus will be included in such statutory
advertisement.
Issuance of Confirmation of Allocation Note (“CAN”)
1. Upon approval of Basis of Allotment by the Designated Stock Exchange, the Registrar to the Issue shall send to the
BRLM and Syndicate Members a list of their Bidders who have been allocated Equity Shares in the Issue. The
approval of the Basis of Allocation by the Designated Stock Exchange for QIB Bidders (including Anchor
Investors) may be done simultaneously with or prior to the approval of the Basis of Allocation for the Retail
and Non-Institutional Bidders. However, Bidders should note that our Company shall ensure that (i) the
Allotment of the Equity Shares and (ii) the instructions by our Company for the demat credit of the Equity
Shares, to all Bidders in this Issue shall be done on the same date. For Anchor Investors, see “Notice to
Anchor Investors: Allotment reconciliation and intimation” below.
2. The Registrar to the Issue will then dispatch the CAN to the Bidders who have been allocated Equity Shares in the
Issue.
3. The Issuance of CAN shall be deemed a valid, binding and irrevocable contract for the Allotment of Equity Shares
to such Bidder.
4. Bidders who have been allocated Equity Shares and who have already paid the Bid Amount into the Escrow
Account(s) at the time of bidding shall directly receive the CAN from the Registrar to the Issue subject,
however, to realisation of his or her cheque or demand draft paid into the Escrow Account(s). The dispatch of
a CAN shall be deemed a valid, binding and irrevocable contract for the Bidder.
Notice to QIBs bidding in the QIB Portion: allotment reconciliation and revised CANs
QIBs bidding in the QIB Portion will be sent a CAN, indicating the number of Equity Shares that may be allocated to
them after the final Basis of Allotment, as approved by the Designated Stock Exchange and reflected in the reconciled
physical book prepared by the Registrar to the Issue. The CAN will constitute a valid, binding and irrevocable contract
(subject only to the issue of a revised CAN, if any). Any revised CAN, if issued, will supersede in its entirety the earlier
CAN.
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Notice to Anchor Investors: Allotment reconciliation and intimation
A physical book will be prepared by the Registrar to the Issue on the basis of the Bid cum Application Forms received
from Anchor Investors. Based on the physical book and at the discretion of our Company, in consultation with the
BRLM, selected Anchor Investors will be sent an Anchor Investor CAN and if required, a revised Anchor Investor CAN.
All Anchor Investors will be sent an Anchor Investor CAN post the Anchor Investor Bidding Date and in the event that
the Issue Price is higher than the Anchor Investor Allocation Price, the Anchor Investors will be sent a revised Anchor
Investor CAN within one day of the Pricing Date indicating the number of Equity Shares allocated to such Anchor
Investor and the Pay-in Date for payment of the balance amount. Anchor Investors should note that they shall be
required to pay any additional amounts, being the difference between the Issue Price and the Anchor Investor
Allocation Price, as indicated in the revised Anchor Investor CAN within the Pay-in Date referred to in the revised
Anchor Investor CAN. The revised Anchor Investor CAN will constitute a valid, binding and irrevocable contract
(subject to the issue of CANs) for the Anchor Investor to pay the difference between the Issue Price and the price at
which allocation is being done to the Anchor Investors and accordingly, the CANs will be issued to such Anchor
Investors. In the event the Issue Price is lower than the price at which allocation is being done to the Anchor Investors,
the Anchor Investors who have been Allotted Equity Shares will directly receive CANs. The CANs shall be deemed a
valid, binding and irrevocable contract for the Allotment of equity Shares to such Anchor Investors.
The final allocation is subject to the physical application being valid in all respect along with receipt of stipulated
documents and Allotment by the Board of Directors or any committee thereof.
Unblocking of ASBA account
Once the Basis of Allotment is approved by the Designated Stock Exchange, the Registrar to the Issue shall provide the
following details to the Controlling Branches of each SCSB, along with instructions to unblock the relevant bank
accounts and transfer the requisite money to the Public Issue Account designated for this purpose, within the
timelines specified in the ASBA facility: (i) the number of Equity Shares to be Allotted against each valid ASBA Bid, (ii)
the amount to be transferred from the relevant bank account to the Public Issue Account, for each valid ASBA Bid, (iii)
the date by which funds referred to in above shall be transferred to the Public Issue Account, and(iv) details of
rejected ASBA Bids, if any, along with reasons for rejection and details of withdrawn and/or unsuccessful ASBA Bids, if
any, to enable SCSBs to unblock the respective bank accounts. On the basis of instructions from the Registrar to the
Issue, the SCSBs shall transfer the requisite amount against each successful ASBA Bidder to the Public Issue account
and shall unblock the excess amount, if any, in the ASBA account. However, the Bid Amount may be unblocked in the
ASBA Account prior to receipt of notification from the Registrar to the Issue by the Controlling Branch of the SCSB in
relation to the approval of the Basis of Allotment in the Issue by the Designated Stock Exchange in the event of
withdrawal or failure of the Issue or rejection of the ASBA Bid, as the case may be.
Designated Date and Allotment of Equity Shares
1. Our Company will ensure that (i) Allotment of Equity Shares; and (ii) credit to the successful Bidder’s
depository account will be completed within twelve Working Days of the Bid/Issue Closing Date. After the
funds are transferred from the Escrow Account to the Public Issue Account on the Designated Date, our
Company will ensure that the credit of Equity Shares to the successful Bidder’s Depository Account is
completed within two Working Days from the date of Allotment.
2. As per SEBI ICDR Regulations, Equity Shares will be issued and Allotment shall be made only in the
dematerialised form to the Allottees. Allottees will have the option to re-materialise the Equity Shares, if they
so desire, in the manner stated in the Depositories Act.
Investors are advised to instruct their Depository Participant to accept the Equity Shares that may be allotted to
them pursuant to this Issue.
General Instructions
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Do’s:
1) Check if you are eligible to apply;
2) Check by which route you are eligible to Bid i.e. Non-ASBA route or ASBA route
3) Read all the instructions carefully and complete the Bid cum Application Form;
4) Ensure that the details about Depository Participant and Beneficiary Account are correct as Allotment of
Equity Shares will be in the dematerialized form only;
5) Ensure that the Bids are submitted at the bidding centres only on forms bearing the stamp of the BRLM or
Syndicate Member. With respect to ASBA Bidders ensure that your Bid is submitted (i) at a Designated Branch
of the SCSB where the ASBA Bidders or the person whose bank account will be utilised by the ASBA Bidder for
bidding has a bank account or (ii) to a member of the Syndicate at Syndicate ASBA Bidding Locations (iii) to
the Broker Centre;
6) With respect to ASBA Bids ensure that the Bid cum Application Form is signed by the account holder in case
the applicant is not the account holder. Ensure that you have mentioned the correct bank account number in
the Bid cum Application Form;
7) Ensure that you have requested for and receive a TRS containing your Bid options;
8) Ensure that you have funds equal to the Bid Amount in your bank account maintained with the SCSB before
submitting the Bid cum Application Form to the respective Designated Branch of the SCSB or to the member
of the Syndicate at Syndicate ASBA Bidding Locations or the Broker Centre;
9) Instruct your respective banks to not release the funds blocked in the bank account under the ASBA process;
10) Ensure that the full Bid Amount is paid for the Bids submitted to the members of the Syndicate and funds
equivalent to the Bid Amount are blocked in case of any Bids submitted though the SCSBs;
11) Submit revised Bids to the same member of the Syndicate through whom the original Bid was placed and
obtain a revised TRS;
12) Ensure that the Bid is within the Price Band;
13) Ensure that the Demographic Details (as defined herein below) are updated, true and correct in all respects.
14) Ensure that the name(s) given in the Bid cum Application Form is exactly the same as the name(s) in which
the beneficiary account is held with the Depository Participant. In case the Bid cum Application Form is
submitted in joint names, ensure that the beneficiary account is also held in same joint names and such
names are in the same sequence in which they appear in the Bid cum Application Form.
15) In the event you are a QIB or a Non-Institutional Bidder, ensure that you have applied through the ASBA
process.
16) Ensure that in the event a Bid cum Application form is submitted at the terminals of the Syndicate Members
and the payment is proposed to be made through the ASBA process, the SCSB with whom the payment is to
be blocked has a branch at any of the bidding centres referred to in the Circular.
17) Ensure that the Bid cum Application Forms submitted at the Bidding Centres bear the stamp of the members
of the Syndicate;
18) Except for Bids (i) on behalf of the Central or State Governments and the officials appointed by the courts,
who, in terms of a SEBI circular dated June 30, 2008, may be exempt from specifying their PAN for transacting
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in the securities market, and (ii) Bids by persons resident in the state of Sikkim, who, in terms of a SEBI
circular dated July 20, 2006, may be exempted from specifying their PAN for transacting in the securities
market, all Bidders should mention their PAN allotted under the Income Tax Act, 1961. The exemption for the
Central or State Government and officials appointed by the courts and for investors residing in the State of
Sikkim is subject to (a) the demographic details received from the respective depositories confirming the
exemption granted to the beneficiary owner by a suitable description in the PAN field and the beneficiary
account remaining in “active status”; and (b) in the case of residents of Sikkim, the address as per the
demographic details evidencing the same;
19) Ensure that thumb impressions and signatures other than in the languages specified in the Eighth Schedule to
the Constitution of India are attested by a Magistrate or a Notary Public or a Special Executive Magistrate
under official seal;
Don’ts:
1) Do not Bid for lower than the minimum Bid size;
2) Do not Bid/ revise Bid price to less than the Floor Price or higher than the Cap Price;
3) Do not Bid on another Bid cum Application Form after you have submitted a Bid to the member of the
Syndicate or the SCSB, as applicable;
4) Do not pay the Bid amount in cash, by money order or by postal order;
5) Do not provide your GIR number instead of your PAN number.
6) Do not send Bid cum Application Forms by post; instead submit the same to members of the Syndicate or the
SCSBs, as applicable;
7) Do not Bid at Cut-off price (for QIBs and Non-Institutional Bidders);
8) Do not Bid for a Bid Amount exceeding `2,00,000 (for Bids by Retail Individual Bidders);
9) Do not fill up the Bid cum Application Form such that the Equity Shares bid for exceeds the Issue size and/ or
investment limit or maximum number of Equity Shares that can be held under the applicable laws or
regulations or maximum amount permissible under the applicable regulations;
10) Do not submit Bid accompanied with Stock invest; and
11) Do not make payment through cheques/ demand drafts in the event you are a QIB or a Non-Institutional
Shareholder.
INSTRUCTIONS SPECIFIC TO ASBA BIDDERS
Do’s:
1) Ensure that you specify ASBA as the ‘Mode of Application’ and use the Bid cum Application Form bearing the
stamp of the relevant SCSB or the members of the Syndicate (except in case of electronic Bid cum Application
Forms );
2) Read all the instructions carefully and complete the Bid cum Application Form;
3) Ensure that your Bid cum Application Form is submitted at a Designated Branch where the ASBA Account is
maintained and not to the Escrow Collecting Banks (assuming that such bank is not a SCSB), to our Company, or
the Registrar to the Issue or the BRLM;
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4) In case of Bid cum Application Form submitted to a member of the Syndicate at the Syndicate ASBA Bidding
Locations, ensure that the SCSB where the ASBA Account is maintained as specified in the Bid cum Application
Form, has named at-least one branch as displayed on the website of SEBI in the Syndicate ASBA Bidding
Locations for the members of the Syndicate to deposit Bid cum Application Form;
5) Ensure that the Bid cum Application Form is signed by the ASBA Account holder in case the ASBA Bidder is not
the account holder;
6) Ensure that you have mentioned the correct ASBA Account number in the Bid cum Application Form;
7) Ensure that you have funds equal to the Bid Amount in the ASBA Account before submitting the Bid cum
Application Form to the respective Designated Branch or to the members of the Syndicate at the Syndicate ASBA
Bidding Locations or the Broker Centre;
8) Ensure that you have correctly checked the authorisation box in the Bid cum Application Form, or have otherwise
provided an authorisation to the SCSB via the electronic mode, for blocking funds in the ASBA Account equivalent
to the Bid Amount mentioned in the Bid cum Application Form;
9) Ensure that you receive an acknowledgement from the Designated Branch or from the members of the Syndicate
at the Syndicate ASBA Bidding Locations or the Broker Centre, as the case maybe, for the submission of your Bid
cum Application Form; and
10) Ensure that the name(s) given in the Bid cum Application Form is exactly the same as the name(s) in which the
beneficiary account is held with the Depository Participant. In case the Bid cum Application Form is submitted in
joint names, ensure that the beneficiary account is also held in same joint names and such names are in the
same sequence in which they appear in the Bid cum Application Form.
Don'ts:
1) Do not Bid on another Bid cum Application Form after you have submitted a Bid to a Designated Branch or to the
members of the Syndicate at the Syndicate ASBA Bidding Locations or the Broker Centre;
2) Payment of Bid Amounts in any mode other than through blocking of Bid Amounts in the ASBA Accounts shall not
be accepted under the ASBA;
3) Do not send your physical Bid cum Application Form by post. Instead submit the same to a Designated Branch or
to a member of the Syndicate at the Syndicate ASBA Bidding Location;
4) Do not submit more than five Bid cum Application Form per ASBA Account;
5) Do not submit the Bid cum Application Form with a member of the Syndicate at a location other than the
Syndicate ASBA Bidding Locations or the Broker Centre; and
6) Do not submit ASBA Bids to a member of the Syndicate at the Syndicate ASBA Bidding Locations unless the SCSB
where the ASBA Account is maintained as specified in the Bid cum Application Form, has named at-least one
branch, as displayed on the SEBI website http://www.sebi.gov.in/cms/sebi_data/attachdocs
/1355898148848.html in the relevant Syndicate ASBA Bidding Locations for the members of the Syndicate to
deposit Bid cum Application Form.
Instructions for completing the Bid cum Application Form
Bidders can obtain Bid cum Application Forms and / or Revision Forms from the any of the member of the Syndicate
or from our Registered Office. Bid cum Application Forms can be obtained from the Designated Branches of the
SCSBs. Bid cum Application Forms shall also be available at the website of the stock exchange at
www.nseindia.com. Syndicate/ sub-syndicate members may also procure Bid cum Application Forms directly from
the investors and submit it to the SCSBs and shall upload the Bid and other details of such Bid cum Application
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Forms in the bidding platform provided by the stock exchange and forward the same to the respective SCSBs. The
SCSBs shall verify the signatures of such applicants block the requisite quantum of funds and forward these forms
to the Registrar.
Bids and revisions of Bids must be:
1) Made only in the prescribed Bid cum Application Form or Revision Form, as applicable.
2) Completed in full, in BLOCK LETTERS in ENGLISH and in accordance with the instructions contained herein, in
the Bid cum Application Form or in the Revision Form. Incomplete Bid cum Application Forms or Revision
Forms are liable to be rejected. Bidders should note that the members of the Syndicate and / or the SCSBs (as
appropriate) will not be liable for errors in data entry due to incomplete or illegible Bid cum Application
Forms or Revision Forms.
3) Information provided by the Bidders will be uploaded in the online IPO system by the members of the
Syndicate and SCSBs, as the case may be, and the electronic data will be used to make allocation/Allotment.
Please ensure that the details are correct and legible.
4) The Bids from the Retail Individual Bidders must be for a minimum of 300 Equity Shares and in multiples of
300 thereafter subject to a maximum Bid amount of `200,000.
5) For Non-institutional and QIB Bidders, bidding under the QIB Portion, Bids must be for a minimum of such
number of Equity Shares such that the Bid Amount exceeds `200,000 and in multiples of 300 Equity Shares
thereafter. All Individual Bidders whose maximum bid amount exceeds `200,000 would be considered under
this category. Bids cannot be made for more than the Issue Size. Bidders are advised to ensure that a single
Bid from them should not exceed the investment limits or maximum number of Equity Shares that can be
held by them under the applicable laws or regulations.
6) In single name or in joint names (not more than three and in the same order as their Depository Participant
details).
7) Thumb impressions and signatures other than in the languages specified in the Eighth Schedule in the
Constitution of India must be attested by a Magistrate or a Notary Public or a Special Executive Magistrate
under official seal.
8) Bids through ASBA must be:
(i) made only in the prescribed Bid cum Application Form or Revision Forms (if submitted in
physical mode) or the electronic mode.
(ii) made in single name or in joint names (not more than three, and in the same order as their
details appear with the Depository Participant).
(iii) completed in full, in BLOCK LETTERS in ENGLISH and in accordance with the instructions
contained in this Draft Red Herring Prospectus and in the Bid cum Application Form.
9) If the ASBA Account holder is different from the ASBA Bidder, the Bid cum Application Form should be signed
by the ASBA Account holder, in accordance with the instructions provided in the Bid cum Application Forms.
Bidder’s Depository Account and Bank Account Details
Bidders should note that on the basis of the Permanent Account Number of the Sole/First Bidder, Depository
Participant’s name, Depository Participant-Identification number and Beneficiary Account Number provided by
them in the Bid cum Application Form, the Registrar to the Issue will obtain from the Depository the demographic
details including category, age, address, Bidders bank account details, MICR code and occupation (hereinafter
referred to as ‘Demographic Details’). These Bank Account details would be used for giving refunds (including
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through physical refund warrants, direct credit, ECS/NECS, NEFT and RTGS) to the Bidders or unblocking the ASBA
account. Hence, Bidders are advised to immediately update their Bank Account details as appearing on the records
of the depository participant. Please note that failure to do so could result in delays in despatch/ credit of refunds
to Bidders at the Bidders sole risk and neither the BRLM nor our Company shall have any responsibility and
undertake any liability for the same. Hence, Bidders should carefully fill in their Depository Account details in the
Bid cum Application Form.
IT IS MANDATORY FOR ALL THE BIDDERS TO GET THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL BIDDERS
SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER
AND BENEFICIARY ACCOUNT NUMBER IN THE BID CUM APPLICATION FORM. INVESTORS MUST ENSURE THAT THE
NAME GIVEN IN THE BID CUM APPLICATION FORM IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY
ACCOUNT IS HELD. IN CASE THE BID CUM APPLICATION FORM IS SUBMITTED IN JOINT NAMES, IT SHOULD BE
ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN THE SAME
SEQUENCE IN WHICH THEY APPEAR IN THE BID CUM APPLICATION FORM.
These Demographic Details would be used for all correspondence with the Bidders including mailing of the
CANs/Allocation Advice and making refunds as per the modes disclosed and the Demographic Details given by Bidders
in the Bid cum Application Form would not be used for any other purposes by the Registrar to the Issue. Hence,
Bidders are advised to update their Demographic Details as provided to their Depository Participants and ensure that
they are true and correct. By signing the Bid cum Application Form, Bidder would have deemed to authorize the
depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on
its records.
Refund orders (where refunds are not being made electronically)/Allocation Advice/CANs would be mailed at the
address of the Bidder as per the Demographic Details received from the Depositories. Such communication may get
delayed if the same once sent to the address obtained from the depositories are returned undelivered. In such an
event, the address and other details given by the Bidder (other than ASBA Bidders) in the Bid cum Application Form
would be used only to ensure dispatch of refund orders. Please note that any such delay shall be at the Bidders sole
risk and neither our Company, the Registrar to the Issue, Escrow Collection Bank(s) nor the BRLM shall be liable to
compensate the Bidder for any losses caused to the Bidder due to any such delay or liable to pay any interest for
such delay.
In case no corresponding record is available with the Depositories that matches three parameters, namely, PAN of the
sole/first Bidder, the Depository Participant’s identity (DP ID) and the beneficiary’s identity, then such Bids are liable
to be rejected.
Bids by Non-Residents, NRIs, FIIs and Foreign Venture Capital Investors registered with SEBI on a repatriation basis.
Bids and revision to Bids must be made in the following manner:
1) On the Bid cum Application Form or the Revision Form, as applicable (Blue in colour), and completed in full in
BLOCK LETTERS in ENGLISH in accordance with the instructions contained therein.
2) In a single name or joint names (not more than three and in the same order as their Depository Participant
Details).
3) Bids on a repatriation basis shall be in the names of individuals, or in the name of FIIs but not in the names of
minors, OCBs, firms or partnerships, foreign nationals (excluding NRIs) or their nominees. Bids by Eligible NRIs
for a Bid Amount of upto `200,000 would be considered under the Retail Portion for the purposes of
allocation and Bids for a Bid Amount of more than `200,000 would be considered under Non-Institutional
Portion for the purposes of allocation.
Refunds, dividends and other distributions, if any, will be payable in Indian Rupees only and net of bank charges
and / or commission. In case of Bidders who remit money through Indian Rupee drafts purchased abroad, such
payments in Indian Rupees will be converted into US Dollars or any other freely convertible currency as may be
permitted by the RBI at the rate of exchange prevailing at the time of remittance and will be dispatched by
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registered post or if the Bidders so desire, will be credited to their NRE accounts, details of which should be
furnished in the space provided for this purpose in the Bid cum Application Form. Our Company will not be
responsible for loss, if any, incurred by the Bidder on account of conversion of foreign currency.
As per the existing policy of the Government of India, OCBs are not permitted to participate in the Issue. The RBI
has however clarified in its circular, A.P. (DIR Series) Circular No. 44, dated December 8, 2003 that OCBs which are
incorporated and are not under the adverse notice of the RBI are permitted to undertake fresh investments as
incorporated non-resident entities in terms of Regulation 5(1) of RBI Notification No.20/2000-RB dated May 3, 2000
under FDI Scheme with the prior approval of Government if the investment is through Government Route and with
the prior approval of RBI if the investment is through Automatic Route on case by case basis. OCBs may invest in
this Issue provided it obtains a prior approval from the RBI. On submission of such approval along with the Bid cum
Application Form, the OCB shall be elgibible to be considered for share allocation.
There is no reservation for Eligible NRIs and FIIs and all Bidders will be treated on the same basis with other
categories for the purpose of allocation.
Payment Instructions
Payment mechanism for ASBA Bidders
The ASBA Bidders shall specify the bank account number in the Bid cum Application Form and the SCSB shall block an
amount equivalent to the Bid Amount in the bank account specified in the Bid cum Application Form. The SCSB shall
keep the Bid Amount in the relevant bank account blocked until receipt of instructions from the Registrar to the Issue
to unblock the Bid Amount. The Bid Amount shall remain blocked in the ASBA Account until finalisation of the Basis of
Allotment in the Issue and consequent transfer of the Bid Amount to the Public Issue Account.
Further, in terms of the SEBI circular CIR/CFD/DIL/1/2013 dated January 2, 2013 it is clarified that for making
applications by banks on own account using ASBA facility, SCSBs should have a separate bank account in own name
with any other SEBI registered SCSB(s). Such account is used solely for the purpose of making application in public
issues and clear demarcated funds should be available in such account for ASBA applications.
Payment into Escrow Account for Bidders other than ASBA Bidders
This section is applicable only for Retail Individual Bidders.
Our Company and the BRLM shall open Escrow Accounts with one or more Escrow Collection Banks in whose favor the
Bidders shall make out the cheque or demand draft in respect of their Bid and/or revision of the Bid. Cheques or
demand drafts received for the full Bid Amount from Bidders in a certain category would be deposited in the Escrow
Account. The Escrow Collection Bank(s) will act in terms of the Red Herring Prospectus and the Escrow Agreement
entered into amongst our Company, the BRLM, Escrow Collection Bank(s) and Registrar to the Issue. The monies in the
Escrow Account shall be maintained by the Escrow Collection Bank(s) for and on behalf of the Bidders. The Escrow
Collection Bank(s) shall not exercise any lien whatsoever over the monies deposited therein and shall hold the monies
therein in trust for the Bidders. On the Designated Date, the Escrow Collection Bank(s) shall transfer the monies from
the Escrow Account to the Public Issue Account with the Bankers to the Issue as per the terms of the Escrow
Agreement. The balance amount after transfer to the Public Issue account shall be transferred to the Refund Account.
Payments of refunds to the Bidders shall also be made from the Refund Account as per the terms of the Escrow
Agreement and the Red Herring Prospectus.
The Bidders should note that the escrow mechanism is not prescribed by SEBI and has been established as an
arrangement between the Escrow Collection Bank(s), our Company, Registrar to the Issue and BRLM to facilitate
collection from the Bidders
Each Bidder shall draw a cheque or demand draft for the amount payable on the Bid and/or on allocation/Allotment
as per the following terms:
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1) All Bidders would be required to pay the full Bid Amount at the time of the submission of the Bid cum
Application Form.
2) The Bidders shall, with the submission of the Bid cum Application Form, draw a payment instrument for the
Bid Amount in favour of the Escrow Account and submit the same to the members of the Syndicate, as
applicable. If the payment is not made favouring the Escrow Account along with the Bid cum Application
Form, the Bid of the Bidder shall be liable to be rejected.
3) The payment instruments for payment into the Escrow Account should be drawn in favor of:
a. In case of resident Anchor Investors: “Escrow Account – MobME Wireless Solutions Limited – Initial Public
Offer - Anchor Investor – R”;
b. In case of Non-Resident Anchor Investors: “Escrow Account - MobME Wireless Solutions Limited – Initial
Public Offer - Anchor Investor – NR”;
c. In case of Resident Retail Investors: “Escrow Account – MobME Wireless Solutions Limited – Initial Public
Offer - R”;
d. In case of Non Resident Retail investors: “Escrow Account – MobME Wireless Solutions Limited – Initial Public
Offer - NR”;
4) In case of bids by NRIs applying on a repatriation basis, the payments must be made through Indian Rupee
drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted through
normal banking channels or out of funds held in the Non-Resident External (NRE) Accounts or the Foreign
Currency Non-Resident Accounts (FCNR), maintained with banks authorised to deal in foreign exchange in
India, along with documentary evidence in support of the remittance. Payment will not be accepted out of
Non-Resident Ordinary (NRO) account of Non Resident Bidder bidding on a repatriation basis. Payment by
drafts should be accompanied by bank certificate confirming that the draft has been issued by debiting to the
NRE Account or the Foreign Currency Non- Resident Account.
5) In case of Bids by NRIs applying on non-repatriation basis, the payments must be made through Indian Rupee
Drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted through
normal banking channels or out of funds held in Non-Resident External (NRE) Accounts or Foreign Currency
Non-Resident (FCNR) Accounts, maintained with banks authorised to deal in foreign exchange in India, along
with documentary evidence in support of the remittance or out of a Non-Resident Ordinary (NRO) Account of
a Non-Resident Bidder bidding on a non-repatriation basis. Payment by drafts should be accompanied by a
bank certificate confirming that the draft has been issued by debiting an NRE or FCNR or NRO Account.
6) In case of Bids by FIIs, the payment should be made out of funds held in Special Non Resident Rupee Account
‘SPNR’ along with documentary evidence in support of the remittance. Payment by drafts should be
accompanied by bank certificate confirming that the draft has been issued by debiting to Special Non
Resident Rupee Account ‘SPNR’.
7) Where a Bidder has been allocated a lesser number of Equity Shares than the Bidder has Bid for, the excess
amount, if any, paid on bidding, after adjustment towards the balance amount payable on the Equity Shares
allocated, will be refunded to the Bidder from the Refund Accounts.
8) The monies deposited in the Escrow Account will be held for the benefit of the Bidders (other than ASBA
Bidders) till the Designated Date.
9) On the Designated Date, the Escrow Collection Bank(s) shall transfer the funds from the Escrow Account as
per the terms of the Escrow Agreement into the Public Issue Account with the Banker to the Issue.
10) No later than twelve working days from the Bid/Issue Closing Date, the Refund Bank shall refund all amounts
payable to unsuccessful Bidders (other than ASBA Bidders) and also the excess amount paid on bidding, if
any, after adjusting for allocation to the successful Bidders payments should be made by cheque, or a
demand draft drawn on any bank (including a Co-operative bank), which is situated at, and is a member of or
sub-member of the bankers’ clearing house located at the center where the Bid cum Application Form is
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submitted. Outstation cheques/bank drafts drawn on banks not participating in the clearing process will not
be accepted and applications accompanied by such cheques or bank drafts are liable to be rejected. Cash/
stock invest/money orders/ postal orders will not be accepted.
11) Bidders are advised to mention the number of application form on the reverse of the cheque / demand draft
to avoid misuse of instruments submitted along with the Bid cum Application Form.
12) In case clear funds are not available in the Escrow Accounts as per final certificates from the Escrow
Collection Bank(s), such Bids are liable to be rejected.
13) Bidders are advised to provide the number of the Bid cum Application Form on the reverse of the cheque or
bank draft to avoid misuse of instruments submitted with the Bid cum Application Form
14) Payments made through cheques without the Magnetic Ink Character Recognition (“MICR”) code will be
rejected.
Payment by Stock invest
In terms of Reserve Bank of India Circular No. DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5, 2003, the
option to use the stock invest instrument in lieu of cheques or bank drafts for payment of bid money has been
withdrawn. Hence, payment through stock invest would not be accepted in this Issue.
Payment by cash / money order
Payment through cash/ money order shall not be accepted in this Issue.
Submission of Bid cum Application Form
All Bid cum Application Forms or Revision Forms duly completed and accompanied by account payee cheques or
drafts shall be submitted to the members of the Syndicate at the time of submission of the Bid. With respect to ASBA
Bidders, the Bid cum Application Form or the ASBA Revision Form shall be submitted to the Designated Branches of
the SCSBs, either by the Syndicate or sub-syndicate members at Syndicate ASBA Bidding Locations or by the ASBA
Bidders directly or to the Broker Centre.
No separate receipts shall be issued for the money payable on the submission of Bid cum Application Form or Revision
Form. However, the collection centre of the members of the Syndicate will acknowledge the receipt of the Bid cum
Application Forms or Revision Forms by stamping and returning to the Bidder the acknowledgement slip. This
acknowledgement slip will serve as the duplicate of the Bid cum Application Form for the records of the Bidder.
Please ensure that in the event a Bid cum Application form is submitted at the terminals of the Syndicate Members
and the payment is proposed to be made through the ASBA process, the SCSB with whom the payment is to be
blocked has a branch at any of the bidding centres referred to in the Circular.
Other Instructions
Joint Bids in the case of Individuals
Bids may be made in single or joint names (not more than three). In the case of joint Bids, all payments / refunds will
be made out in favor of the Bidder whose name appears first in the Bid cum Application Form or Revision Form (‘First
Bidder’). All communications will be addressed to the First Bidder and will be dispatched to his or her address as per
the Demographic Details received from the Depository.
Multiple Bids
A Bidder should submit only one Bid (and not more than one) for the total number of Equity Shares required. Two or
more Bids will be deemed to be multiple Bids if the sole or First Bidder is one and the same. Our Company reserves
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the right to reject, in its absolute discretion, all or any multiple Bids in any or all categories. It is clarified, however,
that Bidders shall have the option to make a maximum of three Bids in the Bid cum Application Form and such options
shall not be considered multiple Bids.
In this regard, the procedures which would be followed by the Registrar to the Issue to detect multiple applications
are given below:
(i) All Bids will be checked for common PAN and Bids with common PAN will be accumulated and taken to a
separate process file which would serve as a multiple master. In this master, a check will be carried out for
the same PAN. In cases where the PAN is different, the same will be deleted from this master.
(ii) The Bids will be scrutinized for DP ID and Beneficiary Account Numbers. In case applications bear the same
DP ID and Beneficiary Account Numbers, these will be treated as multiple applications.
In case of a Mutual Fund, a separate Bid can be made in respect of each scheme of the Mutual Funds registered with
SEBI and such Bids in respect of more than one scheme will not be treated as multiple Bids provided that the Bids
clearly indicates the scheme for which the Bid has been made.
In case of Bids by QIBs under the Anchor Investor Portion and the Net QIB Portion will not be considered as multiple
Bids.
After submitting a Bid cum Application Form either in physical or electronic mode, where such ASBA Bid is uploaded
with the Stock Exchange, an ASBA Bidder cannot Bid, either in physical or electronic mode, on another Bid cum
Application Form. Submission of a second Bid cum Application Form to either the same or to another Designated
Branch of the SCSB or to any member of the Syndicate, will be treated as multiple Bids and will be liable to be rejected
either before entering the Bid into the electronic bidding system, or at any point of time prior to the allocation or
Allotment of Equity Shares in the Issue. Duplicate copies of Bid cum Application Form available on the website of the
Stock Exchange bearing the same application number will be treated as multiple Bids and are liable to be rejected.
More than one ASBA Bidder may Bid for Equity Shares using the same ASBA Account, provided that the SCSBs will not
accept a total of more than five Bid cum Application Forms from such ASBA Bidders with respect to any single ASBA
Account. However, an ASBA Bidder may revise the Bid through the Revision Form.
Permanent Account Number (“PAN”)
The Bidder or in the case of a Bid in joint names, each of the Bidders, should mention his/her PAN allotted under the
I.T. Act. Applications without this information and documents will be considered incomplete and are liable to be
rejected. It is to be specifically noted that Bidders should not submit the GIR number instead of the PAN as the Bid
is liable to be rejected on this ground.
This requirement is not applicable to Bids received on behalf of the Central and State Governments, from residents of
the state of Sikkim and from officials appointed by the courts.
Withdrawal of ASBA Bids
This section is only applicable to retail individual bidders.
ASBA Bidders can withdraw their ASBA Bids during the Issue Period by submitting a request for the same to the
member of the Syndicate or the Designated Branch, as the case may be, through whom the ASBA Bid had been placed.
In case of ASBA Bids submitted to the members of the Syndicate at the Syndicate ASBA Bidding Locations or the
Broker Centre, upon receipt of the request for withdrawal from the ASBA Bidder, the relevant Syndicate Member shall
do the requisite, including deletion of details of the withdrawn Bid cum Application Form from the electronic bidding
system of the Stock Exchange and forwarding instructions to the relevant branch of the SCSB for unblocking of the
funds in the ASBA Account. In case of ASBA Bids submitted to the Designated Branch, upon receipt of the request for
withdrawal from the ASBA Bidder, the relevant Designated Branch shall do the requisite, including deletion of details
of the withdrawn Bid cum Application Form from the electronic bidding system of the Stock Exchange and unblocking
of the funds in the ASBA Account directly.
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In case an ASBA Bidder (other than a QIB and a NII) wishes to withdraw the Bid after the Issue Closing Date, the same
can be done by submitting a withdrawal request to the Registrar prior to the finalisation of Allotment. The Registrar
shall delete the withdrawn Bid from the Bid file and give instruction to the SCSB for unblocking the ASBA Account after
approval of the ‘Basis of Allotment’. QIBs and NIIs cannot withdraw their Bids at any stage.
Right to Reject Bids
In case of QIB Bidders (other than Anchor Investors), bidding under the QIB Portion, our Company, in consultation
with the BRLM may reject Bids provided that the reasons for rejecting the same shall be provided to such Bidder in
writing. In case of Non-Institutional Bidders and Retail Individual Bidders our Company has a right to reject Bids on
technical grounds. With respect to ASBA Bids, the Designated Branches of the SCSBs shall have the right to reject ASBA
Bids if at the time of blocking the Bid Amount in the Bidder’s bank account, the respective Designated Branch
ascertains that sufficient funds are not available in the Bidder’s bank account maintained with the SCSB. Subsequent
to the acceptance of the ASBA Bid by the SCSB, our Company would have a right to reject the ASBA Bids only on
technical grounds.
Grounds for Technical Rejections
Bidders are advised to note that Bids are liable to be rejected among others on the following technical grounds:
1) Amount paid does not tally with the highest number of Equity Shares Bid for. With respect to ASBA Bids, the
amounts mentioned in the Bid cum Application Form does not tally with the amount payable for the value of
the Equity Shares Bid for;
2) In case of partnership firms, Equity Shares may be registered in the names of the individual partners and no
firm as such shall be entitled to apply;
3) Bids by Persons not competent to contract under the Indian Contract Act, 1872, including minors, insane
persons;
4) PAN number not stated and GIR number given instead of PAN number, except for Bids on behalf of the
Central and State Governments, residents of the state of Sikkim and officials appointed by the courts;
5) SCSBs applying on own account using ASBA facility must have a separate bank account in their name with any
other SCSB which is solely for the purposes of making such ASBA application and having clear demarcated
funds blocked for the same. SCSBs applying using an ASBA account held with themselves are liable to be
rejected.
6) Bids for lower number of Equity Shares than specified for that category of investors;
7) Bids at a price less than the Floor Price;
8) Bids at a price more than the Cap Price;
9) Submission of more than five Bid cum Application forms per bank account in the case of ASBA Bids;
10) Bids at cut-off price by Non-Institutional and QIB Bidders;
11) Bids for number of Equity Shares which are not in multiples of 300 Equity Shares ;
12) Category not ticked;
13) Multiple bids as defined in this Draft Red Herring Prospectus;
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14) In case of Bid under power of attorney or by limited companies, corporate, trust etc., relevant documents are
not submitted;
15) Bids accompanied by Stock invest/ money order/postal order/cash;
16) Signature of sole and / or joint bidders missing. With respect to ASBA Bids, the Bid cum Application form not
being signed by the account holders, if the account holder is different from the Bidder;
17) Bid cum Application Form does not have the stamp of the BRLM or Syndicate Member;
18) Bid cum Application Form by ASBA bidders does not have the stamp of the SCSB, except for Bid cum
Application Forms downloaded from the websites of the Stock Exchange, in which case the Bid Cum
Application Forms shall bear an unique application number;
19) Bids by QIBs not submitted through the BRLM / Syndicate Members or in case of ASBA Bids for QIBs
submitted to SCSBs, not intimated to the BRLM / Syndicate Members;
20) Signatures of the bidder not matching with his sign on record with the SCSB in the event a Bid cum
Application Form is submitted through a Syndicate/ sub – syndicate member.
21) Bid cum Application Form does not have Bidder’s depository account details;
22) In case no corresponding record is available with the Depository that matches three parameters: PAN of the
sole name of the Bidder, Depository Participant’s identity (DP ID) and beneficiary’s account number;
23) Bid cum Application Forms are not delivered by the Bidders within the time prescribed as per the Bid cum
Application Form, Bid/Issue Opening Date advertisement and the Red Herring Prospectus and as per the
instructions in the Red Herring Prospectus and the Bid cum Application Form;
24) With respect to ASBA Bids, inadequate funds in the bank account to block the Bid Amount specified in the Bid
cum Application Form at the time of blocking such Bid Amount in the bank account;
25) Bids for amounts greater than the maximum permissible amounts prescribed by the regulations. For further
details, see ‘Issue Procedure - Maximum and Minimum Bid Size’ on page 266 of the Draft Red Herring
Prospectus;
26) Bids where clear funds are not available in Escrow Accounts as per final certificate from the Escrow Collection
Bank(s);
27) Bids by persons in the United States;
28) Bids by any person outside India if not in compliance with applicable foreign and Indian Laws;
29) Bids not uploaded on the terminals of the Stock Exchange;
30) Bids by persons prohibited from buying, selling or dealing in the shares directly or indirectly by SEBI or any
other regulatory authority;
31) Bids by OCBs without specific approval of the RBI;
32) In case the DP ID, client ID and PAN mentioned in the Bid Cum Application Form and entered into the
electronic bidding system of the Stock Exchange by the members of the Syndicate do not match with the DP
ID, client ID and PAN available in the records with the depositories. Non submissions of bank account details
in the space provided in the application form;
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33) ASBA Applications made by using duplicate copy of Bid cum Application Form downloaded from the website
of the Stock Exchange (i.e. two Bid cum Application Forms bearing the same unique identification number);
34) Bids by QIB Bidders and Non-Institutional Bidders where the Bid amount is in excess of `2,00,000 uploaded
after 4.00 p.m. on the Bid/ Issue Closing Date;
35) Bids by NRIs not disclosing their residential status;
36) Bids less than 300 Equity Shares; and
37) Application through cheques / demand drafts by QIBs and Non-Institutional Investors.
IN CASE THE DP ID, CLIENT ID AND PAN MENTIONED IN THE BID CUM APPLICATION FORM AND ENTERED INTO THE
ELECTRONIC BIDDING SYSTEM OF THE STOCK EXCHANGE BY THE SYNDICATE/THE SCSBs DO NOT MATCH WITH THE
DP ID, CLIENT ID AND PAN AVAILABLE IN THE RECORDS WITH THE DEPOSITARIES THE APPLICATION IS LIABLE TO BE
REJECTED AND OUR COMPANY AND THE MEMBERS OF THE SYNDICATE SHALL NOT BE LIABLE FOR LOSSES, IF ANY.
FURTHER, BIDS BY PERSONS PROHIBITED FROM BUYING, SELLING OR DEALING IN THE EQUITY SHARES DIRECTLY OR
INDIRECTLY BY SEBI OR ANY OTHER REGULATORY AUTHORITY WILL BE REJECTED.
For Bid cum Application Forms submitted by non-ASBA Bidders, the Basis of Allotment will be based on the Registrar’s
validation of the electronic Bid details with the Depository records, and the complete reconciliation of the final
certificates received from the Escrow Collection Banks with the electronic Bid details in terms of SEBI circular
CIR/CFD/DIL/3/2010 dated April 22, 2010 and SEBI circular CIR/CFD/DIL/1/2011 dated April 29, 2011. The Registrar
will undertake technical rejections based on the electronic Bid details and the Depository database. In case of any
discrepancy between the electronic Bid data and the Depository records, our Company in consultation with the BRLM,
the Registrar and the Designated Stock Exchange, reserves the right to proceed as per the Depository records or treat
such Bid as rejected.
For ASBA Bids submitted to the SCSBs, in terms of the SEBI circular CIR/CFD/DIL/3/2010 dated April 22, 2010, the
Registrar will reconcile the compiled data received from the Stock Exchange and all SCSBs, and match such data with
the Depository database for correctness of DP ID, Client ID and PAN. In cases where any DP ID, Client ID and PAN
mentioned in the Bid file does not match the one available in the Depository database, our Company reserves the
right to proceed as per the Depository records for such ASBA Bids or treat such ASBA Bids as rejected. The Registrar
will reject multiple ASBA Bids based on common PAN.
For ASBA Bids submitted to the members of the Syndicate at the Syndicate ASBA Bidding Locations or the Broker
Centre, the Basis of Allotment will be based on the Registrar’s validation of the electronic Bid details with the
Depository records, and the complete reconciliation of the final certificates received from the SCSBs with the
electronic bid details in terms of the SEBI circular CIR/CFD/DIL/1/2011 dated April 29, 2011. The Registrar will
undertake technical rejections based on the electronic Bid data and the Depository records. In case of any discrepancy
between the electronic Bid data and the Depository records, our Company, in consultation with the Designated Stock
Exchange, the BRLM and the Registrar, reserves the right to proceed as per the Depository records or treat such ASBA
Bid as rejected.
Basis of Allotment or Allocation
For Retail Individual Bidders
1) Bids received from the Retail Individual Bidders at or above the Issue Price shall be grouped together to
determine the total demand under this category. The Allotment to all the successful Retail Individual Bidders
will be made at the Issue Price.
2) The Issue less Allotment to Non-Institutional and QIB Bidders shall be available for Allotment to Retail
Individual Bidders who have Bid in the Issue at a price that is equal to or greater than the Issue Price.
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3) If the aggregate demand in this category is less than or equal to 234,300 Equity Shares at or above the Issue
Price, full Allotment shall be made to the Retail Individual Bidders to the extent of their valid Bids.
4) If the aggregate demand in this category is greater than 234,300 Equity Shares at or above the Issue Price, the
Allotment shall be made on a proportionate basis being not less than 300 Equity Shares and in multiples of
300 Equity Shares thereafter. For the method of proportionate Basis of Allotment, refer below.
For Non-Institutional Bidders
1. Bids received from Non-Institutional Bidders at or above the Issue Price shall be grouped together to
determine the total demand under this category. The Allotment to all successful Non-Institutional Bidders
will be made at the Issue Price.
2. The Issue Size less Allotment to QIBs and Retail Portion shall be available for Allotment to Non-Institutional
Bidders who have Bid in the Issue at a price that is equal to or greater than the Issue Price.
3. If the aggregate demand in this category is less than or equal to 100,800 Equity Shares at or above the Issue
Price, full Allotment shall be made to Non-Institutional Bidders to the extent of their demand.
4. In case the aggregate demand in this category is greater than 100,800 Equity Shares at or above the Issue
Price, Allotment shall be made on a proportionate basis being not less than 300 Equity Shares and in
multiples of 300 Equity Shares thereafter. For the method of proportionate Basis of Allotment refer below.
For Qualified Institutional Bidders in the QIB Portion
1) Bids received from the QIB Bidders bidding in the QIB Portion at or above the Issue Price shall be grouped
together to determine the total demand under this portion. The Allotment to all the QIB Bidders will be made
at the Issue Price.
2) The QIB Portion shall be available for Allotment to QIB Bidders who have Bid in the Issue at a price that is
equal to or greater than the Issue Price.
3) Allotment shall be undertaken in the following manner:
(i) In the first instance allocation to Mutual Funds for upto 5% of the QIB Portion shall be determined as follows:
(i) In the event that Mutual Fund Bids exceeds 5% of the QIB Portion, allocation to Mutual Funds shall be done
on a proportionate basis for upto 5% of the QIB Portion.
(ii) In the event that the aggregate demand from Mutual Funds is less than 5% of the QIB Portion then all
Mutual Funds shall get full Allotment to the extent of valid bids received above the Issue Price.
(iii) Equity Shares remaining unsubscribed, if any, not allocated to Mutual Funds shall be available for
Allotment to all QIB Bidders as set out in (b) below;
(ii) In the second instance Allotment to all QIBs bidding in the QIB portion shall be determined as follows:
(a) Under-subscription below 5% of the QIB Portion, if any, from Mutual Funds, would be included for allocation
to the remaining QIB Bidders on a proportionate basis.
(b) In the event that the oversubscription in the QIB Portion, all QIB Bidders who have submitted Bids above the
Issue Price shall be allotted Equity Shares on a proportionate basis for upto 95% of the QIB Portion.
(c) Mutual Funds, who have received allocation as per (a) above, for less than the number of Equity Shares Bid
for by them, are eligible to receive Equity Shares on a proportionate basis along with other QIB Bidders.
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The aggregate Allotment available for allocation to QIB Bidders bidding in the QIB Portion shall be 335,100 Equity
Shares.
For Anchor Investors
Allocation of Equity Shares to Anchor Investors, if any, at the Anchor Investor Allocation Price will be at the discretion
of our Company, in consultation with the BRLM, subject to compliance with the following requirements:
1) Not more than 30% of the QIB Portion will be allocated to Anchor Investors;
2) One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids
being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price;
3) Allocation to Anchor Investors shall be on a discretionary basis and subject to a minimum number of two
Anchor Investors for allocation up to `25,000 lacs and minimum number of five Anchor Investors for
allocation more than `25,000 lacs.
In case the Issue Price is greater than Anchor Investor Allocation Price, the additional amount being the difference
shall be paid by the Anchor Investors by the Pay-in Date. In the event the Issue Price is lower than the Anchor Investor
Allocation Price, the Allotment to Anchor Investors shall be at Anchor Investor Allocation Price.
The number of Equity Shares Allotted to Anchor Investors, if any, and the Anchor Investor Allocation Price shall be
made available in the public domain by the BRLM before the Bid Opening Date by intimating the same to the Stock
Exchange.
Method of proportionate Basis of Allotment in the Issue
In the event of the Issue being over-subscribed, we shall finalise the Basis of Allotment in consultation with the
Designated Stock Exchange. The Executive Director (or any other senior official nominated by them) of the Designated
Stock Exchange along with the BRLM and the Registrar to the Issue shall be responsible for ensuring that the Basis of
Allotment is finalised in a fair and proper manner.
The Allotment shall be made in marketable lots, on a proportionate basis as explained below:
1) Bidders will be categorised according to the number of Equity Shares applied for;
2) The total number of Equity Shares to be allotted to each category as a whole shall be arrived at on a
proportionate basis, which is the total number of Equity Shares applied for in that category (number of
Bidders in the category multiplied by the number of Equity Shares applied for) multiplied by the inverse of
the over-subscription ratio;
3) Number of Equity Shares to be allotted to the successful Bidders will be arrived at on a proportionate basis,
which is total number of Equity Shares applied for by each Bidder in that category multiplied by the inverse of
the over-subscription ratio.
4) In all Bids where the proportionate Allotment is less than 300 Equity Shares per Bidder, the Allotment shall be
made as follows:
(i) Each successful Bidder shall be allotted a minimum of 300 Equity Shares; and
(ii) The successful Bidders out of the total Bidders for a category shall be determined by draw of lots in a manner
such that the total number of Equity Shares allotted in that category is equal to the number of Equity Shares
calculated in accordance with (b) above.
5) If the proportionate Allotment to a Bidder is a number that is more than 300 but is not a multiple of 300
Equity Shares (which is the marketable lot), the number in excess of the multiple of one would be rounded
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off to the higher multiple of 300 if that number is 150 or higher. If that number is lower than 150, it would be
rounded off to the lower multiple of zero. All Bidders in such categories would be Allotted Equity Shares
arrived at after such rounding off.
6) If the Equity Shares allocated on a proportionate basis to any category are more than the Equity Shares
allotted to the Bidders in that category, the remaining Equity Shares available for Allotment shall be first
adjusted against any other category, where the allotted shares are not sufficient for proportionate Allotment
to the successful Bidders in that category. The balance Equity Shares, if any, remaining after such adjustment
will be added to the category comprising Bidders applying for minimum number of Equity Shares.
7) Subject to valid Bids being received, allocation of Equity Shares to Anchor Investors shall be at the sole
discretion of our Company, in consultation with the BRLM.
Illustration of Allotment to QIBs and Mutual Funds (“MF”) in the QIB Portion
A. Issue Details
S.No. Particulars Issue details
1. Issue size 20,000 lacs Equity Shares
2. Allocation to QIB (50%) 10,000 lacs Equity Shares
4. Portion available to QIBs 10,000 lacs Equity Shares
Of which:
a. Allocation to MF (5%) 500 lacs Equity Shares
b. Balance for all QIBs including MFs 9,500 lacs Equity Shares
3 No. of QIB applicants 10
4 No. of shares applied for 50,000 lacs Equity Shares
B. Details of QIB Bids in the QIB Portion
S.No. Type of QIB bidders# No. of Equity Shares bid for(in lacs)
1 A1 5,000
2 A2 2,000
3 A3 13,000
4 A4 5,000
5 A5 5,000
6 MF1 4,000
7 MF2 4,000
8 MF3 8,000
9 MF4 2,000
10 MF5 2,000
Total 50,000
# A1-A5: (QIB bidders other than MFs), MF1-MF5 (QIB bidders which are Mutual Funds)
C. Details of Allotment to QIB Bidders/ Applicants
(Number of Equity Shares in lacs)
Type of QIB
bidders
Equity
Shares bid
for (in lacs)
Allocation of 500 lacs Equity
Shares to MF proportionately
(please see note 2 below)
Allocation of balance
9,500 lacs Equity Shares to
QIBs proportionately
(please see note 4 below)
Aggregate
allocation to MFs
(I) (II) (III) (IV) (V)
A1 5,000 0 960 0
A2 2,000 0 384 0
A3 13,000 0 2495 0
A4 5,000 0 960 0
A5 5,000 0 960 0
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Type of QIB
bidders
Equity
Shares bid
for (in lacs)
Allocation of 500 lacs Equity
Shares to MF proportionately
(please see note 2 below)
Allocation of balance
9,500 lacs Equity Shares to
QIBs proportionately
(please see note 4 below)
Aggregate
allocation to MFs
MF1 4,000 10 748 848
MF2 4,000 10 748 848
MF3 8,000 20 1497 1697
MF4 2,000 5 374 424
MF5 2,000 5 374 424
50,000 50 9500 4,242
Please Note:
1. The illustration presumes compliance with the requirements specified in this Draft Red Herring Prospectus in
“Issue Structure” on page 245 of this Draft Red Herring Prospectus.
2. Out of 10,000 lacs Equity Shares allocated to QIBs, 500 lacs (i.e. 5%) will be allocated on proportionate basis
among five Mutual Fund applicants who applied for 20,000 lacs Equity Shares in QIB category.
3. The balance 9,500 lacs Equity Shares (will be allocated on proportionate basis among 10 QIB applicants who
have applied for 50,000 lacs Equity Shares (including five MF applicants who applied for 20,000 lacs Equity
Shares).
4. The figures in the fourth column entitled “Allocation of balance 9,500 lacs Equity Shares to QIBs
proportionately” in the above illustration are arrived as under:
For QIBs other than Mutual Funds (A1 to A5)= No. of shares bid for (i.e. in column II) X 9,500 / 49,500.
For Mutual Funds (MF1 to MF5)= [(No. of shares bid for (i.e. in column II of the table above) less Equity
Shares allotted ( i.e., column III of the table above)] X 9,500 / 49,500.
The numerator and denominator for arriving at allocation of 10,000 lacs Equity Shares to the 10 QIBs are reduced by
500 lacs Equity Shares, which have already been allotted to Mutual Funds in the manner specified in column III of the
table above.
Equity Shares in Dematerialized Form with NSDL or CDSL
As per the provisions of Section 68B of the Companies Act, the Equity Shares in this Issue shall be allotted only in a
dematerialized form, (i.e. not in the form of physical certificates but be fungible and be represented by the statement
issued through the electronic mode). In this context, two agreements have been signed among us, the respective
Depositories and the Registrar to the Issue:
a. a tripartite agreement dated [●] with NSDL, our Company and Registrar to the Issue;
b. a tripartite agreement dated [●] with CDSL, our Company and Registrar to the Issue.
All bidders can seek Allotment only in dematerialized mode. Bids from any Bidder without relevant details of his or her
depository account are liable to be rejected.
(a) A Bidder applying for Equity Shares must have at least one beneficiary account with either of the Depository
Participants of either NSDL or CDSL prior to making the Bid.
(b) The Bidder must necessarily fill in the details (including the Beneficiary Account Number and Depository
Participant’s Identification number) appearing in the Bid cum Application Form or Revision Form.
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(c) Equity Shares allotted to a successful Bidder will be credited in electronic form directly to the beneficiary
account (with the Depository Participant) of the Bidder.
(d) Names in the Bid cum Application Form or Revision Form should be identical to those appearing in the
account details in the Depository. In case of joint holders, the names should necessarily be in the same
sequence as they appear in the account details in the Depository.
(e) If incomplete or incorrect details are given under the heading ‘Bidders Depository Account Details’ in the Bid
cum Application Form or Revision Form, it is liable to be rejected.
(f) The Bidder is responsible for the correctness of his or her demographic details given in the Bid cum
Application Form vis-à-vis those with their Depository Participant.
(g) It may be noted that Equity Shares in electronic form can be traded only on the stock exchange having
electronic connectivity with NSDL and CDSL. The Stock Exchange where our Equity Shares are proposed to be
listed have electronic connectivity with CDSL and NSDL.
(h) The trading of the Equity Shares of our Company would only be in dematerialized form only for all investors.
Communications
All future communications in connection with Bids made in this Issue should be addressed to the Registrar to the Issue
quoting the full name of the sole or First Bidder, Bid cum Application Form number, Bidders Depository Account
Details, number of Equity Shares applied for, date of Bid form, name and address of the member of the Syndicate or
the Designated Branch of the SCSBs where the Bid was submitted and cheque or draft number and issuing bank
thereof or with respect to ASBA Bids, bank account number in which the amount equivalent to the Bid Amount was
blocked.
Bidders can contact the Compliance Officer or the Registrar to the Issue in case of any pre-Issue or post-Issue
related problems such as non-receipt of letters of Allotment, credit of allotted Equity Shares in the respective
beneficiary accounts, refund orders etc. In case of ASBA Bids submitted to the Designated Branches of the SCSBs,
the Bidders can contact the Designated Branches of the SCSBs.
Impersonation
Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68 A of the Companies
Act, which is reproduced below:
“Any person who:
(a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares therein;
or
(b) otherwise induces a company to allot, or register any transfer of shares therein to him, or any other person in
a fictitious name, shall be punishable with imprisonment for a term which may extend to five years”.
PAYMENT OF REFUND
Bidders other than ASBA Bidders must note that on the basis of the names of the Bidders, Depository Participant’s
name, DP ID, Beneficiary Account number provided by them in the Bid cum Application Form, the Registrar to the
Issue will obtain, from the Depositories, the Bidders’ bank account details, including the nine digit Magnetic Ink
Character Recognition (“MICR”) code as appearing on a cheque leaf. Hence Bidders are advised to immediately update
their bank account details as appearing on the records of the Depository Participant. Please note that failure to do so
could result in delays in dispatch of refund order or refunds through electronic transfer of funds, as applicable, and
any such delay shall be at the Bidders’ sole risk and neither our Company, the Registrar to the Issue, Escrow Collection
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Bank(s), Bankers to the Issue nor the BRLM shall be liable to compensate the Bidders for any losses caused to the
Bidder due to any such delay or liable to pay any interest for such delay.
Mode of making refunds
The payment of refund, if any, for Bidders other than ASBA Bidders would be done through one of the following
modes:
1. Direct Credit – Applicants having bank accounts with the Refund Bank (s), as mentioned in the Bid cum
Application Form, shall be eligible to receive refunds through direct credit. Charges, if any, levied by the
Refund Bank(s) for the same would be borne by our Company.
2. ECS / NECS – Payment of refund would be done through ECS / NECS for applicants having an account at any
of the centres where such facility has been made available. This mode of payment of refunds would be
subject to availability of complete bank account details including the MICR code as appearing on a cheque
leaf, from the Depositories. The payment of refunds is mandatory for applicants having a bank account at any
of the centres where such facility is made available, except where the applicant, being eligible, opts to
receive refund through direct credit or RTGS.
3. NEFT – Payment of refund shall be undertaken through NEFT wherever the applicants’ bank has been
assigned the Indian Financial System Code (IFSC), which can be linked to a Magnetic Ink Character
Recognition (MICR), if any, available to that particular bank branch. IFSC Code will be obtained from the
website of RBI as on a date immediately prior to the date of payment of refund, duly mapped with MICR
numbers. Wherever the applicants have registered their nine digit MICR number and their bank account
number while opening and operating the demat account, the same will be duly mapped with the IFSC Code of
that particular bank branch and the payment of refund will be made to the applicants through this method.
The process flow in respect of refunds by way of NEFT is at an evolving stage and hence use of NEFT is subject
to operational feasibility, cost and process efficiency. In the event that NEFT is not operationally feasible, the
payment of refunds would be made through any one of the other modes as discussed in the sections.
4. RTGS – Applicants having a bank account at any of the abovementioned centres and whose refund amount is
or exceeds `200,000 , have the option to receive refund through RTGS provided the Demographic Details
downloaded from the Depositories contain the nine digit MICR code of the Bidder’s bank which can be
mapped with the RBI data to obtain the corresponding IFSC code. Charges, if any, levied by the Refund
Bank(s) for the same would be borne by our Company. Charges, if any, levied by the applicant’s bank
receiving the credit would be borne by the applicant
For all other applicants, including those who have not updated their bank particulars with the MICR code, the refund
orders will be dispatched through Speed Post/ Registered Post. Such refunds will be made by cheques, pay orders or
demand drafts drawn on the Escrow Collection Bank(s) and payable at par at places where Bids are received. Bank
charges, if any, for cashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders.
Mode of making refunds for ASBA Bidders
In case of ASBA Bidders, the Registrar to the Issue shall instruct the relevant SCSB to unblock the funds in the relevant
ASBA Account to the extent of the Bid Amount specified in the Bid cum Application Forms for withdrawn, rejected or
unsuccessful or partially successful ASBA Bids within twelve working days of the Bid/Issue Closing Date.
Disposal of Applications and Application Moneys
With respect to Bidders other than ASBA Bidders, our Company shall ensure dispatch of Allotment advice, refund
orders (except for Bidders who receive refunds through electronic transfer of funds) and give benefit to the
beneficiary account with Depository Participants and submit the documents pertaining to the Allotment to the Stock
Exchange within twelve days of the Bid/Issue Closing Date.
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In case of applicants who receive refunds through NECS, direct credit or RTGS, the refund instructions will be given to
the clearing system within twelve days from the Bid/ Issue Closing Date. A suitable communication shall be sent to the
Bidders receiving refunds through this mode within twelve days of Bid/ Issue Closing Date, giving details of the bank
where refunds shall be credited along with amount and expected date of electronic credit of refund.
Our Company shall use best efforts to ensure that all steps for completion of the necessary formalities for listing and
commencement of trading at the Stock Exchange where the Equity Shares are proposed to be listed, are taken within
twelve Working Days of the Bid/Issue Closing Date.
In accordance with the Companies Act, the requirements of the Stock Exchange and the SEBI ICDR Regulations, our
Company further undertakes that:
Allotment of Equity Shares shall be made only in dematerialised form, including the credit of Allotted Equity
Shares to the beneficiary accounts of the Depository Participants, within twelve Working Days of the Bid /
Issue Closing Date;
With respect to Bidders other than ASBA Bidders, dispatch of refund orders or in a case where the refund or
portion thereof is made in electronic manner, the refund instructions are given to the clearing system within
twelve days of the Bid/Issue Closing Date would be ensured. With respect to the ASBA Bidders, instructions
for unblocking of the ASBA Bidder‘s Bank Account shall be made within eight days from the Bid/Issue Closing
Date.
Our Company shall pay interest at 15% p.a. for any delay beyond the twelve working days from the Bid/Issue Closing
Date as mentioned above, if Allotment is not made and refund orders are not dispatched or if, in a case where the
refund or portion thereof is made in electronic manner, the refund instructions have not been given to the clearing
system in the disclosed manner and/or demat credits are not made to investors within eight days from the day our
Company becomes liable to repay (i.e. twelve Working Days after the Bid / Issue Closing Date or the date of refusal by
the Stock Exchange(s), whichever is earlier). If such money is not repaid within eight days from the day our Company
becomes liable to repay it, our Company and every officer in default shall, on and from expiry of eight days, be liable
to repay the money with interest at the rate of 15% as prescribed under Section 73 of the Companies Act.
Letters of Allotment or Refund Orders or instructions to the SCSBs
We shall give credit to the beneficiary account with Depository Participants within twelve Working Days from the
Bid/Issue Closing Date. Applicants residing at the centres where clearing houses are managed by the RBI, will get
refunds through ECS / NECS only except where applicant is otherwise disclosed as eligible to get refunds through
direct credit and / or RTGS. Our Company shall ensure dispatch of refund orders, if any, by registered post or speed
post at the sole or First Bidder’s sole risk within twelve days of the Bid/Issue Closing Date. Bidders to whom refunds
are made through electronic transfer of funds will be sent a letter through ordinary post, intimating them about the
mode of credit of refund within twelve days of the Bid/ Issue Closing Date. In case of ASBA Bidders, the Registrar to
the Issue shall instruct the relevant SCSBs to unblock the funds in the relevant ASBA Account to the extent of the Bid
Amount specified in the Bid cum Application Forms for withdrawn, rejected or unsuccessful or partially successful
ASBA Bids within twelve Working days of the Bid/Issue Closing Date, which shall be completed within one Working
Day after the receipt of such instruction from the Registrar to the Issue.
Interest in case of delay in dispatch of Allotment Letters or Refund Orders/ instruction to SCSBs by the Registrar to
the Issue
Our Company agrees that the Allotment of Equity Shares in the Issue shall be made not later than twelve Working
Days of the Bid / Issue Closing Date. Our Company further agrees that it shall pay interest at the rate of 15% p.a. if the
Allotment letters or refund orders have not been dispatched to the applicants or if, in a case where the refund or
portion thereof is made in electronic manner, the refund instructions have not been given in the disclosed manner
within twelve Working days from the Bid / Issue Closing Date or instructions to SCSBs to unblock funds in the ASBA
Accounts shall be given within twelve Working Days of the Bid/Issue Closing Date, as the case may be.
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Our Company will provide adequate funds required for dispatch of refund orders or Allotment advice to the Registrar
to the Issue.
Refunds will be made by cheques, pay-orders or demand drafts drawn on a bank appointed by our Company as a
Refund Bank and payable at par at places where Bids are received. Bank charges, if any, for encashing such cheques,
pay orders or demand drafts at other centres will be payable by the Bidders.
Undertaking by our Company
We undertake as follows:
1) that the complaints received in respect of this Issue shall be attended to expeditiously and satisfactorily;
2) that all steps will be taken for the completion of the necessary formalities for listing and commencement of
trading at the stock exchange where the Equity Shares are proposed to be listed within 12 Working days of the
Bid/Issue Closing Date;
3) that the funds required for making refunds as per the modes disclosed or dispatch of Allotment advice by
registered post or speed post shall be made available to the Registrar to the Issue by us;
4) That where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the
applicant within twelve Working days of the Bid/ Issue Closing Date, giving details of the bank where refunds shall
be credited along with amount and expected date of electronic credit of refund;
5) Instructions to SCSBs to unblock funds in the ASBA Accounts shall be given within twelve days of the Bid/Issue
Closing Date.
6) That the instruction for electronic credit of Equity Shares / refund orders / intimation about the refund to non-
resident Indians shall be completed within the specified time;
7) That no further Issue of Equity Shares shall be made till the Equity Shares issued through the Red Herring
Prospectus are listed or until the Bid monies are refunded on account of non-listing, under-subscription etc.; and
8) That adequate arrangement shall be made to collect all Applications Supported by Blocked Amount and to
consider them similar to applications bid through the non-ASBA route while finalizing the Basis of Allotment.
Withdrawal of the Issue
Our Company, in consultation with the BRLM, reserves the right not to proceed with the Issue anytime after the
Bid/Issue Opening Date but before the Allotment of Equity Shares. In such an event our Company would issue a public
notice in the newspapers, in which the pre-Issue advertisements were published, within two days of the Bid/ Issue
Closing Date, providing reasons for not proceeding with the Issue. Our Company shall also inform the same to the
Stock Exchange on which the Equity Shares are proposed to be listed. The BRLM, through the Registrar to the Issue,
shall notify the SCSBs to unblock the ASBA Accounts of the ASBA Bidders within one Working Day from the day of
receipt of such notification.
Any further issue of Equity Shares by our Company shall be in compliance with applicable laws.
If our Company withdraws the Issue after the closure of bidding, our Company shall be required to file a fresh Red
Herring Prospectus.
In the event of withdrawal of the Issue any time after the Issue Opening Date, our Company will forthwith repay,
without interest, all monies received from the applicants in pursuance of the Draft Red Herring Prospectus. If such
money is not repaid within eight days after our Company becomes liable to repay it, i.e. from the date of withdrawal,
then our Company, on and from such expiry of eight days, be liable to repay the money, with such interest as
prescribed under Section 73 of the Companies Act.
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Utilization of the Issue proceeds
The Board of Directors of our Company certifies that:
1) all monies received out of the Issue shall be transferred to a separate Bank Account other than the bank
account referred to in sub-section (3) of Section 73 of the Companies Act;
2) details of all monies utilized out of this Issue referred above shall be disclosed and continue to be disclosed
till the time any part of the Issue proceeds remains unutilized under an appropriate separate head in the
balance sheet of our Company indicating the purpose for which such monies have been utilised; and
3) Details of all unutilized monies out of this Issue, if any, shall be disclosed under an appropriate separate head
in the balance sheet of our Company indicating the form in which such unutilized monies have been invested.
Our Company shall not have recourse to the Issue Proceeds until the approval for listing and Trading of the Equity
Shares from all the Stock Exchange where listing is sought has been received.
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SECTION VIII - MAIN PROVISIONS OF ARTICLES OF ASSOCIATION OF OUR COMPANY
1 The regulations contained in Table ‘A’ in the First Schedule to the Companies Act, 1956 shall not apply
to this Company
Table ‘A’
not to
apply
2 The regulation for the management of the Company and for the governance of the members thereof
and their representatives shall, subject to any exercise of the statutory powers of the Company with
reference to the repeal or alteration of, or addition to its regulations by special resolution, as prescribed
by the said Companies Act, 1956, be such as are contained in these Articles.
INTERPRETATION
3 In the Interpretation of these Article unless repugnant to the subject or context:
i. “The Company” “The Company” or This Company” means “MOBME WIRELESS SOLUTIONS
LIMITED or “This Company”
ii. “The Act” ‘The Act’ means the Companies Act, 1956 or any statutory modification or re-
enactment thereof for the time being in force
iii. “These Articles” “These Articles” means Articles of Association for the time being of the Company
or the Articles of Association as altered from time to time by special resolution.
iv.
“Alter” and “Alter” and “Alteration” shall include the making of
“Alteration” additions and deletions
v. “Annual General “Annual General Meeting” means a General Meeting of the
Meeting” members held in accordance with Section 166 of the Act, and any adjourned holding
thereof.
vi. “Auditors” “Auditors” means and includes those persons appointed as such for the
time being by the Company.
vii. “Board” or
“Board of
Directors”
“Board” or “Board of Directors” means a meeting of the Directors duly
called and constituted, or as the case may be, the Directors assembled at
a Board Meeting collectively or acting by circular resolution.
viii. “Capital” “Capital” means the share capital for the time being raised or authorized
to be raised for the purpose of the Company.
ix. “Debentures” “Debenture” includes Debenture-stock, bonds and other securities of
the company, whether constituting a change on the assets of the
Company or not.
x. “Directors” “Directors” mean the Directors for the time being of the company, or as
the case may be the Directors assembled at a Board collectively or acting
by circular resolution.
xi. “Extra Ordinary General Meeting” “Extra Ordinary General Meeting” means a General Meeting of the
Members other than Annual General Meeting duly called and
constituted and any adjourned holding thereof.
xii. “Gender” “Words” importing the masculine gender also include the feminine
gender.
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xiii. “In writing” and “Written” “In writing” and “Written” include printing, lithography and other modes
of representing or reproducing words in a visible form.
xiv. “Legal Representative “ “Legal Representative” means a person who in law represents the estate
of a deceased or incompetent member.
xv. “Meeting” or “General Meeting” “Meeting” or “General Meeting” means a meeting of the members
xvi. “Member” “Member” means the duly registered holder of the shares of the
company from time to time, the subscribers of the Memorandum of
Association of the Company and beneficial owners as defined in Article
30
xvii. “Month” “Month” means the calendar month.
xviii. “Office” “Office” means the Registered Office for the time being of the Company.
xix. “Ordinary Resolution” “Ordinary Resolution” shall have the meaning assigned to it by Section
189 of the Act.
xx. “Paid-up” “Paid-up” includes capital credited as paid up.
xxi. “ Persons” “Persons” include corporations and firms as well as individuals.
xxii. “Register of Members” “Register of Members” means the Register of Members to be kept
pursuant to the Act.
xxiii. “The Registrar” “The Registrar” means the Registrar of Companies of the State in which
the office of the Company is for the time being situated.
xxiv. “Document” “Document” includes summons, notice, requisition, order, other legal
process and registers, whether issued, sent or kept, in pursuance of this
or any other Act or otherwise.
xxv. “Seal” “Seal” means the common seal for the time being of the Company.
xxvi. “Secretary” “Secretary” means a Company Secretary within the meaning of clause (c)
of Sub-section (1) of Section 2 of the Company Secretaries Act, 1980 and
includes any other individual possessing the prescribed qualifications
and appointed to perform the duties which may be performed by a
secretary under this Act and any other ministerial or administrative
duties.
xxvii. “Secretary in whole-time practice” “Secretary in whole-time practice” means a secretary who shall be
deemed to be in practice within the meaning of Sub-section (2) of
Section 2 of this Companies Secretaries Act, 1980 and who is not in full -
time employment.
xxviii. “Share” “Share” means a share in the share capital of the company and includes
stock except where a distinction between stock and share is expressed
or implied.
xxix. “Singular number” Words importing the singular number include, where the context admits
or requires, the plural number and vice versa.
xxx. “Special Resolution” “Special Resolution” shall have the meaning assigned to it by Section 189
of the Act.
xxxi. “Year” and “Financial Year” “Year” means the calendar year and “Financial Year” shall have the
meaning assigned thereto by section 2(17) of the Act.
Save as aforesaid, any words or expressions defined in the Act shall, if
not inconsistent with the subject or context bear the same meaning in
these Articles.
The marginal notes used in these Articles shall not affect the
construction thereof.
PRELIMINARY
4 The Company shall, on being so required by a member send to him within seven Copy of Memorandum and
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days of the requirement and subject to the payment of a fee of one rupee a copy
of each of the documents referred to in Section 39 of the Act.
Articles to be furnished to
members
CAPITAL AND INCREASE AND REDUCTION OF CAPITAL
5 The Authorized Share Capital of the Company is Rs.4,00,00,000/- (Rupees Four
Crores only) divided into 40,00,000 (Forty Lakhs) Equity Shares of Rs.10/-
(Rupees Ten only) each.
Capital
6 Subject to the provisions of the Act and these Articles, the shares in the Capital
of the Company for the time being (including any shares forming part of any
increased capital of the Company) shall be under the control of the Board who
may allot or otherwise dispose off the same or any of them to such persons, in
such proportion and on such terms and conditions and either at a premium or at
par or (subject to compliance with the provisions of Section 79 of the Act) at a
discount and at such times as it may from time to time think fit and proper and,
with the consent of the General Meeting, give to any person the option to call for
or be allotted any class of shares of the Company either at par or subject as
aforesaid at a discount, such option being exercisable at such times and for such
considerations as the Board thinks fit.
Shares under the control of the
Board
7 In addition to and without derogating from the powers for that purpose
conferred on the Board under Article 6, the Company in General Meeting may
determine that any shares (whether forming part of the original capital or of any
increased capital of the Company) shall be offered to such persons (whether
members or not) in such proportions and on such terms and conditions and
either at a premium or at par or (subject to compliance with the provisions of
Section 79 of the Act) at a discount, as such General Meeting shall determine and
with full power to give to any person (whether a member or not) the option to
call for or be allotted any class of shares of the Company either at a premium or
at par or (subject to compliance with the provisions of section 79 of the Act) at a
discount, such option being exercisable at such times and for such consideration
as may be directed by such General Meeting or the Company in General Meeting
may make any other provisions, whatsoever for the issue, allotment or disposal
of any shares.
Power also to Company in
General Meeting to issue shares
8 The Company in General Meeting may from time to time increase its share
capital by the creation of further shares, such increase to be of such aggregate
amount and to be divided into shares of such respective amounts as the
resolution shall prescribe. Subject to the provisions of the Act, the further shares
shall be issued upon such terms and conditions and with such rights and
privileges annexed thereto, as the General Meeting resolving upon the creation
thereof shall direct, and if no direction be given as the Board shall determine;
and in particular such shares may be issued with a preferential or qualified right
to dividends and in the distribution of assets of the Company, and with a right of
voting at General Meetings of the Company.
Increase of Capital
9 (1) Where at any time after the expiry of two years from the formation of the
Company or at any time after the expiry of one year of the allotment of shares in
the Company made for the first time after its formation, whichever is earlier, it is
proposed to increase the subscribed capital of the Company by allotment of
further shares then:
(a) Such further shares shall be offered with or without the rights of
renunciation to the persons who, at the date of the offer, are holders
of the equity shares of the Company, in proportion, as nearly as
circumstances admit, to the capital paid up on those shares at that
date;
(b) The offer aforesaid shall be made by notice specifying the number of
shares offered and limiting a time not being less than one month from
the date of the offer, within which the offer, if not accepted, will be
deemed to have been declined.
(c) The offer aforesaid shall be deemed to include a right exercisable by
the person concerned to renounce the shares offered to him or any of
them in favour of any other person; and the notice referred to in
clause (b) shall contain a statement of this right;
Further issue of capital
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(d) After the expiry of the time specified in the notice aforesaid, or on
receipt of earlier intimation from the person to whom such notice is
given that he declines to accept the shares offered, the Board of
Directors may dispose of them in such manner as they think most
beneficial to the Company.
Notwithstanding anything contained in sub-section (1) of Article 9 the further
shares aforesaid may be offered to any persons (whether or not those persons
include the persons referred to in clause (a) of sub-section (1) in any manner
whatsoever:
(a) if a special resolution to that effect is passed, by the Company in General
Meeting, or
(b) where no such special resolution is passed, if the votes cast (whether on a
show of hands, or on a poll, as the case may be) in favour of the proposal
contained in the resolution moved in that General Meeting (including the casing
vote, if any, of the Chairman) by members who, being entitled so to do, vote in
person, or where proxies are allowed, by proxy, exceed the votes, if any, cast
against the proposal by members so entitled and voting and the Central
Government is satisfied, on an application made by the Board of Directors in this
behalf , that the proposal is most beneficial to the Company.
10 Subject to the provisions of Section 80 of the Act, the Company shall have power
to issue Preference Shares which are or, at the option of the Company, are liable
to be redeemed, and the Resolution authorizing such issue shall prescribe the
manner, terms and conditions of redemption.
Issue and Redemption of
Preference Shares
11 On the issue of redeemable preference shares under the provisions of Article 10
hereof, the following provisions shall take effect:
(a) No such shares shall be redeemed except out of the profits of the
Company which would otherwise be available for dividend or out of
the proceeds of a fresh issue of shares made for the purpose of the
redemption;
(b) No such shares shall be redeemed unless they are fully paid;
(c) The premium, if any, payable on the redemption shall be provided for
out of the profits of the Company or out of the Company’s Share
Premium Account, before the shares are redeemed; and
(d) Where any such shares are redeemed otherwise than out of the
proceeds of a fresh issue, there shall, out of profits which would
otherwise have been available, for dividend, be transferred to a
reserve fund, to be called “Capital Redemption Reserve Account” a
sum equal to the nominal amount of the shares redeemed, and the
provisions of the Act, relating to the reduction of the share capital of
the Company shall, except as provided under Section 80 of the Act
apply as if the Capital Redemption Reserve Account were paid-up
share capital of the Company.
Provisions applicable in case of
issue and Redemption of
Preference shares
12 Except so far as otherwise provided by the conditions of issue or by these
Articles, any capital raised by the creation of new shares, shall be considered part
of the initial capital and shall be subject to the provisions herein contained with
reference to the payment of calls, and installments, transfer and transmissions,
forfeiture, lien, surrender, voting and otherwise.
New Capital same as Original
Capital
13 (1) The Company shall not have the power to buy its own shares, unless the
consequent reduction of capital is effected and sanctioned in accordance with
Article 14 and in accordance with Section 100 to 104 or Section 402 or other
applicable provisions (if any) of the Act.
(2) Except to the context permitted by Section 77 or other applicable provisions
(if any) of the Act, the Company shall not give whether directly or indirectly and
whether by means of a loan, guarantee, the provisions of security or otherwise
any financial assistance for the purchase of, or in connection with the purchase
or subscription made or to be made by any person of or for any shares in the
Company.
Restrictions on purchase by
company of its own shares
14 The Company may subject to the provisions of Section 100 to 105 and other
applicable provisions (if any) of the Act, from time to time by Special Resolution
Reduction of Capital
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reduce its capital and any capital redemption reserve account or any share
premium account in any manner for the time being authorised by law, and in
particular, capital may be paid off on the footing that it may be called up again or
otherwise.
15 The Company may in General Meeting alter the conditions of its Memorandum
of Association as follows:
(a) Consolidate and divide all or any of its share capital into shares of large
amounts than its existing shares;
(b) Sub-divide its shares or any of them into shares of smaller amount so
however, that in the sub-division the proportion between the amount
paid and the amount, if any, unpaid on each reduced share shall be the
same as it was in the case of the share from which the reduced share is
derived;
(c) Cancel any shares which, at the date of the passing of the resolution,
have not been taken or agreed to be taken by any person and diminish
the amount of its share capital by the amount of the shares so
cancelled; a cancellation of shares in pursuance of this sub-clause shall
not be deemed to be reduction of share capital within the meaning of
the Act.
(d) Convert all or any of its fully paid up shares into stock, and reconvert
that stock into fully paid up shares of any denomination.
If the Company has:
(i) Consolidated and divided its Share Capital into shares of larger
amount than its existing shares
(ii) Converted any shares into stock;
(iii) Re-converted any stock into shares;
(iv) Sub-divided its shares or any of them;
(v) Redeemed any redeemable preference shares; or
(vi) Cancelled any shares, otherwise than in connection with a
reduction of Share Capital under Sections 100 to 104 of the Act,
the Company shall within one month after doing so, give notice
thereof to the Registrar specifying as the case may be, the shares
consolidated, divided, converted, sub-divided, redeemed or
cancelled or the stocks reconverted.
The Company shall thereupon request the Registrar to record the notice and
make any alterations which may be necessary in the Company’s Memorandum
or Articles or both.
Consolidation and division of
capital
Notice to Registrar of
consolidation of share Capital,
conversion of Shares into Stocks
etc.
16 Whenever as a result of issue of new shares of any consolidation or sub-division
of shares, any share becomes held by members in fractions, the Board shall,
subject to the provisions of the Act, and the Articles and to the directions of the
Company in General Meeting, if any, sell those shares which members hold in
fractions for the best price reasonably obtainable and shall pay and distribute to
and amongst the members entitled to such shares in due proportions the net
proceeds of the sale thereof. For the purpose of giving effect to any such sale
the Board may authorise any person to transfer and the purchaser shall neither
be bound to see the application of the purchase money nor shall his title to the
shares be affected by any irregularity or invalidity in the proceedings with
reference to the sale.
Sale of Fractional Shares
17 Wherever the capital, by reason of the issue of preference shares or otherwise, is
divided into different classes of shares, all or any of the rights and privileges
attached to each class may, subject to the provisions of Sections 106 and 107 of
the Act, be modified, commuted, affected or abrogated, or dealt with by
agreement between the Company and any person purporting to contract on
behalf of that class provided such agreement is ratified in writing by holders of
atleast three – fourths in nominal value of the issued shares of that class or is
confirmed by a resolution passed by the votes of not less than three-fourths of
the holders of the shares of that class at a separate General Meeting of the
holders of shares of that class and all the provisions contained in these Articles as
Modification of rights
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to the General Meetings shall mutatis mutandis apply to every such meeting.
18 The rights conferred upon the holders of the shares of any class issued with
preferred or other rights shall not unless otherwise expressly provided by the
terms of the issue of the shares of that class be deemed to be varied by the
creation or issue of further shares ranking paripassu therewith.
Issue of further shares on
paripassu basis
19 The company shall not issue any shares (not being preference shares) which
carry voting right or rights in the Company as to dividend, capital or otherwise
which are disproportionate to rights attached to the holders of other shares (not
being preference shares).
SHARES AND CERTIFICATES
No issue with disproportionate
rights
20 The Company shall cause to be kept a Register and index of Members in
accordance with Sections 150 and 151 of the Act, and the Companies (Issue of
Share Certificates) Rules, 1960, and any modification thereof. Every member
who changes his name or address shall give notice of the change of name or
address to the Company.
Register and Index of Members
21 The shares in the capital shall be numbered progressively according to their
several denominations, and except in the manner hereinbefore mentioned, no
share shall be sub-divided.
Shares to be numbered
progressively
22 Subject to the provisions of the Act, and of these Articles the Board may allot and
issue shares in the capital of the Company as payment or part payment for any
property sold or transferred, goods or machinery supplied or for services
rendered to the Company either in or about the formation or promotion of the
Company or the conduct of its business and any shares which may be so allotted
may be issued as fully paid up shares and if so issued, shall be deemed to be fully
paid up shares.
Directors may allot shares fully
paid-up
23 (1) Where the Company issued shares at a premium whether for
cash or otherwise, a sum equal to the aggregate amount or
value of the premium shall be transferred to an account, to
be called “Share premium Account” and the provisions of the
Act relating to the reduction of the share capital of the
Company shall, except as provided in this clause, apply as if
the share premium account were paid up share capital of the
Company
(2) The share premium account may, notwithstanding sub clause
(1) hereof, be applied by the Company.
(a) In paying up unissued shares of the Company to be issued to
members of the Company as fully paid bonus shares;
(b) In writing off the preliminary expenses of the company.
(c) In writing off the expenses of, or the commission paid or
discount allowed on any issue of shares or debentures of the
Company; and
(d) In providing for the premium payable on the redemption of
any redeemable preference shares or of any debentures of
the Company.
Application of premium
24 If by the terms of issue of any shares or otherwise the whole or any part of the
amount of issue price thereof shall be payable by installments at fixed time,
every such installment shall, when due, be paid to the Company by the person
who for the time being and from to time is the registered holder of the shares or
his legal representatives.
Installment in Shares
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25 Subject to the provisions of these Articles, any application signed by or on behalf
of an applicant for shares in the Company followed by allotment of any share
therein, shall be an acceptance of shares within the meaning of these Articles,
and every person who thus or other wise accepts any shares and whose name is
on the Register or members shall, for the purpose of these Articles, be a member
, provided that no share shall be applied for or allotted to a minor, insolvent or
person of unsound mind.
Acceptance of shares
26 The money (if any) which the Board of Directors shall, on the allotment of any
shares being made by it, require or direct to be paid by way of deposit, call or
otherwise, in respect of any shares allotted by it, shall immediately on the
inscription of the name of the allottee in the Register of Members as the holder
of such shares, become a debt due to and recoverable by the Company from the
allottee thereof, and shall be paid by him accordingly.
Deposits and calls etc., to be a
debt payable immediately
27 Every member, or his heirs, executors or administrators, shall pay to the
Company the proportion of the capital represented by his share or shares which
may, for the time being remain unpaid thereon, in such amounts at such time or
times and in such manner, as the Board of Directors shall, from time to time, in
accordance with the Company’s regulations require or fix for the payment
thereof.
Liability of members
28 The company shall unless prohibited by any provision of law of any other or any
court tribunal or other authority, within three months after the allotment of any
of its shares or debentures and within one month after the application for the
transfer of any such shares or debentures deliver, in accordance with the
procedure laid down in section 53, the certificates of all shares or debentures
allotted or transferred.
Limitation of time for issue of
Certificates
29 Every member or allottee of shares shall be entitled, without payment, to receive
one certificate for each marketable lot for all the shares of the same class
registered in his name and specifying the name of the person in whose favour it
is issued, the share certificate number and the amount paid up thereon. Such
certificate shall be issued only in pursuance of a resolution passed by the Board
and on surrender to the Company of its Letter of Allotment or its Fractional
Coupons of requisite value, save in cases of issues against Letter of Acceptance
or for renunciation or in cases of issues of bonus shares, PROVIDED THAT if the
Letter of Allotment is lost or destroyed, the Board may impose such reasonable
terms, if any, as it think fit, as to evidence and indemnity and the payment of
out-of-pocket expenses incurred by the Company in investigating the evidence. If
any member shall require additional certificate he shall pay for each additional
certificate (not being in the marketable lot) such sum not exceeding One Rupee
as the Board shall determine. The certificate of title to shares shall be issued
under the seal of the Company in conformity with the provisions of the
Companies (Issue of Share Certificates) Rules, 1960 or any statutory modification
or re-enactment thereof for the time being in force.
No fee shall be charged for the issue of shares/ debenture certificates in
replacement of those that are old, decrepit or worn-out or where the cages on
the reverse for recording transfers have been fully utilized.
Share Certificates
DEMATERIALISATION OF SECURITIES
30 I. For the purpose of this Article :
Definition:
“Beneficial Owner” means a person or persons whose name is recorded as such
with a depository.
“SEBI” means the Securities Exchange Board of India.
“Depository” means a Company formed and registered under the Companies
Act, 1956 and which has been granted a certificate of registration to act as a
depository under the Securities and Exchange Board of India Act, 1992 and
“Security” means such security as may be specified by SEBI from time to time.
Dematerialization of Securities:
II Notwithstanding anything contained in these Articles the Company shall be
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entitled to dematerialise its securities and to offer securities in a dematerialized
form pursuant to the Depositories Act, 1996 hereinafter called as the
Depositories Act, which means and includes any amendments, clarifications,
notifications issued by the concerned authorities/ regulators from time to time.
Options for Investors:
III. Every person subscribing to securities offered by the Company shall or
become the Member by transfers, transmissions, transposition, gift or otherwise
(hereinafter called as ‘the transfer’ for the purpose of this Article) have the
option to receive security certificates or to hold the securities with a depository.
Such a person who is the beneficial owner of the securities can at any time opt
out of a depository, if permitted by the law, in respect of any security in the
manner provided by the Depositories Act, and the Company shall provide the
owner, in the manner the required certificate of securities.
If a person opts to hold his / her security with a depository, the Company
shall intimate such depository the details of allotment or of the transfer of
security and on receipt of the information, the depository shall enter in its record
the name of allottee or the transferee as the Beneficial Owner of the security.
Securities in Depositories to be in fungible form:
IV. All Securities held by a depository shall be dematerialised and in fungible
form. Nothing contained on Sections 151, 153A, 153B, 187 B,187C and 372 A of
the Act shall apply to a depository in respect of the securities held by it on behalf
of the Beneficial Owner.
Rights of Depositories and Beneficial Owners:
V.
(a) Notwithstanding anything to the contrary contained in the Act or these
Articles, a depository shall be deemed to be registered owner for the
purpose of effecting transfer of ownership of security on behalf of the
Beneficial Owner.
(b) Save as otherwise provided in (a) above, the depository as the
registered owner of the securities shall not have any voting rights in
respect of the securities held by it.
(c) Every person holding securities of the Company and whose name is
entered as the beneficial owner in the records of the depository shall
be deemed to be a member of the Company. The beneficial owner of
securities shall be entitled to all the rights and benefits and subject to
all the liabilities in respect of his / her securities, which are held by a
depository.
Service of documents:
VI. Notwithstanding anything in the Act or these Articles to the
contrary, where securities are held in a depository the records of
the beneficial ownership may be served by such depository on the
Company by means of electronic mode or by delivery of floppies or
discs.
Transfer of Securities:
VII. Nothing contained in Section 108 of the Act or this Article shall
apply to a transfer of securities affected by a transferor and
transferee both of who are entered as beneficial owners in the
records of a depository.
Allotment of Securities dealt with in a depository:
VIII. Notwithstanding anything contained in the Act or these Articles to
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the contrary, where securities are dealt with by a depository, the
Company shall intimate the details thereof to the depository
immediately on allotment of such securities.
Distinctive numbers of Securities held in a depository:
IX. Nothing contained in the Act or these Articles regarding the
necessity of having distinctive numbers for securities issued by the
Company shall apply to securities held with a depository.
Register and Index of beneficial owners:
X. Notwithstanding anything in the Act or these Articles to the
contrary, the Register and index of beneficial owners maintained
by a depository under Depository Act, 1996 shall be deemed to be
the Register and Index of Members and Security Holders for the
purpose of these Articles.
31 Any two or more joint allottees or holders of shares shall, for the purpose of
Article 29 be treated as a single member and the certificate for any share, which
may be subject to joint ownership, may be delivered to any one of such joint
owners on behalf of all of them.
Joint Allottees or Holders
32 A certificate of shares may be renewed or a duplicate issued in accordance with
the provisions of the Act, and the Companies (Issue of Share Certificate) Rules,
1960, and any modification thereof.
Renewal of Share Certificate
33 If any share stands in the name of two or more persons, the person first named
in the Register of Members, shall as regards receipt of dividends or bonus or
service of notice and / or any other mater connected with the Company, except
voting at meeting and the transfer of the shares, be deemed the sole holder
thereof, but the joint holders of a share shall be, severally as well as jointly, liable
for the payment of all installments and calls due in respect of such share and for
all incidents thereof according to these Articles.
The First Named of Joint
Holders Deemed Sole Holder
Nomination of Shares:
34 (a) Every holder / joint holder of shares or holder/joint holder of debenture of the
Company may at any time, nominate in accordance with the provisions of and in
the manner provided by Section 109A of the Companies Act, 1956 and any
amendments thereof from time to time, a person to whom all the rights in the
shares or debentures of the Company shall vest in the event of the death of the
holder/ joint holder.
(b) Subject to the provisions of Section 109A of the Companies Act, 1956 and Article
34A(a) any person who becomes a nominee by virtue of the provisions of the Act,
upon production of such evidence as may be required by the Board or any
committee thereof, elect either to be registered himself / herself as holders of the
share or debenture as the case may be as the deceased share holder or
debenture holder as the case may be, could have made in accordance with
provisions of and in the manner prescribed by Section 109B of the Companies Act,
1956 and any amendments thereto from time to time.
Provided that the Board may at any time give notice requiring any
such person to elect either to be registered himself/ herself or to transfer the
share or debentures and if the notice is not complied with within ninety days, the
Board may thereafter withhold payment of all dividends, bonuses or other
moneys payable in respect of the shares or debentures or such other rights or
entitlements until the requirements of the notice have been complied with.
(c) A person being a nominee, becoming entitled to a share or debenture by reason
of the death of the holder shall be entitled to the same dividends and other
advantages to which he would be entitled, if he were the registered holder of the
shares or debentures except that he shall not, before being registered as a
member in respect of his share or debenture be entitled in respect of its exercise
any right conferred by membership in relation to meeting of the Company.
35(1) The Company shall not be bound to recognise any equitable, contingent, future or
partial interest in any share, or (except only as is by these presents otherwise
expressly provided) any right in respect of a share other than an absolute right
Company not bound to
recognise any interest in share
other than that of registered
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thereto, in accordance with these presents from time to time registered as the
holder thereof but the Board shall be at liberty as its sole discretion to register
any share in the joint names of two or more persons or the survivors of them.
holder
(2) Save as herein otherwise provided, the company shall be entitled to treat the
person whose name appears on the Register of Members as the holder of any
share as the absolute owner thereof, and accordingly shall not(except as ordered
by a court of competent jurisdiction or as by Law required) be bound to recognise
any benami, trust or equitable, contingent, future, partial or other counter claims
or right to or interest in such share on the part of any other person whether or
not it shall have express or implied notice thereof.
Trust not recognised
36 Shares may be registered in the name of an incorporated company or other body
corporate but not in the name of a person of unsound mind or in the name of any
firm or partnership.
Who may hold shares
UNDERWRITING AND BROKERAGE
37 The Company may pay a commission to any person in consideration of:
(i) his subscribing or agreeing to subscribe whether absolutely or conditionally,
for any shares in or debentures of the Company subject to the restrictions
specified in sub-section (4A) of Section 76 of the Act, or
(ii) his procuring or agreeing to procure subscriptions, whether absolute or
conditional for any shares in, or debentures of the Company, in the following
conditions are fulfilled namely:
(a) the commission paid or agreed to be paid does not exceed in the case of
shares, five per cent of the price at which the shares are issued and in the case of
debentures, two and half percent of the price at which the debentures are issued;
(b) the amount or rate percent of the commission paid or agreed to be paid, on
shares or debentures offered to the public for subscription, is disclosed in the
Prospectus, and in the case of shares or debentures not offered to the public for
subscription is disclosed in the Statement in lieu of Prospectus and filed before
the payment of the commission with the Registrar, and where a circular or notice,
not being a Prospectus and filed before the repayment of commission with the
Registrar, and where a circular or notice, not be a Prospectus inviting subscription
for the shares or debentures is issued is also disclosed in that circular or notice;
(c) the number of shares or debentures which such persons have agreed for a
commission to subscribe, absolutely or conditionally is disclosed in the manner
aforesaid; and
(d) a copy of the contract for the payment of commission is delivered to the
Registrar at the time of delivery of the Prospectus or the statement in lieu of
Prospectus for registration.
Save as aforesaid and save as provided in Section 76 of the Act, the Company shall
not allot any of its shares or debentures or apply any of its moneys, either directly
or indirectly, in payment of any commission, discount or allowance, to any
person in consideration of:
(i) his subscribing or agreeing to subscribe, whether absolutely or conditionally
for any shares in, or debentures of the Company; or
(ii) his procuring or agreeing to procure subscriptions, whether absolutely or
conditionally, for any shares in, or debentures of the Company whether the
shares, debentures or money be so allotted or applied by, being added to the
purchase money of any property acquired by the company or to the contract
price of any work to be executed for the Company, or the money be paid out of
the nominal purchase or contract price, or otherwise.
Power to pay certain
commission and prohibition of
payment of all other
commission discounts etc
38 The Company may pay a reasonable sum for brokerage on any issue of shares and
debentures.
Brokerage may be paid
INTEREST OUT OF CAPITAL
39 Where any shares are issued for the purpose of raising money to defray the
expenses of the construction of any work or building, or the provision of any
plant, which cannot be made profitable for lengthy period, the Company may pay
interest on so much of that share capital as is for the time being paid up, for the
Interest out of Capital
- 310 -
period, at the rate and subject to the conditions and restrictions contained in
Section 208 of the Act, and may charge the same to capital as part of the cost of
construction of the work or building or the provision of the plant.
CALLS
40 The Board of Directors may, from time to time, by a resolution passed at a
Meeting of the Board ( and not by circular resolution) make such call as it may
think fit upon the members in respect of all moneys unpaid on the shares held by
them respectively (whether on account of nominal value of shares or by way of
premium) and not by the conditions of allotment thereof made payable at a fixed
time, and each member shall pay the amount of every call so made on him to the
persons and at the times and place appointed by the Board of Directors. Option or
right to call of share/ debenture shall not be given to any person(s) except with
the sanction of the Company in General Meeting. A call may be made payable by
installments. A call may be postponed or revoked as the Board may determine.
Directors may make Calls
41 Where any calls for further share capital are made on shares such calls be made
on a uniform basis on all shares falling under the same class. For the purpose of
this Article, shares of the same nominal value on which different amounts have
been paid up, shall not be deemed to fall under the same class.
Call on shares of the same class
to be made on the uniform
basis
42 One month’s notice at least of every call payable otherwise than on allotment
shall be given by the Company specifying the time and place of payment, and to
whom such call be paid, provided that the Board may, as its discretion, postpone
the call or revoke it.
Notice of calls
43 A call shall be deemed to have been made at the time when the resolution of the
Board authorising such call passed at the Meeting of the Board of Directors, and
may be made payable by the members on the Register of Members on a
subsequent date to be fixed by the Board.
Calls to date from Resolution
44 The Board of Directors may, from time to time, as its discretion, extend the time
for the payment of any call, and may extend such time as to all or any of the
members, who reside at a distance or other cause, the Board of Directors may
deem fairly entitled to such extension save as a matter of grace and favour.
Directors may extend time
45 If any member fails to pay a call due from him on the day appointed for payment
thereof, or any such extension thereof as aforesaid, he shall be liable to pay
interest on the same from the day appointed for the payment thereof to the time
of actual payment at such rate as shall from time to time be fixed by the Board of
Directors, but nothing in this Article shall render it compulsory upon the Board of
Directors to demand or recover any interest from any such member.
Calls to carry interest from
Resolution
46 Subject to the provisions of the Act and these Articles, on the trial or hearing of
any action or suit brought by the Company against any member or his
representatives to the recovery of any debt or money claimed to be due to the
Company in respect of his shares it shall be sufficient to prove that the name of
the member in respect of whose shares the money is sought to be recovered,
appears entered on the Register of Members as the holder, at or subsequent to
the date at which the money sought to be recovered is alleged to have become
due, of the shares in respect of which such money is sought to be received; that
the resolution making the call duly recovered in the minutes book; and that the
notice of such call was duly given to the member or his representatives sued in
pursuance of these presents, and it shall not be necessary to prove the
appointment of the Directors who made such call, not that a quorum was present
at the Board at which any call was made, not that the meeting at which any call
was made was duly convened or constituted nor any other matters, but the proof
of the matters aforesaid shall be conclusive evidence of the debt.
Proof of Trial in suit for money
due on shares
47 The Board may, if it thinks fit, receive from any member willing to advance the
same, all or any part of the amounts of his respective shares beyond the sums
actually called up, and upon the moneys so paid in advance, or upon so much
thereof as from time to time and to at any time thereafter exceeds the amount of
the calls then made and due in respect of the shares on account of which such
advances are made, the Company may pay or allow interest at such rate as the
member paying such sum in advance and the Board may agree upon, provided
always that at any time after the payment of any such money so paid in advance
Payments in advance of calls
may carry interest
- 311 -
it shall be lawful for the Board from time to time to repay such member so much
of such money as shall then exceed the amount of the calls made upon such
shares, unless there be an express agreement to the contrary, and after such
repayment such member shall be liable to pay and such shares shall be charged
with the payment of all further calls as if no such advance had been made. The
member making such advance payment shall not, however, be entitled to
dividend or to participate in profits or to any voting rights in respect of the
moneys so paid by him, until the same would, but for such payment, become
presently payable.
FORFEITURE, SURRENDER AND LIEN
48 If any member fails to pay any call or installment of a call in respect of any share
on or before the day appointed for the payment of the same, the Board may, at
any time thereafter, during such time as the call or installment remains unpaid,
serve a notice on such – member or on the person (if any) entitled to the share by
transmission requiring him to pay the same, together with any interest that may
have accrued and all expenses that may have been incurred by the company by
reason of such non-payment. Fully paid shares shall be free from lien and that in
the case of partly paid shares, the Company’s lien shall be restricted to money
called or payable at a fixed time in respect of such shares.
If call or installment not paid,
notice may be given
49 The notice shall name a day (not being earlier than the expiry of fourteen days
from the date of service of the notice) and a place or places on and at which such
money, including the call or installment and such interest and expenses as
aforesaid, is to be paid. The notice shall also state that in the event of non-
payment on or before the time and at the place appointed, the shares in respect of
which the call was made or installment was payable, will be liable to be forfeited.
Form of Notice
50 If the requisitions of any such notice as aforesaid are not complied with any share
in respect of which the notice has been given may at any time thereafter, before
the calls or installments and interest and expenses due in respect thereof are paid,
be forfeited by a resolution of the Board to that effect. Such forfeiture shall
include all dividends and bonus declared in respect of the forfeited shares and not
actually paid before forfeiture. Such forfeiture however shall not extend to
unclaimed dividends unless it becomes barred by law.
In default of payment shares to
be forfeited
51 When any shares have been so forfeited, notice of the resolution shall be given to
the members in whose name it stood immediately prior to the forfeiture and an
entry of the forfeiture, with the date thereof, shall forthwith be made in Register
of Members provided however that the failure to give the notice of the shares
having been forfeited will not in any way invalidate the forfeiture.
Notice after forfeiture and
entry of forfeiture in Register
of Members
52 Any shares so forfeited shall be deemed to be the property of the Company and
the Board may sell, re-allot or otherwise dispose of the same in such manner as it
thinks fit.
Forfeited shares to become
property of the Company
53 The Board may, at any time before any share so forfeited shall have been sold, re
allotted or otherwise disposed of, annul the forfeiture thereof as a matter of grace
and favour but not as of right upon such terms and conditions as it may think fit.
Power to annul forfeiture
54 Any member whose share shall have been forfeited shall, notwithstanding the
forfeiture, be liable to pay, and shall forthwith pay to the Company all calls,
installments, interest and expenses owing upon or in respect of such shares at the
time of forfeiture together with interest thereon from the time of forfeiture until
payment at such rate not exceeding fifteen percent per annum as the Board may
determine and the Board may endorse the payment of such moneys or any part
thereof if it thinks fit but shall not be under any obligations so to do.
Arrears to be paid
notwithstanding forfeiture
55 The forfeiture of a share shall involve the extinction of all interest in and also of all
claims and demands against the Company, in respect of the share and all other
rights incidental to the share except only such of those rights as are by these
Articles expressly saved.
Effect of Forfeiture
56 The net proceeds of any such sale shall be applied in or towards satisfaction of the
said debt, liabilities or engagements and the residue (if any) paid to such member,
his heirs, executors, administrators or assignees.
Proceeds how to be applied
57 A certificate in writing signed by two Directors and countersigned by the Certificate of forfeiture
- 312 -
Managing Director or the Secretary of the Company that the call in respect of a
share was made and notice thereof given, and that the default in payment of the
call was made and that the forfeiture was made by a resolution of the Board to
that effect shall be conclusive evidence of the fact stated therein as against all
persons entitled to such share.
58 The Company may receive the consideration, if any, given for the share on any
sale, re allotment or other disposal thereof and may execute a transfer of the
share in favour of the person to whom the share is sold or disposed of and the
person to whom such share is sold, reallotted or disposed off may be registered as
the holder of the share. Any such purchaser or allottee shall not (unless by express
agreement to the contrary) be liable to pay any calls, amounts, installments,
interest and expenses owing to the Company prior to such purchases or allotment,
nor shall he be entitled (unless by express agreement to the contrary) to any of the
dividends, interest or bonuses accrued or which might have accrued upon the
share before the time of completing such purchase or before such allotment. Such
purchaser or allottee shall not be bound to see to the application of the purchase
money, if any, nor shall his title to the share be affected by any irregularity or
invalidity in the proceedings with reference to the forfeiture, sale, re allotment or
disposal of the share.
Title of purchaser and allottee
of forfeited shares
59 Neither a judgment nor a decree in favour of the Company for calls or other
moneys due in respect of any shares nor any part payment or satisfaction thereof
nor the receipts by the Company of portion of any money which shall from time to
time be due from any member in respect of any shares either by way of principal
or interest nor any indulgence granted by the Company in respect of payment of
any such money shall preclude the Company from thereafter proceeding to
enforce a forfeiture of such shares as herein provided.
Partial payment not to
preclude forfeiture
60 The provisions of these Articles as to forfeiture shall apply to the case of non-
payment of any sum which by the terms of issue of a share becomes payable at a
fixed time, whether on account of the nominal value of the share or by way of
premium, as if the same had been payable by virtue of a call duly made and
notified.
The provisions of these Articles
as to forfeiture to apply in case
of non-payment of any sum
61 The Board may at any time, subject to the provisions of the Act, accept the
surrender of any share from or by any members desirous of surrendering the same
on such terms as the Board may think fit.
Board may accept surrender of
shares
62 The Company shall have a first and paramount lien upon all the shares (other than
fully paid up shares) registered in the name of each member (whether solely or
jointly with others) and upon the proceeds of sale thereof for all moneys called or
payable at a fixed time in respect of such shares only to the extent of moneys as
specified in Article 48 above, and no equitable interest in any shares shall be
created except upon the footing and condition that Article 35(2) hereof is to have
full effect. Unless otherwise agreed, the registration of a transfer of shares shall
operate as waiver of the Company’s lien, if any, on such shares. The Board may at
any time declare any shares to be wholly or in part exempt from the provisions of
this Article.
Company’s lien on shares
63 For the purpose of enforcing such lien, the Board may sell the shares subject
thereto in such manner as it thinks fit, but no sale shall be made until such time
fixed as aforesaid shall have arrived and until notice in writing of the intention to
sell shall have been served on such member, his heirs, executors, administrators or
other legal representatives, as the case may be, and default shall have been made
by him or them in payment, fulfillment or discharge of such debts, liabilities or
engagements for seven days after the date of such notice.
Enforcing lien by sale
64 The net proceeds of any such sale shall be received by the company and applied in
or towards the satisfaction of the said debts, liabilities or engagements, and the
residue, if any shall be paid to such member, his heirs, executors, administrators or
other legal representatives as the case may be.
Application of proceeds of sale
65 Upon any sale after forfeiture or for enforcing a lien in purported exercise of the
powers hereinbefore given, the Board of Directors may appoint some person to
execute an instrument of transfer of the shares sold and cause the purchaser’s
name to be entered in the register in respect of the shares sold, and the purchaser
Validity of sales in exercise of
lien and after forfeiture
- 313 -
shall not be bound to see to the regularity of the proceedings, nor to the
application of the purchase money and after his name has been entered in the
Register of Members in respect of such shares the validity of the sale shall not be
impeached by any person, and the remedy of any person aggrieved by the sale
shall be in damages only and against the Company exclusively.
66 Where any shares under the powers in that behalf herein contained are sold by
the Board of Directors after forfeiture or for enforcing a lien, the certificates
originally issued in respect of the relative shares shall (unless the same shall
voluntarily or on demand by the Company, have been previously surrendered to
the Company by the defaulting member) stand cancelled and become null and
void and of no effect and the Board of Directors may issue a new certificate or
certificates for such shares distinguishing it or them in such manner as it may think
fit from the certificate or certificates previously issued in respect of the said
shares.
Board of Directors may issue
new Certificates
67 Any money due from the Company to a member may, without the consent and
notwithstanding the objection of such member, be applied by the Company in or
towards the payment of any money due, from him to the Company for calls or
otherwise.
TRANSFER AND TRANSMISSION OF SHARES
Money due from the Company
may be set off against money
due to the Company
68 The provisions of Section 111A of the Act regarding registration of transfer should
be adhered to. The registration of transfer shall not be refused on the ground of
the transferor being either alone or jointly with any other person or persons
indebted to the Company on any account whatsoever. The Company shall keep a
book to be called the Register of Transfers and therein shall be fairly and distinctly
entered the particulars of every transfer or transmission of any share.
Register of Transfer
69 Subject to the provisions of the Act, and these Articles, no transfer of shares in, or
debentures of the Company shall be registered, unless a proper instrument of
transfer duly stamped and executed by or on behalf of the transferor and by or on
behalf of the transferee and specifying the name address and occupation, if any,
of the transferee has been delivered to the Company along with the certificate
relating to the shares or debentures or if no such certificate is in existence, along
with the letter of allotment of such shares or debentures. The transferor shall be
deemed to remain the holder of such shares until the name of the transferee is
entered in the register in respect thereof. Shares of different classes shall not be
included in the same instrument of transfer.
Execution of Transfer etc.
70 The instrument of transfer shall be in writing and all the provisions of Section 108
of the Act and any statutory modification thereof for the time being shall be duly
complied with in respect of all transfer of shares and of the registration thereof.
The Company shall use a common form of transfer.
Form of Transfer
71 (a) Only fully paid shares or debentures shall be transferred to a minor acting
through his / her legal or natural guardian.
(b) No transfer shall be made to a person of unsound mind.
Transfer to minors
No transfer to a person of
unsound mind
72 (1) An application for the registration of transfer of shares may be made either
by the transferor or by the transferee.
(2) Where the application is made by the transferor and relates to partly paid
shares, the transfer shall not be registered unless the Company gives notice of the
application to the transferee and the transferee makes no objection to the
transfer within two weeks from the receipt of the notice.
(3) For the purpose of clause (2) hereof notice to the transferee shall be deemed to
have been duly given if it is dispatched by prepaid registered post to the transferee
at the address given in the instrument of transfer and shall be deemed to have
been duly delivered at the time at which it would have been delivered in the
ordinary course of post.
(4) If the Company refuses to register the transfer of any shares or transmission
of rights therein, the Company shall within one month from the date on which the
instrument of transfer, or the intimation of transmission as the case may be, was
delivered to the Company, send notice of the refusal to the transferee and the
Transfer of shares
- 314 -
transferor or to the person giving intimation of such transmission as the case may
be.
(5) Nothing in these Articles shall prejudice any power of the Company to register
as shareholder any person to whom the right to any shares of the Company has
been transmitted by operation of law.
(6) Transfer of Shares / Debentures in whatever lot should not be refused. The
Company should not refuse to transfer Share / Debentures in violation of Stock
Exchange listing requirements on the ground that the number of Shares /
Debentures to be transferred is less than any specified number.
73 Every instrument of transfer duly executed and stamped shall be left at the office
for registration accompanied by the certificate of the shares to be transferred and
such other evidence as the Company may require to prove the title of the
transferor or his right to transfer the shares.
Transfer to be left at office as
evidence of title given
74 All instruments of transfer which are registered shall be retained by the Company;
but any instrument of transfer which the Board declines to register shall on
demand be returned to the person depositing the same. The Board may cause to
be destroyed all transfer deeds lying with the Company after such period not being
less than six years as it may determine.
When transfer to be retained
75 The Board may after giving not less than seven days’ previous notice by
advertisement as required by Section 154 of the Act, close the Register of
Members or the Register of Debenture holders for any period or periods not
exceeding in the aggregate 45 (forty – five) days in each year, but not exceeding
30 days at any one time.
Transfer Books when closed
76 In the case of death of any one or more of the persons, named in the Register of
Members as joint shareholders of any share, the survivors shall be the only person
recognized by the Company as having any title to or interest in such shares, but
nothing herein contained shall be taken to release the estate of a joint shareholder
from any liability to the Company on shares held by him jointly with any other
person.
Death of one or more joint
holders of shares
77 Subject to Article 76, the heir, executor or administrator of a deceased shareholder
shall be the only person recognized by the Company as having any title to his
shares and the Company shall not be bound to recognize such heir, executor or
administrator unless such heir, executor or administrator shall have first obtained
probate or letters of administration or succession certificate.
Title to Shares of deceased
holder
78 Subject to the provisions of Act and these Articles, any person becoming entitled to
a share in consequence of the death, bankruptcy or insolvency of any member, or
by any lawful means other than by a transfer in accordance with these presents,
may with the consent of the Board (which it shall not be under any obligation to
give) upon producing such evidence as the Board think sufficient, either be
registered himself as the holder of the share or elect to have some person
nominated by him, and approved by the Board registered as such holder, provided
nevertheless, that if such person shall elect to have his nominee registered, he
shall testify the election by executing to his nominee an instrument of transfer of
the share in accordance with the provisions herein contained and until he does so
he shall not be freed from any liability in respect of the share.
Transmission of Shares
79 The Board shall have the same right to refuse to register a person entitled by
transmission to any share, or his nominee, as if he were the transferee named in
any ordinary transfer presented for registration.
Board may refuse to transmit
80 Every transmission of share shall be verified in such manner as the Board may
require and, if the Board so desires, be accompanied by such evidence as may be
thought necessary and the Company may refuse to register any such transmission
until the same be so verified or requisite evidence produced or until or unless an
Indemnity be given to the Company with regard to such registration which the
Board at its absolute discretion shall consider sufficient, provided nevertheless,
that there shall not be any obligation on the Company or the Board to accept any
indemnity.
Board may require evidence of
Transmission
81 A transfer of a share in the Company of a deceased member thereof made by his
legal representative shall, although the legal representative is not himself a
member be as valid as if he had been a member at the time of the execution of the
Transfer by legal
representative
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instrument of transfer.
82 The certification by the Company of any instrument of transfer of shares in or
debentures of the Company, shall be taken as a representation by the Company to
any person acting on the faith of the certification that there have been produced
to the Company such documents as on the face of them show a prima facie title to
the shares or debentures in the transferor named in the instrument of transfer but
not as a representation that the transferor has any title to the shares or
debentures.
Certificate of Transfer
83 The Company shall incur no liability or responsibility whatever in consequence of
its registering or giving effect to any transfer or transmission of shares made or
purporting to be made by any apparent legal owner thereof as shown or
appearing in the Register of Members to the prejudice of persons having or
claiming any equitable right, title or interest to or in the same shares,
notwithstanding that the Company may have had notice of such equitable right,
title or interest or notice prohibiting registration of such transfer and may have
entered such notice or referred thereto in any book of the Company, and the
Company shall not be bound or required to regard or attend or to give effect to
any notice which may be given to for any equitable right, title or interest or be
under any liability whatsoever for refusing or neglecting so to do, though it may
have been entered or referred to in some books of the Company but the Company
shall nevertheless be at liberty to regard and attend to any such notice and give
effect thereto if the Board shall so think fit.
The Company not liable for
disregard of a Notice
prohibiting registration of a
transfer
84 No fee shall be charged in respect of the transfer or transmission to the same
party, of any number of shares of any class or denomination.
No fee to be charged on
transfer or transmission
85
Where more than one person is registered as the holder of any share the person
first named in the Register of Members as one of the joint holders of a share shall
be deemed the sole holder for matter connected with the Company subject to the
following and other provisions contained in these Articles:
(a) The joint holders of any shares shall be liable severally as well as jointly
for and in respect of all calls and other payments which ought to be
made in respect of such shares;
(b) On the death of any of such joint holder the survivor for survivors shall
be the only persons recognized by the Company as having any title to
the share but the Board may require such evidence of death as it may
deem fit and nothing herein contained shall be taken to release the
estate of a deceased joint holder from any liability on shares held by
him jointly with any other person.
(c) Any one of the several persons who is registered as holder of any share
may give effectual receipts for all dividends and payments on account
of dividends in respect of such share.
(d) Only the person whose name stands first in the Register of Members as
one of the joint holders of any share shall be entitled to delivery of the
certificates relating to such share or to receive documents (which
expression shall be deemed to include all documents referred to in
Article 33) of the Company and any document served on or sent to such
person shall be deemed served on all the joint holders.
(e) Any one of the joint holders may vote at any meeting either personally
or by attorney or by proxy in respect of such shares as if he were solely
entitled thereto and if more than one of such joint holders be present at
any meeting personally or by proxy or by attorney then that one of such
persons so present whose name stands first or hither (as the case may
be) on the Register of Members in respect of such shares shall alone be
entitled to vote in respect thereof but the others of the joint holders
shall be entitled to be present at the meeting; provided always that a
joint holder present at any meeting personally shall be entitled to vote
in preference to a joint holder present by attorney or by proxy although
the name of such joint holder present by any attorney or proxy stands
first or higher (as the case may be) in the register in respect of such
Joint Holders
Joint and several liabilities for
full payment in respect of
shares
Title holders
Effectual receipts
Delivery of certificate and
giving of notice to first named
holder
Votes of joint holders
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shares. Several executors or administrators of a deceased member in
whose (deceased member’s ) sole name any shares stands shall, for the
purposes of this Article be deemed joint holders.
CONVERSION OF SHARES INTO STOCK
86 The Board may, with the sanction of a general meeting, convert any paid up share
into stock and when any shares shall have been converted into stock the several
holders of such stock may thenceforth, transfer their respective interests therein
or any part of such interest in the same manner as and subject to the same
regulations, under which fully paid up shares in the capital of the Company may
be transferred or as near thereto as circumstance will admit, but the Board may
from time to time, if it thinks fit, fix the minimum amount of stock transferable
and direct that fractions of a rupee shall not be dealt with, power nevertheless at
their discretion to waive such rules in any particular case.
Shares may be converted into
stock
87 The stock shall confer on the holders thereof respectively the same rights,
privileges and advantages as regards participation in the profits and voting at
meetings of the Company and for other purposes, as would have been conferred
by shares of equal amount in the capital of the Company of the same class as the
shares from which such stock was converted, but so that none of such privileges
or advantages except participation in the profits of the Company or in the assets
of the Company on a winding up, shall be conferred by any such equivalent part
of consolidated stock as would not, if existing in shares have conferred such
privileges or advantages. No such conversion shall affect or prejudice any
preference or other special privileges attached to the shares so converted. Save
as aforesaid all the provisions herein contained shall, so far as circumstances will
admit, apply to stock as well as to shares. The Company may at any time re-
convert any such stock into fully paid up shares of any denomination.
MEETING OF MEMBERS
Rights of Stock holders
88 (a) Subject to Section 166 of the Act, the Company shall in each year hold in
addition to any other meetings a General Meeting as its Annual General
Meeting and shall specify the meeting as such in the notices calling it;
and not more than fifteen months shall lapse between the date of one
Annual General Meeting of the Company and that of the next, subject
however to the right of the Application under the Act to extend the time
within which any Annual General Meeting may be held.
(b) Every Annual General Meeting shall be called for at a time during
business hours, on a day that is not a public holiday and shall be held
either at the Registered Office of the Company or at some other place
within the city or town or village in which the Registered Office of the
Company is situated.
89 The Company shall in accordance with Section 159 of the Act, within sixty days
from the day on which the Annual General Meeting is held; prepare and file with
the Registrar a return in the form set out in Part II of Schedule V to the Act or as
near as thereto as the circumstances shall admit and containing the particulars
specified in Part I of the said Schedule V
90 The General Meeting referred to in Article 88 shall be called and styled as an
Annual General Meeting and all meetings other than the Annual General Meeting
shall be called Extraordinary General Meetings.
Distinction between Annual
General Meeting and
Extraordinary General Meeting
91 The Board may, whenever it thinks fit, call an Extraordinary General Meeting of
the Company and it shall, on the requisition of the holders of not less than one-
tenth of the issued capital of the Company upon which all calls or other sums then
due have been paid, forthwith proceed to convene an Extraordinary General
Meeting of the Company, and in the case of such requisition the provisions of
section 169 of the Act shall apply. No shareholder or shareholders shall call a
Meeting of the Company except by or upon a requisition as herein provided.
Calling of Extraordinary
General Meeting
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92 (1) A General Meeting of the Company may be called by giving not less than
twenty –one days’ notice in writing.
(2) A general meeting may be called after giving shorter notice than that
specified in sub-clause (1) here if consent is accorded thereof.
(i) In the case of an Annual General Meeting, the members entitled to
vote thereat, and
(ii) In the case of any other Meeting by members of the Company
holding not less than ninety – five percent of such part of the paid
up share capital of the Company as gives a right to vote at that
meeting.
Provided that where any members of the Company are entitled to vote on some
resolution or resolutions to be moved at the Meeting and not on the others,
those members shall be taken into account for the purpose of this sub-clause in
respect of the former resolution or resolutions and not in respect of the latter.
Length of notice for calling
meeting
93 (1) Every notice of the Meeting of Company shall specify the place and the
day and hour of the Meeting, and shall contain a statement of the
business to be transacted thereat.
(2) Notice of every Meeting of the Company shall be given:
(i) to every member of the Company, in any manner authorised by sub-sections
(1) to (4) of Section 53 of the Act;
(ii) to the persons entitled to a share in consequence of the death or insolvency of
a member by sending it through the post in prepaid letter addressed to them by
name, or by the title of representatives of the deceased, or assignees of the
insolvent, or by any like description, at the address, if any, in India supplied for
the purpose by the persons claiming to be so entitled or, until such an address has
been so supplied, by giving the notice in any manner in which it might have been
given if the death or insolvency had not occurred; and
(iii) to the Auditor for the time being of the Company, in any manner authorized
by Section 53 of the Act in the case of any member or members of the Company.
PROVIDED that where the notice of a Meeting is given by advertising the same in
a newspaper circulating in the neighbourhood of the Registered Office of the
Company under sub-section (3) of Section 53 of the Act, the statement of material
facts referred to in Section 173 of the Act need not be annexed to the notice as
required by that section, but it shall be mentioned in the advertisement that the
statement has been forwarded to the members of the Company.
(3) The accidental omission to give notice to or non-receipt of notice by any
member or other person to whom it should be given shall not invalidate the
proceedings at the Meeting.
(4) Every notice convening a Meeting of the Company shall state therein that a
member entitled to attend and vote at the Meeting is entitled to appoint a proxy
to attend and vote instead of himself and that a proxy need not be a member of
the Company.
Contents & manner of service
of notice and persons on whom
it is to be served
94 All business to be transacted at an Annual General Meeting with the exception of
business relation to (i) the consideration of the accounts, balance sheet and the
reports of the Board of Directors and auditors, (ii) the declaration of the dividend,
(iii) the appointment of Directors in place of those retiring and (iv) the
appointment of and the fixing of the remuneration of auditors, and all business to
be transacted at any other meetings of the Company shall be deemed “Special”.
Special Business
95 Where any items of business to be transacted at any meeting of the Company are
deemed to be special as aforesaid, there shall be annexed to the notice of the
meeting an explanatory statement setting out all material facts concerning each
item of business including in particular the nature and extent of the interest, if
any, therein, of every Director, the Manager, if and specifying where any item of
business consists of the according of approval to any document by the meeting,
the time and place, where the document can be inspected.
PROVIDED that where any such item of special business at the meeting of the
Company relates to or affects any other company, the extent of shareholding
interest of every Director, the managing director and the manager, if any, is not
Explanatory statement to be
annexed to notice
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less than such percentage as may be prescribed in the Act of the paid up share
capital of that other company shall also be set out in the statement.
96 No general meeting, annual or extraordinary, shall be competent to enter, discuss
or transact any business which has not been specifically any business in the
notices upon which it is convened.
Meeting not competent to
discuss or transact any
business not mentioned in
notice
97 Five members entitled to vote and present in person shall be a quorum for a
general meeting. When more than one of the joint holders of a share is present,
not more than one of them shall be counted for determining the quorum. Several
executors or administrators of a deceased person in whose sole name a share
stands shall, for the purpose of this article, be deemed joint holders thereof. 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. The President of India or
the Governor of a State being a member of the Company shall be deemed to be
personally present if he is represented in accordance with Section 187A of the
Act.
Quorum
98 No business shall be transacted at any general meeting unless the requisite
quorum shall be present at the commencement of the business.
Presence of Quorum
99 If within half an hour from the time appointed for holding the meeting a quorum
is not present the meeting, if called upon the requisition of members shall stand
dissolved, but in any other case, it shall stand adjourned to the same day in the
next week at the same time and place or if that day is public holiday until the next
succeeding day in the next week which is not a public holiday, or to such other
day, time and place as the Board may determine.
If Quorum not present,
meeting to be dissolved and
when to be adjourned
100 If at the adjourned meeting, a quorum is not present within half an hour from the
time appointed for holding the meeting, the members present shall be a quorum
and may transact the business for which the meeting was called.
101 Where a resolution is passed at an adjourned meeting the resolution shall for all
purposes be treated as having been passed on the date on which it was in fact
passed and shall not be deemed to have been passed on any earlier date.
Resolution passed at
adjourned meeting
102 (a) The Chairman of the General Meeting may adjourn the same
from time to time and from place to place, but no business
shall be transacted at any adjourned meeting other than the
business left unfinished at the meeting from which the
adjournment took place.
(b) When a meeting is adjourned for thirty days or more, notice of
the adjourned meeting shall be given as in the case of an
original meeting
(c) Save as aforesaid, it shall not be necessary to give any notice of
an adjournment of or of the business to be transacted at any
adjourned meeting.
Power to adjourn General
Meeting
Notice of adjourned meeting
103 The Chairman of the Board shall, if willing presides as Chairman at every general
meeting, annual or extraordinary. If there be no such chairman or if at any meeting he
shall not be present within fifteen minutes after the time appointed for holding such
meeting or being present declines to take the chair, the Directors present may choose
one of their members to be Chairman and in default of their doing so the members
present shall choose one of the Directors to be Chairman and if no Director present is
willing to take the chair shall, on a show of hands elect one of their numbers to be
Chairman of the meeting ; if a poll is demanded on the election of the Chairman it shall
be taken forth with in accordance with the provisions of the Act and these Articles, and
the Chairman elected on a show of hands shall exercise all the powers of the Chairman
under the said provisions. If some other person is elected Chairman as a result of the
Poll, he shall be the Chairman for the rest of the meeting.
Chairman of General
Meeting
104 No business shall be discussed at any general meeting except the election of the
Chairman while the Chair is vacant.
Business confined to
election of Chairman
while chair vacant
105 No resolution submitted to a meeting, unless proposed by the Chairman of the meeting
shall be discussed or put to vote until the same has been proposed by a member present
Resolution must be
proposed and
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and entitled to vote at such meeting and seconded by another member present and
entitled to vote at such meeting.
seconded
106 At any general meeting, a resolution put to the vote of the meeting shall, be decided on
a show of hands unless the poll is demanded as provided in these Articles.
How question to be
decided at meetings
107 A declaration by the Chairman that on a show of hands, a resolution has or has not
carried either unanimously or by a particular majority, and an entry to that effect in the
books containing the minutes of the proceedings of the Company shall be exclusive of
the fact, without proof of the number or proportion of the votes cast in favour of or
against such resolution.
Declaration of
Chairman to be
conclusive
108 (1) Before or on the declaration of the result of the voting on any resolution on a show
of hands poll may be ordered to be taken by the chairman of the meeting of his own
motion, and shall be ordered to be taken by him on a demand made in that behalf by the
present or persons specified below that is to day:
Demand for poll
(a) Which confer a power to vote on the resolution not being less than one-tenth of the
total voting power in respect of the resolution, or
(b) by any member or members present in person or by proxy and holding shares in the
Company on which an aggregate such of not less than fifty thousand rupees has been
paid-up.
(2) the demand for a poll may be withdrawn at any time by the person or persons who
made the demand.
109 Any poll duly demanded on the question of adjournment shall be taken forthwith. A poll
demanded on any other question shall be taken at such time not exceeding 48 hours
from the time when the demand was made, as the Chairman of the meeting direct.
Time of taking poll
110 Where a poll is to be taken, the Chairman of the meeting shall appoint two scrutineers
to scrutinize the votes given on the poll and to report thereon to him. The Chairman
shall have power, at any time before the result of the poll is declared to remove a
scrutineer from office and to fill vacancies in the office of the scrutineer arising from
such removal or from any other cause. Of the two scrutineers so to be appointed, one
shall always be a member (not being an officer or employee of the Company) present at
the meeting provided such a member is available and is willing to be appointed.
Scrutineers at Poll
111 The demand for a poll except on the question of the election of Chairman or of an
adjournment shall not prevent the continuance of a meeting for the transaction of any
business other than the question on which a poll has been demanded.
Business may
proceed not-
withstanding
demand for poll
112 In the case of equality of votes, the Chairman shall both on a show of hands and on a
poll have a second or casting vote in addition to the vote or votes to which he may be
entitled as a member.
Chairman’s casting
vote
113 (a) Subject to the provisions of the Act, the Chairman of the meeting shall have power
to regulate the manner in which a poll shall be taken.
Manner of taking
poll and result
thereof
(b) The result of the poll shall be deemed to be the decision of the meeting on the
resolution on which the poll was taken.
VOTE OF MEMBERS
114 Subject to the provisions of the Act and these Articles votes may be given either
personally or by an attorney or by a representative duly authorised under Section 187 of
the Act and Article.
Votes may be given
by proxy or attorney
115 Subject to the provisions of the Act or these Articles every member not disqualified by
Article 118 shall be entitled to be present in person holding any equity share capital
therein shall have one vote and upon a poll the voting right of every such member
present in person or by proxy shall be in proportion to his share of paid-up equity share
capital of the Company.
Provided, however, if any preference shareholder be present at any meeting of the
Company save as provided in Clause(b) of sub-section (2) Section 87 of the Act, he shall
have right to vote only on resolution placed before the meeting which directly affect the
rights attached to his preference shares.
Vote of members
116 On a poll being taken at a meeting of the company, a member entitled to more than one
vote, or his proxy or other person entitled to vote for him as the case may be need not, if
he votes, use all his votes or cast in the same way all the votes he uses.
Right of members to
use his votes
differently
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117 A body corporate whether a company within meaning of the Act or not, if it is a member
or creditor of the Company including being a holder of debentures, may authorise such
person by a resolution of its Board of Directors, as it thinks fit, to act as its representative
at any meeting of members or creditors of the Company.
Representation of
Body Corporate
118 No member shall exercise any voting right in respect of any share registered in his name
on which any calls or other sums presently payable by him have not been paid or in
regard to which the Company has and /or has exercised its right of lien.
Restriction on
exercise of voting
right by members
who have not paid
calls
119 Any member not personally present shall be entitled to vote on a show of hands, unless
such member is a body corporate present by a representative duly authorised under
Section 187 of the Act in which case such representative may vote on a show of hands as
if he were a member of the Company. A proxy who is present at meeting shall not be
entitled to address the meeting.
No voting by proxy
on show of hands
120 If any member be of unsound mind, or in respect of whom an order has been made by
any Court having jurisdiction in lunacy, may vote, whether on a show of hands or on a
poll, by its committee or other legal guardian provided that such evidence of the
authority of the person claiming to vote as shall be acceptable by the Board shall have
been deposited at the office of the Company not less than forty – eight hours before the
time of holding the meeting. If any member be a minor the vote in respect of his shares
shall be done by his guardians or any one of his guardians, if more than one is to be
selected in case of dispute by the Chairman of the meeting.
How member non-
compos mentis and
minors may vote
121 The instrument appointing a proxy shall be in writing and signed by the appointer or his
attorney duly authorised in writing or if the appointer is a body corporate be under its
seal or be signed by an officer or attorney duly authorised by it.
Instrument of proxy
122 The instrument appointing a proxy and the power of attorney or other authority (if any)
under which it is signed or a notary certified copy of that power of attorney shall be
deposited at the registered office of the company not less than forty- eight hours before
the time for holding the meeting or adjourned meeting at which the person named in
the instrument proposes to vote, and in default the instrument of proxy shall not be
treated as valid. A proxy properly lodged before a meeting will be valid for an
adjournment of the meeting.
Instrument of proxy
to be deposited at
office
123 A vote given in accordance with the terms of an instrument of proxy shall be valid
notwithstanding the previous death or insanity of the principal or the revocation of the
proxy or of the authority under which such proxy was executed or the transfer of the
share in respect of which the vote is given, provided that no intimation in writing of the
death, insanity, revocation or transfer shall have been received by the Company at its
office before the commencement of the meeting or adjourned meeting at which the
proxy is used.
When vote by proxy
valid though
authority revoked
124 Every instrument of proxy whether for specified meeting or otherwise shall, as nearly as
circumstances will admit be in any of the forms set out in Schedule IV of the Act.
Form of proxy
125 No objection shall be raised to the qualification of any voter except at the meeting or
adjourned meeting at which such vote shall be tendered and every vote whether given
personally or by proxy, and not disallowed at such meeting or poll shall be deemed valid
for all purposes of such meeting or poll whatsoever.
Time for objection of
votes
126 The Chairman of any meeting shall be sole judge of the validity of every vote tendered at
such meeting. The Chairman present at the time of taking of a poll shall be the sole
judge of the validity of every vote tendered at such poll.
Chairman of any
meeting to be the
judge of validity of
any vote
127
DIRECTORS
The business of the Company shall be managed by the Board of Directors.
Board of Directors
128 Until otherwise determined by a general meeting of the Company and subject to the
provisions of Section 252 of the Act, the number of directors shall not be less than three
and not more than twelve.
Number of Directors
129 The directors of the Company may by passing suitable resolution be remunerated for
their services rendered to the Company subject to the provisions of the Act. The
remuneration, in so far as it consists of a monthly payment, be deemed to accrue from
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day to day.
130 The Company shall not increase the number of its Directors beyond the maximum fixed
by these Articles without the approval of the Central Government
Increase in number
of Directors to
require Government
sanction
131
EX-OFFICIO DIRECTORS
The Company in general meeting may, when appointing a person as Director declare
that his continued presence on the Board of Directors is of advantage to the Company
and that, his office as Director shall not be liable to be determined by retirement or
rotation for such period or until the happening of such an event or contingency as the
Board may specify and thereupon such Director shall not be liable for retirement by
rotation, but shall hold office for the period or until the happening of an event or
contingency as set out in the said Resolution. Such Director shall hereafter be referred
to as “Ex-Officio Director”.
ALTERNATE DIRECTOR
132 The Director may appoint an Alternate Director to act for a Director (hereinafter in this
Article called “the original Director”) during his absence for a period of not less than
three months from the State in which meetings of the Board are ordinarily held. An
Alternate Director shall not be bound to hold any qualification shares.
Every such Alternate Director shall subject to his giving to the Company an address in
India at which notice may be served on him, be entitled to notice of meeting of Directors
and to attend and vote as a Director and be counted for the purpose of a quorum and
generally at such meetings to have and exercise all the powers and duties and
authorities of the Original Director.
An Alternate Director so appointed shall vacate office if and when the Original Director
returns to the State in which meetings of the Board are ordinarily held. If the term of
office of the Original Directors is determined before he so returns to the State aforesaid
any provisions for the automatic reappointment of a retiring Directors in default of
another appointment shall apply to the original and not to the Alternate Director.
133 Subject to the provisions of Sections 260, 263, 264 and 284(6) of the Act and subject to
these Articles, the Directors shall have power at any time and from time to time to
appoint any other person as a Director either to fill a casual vacancy or as an additional
to the Board but so that the total number of Directors shall not at any time exceed the
maximum number fixed. Any additional director so appointed shall retain his office up
to the next general meeting.
Power of Directors
to appoint
additional Directors
and to fill casual
vacancies
134 If and so long as the Company is indebted to any financial institutions, bank, corporation
or any other statutory body, or if the Company has entered into any obligation with any
such institution, bank, corporation or body in relation to any financial assistance by way
of loan advanced to the company or guarantee given of any loan borrowed or liability
incurred by the company or so long as any such institution, bank, corporation or body
remains a member of the Company, the Board may agree that such institution, bank,
corporation or body shall, subject to the provisions of Section 255 of the Act and to the
extent agreed by the Board, jointly or severally be entitled, from time to time, to appoint
one or more persons to be a Director or Directors and appoint any other person or
persons to be a Director or Directors in his place or their places and to fill any vacancy,
otherwise occurring in the office of such Directors. The Directors so appointed shall not,
subject to the provisions of Section 255 of the Act and to the extent agreed by the
Board, be liable to retirement by rotation. Such Director shall be entitled to attend the
General Meetings of the Company.
Nominee
Directors
135 If it is provided by the Trust Deed security or otherwise in connection with any issue of
debentures of the Company, that any person or persons shall have power to nominate a
Director of the Company, then in the case of any and every such issue of debentures, the
person or persons having such power may exercise such power from time to time and
appoint a Director accordingly. Any Director so appointed is herein referred to as
Debenture Director. A Debenture Director may be removed from office at any time by
the person in whom for the time being is vested the power under which he was
Debenture Directors
- 322 -
appointed and another Director may be appointed in his place.
136 A Director need not hold any qualification shares. Qualification of
Directors
137 (1) Subject to the Ceiling limited laid down in Section 198 and Section 309 and
Schedule XIIIof the Act, a Managing Director or Directors, who is in the whole-
time employment of the Company may be paid remuneration either by way of
a monthly payment or at a specified percentage of the net profits of the
Company or partly by one way and partly by the other.
(2) Subject to the provisions of the Act, a Director, who is neither in the whole
time employment nor a Managing Director may be paid remuneration:
(i) by way of monthly, quarterly or annual payment with the
approval of the Central Government :or
(ii) by way of commission if the company by a special resolution
authorises such payments.
(3) The fee payable to a Director (including a Managing or whole-time Director, if
any) for attending a meeting of the Board or Committee thereof shall not
exceed such sum as may be prescribed under Section 310 of the Act.
(4) If any Director be called up on to perform extra services or special exertions or
efforts (which expression shall include work done by a Director as member of
any Committee formed by the Directors), the Board may arrange with such
Directors for such special remuneration for such extra services or special
exertions or either by a fixed sum or otherwise as may be determined by the
Board and such remuneration may be either in addition to or in substitution for
his remuneration above provided.
(5) Any provision relating to the remuneration of any Director including a
Managing or Joint Managing or whole – time Director or any amendment
thereof, whether that provision is contained in the Company’s Memorandum
or Articles, or in an Agreement entered into by it, or any resolution, passed by
the Company in General meeting or by the Board of Directors, shall not have
any effect.
(a) in case where Schedule XIII to the Act is applicable,
unless such increase is in accordance with the conditions
specified in that Schedule; and
(b) in any other case, unless it is approved by the Central
Government and the amendment shall become void if
and in so far as, it is disapproved by the Central
Government.
Remuneration of
Directors
Remuneration for
extra services
Increase in
remuneration of
Directors to require
Government
sanction.
138 The Board may allow and pay to any Director who is not a bonafide resident of the place
where the meetings of the Board or Committee thereof are ordinarily held and who shall
come to such place for the purpose of attending any meeting, such sum as the Board
may consider fair compensation or for traveling, boarding, lodging and other expenses,
in addition to his fee for attending such meeting as above specified, and if any Director
be called upon to go or reside out of the ordinary place of his residence of the
Company’s business, he shall be entitled to be repaid and reimbursed any traveling or
other expenses incurred in connection with business of the Company.
Travelling expenses
incurred by a
Director not a
bonafide resident or
by Director going
out on Company’s
business
139 The Board on behalf of the Company may subject to the provisions of Schedule XIII of
the Act pay a gratuity or pension on retirement to any Director who has held any office
or place of profit, salaried or otherwise, with the Company or to his widow or
dependents and may make contributions to any fund such as provident fund and pay
premiums for the purchase or provisions of any such gratuity pension or allowance.
Payment of pension
etc. to Director who
held salaried office
etc. with the
Company.
140 The continuing Directors may act notwithstanding any vacancy in the Board, but if and
so long as the number is reduced below the quorum fixed by the Act or by these Articles
for a meeting of the Board, the continuing Director or Directors may act for the purpose
of increasing the number of Directors to that fixed for the quorum or for summoning a
general meeting of the Company but for no other purpose.
Directors may act
notwithstanding
vacancy
141 (1) Every Director of the company who is in any way, whether directly or indirectly
concerned or interested in any contract or arrangement, or proposed contract
or arrangement, entered into or to be entered into, by or on behalf of the
Company shall disclose the nature of his concern or interest at a meeting of the
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Board of Directors.
(2) (a) In the case of a proposed contract or arrangement the disclosure required
to be made by a Director under Clause (1) shall be made at the Meeting of the
Board at which the question of entering into the contract or arrangement is
first taken into consideration or if a Director was not at the date of Meeting,
concerned or interested in the proposed contract or arrangement, at the first
Meeting of the Board held after he becomes so concerned or interested.
(b) In the case of any other contract or arrangement, the required disclosure shall be
made at the first meeting of the Board held after the Director becomes concerned or
interested in the contract or arrangement.
(3) (a) For the purpose of Clauses (1) and (2) hereof, a General Notice given to the Board
by a Director to the effect that he is a Director or a Member of a specified body
corporate or is a Member of a specified firm and is to be regarded as concerned or
interested in any contract or arrangement which may, after the date of the notice be
entered into with that body corporate or firm, shall be deemed to be a sufficient
disclosure of concern or interest in relation to any contract or arrangement so made.
(b) Any such General Notice shall expire at the end of the Financial year in which it is
given but may be renewed for a further period of one Financial year at a time, by a fresh
notice in the last month of the Financial year in which it would otherwise have expired.
(c) No such General Notice and no renewal thereof shall be effective unless either it is
given at a Meeting of the Board or the Director concerned take reasonable steps to
secure that it is brought up and read at the first meeting of the Board after it is given.
(d) Nothing in this Article shall apply to any contract or arrangement entered into or to
be entered into between two companies when any of the Directors of the Company or
two of them together hold or holds not more than two percent of the paid up share
capital in the other company.
Disclosure of
Interest of Directors
142 No Director of the Company shall, as Director, take part in the discussion of or vote on
any contract or arrangement entered into or to be entered into by or on behalf of the
Company if he is in any way whether directly or indirectly, concerned or interested in the
contract or arrangement, nor shall his presence count for the purpose of forming a
quorum at the time of any such discussion or vote and if he does vote his vote shall be
void, provided however, that a Director may vote on any contract of indemnity against
any loss which the Director or any one or more of them may suffer by reason of
becoming sureties or surety for the Company.
Interested Director
not to participate or
vote on Board’s
proceedings
143 A Director of the Company or his relative, a firm in which such a Director or relative is
partner, any other partner in such firm or private company of which the Director is a
Member or Director shall not enter into any contract with the Company, except to the
extent and subject to the provisions of Section 297 of the Act.
RETIREMENT AND ROTATION OF DIRECTORS
Board’s sanction to
be required for
certain contracts in
which particular
Director is interested
144 (1) Not less than two-thirds of the total number of directors shall be the persons
whose period of office is liable to determination by retirement of directors by
rotation.
(2) At every annual general meeting, one-third of such of the Directors for the time
being as are liable to retire by rotation, or if their number is not three or a
multiple of three, then the number nearest to one-third shall retire from office.
(3) The Directors to retire by rotation at every annual general meeting shall be
those who have been longest in office since their last appointment but as
between persons who become Directors on the same day, those who are to
retire shall, in default of and subject to any agreement among themselves, be
determined by lot.
(4) At the Annual General Meeting at which a Director retires as aforesaid the
Company may fill up the vacancy by appointing the retiring Director who shall
be eligible for reappointment or some other person thereto.
(5) If the place of the retiring Director is not filled up and the meeting has not
expressly resolved not to fill the vacancy, the meeting shall stand adjourned till
the same day in the next week at the same time and place or if that is a public
holiday, till the next succeeding day which is not a public holiday at the same
Retirement of
Directors by rotation
- 324 -
time and place. If at the adjourned meeting also, the place of the retiring
Director shall be deemed to have been reappointed at the adjourned meeting
unless:
(i) at the meeting or at the previous meeting a resolution for the reappointment of such
Director has been put to vote and lost;
(ii) the retiring Director has by a notice in writing addressed to the Company or its Board
of Directors, expressed his unwillingness to be so re-appointed;
(iii) he is not qualified or is disqualified for appointment;
(iv) a resolution, whether special or ordinary, is required for his appointment in virtue of
any of the provisions of the Act; or
(v) the proviso to sub-section (2) of Section 263 of the Act is applicable to the case.
145 (1) No motion at any general meeting of the Company shall be made for the
appointment of two or more persons as Directors of the Company by a single
resolution unless a resolution that it shall be so made has been first agreed to
by the meeting without any vote being given against it.
(2) A resolution moved in contravention of clause (1) shall be void whether or not
objection was taken at the time of its being so moved; provided that where a
resolution so moved is passed, no provision for the automatic reappointment
shall apply.
(3) For the purpose of this clause a motion for approving a person’s appointment
or for nominating a person for appointment shall be treated as motion for his
appointment.
Appointment of
Directors to be
voted individually
146 (1) A person who is not a retiring Director shall, subject to the provisions of the
Act, be eligible for appointment to the office of Director at any general meeting
if he or some member intending to propose him has not less than fourteen
days before the meeting, left at the office of the Company a notice in writing
under his hand signifying his candidature for the office of Director or the
intention of such member to propose him as a candidate for that office as the
case may be along with a deposit of live hundred rupees which shall be
refunded to such person or, as the case may be, to such member, if the person
succeeds in getting elected as a Director.
(2) The Company shall inform its members of the candidature of person for the
office of Director or the intention of member to propose such person as a
candidate for that office, by serving individual notice on the members not less
than seven days before the meeting.
Provided that it shall not be necessary for the Company to serve individual notices
upon the members as aforesaid if the Company advertises such candidature or intention
not less than seven days before the meeting in at least two newspapers circulating in the
place where the Registered Office of the Company is located, of which one is published
in English language and the other in the Malayalam language.
(3) Every person proposed as a candidate for the office of Director shall sign and
file with the Company his consent to act as a Director if appointed and every
person other than a Director re-appointed after retirement by rotation shall
not act as a Director of the Company unless he has within 30 days of his
appointment, signed and filed with Registrar his consent in writing to act as
such Director.
Consent of
candidates for
Directorship to be
filed with the
Registrar
147 A Director may at any time give notice in writing of his intention to resign by addressing
it to the Board of Directors of the Company and delivering such notice to the Secretary
or leaving the same at the Registered Office of the Company; and thereupon his office
shall be vacated.
Resignation of
Director
148 Subject to Section 258 of the Act, the Company at the General Meeting at which a
Director retires in the manner aforesaid may fill up the vacated office by electing a
person thereto.
Company to appoint
successors
149 The Company shall keep at its Registered Office a register of Directors, Managing
Directors, Managers and Secretary containing the particulars as required by Section 303
of the Act, and shall send to the Registrar a return in the prescribed form containing the
particulars specified in the said register and shall notify to the Registrar any change
among its Directors, Managing Directors, Manager and Secretary or any of the
particulars contained in the register as required by section 303 of the Act.
- 325 -
REMOVAL OF DIRECTORS
150 (1) The Company may, by ordinary resolution remove a Director not being a
Nominee Director appointed under Article 134, or a Debenture Director
appointed under Article 135 and not being a Director appointed by the Central
Government in pursuance of Section 408 of the Act before the expiry of his
period of office.
(2) Special notice shall be required of any resolution to remove a Director under
this article or to appoint some other person in place of a Director so removed
at the meeting at which he is removed.
(3) On receipt of notice of a resolution to remove a Director under this article, the
Company shall forthwith send a copy thereof to the Director concerned and
the Director shall be entitled to be heard on the resolution at the meeting.
(4) Where notice is given of a resolution to remove a Director under this Article
and the Director concerned makes with respect thereto representation in
writing to the Company (not exceeding a reasonable length) and requests their
notification to members of the Company and shall unless the representations
are received by it too late for it to do so:
(a) in any notice of the resolution given to the members of the Company, State
the fact of the representation having been made, and
(b) send a copy of the representation to every member of the Company to whom
notice of the meeting is sent (whether before or after receipt of the
representation by the Company) and if a copy of the representation is not sent
as aforesaid because it was received too late or because of the Company’s
default, the Director may (without prejudice to his right to be heard orally)
require that the representation shall be read out at the meeting provided that
copies of the representation need not be read out at the meeting if, on the
application either of the Company or of any other person who claims to be
aggrieved the Company Law Board is satisfied that the rights conferred by this
sub-clause are being abused to secure needless publicity for defamatory
matter.
(5) A vacancy created by the removal of a Director under this Article may if he had
been appointed by the Company in general meeting or by the Board under
Article 133 hereof, be filled by the appointment of another Director in his
stead by the meeting at which he is removed, provided special notice of the
intended appointment has been given. A Director so appointed shall hold
office until the date up to which his predecessor would have held office if he
had not been removed as aforesaid.
(6) If the vacancy is not filled up under clause (5) hereof it may be filled as a casual
vacancy in accordance with the provisions, so far as they may be applicable of
Article 133 hereof and all the provisions of that Article, shall apply accordingly.
Provided that the Director who is removed from office under this article shall
not be reappointed as a Director by the Board of Directors.
(7) Nothing in this Articles shall be taken:
(a) as depriving a person removed there under of any compensation or damages
payable to him in respect of any appointment terminating with that as Director, or
(b) as derogating from any power to remove a Director which may exist apart from
this Article.
PROCEEDINGS OF DIRECTORS
Removal of
Directors
151 (a) The Board of Directors may meet together for the discussion of business,
adjourn and otherwise regulate its meetings and proceedings as it may think
fit.
(b) A Meeting of the Board of Directors shall be held at least once in every three
months and at least four such meetings shall be held in every year.
(c) The Chairman, if any, of the Board of Directors may at any time and the
Managing Director if any, or the Secretary on the requisition of a Director, shall
summon a meeting of the Board.
(d) Notice of every meeting of the Board of Directors of the Company shall be
Proceedings of
Directors
- 326 -
given in writing to every Director for the time being in India, and at his usual
address in India to every other Director.
152 (a) Subject to Section 287 of the Act the quorum for a meeting of the Board shall
be one-third of the total strength of the Board (any fraction contained in the
one-third being rounded off as one) or two Directors whichever is higher;
provided that where at any meeting the number of interested Directors
exceeds or is equal to two-thirds of the total strength, the number of the
Directors who are not interested and are present at the meeting , being not
less than two shall be the quorum during such time.
(b) For the purpose of clause (a):
(i) “Total strength” means the total strength of the Board of Directors of the
Company as determined in pursuance of the Act, after deducting
therefrom the number of Directors if any, whose places may be vacant at
the time, and
(ii) “ Interested Directors” means any Director whose presence cannot by
reason of Article 142 hereof or any other provisions in the Act, count for
the purpose of forming a quorum at a meeting of the Board, at the time of
discussion or vote on any matter.
Quorum
153 If a Meeting of the Board could not be held for want of quorum, then the Meeting shall
automatically stand adjourned till the same day in the next week, at the same time and
place, or if that day is a Public Holiday, till the next succeeding day which is not a Public
Holiday, at the same time and place.
Procedure in case of
want to quorum
154 Questions arising at any meeting of the Board shall be decided by a majority of votes,
and in case of an equality of votes the Chairman shall have a second or casting vote
Decision of question
155 The Board may elect a Chairman of their meetings, and determine the period for which
he is to hold office, but if no such Chairman is elected or if at any meeting the Chairman
is not present within ten minutes after the time appointed for holding the meeting, the
Directors present may choose one of their number to be the Chairman of the Meeting.
Board may appoint
Chairman
156 A meeting of the Board at which a quorum is present shall be competent to exercise all
or any of the authorities, powers and discretions which by or under the Act or the
Articles are for the time being vested in or exercisable by the Board generally.
Power of Board
meetings
157 Subject to the restrictions contained in Section 292 of the Act, the Board may delegate
any of its powers to a committee of the Board consisting of such member or members if
its body or any other person as it thinks fit and it may from time to time revoke and
discharge any such committee of the Board so formed, and shall in the exercise of the
power so delegated conform to any regulations that may from time to time be imposed
on it by the Board. All acts done by any such Committee of the Board in conformity with
such regulations and in fulfillment of the purpose of their appointment, but not
otherwise, shall have the like force and effect as if done by the Board.
158 The Meeting and proceedings of any such committee of the Board consisting of two or
more persons shall be governed by the provisions herein contained for regulating the
meetings and proceedings of the Board, so far as the same are applicable thereto and
are not superseded by any regulations made by the Board under the last preceding
Article.
Meeting of the
Committee how to
be governed
159 The Directors shall cause minutes to be duly entered in a book or books provided for the
purpose in accordance with the Articles and Section 193 of the Act.
Minutes of
proceedings of the
Board and the
Committees to be
valid
160 Minutes of any Meeting of the Board of Directors or of any Committees of the Board if
purporting to be signed by the Chairman of such meeting or by the Chairman of the next
succeeding meeting shall be for all purpose whatsoever prima facie evidence of the
actual passing of the resolution recorded and the actual and regular transaction or
occurrence of the proceedings so recorded and the regularity of the meeting at which
the same shall appear to have taken place.
Board minutes to be
evidence
161 The Directors shall cause to be kept at the Registered Office of the Company:
(a) (i) a Register of the Directors, Managing Director, Manager and Secretary of the
Company containing the particulars required by Section 303 of the Act:
(ii) a Register of Contracts with companies and firms in which the Directors are
Register of Directors
and Managing
- 327 -
interested, containing the particulars required by Section 301 of the Act, and
(iii) a Register of Directors shareholding containing the particulars required by
Section 307 of the Act, They shall also cause to be kept other Registers and
indexes as required by the Act.
(b) The Company shall comply with the provisions of Section 301, 303 and 307 and
other Sections of the Act with regard to the inspection of Registers and furnishing copies
or extracts so far as the same be applicable to the Company.
Director etc.
162 All acts done by any meeting of the Board or by a Committee of the Board, or by any
person acting as a Director shall notwithstanding that it shall afterwards be discovered
that there was some defect in the appointment of such Directors or committee or
person acting as aforesaid or that they or any of them were or was disqualified or had
vacated office or that the appointment of any of them had been terminated by virtue of
any provisions contained in the Act or in these Articles, be as valid as if every such
person had been duly appointed and was qualified to be a Director and had not vacated
office or his appointment had not been terminated. Provided that nothing in this article
shall be deemed to give validity to acts done by a Director after his appointment has
been shown to the Company to be invalid or to have terminated.
Acts of Board or
Committee valid
notwithstanding
defective
appointment
163 (1) No resolution shall be deemed to have been duly passed by the Board
or by a committee thereof by a circular unless the resolution has
been circulated in draft, together with the necessary papers, if any, to
all the Directors or to all the members of the committee, then in India
(not being less in number than the quorum fixed for a meeting of the
Board or committee as the case may be) and to all other Directors or
members at their usual address in India, and has been approved by
such of the directors as are then in India or by a majority of such of
them as are entitled to vote on the resolution.
(2) A resolution passed by circular without a meeting of the Board or
Committee of the Board shall, subject to the provisions of sub-clause
(1) hereof, be as valid and effectual as a resolution duly passed at a
meeting of the Board of the Committee duly called and held.
Resolution by
Circular
164 (1) Subject to the provisions of the Act and these Articles the Board of Directors of
the Company shall be entitled to exercise all such powers and to do all such
acts and things as the Company is authorised to exercise and do.
Provided that the Board shall not exercise any power or do any act or thing which is
directed or required, whether by the Act, or any other Act or by the Memorandum of
Association of the Company or these Articles or otherwise, to be exercised or done by
the Company in general meeting.
Provided further that in exercising any such power of doing any such act or thing the
Board shall be subject to the provisions contained in this behalf in the Act or in any other
Act or in the Memorandum of Association or in any regulations not inconsistent
therewith and duly made there under including regulations made by the Company in
general meeting.
(2) No regulation made by the Company in General Meeting shall invalidate any prior
act of the Board which would have been valid if that regulation had not been made.
General Powers of
the Board
165 The Board may exercise all such powers of the Company and do all such acts and things
are not by the Act or any other Act or by the Memorandum or by the Articles of the
Company required to be exercised by the Company in general meeting, subject
nevertheless to these Articles, to the provisions of the Act, or any other Act and to such
regulations being not inconsistent with the aforesaid regulations or provisions, as may
be prescribed by the Company in general meeting but no regulation made by the
Company in general meeting shall invalidate any prior act of the Board which would have
been valid if that regulation had not been made. Provided that the Board shall not,
except with the consent of the Company in general meeting:
(a) Sell, lease or otherwise dispose of the whole or substantially the whole of the
undertaking of the Company or where the Company owns more than one undertaking,
of the whole or substantially the whole of any such undertaking.
- 328 -
(b) Invest, otherwise than in trust securities the amount of compensation received by
the Company in respect of the compulsory acquisition of any such undertaking as is
referred to in clause (a) or of any premises or properties used for any such undertakings
and without which it cannot be carried on or can be carried on only with difficulty or
only after a considerable time
(c ) Borrow moneys where the moneys to be borrowed together with the moneys
already borrowed by the Company (apart from the temporary loans obtained from the
Company’s bankers in the ordinary course of business) will exceed the aggregate of the
paid – up capital of the Company and its free reserves that is to say, reserves not set
apart for any specific purpose provided further that the powers specified in Section 292
of the Act, shall subject to these Articles be exercised only at meetings of the Board
unless the same be delegated to the extent therein stated or
(d) Contribute to charitable and other funds not directly relating to the business of the
Company or the welfare of its employees, any amounts the aggregate of which will in
any Financial year, exceed fifty thousand rupees or five per cent of its average net profits
as determined in accordance with the provisions of Sections 349 and 350 of the Act
during the three Financial years immediately proceeding whichever is greater.
(e) Remit, or give time for the repayment of, any debt due by a director except in the
case of renewal or continuance of an advance made by a banking company to its director
in the ordinary course of business
166 Subject to the provisions of Section 292 and 293 of the Act, the Board may, from time to
time, at its discretion and by means of resolution passed at its meetings accept deposits
from members either in advance of calls or otherwise and generally, raise or borrow or
secure the payment of any sum or sums of money for the purposes of the Company.
Powers to Borrow
167 The Board may raise or secure the repayment of such sum or sums in such manner and
upon such terms and conditions in all respects as it thinks fit and in particular by the
issue of bonds, perpetual or redeemable debenture – stock or any mortgage, charge or
other security on the undertaking or the whole or any part of the property of the
Company (both present and future) including its uncalled capital for the time being. The
Board shall exercise such power only by means of resolutions passed at its meetings and
not by circular resolutions.
Condition on which
moneys may be
borrowed
168 Any debentures, debenture – stock, bonds or other securities may be issued at a
discount, premium or otherwise and may be issued on condition that they shall be
convertible into shares of any denomination and with any special privileges as to
redemption, surrender, drawing, allotment of share and attendance (not voting) at
General Meetings of the Company, provided however that no debentures with the right
to conversion into or allotment of shares shall be issued except with the consent of the
Company in General Meeting accorded by a Special Resolution. The Company shall,
before any such issue, make an application to one or more recognized stock exchanges
for permission for the debentures to be dealt with in the stock exchange or each such
stock exchange.
Terms of issue of
debentures
169 If the Directors or any of them or any other persons shall become personally liable for
the payment of any sum primarily due from the Company, the Board may execute or
cause to be executed any mortgage, charge or security over or affecting the whole or
any part of the assets of the Company by way of indemnity against any loss which the
Directors or any one or more of them may suffer by reason of becoming or being
sureties or surety for the Company
Execution of
Indemnity
170 Without prejudice to the general powers conferred by Article 164 and the other powers
conferred by these Articles and Section 291 of the Act, so as not in any way to limit or
restrict those powers, but subject however to the provisions of the Act, it is hereby
expressly declared that the Board shall have the following powers:
Certain powers of
the Board
- 329 -
(1) To pay the costs, charges and expenses preliminary and accidental to
the promotion, establishment and registration of the Company.
(2) Subject to the Section 292 and 297 and other applicable provisions of
the Act, to purchase or otherwise acquire for the Company any
property movable or immovable, rights or privileges which the
Company is authorized to acquire at or for such price or consideration
and generally on such terms and conditions as it may think fit, and in
such purchase or other acquisition to accept such title as the Board
may believe or may be advised to be reasonably satisfactory.
(3) As its discretion and subject to the provisions of the Act, to pay for
any property, rights or privileges, acquired by or for services rendered
to the Company, either wholly of partially in cash or in shares, bonds,
debentures, mortgages or other securities of the Company and any
such shares may be issued either as fully paid up or with such amount
credited as fully paid up thereon as may be agreed upon and any such
bonds debentures mortgages or other securities may either
specifically be charged upon all or any part of the property of the
Company including its uncalled capital.
(4) To secure the fulfillment of any contracts, agreements or
engagements entered into by the Company by mortgage or charge of
all or any of the property of the Company and its uncalled capital for
the time being or in such other manner as it may think fit.
(5) To insure and keep insured against loss s or damage by or otherwise
for such period and to such extent as they may think proper all or any
part of the building machinery goods, stores, produce ad other
movable property of the company either separately or co jointly also
to insure all or any portion of the goods produced machinery and
other articles imported or exported by the Company and to sell assign
surrender or discontinue any policies of assurance effected in
pursuance of this power.
(6) To appoint and at its discretion remove or suspend such mangers,
secretaries, officers, clerks agents and employees from permanent
temporary or special services as it may from time to time think fit,
and to determine their powers and duties and to fix their salaries,
emoluments or remuneration and to require security in such
instances and of such amounts as it may think fit.
(7) To accept from any member, subject to the provisions of the Act
surrender of his share or any part thereof on such terms and
conditions as shall be agreed.
(8) To appoint any person or persons (whether incorporated or not) to
accept and hold in trust for the Company any property belonging to
the Company or in which it is interested or for any other purpose, and
to execute and do all such deeds and things as may be required in
relation to any such trust and to provide for the remuneration of such
trustee or trustees.
(9) To institute conduct defend compound or abandon any legal
proceedings by or against the company or its officers or otherwise
concerning the affairs of the company and also to compound and
allow time for payment or satisfaction or any debts due or any claims
or difference to arbitration and observe the terms of any awards
made therein either according to foreign law and either in India or
abroad and observe and perform or challenge any award made
therein.
(10) To refer any claims or demands by or against the company or any
difference to arbitration and observe and perform the awards.
(11) To act on behalf of the Company in all matters relating to bankrupts
and insolvents.
(12) To make and give receipts, releases and other discharges for money
To pay registration
expenses
To acquire Property
To pay for the
property
To mortgage,
charge, property
To insure
To appoint manager
etc
To accept surrender
of shares
To appoint trustees
To bring and defend
actions
- 330 -
payable to the company and for the claims and demands of the
company.
(13) To open and operate Bank accounts to determine from time to time
who shall be entitled to sign on the company’s behalf bills notes
receipts acceptances endorsements cheques dividend warrants
releases contracts and documents and to give the necessary authority
or such purpose.
(14) Subject to the provisions of the Act and these Articles from time to
time to proceed for the management of the affairs of the company in
or outside India in such manner as it may think fit, and in particular to
appoint any person to be the attorneys or agents of the Company
with such person (including the power to sub-delegates) and upon
such terms as may be thought fit.
(15) Subject to the provisions of the Sections 291, 292, 293, 295, 372A and
other applicable provisions of the Act and these Articles to invest and
deal with the moneys of the Company not immediately required for
the purpose thereof in or upon such security (not being shares in this
Company) or without security and in such manner as it may think fit,
and from time to time to vary or realize such investments,. Save as
provided in Section 49 of the Act all investments shall be made and
held in the company’s own name.
(16) Subject to such sanctions as may be necessary under the Act or the
Articles to give to any director, Officer, or other person employed by
the Company by way of commission on the gross expenditure
thereon or otherwise or a share in the general profits of the
Company, and such interest, commission or share of profits shall be
treated as part of the working expenses of the Company
(17) To execute in the name and on behalf of the company in favour of
any Director or other person who may incur or be about to incur, any
personal liability for the benefit of the Company, such mortgage of
the Company’s property (present and future) as it thinks fit and any
such mortgages may obtain a power of sale and such other powers,
covenants and provisions as shall be agreed upon.
(18) To distribute by way of bonus amongst the staff of the Company a
share or shares in the profits of the Company, and to give to any
Director, officer or other persons employed by the Company a
commission on the profits of any particular business or transaction
and to charge such bonus or commission as part of working expenses
of the Company.
(19) To provide for the welfare of employees or ex-employees of the
Company and the wives and families or the dependents or
connections of such persons by building or contributing to the
building of houses, dwellings or chawls or by grants of money,
pensions , gratuity, annuities, allowances, bonuses or other payments
or by creating and from time to time subscribing or contributing to,
provident fund and other associations, institutions, funds of trusts
and by providing or subscribing or contributing towards places of
instruction or recreation, hospitals and other assistance as the Board
shall think fit.
(20) To subscribe, incur expenditure or other wise to assist or to
guarantee money to charitable, benevolent, religious, scientific,
national or any other institution or subjects which shall have any
moral or other claim to support or aid by the Company, either by
reason of locality or operation or of public and general utility or
otherwise.
(21) Before recommending any dividend, to set aside out of the profits of
the Company such sums as it think proper for depreciation or to a
depreciation fund or to an insurance fund or as a reserve fund or
sinking fund or any special fund to meet contingencies to repay
To refer to
arbitration
To act on insolvency
matters.
To give receipts
To open accounts
etc
To authorize by
power of attorney.
To give Directors
etc. an interest in
business
To provide for
personal liabilities.
To provide for
welfare of
employees.
- 331 -
debentures or for debenture - stock or special dividends or for
equalizing dividends or for repairing, improving extending and
maintaining any of the property of the Company and for such other
purposes (including the purposes referred to in the last two
preceding clauses) as the Board of Directors may in its absolute
discretion think conducive to the interest of the Company, and
subject to Section 292 of Act, to invest the several sums so set aside
or so much thereof as is required to be invested, upon such
investments (other than shares of this Company) as it may think fit
and from time to time to deal with and vary such investments and
dispose of and apply and expend all or any part thereof for the
benefit of the company, in such manner and for such purposes the
Board of Directors, in its absolute discretion think conducive to the
interest of the Company, notwithstanding that the matters to which
the Board of Directors applies or upon which it expends the same or
any part thereof may be matters to or upon which the capital moneys
of the Company might rightly be applied or expended, and to divide
the general reserve fund into such special funds as the Board of
directors may think fit, with full power to transfer the whole or any
portion of a reserve fund or division of a reserve fund to another
reserve fund and with full power to employ the assets constituting all
or any of the above funds including the depreciation fund, in the
business of the Company or in the purchase or repayment of
debentures or debenture – stock and that without being bound to
keep the same separate from the other assets and without being
bound to pay interest on the same, with power however to the Board
of Directors at its discretion to pay or allow to the credit of such funds
interest at such rate as the Board of Directors may think proper.
(22) To pay and charge to the capital account of the Company any
commission or interest lawfully payable there out under the
provisions of Section 76 and 208 of the Act and of the provisions
contained in these presents.
(23) From time to time to make, vary and repeal bye-laws for regulation of
the business of the Company, its officers and servants.
(24) To redeem redeemable preference shares.
(25) Subject to the provisions of the Act and these Articles for or in
relation to any of the matters aforesaid or otherwise for the purpose
of the Company to enter into all such negotiations and contracts and
rescind and vary all such contracts and execute and do all such act,
deeds, and things in the name and on behalf of the Company as it
may consider expedient.
(26) To undertake any branch or kind of business which the Company is
expressly or by implication authorised to undertake at such time or
times as it shall think fit; and to keep through it may been actually
commenced or not, so long as the Board may deem it expedient not
to commence or proceed with such branch or kind of business.
To subscribe to
charitable and other
funds
To create reserve
fund
To negotiate
171
MANAGING DIRECTORS
Subject to the provisions of Sections 267, 268, 269, 309, 310, 311, 316, 317 and Schedule
XIII and other applicable provisions, if any of the Act, the Board of directors may from
time to time appoint one or more of their body to be Managing Director or Managing
Directors or whole – time Directors of the Company for term not exceeding five years at
a time for which he or they is or are to hold such office and may from time to time
remove or dismiss him or them from office and appoint another or others in his or their
place or places.
Board may appoint
Managing Directors
172 Subject to the provisions of the Act and these Articles, a Managing Director shall not
while he continues to hold that office be subject to retirement by rotation and he shall
not be taken into account in determining the Directors liable to retire by rotation or the
number of directors to retire but he shall subject to the terms of any contract between
him and the Company, be subject to the same provisions as to resignation and removal
- 332 -
as the other directors of the Company.
173 The remuneration of a Managing Director shall from time to time be fixed by the Board
and may be by way of salary or commission or participation in profits or by any or all of
these modes or in any other form shall be subject to the limitations prescribed in
Sections 198, 309 and Schedule XIII of the Act
Remuneration of
Managing Directors
174 Subject to the provisions of the Act and to the restrictions contained in these articles the
Board may, from time to time, entrust to and confer upon a Managing Director for the
time being such of the powers exercised by the Board under these Articles as it may
think fit and may confer such powers for such time and to be exercised for such objects
and purposes and upon such terms and conditions and with such restrictions as it thinks
expedient and it may confer such powers either collaterally with or to the exclusion of or
in substitution of all or any of the powers of the Board in that behalf, and may from time
to time revoke, withdrew, alter or vary all or any of such powers.
Directors may confer
power on Managing
Directors
175 Subject to the provisions contained in Sections 318 and 319 of the Act, the Company
shall make payment to a Managing Director by way of compensation for loss of office or
as compensation for retirement from such office or in connection with such loss or
retirement from office, except in cases specified in Section 318 (3) and such payment
shall be subject to the limit specified in Section 318 (4) of the Act.
Compensation for
loss of office
176 The Managing Director or Managing Directors shall not exercise the powers to :
(a) Make calls on shareholders in respect of money unpaid on the shares
of the Company
(b) Issue debentures, and
(c) Except as may be delegated by the Board under Section 292 of the
Act, invest the funds of the Company, or make loans or borrow
moneys.
Managing Director
not to exercise
certain powers
177 The Company shall not appoint or employ or continue the employment of any person as
its Managing Director, whole time Director or Manger who suffers from any of the
infirmities and disabilities listed out in the part I to the Schedule XIII to the Act.
THE SECRETARY
Certain persons not
to be appointed as
Managing Directors
178 The Board may from time to time appoint or remove, at its discretion, any individual
(hereinafter called “the Secretary”) to perform any functions, which by the Act are to be
performed by the Secretary and to execute any other ministerial or administrative duties
which may from time to time be assigned to the Secretary by the Board. The Board may
also at any time appoint some persons (who need not be the Secretary) to keep the
registers required to be kept by the Company. The appointment of Secretary shall
conform to the provisions of Section 383 –A of the Act.
THE SEAL
179 The Board of Directors shall provide a Common Seal for the purpose of the Company,
and shall have power from time to time to destroy the same and substitute a new seal in
lieu thereof, and shall provide for the safe custody of the Seal for the time being and the
Seal shall never be used except by the authority of the Board or Committee of the Board
previously given. Every deed or other instrument to which the Seal of the Company is
required to be affixed shall unless the same is executed by a duly constituted attorney of
the Company, be signed by the persons as prescribed under the Act, provided
nevertheless that certificates or shares or debentures may be sealed and signed in the
manner and in conformity with the provisions of the Companies (Issue of Share
Certificates) Rules 1960.
The seal, its custody
and use
180 The Company may, subject to the provisions of Section 50 of the Act, have for use in any
territory, district or place not situated in the Union of India, an official seal which shall be
a facsimile of the Common Seal of the Company with addition on its face of the name of
the territory, district or place where it is to be used.
Foreign Seal
181 The following provisions shall apply on the Company having a foreign seal under the
preceding article:
(i) The Company shall, by a document under its Common Seal, authorise any
person appointed for the purpose in that territory, district or place, to affix the
official seal to any deed or other document to which the Company is a party in
Provisions
applicable to
Foreign Seal
- 333 -
that territory, district or place.
(ii) The authority of any agent under the preceding clause shall, as
between the Company and any person dealing with the agent,
continue during the period if any mentioned in the document
conferring the authority, or if no period is therein mentioned,
until notice of the revocation or determination of the agent's
authority has been given to the person dealing with him.
(iii) The person affixing any such official seal, certify on the deed or
document to which such seal is affixed.
(iv) A deed or other document to which an official seal is duly affixed
shall bind the Company as If It had been sealed with the Common
Seal of the Company.
MINUTES
182 (1) The Company shall cause minutes of all proceedings of every General Meeting and of
all proceedings of every meeting of its Board of Directors or of every Committee of the
Board to be kept by making within thirty days of the conclusion of every such meeting
concerned, entries thereof in books kept for that purpose with their pages consecutively
numbered.
(2) Each page of every such book shall be initialed or signed and the last page of the
record of proceedings of each meeting in such books shall be dated and signed :
(a) in the case of minutes of proceedings of a meeting of the Board or a Committee
thereof, by the Chairman of the said meeting or the Chairman of the next succeeding
meeting;
(b) in the case of minutes of proceedings of a General Meeting by the Chairman of the
same meeting within the aforesaid period of thirty days or in the event of the death or
inability of that Chairman within the period by a Director duly authorised by the Board
for the purpose.
Minutes
183 Minutes of proceedings of every General Meeting and of the proceedings of every
meetings of the Board kept in accordance with the provisions of Article shall be evidence
of the proceedings recorded therein.
184 Where minutes of the proceedings of any General Meeting of the Company or of any
meeting of the Board or of a Committee of the Board have been kept in accordance with
the provisions of Article 182 above then, until the contrary is proved, the meeting shall
be deemed to have been duly called and held, and all proceedings thereat to have duly
taken place, and in particular all appointments of directors or liquidators made at the
meeting shall be deemed to be valid.
185 (1) The books containing the minutes of the proceedings of any General
Meetings of the Company shall be kept at the Registered Office of the
Company and shall be open to Inspection of any member without
charge between the hours of 2 p.m. and 5 p.m. during business hours
on each working day except Saturday.
(2) Any member of the Company shall be entitled to be furnished, within
seven days after he has made a request in writing in that behalf to the
Company with a copy of any minutes referred to in clause (a) above
on payment of thirty paise for everyone hundred words or fractional
part thereof required to be copied.
(3) In no case the minutes of proceedings of a meeting shall be attached
to any such book as aforesaid by pasting or otherwise.
(4) The minutes of different meetings shall contain a fair and correct
summary of proceedings thereat.
(5) All appointments of officers made at any of the meetings aforesaid
shall be included in the, minutes of the meeting.
(6) In the case of meeting of the Board of Directors or of a Committee of
the Board, the minutes shall also contain :
(a) The names of the Directors present at the meeting,
- 334 -
and
(b) In the case of each resolution passed at the meeting the names of the Directors, if
any, dissenting or not concurring in the resolution.
(7) Nothing contained in sub-clauses (1) to (6) hereof shall be deemed torequire the
inclusion in any such minutes of any matter which, in the opinion of the chairman of the
meeting:
(a) is or could reasonably be regarded as defamatory or
(b) is irrelevant or immaterial to the proceedings or
(c) is detrimental to the interests of the Company.
The Chairman shall exercise an absolute discretion in regard to the inclusion or non-
inclusion of any matters in the minutes on the grounds specified in this clause.
DIVIDENDS
186 The profits of the Company which it shall from time to time determine, subject to the
provisions of Section 205 of the Act, to divide in respect of any year or other period shall,
be applied first in paying the fixed preferential dividend on the capital paid up on the
preference shares if any, and secondly in paying a dividend declared for such year or
other period on the capital paid up on the equity shares.
187 No amount paid or credited as paid on shares in advance at calls shall be treated for the
purpose of Article 186 as paid up on the share.
Amount paid in
advance of calls not
to be treated as paid
up capital
188 All dividends shall be apportioned and paid proportionately to the amounts paid or
credited as paid on the shares during any portion or portions of the period in respect of
which the dividend is paid, but if any share is issued on terms providing that it shall rank
for dividend as from a particular date, such share shall rank for dividend accordingly.
Apportionment of
Dividends
189 The company in general meeting may subject to the provision of Section 205 of the Act
declare a dividend to be paid to the members according to their rights and interests in
the profits and may fix the time for payment.
Declaration of
Dividends
190 No larger dividend shall be declared than is recommended by the Board but the
Company in general meeting may declare a smaller dividend.
Restrictions on
amount of Dividend
191 (1) No dividend shall be 'payable except out of the profits of the Company arrived at as
stated in Section 205 of the Act.
(2) The declaration of the Board as to the amount of the net profits of the Company shall
be conclusive.
Dividend out of
profits only
192 The Board of Directors may from time to time pay to the members such Interim
dividends as in its judgement the position of the Company justifies.
193 The Board may retain any dividends payable on shares on which the Company has a lien
and may apply the same in or towards the satisfaction of the debts, liabilities or
engagements in respect of which the lien exists.
Debts may be
deducted
194 Any general meeting declaring a dividend may make a call on the members of such
amounts as the meeting fixes but so that the call on each member shall not exceed the
dividend payable to him and so that the call may be made payable at the same time as
the dividend and the dividend may if so arranged between the Company and the
member, be set off against the call.
Dividend and call
together
195 (a) Where the Company has declared a dividend but which has not been paid or claimed
the dividend warrant in respect thereof has not been posted within 30days from the
date of declaration to any shareholder entitled to the payment of the dividend, the
Company shall within 7 days from the date of expiry of the said period of 30 days, open a
special account in that behalf in any scheduled bank called "Unpaid Dividend Account"
and transfer to the said account, the total amount of dividend which remains unpaid or
unclaimed in relation to which no dividend warrant has been posted.
(b)Any money transferred to the unpaid dividend account of the Company, which
remains unpaid or unclaimed for a period of seven years from the date of such transfer,
shall be transferred by the Company to the general revenue account of the Central
Government. A claim to any money so transferred to the general revenue account, may
be preferred to the Central Government by the shareholders to whom the money is due.
No unclaimed dividend shall be forfeited by the Board, unless the claim thereof becomes
barred by law.
Unpaid dividend or
dividend warrant
posted
- 335 -
196 A transfer of shares shall not pass the right to any dividend declared thereon before the
registration of the transfer.
Effect of Transfer
197 The Board may retain the dividends payable upon shares in respect of which any person
is under Article 78 entitled to become a member or which any person under that Article
is entitled to transfer until such person shall become a member in respect of such shares
or shall duly transfer the same.
Retention in certain
cases
198 No member shall be entitled to receive payment of any interest or dividend in respect of
his own share or shares whilst any money may be due or owing from him to the
company in respect of such share or shares or otherwise howsoever either alone or
jointly with any other person or persons and the Board may deduct from the interest or
dividend payable to any shareholder all sums of money so due, from him to the
Company.
No member to
receive interest or
dividend whilst
indebted to the
Company and
Company’s right to
reimbursement
there out
199 Any dividend payable in cash may be paid by cheque or warrant sent through the post
directed to the registered address of the shareholder entitled to the payment of the
dividend or in the case of joint shareholders to the registered address of that one whose
name stands first on the Register of Members in respect of the joint shareholding or to
such persons and to such address as the holder or the joint shareholders may in writing
direct and every cheque or warrant so sent shall be made payable to the order of the
person to whom it is sent and the Company shall not be responsible or liable for any
cheque or warrant lost in transit or for any dividend lost to the member or person
entitled thereto by the forged endorsement of any cheque or warrant or the fraudulent
recovery thereof by any other means. The Company may, if it thinks fit, call upon the
shareholders when applying for dividends or bonus to produce their share certificates at
the registered office or other place where the payment of dividend is to be made.
Payment by post
200 The Company shall pay dividend or send the warrant in respect
thereof to the shareholder entitled to the payment of the dividend within thirty days
from the date of the declaration of the dividend unless :
(a) the dividend could not be paid by reason of the operation
of any law, or
(b) a shareholder has given directions to the Company
regarding the payment of dividend and these directions
cannot be complied with, or
(c) there is a dispute regarding the right to receive the
dividend, or
(d) the dividend has been lawfully adjusted by the Company
against any sum due to it from the shareholder, or
(e) for any other reason, the failure to pay the dividend or to
post the warrant within the period aforesaid was not due to
any default on the part of the Company.
Dividend to be paid
within thirty days
201 (a) Any general meeting may. upon the recommendation of the
Board, resolve that any moneys, investments or other assets forming part of the
undistributed profits of the Company standing to the credit of any of the profit and loss
account or any capital redemption reserve fund or in the hands of the Company and
available for dividend or representing premium received on the issue of shares and
standing to the credit of the share premium account be capitalised and distributed
amongst such of the shareholders as would be entitled to receive the same if distributed
by way of dividend and in the same proportions on the footing that they become
entitled thereto as capital and that all or any proportions on the footing that they
become entitled thereto as capital and that all or any part of such capitalised fund shall
not be paid in cash but shall be applied subject to the provisions contained in clause (b)
hereof on behalf of such shareholders in or towards:
(1) paying either at par or at such premium as the resolution may provide any unissued
shares or debenture-stock of the Company which shall be allotted, distributed and
credited as fully paid up to and amongst such members in the proportions aforesaid; or
(2) paying up any amounts for the time being remaining unpaid on any shares or
debenture-stock held by such members respectively; or
(3) paying up partly in the way specified in sub-clause (1) and partly in that specified in
Capitalization of
Reserves
- 336 -
sub-clause (2); and that such distribution or payment shall be accepted by such
shareholders in full satisfaction of their interest in the capitalised sum.
(b) (1) Any moneys, investments or other assets representing premium received on the
issue of shares and standing to the credit of share premium account; and
(2) If the Company has redeemed any redeemable preference shares, all or any
part of any capital redemption fund arising from redemption of such shares;
may by resolution of the company be applied only in paying up in full or any
shares then remaining unissued to be issued to such members of the company
as the general meeting may resolve up to an amount equal to the nominal
amount of the shares so issued.
(c) Any general meeting may resolve that any surplus moneys arising from the realization
of any capital assets of the Company or an investment representing the same or any
other undistributed profits of the Company not subject to charge for income-tax be
distributed amongst the members on the footing that they receive the same as capital.
(d) For the purpose of giving effect to any such resolution the Board may
settle any difficulty which may arise in regard to the distribution of
payment as aforesaid as it thinks expedient and in particular it may
issue fractional certificates and may fix the value for distribution of
any specific assets and may determine that cash payments be made
to any members on the footing of the value so fixed and may vest any
such cash, share, debentures, debenture-stock, bonds or other
obligation in trustees upon such trust for the persons entitled thereto
as may seem expedient to the Board and generally may make such
arrangement for acceptance, allotment and sale of such shares,
debentures, debenture-stock, bonds or other obligations and
fractional certificates or otherwise as it may think fit.
(e) If and whenever any share becomes held by any member in fraction,
the Board may subject to the provisions of the Act, and these Articles
and to the directions of the Company in general meeting, if any, sell
the shares which members hold in fractions for the best price
reasonably obtained and shall pay and distribute to and amongst the
members entitled to such shares in due proportion the net proceeds
of the sale thereof; for the purpose of giving effect to any such sale
the Board may authorise any person to transfer the shares sold to the
purchaser thereof, comprised in any such transfer and he shall not be
bound to see to the application of the purchase money nor shall his
title to the shares be affected by any irregularity or invalidity in the
proceedings with reference to the sale.
(f) Where required, a proper contract shall be delivered to the Registrar
for registration in accordance with Section 75 of the Companies Act
and the Board may appoint any person to sign such contract on
behalf of the persons entitled to the dividend or capitalised fund and
such appointment shall be effective.
ACCOUNTS
202 The Company shall cause to be kept proper books of account with respect to :
(a) all sums of money received and expended by the Company and the matters in
respect of which receipts and expenditure take place;
(b) all sales and purchase of goods by the Company; and
(c) the assets and liabilities of the Company.
Books of Account to
be kept
203 (1) The books of account shall be kept at the Registered Office of the Company or
at such other place in India as the Board of Directors may decide and when the
Board of Directors so decides, the Company shall within seven days of the
decision, file with the Registrar a notice in writing giving the full address of that
other place.
(2) The books of accounts shall be open to inspection by any director during
business hours.
Books where to be
kept and inspection
204 The Board of Directors shall from time to time determine whether and to what extent
and at what times and place and under what conditions or regulations the accounts and
Inspection by
members
- 337 -
books of the Company or any of them shall be open to the inspection of the Members,
and no Member (not being a Director) shall have any right of inspecting any account or
book or document of the Company except as conferred by the Board of Directors or by
the resolution of the Company in general meeting.
205 The Board of Directors shall from time to time, in accordance with the Sections 210, 211,
212, 215, 216 and, 217 of the Act, cause to be prepared and to be laid before the
Company in general meeting, such Balance Sheets, Profit and Loss Accounts and Reports
as are required by these Sections.
Statement of
Accounts to be
furnished to General
Meeting
206 (a) The copies of every Balance Sheet (including Profit and Loss Account, the Auditor's
Report and every other document required by law to be annexed or attached, as the
case may be, to the Balance Sheet) shall be available for inspection at the Registered
Office of the Company, during working hours, for a period of twenty-one days before the
date of Annual General Meeting. The Company shall send a statement containing salient
features of such documents, in the prescribed form or the copies of the documents
aforesaid, as the Company may deem fit, to every member of the Company and to every
trustee for the holders of any debentures issued by the Company not less than twenty
one days before the date of the meeting.
(b) Any member or holder of debentures of the Company and any person from whom
the Company has accepted a sum of money by way of deposit shall, on demand, be
entitled to be furnished free of cost of the last Balance Sheet of the Company and of
every document required by law to be annexed or attached thereto, including the profit
and loss account and the Auditors' Report.
AUDIT
Right to Balance
Sheet and Loss
Account etc
207 Every Balance Sheet and Profit and Loss Account shall be audited by one or more
Auditors to be appointed as hereinafter mentioned.
(a) The Company at the Annual General Meeting each year shall appoint an Auditor or
Auditors to hold office from the conclusion of that meeting until the conclusion of the
next Annual General Meeting and shall, within seven days of the appointment, give
intimation thereof to every auditor so appointed.
(b) At any Annual General Meeting a Retiring Auditor, by whatever authority appointed,
shall be reappointed unless:
(i) he is not qualified for reappointment.
(ii) he has given the Company notice in writing of his unwillingness to be reappointed.
(iii) a resolution has been passed at the meeting appointing somebody instead of him or
providing expressly that he shall not be reappointed; or
(iv) where notice has been given of an intended resolution to appoint some person or
persons in the place of retiring Auditor, and by reason of the death, incapacity or
disqualification of that person or of that person or of all those persons as the case may
be, the resolution cannot be proceeded with;
(c) Where at an Annual General Meeting no Auditors are appointed or re-appointed, the
Central Government may appoint a person to fill the vacancy.
(d) The Company shall, within seven days of the Central Government power under sub-
clause (c) becoming exercisable give notice of that that to the Government.
(e) The Directors may fill any casual vacancy in the office of Auditor, but while any such
vacancy continues the surviving or continuing Auditor or Auditors (if any) may act, but
where such vacancy be caused by the resignation of an Auditor, the vacancy shall only
be filled by the Company in General Meeting.
(f) A person, other than a retiring Auditor, shall not be capable of being appointed at an
Annual General Meeting unless special notice of the Resolution for appointment of that
person to the office of Auditor has been given by a member to the Company not less
than fourteen days before the Meeting in accordance with Section 190 of the Act, and
the Company shall send a copy of any such notice to the retiring Auditor and shall give
notice thereof to the members in accordance with Section 190 of the Act, and the
provisions of Section 225 of the Act shall apply in the matter. The provisions of this sub-
clause shall also apply to a Resolution that a retiring Auditor shall not be re-appointed.
(g) The persons qualified for appointment as Auditors shall be only those referred to in
Section 226 of the Act.
(h) None of the persons mentioned in Section 226 of the Act as being not qualified for
appointment as Auditors shall be appointed as Auditors of the Company.
Accounts to be
audited
- 338 -
208 The Company shall comply with the provisions of Section 228 of the Act in relation to the
audit of the accounts of branch offices of the Company, except to the extent to which
any exemption may be granted by the Central Government, in that behalf.
Audit of Branch
at Office
209 The remuneration of the Auditors shall be fixed by the Company in General Meeting in
such manner as the Company may in General Meeting determine except that the
remuneration of any Auditors appointed to fill any casual vacancy may be fixed by the
Directors.
Remuneration of
Auditors
210 (a) The Auditors of the Company shall have a right of access at all times to the books and
vouchers of the Company and shall be entitled to require from the Directors and Officers
of the Company such information as may be necessary for the performance of the duties
of the Auditor/s.
(b) All notices of and other communications relating to, any General Meeting of the
Company which any member of Company's entitled to have sent to him shall also be
forwarded to the Auditors of the Company, and the Auditor/s shall be entitled to attend
any General Meeting and to be heard at any General meeting which he attends to any
part of the business which concerns him as Auditor.
(c) The Auditors shall make a Report to the members of the Company on the accounts
examined by him and on every Balance Sheet and Profit and Loss Account, and on every
other document declared by the Act to be part of or annexed to the Balance Sheet or
Profit and Loss Account, which are laid before the Company in Annual General Meeting
during his tenure of office, and the Report shall state whether, in his opinion and to the
best of his information and according to the explanation given to him, the said accounts
give the information required by the Act in the manner so required and give a true and
fair view:
(i) whether he has obtained all the information and explanations which to be best of
his knowledge and belief were necessary for the purpose of his audit;
(ii) whether, in his opinion, proper books of accounts as required by law have been
kept by the Company so far as appears from his examination of those books and proper
returns adequate for the purposes of his audit have been received from branches not
visited by him;
(iii) whether the report on the accounts of any branch office audited under Section 228
by a person other than the Company's Auditor has been forwarded to him as required by
Clause (c) of sub-section (3) of the Section and how he has dealt with the same in
preparing the Auditor's Report;
(iv) whether the Company's Balance Sheet and Profit and Loss Account dealt with by
the Report are in agreement with the books of account and returns;
(d) Where any of the matters referred to in this Article is answered in the negative or
with a qualification the Auditor's Report shall state the reasons for the answer.
Auditor to have
access to the
books of the
Company
211 Every account when audited and approved by a General Meeting shall be conclusive
except as regards any error there discovered within three months next after the
approval thereof.
Accounts when
audited and
approved to be
conclusive except as
to errors discovered
within three months
212
DOCUMENTS AND NOTICES
(1) A document or notice may be served by the Company on any member hereof
either personally or by sending it by post to him to his registered address or if
he has no registered address, in India to the address if any, within India
supplied by him to the Company for the giving of notices to him.
(2) Where a document or notice is sent by post:
(a) Service thereof shall be deemed to be effected by properly addressing,
prepaying and posting a letter containing the document or the notice, provided
that where a member has intimated to the Company in advance that
documents or notices should be sent to him under a certificate of posting or by
registered post with or without acknowledgment due and has deposited with
Service of
Documents on
members by
Company
- 339 -
the Company a sum sufficient to defray the expenses of doing so, service of the
document or notice shall not be deemed to be affected unless it is sent in the
manner intimated by the member; and
(b) Such service shall be deemed to have been effected:
(i) in the case of a notice of a meeting at the expiration of forty
eight hours after the letter containing the same is posted; and
(ii) in any other case, at the time at which the letter would be
delivered in the ordinary course of post.
(3) A document or notice may be served by the Company on the joint holders of a share
by serving, it on the joint holder named first in the Register of Members in respect of the
share.
(4)A document or notice may be served by the Company on the person entitled to a
share in consequence of the death or insolvency of a member by sending it through post
in a prepaid letter addressed to them by name, or by the title of representatives of the
deceased, or assignees of the insolvent, by any like description, at the address if any, in
India supplied for the purpose by the persons claiming to be so entitled or until such an
address has been so supplied, by serving the document or notice in any manner in which
it might have been served if the death or insolvency had not occurred.
(5) A certificate in writing signed by the manager, secretary or other Officer or
employees of the Company, that the notice was properly addressed, prepaid and posted
shall be conclusive evidence thereof.
(6) The service of any document or notice to be given by the Company may be written or
printed or lithographed.
213 A document may be served on the Company or an Officer thereof by sending it to the
Company or the Officer at the registered office of the Company by post under a
certificate of posting or by registered post or by leaving it at its registered office.
Service of
documents on
Company
214 Save as otherwise expressly provided in, the Act, a document or proceeding requiring
authentication by the Company may be signed by a Director, Managing Director, the
Manager, the Secretary, or other authorised officer of the Company and need not be
under the Common Seal of the Company.
INDEMNITY
Authentication of
documents and
proceedings
215 Subject to the provisions of Section 201 of the Act, every Director, Manager and other
officer or any person (whether officer of the Company or not) employed by the
Company, or as an auditor, or servant of the Company shall be indemnified by the
Company and it shall be the duty of the Board to payout of the funds of the Company all
costs, charges, losses and expenses which any such officer or servant may incur or
become liable to by reason of any contract entered into or act or thing done by him as
such officer or servant or in any way in the discharge of his duties including expenses,
and in particular and so as not to limit the generality of the foregoing provisions, against
all liabilities incurred by him as such director, manager, officer or servant in defending
any proceedings, whether civil or criminal, in which judgment is given in his favour or in
which he is acquitted or in connection with any application under Section 633 of the Act
in which relief is granted by the Court.
Company may
Indemnify
216 Subject to the provisions of Section 201 of the Act, no Director, Manager or other Officer
of the Company shall be liable for the acts, receipts, neglects of any other director or
officer or for joining in any receipt or other act for conformity or for any loss or expense
happening to the company through the insufficiency or deficiency of title to any
property acquired by order of the Board for or on behalf of the Company, or for the
insufficiency or deficiency of any security in or upon which any of the moneys of the
Company shall be invested or for any, loss or damage arising from the bankruptcy or
insolvency or an act of tort of any person with whom any moneys, securities or effects
Directors and other
officers not
responsible for the
acts of others
- 340 -
shall be deposited or for any loss occasioned by an error of judgment, omission, default
or oversight, on his part, or for any other loss, damage or misfortune whatsoever which
shall happen in the execution of the duties of his office or in relation thereto unless the
same happens through his own dishonesty.
WINDING UP
217 If the Company shall be wound up, and the assets available for distribution among the
members as such shall be insufficient to repay the whole of the paid up capital, such
assets shall be distributed so that, as nearly as may be the losses shall be borne by the
members in proportion to the capital paid up or which ought to have been paid up at the
commencement of the winding up on the shares held by them respectively and if in a
winding up the assets available for distribution among the members shall be more than
sufficient to repay the whole of the capital paid up at the commencement of the winding
up the excess shall be distributed amongst the members in proportion to the capital paid
up or which ought to have been paid up at the commencement of the winding up on the
shares held by them respectively. But this Article is to be without prejudice to the right
of the holders of shares issued upon special terms and conditions.
SECRECY CLAUSE
Distribution of
assets
218 No member or other person (not being a Director) shall be entitled to visit or inspect any
property or premises or works of the Company without the permission of the Board or
to require discovery of or any information respecting any detail of the Company's trading
or any matter which is or may be in the nature of a trade secret, mystery of trade, secret
process or any other matter which may relate to the conduct of the business of the
Company and which in the opinion of the board it would be inexpedient in the interest
of the Company to disclose
Secrecy Clause
219 Every Director, Manager, Auditor, Treasurer, Trustee, Member of a Committee, Agent,
Officer, Servant, Accountant or other person employed in the business of the Company
shall, when required, sign a declaration pledging himself to observe strict secrecy
respecting all transactions of the Company with the customers and the state of accounts
with individuals and in matters relating thereto, and shall by such declaration pledge
himself not to reveal any of the matters which may come to his knowledge in the
discharge of his duties, except when required so to do by the Board or by any meeting of
the shareholders if any or by a Court of Law, or by the persons to whom the matters
relate and except so far as may be necessary in order to comply with any of the
provisions in these presents contained.
Secrecy Under
taking
220 Each member of the Company, present and future, is to be deemed to join the Company
with full knowledge of all the contents of these presents.
Knowledge implied
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SECTION IX – OTHER INFORMATION
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
The copies of the following contracts which are or may be deemed material have been entered or to be entered into
by our Company (not being contracts entered into in the ordinary course of business carried on by our Company or
contracts entered into more than two years before the date of the Draft Red Herring Prospectus). These contracts,
copies of which will be attached to the copy of the Red Herring Prospectus delivered to the RoC for registration, and
also the documents for inspection referred to hereunder may be inspected at the Registered Office from 10.00 am to
4.00 pm on Working Days from the date of the Red Herring Prospectus until the Bid Closing Date.
A. Material Contracts to the Issue
1. Issue Agreement dated January 29, 2013 entered into between our Company and the BRLM.
2. Market Making Agreement dated [●] entered into between our Company and the BRLM.
3. Agreement dated December 10, 2012 entered into between our Company and the Registrar to the Issue.
4. Escrow Agreement dated [●] entered into between our Company, the BRLM, Escrow Collection Bank and the
Registrar to the Issue.
5. Syndicate Agreement dated [●] entered into between our Company, BRLM and the Syndicate Members.
6. Underwriting Agreement dated [●] entered into between our Company, the BRLM and the Syndicate
Members.
B. Material Documents
1. Memorandum and Articles of Association of our Company, as amended from time to time.
2. Our Company’s Certificate of incorporation dated December 12, 2006 issued by the Registrar of Companies,
Kerala and Lakshadweep and the revised Certificate of Incorporation dated January 15, 2013.
3. Board resolution authorising the Issue dated November 15, 2012.
4. Shareholders’ resolution authorizing the Issue dated December 10, 2012.
5. Resolution of the IPO Committee of the Board of Directors dated February 7, 2013 approving the Draft Red
Herring Prospectus.
6. Shareholders’ resolution dated April 1, 2010 appointing Mr. Sanjay Vijayakumar and Mr. Sony Joy as the whole-
time Directors of our Company with effect from April 1, 2010.
7. Report of our Statutory Auditors M/s Sivaprasad and Associates, Chartered Accountants dated February 6, 2013,
on our Company’s Unconsolidated Restated Financial Statements and Consolidated Restated Financial Statements
as of and for the six months period ended September 30, 2012, Financial Years ended March 31 2012, 2011, 2010,
2009 and for the initial period ended March 31, 2008, including their consent.
8. Statement of Tax Benefits from, M/s Sivaprasad and Associates, Chartered Accountants dated February 6, 2013
including their consent.
9. Copies of annual reports of our Company for the Financial Years ended March 31 2012, 2011, 2010, 2009 and for
the initial period ended March 31, 2008 and also the financial statements for the six months period ended
September 30, 2012.
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10. Consents of Bankers to our Company, BRLM, Syndicate Member(s), Registrar to the Issue, Escrow Collection
Banks, Refund Bank(s), the Statutory Auditors, Domestic Legal Counsel to the Issue, Market Maker, Directors of
our Company, Advisor, Company Secretary and Compliance Officer as referred to, in their respective capacities.
11. Due diligence certificate dated [●] issued by the BRLM upon filing the Prospectus.
12. In-principle listing approval dated [●] received from NSE.
13. Tripartite Agreement between NSDL, our Company and the Registrar to the Issue dated [●].
14. Tripartite Agreement between CDSL, our Company and the Registrar to the Issue dated [●].
15. IPO Grading Report by [●] dated [●].
Any of the contracts or documents mentioned in the Draft Red Herring Prospectus may be amended or modified at
any time if so required in the interest of our Company or if required by the other parties, without reference to the
shareholders subject to compliance of the provisions contained in the Companies Act and other relevant statutes.
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DECLARATION
We, the Directors, certify that all relevant provisions of the Companies Act and the regulations or guidelines issued by
the GoI or SEBI, as applicable, have been complied with and no statement made in the Draft Red Herring Prospectus is
contrary to the provisions of the Companies Act, the SEBI Act or the rules or regulations issued there under. We
further certify that all the statements in this Draft Red Herring Prospectus are true and correct.
Signed by the Directors of our Company
Mr. George Brody
(Chairman and Independent Director)
Mr. Sanjay Vijayakumar
(Whole-Time Director)
Mr. Sony Joy
(Whole-Time Director)
Mr. Jose Thomas Pattara
(Non-executive Director)
Mr. Aynampudi Subbarao
(Independent Director)
Signed by the Chief Manager Finance
Arun Ramakrishnan Nair
Date:
Place:
- 344 -
ANNEXURE I
Price Information of Previous Issue(s) handled by IDBI Capital Market Services Limited
Sr. No. Issue Name Issue Size (
`mn) Issue Price ( `) Listing Date
Opening Price on listing
date ( `)
Closing Price on listing
date ( `)
% Change in price on
listing date
(Closing) vs Issue
Price
Benchmark Index on
listing date
(Closing)
Closing price as on
10th calendar day from
listing day ( `)
Benchmark Index as
on 10th calendar
days from listing day (Closing)
Closing Price as on
20th calendar day from listing day
( `)
Benchmark Index as
on 20th calendar
days from listing day (Closing)
Closing Price as on
30th calendar day from listing day
( `)
Benchmark index as on 30th calendar
days from listing day (Closing)
1 PC Jeweller Ltd. 6,012.87 135.00 December 27, 2012 135.50 149.00 10.37% 5,870.10 181.65 5,988.40 N.A N.A N.A N.A
2 Credit and Analysis Rating Agency 5,399.78 750.00 December 26, 2012 949.00 924.00 23.20% 5,905.60 934.75 6,016.15 N.A N.A N.A N.A
3 Thejo Engineering Limited 190.00 402.00 September 18, 2012 403.00 403.00 0.25% 5,600.05 375.00 5,649.50 375.00 5,746.95 392.90 5,660.25
4 NBCC Limited 1,272.00 106.00 April 12, 2012 101.00 96.95 -8.54% 5,276.85 96.35 5,200.60 94.75 5,239.15 86.55 4,928.90
5 SRS Limited 2,030.00 58.00 September 16, 2011 68.00 33.25 -42.67% 5,084.25 33.85 4,835.40 30.15 4,888.05 35.40 5,118.25
6 Aanjaneya Lifecare Limited 1,170.00 234.00 May 27, 2011 218.00 311.10 32.95% 5,476.10 376.70 5,532.05 364.40 5,447.50 390.45 5,526.60
7 MOIL Limited 12,379.50 375.00 December 15, 2010 565.00 465.05 24.01% 5,892.30 448.85 6,011.60 453.95 6,157.60 442.15 5,751.90
8 Gujarat Pipavav Port Limited 5,538.50 46.00 September 9, 2010 56.10 54.05 17.50% 5,640.05 54.85 5,980.45 60.30 6,029.50 59.35 6,103.45
9 SJVN Limited 10,439.10 26.00 May 20, 2010 27.10 25.10 -3.46% 4,947.60 24.70 5,086.30 24.10 4,987.10 24.10 5,262.60
10 ARSS Infrastructure Projects Limited 1,030.00 450.00 March 03, 2010 630.00 737.45 63.88% 5,088.10 750.40 5,137.00 908.90 5,205.20 991.75 5,290.50
11 JSW Energy Limited 26,510.00 100.00 January 04, 2010 106.00 100.85 0.85% 5,232.20 117.70 5,233.95 110.05 5,007.90 105.15 4,830.10
12 Astec Life Sciences 615.00 82.00 November 25, 2009 83.00 84.00 2.44% 5,108.45 86.90 5,108.90 87.70 5,105.70 82.05 5,178.40
Notes: 1. In case of discounts given to certain categories of investors, the undiscounted issue price has been taken as the issue price. 2. Issue size has been taken net of promoter's contribution, if any. 3. If the 10th, 20th and 30th calendar day from listing day is not a working day, closing price on next working day has been taken. 4. All prices are according to trades on NSE and the benchmark index is the Nifty. If the stock is not listed on the NSE (Rishabhdev), the BSE prices are taken and SENSEX is
the benchmark.
- 345 -
Summary Statement of Disclosures for IDBI Capital Market Services Limited
Financial Year Total No. of IPOs
Total Funds Raised ( `Cr)
No. of IPOs trading at discount on listing date
No. of IPOs trading at premium on listing date
No. of IPOs trading at discount as on 30th calendar day from listing
day
No. of IPOs trading at premium as on 30th calendar day from listing
day
Over 50%
Between 25%-50%
Less than 25%
Over 50%
Between 25-50%
Less than 25%
Over 50%
Between 25%-50%
Less than 25%
Over 50%
Between 25%-50%
Less than 25%
2012-2013 4 1,287.45
1
3
2
2011-2012 2 320.00
1
1
1
1
2010-2011 3 2,835.71
1
2
1
1 1
2009-2010 4 2,838.12
1 1
2
1
1
2
Note: Total Funds raised is taken as the sum of individual Issue Size.
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