DRAFT RED HERRING PROSPECTUS
December 23, 2015
Please read section 32 of the Companies Act
(This Draft Red Herring Prospectus will be updated
upon filing with the RoC)
Book Built Issue
NIHILENT TECHNOLOGIES LIMITED
Our Company was incorporated as Nihilent Technologies Private Limited on May 29, 2000 under the Companies Act, 1956. The name of our Company was changed to Nihilent Technologies Limited
pursuant to conversion of the status of our Company to a public limited company and a fresh certificate of incorporation consequent to change of name dated September 10, 2015 was issued by the
Registrar of Companies, Maharashtra at Pune (“RoC”). For further details, please see section titled “History and Certain Corporate Matters” on page 139.
Corporate Identity Number: U72900PN2000PLC014934.
Registered and Corporate Office: Office No. 403 and 404, 4th floor, Weikfield IT Citi Infopark, Nagar Road, Pune - 411014
Tel No: +9120 398 46100; Fax No: +91 20 398 46499
Contact Person: Mr. Rahul Bhandari; Tel No:+91 20 39846100; Fax No: +91 20 39846499.
E-mail: rahul.bhandari@nihilent.com; Website: www.nihilent.com
PROMOTERS OF OUR COMPANY: L. C. SINGH, HATCH INVESTMENTS (MAURITIUS) LIMITED, ADCORP PROFESSIONAL SERVICES LIMITED AND DIMENSION DATA
PROTOCOL B.V.
PUBLIC ISSUE OF [●] EQUITY SHARES OF FACE VALUE ` 10 EACH (“EQUITY SHARES”) OF NIHILENT TECHNOLOGIES LIMITED (“COMPANY” OR “ISSUER”) FOR CASH AT A PRICE
OF ` [●] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ` [●] PER EQUITY SHARE) AGGREGATING UP TO ` [●] MILLION CONSISTING OF A FRESH ISSUE* OF UP TO [●]
EQUITY SHARES BY OUR COMPANY AGGREGATING UP TO ` 1,400 MILLION (“FRESH ISSUE”) AND AN OFFER FOR SALE OF UP TO 2,438,199 EQUITY SHARES BY THE SELLING
SHAREHOLDERS (AS DEFINED HEREIN) AGGREGATING UP TO ` [●] MILLION (“OFFER FOR SALE”). THE FRESH ISSUE AND THE OFFER FOR SALE ARE TOGETHER REFERRED TO
AS THE “ISSUE”. THE ISSUE WILL CONSTITUTE [●] % OF THE POST-ISSUE PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.
THE FACE VALUE OF THE EQUITY SHARES IS ` 10 EACH.
THE PRICE BAND, DISCOUNT, IF ANY, TO RETAIL INDIVIDUAL INVESTORS AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY IN CONSULTATION WITH THE
BOOK RUNNING LEAD MANAGER (“BRLM”) AND WILL BE ADVERTISED IN ONE ENGLISH, HINDI AND MARATHI NEWSPAPERS (MARATHI BEING THE REGIONAL LANGUAGE
OF MAHARASHTRA WHERE OUR REGISTERED OFFICE IS LOCATED), EACH OF WIDE CIRCULATION IN ACCORDANCE WITH THE SEBI ICDR REGULATIONS.
In case of revision in the Price Band, the Bid/ Issue Period shall be extended for at least three Working Days after such revision of the Price Band, subject to the Bid/ Issue Period not exceeding
10 Working Days. Any revision in the Price Band, and the revised Bid/ Issue Period, if applicable, shall be widely disseminated by notification to the BSE Limited (“BSE”) and the National Stock
Exchange of India Limited (“NSE”), by issuing a press release and also by indicating the change on the websites of the BRLM and at the terminals of the Syndicate Members and the Self Certified
Syndicate Banks (“SCSBs”).
In terms of Rule 19(2)(b)(i) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”) and Regulation 41 of the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009, as amended (“SEBI ICDR Regulations”), this is an Issue for at least 25% of the post-Issue capital of our Company. The Issue is being made through the
Book Building Process in compliance with the provisions of Regulation 26(2) of the SEBI ICDR Regulations, wherein at least 75% of the Issue shall be Allotted on a proportionate basis to Qualified
Institutional Buyers (“QIB Portion”), provided that the Company in consultation with the BRLM may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis. 5% of the QIB
Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation
on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. If at least 75% of the Issue cannot be Allotted to QIBs, then the
entire application money shall be refunded forthwith. Further, not more than 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not more than
10% of the Issue shall be available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Issue Price. All
potential investors, may participate in this Issue through an Application Supported by Blocked Amount (“ASBA”) process providing details of the bank account which will be blocked by the SCSBs.
QIBs and Non-Institutional Bidders are mandatorily required to utilise the ASBA process to participate in this Issue. All QIBs (other than Anchor Investors, if any) and Non-Institutional Investors must
compulsorily and Retail Individual Bidders may optionally participate in this Issue through the ASBA process by providing the details of their respective bank accounts in which the corresponding Bid
Amounts will be blocked by the SCSBs. Specific attention of investors is invited to section titled “Issue Procedure” on page 321.
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 our Equity Shares. The Face Value of the Equity Shares is ` 10 and the Floor Price is [●] times of the
Face Value and the Cap Price is [●] times of the Face Value. The Issue Price (as determined and justified by our Company and the BRLM as stated in “Basis for Issue Price” on page 100 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 involves a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment.
Investors are advised to read the Risk Factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of our
Company and 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 this Draft Red Herring Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” beginning on page 16.
ISSUER’S AND THE SELLING SHAREHOLDER’S ABSOLUTE RESPONSIBILITY
Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this 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 this 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 this 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.
Each Selling Shareholder accepts responsibility only for statements in this Draft Red Herring Prospectus in relation to itself and the Equity Shares being sold by it through the Offer for Sale. The
Selling Shareholders do not assume any responsibility for any other statement in this Draft Red Herring Prospectus, including without limitation, any and all of the statements made by or relating to
the Company or its business.
LISTING
The Equity Shares offered through this Draft Red Herring Prospectus are proposed to be listed on the BSE and the NSE. The in-principle approvals of the Stock Exchanges for listing the Equity Shares
have been received pursuant to letter no. [●] dated [●] and letter no. [●] dated [●], respectively. For the purpose of this Issue, [●] shall be the Designated Stock Exchange.
BOOK RUNNING LEAD MANAGER
REGISTRAR TO THE ISSUE
Motilal Oswal Investment Advisors Private Limited
Motilal Oswal Tower,
Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai - 400 025
Tel: +91 22 3980 4200
Fax: +91 22 3980 4315
E-mail:nihilent.ipo@motilaloswal.com
Investor Grievance E-mail: moiaplredressal@motilaloswal.com
Website: www.motilaloswal.com
Contact Person: Mr. Subodh Mallya
SEBI Registration No.: INM000011005
Link Intime India Private Limited
C-13, Pannalal Silk Mills Compound
L.B.S.Marg, Bhandup (West),Mumbai - 400078
Tel: +91 22-61715400
Fax: +91 22-25960329
E-mail: ntl.ipo@linkintime.co.in
Investor Grievance E-mail: ntl.ipo@linkintime.co.in
Website: www.linkintime.co.in
Contact Person: Ms. Shanti Gopalkrishnan
SEBI Registration No.: INR000004058
BID/ISSUE PROGRAMME#
BID / ISSUE OPENS ON: [●]*
BID / ISSUE CLOSES ON: [●]**
Our Company in consultation with the BRLM, may offer a discount of up to 10% (equivalent of ` [●]) on the Issue Price to Retail Individual Investors.
* Our Company may in consultation with the BRLM, consider participation by Anchor Investors. The Anchor Investor shall bid on the Anchor Investor Bidding Date i.e. one working day prior to the
Bid/ Issue Opening Date.
** Our Company may in consultation with the BRLM, consider closing the Bidding by QIB Bidders one Working Day prior to the Bid / Issue Closing Date in accordance with the SEBI ICDR Regulations
#
TABLE OF CONTENTS
SECTION I: GENERAL .......................................................................................................................................... 1
DEFINITIONS AND ABBREVIATIONS .............................................................................................................. 1
CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ....... 12
FORWARD-LOOKING STATEMENTS ............................................................................................................. 15
SECTION II: RISK FACTORS ............................................................................................................................ 16
SECTION III: INTRODUCTION ........................................................................................................................ 35
SUMMARY OF INDUSTRY................................................................................................................................ 35
SUMMARY OF OUR BUSINESS ....................................................................................................................... 39
SUMMARY OF FINANCIAL INFORMATION ................................................................................................. 44
THE ISSUE ........................................................................................................................................................... 53
GENERAL INFORMATION ................................................................................................................................ 55
CAPITAL STRUCTURE ...................................................................................................................................... 63
OBJECTS OF THE ISSUE.................................................................................................................................... 91
BASIS FOR ISSUE PRICE ................................................................................................................................. 100
STATEMENT OF TAX BENEFITS ................................................................................................................... 104
SECTION IV: ABOUT OUR COMPANY ......................................................................................................... 107
INDUSTRY ......................................................................................................................................................... 107
BUSINESS .......................................................................................................................................................... 121
REGULATIONS AND POLICIES ..................................................................................................................... 135
HISTORY AND CERTAIN CORPORATE MATTERS .................................................................................... 139
SUBSIDIARIES .................................................................................................................................................. 145
MANAGEMENT ................................................................................................................................................ 151
OUR PROMOTERS, PROMOTER GROUP AND GROUP COMPANIES ...................................................... 169
RELATED PARTY TRANSACTIONS .............................................................................................................. 177
DIVIDEND POLICY .......................................................................................................................................... 178
SECTION V: FINANCIAL INFORMATION ................................................................................................... 179
FINANCIAL STATEMENTS ............................................................................................................................. 179
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS .................................................................................................................................................... 274
FINANCIAL INDEBTEDNESS ......................................................................................................................... 293
SECTION VI: LEGAL AND OTHER INFORMATION ................................................................................. 296
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ......................................................... 296
GOVERNMENT AND OTHER APPROVALS .................................................................................................. 299
OTHER REGULATORY AND STATUTORY DISCLOSURES ...................................................................... 302
SECTION VII: ISSUE INFORMATION ........................................................................................................... 312
TERMS OF THE ISSUE ..................................................................................................................................... 312
ISSUE STRUCTURE .......................................................................................................................................... 315
ISSUE PROCEDURE.......................................................................................................................................... 321
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ................................................... 373
SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION................................................ 375
SECTION IX: OTHER INFORMATION ......................................................................................................... 389
DECLARATION .................................................................................................................................................. 391
SECTION I: GENERAL
DEFINITIONS AND ABBREVIATIONS
This Draft Red Herring Prospectus uses certain definitions and abbreviations which, unless the context otherwise
indicates or implies, shall have the meaning as provided below. References to any legislation, act, regulation,
rules, guidelines or policies shall be to such legislation, act, regulation, rules, guidelines or policies as amended
from time to time.
General Terms
Term
“our
Company”,
“the
Company” and “the Issuer”
“we”, “us”, “our” or “Group”
Company Related Terms
Term
Articles
/
Articles
of
Association / AoA
Auditors / Statutory Auditors
Board / Board of Directors
Corporate Office
Director(s)
Equity Shares
Independent Directors
Key Management Personnel
Memorandum / Memorandum
of Association / MoA
Promoters
Promoter Group
Registered Office
Registrar of Companies / RoC
Restated Consolidated Financial
Statements
Restated Financial Statements
Restated Standalone Financial
Statements
Description
Nihilent Technologies Limited, a company incorporated under the Companies
Act, 1956, bearing CIN U72900PN2000PLC014934 and having its registered
office at Office No. 403 and 404, 4th floor, Weikfield IT Citi Infopark, Nagar
Road, Pune - 411014.
Unless the context otherwise indicates or implies, refers to our Company
together with our Subsidiaries, on a consolidated basis.
Description
Articles of Association of our Company, as amended.
The statutory auditors of our Company, namely, B S R & Co. LLP, Chartered
Accountants.
Board of directors of our Company, unless otherwise specified.
The corporate office of our Company, located at Office No. 403 and 404, 4th
floor, Weikfield IT Citi Infopark, Nagar Road, Pune - 411014.
Director(s) of our Company, unless otherwise specified. For further details of
our Directors, please see section titled “Management” on page 151.
Equity shares of our Company of face value of ` 10 each.
Independent directors on the Board, and eligible to be appointed as an
independent director under the provisions of the Companies Act and the Listing
Regulations. For details of the Independent Directors, please see section titled
“Management” on page 151.
Key management personnel of our Company in terms of the SEBI ICDR
Regulations and the Companies Act and disclosed in the section titled
“Management” on page 151.
Memorandum of Association of our Company, as amended.
Promoters of our Company namely L.C. Singh, Hatch Investments (Mauritius)
Limited, Adcorp Professional Services Limited and Dimension Data Protocol
B.V. For details, please see section titled “Our Promoters, Promoter Group and
Group Companies” on page 169.
Means and includes such persons and entities constituting the promoter group in
terms of Regulation 2(1) (zb) of the SEBI ICDR Regulations.
The registered office of our Company, located at Office No. 403 and 404, 4th
floor, Weikfield IT Citi Infopark, Nagar Road, Pune - 411014.
The Registrar of Companies, Maharashtra, located at Pune located at PMT
Building, 3rd Floor, Deccan Gymkhana, Pune - 411004.
Restated consolidated financial statement of assets and liabilities as at and for
the three month period ended June 30, 2015 and Fiscal Years ended March 31,
2015, 2014, 2013, 2012 and 2011 and statement of profit and loss and statement
of cash flows for the three month period ended June 30, 2015 and each of the
Fiscal Years ended March 31, 2015, 2014, 2013, 2012 and 2011 of our
Company and its Subsidiaries read along with all the notes thereto and included
in the section titled “Financial Statements” on page 179.
Collectively, the Restated Consolidated Financial Statements and Restated
Standalone Financial Statements.
Restated standalone financial statement of assets and liabilities as at and for the
three month period ended June 30, 2015 and Fiscal Years ended March 31,
2015, 2014, 2013, 2012 and 2011 and statement of profit and loss and statement
1
Term
Selling Shareholders
Shareholders
Subsidiaries
Description
of cash flows for the three month period ended June 30, 2015 and each of the
Fiscal Years ended March 31, 2015, 2014, 2013, 2012 and 2011 of our
Company read along with all the notes thereto and included in the section titled
“Financial Statements” on page 179.
The selling shareholders as disclosed in the section titled “Capital Structure” on
page 63.
Shareholders of our Company from time to time.
Subsidiaries of our Company, namely, Seventh August IT Services Private
Limited, Nihilent Tanzania Limited, Nihilent Nigeria Limited, Nihilent
Technologies Inc., GNet Group LLC, GNET Group (I) Private Limited,
Nihilent Australia Pty. Limited and Intellect Bizware Services Private Limited.
Issue Related Terms
Term
Allot / Allotment / Allotted
Allottee
Allotment Advice
Anchor Investor
Anchor
Investor Bid /
Issue Period
Anchor Investor Issue Price
Anchor Investor Portion
Application Supported by
Blocked Amount or ASBA
ASBA Account
ASBA Bid
ASBA Bidder
Banker(s) to the Issue /
Escrow Collection Bank(s)
Basis of Allotment
Bid
Description
Unless the context otherwise requires, allotment of the Equity Shares pursuant
to the Fresh Issue and transfer of the Equity Shares offered by the Selling
Shareholders pursuant to the Offer for Sale to the successful Bidders.
A successful Bidder to whom the Equity Shares are / have been Allotted.
Note or advice or intimation of Allotment sent to the Bidders who have been or
are to be Allotted the Equity Shares after the Basis of Allotment has been
approved by the Designated Stock Exchange.
A Qualified Institutional Buyer, applying under the Anchor Investor Portion,
who has Bid for an amount of at least ` 100.00 million and in accordance with
the requirements specified in the SEBI ICDR Regulations.
The day, one Working Day prior to the Bid / Issue Opening Date, on which
Bids by Anchor Investors shall be submitted.
The price at which Equity Shares will be issued in terms of the Red Herring
Prospectus and Prospectus to the Anchor Investors, which price will be 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
Book Running Lead Manager prior to the Bid / Issue Opening Date.
Up to 60% of the QIB Portion which may be allocated by our Company in
consultation with the BRLM, to Anchor Investors 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 price at which allocation is being done to Anchor Investors.
An application, whether physical or electronic, used by Bidders, other than
Anchor Investors, to make a Bid authorising an SCSB to block the Bid Amount
in the ASBA Account.
ASBA is mandatory for QIBs (except Anchor Investors) and Non Institutional
Bidders participating in the Issue.
An account maintained with an SCSB and specified in the Bid cum Application
Form submitted by ASBA Bidders for blocking the Bid Amount mentioned in
the Bid cum Application Form.
A Bid by ASBA Bidders.
Prospective investors (other than Anchor Investors) in the Issue who intend to
submit the Bid through the ASBA process.
Banks which are clearing members and registered with SEBI as bankers to an
issue and with whom the Escrow Account will be opened, in this case being [●].
Basis on which Equity Shares will be Allotted to successful Bidders under the
Issue and which is described in the section titled “Issue Procedure” beginning
on page 321.
An indication to make an offer during the Bid / Issue Period by a Bidder
pursuant to submission of the Bid cum Application Form, or during the Anchor
Investor Bid / Issue Period by the Anchor Investors, to subscribe to or purchase
the Equity Shares of our Company at a price within the Price Band, including
all revisions and modifications thereto as permitted under the SEBI ICDR
2
Term
Bid Amount
Bid cum Application Form
Bid / Issue Closing Date
Bid / Issue Opening Date
Bid / Issue Period
Bid Lot
Bidder
Book Building Process
Broker Centres
Book Running Lead Manager
or BRLM
CAN
/ Confirmation of
Allocation Note
Cap Price
Client ID
Cut-off Price
Designated Branches
Designated Date
Designated Stock Exchange
Description
Regulations.
Highest value of optional Bids indicated in the Bid cum Application Form and
payable by the Bidder upon submission of the Bid, less discount to Retail
Individual Investors, if applicable.
Form used by a Bidder, including an ASBA Bidder, to make a Bid and which
will be considered as the application for Allotment or transfer, as the case may
be, in terms of the Red Herring Prospectus.
Except in relation to any Bids received from Anchor Investors, the date after
which the Syndicate, the Designated Branches and the Registered Brokers will
not accept any Bids, which shall be notified in two national daily newspapers,
one each in English and Hindi, and in one Marathi daily newspaper, each with
wide circulation and in case of any revision, the extended Bid Closing Date also
to be notified on the website and terminals of the Syndicate, the Non Syndicate
Registered Brokers and SCSBs, as required under the SEBI ICDR Regulations.
Except in relation to any Bids received from Anchor Investors, the date on
which the Syndicate, the Designated Branches and the Registered Brokers shall
start accepting Bids, which shall be notified in two national daily newspapers,
one each in English and Hindi, and in one Marathi daily newspaper, each with
wide circulation.
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 can submit their Bids, including any revisions
thereof.
[●] Equity Shares.
Any prospective investor who makes a Bid pursuant to the terms of the Red
Herring Prospectus and the Bid cum Application Form and unless otherwise
stated or implied, includes an ASBA Bidder and an Anchor Investor.
Book building process, as provided in Schedule XI of the SEBI ICDR
Regulations, in terms of which the Issue is being made.
Broker centres notified by the Stock Exchanges where Bidders can submit the
Bid cum Application Forms to a Registered Broker.
The details of such Broker Centres, along with the names and contact details of
the Registered Broker are available on the respective website of the Stock
Exchanges.
Book running lead manager to the Issue, being Motilal Oswal Investment
Advisors Private Limited.
Notice or intimation of allocation of the Equity Shares sent to Anchor Investors,
who have been allocated the Equity Shares, after the Anchor Investor Bid /
Issue Period.
Higher end of the Price Band, above which the Issue Price will not be finalised
and above which no Bids will be accepted.
Client identification number maintained with one of the Depositories in relation
to demat account.
Issue Price finalised by our Company in consultation with the BRLM.
Only Retail Individual Bidders are entitled to Bid at the Cut-off Price. QIBs and
Non-Institutional Bidders are not entitled to Bid at the Cut-off Price.
Such branches of the SCSBs which shall collect the Bid cum Application Forms
used by the ASBA Bidders, a list of which is available on the website of SEBI
at http://www.sebi.gov.in or at such other website as may be prescribed by
SEBI from time to time.
Date on which funds are transferred by the Escrow Collection Bank(s) from the
Escrow Account or the amounts blocked by the SCSBs are transferred from the
ASBA Accounts, as the case may be, to the Public Issue Account or the Refund
Account, as appropriate, after the Prospectus is filed with the RoC, following
which the board of directors may Allot Equity Shares to successful Bidders /
Applicants in the fresh Issue may give delivery instructions for the transfer of
the Equity Shares constituting the Offer for Sale.
[●].
3
Term
Draft Red Herring Prospectus
/ DRHP
Eligible NRI(s)
Escrow Account
Escrow Agreement
First Bidder
Floor Price
Fresh Issue
General Information
Document / GID
Issue
Offer Agreement
Issue Price
Issue Proceeds/Gross Proceeds
Mutual Fund Portion
Mutual Funds
Net Proceeds
Net QIB Portion
Non-Institutional Bidders
Non-Institutional Category
Description
This Draft Red Herring Prospectus dated December 23, 2015 issued in
accordance with the SEBI ICDR Regulations, which does not contain complete
particulars of the price at which the Equity Shares will be Allotted and the size
of the Issue, including any addendum or corrigendum thereto.
NRI(s) from jurisdictions outside India where it is not unlawful to make an offer
or invitation under the Issue and in relation to whom the Bid cum Application
Form and the Red Herring Prospectus will constitute an invitation to subscribe
to or purchase the Equity Shares.
Account opened with the Escrow Collection Bank(s) and in whose favour the
Bidders (excluding the ASBA Bidders) will issue cheques or drafts in respect of
the Bid Amount when submitting a Bid.
Agreement to be entered into by our Company, the Selling Shareholders, the
Registrar to the Issue, the BRLM, the Syndicate Members, the Escrow Collection
Bank(s) and the Refund Bank(s) for collection of the Bid Amounts and where
applicable, refunds of the amounts collected from the Bidders (excluding the
ASBA Bidders), on the terms and conditions thereof.
Bidder whose name shall be mentioned in the Bid cum Application Form or the
Revision Form and in case of joint Bids, whose name shall also appear as the
first holder of the beneficiary account held in joint names.
Lower end of the Price Band, subject to any revision thereto, at or above which
the Issue Price and the Anchor Investor Issue Price will be finalised and below
which no Bids will be accepted.
Fresh issue of up to [●] Equity Shares aggregating up to ` 1,400 million by our
Company.
General Information Document prepared and issued in accordance with the
circular (CIR/CFD/DIL/12/2013) dated October 23, 2013 notified by SEBI.
Public issue of up to [●] Equity Shares of face value of ` 10 each for cash at a
price of ` [●] each, aggregating up to ` 1,400 million comprising the Fresh
Issue and the Offer for Sale of up to 2,438,199 Equity Shares.
Agreement dated December 23, 2015 between our Company, the Selling
Shareholders and the BRLM, pursuant to which certain arrangements are agreed
to in relation to the Issue.
Final price at which Equity Shares will be Allotted in terms of the Red Herring
Prospectus and Prospectus. The Issue Price will be decided by our Company in
consultation with the BRLM on the Pricing Date.
A discount of up to 10% (equivalent to ` [●]) on the Issue Price may be offered
to Retail Individual Investors. The Rupee amount of the such discount, if any,
will be decided by our Company in consultation with the BRLM, and advertised
in [●] editions of [●], [●] editions of [●] and [●] editions of [●] (which are
widely circulated English, Hindi and Marathi newspapers, Marathi being the
regional language of Maharashtra where our Registered Office is located), at
least five Working Days prior to the Bid / Issue Opening Date, and shall be
made available to the Stock Exchanges for the purpose of uploading on their
website.
Proceeds of the Issue that is available to our Company.
5% of the QIB Portion (excluding the Anchor Investor Portion), or [●] Equity
Shares which shall be available for allocation to Mutual Funds only.
Mutual funds registered with SEBI under the Securities and Exchange Board of
India (Mutual Funds) Regulations, 1996.
Proceeds of the Fresh Issue less our Company’s share of the Issue expenses.
For further information about use of the Net Proceeds and the Issue expenses,
please see section titled “Objects of the Issue” on page 91.
The QIB Portion less the number of Equity Shares Allotted to Anchor Investors
on a discretionary basis.
All Bidders that are not QIBs or Retail Individual Investors who have Bid for
Equity Shares for an amount of more than ` 200,000.00 (but not including NRIs
other than Eligible NRIs).
Portion of the Issue being not less than 15% of the Issue consisting of [●]
4
Term
Non-Resident
Offer for Sale
Price Band
Pricing Date
Prospectus
Public Issue Account
QIB Category / QIB Portion
Qualified Institutional Buyers
or QIBs / QIB Bidder
Red Herring Prospectus or
RHP
Refund Account(s)
Refund Bank(s)
Refunds through electronic
transfer of funds
Registered Brokers
Registrar to the Issue or
Registrar
Retail Individual Investors /
Retail Individual Bidders /
RIIs
Retail Category
Revision Form
Description
Equity Shares which shall be available for allocation on a proportionate basis to
Non-Institutional Bidders, subject to valid Bids being received at or above the
Issue Price.
A person resident outside India as defined under FEMA and includes a non resident Indian, FIIs and FPIs.
Offer for sale of up to 2,438,199 Equity Shares by the Selling Shareholders.
Price band of a minimum price of ` [●] per Equity Share (Floor Price) and the
maximum price of ` [●] per Equity Share (Cap Price) including any revisions
thereof.
Price Band and the minimum Bid Lot size for the Issue will be decided by our
Company in consultation with the BRLM and will be advertised, at least five
Working Days prior to the Bid / Issue Opening Date, in [●] edition of the
English national newspaper [●], [●] edition of the Hindi national newspaper [●],
and [●] edition of the Marathi newspaper [●], each with wide circulation.
Date on which our Company in consultation with the BRLM, will finalise the
Issue Price.
Prospectus to be filed with the RoC after the Pricing Date in accordance with
Section 26 of the Companies Act and the SEBI ICDR Regulations 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.
The bank account opened with the Bankers to the Issue by our Company under
Section 40 of the Companies Act to receive money from the Escrow Account
and where the funds shall be transferred by the SCSBs from the ASBA
Accounts on or about the Designated Date.
The portion of the Issue (including the Anchor Investor Portion) being 75% of
the Issue which shall be available for allocation to QIBs, including the Anchor
Investors.
Qualified institutional buyers as defined under Regulation 2(1)(zd) of the SEBI
ICDR Regulations.
Red Herring Prospectus to be issued in accordance with Section 32 of the
Companies Act and the provisions of the SEBI ICDR Regulations, which will
not have complete particulars of the price at which the Equity Shares will be
offered and the size of the Issue.
Red Herring Prospectus will be registered with the RoC at least three days
before the Bid / Issue Opening Date and will become the Prospectus upon filing
with the RoC after the Pricing Date.
Account opened with the Refund Bank(s), from which refunds, if any, of the
whole or part of the Bid Amount (excluding refund to ASBA Bidders) shall be
made.
The Banker(s) to the Issue, with whom the Refund Account(s) will be opened, in
this case being [●].
Refunds through NECS, direct credit, RTGS or NEFT, as applicable.
Stock brokers registered with the stock exchanges having nationwide terminals,
other than the Members of the Syndicate.
Link Intime India Private Limited
Individual Bidders, submitting Bids, who have Bid for the Equity Shares for an
amount not more than ` 200,000 in any of the bidding options in the Issue
(including HUFs applying through their Karta and Eligible NRIs and does not
include NRIs other than Eligible NRIs).
The portion of the Issue being not less than 15% of the Issue available for
allocation to Retail Individual Investor(s) in accordance with the SEBI ICDR
Regulations, subject to valid Bids being received at or above the Issue Price.
Form used by Bidders, including ASBA Bidders, to modify the quantity of the
Equity Shares or the Bid Amount in any of their Bid cum Application Forms or
any previous Revision Form(s).
5
Term
Self Certified Syndicate
Bank(s) or SCSB(s)
Share Escrow Agreement
Specified Locations
Syndicate Agreement
Syndicate Members
Sub Syndicate
Syndicate or Members of the
Syndicate
TRS or Transaction
Registration Slip
Underwriters
Underwriting Agreement
Working Day
Description
QIB Bidders and Non-Institutional Bidders are not allowed to lower their Bids
(in terms of quantity of Equity Shares or the Bid Amount) at any stage.
The banks which are registered with SEBI under the Securities and Exchange
Board of India (Bankers to an Issue) Regulations, 1994 and offer services in
relation to ASBA, including blocking of an ASBA Account in accordance with
the SEBI ICDR Regulations and a list of which is available on
http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised
Intermediaries or at such other website as may be prescribed by SEBI from time
to time.
Agreement to be entered into between the Selling Shareholders, our Company
and the Escrow Agent in connection with the transfer of Equity Shares under
the Offer for Sale by the Selling Shareholders and credit of such Equity Shares
to the demat account of the Allottees.
Bidding centres where the Syndicate shall accept Bid cum Application Forms
from ASBA Bidders, a list of which is available at the website of the SEBI
(www.sebi.gov.in/sebiweb.home/list/5/33/0/0/Recognised-Intermediaries) and
updated from time to time.
Agreement to be entered into between the BRLM, the Syndicate Members, our
Company and the Selling Shareholders in relation to collection of Bids in the
Issue (other than Bids directly submitted to the SCSBs under the ASBA process
and Bids submitted to the Non Syndicate Registered Brokers at the Broker
Centres).
Intermediaries registered with SEBI who are permitted to carry out activities as
an underwriter, in this case being, [●].
The sub-syndicate members, if any, appointed by the Book Running Lead
Manager and the Syndicate Members, to collect Bid cum Application Forms.
BRLM and the Syndicate Members.
Slip or document issued by the Syndicate, or the SCSB (only on demand), as
the case may be, to the Bidder as proof of registration of the Bid.
The Book Running Lead Manager and the Syndicate Members
Agreement among the Underwriters, our Company, the Selling Shareholders
and the Registrar to the Issue to be entered into on or immediately after the
Pricing Date.
Any day, other than Saturdays and Sundays, on which commercial banks in
Mumbai are open for business, provided however, for the purpose of the time
period between the Bid / Issue Closing Date and listing of the Equity Shares on
the Stock Exchanges, “Working Days” shall mean all days excluding Sundays
and bank holidays in Mumbai in accordance with the circular no.
CIR/CFD/DIL/3/2010 dated April 22, 2010 issued by SEBI.
Technical / Industry Related Terms / Abbreviations
Term
A2A
ADM
APAC
API
B2B
B2C
B-BBEE
BFSI
BI
BLA
BPaaS
BPM
BU
C&E
CAD/M
CAGR
Description
Application to Application
Application Development Management
Asia-Pacific
Application Program Interface
Business to Business
Business to Consumers
Broad Based Black Economic Empowerment
Banking, Financial Services and Insurance
Business Intelligence
Business Level Agreement
Business Process as a Service
Business Process Management
Business Unit
Central & Eastern Europe
Custom Application Development/Management
Compounded Annual Growth Rate
6
Term
CC
CE
CEO
CFO
CIO
CIS
CMMI
CMO
COD
COO
CPG
CRM
CTO
ERP
ESP
F&A
FDI
FTE
GDC
GDP
GERD
GIC
GST
HANA
HCM
HMS
HRO
IaaS
ICT
IoT
IP
ISO
ISP
ISRO
IT
ITIL
ITO
JV
KPO
LATAM
M&A
M2M
MA
MBA
MCA
MEA
MNC
MP
MPE
MSME
NLP
ODC
OEM
OPD
OSPD
P&C
P3M3
PaaS
Description
Contact Centre
Continental Europe
Chief Executive Officer
Chief Financial Officer
Chief Information Officer
Customer Interaction & Support
Capability Maturity Model Integration
Chief Marketing Officer
Cash On Delivery
Chief Operating Officer
Consumer Product Group
Customer Relationship Management
Chief Technology Officer
Enterprise Resource Planning
Engineering Service Provider
Finance and Accounting
Foreign Direct Investment
Full Time Employee
Global Delivery Centre
Gross Domestic Production
Gross Economic R&D
Global In-house Centre
Goods and Services Tax
High-Performance Analytic Appliance
Human Capital Management
Health Management System
Human Resource Outsourcing
Infrastructure as a Service
Information and Communication Technology
Internet of Things
Intellectual Property
Infrastructure Services Outsourcing
Indian Service Providers
Indian Space Research Organisation
Information Technology
Information Technology Infrastructure Library
IT Outsourcing
Joint Venture
Knowledge Process Outsourcing
Latin America
Mergers & Acquisitions
Machine to Machine
Master of Arts
Masters in Business Administration
Masters in Computer Applications
Middle East & Africa
Multi National Company
Madhya Pradesh
Media, Publishing and Entertainment
Micro, Small and Medium Enterprises
Natural Language Processing
Offshore Delivery Centre
Original Equipment Manufacturer
Outsourcing Product Development
Outsourced Software Product Development
Property and Casualty
Portfolio, Programme and Project Management Maturity Model
Platform-as-a-Service
7
Term
PCMM
PE
PG
PGDBM
PLM
POS
PPP
R&D
RoI
RoW
RPA
SaaS
SAP
SCM
SFIA
SG&A
SI
SLA
SMAC
SMACI
SMB
SME
SOA
SQA
T&M
TAT
TCS
UX
VAS
VC
WE
Description
People Capability Maturity Model
Private Equity
Post Graduate
Post Graduate Diploma in Business Management
Product Lifecycle Management
Point of Sale
Public Private Partnership
Research & Development
Return on Investment
Rest of the World
Robotic Process Automation
Software-as-a-Service
Systems, Applications and Products
Supply Chain Management
Skills Framework for the Information Age
Selling, General and Administration
System Integration
Service Level Agreement
Social, Mobile, Analytics and Cloud
Social Media, Mobility, Analytics, Cloud and Internet of Everything
Small and Medium Businesses
Small and Medium Enterprises
Service Oriented Architecture
Software Quality Assurance
Time and Material
Turn Around Time
Tata Consultancy Services
User Experience
Value Added Services
Venture Capital
Western Europe
Conventional and General Terms or Abbreviations
Term
` / Rs. / Rupees / INR
AGM
AIF
AS / Accounting Standards
Bn / bn
BSE
CAGR
Category I Foreign Portfolio
Investors
Category II Foreign Portfolio
Investors
Category III Foreign Portfolio
Investors
CC
CCI
CDSL
CENVAT
CESTAT
CIN
CIT
Companies Act
Description
Indian Rupees
Annual General Meeting
Alternative Investment Fund as defined in and registered with SEBI under the
Securities and Exchange Board of India (Alternative Investments Funds)
Regulations, 2012
Accounting Standards issued by the Institute of Chartered Accountants of India
Billion
BSE Limited
Compounded Annual Growth Rate
FPIs that are registered as “Category I foreign portfolio investors” under the
SEBI FPI Regulations.
FPIs that are registered as “Category II foreign portfolio investors” under the
SEBI FPI Regulations.
FPIs that are registered as “Category III foreign portfolio investors” under the
SEBI FPI Regulations.
Cash Credit
Competition Commission of India
Central Depository Services (India) Limited
Central Value Added Tax
Customs, Excise and Service Tax Appellate Tribunal
Corporate Identity Number
Commissioner of Income Tax
Companies Act, 2013, to the extent in force pursuant to the notification of
8
Term
Companies Act, 1956
CST Act
CST Rules
Depositories
Depositories Act
DIN
DIPP
DP / Depository Participant
DP ID
EBITDA
EGM
EPS
Equity Listing Agreement
ESOP
ESOS
EUR / Euro
FCNR Account
FDI
FDI Policy
FEMA
FEMA Regulations
FII(s)
Financial Year / Fiscal / FY
FIPB
FPI(s)
FVCI
GAAR
GDP
GIR
GoI or Government
HUF
ICAI
IEC
IFRS
Indian GAAP
IPO
IRDA
IST
IT
IT Act
JV
LC
LIBOR
Listing Regulations
MAT
MCA
Description
sections of the Companies Act, 2013, along with the relevant rules made
thereunder
Companies Act, 1956 (without reference to the provisions thereof that have
ceased to have effect upon notification of the sections of the Companies Act,
2013) along with the relevant rules made thereunder
Central Sales Tax Act, 1956
Central Sales Tax (Registration and Turnover Rules), 1957
NSDL and CDSL
The Depositories Act, 1996
Director Identification Number
Department of Industrial Policy and Promotion, Ministry of Commerce and
Industry, Government of India
A depository participant as defined under the Depositories Act
Depository Participant Identification
Earnings Before Interest, Taxes, Depreciation and Amortization
Extraordinary General Meeting
Earnings Per Share
Listing Agreement to be entered into with the Stock Exchanges on which the
Equity Shares of our Company are to be listed
Employee Stock Option Plan
Employee Stock Option Scheme
The official currency of the European Union and consequently, the official
currency of Netherlands.
Foreign currency non-resident account
Foreign direct investment
Consolidated Foreign Direct Investment Policy notified by the DIPP vide circular
no. D/o IPP F. No. 5(1)/2015-FC-1 effective from May 12, 2015
Foreign Exchange Management Act, 1999, read with rules and regulations
thereunder
FEMA (Transfer or Issue of Security by a Person Resident Outside India)
Regulations, 2000 and amendments thereto
Foreign institutional investors as defined under the SEBI FPI Regulations
Unless stated otherwise, the period of 12 months ending March 31 of that
particular year
Foreign Investment Promotion Board
Foreign portfolio investors as defined under the SEBI FPI Regulations
Foreign venture capital investors as defined and registered under the SEBI
FVCI Regulations
General Anti Avoidance Rules
Gross Domestic Product
General Index Register
Government of India
Hindu Undivided Family
The Institute of Chartered Accountants of India
Import Export Code
International Financial Reporting Standards
Generally Accepted Accounting Principles in India
Initial public offering
Insurance Regulatory and Development Authority
Indian Standard Time
Information Technology
The Income Tax Act, 1961
Joint Venture
Letter of Credit
London Interbank Offered Rate
Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015
Minimum Alternate Tax
Ministry of Corporate Affairs
9
Term
MENA
MICR
Mn
Mutual Fund (s)
N.A. / NA
NAV
NECS
NEFT
Net worth
NR
NRE Account
NRI
NRO Account
NSDL
NSE
OCB / Overseas Corporate
Body
p.a.
P/E Ratio
PAN
PAT
PLR
RBI
RoNW
RTGS
SCRA
SCRR
SEBI
SEBI Act
SEBI AIF Regulations
SEBI FII Regulations
SEBI FPI Regulations
SEBI FVCI Regulations
SEBI ICDR Regulations
SEBI VCF Regulations
Securities Act
SICA
SPV
State Government
Stock Exchanges
STT
Takeover Regulations
Description
Middle East and North Africa
Magnetic Ink Character Recognition
Million
Mutual Fund (s) means mutual funds registered under the SEBI (Mutual Funds)
Regulations, 1996
Not Applicable
Net Asset Value
National Electronic Clearing Services
National Electronic Fund Transfer
Equity share capital + Reserves and surplus (including Cumulative translation
reserve, General Reserve, Securities premium account and Surplus in statement of
profit and loss).
Non-resident
Non Resident External Account
A person resident outside India, who is a citizen of India or a person of Indian
origin, and shall have the meaning ascribed to such term in the Foreign
Exchange Management (Deposit) Regulations, 2000
Non Resident Ordinary Account
National Securities Depository Limited
The National Stock Exchange of India Limited
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 FEMA. OCBs are not allowed to invest in the Issue
Per annum
Price/Earnings Ratio
Permanent Account Number
Profit After Tax
Prime Lending Rate
The Reserve Bank of India
Return on Net Worth
Real Time Gross Settlement
Securities Contracts (Regulation) Act, 1956
Securities Contracts (Regulation) Rules, 1957
The Securities and Exchange Board of India constituted under the SEBI Act,
1992
Securities and Exchange Board of India Act, 1992, as amended
Securities and Exchange Board of India (Alternative Investments Funds)
Regulations, 2012, as amended
Securities and Exchange Board of India (Foreign Institutional Investors)
Regulations, 1995, as amended
Securities and Exchange Board of India (Foreign Portfolio Investors)
Regulations, 2014, as amended
Securities and Exchange Board of India (Foreign Venture Capital Investors)
Regulations, 2000, as amended
Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009, as amended
Securities and Exchange Board of India (Venture Capital Fund) Regulations,
1996, as amended
U.S. Securities Act of 1933, as amended
Sick Industrial Companies (Special Provisions) Act, 1985
Special Purpose Vehicle
The government of a state in India
The BSE and the NSE
Securities Transaction Tax
Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011, as amended
10
Term
Tshs
U.S. / USA / United States
UK
US GAAP
USD / US$
VAT
VCFs
VUCA
WCDL
ZAR
Description
Tanzanian Shilling
United States of America
United Kingdom
Generally Accepted Accounting Principles in the United States of America
United States Dollars
Value added tax
Venture Capital Funds as defined in and registered with SEBI under the SEBI
VCF Regulations
Volatility, Uncertainty, Complexity and Ambiguity
Cash Credit Demand Loan
South African Rand
The words and expressions used but not defined herein shall have the same meaning as is assigned to such terms
under the SEBI ICDR Regulations, the Companies Act, the SCRA, the Depositories Act and the rules and
regulations made thereunder.
11
CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA
Certain Conventions
All references to “India” in this Draft Red Herring Prospectus are to the Republic of India and all references to the
“U.S.”, “USA” or “United States” are to the United States of America. Further, all references to the “RSA.” are to
the Republic of South Africa and all references to the “UK” are to the United Kingdom.
Financial Data
Unless stated otherwise, the financial information in this Draft Red Herring Prospectus is derived from our Restated
Consolidated Financial Statements and Restated Standalone Financial statements:
(i)
as of and for the fiscal year ended March 31, 2015 prepared in accordance with the accounting principles
generally accepted in India, including the Accounting Standards specified under Section 133 of the
Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(ii)
as of and for the fiscal years ended March 31, 2014 prepared in accordance with the accounting principles
generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956
read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in
respect of section 133 of the Companies Act, 2013;
(iii)
as of and for the fiscal years ended March 31, 2013, 2012 and 2011 prepared in accordance with the
accounting principles generally accepted in India, including the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; and
(iv)
as of and for the three month period ended June 30, 2015 prepared in accordance with with the accounting
principles generally accepted in India, including the Accounting Standards specified under Section 133 of the
Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.
The above stated Restated Financial Statements have been restated in accordance with Section 26 of the Companies
Act, 2013 read with the Companies (Prospectus and Allotment of Securities) Rules, 2014, the SEBI ICDR
Regulations, as amended from time to time
Unless otherwise indicated, any percentage amounts, as set out in this Draft Red Herring Prospectus, including in
the sections titled “Risk Factors”, “Business”, “Industry” and “Management Discussion and Analysis of Financial
Conditions and Results of Operations” have been rounded off to the second decimal place and have been
calculated on the basis of the Restated Financial Statements.
Our Company’s financial year commences on April 1 and ends on March 31 of the next year; accordingly, all
references to a particular financial year, unless stated otherwise, are to the 12 month period ended on March 31 of
that year.
There are significant differences between Indian GAAP, US GAAP and IFRS. The reconciliation of the financial
information to IFRS or US GAAP financial information has not been provided. Our Company has not attempted to
explain those differences or quantify their impact on the financial data included in this Draft Red Herring
Prospectus and we urge Investors to consult your own advisors regarding such differences and their impact on our
Company’s financial data. In addition, please see “Risk Factor No. 34 – Our Company, will be required to prepare
financial statements under Ind-AS (which is India’s convergence to IFRS). The transition to Ind-AS in India is
very recent and there is no clarity on the impact of such transition on our Company.” on page 27. Accordingly, the
degree to which the financial information included in this Draft Red Herring Prospectus will provide meaningful
information is entirely dependent on the reader’s level of familiarity with Indian accounting policies and practices,
Indian GAAP, the Companies Act and the SEBI ICDR Regulations. Any reliance by persons not familiar with
Indian accounting policies, Indian GAAP, the Companies Act, the SEBI ICDR Regulations and practices on the
financial disclosures presented in this Draft Red Herring Prospectus should accordingly be limited.
Unless the context otherwise indicates, any percentage amounts, as set forth in sections titled “Risk Factors”,
“Business”, “Management’s Discussion and Analysis of Financial Conditional and Results of Operations”
beginning on pages 16, 121 and 274 respectively, and elsewhere in this Draft Red Herring Prospectus have been
calculated on the basis of the restated consolidated and unconsolidated financial statements of our Company.
Currency and Units of Presentation
12
All references to:








“Rupees” or “Rs.” or “INR” or “`” are to Indian Rupee, the official currency of the Republic of India;
“Rands” or “ZAR” are to South African Rands, the official currency of the Republic of South Africa;
“USD” or “US$” are to United States Dollar, the official currency of the United States of America;
“GBP” or “£” are to Great Britain Pounds, the official currency of United Kingdom.
“Euro” or “EUR” are to Euro, the official currency of the European Union and consequently, the official
currency of the Kingdom of Netherlands;
“TZS” are to Tanzanian Shillings , the official currency of Tanzania;
“Naira” are to Nigerian Naira , the official currency of Nigeria;
ÄUD” are to Australian Dollars, the official currency of Australia; and
Except otherwise specified, our Company has presented certain numerical information in this Draft Red Herring
Prospectus in “million” units. One million represents 1,000,000 and one billion represents 1,000,000,000.
Exchange Rates
This Draft Red Herring Prospectus contains conversion of certain other currency amounts into Indian Rupees that
have been presented solely to comply with the SEBI ICDR Regulations. These conversions should not be
construed as a representation that these currency amounts could have been, or can be converted into Indian
Rupees, at any particular rate or at all.
The following table sets forth, for the periods indicated, information with respect to the exchange rate between the
Rupee and other currencies:
(in `)
Currency
As on
March 31,
2011
As on
March 31,
2012
1 USD(1)
44.65
51.16
1 EUR(1)
63.24
68.34
(2)
1 AUD
35.88
41.24
1 ZAR
6.62
6.74
1 GBP
72.54
81.95
1 TZS
0.03
0.03
1 Naira
0.29
0.32
Source:
(1)
RBI Reference Rate sourced from www.rbi.org.in
(2)
www.oanda.com
As on
March 31,
2013
As on
March 31,
2014
As on
March 31,
2015
As of June
30, 2015
54.39
69.54
43.81
5.88
82.76
0.03
0.34
60.10
82.58
47.45
6.65
99.69
0.04
0.36
62.59
67.51
45.50
5.17
92.40
0.03
0.31
63.75
71.20
47.14
5.18
99.89
0.03
0.32
In case March 31 of any of the respective years is a public holiday, the previous calendar day not being a public
holiday has been considered.
Industry and Market Data
Unless stated otherwise, industry and market data used in this Draft Red Herring Prospectus has been obtained or
derived from publicly available information as well as various industry publications and sources.
Industry publications generally state that the information contained in such publications has been obtained from
publicly available documents from various sources believed to be reliable but their accuracy and completeness are
not guaranteed and their reliability cannot be assured. Although we believe the industry and market data used in
this Draft Red Herring Prospectus is reliable, it has not been independently verified by us, the Selling Shareholders
or the BRLM or any of their affiliates or advisors. The data used in these sources may have been re-classified by
us for the purposes of presentation. Data from these sources may also not be comparable.
The extent to which the market and industry data used in this Draft Red Herring Prospectus is meaningful depends
on 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 business of our Company is conducted, and
methodologies and assumptions may vary widely among different industry sources.
13
Such data involves risks, uncertainties and numerous assumptions and is subject to change based on various
factors. Accordingly, investment decisions should not be based solely on such information.
14
FORWARD-LOOKING STATEMENTS
This Draft Red Herring Prospectus contains certain “forward-looking statements”. These forward-looking
statements generally can be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”,
“estimate”, “intend”, “objective”, “plan”, “project”, “will”, “will continue”, “will pursue”, “seek to” or other
words or phrases of similar import. Similarly, statements that describe our Company’s strategies, objectives,
plans, prospects 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 to differ materially from those
contemplated by the relevant forward-looking statement.
Actual results may differ materially from those suggested by the forward-looking statements due to risks or
uncertainties associated without expectations with respect to, but not limited to, regulatory changes pertaining to
the industry in India in which our Company operates and our ability to respond to them, our ability to
successfully implement our strategy, our growth and expansion, technological changes, our Company’s exposure
to market risks, general economic and political conditions in India which have an impact on its business activities
or investments, the monetary and fiscal policies of India, inflation, deflation 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 its industry. Certain important
factors that could cause actual results to differ materially from our Company’s expectations include, but are not
limited to, the following:









the size, complexity, timing, pricing terms and profitability of significant contracts, as well as changes in
the corporate decision-making processes of our clients;
the business or financial condition of our clients or the economy generally, or any developments in the
IT sector in macro-economic factors, which may affect the rate of growth in the use of technology in
business, type of technology spending by our clients and the demand for our services;
the high concentration of orders in a limited number of countries and the concentration of orders in
certain industries;
fluctuations in exchange rates;
the effect of increased wage pressure in India and other countries in which we operate;
the size and timing of our facilities’ expansion;
the proportion of projects that are performed at clients’ sites compared to work performed at offshore
facilities;
our ability to expand sales to our existing customers and increase sales of our services to new customers,
of whom some may be reluctant to change their current IT systems due to the high costs already incurred
on implementing such systems and/or the potential disruption it would cause with personnel, processes
and infrastructures; and
our ability to forecast accurately our clients’ demand patterns to ensure the availability of trained
employees to satisfy such demand.
For further discussion on factors that could cause the actual results to differ from the expectations, please see
sections titled “Risk Factors”, “Business” and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” on pages 16, 121 and 274, 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 gains or losses could materially differ from those that have been estimated.
We cannot assure investors that the expectation reflected in these forward-looking statements will prove to be
correct. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking
statements and not to regard such statements as a guarantee of future performance.
Forward-looking statements reflect the current views of our Company as of the date of this Draft Red Herring
Prospectus and are not a guarantee of future performance. These statements are based on the managements’
beliefs and assumptions, which in turn are based on currently available information. Although, we believe the
assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions
could prove to be inaccurate, and the forward-looking statements based on these assumptions could be incorrect.
Neither our Company, our Directors, the Selling Shareholders, the BRLM, the Syndicate, nor any of their
respective affiliates or advisors have any obligation 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 the SEBI ICDR Regulations, our Company
and the BRLM will ensure that investors in India are informed of material developments until the time of the
grant of listing and trading permission by the Stock Exchanges.
15
SECTION II: RISK FACTORS
RISK FACTORS
An investment in our Equity Shares involves a high degree of risk. You should carefully consider the risks
described below as well as other information in this Draft Red Herring Prospectus before making an investment in
our Equity Shares. You should read this section in conjunction with the sections titled “Business” and
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on pages
121 and 274, respectively, as well as the other financial, statistical information and other conditions contained in
this Draft Red Herring Prospectus. The risks described in this section are those that we consider to be the most
significant to our business, results of operations and financial condition. Additional risks and uncertainties not
presently known to us or that we currently believe to be immaterial may also have an adverse effect on our
business, results of operations and financial condition. If any or a combination of the following events occur, our
business, financial condition, results of operations and prospects could materially suffer, the trading price of our
Equity Shares could decline and you may lose all or part of your investment. Unless specified or quantified in the
relevant risk factors below, we are not in a position to quantify the financial or other implication of any of the risks
mentioned herein.
Prospective investors should pay particular attention to the fact that our Company is incorporated under the laws
of India and is subject to a legal and regulatory environment which may differ in certain respects from that of
other countries.
Unless otherwise stated, the financial information of our Company used in this section is derived from our restated
financial statements.
This Draft Red Herring Prospectus contains forward-looking statements that involve risks and uncertainties. Our
actual results may differ materially from those anticipated in these forward-looking statements as a result of
certain factors, including the considerations described below and elsewhere in this Draft Red Herring Prospectus.
Please see section titled “Forward Looking Statements” beginning on page 15.
Risks relating to our Company
1.
Our results of operations could be adversely affected by volatile, negative or uncertain economic
conditions and the effects of these conditions on our clients’ businesses and levels of business activity.
Global macroeconomic conditions affect our clients’ businesses and the markets they serve. Volatile, negative or
uncertain economic conditions or economic sanctions in our significant markets have undermined and could in the
future undermine business confidence in our significant markets or in other markets, which are increasingly
interdependent, and cause our clients to reduce or defer their spending on new initiatives and technologies, or may
result in clients reducing, delaying or eliminating spending under existing contracts with us, which would
negatively affect our business. Growth in the markets we serve could be at a slow rate, or could stagnate or
contract, in each case, for an extended period of time. Differing economic conditions and patterns of economic
growth and contraction in the geographical regions in which we operate and the industries we serve have affected
and may in the future affect demand for our services. A material portion of our revenues and profitability is derived
from our clients in South Africa. Weak demand or a slower than expected recovery in these markets could have a
material adverse effect on our results of operations. In addition, because we operate in various countries and have
businesses in markets outside of South Africa, an economic slowdown in one or more of those other markets could
adversely affect our results of operations as well. Ongoing economic volatility and uncertainty and changing
demand patterns affect our business in a number of other ways, including making it more difficult to accurately
forecast client demand and effectively build our revenue and resource plans, particularly in consulting and
technology.
Economic volatility and uncertainty is particularly challenging because it may take some time for the effects and
changes in demand patterns resulting from these and other factors to manifest themselves in our business and
results of operations. Changing demand patterns from economic volatility and uncertainty could have a significant
negative impact on our results of operations.
2.
Our business and profitability may be negatively affected if we are not able to anticipate rapid changes in
technology, or innovate and diversify our service offerings in response to market challenges.
Our success will depend, in part, on our ability to develop and implement management and technology solutions
that anticipate and keep pace with rapid and continuing changes in technology, industry standards and client
16
preferences. We may not be successful in anticipating or responding to these developments on a timely basis, and
our ideas may not be successful in the marketplace. Also, products and technologies developed by our competitors
may make our service or product offerings uncompetitive or obsolete. Any one of these circumstances could have a
material adverse effect on our ability to obtain and successfully complete important client engagements.
3.
We derive a significant portion of our revenues from clients in South Africa. Therefore, factors that
adversely affect the South African economy, or our ability to do business in South Africa, may adversely affect
our business.
We have historically derived, and may continue to derive, a significant portion of our revenues from clients
geographically located in South Africa. For the three month period ended June 30, 2015 and for the Fiscals 2015,
2014 and 2013, 66.53%, 77.05%, 85.03% and 86.14%, respectively, of our restated consolidated total revenues
were derived from South Africa. Economic slowdowns in South Africa, declines in the value of the South African
Rand, changes in South African laws including those relating to data security and privacy, laws that impose
restrictions on outsourcing or immigration or hiring local employees or mandate requirements regarding
compliance with Broad Based Black Economic Empowerment (B-BBEE) and other restrictions or factors that
adversely affect the economic health of, or our ability to do business in, South Africa may adversely affect our
business and profitability. The mandatory requirements for hiring locals and compliance with B-BBEE
requirements where the Company is mandated to get compliance certificates to get projects may make us less
competitive. For further details on these risks, please see risk factors titled “A significant percentage of our
revenues are denominated in South African Rand and other foreign currencies whereas, a significant percentage of
our costs are denominated in Indian Rupees. As a result, we may face currency exchange risks” on page 17 of this
Draft Red Herring Prospectus.
4.
A significant percentage of our revenues are denominated in South African Rand and other foreign
currencies whereas, a significant percentage of our costs are denominated in Indian Rupees. As a result, we
may face currency exchange risks.
In Fiscal 2013, 2014 and 2015, we derived 86%, 85% and 77%, respectively, of our revenues from clients located
in South Africa. At the same time, a substantial proportion of our costs are denominated in Indian Rupees. The
exchange rate between the Rupee and the South African Rand may fluctuate in the future. We expect that a
majority of our revenues will continue to be generated in South African Rand and that a significant portion of our
expenses will continue to be denominated in Indian Rupees. Accordingly, our operating results have been and will
continue to be impacted by fluctuations in the exchange rate between the Indian Rupee and the South African Rand
and other foreign currencies.
We have sought to reduce the effect of exchange rate fluctuations on our operating results by implementing a
Forex Risk Management Policy. Our Company hedges its net exposure (i.e. foreign currency receivables less
foreign currency payables) at the overseas branches and receivables against the offshore business. The hedging is
done through forward contracts entered with authorised dealers in India.
5.
We derive a significant portion of our revenues from a limited number of clients. The loss of, or a
significant reduction in the revenues we receive from, one or more of these clients, may adversely affect our
business.
We derive a significant portion of our revenues from a limited number of clients. For the three month period ended
June 30, 2015 and for the Fiscals 2015, 2014 and 2013, our top five clients cumulatively accounted for 54.92%,
65.55%, 74.35% and 75.72%, respectively, of our revenues. For the same periods, our ten largest clients accounted
for 67.74%, 74.58%, 86.91% and 87.44%, respectively, of our revenues. Since there is significant competition for
the services we provide and we are typically not an exclusive service provider to our large enterprise clients, the
level of revenues from our largest clients could vary from year to year. Our largest clients typically retain us under
master services agreements or teaming agreements that do not provide for specific amounts of guaranteed business
from these clients. These agreements are typically terminable by our clients with short notice and without
significant penalties. We depend in large part on our ability to generate additional business from our base of
existing clients. Due to the nature of services we offer, we have multi-level engagements with our clients and we
perform a customized service to deliver solutions and services that are tailored to those needs. If a client is not
satisfied with the nature of the outcome of the services performed by us or product developed by us, we could incur
additional costs to address the situation, the profitability of that work might be impaired, and the client’s
dissatisfaction with our services could damage our ability to obtain additional work from that client. This, coupled
with any negative publicity around our inability to provide such service, may further damage our business by
affecting our ability to compete for new contracts with current and prospective clients. Our clients may also decide
to reduce spending on consulting and IT services because of economic pressures and other factors, both internal
17
and external, relating to their business. There are also other competitive service providers working for same clients.
The loss of, or a significant reduction in the revenues that we receive from one or more of our major clients, may
adversely affect our business and profitability.
6.
We derive a significant portion of our revenues from clients in the media and telecommunication and
BFSI industries. Therefore, factors that adversely affect the economic health of, or demand for our services in,
these industries, may adversely affect our business.
We derive a significant portion of our revenues from clients in the media and telecommunication and BFSI
industries. For the three month period ended June 30, 2015 and for the Fiscals 2015, 2014 and 2013, we derived a
34.87%, 38.87%, 36.48% and 29.91%, respectively, of our restated consolidated total revenues from, clients in the
media and telecommunication industry and 29.37%, 30.81%, 38.54%, 39.56% , respectively, from clients in the
BFSI industry. Consequently, factors that adversely affect the economic health of, or demand for our services in
these industries or a ramp down, may lead to lower demand for our services and adversely affect our business and
profitability.
7.
Our success depends in large part upon our senior management and our ability to retain them.
We are dependent on the experience and the continued efforts of the senior members of our management team,
many of whom have been with us for a significant period of time. The loss of one or more members of our senior
management team would impact our ability to obtain, retain and execute important engagements and our ability to
maintain and grow our revenues. Competition for senior management in our industry is intense, and we may not be
able to recruit and retain suitable persons to replace the loss of any of our senior managers in a timely manner.
8.
There are certain direct tax proceedings against our Company. Any adverse outcome in any of these
proceedings may adversely affect our profitability and reputation and may have an adverse effect on our results
of operations and financial condition.
There are certain direct tax proceedings involving our Company. These proceedings are pending at different levels
of adjudication. The brief details of such outstanding litigation are as follows:
Litigation against our Company:
Nature of the cases
No. of cases outstanding
Direct Tax Proceedings
4
Amount involved
(in ` million)*
416.15
*Included to the extent quantifiable
For further details, see the section titled “Outstanding Litigation and Material Developments” on page 296.
We cannot assure you that these legal proceedings will be decided in favour of our Company or our Subsidiaries,
as the case may be, or that no further liability will arise out of these proceedings. Further, such legal proceedings
could divert management time and attention and consume financial resources. Any adverse outcome in any of
these proceedings may adversely affect our profitability and reputation and may have an adverse effect on our
results of operations and financial condition.
9.
We have contingent liabilities, and our profitability could be adversely affected if any of these contingent
liabilities materialise.
The contingent liabilities of our Company for the three month period ended June 30, 2015 and for the Fiscal
Year ended March 31, 2015, restated as at June 30, 2015, are as mentioned in the table below:
Particulars
As at March 31, 2015
Guarantee issued*
135.00
(in ` million)
As at June 30, 2015
140.75
*Guarantee issued excludes the performance guarantee issued by our Company to the State of Queensland, amount of which is
unascertainable.
Our results of operations and cash flow would be impacted if the abovementioned guarantee is enforced. There
were no contingent liabilities for the Fiscal Years ended March 31, 2014, 2013, 2012 and 2011 as per our
Restated Consolidated Financial Statements.
18
10.
Our success is dependent on our ability to attract and retain the highly skilled professionals we need to
sustain our business.
Our success is dependent, in large part, on our ability to keep our supply of skills and resources in balance with client
demand and our ability to attract and retain personnel with the knowledge and skills to lead our business.
Experienced personnel in our industry are in high demand, and competition for talent is intense. We must hire, retain
and motivate appropriate numbers of talented people with diverse skills in order to serve clients, respond quickly to
rapid and ongoing technology, industry and macroeconomic developments and grow and manage our business. For
example, if we are unable to hire or continually train our employees to keep pace with the rapid and continuing
changes in technology and the industries we serve or changes in the types of services clients are demanding, such
as the increase in demand for outsourcing services, we may not be able to develop and deliver new services and
solutions to fulfill client demand. The attrition rate of employees on our payroll for the three month period ended
June 30, 2015 and Fiscal Years ended March 31, 2015, 2014 and 2013 was approximately 4.52%, 19.95 %,
16.08% and 14.24%, respectively. We define attrition as the ratio of the number of employees that have left us
during a defined period to the total number of employees that are on our pay-roll at the end of such period. As we
expand our services and solutions, we must also hire and retain an increasing number of professionals with
different skills and professional expectations than those of the professionals we have historically hired and
retained. Additionally, if we are unable to successfully integrate, motivate and retain these professionals, our ability
to continue to secure work in those industries and for our services and solutions may suffer.
11.
We might not be able to replicate some of the solutions provided to some of our clients due to restrictive
covenants in our agreements with them. This could limit our ability to monetize some of the learnings and
intellectual property that we have developed and this may have an adverse effect on our results of operations
and financial condition.
Our Company has entered into several contracts with clients and business partners that have restrictive covenants
such as non-compete and non-solicitation clauses which limits our ability to deploy, in part or whole, solutions that
we may have developed/deployed as a result of such contracts. This may limit our ability to deploy solutions to
new clients using the paradigms deployed in the aforesaid contracts. In such cases, there can be no guarantee that
we will be able to monetize the know-how and intellectual property developed with such clients and/or business
partners. If we are not able to recover the costs spent on development of such know-how or are restricted from
using such solutions any further, this may have an adverse effect on our results of operations and financial
condition.
12.
The markets in which we compete are highly competitive, and we might not be able to compete effectively
or charge the same rates which we are currently charging.
The markets in which we offer our services are highly competitive. Our competitors include:

large multinational providers and consulting firms including the services arms of large global technology
providers that offer some or all of the services that we do;

off-shore service providers in lower-cost locations, particularly in India, that offer services globally that are
similar to the services we offer, often at highly competitive prices and on more aggressive contractual terms;

niche solution or service providers or local competitors that compete with us in a specific geographic market,
industry segment or service area, including companies that provide new or alternative products, services or
delivery models; and

in-house departments of large corporations that use their own resources, rather than engage an outside firm for
the types of services we provide.
Some competitors are companies that may have greater financial, marketing or other resources than we do and,
therefore, may be better able to compete for new work and skilled professionals.
Even if we have potential offerings that address marketplace or client needs, competitors may be more successful
at selling similar services they offer, including to companies that are our clients. Some competitors are more
established in certain markets, and that may make executing our geographic expansion strategy in these markets
more challenging. Additionally, competitors may also offer more aggressive contractual terms, which may affect
our ability to win work. Our future performance is largely dependent on our ability to compete successfully in the
markets we currently serve, while expanding into additional markets. If we are unable to compete successfully, we
could lose market share and clients to competitors, which could materially adversely affect our results of
operations.
19
In addition, we may face greater competition due to consolidation of companies in the technology sector, through
strategic mergers or acquisitions. Consolidation activity may result in new competitors with greater scale, a broader
footprint or offerings that are more attractive than ours. For example, there has been a trend toward consolidation
among hardware manufacturers, software developers and vendors, and service providers, which has resulted in the
convergence of products and services. Over time, our access to such products and services may be reduced as a
result of this consolidation. Additionally, vertically integrated companies are able to offer as a single provider more
integrated services (software and hardware) to clients than we can in some cases and therefore may represent a
more attractive alternative to clients. If buyers of services favour using a single provider for all technology needs,
then such buyers may direct more business to such competitors. Also, as a result of competition, we may not be
able to continue to charge the same rates we are charging. All the above factors could materially adversely affect
our competitive position and our results of operations.
13.
Our investments in technology may not yield the intended results especially on our research and
development.
We invest in and intend to continue investing in human capital to enhance our R&D capabilities, particularly with a
view to enter into new areas. Our focus areas currently include developing integrated digital transformation
framework for effecting change, developing intelligent enterprise model, payment engines and ecommerce
ecosystem. We also engage with our customers in developing intellectual property and products combining their
expert knowledge of the business with our technical expertise. Our choice of focus areas and investments in
technology and human capital for R&D are based on the management’s perception of the IT industry. We cannot
assure you that such investments will yield the intended results. Inability of our Company to achieve intended
results from its investments in technology and human capital for R&D may adversely impact our cash flows and
results of operations.
14.
We may undertake strategic acquisitions, which may prove to be difficult to integrate and manage or may
not be successful.
We have, in the recent past, pursued acquisitions and strategic partnerships as part of our growth strategy. In
October, 2014, we acquired the entire interest in GNet Group LLC. In September 2015, we acquired 51%
shareholding in Intellect Bizware Services Private Limited with a right to acquire the balance 49% stake over a
period of time. We may make further acquisitions or investments, including in geographies in which we do not
currently operate, to expand our access to large clients, acquire new service offerings, or enhance our technical or
research capabilities. We have also earmarked ` 488.80 million towards acquisitions and strategic investments.
Our acquisitions may not contribute to our profitability, and we may be required to incur or assume debt, or
assume contingent liabilities, as part of any acquisition. We may not successfully identify suitable acquisition
candidates or joint venture opportunities. We also might not succeed in completing targeted transactions or achieve
desired results of operations. We could have difficulty in assimilating the personnel, operations, technology and
software assets of the acquired company. These difficulties could disrupt our ongoing business, distract our
management and employees and increase our expenses. In addition, we might need to dedicate additional
management and other resources, and our organizational structure could make it difficult for us to efficiently
integrate acquired businesses into our ongoing operations and assimilate and retain employees of those businesses
into our culture and operations. Business combination and investment transactions may result in significant costs
and expenses and charges to earnings, including those related to severance pay, early retirement costs, employee
benefit costs, goodwill and asset impairment charges, assumed litigation and other liabilities, and legal, accounting
and financial advisory fees. We may have difficulties as a result of entering into new markets where we have
limited or no direct prior experience or where competitors may have stronger market positions. We might fail to
realise the expected benefits or strategic objectives of any acquisition we undertake. We might not achieve our
expected return on investment or may lose money.
Further, as a result of our growth strategy to continue geographic expansion, we are more susceptible to certain
risks like when we enter a new country, we are exposed to generating revenue in a new currency for which we may
not be able to hedge against fluctuations in foreign currency. In some countries we could be subject to strict
restrictions on the movement of cash and the exchange of foreign currencies, which could limit our ability to use
this cash across our global operations. Acts of terrorist violence, armed regional and international hostilities and
international responses to these hostilities, natural disasters, global health risks or pandemics or the threat of or
perceived potential for these events could have a negative impact on us. These events could adversely affect our
clients’ levels of business activity and precipitate sudden significant changes in regional and global economic
conditions and cycles. These events also pose significant risks to our people and to physical facilities and
operations around the world, whether the facilities are ours or those of our alliance partners or clients. By
disrupting communications and travel and increasing the difficulty of obtaining and retaining highly skilled and
qualified personnel, these events could make it difficult or impossible for us to deliver services to our clients.
20
15.
We propose to utilize part of the Net Proceeds to undertake an acquisition for which the target has not
been identified.
We propose to utilize ` 488.80 million from our Net Proceeds towards acquisitions and other strategic investments.
We propose to use these Net Proceeds to acquire the balance 49% stake in Intellect and for other acquisitions
where the target is yet to be identified (“Unidentified Acquisitions”). As on date of filing this Draft Red Herring
Prospectus, we have not entered into any definitive agreements towards the Unidentified Acquisitions. The
estimates are based solely on management estimates of the amounts to be utilised towards an acquisition and other
relevant considerations. The actual deployment of funds will depend on a number of factors, including the timing,
nature, size and number of strategic initiatives undertaken, as well as general factors affecting our results of
operation, financial condition and access to capital. In the interim, the Net Proceeds proposed to be utilized
towards this object shall be deposited only in the scheduled commercial banks included in the Second Schedule of
the Reserve Bank of India Act, 1934. For further details in relation to this object, please see section titled “Objects
of the Issue” on page 91.
16.
If we are unable to raise additional capital, our business prospects could be adversely affected.
We intend to fund part of our expansion plans through our internal accruals, borrowed funds and from the Net
Proceeds. We will continue to incur significant expenditure, especially in relation to our inorganic growth strategy
of expansion through acquisitions. We cannot assure you that we will continue to have sufficient capital resources
for our current operations or any future expansion plans that we may have. While we expect our cash on hand and
cash flow from operations to be adequate to fund our existing commitments, our ability to incur any future
borrowings is dependent upon the success of our operations and our ability to integrate the operations of the
acquired entities with ours. Our ability to arrange financing and the costs of capital of such financing are dependent
on numerous factors, including general economic and capital market conditions, credit availability from banks,
investor confidence, the continued success of our operations and other laws that are conducive to our raising
capital in this manner. If we decide to meet our capital requirements through debt financing, we may be subject to
certain restrictive covenants. If we are unable to raise adequate capital in a timely manner and on acceptable terms,
or at all, our business, results of operations, cash flows and financial condition could be adversely affected.
17.
Our funding requirements and proposed deployment of the Net Proceeds are based on management
estimates and have not been independently appraised, and may be subject to change based on various factors,
some of which are beyond our control.
Our funding requirements and the proposed deployment of the Net Proceeds are based on management estimates,
quotations from suppliers and our current business plan, and have not been appraised by an independent entity.
Furthermore, in the absence of such independent appraisal, or the requirement for us to appoint a monitoring
agency in terms of the SEBI ICDR Regulations, the deployment of the Net Proceeds is at our discretion. We may
have to revise our expenditure and funding requirements as a result of variations in costs, estimates, quotations or
other external factors, which may not be within the control of our management. This may entail rescheduling,
revising or cancelling planned expenditure and funding requirements at the discretion of our Board. Further,
quotations from suppliers are only valid for limited periods and there can be no assurance that we will be able to
obtain new quotations from these or other suppliers on the same terms.
Further we intend to utilise ` [●] million from the Net Proceeds for general corporate purposes. The funds
earmarked for general corporate purposes based on the Cap Price and Floor Price constitute [●]% and [●]% of the
Gross Proceeds of the Issue, respectively. The management has not made any specific commitments with respect to
utilization of the Gross Proceeds that will be raised for general corporate purposes and therefore, will not be able to
make adequate disclosures with regard to such utilization. See also, the segment on ‘General Corporate Purpose’ in
the section titled “Objects of the Issue” beginning on page 91.
18.
Our Company has acquired 51% of the shareholding of Intellect Bizware Services Private Limited
(“Intellect”) under the terms of a share purchase and share subscription agreement dated September 1, 2015
(“SPSA”) under which our Company is granted an option to acquire the balance 49% of the shareholding of
Intellect. Any such failure to acquire the remaining stake of Intellect may adversely affect our results of
operations and financial condition.
Our Company entered into a SPSA with Intellect and Mr. Syed Sabahat Husain Kazi, Mr. Lingam Gopalakrishna
and Mr. Sanjay Prabhakar Gupte (“Key Shareholders”), to effectuate the acquisition of Intellect by our Company.
Under the terms of the SPSA, our Company has acquired 51% of the equity shareholding of Intellect and is granted
an irrevocable unconditional right and option to acquire the balance 49% of the shareholding. The SPSA provides
21
that our Company has the option to acquire the balance shareholding either directly or through its subsidiaries in a
single transaction within a period of three years or alternatively in tranches within a period of three or five years.
Our Company intends to utilize a portion of the Net Proceeds for the acquisition of the balance 49% stake in
Intellect. In the event that we are unable to acquire such remaining stake in a timely manner and at favourable
commercial terms, the Key Shareholders may still exercise significant influence on Intellect. Further, we cannot be
assured of whether we will be able to successfully integrate the operations of Intellect with our Company. Any
such failure to acquire the remaining stake of Intellect or failure to integrate the operations of Intellect may
adversely affect our results of operations and financial condition.
19.
We could have liability or our reputation could be damaged if we fail to protect client and/or Company
data or information systems as obligated by law or contract or if our information systems are breached.
We are dependent on information technology networks and systems to securely process, transmit and store
electronic information and to communicate among our locations around the world and with our clients, alliance
partners, and vendors. As the breadth and complexity of this infrastructure continues to grow, including as a result
of the use of mobile technologies and social media, the potential risk of security breaches and cyberattacks
increases. Such breaches could lead to shutdowns or disruptions of our systems and potential unauthorized
disclosure of sensitive or confidential information.
In providing services to clients, we often manage, utilise and store sensitive or confidential client or Company data,
including personal data, and we expect these activities to increase. As a result, we are subject to numerous laws
and regulations designed to protect this information, such as the national laws implementing the European Union
Directive on Data Protection and various federal and state laws governing the protection of health or other
personally identifiable information. These laws and regulations are increasing in complexity and number, change
frequently and sometimes conflict among the various countries in which we operate. If any person, including any
of our employees, negligently disregards or intentionally breaches our established controls with respect to client or
Company data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary
damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions. These
monetary damages might not be subject to a contractual limit of liability or an exclusion of consequential or
indirect damages and could be significant. Unauthorised disclosure of sensitive or confidential client or Company
data, whether through systems failure, employee negligence, fraud or misappropriation, could damage our
reputation and cause us to lose clients.
Further, unauthorised access to or through our information systems or those we develop for our clients, whether by
our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized
crime and/or state-sponsored organizations, who may develop and deploy viruses, worms or other malicious
software programs, could result in negative publicity, significant remediation costs, legal liability, damage to our
reputation and government sanctions and could have a material adverse effect on our results of operations. In
addition, our liability insurance might not be sufficient in type or amount to cover us against claims related to
security breaches, cyberattacks and other related breaches.
20.
Our work with government clients exposes us to additional risks inherent in the government contracting
environment.
Our clients include national, provincial, state and local governmental entities. Our government work carries various
risks inherent in the government contracting process. These risks include, but are not limited to, the following:

Government entities often reserve the right to audit our contract costs and conduct inquiries and investigations
of our business practices with respect to government contracts. Negative findings from existing and future
audits, investigations or inquiries could affect our future sales and profitability by preventing us, by operation
of law or in practice, from receiving new government contracts for some period of time.

If a government client discovers improper or illegal activities in the course of audits or investigations, we may
become subject to various civil and criminal penalties, which may include termination of contracts, forfeiture
of profits, suspension of payments, fines and suspensions or debarment from doing business with other
agencies of that government. The inherent limitations of internal controls may not prevent or detect all
improper or illegal activities.

Government contracts are subject to heightened reputational and contractual risks compared to contracts with
commercial clients. For example, government contracts and the proceedings surrounding them are often
subject to more extensive scrutiny and publicity. Negative publicity, including an allegation of improper or
illegal activity, regardless of its accuracy, may adversely affect our reputation. Further, terms and conditions
of government contracts also tend to be more onerous and are often more difficult to negotiate.
22

Government entities typically fund projects through appropriated monies. While these projects are often
planned and executed as multi-year projects, government entities usually reserve the right to change the scope
of or terminate these projects for lack of approved funding and/or at their convenience. Changes in
government or political developments, including budget deficits, shortfalls or uncertainties, government
spending reductions or other debt constraints could result in our projects being reduced in price or scope or
terminated altogether, which also could limit our recovery of incurred costs, reimbursable expenses and profits
on work completed prior to the termination. Furthermore, if insufficient funding is appropriated to the
government entity to cover termination costs, we may not be able to fully recover our investments.

Political and economic factors such as pending elections, the outcome of recent elections, changes in
leadership among key executive or legislative decision makers, revisions to governmental tax or other policies
and reduced tax revenues can affect the number and terms of new government contracts signed or the speed at
which new contracts are signed, decrease future levels of spending and authorisations for programs that we
bid, shift spending priorities to programs in areas for which we do not provide services and/or lead to changes
in enforcement or how compliance with relevant rules or laws is assessed.
The occurrences or conditions described above could affect not only our business with the particular government
entities involved, but also our business with other entities of the same or other governmental bodies or with certain
commercial clients, and could have a material adverse effect on our business or our results of operations.
21.
We have provided a performance guarantee to the State of Queensland in relation to performance of
obligations by our Subsidiary, Nihilent Australia Pty Limited (“Nihilent Australia”) under a Government
Information Technology Contracting (“GITC Agreement”) entered into between Nihilent Australia and the
State of Queensland.
We have provided a performance guarantee dated April 28, 2014 (“Performance Guarantee”) in relation to
performance of obligations by our Subsidiary, Nihilent Australia under a GITC Agreement entered into between
Nihilent Australia and the State of Queensland for supply of information communication technology products and /
or services to customers. Under the terms of the performance guarantee, in the event Nihilent Australia fails to
perform its obligations under the GITC Agreement, our Company shall complete or cause to be completed the
obligations undertaken by Nihilent Australia. Further, our Company shall also be liable to indemnify any
customers for any breach of obligations by Nihilent Australia. Although we have read and understood the terms of
the GITC Contract, we cannot predict the impact of the invocation of the Performance Guarantee. Further, we
cannot assure you whether we will be able to perform the obligations undertaken by Nihilent Australia upon
invocation of the guarantee. Any inability of our Company to perform its obligations under the Performance
Guarantee may adversely impact our profitability and financial condition.
22.
We might be required to use open source software in providing services to our clients. There are risks
associated with the use of open source software and may have an adverse effect on our results of operations and
financial condition.
Our Company may be required to use open source software in providing services to our clients. Further, some of
our clients may also be using open source software on which some of our products and services may need to
operate. There are significant benefits and risks associated with open source software. If a company were to buy a
commercial closed source solution for an enterprise use, there is an elaborate procedure followed finalizing and
purchasing a product. This includes requirement analysis, defining acceptance criteria, evaluating the product,
security considerations etc. An open source product, however, might not undergo this kind of evaluation. This
could pose business and security risk and lead to some unanticipated costs such as the losing credibility among our
customers and may have an adverse effect on our results of operations and financial condition. Any claims or
litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we
pay substantial damages or ongoing royalty payments.
23.
We may be liable to our clients for damages caused by system failures, disclosure of confidential
information or data security breaches or any unscrupulous acts by our employees, which could harm our
reputation and cause us to lose clients.
Many of our contracts involve projects that are critical to the operations of our clients’ businesses and provide
benefits to our clients that may be difficult to quantify. Any failure in a client’s system could result in a claim for
substantial damages against us, regardless of our responsibility for such failure. In addition, we often have access
to, or are required to collect and store, confidential client data. We face a number of threats to our data centres and
networks such as unauthorised access, security breaches and other system disruptions. It is critical to our business
that our infrastructure remains secure and is perceived by customers to be secure.
23
We seek to rely on encryption and authentication technology licensed from third parties to provide the security and
authentication necessary to effect secure online transmission of confidential client information. Despite our
security measures, advances in computer capabilities, new discoveries in the field of cryptography or other events
or developments may result in a compromise or breach of the algorithms that we use to protect sensitive customer
transaction data. Breaches of our security measures or the accidental loss, inadvertent disclosure or unapproved
dissemination of confidential customer data could expose us, our customers or the individuals affected to a risk of
loss or misuse of this information, or cause interruptions in our operations. We may be required to expend
significant capital and other resources to protect against such security breaches, to alleviate problems caused by or
to investigate such breaches, all of which could subject us to liability, damage our reputation and diminish the
value of our brand name.
Although we attempt to limit our contractual liability for consequential damages in rendering our services, many of
our client agreements do not limit our potential liability for breaches of confidentiality and we cannot be assured
that such limitations on liability will be enforceable in all cases, or that they will otherwise protect us from liability
for damages. Moreover, if any person, including any of our employees or former employees or subcontractors,
penetrates our network security or misappropriates sensitive data, we could be subject to significant liability from
our clients or from our clients’ customers for breaching contractual confidentiality provisions or privacy laws.
Unauthorised disclosure of sensitive or confidential client and customer data, whether through breach of our
computer systems, systems failure, loss or theft of assets containing confidential information or otherwise, could
render us liable to our clients for damages, damage our reputation and cause us to lose clients.
Additionally, any fraud undertaken by an employee when deputed to a client or any unscrupulous acts by them
could result in reputational harm. A successful assertion of one or more large claims against us that exceeds our
available insurance coverage or results in changes to our insurance policies, including premium increases or the
imposition of a large deductible or co-insurance requirement, could adversely affect our revenues and results of
operations. We may also be liable to our clients for damages or termination of contract if we are unable to address
disruption in services to them with adequate business continuity plans and/or for non-compliance with our clients’
information security policies and procedures.
24.
A significant number of our software development facilities are concentrated in Maharashtra.
Although we have four software development facilities located at Pune, Mumbai, Minneapolis, Dallas and
Johannesburg, a significant volume of our software development is facilitated out of the Mumbai facility which is
primarily focused at servicing our clients based in South Africa, India and other territories. These software
development facilities are subject to operational risks, such as the breakdown or failure of equipment, power
supply or processes, technology obsolescence, labour disputes, natural disasters and breakout of fires. The
occurrence of any of these risks could significantly affect our business and results of operations. Although we
continue to take precautions to minimise the risk of any significant operational problems at these facilities, our
business, financial condition and results of operations may be adversely affected by any disruption of operations
at any of these facilities.
25.
Our inability to protect or use our intellectual property rights and proprietary tool may adversely affect
our business.
Our software tools are our proprietary intellectual property and we rely on a combination of patent, copyright and
trademark laws, confidentiality agreements with employees, customers and third parties to protect our intellectual
property rights.
We may not be able to prevent infringement of our trademarks and a passing off action may not provide sufficient
protection until such time that this registration is granted. For details on the copyrights used by us, please see
section titled “Government and Other Approvals” on page 299.
We are also exposed to the risk that other entities may pass off their services as ours by imitating our brand name.
Any such activities could harm the reputation of our brand and sales of our products, which could in turn adversely
affect our financial performance and the market price of the Equity Shares. Notwithstanding the precautions we
take to protect our intellectual property rights, it is possible that third parties may copy or otherwise infringe on our
rights, which may have an adverse effect on our business, results of operations, cash flows and financial condition.
While we take care to ensure that we comply with the intellectual property rights of others, we cannot determine
with certainty whether we are infringing any existing third-party intellectual property rights which may force us to
alter our offerings. We may also be susceptible to claims from third parties asserting infringement and other related
24
claims. If similar claims are raised in the future, these claims could result in costly litigation, divert management’s
attention and resources, subject us to significant liabilities and require us to enter into potentially expensive royalty
or licensing agreements or to cease certain offerings. Furthermore, necessary licenses may not be available to us on
satisfactory terms, if at all. Any of the foregoing could have an adverse effect on our business, results of
operations, cash flows and financial condition. These protections may not be sufficient to prevent unauthorized
parties from infringing upon or misappropriating our products, services or proprietary information in the
jurisdictions in which we operate. In addition, although we believe that our products, services and proprietary
information do not infringe upon the intellectual property rights of others and that we have all the rights necessary
to use the intellectual property employed in our business, there can be no assurance that infringement claims will
not be asserted against us in the future.
26.
Our insurance coverage may not be adequate to protect us against all potential losses to which we may be
subject, and this may have a material adverse effect on our business, financial condition and results of
operations.
We maintain such insurance coverage as we believe is customary in our industry. Our insurance policies, however,
may not provide adequate coverage in certain circumstances and are subject to certain deductibles, exclusions and
limits on coverage. We cannot assure you that the terms of our insurance policies will be adequate to cover any
damage or loss suffered by us or that such coverage will continue to be available on reasonable terms or will be
available in sufficient amounts to cover one or more large claims, or that the insurer will not disclaim coverage as
to any future claim. In particular, we do not maintain business interruption insurance and therefore if our
operations are interrupted, we would suffer loss of revenues, and our results of operations and cash flows would be
adversely affected. A successful assertion of one or more large claims against us that exceeds our available
insurance coverage or changes in our insurance policies, including premium increases or the imposition of a larger
deductible or co-insurance requirement, could adversely affect our business, financial condition, results of
operations and cash flows.
27.
We are subject to restrictive covenants in certain debt facilities provided to us.
There are certain restrictive covenants in the financing agreement we have entered into with the FirstRand Bank for
the term loan of ` 120 million and HSBC Bank (Mauritius) Limited for a term loan of USD 2 million. For instance,
we are required to obtain prior written consent of the lenders for matter including, (i) conveying, selling, leasing,
mortgaging, disposing of or otherwise charging all or any part of its assets over which security interest has been
created; (ii) altering the nature of our business and amending or altering any of the provisions of Memorandum and
Articles of Association relating to Company’s borrowing power and principal business activities; (iii) issuing any
debentures, raising any loans or availing any credit facility from any other bank, financial institution, any person,
firm or company; accepting deposits from public issue equity or preferential capital changing its capital structure;
or creating a security interest other than for the exceptions provided in the loan agreement; (iv) making substantial
changes to the general nature of our Company’s business from that carried on at the date of the Agreement; (v)
making any change in the control of its management or substantially or materially changing the beneficial
ownership of the Company; (vi) (merge or acquire interest in any other company resulting into a change in control
of either one of them, directly or indirectly. For further details, please see section titled “Financial Indebtedness”
on page 293.
If we fail to meet our obligations or covenants (or approvals to undertake certain transactions) provided under the
financing agreements, the relevant lenders could declare us in default under the terms of our agreements,
accelerate the maturity of our obligations or take over the financed project. We cannot assure you that, in the event
of any such acceleration, we will have sufficient resources to repay these borrowings. Our failure to meet
our obligations under the debt financing agreements could have an adverse effect on our business, financial
condition, cash flows and results of operations.
28.
The Promoters and Directors hold Equity Shares in our Company and are therefore interested in the
Company's performance in addition to their remuneration and reimbursement of expenses.
Certain of our Directors and our Promoters are interested in our Company, in addition to regular remuneration or
benefits and reimbursement of expenses, to the extent of their shareholding in our Company. We cannot assure
you that our Promoters will exercise their rights as shareholders to the benefit and best interest of our Company.
Our Promoters will continue to exercise significant control over us, including being able to control the
composition of our Board of Directors and determine decisions requiring simple or special majority voting of
shareholders, and our other shareholders may be unable to affect the outcome of such voting. Our Promoters may
take or block actions with respect to our business which may conflict with the best interests of the Company or that
of minority shareholders. For details on the interest of our Promoters and Directors of our Company, other than
25
reimbursement of expenses incurred or normal remuneration or benefits, please see section titled “Management”
and “Our Promoters, Promoter Group and Group Companies” on pages 151 and 169, respectively.
29.
Our ability to pay dividends in the future will depend on our earnings, financial condition, working
capital requirements, capital expenditures and restrictive covenants of our financing arrangements.
Our ability to pay dividends in the future will depend on our earnings, financial condition, cash flow, working
capital requirements and capital expenditure. Any future determination as to the declaration and payment of
dividends will be at the discretion of our Board and will depend on factors that our Board deems relevant,
including among others, our future earnings, financial condition, cash requirements, business prospects and any
other financing arrangements. Hence, while we have a formal dividend policy, we cannot assure you that we will
be able to pay dividends in the future. For details of dividends paid by our Company in the past, please see section
titled “Dividend Policy” on page 178.
30.
Our Group Company and certain other ventures promoted by our Promoters engage in a similar line of
business. Any conflict of interest which may occur between our business and the business of the members of our
Promoter Group, could adversely affect our business, prospects, results of operations and financial condition.
Our Group Company and certain entities within our Promoter Group are authorized under their constitutional
documents to engage in a similar line of business as us. For further details with respect to our Promoters and
members of our Promoter Group, please see section titled “Our Promoters, Promoter Group and Group
Companies” on page 169. We cannot assure you that our Promoters will not favour the interests of the members of
our Promoter Group over our interests. Such other members of our Promoter Group, including those in a similar
line of business, may dilute our Promoters’ attention to our business, which could adversely affect our business,
prospects, financial condition and results of operations.
We have not entered into any non-solicitation or non-compete agreement with Vastu or any member of our
Promoter Group. While neither Vastu nor such members of the Promoter Group are currently carrying on any
business in conflict with our Company, there is no assurance that such a conflict will not arise in the future, or that
we will be able to suitably resolve any such conflict without an adverse effect on our business or operations. There
can be no assurance that our Group Company, our Promoters or members of our Promoter Group will not provide
comparable services, expand their presence, solicit our employees or acquire interests in competing ventures in the
locations or segments in which we operate. A conflict of interest may occur between our business and the business
of the members of our Promoter Group and Group Company, which could have an adverse effect on our business,
prospects, results of operations and financial condition.
31.
We have entered into certain related party transactions and may continue to do so in the future.
We have entered into transactions with related parties, within the meaning of AS 18 as notified by the Companies
(Accounting Standards) Rules, 2006. For further information on our related party transactions please see the
section titled “Financial Information” on page 179. Such transactions may give rise to current or potential conflicts
of interest with respect to dealings between us and such related parties.
32.
We do not own certain premises used by our Company.
Certain premises used by our Company have been obtained on a lease or license basis. Our registered and
corporate office is held by our Company on a leave and license basis. If we are unable to renew the agreements
under which we occupy or use the premises, on terms and conditions acceptable to us, or at all, we may suffer a
disruption in our operations.
External Risks
33.
Political, economic or other factors that are beyond our control may have an adverse effect on our
business and results of operations.
Our performance, growth and market price of our Equity Shares are and will be dependent on the health of the
Indian economy. There have been periods of slowdown in the economic growth of India. Demand for our products
may be adversely affected by an economic downturn in domestic, regional and global economies. India’s economic
growth is affected by various factors including domestic consumption and savings, balance of trade movements,
namely export demand and movements in key imports (oil and oil products), global economic uncertainty and
26
liquidity crisis, volatility in exchange currency rates, and annual rainfall which affects agricultural production.
Consequently, any future slowdown in the Indian economy could harm our business, results of operations and
financial condition. Also, a change in the Government or a change in the economic and deregulation policies could
adversely affect economic conditions prevalent in the areas in which we operate in general and our business in
particular and high rates of inflation in India could increase our costs without proportionately increasing our
revenues, and as such decrease our operating margins.
Further, the occurrence of natural disasters, including cyclones, storms, floods, earthquakes, tsunamis, tornadoes,
fires, explosions and pandemic disease could damage our assets and adversely affect our operations. Acts of
violence may adversely affect global equity markets as well as the Indian economy and stock markets where our
Equity Shares will trade. The consequences of any armed conflicts are unpredictable, and we may not be able to
foresee events that could have an adverse effect on our business. Military activity or terrorist attacks could
adversely affect the Indian economy by disrupting communications and making travel more difficult. Such events
could also create a perception that investments in Indian companies involve a higher degree of risk. This, in turn,
could have an adverse effect on the market for securities of Indian companies, including the Equity Shares, and on
the market for our products.
34.
Our Company, will be required to prepare financial statements under Ind-AS (which is India’s
convergence to IFRS). The transition to Ind-AS in India is very recent and there is no clarity on the impact of
such transition on our Company.
Our Company currently prepares its annual and interim financial statements under Indian GAAP. Companies in
India, including our Company, will be required to prepare annual and interim financial statements under Indian
Accounting Standard 101 “First-time Adoption of Indian Accounting Standards (“Ind-AS”). On January 2, 2015,
the Ministry of Corporate Affairs, Government of India (the “MCA”) announced the revised roadmap for the
implementation of Ind-AS (on a voluntary as well as mandatory basis) for companies other than banking
companies, insurance companies and non-banking finance companies through a press release (the “Press Release”).
Further, on February 16, 2015, the MCA has released the Companies (Indian Accounting Standards) Rules, 2015
(the “Ind AS Rules”) which have come into effect from April 1, 2015. The Ind AS Rules provide for voluntary
adoption of Ind AS by companies in Fiscal 2015.
Ind-AS will be required to be implemented on a mandatory basis by companies based on their respective net worth
as set out below:
Category of companies
Companies whose securities are either listed or proposed to
list, on any stock exchange in India or outside India and having
a net worth of ` 5,000 million or more.
First Period of Reporting
Financial year commencing on or after April 1,
2016
Companies other than those covered in (1) above and having a
net worth of ` 5,000 million or more.
Holding, subsidiary, joint venture or associate companies of
companies covered above in serial number (1) and (2).
Companies whose securities are either listed or proposed to
list, on any stock exchange in India or outside India and having
a net worth of less than ` 5,000 million.
Unlisted companies having a net worth of ` 2,500 million or
more but less than ` 5,000 million.
Holding, subsidiary, joint venture or associate companies of
companies covered above in serial number (4) and (5).
Financial year commencing on or after April 1,
2016
Financial year commencing on or after April 1,
2016
Financial year commencing on or after April 1,
2017
Financial year commencing on or after April 1,
2017
Financial year commencing on or after April 1,
2017
In addition, any holding, subsidiary, joint venture or associate companies of the companies specified above shall
also comply with such requirements from the respective periods specified above.
There is not yet a significant body of established practice on which to draw informing judgments regarding its
implementation and application. Additionally, Ind-AS differs in certain respects from IFRS and therefore financial
statements prepared under Ind-AS may be substantially different from financial statements prepared under IFRS.
There can be no assurance that the Company’s financial condition, results of operation, cash flow or changes in
shareholders’ equity will not be presented differently under Ind-AS than under Indian GAAP or IFRS. When our
Company adopts Ind-AS reporting, it may encounter difficulties in the ongoing process of implementing and
enhancing its management information systems. There can be no assurance that the adoption of Ind-AS by our
27
Company will not adversely affect its results of operation or financial condition.
35.
We may be affected by competition law in India and any adverse application or interpretation of the
Competition Act, 2002 could adversely affect our business.
The Competition Act, 2002, as amended (the “Competition Act”), regulates practices having an appreciable
adverse effect on competition in the relevant market in India. Under the Competition Act, any formal or informal
arrangement, understanding or action in concert, which causes or is likely to cause an appreciable adverse effect on
competition is considered void and may result in the imposition of substantial monetary penalties. Further, any
agreement among competitors which directly or indirectly involves the determination of purchase or sale prices,
limits or controls production, supply, markets, technical development, investment or provision of services in any
manner, shares the market or source of production or provision of services by way of allocation of geographical
area, type of goods or services or number of customers in the relevant market or in any other similar way, or
directly or indirectly results in bid-rigging or collusive bidding is presumed to have an appreciable adverse effect
on competition. The Competition Act also prohibits abuse of a dominant position by any enterprise. If it is proved
that the contravention committed by a company took place with the consent or connivance of or is attributable to
any neglect on the part of, any director, manager, secretary or other officer of such company, that person shall be
guilty of the contravention and may be liable to punishment.
On March 4, 2011, the Government issued and brought into force the combination regulation (merger control)
provisions under the Competition Act with effect from June 1, 2011. These provisions require acquisitions of
shares, voting rights, assets or control or mergers or amalgamations that cross the prescribed asset and turnover
based thresholds to be mandatorily notified to and pre-approved by the Competition Commission of India (the
“CCI”). Additionally, on May 11, 2011, the CCI issued the Competition Commission of India (Procedure in regard
to the transaction of business relating to combinations) Regulations, 2011, which sets out the mechanism for
implementation of the merger control regime in India. The Competition Act aims to, among others, prohibit all
agreements and transactions which may have an appreciable adverse effect on competition in India. Further, the
CCI has extra-territorial powers and can investigate any agreements, abusive conduct or combination occurring
outside India if such agreement, conduct or combination has an appreciable adverse effect on competition in India.
However, we cannot predict the impact of the provisions of the Competition Act on the agreements entered into by
us at this stage. We are not currently party to any outstanding proceedings, nor have we received notice in relation
to non-compliance with the Competition Act or the agreements entered into by us. However, 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 CCI, or any adverse publicity that may be generated due to scrutiny or
prosecution by the CCI or if any prohibition or substantial penalties are levied under the Competition Act, it would
adversely affect our business, results of operation and prospects.
The applicability or interpretation of the Competition Act to any merger, amalgamation or acquisition proposed or
undertaken by us, or any enforcement proceedings initiated by CCI for alleged violation of provisions of the
Competition Act may adversely affect our business, financial condition or results of operation.
36.
Changes in legislation or the rules relating to tax regimes could adversely affect our business, prospects
and results of operations.
Our business is subject to a significant number of state tax regimes and changes in legislation governing the rules
implementing them or the regulator enforcing them in any one of those jurisdictions could adversely affect our
results of operations. The applicable categories of taxes and tax rates also vary significantly from state to state,
which may be amended from time to time. The final determination of our tax liabilities involves the interpretation
of local tax laws and related regulations in each jurisdiction as well as the significant use of estimates and
assumptions regarding the scope of future operations and results achieved and the timing and nature of income
earned and expenditures incurred. We are involved in various disputes with tax authorities. For details of these
disputes, please see section titled “Outstanding Litigation and Material Developments” on page 296. Changes in
the operating environment, including changes in tax law, could impact the determination of our tax liabilities for
any given tax year. Taxes and other levies imposed by the Government or State Governments that affect our
industry include income tax and other taxes, duties or surcharges introduced from time to time. The tax scheme in
India is extensive and subject to change from time to time and any adverse changes in any of the taxes levied by
the Government or State Governments could adversely affect our competitive position and profitability.
The Government of India has proposed a comprehensive national goods and services tax (“GST”) regime that will
combine taxes and levies by the Central and State Governments into a unified rate structure. Although the
Government has announced that it is committed to introduce GST with effect from April 1, 2016, given the limited
availability of information in the public domain concerning the GST, we are unable to provide any assurance as to
28
the exact date of when GST is to be introduced or any other aspect of the tax regime following implementation of
the GST. Further, any disagreements between certain state governments may also create further uncertainty
towards the implementation of the GST. 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.
Further, the General Anti Avoidance Rules (“GAAR”) is proposed to be effective from April 1, 2017. The tax
consequences of the GAAR provisions being applied to an arrangement could result in denial of tax benefit
amongst other consequences. In the absence of any precedents on the subject, the application of these provisions is
uncertain. If the GAAR provisions are made applicable to our Company, it may have an adverse tax impact on us.
We have not determined the impact of such proposed legislations on our business. Uncertainty in the applicability,
interpretation or implementation of any amendment to, or change in, governing law, regulation or policy, including
by reason of an absence, or a limited body, of administrative or judicial precedent may be time consuming as well
as costly for us to resolve and may impact the viability of our current business or restrict our ability to grow our
business in the future.
37.
Our global operations expose us to numerous and sometimes conflicting legal and regulatory
requirements, and violation of these regulations could harm our business.
Revenues from customers located outside India accounted for 98.42%, 98.91 %, 99.79%, and 99.12% respectively,
of our total revenues for Fiscal 2013, 2014, 2015 and the three month period ended June 30, 2015. We have offices
in South Africa, United Kingdom, Australia, USA, Tanzania, Nigeria, and Ireland and a significant number of our
employees are assigned to engagements outside India. We intend to continue to establish development facilities and
offices in international locations. We have operations in a number of countries outside India, including South Africa,
the United States, United Kingdom, Nigeria, Tanzania, Ireland and Australia.
Since we provide services to clients throughout the world, we are subject to numerous, and sometimes conflicting,
legal requirements on matters as diverse as import/export controls, content requirements, restrictions on
remittances overseas where we operates, trade restrictions, the environment (including electronic waste), tariffs,
taxation, sanctions, government affairs, anti-corruption, whistle blowing, internal and disclosure control
obligations, data protection and privacy and labour relations and certain regulatory requirements that are specific to
our clients’ industries. For instance, we have operations in Nigeria where our income from Nigeria is subject to a
withholding tax of 10% on registration of service contracts with National Office for Technology Acquisition and
Promotion (NOTAP) for remitting funds outside Nigeria. Non-compliance with these regulations in the conduct of
our business could result in fines, penalties, criminal sanctions against us or our officers, disgorgement of profits,
prohibitions on doing business and have an adverse impact on our reputation. Gaps in compliance with these
regulations in connection with the performance of our obligations to our clients could also result in exposure to
monetary damages, fines and/or criminal prosecution, unfavourable publicity, restrictions on our ability to process
information and allegations by our clients that we have not performed our contractual obligations. Many countries
also seek to regulate the actions that companies take outside of their respective jurisdictions, subjecting us to
multiple and sometimes competing legal frameworks in addition to our home country rules. Due to the varying
degree of development of the legal systems of the countries in which we operate, local laws might be insufficient
to defend us and preserve our rights. We could also be subject to risks to our reputation and regulatory action on
account of any unethical acts by any of our employees, partners or other related individuals.
We have a number of employees located outside of India. We are subject to risks relating to compliance with a
variety of national and local laws, including multiple tax regimes, labour laws, and employee health, safety, wages
and benefits laws. We may, from time to time, be subject to litigation or administrative actions resulting from
claims against us by current or former employees individually or as part of class actions, including claims of
wrongful terminations, discrimination, misclassification or other violations of labour law or other alleged conduct.
We may also, from time to time, be subject to litigation resulting from claims against us by third parties, including
claims of breach of non-compete and confidentiality provisions of our employees’ former employment agreements
with such third parties or claims of breach by us of their intellectual property rights. Our failure to comply with
applicable regulatory requirements could have a material adverse effect on our business, financial condition and
results of operations.
38.
Any disruption in the supply of power, IT infrastructure and telecommunications lines to our facilities
could disrupt our business process or subject us to additional costs.
Any disruption in basic infrastructure, including the supply of power, could negatively impact our ability to
provide timely or adequate services to our clients. We rely on a number of telecommunications service and other
infrastructure providers to maintain communications between our various facilities in India and overseas and our
29
clients' operations in South Africa, United States and elsewhere. Telecommunications networks are subject to
failures and periods of service disruption which can adversely affect our ability to maintain active voice and data
communications among our facilities and with our clients. Such disruptions may cause harm to our clients'
business. We may not be covered for any claims or damages if the supply of power, IT infrastructure or
telecommunications lines is disrupted. This could disrupt our business process or subject us to additional costs.
39.
Investors may not be able to enforce a judgment of a foreign court against our Company.
Our Company is a company incorporated under the laws of India. Majority of our Company’s Directors and Key
Management Personnel are residents of India and our assets are substantially located in India. As a result, it may
not be possible for investors to effect service of process upon our Company or such persons in jurisdictions outside
India, or to enforce against them judgments obtained in courts outside India. Moreover, it is unlikely that a court in
India would award damages on the same basis as a foreign court if an action were brought in India or that an Indian
court would enforce foreign judgments if it viewed the amount of damages as excessive or inconsistent with Indian
public policy.
40.
If the rate of Indian price inflation increases, our results of operations and financial condition may be
adversely affected.
In recent years, India’s wholesale price inflation index has indicated an increasing inflation trend compared to prior
periods. An increase in inflation in India could cause a rise in the cost of transportation, wages or any other
expenses. However, we may be unable to increase the prices of our products sufficiently to preserve our operating
margins. If this trend continues, we may be unable to reduce our costs or pass our increased costs to our customers
and our business, results of operations and financial condition may be adversely affected.
41.
Financial instability in Indian financial markets could adversely affect our results of operations and
financial condition.
The Indian financial market and the Indian economy are influenced by economic and market conditions in other
countries, particularly in the emerging market in Asian countries. Financial turmoil in Asia, Europe, the United
States and elsewhere in the world in recent years has affected the Indian economy. Although economic conditions
are different in each country, investors’ reactions to developments in one country can have an adverse effect on the
securities of companies in other countries, including India. A loss in investor confidence in the financial systems of
other emerging markets may cause increased volatility in Indian financial markets and, indirectly, in the Indian
economy in general. Any global financial instability, including further deterioration of credit conditions in the U.S.
market, could also have a negative impact on the Indian economy. Financial disruptions may occur again and could
adversely affect our results of operations and financial condition.
42.
Under Indian law, foreign investors are subject to investment restrictions that limit our ability to attract
foreign investors, which may adversely affect the trading price of the Equity Shares.
Under foreign exchange regulations currently in force in India, transfer of shares between non-residents and
residents are freely permitted (subject to certain exceptions), if they comply with the valuation and reporting
requirements specified by the RBI. If a transfer of shares is not in compliance with such requirements and does not
fall under any of the exceptions specified by the RBI, then the RBI’s prior approval is required. Additionally,
shareholders who seek to convert Rupee proceeds from a sale of shares in India into foreign currency and repatriate
that foreign currency from India require a no-objection or a tax clearance certificate from the Indian income tax
authorities. We cannot assure you that any required approval from the RBI or any other governmental agency can
be obtained on any particular terms or at all.
43.
Any downgrading of India’s debt rating by a domestic or international rating agency could adversely
affect our business.
India’s sovereign debt rating could be downgraded due to various factors, including changes in tax or fiscal policy
or a decline in India’s foreign exchange reserves, which are outside our control. Any adverse revisions to India’s
credit ratings for domestic and international debt by domestic or international rating agencies may adversely affect
our ability to raise additional financing, and the interest rates and other commercial terms at which such additional
financing is available. This could have an adverse effect on our business and financial performance, ability to
obtain financing for capital expenditures and the price of the Equity Shares.
44.
You may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.
30
Under current Indian tax laws, unless specifically exempted, capital gains arising from the sale of Equity Shares in
an Indian company are generally taxable in India. Any gain realized on the sale of listed equity shares on a stock
exchange held for more than 12 months 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 realized on the sale of equity shares held for more than 12 months,
which are sold other than on a recognized stock exchange and on which no STT has been paid to an Indian resident,
will be subject to long term capital gains tax in India. Further, any gain realized 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 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.
45.
Rights of shareholders under Indian laws may be more limited than under the laws of other jurisdictions.
Indian legal principles related to 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 including
in relation to class actions, 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 shareholder in an Indian
company than as shareholder of a corporation in another jurisdiction.
46.
Our ability to raise foreign capital may be constrained by Indian law.
As an Indian company, we are subject to exchange controls that regulate borrowing in foreign currencies. Such
regulatory restrictions limit our financing sources for our projects under development and hence could constrain
our ability to obtain financings on competitive terms and refinance existing indebtedness. In addition, we cannot
assure you that any required regulatory approvals for borrowing in foreign currencies will be granted to us without
onerous conditions, or at all. Limitations on foreign debt may have an adverse effect on our business growth,
financial condition and results of operations.
Risks Related to the Issue
47.
The Equity Shares have never been publicly traded, and, after the Issue, the Equity Shares may
experience price and volume fluctuations, and an active trading market for the Equity Shares may not develop.
Further, the price of the Equity Shares may be volatile, and you may be unable to resell the Equity Shares at or
above the Issue Price, or at all.
Prior to the Issue, there has been no public market for the Equity Shares, and an active trading market on the Stock
Exchanges may not develop or be sustained after the Issue. Listing and quotation does not guarantee that a market
for the Equity Shares will develop, or if developed, the liquidity of such market for the Equity Shares. The Issue
Price of the Equity Shares is proposed to be determined through a book-building process and may not be indicative
of the market price of the Equity Shares at the time of commencement of trading of the Equity Shares or at any
time thereafter. The market price of the Equity Shares may be subject to significant fluctuations in response to,
among other factors, variations in our operating results of our Company, market conditions specific to the industry
we operate in, developments relating to India, volatility in the Stock Exchanges, securities markets in other
jurisdictions, variations in the growth rate of financial indicators, variations in revenue or earnings estimates by
research publications, and changes in economic, legal and other regulatory factors.
48.
You will not be able to immediately sell any of the Equity Shares you purchase in this Issue on the Stock
Exchanges.
Under the SEBI Regulations, we are permitted to allot Equity Shares within 12 Working Days of the Bid/Issue
Closing Date. Consequently, the Equity Shares you purchase in the Issue may not be credited to your book or
dematerialized account with the Depository Participants until 12 Working Days after the Bid/Issue Closing Date.
You can start trading in the Equity Shares only after they have been credited to your dematerialized account and
listing and trading permissions are received from the Stock Exchanges.
49.
The Issue Price of the Equity Shares may not be indicative of the market price of the Equity Shares after
the Issue.
31
The Issue Price of the Equity Shares will be determined by the Company in consultation with the BRLM through
the Book Building Process. This price will be based on numerous factors, as described under “Basis for Issue Price”
on page 100 and may not be indicative of the market price for the Equity Shares after the Issue. The market price
of the Equity Shares could be subject to significant fluctuations after the Issue, and may decline below the Issue
Price.
50.
Any future issuance of Equity Shares, or convertible securities or other equity linked securities by us and
any sale of Equity Shares by our Promoters or significant shareholders may dilute your shareholding and
adversely affect the trading price of the Equity Shares.
After the completion of the Issue, our Promoters and significant shareholders will own, directly and indirectly,
approximately 79.28% of our outstanding Equity Shares. Any future issuance of the Equity Shares, convertible
securities or securities linked to the Equity Shares by us may dilute your shareholding in the Company, adversely
affect the trading price of the Equity Shares and our ability to raise capital through an issue of our securities. In
addition, any perception by investors that such issuances or sales might occur could also affect the trading price of
the Equity Shares. No assurance may be given that we will not issue additional Equity Shares. The disposal of
Equity Shares by any of our significant shareholders, or the perception that such sales may occur may significantly
affect the trading price of the Equity Shares. Except as disclosed in the section titled “Capital Structure” on page
63, no assurance may be given that our significant shareholders will not dispose of, pledge or encumber their
Equity Shares in the future.
51.
Holders of Equity Shares may be restricted in their ability to exercise pre-emptive rights under Indian
law and thereby suffer future dilution of their ownership position.
Under the Companies Act, a company incorporated in India must offer its equity shareholders pre-emptive rights to
subscribe and pay for a proportionate number of equity shares to maintain their existing ownership percentages
prior to issuance of any new equity shares, unless the pre-emptive rights have been waived by the adoption of a
special resolution by holders of three-fourths of the equity shares voting on such resolution.
However, if the law of the jurisdiction that you are in does not permit the exercise of such pre-emptive rights
without our filing an offering document or registration statement with the applicable authority in such jurisdiction,
you will be unable to exercise such pre-emptive rights, unless we make such a filing. If we elect not to file a
registration statement, the new securities may be issued to a custodian, who may sell the securities for your benefit.
The value such custodian receives on the sale of any such securities and the related transaction costs cannot be
predicted. To the extent that you are unable to exercise pre-emptive rights granted in respect of our Equity Shares,
your proportional interests in our Company may be reduced.
52.
QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in terms of
quantity of Equity Shares or the Bid Amount) at any stage after submitting a Bid.
Pursuant to the SEBI Regulations, QIBs and Non-Institutional Investors are not permitted to withdraw or lower
their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after submitting a Bid. While our
Company is required to complete Allotment pursuant to the Issue within 12 Working Days from the Bid/Issue
Closing Date, events affecting the Bidders’ decision to invest in the Equity Shares, including material adverse
changes in international or national monetary policy, financial, political or economic conditions, our business,
results of operation or financial condition may arise between the date of submission of the Bid and Allotment. Our
Company may complete the Allotment of the Equity Shares even if such events occur, and such events limit the
Bidders’ ability to sell the Equity Shares Allotted pursuant to the Issue or cause the trading price of the Equity
Shares to decline on listing.
53.
Our revenues, expenses and profitability may be subject to significant fluctuation and hence may be
difficult to predict. This increases the likelihood that our results of operations could fall below the expectations
of investors and market analysts, which could cause the market price of the Equity Shares to decline.
Our revenues, expenses and profitability are likely to vary significantly in the future from period to period. Factors
which result in fluctuations in our revenues, expenses and profits include:


the size, complexity, timing, pricing terms and profitability of significant contracts, as well as changes in
the corporate decision-making processes of our clients;
the business or financial condition of our clients or the economy generally, or any developments in the IT
sector in macro-economic factors, which may affect the rate of growth in the use of technology in business,
type of technology spending by our clients and the demand for our services;
32

the high concentration of orders in a limited number of countries and the concentration of orders in certain
industries;
fluctuations in exchange rates;
the effect of increased wage pressure in India and other countries in which we operate;
the size and timing of our facilities’ expansion;
the proportion of projects that are performed at clients’ sites compared to work performed at offshore
facilities;
our ability to expand sales to our existing customers and increase sales of our services to new customers, of
whom some may be reluctant to change their current IT systems due to the high costs already incurred on
implementing such systems and/or the potential disruption it would cause with personnel, processes and
infrastructures; and
our ability to forecast accurately our clients’ demand patterns to ensure the availability of trained employees
to satisfy such demand.






A significant portion of our total operating expenses, particularly expenses related to personnel and facilities, are
fixed in advance of any period. As a result, unanticipated variations in the size and scope of projects, as well as
unanticipated cancellations, contract terminations or the deferral of contracts or changes occurring as a result of our
clients reorganising their operations, or unanticipated variations in the number and timing of projects or employee
utilisation rates, or the accuracy of estimating resources required to complete ongoing projects, may cause
significant variations in operating results in any particular period. In addition, demands for higher compensation
could lead to employee disputes and, potentially, work stoppages or slowdowns.
As a result, unanticipated variations to our projects in the manner and with the effects as mentioned above may
cause significant variations in our results of operations in any particular quarter. Our pricing remains competitive
and clients remain focused on cost reduction and capital conservation and cost management limitations may not be
sufficient to negate pressure on pricing and utilisation rates. We may not be able to sustain our historical levels of
profitability.
Therefore, we believe that period-to-period comparisons of our results of operations are not necessarily meaningful
and should not be relied upon as indications of future performance. It is indeed possible that in the future some of
our periodic results of operations may be below the expectations of investors and market analysts, and the market
price of the Equity Shares could decline.
Prominent Notes
1.
Initial public offering of [●] Equity Shares having a face value of ` 10 each of our Company for cash at a price
of ` [●] per Equity Share (including a share premium of ` [●] per Equity Share) aggregating up to ` [●]
million, comprising of a Fresh Issue of up to [●] Equity Shares aggregating to ` 1,400 million by our
Company and an Offer for Sale of up to 2,438,199 Equity Shares by Selling Shareholders. The Issue shall
constitute [●] % of the fully diluted post-Issue paid-up capital of our Company.
2.
Our Company was incorporated as Nihilent Technologies Private Limited on May 29, 2000 at Pune under the
Companies Act, 1956. The name of our Company was changed to Nihilent Technologies Limited pursuant to
conversion of the status of our Company to a public limited company and a fresh certificate of incorporation
consequent to change of name dated September 10, 2015 was issued by the RoC. For further details, please see
section titled “History and Certain Corporate Matters” on page 139.
3.
Our Net Worth, as at June 30, 2015, was ` 1,898.41 million, as derived from our Restated Standalone
Financial Statements, and was ` 1,793.97 million, as derived from Restated Consolidated Financial
Statements.
4.
The net asset value per Equity Share ` 95.08 as at June 30, 2015, as per our restated standalone financial
statements and the net asset value per Equity Share was ` 89.85 as at June 30, 2015, as per our restated
consolidated financial statements.
5.
The average cost of acquisition per Equity Share by our Promoters is set forth in the table below:
Sr.
No.
1.
2.
No. of Equity Shares
held
2,020,000
13,808,781
Name of the Promoter
L. C. Singh
Hatch Investments (Mauritius) Limited
33
Average price per Equity
Share (in ` )
0.001
20.027
6.
For details in relation to Group Companies, including business interests see section titled “Our Promoter,
Promoter Group and Group Companies” and section titled “Related Party Transactions” on pages 169 and 177.
7.
There are no financing arrangements whereby the Promoter Group, the Promoters or the relatives of the
Directors have financed the purchase of our Equity Shares by any other person other than in the normal course
of business of such financing entity in the six months immediately preceding the date of this Draft Red
Herring Prospectus.
8.
For the Fiscal Year ended March 31, 2015 and the three month period ended June 30, 2015, we had entered
into certain related party transactions with related parties (as defined under Accounting Standard 18). For
further details in this regard, please see section titled “Financial Statements” on page 179.
For any complaints in relation to the Issue, Bidders may contact the Book Running Lead Manager. For further
details of the Book Running Lead Manager, including contact details, please see section titled “General
Information” on page 55.
34
SECTION III: INTRODUCTION
SUMMARY OF INDUSTRY
The following information includes extracts from publicly available information, industry reports, data and statistics
and has been extracted from official sources and other sources that we believe to be reliable, but which has not been
independently verified by us or the BRLM, or any of our or their respective affiliates or advisers.
While we believe Industry sources and publications and the information contained are generally believed to be
reliable, 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. Industry sources and
publications are also prepared based on information and estimates as of specific dates and may no longer be
current or reflect current trends. Such information, data and estimates may be approximations or use rounded
numbers. All references to years in the section below are to calendar years unless specified otherwise.
State of the Global Economy
The World Bank report on the global economic prospects notes that global growth hit a soft patch at the start of the
year, but remains broadly on track to reach about 2.8 percent in 2015, somewhat below earlier forecasts, with a
modest pickup in 2016–17. (Source: Global Economic Prospects, Global Economy in Transition, World Bank
(“World Bank Report”)) Looking forward, global activity should be supported by continued low commodity prices
and generally still-benign financing conditions, notwithstanding the expected modest tightening in U.S. monetary
policy. (Source: World Bank Report).
The Global IT-BPM Industry
Overview
According to NASSCOM, businesses all over the world are now facing a digital and connected customer – one who
is informed, decisive and influential. Organizations have no choice but to use technology to undergo a digital
transformation themselves. Digitization can extend the reach of organizations, enhance management decisions and
accelerate development of new growth engines. Thus, unpredictable economic conditions and rapidly evolving
customer requirements is influencing how and where each dollar is spent; as firms not only look to get more with
less, but also get new, yet unrealized benefits. (Source: The IT-BPM Sector in India, Strategic Review 2015,
NASSCOM- February 2015 “NASSCOM Report”)
NASSCOM notes that customers today expect technology not only to enable efficient operations, but also creating
new avenues of growth. This scenario is both challenging and exciting, and is ensuring a dual role for technology,
which will be used for both traditional applications that are anchored around stability and efficiency, and modern
systems that focuses on agility, rapid application evolution and tighter alignment with business units. This is likely
to dictate global technology spend with an increased need for enterprise digital transformation as the new way to
engage and serve customers. (Source: NASSCOM Report)
Digital Enterprise
According to NASSCOM, firms recognising IT as a strategic asset with which they can renew vital aspects of their
operations — are investing in digital tools, capabilities, and skills to more easily identify useful data, evaluate it,
excerpt it, analyse it, derive insights from it, share it, manage it, comment on it, report on it, and, most importantly,
act on it. This next generation enterprise – ‘digital enterprise’ leverages digital technology to re-imagine their
business. Digital capabilities will be fundamental to firms transforming customer experience. The future enterprise
will leverage the maturation and convergence of social, mobile, analytics, big data, cloud and the Internet of Things
to drive this agenda. (Source: NASSCOM, the IT-BPM Sector in India, Strategic Review 2014 (“NASSCOM Report
2014”))
NASSCOM believes that the accelerating pace of business, the growing impact of digital, and several other major
indicators suggest that a next generation enterprise is on the horizon. This digital enterprise leverages digital
technology to re-imagine businesses, and embraces the key characteristics that enable future success. Innovative,
fast, responsive, agile, creative and, design-oriented are some of these key characteristics. Digital technology drives
value in businesses in four ways: enhanced connectivity, automation of manual tasks, improved decision-making,
and product or service innovation. Tools such as big data analytics, apps, workflow systems, and cloud platforms —
35
all of which enable this value — are often applied by businesses to enhance value to the customer and thus
transform the way business is done. (Source: NASSCOM Report 2014)
Indian IT-BPM Industry
Overview
NASSCOM notes that the industry demonstrated flexibility and resolve to adjust to turbulent economic conditions
and experience double digit growth. Overall revenue (exports + domestic) for FY2015 is expected at USD 146
billion, a growth of ~13 per cent over last year, an overall y-o-y addition of ~USD 17 billion. Industry contribution
relative to India’s GDP is set to touch an estimated 9.5 per cent and share in total services exports >38 per cent. The
industry currently employs >3.5 million – India’s largest private sector employer. It is also playing a key role in
promoting diversity within the industry – women employees (>34 per cent share), 170,000 foreign nationals and a
greater share of employees from non-Tier I Indian cities. (Source: NASSCOM Report)
Exports Market
NASSCOM expects FY2015 to see the exports market at over USD 98 billion, recording a 12.3 per cent growth
over last year. ER&D and product development segment is the fastest growing at 13.2 per cent, driven by higher
value-added services from existing players and an increased business from GICs. IT services exports are to grow at
industry rate of 12.6 per cent. Value-added services around SMAC – upgrading legacy systems to be SMAC
enabled, greater demand for ERP, CRM, mobility from manufacturing segment and user experience technologies in
retail segment is driving growth in IT services. BPM is being driven by greater automation, expanding omni-channel
presence, application of analytics across entire value chain, etc. (Source: NASSCOM Report)
Exports to USA, the largest market grew above industry average, aided by an economic revival and higher
technology adoption. Demand from Europe remained strong during the first half of the year, but softened during the
second half due to currency movements and economic challenges. Manufacturing, utilities and retail growth
remained strong as clients increase discretionary spend on customer experience, digital, analytics, ERP updates and
improving overall efficiency. BFSI, the most mature market experienced cost pressures affecting growth. (Source:
NASSCOM Report)
NASSCOM, in its report, notes that the industry is attempting to shift from a linear to a non-linear growth model
and has therefore been following a differentiated growth path. These strategies include both inward and outward
looking initiatives. One of the primary strategies focuses on product/IP development; this is further being supported
by their verticalised offerings. Expertise developed in specific verticals is enabling IT-BPM firms to deliver
innovative products and services to customers that in turn facilitate entry into new markets/ geographies, access to
customers, etc. Rapid upscaling of capabilities around SMAC and other emerging technologies is enabling it to
expand services to existing customers and also attract new customers. (Source: NASSCOM Report)
Domestic market
NASSCOM believes that the need for Indian firms to effectively compete in a globalized world presents an
immense untapped opportunity for the supply side. As an economy, India is beginning to stabilise post elections.
Overall business confidence is picking up with the new government in place and its clear policies and economic
growth agendas particularly – Digital India and Make in India, have helped drive a vision of a technology enabled
India. (Source: NASSCOM Report)
A further push in this direction is coming from the government’s Digital India campaign which envisages a USD 20
billion investment covering mobile connectivity throughout the country, re-engineering of government process via
technology and enabling e-delivery of citizen services. (Source: NASSCOM Report)
The domestic IT-BPM market, according to NASSCOM, is rapidly approaching the USD 50 billion mark. In
FY2015, the market is expected to be a little over USD 48 billion, an annual growth of 14 per cent. This is fasterthan-industry growth that is largely being driven by the growth in eCommerce segment. (Source: NASSCOM
Report)
IT services (>USD 13 billion) and software products (>USD 4 billion) segments are the next fast growing segment
at 10 per cent and 12 per cent respectively. IT services is being driven by SMAC-cloud enablement, custom
developing application for mobile; with the return of focus on infrastructure projects (largely in later half of 2014),
there is an uptick in demand for SI and IT consulting. SMEs are also increasingly opting for managed and datacentre
36
services as a cost saving measure. Software products are growing on the back of demand for mobile app
development, security software, system software, customer analytics products, etc. (Source: NASSCOM Report)
NASSCOM expects the BPM segment to grow by 8 per cent to USD 3.5 billion; although there is growing demand
for knowledge services, particularly analytics, it remains a CIS dominated segment. BPM is seeing continuous
demand for outsourcing from home-bred firms in the BFSI, telecom, healthcare, retail, etc. (Source: NASSCOM
Report)
IT Services
NASSCOM notes that the IT services segment aggregated export revenues of over USD 55 billion in FY2015,
accounting for over 56 percent of total exports, a growth of 12.6 per cent over FY2014. Indian IT service offerings
have evolved from application development and management, to emerge as full service players providing testing
services, infrastructure services, consulting and system integration. Within that, IT outsourcing exhibited strong
growth, driven by increased spend in infrastructure services outsourcing (ISO), software testing, custom application
development and management (CADM) and SOA/web service segments. (Source: NASSCOM Report)
Enterprise digital transformation
The impact of disruptive trends, NASSCOM notes, such as cloud computing and mobility/analytics have
transformed the IT services industry. The earlier focus on providing delivery and process capabilities, which has
been the cornerstone of the industry’s success so far, is changing. The adoption of the latest technology trends is
focused on changing the delivery methodology of software applications and therefore converges with the traditional
IT services market. Cloud adoption has led to an increase in ‘As a service’ offering as SaaS and cloud specific deals
increase. There is a shift in client needs as they become less labor-intensive and more focused on higher-value
business needs. The year witnessed digital deals being funded, dominating deal counts and influencing standard
contracts. Discretionary services are expected to become digital-centric, and drive growth. (Source: NASSCOM
Report)
Emerging technologies and digitisation have been altering business landscape, and adding value to customer
business. Implementing new wave of technologies in their solutions has now become a business imperative for all
service providers. Firms are investing internally in building these solutions as every customer is looking to its IT
vendor to bring in more value generation business rather than merely maintaining the back-end technology
infrastructure. (Source: NASSCOM Report)
Business Process Management
NASSCOM, in its report, expects high customer expectations; automation; big data/analytics along with traditional
services will be the key drivers for the global BPM services. India’s share of global sourcing was 38 per cent in
2014. Globally, the BPM sourcing was seen growing at 13 per cent.
According to NASSCOM, the BPM sector in India has grown over 1.8X in the last five years and is expected to
clock revenues worth USD 26 billion in FY2015, with a growth rate of 11 per cent over FY2014. Of the total Indian
BPM market in FY2015, contribution of the exports revenue is 87 per cent, while the remaining 13 per cent is
attributed to domestic business. The exports market grew at a faster pace compared to domestic market. The
domestic market witnessed a growth of 8 per cent to reach USD 4 billion in FY2015 while the exports market grew
at 11 per cent during the same period to reach USD 23 billion. (Source: NASSCOM Report)
The report shows the BPM Industry growing its export employment base at 4 per cent in FY2015, an addition of
over 43,000 employees. The export employee base accounts for 23 per cent of the total IT-BPM employee base
which includes around 25 per cent domain specialists and technical graduates and post graduates. The employee
profile has undergone a significant change in the last few years from ‘undergraduates” to “domain specialists” thus
changing its perception to a lucrative career option. In the future too domain and business specialists will be in
greater demand to understand customer requirements and accordingly sell domain focused, IP-led platforms.
(Source: NASSCOM Report)
Customer Interaction Services
CIS includes all forms of IT-enabled customer contact; inbound or outbound, voice or non-voice based support used
to provide customer services, sales and marketing, technical support and help desk services. (Source: NASSCOM
Report)
37
According to NASSCOM, organizations in India catering to the exports market have steadily built up their
capabilities, acquiring expertise across service lines – initially Customer Interaction Services (CIS) and then
branched into high end services, at the same time increasing the depth of services. CIS continues to have the largest
share at USD 9.2 billion, followed by F&A at USD 4.9 billion, and knowledge services at USD 4.7 billion. (Source:
NASSCOM Report)
Analytics
NASSCOM notes that with increasing penetration of software component, driven particularly by cloud, mobile
and connectivity technologies, there is increasing demand for analytics and embedded software specialists.
(Source: NASSCOM Report). Indian analytics product firms have shown a growth rate of above 40 per cent in last
few years; whilst several niche players have witnessed ~100 per cent growth within first year of launch. Over 200
analytics focused firms have successfully developed and deployed products catering to niche business needs, cut
across vertical specific needs, horizontal process centric and niche applications and platforms along with enterprise
BI and marketing analytics functionalities.
38
SUMMARY OF OUR BUSINESS
The information in this section should be read together with, the detailed financial and other information included
in this Draft Red Herring Prospectus, including the information contained in the sections titled “Risk Factors”,
“Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Company” and
“Financial Statements” on pages 16, 274 and 179 respectively. Unless otherwise stated, the financial information
of our Company used in this section has been derived from our Restated Consolidated Financial Statements.
Overview
We are a global business consulting and IT services solutions integration company. Our mission is to deliver
organizational change systemically for our clients. As on November 30, 2015, we had more than 1,500 employees
across 18 offices located in India, South Africa, Nigeria, Tanzania, United States, United Kingdom, Ireland and
Australia. Our Company was awarded the Excellence Award from the Institute of Economic Studies in 2015, the
Red Herring Top 100 award for Asia in 2011 and was also a finalist for the Red Herring Top 100 award globally in
2011. Our Company has also been selected as one of India’s top emerging companies in the India Emerging 20
Programme for fiscal 2015-16.
Our customer engagements comprise holistic analysis of problems which span across people, process, technology,
as well as learning and innovation. Our service offerings include:
(a)
Enterprise transformation and change management that covers several aspects of businesses including
analyzing the changing customer demographics, defining and executing change strategy around people,
process and technology;
(b) Digital transformation services through which we help our clients formulate and execute their digital business
strategy by providing services on digital channels using analytics, statistical modelling, machine learning,
Natural Language Processing (“NLP”) and social marketing tools and techniques; and
(c)
Enterprise IT services wherein we develop applications across wide range of hardware and software
platforms, develop solutions to integrate various applications across platforms, provide migration, reengineering and software maintenance services.
Our Company was incorporated on May 29, 2000 as a private limited company and was converted into a public
limited company on September 10, 2015. Nedbank Africa Investment Limited through a special purpose vehicle
Hatch Investments (Mauritius) Limited (“Hatch”) invested ` 300 million in our Company. For details of
investment made by Hatch, please see section titled “Capital Structure” on page 63. Subsequently, pursuant to a
change in the investment strategy of the Nedcor Group, Dimension Data Protocol B.V. (“DD Protocol”) and
Adcorp Professional Services Limited (“Adcorp Professional”) took over Hatch in 2002 and 2006 respectively
and each holds 50 percent of the share capital of Hatch.
The current promoters of the Company are L.C. Singh, Hatch, DD Protocol and Adcorp Professional. Hatch is an
investment holding company which currently holds 69.16% of the total paid up equity share capital of our
Company. Adcorp Professional Services Limited (previously named Paracon Holdings Limited) is a company
offering highly specialized and diverse information and communication technology resourcing and solutions and is
currently a wholly-owned subsidiary of Adcorp Holdings Limited. Dimension Data Protocol BV has been
incorporated in the Netherlands and is a wholly owned subsidiary of Dimension Data Holdings Nederland BV
which is ultimately owned by Dimension Data Holdings Plc. Dimension Data Holdings Plc also provides ICT
solutions for businesses worldwide.
Over the years we have helped over 300 clients across in more than thirty countries and deployed solutions across
business functions. We have developed proprietary frameworks and methodologies in-house, based on
competencies gained on assignments and our understanding of businesses, to aid our service offerings. These
include tools such as MC3 TM a patented tool which helps us provide our change management solutions, 14Signals
a tool which is used for evaluating perception, experience and aspirations of a customer, SightN2 a framework for
digital marketing and LAMAT through which we provide a customized dashboard to monitor performance levels
against target projections, among others.
Since our Company focused on South Africa, we still derive a majority of our revenues from South Africa where
we have long standing relations with corporate clients. As a part of our global strategy, we are expanding our
operations in other geographies such as United States, United Kingdom, Australia, Ireland, India, Nigeria and
Tanzania. Towards this, we acquired GNet Group LLC a business intelligence and analytics company based out of
39
Minneapolis, USA through our wholly owned subsidiary Nihilent Technologies Inc, and completed its integration
into our Company. In September 2015, we acquired 51 percent shareholding of Intellect Bizware Services Private
Limited (“Intellect”), a company based in Mumbai specializing in ERP and enterprise innovations based on SAP
and HANA to develop and strengthen our presence in the ERP space. Pursuant to a share purchase and
shareholders’ agreement dated September 1, 2015, our Company has an irrevocable unconditional right and option
to acquire the balance 49 percent of the shareholding of Intellect. For further details, please see section titled
“History and Certain Corporate Matters” on page 139. These acquisitions complement our existing service
offerings and help us provide a wider set of solutions to our clients.
A break-up of our revenues for the three months period ended June 30, 2015 and for the financial years ended
2015, 2014 and 2013 from our various geographies is listed below:
` in million
As
at
March
31
As at June
Geographic Segment
30, 2015
2015
2014
2013
India
6.71
6.17
26.61
31.53
507.01
South Africa
2,252.50
2,081.39
1,724.29
United Kingdom
55.73
193.46
179.88
152.83
United States of America
120.41
226.43
27.26
27.23
Australia
20.80
32.19
Rest of the world
51.47
212.53
132.65
65.92
Total Revenue from operations
762.13
2,923.28
2,447.79
2,001.80
The key industries to which we provide our services include BFSI, media & entertainment, mobility and
telecommunications, life sciences and healthcare, manufacturing, retail & consumer products. We have also been
engaged by the government and public sector companies in several countries. We service our clients globally
through our branch offices located in South Africa, Ireland and United Kingdom and our subsidiaries located in
India, Nigeria, Tanzania, Unites States and Australia.
We built a software engineering facility in Pune in the year 2000. Our facility at Pune was one of the select
facilities world-over to be certified as CMMI Level 5 in 2004 which was subsequently upgraded to CMMI- Dev®
Maturity Level 5 on March 31, 2015. Further, our Pune facility has also been certified ISO 9001:2008 for design,
development, maintenance, re-engineering and migration of software solutions in client server, main-frame and
web-based environment and ISO 27001:2013 for application management services in the financial sector. We also
have software development facilities located at Mumbai, Minneapolis, Dallas and Johannesburg. Our clients
include Nedbank Limited, MultiChoice Support Services Pty Ltd, Gillette Children’s Specialty Healthcare, Polaris,
Visa Cape Town Proprietary Limited, Global Trading Company LLC, The Banking Association South Africa, and
Smyths Toys HQ among others.
We make considerable investments in human resources in order to service our clients and to innovate and develop
intellectual property to serve the needs of our customers. Based on our Restated Consolidated Financial
Statements, our total employee benefits expenses for the three month period ended June 30, 2015 and for the
financial years ended 2015, 2014 and 2013 were 72.93%, 72.64%, 72.01% and 68.82% of our total expenditure.
(excluding tax expenses). We primarily employ graduates and post graduates in engineering and management who
receive training in-house.
Based on our Restated Consolidated Financial Statements, our revenue from operations were ` 762.13 million, `
2,923.28 million, ` 2,447.79 million and ` 2,001.80 million and our profit after tax (after adjustment of share of
minority interest) was ` 68.21 million, ` 373.62 million, ` 436.57 million and ` 391 million for the three-month
period ended June 30, 2015 and for the financial years ended 2015, 2014 and 2013 respectively.
Our Strengths
Integrated business consulting and IT services approach with a focus on enterprise transformation through our
change management solutions
Successful implementation of major new enabling technologies has become critical to organizations to achieve
growth or improvements in efficiency and productivity. We have developed a range of service offerings in order to
address the varied and evolving requirements of our clients. Further, we have the ability to provide services across
the value chain from providing consultancy services, to assisting in formulating and implementing a portfolio of
projects and subsequently monitoring them to ensure that the desired results are achieved. We have a track record
of executing a number of large, end-to-end, mission critical projects in diverse business areas and technology
40
domains for clients. For instance, we helped a large banking group in South Africa with requirements evaluation
and management; development, testing and implementation activities and designed and developed backend
application software on mainframes for integrating platforms across their retail and corporate banking business
divisions. Our presence in various countries has enabled us to execute complex engagements in a timely manner
and to adopt best practices from such programs.
We have also developed our own in-house tools such as MC3 TM a patented framework that helps us bring about
knowledge enabled transformation in organizations, thereby helping us partner with clients to successfully
translating their business strategies into definitive business results. Further, owning our own tools or frameworks
allows us to regularly improve our platform to meet new customer needs and to seamlessly and rapidly deliver new
features and functionality to our customers. Our range of offerings help our clients achieve their business
objectives and enable us to obtain additional business from existing clients as well as address a larger base of
potential new clients.
Similarly, our other patented framework 14Signals helps in capturing the needs, wants and aspiration of customers
that helps us to design customer centric business strategies. The SightN2, a digital marketing platform developed
by our US subsidiary, has already been successfully deployed at a major manufacturer of special entertainment
vehicle in US. We intend to leverage this experience globally with other clients.
Our Natural Language Processing tool uses a combination of open source and proprietary software to creating a
tool that helps us provide technology led legal document processing for international clients. We also propose to
use this tool in various applications for generic queries and abstract extraction.
Enduring relationships with clients
We establish long-term relationships with our clients for multi-layered engagement with various departments of
the client organisations. Our broad range of services offerings help us to cross sell multiple services to existing
customers as well as acquire new customers. We also conduct regular reviews with senior management of all our
key clients to engage with them to provide consistent service and to work on future opportunities. We combine our
comprehensive range of service offerings with industry specific experiences and insights to provide tailored
solutions to our clients across business verticals, industries and geographies. Our commitment to client satisfaction
serves to strengthen our relationships. As an example, for one of our key clients, we initially started with a
consulting assignment and over the years we have provided multiple services across technologies to various
companies within the group.
Our growing global footprint
We initially commenced our operations in the United Kingdom, United States and South Africa but strategically
decided to curtail our operations to emerging markets such as South Africa due to adverse global economic
conditions in the IT sector in the years 2000, 2001 and 2002. We however continued to maintain our presence in
the United Kingdom and the United States. Subsequently having achieved experience and success in emerging
markets, we decided to expand our operations to other destinations.
We also recently acquired 51 percent stake in Intellect, an ERP implementation, support and consulting services
company located in Mumbai which has a majority of clients based in India. This acquisition has helped us
strengthen and expand our presence in India and has also provided us with an opportunity to sell their services in
multiple locations. Our growing global footprint enables us to service and support our existing clients in a number
of important markets from locations closer to our clients, and positions us well to develop new clients.
Additionally, the acquisition of GNet Group LLC by our US subsidiary has helped us create a significant presence
in the US market.
We now have a sales and marketing presence across eight countries. We have also expanded our delivery
capability to six cities in four countries. The total number of employees at locations outside India as of November
30, 2015 was approximately 384.
Joint Research and Development opportunities with our clients
We engage with our customers in developing intellectual property and products combining their knowledge of the
business with our technical expertise. This is a symbiotic relationship wherein, the risk of investment in R&D is
shared as direct expenses are borne by the client while we benefit from skills utilised to develop such new products
or processes. We have completed a number of such projects, while a few of them are ongoing. These projects are
mainly in the digitization space and are expected to yield significant benefits in the medium to long term.
41
Strong and tenured management team
The senior management team includes some of the most experienced managers in the Indian IT services industry.
Some of our senior management team have been with us for approximately 15 years and have been instrumental in
the growth of our Company. For instance, L.C. Singh, our Chief Executive Officer and founder is recognised as a
pioneer in the IT services industry. L.C. Singh held key positions at Tata Consultancy Services Limited (“TCS”)
where he was the senior vice president in charge of operations for UK, South Africa and Middle-East and was also
responsible for marketing, public relations and brand-building. L.C. Singh was also the President and Chief
Executive Officer of Zensar Technologies. Minoo Dastur, our chief operating officer began his career in the
information systems industry in 1983. He previously headed the corporate marketing group at TCS and
subsequently headed the marketing function of the banking group and was involved in establishing the presence
for TCS in South Africa. Shobha Agarwal our vice president - corporate strategy has a career spanning nearly 30
years. Before joining us, she was also associated with TCS for nearly 20 years. Ashok Sontakke, our vice president
- quality and processes has several years of experience in quality control and quality assurance functions and has
extensive consulting experience in process improvement, software measurement program, internal process audits
and external audits/assessments. Abhay Ghate, our vice president and chief technology officer has over 20 years of
experience in the IT industry covering complete spectrum of activities in software development. Ravi Teja, vice
president - consulting businesses has extensive experience in Africa and has been overseeing our Company’s
expansion into East and West African territories.
A cohesive team of our experienced senior management coupled with trained managers and skilled employees
enables us to identify new avenues of growth, and help us to implement our business strategies in an efficient
manner and to continue to build on our track record of successful projects.
Our Strategy
Focus on deepening and strengthening our relationships with our customers
Over the years, we have developed strong relationships with our clients. Given the nature of our service, our
success depends on our ability to help clients deliver more value to their customers. Towards this, we conduct
periodic market scans to identify technologies with the potential for causing significant changes in the manner in
which processes were hitherto being managed. Our immediate focus is then to study and develop quick prototype
solutions, deploy them in controlled operational environment, plough back the learnings to quickly optimize and
develop unique customized products. We intend to continue building our long term relationships and strengthen
and deepen our relationships with our customers by expanding our service offerings. For instance, we plan to make
further investments in creating the future “Intelligent Enterprise” by ways to combining the transactional data,
social data and consumer data to create a unified enterprise information view. We are currently working on such a
prototype. This taken in conjunction with predictive analytics and natural language programming will be a key
solution to some of our existing customers and markets in general.
Expanding our service offerings
We will continue to leverage our service offerings to develop an in-depth understanding of how industries are
structured and operate, key trends within the industries and how companies are affected by these trends, and how
companies can create or diminish value. We intend to continue expanding our range of service offerings in order to
increase business from our existing clients and acquire new clients. NASSCOM in its report estimates that 80% of
incremental expenditure over the next decade may be driven by digital technologies that would need to be
integrated with legacy core technologies (Source: NASSCOM Report). We intend to therefore continue to retain
and grow our expertise in conventional IT platforms while investing in newer platforms, analytics, big data, mobile
systems, social media, natural language programming, the internet of things and predictive BI. Over the last two
years we have added competencies in business intelligence and data management and have added ERP deployment
and solutions through organic and inorganic investments.
Besides technologies, changes would be driven by investments in business processes and the way enterprises
would be managed in future. This market segment will continue to grow 4 – 6% and would reach up to USD 250
billion by 2025 (Source: NASSCOM Report). We increasingly work with our clients to create value by leveraging
information technology to reinvent and transform fundamental business operations through our proprietary change
management framework i.e. MC3 TM and 14 Signals; a consumer analysis framework. We strive to leverage our
industry expertise and technology and business process skills to help clients discover and create new business
models and, in many cases, transform entire business functions. We are well positioned to develop and implement
42
new business models and operate critical business functions for our clients, based on the competencies we have
developed and our successful implementation of various projects in change management.
Expansion of our global capabilities
We intend to further expand our global presence, which will provide us with greater competitive advantages in
acquiring and servicing our global clients. For instance, our investment in GNet will give us a toehold in USA,
which is a mature market for IT-BPM services. Further, our acquisition of Intellect will help us expand our
presence domestically in the Indian IT-BPM sector, which the NASSCOM report believes, provides a level playing
field for small as well as large players. We intend to establish additional sales offices as well as global
development centers and recruit local employees to enhance our client interface skills and deliver solutions from
proximate locations. Leveraging on our experience, we have expanded our operations over the years in the United
States, United Kingdom, Australia, Ireland, India, Nigeria and Tanzania.
Continuing to strengthen our human capital
We aim to develop our position as a preferred employer in the Indian IT services industry and place special
emphasis on attracting and retaining highly skilled employees. We intend to keep hiring management graduates
and train them in our proprietary frameworks & tools and skill them with BPM techniques like 6 Sigma, LEAN,
Balanced Scorecard and SCAMPI besides MC³ TM and 14 Signals. We will continue to bring in more people with
statistical qualifications and train them as data scientists to further enhance our capacity. We will work to increase
our co-operation with known statistical bodies and individuals. We will continue to invest in the career
development and training of our employees, with the objective of further enhancing their technical and leadership
skills. For instance, our acquisition of GNet strengthened our team of IT Professionals that will allow us to enhance
our capability in executing digital transformation programs. As a tool for employee engagement and retention, our
Company has issued sweat equity and ESOPs to employees over the years. Further, we intend to attract, hire,
develop and retain our professionals, which are critical to our enterprise, by continuing to offer ESOPs to eligible
employees.
Enhance our delivery capabilities through investments in R&D
To deliver value to our clients more quickly, it is critical to create assets, such as software and business
architectures and process methodologies, which enable us to quickly implement market-ready solutions for our
clients. To this end, we intend to continue investing in our employees to enhance our R&D capabilities,
particularly with a view to create solutions in emerging technologies that enhance our ability to develop tools for
leading our entry into new areas such as payments and intelligent enterprises and developing products that address
clients in specific industries. Our focus areas currently include business intelligence and analytics, digitization and
user experience, payments and ecommerce ecosystem. The products of our R&D activities will continue to
differentiate us from our competitors and position us well for winning complex projects.
Our Company is vigilant to the emerging trends in the market and preparing to invest in tools, technologies and
frameworks that would keep differentiating us in the market. We have a view the way enterprises will be managed
in future. Based on our direct knowledge of organizations and systems theories, we are in process of creating a
prototype that would go through a rigorous process of review with select customers in controlled manner that we
plan to release over the coming years. This proposed offering is vertical and industry agnostic.
We currently have a cloud hosted portal, namely, www.tumbhi.com (“Tumbhi”) in our wholly owned subsidiary,
Seventh August IT Services Private Limited. We intend to develop this platform for artists, art lovers and art
seekers from across the world, to share their common passion or art, collaborate with other artists, get their work
reviewed by industry experts and obtain access to opportunities. It is intended that an aspiring artist can submit
his/her artifact and Tumbhi will publish it for public view. It is intended that Tumbhi in the future may charge a
consultancy fee to artists to publish their artwork and generate additional revenues through advertising amongst
others.
Our customers in media and entertainment industry have future plans to develop such platforms of their own and
we have the opportunity to license this framework to them. The initiative also gives us the opportunity to
understand the nuances of ecommerce and helps us get insights and firsthand knowledge of future e-tailing.
43
SUMMARY OF FINANCIAL INFORMATION
The following tables set forth the summary financial information derived from:
a)
The audited restated standalone financial statements, prepared in accordance with Indian GAAP, the
Companies Act, as applicable and restated in accordance with the SEBI ICDR Regulations as of and for the
years ended March 31, 2011, 2012, 2013, 2014 and 2015 and as of and for the three months ended June 30,
2015; and
b)
The audited restated consolidated financial statements, prepared in accordance with Indian GAAP, the
Companies Act, as applicable and restated in accordance with the SEBI ICDR Regulations as of and for the
years ended March 31, 2011, 2012, 2013, 2014 and 2015 and as of and for the three months ended June 30,
2015.
The financial statements referred to above are presented under the section titled “Financial Statements” on page
179. The summary financial information presented below should be read in conjunction with these financial
statements, the notes thereto and the section “Financial Statements” on page 179.
STANDALONE STATEMENT OF ASSETS AND LIABILITIES
As at March 31,
Particulars
SHARE HOLDERS' FUNDS
Share capital
Reserves and surplus
NON-CURRENT LIABILITIES
Long term provisions
CURRENT LIABILITIES
Trade payables
Other current liabilities
Short-term provisions
Total Equity and Liabilities
NON-CURRENT ASSETS
Fixed assets
Tangible assets
Intangible assets
Capital work-in-progress
Non-current investments
Deferred tax assets / (liabilities) - net
Long term loans and advances
Other non-current assets
CURRENT ASSETS
Current investments
Trade receivables
Cash and bank balances
Short-term loans and advances
2011
All figures in ` million
As at 30
June
2015
2015
2012
2013
2014
182.97
651.94
834.91
183.37
885.15
1,068.52
183.37
1,044.13
1,227.50
199.66
1,359.80
1,559.46
199.66
1,624.15
1,823.81
199.66
1,698.75
1,898.41
10.04
12.81
17.79
25.32
31.36
30.41
33.80
103.98
27.84
165.62
34.84
118.58
67.68
221.10
53.27
148.79
55.81
257.87
74.59
264.79
72.79
412.17
53.31
247.41
70.02
370.74
40.74
184.87
84.52
310.13
1,010.57
1,302.43
1,503.16
1,996.95
2,225.91
2,238.95
12.46
5.53
19.33
68.79
13.87
50.44
3.95
174.37
12.12
8.43
16.78
68.79
3.80
61.13
3.72
174.77
23.93
6.32
16.84
68.79
(3.24)
89.95
4.12
206.71
64.25
14.48
73.33
3.70
103.05
0.34
259.15
63.66
15.37
274.88
25.01
161.74
0.34
541.00
74.50
13.25
274.88
37.60
183.19
0.07
583.49
80.55
289.51
349.73
93.26
309.48
321.34
354.55
91.55
292.18
379.20
540.52
33.59
451.35
589.54
532.80
44.03
262.34
546.58
692.58
47.22
278.05
592.91
600.40
57.82
44
As at March 31,
Particulars
Other current assets
Total Assets
2011
All figures in ` million
As at 30
June
2015
2015
2012
2013
2014
23.15
836.20
50.74
1,127.66
50.96
1,296.45
120.08
1,737.80
136.19
1,684.91
126.28
1,655.46
1,010.57
1,302.43
1,503.16
1,996.95
2,225.91
2,238.95
45
STANDALONE STATEMENT OF PROFIT AND LOSS
All figures in ` million
For the period ended March 31,
Particulars
Revenue from operations
Other income
Expenses
Employee benefits expense
Depreciation and amortization
expense
Other expenses
Profit before tax
Tax expense:
Current tax
MAT credit entitlement recognised
Deferred tax charge / (release)
Profit for the period
2011
2012
2013
2014
Period from 1
April 2015 to
30 June 2015
2015
1,368.01
6.75
1,374.76
1,586.73
28.39
1,615.12
1,979.58
37.66
2,017.24
2,427.71
43.25
2,470.96
2,678.34
38.39
2,716.73
650.42
13.14
663.56
710.01
872.21
1,005.37
1,314.88
1,510.26
425.31
26.19
17.08
24.23
32.85
53.28
14.51
388.60
1,124.80
372.67
1,261.96
424.03
1,453.63
444.71
1,792.44
541.42
2,104.96
138.19
578.01
249.96
353.16
563.61
678.52
611.77
85.55
48.02
104.85
169.52
230.63
222.05
40.60
(46.18)
-
-
-
-
-
1.19
3.03
10.07
114.92
7.04
176.56
(6.94)
223.69
(21.31)
200.74
(12.59)
28.01
246.93
238.24
387.05
454.83
411.03
57.54
46
STANDALONE STATEMENT OF CASHFLOWS
All figures in ` million
For the period ended March 31,
Particulars
2011
A
2013
2014
2015
Cash flow from operating
activities:
Profit before tax
Adjustments for:
Depreciation and amortisation
expense
Interest income
Dividend on mutual funds
(Profit) / Loss on sale of fixed assets
Interest expense
(Profit) / Loss on sale of investments
Unrealised foreign exchange loss /
(gain) (net)
Operating profit before working
capital changes
Adjustments for changes in
working capital :
- (Increase) / Decrease in trade
receivables
- (Increase) / Decrease in short term
loans and advances
- (Increase)/ Decrease in other current
assets
- (Increase) in long term loans and
advances
- Increase / (Decrease) in trade
payables
- Increase / (Decrease) in long term
provisions
- Increase / (Decrease) in short term
provisions
- Increase / (Decrease) in other
current liabilities
Cash generated from / (used in)
operations
- Taxes paid
Net cash from/ (used in) operating
activities
B
2012
Period from
1 April 2015
to 30 June
2015
Cash flow from Investing activities:
Purchase of fixed assets
Proceeds from sale of fixed assets
Purchase of investments
Sale of investments
(Increase) / Decrease in fixed
deposits with original maturity in
249.96
353.16
563.61
678.52
611.77
85.55
26.19
17.08
24.23
32.85
53.28
14.51
(1.84)
(4.10)
0.01
0.01
-
(5.44)
(13.73)
-
(15.64)
(20.93)
(0.65)
-
(15.02)
(25.70)
0.03
(1.99)
(18.03)
(16.97)
(0.22)
(2.64)
(5.96)
(3.85)
(0.68)
(2.65)
4.81
(3.02)
(52.24)
0.99
(6.53)
17.06
275.04
348.05
498.38
669.68
620.66
103.98
61.08
(31.83)
(57.86)
(210.34)
42.96
(46.34)
(19.56)
1.71
(11.37)
(10.44)
(0.90)
(12.89)
(8.79)
(27.59)
(0.22)
(69.12)
(16.11)
9.91
(27.32)
(2.07)
(1.61)
(10.13)
(37.51)
(2.62)
(15.95)
1.04
18.43
21.32
(21.28)
(14.86)
9.88
2.77
4.98
7.53
6.05
(0.95)
(3.23)
(8.08)
(0.55)
15.78
(1.59)
6.22
38.48
14.60
30.21
116.00
(17.38)
(62.54)
309.63
298.60
480.39
530.28
574.90
(20.09)
(55.42)
(54.24)
(144.84)
(235.13)
(244.93)
(47.28)
254.21
244.36
335.55
295.15
329.97
(67.37)
(33.39)
0.11
(436.56)
356.01
(28.53)
0.95
(873.14)
644.21
(28.08)
0.85
(833.97)
851.27
(62.15)
0.37
(4,757.67)
4,600.51
(55.44)
0.36
(282.93)
471.94
(22.55)
0.70
(304.23)
288.52
(10.57)
10.23
18.33
1.21
(141.78)
0.27
47
All figures in ` million
For the period ended March 31,
Particulars
2011
excess of three months
Investment in equity shares of
subsidiaries/ associate
Interest received
Dividend income on mutual funds
Net cash from / (used in) investing
activities
C
D
2012
2013
2014
2015
Period from
1 April 2015
to 30 June
2015
-
-
-
(4.54)
(201.55)
-
1.84
4.10
4.04
13.73
17.06
20.93
14.82
25.70
17.87
16.97
3.41
3.85
(118.46)
(228.51)
46.39
(181.75)
(174.56)
(30.03)
(0.16)
(0.01)
1.28
0.40
(174.04)
-
(140.15)
16.29
(140.15)
-
-
1.11
0.40
(174.04)
(123.86)
(140.15)
-
Effect of unrealised exchange loss
on cash and cash equivalents*
4.15
(1.43)
(3.20)
0.17
2.74
5.23
Net increase / (decrease) in cash
and cash equivalents (A+B+C+D)
141.01
14.82
204.70
(10.29)
18.00
(92.17)
Cash and cash equivalents as at
beginning of the period (Refer
Annexure: XXVIII)
178.72
319.73
334.55
539.25
528.96
546.96
Cash and cash equivalents as at
end of the period (Refer Annexure:
XXVIII)
319.73
334.55
539.25
528.96
546.96
454.79
Cash flow from financing activities:
Dividend paid during the period
Repayment of long term borrowings
Interest paid
Loan repaid by Trust
Net cash generated from / (used in)
financing activities
* Includes amounts on account of revaluation of South Africa operation classified as a non-integral operation as
per Accounting Standard (AS-11) - The Effects of Changes in Foreign Exchange Rates.
48
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
Particulars
SHARE HOLDERS' FUNDS
Share capital
Reserves and surplus
MINORITY INTEREST
NON-CURRENT LIABILITIES
Long term provisions
Long-term borrowings
Deferred tax liabilities (net)
Other long term liabilities
CURRENT LIABILITIES
Trade payables
Other current liabilities
Short-term provisions
Total Equity and Liabilities
NON-CURRENT ASSETS
Fixed assets
Tangible assets
Intangible assets
Goodwill on consolidation (net)
Capital work-in-progress
Non-current investments
Deferred tax assets (net)
Long term loans and advances
Other non-current assets
CURRENT ASSETS
Current investments
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets
Total Assets
2011
As at March 31,
2012
2013
2014
All figures in ` million
As at 30
2015 June 2015
182.97
592.24
775.21
183.37
826.31
1,009.68
183.37
989.21
1,172.58
199.66
1,286.71
1,486.37
199.66
1,508.07
1,707.73
199.66
1,594.31
1,793.97
-
-
-
0.34
0.03
-
10.03
10.03
12.80
12.80
17.76
2.63
20.39
25.32
25.32
31.36
78.49
0.18
22.23
132.26
30.41
79.79
0.18
22.23
132.61
34.20
98.80
29.05
162.05
34.43
113.51
69.12
217.06
56.31
142.37
56.25
254.93
75.64
267.69
72.79
416.12
63.54
326.94
70.13
460.61
55.90
265.66
85.11
406.67
947.29
1,239.54
1,447.90
1,928.15
2,300.63
2,333.25
12.58
5.52
19.33
4.84
14.49
50.44
3.95
111.15
12.54
8.08
16.82
4.84
4.70
61.28
3.72
111.98
24.31
5.97
16.85
4.84
89.56
4.12
145.65
64.93
14.48
4.84
3.69
103.28
0.34
191.56
76.53
37.84
169.46
4.84
21.97
164.46
0.34
475.44
87.31
34.84
169.46
4.84
37.60
186.74
0.07
520.86
80.55
275.64
359.14
93.35
27.46
836.14
309.48
310.22
363.43
92.37
52.06
1,127.56
292.18
357.10
565.82
34.66
52.49
1,302.25
451.35
579.00
539.70
44.36
122.18
1,736.59
262.34
578.39
807.96
51.02
125.48
1,825.19
278.05
638.16
735.73
58.85
101.60
1,812.39
947.29
1,239.54
1,447.90
1,928.15
2,300.63
2,333.25
49
CONSOLIDATED STATEMENT OF PROFIT AND LOSS
2011
1,376.69
15.13
1,391.82
All figures in ` million
For the period ended March 31,
June 30,
2012
2013
2014
2015
2015
1,601.74 2,001.80 2,447.79 2,923.28
762.13
29.00
38.09
43.96
37.64
13.27
1,630.74 2,039.89 2,491.75 2,960.92
775.40
718.27
26.18
388.25
1,132.70
881.99
17.16
377.56
1,276.71
1,013.85
24.31
435.13
1,473.29
1,320.83
32.91
480.51
1,834.25
1,731.47
1.76
56.35
593.97
2,383.55
497.28
1.02
16.43
167.12
681.85
259.12
354.03
566.60
657.50
577.37
93.55
49.29
(46.18)
1.19
4.30
105.11
9.79
114.90
168.27
7.33
175.60
230.68
(6.32)
224.36
222.34
(18.28)
204.06
41.00
(15.63)
25.37
Profit after tax but before minority interest
254.82
239.13
391.00
433.14
373.31
68.18
Add/(Less): Share of loss/ (profit) of minority
-
-
-
3.43
0.31
0.03
254.82
239.13
391.00
436.57
373.62
68.21
Particulars
Revenue from operations
Other income
Expenses
Employee benefits expense
Finance costs
Depreciation and amortization expense
Other expenses
Profit before tax
Tax expense:
Current tax
MAT credit entitlement recognised
Deferred tax charge / (release)
Profit for the period
50
CONSOLIDATED STATEMENT OF CASH FLOWS, AS RESTATED
All figures in ` million
Period
from 1
April
2015 to
2015
30 June
2015
For the period ended March 31
Particulars
A
2012
2013
2014
259.12
354.03
566.60
657.50
577.37
93.55
26.18
0.01
(1.85)
(4.10)
0.01
(8.36)
17.16
(5.45)
(13.73)
-
24.31
(15.65)
(20.93)
(0.65)
(0.40)
32.91
(15.04)
(25.70)
0.37
(1.99)
56.35
1.76
(18.41)
(16.97)
0.01
(2.64)
16.43
1.02
(6.08)
(3.85)
(0.69)
(2.65)
4.81
(3.04)
(55.41)
1.08
(12.11)
18.03
275.82
348.97
497.87
649.13
585.36
115.76
72.79
(34.58)
(46.88)
(221.90)
0.61
(59.77)
(31.51)
0.98
(11.62)
(9.70)
(4.38)
(7.83)
(13.10)
(24.60)
(0.43)
(69.69)
(3.30)
23.88
(22.05)
(2.10)
(0.80)
(10.93)
(39.01)
(7.25)
(16.42)
0.23
21.88
19.33
(12.10)
(7.64)
10.03
2.77
4.96
7.56
6.04
(0.95)
-
-
-
-
22.23
-
39.02
(8.09)
(0.56)
15.85
(1.65)
6.22
(8.20)
14.71
28.86
125.32
12.15
(61.28)
306.38
(56.40)
298.29
(54.32)
493.28
(144.91)
504.97
(235.50)
565.95
(246.03)
1.14
(47.54)
249.98
243.97
348.37
269.47
319.92
(46.40)
(33.38)
0.11
8.36
(28.67)
0.23
-
(27.99)
0.85
-
(62.88)
0.39
-
(80.51)
0.11
-
(25.43)
0.71
-
-
-
-
-
(199.61)
-
(436.56)
356.01
(10.29)
(873.14)
644.21
10.23
(833.97)
851.64
18.33
(4,757.67)
4,600.51
1.21
(282.93)
471.94
(144.78)
(304.23)
288.52
0.01
Cash flow from operating activities:
Profit before tax
Adjustments for:
Depreciation and amortisation expense
Interest expense
Interest income
Dividend on mutual funds
(Profit) / Loss on sale of fixed assets
Profit on sale of investments
Unrealised foreign exchange loss /
(gain) (net)
Operating profit before working
capital changes
Adjustments for changes in working
capital :
- (Increase) / Decrease in trade
receivables
- (Increase) / Decrease in short term
loans and advances
- (Increase) / Decrease in other current
assets
- (Increase) in long term loans and
advances
- Increase / (Decrease) in trade
payables
- Increase / (Decrease) in long term
provisions
- Increase in other long term liabilities
- Increase / (Decrease) in short term
provisions
- Increase / (Decrease) in other current
liabilities
Cash generated from operations
- Taxes paid
Net cash from / (used in) operating
activities
B
2011
Cash flow from Investing activities:
Purchase of fixed assets
Proceeds from sale of fixed assets
Proceeds from sale of investments
Payment for acquisition of business,
net of cash acquired
Purchase of investments
Sale of investments
(Increase) / Decrease in fixed deposits
51
All figures in ` million
Period
from 1
April
2015 to
2015
30 June
2015
For the period ended March 31
Particulars
with original maturity in excess of
three months
Decrease in margin money and other
deposits
Interest received
Dividend income on mutual funds
Net cash from / (used in) investing
activities
C
D
2011
2012
2013
2014
-
-
-
-
-
0.27
1.85
4.10
4.05
13.73
17.02
20.93
14.83
25.70
17.88
16.97
3.53
3.85
(109.80)
(229.36)
46.81
(177.91)
(200.93)
(32.77)
(0.16)
-
-
-
125.59
-
(0.01)
1.28
0.40
(174.04)
-
(140.12)
16.29
(140.15)
(1.76)
-
(1.02)
-
1.11
0.40
(174.04)
(123.83)
(16.32)
(1.02)
3.72
(0.72)
(0.02)
3.58
20.81
7.97
Net increase / (decrease) in cash and
cash equivalents (A+B+C+D)
145.01
14.29
221.12
(28.69)
123.48
(72.22)
Cash and cash equivalents as at
beginning of the year
(Refer Annexure: XVIII)
184.13
329.14
343.43
564.55
535.86
659.34
Cash flow from financing activities:
Repayment of / Proceeds from
borrowings
Dividend paid during the year
Interest paid
Loan repaid by Trust
Net cash generated from / (used in)
financing activities
Effect of unrealised exchange loss on
cash and cash equivalents*
Cash and cash equivalents as at end of
329.14
343.43
564.55
535.86
659.34
587.12
the year (Refer Annexure: XVIII)
* Includes amounts on account of revaluation of South Africa operation classified as a non-integral operation as
per Accounting Standard (AS-11) - The Effects of Changes in Foreign Exchange Rates.
Reservations, qualifications and adverse remarks in the last five fiscal years
The Statutory Auditors of our Company have not made any reservations, qualifications or adverse remarks in the
Auditor’s reports issued in relation to the Restated Financial Statements.
Change in accounting policies in the last three years
There has been no change in accounting policies of the Company in the last three years.
52
THE ISSUE
The following table summarises the Issue details:
Up to [●] Equity Shares aggregating up to ` [●]
million
The Issue
of which:
(i)
Fresh Issue
(ii)
Up to [●] Equity Shares aggregating up to `
1,400 million
Up to 2,438,199 Equity Shares
(1)
Offer for Sale
(3)
The Issue consists of
of which
A) QIB Portion(6)
of which
Anchor Investor Portion
Balance available for allocation to QIBs other than
Anchor Investors (assuming Anchor Investor Portion is
fully subscribed)
of which:
Available for allocation to Mutual Funds only (5% of the
QIB Portion (excluding the Anchor Investor Portion)) (7)
Up to [●] Equity Shares
Balance of QIB Portion for all QIBs including Mutual
Funds
[●] Equity Shares
B) Non-Institutional Category(4)
Not less than [●] Equity Shares
C) Retail Category(5)
Not less than [●] Equity Shares
[●] Equity Shares
Not more than [●] Equity Shares
[●] Equity Shares
[●] Equity Shares
Pre and post Issue Equity Shares
Equity Shares outstanding prior to the Issue
19,965,800 Equity Shares
Equity Shares outstanding after the Issue
[●] Equity Shares
(2)
Please see section titled “Objects of the Issue”
on page 91. Our Company will not receive any
proceeds from the Offer for Sale.
Allocation to investors in all categories, except the Retail Category and the Anchor Investor Portion, if any, shall
be made on a proportionate basis.
Utilisation of Net Proceeds
(1)
(2)
(3)
(4)
(5)
(6)
The Fresh Issue has been authorised by the Board of our Company pursuant to its resolution passed on
August 25, 2015 and the shareholders pursuant to a resolution passed on December 11, 2015.
In terms of Rule 19(2)(b)(i) of the Securities Contracts (Regulation) Rules, 1957, as amended (the
“SCRR”) and Regulation 41 of the SEBI ICDR Regulations, the Issue is being made for at least 25%
of the post-Issue capital of our Company.
For details of selling shareholders, please see section titled “Capital Structure” on page 63.
In case of under-subscription in the Issue, the Equity Shares in the Fresh Issue will be issued prior to
the sale of Equity Shares in the Offer for Sale. Subject to valid Bids being received 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 combination of categories of Bidders at the discretion
of our Company in consultation with the BRLMs and the Designated Stock Exchange.
Our Company in consultation with the BRLM, may offer a Retail Discount of up to [●]% (equivalent of
` [●]) per Equity Share, which shall be announced at least five Working Days prior to the Bid/ Issue
Opening Date.
Our Company in consultation with the BRLMs, may allocate up to 60% of the QIB Portion to Anchor
Investors on a discretionary basis. One-third of the Anchor Investor Portion shall be reserved for
53
(7)
domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above
the Anchor Investor Allocation Price. For details, please see section titled “Issue Procedure” on page
321.
Subject to valid Bids being received at, or above, the Issue Price.
Allocation to all categories, except the Anchor Investor Portion and the Retail Category shall be made on
a proportionate basis. For details, please see section titled “Issue Procedure” on page 321. For details on
the terms of the Issue, see “Terms of the Issue” on page 312. For details, including in relation to grounds
for rejection of Bids, please see section titled “Issue Procedure” on page 321.
54
GENERAL INFORMATION
Our Company was incorporated as Nihilent Technologies Private Limited on May 29, 2000 at Pune under the
Companies Act, 1956. Subsequently, our Company was converted into a public limited company and
consequently, the name of our Company was changed to Nihilent Technologies Limited. A fresh certificate of
incorporation pursuant to the change of name was issued by the RoC on September 10, 2015.
Registered Office and Registration Number of our Company
Nihilent Technologies Limited
Office No. 403 and 404, 4th floor
Weikfield IT Citi Infopark
Nagar Road, Pune - 411014
Tel: +91 20 398 46100
Fax: +91 20 398 46499
Website: www.nihilent.com
Corporate Identity Number: U72900PN2000PLC014934
Corporate Office of our Company
Nihilent Technologies Limited
Office No. 403 and 404, 4th floor
Weikfield IT Citi Infopark
Nagar Road, Pune - 411014
Tel: +91 20 398 46100
Fax: +91 20 398 46499
Address of the RoC
Registrar of Companies, Pune
PMT Building 3rd Floor,
Deccan Gymkhana,
Pune - 411004
Board of Directors
The Board of Directors consists of:
Name
Designation
DIN
Address
Jeremy John Ord
Non-Executive Chairman
01583325
L. C. Singh
Vice Chairman and CEO
01034826
Richard Pike
Non-Executive Director
07327277
Santosh Pande
Independent Director
01070414
Kasaragod
Kini
Independent Director
00812946
Satish K. Tripathi
Independent Director
07277285
Lila
Poonawalla
Independent Director
00074392
19A Coronation Road, Sandhurst,
Johannesburg, 2196, , South Africa
D-301, Adhara, One North, Magarpatta,
Pune - 411028
P.O. BOX 517, Morningside 2057,
Morningside, Johannesburg, South Africa
House No. 1C, One Apartment, Sector 22,
Gurgaon, 122015, Haryana, India
B-202, Mantri Pride Apartment, Mountain
Road, 1 Block, Jayanagar, Bangalore –
560011
889 Lebrun Road, Amherst, New York
14226, United States of America
Fili Villa, S.No. 23, Baner Road,
Balewadi, Pune-411045
Ashok
Firoz
For further details of our Directors, please see section titled “Management” on page 151.
55
Company Secretary and Compliance Officer
Rahul Bhandari is the Company Secretary and Compliance Officer of our Company. His contact details are as
follows:
Rahul Bhandari
Nihilent Technologies Limited
Office No. 403 and 404, 4th floor
Weikfield IT Citi Infopark
Nagar Road, Pune - 411014
Tel: +91 20 398 46100
Fax: +91 20 398 46499
E-mail: rahul.bhandari@nihilent.com
Investors can contact the Company Secretary and the Compliance Officer or 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 Equity Shares in the respective beneficiary account and refund orders.
Chief Financial Officer
Shubhabrata Banerjee is the Chief Financial Officer of our Company. His contact details are as follows:
Shubhabrata Banerjee
Office No. 403 and 404, 4th floor
Weikfield IT Citi Infopark
Nagar Road, Pune - 411014
Tel: +91 20 398 46100
Fax: +91 20 398 46499
E-mail: s.banerjee@nihilent.com
Book Running Lead Manager
Motilal Oswal Investment Advisors Private Limited
Motilal Oswal Tower,
Rahimtullah Sayani Road,
Opposite Parel ST Depot, Prabhadevi,
Mumbai - 400 025
Tel: +91 22 3980 4200
Fax: +91 22 3980 4315
E-mail: nihilent.ipo@motilaloswal.com
Investor Grievance E-mail:
moiaplredressal@motilaloswal.com
Website: www.motilaloswal.com
Contact Person: Mr. Subodh Mallya
SEBI Registration No.: INM000011005
Syndicate Members
[●]
Legal Counsel to the Issue
Khaitan & Co
One Indiabulls Centre
13th Floor, Tower 1
841, Senapati Bapat Marg
Elphinstone Road
Mumbai - 400 013
Tel: +91 22 6636 5000
Fax: +91 22 6636 5050
56
Auditors to our Company
B S R & Co. LLP.
Chartered Accountants
701-703, 7th Floor, Godrej Castlemaine
Bundgarden Road
Pune – 411001
Tel: +91 20 305 04000
Fax: +91 20 305 04100
E-mail: juzerm@bsraffiliates.com / siddharthag@bsraffiliates.com
Firm Registration Number: 101248W/W-100022
Registrar to the Issue
Link Intime India Private Limited
C-13, Pannalal Silk Mills Compound
L.B.S.Marg, Bhandup (West), Mumbai - 400078
Tel: +91 22 61715400
Fax: +9122 25960329
E-mail: ntl.ipo@linkintime.co.in
Investor Grievance E-mail: ntl.ipo@linkintime.co.in
Website: www.linkintime.co.in
Contact Person: Ms. Shanti Gopalkrishnan
SEBI Registration No.: INR000004058
CIN: U67190MH1999PTC118368
All grievances relating to the Issue may be addressed to the Registrar to the Issue, giving full details such as
name, application number, address of the Bidder, number of the Equity Shares applied for, the Bid Amount
paid on submission of the Bid cum Application Form and the entity and centre where the Bid cum Application
Form was submitted.
All grievances relating to the ASBA process may be addressed to the Registrar to the Issue with a copy to the
relevant SCSB and the Syndicate Members at the Specified Locations or the Registered Broker at the Broker
Centres with whom the Bid cum Application Form was submitted. In addition to the information indicated
above, the ASBA Bidder should also specify the Designated Branch or the collection centre of the SCSB or the
address of the centre of the Syndicate Member at the Specified Locations and if applicable, the Registered
Broker at the Broker Centre where the Bid cum Application Form was submitted by the ASBA Bidder.
Further, with respect to the Bid cum Application Forms submitted with the Registered Brokers, the investor
shall also enclose the acknowledgment from the Registered Broker in addition to the documents/information
mentioned hereinabove.
Bankers to the Issue and Escrow Collection Banks
[●]
Refund Bank
[●]
Bankers to our Company
FirstRand Bank
TCG Financial Centre
4th Floor, C-53, G-Block
Bandra Kurla Complex
Mumbai – 400050
Contact Person: Manish Mathur
Tel: +91 22 6625 8606
Fax: +91 22 6625 8676
57
Email: manish.mathur@firstrand.co.in
Website: www.frb.co.in
Self Certified Syndicate Banks
The list of banks that have been notified by SEBI to act as the SCSBs for the ASBA process is provided on the
website of SEBI at http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries as updated
from time to time. For details of the Designated Branches which shall collect Bid cum Application Forms from
the ASBA Bidders, refer to the above-mentioned link. Further, the branches of the SCSBs where the Syndicate
at the Specified Locations could submit the Bid cum Application Form are provided on the aforementioned
website of SEBI.
Registered Brokers
Bidders can submit Bid cum Application Forms in the Issue using the stock broker network of the Stock
Exchanges, i.e., through the Registered Brokers at the Broker Centres. The list of the Registered Brokers,
including details such as postal address, telephone number and e-mail address, is provided on the websites of the
BSE and the NSE at http://www.bseindia.com/Markets/PublicIssues/brokercentres_new.aspx?expandable=3 and
http://www.nseindia.com/products/content/equities/ipos/ipo_mem_terminal.htm, respectively, as updated from
time to time. In relation to ASBA Bids submitted to the Registered Brokers at the Broker Centres, the list of
branches of the SCSBs at the Broker Centres named by the respective SCSBs to receive deposits of the Bid cum
Application Forms from the Registered Brokers will be available on the website of the SEBI (www.sebi.gov.in)
and updated from time to time.
Monitoring Agency
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 the Fresh Issue size shall not exceed ` 5,000 million.
Credit Rating
As this is an issue of Equity Shares, there is no credit rating required for the Issue.
Appraising Entity
None of the objects for which the Net Proceeds will be utilised have been appraised by any agency.
Trustees
As this is a public issue of Equity Shares, the appointment of trustees is not required.
Experts
Except as stated below, our Company has not obtained any expert opinions:
Our Company has received written consent from our Statutory Auditors namely, B S R & Co. LLP., Chartered
Accountants, to include their names as required under Section 26(1)(a)(v) of the Companies Act in this Draft
Red Herring Prospectus and as “expert” as defined under section 2(38) of the Companies Act in respect of the
reports of the Statutory Auditors on the restated consolidated financial statements, restated unconsolidated
financial statements, and the “Statement of Tax Benefits” each dated December 7, 2015 and included in this
Draft Red Herring Prospectus and such consents have not been withdrawn as on the date of this Draft Red
Herring Prospectus. However, the term “expert” shall not be construed to mean an “expert” as defined under the
Securities Act.
Responsibilities of the BRLM
Motilal Oswal Investment Advisors Private Limited (“Motilal Oswal”) is the sole Book Running Lead Manager
to this Issue. The list of major responsibilities of the Book Running Lead Manager, inter alia, is as follows:
58
Sr.
No.
1.
2.
Activity
Due diligence of our Company’s operations/ management/ business plans/ legal.
Drafting and design of the Draft Red Herring Prospectus, Red Herring Prospectus
and Prospectus. The BRLM shall ensure compliance with stipulated requirements
and completion of prescribed formalities with the Stock Exchanges, RoC and SEBI
Capital
structuring
withoftheProspectus
relative components
and formalities
such
composition
including
finalisation
and RoC filing
of the same
andasdrafting
and
ofapproval
debt andofequity,
type ofadvertisements
instruments.
all statutory
Responsibility and
co-ordination
Motilal Oswal
Motilal Oswal
Appointment of all other intermediaries (for example, Registrar(s), printer(s) and
Banker(s) to the Issue, advertising agency.)
3.
Drafting and approval of all publicity material other than statutory advertisement as
mentioned in (2) above including corporate advertisement, brochure and Preparation
and finalisation of the road-show presentation
Motilal Oswal
4.
Domestic institutional marketing including banks/ mutual funds and allocation of
investors for meetings and finalising road show schedules
Motilal Oswal
5.
International institutional marketing including; allocation of investors for meetings
and finalising road show schedules
Motilal Oswal
6.
Non-Institutional & Retail Marketing of the Offer, which will cover, inter alia:
Motilal Oswal




Formulating marketing strategies;
Finalising centres for holding conferences for brokers;
Finalising collection centres; and
Follow-up on distribution of publicity and Offer material including form,
prospectus and deciding on the quantum of the Offer material.
7.
Preparation of publicity budget, finalising Media and PR strategy. Coordination with
Stock Exchanges for book building process including software, bidding terminals.
Motilal Oswal
8.
Pricing and managing the book
Motilal Oswal
9.
Post-issue activities, which shall involve essential follow-up steps including followup with bankers to the issue and Self Certified Syndicate Banks to get quick estimates
of collection and advising the issuer about the closure of the issue, based on correct
figures, finalisation of the basis of allotment or weeding out of multiple applications,
listing of instruments, dispatch of certificates or demat credit and refunds and
coordination with various agencies connected with the post-issue activity such as
registrars to the issue, bankers to the issue, Self Certified Syndicate Banks including
responsibility for underwriting arrangements, as applicable.
Motilal Oswal
Book Building Process
The book building, in the context of 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, minimum Bid lot size and the Rupee amount
of the discount, if any, offered to Retail Individual Investors, shall be decided by our Company in
consultation with the BRLM, and advertised in a widely circulated English, Hindi and Marathi newspaper,
Marathi being the regional language of Maharashtra, where our Registered Office is located, at least five
Working Days prior to the Bid/ Issue Opening Date, and shall be made available to the Stock Exchanges for
the purpose of uploading on their website(s). The Issue Price shall be determined by our Company in
consultation with the BRLM after the Bid/ Issue Closing Date. The principal parties involved in the Book
Building Process are:




our Company;
the Selling Shareholders;
the BRLM;
the Syndicate Members;
59




the SCSBs;
the Registered Brokers;
the Registrar to the Issue; and
the Escrow Collection Bank(s).
Pursuant to Rule 19(2) (b) (i) of SCRR read with Regulation 41 of the SEBI ICDR Regulations, the Issue is
being made for at least 25% post-Issue paid up Equity Share capital of our Company (the minimum number of
securities as specified under Rule 19(2)(b)(i) of the SCRR). Further, the Issue is being made through the Book
Building Process where in 75% of the Issue shall be available for allocation to QIBs on a proportionate basis.
Further, not more than 15% of the Issue will be available for allocation on a proportionate basis to NonInstitutional Bidders and not more than 10% of the Issue will be available for allocation to Retail Individual
Bidders, subject to valid Bids being received at or above the Issue Price. Under subscription, if any, in any
category, except in the QIB Category, would be allowed to be met with the 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.
QIBs (excluding Anchor Investors) and Non-Institutional Bidders can participate in the Issue only
through the ASBA process and Retail Individual Bidders have the option to participate through the
ASBA process. Anchor Investors are not permitted to participate through the ASBA process.
In accordance with the SEBI ICDR Regulations, QIBs bidding in the QIB category and NonInstitutional Bidders bidding in the Non-Institutional Category are not allowed to withdraw or lower
the size of their Bids (in terms of the quantity of the Equity Shares or the Bid Amount) at any stage.
Retail Individual Bidders can revise their Bids during the Bid/ Issue Period and withdraw their Bids
until finalisation of the Basis of Allotment. Further, Anchor Investors cannot withdraw their Bids after
the Anchor Investor Bid/ Issue Period. Allocation to the Anchor Investors will be on a discretionary
basis. For further details, please see section titled “Issue Structure” and “Issue Procedure” on pages 315 and
321, respectively.
Our Company and the Selling Shareholders will comply with the SEBI ICDR Regulations and any other
ancillary directions issued by SEBI for the Issue. In this regard, our Company has appointed the BRLM 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.
Illustration of Book Building Process and Price Discovery Process
Investors should note that this example is solely for illustrative purposes and is not specific to the Issue; it 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
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
bidding centres during the bidding period. The illustrative book given 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
500
1,000
1,500
2,000
2,500
Bid Amount (`)
24
23
22
21
20
Cumulative Quantity
500
1,500
3,000
5,000
7,500
Subscription
16.67%
50.00%
100.00%
166.67%
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 equity shares is the price at which the book cuts off, i.e., ` 22 in the above
example. An issuer, in consultation with its book running lead managers, will finalise the issue price at or
below such cut-off price, i.e., at or below ` 22. All bids at or above this issue price and cut-off bids are valid
bids and are considered for allocation in the respective categories.
60
Steps to be taken by Bidders for Bidding:
1.
Check eligibility for making a Bid (please see section titled “Issue Procedure – Who Can Bid?” on
page 322);
2.
Ensure that you have a demat account and the demat account details are correctly mentioned in the
Bid cum Application Form;
3.
Except for Bids (i) on behalf of the Central or the State Governments and the officials appointed by
courts, who, in terms of the circular dated June 30, 2008 issued by SEBI, may be exempt from
specifying their PAN for transacting in the securities market, and (ii) Bids by persons resident in the
state of Sikkim, who, in terms of the circular dated July 20, 2006 issued by SEBI, may be exempted
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 IT Act in the Bid cum Application Form. In
accordance with the SEBI ICDR Regulations, the PAN would be the sole identification number for
participants transacting in the securities market, irrespective of the amount of transaction (please refer
to the section titled “Issue Procedure” from page 321);
4.
Ensure that the Bid cum Application Form is duly completed as per the instructions given in the Red
Herring Prospectus and in the Bid cum Application Form;
5.
Bids by QIBs (except Anchor Investors) and the Non-Institutional Bidders shall be submitted only
through the ASBA process;
6.
Bids by non-ASBA Bidders will have to be submitted to the Syndicate (or their authorised agents) at
the bidding centers or the Registered Brokers at the Broker Centers; and
7.
Bids by ASBA Bidders will have to be submitted to the Designated Branches or the Syndicate at the
Specified Locations or the Registered Brokers at the Broker Centres in physical form. It may also be
submitted in electronic form to the Designated Branches of the SCSBs only. ASBA Bidders should
ensure that the ASBA Accounts have adequate credit balance at the time of submission to the SCSB
or the Syndicate or the Broker to ensure that the Bid cum Application Form submitted by the ASBA
Bidders is not rejected. In relation to ASBA Bids submitted to the Registered Brokers at the Broker
Centres, the list of branches of the SCSBs at the Broker Centres named by the respective SCSBs to
receive deposits of the Bid cum Application Forms from the Registered Brokers will be available on
the website of the SEBI (www.sebi.gov.in) and updated from time to time.
For further details for the method and procedure for Bidding, please refer to the section titled “Issue Procedure”
on page 321.
Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final approval of the RoC after the
Prospectus is filed with the RoC; and (ii) final listing and trading approvals of the Stock Exchanges, which our
Company shall apply for after Allotment.
Underwriting Agreement
After determination of the Issue Price and allocation of Equity Shares, but prior to the filing of the Prospectus
with the RoC, our Company and the Selling Shareholders will enter into an Underwriting Agreement with the
Underwriters 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 will be responsible for bringing in the amount devolved in
the event that the Syndicate Members do not fulfil their underwriting obligations. The Underwriting
Agreement is dated [●]. Pursuant to the terms of the Underwriting Agreement, the obligations of the
Underwriters will be several and will be subject to certain conditions specified therein.
The Underwriters have indicated their intention to underwrite the following number of Equity Shares:
This portion has been intentionally left blank and will be completed before filing the Prospectus with the RoC.
61
Name, address, telephone number, fax number
and e-mail address of the Underwriters
[●]
[●]
Indicative number of Equity
Shares to be underwritten
[●]
[●]
Amount underwritten
(` in million)
[●]
[●]
The above mentioned is indicative underwriting and will be finalised after pricing and actual allocation and
subject to the provisions of the SEBI ICDR Regulations.
In the opinion of the Board of Directors (based on certificates provided by the Underwriters), resources of the
above mentioned Underwriters are sufficient to enable them to discharge their respective underwriting
obligations in full. The abovementioned Underwriters are registered with SEBI under section 12(1) of the
SEBI Act or registered as brokers with the Stock Exchange(s). The Board of Directors / Committee of
Directors, at its meeting held on [●], has accepted and entered into the Underwriting Agreement mentioned
above on behalf of our Company.
Allocation among the Underwriters may not necessarily be in proportion to their underwriting commitment set
forth in the table above.
Notwithstanding the above table, the Underwriters shall be severally responsible for ensuring payment with
respect to the 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 subscription for or subscribe to the Equity Shares to the extent of the defaulted amount
in accordance with the Underwriting Agreement.
62
CAPITAL STRUCTURE
The share capital of our Company as of the date of this Draft Red Herring Prospectus, is set forth below:
(in ` except share data)
Aggregate
Sr.
Aggregate Value
Particulars
value at Issue
No.
at Face Value
Price
A
Authorised Share Capital
40,000,000 Equity Shares
400,000,000
B
C
E
F
Issued, subscribed and paid up capital before the Issue
19,965,800 Equity Shares
Present Issue in terms of this Draft Red Herring Prospectus
Up to [●] Equity Shares
which consists of
Fresh Issue* of up to [●] Equity Shares, aggregating to `1,400 million
Offer for Sale** of up to 2,438,199 Equity Shares
Issued, Subscribed and Paid Up Equity Capital after the Issue
[●] Equity Shares
Share Premium Account
Before the Issue
After the Issue
199,658,000
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
96,166,000
[●]
*The Issue has been authorized by a resolution of the Board of Directors dated August 25, 2015 and by a resolution of the
Shareholders of our Company, dated December 11, 2015.
**For details of Selling Shareholders, please see section titled “Capital Structure-Details of Equity Shares offered by the
Selling Shareholders on page 68. Further, the Equity Shares being offered by the Selling Shareholders in the Issue have
been held by them for a period of at least one year prior to the filing of the Draft Red Herring Prospectus with SEBI
and are eligible for sale in the Issue.
Changes in authorized equity share capital of our Company
Date of Shareholder’s
Resolution
Upon incorporation
Authorised share
capital
(in `)
100,000
August 23, 2000
200,000,000
December 11, 2015
400,000,000
63
Details of Changes
Original authorised capital comprised of 10,000 Equity
Shares of face value of `10 each.
Increase of authorised share capital by 19,990,000 Equity
Shares of face value of `10 each.
Increase in authorised capital by 20,000,000 Equity Shares
of face value `10 each.
Notes to Capital Structure
1.
Equity share capital history of our Company
(a) The history of the equity share capital of our Company is provided in the following table:
Date of
allotment of
Equity Shares
May 29, 2000
No. of
Equity
Shares
allotted
200
Face
value
(`)
Issue
price
(`)
Nature of
considerati
on
10
Cash
to
Cumulative
paid up
capital (`)
March 25,
2001
March 25,
2001
April 20, 2001
7,254,870
10
20.03*
Cash
Subscription
MoA(1)
Allotment(2)
10,800
10
10
Cash
Allotment(3)
7,265,870
72,658,700
7,725,130
10
20.03*
Cash
Allotment(4)
14,991,000
149,910,000
June 21, 2001
1,990,000
10
10
Cash
Allotment(5)
16,981,000
169,810,000
October 31,
2001
2,567,300
10
-
Other
cash
than
19,548,300
195,483,000
30,000
10
-
Other
cash
than
Allotment of sweat
equity shares
in
accordance
with
section 79A of the
Companies
Act,
1956(6)
Allotment of sweat
equity shares
in
accordance
with
section 79A of the
Companies Act, 1956
19,578,300
195,783,000
19,645,800
196,458,000
September 12,
2002
10
Cumulative
number of
shares
Reason for
allotment
200
2,000
7,255,070
72,550,700
(7)
October 9,
2002
67,500
10
-
Other
cash
than
Allotment of sweat
equity shares
in
accordance
with
section 79A of the
Companies Act, 1956
January 28,
2005
May 16, 2005
133,332
10
10
Cash
Allotment(9)
19,779,132
197,791,320
66,668
10
10
Cash
Allotment(10)
19,845,800
198,458,000
August 24,
2005
120,000
10
-
Other
cash
Allotment of sweat
equity shares
in
accordance
with
section 79A of the
Companies Act, 1956
19,965,800
199,658,000
(8)
than
(11)
*Rounded
off to two decimal places.
(1)
100 Equity Shares allotted to L. C. Singh and 100 Equity Shares allotted to Nimisha Singh.
(2)
Equity Shares allotted to Hatch Investments (Mauritius) Limited.
(3)
10,000 Equity Shares allotted to Employee Welfare Trust (held through its trustees), 100 Equity Shares each
allotted to Santosh Pande, Minoo Dastur, Namadeva Prabhu Basrur, Srinivas Adavirao Kulkarni, Vistasp A.
Wadia, Subramaniam Iyer, Shobha Agarwal and Karuna Agarwal.
(4)
(5)
Equity Shares allotted to Hatch Investments (Mauritius) Limited.
Equity Shares allotted to Employee Welfare Trust (held through its trustees).
64
(6)
2,019,800 Equity Shares allotted to L. C. Singh, 180,000 Equity Shares allotted to Santosh Pande, 40,000 Equity Shares
allotted to Subramaniam Iyer, 100,000 Equity Shares allotted to Srinivas Kulkarni, 50,000 Equity Shares allotted to
Minoo Dastur, 112500 Equity Shares allotted to Namadeva Prabhu Basrur, 40,000 Equity Shares allotted to Shobha
Agarwal and 25,000 Equity Shares allotted to Vistasp Wadia.
(7)
Equity Shares allotted to Karuna Agarwal.
(8)
20,000 Equity Shares allotted to Santosh Pande, 25,000 Equity Shares allotted to Srinivas Kulkarni, 12,500 Equity Shares
allotted to Namadeva Prabhu Basrur and 10,000 Equity Shares allotted to Shobha Agarwal.
(9)
Equity Shares allotted to Sunil Kumar Singhal.
(10)
Equity Shares allotted to Sunil Kumar Singhal.
(11)
75,000 Equity Shares allotted to Minoo Dastur, 20,000 Equity Shares allotted to Karuna Agarwal, 25,000 Equity Shares
allotted to Ashok Sontakke.
(b) The details of the Equity Shares allotted for consideration other than cash is provided in the following table:
Date of allotment
of the Equity
Shares
October 31, 2001
Number of
the Equity
Shares
Face value
(`)
2,567,300
10
-
September 12, 2002
30,000
10
-
October 9, 2002
67,500
10
-
August 24, 2005
120,000
10
-
2,784,800
-
-
Total
Reasons for allotment and benefits
accrued to our Company
Issue price
(`)
Allotment of sweat equity shares to certain
employees in lieu of services provided
Allotment of sweat equity shares to certain
employees in lieu of services provided
Allotment of sweat equity shares to certain
employees in lieu of services provided
Allotment of sweat equity shares to certain
employees in lieu of services provided
-
Our Company has not issued or allotted any Equity Shares in terms of any scheme approved under sections 391-394
of the Companies Act, 1956.
2.
Since incorporation, our Company has not revalued any of its fixed assets.
3.
Our Company has not made any issue of specified securities at a price lower than the Issue Price during the
preceding one year from the date of filing of this Draft Red Herring Prospectus.
4.
Build-up of Promoter’s Shareholding, Promoter’s contribution and Lock-in
As on the date of this Draft Red Herring Prospectus, our Promoters hold 15,828,781 Equity Shares, constituting
79.28% of the issued, subscribed and paid-up Equity Share capital of our Company. The details regarding our
Promoters’ shareholding is set out below.
A.
Build-up of Equity Shares held by our Promoters
The details of the build-up of our Promoter’s shareholding in our Company is as follows:
1.
L. C. Singh
Sr.
No.
Date of
allotment/
transfer
1.
June 2, 2000
Nature of
allotment/
Details of
transfer
Subscription to
MOA
Number of
Equity
Shares
100
Face
Value
(`)
10
65
Issue/
transfer
Price per
Equity
Share (`)
10
Nature of
consideration
Cash
Percentage
of pre-issue
paid-up
capital (%)
Percentage
of post-issue
paid-up
capital (%)
0.001
[●]
Sr.
No.
2.
3.
Nature of
allotment/
Details of
transfer
Date of
allotment/
transfer
March 23,
2001
October 31,
2001
Transfer from
Nimisha Singh
Allotment of
sweat equity
shares
Total
2.
100
10
Issue/
transfer
Price per
Equity
Share (`)
10
2,019,800
10
-
Number of
Equity
Shares
Face
Value
(`)
Percentage
of pre-issue
paid-up
capital (%)
Percentage
of post-issue
paid-up
capital (%)
Cash
0.001
[●]
Other than
cash
10.12
[●]
Nature of
consideration
2,020,000
Hatch Investments (Mauritius) Limited
Sr.
No.
1.
2.
3.
Number of
Equity
Shares
Face
Value
(`)
Allotment
7,254,870
10
Issue/
transfer
Price per
Equity
Share (`)
20.03**
Allotment
7,725,130
10
Transfer to
Vastu IT
Private
Limited
(1,171,219)
-
Nature of
allotment/
Details of
transfer
Date of
allotment/
transfer
March 25,
2001
April 20,
2001
August 02,
2006
Total
Cash
Percentage
of preissue paidup capital
(%)
36.34
20.03**
Cash
38.69
[●]
-
-
(5.87)
[●]
Nature of
consideration
Percentage of
post-Issue paidup capital (%)
[●]
13,808,781
** Rounded off to two decimal places
All the above Equity Shares were fully paid-up at the time of allotment or transfer, as the case may be.
B. Details of Promoter’s contribution locked-in for three years
Pursuant 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 (“Promoter’s Contribution”) in the Issue and our Promoters’ shareholding in excess of 20%
shall be locked in for a period of one year from Allotment.
The details of the Equity Shares held by our Promoters, which shall be locked-in for a period of three years
from the date of Allotment are set out in the following table:
Name of the
Promoters
Date of
transaction
Nature of
transaction
No. of
Equity
Shares
L. C. Singh
Hatch
Investment
(Mauritius)
Limited
[●]
[●]
[●]
[●]
[●]
[●]
Face
value
(`)
[●]
[●]
Issue/
acquisition
price per
Equity Share
(`)
[●]
[●]
No. of
Percentage of
Equity
post-Issue paid-up
Shares
capital (%)
locked-in
[●]
[●]
[●]
[●]
The minimum Promoter’s 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. The Equity Shares that are being
locked-in are not ineligible for computation of Promoter’s contribution under Regulation 33 of the SEBI ICDR
Regulations. In this connection, our Company confirms the following:
66
i.
The Equity Shares offered for minimum 20% Promoter’s contribution have not been acquired (a) in the last
three years for consideration other than cash and revaluation of assets or capitalization of intangible assets;
or; (b) pursuant to a bonus issue out of revaluation reserves, or unrealised profits of our Company; or (c)
from a bonus issue against Equity Shares which are otherwise ineligible for computation of Promoter’s
Contribution;
ii. The Company has not been formed by the conversion of a partnership firm into a company;
iii. The Promoters’ Contribution does 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;
iv. Except Hatch Investments (Mauritius) Limited, whose Equity Shares will be dematerialised prior to filing
of the Red Herring Prospectus, the Equity Shares held by our Promoters and offered for minimum 20%
Promoter’s contribution, are in dematerialised form and not subject to any pledge; and
v.
The Equity Shares offered for Promoter’s Contribution do not consist of Equity Shares for which specific
written consent has not been obtained from the Promoters for inclusion of its subscription in the Promoter’s
Contribution subject to lock-in.
With respect to 7,254,870 Equity Shares allotted on March 25, 2001 and 7,725,130 Equity Shares allotted on
April 20, 2001 to Hatch Investments (Mauritius) Limited, a loan of USD 3,320,818 was availed by Hatch
Investments (Mauritius) Limited from Nedcor Bank Limited and the aforementioned loan has been repaid and
no amounts are outstanding as on date of this Draft Red Herring Prospectus. Further, the acquisition of
2,020,000 Equity Shares held by L. C. Singh, has been financed from owned funds.
C. Details of pre-Issue equity share capital locked-in for one year
In addition to the 20% of the fully diluted post-Issue shareholding of our Company held by our Promoters and
locked in for a period of three years as specified above, the entire pre-Issue Equity Share capital of our
Company will be locked-in for a period of one year from the date of Allotment, except (i) the Equity Shares
offered pursuant to the Offer for Sale; (ii) 271,300 Equity Shares held by the current employees of the
Company as on the date of this Draft Red Herring Prospectus which were transferred to them by the Employee
Welfare Trust pursuant to the exercise of options granted under the various ESOP Schemes; and (ii) 1,321,420
Equity Shares currently held by the Employee Welfare Trust.
The 1,321,420 Equity Shares held by the Employee Welfare Trust will be transferred to our employees upon
exercise of vested options and those transferred Equity Shares will not be subject to any lock-in. Additionally,
any unsubscribed portion of the Offer for Sale being offered by the Selling Shareholders would also be lockedin for one year from the date of Allotment.
D. Lock in of Equity Shares Allotted to Anchor Investors
Equity Shares Allotted to Anchor Investors in the Anchor Investor Portion shall be locked-in for a period of 30
days from the date of Allotment.
E. Other requirements in respect of lock-in
The Equity Shares held by the Promoters which are locked – in for a period of one year from the date of
Allotment in the Issue may be pledged only with scheduled commercial banks or public financial institutions as
collateral security for loans granted by such banks or public financial institutions provided that the pledge of
the Equity Shares is one of the terms of the sanction of such loans. Further, the Equity Shares held by our
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 with scheduled commercial banks or public financial institutions if, in addition to
complying with the aforesaid condition, the loans have been granted by the scheduled commercial banks or
public financial institutions for the purpose of financing one or more Objects of the Issue.
67
The Equity Shares held by persons other than the 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 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 Promoter
and locked-in, may be transferred to and among the Promoter or 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.
5.
Details of Equity Shares offered as Offer for Sale by the Selling Shareholders
The following shareholders are offering for sale an aggregate of 2,438,199 Equity Shares in this Issue pursuant
to the consent letters issued to our Board of Directors:
Sr.
No.
Name of the shareholder
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
Vastu IT Private Limited
L.C. Singh
Mr. Minoo Dastur
Mr. Sunil Kumar Singhal
Ms. Shobha Agarwal
Mr. Namdeva Prabhu Basrur
Ms. Karuna Agarwal
Mr. Santosh Pande
Mr. Robin Rastogi
Mr. Ashok Sontakke
Mr. Sundaresan Narayanan
Mr. Vineet Bahal
Brig. Philip S. Manoharan
Mr. Abhay Ghate
Mr. Shubhabrata Banerjee
Mr. Vistasp Wadia
Mr. Kiran Chaudhari
Mr. Bommireddipalli Ravi Teja
Mr. Vijay Zende
Mr. Abhimanyu Sinha
Mr. Kamlesh Sancheti
Mr. Nishant Baranwal
Mr. Shrikant Brahme
Ms. Vimla Sheshadri
Mr. Abhijit Bongale
Mr. Hemant Garud
Mr. S.S.Giri
Mr. Anurag Shah
Mr. Rahul Bhandari
Mr. Sandeep Sreedharan
Mr. Girish Sarolkar
Mr. Shohel Noor
Ms. Manisha Mulay
Mr. Arindam Dutta
Ms. Vivienne Carol Roiz
Mr. Farhad Khambata
No. of Equity Shares
held as on the date of
this Draft Red
Herring Prospectus
1,171,219
2,020,000
230,100
200,000
80,100
125,100
55,100
200,100
50,000
40,000
55,000
44,000
45,000
51,800
75,000
25,100
29,500
38,500
35,400
30,080
21,000
25,000
12,000
9,000
8,000
9,000
12,000
4,700
5,000
8,000
3,400
15,500
5,000
3,000
3,000
3,000
68
No. of Equity
Shares offered
1,171,219
300,000
180,100
100,000
74,100
65,000
54,100
50,100
45,000
40,000
39,400
32,000
30,000
26,000
25,000
25,000
23,500
20,000
20,000
19,980
10,500
10,000
9,000
8,500
8,000
7,000
5,000
4,700
4,000
4,000
3,400
7,500
3,000
2,400
2,000
1,800
Date of the consent/
transmittal letter
August 17, 2015
December 11, 2015
August 16, 2015
December 11, 2015
August 17, 2015
August 13, 2015
August 14, 2015
August 13, 2015
August 17, 2015
August 17, 2015
August 17, 2015
August 15, 2015
August 17, 2015
August 17, 2015
August 17, 2015
August 14, 2015
August 17, 2015
August 18, 2015
August 17, 2015
August 17, 2015
August 18, 2015
August 18, 2015
August 17, 2015
August 17, 2015
August 12, 2015
August 18, 2015
August 18, 2015
August 17, 2015
August 18, 2015
August 17, 2015
August 16, 2015
August 18, 2015
August 14, 2015
August 18, 2015
August 17, 2015
August 17, 2015
Sr.
No.
37.
38.
39.
40.
41.
42.
43.
Name of the shareholder
Mr. Gurumukh Das Maheshwari
Mr. Sachidanand Kulkarni
Mr. Avijit Karmakar
Mr. Nilesh Dharwadkar
Mr. Vaibhav Raj Singh
Mr Abhijit Pantoji
Mr. Vinayak Ragho
Total
No. of Equity Shares
held as on the date of
this Draft Red
Herring Prospectus
1,200
1,200
3,000
1,500
2,000
1,800
400
No. of Equity
Shares offered
1,200
1,200
1,200
1,000
1,000
900
400
2,438,199
Date of the consent/
transmittal letter
August 17, 2015
August 14, 2015
August 18, 2015
August 14, 2015
August 17, 2015
August 18, 2015
August 17, 2015
The Equity Shares being offered in this Issue have been held by the respective Selling Shareholder for a period
of more than one year prior to the filing of the Draft Red Herring Prospectus with SEBI. The Equity Shares held
by the Selling Shareholders were either acquired/allotted in the manner as stated under heading “Equity share
capital history of our Company” or were transferred by the Employee Welfare Trust pursuant to an Employee
Stock Option Scheme.
69
6.
Shareholding Pattern of our Company
Pursuant to Regulation 31 of the Listing Regulations, the holding of specified securities is divided into the following three categories:
(a) Promoter and Promoter Group;
(b) Public; and
(c) Non-Promoter - Non Public.
The following are the statements representing the shareholding pattern of our Company:
(a) Statement showing shareholding pattern of the Promoter and Promoter Group
Category and
name of the
shareholders
(1)
(a)
(b)
(c)
(d)
(e)
(2)
(a)
Indian
Individuals/
Hindu
Undivided
Family
Central
Government /
State
Governments
Bodies
Corporate:
Vastu IT
Private
Limited
(Promoter
Group)
Financial
Institutions/
Banks
Any Other
(specify)
Sub-total
(A)(1)
Foreign
Individuals
(Non-resident
individuals/
No. of
shareh
older
No. of fully
paid up
equity
shares held
Partly
paid up
equity
shares
held
No. of
shares
underlying
depository
receipts
Total no. of
shares held
Number of Voting
Rights held in each
class of securities
Shareholdi
ng
calculated
as per
SCRR,
1957
As a % of
(A+B+C2)
No of
Voting
Rights
Total
as a %
of
Total
Voting
Rights
No. of
Shares
Underlying
Outstandin
g
convertible
securities
(including
warrants)
Shareholding as
a % assuming
full conversion
of convertible
securities (as
percentage of
diluted share
capital)
Number of
locked in
shares
As
a% of
total
shares
held
No
(a)
Number of
shares
pledged or
otherwise
encumbered
No
(a)
As a%
of total
shares
held
Number of
equity
shares held
in
demateriali
sed form
1
2,020,000
0
0
2,020,000
10.12%
2,020,000
10.12%
NIL
0
0
0
20,20,000
0
0
0
0
0
0
0
0
0
0
0
0
0
1
1,171,219
0
0
1,171,219
5.87%
1,171,219
5.87%
0
0
0
0
1,171,219
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
3,191,219
0
0
3,191,219
15.99%
3,191,219
15.99%
0
0
0
0
3,191,219
0
0
0
0
0
0
0
0
0
0
0
0
0
70
Category and
name of the
shareholders
(b)
(c)
(d)
(e)
(f)
Foreign
Individuals)
Government
Bodies
Corporate
Institutions
Foreign
Portfolio
Investor
Any Other
(specify)
Sub Total (A)
(2)
Total (A) =
(A)(1)+(A)(2)
No. of
shareh
older
No. of fully
paid up
equity
shares held
Partly
paid up
equity
shares
held
No. of
shares
underlying
depository
receipts
Total no. of
shares held
Number of Voting
Rights held in each
class of securities
Shareholdi
ng
calculated
as per
SCRR,
1957
As a % of
(A+B+C2)
No of
Voting
Rights
Total
as a %
of
Total
Voting
Rights
No. of
Shares
Underlying
Outstandin
g
convertible
securities
(including
warrants)
Shareholding as
a % assuming
full conversion
of convertible
securities (as
percentage of
diluted share
capital)
Number of
locked in
shares
As
a% of
total
shares
held
No
(a)
Number of
shares
pledged or
otherwise
encumbered
No
(a)
As a%
of total
shares
held
Number of
equity
shares held
in
demateriali
sed form
0
1
0
13,808,781
0
0
0
0
0
13,808,781
0
69.16%
0
13,808,781
0
69.16%
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
13,808,781
0
0
13,808,781
69.16%
13,808,781
69.16%
0
0
0
0
0
3
17,000,000
0
0
17,000,000
85.15
17,000,000
85.15
0
0
0
0
3,191,219
71
(b) Statement showing shareholding pattern of the Public shareholder
Category and
name of the
shareholders
(1)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(2)
(3)
(a)
Institutions
Mutual Funds/
Venture
Capital Funds
Alternate
Investment
Funds
Foreign
Venture
Capital
Investors
Foreign
Portfolio
Investors
Financial
Institutions
Banks
Insurance
Companies
Provident
Funds /
Pension Funds
Any Other
(Specify)
Sub-Total
(B)(1)
Central
Government/
State
Government(s)
/ President of
India
Sub-Total
(B)(2)
Noninstitutions
Individuals –
No. of
shareh
older
No. of fully
paid up
equity
shares held
Partly
paid
up
equity
shares
held
No. of
shares
underly
ing
deposit
ory
receipts
Total no. of
shares held
Sharehold
ing
calculated
as per
SCRR,
1957
As a % of
(A+B+C2)
Number of Voting
Rights held in each
class of securities
Total
as a %
of
Total
Voting
Rights
No of
Voting
Rights
No. of Shares
Underlying
Outstanding
convertible
securities
(including
warrants)
Total
Shareholding, as
a % assuming
full conversion
of convertible
securities (as
percentage of
diluted share
capital)
Number of locked in
shares
As a% of
total
shares
held
(b)
No
(a)
Number of shares
pledged or
otherwise
encumbered
As a%
of total
shares
held
(Not
applica
ble)
No
(Not
applica
ble) (a)
Number
of equity
shares
held in
demateri
alised
form
-
-
-
-
-
-
-
-
-
-
-
NA
NA
-
-
-
-
-
-
-
-
-
-
-
-
NA
-
-
-
-
-
-
-
-
-
-
-
-
NA
-
-
-
-
-
-
-
-
-
-
-
-
NA
-
-
-
-
-
-
-
-
-
-
-
-
NA
-
-
-
-
-
-
-
-
-
-
-
-
NA
-
-
-
-
-
-
-
-
-
-
-
-
NA
-
-
-
-
-
-
-
-
-
-
-
-
NA
-
0
0
0
0
0
0
0
0
0
0
0
NA
-
-
-
-
-
-
-
-
-
-
-
NA
-
0
0
0
0
0
0
0
0
-
0
-
NA
-
42
188,500
0
0
188,500
1.05
188,500
1.05
-
0
-
NA
75,600
72
Category and
name of the
shareholders
(b)
(c)
(d)
(e)
i. Individual
shareholders
holding
nominal
share capital
up to `2
lakhs
ii. Individual
shareholders
holding
nominal
share capital
above `2
lakhs
NBFCs
registered with
RBI
Employee
Trusts
Overseas
Depositories
(holding DRs)
(balancing
figure)
Any Other
(specify)
Sub-Total
(B)(3)
Total Public
Shareholding
(B) =
(B)(1)+(B)(2)
+(B)(3)
No. of
shareh
older
No. of fully
paid up
equity
shares held
Partly
paid
up
equity
shares
held
No. of
shares
underly
ing
deposit
ory
receipts
Total no. of
shares held
Sharehold
ing
calculated
as per
SCRR,
1957
As a % of
(A+B+C2)
Number of Voting
Rights held in each
class of securities
Total
as a %
of
Total
Voting
Rights
No of
Voting
Rights
No. of Shares
Underlying
Outstanding
convertible
securities
(including
warrants)
Total
Shareholding, as
a % assuming
full conversion
of convertible
securities (as
percentage of
diluted share
capital)
Number of locked in
shares
As a% of
total
shares
held
(b)
No
(a)
Number of shares
pledged or
otherwise
encumbered
As a%
of total
No
shares
(Not
held
applica
(Not
ble) (a)
applica
ble)
Number
of equity
shares
held in
demateri
alised
form
20
1,455,880
0
0
1,455,880
7.32
1,455,880
7.32
-
0
-
NA
812,400
0
0
0
0
0
0
0
0
-
0
-
NA
0
0
0
0
0
0
0
0
0
-
0
-
NA
0
0
0
0
0
0
0
0
0
0
0
NA
0
0
0
0
0
0
0
0
0
0
0
-
NA
0
62
1,644,380
0
0
1,644,380
8.37
1,644,380
0
0
0
-
NA
8,88,000
62
1,644,380
0
0
1,644,380
8.37
1,644,380
0
0
0
NA
8,88,000
73
(c) Statement showing shareholding pattern of the Non-Promoter – Non Public shareholder
Category and
name of the
shareholders
(1)
(a)
Custodian/
DR Holder
Name of DR
Holders (if
available)
Sub Total
C(1)
(2)
Employee
Benefit Trust
(under SEBI
(Share based
Employee
Benefit)
Regulations,
2014)
Sub Total C
(2)
Total NonPromoterNon Public
Shareholding
(C) =
(C)(1)+(C)(2)
No. of
shareh
older
No. of fully
paid up
equity
shares held
Partly
paid
up
equity
shares
held
No. of
shares
underlying
depository
receipts
Total no. of
shares held
Shareholdi
ng
calculated
as per
SCRR,
1957
Number of Voting Rights
held in each class of
securities
As a % of
(A+B+C2)
No of
Voting
Rights
Total as a
% of Total
Voting
Rights
No. of Shares
Underlying
Outstanding
convertible
securities
(including
warrants)
Total
Shareholding,
as a %
assuming full
conversion of
convertible
securities (as
percentage of
diluted share
capital)
Number of
locked in shares
Number of shares
pledged or
otherwise
encumbered
As a%
of total
shares
held
(b)
As a%
of total
shares
held
(Not
applica
ble)
No
(a)
No
(Not
applica
ble) (a)
Number
of
equity
shares
held in
demater
ialised
form
(Not
Applica
ble)
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
1
1,321,420
0
0
1.321,420
6.62
1.321,420
6.62
0
0
0
NA
NIL
1
1,321,420
0
0
1,321,420
6.62
1,321,420
6.62
0
0
0
NA
NIL
1
1,321,420
0
0
1.321,420
6.62
1.321,420
6.62
0
0
0
NA
NIL
74
7.
Equity Shares held by top ten shareholders
(a) On the date of this Draft Red Herring Prospectus are as follows:
1.
2.
3.
Hatch Investments (Mauritius) Limited
L C Singh
Employee Welfare Trust held through its trustee
13,808,781
2,020,000
1,321,420
Percentage of
pre-Issue
shareholding
(%)
69.16
10.12
6.62
4.
5.
6.
7.
8.
9.
10.
Vastu IT Private Limited
Minoo Dastur
Santosh Pande
Sunil Kumar Singhal
Namdeva Prabhu Basrur
Shobha Agarwal
Shubhabrata Banerjee
Total
1,171,219
230,100
200,100
200,000
125,100
80,100
75,000
19,231,820
5.87
1.15
1.00
1.00
0.63
0.40
0.38
96.32
Sr.
No.
Name of the Shareholder
No. of Shares
Percentage
of post-Issue
shareholding
(%)
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
(b) Ten days prior to the date of this Draft Red Herring Prospectus are as follows:
Sr.
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Name of the Shareholder
No. of Shares
Hatch Investments (Mauritius) Limited
L C Singh
Employee Welfare Trust held through its trustee
Vastu IT Private Limited
Minoo Dastur
Santosh Pande
Sunil Kumar Singhal
Namdeva Prabhu Basrur
Shobha Agarwal
Shubhabrata Banerjee
Total
13,808,781
2,020,000
1,321,420
1,171,219
230,100
200,100
200,000
125,100
80,100
75,000
19,231,820
Percentage
of pre-Issue
shareholdin
g (%)
69.16
10.12
6.62
5.87
1.15
1.00
1.00
0.63
0.40
0.38
96.32
Percentage
of post-Issue
shareholdin
g (%)
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
(c) Two years prior to the date of filing this Draft Red Herring Prospectus are as follows:
Sr.
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Name of the Shareholder
No. of Shares
Hatch Investments (Mauritius) Limited
L C Singh
Employee Welfare Trust held through its trustee
Vastu IT Services Private Limited
Minoo Dastur
Santosh Pande
Sunil Kumar Singhal
Namdeva Prabhu Basrur
Shobha Agarwal
Shubhabrata Banerjee
Total
13,808,781
2,020,000
1,523,900
1,171,219
218,100
200,100
200,000
125,100
68,100
67,000
19,402,300
75
Percentage
of pre-Issue
shareholdin
g (%)
69.16
10.12
7.68
5.87
1.09
1.00
1.00
0.63
0.34
0.34
97.22
Percentage
of post-Issue
shareholdin
g (%)
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
8.
Our Promoters, Promoter Group or our Directors have not purchased, subscribed to or sold any securities of our
Company within three years immediately preceding the date of this Draft Red Herring Prospectus which in
aggregate is equal to or greater than 1% of pre-Issue capital of our Company.
9.
Employee Stock Option Scheme
Our Company instituted an Employee Stock Option Plan (“ESOP Plan”), pursuant to a Board resolution dated
March 3, 2002 and resolution of the Shareholders in an EGM dated March 3, 2002. Pursuant to the ESOP Plan, the
Company has allotted 2,000,000 Equity Shares to the Employee Welfare Trust. Under the ESOP Plan, the following
Employee Stock Option Schemes were formulated:
(i)
The Nihilent Technologies Private Limited – Joining Employee Stock Option Scheme (the “Joining ESOS”);
(ii) The Nihilent Technologies Private Limited – Employee Stock Option Scheme 2002 (the “ESOS 2002”);
(iii) The Nihilent Technologies Private Limited – Employee Stock Option Scheme 2005 (the “ESOS 2005”);
(iv) The Nihilent Technologies Private Limited – Employee Stock Option Scheme 2006 (the “ESOS 2006”);
(v) The Nihilent Technologies Private Limited – Employee Stock Option Scheme 2007 (the “ESOS 2007);
(vi) The Nihilent Technologies Private Limited – Employee Stock Option Scheme 2010 (the “ESOS 2010”); and
(vii) The Nihilent Technologies Limited – Employee Stock Option Scheme 2015 (the “ESOS 2015”).
All of the abovementioned schemes are administered through the Employee Welfare Trust which was constituted for
this purpose.
The Employee Welfare Trust would transfer Equity Shares to the employees of the Company from time to time as
directed by the Compensation Committee. The details options granted pursuant to the above employee stock option
schemes are listed below:
(i)
Joining ESOS
Our Company has granted 93,000 stock options under Joining ESOP of which 55,200 stock options have lapsed or been
cancelled. Further, 37,800 options have vested and have been exercised. No further options are proposed to be issued
pursuant to Joining ESOS.
The following table sets forth the particulars of the options granted under Joining ESOS as of the date of this Draft
Red Herring Prospectus:
Particulars
Details
Options granted
Pricing formula
Options vested
Options exercised
Total number of Equity Shares transferred from the
Employee Welfare Trust as a result of full exercise of
options granted
Options forfeited/lapsed/cancelled
Variation of terms of options
Money realised by exercise of options (`in million)
Total number of options in force
76
93,000
Issued at face value of `10 each
37,800
37,800
37,800
55,200
Nil
0.378
Nil
a.
b.
c.
Particulars
Employee wise details of options granted to
Directors, Key Managerial Personnel
management personnel
Details
and
other
Any other employee who received a grant in any one year
of options amounting to 5% or more of the options granted
during that year
Identified employees who are granted options, during any
one year equal to or exceeding 1% of the issued Equity
Shares (excluding outstanding warrants and conversions)
of our Company at the time of grant
Vesting schedule/ conditions
Fully diluted EPS pursuant to issue of Equity Shares on
exercise of options calculated in accordance with AS 20
‘Earnings Per Share’
In case the employee compensation cost is calculated
using intrinsic value of the stock options, the difference
between the employee compensation cost so computed
and the employee compensation cost that shall have been
recognized if it had used the fair value of the options and
the impact of this difference on the profits and on the EPS
of our Company
Weighted average exercise price and the weighted average
fair value of options whose exercise price either equals or
exceeds or is less than the market price of the stock
Name of
Director/KMP
Vineet Bahal
Robin Rastogi
Ravi Teja
Total
Name of
Employees
Gurumukh Das
Maheshwari
Robin Rastogi
Vineet Bahal
Rajesh K Sajnani
Vibhas Joshi
Ravi Teja
K Jeyachandra
Abhimanyu Sinha
Chandan Chatterjee
Time from date of
offer
One year
Two years
Three years
Four years
Five years
Not Applicable
No. of Options
granted
5000
5000
15000
25,000
No. of
Options
granted
12000
5,000
3,000
5,000
7,500
10,000
15,000
15,000
8,000
% of Options
granted
(>5%)
12.9
5.4
5.4
8.1
10.8
16.1
16.1
8.6
10.8
Nil
Cumulative
percentage of Equity
Shares vesting (%)
20
20
20
20
20
Not Applicale
Exercise price is fixed at face value of `10 which
was higher than the fair value.
Weighted average exercise price (as on the date of
grant)- Not applicable
Method and significant assumptions used to estimate the
fair value of options granted including weighted average
77
Weighted average fair value (as on the date of
grant)- Not applicable
Not applicable
Particulars
information, namely risk free interest rate, expected life,
expected volatility, expected dividends and the price of the
underlying share in the market at the time of grant of the
options
Lock-in
Impact on profits and on EPS of the last three years if our
Company had followed accounting policies specified in
respect of options granted in the last three years
Details
Nil
Not Applicable
Intention of the holders of Equity Shares allotted on
exercise of options to sell their Equity Shares within three
months after the listing of Equity Shares pursuant to the
Issue
The employees may sell the Equity Shares held by
them pursuant to exercise of options within three
months from the date of Listing.
Intention to sell Equity Shares allotted pursuant to Joining
ESOS within three months after the listing of Equity Shares
by Directors, Key Management Personnel, other
management personnel and employees having Equity
Shares arising out of the Joining ESOS, amounting to more
than 1% of the issued capital (excluding outstanding
warrants and conversions)
The employees may sell the Equity Shares held by
them pursuant to exercise of options within three
months from the date of Listing.
(ii)
ESOS 2002
Our Company has granted 150,000 stock options under ESOP 2002 of which 99,600 stock options have lapsed or been
cancelled. Further, 50,400 options have vested and have been exercised. No further options are proposed to be issued
pursuant to ESOS 2002 and the ESOS 2002 is closed as on date.
The following table sets forth the particulars of the options granted under ESOS 2002 as of the date of this Draft Red
Herring Prospectus:
d.
Particulars
Options granted
Pricing formula
Options vested
Options exercised
Total number of Equity Shares transferred from the
Employee Welfare Trust as a result of full exercise of
options granted
Options forfeited/lapsed/cancelled
Variation of terms of options
Money realised by exercise of options (`in million)
Total number of options in force
Employee wise details of options granted to
Directors, Key Managerial Personnel and other
management personnel
78
Details
150,000
Issued at face value of `10 each
50,400
50,400
50,400
99,600
Nil
0.504
Nil
Name of
Director/KMP
Abhay Ghate
Vineet Bahal
Robin Rastogi
Ravi Teja
Sundaresan
Narayanan
No. of Options
granted
6,000
5,000
5,000
4,000
4,000
Particulars
Details
Total
e.
f.
Any other employee who received a grant in any one year
of options amounting to 5% or more of the options granted
during that year
Identified employees who are granted options, during any
one year equal to or exceeding 1% of the issued Equity
Shares (excluding outstanding warrants and conversions) of
our Company at the time of grant
Vesting schedule/ conditions
Fully diluted EPS pursuant to issue of Equity Shares on
exercise of options calculated in accordance with AS 20
‘Earnings Per Share’
In case the employee compensation cost is calculated using
intrinsic value of the stock options, the difference between
the employee compensation cost so computed and the
employee compensation cost that shall have been
recognized if it had used the fair value of the options and
the impact of this difference on the profits and on the EPS
of our Company
Weighted average exercise price and the weighted average
fair value of options whose exercise price either equals or
exceeds or is less than the market price of the stock
24,000
Nil
Nil
Time from date of
offer
One year
Two years
Three years
Four years
Five years
Not applicable
Cumulative
percentage of Equity
Shares vesting (%)
20
20
20
20
20
Not applicable
Exercise price is fixed at face value of `10 which
was higher than the fair value.
Weighted average exercise price (as on the date of
grant)- Not applicable
Method and significant assumptions used to estimate the
fair value of options granted including weighted average
information, namely risk free interest rate, expected life,
expected volatility, expected dividends and the price of the
underlying share in the market at the time of grant of the
options
Lock-in
Impact on profits and on EPS of the last three years if our
Company had followed accounting policies specified in
respect of options granted in the last three years
Weighted average fair value (as on the date of
grant)- Not applicable
Not applicable
Nil
Not applicable
Intention of the holders of Equity Shares allotted on exercise
of options to sell their Equity Shares within three months
after the listing of Equity Shares pursuant to the Issue
The employees may sell the Equity Shares held by
them pursuant to exercise of options within three
months from the date of Listing.
Intention to sell Equity Shares allotted pursuant to ESOS
2002 within three months after the listing of Equity Shares
by Directors, Key Management Personnel, other
management personnel and employees having Equity Shares
arising out of the ESOS 2002, amounting to more than 1% of
The employees may sell the Equity Shares held by
them pursuant to exercise of options within three
months from the date of Listing.
79
Particulars
the issued capital (excluding outstanding warrants and
conversions)
(iii)
Details
ESOS 2005
Our Company has granted 325,500 stock options under ESOP 2005 of which 220,400 stock options have lapsed or been
cancelled. Further, 105,100 options have vested and have been exercised. No further options are proposed to be issued
pursuant to ESOS 2005 and the ESOS 2005 is closed as on date.
The following table sets forth the particulars of the options granted under ESOS 2005 as of the date of this Draft Red
Herring Prospectus:
Particulars
a.
b.
c.
Details
Options granted
Pricing formula
Options vested
Exercise price of options (`)
Options exercised
Total number of Equity Shares transferred from the
Employee Welfare Trust as a result of full exercise of options
granted
Options forfeited/lapsed/cancelled
Variation of terms of options
Money realised by exercise of options (`in million)
Total number of options in force
Employee wise details of options granted to
Directors, Key Managerial Personnel and other management
personnel
Any other employee who receives a grant in any one year of
options amounting to 5% or more of the options granted
during that year
Identified employees who are granted options, during any
one year equal to or exceeding 1% of the issued Equity
Shares (excluding outstanding warrants and conversions) of
our Company at the time of grant
Vesting schedule/ conditions
325,500
Issued at face value of `10 each
105,100
10
105,100
105,100
220,400
Nil
1.051
Nil
Name of Director
/KMPs
Abhay Ghate
Vineet Bahal
Robin Rastogi
Ravi Teja
Sundaresan
Narayanan
Total
Options
12,000
7,500
7,500
7,500
10,000
44,500
Nil
Nil
Time from date of
offer
One year
Two years
Three years
Four years
Five years
80
No.
of
granted
Cumulative
percentage of Equity
Shares vesting (%)
20
20
20
20
20
Particulars
Details
Fully diluted EPS pursuant to issue of Equity Shares on
exercise of options calculated in accordance with AS 20
‘Earnings Per Share’
Not applicable
In case the employee compensation cost is calculated using
intrinsic value of the stock options, the difference between the
employee compensation cost so computed and the employee
compensation cost that shall have been recognized if it had
used the fair value of the options and the impact of this
difference on the profits and on the EPS of our Company
Weighted average exercise price and the weighted average fair
value of options whose exercise price either equals or exceeds
or is less than the market price of the stock
Not applicable
Exercise price is fixed at face value of `10 which
was higher than the fair value.
Weighted average exercise price (as on the date of
grant)- Not applicable
Method and significant assumptions used to estimate the fair
value of options granted including weighted average
information, namely risk free interest rate, expected life,
expected volatility, expected dividends and the price of the
underlying share in the market at the time of grant of the
options
Lock-in
Impact on profits and on EPS of the last three years if our
Company had followed accounting policies specified in
respect of options granted in the last three years
Weighted average fair value (as on the date of
grant)- Not applicable
Not applicable
Nil
Not Applicable
Intention of the holders of Equity Shares allotted on exercise
of options to sell their Equity Shares within three months after
the listing of Equity Shares pursuant to the Issue
The employees may sell the Equity Shares held by
them pursuant to exercise of options within three
months from the date of Listing.
Intention to sell Equity Shares arising out of ESOS 2005
within three months after the listing of Equity Shares by
Directors, Key Management Personnel, other management
personnel and employees having Equity Shares arising out of
the ESOS 2005, amounting to more than 1% of the issued
capital (excluding outstanding warrants and conversions)
The employees may sell the Equity Shares held by
them pursuant to exercise of options within three
months from the date of Listing.
(iv)
ESOS 2006
Our Company has granted 75,000 stock options under ESOP 2006 of which none of the stock options have lapsed or been
cancelled. Further, 75,000 options have vested and have been exercised. No further options are proposed to be issued
pursuant to ESOS 2006 and the ESOS 2006 is closed as on date.
The following table sets forth the particulars of the options granted under ESOS 2006 as of the date of this Draft Red
Herring Prospectus:
81
Particulars
a.
b.
c.
Details
Options granted
Pricing formula
Options vested
Exercise price of options (`)
Options exercised
Total number of Equity Shares transferred from the
Employee Welfare Trust as a result of full exercise of
options granted
Options forfeited/lapsed/cancelled
Variation of terms of options
Money realised by exercise of options (`in million)
Total number of options in force
Employee wise details of options granted to
Directors, Key Managerial Personnel and other
management personnel
Any other employee who receives a grant in any one year
of options amounting to 5% or more of the options
granted during that year
Identified employees who are granted options, during any
one year equal to or exceeding 1% of the issued Equity
Shares (excluding outstanding warrants and conversions)
of our Company at the time of grant
Vesting schedule/ conditions
Fully diluted EPS pursuant to issue of Equity Shares on
exercise of options calculated in accordance with AS 20
‘Earnings Per Share’
In case the employee compensation cost is calculated
using intrinsic value of the stock options, the difference
between the employee compensation cost so computed
and the employee compensation cost that shall have been
recognized if it had used the fair value of the options and
the impact of this difference on the profits and on the EPS
of our Company
Weighted average exercise price and the weighted
average fair value of options whose exercise price either
equals or exceeds or is less than the market price of the
stock
Method and significant assumptions used to estimate the
fair value of options granted including weighted average
information, namely risk free interest rate, expected life,
expected volatility, expected dividends and the price of
the underlying share in the market at the time of grant of
the options
Lock-in
82
75,000
Issued at face value of `10 each
75,000
10
75,000
75,000
Nil
Nil
0.75
Nil
Name of Director/
KMPs
Minoo Dastur
Total
No.
of
granted
75,000
75,000
Options
Nil
Nil
Time from date of
offer
One year
Not Applicable
Cumulative
percentage of Equity
Shares vesting (%)
100
Not Applicable
Exercise price is fixed at face value of `10 which was
higher than the fair value.
Weighted average exercise price (as on the date of
grant)- Not applicable
Weighted average fair value (as on the date of grant)Not applicable
Not applicable
Nil
Particulars
Impact on profits and on EPS of the last three years if our
Company had followed accounting policies specified in
respect of options granted in the last three years
Details
Not Applicable
Intention of the holders of Equity Shares allotted on
exercise of options to sell their Equity Shares within three
months after the listing of Equity Shares pursuant to the
Issue
The employees may sell the Equity Shares held by
them pursuant to exercise of options within three
months from the date of Listing.
Intention to sell Equity Shares arising out of ESOS 2006
within three months after the listing of Equity Shares by
Directors, Key Management Personnel, other management
personnel and employees having Equity Shares arising out
of the ESOS 2006, amounting to more than 1% of the
issued capital (excluding outstanding warrants and
conversions)
The employees may sell the Equity Shares held by
them pursuant to exercise of options within three
months from the date of Listing.
(v)
ESOS 2007
Our Company has granted 284,900 stock options under ESOP 2007 of which 88,720 stock options have lapsed or been
cancelled. Further, 196,180 options have vested and have been exercised. No further options are proposed to be issued
pursuant to ESOS 2007 and the ESOS 2007 is closed as on date.
The following table sets forth the particulars of the options granted under ESOS 2007 as of the date of this Draft Red
Herring Prospectus:
Particulars
Details
Options granted
Pricing formula
Options vested
Exercise price of options (`)
Options exercised
Total number of Equity Shares transferred from the
Employee Welfare Trust as a result of full exercise of
options granted
Options forfeited/lapsed/cancelled
Variation of terms of options
Money realised by exercise of options (`in million)
Total number of options in force
Employee wise details of options granted to
a.
Directors, Key Managerial Personnel and other management
personnel
83
284,900
Issued at face value of `10 each
196,180
10
196,180
196,180
88,720
Nil
1.9618
Nil
Name of Director/
KMPs
Shubhabrata Banerjee
Abhay Ghate
Vineet Bahal
Robin Rastogi
Ravi Teja
Sundaresan
Narayanan
Total
No.
of
granted
Options
55,000
15,000
15,000
10,000
12,000
15,000
122,000
Particulars
b.
c.
Details
Any other employee who receives a grant in any one year of
options amounting to 5% or more of the options granted
during that year
Identified employees who are granted options, during any
one year equal to or exceeding 1% of the issued Equity
Shares (excluding outstanding warrants and conversions) of
our Company at the time of grant
Vesting schedule/ conditions
Fully diluted EPS pursuant to issue of Equity Shares on
exercise of options calculated in accordance with AS 20
‘Earnings Per Share’
In case the employee compensation cost is calculated using
intrinsic value of the stock options, the difference between
the employee compensation cost so computed and the
employee compensation cost that shall have been recognized
if it had used the fair value of the options and the impact of
this difference on the profits and on the EPS of our
Company
Weighted average exercise price and the weighted average
fair value of options whose exercise price either equals or
exceeds or is less than the market price of the stock
Name of
Employees
Vineet Bahal
Nishant Baranwal
Abhay Y. Ghate
Vijay Zende
Sundaresan
Narayanan
Ashok Sontakke
Kiran Chaudhari
Vikram Shetty
Ramakrishnan P.
Ashwini Khanna
Abhimanyu Sinha
Shubhabrata
Banerjee
Nil
No. of
Options
granted
15,000
15,000
15,000
15,000
15,000
% of Options
granted
(>5%)
5.27%
5.27%
5.27%
5.27%
5.27%
15,000
15,000
15,000
15,000
15,000
15,900
55,000
5.27%
5.27%
5.27%
5.27%
5.27%
5.58%
19.31%
Time from date of
offer
Cumulative
percentage of Equity
Shares vesting (%)
One year
20
Two years
20
Three years
20
Four years
20
Five years
20
For certain employees, options vested on
acceptance of them
Not Applicable
The Company uses intrinsic value method of
accounting allowed by the Guidance Note
‘Employee Share Based Payment’ applicable to
employee stock options. Had fair value method
been used, the impact on the net profit for the year
EPS, basic and diluted are not expected to be
material
Exercise price is fixed at face value of `10 which
was higher than the fair value.
Weighted average exercise price (as on the date of
grant)- Not applicable
Weighted average fair value (as on the date of
grant)- Not applicable
84
Particulars
Details
Method and significant assumptions used to estimate the fair
value of options granted including weighted average
information, namely risk free interest rate, expected life,
expected volatility, expected dividends and the price of the
underlying share in the market at the time of grant of the
options
Lock-in
Impact on profits and on EPS of the last three years if our
Company had followed accounting policies specified in
respect of options granted in the last three years
Intention of the holders of Equity Shares allotted on exercise
of options to sell their Equity Shares within three months
after the listing of Equity Shares pursuant to the Issue
Intention to sell Equity Shares arising out of ESOS 2007
within three months after the listing of Equity Shares by
Directors, Key Management Personnel, other management
personnel and employees having Equity Shares arising out of
the ESOS 2007, amounting to more than 1% of the issued
capital (excluding outstanding warrants and conversions)
(vi)
Not applicable
Nil
The Company uses intrinsic value method of
accounting allowed by the Guidance Note
‘Employee Share Based Payment’ applicable to
employee stock options. Had fair value method
been used, the impact on the net profit for the year
EPS, basic and diluted are not expected to be
material
The employees may sell the Equity Shares held by
them pursuant to exercise of options within three
months from the date of Listing.
The employees may sell the Equity Shares held by
them pursuant to exercise of options within three
months from the date of Listing.
ESOS 2010
Our Company has granted 474,600 stock options under ESOP 2010 of which 135,400 stock options have lapsed or been
cancelled. Further, 339,200 options have vested and have been exercised. No further options are proposed to be issued
pursuant to ESOS 2010 and the ESOS 2010 is closed as on date.
The following table sets forth the particulars of the options granted under ESOS 2010 as of the date of this Draft Red
Herring Prospectus:
Particulars
a.
Details
Options granted
Pricing formula
Options vested
Exercise price of options (`)
Options exercised
Total number of Equity Shares transferred from the
Employee Welfare Trust as a result of full exercise of
options granted
Options forfeited/lapsed/cancelled
Variation of terms of options
Money realised by exercise of options (`in million)
Total number of options in force
Employee wise details of options granted to
Directors, Key Managerial Personnel and other
management personnel
85
474,600
Issued at face value of `10 each
339,200
10
339,200
339,200
135,400
Nil
3.392
Nil
Name of
Director/KMP
Minoo Dastur
Shobha Agarwal
No. of Options
granted
30,000
30,000
Particulars
Details
Shubhabrata Banerjee
Rahul Bhandari
Abhay Ghate
Vineet Bahal
Robin Rastogi
Ravi Teja
Sundaresan
Narayanan
Total
b.
Any other employee who receives a grant in any one year of
options amounting to 5% or more of the options granted
during that year
Name of
Employees
Minoo Dastur
Shobha Agarwal
Robin Rastogi
Sundaresan
Narayanan
S.S.Giri
Nitin Sadawarte
c.
Identified employees who are granted options, during any
one year equal to or exceeding 1% of the issued Equity
Shares (excluding outstanding warrants and conversions) of
our Company at the time of grant
Vesting schedule/ conditions
Fully diluted EPS pursuant to issue of Equity Shares on
exercise of options calculated in accordance with AS 20
‘Earnings Per Share’
In case the employee compensation cost is calculated using
intrinsic value of the stock options, the difference between
the employee compensation cost so computed and the
employee compensation cost that shall have been
recognized if it had used the fair value of the options and
the impact of this difference on the profits and on the EPS
of our Company
Weighted average exercise price and the weighted average
fair value of options whose exercise price either equals or
exceeds or is less than the market price of the stock
Method and significant assumptions used to estimate the
fair value of options granted including weighted average
information, namely risk free interest rate, expected life,
expected volatility, expected dividends and the price of the
86
Time from date of
offer
One year
Two years
Three years
Four years
Five years
Not Applicable
20,000
5,000
20,000
20,000
25,000
12,100
26,000
188,100
No. of
Options
granted
30,000
30,000
25,000
26,000
% of Options
granted
(>5%)
6.32%
6.32%
5.27%
5.48%
30,000
25,000
6.32%
5.27%
Nil
Cumulative
percentage of Equity
Shares vesting (%)
20
20
20
20
20
The Company uses intrinsic value method of
accounting allowed by the Guidance Note
‘Employee Share Based Payment’ applicable to
employee stock options. Had fair value method been
used, the impact on the net profit for the year EPS,
basic and diluted are not expected to be material
Exercise price is fixed at face value of `10
Weighted average exercise price (as on the date of
grant)- Not applicable
Weighted average fair value (as on the date of
grant)- Not applicable
Not applicable
Particulars
Details
underlying share in the market at the time of grant of the
options
Lock-in
Impact on profits and on EPS of the last three years if our
Company had followed accounting policies specified in
respect of options granted in the last three years
Intention of the holders of Equity Shares allotted on exercise
of options to sell their Equity Shares within three months
after the listing of Equity Shares pursuant to the Issue
Intention to sell Equity Shares arising out of ESOS 2010
within three months after the listing of Equity Shares by
Directors, Key Management Personnel, other management
personnel and employees having Equity Shares arising out of
the ESOS 2010, amounting to more than 1% of the issued
capital (excluding outstanding warrants and conversions)
(vii)
Nil
The Company uses intrinsic value method of
accounting allowed by the Guidance Note
‘Employee Share Based Payment’ applicable to
employee stock options. Had fair value method been
used, the impact on the net profit for the year EPS,
basic and diluted are not expected to be material
The employees may sell the Equity Shares held by
them pursuant to exercise of options within three
months from the date of Listing.
The employees may sell the Equity Shares held by
them pursuant to exercise of options within three
months from the date of Listing.
ESOS 2015
Our Company instituted an employee stock option scheme (“ESOS 2015”), pursuant to a resolution passed by our
shareholders in an EGM held on December 11, 2015. Pursuant to ESOS 2015, stock options shall be granted to our
employees, including directors (other than the Promoters of our Company, our Independent Directors and directors
holding, directly or indirectly more than 5% of the Equity Shares of our Company), subject to the approval of our Board.
Up to 1,321,420 fully paid up Equity Shares of our Company may be transferred to employees from the Nihilent
Employee Welfare Trust, upon exercise of options granted. The stock options shall be exercisable through the
Nihilent Employee Welfare Trust (“Trust”), set up by our Company pursuant to the ESOP Plan, in one or more
tranches and at a price decided by our Board, in accordance with the applicable laws and regulations. As on the date
of this Draft Red Herring Prospectus, no options have been issued under ESOS 2015.
10. Our Company, our Promoters, the Selling Shareholders, our Directors and the BRLM have not entered into any
buyback and/or standby arrangements and or any other similar arrangements for the purchase of Equity Shares
being offered through this Issue.
11. During the past six months immediately preceding the date of this Draft Red Herring Prospectus, our Promoters,
Promoter Group, or our Directors of our Company and their relatives and associates have not purchased/sold or
financed any Equity Shares of our Company other than in the normal course of business.
12. As on the date of this Draft Red Herring Prospectus 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/
receive any Equity Shares after the Issue.
13. Our Company has not raised any bridge loans against the proceeds of the Issue. However, depending upon the
business requirements of our Company, our Company may require financing facilities prior to the filing of the
Red Herring Prospectus.
14. The Equity Shares are fully paid-up and there are no partly paid-up Equity Shares as on date of this Draft Red
Herring Prospectus. The Equity Shares issued pursuant to this Issue shall be fully paid-up.
15. Other than issuing options under ESOS 2015 and transferring Equity Shares from the Employee Welfare Trust
to eligible employees upon vesting, our Company shall not make any further issue of Equity Shares and/or any
87
securities convertible into Equity Shares, whether by way of issue of bonus shares, preferential allotment, rights
issue or in any other manner, during the period commencing from filing of this Draft Red Herring Prospectus
with SEBI until the Equity Shares have been listed on the Stock Exchanges.
16. Other than issuing options under ESOS 2015 and transferring Equity Shares from the Employee Welfare Trust
to eligible employees upon vesting, our Company presently does not have any intention or proposal, and has not
entered into negotiations nor are considering to alter its capital structure for a period of six months from the
Bid/ Issue Opening Date, 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 bonus or rights issue or further public offering or qualified institutions
placement or otherwise, except that if our Company enters into acquisitions, joint venture(s) or any other
arrangements, our Company may consider raising additional capital to fund such activities or to use Equity
Shares as a currency for acquisitions or participation in such joint ventures at any time during the
aforementioned six months.
17. There shall be only one denomination of the Equity Shares, unless otherwise permitted by law.
18. Except for 300,000 and 1,171,219 Equity Shares proposed to be sold in the Offer for Sale by L. C. Singh and
Vastu IT Private Limited, respectively, our Promoters and members of the Promoter Group will not participate
in the Issue.
19. Total number of Shareholders of our Company as on the date of this Draft Red Herring Prospectus are 66.
20. As on the date of this Draft Red Herring Prospectus, none of the Equity Shares of our Company are subject to
any pledge or encumbrance.
21. No person connected with the Issue, including, but not limited to, the BRLM, the members of the Syndicate, our
Company, the Selling Shareholders, the Directors, the Promoter Group, Group Companies, and the KMPs, shall
offer any incentive, whether direct or indirect, in any manner, whether in cash or kind or services or otherwise
to any Bidder for making a Bid except as disclosed in this Draft Red Herring Prospectus.
22. Our Company has not issued any Equity Shares out of its revaluation reserves.
23. Our Company has not made any public issue of its Equity Shares or rights issue of any kind since its
incorporation.
24. As on the date of this Draft Red Herring Prospectus, neither the BRLM nor their associates (in accordance with
the definition of “associate company” as provided under section 2(6) of the Companies Act) hold any Equity
Shares in our Company. The BRLM and their affiliates may engage in the transactions with and perform services
for our Company in the ordinary course of business or may in the future engage in commercial banking and
investment banking transactions with our Company for which they may in the future receive customary
compensation.
25. Save and except as stated below, none of our Directors, KMPs, Promoter group or Directors of our Promoter
have any shareholding in our Company as on the date of this Draft Red Herring Prospectus:
Sr.
No.
1.
2.
3.
4.
5.
6.
7.
Name of the Director/
KMP/Director of
Promoter/ Promoter
Group
L. C. Singh
Vastu IT Private Limited
Minoo Dastur
Santosh Pande
Rahul Bhandari
Shubhabrata Banerjee
Shobha Agarwal
Designation
Executive Director and CEO
Promoter Group
President and Chief Operating Officer
Independent Director
Company Secretary and Compliance Officer
Chief Financial Officer
Vice President - Corporate Strategy
88
No. of Equity
Shares
Percentage
(%)
2,020,000
1,171,219
230,100
200,100
5,000
75,000
80,100
10.12
5.87
1.15
1.00
0.03
0.38
0.40
Sr.
No.
8.
9.
10.
11.
12.
Name of the Director/
KMP/Director of
Promoter/ Promoter
Group
Abhay Ghate
B. Ravi Teja
Vineet Bahal
Robin Rastogi
Sundaresan Narayanan
Designation
Vice President and Chief Technology Officer
Vice President Consulting Business
Senior Vice President - Techno Commercial
Vice President and Regional Head- Australia
Vice President – Internal Systems and Strategic
Initiatives
Total
No. of Equity
Shares
Percentage
(%)
51,800
38,500
44,000
50,000
55,000
0.26
0.19
0.22
0.25
0.22
4,020,819
20.09
26. Any 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 [●] 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.
27. The Issue is being made for at least 25% of the post Issue paid-up capital pursuant to Rule 19(2)(b)(i) of SCRR
read with Regulation 41 of the SEBI ICDR Regulations. Our Company is eligible for the Issue in accordance
with Regulation 26(2) of the SEBI ICDR Regulations. Further, the Issue is being made through the Book
Building Process where in 75% of the Issue shall be available for allocation to QIBs on a proportionate basis.
Further, not more than 15% of the Issue will be available for allocation on a proportionate basis to NonInstitutional Bidders and not more than 10% of the Issue will be available for allocation to Retail Individual
Bidders, subject to valid Bids being received at or above the Issue Price. The allotment of Equity Shares to each
Retail Individual Bidder shall not be less than minimum Bid Lot, subject to availability of Equity Shares in
Retail Investor category, and the remaining available Equity Shares, if any, shall be allotted on proportionate
basis. Our Company may, in consultation with the BRLM, allocate up to 60% of the QIB Portion to Anchor
Investors at the Anchor Investor Allocation Price, on a discretionary basis, out of which at least one-third will
be reserved for allocation to domestic Mutual Funds only subject to Bids received at or above the Anchor
Investor Allocation Price. In the event of under-subscription or non-allocation in the Anchor Investor Portion,
the balance Equity Shares shall be added to the Net QIB Portion. Such number of Equity Shares representing up
to 5% of the Net QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only,
and the remainder shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual
Funds, subject to valid Bids being received at or above the Issue Price.
28. Under subscription, if any, in Non-Institutional Bidders and Retail Individual Bidders, would be met with spill
over from any other categories or combination of categories at the discretion of our Company in consultation
with the BRLM and 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. Any inter-se spill
over, if any, would be effected in accordance with applicable laws, rules, regulations and guidelines.
29. 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. For further
details, please see “Issue Procedure – Who Can Bid” on page 322.
30. Our Company shall ensure that transactions in the Equity Shares by the Promoters and the Promoter Group
between the date of registering the Red Herring Prospectus with the RoC and the Bid/Issue Closing Date, if any,
shall be reported to the Stock Exchanges within 24 hours of such transaction.
31. Our Company and the Selling Shareholders agree that they will not, without the prior written consent of the
BRLM, during the period commencing from the date of Issue Agreement and ending 180 (One hundred and
eighty) calendar days after the date of the Prospectus, (i) issue, offer, lend, sell, contract to sell or issue, sell any
option or contract to purchase, purchase any option or contract to sell or issue, grant any option, right or warrant
to purchase, lend or otherwise transfer or dispose of or create any encumbrances in relation to, directly or
89
indirectly, any Equity Shares or any securities convertible into or exercisable or exchangeable for Equity Shares
or whether by way of split or consolidation of the denomination of the Equity Shares; (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of the Equity Shares or any securities convertible into or exercisable as or exchangeable for the Equity Shares;
or (iii) publicly announce any intention to enter into any transaction described in (i) or (ii) above; whether any
such transaction described in (i) or (ii) above is to be settled by delivery of the Equity Shares or such other
securities, in cash or otherwise.
For details of our related party transactions, please see sub-section titled “Financial Statements” on page 179.
90
OBJECTS OF THE ISSUE
The Issue comprises of a Fresh Issue by our Company and an Offer for Sale by the Selling Shareholders.
The Offer for Sale
The Selling Shareholders will be entitled to the proceeds of the Offer for Sale after deducting their proportion of
Issue related expenses. Our Company will not receive any proceeds of the Offer for Sale. Other than the listing fees
which shall be borne by our Company, the expenses in relation to the Issue will be borne by our Company and the
Selling Shareholders in proportion to the Equity Shares contributed to the Issue by our Company and the Selling
Shareholders, respectively.
The Fresh Issue
Our Company proposes to utilise the Net Proceeds towards funding of the following objects:
1.
Purchase of IT software, hardware and network equipment for a development centre in Pune and replacement
and upgradation activities at our corporate office;
2.
Investment in Nihilent Technologies Inc, our wholly owned subsidiary for repayment/prepayment of the loan
availed from HSBC Bank (Mauritius) Limited;
3.
Repayment of a loans availed by our Company;
4.
Acquisitions and other strategic initiatives;
5.
Development of new software platforms; and
6.
General corporate purposes.
In addition we expect to achieve the benefits of listing our Equity Shares on the Stock Exchanges, which we believe
amongst other things will enhance our brand and visibility and to make the ESOP schemes more effective to retain
employees.
The main objects and objects incidental and ancillary to the main objects set out in our Memorandum of Association
enable us to undertake our existing business activities and the activities for which funds are being raised by us
through the Fresh Issue.
Net Proceeds
The details of the Net Proceeds are set forth in the table below:
Estimated Amount (In ` million)
Particulars(1)
Gross proceeds of the Fresh Issue
Less: Issue expenses to be borne by our Company(1)
Net Proceeds
(1)
Up to 1,400
[●]
[●]
To be determined on finalisation of the Issue Price and updated in the Prospectus prior to the filing with the Registrar of
Companies.
Means of Finance
The fund requirements set out below are proposed to be entirely funded from the Net Proceeds. Accordingly, our
Company confirms that there is no requirement to make firm arrangements of finance through verifiable means
towards at least 75% of the stated means of finance, excluding the Net Proceeds for the objects mentioned below.
91
Requirement of Funds and Utilisation of Net Proceeds
The Net Proceeds are proposed to be utilised in the manner as set forth below:
Particulars
Purchase of IT software, hardware and
network equipment for a development
centre in Pune and replacement and
upgradation activities at our corporate
office
Investment in Nihilent Technologies Inc,
our wholly owned subsidiary for
repayment/prepayment of the loan availed
from HSBC Bank (Mauritius) Limited
Repayment of loans availed by our
Company
Acquisitions and other strategic initiatives
Development of new software platforms
General corporate purposes*
Total
Total
Estimated
Utilization
from Net
Proceeds
204.37
(In ` million)
Amount to be deployed from the Net Proceeds
in
Fiscal Year
2017
Fiscal Year
2018
Fiscal Year
2019
25.16
154.08
25.13
99.00
66.00
33.00
-
120.00
120.00
-
-
488.80
60.58
[●]
[●]
49.50
46.81
[●]
[●]
216.00
6.56
[●]
[●]
223.30
7.21
[●]
[●]
* The amount will be finalised upon determination of the Offer Price.
As indicated above, our Company proposes to deploy the entire Net Proceeds towards the objects as described
herein during Fiscal Years 2017, 2018 and 2019, as applicable. In the event that the estimated utilization of the Net
Proceeds in a scheduled Fiscal Year is not completely utilised, the same shall be done in the next Fiscal Year.
Further, if the Net Proceeds are not completely utilised for the objects stated above by Fiscal Year 2019 due to
factors such as: (i) economic and business conditions; (ii) timely completion of the Issue, market conditions outside
the control of our Company; and (iii) other commercial considerations; the Net proceeds would be utilised (in part or
full) in subsequent periods as may be determined by our Company in accordance with applicable law.
The above fund requirements, deployment of funds and the intended use of the Net Proceeds as described herein are
based on our current business plan, management estimates, quotations from suppliers and present market conditions.
Our fund requirements have not been appraised by any bank or financial institution or any other external agency.
The funding requirements and deployment as mentioned above may have to be revised and may entail rescheduling
and / or revising the planned expenditure and funding requirements and increasing or decreasing the expenditure for
a particular purpose from the planned expenditure at the discretion of our management, subject to compliance with
applicable law. For further details, please see Risk Factor No. 17 - Our funding requirements and proposed
deployment of the Net Proceeds are based on management estimates and have not been independently appraised,
and may be subject to change based on various factors, some of which are beyond our control.” on page 21.
In case of variations in the actual utilisation of funds earmarked for the purposes set forth above, increased fund
requirements for a particular purpose may be financed by surplus funds, if any, available in respect of the other
purposes for which funds are being raised in this Fresh Issue. In case of a shortfall in raising requisite capital from
the Net Proceeds towards meeting the objects of the Fresh Issue, we may explore a range of options including
utilising our internal accruals and seeking debt from financial institutions and other lenders. We believe that such
alternate arrangements would be available to fund any such shortfalls.
Details of the Objects of the Issue
The details in relation to the objects of the Fresh Issue are set forth below:
92
1.
Purchase of IT software, hardware and network equipment for our a development centre in Pune and
replacement and upgradation activities at our Corporate Office
(a)
Purchase of IT software, hardware and network equipment for a development centre in Pune
In furtherance to our strategy to invest in R&D and strengthen our human capital, we require additional office space
in Pune. Accordingly, we have entered into lease and license agreements each dated July 10, 2015 respectively with
NV Projects Private Limited for leasing a new office space admeasuring 33,659 square feet and 24,212 square feet
situated on the first and eighth floor of the building adjacent to the premises in which our Registered and Corporate
Office is situated. This new office space will be used as a development centre.
Our Company intends to utilise ` 131.34 million from the Net Proceeds to purchase IT software, hardware and
network equipment for IT hardware and software requirement for this development centre. The estimated total
expenses required to be incurred is set forth below:
Sr. No.
A.
1.
2.
3.
4.
5.
6.
7.
B.
1.
2.
3.
4.
5.
7.
C.
1.
2.
Cost per
license/Unit
(in `)
Particulars
Software
Office 365 licenses
Windows client access license (for active
directory connectivity)
Windows data center edition (server)
license (for Windows Standard/Enterprise
edition servers)
MS Visio Professional
MS Project Professional
VMware operations management software
with support
Antivirus license
Sub – total (A)
Hardware
Computers (laptops/desktops)
New HP server chassis (for addition of
blade servers)
Blade servers
Printer
Projectors
Video conferencing facility
Sub – total (B)
Network Equipment
Switches with stacking and uplink
modules
Wi-Fi access points + controller
Sub – total (C)
TOTAL (A +B+C)
Total
Estimated
Amount*
(` in million)
Quantity
12,569.54
4,328.59
900
900
11.31
3.90
699,996.88
1
0.70
42,870.21
83,544.52
572,806.50
50
50
12
2.14
4.18
6.87
1,421.41
900
1.27
30.37
84,420.00
4,166,925.00
900
1
75.98
4.17
990,990.00
366,188.00
64,850.00
735,152
6
4
2
1
5.95
1.46
0.07
0.74
88.37
Various
Various
10.45
2,153,798.00
1
2.15
12.60
131.34
*The above figures are based on quotations received from various vendors
(b)
Replacement and upgradation activities at our Corporate Office
Our Company intends to utilise ` 73.03 million from the Net Proceeds to replace certain light fittings, vehicles and
laptops as well as upgrade the other office infrastructure. The estimated total expenses required to be incurred would
be as per below:
93
Sr. No.
Particulars
1.
Replacement of light fittings (LED lights) and
pedestal fans
Replacement of office vehicle with new ones
Upgradation of the other office infrastructure
Replacement of laptops (with three years
international onsite warranty)
Total
2.
3.
4.
Various
Various
Total
Estimated
Amount*
4.14
2,105,000
Various
80,083
2
Various
800
4.21
0.61
64.07
Cost per unit
(in `)
Quantity
73.03
*The above figures are based on quotations received from various vendors
In relation to the purchase of IT software, hardware and network equipment for our development centre in Pune and
replacement and upgradation activities at our Corporate Office, we have received quotations from various vendors
which are valid as on the date of this Draft Red Herring Prospectus. However, we have not entered into any
definitive agreements with any of these vendors and there can be no assurance that the same vendors would be
engaged to eventually supply the above licenses, hardware and equipment or at the same costs. The abovementioned
quantities are based on management estimates. We do not intend to purchase any second-hand hardware, vehicles or
equipments.
2.
Investment in Nihilent Technologies Inc, our wholly owned subsidiary for repayment/prepayment of the
loan availed from HSBC Bank (Mauritius) Limited:
Our Company proposes to utilise ` 99.00 million from the Net Proceeds towards making an equity investment in
Nihilent Technologies Inc., our wholly owned subsidiary (“Nihilent USA”). Nihilent USA has availed a term loan
facility of USD 2 million from HSBC Bank (Mauritius) Limited, pursuant to a letter dated September 22, 2014
(“HSBC Facility”) for the purposes of acquiring GNet Group LLC, USA. The security for the HSBC Facility is a
standby letter of credit issued by HSBC India. The relevant terms of the HSBC Facility are set forth below:
Particulars
Amount Sanctioned (1)
Amount outstanding as on December 15, 2015 (1)
Rate of interest (per annum)
Repayment Date/Schedule
Details
USD 2 million or ` 134 million*
USD 2 million or ` 134 million
LIBOR 3 months + 1.80% per annum
8 equal quarterly instalments commencing after 1 year
of moratorium from the date of first drawdown. The first
quarterly instalment is due on December 23, 2015
Nihilent Technologies Inc shall within three business
days of demand, pay to HSBC its break costs
attributable to all or any part of the HSBC Facility or the
said dues being paid by the borrower on a day other than
the last day of an interest period for the HSBC Facility.
HSBC shall, at its own discretion and as reasonably
practicable provide a certificate confirming the amount
of its break costs for any interest period in which they
accrue.
Break costs
*
Exchange rate of ` 66.98 as on December 15, 2015 has been considered
(1)
The amounts due under the facility agreement will be repaid by Nihilent USA in US Dollars. Further, Bipin Vora and Associates, Chartered
Accountants vide their certificate dated December 15, 2015 have confirmed the amount outstanding and the fact that these borrowings have been
utilised for the purpose for which they were availed.
As indicated in the table above, the HSBC Facility availed by Nihilent USA stipulates levy of break costs in relation
to prepayment. We will take such provisions into consideration while deciding the repayment of the HSBC Facility.
Payment of such break costs, if any, shall be made out of the Net Proceeds of the Issue. In the event that the Net
Proceeds of the Issue are not sufficient for the payment of break costs, such payment shall be made from the internal
94
accruals of Nihilent USA. Additionally, no dividend has been assured to our Company by Nihilent USA. We believe
that this investment will help reduce our outstanding indebtedness and improve our debt equity ratio.
3.
Repayment of loans availed by our Company
Our Company proposes to utilise an estimated amount of ` 120 million from the Net Proceeds towards repayment,
in full or in part of loans availed by our Company. As on the date of the Draft red Herring Prospectus, our Company
has availed a term loan facility of ` 120 million from FirstRand Bank (“FRB”) pursuant to a sanction letter dated
October 15, 2015 (“FRB Term Loan”) for the purposes of expansion of office premises and operations of the
business activities, in accordance with the applicable laws. The terms of the FRB Facility are set out below:
Particulars
Amount sanctioned (1)
Amount outstanding as on December 15, 2015(1)
Details
` 120 million
` 120 million
1)
Bipin Vora and Associates , Chartered Accountants vide their certificate dated December 15, 2015 have confirmed the amount outstanding and
the fact that these borrowings have been utilised for the purpose for which they were availed.
For further details of the FRB Term Loan, please see section titled “Financial Indebtedness” on page 293. As
indicated in the table above, the FRB Term Loan availed by our Company stipulates levy of prepayment penalty by
way of commission in relation to prepayment. Our Company will take such provisions into consideration while
deciding the prepayment of the FRB Term Loan. Payment of such prepayment penalties, if any, shall be made out of
the Net Proceeds of the Issue. In the event that the Net Proceeds of the Issue are not sufficient for the payment of
prepayment penalties, such payment shall be made from the internal accruals of our Company.
Additionally, the amount of loans availed by the Company is dependent on several factors and may vary with the
business cycle of the Company. Accordingly, we may instead utilise the Net Proceeds for repayment or pre-payment
of any such new loans. However, the aggregate amount to be utilised from the Net Proceeds towards repayment/prepayment of loans would not exceed `120 million. We believe that such repayment will help reduce our outstanding
indebtedness and debt servicing costs and enable utilisation of our accruals for further investment in our business
growth and expansion. In addition, we believe that this would improve our ability to raise further resources in the
future to fund our potential business development opportunities.
4.
Acquisitions and other strategic initiatives
One of our strategies is to expand our global presence inorganically through acquisition of companies that
complement our competencies. We believe that we have benefited significantly from the acquisitions undertaken by
us in the past. The acqusition of GNet helped strengthen our delivery team enabling us to bolster our digital strategy
execution capabilities and increase our presence in the United States. Similarly, in September 2015, we acquired 51
percent shareholding in Intellect Bizware Services Private Limited (“Intellect”), an ERP implementation, support
and consulting services company located in Mumbai which has majority of clients based in India. This acquisition
has helped us strengthen and expand our presence in India and has also provided us with an opportunity to sell their
services in multiple geographies where we operate.
Rationale for acquisitions:
The following are the benefits which we typically intend to derive from our acqusitions:
(a) To increase our service offerings
We cater to customers across different business verticals. We often receive requests from existing clients as well as
new customers to provide certain services which are not part of our current service offering. We typically seek to
acquire companies which provide such services and those which would help us grow our service offerings.
Additionally, we look at acquisitions that help us obtain a more localised knowledge about the requirements of a
particular market or client.
95
(b) To enhance our technology bandwidth
We seek to acquire companies which have expertise in technologies that complement our offerings. Such
acquisitions enable us to offer a broader range of services to prospects and our customers.
(c)
Enhancing our geographical reach
One of our strategies is to increase our customer and revenue from developed countries such as the United States,
Europe and Australia. In this context, we seek to acquire entities which have a geographical presence in these
regions that would help us to either establish our presence or enhance our service offerings in these regions.
Acqusition process:
Our acquistion strategy is supervised by our Board. While acquiring a company, we typically follow the process
menitoned below:

Identifying the target company;

Entering into a non-disclosure agreement with the target company;

Conduct detailed due diligence of the target company by hiring relevant specialists and other external advisors
and agencies; and

On satisfactory conclusion of the due diligence exercise, our company enters into definitive ‘purchase
agreement’ in relation to the target company.
Utiliztion of Net Proceeds:
We intend to utilise ` 488.80 million from the Net Proceeds towards potential acquisitions and strategic initiatives.
Acquisition of balance 49% shareholding in Intellect
Our Company entered into a Share Purchase and Shareholders’ Agreement (“SPSA”) dated September 1, 2015 with
Intellect Bizware Services Private Limited (“IBSPL”) along with Mr. Syed Sabahat Kazi, Mr. Lingam
Gopalakrishna and Mr. Sanjay Prabhakar Gupte (jointly referred to as “Key Shareholders”). Under the terms of the
SPSA, our Company has acquired 51% of the equity shareholding of IBSPL and has been granted an irrevocable and
unconditional right and option to acquire the balance 49% shareholding of the IBSPL. The SPSA provides that our
Company has the option to acquire the balance shareholding either: (a) directly or through its subsidiaries in a single
transaction within a stipulated time of 30 days after August 31, 2016; or (ii) in one or more tranches within a period
of three years; or (iii) in one or more tranches in a period of five (5) years of the completion of the acquisition of the
initial Stake or such other extended period in terms of the SPSA. The acquisition price for the balance 49 percent is
based on a valuation methodology which is linked to a target EBITDA vis –a vis the actual EBITDA achieved at the
end of each year as set forth in the SPSA. Since the acquisition price of the balance 49 percent of IBSPL is linked to
a valuation methodology set forth in the SPSA, the same cannot be determined at this stage. As on the date of this
Draft Red Herring Prospectus, except for the acquisition of the balance 49 percent of IBPSL pursuant to the SPSA
as mentioned above, we have not entered into any definitive agreements towards any furture acquisitions or strategic
initiatives.
The amount of Net Proceeds identified for acqusitions is based on our management’s estimates. The actual
deployment of funds will depend on a number of factors, including the timing, nature, size and number of strategic
initiatives undertaken, as well as general factors affecting our results of operation, financial condition and access to
capital. These factors will also determine the form of investment for these potential strategic initiatives, i.e., whether
they will involve equity, debt or any other instrument or combination thereof. The portion of the Net Proceeds
allocated towards this Object may not be the total value or cost of any such acqusitions, but is expected to provide us
with sufficient financial leverage to enter into binding agreements. In the event that there is a shortfall of funds
96
required for such acqusitions, such shortfall shall be met out of the portion of the Net Proceeds allocated for general
corporate purposes.
5.
Developing new software platforms
(a) Developing an automated tool as dashboard for use by key executives
We intend to utilise ` 40.85 million from the Net Proceeds to develop a digital dashboard for use by key executives
of customers and prospects to monitor progress across various parameters their respective organisation on a variety
of devices. Each dash board is customised to include the areas in an organisation which the senior executive
controls. The purpose of this dash board will be to enable the key executives in an organisation to detect unintended
deviations in a particular project or targets so that problems can be detected and solved at an early stage.
We intend to leverage our capabilities in consulting, analytics with big data and natural language processing to help
us in gathering information and development of the digital dashboard. The estimated costs in terms of salaries,
consultancy fees and infrastrucutre to develop this platform, based on management estimates, is listed below:
Amount
(in ` Million)
Sr. No.
Description
1.
Salaries and recrutiment for 18 to 24 employees which include
mathematician, statistician and data scientist with experience in
data warehousing, visulisation, high end graphics, machine
learning, natural language processing etc. to be hired / deployed
over a period of approximately two and a half years for this project.
Consultancy fees to external parties for professional and technical
services
Infrastructure related expenses (mainly for cloud based services)
TOTAL
2.
3.
27.39
11.50
1.96
40.85
(b) Development of capabilities in relation to e-commerce platforms
We currently have a cloud hosted website, namely, www.tumbhi.com (“Tumbhi”) which is operated through our
wholly owned subsidiary, Seventh August IT Services Private Limited. We intend to develop this platform for
artists, art lovers and art seekers from across the world, to share their common passion or art, collaborate with other
artists, get their work reviewed by industry experts and obtain access to other opportunities. It is intended that an
aspiring artist can submit his/her artifact and Tumbhi will publish it for public view. It is intended that Tumbhi in the
future may charge a consultancy fee to artists to publish their artwork and generate additional revenues through
advertising.
Further, our customers in media and entertainment industry have future plans to developing such platforms of their
own and we have the opportunity to brand such platforms and license to them. The initiative also gives us the
opportunity to understand the nuances of ecommerce and helps us get insights and first hand knowledge of future etaling.
We intend to invest ` 19.73 million out of the Net proceeds in our subsidiary Seventh August IT Services Private
Limited either through debt or equity investment as may be decided by our Board for developing and promoting
Tumbhi platform. Based on management estimates, these amounts would be used towards paying salaries and
recruitment expenses for recruiting approximately seven employees with experience in website design, e-commerce
backend, marketing and customer support and procurement over a period of 30 to 36 months.
6.
General corporate purposes
Our Company proposes to deploy the balance Net Proceeds aggregating to ` [●] million towards general corporate
purposes, subject to such utilisation not exceeding 25% of the Gross Proceeds, in compliance with the SEBI
Regulations. The general corporate purposes for which our Company proposes to utilise Net Proceeds include
97
meeting exigencies and expenses incurred, by our Company in the ordinary course of business. In addition to the
above, our Company may utilise the Net Proceeds towards other expenditure (in the ordinary course of business)
considered expedient and as approved periodically by the Board or a duly constituted committee thereof, subject to
compliance with necessary provisions of the Companies Act. Our Company’s management, in accordance with the
policies of the Board, shall have flexibility in utilising surplus amounts, if any.
7.
Issue Expenses
The total expenses of the Issue are estimated to be approximately ` [●] million. The break-up for the Issue expenses
is as follows:
[●]
As a % of
the
total
estimated
Issue
expenses(1)
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
Estimated
expenses(1)(2)
(in ` million)
Activity
BRLM’s fees and commissions (including underwriting
commission, brokerage and selling commission)
Commission/processing fee for SCSBs(3) and Bankers to the
Issue
Brokerage and selling commission for Registered Brokers(4)
Registrar to the Issue
Other advisors to the Issue
Others
 Listing fees, SEBI filing fees, book building software
fees
As a % of
the total
Issue size(1)
[●]

Printing and stationary
[●]
[●]
[●]

Advertising and marketing expenses
[●]
[●]
[●]

Miscellaneous
[●]
[●]
[●]
[●]
[●]
[●]
Total estimated Issue expenses
(1)
Amounts will be finalized at the time of filing the Prospectus and on determination of Issue Price and other details.
(2)
Other than the listing fees which shall be borne by our Company, the expenses in relation to the Issue will be borne by
our Company and the Selling Shareholders in proportion to the Equity Shares contributed to the Issue by our Company
and the Selling Shareholders, respectively.
(3)
The SCSBs would be entitled to a processing fees of ` [●] (excluding service tax) per Bid cum Application Form, for
processing the Bid cum Application Forms procured by the members of the Syndicate or the Registered Brokers and
submitted to the SCSBs.
(4)
For every valid Bid cum Application Form, commission payable will be ` [] per Bid cum Application Form procured by
the Registered Broker. The total commission to be paid to the Registered Brokers for the Bid cum Applications Forms
procured by them, which are considered eligible for allotment in the Issue, shall be capped at ` [] million (the
“Maximum Brokerage”). In case the total commission payable to the Registered Brokers exceeds the Maximum
Brokerage, then the amount paid to the Registered Brokers would be proportionately adjusted such that the total
commission payable to them does not exceed the Maximum Brokerage. The quantum of commission payable to
Registered Brokers is determined on the basis of Bid cum Applications Forms. The terminal from which the Bid has been
uploaded will be taken into account in order to determine the commission payable to the relevant Registered Broker.
Interim use of Net Proceeds
Our Company, in accordance with the policies established by the Board from time to time, will have flexibility to
deploy the Net Proceeds. Pending utilisation for the purposes described above, our Company will deposit the Net
98
Proceeds only with scheduled commercial banks included in Second Schedule of Reserve Bank of India Act, 1934.
In accordance with Section 27 of the Companies Act, 2013, our Company confirms that it shall not use the Net
Proceeds for any investment in the equity markets.
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.
Monitoring of Utilisation of Funds
Since the proceeds from the Fresh Issue do not exceed ` 5,000 million, in terms of Regulation 16 of the SEBI
Regulations, our Company is not required to appoint a monitoring agency for the purposes of this Issue. Our Board
will monitor the utilisation of the proceeds of the Issue. Our Company will disclose the utilization of the Net
Proceeds under a separate head in our balance sheet along with the relevant details, for all such amounts that have
not been utilized. Our Company will indicate investments, if any, of unutilised Net Proceeds in the balance sheet of
our Company for the relevant Fiscal Years subsequent to receipt of listing and trading approvals from the Stock
Exchanges.
Pursuant to Regulation 32(3) of the Listing Regulations, our Company shall on a quarterly basis disclose to the
Audit Committee the uses and application of the Net Proceeds. Until such time as any part of the Net Proceeds
remains unutilized, our Company will disclose the utilization of the Net Proceeds under separate heads in our
Company’s balance sheet(s) clearly specifying the amount of and purpose for which Net Proceeds have been utilized
so far, and details of amounts out of the Net Proceeds that have not been utilized so far, also indicating interim
investments, if any, of such unutilized Net Proceeds. In the event that our Company is unable to utilize the entire
amount that we have currently estimated for use out of the Net Proceeds in a Fiscal Year, we will utilize such
unutilized amount in the next Fiscal Year.
Further, in accordance with Regulation 32(1) (a) of the Listing Regulations our Company shall furnish to the Stock
Exchanges on a quarterly basis, a statement indicating material deviations, if any, in the utilization of the Net
Proceeds for the objects stated in this Draft Red Herring Prospectus. This information will also be advertised in
newspapers simultaneously with the interim or annual financial results of our Company after placing them before
the Audit Committee.
Variation in Objects
In accordance with Section 13(8) and Section 27 of the Companies Act, 2013 and applicable rules, our Company
shall not vary the objects of the Issue without our Company being authorised to do so by the Shareholders by way of
a special resolution through postal ballot. In addition, the notice issued to the Shareholders in relation to the passing
of such special resolution (the “Postal Ballot Notice”) shall specify the prescribed details as required under the
Companies Act and applicable rules. The Postal Ballot Notice shall simultaneously be published in the newspapers,
one in English and one in the vernacular language of the jurisdiction where the Registered Office is situated. Our
Promoters or controlling Shareholders will be required to provide an exit opportunity to such Shareholders who do
not agree to the proposal to vary the objects, at such price, and in such manner, as may be prescribed by SEBI, in
this regard.
Appraising Entity
None of the objects of the Issue for which the Net Proceeds will be utilized have been appraised.
Other Confirmations
No part of the proceeds of the Fresh Issue will be paid by us to the Promoters and Promoter Group, the Directors,
associates or Key Management Personnel, except in the normal course of business and in compliance with
applicable law.
99
BASIS FOR ISSUE PRICE
The Issue Price will be determined by our Company, in consultation with the BRLM, on the basis of assessment of
market demand for the Equity Shares offered through the Book Building Process and on the basis of quantitative and
qualitative factors as described below. 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.
Investors should also refer to the sections “Business”, “Risk Factors” and “Financial Statements” on pages 121, 16
and 179, respectively, to have an informed view before making an investment decision.
Qualitative Factors
We believe that the following are our competitive strengths:

Integrated global business consulting and IT services Company: Focused on enterprise transformation
through our change management solutions that comprises of process transformation, information technology
and cultural transformation and combine them in holistic manner.

Enduring relationships with clients: Creating a long term partnership with the clients and understanding their
business drivers for creating a symbiotic relationship with the customers.

Our growing global footprint: Enables us to service and support our existing clients in a number of important
markets from locations closer to our clients, and positions us well to develop new clients. This also enables us
to early adapt to emerging technologies from the developed countries and propagate and apply them in
emerging markets.

Joint research and development opportunities with our clients: We engage with our clients and develop
intellectual property and products combining their knowledge of the business with our technical expertise thus
helping us to create a symbiotic relationship.

Strong and tenured management team: A cohesive team of our experienced senior management with proven
track records across competencies, coupled with trained managers and skilled employees enables us to identify
new avenues of growth, and help us to implement our business strategies in an efficient manner and to continue
to build on our track record of successful projects.
For further details, please see sections titled “Business - Our Strengths” on pages 123 of this Draft Red Herring
Prospectus.
Quantitative Factors
The information presented below relating to our Company is based on the Restated Standalone Financial Statements
and Restated Consolidated Financial Statements prepared in accordance with Indian GAAP and the Companies Act
and restated in accordance with the SEBI Regulations. For details, please see section titled “Financial Statements”
on page 179.
Some of the quantitative factors which may form the basis for computing the Issue Price are as follows:
1.
Earnings Per Share (EPS)
As per our Restated Standalone Financial Statements:
Year Ended
Basic EPS (in ₹)
100
Diluted EPS (in ₹)
Weight
Year Ended
March 31, 2013
March 31, 2014
March 31, 2015
Weighted Average
For the three month period ended June 30, 2015*
* Annualised
Basic EPS (in ₹)
21.16
24.68
22.18
22.84
12.39
As per our Restated Consolidated Financial Statements:
Year Ended
Basic EPS (in
₹)
March 31, 2013
21.37
March 31, 2014
23.69
March 31, 2015
20.16
Weighted Average
21.54
For the three month period ended June 30, 2015*
14.68
* Annualised
Diluted EPS (in ₹)
20.70
24.37
22.04
22.59
12.34
Weight
1
2
3
Diluted EPS (in ₹)
Weight
20.91
23.39
20.04
21.30
14.63
1
2
3
Notes:
a) Weighted average number of Equity Shares is the number of Equity Shares outstanding at the beginning of
the year adjusted by the number of Equity Shares issued during year multiplied by the time weighing factor.
The time weighing factor is the number of days for which the specific shares are outstanding as a
proportion of total number of days during the year.
b) Earnings per share are calculated in accordance with Accounting Standard 20 ‘Earnings Per Share’,
notified accounting standard by Companies (Accounting Standards) Rules, 2006 (as amended).
2.
Price/Earning (“P/E”) ratio in relation to Price Band of ₹[●] to ₹[●] per Equity Share
Particulars
Based on basic EPS as per the
Restated Standalone Financial
Statements for FY 2015
Based on basic EPS as per the
Restated Consolidated Financial
Statements for FY 2015
Based on diluted EPS as per the
Restated Standalone Financial
Statements for FY 2015
Based on diluted EPS as per the
Restated Consolidated Financial
Statements for FY 2015
3.
P/E at the lower end of Price
band (no. of times)
P/E at the higher end of Price
band (no. of times)
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
Industry P/E Ratio
Particulars
Industry P/E(x)*
Highest
20.50
Lowest
26.34
Industry Composite
23.40
* Source: The highest and lowest Industry P/E shown above is based on the Industry peer set provided below
under “Comparison with Listed Industry Peers”. The Industry composite has been calculated as the arithmetic
101
average P/E of the Industry peer set provided below. For further details, see “Basis for Offer Price Comparison with Listed Industry Peers”
4.
Return on Net Worth (“RoNW”)
As per Restated Standalone Financial Statements:
Particulars
Year ended March 31, 2013
Year ended March 31, 2014
Year ended March 31, 2015
Weighted Average
RoNW %
31.53
29.17
22.54
26.25
Weight
1
2
3
As per Restated Consolidated Financial Statements:
Particulars
Year ended March 31, 2013
Year ended March 31, 2014
Year ended March 31, 2015
Weighted Average
RoNW %
33.35
29.37
21.88
26.29
Weight
1
2
3
Return on Net Worth for Equity Shareholders =
5.
Net Profit After Tax after minority interest
Net Worth excluding revaluation reserve as at the end of the period
Minimum RoNW after the Issue needed to maintain Pre-Issue EPS for the year ended March 31, 2015:
To maintain pre-Issue basic EPS
Particulars
At the Floor Price
At the Cap Price
Standalone (%)
[•]
[•]
Consolidated (%)
[•]
[•]
Standalone (%)
[•]
[•]
Consolidated (%)
[•]
[•]
To maintain pre-Issue diluted EPS
Particulars
At the Floor Price
At the Cap Price
6.
Net Asset Value (“NAV”) per Equity Share of face value of ₹10 each
NAV per Equity Share
Restated Standalone Financial
Statements
91.35
95.08
[●]
[●]
[●]
[•]
As on March 31, 2015
As on June 30, 2015
At Floor Price
At Cap Price
At Issue Price
After the Issue
Net Asset Value Per Equity Share
=
(in ₹)
Restated Consolidated
Financial Statements
85.53
89.85
[●]
[●]
[●]
[•]
Net Worth excluding revaluation reserve and preference share capital
at the end of the period/year divided by Number of Equity Shares
102
outstanding at the end of year/period
7.
Comparison with Listed Industry Peers
We are a global business consulting and IT services solutions integration company. We believe that none of the
listed companies in India are focused exclusively on the same segments as our Company, especially with
respect to our Enterprise Transformation and Change Management. There are, however, listed IT services’
companies, which are listed below as peer group companies:
Name of the company
For the year ended March 31, 2015
Total
Basic
Diluted
P/E
RoNW
Revenue
EPS
(%)
EPS ₹
(in
in ₹
₹million)
Face
Value
in ₹
Nihilent Technologies
Ltd#
Peer Group@
Mindtree Limited
Persistent Systems Limited
Zensar Technologies
Limited
Industry Composite
#
@
NAV
in ₹
10
2,717
22.18
22.04
[●]
22.54
91.35
10
10
36,454
13,382
64.14
32.87
63.85
32.41
23.36
20.50
26.65
19.14
239.58
169.36
10
11,007
41.69
41.04
26.34
23.77
172.64
23.40
23.19
Source: Based on the Restated Standalone Financial Statements for the year ended March 31, 2015.
Based on audited standalone financial results for the financial year ended March 31, 2015
Notes:
1.
Total revenue is as sourced from the financial results reports of the companies
2.
Basic EPS and Diluted EPS refer to the EPS sourced from the annual report of these companies as at March 31, 2015
3.
P/E Ratio has been computed as the closing market prices of the companies sourced from the NSE website as on December 18, 2015
as divided by the diluted EPS provided under Note 2.
4.
RoNW (%) has been computed as net profit after tax sourced from the annual report of these companies divided by the net worth of
these companies as at March 31, 2015. Net worth has been computed as sum of share capital and reserves and surplus.
5.
NAV is computed as the closing net worth of these companies, computed as per Note 4, divided by the weighted average number of
shares after giving effect to dilution sourced from the annual report of these companies.
6.
Industry composite numbers of P/E and RoNW is computed by taking a simple average of the P/E ratios and the RoNW of these
companies.
For a detailed discussion on the qualitative factors, which form the basis for computing the Issue Price, please see
sections titled “Business” and “Risk Factors” on pages 121 and 16, respectively.
The Issue Price of ₹ [●] has been determined by our Company in consultation with the BRLM, on the basis of
assessment of market demand from investors for Equity Shares through the Book Building Process and, is justified
in view of the above qualitative and quantitative parameters. The BRLM believes that the Issue Price of ₹ [] is
justified in view of the above parameters. Investors should read the above mentioned information along with the
sections “Risk Factors” and “Financial Statements” on pages 16 and 179, respectively, to have a more informed
view. The trading price of the Equity Shares could decline due to the factors mentioned in the section titled “Risk
Factors” beginning on page 16 or any other factors that may arise in the future and you may lose all or part of your
investments.
103
STATEMENT OF TAX BENEFITS
To,
The Board of Directors
NIHILENT TECHNOLOGIES LIMITED
Date: December 21, 2015
Dear Sirs,
Subject: Statement of possible special tax benefits (‘the Statement’) available to Nihilent Technologies Private
Limited (“the Company”) and its shareholders prepared in accordance with the requirement in SCHEDULE
VIII – CLAUSE (VII) (L) of Securities and Exchange Board of India (Issue of Capital Disclosure
Requirements) Regulations 2009, as amended (‘the Regulations’)
We hereby report that the enclosed Annexure prepared by the Company, states the possible special tax benefits
available to the Company and to the shareholders of the Company under the Income Tax Act, 1961, Customs Act,
1962, Central Excise Act, 1944 and the Cenvat Credit Rules, 2004 as amended by the Finance Act, 2015 (i.e.
applicable for financial year 2015-16, relevant to the assessment year 2016-17) presently in force in India as on the
signing date. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions
prescribed under the relevant provisions of the various Acts as mentioned above. Hence, the ability of the Company
or its shareholders to derive the special tax benefits is dependent upon fulfilling such conditions, which is based on
business imperatives the Company may face in the future and accordingly, the Company may or may not choose to
fulfill.
The benefits discussed in the enclosed Annexure cover only special tax benefits available to the Company and do
not cover any general tax benefits available to the company. Further, the preparation of the Statement and its
contents is the responsibility of the Management. We were informed that this statement is only intended to provide
general information to the investors 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 offer for sale.
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; or
 The conditions prescribed for availing the benefits have been/ would be met with.
The contents of the enclosed statement are based on information, explanations and representations obtained from the
Company and on the basis of our understanding of the business activities and operations of the Company.
Our views expressed herein are based on the facts and assumptions indicated to us. No assurance is given that the
revenue authorities/ courts will concur with the views expressed herein. Our views are based on the existing
provisions of law and its interpretation, which are subject to change from time to time. We do not assume
responsibility to update the views consequent to such changes. We shall not be liable to the Company for any
claims, liabilities or expenses relating to this assignment except to the extent of fees relating to this assignment, as
finally judicially determined to have resulted primarily from bad faith or intentional misconduct. We will not be
liable to any other person in respect of this statement.
The enclosed annexure is intended for your information and for inclusion in the Draft Red Herring Prospectus in
connection with the proposed issue of equity shares and is not to be used, referred to or distributed for any other
purpose without our prior written consent.
Yours faithfully,
For B S R & Co. LLP
104
Chartered Accountants
ICAI firm registration number: 101248W/W-100022
Juzer Miyajiwala
Partner
Membership No.: 047483
Place: Mumbai
105
ANNEXURE TO THE STATEMENT OF POSSIBLE SPECIAL TAX BENEFITS AVAILABLE TO THE
COMPANY AND ITS SHAREHOLDERS UNDER THE APPLICABLE TAX LAWS IN INDIA
Outlined below are the possible Special tax benefits available to the Company and its shareholders under the tax
laws in force in India (i.e. applicable for the Financial Year 2015-16 relevant to the assessment year 2016-17). These
benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax
laws. Hence, the ability of the Company or its shareholders to derive the Special tax benefits is dependent upon
fulfilling such conditions, which based on business imperatives it faces in the future, it may or may not choose to
fulfill.
UNDER THE INCOME TAX ACT, 1961 (“THE ACT”)
A. BENEFITS TO THE COMPANY UNDER THE ACT:
The Company will be entitled to deduction under the sections mentioned hereunder from its total income chargeable
to Income Tax.
1. Special tax benefits available to the Company
a. Relief under section 90 of the Act
The company has a branch in South Africa and United Kingdom. The company is eligible to claim relief under
section 90 of the Act against the taxes paid in South Africa and United Kingdom respectively, subject to satisfaction
of relevant conditions prescribed in the Act, if any.
2. Special Tax Benefits to the shareholders of the Company
There are no Special Tax benefits available to the shareholders of the company.
UNDER THE CUSTOMS ACT, 1962
The Company, being an STP unit, would be permitted to import goods without payment of Customs duty subject to
fulfillment of prescribed conditions (Notification no. 52/2003-Cus. dated 31 March 2003).
UNDER THE CENTRAL EXCISE ACT, 1944
The Company, being an STP unit, would be permitted to procure goods locally without payment of Excise duty
subject to fulfillment of prescribed conditions (Notification no. 22/2003-C.E. dated 31 March 2003).
106
SECTION IV: ABOUT OUR COMPANY
INDUSTRY
The following information includes extracts from publicly available information, industry reports, data and statistics
and has been extracted from official sources and other sources that we believe to be reliable, but which have not
been independently verified by us or the BRLM, or any of our or their respective affiliates or advisers.
While we believe Industry sources and publications and the information contained are generally believed to be
reliable, 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. Industry sources and
publications are also prepared based on information and estimates as of specific dates and may no longer be
current or reflect current trends. Such information, data and estimates may be approximations or use rounded
numbers. All references to years in the section below are to calendar years unless specified otherwise.
State of the Global Economy
The World Bank report on the global economic prospects notes that global growth hit a soft patch at the start of the
year, but remains broadly on track to reach about 2.8 percent in 2015, somewhat below earlier forecasts, with a
modest pickup in 2016–17. (Source: Global Economic Prospects, Global Economy in Transition, World Bank
(“World Bank Report”)) Looking forward, global activity should be supported by continued low commodity prices
and generally still-benign financing conditions, notwithstanding the expected modest tightening in U.S. monetary
policy. (Source: World Bank Report).
Exhibit 1: Global activity
(Source: World Bank Report)
The report pegs global growth to be 2.8 percent
in 2015, lower than anticipated in January.
Growth is expected to pick up to 3.2 percent in
2016–17, broadly in line with previous
forecasts. Developing economies are facing
two transitions. First, the widely expected
tightening of monetary conditions in the
United States, along with monetary expansion
by other major central banks, has contributed
to broad-based appreciation in the U.S. dollar
and is exerting downward pressure on capital
flows to developing countries. Many
developing-country currencies have weakened
against the U.S. dollar, particularly those of countries with weak growth prospects or elevated vulnerabilities. In
some countries, this trend has raised concerns about balance sheet exposures in the presence of sizeable dollardenominated liabilities. Currency depreciations have been significantly less in trade-weighted terms, partly due to a
weakening euro and yen, thus offering only modest prospects for competitiveness gains to boost exports. Second,
despite some pickup in the first quarter of 2015, lower oil prices are having an increasingly pronounced impact. In
oil-importing countries, the benefits to activity have so far been limited, although they are helping to reduce
vulnerabilities. In oil-exporting countries, lower prices are sharply reducing activity and increasing fiscal, exchange
rate, or inflationary pressures. Risks remain tilted to the downside, with some pre-existing risks receding but new
ones emerging. (Source: World Bank Report)
107
The Global IT-BPM Industry
Overview
According to NASSCOM, businesses all over the world are now facing a digital and connected customer – one who
is informed, decisive and influential. Organizations have no choice but to use technology to undergo a digital
transformation themselves. Digitization can extend the reach of organizations, enhance management decisions and
accelerate development of new growth engines. Thus, unpredictable economic conditions and rapidly evolving
customer requirements is influencing how and where each dollar is spent; as firms not only look to get more with
less, but also get new, yet unrealized benefits. (Source: The IT-BPM Sector in India, Strategic Review 2015,
NASSCOM – February 2015 “NASSCOM Report”)
NASSCOM notes that customers today expect technology not only to enable efficient operations, but also creating
new avenues of growth. This scenario is both challenging and exciting, and is ensuring a dual role for technology,
which will be used for both traditional applications that are anchored around stability and efficiency, and modern
systems that focuses on agility, rapid application evolution and tighter alignment with business units. This is likely
to dictate global technology spend with an increased need for enterprise digital transformation as the new way to
engage and serve customers. (Source: NASSCOM Report)
Exhibit 2: IT services industry has evolved to focus on enterprise digital transformation
Source: NASSCOM Report
NASSCOM believe that these trends have immensely impacted the information technology and business process
management (“IT-BPM”) sector along with the overall effect of changing customer expectation, digitisation and
regulatory changes across the globe. In such a scenario, the worldwide IT-BPM spend was nearly USD 2.3 trillion, a
growth of 4.6 per cent over 2013. Software products, IT and BPM services continued to lead, accounting for over
USD 1.25 trillion–55 per cent of total spend. Hardware spend at USD 1 trillion, accounted for balance 45 per cent.
108
While Americas remained the largest market, APAC recorded highest growth of 5.1 per cent, driven by faster
growth in BPM services. (Source: NASSCOM Report)
Exhibit 3: Global IT spend
2013
2014
2013
USD 2,176 bn
1400 1440
979 1022
635 657
167 177
Worldwide
Services
Worldwide BPM
395 420
Worldwide
Software
Worldwide
Hardware
2014
USD 2,275
bn
Total
Worldwide
Engineering
Spend
All figures in USD billion. Source: NASSCOM Report
According to NASSCOM, the global spending on IT services grew at 3.5 per cent in 2014, to reach USD 657
billion, aided by the improving economies of the US and other regions. Traditional and mature verticals such as
banking, financial services and insurance (“BFSI”), manufacturing and telecommunications continue to drive
growth while the share of verticals such as healthcare and retail increased as social, mobile, analytics and cloud
(“SMAC”) adoption across industries increased. IS outsourcing and custom application development growth
increased substantially, driven by SMAC adoption. The demand for IT consulting services grew, while systems
integration and outsourcing dropped marginally. Commoditisation, increasing demand for cloud platform services
and drop in hardware maintenance services also affected the segment. (Source: NASSCOM Report)
NASSCOM notes that the global BPM market this year was marked by fundamental shifts driven by the increasing
use of automation and analytics to further increase enterprise operational efficiencies as well as gain deeper insight
into business performance. Global BPM spend grew at 5.5 per cent in 2014, a CAGR (2010-2014) of 5.3 per cent to
reach USD 177 billion. A significant percentage of this growth was led by the Americas and EMEA market, with a
growth rate of 5 per cent and 9 per cent respectively in 2014. While matured verticals such as BFSI, manufacturing
and telecom contributed significantly in absolute amount due to higher base (despite slower growth), emerging
verticals such as healthcare and retail were the main growth drivers. Similarly, in horizontal services, finance and
accounting and procurement services recorded highest growth at 7 per cent and 13 per cent respectively. Domainspecific services and big data analytics enabling business outcomes became the main differentiator among service
providers. (Source: NASSCOM Report)
109
Exhibit 4: Global sourcing growing 2X faster than global IT spend
IT Sourcing
Business process Sourcing
148 - 153
134 - 140
60 - 62
53 - 55
↑ 9 – 10%
88 - 91
81 - 85
2013
2014
Figures in USD billion | Source: NASSCOM Report
India maintained its leadership position in the global sourcing area with a share of 55 per cent of global IT-BPM
spend in 2014. New delivery centers for global sourcing added in 2014 recorded a growth of 49 per cent, with over
27 per cent of the new additions being in India. (Source: NASSCOM Report)
Exhibit 5: India remains a key sourcing destination
41
38
30
29
21
20
17
21
14
10
4
India
Eastern Europe
Rest of Asia
Latin America
2013
Phillippines
6
Africa
2014
Source: NASSCOM Report
Digital Enterprise
According to NASSCOM, firms recognising IT as a strategic asset with which they can renew vital aspects of their
operations — are investing in digital tools, capabilities, and skills to more easily identify useful data, evaluate it,
excerpt it, analyse it, derive insights from it, share it, manage it, comment on it, report on it, and, most importantly,
act on it. This next generation enterprise – ‘digital enterprise’ leverages digital technology to re-imagine their
business. Digital capabilities will be fundamental to firms transforming customer experience. The future enterprise
will leverage the maturation and convergence of social, mobile, analytics, big data, cloud and the Internet of Things
to drive this agenda. (Source: NASSCOM, the IT-BPM Sector in India, Strategic Review 2014 (“NASSCOM Report
2014”))
NASSCOM believes that the accelerating pace of business, the growing impact of digital, and several other major
indicators suggest that a next generation enterprise is on the horizon. This digital enterprise leverages digital
technology to re-imagine businesses, and embraces the key characteristics that enable future success. Innovative,
110
fast, responsive, agile, creative and, design-oriented are some of these key characteristics. Digital technology drives
value in businesses in four ways: enhanced connectivity, automation of manual tasks, improved decision-making,
and product or service innovation. Tools such as big data analytics, apps, workflow systems, and cloud platforms —
all of which enable this value — are often applied by businesses to enhance value to the customer and thus
transform the way business is done. (Source: NASSCOM Report 2014)
Exhibit 15: Digital enterprise: The future of every organisation
Source: NASSCOM Report 2014
The NASSCOM Report 2014 notes that over the years, there has been a critical shift in IT spending with business
stakeholders increasingly making IT purchases out of their business budgets, eating into CIOs’ tech budgets.
According to a survey conducted by Forrester, 2013 witnessed a heightened acceleration in this trend, with CIOs
exclusively controlling just about 51 per cent of enterprise IT procurement decisions as compared to 58 per cent the
previous year. With business leaders increasingly driving IT purchases, IT budgets owned and controlled by them
are expected to grow much faster than those controlled by IT in the near future. Businesses will push for new IT
organisations that better support growth strategies, by taking steps to reorganise their IT departments in order to
better engage the business and drive better business outcomes. (Source: NASSCOM Report 2014)
Indian IT-BPM Industry
Overview
NASSCOM notes that the industry demonstrated flexibility and resolve to adjust to turbulent economic conditions
and experience double digit growth. Overall revenue (exports + domestic) for FY2015 is expected at USD 146
111
billion, a growth of ~13 per cent over last year, an overall y-o-y addition of ~USD 17 billion. Industry contribution
relative to India’s GDP is set to touch an estimated 9.5 per cent and share in total services exports >38 per cent. The
industry currently employs >3.5 million – India’s largest private sector employer. It is also playing a key role in
promoting diversity within the industry – women employees (>34 per cent share), 170,000 foreign nationals and a
greater share of employees from non-Tier I Indian cities. (Source: NASSCOM Report)
Exports Market
NASSCOM expects FY2015 to see the exports market at over USD 98 billion, recording a 12.3 per cent growth over
last year. ER&D and product development segment is the fastest growing at 13.2 per cent, driven by higher valueadded services from existing players and an increased business from GICs. IT services exports are to grow at
industry rate of 12.6 per cent. Value-added services around SMAC – upgrading legacy systems to be SMAC
enabled, greater demand for ERP, CRM, mobility from manufacturing segment and user experience technologies in
retail segment is driving growth in IT services. BPM is being driven by greater automation, expanding omni-channel
presence, application of analytics across entire value chain, etc. (Source: NASSCOM Report)
Exports to USA, the largest market grew above industry average, aided by an economic revival and higher
technology adoption. Demand from Europe remained strong during the first half of the year, but softened during the
second half due to currency movements and economic challenges. Manufacturing, utilities and retail growth
remained strong as clients increase discretionary spend on customer experience, digital, analytics, ERP updates and
improving overall efficiency. BFSI, the most mature market experienced cost pressures affecting growth. (Source:
NASSCOM Report)
NASSCOM, in its report, notes that the industry is attempting to shift from a linear to a non-linear growth model
and has therefore been following a differentiated growth path. These strategies include both inward and outward
looking initiatives. One of the primary strategies focuses on product/IP development; this is further being supported
by their verticalised offerings. Expertise developed in specific verticals is enabling IT-BPM firms to deliver
innovative products and services to customers that in turn facilitate entry into new markets/ geographies, access to
customers, etc. Rapid upscaling of capabilities around SMAC and other emerging technologies is enabling it to
expand services to existing customers and also attract new customers. (Source: NASSCOM Report)
Domestic market
NASSCOM believes that the need for Indian firms to effectively compete in a globalized world presents an immense
untapped opportunity for the supply side. As an economy, India is beginning to stabilise post elections. Overall
business confidence is picking up with the new government in place and its clear policies and economic growth
agendas particularly – Digital India and Make in India, have helped drive a vision of a technology enabled India.
(Source: NASSCOM Report)
A further push in this direction is coming from the government’s Digital India campaign which envisages a USD 20
billion investment covering mobile connectivity throughout the country, re-engineering of government process via
technology and enabling e-delivery of citizen services. (Source: NASSCOM Report)
The domestic IT-BPM market, according to NASSCOM, is rapidly approaching the USD 50 billion mark. In
FY2015, the market is expected to be a little over USD 48 billion, an annual growth of 14 per cent. This is fasterthan-industry growth that is largely being driven by the growth in eCommerce segment. (Source: NASSCOM
Report)
IT services (>USD 13 billion) and software products (>USD 4 billion) segments are the next fast growing segment
at 10 per cent and 12 per cent respectively. IT services is being driven by SMAC-cloud enablement, custom
developing application for mobile; with the return of focus on infrastructure projects (largely in later half of 2014),
there is an uptick
112
in demand for SI and IT consulting. SMEs are also increasingly opting for managed and datacentre services as a cost
saving measure. Software products is growing on the back of demand for mobile app development, security
software, system software, customer analytics products, etc. (Source: NASSCOM Report)
NASSCOM expects the BPM segment to grow by 8 per cent to USD 3.5 billion; although there is growing demand
for knowledge services, particularly analytics, it remains a CIS dominated segment. BPM is seeing continuous
demand for outsourcing from home-bred firms in the BFSI, telecom, healthcare, retail, etc. (Source: NASSCOM
Report)
IT Services
NASSCOM notes that the IT services segment aggregated export revenues of over USD 55 billion in FY2015,
accounting for over 56 percent of total exports, a growth of 12.6 per cent over FY2014. Indian IT service offerings
have evolved from application development and management, to emerge as full service players providing testing
services, infrastructure services, consulting and system integration. Within that, IT outsourcing exhibited strong
growth, driven by increased spend in infrastructure services outsourcing (ISO), software testing, custom application
development and management (CADM) and SOA/web service segments. (Source: NASSCOM Report)
Exhibit 6: Industry landscape is mature and diverse
Source: NASSCOM Report
CADM exports, the largest IT services segment with a share of 48 per cent, reached USD 26 billion during FY2015,
a growth of 10.3 per cent over last year. Demand is being driven by mobility, social, cloud and analytics – these
technologies are also driving the urgent need to modernise existing legacy systems, which is further driving growth.
ISO grew the fastest among all IT services segments at nearly 20 per cent to reach USD 11 billion in FY2015.
(Source: NASSCOM Report)
Cloud based services are the main disruptors in this segment driving growth. Demand for software testing has
increased rapidly at over 18 per cent to cross USD 4 billion in FY2015 driven by new applications developed around
emerging technologies. Testing budgets are being driven by transformational projects based on SMAC technologies.
(Source: NASSCOM Report)
The early part of the year was characterised by healthy growth in Europe (including UK) and APAC with US, the
biggest market for IT services exports also continuing its growth momentum. The vertical market was driven by
113
emerging verticals of healthcare, retail and utilities, even as the traditional verticals BFSI and manufacturing
continued to be the largest shareholders. (Source: NASSCOM Report)
Domestic IT services grew by 10.2 per cent to reach USD 13 billion, driven by IS outsourcing, cloud services and
increasing adoption from all customer segments – government, enterprise, consumers and SMBs. (Source:
NASSCOM Report)
Exhibit 7: SMAC drives growth in most service lines
Source: NASSCOM Report
Enterprise digital transformation
The impact of disruptive trends, NASSCOM notes, such as cloud computing and mobility/analytics have
transformed the IT services industry. The earlier focus on providing delivery and process capabilities, which have
been the cornerstone of the industry’s success so far, is changing. The adoption of the latest technology trends is
focused on changing the delivery methodology of software applications and therefore converge with the traditional
IT services market. Cloud adoption has led to an increase in ‘As a service’ offering as SaaS and cloud specific deals
increase. There is a shift in client needs as they become less labor-intensive and more focused on higher-value
business needs. The year witnessed digital deals being funded, dominating deal counts and influencing standard
contracts. Discretionary services are expected to become digital-centric, and drive growth. (Source: NASSCOM
Report)
Emerging technologies and digitisation have been altering business landscape, and adding value to customer
business. Implementing new wave of technologies in their solutions has now become a business imperative for all
service providers. Firms are investing internally in building these solutions as every customer is looking to its IT
vendor to bring in more value generation business rather than merely maintaining the back-end technology
infrastructure. (Source: NASSCOM Report)
114
Exhibit 8: Digital transformation and business needs of customer; emerging key industry disrupters
Supply Side
• ‘As a service’ oerings increase, as shifting of software applications to cloud grows
• Drop in Systems Integration (SI) growth as SaaS and cloud specific deal increases
• Cloud/IaaS aecting ITO growth as rms use IaaS as an alternative to outsourcing their existing
IT systems
Technology
Impact
• Automation reduces labour dependence - leading to greater adoption of low-code solutions
• New tech (digital/SMAC) replaces ERP as the mainstream discretionary spend area with
recognition of solid RoI, changing business realities and eciency
• Increase in investment for enhancing required digital skills and technologies
Demand
Side
• Client expectations less labor-intensive and more focused on higher-value business needs
• Connectivity, mobility and cloud growth driving demand for security, encryption services
• Shift to customer-focused exible hybrid sourcing models
• “On demand” service delivery models gaining acceptance
Investment
& Deals
• Most ITO deals structured around ADM, testing and network services
• Share of renewals/restructured deals in IT Outsourcing declining over time
• M&A’s focused on specialisation, SMAC capabilities, verticalisation; for e.g.,CognizantOdecee, Tech Mahindra-Sofgen, Synechron-Team Trade
115
Exhibit 9: New wave technologies driving the industry to a significantly altered sphere
Source: NASSCOM Report
Business Process Management
NASSCOM, in its report, expects high customer expectations; automation; big data/analytics along with traditional
services will be the key drivers for the global BPM services. India’s share of global sourcing was 38 per cent in
2014. Globally, the BPM sourcing was seen growing at 13 per cent.
Exhibit 10: India’s share grew 1.2X in 5 years
Exhibit 9: Spend: getting back to pre-crisis numbers
Figures in USD billion | Source: NASSCOM Report
116
Figures in USD billion | Source: NASSCOM Report
According to NASSCOM, the BPM sector in India has grown over 1.8X in the last five years and is expected to
clock revenues worth USD 26 billion in FY2015, with a growth rate of 11 per cent over FY2014. Of the total Indian
BPM market in FY2015, contribution of the exports revenue is 87 per cent, while the remaining 13 per cent is
attributed to domestic business. The exports market grew at a faster pace compared to domestic market. The
domestic market witnessed a growth of 8 per cent to reach USD 4 billion in FY2015 while the exports market grew
at 11 per cent during the same period to reach USD 23 billion. (Source: NASSCOM Report)
NASSCOM notes that the BPM industry has seen many stages of evolution over the years. This decade has been
recognised as an era of digital age, with emphasis on disruptive services making use of SMAC technology to
provide automation and digitisation. The last decade belonged to productivity improvement and incremental
innovation, with emphasis on depth and breadth of services, value addition and access to new markets were the key
focus areas. The industry has not only added scale, but has also matured significantly in terms of scope of service
offerings, customer segments served and service delivery model. The scope of services tremendously expanded to
include increasingly complex processes involving rule-based decision making, critical individual judgment and
domain/vertical specific knowledge and it lead to a major transformation with BPM industry moving way ahead
from efficiency to effectiveness. (Source: NASSCOM Report)
The report shows the BPM Industry growing its export employment base at 4 per cent in FY2015, an addition of
over 43,000 employees. The export employee base accounts for 23 per cent of the total IT-BPM employee base
which includes around 25 per cent domain specialists and technical graduates and post graduates. The employee
profile has undergone a significant change in the last few years from ‘undergraduates” to “domain specialists” thus
changing its perception to a lucrative career option. In the future too domain and business specialists will be in
greater demand to understand customer requirements and accordingly sell domain focused, IP-led platforms.
(Source: NASSCOM Report)
Exhibit 11: Industry continues to hire, with increasing focus on skill over capacity
Source: NASSCOM Report
Customer Interaction Services
CIS includes all forms of IT-enabled customer contact; inbound or outbound, voice or non-voice based support used
to provide customer services, sales and marketing, technical support and help desk services. (Source: NASSCOM
Report)
According to NASSCOM, organizations in India catering to the exports market have steadily built up their
capabilities, acquiring expertise across service lines – initially Customer Interaction Services (CIS) and then
branched into high end services, at the same time increasing the depth of services. CIS continues to have the largest
share at USD 9.2 billion, followed by F&A at USD 4.9 billion, and knowledge services at USD 4.7 billion. (Source:
NASSCOM Report)
117
Exhibit 12: Technology enabling greater play of non-voice channels
Source: NASSCOM Report
It notes that CIS, the most matured vertical grew 8 per cent in FY2015, experiencing a change towards multichannel
integrated services with new business imperatives like emergence of BPaaS/ cloud based services for CRM and
analytics. Shift to CIS non-voice services due to multichannel customer interaction, automation, artificial
intelligence, etc. is expected to become a game changer. With change in customer expectations, service delivery
strategies supporting BPaaS, mobility and advanced analytics played an important role in the F&A segment,
resulting in providing end-to-end F&A outsourcing across business processes, technology and infrastructure.
Knowledge services remained the fastest growing segment within BPM industry growing at over 18 per cent in
FY2015. With digitisation of data and increasing complexities, organisations are looking more towards data to drive
business decisions. Within knowledge services, analytics grew substantially as firms looked at achieving increased
business outcomes through meaningful and actionable insights. (Source: NASSCOM Report)
NASSCOM notes that even as traditional verticals like BFSI and telecom increasingly demand more and more realtime analytics to enhance their capabilities, emerging verticals like healthcare, retail and utilities use analytics to
offer numerous opportunities, e.g., predictive knowledge services to provide better patient care, by leveraging data
related to digitisation of health records. Traditional geographies USA and Europe continue to be the main growth
drivers, while firms expand scope to Continental Europe and APAC countries. (Source: NASSCOM Report)
Domestic BPM recorded a growth of 8 per cent in FY2015 to reach USD 4 billion. The segment is seeing
continuous demand for outsourcing from home-bred firms operating in financial services, consumer durables,
automobiles, retail, telecom, etc. The growing consumption pattern in Tier II/III cities and rural areas is also
translating into opportunity for value-added services. New Government initiatives, growing eCommerce market,
social media platforms are expected to drive growth in the domestic market. (Source: NASSCOM Report)
Analytics
NASSCOM notes that with increasing penetration of software component, driven particularly by cloud, mobile and
connectivity technologies, there is increasing demand for analytics and embedded software specialists. (Source:
NASSCOM Report). Indian analytics product firms have shown a growth rate of above 40 per cent in last few years;
whilst several niche players have witnessed ~100 per cent growth within first year of launch. Over 200 analytics
focused firms have successfully developed and deployed products catering to niche business needs, cut across
vertical specific needs, horizontal process centric and niche applications and platforms along with enterprise BI and
marketing analytics functionalities.
118
Exhibit 13: Analytics fastest growing knowledge services segment
Source: NASSCOM Report
Exhibit 14: Key Trends in Analytics
Supply side
• Cloud based deployments enabling
lower cost of adoption
• Niche oerings and innovative
business models for deployment
• Verticalised and domain centric
functionalities
Demand side
• Need for monitoring and analysing
key business metrics in real time
• Informed decision making at
tactical and strategic levels
Technology impact
• Emergence of SaaS/cloud based
solutions
• Intuitive user interface; easily
congurable solutions
Source: NASSCOM Report
Indian Industry Growth
NASSCOM notes that service providers are likely to respond to the changes in the industry by building new service
lines and re-inventing existing ones. Investment portfolios would need to shift to match the new circumstances.
Indian companies could also potentially be able to create three-in-one organizations that can serve companies at all
levels of digital transformations, to retrain their workforce and develop digital capabilities, and to forge appropriate
partnerships to access external talent. (NASSCOM, Perspective 2025, Shaping the Digital Revolution (“NASSCOM
Perspective 2025”))
According to NASSCOM, based on various assumptions mentioned in the report, the Indian technology, BPM and
engineering services industry is expected to be on track to achieve its revenue goal of USD 200 billion to USD 225
billion by 2020 from USD 118 billion in 2014. Further, this revenue pool is likely to expand to USD 350 billion to
USD 400 billion by 2025, based on the industry's potential for digital innovation. Such an expansion would suggest
a compound annual revenue growth rate of 9 to 11 per cent from 2014 to 2020 and of 10 to 12 per cent from 2020 to
2025. These projections also suggest that the share of digital business in the Indian revenue pools is expected to
increase from 4 per cent in 2014 to 20 to 25 per cent by 2020. Depending on the level of digital innovation, the share
will reach 35 to 40 per cent under a base case or to 40 to 50 per cent assuming more aggressive innovation. Around
40 per cent of the growth in the technology and operations revenue pools will be likely to come from increased
offshoring by 2020 from new industries turning to offshoring and new geographies, particularly Asia-Pacific and
Europe. (Source: NASSCOM Perspective 2025).
119
Exhibit 16: Indian industry revenues could reach USD 200 to 225 billion by 2020, USD 350 to 400 billion by
2025
Source: NASSCOM Perspective 2025
Challenges to growth
NASSCOM in its report Perspective 2025 notes that there could be several challenges that could limit the Industry’s
growth:

First, there is a global shortage of trained digital talent. Along with effective recruiting, companies may need to
address high attrition rates through competitive compensation structures and continuous skill development
programmes.

Second, to sustain growth, physical and technology infrastructure would need to be significantly improved
outside the major metropolitan areas, allowing the next generation of companies and workers to settle in the
smaller cities

Third, much of the industry growth over the next decade is likely to come from small, highly specialized
entrepreneurs and a favourable regulatory regime will incentivize growth in the industry.

Finally, the unstable economic situation in major markets, including the European Union, could slow the
industry's global expansion
120
BUSINESS
The information in this section should be read together with, the detailed financial and other information included
in this Draft Red Herring Prospectus, including the information contained in the sections titled “Risk Factors”,
“Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Company” and
“Financial Statements” on pages 16, 274 and 179 respectively. Unless otherwise stated, the financial information of
our Company used in this section has been derived from our Restated Consolidated Financial Statements.
Overview
We are a global business consulting and IT services solutions integration company. Our mission is to deliver
organizational change systemically for our clients. As on November 30, 2015, we had more than 1,500 employees
across 18 offices located in India, South Africa, Nigeria, Tanzania, United States, United Kingdom, Ireland and
Australia. Our Company was awarded the Excellence Award from the Institute of Economic Studies in 2015, the
Red Herring Top 100 award for Asia in 2011 and was also a finalist for the Red Herring Top 100 award globally in
2011. Our Company has also been selected as one of India’s top emerging companies in the India Emerging 20
Programme for fiscal 2015-16.
Our customer engagements comprise holistic analysis of problems which span across people, process, technology,
as well as learning and innovation. Our service offerings include:
(a) Enterprise transformation and change management that covers several aspects of businesses including
analyzing the changing customer demographics, defining and executing change strategy around people, process
and technology;
(b) Digital transformation services through which we help our clients formulate and execute their digital business
strategy by providing services on digital channels using analytics, statistical modelling, machine learning,
Natural Language Processing (“NLP”) and social marketing tools and techniques; and
(c) Enterprise IT services wherein we develop applications across wide range of hardware and software platforms,
develop solutions to integrate various applications across platforms, provide migration, re-engineering and
software maintenance services.
Our Company was incorporated on May 29, 2000 as a private limited company and was converted into a public
limited company on September 10, 2015. Nedbank Africa Investment Limited through a special purpose vehicle
Hatch Investments (Mauritius) Limited (“Hatch”) invested ` 300 million in our Company. For details of investment
made by Hatch, please see section titled “Capital Structure” on page 63. Subsequently, pursuant to a change in the
investment strategy of the Nedcor Group, Dimension Data Protocol B.V. (“DD Protocol”) and Adcorp Professional
Services Limited (“Adcorp Professional”) took over Hatch in 2002 and 2006 respectively and each holds 50
percent of the share capital of Hatch.
The current promoters of the Company are L.C. Singh, Hatch, DD Protocol and Adcorp Professional. Hatch is an
investment holding company which currently holds 69.16% of the total paid up equity share capital of our
Company. Adcorp Professional Services Limited (previously named Paracon Holdings Limited) is a company
offering highly specialized and diverse information and communication technology resourcing and solutions and is
currently a wholly-owned subsidiary of Adcorp Holdings Limited. Dimension Data Protocol BV has been
incorporated in the Netherlands and is a wholly owned subsidiary of Dimension Data Holdings Nederland BV
which is ultimately owned by Dimension Data Holdings Plc. Dimension Data Holdings Plc also provides ICT
solutions for businesses worldwide.
Over the years we have helped over 300 clients across in more than thirty countries and deployed solutions across
business functions. We have developed proprietary frameworks and methodologies in-house, based on competencies
gained on assignments and our understanding of businesses, to aid our service offerings. These include tools such as
MC3 TM a patented tool which helps us provide our change management solutions, 14Signals a tool which is used for
evaluating perception, experience and aspirations of a customer, SightN2 a framework for digital marketing and
121
LAMAT through which we provide a customized dashboard to monitor performance levels against target
projections, among others.
Since our Company focused on South Africa, we still derive a majority of our revenues from South Africa where we
have long standing relations with corporate clients. As a part of our global strategy, we are expanding our operations
in other geographies such as United States, United Kingdom, Australia, Ireland, India, Nigeria and Tanzania.
Towards this, we acquired GNet Group LLC a business intelligence and analytics company based out of
Minneapolis, USA through our wholly owned subsidiary Nihilent Technologies Inc, and completed its integration
into our Company. In September 2015, we acquired 51 percent shareholding of Intellect Bizware Services Private
Limited (“Intellect”), a company based in Mumbai specializing in ERP and enterprise innovations based on SAP
and HANA to develop and strengthen our presence in the ERP space. Pursuant to a share purchase and shareholders’
agreement dated September 1, 2015, our Company has an irrevocable unconditional right and option to acquire the
balance 49 percent of the shareholding of Intellect. For further details, please see section titled “History and Certain
Corporate Matters” on page 139. These acquisitions complement our existing service offerings and help us provide a
wider set of solutions to our clients.
A break-up of our revenues for the three months period ended June 30, 2015 and for the financial years ended 2015,
2014 and 2013 from our various geographies is listed below:
` in million
As
at
March
31
As at June
Geographic Segment
30, 2015
2015
2014
2013
India
6.71
6.17
26.61
31.53
South Africa
507.01
2,252.50
2,081.39
1,724.29
United Kingdom
55.73
193.46
179.88
152.83
United States of America
120.41
226.43
27.26
27.23
Australia
20.80
32.19
Rest of the world
51.47
212.53
132.65
65.92
Total Revenue
762.13
2,923.28
2,447.79
2,001.80
The key industries to which we provide our services include BFSI, media and entertainment, mobility and
telecommunications, life sciences and healthcare, manufacturing, retail and consumer products. We have also been
engaged by the government and public sector companies in several countries. We service our clients globally
through our branch offices located in South Africa, Ireland and United Kingdom and our subsidiaries located in
India, Nigeria, Tanzania, Unites States and Australia.
We built a software engineering facility in Pune in the year 2000. Our facility at Pune was one of the select facilities
world-over to be certified as CMMI Level 5 in 2004 which was subsequently upgraded to CMMI- Dev® Maturity
Level 5 on March 31, 2015. Further, our Pune facility has also been certified ISO 9001:2008 for design,
development, maintenance, re-engineering and migration of software solutions in client server, main-frame and
web-based environment and ISO 27001:2013 for application management services in the financial sector. We also
have software development facilities located at Mumbai, Minneapolis, Dallas and Johannesburg. Our clients include
Nedbank Limited, MultiChoice Support Services Pty Ltd, Gillette Children’s Specialty Healthcare, Polaris, Visa
Cape Town Proprietary Limited, Global Trading Company LLC, The Banking Association South Africa, and
Smyths Toys HQ among others.
We make considerable investments in human resources in order to service our clients and to innovate and develop
intellectual property to serve the needs of our customers. Based on our Restated Consolidated Financial Statements,
our total employee benefits expenses for the three month period ended June 30, 2015 and for the financial years
ended 2015, 2014 and 2013 were 72.93%, 72.64%, 72.01% and 68.82% of our total expenditure. (excluding tax
expenses). We primarily employ graduates and post graduates in engineering and management who receive training
in-house.
Based on our Restated Consolidated Financial Statements, our revenue from operations were ` 762.13 million, `
2,923.28 million, ` 2,447.79 million and ` 2,001.80 million and our profit after tax (after adjustment of share of
minority interest) was ` 68.21 million, ` 373.62 million, ` 436.57 million and ` 391 million for the three-month
period ended June 30, 2015 and for the financial years ended 2015, 2014 and 2013 respectively.
122
Our Strengths
Integrated business consulting and IT services approach with a focus on enterprise transformation through our
change management solutions
Successful implementation of major new enabling technologies has become critical to organizations to achieve
growth or improvements in efficiency and productivity. We have developed a range of service offerings in order to
address the varied and evolving requirements of our clients. Further, we have the ability to provide services across
the value chain from providing consultancy services, to assisting in formulating and implementing a portfolio of
projects and subsequently monitoring them to ensure that the desired results are achieved. We have a track record of
executing a number of large, end-to-end, mission critical projects in diverse business areas and technology domains
for clients. For instance, we helped a large banking group in South Africa with requirements evaluation and
management; development, testing and implementation activities and designed and developed backend application
software on mainframes for integrating platforms across their retail and corporate banking business divisions. Our
presence in various countries has enabled us to execute complex engagements in a timely manner and to adopt best
practices from such programs.
We have also developed our own in-house tools such as MC3 TM a patented framework that helps us bring about
knowledge enabled transformation in organizations, thereby helping us partner with clients to successfully
translating their business strategies into definitive business results. Further, owning our own tools or frameworks
allows us to regularly improve our platform to meet new customer needs and to seamlessly and rapidly deliver new
features and functionality to our customers. Our range of offerings help our clients achieve their business objectives
and enable us to obtain additional business from existing clients as well as address a larger base of potential new
clients.
Similarly, our other patented framework 14Signals helps in capturing the needs, wants and aspiration of customers
that helps us to design customer centric business strategies. The SightN2, a digital marketing platform developed by
our US subsidiary, has already been successfully deployed at a major manufacturer of special entertainment vehicle
in US. We intend to leverage this experience globally with other clients.
Our Natural Language Processing tool uses a combination of open source and proprietary software to creating a tool
that helps us provide technology led legal document processing for international clients. We also propose to use this
tool in various applications for generic queries and abstract extraction.
Enduring relationships with clients
We establish long-term relationships with our clients for multi-layered engagement with various departments of the
client organisations. Our broad range of services offerings help us to cross sell multiple services to existing
customers as well as acquire new customers. We also conduct regular reviews with senior management of all our
key clients to engage with them to provide consistent service and to work on future opportunities. We combine our
comprehensive range of service offerings with industry specific experiences and insights to provide tailored
solutions to our clients across business verticals, industries and geographies. Our commitment to client satisfaction
serves to strengthen our relationships. As an example, for one of our key clients, we initially started with a
consulting assignment and over the years we have provided multiple services across technologies to various
companies within the group.
Our growing global footprint
We initially commenced our operations in the United Kingdom, United States and South Africa but strategically
decided to curtail our operations to emerging markets such as South Africa due to adverse global economic
conditions in the IT sector in the years 2000, 2001 and 2002. We however continued to maintain our presence in the
United Kingdom and the United States. Subsequently having achieved experience and success in emerging markets,
we decided to expand our operations to other destinations.
We also recently acquired 51 percent stake in Intellect, an ERP implementation, support and consulting services
company located in Mumbai which has a majority of clients based in India. This acquisition has helped us
123
strengthen and expand our presence in India and has also provided us with an opportunity to sell their services in
multiple locations. Our growing global footprint enables us to service and support our existing clients in a number of
important markets from locations closer to our clients, and positions us well to develop new clients. Additionally,
the acquisition of GNet Group LLC by our US subsidiary has helped us create a significant presence in the US
market.
We now have a sales and marketing presence across eight countries. We have also expanded our delivery capability
to six cities in four countries. The total number of employees at locations outside India as of November 30, 2015
was approximately 384.
Joint Research and Development opportunities with our clients
We engage with our customers in developing intellectual property and products combining their knowledge of the
business with our technical expertise. This is a symbiotic relationship wherein, the risk of investment in R&D is
shared as direct expenses are borne by the client while we benefit from skills utilised to develop such new products
or processes. We have completed a number of such projects, while a few of them are ongoing. These projects are
mainly in the digitization space and are expected to yield significant benefits in the medium to long term.
Strong and tenured management team
The senior management team includes some of the most experienced managers in the Indian IT services industry.
Some of our senior management team have been with us for approximately 15 years and have been instrumental in
the growth of our Company. For instance, L.C. Singh, our Chief Executive Officer and founder is recognised as a
pioneer in the IT services industry. L.C. Singh held key positions at Tata Consultancy Services Limited (“TCS”)
where he was the senior vice president in charge of operations for UK, South Africa and Middle-East and was also
responsible for marketing, public relations and brand-building. L.C. Singh was also the President and Chief
Executive Officer of Zensar Technologies. Minoo Dastur, our chief operating officer began his career in the
information systems industry in 1983. He previously headed the corporate marketing group at TCS and
subsequently headed the marketing function of the banking group and was involved in establishing the presence for
TCS in South Africa. Shobha Agarwal our vice president - corporate strategy has a career spanning nearly 30 years.
Before joining us, she was also associated with TCS for nearly 20 years. Ashok Sontakke, our vice president quality and processes has several years of experience in quality control and quality assurance functions and has
extensive consulting experience in process improvement, software measurement program, internal process audits
and external audits/assessments. Abhay Ghate, our vice president and chief technology officer has over 20 years of
experience in the IT industry covering complete spectrum of activities in software development. Ravi Teja, vice
president - consulting businesses has extensive experience in Africa and has been overseeing our Company’s
expansion into East and West African territories.
A cohesive team of our experienced senior management coupled with trained managers and skilled employees
enables us to identify new avenues of growth, and help us to implement our business strategies in an efficient
manner and to continue to build on our track record of successful projects.
Our Strategy
Focus on deepening and strengthening our relationships with our customers
Over the years, we have developed strong relationships with our clients. Given the nature of our service, our success
depends on our ability to help clients deliver more value to their customers. Towards this, we conduct periodic
market scans to identify technologies with the potential for causing significant changes in the manner in which
processes were hitherto being managed. Our immediate focus is then to study and develop quick prototype solutions,
deploy them in controlled operational environment, plough back the learnings to quickly optimize and develop
unique customized products. We intend to continue building our long term relationships and strengthen and deepen
our relationships with our customers by expanding our service offerings. For instance, we plan to make further
investments in creating the future “Intelligent Enterprise” by ways to combining the transactional data, social data
and consumer data to create a unified enterprise information view. We are currently working on such a prototype.
124
This taken in conjunction with predictive analytics and natural language programming will be a key solution to some
of our existing customers and markets in general.
Expanding our service offerings
We will continue to leverage our service offerings to develop an in-depth understanding of how industries are
structured and operate, key trends within the industries and how companies are affected by these trends, and how
companies can create or diminish value. We intend to continue expanding our range of service offerings in order to
increase business from our existing clients and acquire new clients. NASSCOM in its report estimates that 80% of
incremental expenditure over the next decade may be driven by digital technologies that would need to be integrated
with legacy core technologies (Source: NASSCOM Report). We intend to therefore continue to retain and grow our
expertise in conventional IT platforms while investing in newer platforms, analytics, big data, mobile systems, social
media, natural language programming, the internet of things and predictive BI. Over the last two years we have
added competencies in business intelligence and data management and have added ERP deployment and solutions
through organic and inorganic investments.
Besides technologies, changes would be driven by investments in business processes and the way enterprises would
be managed in future. This market segment will continue to grow 4 – 6% and would reach up to USD 250 billion by
2025 (Source: NASSCOM Report). We increasingly work with our clients to create value by leveraging information
technology to reinvent and transform fundamental business operations through our proprietary change management
framework i.e. MC3 TM and 14 Signals; a consumer analysis framework. We strive to leverage our industry expertise
and technology and business process skills to help clients discover and create new business models and, in many
cases, transform entire business functions. We are well positioned to develop and implement new business models
and operate critical business functions for our clients, based on the competencies we have developed and our
successful implementation of various projects in change management.
Expansion of our global capabilities
We intend to further expand our global presence, which will provide us with greater competitive advantages in
acquiring and servicing our global clients. For instance, our investment in GNet will give us a toehold in USA,
which is a mature market for IT-BPM services. Further, our acquisition of Intellect will help us expand our presence
domestically in the Indian IT-BPM sector, which the NASSCOM report believes, provides a level playing field for
small as well as large players. We intend to establish additional sales offices as well as global development centers
and recruit local employees to enhance our client interface skills and deliver solutions from proximate locations.
Leveraging on our experience, we have expanded our operations over the years in the United States, United
Kingdom, Australia, Ireland, India, Nigeria and Tanzania.
Continuing to strengthen our human capital
We aim to develop our position as a preferred employer in the Indian IT services industry and place special
emphasis on attracting and retaining highly skilled employees. We intend to keep hiring management graduates and
train them in our proprietary frameworks and tools and skill them with BPM techniques like 6 Sigma, LEAN,
Balanced Scorecard and SCAMPI besides MC³ TM and 14 Signals. We will continue to bring in more people with
statistical qualifications and train them as data scientists to further enhance our capacity. We will work to increase
our co-operation with known statistical bodies and individuals. We will continue to invest in the career development
and training of our employees, with the objective of further enhancing their technical and leadership skills. For
instance, our acquisition of GNet strengthened our team of IT Professionals that will allow us to enhance our
capability in executing digital transformation programs. As a tool for employee engagement and retention, our
Company has issued sweat equity and ESOPs to employees over the years. Further, we intend to attract, hire,
develop and retain our professionals, which are critical to our enterprise, by continuing to offer ESOPs to eligible
employees.
Enhance our delivery capabilities through investments in R&D
To deliver value to our clients more quickly, it is critical to create assets, such as software and business architectures
and process methodologies, which enable us to quickly implement market-ready solutions for our clients. To this
125
end, we intend to continue investing in our employees to enhance our R&D capabilities, particularly with a view to
create solutions in emerging technologies that enhance our ability to develop tools for leading our entry into new
areas such as payments and intelligent enterprises and developing products that address clients in specific industries.
Our focus areas currently include business intelligence and analytics, digitization and user experience, payments and
ecommerce ecosystem. The products of our R&D activities will continue to differentiate us from our competitors
and position us well for winning complex projects.
Our Company is vigilant to the emerging trends in the market and preparing to invest in tools, technologies and
frameworks that would keep differentiating us in the market. We have a view the way enterprises will be managed
in future. Based on our direct knowledge of organizations and systems theories, we are in process of creating a
prototype that would go through a rigorous process of review with select customers in controlled manner that we
plan to release over the coming years. This proposed offering vertical and industry agnostic.
We currently have a cloud hosted portal, namely, www.tumbhi.com (“Tumbhi”) in our wholly owned subsidiary,
Seventh August IT Services Private Limited. We intend to develop this platform for artists, art lovers and art seekers
from across the world, to share their common passion or art, collaborate with other artists, get their work reviewed
by industry experts and obtain access to opportunities. It is intended that an aspiring artist can submit his/her artifact
and Tumbhi will publish it for public view. It is intended that Tumbhi in the future may charge a consultancy fee to
artists to publish their artwork and generate additional revenues through advertising amongst others.
Our customers in media and entertainment industry have future plans to develop such platforms of their own and we
have the opportunity to license this framework to them. The initiative also gives us the opportunity to understand the
nuances of ecommerce and helps us get insights and firsthand knowledge of future e-tailing.
Our Operations
Our customer engagement is generally divided into three broad categories, namely: (i) enterprise transformation and
change management services; (ii) digital transformation services; and (iii) enterprise IT services.
Unlike traditional consulting and IT services, we deploy a holistic business change and transformation management
framework aided by other tools to help our clients identify, achieve, and sustain a unique position in the
marketplaces. This effort is improved significantly when their decisions are based on a systems orientated approach
which is more holistic.
14Signals: Our patented framework, 14Signals, has been developed to obtain a holistic understanding of customer
value by studying eight value signals and six cost signals. This tool studies customer value at an expectation stage,
pre-purchase stage, experiential stage and post-purchase stage, thereby helping us understand loyalty in a tangible
way, in the form an index, namely, the Predictive Loyalty Index. When measured over a period of time, the tracker
helps us predict customer loyalty. We have successful case studies of the 14Signals framework implementations for
banks, telecom, automotive sector companies and governments among others. The output of deploying the 14Signals
framework provides us with the necessary inputs and learnings to deploy our patented MC3 TM strategy execution
framework for enterprise transformation and change management services as well for digitization services.
(a)
Enterprise Transformation and Change Management
Our Enterprise Transformation practice partners with clients in successfully translating business strategies into
definitive business results. The practice is based on our patented change management framework, MC3 TM and is
supported by proprietary tools and technologies. Key offerings include business change management using MC 3 TM,
strategy execution using balanced scorecard and dashboards, digital strategy and transformation, capability
assessment and development, performance management, knowledge management, innovation management and
customer experience management.
126
The change management process is implemented through the following steps:

Inputs from customers are first obtained through our patented tool 14Signals;

Subsequently, based on this information, goals for the organization and its people are formulated and a strategy
is developed to achieve these goals. This strategy would cover finance, customer, process and learning
(performance matrix);

Once the strategy is developed, the workforce is aligned to meet the organisational goals through training. This
process is called intent alignment;

Subsequently, the aforementioned process is used to create, capture and disseminate knowledge and the
learnings from this are then used to further refine the processes.

The above steps combined help the organisation to achieve their goals.
The key characteristics of our MC3 TM framework are as follows:
(i)
Multi-layered engagement: Our MC3 TM framework tells us that enterprises are not simply the sum of their
components or parts. Instead, they are the end result of all of their processes, systems, and people – a
complex web of inter-dependencies and inter-relationships. Our MC3 TM framework guides businesses to
consciously design and deliver change by focusing on the intent, content, action and performance
management pillars within their organization.
(ii)
Strategy Formulation and execution: We also help our clients to put their strategy into action by integrating
their transformational programs into the organization’s operations, thereby helping our clients to achieve the
results promised by their strategy. Our service offering also spans strategy design, execution and monitoring.
(iii)
Process management: We assist our clients to re-engineer their most critical processes for improved
efficiency and effectiveness. We have capabilities to use specialized techniques such as lean, theory of
constraints, total quality management and six-sigma. Through our focused set of offering, we have helped
many of our clients to manage their unit cost of processing by integrating their operations, standardizing and
aligning their processes, centralizing their fulfilment capability, optimizing and automating their business
127
processes, while ensuring their employees are multi-skilled and kept engaged and motivated to pursue a
performance based continuous improvement work culture.
(iv)
People Management: Optimizing employee productivity continues to remain a prime challenge for
organisations. We help organizations engage, manage, and develop their workforce to utilize its full potential
in alignment with their organizations overall mission, strategy and action plans based on our home grown
framework such as MC3 TM , CAS and ELE and international standards which include SFIA and PCMM.
(b) Digital Transformation Services
Digital technologies have profoundly changed the ways we do business, buy, work and live. In this era of
technology change, driven by the convergence of social, mobile, and cloud technologies, every enterprise reexamine its future strategy, or risk losing competitiveness. New roles such as chief digital officer and chief data
officers are being created to increase focus on understanding customer interactions and behavior, through use of
analytics. We help our clients in the areas of digital maturity assessment and roadmap creation, digital business
model innovation, digital customer experience enhancements, digital operations and digital workforce management.
We have two strategic frameworks that help customers design their digital strategies and also execute them. The
digital strategy design framework is formulated using our patented 14Signals framework by obtaining customer
feedback and the digital framework is subsequently executed using our patented MC3 TM framework.
We help our clients to formulate their digital business strategy in the manner listed below:
(i)
Digital maturity assessment and roadmap creation:
Digital maturity diagnostics includes listening to needs,
wants and aspirations of customers and prospective
customers through our patented 14 SignalsTM framework.
•
Subsequently, a digital strategy and roadmap is
created with a business case for each initiative. This
digital strategy includes solutions on how to market their
products digitally and to provide service through use of
digital tools.
•
Digital strategy includes Digital Marketing,
Service and Operations strategies through usage of tools
such as customer journey maps and digital use cases.
•
The manner in which the digital business
strategy of an organisation is formulated is depicted in
the diagram.
We assist our clients to towards digital maturity assessment and to create a roadmap through the following:
(ii)
Digital marketing and service strategy, for enhanced customer experience:
The focus is on digital marketing, sales and service that enable continuous learning of customer behavior /
preferences and profiling. This helps an organization in engaging in a personalized, intuitive and contextual way
through the customer lifecycle journey. It helps accelerate revenue growth through targeted and deeper relationship
with customer by offering customized user specific products and services.
128
(iii)
Digital strategy execution services
Our digital strategy execution framework is detailed in the diagram below. It includes enabling an organisation to
interact with its customers through digital channels and helps profiling customers through real time analytics and
information. The framework outlines the following:

Digital strategy execution is done using our patented MC3 TM framework for change management, managing
people, skills and culture under a strong leadership team.

Existing business models are optimized by leveraging digital technologies to deliver specific products/ services
to targeted customers.

New digital revenue streams are identified through entirely new business models.
(iv)
Digital technologies implementation services

The key technologies that play a strategic role to implement our services are social media, mobility,
analytics, cloud and internet of everything.

The social media and mobility are the key digital channels that help in delivering the marketing, service
and operations experience to the customers.

The internet of everything generates large amount of data about customers, transactions and business which
is then analysed for decision making.

The above data which is un-structured, semi-structured or structured is referred to as Big Data. These are
then analyzed for through machine learning and natural language processing (NLP).

All the above data generated through the digital channels resides on cloud along with the applications and
business components which are then processed through our tools on cloud.
In addition to the above, we also provide solutions to integrate digital technologies into traditional applications such
as ERP, CRM, SCM and others.
129
(v)
Digital skills, culture and leadership creation services:
The implementation of the above technologies is supported by creating capabilities in people, digital skills, culture
and leadership. We assist the organization to develop a collaborative and efficient workforce for leveraging digital
technologies. We also help executing strategies for reaching out and recruiting, identifying and provisioning of
need-based training, to manage employee performance or productivity.
(c)
(i)
Enterprise IT Services
Software application management services:
We provide the following services under our Software application management services:

Application Development Services: We design and develop software applications for our clients across a
range of hardware and software platforms with a focus to align the business objectives with the capabilities of
proposed software application to ensure the solution delivered meets the specific requirements of our clients.

Application Maintenance Services: Ongoing maintenance, enhancements and help desk support for certain
software applications. The maintenance services are designed to enhance the efficiency and extend the useful
life of the application(s) covered.

Migration, Reengineering, Refactoring and Renovation: The services in this area are aimed at prolonging
assuring that the applications are protected against obsolescence and remain updated so as to enable
assimilation of business and technology changes through incremental enhancements without major capital
investments.

Enterprise Application Integration services: Our enterprise application integration services address the
needs of Application-to-Application Integration (A2A) and Business-to-Business Integration (B2B) as well as
integration needs in supply chain, customer relationship management and enterprise resource management.

E-commerce and Internet Services: We provide services for building intranet, extranet and internet based
applications in areas such as electronic payments, business to business trading, website management, web
enablement of legacy applications and content management.

Product Engineering Services: We help clients in new product development and product lifecycle
management through services in the areas of product design and development, product testing as well as
system integration and services as a systems integration partner. The focus is on optimizing cost of ownership
in long term through reusable solutions, use of tools etc. and creation of such assets.

Architecture Consulting Services: These services are aimed at assuring alignment of technology,
application and data architecture to the business needs and existing business architecture. The services
comprise architecture assessments for identifying the gaps in current architectural status against the business
needs/strategic objectives as well as designing roadmap for alignment.
(ii)
Enterprise Application Services:
Under our enterprise application services, we provide services which help our client to select, configure, integrate,
test and roll out enterprise solutions using packaged software. The services are aimed at assisting our customer in
achieving the expected outcome from their software investments.
(iii)
Generic Services:
We provide services to enable right selection of suite of application packages and tools, configuration of the package
parameters to enable the optimal business processes as well as assessments/audits to identify gaps or areas to address
so as to improve the returns from implementation. The generic services we provide include the following:
130

Customization Services: We provide customization services to ensure that the available applications are
adjusted for specific information support and analytical requirements of the customer organization, thus
assuring best utilization of the package capabilities.

Implementation Services: Our implementation services form a part of change implementation services with
holistic considerations to address technology, people as well as process aspects. We assist in implementing
technology infrastructure till transitioning is completed and the installation reaches stability. We provide
operational and technology support mechanism to assure business continuity in the new environment. Further,
we undertake initiatives to train employees and preparing them to work with the new technology set-up.

Upgrade Services: We provide upgrade services to enable implementation of new versions and/or
technology platforms from the existing ones.

Quality Improvement and CMMI Services: We provide services for IT Management. We are an SEI
Partner (worldwide – inclusive USA), a well-established and recognized brand to offer CMMI consulting and
Appraisal Service across the globe. We help clients assess their IT processes, plan improvements, and
implement change and measure results. Our quality improvement and CMMI Services include:

End to End CMMI® Training, Consulting and Appraisal Services;

SCAMPISM A, B & C Appraisal Services;

SEI Authorized Introduction to CMMI® Training;

CMMI® and High Maturity Training;

Professional services for implementation and institutionalization of best practices based on ISO 9001,
CMMI®, ITIL and ISO 27001; and

SQA services based on ISO 9001, CMMI®, ITIL and ISO 27001.

Software Testing Services: We have evolved our testing processes based on IEEE 829 standards of testing.
The reporting on defect management provides analytical insights that can be used to improve the efficiency of
the applications being covered. These services include test consulting and audits, conventional testing,
verification and validation, test automation, performance testing, and building test center.

Program Management Services: Though our program management services we offer assistance to clients to
deliver improved success from their programs and projects, helping them realize the maximum financial
benefits from their program strategies.

IT Infrastructure Management: We provide IT infrastructure management services from client premises as
well as from off shore management centers, which primarily consists of support for managing servers,
storage, databases, network and security and data center services – such as backup and disaster recovery,
service monitoring - alerts, logs and audit, notification and reporting; and, migration and transformation.
Our Industry Sectors
We combine our comprehensive range of service offerings with industry-specific experience to provide services to
clients in several industries.
Banking, Financial Services and Insurance
We offer a wide range of IT solutions and services to our clients in the banking, financial services and insurance
industries. We have undertaken change and digital transformation services for a number of BFSI companies
worldwide by assisting them in creating multi-year strategic plans, integrating their processing centers, transforming
their branches, standardizing and centralizing their transactions, creating new customer value propositions, and
131
designing new digital channels for marketing, customer service, transactions and payments. We have redesigned
their business processes, designed their IT/Digital strategies, implemented core banking and core insurance systems
and integrated them with ERPs, CRMs and contact centers.
Media, Entertainment and Telecommunications
We have experience in developing industry specific solutions to our clients in the media, telecommunications and
entertainment sector. We have built mobility money platforms for telecom companies, designed and implemented
content purchasing and scheduling applications for media and entertainment companies. We have used big data
analytics for predictive modeling to understand consumer behavior.
Life Sciences and Healthcare
We have experience in developing industry specific solutions to our clients in the life sciences and healthcare sector.
We have undertaken projects in relation to big data analytics for post-cancer treatment, redesigning processes for
health insurance administration, personal health and electronic health records IT product design and implementation,
redesigning hospital administration process redesign using Lean/Six Sigma and IT applications implementation of
real-time patient feedback systems in healthcare for quick decision making and innovations.
Manufacturing, Retail and Consumer Products
We have experience in developing industry specific solutions to our clients in the manufacturing and retail sector.
We have assisted manufacturing, retail and Consumer Product Group (CPG) companies to transform using
techniques and methodologies such as Lean, Sigma and Total Quality Management. We have also helped
organizations implement SAP ERP, HANA, BI/BO and Microsoft AML, Power BI in organizations in these
industries.
Government and Public Sector
We have experience in developing industry specific solutions to our clients in the government sector. Government
and state-owned enterprises have benefitted from our service offerings that focus on government transformation,
citizen service delivery enhancement, long-term strategy creation, and using monitoring and evaluation frameworks
for strategy/metrics office set up using balanced scorecards. We have also undertaken digital transformation projects
for income tax/customs departments, national airline companies, public broadcasters, national oil companies,
government departments and public sector banks in India and overseas.
Our Geographic Segments
We have operations in South Africa, North America, United Kingdom, East and West Africa, India and Australia. In
each of our geographic segments, we have dedicated sales and consulting professionals who service our clients. This
enables us to develop a better understanding of local requirements and service our clients more effectively.
South Africa
South Africa is our largest market and the sale of services to customers located in South Africa contributed 77.05
percent of our total revenue during fiscal 2015. We conduct our operations in South Africa through our branch office
at Sandton, Johannesburg and our two sales offices at Durban and Cape Town. The IT services market in South
Africa is a highly competitive and mature market. We have provided our services to clients in BFSI, Oil and Gas,
Media, Entertainment and Telecom sectors in South Africa.
United States of America
In Fiscal 2015, the sale of services to customers located in United States contributed 7.75 percent of our total
revenue during fiscal 2015. The United States of America has one of the most advanced IT services industry in the
world. We started our operations in the United States in 2002. We conduct our operations in the United States of
America through our wholly owned subsidiary, Nihilent Technologies Inc. We have five offices in the United States.
132
Our focus in the United States market has been in the areas of big data, data sciences, business intelligence, analytics
and electronic health records.
United Kingdom
In Fiscal 2015, the sale of services to customers located in United Kingdom contributed 6.62 percent of our total
revenue during fiscal 2015. We started our operations in the United Kingdom in 2001. We have one branch office in
London. Our focus in the United Kingdom market has been in the areas of retail, media, telecom and BFSI industry
verticals with leading companies in these industries which use our services for BI, Business-centric testing, SAP,
HANA and e- commerce.
Others
In Fiscal 2015, the sale of services to customers located in other geographies, excluding South Africa, United States
of America and United Kingdom, cumulatively contributed 8.58 percent of our total revenue during fiscal 2015, out
of which Africa has contributed the most approximately, 6.27 percent. We started our operations in Tanzania in
Fiscal 2013 and Nigeria and Australia in Fiscal 2014. We offer full range of services in these geographies.
Research and Development
We engage with our customers in developing tools and products combining their knowledge of the business with our
technical expertise. We have also developed tools such as MC3 TM, 14Signals, SigntN2 and LAMAT as a part of our
R& D initiatives. Our R&D activities will continue to differentiate us from our competitors and position us well for
winning complex projects. Our focus areas currently include business intelligence and analytics, digitization and
user experience, payments and ecommerce ecosystem.
Sales and Marketing Network
Our sales team works to identify sales opportunities to existing and prospective clients and is spread across the
world. Our sales network comprises of 18 offices in eight countries, which has helped us establish our presence in
those countries.
Our sales and marketing strategy is primarily focused on: (i) geographic segments; and (ii) client engagement
organisations for large mature relationships. We also focus on sectors like BFSI, telecommunications and media
where we have developed significant competencies.
Quality Processes
We focus on processes which help us deliver quality services. Our software engineering facility at Pune was
certified CMMI- Dev® Maturity Level 5 in the year 2015. Further, our Pune facility has also been certified ISO
9001:2008 for design, development, maintenance, re-engineering, migration of software solutions in client server,
main frame and web-based environment and ISO 27001:2013 for application management services in the financial
sector.
Human Resources
Our work force is a critical factor in maintaining our competitive position and our human resource policies focus on
training and retaining our employees. As a tool for employee engagement and retention, our Company has issued
sweat equity and ESOPs to employees over the years. As on November 30, 2015, we had more than 1,500
employees across 18 offices located in India, South Africa, Nigeria, Tanzania, United States, United Kingdom
Ireland and Australia. Our success depends to a great extent on our ability to recruit, train and retain high quality IT
professionals. Accordingly, we place special emphasis on the human resources function in our organization. Our
brand name, industry leadership position, wide range of growth opportunities, focus on long-term professional
development and grant of ESOPs and sweat equity give us significant advantages in attracting and retaining skilled
employees. We place special emphasis on the training our employees to enable them to service our clients.
133
Insurance
We maintain insurance policies against third party liabilities, including a commercial general liability policies and
professional liability policies. Our directors and officers are covered under a directors and officers’ liability
insurance policy. We also maintain group insurance and medical insurance policies for the benefits of our employees.
Intellectual Property
In the course of our R&D and consulting activities, we create a range of intellectual property which we brand and
protect through trademarks, copyrights and patents, and through trade secret, agreements, confidentiality procedures
and contractual provisions. Trademarks are used to brand and protect our product and service offerings while
copyright is used to protect the content of our intellectual property. Patents are sought for inventions that form part
of our products and tools that are used in our consultancy and service businesses and which may also be offered for
licensing to customers. We own all or part of the intellectual property rights for such copyrights and patents. We
have 15 registered and valid trademark approvals in India and 14 registered and valid trademark approvals outside
India. Some of our significant trademarks include MC3 TM, 14Signals and LAMAT. Further, we currently have two
patents registered in the name of our Promoter L.C. Singh in South Africa. For further details, see “Government and
Other Approvals” on page 299.
Competition
We focus on change management solutions to organisations. Accordingly, we have different set of competitors for
our various individual offerings. For instance, for IT projects our competitors include most of the large Indian IT
services companies, such TCS, Infosys Limited, Mindtree Limited, Zensar Technologies Limited, Persistent
Systems Limited and HCL Technologies Limited and international IT services companies, such as Accenture PLC,
Cap Gemini S.A and IBM Global Services (a division of IBM). For our strategy formulation and consulting
business, we compete with larger players such as Accenture PLC, Deloitte and Gemini Consulting and Services.
While we expect these competitive pressures to continue, our focused technology expertise, client references and
track record with our customers, flexible approach and highly motivated professionals gives us sufficient edge to
keep capturing new clients in geographies in which we are present.
The IT services industry is also witnessing the emergence of competition from Philippines and Latin America,
which have labour costs similar to or lower than India. Clients that presently outsource a significant proportion of
their IT service requirements to vendors in India may seek to reduce their dependence on one country and outsource
work to other offshore destinations. We also believe that our global delivery model, which combines offshore and
near shore delivery centers, helps us respond to new opportunities and obtain customers, meet client requirements
for business continuity planning and recruit skilled IT professionals with location-specific language and cultural
skills.
Our Property
All the premises from which we operate are on a leasehold basis. Our registered office is situated at Office No. 403
and 404, 4th floor, D Block, Weikfield IT Citi Infopark, Nagar Road, Pune - 411014 and has been leased to us.
Further, we have also taken on lease the 1st and 8th Floor, B- Block, Weikfield IT Citi Infopark, Nagar Road, Pune 411014 for the expansion of our development facility. We have offices across 18 locations in India, South Africa,
Ireland, Nigeria, Tanzania, United States, United Kingdom and Australia. In addition, we have taken residential
premises on lease in Pune, Mumbai and South Africa for providing accommodation to our employees.
134
REGULATIONS AND POLICIES
The following is an overview of the relevant regulations and policies as prescribed by the Government of India or
other regulatory bodies which are applicable to our business and operations in India. The information detailed
below has been obtained from publications available in the public domain. The regulations set out below are not
exhaustive and are only intended to provide general information to the investors and are neither designed nor
intended to substitute for professional legal advice.
Software Technology Parks Scheme
The STPI Scheme was introduced by the Government with the objective of encouraging, promoting and boosting the
software exports from India. The STPI Scheme, which is a 100% export oriented scheme, provides benefits such as
data communication facilities, operational space, common amenities, single window clearances and approvals
including project approvals, import certification and other facilities to boost software exports from India. In order to
avail the benefits as envisaged by the Government, a company is required to register itself with the appropriate
authorities. The principal compliance required of a company accorded approval under the STPI Scheme is the
fulfilment of the export obligation. The letters of permission may contain other conditions. Additionally, the unit is
required to file monthly, quarterly and annual returns to STPI in the nature of a performance report indicating the
export performance.
Information Technology Act, 2000
The Information Technology Act, 2000 (the “IT Act”) creates liability on a body corporate which is negligent in
implementing and maintaining reasonable security practices and procedures, and thereby causing wrongful loss or
wrongful gain to any person, while possessing, dealing or handling any sensitive personal data or information in a
computer resource owned, controlled or operated by it but affords protection to intermediaries with respect to third
party information liability. The IT Act also provides for civil and criminal liability including compensation, fines
and imprisonment for various computer related offences. These include offences relating to unauthorized disclosure
of confidential information and committing of fraudulent acts through computers, tampering with source code,
unauthorised access, publication or transmission of obscene material etc.
In April 2011, the Department of Information Technology under the Ministry of Communications and Information
Technology notified the Information Technology (Reasonable Security Practices and Procedures and Sensitive
Personal Data or Information) Rules, 2011 under section 43A of the IT Act (the “IT Personal Data Protection
Rules”) and the Information Technology (Intermediaries Guidelines) Rules, 2011 under Section 79(2) of the IT Act
(the “IT Intermediaries Rules”). The IT Personal Data Protection Rules prescribe directions for the collection,
disclosure, transfer and protection of sensitive personal data. The IT Intermediaries Rules require persons receiving,
storing, transmitting or providing any service with respect to electronic messages to not knowingly host, publish,
transmit, select or modify any information prohibited under the Intermediaries Rules and to disable such information
after obtaining knowledge of it.
Intellectual Property Laws
The Trade Marks Act, 1999
Indian trademark law permits the registration of trademarks for goods and services. The Trade Marks Act, 1999
(“Trademark Act”) governs the statutory protection of trademarks and for the prevention of the use of fraudulent
marks in India. An application for trademark registration may be made by individual or joint applicants and can be
made on the basis of either use or intention to use a trademark in the future. Once granted, trademark registration is
valid for ten years, unless cancelled. If not renewed after ten years, the mark lapses and the registration have to be
restored. The Trademark (Amendment) Act, 2010 has been enacted by the government to amend the Trademark Act
to enable Indian nationals as well as foreign nationals to secure simultaneous protection of trademark in other
countries. It also seeks to simplify the law relating to transfer of ownership of trademarks by assignment or
transmission and to align the law with international practice.
135
The Patents Act, 1970
The Patents Act, 1970 (“Patents Act”) governs the patent regime in India. Being a signatory to the Agreement on
Trade Related Aspects of Intellectual Property Rights, India is required to recognise product patents as well as
process patents. In addition to broad requirement that an invention satisfy the requirements of novelty, utility and
non-obviousness in order for it to avail patent protection, the Patents Act further provides that patent protection may
not be granted to certain specified types of inventions and materials even if they satisfy the above criteria. The
Patents Act prohibits any person resident in India from applying for patent for an invention outside India without
making an application for the invention in India. The term of a patent granted under the Patents Act is for a period of
twenty years from the date of filing of the application for the patent.
The Copyright Act, 1957
The Copyright Act, 1957 (“Copyright Act”) governs copyright protection in India. Under the Copyright Act, a
copyright may subsist in original literary, dramatic, musical or artistic works, cinematograph films, and sound
recordings. 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 may expedite
infringement proceedings. Once registered, copyright protection of a work lasts for a period of sixty years from the
demise 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 the copyright are all acts which amounts to an infringement of copyright.
Labour Laws
The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (the “EPF Act”) applies to factories
employing 20 or more employees and such other establishments and industrial undertakings as notified by the
government from time to time. The EPF Act requires all such establishments to be registered with the Regional
Provident Fund Commissioner and requires the 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.
The Employees’ State Insurance Act, 1948
The Employees’ State Insurance Act, 1948 (the “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 required to register such factory or establishment under the ESI Act and maintain prescribed records
and registers. Every employee (including casual and temporary employees), whether employed directly or through a
contractor, who is in receipt of wages up to ` 15,000 per month is entitled to be insured under the ESI Act.
The Industrial Disputes Act, 1947
The Industrial Disputes Act, 1947 provides the procedure for investigation and settlement of industrial disputes.
When a dispute exists or is apprehended, the conciliation officer may settle such dispute or the appropriate
government may refer the dispute to a labour court, tribunal or arbitrator, to prevent the occurrence or continuance
of the dispute, or a strike or lock-out while the proceeding is pending. The labour courts and tribunals may grant
appropriate relief including ordering modification of contracts of employment or reinstatement of workmen.
136
The Contract Labour (Regulation and Abolition) Act, 1970
The Contract Labour (Regulation and Abolition) Act, 1970 (the “CLRA Act”) requires companies employing 20 or
more contract labourers to be registered and prescribes certain obligations with respect to welfare and health of
contract labourers. Under the CLRA Act, both the establishment and the contractor are to be registered with the
registering officer. The CLRA Act imposes certain obligations on the contractor in relation to establishment of
canteens, rest rooms, drinking water, washing facilities, first aid and other facilities and payment of wages.
However, in the event the contractor fails to provide these amenities, the principal employer is under an obligation
to provide these facilities within a prescribed time period.
The following labour laws are also applicable to our Company:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
The Employee’s Compensation Act, 1923;
The Payment of Gratuity Act, 1972;
The Payment of Bonus Act, 1965;
The Minimum Wages Act, 1948;
The Payment of Wages Act, 1936.
The Equal Remuneration Act, 1976;
Child Labour (Prohibition and Regulation) Act, 1986; and
Apprentices Act, 1961
Environmental Laws
The Environment (Protection) Act, 1986
The Environment (Protection) Act, 1986 (the “EPA”) is an umbrella legislation designed to provide a framework for
the government to coordinate the activities of various central and state authorities established under various laws,
such as the Water (Prevention and Control of Pollution) Act, 1974, the Air (Prevention and Control of Pollution)
Act, 1981, etc. The EPA vests with the Government the power to take any measure it deems necessary or expedient
for protecting and improving the quality of the environment and preventing and controlling environmental pollution.
The Water (Prevention and Control of Pollution) Act, 1974
The Water (Prevention and Control of Pollution) Act, 1974 (the “Water Act”) aims to prevent and control water
pollution by factories and manufacturing units and to maintain and restore the quality and wholesomeness of water.
The Air (Prevention and Control of Pollution) Act, 1981
The Air (Prevention and Control of Pollution) Act, 1981 (the “Air Act”) provides for the prevention, control and
abatement of air pollution. Pursuant to the provisions of the Air Act, any person establishing or operating any
industrial plant within an air pollution control area, must obtain the consent of the relevant state pollution control
board prior to establishing or operating such industrial plant.
The Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008
The Hazardous Wastes (Management Handling and Transboundary Movement) Rules, 2008 (the “Hazardous
Wastes Rules”) aim to regulate the proper collection, reception, treatment, storage and disposal of hazardous waste.
The Hazardous Wastes Rules impose an obligation on every occupier and operator of a facility generating hazardous
waste to dispose of such waste without adverse effect on the environment, including through the proper collection,
treatment, storage and disposal of such waste. Every occupier and operator of a facility generating hazardous waste
must obtain an approval from the relevant pollution control board.
137
Shops and Establishments Legislations
The provisions of various shops and establishments legislations, applicable in the states in which the establishments
are set up, regulate the work and employment of the workers employed in shops and establishments, including
commercial establishments, and provide for fixation of working hours, rest intervals, overtime, holidays, leave,
termination of service, maintenance of shops and establishments, and other rights and obligations of the employers
and employees.
Foreign Ownership of Indian Securities
Foreign investment in Indian securities is regulated through the Industrial Policy of the Government and the FEMA
and the circulars and notifications issued there under.
The consolidated FDI Policy Circular of 2015 issued by the DIPP, which took effect from May 12, 2015, as
amended (“Consolidated FDI Policy”), consolidates and supersedes all previous press notes, press releases and
clarifications on FDI issued by the DIPP.
The transfer of shares from an Indian resident to an on-resident does not require the prior approval of the FIPB or
the RBI, provided that (i) the activities of the investee company are under the automatic route under the FDI policy
and such transfer does not attract the provisions of the Takeover Regulations; (ii) the non-resident shareholding is
within applicable sectoral limits under the FDI policy; and (iii) the pricing is in accordance with the guidelines
prescribed by the SEBI and the RBI.
Foreign Trade (Development and Regulation) Act, 1992
In India, exports and imports are regulated by the Foreign Trade (Development and Regulation) Act, 1972 (the
“Foreign Trade Act”). Under the Foreign Trade Act, every importer and exporter must obtain an ‘Importer
Exporter Code’ from the Director General of Foreign Trade or from any other duly authorized officer. The Director
General of Foreign Trade or an authorised officer can suspend or cancel a licence issued for export or import of
goods in accordance with the Foreign Trade Act, after giving the licence holder a reasonable opportunity of being
heard.
Other regulations
In addition to the above, our Company is required to comply with the provisions of the Companies Act, the
Competition Act, 2002, different state laws, various tax related laws and other applicable statutes for its day-to-day
operations.
Laws applicable for operations outside India
Our Company operates in various jurisdictions, including United States of America, Europe, Australia, Nigeria,
Tanzania and South Africa either through our Subsidiaries or branch offices. The relevant laws in these jurisdictions
are applicable to our Subsidiaries and branch offices, which relate to incorporation or registration as applicable,
labour, immigration, intellectual property, data protection, taxation, and other business related laws.
138
HISTORY AND CERTAIN CORPORATE MATTERS
Brief history of our Company
Our Company was incorporated as a private limited company, under the name of ‘Nihilent Technologies Private
Limited’ on May 29, 2000 at Pune under the Companies Act, 1956. The name of our Company was subsequently
changed to ‘Nihilent Technologies Limited’ pursuant to conversion of the status of our Company to a public limited
company and a fresh certificate of incorporation dated September 10, 2015 was issued by the RoC.
For information on our Company’s profile, activities, services, market, growth, technology, standing with reference
to prominent competitors and customers, please see section titled “Business” and “Industry” on pages 121 and 107,
respectively. For details of the management of our Company and its managerial competence, please see section
titled “Management” on page 151.
There have been no changes in the activities of the Company during the last five years which could have a material
effect on its profits/losses, including discontinuance of lines of business, loss of agencies or markets and other such
factors.
Changes in the Registered Office
Date of change
Details of the change in the address of Registered Office
July 1, 2000
Registered office of our Company changed from ‘B-11, The Woods, North Main Road,
Koregaon Park, Pune - 400 001’ to ‘Amar Avinash Corporate City, First Floor, 11 Bund
Garden Road, Pune – 411 001’.
September 23, 2008
Registered office of our Company changed from ‘Amar Avinash Corporate City, First
Floor, 11 Bund Garden Road, Pune – 411 001’ to ‘4th Floor, Weikfield IT Citi Infopark,
Nagar Road, Pune – 400 014’.
The changes in the registered office address mentioned above were made to enable greater operational efficiency
and administrative convenience.
Main Objects of our Company
The main objects contained in the Memorandum of Association of our Company include the following:
“To undertake development of software and all software related services and activities relating to the internet and
information technology within and outside India and to provide on-going software support to various global
customers, in particular, by offering strategic responsibility management with innovative ideas driven e-enterprise
business solutions all the way through to business critical solutions and support, including managing of networks,
data centres and hosting.”
The main objects as contained in the Memorandum of Association enable our Company to carry on the business
presently being carried out.
Amendments to our Memorandum of Association of our Company
Set out below are the amendments to our Memorandum of Association since the incorporation of our Company:
Date of
Shareholders’
resolution
August 23, 2000
Particulars
The capital clause of the MoA was substituted to reflect the increase in the authorised
capital of our Company from `100,000 divided into 10,000 equity shares of `10 each to
`200,000,000 divided into 20,000,000 equity shares of `10 each.
139
Date of
Shareholders’
resolution
August 30, 2001
October 3, 2006
Particulars
A new set of MoA was adopted by the shareholders of our Company.
Alteration of the objects clause of the MoA by insertion of new sub-clause III B (7) to the
objects incidental or ancillary to the main objects:
“III B (7) – To assemble, maintain, buy, sell, import, export, distribute, trade or otherwise
deal in information technology consumables such as computer spare parts, components,
floppies and other accessories and to import, export, distribute, develop, maintain,
service, sale, purchase, hire, lease, sub-lease, outsource interactive/non-interactive
computer systems used for conducting customer feedback/survey and related services in
various organisations/enterprises.”
July 20, 2012
Alteration of the objects clause of the MoA by insertion of new sub-clause III B (45) to the
objects incidental or ancillary to the main objects:
“III B (45) – To develop, maintain, host, run portal(s) for creating an online real/social
community which amongst other shall include aspiring, deserving, upcoming and
untapped talent from public at large to promote, perform, Produce, Distribute, Import,
Export, Publish, Exhibit or Trade in various Arts like music, singing, acting, dancing,
writing, photography through various means, creation of Intellectual Property Rights and
to act as a structured platform by exploring strategic tie-ups and brining in proximity
renowned personalities/experts for conceptualizing and promoting ideas, through use of
technologies in IT/ITES by deploying ultramodern web based technologies and to do all
acts and deeds as may be necessary in the course of trade.”
September 10, 2015
Pursuant to the conversion from a private limited company to a public company limited by
shares, a new certificate of incorporation was issued by the ROC and the name of our
Company was changed from ‘Nihilent Technologies Private Limited’ to ‘Nihilent
Technologies Limited’. Consequently, the name clause of the MoA was altered to reflect
the change in name.
December 11, 2015
The capital clause of the MoA was substituted to reflect the increase in the authorised
capital of our Company from `200,000,000 divided into 20,000,000 equity shares of `10
each to `400,000,000 divided into 40,000,000 equity shares of `10 each.
Major events and milestones of our Company
The table below sets forth the key events in the history of our Company:
Year
2000
2001
2002
2005
2010
2013
Particulars
Incorporation of our Company.
Our Company entered the United Kingdom market and set up a branch office, for carrying out
operations.
Our Company established its operations in the United States of America with incorporation of
our subsidiary company Nihilent Technologies Inc.
Our Company launched its Enterprise Transformation Consulting Practise.
Our Company started providing CMMi certifications to global clients.
Our Company created a proprietary MC3 TM framework.
Our Company registered 14 Signals patent for ‘Customer Loyalty Evaluation’ service.
Our Company set up its subsidiary Nihilent Australia Pty Limited in Australia.
Our Company set up its subsidiary Nihilent Nigeria Limited in Nigeria.
140
Year
2014
2015
Particulars
Our Company set up its subsidiary Nihilent Tanzania Limited in Tanzania.
Our Company through its subsidiary Nihilent Technologies Inc., acquired GNet Group LLC, a
business intelligence and sharepoint solutions provider based in the United States.
Our Company started operations in Ireland and set up a branch office, for carrying out
operations.
Our Company acquired 51 percent of the paid up equity capital of Intellect Bizware Services
Private Limited, a SAP consulting entity, based in Mumbai.
There have been no material delays in setting up projects or time or cost over-runs. Furthermore, none of our
loans taken from banks and financial institutions have been converted into equity in the past.
Awards and Recognitions
The table below sets forth the key awards and recognitions granted to our Company:
Fiscal Year
2011-12
2015-16
Particulars
Our Company was awarded the Red Herring Top 100 Asia Award
 Our Company was awarded the Excellence Award from the Institute of Economic Studies
 Selected as one of India’s top emerging companies in the 2016 India Emerging 20
Programme
Our Holding Company
For details regarding our holding company, please see section titled “Our Promoters, Promoter Group and Group
Companies” on page 169.
Our Subsidiaries
For details regarding our Subsidiaries, please see section titled “Subsidiaries” on page 145.
Our Shareholders
For details regarding our shareholders, please see section titled “Capital Structure” on page 63.
Injunctions or restraining order against our Company
As of the date of this Draft Red Herring Prospectus, there are no injunctions or restraining orders against our
Company.
Technology, Market Competence and other details regarding our Company
For details of our Company’s business, products and services, its growth, standing with reference to the prominent
competitors, management, technologies and services, please see sections titled “Business” and “Industry” on pages
121 and 107.
Capital raising through equity and debt
Except as mentioned in the chapter “Capital Structure” on page 63, our Company has not raised any capital by way
of equity or convertible debentures.
141
Defaults or Rescheduling of borrowings with financial institutions/ banks
There have been no defaults or rescheduling of borrowings with the financial institutions/banks for which a notice
has been issued or any action has been taken by any financial institutions/banks.
Revaluation of Assets
Our Company has not revalued its assets since incorporation.
Details regarding acquisition of business/undertakings, mergers and amalgamations
Details of key agreements in relation to acquisitions made by our Company are as mentioned below.
Summary of Key Agreements
1.
Shareholders’ Agreement between our Company, Nedcor Bank Limited (“Nedcor Bank”), Nedbank
Africa Investments (“Nedcor”) Limited and Mr. L. C. Singh, our Promoter (“LCS”) dated July 12,
2000.
In order to regulate the relationship and respective rights and obligations as shareholders, Nedcor Bank, Nedcor,
LCS and our Company entered into a shareholders’ agreement dated July 12, 2000 the (“SHA”). The SHA was
amended pursuant to five supplemental agreements dated February 5, 2001, March 15, 2001, December 20, 2001,
September 23, 2006 and January 22, 2007. Pursuant to a deed of assignment dated June 20, 2002, all the rights and
obligations of Nedcor and Nedcor Bank were assigned to Hatch Investments (Mauritius) Limited (“Hatch”). Nedcor
through Hatch invested in our Company.
The SHA provides that the number of directors on the Board would be capped at maximum of six directors
including the Chairman who shall not have a casting vote. The SHA provides that of the six directors four directors
shall be nominated by Hatch as long as Hatch’s holding in the company remains above 50.1% and the remaining
two directors shall be nominated by LCS. Under the terms of the SHA no third party having less than 10%
shareholding shall be entitled to appoint a director on the Board.
Further, the SHA allows for the appointment of professionals by our Company on the recommendation of LCS
(“Significant Members”), who in accordance with the terms of their respective employment agreements shall be
allotted Equity Shares, such that the total shareholding of the Significant Members together with LCS, is at least
15.1%. Further, the SHA provides that every Significant Member shall be required to execute a power of attorney in
favour of LCS inter alia giving the power to vote on the Equity Shares held by such Significant Members. The SHA
also provides for the creation of a Stock Option Committee to govern the allotment of shares to the employees vide
an Employee Stock Option Plan (“ESOP”).
The SHA places certain lock-in restrictions with respect to sale or transfer of shares held by LCS and the Significant
Members. Under the terms of the SHA, LCS is permitted to dispose the shares held by him only after the completion
of two years. LCS is further restricted to dispose only one-third of the shares held by him in the third year and is
allowed to dispose of his entire holding only after the fourth year. Additionally, the SHA requires the Significant
Members to not dispose any of the shares held by them for the first two years. The Significant Members are allowed
to dispose only one-third of the shares held by him in the third year and the fourth year and further are allowed to
dispose of their entire shareholding only after the fifth year, from the date of such allotment. Separately, under the
term of the SHA, Nedcor also agrees to lock in its shareholding for a period of three years.
The SHA also provides pre-emptive rights wherein terms and conditions are laid down for offering the shares to
other existing shareholders before the same is offered to a third party. Such shares may be sold to third parties only
after the right of first refusal has been exercised by the other shareholders, in consonance with the terms of the SHA.
Further, the Company, LCS and Hatch have entered into a sixth supplemental agreement dated September 15, 2015,
pursuant to which the SHA shall terminate upon listing of the Equity Shares, pursuant to an initial public offering.
142
2.
Share Purchase and Shareholders’ Agreement between our Company and Intellect Bizware Services
Private Limited (“IBSPL”) along with Mr. Syed Sabahat Husain Kazi, Mr. Lingam Gopalakrishna and
Mr. Sanjay Prabhakar Gupte (jointly referred to as “Key Shareholders”) dated September 1, 2015
amended vide a subsequent agreement dated December 21, 2015 (“SPSA”).
Our Company entered into a SPSA with IBSPL and its Key Shareholders, to effectuate the acquisition of IBSPL by
our Company. Under the terms of the SPSA, our Company has acquired 51% of the equity shareholding of IBSPL
and is granted an irrevocable unconditional right and option to acquire the balance 49% of the shareholding. Under
the SPSA, our Company has the option to acquire the balance shareholding either directly or through its subsidiaries
in a single transaction within a stipulated time of 30 days after August 31, 2016; or (ii) in one or more tranches
within a period of three years; or (iii) in 1 (one) or more tranches in a period of five (5) years of the completion of
the acquisition of the initial Stake or such other extended period in terms of the SPSA. The SPSA provides for a
valuation methodology for acquiring 49 percent stake in IBSPL which is linked to a target EBITDA vis-à-vis actual
EBITDA achieved at the end of each year.
To govern the functioning, management and to regulate the relationship and respective rights and obligations
between our Company, IBSPL and its Key shareholders till such time as the complete acquisition is effectuated, the
SPSA provides detailed terms and conditions for the management of IBSPL. The SPSA provides terms for
composition of the board of directors of IBSPL and frequency of the board meetings, appointment and removal of
directors, conducting the business of IBSPL, banking, accounting and matters relating to finance along with
provisions for declaration of dividend. Additionally, the SPSA confers certain pre-emptive rights on the Key
Shareholders with regards to disposal of their respective shareholding in favour of our Company. Further the SPSA
lists out the obligations of our Company and IBSPL till such time as the acquisition is completed.
3.
Shareholder’s Agreement (“SHA”) between our Company, Mr. Oti Ikomi and Nihilent Nigeria Limited
(“NNL”), dated June 7, 2013
Our Company entered into a Heads of Agreement (“HOA”), dated January 11, 2013, and an addendum dated March
20, 2013 with Mr. Oti Ikomi, to establish and incorporate a company in Nigeria which shall be engaged in the
business of IT consulting, software development and software solutions. Pursuant to the HOA a shareholder’s
agreement was entered into between our Company, Mr. Oti Ikomi and NNL to regulate the affairs of NNL and their
relationship between them as shareholders. Pursuant to the SHA, our Company holds 51% and Mr. Ikomi holds 49%
of NNL’s shareholding, resepectively.
The SHA provides for the board of NNL to consist of four directors with Mr. Ikomi as its Chairman. Our Company
has been granted the right to appoint our CEO as the second director on NNL’s board along with a nominee director.
Further, the terms of the SHA require for an independent director to also be appointed on the board of directors of
NNL. In the event that Mr. Ikomi ceases to hold 49% of the total paid up share capital of NNL, under the SHA our
Company has been granted the right to appoint a chairman on to the board of NNL. The SHA also provides detailed
terms and conditions for the management, composition of the board of directors, frequency of the board meetings,
appointment and removal of directors, conducting the business of NNL, terms related to banking, accounting and
matters relating to finance along with provisions for declaration of dividend.
Additionally, the SHA confers certain pre-emptive rights on the shareholders of NNL, with regards to disposal of
their respective shareholding. The SHA also provides a right to Mr. Ikomi to dispose of its shareholding in case
NNL fails to achieve listing of its shares on a stock exchange within a period of 5 years, with the first right of refusal
being given to our Company in relation to such disposal.
Except as disclosed above, on the date of this Draft Red Herring Prospectus, our Company is not a party to any
material agreements, which have not been entered into in the ordinary course of business.
Competition
For details of competition faced by our Company, please see section titled “Business” beginning on page 121.
143
Financial and Strategic Partners
Our Company does not have any financial and strategic partners as of the date of filing this Draft Red Herring
Prospectus.
144
SUBSIDIARIES
Our Company has the following subsidiaries:
1.
2.
3.
4.
5.
6.
7.
8.
Seventh August IT Services Private Limited;
Nihilent Tanzania Limited;
Nihilent Nigeria Limited;
Nihilent Technologies, Inc.;
GNet Group, LLC;
GNET Group (I) Private Limited;
Nihilent Australia Pty. Limited; and
Intellect Bizware Services Private Limited.
Details of the Subsidiaries
1.
Seventh August IT Services Private Limited (“Seventh August”)
Corporate Information:
Seventh August IT Services Private Limited was incorporated on September 10, 2007 under the Companies Act,
1956 at Pune, Maharashtra, India. Seventh August IT Services Private Limited is involved in the business of
computer software development services including online and offshore software development services. Further,
Seventh August also has a cloud hosted portal called tumbhi.com for creating opportunities for art, artists and
artifacts by creating communities of artists and art lovers for interacting with each other. The registered office of
Seventh August is situated at Sumol Plot No. 27, Manmohan Society, Lane No. 1, Karvenagar, Pune – 411 052.
Capital Structure
The capital structure of Seventh August is as follows:
No. of equity shares of ` 10 each
50,000
10,000
Authorised capital
Issued, subscribed and paid-up capital
Shareholding Pattern
The shareholding pattern of Seventh August is as follows:
Sr.No.
1.
2.
3.
2.
Name of the shareholder
Nihilent Technologies
Limited
L. C. Singh
No. of equity shares of
` 10 each
9,998
1
1
10,000
Rahul Bhandari
Total
Percentage of total equity holding
(%)
99.98%
0.01%
0.01%
100.00%
Nihilent Tanzania Limited (“Nihilent Tanzania”)
Corporate Information:
Nihilent Tanzania Limited was incorporated on February 12, 2013 under the Companies Act, 2002 of Tanzania.
Nihilent Tanzania is involved in the business of consulting in information technology and development of
145
software and other software related services and activities. The registered office of Nihilent Tanzania is situated
at P.O. Box 9912, Plot No.565, Old Bagamoyo Road, DSM Kinondoni, Dar Es Salaam, Tanzania.
Capital Structure
The capital structure of Nihilent Tanzania is as follows:
No. of equity shares of Tshs1,000 each
30,000
10,000
Authorised capital
Issued, subscribed and paid-up capital
Shareholding Pattern
The shareholding pattern of Nihilent Tanzania is as follows:
Sr.No.
1.
2.
Name of the shareholder
Nihilent Technologies
Limited
Sophia
Mwaniwa
Chamzingo
No. of equity shares of
Tshs1,000 each
9,500
Total
3.
Percentage of total equity
holding (%)
95.00
500
5.00
10,000
100
Nihilent Nigeria Limited (“Nihilent Nigeria”)
Corporate Information:
Nihilent Nigeria was incorporated on May 24, 2013 under the Companies and Allied Matters Act, 1990 of the
Federal Republic of Nigeria. Nihilent Nigeria is involved in the business of providing global solutions and
consulting in information technology. The registered office of Nihilent Nigeria is situated at 24, Idejo Street,
Victoria Island, Lagos, Nigeria.
Capital Structure
The capital structure of Nihilent Nigeria is as follows:
No. of equity shares of 1.00 Nigerian Naira each
Authorised capital
Issued, subscribed and paid-up capital
53,000,000
10,000,000
Shareholding Pattern
The shareholding pattern of Nihilent Nigeria is as follows:
Sr.No.
1.
2.
Name of the shareholder
Nihilent Technologies
Limited
Otimeyin Ikomi
Total
No. of equity shares of
1.00 Nigerian Naira each
5,100,000
4,900,000
10,000,000
146
Percentage of total equity holding
(%)
51.00
49.00
100
4.
Nihilent Technologies, Inc. (“Nihilent Inc”)
Corporate Information:
Nihilent Technologies, Inc. was incorporated on April 1, 2001 under the General Corporation Law of the State of
Delaware at the State of Delaware. Nihilent Inc is involved in the business of providing business consulting and
solutions in information technology. The registered office of Nihilent Inc is situated at 103 Carnegie Center, Suite
300, Princeton, New Jersey 08540.
Capital Structure
The capital structure of Nihilent Inc is as follows:
No. of equity shares (as its common stock)
Authorised capital
Issued, subscribed and paid-up capital
3,000
1,000
Shareholding Pattern
The shareholding pattern of Nihilent Inc is as follows:
Sr.No.
1.
5.
Name of the shareholder
Nihilent
Limited
Total
1,000
Percentage of total equity holding
(%)
100
1,000
100
No. of equity shares
Technologies
GNet Group, LLC. (“GNet Group”)
Corporate Information:
GNet Group, LLC was incorporated on April 12, 2005 under the Minnesota Statutes at the State of Minnesota. GNet
Group is involved in the business of software development, consultancy and software services. The registered office
of GNet Group is situated at 2675 Long Lake Road, Suite 150, Roseville, Minnesota 55113. .
Shareholding Pattern
Nihilent Technologies Inc, our wholly owned subsidiary, is the holder of 2,110,000 units of GNet Group which
represents 100% of the membership units and interests in GNet Group, LLC.
6.
GNET Group India Private Limited (“GNET India”)
Corporate Information:
GNET India was incorporated on September 7, 2010 under the Companies Act, 1956 at Pune. GNET India is
involved in the business of consulting, training and implementing of computerized systems and software. The
registered office of GNET India is Plot No. 17, Sadanand Society, Bibwewadi, Pune – 411 037, Maharashtra,
India. GNET India has not had any operations since April 1, 2015.
147
Capital Structure
The capital structure of GNET India is as follows:
No. of equity shares of ` 10 each
Authorised capital
Issued, subscribed and paid-up capital
100,000
12,730
Shareholding Pattern
The shareholding pattern of GNET India as follows:
Sr.No.
7.
Name of the shareholder
1.
GNet Group LLC
2.
Rahul Bhandari
Total
No. of equity shares of
` 10 each
12,729
1
12,730
Percentage of total equity
holding (%)
99.99
0.01
100
Nihilent Australia Pty Limited (“Nihilent Australia”)
Corporate Information:
Nihilent Australia was incorporated on July 11, 2013 under the Corporations Act, 2001 at Victoria. Nihilent
Australia is involved in the business of providing solutions and consulting in information technology, change
management and other related services. The registered office of Nihilent Australia is situated at Level 1, 225
George Street, Sydney NSW 2000.
Capital Structure
The capital structure of Nihilent Australia is as follows:
No. of equity shares of AUD 1 each
Authorised capital
Issued, subscribed and paid-up capital
250,000
250,000
Shareholding Pattern
The shareholding pattern of Nihilent Australia is as follows:
Sr.No.
1.
Name of the shareholder
Nihilent
Limited
Total
Technologies
No. of equity shares of
AUD 1 each
250,000
250,000
148
Percentage of total equity
holding (%)
100
100
8.
Intellect Bizware Services Private Limited (“Intellect”)
Corporate Information:
Intellect Bizware Services Private Limited was incorporated on May 22, 2009 under the Companies Act, 1956 at
Mumbai. Our Company acquired 51% stake in Intellect pursuant to the Share Purchase and Shareholders
Agreement dated September 1, 2015 entered into between our Company, Intellect, Syed Sabahat Husain Kazi,
Lingam Gopalakrishna and Sanjay Prabhakar Gupte. Intellect is involved in the business of SAP implementation,
support and consultancy, SAP solutions and mobile enterprise apps and web portals. The registered office of
Intellect Bizware Services Private Limited is situated at H 219, Tower # 3, International Technology Centre, CBD
Belapur, Navi Mumbai, Maharashtra 400 614.
Capital Structure
The capital structure of Intellect is as follows:
No. of equity shares of ` 10 each
100,000
10,000
Authorised capital
Issued, subscribed and paid-up capital
Shareholding Pattern
The shareholding pattern of Intellect is as follows:
Sr.No.
1.
2.
3.
4.
Name of the shareholder
Nihilent
Technologies
Limited
Syed Sabahat Husain Kazi
Gopala Krishna Lingam
Sanjay Prabhakar Gupte
Total
No. of equity shares of
` 10 each
5,100
1,960
1,960
980
10,000
Percentage of total equity
holding (%)
51.00
19.60
19.60
9.80
100.00
Public or rights issues
None of our Subsidiaries have made any public or rights issue in the last three years nor have it become a sick
company or are under winding up. Further, none of our Subsidiaries are listed on any stock exchange in India or
abroad.
Our Subsidiaries have not been refused listing of any of its securities, at any time, by any of the recognised stock
exchanges in India or abroad.
There are no accumulated profits or losses of our Subsidiaries not accounted for by our Company.
Interest of the Subsidiary in our Company
Other than as disclosed in “Related Party Transactions” on page 177, our Subsidiaries are not interested in the
business of our Company.
None of our Subsidiaries hold any Equity Shares in our Company. For details of the transactions between our
Company and the Subsidiaries, see “Related Party Transactions” on page 177.
Our Subsidiary does not have any business interest in our Company except as stated in the section titled “Business”
on page 121.
149
Material Transactions
Other than as disclosed in the section “Related Party Transactions” on page 177, there are no sales or purchase
between the Subsidiary and our Company where such sales or purchases exceed in value in the aggregate 10% of the
total sales or purchases of our Company.
Common Pursuits
Our Subsidiaries conduct business similar to those conducted by our Company. Our Company would adopt
necessary measures and practices as permitted by law and regulatory guidelines to address any conflict situation as
and when they arise.
150
MANAGEMENT
Board of Directors
The Articles of Association require our Company to have not less than three Directors and not more than fifteen
Directors. We currently have seven Directors on our Board of Directors.
The following table sets forth details of our Board of Directors as of the date of filing of this Draft Red Herring
Prospectus with SEBI:
Sr.
No.
1.
Name, designation, occupation, DIN,
address, nationality, date of appointment
and term
Jeremy John Ord
57 years
1. Britehouse Holdings (Proprietary)
Limited;
2. Datacraft Pty. Limited;
3. DDA Holdings Pty. Limited;
4. Dimension Data Holdings Plc.;
5. Dimension Data Facilities (Proprietary)
Limited;
6. Dimension Data Pty. Limited;
7. Dimension Data Management Services
Pty. Limited;
8. Dimension Data Middle East and Africa
Pty. Limited;
9. Hatch Investments (Mauritius) Limited;
10. The Oval Advertising and Promotions
Co. Pty. Limited; and
11. Tradebridge Pty. Limited.
66 years
1.
2.
3.
Designation: Non-Executive Chairman
Occupation: Business Executive
DIN: 01583325
Address: 19 A, Coronation Road, Sandhurst,
Johannesburg - 2196, South Africa
Date of appointment: October 18, 2006
Term: Liable to retire by rotation
2.
y L. C. Singh
Other
directorships/partnership/trusteeships
Age
Designation: Vice Chairman and CEO
GNet Group LLC;
Nihilent Nigeria Limited; and
Intellect Bizware Services Private
Limited.
Occupation: Professional
DIN: 01034826
Address: D-301, Adhara,
Magarpatta, Pune - 411028
One
North,
Date of appointment: Date of Incorporation
Term: Up to March 31, 2017
3.
Richard Linden Pike
54 years
Designation: Non-Executive Director
Occupation: Business Executive
DIN: 07327277
Address: P.O. BOX 517, Morningside 2057,
Morningside, Johannesburg, South Africa
151
1. Adcorp Holdings Limited;
2. APBA Pte Limited;
3. Adcorp Holdings Singapore Pte
Limited;
4. Adcorp Holdings Australia (Pty)
Limited;
5. Adcorp Holdings International Pte
Limited;
6. Dare Holdings Pty Ltd.; and
7. Dare Holdings (NZ) (Pty) Ltd.
Sr.
No.
Name, designation, occupation, DIN,
address, nationality, date of appointment
and term
Date of appointment: December 7, 2015
Other
directorships/partnership/trusteeships
Age
Term: Liable to retire by rotation
4.
Santosh Pande
63 years
1. RSP Management Consultants Private
Limited; and
2. Triveni Engineering and Industries
Limited.
70 years
1.
2.
3.
Designation: Independent Director
Occupation: Professional
DIN: 01070414
Address: House No. 1C, One Apartment,
Sector 22, Gurgaon - 122015
Date of appointment as Director: August 1,
2000
Date of re-appointment as an Independent
Director: August 25, 2015
Term: Five years with effect from December
11, 2015
5.
Kasaragod Ashok Kini
Designation: Independent Director
Occupation: Professional
4.
5.
6.
DIN: 00812946
Address: B-202, Mantri Pride Apartment,
Mountain Road, 1 Block, Jayanagar,
Bangalore – 560011
7.
8.
Date of appointment: September 10, 2015
Term: Five years with effect from December
11, 2015
6.
Satish K. Tripathi
64 years
Designation: Independent Director
Occupation: Computer Scientist
DIN: 07277285
Address: 889 Lebrun Road, Amherst, New
York 14226, United States of America
Date of appointment: September 10, 2015
152
Nil
lndusind Bank Limited;
SBI Capital Markets Limited;
Edelweiss
Asset
Reconstruction
Company Limited;
UTI Trustee Company Private Limited;
Fino Paytech Limited;
lntrepid Finance and Leasing Private
Limited;
GOCL Corporation Limited; and
Gulf Oil Lubricants India Limited.
Sr.
No.
7.
Name, designation, occupation, DIN,
address, nationality, date of appointment
and term
Term: Five years with effect from December
11, 2015
Lila Firoz Poonawalla
Other
directorships/partnership/trusteeships
Age
71 years
1.
Designation: Independent Director
2.
Occupation: Business Executive
3.
4.
5.
DIN: 00074392
Address: Fili Villa, S.No. 23, Baner Road,
Balewadi, Pune - 411045, Maharashtra, India
6.
7.
8.
Date of appointment: October 13, 2015
Pragati Leadership Institute Private
Limited;
Nobletek PLM Solutions Private
Limited;
Blossom Industries Limited;
KPIT Technologies Limited;
Bajaj Allianz Life Insurance Company
Limited;
Bajaj Allianz General Insurance
Company;
VE Commercial Vehicle Limited; and
Impact Automotive Solutions Limited.
Term: Five years with effect from December
11, 2015
Relationship between our Directors
None of our Directors are related to each other.
Confirmations
None of our Directors is or was a director of any listed company, whose shares have been or were suspended from
being traded on NSE or BSE, during the last five years preceding the date of this Draft Red Herring Prospectus,
during the term of his/her directorship in such company.
None of our Directors is or was, a director of any listed company, which has been or was delisted from any stock
exchange during the tenure of his/her directorship in such company.
None of our Directors has been or was, identified as wilful defaulter by RBI or any other authority. There are no
violations of securities laws committed by our Directors in the past and no such proceedings are pending against
them.
No consideration, either in cash or shares or otherwise have been paid or agreed to be paid to any of our Directors or
to the firms or companies in which they are interested by any person, either to induce him to become or to help him
qualify as a Director, or otherwise for services rendered by him or by the firm or company in which he is interested,
in connection with the promotion or formation of our Company.
Appointment of relatives of our Directors to any office or place of profit
Except as disclosed below, none of the relatives of our Directors currently hold any office or place of profit in our
Company:
Ms. Swati Singh, daughter of Mr. L. C. Singh, is employed as MC 3 TM Business Consultant in Nihilent Technologies
Inc., which is a wholly owned subsidiary of our Company. She received remuneration of USD 2,848 bi-weekly from
April 2013 to January 2014.
153
Brief Profile of our Directors
Jeremy John Ord, aged 57 years, is the Chairman of the Board of our Company. He is currently an Executive
Chairman and director of Dimension Data Holdings Plc. and he has previously served as the managing director and
chief executive officer of Dimension Data Holdings Plc. He has also served as a non-executive director of Paracon
Holdings Limited and Datacraft Asia Limited. He is a council member and Member of the board of governors of the
South African Foundation. He is also a member of the board of governors of the University of the Witwatersrand
Foundation. He was appointed as a Director of our Company on October 18, 2006.
L. C. Singh, aged 66 years, is our Executive Director and our Chief Executive Officer. He has served on our Board
since our Company’s incorporation and he is the founder of our Company. He graduated with a bachelor’s degree in
Technology (B.Tech) from the Institute of Technology Banaras Hindu University in the year 1970. He holds a
bachelor’s degree in science, specialising in Chemical Engineering. He also holds a diploma in Advanced
Management Programme from the Harvard Business School. He is a fellow member of the Indian Institute of
Management Consultants of India and a fellow member of the Computer Society of India. He has a total experience
of 44 years in the IT Industry. Prior to incorporating our Company, he has worked with Zensar Technologies
Limited in the capacity of the President and CEO. He has received various prestigious awards such as the Udyog
Ratan Award by the Institute of Economic Studies in the year 2015.
Richard Linden Pike, aged 54 years, a Non-Executive Director on the Board of our Company, graduated with a
bachelor’s degree in Commerce from the University of Witwatersrand in the year 1986. He is a qualified chartered
accountant and a member of the South African Institute of Chartered Accountants. He has a total experience of
about 26 years in the field of finance. He is currently the CEO of Adcorp Holdings Limited. He was appointed as a
Director of our Company on December 7, 2015.
Santosh Pande, aged 63 years, an Independent Director on the Board of our Company, graduated with a bachelor‘s
degree in Mechanical Engineering from Indian Institute of Technology, Kharagpur in the year 1973 and also holds a
post graduate diploma in management from Indian Institute of Management, Kolkata and is also a fellow of the
Institute of Cost Accountants of India. He has authored an e-book titled ‘An Overview of Corporate Governance
Reforms in India’. He was awarded a Ph.D. in Business Administration by Aligarh Muslim University for his
dissertation titled ‘Ownership Concentration, Corporate Governance and Firm's Financial Performance’. He has a
total experience of more than 40 years as finance professional. Prior to joining our Company, he has worked with
companies such as HCL Technologies Limited and Continental Engines Limited. He was appointed as an
Independent Director of our Company for five years with effect from December 11, 2015.
Kasaragod Ashok Kini, aged 70 years, an Independent Director on the Board of our Company, graduated with a
bachelor’s degree in science from University of Mysore. He also holds a master’s degree in arts (English) from
University of Madras. He has a total experience of over 40 years in banking industry. He is currently a member of
the board of directors of UTI Trustee Company Private Limited. Prior to joining our Company, he worked with the
State Bank of India from where he retired in the capacity of a Managing Director. He was appointed as an
Independent Director of our Company for five years with effect from December 11, 2015.
Satish K. Tripathi, aged 64 years, an Independent Director on the Board of our Company, graduated with a
bachelor’s degree in science from Banaras Hindu University in the year 1968 and a master’s degree in science
specialising in statistics in the year 1971. He also holds a master’s degree in computer science from University of
Toronto in 1976. He holds a PhD in philosophy in computer science from the University of Toronto. He has a total
experience of more than 35 years working as a computer scientist. He currently holds the position of President of the
University of Buffallo He was appointed as an Independent Director of our Company for five years with effect from
December 11, 2015.
Lila Firoz Poonawalla, aged 71 years, an Independent Director on the Board of our Company, graduated with a
bachelor’s degree in Mechanical Engineering from University of Pune in the year 1967. She has a total experience
of more than 35 years in the corporate field. She is recipient of prestigious ‘Padmashree’ award in 1989 conferred
by the then President of India and Order of the Polar Star by Carl XVI Gustaf, King of Sweden, in 2003. She was
appointed as an Independent Director of our Company for five years with effect from December11, 2015.
154
Terms of appointment of the Executive Directors
L. C. Singh was appointed as an Executive Director and CEO of our Company at the inception of the Company. He
was re-appointed as an Executive Director of our Company pursuant to a Board resolution dated December 7, 2015
and a Shareholders’ resolution passed at our EGM of our Company held on December 11, 2015. He shall hold office
until March 31, 2017. He is entitled to receive a bonus of `2.97 million, subject to the achievement of performance
targets set by the Board to be reviewed at the end of Fiscal Year. He is also entitled for perquisites and allowances
as may be determined by the Board.
The following are the terms of remuneration of L. C. Singh:
Particulars
Basic Salary
Commission/Bonus
Perquisites
Others
Remuneration
`17.60 million
`2.97 million, subject to achievement of performance targets
Nil
Nil
Service agreement between our Company and L.C. Singh, dated March 5, 2014.
Our Company entered into an agreement with Mr. L. C. Singh (“LCS”) dated February 2, 2001 pursuant to which
LCS was appointed as the President and CEO of the Company for a period of three years, until May 31, 2003. The
appointment was extended, vide subsequent agreements dated March 15, 2004, June 29, 2006, March 18, 2008 and
March 24, 2008 entered between LCS and the Company, whereby the most recent extension of appointment was
from April 1, 2011 to March 31, 2014. Subsequently, a service agreement was entered into between LCS and our
Company dated March 5, 2014 in furtherance of our Company’s intention to appoint LCS as the Vice Chairman and
CEO of our Company (“Service Agreement”).
The Service Agreement sets out the duties of LCS in the capacity of an employee of our Company along with details
of remuneration, reimbursements, and perquisites such as medical reimbursements that have been granted to LCS.
Under the terms of the Service Agreement, LCS is entitled to a bonus over and above the fixed remuneration,
subject to achievement of performance targets set by the Board of our Company. The Service Agreement broadly
covers the entitlement of our Company’s right to any intellectual property pertaining to inventions, discoveries etc.,
that may be made by LCS during his term of appointment. The Service Agreement also provides for the grounds for
termination in case of incapacitation or resignation.
Terms of appointment of the Non-Executive Directors and Independent Directors
Pursuant to shareholder’s resolution passed in the EGM held on December 11, 2015, the Non-Executive directors
and Independent Directors of our Company are entitled to be paid a commission which is subject to a maximum of
1% of the net profits of the Company, for each Fiscal Year.
In addition to the above, travel expenses for attending meetings of the Board of Directors or a committee thereof and
other Company related expenses are borne by our Company on behalf of the Non-Executive Directors, from time to
time.
Borrowing Powers of our Board of Directors
Our Articles, subject to the provisions of the Companies Act authorise our Board, at its discretion, to generally raise
or borrow or secure the payment of any sum or sums of money for the purposes of the operations of our Company.
Provided however, where the money to be borrowed together with the money already borrowed (apart from
temporary loans (as defined under the Companies Act) obtained from our Company's bankers in the ordinary course
of business) exceeds the aggregate of the paid-up capital of our Company and its free reserves, the Board shall not
borrow such moneys without the consent of the Shareholders, obtained in a General Meeting. Pursuant to a
resolution passed by our Shareholders on December 11, 2015, our Board has been authorised to borrow any sum or
sums of monies (apart from temporary loans obtained or to be obtained from our Company’s bankers in the ordinary
155
course of business) in excess of our aggregate paid-up capital and free reserves, provided that the total amount
which may be so borrowed and outstanding shall not at any time exceed the limit of `1,000 million.
Payment or benefit to Directors of our Company
The sitting fees/other remuneration paid to Directors of the Company in Fiscal Year 2015 are as follows:
A.
Remuneration to Executive Directors:
The details of remuneration paid to our Executive Directors in the Fiscal Year 2015 are as follows:
Remuneration (in `million)
18.56
12.82
31.38
Name of Director
L. C. Singh
Minoo D. Dastur
Total
B.
Remuneration to Non-Executive Directors:
Our Company has not paid any remuneration to the non-executive Directors of our Company in the Fiscal Year
2015.
Except as disclosed in this Draft Red Herring Prospectus, none of the beneficiaries of loans, advances and sundry
debtors are related to our Directors. Except statutory and contractual benefits upon termination of their employment
in our Company or retirement, no officer of our Company, including our Directors and key management personnel,
are entitled to any benefits.
No remuneration has been paid, or is payable, to the Directors of our Company by our Subsidiaries.
Arrangement or understanding with major shareholders, customers, suppliers or others
L.C. Singh was appointed as the Vice Chairman and CEO of our Company pursuant to the shareholders’ agreement
dated July 12, 2000, as amended from time to time. For further details in relation to the shareholders’ agreement
please see section titled “History and Certain Corporate Matters” on page 139. Other this, there has been no other
arrangement or understanding with the major shareholders, customers, suppliers of our Company, or others,
pursuant to which any of our Directors were appointed on the Board.
Shareholding of Directors in our Company
Other than the following, none of our Directors holds any Equity Shares as of the date of filing this Draft Red
Herring Prospectus:
Name of Director
Number of Equity Shares held
L. C. Singh
Santosh Pande
Total
Percentage Shareholding (%)
2,020,000
200,100
2,220,100
10.12
1.00
11.12
Our Directors do not hold any outstanding vested options, pursuant to the employee stock option scheme
implemented by our Company.
Our Articles of Association do not require our Directors to hold any qualification shares.
Shareholding of Directors in Subsidiaries
The shareholding of the Directors in our Subsidiaries is set forth below:
156
Name of the Director
L. C. Singh
Name of the Subsidiary
Seventh August IT
Services Private Limited
Number of equity
shares
1
Percentage of
shareholding (%)
0.01
Bonus or profit sharing plan for our Directors
Except as disclosed above, our Company does not have any performance linked bonus or a profit sharing plan for
our Directors.
Interest of Directors
All Directors may be deemed to be interested to the extent of fees, commission and travel expenses being borne by
our Company for attending meetings of the Board of Directors or a committee thereof and other Company related
expenses and other remuneration and reimbursements.
Our Directors may also be regarded as interested in the Equity Shares or equity shares of our Subsidiary held by
them as disclosed in this Draft Red Herring Prospectus. Our Directors may also be regarded as interested in the
Equity Shares that may be subscribed by or allotted to them or to the companies, firms and trusts, in which they are
interested as directors, members, partners, trustees, beneficiaries or promoter, pursuant to the Issue. All of our
Directors may also be deemed to be interested to the extent of any dividends payable to them and other distributions
in respect of the Equity Shares.
Except as disclosed below, no amount or benefit has been paid or given within the two preceding years or is
intended to be paid or given to any of our Directors except the normal remuneration for services rendered in the
capacity of being Directors:
Our Company has entered into a Leave and License Agreement dated March 1, 2013 with L. C. Singh in connection
with the premises located at B 108/45, Shrihari Krishna Kripa CHS, Manish Nagar, Andheri (W), Mumbai –
400053, Maharashtra, India. The total amount paid towards rent to L.C. Singh during the Fiscal Year ended March
31, 2015 was `0.20 million
Our Company has not entered into any service contracts with our Directors which provide for benefits upon
termination of employment of our Directors.
For details of the Service Agreement with L. C. Singh, please see section titled “Management” on page 151.
Except L. C. Singh none of our Directors have any interest in the promotion of our Company. Further, our Directors
have no interest in any property acquired or proposed to be acquired by our Company within the two years from the
date of this Draft Red Herring Prospectus.
Changes in the Board in the last three years
Name
Minoo Dastur
Date of appointment
Date of Cessation
Reason
October 2, 2002
August 31, 2015
Resignation
October 10, 2006
October 18, 2015
Resignation
Kasaragod Ashok Kini
September 10, 2015
-
Appointment
Satish K. Tripathi
September 10, 2015
-
Appointment
October 13, 2015
-
Appointment
Mireille Levenstein
Lila Firoz Poonawalla
157
Name
Date of appointment
Date of Cessation
Reason
Mark Anthony Jurgens
October 18, 2006
December 7, 2015
Resignation
Patrick Keith Quarmby
October 26, 2007
December 7, 2015
Resignation
December 7, 2015
-
Appointment
Richard Pike
Corporate Governance
The provisions of the Listing Regulations with respect to corporate governance will be applicable to our Company
immediately upon the listing of the Equity Shares with the Stock Exchanges. Our Company is in compliance with
the requirements of the applicable regulations in respect of corporate governance in accordance with the Listing
Regulations and the Companies Act, pertaining to the constitution of the Board and committees thereof. The Board
functions either on its own or through various committees constituted to oversee specific operational areas.
Currently, our Board has seven Directors (including one woman Director) of which four are Independent Directors
which constitutes more than 50% of our Board.
The Board functions either as a full board or through various committees constituted to oversee specific operational
areas. Our Company’s executive management provides the Board with detailed reports on its performance
periodically.
The details of the Audit committee, Nomination and Remuneration committee, Stakeholders’ Relationship
committee, Corporate Social Responsibility committee and Risk Management committee are given below:
Committees of the Board
The Board has constituted the following committees in accordance with the requirements of the Companies Act and
Listing Regulations:
A. Audit Committee
The Audit committee was constituted by a resolution of our Board dated March 3, 2002 and reconstituted on
December 7, 2015. The current constitution of the Audit committee is as follows:
Name of Director
Kasaragod Ashok Kini
Santosh Pande
Richard Pike
Designation in the Committee
Chairman (Independent Director)
Member (Independent Director)
Member (Non-Executive Director)
Rahul Bhandari, Company Secretary and Compliance Officer is secretary of the Audit committee.
The scope and function of the Audit committee is in accordance with Section 177 of the Companies Act, 2013
and Regulation 18 of the Listing Regulations and its terms of reference are as follows:
Terms of reference of the Audit committee:
(a)
Oversight of the company’s financial reporting process, examination of the financial statement and the
auditors’ report thereon and the disclosure of its financial information to ensure that the financial statement is
correct, sufficient and credible;
(b)
Providing recommendation for appointment, re-appointment and replacement, remuneration and terms of
appointment of auditors of the company and the fixation of audit fee;
158
(c)
Review and monitor the statutory auditor’s independence and performance and effectiveness of audit process;
(d)
Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
(e)
Reviewing, with the management, the annual financial statements before submission to the Board for
approval, with particular reference to:
(i)
Matters required to be included in the ‘Director’s Responsibility Statement’ to be included in the
Board’s report in terms of clause (c) of sub-section 3 of Section 134 of the Companies Act;
(ii)
Changes, if any, in accounting policies and practices and reasons for the same;
(iii)
Major accounting entries involving estimates based on the exercise of judgment by management;
(iv)
Significant adjustments made in the financial statements arising out of audit findings;
(v)
Compliance with listing and other legal requirements relating to financial statements
(vi)
Disclosure of any related party transactions; and
(vii)
Modified opinion in the draft audit report.
(f)
Reviewing, with the management, the quarterly and half-yearly financial statements before submission to the
Board for approval;
(g)
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 utilized 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;
(h)
Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the
internal control systems;
(i)
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;
(j)
Discussion with internal auditors any significant findings and follow up there on;
(k)
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;
(l)
Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as
post-audit discussion to ascertain any area of concern;
(m)
Look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of non-payment of declared dividends) and creditors;
(n)
Review the functioning of the whistle blower mechanism;
(o)
Approval of appointment of the chief financial officer (i.e., the whole time finance Director or any other
person heading the finance function or discharging that function) after assessing the qualifications,
experience and background etc. of the candidate;
159
(p)
Approval or any subsequent modification of transactions of the company with related parties and omnibus
approval for related party transactions proposed to be entered into by the Company subject to such conditions
as may be prescribed;
(q)
Scrutiny of inter-corporate loans and investments;
(r)
Valuation of undertakings or assets of the company, wherever it is necessary;
(s)
Evaluation of internal financial controls and risk management systems; and
(t)
Carry out any other function as mentioned in the terms of reference of the Audit committee and in
accordance with the Companies Act, 2013, SEBI ICDR Regulations and Listing Regulations.
Powers of the Audit committee shall include the following:
(a)
To investigate any activity within its terms of reference;
(b)
To seek information from any employer;
(c)
To obtain outside legal or other professional advice; and
(d)
To secure attendance of outsiders with relevant expertise, if it is considered necessary.
The Audit committee also reviews the following information:
(a)
Management’s discussion and analysis of financial condition and results of operations;
(b)
Statement of significant related party transaction (as defined by the Audit committee), submitted by the
management;
(c)
Management letters/letters of internal control weakness issued by the statutory auditors;
(d)
Internal audit reports relating to internal control weaknesses; and
(e)
The appointment, removal and terms of remuneration of the chief internal auditor.
(f)
statement of deviations:
(a) quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to
stock exchange(s) in terms of the Regulation 32(1) of the Listing Regulations.
(b) annual statement of funds utilized for purposes other than those stated in the offer
document/prospectus/notice in terms of Regulation 32(7) of the Listing Regulations.
The Audit Committee is required to meet at least four times in a year under Regulation 18 (2)(a) of the Listing
Regulations.
B. Nomination and Remuneration Committee
The Nomination and Remuneration committee was constituted by a resolution of our Board dated September 30,
2003 and reconstituted on December 7, 2015. The current constitution of the Nomination and Remuneration
committee is as follows:
Name of Director
Satish Tripathi
Designation in the Committee
Chairman (Independent Director)
160
Name of Director
Kasargod Ashok Kini
Richard Pike
Jeremy John Ord
Designation in the Committee
Member (Independent Director)
Member (Non-Executive Director)
Member (Non-Executive Director)
Rahul Bhandari, Company Secretary and Compliance Officer is secretary of the Nomination and Remuneration
committee.
The scope and function of the Nomination and Remuneration committee is in accordance with Section 178 of the
Companies Act, 2013 read with Regulation 19 of the Listing Regulations and its terms of reference are as follows:
Terms of reference of the Nomination and Remuneration Committee:
(a)
Formulation of the criteria for determining qualifications, positive attributes and independence of a director
and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel
and other employees;
(b)
Formulation of criteria for evaluation of independent directors and the Board;
(c)
Devising a policy on Board diversity;
(d)
Identifying persons who are qualified to become directors and who may be appointed in senior management
in accordance with the criteria laid down, and recommend to the Board their appointment and removal. The
company shall disclose the remuneration policy and the evaluation criteria in its Annual Report;
(e)
To extend or continue the term of appointment of the independent director, on the basis of the report of
performance evaluation of independent directors.
(f)
Analysing, monitoring and reviewing various human resource and compensation matters;
(g)
Determining the company’s policy on specific remuneration packages for executive directors including
pension rights and any compensation payment, and determining remuneration packages of such directors;
(h)
Determining compensation levels payable to the senior management personnel and other staff (as deemed
necessary), which shall be market-related, usually consisting of a fixed and variable component;
(i)
Reviewing and approving compensation strategy from time to time in the context of the then current Indian
market in accordance with applicable laws;
(j)
Performing such functions as are required to be performed by the compensation committee under the
Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;
(k)
Framing suitable policies and systems to ensure that there is no violation, by an employee of any applicable
laws in India or overseas, including the Securities and Exchange Board of India (Prohibition of Insider
Trading) Regulations, 2015 and the Securities and Exchange Board of India (Prohibition of Fraudulent and
Unfair Trade Practices relating to the Securities Market) Regulations, 2003.
(l)
Performing such other activities as may be delegated by the Board of Directors and/or are statutorily
prescribed under any law to be attended to by the Nomination and Remuneration committee.
C. Stakeholders’ Relationship Committee
The Stakeholders’ Relationship Committee was constituted by a resolution of our Board dated December 7, 2015.
The current constitution of the Stakeholders’ Relationship committee is as follows:
161
Name of Director
Lila Poonawala
Kasaragod Ashok Kini
Designation in the Committee
Chairman (Independent Director)
Member (Independent Director)
Rahul Bhandari, Company Secretary and Compliance Officer is the secretary of the Stakeholder’s Relationship
Committee.
This Committee is responsible for the redressal of shareholders’ and investor’s grievances including but not limited to
transfer of shares, non-receipt of annual report and non-receipt of dividend. The scope and function of the
Stakeholders’ Relationship Committee is in accordance with Section 178 (6) of the Companies Act read with
Regulation 20 of the Listing Regulations and its terms of reference are as follows:
(a)
Considering and resolving the grievances of security holders of the Company, including complaints related to
transfer of shares, non-receipt of annual report, non-receipt of declared dividends, balance sheets of the
Company or any other documents or information to be sent by the Company to its shareholders etc.
(b)
Investigating complaints relating to allotment of shares, approval of transfer or transmission of shares,
debentures or any other securities;
(c)
Giving effect to all transfer/transmission of shares and debentures, dematerialization of shares and
rematerialisation of shares, split and issue of duplicate/consolidated share certificates, allotment and listing of
shares, buy back of shares, compliance with all the requirements related to shares, debentures and other
securities from time to time;
(d)
Oversee the performance of the registrars and transfer agents of the Company and to recommend measures
for overall improvement in the quality of investor services and also to monitor the implementation and
compliance of the code of conduct for prohibition of insider trading pursuant to the SEBI (Prohibition of
Insider Trading) Regulations, 2015, and other related matters as may be assigned by the Board; and
(e)
Carrying out any other function as may be delegated by the Board of Directors.
D.
Corporate Social Responsibility Committee:
The Corporate Social Responsibility committee was constituted by a resolution of our Board dated April 15, 2014
and reconstituted on December 7, 2015. The current constitution of the Corporate Social Responsibility Committee is
as follows:
Name of Director
L. C. Singh
Lila Poonawala
Santosh Pande
Designation in the Committee
Chairman (Executive Director)
Member (Independent Director)
Member (Independent Director)
The scope and functions of the Corporate Social Responsibility Committee is in accordance with Section 135
of the Companies Act and its terms of reference are as follows:
(a)
Formulate and recommend to the board of directors, a “Corporate Social Responsibility Policy” which shall
indicate the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act
read with Companies (Corporate Social Responsibility Policy) Rules 2014, as notified by the Ministry of
Corporate Affairs, Government of India on February 27, 2014;
(b)
Review and recommend the amount of expenditure to be incurred on the activities referred to in clause (a);
(c)
Monitor the Corporate Social Responsibility Policy of the Company and its implementation from time to
time; and
162
(d)
Any other matter as the Corporate Social Responsibility Committee may deem appropriate after approval of
the Board of Directors or as may be directed by the Board of Directors from time to time.
E. Risk Management Committee
The Risk Management Committee was constituted by a resolution of our Board dated December 7, 2015. The
current constitution of the Risk Management Committee is as follows:
Name of Director
Santosh Pande
Lila Poonawala
L. C. Singh
Designation in the Committee
Chairman (Independent Director)
Member (Independent Director)
Member (Executive Director)
Rahul Bhandari, Company Secretary and Compliance Officer is secretary of the Risk Management Committee.
The scope and functions of the Risk Management committee is in accordance with Section 135 of the
Companies Act read with Regulation 21 of the Listing Regulations and its terms of reference are as follows:
(a)
Laying down risk assessment and minimization procedures and the procedures to inform Board the same;
(b)
Framing, implementing, reviewing and monitoring the risk management plan for the Company; and
(c)
Performing such other activities as may be delegated by the Board of Directors and/or are statutorily
prescribed under any law to be attended to by the Risk Management Committee.
163
Management Organisation Chart
Board of Directors
Vice Chairman and CEO
L.C Singh
Company Secretary
Rahul Bhandari
VP and CTO
Abhay Ghate
VP - Global
Consulting
Businesses
Ravi Teja
CFO
Shubhabrata Banerjee
VP HR & RMG
Gyan Daultani
VP - Internal
Systems and
Strategic
Initiatives
Sundaresan
Narayanan
President and COO
Minoo Dastur
Sr. VP - Techno-
Commercial
Vineet Bahal
164
VP and
Regional
Head –
Australia
Robin
Rastogi
VP-Corporate
Strategy
Shobha
Agarwal
President –
Nihilent
Technologie
s Inc.
Venkatara
man K
CEO and Cofounder and
Mentor, Intellect
Bizware
Syed Sabahat
Husain Kazi
Key Management Personnel
Provided below are the details of our Key Managerial Personnel, as on the date of this Draft Red Herring
Prospectus:
L. C. Singh, Shubhabrata Banerjee and Rahul Bhandari are Key Managerial Personnel as defined under Section 203
of the Companies Act, 2013.
L. C. Singh, aged 66 years is our Executive Director and Chief Executive Officer. For further details, see section
titled “Management- Board of Directors” on page 151.
Minoo Darab Dastur, aged 55 years, is the President and Chief Operating Officer of our Company. He holds a
bachelor’s degree in science from University of Bombay and is a Certified Management Consultant by the Institute
of Management Consultants of India. He also holds a diploma in business management from K. C. College of
Management Studies. He has worked with Datamatics Consultants Limited from 1983 to 1986 and with Tata
Consultancy Services as the head of the corporate banking group from 1986 to the year 2000. He has been active
member of the Institute of Electrical and Electronics Engineers (IEEE), the Association for Computing Machinery
(ACM), the Bombay Management Association (BMA) and the Computer Society of India (CSI). He was also the
Chairman of the Indo-South African Chamber in India. He has an experience of 30 years in the IT consulting
industry. He is involved in the strategic planning of our Company. He joined our Company on August 7, 2000 His
gross remuneration for the Fiscal Year 2015 was `12.82 million.
Shubhabrata Banerjee, aged 49 years, is the Chief Financial Officer of our Company and is responsible for
financial planning, funds management, accounting and reporting, strategic initiatives, investor relations, risk
management and control processes. He holds a bachelor’s degree in science from St. Xavier’s College, Calcutta in
the year 1988. He is a qualified Chartered Accountant and is a fellow member of the Institute of Chartered
Accountants of India. He is also an associate member of Institute of Cost Accountants of India. Further, he also
holds a degree of executive masters in International Business from Indian Institute of Foreign Trade. He has around
20 years of experience in finance and accounting. Prior to joining our Company, he has worked with NIIT
Technologies. He joined our Company on September 1, 2005. His gross remuneration for the Fiscal Year 2015 was
` 6.74 million.
Rahul S. Bhandari, aged 40 years, is the Company Secretary of our Company and is responsible for secretarial
compliances at our Company. He holds a bachelor’s degree in law from Symbiosis Law School, Pune and a
bachelor’s degree as well as a post graduate degree in commerce from Marathwada Mitra Mandal College of
Commerce, Pune. He is a qualified company secretary and a member of the Institute of Company Secretaries of
India. He has around 15 years of experience in secretarial field. Prior to joining our Company, he has worked with
Hitech Plast Limited, Pune, a listed company, as an Assistant Company Secretary and Compliance Officer. He
joined our Company on April 2, 2007. His gross remuneration for the Fiscal Year 2015 was `2.74 million.
Abhay Ghate, aged 47 years, is the Vice President and Chief Technology Officer of our Company. He holds a
bachelor’s degree in Mechanical Engineering from College of Engineering, Pune and a master’s degree in
Technology specializing in Production Engineering from the Indian Institute of Technology, Mumbai. Prior to
joining our Company, he has worked with Tata Consultancy Services. He has over 23 years of experience in the IT
industry. He joined our Company on November 29, 2000. His gross remuneration for the Fiscal Year 2015 was `
5.20 million.
B. Ravi Teja, aged 45 years, is the Vice President - Consulting Businesses of our Company. He holds a bachelor’s
degree in electronic engineering from the National Institute of Technology, Allahabad and a master’s degree in
Business Administration from the School of Management, IIT Bombay with specialization in Manufacturing and
Technology Management. He has 20 years of experience in the IT industry. Prior to joining our Company, he was
associated with Tata Consultancy Services as a software engineers in ERP and CRM systems. He joined our
Company on September 18, 2000. His gross remuneration for the Fiscal Year 2015 was ` 5.09 million.
Lt. Col. (Retd.) Gyan Daultani, aged 63 years is the Vice President – Human Resources and Resource Management
Group. He holds a bachelor’s degree in telecom engineering from the Military College of Telecommunication
165
Engineering in the year 1981 and a master’s degree in Management science from Symbiosis Institute of
Management, Pune. He has served the Indian Army for 21 years and retired at the rank of Lieutenant Colonel. He
has 15 years of experience in the IT industry. Prior to joining our Company, he was associated with Tech Mahindra
Limited as a Group Manager, Resource Management Group and a resident director of IMC India. He has also been
associated with DaimlerChrysler Aerospace, Germany. He heads the Human Resource and Resource Management
Group functions of our Company. He joined our Company on April 15, 2008. His gross remuneration for the Fiscal
Year 2015 was `4.39 million.
Sundaresan Narayanan, aged 57 years, is the Vice President – Internal Systems and Strategic Initiatives of our
Company. He holds a bachelor’s degree in engineering from University of Calcutta in the year 1979 and a master’s
degree in Electronic Engineering from Indian Institute of Technology Kharagpur. He has an experience of
approximately 35 years in the IT industry. Prior to joining our Company, he was associated with Tata Consultancy
Services for a period of 16 years in the capacity of a Senior Consultant. He joined our Company on November 5,
2001. His gross remuneration for the Financial Year 2015 was `5.43 million.
Vineet Bahal, aged 48 years, is the Senior Vice President - Techno-Commercial of our Company. He holds a
bachelor’s degree in science from University of Bombay and a master’s degree in Computer Applications from
University of Pune in the year 1995. He has approximately 25 years of experience in IT consulting and delivery
management. Prior to joining our Company he was associated with Tata Consultancy Services and Zensar
Technologies. He joined our Company on August 16, 2000. His gross remuneration for the Fiscal Year 2015 was
`5.86 million which is paid in equivalent ZAR.
Robin Rastogi, aged 44 years, is the Vice President and Regional Head of our subsidiary Nihilent Australia Pty.
Limited. He holds a bachelor’s degree in Electrical and Electronics Engineering from Birla Institute of Technology,
India. He has an experience of approximately 22 years in the IT industry. He oversees the operations of our
company in the Asia Pacific region and manages client and partner relationships based out of Australia. Before
joining our Company, he worked with Zensar Technologies. He joined our Company on July 3, 2000. His gross
remuneration for the Financial Year 2015 was AUD 109,840 million.
Shobha Agarwal, aged 58 years is the Vice President – Corporate Strategy of our Company. She holds a bachelor’s
degree in chemical engineering from the Indian Institute of Technology, Kharagpur and a postgraduate diploma in
management from the Indian Institute of Management, Ahmedabad. She has an experience of 34 years in the IT
industry. Before joining our Company, she was associated with Tata Consultancy Services for nearly 20 years in the
capacity of a senior consultant. She oversees and handles the strategic cross-border investment function of our
Company. She joined our Company on September 1, 2000. Her gross remuneration for the Fiscal Year 2015 was
`6.21 million.
Venkataraman Kavasseri, aged 54 years is the President of our subsidiary Nihilent Technologies Inc. He holds a
bachelor’s degree in commerce. He is also the Chief Executive Officer of GNet Group LLC. He has held senior
management positions in companies like Datapro, Focus Software, Homeward Residential Corporation Private
Limited and Netpro Technologies. He has over 34 years’ experience. His gross remuneration for the Fiscal Year
2015 was USD 364,684 million. He was employed with Nihilent group with effect from October 1, 2014, when
Nihilent Technologies Inc. acquired GNet Group LLC.
Syed Sabahat Husain Kazi, aged 45 years, is the Chief Executive Officer and one of the founding directors of our
subsidiary Intellect Bizware Services Private Limited which was acquire by our Company on September 1, 2015. He
holds a bachelor’s degree in engineering from Nagpur University and master’s degree in Business Administration
from Nagpur University. He has approximately 16 years of experience in the IT industry. He joined Intellect
Bizware Services Private Limited on October 4, 2000.
All key management personnel as disclosed above are permanent employees of either our Company or our
subsidiary. None of our key management personnel, mentioned above, are related to each other.
Family relationships of Directors with Key Management Personnel
None of our key management personnel are related to the Directors of our Company.
166
Arrangements and Understanding with Major Shareholders
Except for L.C Singh, none of our key management personnel have been selected pursuant to any arrangement or
understanding with any major shareholders, customers or suppliers of our Company, or others.
Shareholding of the Key Management Personnel
The following is the shareholding of the Key Management Personnel in our Company, as on the date of this Draft
Red Herring Prospectus.
Sr. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Name of the Key Managerial Personnel
L C Singh
Minoo Darab Dastur
Shobha Agrawal
Shubhabrata Banerjee
Sundaresan Narayanan
Abhay Ghate
Robin Rastogi
Vineet Bahal
Ravi Teja
Rahul Bhandari
Venkatraman Kavasseri
Gyan Daultani
Syed Sabahat Husain Kazi
Total
No. of Equity Shares held
2,020,000
230,100
80,100
75,000
55,000
51,800
50,000
44,000
38,500
5,000
Nil
Nil
Nil
2,649,500
Bonus or profit sharing plan of the Key Management Personnel
Except as stated otherwise in this Draft Red Herring Prospectus and the performance based bonus or variable
payment made to our employees, pursuant to the terms of employment, or except pursuant to the terms of the service
agreement between our Company and L. C. Singh our Company does not have any bonus or profit sharing plan. For
further details regarding the service agreement, please see section titled “Management” on page 151.
Interest of Key Management Personnel
The Key Management Personnel of our Company do not have any interest in our Company other than to the extent
of the remuneration or benefits to which they are entitled to as per their terms of appointment and reimbursement of
expenses incurred by them during the ordinary course of their service. The key management personnel may also be
deemed to be interested to the extent of any dividend payable to them and other distributions in respect of Equity
Shares held by them, if any.
Except as mentioned below, none of the Key Management Personnel have been paid any consideration/benefits of
any nature by our Company, other than their remuneration.
1.
Our Company has entered into a Leave and License Agreement dated March 1, 2013 with L. C. Singh. For
further details, please see the section titled “Management” on page 151.
2.
Our Company has entered into a Leave and License Agreement dated December 1, 2014 with Shobha Agarwal
in connection with the premises located at A5, Padma Vilas Enclave, 18 Mahadji Shinde, Road, Wanowrie,
Pune – 411040, Maharashtra, India. Under the terms of the Agreement the total remuneration payable to Ms.
Agarwal is `24,200 per month.
167
Changes in the Key Management Personnel
Except for Venkataraman Kavasseri who was employed with the Nihilent Group with effect from October 1, 2014,
when Nihilent Technologies Inc. acquired GNet Group LLC and Syed Sabahat Husain Kazi who became a key
managerial personnel upon acquisition of a 51 percent stake in Intellect Bizware Services Private Limited on
September 1, 2015, there have been no changes in the Key Management Personnel, otherwise than by way of
retirement in the normal course during the last three years prior to the date of filing this Draft Red Herring
Prospectus.
Employee Stock Option Plan/Employee Stock Purchase Scheme
For details in relation to employee stock option plan scheme of our Company, see section titled “Capital Structure”
at page 63.
Loans taken by Directors/Key Management Personnel
Our Company has not granted any loans to our Directors and/or Key Management Personnel.
Payment or Benefit to officers of our Company (non-salary related):
Except as disclosed in the section titled “Management – Interest of Key Management Personnel” on page 167, no
amount or benefit has been paid or given within the two preceding years or intended to be paid or given to any
officer of the Company, including our directors and key management personnel.
168
OUR PROMOTERS, PROMOTER GROUP AND GROUP COMPANIES
The Promoters of our Company are L.C. Singh, Hatch Investments (Mauritius) Limited, Adcorp Professional
Services Limited and Dimension Data Protocol B.V. As on the date of filing of this Draft Red Herring Prospectus,
the Promoters, together hold 15,828,781 Equity Shares representing 79.28% of the pre-Issue issued, subscribed and
paid-up capital of the Company. For details please see section titled “Capital Structure” on page 63.
Details of our Promoters are as follows:
Individual Promoter
L. C. Singh
L.C. Singh, aged 66 years, is the Vice Chairman and CEO of our Company.
Driving Licence: MH1220070096520
Passport No.: Z3427451
Voters Identity Card: RRH8004368
Residential Address: D-301, Adhara, One North, Magarpatta, Pune – 411 028
For a complete profile of Mr. L.C. Singh, i.e., his educational qualifications, professional
experience, positions / posts held in the past and other directorships and special
achievements, please see the section titled “Management” on page 151.
As on date of this Draft Red Herring Prospectus, L. C. Singh holds 20,20,000 Equity
Shares representing 10.12% of the pre-issue paid-up capital of our Company.
Corporate Promoters
1. Hatch Investments (Mauritius) Limited (“Hatch”)
Corporate Information
Hatch was incorporated on March 9, 2001 under the Companies Act, 1984 of the Republic of Mauritius as a private
company limited by shares. As on date of this Draft Red Herring Prospectus, Hatch holds 13,808,781 Equity Shares
representing 69.16% of the total paid-up capital of our Company. The registered office of Hatch is situated at 2 nd
floor, Block B, Medine Mews, Chaussee Street, Mauritius. The principal business of Hatch is to hold investments.
Adcorp Professional Services Limited and Dimension Data Protocol B.V. each holds 50% of the share capital of
Hatch.
Board of Directors
The board of directors of Hatch comprises of:
1.
2.
3.
4.
5.
6.
Jason Barr;
Zaredhin Jaunbaccus;
Jeremy Ord;
Patrick Quarmby;
Mireille Levenstein; and
Mark Jurgens.
Promoters of Hatch
The promoters of Hatch are:
1.
Dimension Data Protocol B.V.; and
169
2. Adcorp Professional Services Limited.
Change in control of Hatch
There has been no change in control of Hatch in the last three years.
2. Adcorp Professional Services Limited (“Adcorp Professional”)
Corporate Information
Adcorp Professional was originally incorporated as Paracon Holdings Limited on May 29, 1997. The name of
Paracon Holdings Limited was changed to Adcorp Professional Services Limited with effect from August 1, 2014.
As on date of this Draft Red Herring Prospectus, Adcorp Professional holds 50% of the share capital of Hatch, and
does not directly hold any Equity Shares in our Company. The registered office of Adcorp Professional is situated at
Adcorp Office Park, Nicolway Bryanston, Cnr William Nicol Drive and Wedgewood Link, Bryanston, Sandton,
2191. The principal business of Adcorp Professional is investment holding. Adcorp Professional is a wholly owned
subsidiary of Adcorp Holdings Limited.
Board of Directors
The board of directors of Adcorp Professional as on the date of this Draft Red Herring Prospectus comprises of the
following persons:
1.
2.
3.
Mark Jurgens; Chief Executive Officer
Campbell Bomela; Executive Director
Bhabalazi Bulunga; Non-Executive Director
Promoters of Adcorp Professional
The promoter of Adcorp Professional is Adcorp Holdings Limited (“Adcorp Holdings”). Adcorp Holdings is listed
on the Johannesburg Stock Exchange.
The board of directors of Adcorp Holdings as on the date of this Draft Red Herring Prospectus comprises of the
following:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Mfundiso J. N. Njeke; independent non executive chairman;
S. Mabaso-Koyana; independent non-executive director;
MW. Spicer; independent non-executive director;
TDA. Ross; independent non-executive director;
ME Mthunzi; independent non-executive director;
NS Ndhlazi; independent non-executive director;
GP Dingaan; non-executive director;
MR Ramaite; non-executive director;
Richard Linden Pike; executive director, chief executive officer;
PC Swart; executive director, chief operations officer;
AM Sher; executive director, chief financial officer;
BE Bulunga; executive director;
C. Maswanganyi; alternate non-executive director;
N. Sihlangu – alternate director; and
A. Guharoy – executive director.
Change in control of Adcorp Professional
There has been no change in control of Adcorp Professional in the last three years.
170
3. Dimension Data Protocol B.V. (“Dimension Data”)
Corporate Information
Dimension Data Protocol B.V. (earlier named Falgar Holdings BV) was incorporated on April 6, 2001 under the
laws of Netherlands. As on date of this Draft Red Herring Prospectus, Dimension Data holds 50% of the share
capital of Hatch Investments (Mauritius) Limited and does not directly hold any Equity Shares in the Company. The
registered office of Dimension Data is situated at 23 - 25, Veemweg, Barneveld, 3771 MT, Netherlands Postal code:
3771 MT. The principal business of Dimension Data is to participate in, to in any way take interest in, to administer
and to finance other companies of any nature.
Board of Directors
The board of directors of Dimension Data as on the date of this Draft Red Herring Prospectus comprises of the
following persons:
1.
2.
Andrew Coulsen; and
Anne Jan Reitsma.
Promoters of Dimension Data
The promoter of Dimension Data is Dimension Data Holdings PLC (“Dimension Data Holdings”).
The board of directors of Dimension Data Holdings as on the date of this Draft Red Herring Prospectus comprises of
the following:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Jeremy Ord, Chairman
Brett Dawson, Chief Executive Officer
David Sherriffs, Chief Financial Officer
Patrick Quarmby, Executive Director
Stephen Joubert, Executive Director
John Newbury, Non Executive Director
Roderick Scott, Non Executive Director
Toshiaki Sakurai, Non Executive Director
Tsunehisa Okuno, Non Executive Director
Change in control of Dimension Data
There has been no change in control of Dimension Data in the last three years.
We confirm that the PAN, bank account number and passport number with respect to L.C. Singh and the bank
account number of Hatch, Adcorp Professional shall be submitted to the Stock Exchanges at the time of filing this
Draft Red Herring Prospectus with them. Dimension Data does not have a bank account as on date of this Draft Red
Herring Prospectus.
Change in control of our Company in the last five years
There has been no change in the control of our Company in the last five years.
Interests of Promoters
Except as disclosed below, the Promoters are interested in us to the extent that they are the promoters of our
Company, their shareholding in our Company, dividend payable and other distributions in respect of the Equity
Shares held by them.
171

Our Company has entered into a Leave and License Agreement dated March 1, 2013 with our Promoter, L.
C. Singh in connection with the premises located at B 108/45, Shrihari Krishna Kripa CHS, Manish Nagar,
Andheri (W), Mumbai 400 053. The total amount paid towards rent to L.C. Singh during the Fiscal Year
ended March 31, 2015 was ` 0.20 million.

Further, our Company has entered into a lease agreement dated April 12, 2012 with Vikash Gokul, son-in law
of L.C Singh and Nimisha Singh, the daughter of L.C. Singh, in connection with lease of a residential
premises in South Africa. The total amount paid towards rent to Vikash Gokul and Nimisha Singh during the
Fiscal Year ended March 31, 2015 was ` 0.81 million.

Further, L.C. Singh may be deemed to be interested to the extent of remuneration, perquisites, special
allowance and to the extent of the travel expenses being borne by our Company from time to time for
attending meetings of the Board of Directors or a committee thereof and other related expenses. For further
information, please see “Capital Structure” and “Management” on pages 63 and 151 respectively.

Our Company has entered into a solutions teaming agreement with Adcorp Professional (previously, Paracon
Holdings Limited) dated July 1, 2007 to jointly grow business in South Africa pursuant to Adcorp
Professional sub-contracting services a back-to back arrangement directly to customers. Adcorp Professional
is entitled to receive a referral fee equal to 7.5% of the amounts due to our Company in terms to each backto-back arrangement entered into with the customer.
Further, our Company has also entered into a service agreement dated July 1, 2007 with Adcorp Professional
(previously, Paracon Holdings Limited) for providing services including development of computer software,
business and management consulting to Adcorp Professional through a confirmation of assignment (“COA”)
entered into with direct subsidiaries of Adcorp Professional. The consideration for the services provided
under this agreement shall be stipulated in each COA entered into between the Company and the direct
subsidiary of Adcorp Professional.
The details of transactions entered into by our Company with Paracon SA (Pty) Limited, a wholly owned
subsidiary of Adcorp Professional, are set out below:
(` in million)
June 30,
March 31,
March 31,
March 31,
Particulars
2015
2015
2014
2013
Software and consultancy services rendered
Sales commission
Trade and other receivables
Trade payables
30.70
284.52
285.44
321.00
2.69
28.07
24.60
26.69
57.00
3.25
213.06
13.87
2.77
11.26
13.96
1.54

Our Company entered into a lease agreement with Paracon SA (Pty) Limited, a subsidiary of Adcorp
Professional dated October 1, 2015 in relation to use of its office space in Cape Town at a monthly rent of
ZAR 3,240 per employee.

Our Company has entered into two proposals dated March 31, 2015 and June 10, 2015 for offshore-testing
services with All about Project Management (Pty) Limited, a wholly owned subsidiary of Adcorp
Professional, for testing services for its project management tool. Pursuant to the proposal dated March 31,
2015, our Company allocated one test analyst to work on the project from April 15, 2015 to May 14, 2015.
The total amount paid to our Company under the said proposal during the three month period ended June 30,
2015 was 0.29 million. Further, under the proposal dated June 10, 2015, our Company shall allocate two test
analysts effective from June 1, 2015 for a period of 12 months. No amount was paid to our Company under
the said proposal during the three month period ended June 30, 2015.
Except as stated in section titled “Related Party Transactions” on page 177 of this Draft Red Herring Prospectus,
respectively, and as stated above, we have not entered into any contract, agreements or arrangements which are not
172
in the ordinary course of business during the preceding two years from the date of this Draft Red Herring Prospectus
or propose to enter into any such contract in which our Promoters are directly or indirectly interested and no
payments have been made to them in respect of the contracts, agreements or arrangements which are proposed to be
made with them.
Our Promoters are not interested in any property acquired by us in the two years preceding the date of this Draft Red
Herring Prospectus, or proposed to be acquired by us.
Our Promoters are not related to any sundry debtors of the Company.
Payment or benefits to our Promoters in the last two years
Except as disclosed below and stated in section titled “Related Party Transactions” and “Management” on page 177
and 151 of this Draft Red Herring Prospectus, respectively, no benefits have been paid or given to our Promoters or
our Promoter Group, within the two years preceding the date of this Draft Red Herring Prospectus:
Our Company has paid USD 40,000 and USD 35,000 during the Fiscal Years ended March 31, 2015 and March 31,
2014 to Hatch Investments (Mauritius) Limited as reimbursement of professional charges incurred by Hatch towards
legal fees, tax advice etc.
Common Pursuits
Other than as disclosed below, none of our Promoters have any interest in any venture that is involved in activities
similar to those conducted by our Company.
Various subsidiaries of Adcorp Professional provide services which, are similar to services provided by our
Company, the details of which are set out below:
Company name
Paracon SA (Pty) Limited
Mondial IT Solutions (Pty) Limited
All about Project Management (Pty) Limited
Activity undertaken
Provision of skilled ICT consultants
Provision of SAP skills
Provision of project management solutions
Our Company will adopt necessary procedures and practices as permitted by law to address any conflict situation as
and when they arise.
Other confirmations
None of our Promoters or our Promoter Group has been prohibited from accessing the capital markets under any
order or direction passed by SEBI or any other authority, regulatory or governmental.
Our Promoters have not been declared as wilful defaulters by the RBI or any other governmental authority. Further,
there are no violations of securities laws committed by our Promoters in the past and no proceedings for violation of
securities laws are pending against them.
Save as disclosed in the section titled “Outstanding Litigation and Material Developments” on page 296, there is no
litigation or legal action pending or taken by any ministry, department of the government or statutory authority in
India during the last five years preceding the date of the Issue against our Promoters. Our Promoters are not and
have never been a promoter, director or person in control of any other company which is prohibited from accessing
or operating in capital markets under any order or direction passed by SEBI or any other regulatory or governmental
authority in India. Except as disclosed in this Draft Red Herring Prospectus, our Promoters are not interested in any
intellectual property rights that are used by the Company.
Except as disclosed in “Related Party Transactions” on page 177, there have been no sales or purchases between our
Company and Promoter Group where such sale or purchase exceeded in value in the aggregate of 10% of the total
sales or purchase of our Company.
173
Companies with which our Promoters have disassociated in the last three years
Except as disclosed below, our Promoters have not disassociated from any company in the last three years:
Adcorp Professional Services Limited sold its 49% stake in Zenzele Recruitment (Pty) Limited (“Zenzele”) with
effect from July 1, 2015 due to the declining business operations of Zenzele.
Promoter Group
In addition to the Promoters named above, the following individuals and entities form a part of the Promoter Group:
Natural persons who are part of the Promoter Group
Name of the Promoter
L.C. Singh
Name of the Relative
Nimisha Singh
Swati Singh
Yashwant Singh
Harish Chandra Singh
Uday Chandra Singh
Moti Chandra Singh
Vijay Singh
Bhanu Pratap Singh
Relationship with the Promoter
Daughter
Daughter
Brother
Brother
Brother
Brother
Wife’s brother
Wife’s brother
Bodies Corporate forming part of the Promoter Group
The bodies corporate forming part of our Promoter Group are as follows:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Setu Creations Private Limited
Vastu IT Private Limited
Adcorp Holdings Limited
Paracon SA (Pty) Limited
Kelly Group Limited
Mondial IT Solutions (Pty) Limited
The Personnel Concept (Pty) Limited
All about Project Management (Pty) Limited
Comsel Eighteen (Pty) Limited
ADfusion (Pty) Limited
Dimension Data Holdings Nederland BV
Hindu Undivided Families forming of the Promoter Group
NIL
Trusts forming part of the Promoter Group
NIL
Partnership firms forming part of our Promoter Group
NIL
Group Companies
In accordance with the provisions of the SEBI ICDR Regulations, for the purpose of identification of ‘Group
Companies’, our Company has considered companies as covered under the applicable accounting standards, being
174
AS 18. Further, there are no other companies that are considered material by our Board for identification as ‘Group
Companies’ in terms of the SEBI ICDR Regulations.
Based on the above, our only Group Company is Vastu IT Private Limited (“Vastu”)
Vastu: (i) is not listed on any stock exchange; (ii) has not completed any public or rights issue since the date of its
incorporation; (iii) is not under winding-up; (iv) has not become defunct; or (v) has not made an application to the
relevant registrar of companies in whose jurisdiction such Group Company is registered, for striking off its name.
Details of our Group Company
Vastu IT Private Limited
Vastu IT Private Limited was incorporated on November 30, 2005 at Mumbai under the Companies Act, 1956.
Vastu is involved in the business of software related research and development and selling and consulting of
software solutions.
The capital structure of Vastu is as follows:
No. of equity shares of ` 10 each
10,000
10,000
Authorised capital
Issued, subscribed and paid-up capital
Interest of our Promoter and Promoter Group
As on date, Swati Singh and Nimisha Singh (both daughters of our Promoter, L. C. Singh) hold 5,000 equity shares
each of Vastu, which constitutes 100% of it’s paid up share capital.
Shareholding of Vastu in our Company
No. of Equity Shares of our Company held as on date of this Draft Red
Herring Prospectus
Percentage of Share Capital held
1,171,219
5.87%
Financial Information
The audited financial statements of Vastu for the last three Financial Years are as follows:
(in `, except share data)
For the Financial Year
2015
2014
2013
100,000
100,000
100,000
2 ,241,691
2,293,477
2 ,331,250
7,027,314
7,027,314
8,784,142
6 ,967,914
6,993,824
8,751,481
696.79
699.38
875.15
696.79
699.38
875.15
234.17
239.35
243.13
Particulars
Equity Capital
Reserves and surplus (excluding revaluation)
Sales / Turnover
Profit / (loss) after tax
Earnings per share (Basic)
Earnings per share (Diluted)
Net Asset Value per share
Defunct Group Companies
Vastu is not defunct and no application has been made to the Registrar of Companies for striking off its name during
the five years preceding the date of filing of this Draft Red Herring Prospectus with SEBI.
175
Business Interest of Group Companies
Other than the shareholding of Vastu in our Company, it does not have any other business interest in our Company.
Sale/Purchase between Group Companies
There are no sales or purchase between Vastu and our Company where such sales or purchases exceed in value in
the aggregate 10% of the total sales or purchases of our Company.
Other than as stated in this section, Vastu does not have any interest in the shareholding of our Company.
Loss making Group Companies
Vastu has not incurred losses in the last Financial Year.
Group Companies with negative net worth
Vastu did not have negative net worth in the last Financial Year.
Common Pursuits
Vastu is in a similar line of business as our Company. We shall adopt necessary procedures and practices as
permitted by law to address any conflict situations, as and when they may arise. For further details, please see
section titled “Risk Factors” on page 16.
176
RELATED PARTY TRANSACTIONS
For details of related party transactions during the last five Fiscal Years and three month period ended June 30,
2015, as per the requirements under Accounting Standard 18 “Related Party Disclosures” issued by the Institute
of Chartered Accountants of India, see “Financial Statements – Annexure: XIX - Restated Statement of Related
Parties” and “Financial Statements – Annexure: XXIV - Restated Consolidated Statement of Related Parties” on
page 212 and 266, respectively.
177
DIVIDEND POLICY
The declaration and payment of dividends will be recommended by the Board of Directors and approved by the
Shareholders, at their discretion, subject to the provisions of the Articles of Association and applicable law,
including the Companies Act. The Board of Directors of our Company adopted the dividend policy in its meeting
held on June 21, 2013. In accordance with the dividend policy of our Company and the Companies Act, dividend
shall be declared only out of the current year’s profit subject to making provision for depreciation and transferring
to the reserves such amount of profits as may be prescribed. Dividend may be paid out of the profits from the
previous Fiscal Years after making provision for depreciation and provided that the profits remained undistributed.
Our Company may declare dividend out of reserves provided that such payment has been approved by the Board
and the Shareholders of our Company. Our Company shall endeavour the distribution of 25% of the PAT as
dividend after taking into account the (i) Company’s need for capital; and (ii) maintaining cash required, looking
forward to the outflow in the following 12 months. The Board may, at its discretion, declare dividend higher or
lower than as provided in the dividend policy. The dividend, if any, will depend on a number of factors, including
but not limited to the future capital expenditure, programme including expansion and technology upgradation,
provision for contingent liabilities, contingency fund, mergers and acquisitions and overall financial position of our
Company.
The Board may choose to declare interim dividend based on the review of profits during the Fiscal Year. The
Board shall recommend the final dividend to the shareholders at the AGM based on the review of profits arrived at
as per the audited financial statements for that Fiscal Year.
In addition, our ability to pay dividends may be impacted by a number of factors, including restrictive covenants
under the loan or financing arrangements our Company is currently availing of or may enter into, to finance our
fund requirements for our business activities.
The table below sets forth the details of dividend declared by our Company on its equity shares during the last four
Fiscal Years:
Fiscal Year
2015-16
2014-15
2013-14
2012-13
Dividend per
share (`)
6.00
6.00
6.00
7.50
Amount of dividend declared
exclusive of tax (` in million)
119.79
119.79
119.79
149.75
Rate of dividend
(%)
60%
60%
60%
75%
The amounts paid as dividends in the past are not necessarily indicative of the dividend policy of our Company or
dividend amounts, if any, in the future. There is no guarantee that any dividends will be declared or paid or that the
amount thereof will not be decreased in the future.
178
SECTION V: FINANCIAL INFORMATION
FINANCIAL STATEMENTS
S No.
1.
2.
Particulars
Restated Standalone Financial Statements along with the Statutory Auditor’s
report thereon
Restated Consolidated Financial Statements along with the Statutory
Auditor’s report thereon
179
Page Nos.
180
228
Report of the Independent Auditor on the
Summary of Restated Standalone Financial Statements
The Board of Directors
Nihilent Technologies Limited
4th Floor, Weikfield IT Citi Infopark,
Nagar Road, Pune 411 014
Maharashtra, India
Dear Sirs,
We have examined the attached Restated Standalone Financial Information of Nihilent Technologies Limited (‘the
Company’) as prepared by the management of the Company and approved by the Board of Directors of the
Company in terms of the requirements of Section 26 of the Companies Act, 2013 read with the Companies
(Prospectus and Allotment of Securities) Rules, 2014, the Securities and Exchange Board of India (Issue of Capital
and Disclosure Requirements) Regulations, 2009, as amended from time to time (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 4 August 2015 and addendums dated 10 September 2015 and 19
October, 2015 thereto in connection with the proposed issue of Equity Shares of the Company by way of fresh issue
and / or an offer for sale by the existing shareholders.
This Restated Standalone Financial Information has been extracted by the Management from the financial
statements for the years ended 31 March 2015, 31 March 2014, 31 March 2013, 31 March 2012 and 31 March 2011
which were audited by us under the Companies Act, 1956 or the Companies Act, 2013, as applicable and the special
purpose standalone financial statements for the three months period ended 30 June 2015 which were audited by us.
1
In accordance with the requirements of Section 26 of the Companies Act, 2013 read with the Companies
(Prospectus and Allotment of Securities) Rules, 2014, the SEBI Regulations, and the Guidance Note, as
amended from time to time, and in terms of our engagement agreed with you, we further report that:
a)
the Restated Standalone Statement of Assets and Liabilities of the Company as at 30 June 2015, 31 March
2015, 31 March 2014, 31 March 2013, 31 March 2012 and 31 March 2011, examined by us, as set out in
Annexure [I] to this Report read with the significant accounting policies in Annexure [IV], is after making
such adjustments and regrouping as more fully described in the Notes to the Restated Standalone Financial
Information enclosed as Annexure [V] to [XXVIII] to this Report, and in our opinion is appropriate. As a
result of these adjustments, the amounts reported in the above mentioned statement is not necessarily the
same as those appearing in the financial statements of the Company for the relevant financial years;
b) the Restated Standalone Statement of Profit and Loss of the Company for the three months period ended 30
June 2015 and years ended 31 March 2015, 31 March 2014, 31 March 2013, 31 March 2012 and 31 March
2011, as set out in Annexure [II] to this Report read with the significant accounting policies in Annexure
[IV], is after making such adjustments and regrouping as more fully described in the Notes to the Restated
Standalone Financial Information enclosed as Annexure [V] to [XXVIII] to this Report, and in our opinion
is appropriate. As a result of these adjustments, the amounts reported in the above mentioned statement is
not necessarily the same as those appearing in the financial statements of the Company for the relevant
financial years; and
c)
the Restated Standalone Statement of Cash Flows of the Company for the three months period ended 30
June 2015 and years ended 31 March 2015, 31 March 2014, 31 March 2013, 31 March 2012 and 31 March
2011, as set out in Annexure [III] to this Report read with the significant accounting policies in Annexure
[IV], is after making such adjustments and regrouping as more fully described in the Notes to the Restated
Standalone Financial Information enclosed as Annexure [V] to [XXVIII] to this Report, and in our opinion
is appropriate. As a result of these adjustments, the amounts reported in the above mentioned statement is
180
not necessarily the same as those appearing in the financial statements of the Company for the relevant
financial years.
2
Based on the above, we are of the opinion that the Restated Standalone Financial Information:
i)
ii)
iii)
iv)
3
has been prepared using consistent accounting policies for all the reporting periods;
has been made after incorporating adjustments for prior period and other material amounts in the
respective financial periods to which they relate;
does not contain any qualifications or emphasis of matter requiring adjustments; and
does not contain any extra-ordinary items that need to be disclosed separately in the Restated
Standalone Financial Information.
We have also examined the following Restated Standalone Financial Information as set out in the Annexure
prepared by the Management of the Company and approved by the Board of Directors, relating to the Company
for the three months period ended 30 June 2015 and years ended 31 March 2015, 31 March 2014, 31 March
2013, 31 March 2012 and 31 March 2011:
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
ix)
x)
xi)
xii)
xiii)
xiv)
xv)
xvi)
xvii)
xviii)
xix)
xx)
xxi)
xxii)
xxiii)
xxiv)
Notes on Material Adjustments and Regroupings, included in Annexure V
Statement of Contingent Liabilities, as restated, included in Annexure VI
Current tax matters outstanding as at 30 June 2015, included in Annexure VII
Gratuity, as restated, included in Annexure VIII
Statement of Non-Current Investments, as restated, included in Annexure IX
Statement of Current Investments, as restated, included in Annexure X
Statement of Trade Receivables, as restated, included in Annexure XI
Statement of Capital Work In Progress, as restated, included in Annexure XII
Statement of Long-Term and Short-Term Loans and Advances and Other Non-Current and Current
assets, as restated, included in Annexure XIII
Statement of Current and Non - Current Liabilities and Long-Term and Short-Term Provisions, as
restated, included in Annexure XIV
Statement of Share Capital, as restated, included in Annexure XV
Statement of Reserves and Surplus, as restated, included in Annexure XVI
Statement of Fixed Assets, as restated, included in Annexure XVII
Statement of Dividend Paid, as restated, included in Annexure XVIII
Statement of Related Party Transactions, as restated, included in Annexure XIX
Capitalisation Statement, as per the restated financial information, included in Annexure XX
Statement of Accounting Ratios, as per the restated financial information, included in Annexure XXI
Statement of Standalone Tax Shelter, as restated, included in Annexure XXII
Other information pertaining to transactions in Foreign Currency, as restated, included in Annexure
XXIII
Statement of Revenue from Operations, as restated, included in Annexure XXIV
Statement of Employee Benefits, as restated, included in Annexure XXV
Statement of Other Expenses, as restated, included in Annexure XXVI
Statement of Employee Stock Options, as restated, included in Annexure XXVII
Cash and Bank balances, as restated, included in Annexure XXVIII
4
This report should not in any way be construed as a reissuance or re-dating of any of the previous audit reports
issued by us, nor should this report be construed as an opinion on any of the financial statements referred to
herein.
5
We have no responsibility to update our report for events and circumstances occurring after the date of the
report.
181
6
In our opinion, the above Restated Standalone Financial Information contained in Annexure [I] to [XXVIII] of
this report read along with the Significant Accounting Policies and Notes to the Restated Standalone Financial
Information is prepared after making adjustments and regrouping as considered appropriate and has been
prepared in accordance with Section 26 of the Companies Act, 2013 read with The Companies (Prospectus and
Allotment of Securities) Rules, 2014, to the extent applicable, SEBI Regulations and the Guidance note, as
amended from time to time, and in terms of our engagement as agreed with you.
7
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 by way of fresh issue and / or an offer for sale by the
existing shareholders. Our report should not be used, referred to or distributed for any other purpose except with
our consent in writing.
For B S R & Co. LLP
Chartered Accountants
Firm registration number: 101248W/ W-100022
Juzer Miyajiwala Partner
Membership Number.: 047483
Date: 7 December 2015
Place: Pune
182
Annexure I: Restated standalone statement of assets and liabilities
Reference
Particulars
All figures in `million
As at March 31,
As at 30
June
2015
2011
2012
2013
2014
2015
182.97
183.37
183.37
199.66
199.66
199.66
651.94
885.15
1,044.13
1,359.80
1,624.15
1,698.75
834.91
1,068.52
1,227.50
1,559.46
1,823.81
1,898.41
10.04
12.81
17.79
25.32
31.36
30.41
33.80
34.84
53.27
74.59
53.31
40.74
103.98
118.58
148.79
264.79
247.41
184.87
27.84
67.68
55.81
72.79
70.02
84.52
165.62
221.10
257.87
412.17
370.74
310.13
1,010.57
1,302.43
1,503.16
1,996.95
2,225.91
2,238.95
12.46
12.12
23.93
64.25
63.66
74.50
5.53
8.43
6.32
14.48
15.37
13.25
19.33
16.78
16.84
-
-
-
68.79
68.79
68.79
73.33
274.88
274.88
13.87
3.80
(3.24)
3.70
25.01
37.60
50.44
61.13
89.95
103.05
161.74
183.19
3.95
3.72
4.12
0.34
0.34
0.07
174.37
174.77
206.71
259.15
541.00
583.49
SHARE HOLDERS' FUNDS
Share capital
Reserves and surplus
Refer Annexure
XV
Refer Annexure
XVI
NON-CURRENT LIABILITIES
Long term provisions
Refer Annexure
XIV
CURRENT LIABILITIES
Trade payables
Other current liabilities
Short-term provisions
Refer Annexure
XIV
Refer Annexure
XIV
Refer Annexure
XIV
Total Equity and Liabilities
NON-CURRENT ASSETS
Fixed assets
Tangible assets
Intangible assets
Capital work-in-progress
Non-current investments
Refer Annexure
XVII
Refer Annexure
XVII
Refer Annexure
XII
Refer Annexure IX
Deferred tax assets / (liabilities) - net
Long term loans and advances
Other non-current assets
Refer Annexure
XIII
Refer Annexure
XIII
CURRENT ASSETS
Current investments
Refer Annexure X
80.55
309.48
292.18
451.35
262.34
278.05
Trade receivables
Refer Annexure XI
289.51
321.34
379.20
589.54
546.58
592.91
Cash and bank balances
Refer Annexure
XXVIII
Refer Annexure
XIII
Refer Annexure
XIII
349.73
354.55
540.52
532.80
692.58
600.40
93.26
91.55
33.59
44.03
47.22
57.82
23.15
50.74
50.96
120.08
136.19
126.28
836.20
1,127.66
1,296.45
1,737.80
1,684.91
1,655.46
1,010.57
1,302.43
1,503.16
1,996.95
2,225.91
2,238.95
Short-term loans and advances
Other current assets
Total Assets
The above statement should be read with the significant accounting policies in Annexure IV and the notes to the
restated standalone financial information enclosed as Annexure [V] to [XXVIII]
183
Annexure II: Restated Standalone Statement of Profit and Loss
All figures in `million
For the year ended March 31,
Particulars
Revenue from operations
Reference
Refer Annexure XXIV
Other income
2011
2012
2013
2014
2015
1,368.01
1,586.73
1,979.58
2,427.71
2,678.34
Period from 1
April 2015 to
30 June 2015
650.42
6.75
28.39
37.66
43.25
38.39
13.14
1,374.76
1,615.12
2,017.24
2,470.96
2,716.73
663.56
710.01
872.21
1,005.37
1,314.88
1,510.26
425.31
26.19
17.08
24.23
32.85
53.28
14.51
388.60
372.67
424.03
444.71
541.42
138.19
1,124.80
1,261.96
1,453.63
1,792.44
2,104.96
578.01
249.96
353.16
563.61
678.52
611.77
85.55
48.02
104.85
169.52
230.63
222.05
40.60
(46.18)
-
-
-
-
-
Expenses
Employee benefits expense
Refer Annexure XXV
Depreciation and amortization
expense
Refer Annexure XVII
Other expenses
Refer Annexure XXVI
Profit before tax
Tax expense:
Current tax
MAT credit entitlement recognised
Deferred tax charge / (release)
Profit for the period
1.19
10.07
7.04
(6.94)
(21.31)
(12.59)
3.03
114.92
176.56
223.69
200.74
28.01
246.93
238.24
387.05
454.83
411.03
57.54
The above statement should be read with the significant accounting policies in Annexure IV and the notes to the
restated standalone financial information enclosed as Annexure [V] to [XXVIII]
184
Annexure III: Restated Standalone Statement of cash flows
For the year ended March 31,
Particulars
2011
A
2012
2013
2014
All figures in `million
Period from
1 April 2015
to 30 June
2015
2015
Cash flow from operating
activities:
Profit before tax
Adjustments for:
Depreciation and amortisation
expense
Interest income
Dividend on mutual funds
(Profit) / Loss on sale of fixed assets
Interest expense
(Profit) / Loss on sale of investments
Unrealised foreign exchange loss /
(gain) (net)
Operating profit before working
capital changes
Adjustments for changes in
working capital :
- (Increase) / Decrease in trade
receivables
- (Increase) / Decrease in short term
loans and advances
- (Increase) / Decrease in other
current assets
- (Increase) in long term loans and
advances
- Increase / (Decrease) in trade
payables
- Increase / (Decrease) in long term
provisions
- Increase / (Decrease) in short term
provisions
- Increase / (Decrease) in other
current liabilities
Cash generated from/(used in)
operations
- Taxes paid
Net cash from/(used in) operating
activities
249.96
353.16
563.61
678.52
611.77
85.55
26.19
17.08
24.23
32.85
53.28
14.51
(1.84)
(4.10)
0.01
0.01
-
(5.44)
(13.73)
-
(15.64)
(20.93)
(0.65)
-
(15.02)
(25.70)
0.03
(1.99)
(18.03)
(16.97)
(0.22)
(2.64)
(5.96)
(3.85)
(0.68)
(2.65)
4.81
(3.02)
(52.24)
0.99
(6.53)
17.06
275.04
348.05
498.38
669.68
620.66
103.98
61.08
(31.83)
(57.86)
(210.34)
42.96
(46.34)
(19.56)
1.71
(11.37)
(10.44)
(0.90)
(12.89)
(8.79)
(27.59)
(0.22)
(69.12)
(16.11)
9.91
(27.32)
(2.07)
(1.61)
(10.13)
(37.51)
(2.62)
(15.95)
1.04
18.43
21.32
(21.28)
(14.86)
9.88
2.77
4.98
7.53
6.05
(0.95)
(3.23)
(8.08)
(0.55)
15.78
(1.59)
6.22
38.48
14.60
30.21
116.00
(17.38)
(62.54)
309.63
298.60
480.39
530.28
574.90
(20.09)
(55.42)
(54.24)
(144.84)
(235.13)
(244.93)
(47.28)
254.21
244.36
335.55
295.15
329.97
(67.37)
185
For the year ended March 31,
Particulars
B
C
D
2011
2012
2013
(33.39)
0.11
(436.56)
356.01
(28.53)
0.95
(873.14)
644.21
(28.08)
0.85
(833.97)
851.27
(62.15)
0.37
(4,757.67)
4,600.51
(55.44)
0.36
(282.93)
471.94
(22.55)
0.70
(304.23)
288.52
(10.57)
10.23
18.33
1.21
(141.78)
0.27
-
-
-
(4.54)
(201.55)
-
1.84
4.10
4.04
13.73
17.06
20.93
14.82
25.70
17.87
16.97
3.41
3.85
(118.46)
(228.51)
46.39
(181.75)
(174.56)
(30.03)
(0.16)
(0.01)
1.28
0.40
(174.04)
-
(140.15)
16.29
(140.15)
-
-
1.11
0.40
(174.04)
(123.86)
(140.15)
-
Effect of unrealised exchange loss
on cash and cash equivalents*
4.15
(1.43)
(3.20)
0.17
2.74
5.23
Net increase / (decrease) in cash
and cash equivalents (A+B+C+D)
141.01
14.82
204.70
(10.29)
18.00
(92.17)
Cash and cash equivalents as at
beginning of the period (Refer
Note: XXVIII)
178.72
319.73
334.55
539.25
528.96
546.96
Cash and cash equivalents as at
end of the period (Refer Note:
XXVIII)
319.73
334.55
539.25
528.96
546.96
454.79
Cash flow from Investing activities:
Purchase of fixed assets
Proceeds from sale of fixed assets
Purchase of investments
Sale of investments
(Increase) / Decrease in fixed
deposits with original maturity in
excess of three months
Investment in equity shares of
subsidiaries/ associate
Interest received
Dividend income on mutual funds
Net cash from / (used in) investing
activities
Cash flow from financing activities:
Dividend paid during the period
Repayment of long term borrowings
Interest paid
Loan repaid by Trust
Net cash generated from / (used in)
financing activities
2014
All figures in `million
Period from
1 April 2015
to 30 June
2015
2015
* Includes amounts on account of revaluation of South Africa operation classified as a non-integral operation as per
Accounting Standard (AS-11) - The Effects of Changes in Foreign Exchange Rates.
Note:
The above statement should be read with the significant accounting policies in Annexure [IV] and the notes to the
Restated Standalone Financial Information enclosed as Annexure [V] to [XXVIII].
186
Annexure IV: Notes to the Standalone Financial Information, as restated
(Currency: Indian Rupees in millions)
BACKGROUND
Nihilent Technologies Limited (‘NTL’ or the ‘Company’ or ‘Nihilent’), is engaged in rendering software services,
business consulting in the area of enterprise transformation, change and performance management and providing
related IT services. The Company's registered office and global offshore delivery center is located at Pune India
from where it services its global clientele.
The Company, during the month of September 2015 made an application to the Registrar of Companies (Pune) for
conversion of the Company from “Private Limited” to “Public Limited” and accordingly received a fresh certificate
of incorporation for the same changing the Company’s name to “Nihilent Technologies Limited” from “Nihilent
Technologies Private Limited”.
1.
SIGNIFICANT ACCOUNTING POLICIES
1.1. Basis of preparation
The Restated Standalone Financial Information have been prepared and presented under the historical cost
convention as a going concern on the accrual basis and to comply in all material aspects with all the applicable
accounting principles in India (“GAAP”) including the Accounting Standards specified under section 133 of
the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, after making
adjustments as considered appropriate and have been prepared in accordance with Section 26 of the
Companies Act, 2013 read with The Companies (Prospectus and Allotment of Securities) Rules, 2014, and
Securities Exchange Board of India (‘SEBI’), (Issue of Capital and Disclosure Requirements) Regulations,
2009 (the “SEBI Regulations”) for each of the five years ended 31 March 2011, 31 March 2012, 31 March
2013, 31 March 2014, 31 March 2015 and three months period ended 30 June 2015 in a manner consistent
with the accounting policies being adopted for the three months period ended 30 June 2015. As a result of
these adjustments, the amounts reported in the above mentioned statements are not necessarily the same as
those appearing in the financial statements of the Company for the relevant financial years. The financial
statements are presented in Indian rupees rounded off to the nearest million.
These restated standalone financial information have been prepared so as to contain information / disclosures
and incorporating adjustments set out below in accordance with the SEBI Regulations:
(a)
(b)
(c)
Adjustments for the material amounts in respective periods to which they relate;
Adjustments for previous years identified and adjusted in arriving at the profits of the periods to
which they relate irrespective of the period in which the event triggering the profit or loss occurred;
and
Adjustments for reclassification of the corresponding items of income, expenses, assets and liabilities,
in order to bring them in line with the groupings as per the audited standalone financial information of
the Company as at and for the three months period ended 30 June 2015 and the requirements of the
SEBI Regulations.
1.2. Use of estimates
The preparation of the financial statements in conformity with GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities
on the date of the financial statements and reported amounts of revenue and expenditure for the period. Actual
results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in
the current and future periods.
1.3. Current–non-current classification
187
All assets and liabilities are classified into current and non-current.
Assets
An asset is classified as current when it satisfies any of the following criteria:
(a)
it is expected to be realised in, or is intended for sale or consumption in, the Company’s normal
operating cycle;
(b)
it is held primarily for the purpose of being traded;
(c)
it is expected to be realised within 12 months after the reporting date; or
(d)
it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for
at least 12 months after the reporting date.
Current assets include the current portion of non-current financial assets.
All other assets are classified as non-current.
Liabilities
A liability is classified as current when it satisfies any of the following criteria:
(a)
it is expected to be settled in the Company’s normal operating cycle;
(b)
it is held primarily for the purpose of being traded;
(c)
it is due to be settled within 12 months after the reporting date; or
(d)
the Company does not have an unconditional right to defer settlement of the liability for at least 12
months after the reporting date. Terms of a liability that could, at the option of the counterparty, result
in its settlement by the issue of equity instruments do not affect its classification.
Current liabilities include current portion of non-current financial liabilities.
All other liabilities are classified as non-current.
Operating cycle
Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash
equivalents. The Company’s normal operating cycle is less than 12 months.
1.4. Fixed assets and depreciation
Fixed assets are carried at cost of acquisition or construction less accumulated depreciation. The cost of
fixed assets includes taxes, duties, freight and other incidental expenses related to the acquisition and
installation of the respective assets.
Leasehold improvements are depreciated over the term of the lease or the estimated useful life of the asset
whichever is shorter.
Depreciation is provided on a straight line method. The rates of depreciation prescribed in Schedule II to
the Companies Act, 2013 are considered as the indicative rates. If management’s estimate of the useful life
of a fixed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review
is shorter/ greater than that envisaged in the aforesaid Schedule, depreciation is provided at a higher/ lower
rate based on the management’s estimate of the useful life / remaining useful life.
Pursuant to the policy, estimated useful lives of assets which have been consistently followed for each of
the reporting periods are as follows:
188
Estimated economic
useful life in years
Asset Group
Computers and networking equipment (Software forming part of computer
systems are depreciated at the rates applicable to computers)
Electrical equipments, Plant and equipments, Furniture and fittings, Office
equipments
Vehicles
3 years
4 years
5 years
1.5. Intangible assets and amortization
Intangible assets are recognized when the asset is identifiable, is within the control of the Company, it is
probable that the future economic benefits that are attributable to the asset will flow to the Company and
cost of the asset can be reliably measured. Acquired intangible assets representing software are recorded at
their acquisition price and are amortized over its estimated useful life of three years commencing from the
date the assets are available for their use. The estimated useful life of intangible assets is reviewed by
management at each Balance Sheet date.
1.6. Impairment of assets
In accordance with Accounting Standard (AS 28) – Impairment of Assets, the carrying amounts of the
Company's assets are reviewed at each Balance Sheet date to determine whether there is any indication of
impairment. If any such indication exists, the asset’s recoverable amount is estimated, at higher of the net
selling price and the value in use. An impairment loss is recognized whenever the carrying amount of an
asset or its cash generating unit exceeds its recoverable amount. 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 reinstated at the recoverable amount subject to a maximum of depreciable
historical cost.
1.7. Investments
Long-term investments are carried 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.
Profit or loss on sale of investments is determined on the basis of weighted average carrying amount of
investments disposed off.
1.8. Revenue recognition
The Company derives its revenue primarily from rendering software service activities. Revenue from
“time and material” contracts is recognized as and when the related services are performed based on the
time charged and in accordance with the terms of the specified customer contracts. Revenue from fixed
price contracts is recognized using percentage of completion method. Provision for estimated losses on
uncompleted contracts are recorded in the period in which such losses become probable based on current
contract estimates.
The asset, “Cost and estimated earnings in excess of billings”, represents revenues recognized in excess of
amounts billed. These amounts are billed after the milestones specified in the agreement are achieved. The
liability, “Billings in excess of revenue”, represents billings in excess of revenue recognized.
Revenue on maintenance contracts is recognized on straight-line basis over the period of the contract.
189
Interest income is recognized on a time proportion basis taking into account the amount outstanding and
the interest rates applicable.
Dividend income is recognized when the right to receive payment is established
1.9. Employee benefits
a) Short term employee benefits
Employee benefits payable wholly within twelve months of rendering the service are classified as
short term employee benefits and are recognized in the period in which the employee renders the
related service.
b) Post-employment benefits - defined benefit plan
The employees’ gratuity scheme is a defined benefit plan. The present value of the obligation under
such defined benefit plan is determined at each Balance Sheet date based on actuarial valuation
carried out by an independent actuary using projected unit credit method. Actuarial gains and losses
are recognized immediately in the Statement of Profit and Loss. Past service cost is recognized as an
expense on a straight line basis over the average period until the benefit becomes vested. To the extent
the benefits are already vested past service cost is recognized immediately.
c)
Post-employment benefits - defined contribution plans
The Company’s superannuation scheme and provident fund scheme are defined contribution plans.
The contributions paid/payable under the schemes are recognized immediately in the Statement of
Profit and Loss.
d) Long term employee benefit
Long term employee benefit comprise of compensated absences. These are measured based on
actuarial valuation carried out by an independent actuary at the Balance Sheet date using projected
unit credit method. Actuarial gains and losses are recognised immediately in the Statement of Profit
and Loss. For the three months period ended 30 June 2015, these were measured based on actuarial
valuation carried out by an independent actuary at the Balance Sheet date of the immediately
preceding financial year using projected unit credit method, adjusted for significant changes in earned
leaves accrued, curtailments, settlements or any other significant events.
1.10. Foreign Currency Transactions
a) India operations
Transactions in foreign currency are recorded at pre-determined rates that approximate the exchange
rate prevailing on the date of the respective transaction. Exchange differences arising on foreign
exchange transactions settled during the period are recognized in the Statement of Profit and Loss for
the period. Monetary assets and liabilities denominated in foreign currency as at the Balance Sheet
date are translated at the period-end exchange rate and the resultant exchange differences are
recognized in the Statement of Profit and Loss.
b) Foreign branch office operations
Integral branch operation
Statement of Profit and Loss items other than depreciation costs are translated into the reporting
currency at monthly average exchange rates. Foreign currency denominated monetary assets and
liabilities at period-end are translated at the period-end exchange rates. Fixed assets are translated at
exchange rates on the date of the transaction and depreciation on fixed assets is translated at the
exchange rates used for the translation of the underlying fixed assets. Net exchange difference
resulting from translation of items in the financial statements of the integral foreign branch offices is
recognized in the Statement of Profit and Loss.
190
Non -integral branch operation
Statement of Profit and Loss items are translated into the reporting currency at monthly average
exchange rates. Foreign currency denominated monetary and non-monetary assets and liabilities at
period-end are translated at the period-end exchange rates. Net exchange difference resulting from
translation of items in the financial statements of the non-integral foreign branch offices is
accumulated in a foreign currency translation reserve.
c)
Derivative Instruments
The forward exchange contracts taken to hedge existing assets or liabilities are translated at the
closing exchange rates and resultant exchange differences are recognized in the same manner as those
on the underlying foreign currency asset or liability. The premium or discount on such forward
exchange contracts are recognized over the period of the contract.
Apart from forward exchange contracts taken to hedge existing assets or liabilities, the Company also
uses derivatives to hedge its foreign currency risk exposure relating to firm commitments and highly
probable transactions. In accordance with the relevant announcement of the Institute of Chartered
Accountants of India, the Company provides for losses in respect of such outstanding derivative
contracts at the balance sheet date by marking them to market. Net gain, if any, is not recognized.
1.11. Leases
Lease payments under operating lease arrangements are charged to the Statement of Profit and Loss on a
straight line basis method over the period of lease.
1.12. Borrowing Cost
Borrowing costs are expensed in the period in which it is incurred except borrowing costs directly
attributable to the acquisition of those qualifying assets which necessarily take a substantial period of time
to get ready for their intended use are capitalized as part of cost of such assets.
1.13. Provisions and contingencies
A provision is recognized in the Balance Sheet when the Company has a present obligation as a result of a
past event, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Loss contingencies arising from claims, litigation, assessment, fines, penalties etc. are recorded when it is
probable that a liability has been incurred, and the amount can be reasonably estimated. A disclosure for a
contingent liability is made when there is a possible or present obligation that may, but probably will not
require an outflow of resources. When there is a possible obligation in respect of which the likelihood of
outflow of resources is remote, no provision or disclosure is made.
1.14. Taxation
Income-tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with
the income-tax law), and deferred tax charge or credit (reflecting the tax effect of timing differences
between accounting income and taxable income for the period).
The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized
using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax
assets are recognized only to the extent there is reasonable certainty that the asset can be realized in future;
however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax
assets are recognized only if there is a virtual certainty of realization of the assets. Deferred tax assets are
reviewed as 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 realized.
In accordance with the Guidance Note issued by Institute of Chartered Accountants of India, the Company
recognizes Minimum Alternate Tax credit as an asset only to the extent the probability exists that the
Company will become liable to pay normal income tax during the specified period as per provision of
Income Tax Act, 1961.
191
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off
the recognised amounts and there is an intention to settle the asset and the liability on a net basis. Deferred
tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets
against liabilities representing current tax and where the deferred tax assets and deferred tax liabilities
relate to taxes on income levied by the same governing taxation laws.
1.15. Accounting for employee share based payments
The Company uses the intrinsic value method of accounting allowed by the Guidance Note “Employee
Share Based Payment” applicable for employee stock options and sweat equity granted after 1 April, 2005
to account for share based payment plans.
Under this method, compensation expense is recorded on the date of the grant only if the current fair value
of the underlying stock exceeds the exercise price.
1.16. Earnings per share (‘EPS’)
The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders
for the period by the equity shares outstanding during the reporting period. In computing the basic
earnings per share, the shares or stock options granted to an ESOP trust are not included in the shares
outstanding till the employees have exercised their right to obtain shares or stock options, after fulfilling
the requisite vesting conditions. Till such time, shares or stock options so granted are considered as
dilutive potential equity shares for the purpose of calculating diluted earnings per share. The number of
shares used in computing diluted earnings per share comprises the weighted average number of shares
considered for deriving basic earnings per share, and also the weighted average number of equity shares,
which could have been issued on the conversion of all dilutive potential equity shares. In computing
dilutive earnings per share, only potential equity shares that are dilutive and that decrease profit per share
are included.
192
Annexure V: Notes on Material Adjustments and Regroupings
The summary of results of restatement made in the audited standalone financial statements for the respective years
and period from 1 April 2015 to 30 June 2015 its impact on the profit/ (loss) of the Company is as follows:
For the year ended 31 March
Particulars
Net profit after tax as per audited
statement of profit and loss
Material adjustments on account
of (Refer Annexure VA):
a) Accruals (Refer Annexure VA
(a))
b) Provision for doubtful debts
(Refer Annexure VA (b))
c) Provision for bonus (Refer
Annexure VA (c))
Total impact of the adjustments
All figures in `million
Period from
1 April 2015
to 30 June
2015
2015
2011
2012
2013
2014
183.28
179.59
377.10
524.54
532.89
71.71
7.03
(2.45)
11.22
(8.75)
(23.40)
(16.07)
(1.25)
4.97
(3.64)
26.03
(31.35)
1.70
10.48
27.46
20.70
1.16
(23.52)
(7.11)
16.26
29.98
28.28
18.44
(78.27)
(21.48)
6.49
38.41
60.18
(80.60)
(70.20)
-
d) Tax for respective period
e) MAT credit adjusted to respective
period
f) Tax impact on adjustments
46.18
-
(69.33)
-
-
-
(5.28)
(9.74)
(9.18)
(7.55)
26.61
7.31
Total Adjustments
63.65
58.65
9.95
(69.71)
(121.86)
(14.17)
246.93
238.24
387.05
454.83
411.03
57.54
Net profit after tax, as restated
193
Annexure VA: Notes on material adjustments to the restated standalone summary statements and other
disclosures
Material Adjustments
a)
An accrual is recognized when the Company has a present obligation as a result of a past event, and there is a
probable outflow of economic benefits to settle the obligation. During the period the Company has reversed
such accruals which are no longer required pertaining to sales commission, advertisement, rent, other accruals,
etc. For the purpose of Statement of Profit and Loss as restated, these reversals of provision have been
considered in the period in which these provisions were initially recognised.
b)
Provision for doubtful debts is made in the Statement of Profit and Loss in the period in which uncertainty as
to the ultimate collection of outstanding amount arises and is reversed in the period when such uncertainty
ceases or when dues are collected. For the purpose of Profit and Loss account as restated, these provisions and
reversals of provision have been considered in the period in which the revenue was actually billed to the
customer.
c)
Accruals for employee performance incentives are recognised based on estimation at the period end and any
excess provisions are reversed when the actual amount payable is crystallised. For the purpose of Statement of
Profit and Loss as restated, this reversal of provision for performance incentive has been considered in the
period for which the provision was initially recognised.
Tax impact on the adjustments
Tax impact (including deferred tax) on restatement adjustments to the financial statements have been adjusted in the
respective years. The current taxes for the years ended 31 March 2011, 2012, 2013, 2014, 2015 and period from 1
April 2015 to 30 June 2015 are on an estimated basis.
Regrouping
a) Figures have been regrouped for the consistency of presentation.
b) Appropriate adjustments have been made in the restated statement of assets and liabilities, restated statement of
profit and loss and restated cash flow, wherever required, by regrouping the corresponding items of income,
expenses, assets, liabilities and cash flows in order to bring them in line with the groupings prepared in
accordance with Schedule III to the Companies Act, 2013 and the requirements of the Securities and Exchange
Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (as amended).
c)
The financial statements for the year ended 31 March 2011 were prepared under the old Schedule VI to the
Companies Act, 1956. Regroupings have been made in the financial information presented pertaining to this
year to comply with the requirements as stated above.
194
Annexure VB: Notes on material regroupings to the restated standalone summary statements and other
disclosures
1
Regrouping of `55.31 million for the Financial Year ended 31 March 2011, `153.45 million for the Financial
Year ended 31 March 2012 and `182.75 million for the Financial Year ended 31 March 2013 from Long term
provisions to Short term provisions.
2
Regrouping of `13.40 million for the Financial Year ended 31 March 2011 and `14.22 million for the Financial
Year ended 31 March 2012 from Other current assets to Short term loans and advances.
3
Regrouping of `3.95 million for the Financial Year ended 31 March 2011 and `3.72 million for the Financial
Year ended 31 March 2012 from Cash and bank balances to Other non-current assets.
4
Regrouping of `84.23 million for the Financial Year ended 31 March 2011, `113.69 million for the Financial
Year ended 31 March 2012, `27.64 million for the Financial Year ended 31 March 2013 and `33.12 million for
the Financial Year ended 31 March 2014 from Short term provisions to Other current liabilities.
5
Regrouping of `1.36 million for the Financial Year ended 31 March 2011 and `2.42 million for the Financial
Year ended 31 March 2012 from Other current liabilities (accrued salaries and benefits) to Other current
liabilities (employee related benefits).
6
Regrouping of `1.36 million for the Financial Year ended 31 March 2011 and `17.41 million for the Financial
Year ended 31 March 2012 from Other current liabilities (provision for expenses) to Other current liabilities
(employee related benefits).
7
Regrouping of `46.98 million for the Financial Year ended 31 March 2011 from Other current liabilities
(provision for expenses) to Other current liabilities (withholding and other taxes payable) `7.84 million and
Trade payables `39.14 million respectively.
8
Regrouping of `3.00 million for the Financial Year ended 31 March 2011 from Salary and bonus – Employee
benefits expenses to Other expenses.
Regrouping of `40.70 million for the Financial Year ended 31 March 2012 from Other current liabilities to
Trade payables.
10 Regrouping of `12.68 million for the Financial Year ended 31 March 2012 from Other expenses (Travelling
and conveyance expenses) to Employee benefits expenses.
11 Regroupings have been appropriately adjusted in the Restated Cash Flow Statement.
9
195
Annexure VI: Statement of Contingent Liabilities, as restated
As at 31 March
Particulars
2011
2012
2013
2014
Income tax matters
-
-
-
-
Guarantee issued
-
-
-
-
196
All figures in ` million
As at 30
June
2015
2015
135.00
140.75
Annexure VII: Current tax matters outstanding as at 30 June 2015
During the year ended 31 March 2012, the Company had received a draft assessment order in respect of the
A.Y.2008-09 containing addition on account of regular assessment (under MAT) of Rs.74.03 Million and addition
on account of transfer pricing of Rs.171.25 Million. During the year ended 31 March 2012, Company had filed an
appeal before First Appellate Authority i.e. Dispute Resolution Panel (‘DRP’). During the year ended 31 March
2013, Company received partial relief from First Appellate Authority i.e. DRP of Rs. 48.53 Million on account of
transfer pricing. Accordingly Department had passed final assessment order considering the direction given by DRP.
During the year ended 31 March 2013, Company had filed an appeal to Second Appellate Authority for balance
relief on account of regular assessment of Rs.74.03 Million and on account of transfer pricing additions of Rs.122.72
Million.
During the year ended 31 March 2013, the Company had received a draft assessment order in respect of the
A.Y.2009-10 containing addition on account of transfer pricing of Rs.218.51 Million. During the year ended 31
March 2013, Company had filed an appeal before First Appellate Authority i.e. Dispute Resolution Panel (‘DRP’).
During the year ended 31 March 2014, Company had received order from First Appellate Authority confirming the
addition made by Assessing Officer. Accordingly Department had passed final assessment order considering the
directions given by DRP. During the year ended 31 March 2014, the Company had filed an appeal to Second
Appellate Authority for entire relief on account of transfer pricing of Rs. 218.51 Million.
The Company has been professionally advised that these orders could be successfully contested before the higher
authorities subject to the availability of the necessary documentation to support the arm’s length price method
adopted by the Company. The Company, as a prudent corporate practice, based on the above events, has made a
provision for the aforesaid matters and will continue to contest the orders and pursue the judicial avenues available
to it.
Transfer Pricing
Management believes that the Company's international transactions, with related parties post 31 March 2014 (last
period up to which an Accountants' Report has been submitted as required under the Income tax Act, 1961) continue
to be at arm's length and that the transfer pricing legislation will not have any impact on these financial statements,
particularly on the amount of tax expense and that of provision for taxation.
197
Annexure VIII: Gratuity, as restated
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service
is eligible for gratuity on completion of service/ on separation, 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
funded.
Particulars
Liability at beginning of the period
Current Service Cost
Past Service Cost
Interest Cost on defined benefit obligation
Benefits Paid
Actuarial (gain) / loss on the obligations for the
period
Liability at end of the period
Fair value of the plan assets at the beginning of
the period
Expected return on plan assets
Actuarial gain/ (loss) on plan assets
Contributions by the employer
Benefits Paid
Fair value of the plan assets at the end of the
period
Amount recognised in Balance Sheet
Obligations as at period end
Less: Fair value of plan assets at the period end
Net liability
All figures in ` million
As at 30
June 2015
2015
41.23
56.03
10.77
2.89
2011
13.45
3.85
As at 31 March
2012
2013
2014
17.66
20.35
28.66
4.05
5.48
8.00
0.85
1.01
(1.81)
1.45
(2.67)
1.63
(2.64)
2.29
(4.16)
3.64
(6.63)
1.12
(1.98)
0.31
(0.14)
3.84
6.44
7.02
(0.37)
17.66
20.35
28.66
41.23
56.03
57.69
5.45
8.11
20.05
28.60
25.00
41.82
0.38
(0.14)
0.57
0.04
1.60
0.59
0.86
(0.30)
2.12
2.05
0.89
(0.95)
4.23
14.00
9.00
-
19.28
-
(1.81)
(2.67)
(2.64)
(4.16)
(6.63)
(1.98)
8.11
20.05
28.60
25.00
41.82
39.78
17.66
8.11
9.55
20.35
20.05
0.30
28.66
28.60
0.06
41.23
25.00
16.23
56.03
41.82
14.21
57.69
39.78
17.91
2011
All figures, other than assumptions data, in ` million
As at 31 March
As at 30
June 2015
2012
2013
2014
2015
Expenses recognised in Statement of
Profit and Loss
Current service cost
Past service cost
Interest cost on defined benefit obligation
Expected return on plan assets
Net actuarial (gain)/ loss for the period
Total expenses
3.85
0.85
1.01
(0.38)
0.45
5.78
4.05
1.45
(0.57)
(0.18)
4.75
5.48
1.63
(1.60)
3.25
8.76
8.00
2.29
(0.86)
6.74
16.17
10.77
3.64
(2.12)
4.97
17.26
2.89
1.12
(0.89)
0.58
3.70
Assumptions
Expected rate of return of plan assets
Discount rate
Salary escalation rate
7.00%
7.50%
5.50%
7.00%
8.25%
5.50%
8.00%
8.00%
6.00%
8.00%
8.84%
8.00%
8.50%
8.00%
8.00%
8.50%
8.00%
7.25%
Particulars
198
Annexure IX: Statement of Non-Current Investments, as restated
Particulars
All figures in ` million
As at 30
June 2015
2015
As at 31 March
2012
2013
2014
2011
Non-current Investments
Long term trade investments (unquoted)
at cost
Investment in equity instruments of wholly
owned subsidiaries
Equity shares of Nihilent Technologies
Inc.
Equity shares in Nihilent Australia
Limited
Equity shares in Seventh August IT
Services Private Limited
Investment in equity instruments of
subsidiaries
Equity shares in Nihilent Nigeria Limited
(see Note 1 below)
Equity shares in Nihilent Tanzania
Limited
Investment in equity instruments of
associates
Equity shares in Nico Technologies
Limited, Malawi
(see Note 2 below)
Investment in equity instruments - others
Equity shares in Nico Technologies
Limited, Malawi
(see Note 3 below)
Total
68.69
68.69
68.69
68.69
250.27
250.27
-
-
-
-
14.01
14.01
0.10
0.10
0.10
0.10
0.10
0.10
-
-
-
4.22
10.18
10.18
-
-
-
0.32
0.32
0.32
-
0.00*
0.00*
0.00*
-
-
-
-
-
-
0.00*
0.00*
68.79
68.79
68.79
73.33
274.88
274.88
*since denominated in millions
Note:
1 As at 30 June 2015, the Company has remitted ` 8.38 Million to Nihilent Nigeria Limited towards Share
Application Money against which shares are pending to be allotted for a period exceeding six months from the
date of effecting remittance.
As required by the Master Circular on Direct Investment by Residents in Joint Venture (JV) / Wholly Owned
Subsidiary (WOS) Abroad read with Foreign Exchange Management (Transfer or Issue of Any Foreign
Security) (Amendment) Regulations, 2004, an Indian party which has made direct investment abroad is under
an obligation to receive share certificates or any other document as an evidence of investment in the foreign
entity, where share certificates are not issued, to the satisfaction of the Reserve Bank of India (“RBI”) within six
months, or such further period as RBI may permit, from the date of effecting remittance.
The Company has submitted the ‘Certificate of Capital Importation’ (“CCI”) to the Authorized Dealer as
evidence of investment and is confident that it shall receive the share certificates in due course."
2
During the year 2011-12 the Company acquired 25.1% equity shares of Nico Technologies Limited (“Nico”) for
USD 1. Considering the economic conditions of Malawi the Management is of the opinion that significant
foreign exchange repatriation restrictions exist as a result of which repatriation of fund from Nico is uncertain.
In such cases Accounting Standard 23 – Accounting for Investment in Associates in Consolidated Financial
Statements restricts recognition of investor’s share of net asset and of investee in the consolidated financial
199
statements till the uncertainty is resolved. Hence, interest of the Company in the equity of Nico has not been
recognized in the Consolidated Financial Statements.
3
The nominated directors resigned from the Board of Directors of Nico with effect from 6 February 2015 and
accordingly the Group stopped participating in the financial and operating policy decisions of Nico.
Considering the relevant facts and the requirements of Accounting Standard 23 – Accounting for Investment in
Associates in Consolidated Financial Statements, the Management is of the opinion that it does not exercise
significant influence over Nico.
200
Annexure X: Statement of Current Investments, as restated
As at 31 March
Particulars
2011
2012
2013
2014
All figures in ` million
As at 30
June
2015
2015
Current Investments
Non trade , quoted - at lower of cost
and fair value
Investment in mutual funds
80.55
309.48
292.18
451.35
262.34
278.05
Total
80.55
309.48
292.18
451.35
262.34
278.05
201
Annexure XI: Statement of Trade Receivables, as restated
As at 31 March
Particulars
Unsecured, considered good
Debts outstanding for a period
exceeding six months from the date
they became due for payment
Other debts
2011
2012
2013
2014
All figures in ` million
As at 30
June
2015
2015
16.46
17.82
44.59
83.08
68.52
57.99
283.23
316.68
356.46
537.22
518.76
575.77
Sub-total
299.69
334.50
401.05
Less: Restated provision for doubtful
10.18
13.16
21.85
debts (net of reversals)
Total
289.51
321.34
379.20
Note: For trade receivables from related parties - Refer Annexure XIX.
620.30
587.28
633.76
30.76
40.70
40.85
589.54
546.58
592.91
202
Annexure XII: Statement of Capital Work In Progress, as restated
All figures in ` million
As at 30
June
2015
2015
As at 31 March
Particulars
2011
2012
2013
2014
Capital work -in -progress
Capital work -in -progress
19.33
16.78
16.84
-
-
-
Total
19.33
16.78
16.84
-
-
-
203
Annexure XIII: Statement of Long-Term and Short-Term Loans and Advances and Other Non-Current and
Current assets, as restated
All figures in ` million
2011
Long term loans and advances , (Unsecured,
considered good)
Advances to related parties
Advance income tax (net)
Service tax and Vat balance receivable
Capital advances
Security Deposits - to related parties
Security Deposits - to others
Other Loans and advances, (unsecured,
considered doubtful)
Service Tax balance receivable
Less: Provision for doubtful receivable
Total
Other non-current assets
Margin deposits and other deposits
Bank deposits (due to mature after 12 months)
Total
Short term loans and advances, (unsecured,
considered good)
Prepaid expenses
Advances to employees
Advances to related parties
Advances to suppliers
MAT credit entitlement
Service tax balance receivable
Other Loans and advances, (unsecured,
considered doubtful)
Service Tax balance receivable
Less: Provision for doubtful receivable
Total
Other current assets
Cost and estimated earnings in excess of billings
Others
Total
As at 30
June 2015
As at 31 March
Particulars
2012
2013
2014
2015
0.01
23.12
9.07
18.24
50.44
0.01
20.43
10.38
11.31
19.00
61.13
0.01
53.76
13.64
5.19
0.07
17.28
89.95
59.46
19.18
2.46
0.07
21.88
103.05
81.16
54.59
4.23
0.07
21.69
161.74
96.12
61.69
3.52
0.06
21.80
183.19
50.44
61.13
89.95
103.05
2.29
2.29
161.74
2.29
2.29
183.19
3.95
3.95
3.72
3.72
3.92
0.20
4.12
0.34
0.34
0.34
0.34
0.07
0.07
8.85
3.97
74.60
5.84
93.26
6.27
3.76
0.26
74.60
6.66
91.55
11.40
9.56
0.42
0.10
12.11
33.59
14.72
12.07
1.06
1.68
14.50
44.03
29.55
14.08
2.97
0.62
47.22
34.21
16.69
5.46
1.46
57.82
2.29
2.29
93.26
2.29
2.29
91.55
2.29
2.29
33.59
2.29
2.29
44.03
-
-
47.22
57.82
21.52
1.63
23.15
48.98
1.76
50.74
50.67
0.29
50.96
119.59
0.49
120.08
135.64
0.55
136.19
120.23
6.05
126.28
Note: For balances with related parties - Refer Annexure XIX.
204
Annexure XIV: Statement of Current and Non - Current Liabilities and Long-Term and Short-Term
Provisions, as restated
As at 31 March
Particulars
2011
2012
2013
2014
All figures in ` million
As at 30
June
2015
2015
Non-current liabilities - Long term
provisions
Provision for employee benefits:
Compensated absences
10.04
12.81
17.79
25.32
31.36
30.41
Total
10.04
12.81
17.79
25.32
31.36
30.41
Current liabilities - Trade payables
33.80
34.84
53.27
74.59
53.31
40.74
1.47
15.64
5.39
1.07
29.01
7.77
1.36
39.73
7.32
1.07
105.37
7.85
1.07
100.57
2.92
8.59
64.42
2.79
10.67
1.77
12.43
62.52
35.82
48.68
70.81
103.98
78.96
118.58
87.95
148.79
87.98
264.79
107.03
247.41
60.39
184.87
Gratuity
9.55
0.30
0.06
16.23
14.21
17.91
Compensated absences
3.38
4.55
4.24
3.85
4.28
6.80
14.00
61.92
50.60
51.80
50.62
58.90
0.91
0.91
0.91
0.91
0.91
0.91
Total
27.84
67.68
Note: For balances with related parties - Refer Annexure XIX.
55.81
72.79
70.02
84.52
Other current liabilities
Advances received from customers
Billings in excess of revenue
Advances from related parties
Withholding taxes and other statutory
liabilities
Employee related liabilities
Total
Short-term provisions
Provision for employee benefits:
Provision for income tax (net)
Provision for fringe benefit tax (net)
205
Annexure XV: Statement of Share Capital, as restated
All figures in ` million
As at 30
June
2015
2015
As at 31 March
Particulars
2011
2012
2013
2014
Equity Share capital
Authorized equity share capital
200.00
200.00
200.00
200.00
200.00
200.00
Issued, subscribed and fully paid up
Less: Loan recoverable from ESOP
trust
199.66
199.66
199.66
199.66
199.66
199.66
16.69
16.29
16.29
-
-
-
182.97
183.37
183.37
199.66
199.66
199.66
206
Annexure XVI: Statement of Reserves and Surplus, as restated
As at 31 March
Particulars
2011
2012
2013
2014
All figures in ` million
As at 30
June
2015
2015
Cumulative translation reserve
At the commencement of the period
Add: Current period transfer
Closing balance
28.39
28.39
28.39
(5.03)
23.36
23.36
(54.03)
(30.67)
(30.67)
0.99
(29.68)
(29.68)
(6.53)
(36.21)
(36.21)
17.06
(19.15)
General Reserve
At the commencement of the period
Amount transferred from surplus
Closing balance
-
-
37.71
37.71
37.71
52.45
90.16
90.16
90.16
90.16
90.16
96.17
96.17
96.17
96.17
96.17
96.17
Opening Reserve, restated
280.45
527.38
765.62
940.92
1,203.15
1,474.03
Profit for the period, restated
246.93
238.24
387.05
454.83
411.03
57.54
527.38
765.62
1,152.67
1,395.75
1,614.18
1,531.57
Transfer to general reserve
-
-
37.71
52.45
-
-
Interim dividend
-
-
149.75
119.79
119.79
-
Tax on interim dividend
-
-
24.29
20.36
20.36
-
Closing balance
527.38
765.62
940.92
1,203.15
1,474.03
1,531.57
Total
651.94
885.15
1,044.13
1,359.80
1,624.15
1,698.75
Securities premium account
Surplus (Profit and Loss balance)
Less: Appropriations
207
Annexure XVII: Statement of Fixed Assets, as restated
All figures in ` million
Intangible
Assets
Tangible Assets
Particulars
Cost
Opening balance as at 1 April 2010
Additions
Disposals
Adjustments
Closing balance as at 31 March 2011
Opening balance as at 1 April 2011
Additions
Disposals
Adjustments
Closing balance as at 31 March 2012
Opening balance as at 1 April 2012
Additions
Disposals
Effects of movement on foreign exchange
Closing balance as at 31 March 2013
Opening balance as at 1 April 2013
Additions
Disposals
Effects of movement on foreign exchange
Closing balance as at 31 March 2014
Opening balance as at 1 April 2014
Additions
Disposals
Effects of movement on foreign exchange
Closing balance as at 31 March 2015
Opening balance as at 1 April 2015
Additions
Disposals
Effects of movement on foreign exchange
Closing balance as at 30 June 2015
Leasehold
Improvements
Plant and
equipments
Furniture
and fittings
Vehicles
Electrical
equipments
Office
equipments
Computers
7.24
0.00*
7.24
7.24
0.02
7.26
7.26
0.40
(0.01)
7.65
7.65
3.45
11.10
11.10
0.09
(0.01)
11.18
11.18
0.02
11.20
6.76
0.32
7.08
7.08
2.91
(0.59)
9.40
9.40
0.03
(0.86)
8.57
8.57
1.61
(0.55)
9.63
9.63
1.46
(0.99)
0.02
10.12
10.12
(0.15)
9.97
21.60
0.60
(0.80)
21.40
21.40
0.24
21.64
21.64
1.12
(1.24)
(0.07)
21.45
21.45
6.65
(5.10)
23.00
23.00
1.15
(0.34)
0.05
23.86
23.86
0.05
(0.03)
(0.01)
23.87
6.94
1.37
8.31
8.31
0.47
(0.88)
7.90
7.90
3.90
(3.16)
8.64
8.64
8.64
8.64
8.64
8.64
2.10
(1.25)
0.01
9.50
11.82
0.05
0.00*
11.87
11.87
0.42
(0.10)
12.19
12.19
1.20
(0.01)
13.38
13.38
2.06
(0.17)
15.27
15.27
1.30
(0.01)
0.02
16.58
16.58
0.17
(0.03)
16.72
8.29
0.32
(0.21)
8.40
8.40
0.20
8.60
8.60
0.88
(0.11)
(0.02)
9.35
9.35
2.67
(1.69)
10.33
10.33
5.91
(1.65)
(0.16)
14.43
14.43
0.29
(0.11)
14.61
76.75
6.97
(0.57)
83.15
83.15
4.16
(0.06)
(0.17)
87.08
87.08
13.94
(6.52)
(0.04)
94.46
94.46
43.48
(20.26)
(0.01)
117.67
117.67
24.13
(3.94)
0.22
138.08
138.08
17.24
(1.41)
153.91
208
Total
139.40
9.63
(1.58)
147.45
147.45
8.42
(1.63)
(0.17)
154.07
154.07
21.47
(11.90)
(0.14)
163.50
163.50
59.92
(27.77)
(0.01)
195.64
195.64
34.04
(6.93)
0.14
222.89
222.89
19.85
(2.95)
(0.01)
239.78
Software
37.53
5.23
42.76
42.76
11.35
0.17
54.28
54.28
12.67
(0.01)
66.94
66.94
21.80
(1.05)
87.69
87.69
19.63
107.32
107.32
3.41
0.01
110.74
All figures in ` million
Intangible
Assets
Tangible Assets
Particulars
Accumulated Depreciation/
Amortisation
Opening balance as at 1 April 2010
Depreciation/ Amortisation for the year
Disposals
Closing balance as at 31 March 2011
Opening balance as at 1 April 2011
Depreciation/ Amortisation for the year
Disposals
Closing balance as at 31 March 2012
Opening balance as at 1 April 2012
Depreciation/ Amortisation for the year
Disposals
Effects of movement in foreign exchange
Closing balance as at 31 March 2013
Opening balance as at 1 April 2013
Depreciation/ Amortisation for the year
Disposals
Effects of movement in foreign exchange
Closing balance as at 31 March 2014
Opening balance as at 1 April 2014
Depreciation/ Amortisation for the year
Disposals
Effects of movement in foreign exchange
Closing balance as at 31 March 2015
Opening balance as at 1 April 2015
Depreciation/ Amortisation for the period
Disposals
Effects of movement in foreign exchange
Closing balance as at 30 June 2015
Carrying amounts
As at 31 March 2011
As at 31 March 2012
Leasehold
Improvements
Plant and
equipments
Furniture
and fittings
Vehicles
Electrical
equipments
Office
equipments
Computers
5.62
0.59
6.21
6.21
1.05
7.26
7.26
0.07
(0.01)
7.32
7.32
0.28
7.60
7.60
0.64
0.02
8.26
8.26
0.17
(0.02)
8.41
5.51
0.81
6.32
6.32
1.07
(0.57)
6.82
6.82
0.90
(0.67)
7.05
7.05
0.88
(0.55)
7.38
7.38
1.24
(0.99)
0.02
7.65
7.65
0.24
(0.13)
0.05
7.81
19.04
2.54
(0.79)
20.79
20.79
0.60
21.39
21.39
0.38
(1.24)
(0.06)
20.47
20.47
0.70
(4.72)
(0.02)
16.43
16.43
1.93
(0.33)
0.06
18.09
18.09
0.52
(0.03)
(0.01)
18.57
5.88
0.77
6.65
6.65
0.73
(0.88)
6.50
6.50
0.92
(3.16)
4.26
4.26
1.15
5.41
5.41
1.15
0.01
6.57
6.57
0.35
(1.25)
(0.01)
5.66
10.54
1.27
0.00*
11.81
11.81
0.10
(0.01)
11.90
11.90
0.25
(0.01)
12.14
12.14
0.55
(0.17)
12.52
12.52
1.19
(0.01)
(0.01)
13.69
13.69
0.30
(0.01)
13.98
7.00
0.77
(0.13)
7.64
7.64
0.36
8.00
8.00
0.75
(0.11)
(0.02)
8.62
8.62
0.40
(1.68)
7.34
7.34
1.57
(1.65)
0.01
7.27
7.27
0.56
(0.11)
7.72
67.37
8.74
(0.54)
75.57
75.57
4.55
(0.04)
80.08
80.08
6.18
(6.52)
(0.03)
79.71
79.71
15.26
(20.25)
(0.01)
74.71
74.71
26.83
(3.82)
(0.02)
97.70
97.70
6.83
(1.41)
0.01
103.13
120.96
15.49
(1.46)
134.99
134.99
8.46
(1.50)
141.95
141.95
9.45
(11.71)
(0.12)
139.57
139.57
19.22
(27.37)
(0.03)
131.39
131.39
34.55
(6.80)
0.09
159.23
159.23
8.97
(2.93)
0.01
165.28
26.53
10.70
37.23
37.23
8.62
45.85
45.85
14.78
(0.01)
60.62
60.62
13.63
(1.05)
0.01
73.21
73.21
18.73
0.01
91.95
91.95
5.54
97.49
1.03
-
0.76
2.58
0.61
0.25
1.66
1.40
0.06
0.29
0.76
0.60
7.58
7.00
12.46
12.12
5.53
8.43
209
Total
Software
All figures in ` million
Intangible
Assets
Tangible Assets
Particulars
As at 31 March 2013
As at 31 March 2014
As at 31 March 2015
As at 30 June 2015
* Amount rounded off in millions
Leasehold
Improvements
0.33
3.50
2.92
2.79
Plant and
equipments
1.52
2.25
2.47
2.16
Furniture
and fittings
0.98
6.57
5.77
5.30
210
Vehicles
4.38
3.23
2.07
3.84
Electrical
equipments
1.24
2.75
2.89
2.74
Office
equipments
0.73
2.99
7.16
6.89
Computers
14.75
42.96
40.38
50.78
Total
23.93
64.25
63.66
74.50
Software
6.32
14.48
15.37
13.25
Annexure XVIII: Statement of Dividend Paid, as restated
Particulars
(Amounts in ` million, other than share related data)
As at 31 March
As at 30
June
2015
2012
2013
2014
2015
19,965,80 19,965,80 19,965,80
19,965,800 19,965,800
0
0
0
199.66
199.66
199.66
199.66
199.66
10.00
10.00
10.00
10.00
10.00
7.50%
6.00%
6.00%
-
2011
Number of fully paid equity
19,965,800
shares
Equity share capital
199.66
Face value (Rs. per share)
10.00
Rate of dividend %
Amount of dividend (Rs. per
share)
Amount of dividend (excluding
Tax on dividend)
Note: For transactions with related parties - Refer Annexure XIX.
211
7.50
6.00
6.00
-
149.75
119.79
119.79
-
Annexure XIX: Statement of Related Party Transactions, as restated
Particulars
Holding
Company
Subsidiary
Year ended 31
March 2011
Year ended 31
March 2012
Year ended 31
March 2013
Year ended 31
March 2014
Year ended 31
March 2015
Hatch
Investments
(Mauritius)
Limited
Nihilent
Technologies
Inc
Seventh August
IT Services Pvt
Limited
Hatch
Investments
(Mauritius)
Limited
Nihilent
Technologies
Inc
Seventh August
IT Services Pvt
Limited
Hatch
Investments
(Mauritius)
Limited
Nihilent
Technologies
Inc
Seventh August
IT Services Pvt
Limited
Hatch
Investments
(Mauritius)
Limited
Nihilent
Technologies
Inc
Seventh August
IT Services Pvt
Limited
Nihilent Nigeria
Limited
Nihilent
Tanzania
Limited
Hatch
Investments
(Mauritius)
Limited
Nihilent
Technologies
Inc
Seventh August
IT Services Pvt
Limited
Nihilent Nigeria
Limited
Nihilent
Tanzania
Limited
Nihilent
Australia
Limited
GNET Group
LLC (from 1
October 2014)
GNET Group
(I) Private
Limited (from 1
October 2014)
Nico
Technologies
Limited (upto 6
February 2015)
Mr.L.C.Singh
Mr.Minoo
Dastur
Ms.Swati Singh
Dastur Dadhich
& Kalambi
*
Nico
Technologies
Limited (from
14 December
2011)
Mr.L.C.Singh
Mr.Minoo
Dastur
Ms.Swati Singh
Dastur Dadhich
& Kalambi
*
#
#
*
*
Nihilent
Employee
Welfare Trust
Nihilent
Technologies
Private Limited
Nihilent
Employee
Welfare Trust
Nihilent
Technologies
Private Limited
Associate
Key
managemen
t personnel,
their
relatives
and
enterprises
over which
any key
managerial
personnel
or their
relative has
significant
influence,
where
transaction
s exist
Three months
period ended
30 June 2015
Hatch
Investments
(Mauritius)
Limited
Nihilent
Technologies
Inc
Seventh August
IT Services Pvt
Limited
Nihilent Nigeria
Limited
Nihilent
Tanzania
Limited
Nihilent
Australia
Limited
GNET Group
LLC
GNET Group
(I) Private
Limited
Nico
Technologies
Limited
Nico
Technologies
Limited
Mr.L.C.Singh
Mr.Minoo
Dastur
Ms.Swati Singh
Dastur Dadhich
& Kalambi
Ms.Nimisha
Singh
#
Mr.L.C.Singh
Mr.Minoo
Dastur
Ms.Swati Singh
*
Mr.L.C.Singh
Mr.Minoo
Dastur
Ms.Swati Singh
*
Mr.L.C.Singh
Mr.Minoo
Dastur
Ms.Swati Singh
*
Ms.Nimisha
Singh
#
Ms.Nimisha
Singh
Mr. Rahul
Bhandari
Vastu IT
Private Limited
Nihilent
Employee
Welfare Trust
Nihilent
Technologies
Private Limited
Vastu IT
Private Limited
*
Ms.Nimisha
Singh
Mr. Rahul
Bhandari (from
1 April 2014)
Vastu IT
Private Limited
*
Nihilent
Technologies
Private Limited
Nihilent
Technologies
Private Limited
Nihilent
Technologies
Private Limited
212
#
*
*
Year ended 31
March 2012
Year ended 31
March 2013
Year ended 31
March 2014
Year ended 31
March 2015
- Managers
- Managers
Superannuation Superannuation
Scheme
Scheme
Nihilent
Nihilent
Technologies
Technologies
Private Limited Private Limited
- Employees'
- Employees'
Group Gratuity
Group Gratuity
Cum Life
Cum Life
Assurance
Assurance
Scheme
Scheme
* No transactions during this period
# Not a related party.
- Managers
Superannuation
Scheme
Nihilent
Technologies
Private Limited
- Employees'
Group Gratuity
Cum Life
Assurance
Scheme
- Managers
Superannuation
Scheme
*
- Managers
Superannuation
Scheme
Nihilent
Technologies
Private Limited
- Employees'
Group Gratuity
Cum Life
Assurance
Scheme
Particulars
Year ended 31
March 2011
213
Three months
period ended
30 June 2015
- Managers
Superannuation
Scheme
*
Statement of transactions with related parties (in respect of parties above), as restated
All figures in `million
For the period
from 1 April
2015 to 30
2015
June 2015
For the year ended 31 March
Related party
Hatch Investments
(Mauritius) Limited
Nihilent Technologies, Inc.
Seventh August IT Services
Private Limited
Nico Technologies Limited
Nihilent Nigeria Limited
Nihilent Tanzania Limited
GNET Group LLC
Nihilent Australia Limited
Mr. L.C.Singh
Mr. Minoo Dastur
Nature of Transactions
Reimbursement of
professional charges
Dividend paid (net of
dividend distribution tax)
Professional charges
recovery
Investments in equity
shares
Reimbursement of
expenses (paid) / received
- net
Professional charges
recovery
Reimbursement of
expenses (received) / paid
Professional charges paid
Software and consultancy
services rendered
Software and consultancy
services rendered
Investments in equity
shares
Share Application money
(paid)
Reimbursement of
expenses (paid)
Reimbursement of
expenses (paid)
Investments in equity
shares
Software and consultancy
services rendered
Software and consultancy
services rendered
Software and consultancy
services rendered
Reimbursement of
expenses (paid)
Investments in equity
shares
Managerial Remuneration
Dividend paid (net of
dividend distribution tax)
Guest house rent
Managerial Remuneration
Dividend paid (net of
dividend distribution tax)
214
2011
2012
2013
2014
1.60
-
1.91
2.21
2.40
2.40
-
-
86.77
68.77
68.77
-
16.14
8.23
2.57
0.99
12.55
2.25
-
-
-
-
181.58
-
-
-
-
0.53
(5.71)
(0.13)
-
2.85
3.15
-
-
-
-
-
-
0.59
(10.88)
1.74
-
-
1.51
-
-
#
-
-
2.07
6.05
5.77
#
-
-
-
-
31.46
5.98
-
-
-
1.66
-
-
-
-
-
2.36
3.60
-
-
-
-
-
0.78
-
-
-
-
0.05
0.42
-
-
-
-
0.32
-
-
-
-
-
-
3.79
-
-
-
-
-
3.86
13.53
-
-
-
-
13.47
11.13
-
-
-
-
-
0.75
-
-
-
-
14.01
-
10.96
12.41
13.97
17.28
18.56
5.11
-
-
12.69
10.06
10.06
-
0.13
8.27
0.16
8.68
0.15
9.07
0.18
10.22
0.20
12.82
0.05
3.61
-
-
1.33
1.12
1.12
-
All figures in `million
For the period
from 1 April
2015 to 30
2015
June 2015
For the year ended 31 March
Related party
Nature of Transactions
Ms. Swati Singh
Mr. Rahul Bhandari
Dastur Dadhich & Kalambi
Vastu IT Private Limited
Nihilent Technologies
Private Limited - Managers
Superannuation Scheme
Nihilent Technologies
Private Limited Employees' Group Gratuity
Cum Life Assurance
Scheme
Ms. Nimisha Singh
# Not a related party.
2011
2012
2013
2014
0.55
-
-
-
-
-
#
#
#
#
2.46
0.76
#
#
#
#
0.02
-
0.08
0.06
-
-
-
-
-
-
8.78
7.03
7.03
-
Managers Superannuation
Scheme – Contribution
3.15
3.45
4.02
4.83
5.97
1.04
Employees Group
Gratuity Cum Life
Assurance Scheme –
Contribution
4.23
14.00
9.00
-
19.28
-
-
-
0.81
0.79
0.81
0.20
Salary to relative of
director
Salary
Dividend paid (net of
dividend distribution tax)
Professional fees paid
Dividend paid (net of
dividend distribution tax)
Rent paid
Statement of outstanding balances with related parties, as restated
As at 31 March
Nature of
amount
Trade
Receivables
Loans and
Advances and
other
receivables /
(payables)
Share
Application
money pending
allotment
Employees
Group Gratuity
Cum Life
Assurance
Scheme –
Related party
Nihilent Technologies, Inc.
Seventh August IT Services
Private Limited
Nico Technologies Limited
Nihilent Tanzania Limited
GNET Group LLC
Nihilent Australia Limited
Nihilent Technologies, Inc.
Seventh August IT Services
Private Limited
Nihilent Tanzania Limited
Nihilent Australia Ltd
Employee Welfare Trust
Nihilent Nigeria Limited
Ms. Nimisha Singh
Nihilent Nigeria Limited
Nihilent Technologies
Private Limited Employees' Group Gratuity
Cum Life Assurance
Scheme
All figures in ` million
As at
30
June
2014
2015
2015
13.69
12.61
12.81
2011
2012
2013
16.09
14.92
18.23
-
2.85
6.02
-
-
-
(5.39)
(7.77)
(7.32)
0.05
(7.85)
0.63
3.79
1.86
12.41
(2.14)
#
3.38
11.17
12.39
(2.01)
-
0.26
0.42
1.01
1.57
3.31
16.69
-
16.29
-
16.29
0.07
0.05
0.07
0.47
0.93
(0.78)
0.07
0.47
1.68
(0.78)
0.06
-
-
-
2.36
5.96
5.96
0.01
0.01
0.01
-
-
-
215
As at 31 March
Nature of
amount
Related party
receivable from
trust
Cost and
estimated
Nihilent Nigeria Limited
earnings in
excess of billing
#Not a related party
2011
2012
2013
2014
2015
-
-
-
-
31.56
216
As at
30
June
2015
-
Annexure XX: Capitalisation Statement, as per the restated financial information
Particulars
Total debt (A)
Shareholders funds
Share capital
Reserves and surplus
Total shareholders funds (B)
Total debt/ shareholders funds (A/B)
All figures in ` million
Pre- issue as at 30
June 2015
Post Issue
-
[●]
199.66
1,698.75
1,898.41
[●]
[●]
[●]
-
-
Note:
1. The figures disclosed above are based on the restated financial information of the Company.
2. Post issue details have not been provided as the issue price of the share is not known at the date of the report.
217
Annexure XXI: Statement of Accounting Ratios, as per the restated financial information
Particulars
2011
(Amounts in ` million, other than share related data)
As at 31 March
As at 30
June 2015
2012
2013
2014
2015
Net worth (A)
834.91
1,068.52
1,227.50
1,559.46
1,823.81
1,898.41
Net profit after tax (B)
246.93
238.24
387.05
454.83
411.03
57.54
18,120,209
18,211,739
18,294,173
18,432,156
18,528,763
18,580,749
18,792,320
18,736,616
18,699,701
18,664,548
18,646,166
18,646,736
13.63
13.08
21.16
24.68
22.18
12.39
13.14
12.72
20.70
24.37
22.04
12.34
29.58%
22.30%
31.53%
29.17%
22.54%
12.12%
19,965,800
19,965,800
19,965,800
19,965,800
19,965,800
19,965,800
Net assets value per share of Rs.10
each
(I = A/H)
41.82
53.52
61.48
78.11
91.35
95.08
Face value per share (Rs)
Rs.10
Rs.10
Rs.10
Rs.10
Rs.10
Rs.10
Weighted average number of equity
shares outstanding during the period
For basic earnings per share (C)
(Nos.)
For diluted earnings per share (D)
(Nos.)
Earnings per share (annualised)
Basic earnings per share (Rs) (E=
B/C)
Diluted earnings per share (Rs) (F =
B/D)
Return on net worth (%) (G =
B/A) (annualised)
Number of shares outstanding at the
end of the period (H)
Notes:
1
The above ratios are calculated as under:
a)
Earnings per share = Net profit after tax / weighted average number of shares outstanding during the period
b) Return on net worth (%) = Net profit after tax / net worth as at the end of period
c)
Net asset value (Rs) = Net worth / number of equity shares as at the end of period
d) Net worth, as restated is = Equity share capital + Reserves and surplus, as restated [including Cumulative
translation reserve, General Reserve, Securities premium account and Surplus in statement of profit and
loss].
2.
The figures disclosed above are based on the restated financial information of Nihilent Technologies Limited.
218
3.
Earning per shares (EPS) calculation is in accordance with Accounting Standard (AS) 20 - Earnings Per Share
prescribed by the Companies (Accounting Standards) Rules, 2006."
219
Annexure XXII: Statement of Standalone Tax Shelter, as restated
All figures in ` million
As at 31 March
2012
2013
353.16
563.61
2014
678.52
2015
611.77
32.45%
20.01%
32.45%
20.01%
32.45%
18.50%
33.99%
18.50%
33.99%
18.50%
34.61%
18.50%
Tax thereon at above rate normal tax rate
(C) = (A) * (B)
50.02
114.58
182.89
230.63
207.94
29.61
Permanent differences (D)
(4.07)
1.06
(19.51)
(24.15)
(21.18)
(4.97)
Tax impact of permanent
differences
(0.81)
0.34
(6.33)
(8.21)
(7.20)
(1.72)
(10.51)
(1.45)
(0.65)
(12.61)
3.66
5.31
(7.96)
1.01
2.88
(4.40)
(5.06)
(6.58)
14.71
(21.01)
(36.25)
(42.55)
1.72
(7.66)
21.54
15.60
(4.16)
(6.32)
(4.77)
(15.25)
10.48
(1.25)
7.03
16.26
27.46
5.03
(2.45)
30.04
20.70
(3.64)
11.22
28.28
1.16
26.03
(8.78)
18.41
(23.52)
(31.35)
(23.40)
(78.27)
(7.11)
1.70
(16.07)
(21.48)
1.19
10.07
7.04
(8.21)
(21.31)
(12.71)
-
-
-
1.27
-
0.12
48.02
104.85
169.52
230.63
222.05
40.60
1.19
10.07
7.04
(6.94)
(21.31)
(12.59)
49.21
114.92
176.56
223.69
200.74
28.01
245.89
354.22
544.10
654.37
590.59
80.58
Particulars
Restated profit before tax (A)
Tax Rate
Normal tax rate (%) (B)
Minimum alternate tax rate (%)
Timing Difference
Depreciation and amortisation
Employee benefits
Provision for doubtful debts
Total (E)
Effect of restatement
Employee benefits
Provision for doubtful debts
Reversal of accruals
Total (F)
Tax expense/(saving) thereon (G)
= (E+F) * (B)
Deferred tax expense due to
change in substantially enacted
tax rate (H)
Adjusted current tax expense
Adjusted deferred tax expense (I)
= (G+H)
Total adjusted tax expense (J)
Taxable profit after permanent
differences (K) = (A) + (D)
2011#
249.96
220
As at 30
June 2015
85.55
All figures in ` million
Particulars
2011#
Effective tax rate (excluding the
impact of change in
20.01%
substantially enacted tax rate)
(L) = (J-H) / (K)
# The tax liability for the year is under MAT
2012
As at 31 March
2013
32.45%
221
32.45%
2014
2015
33.99%
33.99%
As at 30
June 2015
34.61%
Annexure XXIII: Other information pertaining to transactions in Foreign Currency, as restated
All figures in ` million
For the period
For the year ended 31 March
from 1 April
Particulars
2015 to 30
2011
2012
2013
2014
2015
June 2015
Earnings in foreign currency
Export of services- software
1,355.74
1,575.64
1,949.01
2,400.16
2,672.16
645.49
solutions
Other income
13.09
12.08
3.41
Total
1,355.74
1,575.64
1,949.01
2,413.25
2,684.24
648.90
b. CIF value of imports
Bought out packages/ products
Total
2.57
2.57
3.89
3.89
5.88
5.88
10.01
10.01
c. Expenditure in foreign
currency
Professional charges
14.04
19.66
20.06
27.04
Rent
34.00
42.26
45.08
39.74
Sales commission
21.09
22.14
27.14
27.40
Salary and living allowance
345.89
465.19
525.68
699.47
Others
39.28
50.14
54.61
115.93
Total
454.30
599.39
672.57
909.58
Note: The above figures exclude amounts in local currency of foreign branch.
222
2.97
2.97
16.17
16.17
13.07
39.52
20.07
732.26
86.11
891.03
1.70
9.19
2.14
206.95
26.30
246.28
Annexure XXIV: Statement of Revenue from Operations, as restated
All figures in ` million
For the year ended 31 March
Particulars
2011
Sale of services
1,368.01
2012
1,586.73
2013
1,979.58
Total revenue from
1,368.01
1,586.73
1,979.58
operations
Note: For transactions with related parties - Refer Annexure XIX.
223
2014
2015
From the period 1 April
2015 to 30 June 2015
2,427.71
2,678.34
650.42
2,427.71
2,678.34
650.42
Annexure XXV: Statement of Employee Benefits, as restated
For the year ended 31 March
Particulars
2011
Salaries and bonus
Contribution to provident and
other funds
Staff Welfare
2012
2013
2014
All figures in ` million
From the
period 1
April 2015
2015
to 30 June
2015
1,448.66
409.44
681.55
844.19
968.95
1,266.72
24.75
25.05
32.45
42.44
54.39
14.20
3.71
2.97
3.97
5.72
7.21
1.67
Total
710.01
872.21
1,005.37
Note: For transactions with related parties - Refer Annexure XIX.
1,314.88
1,510.26
425.31
224
Annexure XXVI: Statement of Other Expenses, as restated
For the year ended 31 March
Particulars
Rent
Advertising and publicity
Payment to auditors
Sub-contracting charges
Business promotion
Communication
Electricity expenses
Foreign currency loss (net)
Insurance
Legal and professional expenses
Membership and subscription
Rates and taxes
Repairs and maintenance
Staff recruitment
Staff training
Provision for doubtful debts
Sales commission
Vehicle expenses
Travelling and conveyance
expense
Miscellaneous expenses
Loss on sale of asset (net)
All figures in ` million
From the
period 1
April
2015 2015 to 30
June 2015
73.14
18.08
11.08
3.06
2.52
1.91
23.58
3.79
8.74
2.47
18.82
4.92
20.24
4.48
66.63
16.99
13.51
3.03
52.30
8.78
9.17
3.05
6.53
2.01
20.15
5.44
14.37
5.58
5.84
1.02
9.94
0.15
22.68
2.14
18.68
3.03
2011
2012
2013
2014
61.03
3.32
1.26
3.31
12.84
12.65
25.15
9.02
37.22
3.26
2.81
10.95
7.42
3.97
3.05
21.09
10.26
66.61
5.64
1.39
7.19
15.39
14.51
12.11
45.40
4.22
3.75
13.35
4.26
3.70
2.98
22.14
13.11
70.35
23.22
3.35
1.06
15.23
17.42
27.85
10.61
60.80
4.68
5.65
14.81
5.49
5.05
8.69
27.14
14.05
70.61
4.48
1.93
9.66
17.39
19.64
17.59
10.50
66.57
8.90
8.22
16.55
9.47
5.70
8.91
32.97
13.77
149.54
130.27
98.98
106.88
131.84
40.49
10.45
-
6.65
-
9.60
-
14.94
0.03
11.66
-
7.77
-
424.03
444.71
541.42
138.19
Total
388.60
372.67
Note: For transactions with related parties - Refer Annexure XIX.
225
Annexure XXVII: Statement of Employee Stock Options, as restated
As at 30 June 2015
During the three months period ended 30 June 2015, the Company had one Share Based Option Arrangement which
had options outstanding, as described below:
Type of Arrangement
Date of Grant
Number of shares/ options granted
Contractual Life (including vesting period and
exercise period)
Vesting conditions
Method of Settlement
Particulars
Options outstanding at the beginning of the
period
Options granted during the period
Options forfeited during the period
Options previously considered lapsed
reinstated
Exercised during the period
Expired during the period
Options outstanding at the end of the period
Exercisable at end of the period
Employee Stock Option Scheme - 2010
21 January 2010
474,600
7 years
Vesting Period Starts from One year from the offer date and
lasts till five years of offer date with 20% vesting every year.
Equity based
Employee Stock Option Scheme - 2010
66,440
1,600
64,840
64,840
226
Annexure XXVIII: Cash and Bank balances, as restated
As at 31 March
Particulars
Cash and cash equivalents
Cash on hand
Balances with banks:
in current accounts
deposits with original maturity of
less than three months
Other bank balances
Fixed deposit (with original
maturity less than 12 months but
more than 3 months)
Total cash and bank balances
2011
2012
2013
2014
All figures in ` million
As at 30
June
2015
2015
0.34
0.05
0.08
0.03
0.09
0.08
319.39
314.50
509.17
508.07
546.87
454.71
-
20.00
30.00
20.86
-
-
319.73
334.55
539.25
528.96
546.96
454.79
30.00
20.00
1.27
3.84
145.62
145.61
349.73
354.55
540.52
532.80
692.58
600.40
Note: Fixed deposits with a original maturity period of less than 3 months are classified as "Cash and cash
equivalents" and fixed deposits with a original maturity period of greater than 3 months, but with a maturity date of
less than 12 months from balance sheet date are classified as "Other bank balances".
227
The Board of Directors
Nihilent Technologies Limited
4th Floor, Weikfield IT Citi Infopark,
Nagar Road, Pune 411 014
Maharashtra, India
Dear Sirs,
We have examined the attached Restated Consolidated Financial Information of Nihilent Technologies Limited (‘the
Company’) and its subsidiaries collectively referred to as ‘the Group’, as prepared by the Management and approved
by the Board of Directors of the Company in terms of the requirements of Section 26 of the Companies Act, 2013
read with the Companies (Prospectus and Allotment of Securities) Rules, 2014, the Securities and Exchange Board
of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended from time to time (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 4 August 2015 and addendums dated 10
September 2015 and 19 October 2015 thereto in connection with the proposed issue of Equity Shares of the
Company by way of a fresh issue and / or an offer for sale by the existing shareholders.
This Restated Consolidated Financial Information has been extracted by the Management from the consolidated
financial statements for the years ended 31 March 2015, 31 March 2014, 31 March 2013, 31 March 2012 and 31
March 2011 and the special purpose consolidated financial statements for the three months period ended 30 June
2015 which were audited by us.
1.
In accordance with the requirements of Section 26 of the Companies Act, 2013 read with the Companies
(Prospectus and Allotment of Securities) Rules, 2014, the SEBI Regulations and the Guidance Note, as
amended from time to time, and in terms of our engagement agreed with you, we further report that:
a)
the Restated Consolidated Statement of Assets and Liabilities of the Group as at 30 June 2015, 31
March 2015, 31 March 2014, 31 March 2013, 31 March 2012 and 31 March 2011, examined by us, as
set out in Annexure [I] to this Report read with the significant accounting policies in Annexure [IV], is
after making such adjustments and regrouping as more fully described in the Notes to the Restated
Consolidated Financial Information enclosed as Annexure [V] to [XXIX] to this Report, and in our
opinion is appropriate. As a result of these adjustments, the amounts reported in the above mentioned
statement is not necessarily the same as those appearing in the financial statements of the Group for the
relevant financial years;
b)
the Restated Consolidated Statement of Profit and Loss of the Group for the three months period ended
30 June 2015 and years ended 31 March 2015, 31 March 2014, 31 March 2013, 31 March 2012 and 31
March 2011, as set out in Annexure [II] to this Report read with the significant accounting policies in
Annexure [IV], is after making such adjustments and regrouping as more fully described in the Notes to
the Restated Consolidated Financial Information enclosed as Annexure [V] to [XXIX] to this Report,
and in our opinion is appropriate. As a result of these adjustments, the amounts reported in the above
mentioned statement is not necessarily the same as those appearing in the financial statements of the
Group for the relevant financial years; and
c)
the Restated Consolidated Statement of Cash Flows of the Group for the three months period ended 30
June 2015 and years ended 31 March 2015, 31 March 2014, 31 March 2013, 31 March 2012 and 31
March 2011, as set out in Annexure [III] to this Report read with the significant accounting policies in
Annexure [IV], is after making such adjustments and regrouping more fully described in the Notes to
the Restated Consolidated Financial Information enclosed as Annexure [V] to [XXIX] to this Report,
228
and in our opinion is appropriate. As a result of these adjustments, the amounts reported in the above
mentioned statement is not necessarily the same as those appearing in the financial statements of the
Group for the relevant financial years.
2.
Based on the above, we are of the opinion that the Restated Consolidated Financial Information:
i.
ii.
has been prepared using consistent accounting policies for all the reporting periods;
has been made after incorporating adjustments for prior periods and other material amounts in the
respective financial periods to which they relate;
iii. does not contain any qualifications or emphasis of matter requiring adjustments; and
iv. does not contain any extra-ordinary items that need to be disclosed separately in the Restated Consolidated
Financial Information.
3.
We have also examined the following Restated Consolidated Financial Information as set out in the Annexure
prepared by the Management of the Group and approved by the Board of Directors, relating to the Group for the
three months period ended 30 June 2015 and years ended 31 March 2015, 31 March 2014, 31 March 2013, 31
March 2012 and 31 March 2011:
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
ix)
x)
xi)
xii)
xiii)
xiv)
xv)
xvi)
xvii)
xviii)
xix)
xx)
xxi)
xxii)
xxiii)
xxiv)
xxv)
4.
Notes on Material Adjustments and Regroupings, included in Annexure V
Statement of Contingent Liabilities, as restated, included in Annexure VI
Current tax matters outstanding as at 30 June 2015, included in Annexure VII
Gratuity, as restated, included in Annexure VIII
Segment Reporting, as restated, included in Annexure IX
Statement of Non-Current Investments, as restated, included in Annexure X
Statement of Current Investments, as restated, included in Annexure XI
Statement of Trade Receivables, as restated, included in Annexure XII
Statement of Fixed Assets, as restated, included in Annexure XIII
Statement of Capital Work In Progress, as restated, included in Annexure XIV
Statement of Long-Term and Short-Term Loans and Advances and Other Non-Current and Current
assets, as restated, included in Annexure XV
Statement of Current and Non - Current Liabilities and Long-Term and Short-Term Provisions, as
restated, included in Annexure XVI
Statement of Long-term borrowings, as restated, included in Annexure XVII
Statement of Cash and Bank balances, as restated, included in Annexure XVIII
Statement of Share Capital, as restated, included in Annexure XIX
Statement of Reserves and Surplus, as restated, included in Annexure XX
Statement of Dividend Paid, included in Annexure XXI
Statement of Revenue from Operations, as restated, included in Annexure XXII
Statement of Employee Benefits, as restated, included in Annexure XXIII
Statement of Related Party Transactions, as restated, included in Annexure XXIV
Capitalisation Statement, as per the restated financial information, included in Annexure XXV
Statement of Accounting Ratios, as per the restated financial information, included in Annexure XXVI
Statement of Other Expenses, as restated, included in Annexure XXVII
Statement of Finance Costs, as restated, included in Annexure XXVIII
Statement of Employee Stock Options, as restated, included in Annexure XXIX
This Report should not in any way be construed as a reissuance or re-dating of any of the previous audit reports
issued by us, nor should this report be construed as an opinion on any of the financial statements referred to
herein.
229
5.
We have no responsibility to update our Report for events and circumstances occurring after the date of this
Report.
6.
In our opinion, the above Restated Consolidated Financial Information contained in Annexure [I] to [XXIX] of
this Report read along with the Significant Accounting Policies and Notes to the Restated Consolidated
Financial Information is prepared after making adjustments and regrouping as considered appropriate and has
been prepared in accordance with Section 26 of the Companies Act, 2013 read with The Companies (Prospectus
and Allotment of Securities) Rules, 2014, to the extent applicable, SEBI Regulations and the Guidance note, as
amended from time to time, and in terms of our engagement as agreed with you.
7.
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 by way of fresh issue and / or an offer for sale by the
existing shareholders. Our Report should not be used, referred to or distributed for any other purpose except
with our consent in writing.
For B S R & Co. LLP
Chartered Accountants
Firm registration number: 101248W/ W-100022
Juzer Miyajiwala
Partner
Membership Number.: 047483
Date: 7 December 2015
Place: Pune
230
Annexure I: Consolidated Statement of Assets and Liabilities, as restated
All figures in ` million
As at March 31,
Particulars
SHARE HOLDERS' FUNDS
Share capital
Reserves and surplus
MINORITY INTEREST
NON-CURRENT
LIABILITIES
Long term provisions
Long-term borrowings
Deferred tax liabilities (net)
Other long term liabilities
CURRENT LIABILITIES
Trade payables
Other current liabilities
Short-term provisions
Total Equity and Liabilities
NON-CURRENT ASSETS
Fixed assets
Tangible assets
Intangible assets
Goodwill on consolidation
(net)
Capital work-in-progress
Non-current investments
Deferred tax assets (net)
Long term loans and advances
Other non-current assets
CURRENT ASSETS
Current investments
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets
Total Assets
2011
2012
2013
2014
2015
As at 30
June
2015
Refer Annexure XIX
Refer Annexure XX
182.97
592.24
775.21
-
183.37
826.31
1,009.68
-
183.37
989.21
1,172.58
-
199.66
1,286.71
1,486.37
0.34
199.66
1,508.07
1,707.73
0.03
199.66
1,594.31
1,793.97
-
Refer Annexure XVI
Refer Annexure XVII
10.03
10.03
12.80
12.80
17.76
2.63
20.39
25.32
25.32
31.36
78.49
0.18
22.23
132.26
30.41
79.79
0.18
22.23
132.61
34.20
98.80
29.05
162.05
947.29
34.43
113.51
69.12
217.06
1,239.54
56.31
142.37
56.25
254.93
1,447.90
75.64
267.69
72.79
416.12
1,928.15
63.54
326.94
70.13
460.61
2,300.63
55.90
265.66
85.11
406.67
2,333.25
12.58
5.52
12.54
8.08
24.31
5.97
64.93
14.48
76.53
37.84
87.31
34.84
-
-
-
-
169.46
169.46
19.33
4.84
14.49
50.44
3.95
111.15
16.82
4.84
4.70
61.28
3.72
111.98
16.85
4.84
89.56
4.12
145.65
4.84
3.69
103.28
0.34
191.56
4.84
21.97
164.46
0.34
475.44
4.84
37.60
186.74
0.07
520.86
80.55
275.64
309.48
310.22
292.18
357.10
451.35
579.00
262.34
578.39
278.05
638.16
359.14
363.43
565.82
539.70
807.96
735.73
93.35
27.46
836.14
947.29
92.37
52.06
1,127.56
1,239.54
34.66
52.49
1,302.25
1,447.90
44.36
122.18
1,736.59
1,928.15
51.02
125.48
1,825.19
2,300.63
58.85
101.60
1,812.39
2,333.25
Reference
Refer Annexure XVI
Refer Annexure XVI
Refer Annexure XVI
Refer Annexure XVI
Refer Annexure XIII
Refer Annexure XIV
Refer Annexure X
Refer Annexure XV
Refer Annexure XV
Refer Annexure XI
Refer Annexure XII
Refer
Annexure
XVIII
Refer Annexure XV
Refer Annexure XV
Note:
The above statement should be read with the significant accounting policies in Annexure [IV] and the notes to the
Restated Consolidated Financial Information enclosed as Annexure [V] to [XXIX].
231
Annexure II: Consolidated Statement of Profit and Loss, as restated
Particulars
Revenue from operations
Other income
Expenses
Employee benefits expense
Finance costs
Depreciation and
amortization expense
Other expenses
Profit before tax
Tax expense:
Current tax
MAT credit entitlement
recognised
Deferred tax charge /
(release)
Profit after tax but before
minority interest
Add/(Less): Share of loss/
(profit) of minority
Profit for the period
Reference
Refer Annexure XXII
Refer Annexure XXIII
Refer Annexure
2011
1,376.69
15.13
1,391.82
718.27
881.99
1,013.85
1,320.83
1,731.47
497.28
-
-
-
-
1.76
1.02
26.18
17.16
24.31
32.91
56.35
16.43
388.25
377.56
435.13
480.51
593.97
167.12
1,132.70
259.12
1,276.71
354.03
1,473.29
566.60
1,834.25
657.50
2,383.55
577.37
681.85
93.55
49.29
105.11
168.27
230.68
222.34
41.00
(46.18)
-
-
-
-
-
1.19
9.79
7.33
(6.32)
(18.28)
(15.63)
4.30
114.90
175.60
224.36
204.06
25.37
254.82
239.13
391.00
433.14
373.31
68.18
-
-
-
3.43
0.31
0.03
254.82
239.13
391.00
436.57
373.62
68.21
XXVIII
Refer Annexure XIII
Refer Annexure
XXVII
All figures in ` million
June
For the period ended March 31,
30,
2012
2013
2014
2015
2015
1,601.74
2,001.80
2,447.79 2,923.28
762.13
29.00
38.09
43.96
37.64
13.27
1,630.74
2,039.89
2,491.75 2,960.92
775.40
Note:
The above statement should be read with the significant accounting policies in Annexure [IV] and the notes to the
Restated Consolidated Financial Information enclosed as Annexure [V] to [XXIX].
232
Annexure III: Restated consolidated statement of cash flows
All figures in ` million
Particulars
A
For the period ended March 31
2014
June 30
2011
2012
2013
2015
2015
259.12
354.03
566.60
657.50
577.37
93.55
26.18
17.16
24.31
32.91
56.35
16.43
Interest expense
0.01
-
-
-
1.76
1.02
Interest income
(1.85)
(5.45)
(15.65)
(15.04)
(18.41)
(6.08)
Dividend on mutual funds
(4.10)
(13.73)
(20.93)
(25.70)
(16.97)
(3.85)
0.01
-
(0.65)
0.37
0.01
(0.69)
(8.36)
-
(0.40)
(1.99)
(2.64)
(2.65)
4.81
(3.04)
(55.41)
1.08
(12.11)
18.03
275.82
348.97
497.87
649.13
585.36
115.76
72.79
(34.58)
(46.88)
(221.90)
0.61
(59.77)
- (Increase) / Decrease in short term loans and
advances
(31.51)
0.98
(11.62)
(9.70)
(4.38)
(7.83)
- (Increase)/ Decrease in other current assets
(13.10)
(24.60)
(0.43)
(69.69)
(3.30)
23.88
- (Increase) in long term loans and advances
(22.05)
(2.10)
(0.80)
(10.93)
(39.01)
(7.25)
- Increase / (Decrease) in trade payables
(16.42)
0.23
21.88
19.33
(12.10)
(7.64)
10.03
2.77
4.96
7.56
6.04
(0.95)
Cash flow from operating activities:
Profit before tax
Adjustments for:
Depreciation and amortisation expense
(Profit) / Loss on sale of fixed assets
Profit on sale of investments
Unrealised foreign exchange loss / (gain) (net)
Operating profit before working capital changes
Adjustments for changes in working capital :
- (Increase) / Decrease in trade receivables
- Increase / (Decrease) in long term provisions
- Increase in other long term liabilities
B
-
-
-
-
22.23
-
- Increase / (Decrease) in short term provisions
39.02
(8.09)
(0.56)
15.85
(1.65)
6.22
- Increase / (Decrease) in other current liabilities
(8.20)
14.71
28.86
125.32
12.15
(61.28)
Cash generated from operations
306.38
298.29
493.28
504.97
565.95
1.14
- Taxes paid
(56.40)
(54.32)
(144.91)
(235.50)
(246.03)
(47.54)
Net cash from operating activities
249.98
243.97
348.37
269.47
319.92
(46.40)
(33.38)
(28.67)
(27.99)
(62.88)
(80.51)
(25.43)
Proceeds from sale of fixed assets
0.11
0.23
0.85
0.39
0.11
0.71
Proceeds from sale of investments
8.36
-
-
-
-
-
-
-
-
-
(199.61)
-
(436.56)
(873.14)
(833.97)
(4,757.67)
(282.93)
(304.23)
Sale of investments
356.01
644.21
851.64
4,600.51
471.94
288.52
(Increase) / Decrease in fixed deposits with original
maturity in excess of three months
(10.29)
10.23
18.33
1.21
(144.78)
0.01
Cash flow from Investing activities:
Purchase of fixed assets
Payment for acquisition of business, net of cash
acquired
Purchase of investments
Decrease in margin money and other deposits
Interest received
-
-
-
-
-
0.27
1.85
4.05
17.02
14.83
17.88
3.53
233
All figures in ` million
Particulars
Dividend income on mutual funds
Net cash from / (used in) investing activities
C
For the period ended March 31
2011
2013
2014
2015
2015
4.10
13.73
20.93
25.70
16.97
3.85
(109.80)
(229.36)
46.81
(177.91)
(200.93)
(32.77)
(0.16)
-
-
-
125.59
-
-
-
(174.04)
(140.12)
(140.15)
-
(0.01)
-
-
-
(1.76)
(1.02)
1.28
0.40
-
16.29
-
-
1.11
0.40
(174.04)
(123.83)
(16.32)
(1.02)
3.72
(0.72)
(0.02)
3.58
20.81
7.97
145.01
14.29
221.12
(28.69)
123.48
(72.22)
184.13
329.14
343.43
564.55
535.86
659.34
329.14
343.43
564.55
535.86
659.34
587.12
Cash flow from financing activities:
Repayment of / Proceeds from borrowings
Dividend paid during the year
Interest paid
Loan repaid by Trust
D
2012
June 30
Net cash generated from / (used in) financing
activities
Effect of unrealised exchange loss on cash and
cash equivalents*
Net increase / (decrease) in cash and cash
equivalents (A+B+C+D)
Cash and cash equivalents as at beginning of the
year
(Refer Annexure: XVIII)
Cash and cash equivalents as at end of the year
(Refer Annexure: XVIII)
* Includes amounts on account of revaluation of its non-integral operations as per Accounting Standard (AS-11) The Effects of Changes in Foreign Exchange Rates.
Note:
The above statement should be read with the significant accounting policies in Annexure [IV] and the notes to the
Restated Consolidated Financial Information enclosed as Annexure [V] to [XXIX].
234
Annexure IV: Notes to the Consolidated Financial Statements, as restated
(Currency: Indian Rupees in millions)
Background
Nihilent Technologies Limited (‘NTL’ or the ‘Company’) and its subsidiaries Nihilent Technologies Inc. & GNET
Group LLC in United States of America (USA), Nihilent Tanzania Limited in Tanzania, Nihilent Australia Pty Ltd.
in Australia, Nihilent Nigeria Limited in Nigeria and Seventh August IT Services Private Limited & GNET Group
(I) Private Limited in India (collectively referred to as ‘the Group’), are engaged in software services, business
consulting in the area of enterprise transformation, change and performance management and providing related IT
services. The Company's registered office and global offshore delivery center is located at Pune, India from where it
services its global clientele.
The Company, during the month of September 2015, made an application to the Registrar of Companies (Pune) for
conversion of the Company from “Private Limited” to “Public Limited” and accordingly received a fresh certificate
of incorporation for the same changing the Company’s name to “Nihilent Technologies Limited” from “Nihilent
Technologies Private Limited”.
1.
SIGNIFICANT ACCOUNTING POLICIES
1.1. Basis of preparation
The Restated Consolidated Financial Information have been prepared and presented under the historical cost
convention as a going concern on the accrual basis and to comply in all material aspects with all the applicable
accounting principles in India (“GAAP”) including the Accounting Standards specified under section 133 of
the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, after making
adjustments as considered appropriate and have been prepared in accordance with Section 26 of the
Companies Act, 2013 read with The Companies (Prospectus and Allotment of Securities) Rules, 2014, and
Securities Exchange Board of India (‘SEBI’), (Issue of Capital and Disclosure Requirements) Regulations,
2009 (the “SEBI Regulations”) for each of the five years ended 31 March 2011, 31 March 2012, 31 March
2013, 31 March 2014 and 31 March 2015 and three months period ended 30 June 2015 in a manner consistent
with the accounting policies being adopted for the three months period ended 30 June 2015. As a result of
these adjustments, the amounts reported in the above mentioned statements are not necessarily the same as
those appearing in the financial statements of the Company for the relevant financial years. The financial
statements are presented in Indian rupees rounded off to the nearest million.
These restated consolidated financial information have been prepared so as to contain information / disclosures
and incorporating adjustments set out below in accordance with the SEBI Regulations:
a) Adjustments for the material amounts in respective periods to which they relate;
b) Adjustments for previous periods identified and adjusted in arriving at the profits of the periods to
which they relate irrespective of the period in which the event triggering the profit or loss occurred;
and
c) Adjustments for reclassification of the corresponding items of income, expenses, assets and liabilities,
in order to bring them in line with the groupings as per the audited consolidated financial information
of the Group as at and for the period ended 30 June 2015 and the requirements of the SEBI
Regulations.
235
Principles of consolidation
The consolidated interim financial statements have been prepared in accordance with Accounting Standard
(AS) 21- Consolidated Financial Statements and include the following subsidiaries:
Sno.
1
2
3
4
5
1
2
Country of
Incorporation
Name of the subsidiary
Direct Subsidiaries
Nihilent Technologies Inc.
Nihilent Australia Pty Ltd.
Seventh August IT Services Private Limited
Nihilent Tanzania Limited
Nihilent Nigeria Limited
Indirect subsidiaries
GNET Group LLC (Subsidiary of Nihilent Technologies
Inc.)
GNET Group (I) Private Limited (Subsidiary of GNET
Group LLC)
United States of America
Australia
India
Tanzania
Nigeria
United States of America
India
% voting power
held
100%
100%
100%
95%
51%
100%
100%
The financial statements of Nihilent Technologies Limited, the parent company and its subsidiaries, have been
consolidated on a line by line basis and all material intercompany transactions, balances and unrealized
surpluses and deficits on transactions between group companies have been eliminated on consolidation.
Consistency in application of accounting policies within the Group is ensured to the extent practicable.
The excess of the cost to the Company of its investment in a subsidiary and the Company’s portion of equity of
the subsidiary on the date at which investment in the subsidiary is made, is described as goodwill and
recognized separately as an asset in the consolidated financial statements. The excess of the Company’s
portion of equity of the subsidiary over the cost of investment in the subsidiary is treated as capital reserve in
the consolidated financial statements. Goodwill arising on consolidation is not amortized. It is tested for
impairment on a periodic basis and written off if found impaired.
Share of minority interest in the net profit is adjusted against the income to arrive at the net income attributable
to shareholders of the parent company. Minority interest’s share of net assets is presented separately in the
Balance Sheet.
If the losses attributable to the minority in a consolidated subsidiary exceed the minority’s share in equity of
the subsidiary, then the excess, and any further losses applicable to the minority, are adjusted against the
Group’s interest except to the extent that the minority has a binding obligation to, and is able to, make good the
losses. If the subsidiary subsequently reports profits, all such profits are allocated to the Group’s interest until
the minority’s share of losses previously absorbed by the Group has been adjusted.
The consolidated interim financial statements are prepared using uniform accounting policies for like
transactions and other events in similar circumstances and necessary adjustments required for deviations, if
any, are made in the consolidated interim financial statements. The consolidated interim financial statements
are presented in the same manner as the Company’s unconsolidated interim financial statements.
1.2. Use of estimates
The preparation of the financial statements in conformity with GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities
on the date of the financial statements and reported amounts of revenue and expenditure for the period. Actual
results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in
the current and future periods.
236
1.3. Current–non-current classification
All assets and liabilities are classified into current and non-current.
Assets
An asset is classified as current when it satisfies any of the following criteria:
(a) it is expected to be realised in, or is intended for sale or consumption in, the Group’s normal operating
cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is expected to be realised within 12 months after the reporting date; or
(d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at
least 12 months after the reporting date.
Current assets include the current portion of non-current financial assets.
All other assets are classified as non-current.
Liabilities
A liability is classified as current when it satisfies any of the following criteria:
(a) it is expected to be settled in the Group’s normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is due to be settled within 12 months after the reporting date; or
(d) the Group does not have an unconditional right to defer settlement of the liability for at least 12 months
after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its
settlement by the issue of equity instruments do not affect its classification.
Current liabilities include current portion of non-current financial liabilities.
All other liabilities are classified as non-current.
Operating cycle
Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash
equivalents. The Group’s normal operating cycle is less than 12 months.
1.4. Fixed assets and depreciation
Fixed assets are carried at cost of acquisition or construction less accumulated depreciation. The cost of fixed
assets includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of
the respective assets.
Leasehold improvements are depreciated over the term of the lease or the estimated useful life of the asset
whichever is shorter.
Depreciation is provided on a straight line method. The rates of depreciation prescribed in Schedule II to the
Companies Act, 2013 are considered as the indicative rates. If management’s estimate of the useful life of a
fixed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is
shorter/ greater than that envisaged in the aforesaid Schedule, depreciation is provided at a higher/ lower rate
based on the management’s estimate of the useful life / remaining useful life.
Pursuant to the policy, estimated useful lives of assets which have been consistently followed for each of the
reporting periods are as follows:
Asset Group
Estimated economic
useful life in years
Computers and networking equipment (Software forming part of computer
systems are depreciated at the rates applicable to computers)
3 years
237
Estimated economic
useful life in years
Asset Group
Electrical equipments, Plant and equipments, Furniture and fittings, Office
equipments
Vehicles
4 years
5 years
For certain fixed assets of the subsidiaries, the estimated economic useful life is different than the useful life of
other fixed assets as envisaged by the group. However the same is not expected to have any material impact on
the financial statements of the group.
1.5. Intangible assets and amortization
Intangible assets are recognized when the asset is identifiable, is within the control of the Group, it is probable
that the future economic benefits that are attributable to the asset will flow to the Group and cost of the asset
can be reliably measured. Acquired intangible assets representing software are recorded at their acquisition
price and are amortized over its estimated useful life of three years commencing from the date the assets are
available for their use. The estimated useful life of intangible assets is reviewed by management at each
Balance Sheet date.
1.6. Impairment of assets
In accordance with Accounting Standard (AS 28) – Impairment of Assets, the carrying amounts of the Group's
assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If
any time such indication exists, the asset’s recoverable amount is estimated, at higher of the net selling price
and the value in use. An impairment loss is recognized whenever the carrying amount of an asset or its cash
generating unit exceeds its recoverable amount. 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
reinstated at the recoverable amount subject to a maximum of depreciable historical cost.
1.7. Investments
Long-term investments are carried 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.
Profit or loss on sale of investments is determined on the basis of weighted average carrying amount of
investments disposed off.
1.8. Revenue recognition
The Group derives its revenue primarily from rendering software service activities. Revenue from “time and
material” contracts is recognized as and when the related services are performed based on the time charged and
in accordance with the terms of the specified customer contracts. Revenue from fixed price contracts is
recognized using percentage of completion method, under which the sales value of performance including
earnings thereon is determined by relating the actual man hours of work performed to date to the estimated
total man hours for each contract. Provision for estimated losses on uncompleted contracts are recorded in the
period in which such losses become probable based on current contract estimates.
The asset, “Cost and estimated earnings in excess of billings”, represents revenues recognized in excess of
amounts billed. These amounts are billed after the milestones specified in the agreement are achieved. The
liability, “Billings in excess of revenue”, represents billings in excess of revenue recognized.
Revenue on maintenance contracts is recognized on straight-line basis over the period of the contract.
238
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the
interest rate applicable.
Dividend income is recognized when the right to receive payment is established.
1.9. Employee benefits
a) Short term employee benefits
Employee benefits payable wholly within twelve months of rendering the service are classified as short
term employee benefits and are recognized in the period in which the employee renders the related
service.
b) Post-employment benefits - defined benefit plan
The employees’ gratuity scheme is a defined benefit plan. The present value of the obligation under such
defined benefit plan is determined at each Balance Sheet date based on actuarial valuation carried out by
an independent actuary using projected unit credit method. Actuarial gains and losses are recognized
immediately in the Statement of Profit and Loss. Past service cost is recognized as an expense on a
straight line basis over the average period until the benefit becomes vested. To the extent the benefits are
already vested past service cost is recognized immediately.
c)
Post-employment benefits - defined contribution plans
The superannuation scheme and provident fund scheme applicable to certain companies within the Group
are defined contribution plans. The contributions paid/payable under the schemes are recognized
immediately in the Statement of Profit and Loss.
d) Long term employee benefit
Long term employee benefit comprise of compensated absences. These are measured based on actuarial
valuation carried out by an independent actuary at the Balance Sheet date using projected unit credit
method. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss. For
the three months period ended 30 June 2015, these were measured based on actuarial valuation carried out
by an independent actuary at the Balance Sheet date of the immediately preceding financial year using
projected unit credit method, adjusted for significant changes in earned leaves accrued, curtailments,
settlements or any other significant events.
1.10. Foreign Currency Transactions
Transactions in foreign currency are recorded at pre-determined rates to the respective functional currencies at
the exchange rates that approximate the rate prevailing on the date of the transaction. Exchange differences
arising on foreign exchange transactions settled during the period are recognized in the Statement of Profit and
Loss for the period. Monetary assets and liabilities denominated in foreign currency as at the Balance Sheet
date are translated at the period-end exchange rate and the resultant exchange differences are recognized in the
Statement of Profit and Loss.
For the purpose of consolidation, Statement of Profit and Loss items are translated into the reporting currency
at monthly average exchange rates. Foreign currency denominated monetary and non-monetary assets and
liabilities at period-end are translated at the period-end exchange rates. Non-monetary assets and liabilities
denominated in foreign currencies that are measured in terms of historical cost in foreign currency are
translated using the exchange rate at the date of the transaction. Net exchange difference resulting from
translation of items in the financial statements of the subsidiaries and non-integral foreign operations are
accumulated in foreign currency translation reserve.
Derivative Instruments
The forward exchange contracts taken to hedge existing assets or liabilities are translated at the closing
exchange rates and resultant exchange differences are recognized in the same manner as those on the
239
underlying foreign currency asset or liability. The premium or discount on such forward exchange contracts
are recognized over the period of the contract.
Apart from forward exchange contracts taken to hedge existing assets or liabilities, the Company also uses
derivatives to hedge its foreign currency risk exposure relating to firm commitments and highly probable
transactions. In accordance with the relevant announcement of the Institute of Chartered Accountants of India,
the Company provides for losses in respect of such outstanding derivative contracts at the balance sheet date
by marking them to market. Net gain, if any, is not recognized.
1.11. Leases
Lease payments under operating lease arrangements are charged to the Statement of Profit and Loss on a
straight line basis method over the period of lease.
1.12. Borrowing Cost
Borrowing costs are expensed in the period in which it is incurred except borrowing costs directly attributable
to the acquisition of those qualifying assets which necessarily take a substantial period of time to get ready for
their intended use are capitalized as part of cost of such assets.
1.13. Provisions and contingencies
Provision is recognized in the Balance Sheet when the Group has a present obligation as a result of a past
event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Loss
contingencies arising from claims, litigation, assessment, fines, penalties etc. are recorded when it is probable
that a liability has been incurred, and the amount can be reasonably estimated. A disclosure for a contingent
liability is made when there is a possible or present obligation that may, but probably will not require an
outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of
resources is remote, no provision or disclosure is made.
1.14. Taxation
Income-tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with the
income-tax law), and deferred tax charge or credit (reflecting the tax effect of timing differences between
accounting income and taxable income for the period).
The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using
the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are
recognized only to the extent there is reasonable certainty that the asset can be realized in future; however,
where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are
recognized only if there is a virtual certainty of realization of the assets. Deferred tax assets are reviewed as 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 realized.
In accordance with the Guidance Note issued by Institute of Chartered Accountants of India, the Group
recognizes Minimum Alternate Tax credit as an asset only to the extent the probability exists that the Group
will become liable to pay normal income tax during the specified period as per provision of Income Tax Act,
1961.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the
recognised amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax
assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against
liabilities representing current tax and where the deferred tax assets and deferred tax liabilities relate to taxes
on income levied by the same governing taxation laws.
1.15. Accounting for employee share based payments
240
The Group uses the intrinsic value method of accounting allowed by the Guidance Note “Employee Share
Based Payment” applicable for employee stock options and sweat equity granted after 1 April, 2005 to account
for share based payment plans.
Under this method, compensation expense is recorded on the date of the grant only if the current fair value of
the underlying stock exceeds the exercise price.
1.16. Earnings per share (‘EPS’)
The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for
the period by the weighted average number of equity shares outstanding during the reporting period. In
computing the basic earnings per share, the shares or stock options granted to an ESOP trust are not included
in the shares outstanding till the employees have exercised their right to obtain shares or stock options, after
fulfilling the requisite vesting conditions. Till such time, shares or stock options so granted are considered as
dilutive potential equity shares for the purpose of calculating diluted earnings per share. The number of shares
used in computing diluted earnings per share comprises the weighted average number of shares considered for
deriving basic earnings per share, and also the weighted average number of equity shares, which could have
been issued on the conversion of all dilutive potential equity shares. In computing dilutive earnings per share,
only potential equity shares that are dilutive and that decrease profit per share are included.
241
Annexure V: Notes on Material Adjustments and Regroupings
The summary of results of restatement made in the audited consolidated financial statements for the respective years
and period from 1 April 2015 to 30 June 2015 its impact on the profit/ (loss) of the Group is as follows:
All figures in ` million
For the year ended 31 March
Particulars
Net profit after tax and minority
interest as per audited statement of
profit and loss
Material adjustments on account of
(Refer Annexure VA):
a) Accruals (Refer Annexure VA (a))
b) Provision for doubtful debts (Refer
Annexure VA (b))
c) Provision for bonus (Refer Annexure
VA (c))
Total impact of the adjustments
d) Tax for respective period
e) MAT credit adjusted to respective
period
f) Tax impact on adjustments
Total Adjustments
Net profit after tax, as restated
2011
2012
2013
2014
For period
from 1 April
2015 to 30
June 2015
2015
191.18
181.06
380.45
504.98
489.79
88.07
7.02
(2.43)
11.22
(8.73)
(23.40)
(16.07)
(1.25)
4.08
(2.75)
27.92
(26.15)
(3.50)
10.48
27.46
20.70
1.16
(20.10)
(10.53)
16.25
6.49
29.11
38.41
29.17
60.18
20.35
(80.60)
(69.65)
(70.20)
(30.10)
-
46.18
-
(69.33)
-
-
-
(5.28)
63.64
254.82
(9.45)
58.07
239.13
(9.47)
10.55
391.00
(8.16)
(68.41)
436.57
23.68
(116.17)
373.62
10.24
(19.86)
68.21
Annexure VA: Notes on adjustments to the restated consolidated summary statements and other disclosures
Material adjustments
a)
An accrual is recognized when the Group has a present obligation as a result of a past event, and there is a
probable outflow of economic benefits to settle the obligation. During the period the Group has reversed such
accruals which are no longer required pertaining to sales commission, advertisement, rent, other accruals, etc.
For the purpose of Statement of Profit and Loss as restated, these reversals of provision have been considered in
the period in which these provisions were initially recognised.
b) Provision for doubtful debts is made in the Statement of Profit and Loss in the period in which uncertainty as to
the ultimate collection of outstanding amount arises and is reversed in the period when such uncertainty ceases
or when dues are collected. For the purpose of Profit and Loss account as restated, these provisions and
reversals of provision have been considered in the period in which the revenue was actually billed to the
customer.
c)
Accruals for employee performance incentives are recognised based on estimation at the period end and any
excess provisions are reversed when the actual amount payable is crystallised. For the purpose of Statement of
Profit and Loss as restated, this reversal of provision for performance incentive has been considered in the
period for which the provision was initially recognised.
242
Tax impact of the adjustments
Tax impact (including deferred tax) on restatement adjustments to the financial statements have been adjusted in the
respective years. The current taxes for the years ended 31 March 2011, 2012, 2013, 2014, 2015 and period from 1
April 2015 to 30 June 2015 are on an estimated basis.
Regrouping
a)
Figures have been regrouped / recasted for the consistency of presentation.
b) Appropriate adjustments have been made in the restated statement of assets and liabilities, restated statement of
profit and loss and restated cash flow, wherever required, by regrouping the corresponding items of income,
expenses, assets, liabilities and cash flows in order to bring them in line with the groupings prepared in
accordance with Schedule III to the Companies Act, 2013 and the requirements of the Securities and Exchange
Board of India (Issue of Capital & Disclosure Requirements) Regulations, 2009 (as amended).
c)
The financial statements for the year ended 31 March 2011 were prepared under the old Schedule VI to the
Companies Act, 1956. Regroupings have been made in the financial information presented pertaining to this
year to comply with the requirements as stated above.
Annexure VB: Notes on adjustments to the restated consolidated summary statements and other disclosures
1.
Regrouping of Rs. 55.31 million for the Financial Year ended 31 March 2011, Rs. 153.45 million for the
Financial Year ended 31 March 2012 and Rs. 182.75 million for the Financial Year ended 31 March 2013 from
Long term provisions to short term provisions.
2.
Regrouping of Rs. 13.40 million for the Financial Year ended 31 March 2011 and Rs. 14.22 million for the
Financial Year ended 31 March 2012 from Other current assets to short term loans and advances.
3.
Regrouping of Rs. 3.95 million for the Financial Year ended 31 March 2011 and Rs. 3.72 million for the
Financial Year ended 31 March 2012 from Cash and bank balances to other non-current assets.
4.
Regrouping of Rs. 84.23 million for the Financial Year ended 31 March 2011, Rs. 113.69 million for the
Financial Year ended 31 March 2012, Rs. 27.64 million for the Financial Year ended 31 March 2013 and Rs.
33.12 million for the Financial Year ended 31 March 2014 from Short term provisions to other current
liabilities.
5.
Regrouping of Rs. 1.36 million for the Financial Year ended 31 March 2011 and Rs. 2.42 million for the
Financial Year ended 31 March 2012 from Other current liabilities (accrued salaries and benefits) to other
current liabilities (employee related benefits).
6.
Regrouping of Rs. 1.36 million for the Financial Year ended 31 March 2011 and Rs. 17.41 million for the
Financial Year ended 31 March 2012 from Other current liabilities (provision for expenses) to other current
liabilities (employee related benefits).
Regrouping of Rs. 46.98 million for the Financial Year ended 31 March 2011 from other current liabilities
(provision for expenses) to other current liabilities (withholding and other taxes payable) Rs. 7.84 million and
trade payables Rs. 39.14 million respectively.
7.
243
8.
Regrouping of Rs. 3.00 million for the Financial Year ended 31 March 2011 from salary and bonus – employee
benefits expenses to other expenses.
9.
Regrouping of Rs. 40.70 million for the Financial Year ended 31 March 2012 from other current liabilities to
trade payables.
10. Regrouping of Rs. 12.68 million for the Financial Year ended 31 March 2012 from Other expenses (travelling
and conveyance expenses) to employee benefits expenses.
11. Regroupings have been appropriately adjusted in the Restated Cash Flow Statement.
244
Annexure VI: Statement of Contingent Liabilities, as restated
As at 31 March
Particulars
Income tax matters
Guarantee issued
2011
2012
2013
2014
-
-
-
-
245
All figures in ` million
As at 30
June
2015
2015
135.00
140.75
Annexure VII: Current tax matters outstanding as at 30 June 2015
During the year ended 31 March 2012, the Company had received a draft assessment order in respect of the
A.Y.2008-09 containing addition on account of regular assessment (under MAT) of Rs.74.03 Million and addition
on account of transfer pricing of Rs.171.25 Million. During the year ended 31 March 2012, Company had filed an
appeal before First Appellate Authority i.e. Dispute Resolution Panel (‘DRP’). During the year ended 31 March
2013, Company received partial relief from First Appellate Authority i.e. DRP of Rs. 48.53 Million on account of
transfer pricing. Accordingly Department had passed final assessment order considering the direction given by DRP.
During the year ended 31 March 2013, Company had filed an appeal to Second Appellate Authority for balance
relief on account of regular assessment of Rs.74.03 Million and on account of transfer pricing additions of Rs.122.72
Million.
During the year ended 31 March 2013, the Company had received a draft assessment order in respect of the
A.Y.2009-10 containing addition on account of transfer pricing of Rs.218.51 Million. During the year ended 31
March 2013, Company had filed an appeal before First Appellate Authority i.e. Dispute Resolution Panel (‘DRP’).
During the year ended 31 March 2014, Company had received order from First Appellate Authority confirming the
addition made by Assessing Officer. Accordingly Department had passed final assessment order considering the
directions given by DRP. During the year ended 31 March 2014, the Company had filed an appeal to Second
Appellate Authority for entire relief on account of transfer pricing of Rs. 218.51 Million.
The Company has been professionally advised that these orders could be successfully contested before the higher
authorities subject to the availability of the necessary documentation to support the arm’s length price method
adopted by the Company. The Company, as a prudent corporate practice, based on the above events, has made a
provision for the aforesaid matters and will continue to contest the orders and pursue the judicial avenues available
to it.
Transfer Pricing
Management believes that the Company's international transactions, with related parties post 31 March 2014 (last
period up to which an Accountants' Report has been submitted as required under the Income tax Act, 1961) continue
to be at arm's length and that the transfer pricing legislation will not have any impact on these financial statements,
particularly on the amount of tax expense and that of provision for taxation.
246
Annexure VIII: Gratuity, as restated
The Group has a defined benefit gratuity plan. Every employee who has completed five years or more of service is
eligible for gratuity on completion of service/ on separation, 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 funded.
All figures in ` million
As at 30
June
2014
2015
2015
28.66
41.23
56.03
8.00
10.77
2.89
2.29
3.64
1.12
(4.16)
(6.63)
(1.98)
As at 31 March
Particulars
Liability at beginning of the period
Current Service Cost
Past Service Cost
Interest Cost on defined benefit obligation
Benefits Paid
Actuarial (gain) / loss on the obligations for the
period
Liability at end of the period
Fair value of the plan assets at the beginning of
the period
Expected return on plan assets
Actuarial gain/ (loss) on plan assets
Contributions by the employer
Benefits Paid
Fair value of the plan assets at the end of the
period
Amount recognised in Balance Sheet
Obligations as at period end
Less: Fair value of plan assets at the period end
Net liability
Particulars
Expenses recognised in Statement of
Profit and Loss
Current service cost
Past service cost
Interest cost on defined benefit obligation
Expected return on plan assets
Net actuarial (gain)/ loss for the period
Total expenses
Assumptions
Expected rate of return of plan assets
Discount rate
Salary escalation rate
2011
2012
2013
13.45
3.85
0.85
1.01
(1.81)
17.66
4.05
1.45
(2.67)
20.35
5.48
1.63
(2.64)
0.31
(0.14)
3.84
6.44
7.02
(0.37)
17.66
20.35
28.66
41.23
56.03
57.69
5.45
8.11
20.05
28.60
25.00
41.82
0.38
(0.14)
4.23
(1.81)
0.57
0.04
14.00
(2.67)
1.60
0.59
9.00
(2.64)
0.86
(0.30)
(4.16)
2.12
2.05
19.28
(6.63)
0.89
(0.95)
(1.98)
8.11
20.05
28.60
25.00
41.82
39.78
17.66
8.11
9.55
20.35
20.05
0.30
28.66
28.60
0.06
41.23
25.00
16.23
56.03
41.82
14.21
57.69
39.78
17.91
2011
(Amounts in ` millions, other than assumptions data)
As at 31 March
As at 30
2012
2013
2014
2015 June 2015
3.85
0.85
1.01
(0.38)
0.45
5.78
4.05
1.45
(0.57)
(0.18)
4.75
5.48
1.63
(1.60)
3.25
8.76
8.00
2.29
(0.86)
6.74
16.17
10.77
3.64
(2.12)
4.97
17.26
2.89
1.12
(0.89)
0.58
3.70
7.00%
7.50%
5.50%
7.00%
8.25%
5.50%
8.00%
8.00%
6.00%
8.00%
8.84%
8.00%
8.50%
8.00%
8.00%
8.50%
8.00%
7.25%
247
Annexure IX: Segment Reporting, as restated
Business segments: The Group’s activities involve predominantly providing software related services, which is
considered to be a single business segment since these are subject to similar risks and returns. Accordingly, software
services comprise the primary basis of segmental information as set out in these financial statements, which
therefore reflect the information required by Accounting Standard (AS 17) - Segment Reporting with respect to
primary segments. Secondary segmental reporting is identified on the basis of the geographical location of the
customers.
Geographic segments: The Group has identified India, South Africa, United States of America, United Kingdom,
Australia and Rest of the World as geographical segments for secondary segmental reporting. Geographical sales are
segregated based on the location of the customer who is invoiced or in relation to which the sale is otherwise
recognised. Assets other than trade receivables and cost and estimated earnings in excess of billings used in the
Group’s business have not been identified to any of the reportable segments, as these are used interchangeably
between segments.
As at 31 March
Particulars
Revenues
Total revenue
India
South Africa
United Kingdom
United States of America
Australia
Rest of the world
Segment Revenue
Segment assets
India
South Africa
United Kingdom
United States of America
Australia
Rest of the world
Total assets
2011
2012
2013
2014
All figures in ` million
As at 30
June
2015
2015
12.27
1,129.16
121.79
31.87
81.60
1,376.69
11.80
1,346.28
161.69
23.97
58.00
1,601.74
31.53
1,724.29
152.83
27.23
65.92
2,001.80
26.61
2,081.39
179.88
27.26
132.65
2,447.79
6.17
2,252.50
193.46
226.43
32.19
212.53
2,923.28
6.71
507.01
55.73
120.41
20.80
51.47
762.13
2.78
259.13
18.64
15.37
5.55
301.47
3.81
304.79
16.75
29.15
6.04
360.54
10.99
365.10
13.01
3.48
16.72
409.30
2.31
619.12
41.70
4.98
32.58
700.69
3.70
550.83
67.98
60.36
6.85
12.52
702.24
3.51
491.81
58.10
63.62
14.91
101.63
733.58
248
Annexure X: Statement of Non-Current Investments, as restated
Particulars
Non-current Investments
Long term investments - (Quoted) - at
cost less any other temporary diminution
Equity shares in MMIRS
Investment in equity instruments of
associate
Equity shares in Nico Technologies
Limited, Malawi (see Note 2 below)
Investment in equity instruments - Others
Equity shares in Nico Technologies
Limited, Malawi (see Note 3 below)
Total
* Since denominated in millions
All figures in ` million
As at 30
June 2015
2015
As at 31 March
2012
2013
2014
2011
4.84
4.84
4.84
4.84
4.84
4.84
-
0.00*
0.00*
0.00*
-
-
-
-
-
-
0.00*
0.00*
4.84
4.84
4.84
4.84
4.84
4.84
Note:
1.
As at 30 June 2015, the Company has remitted INR 8.38 Million to Nihilent Nigeria Limited towards Share
Application Money against which shares are pending to be allotted for a period exceeding six months from the
date of effecting remittance. As required by the Master Circular on Direct Investment by Residents in Joint
Venture (JV) / Wholly Owned Subsidiary (WOS) Abroad read with Foreign Exchange Management (Transfer
or Issue of Any Foreign Security) (Amendment) Regulations, 2004, an Indian party which has made direct
investment abroad is under an obligation to receive share certificates or any other document as an evidence of
investment in the foreign entity, where share certificates are not issued, to the satisfaction of the Reserve Bank
of India (“RBI”) within six months, or such further period as RBI may permit, from the date of effecting
remittance.The Company has submitted the ‘Certificate of Capital Importation’ (“CCI”) to the Authorized
Dealer as evidence of investment and is confident that it shall receive the share certificates in due course.
2.
During the year 2011-12 the Company acquired 25.1% equity shares of Nico Technologies Limited (“Nico”) for
USD 1. Considering the economic conditions of Malawi the Management is of the opinion that significant
foreign exchange repatriation restrictions exist as a result of which repatriation of fund from Nico is uncertain.
In such cases Accounting Standard 23 – Accounting for Investment in Associates in Consolidated Financial
Statements restricts recognition of investor’s share of net asset and of investee in the consolidated financial
statements till the uncertainty is resolved. Hence, interest of the Company in the equity of Nico has not been
recognized in the Consolidated Financial Statements.
3.
The nominated directors resigned from the Board of Directors of Nico with effect from 6 February 2015 and
accordingly the Group stopped participating in the financial and operating policy decisions of Nico.
Considering the relevant facts and the requirements of Accounting Standard 23 – Accounting for Investment in
Associates in Consolidated Financial Statements, the Management is of the opinion that it does not exercise
significant influence over Nico.
249
Annexure XI: Statement of Current Investments, as restated
Particulars
Current Investments
Non trade , quoted - at lower of cost and fair
value
Investment in mutual funds
Total
2011
80.55
80.55
250
As at 31 March
2012
2013
2014
All figures ` million
As at 30
June 2015
2015
309.48
309.48
262.34
262.34
292.18
292.18
451.35
451.35
278.05
278.05
Annexure XII: Statement of Trade Receivables, as restated
As at 31 March
Particulars
Unsecured, considered good
Debts outstanding for a period exceeding six
months from the date they became due for
payment
Other debts
Sub-total
Less: Restated provision for doubtful debts (net of
reversals)
Total
2011
2012
2013
2014
All figures ` million
As at 30
June
2015
2015
22.84
19.47
45.25
78.47
84.92
82.81
269.81
292.65
311.75
331.22
341.63
386.88
539.36
617.83
538.32
623.24
600.36
683.17
17.01
21.00
29.78
38.83
44.85
45.01
275.64
310.22
357.10
579.00
578.39
638.16
Note: For trade receivables from related parties - Refer annexure XXIV.
251
Annexure XIII: Statement of Fixed Assets, as restated
All figures in ` million
Tangible Assets
Particulars
Cost
Opening balance as at 1
April 2010
Additions
Disposals
Adjustments
Closing balance as at 31
March 2011
Opening balance as at 1
April 2011
Additions
Disposals
Effects of movement on
foreign exchange
Closing balance as at 31
March 2012
Opening balance as at 1
April 2012
Additions
Disposals
Effects of movement on
foreign exchange
Closing balance as at 31
March 2013
Opening balance as at 1
April 2013
Additions
Disposals
Effects of movement on
foreign exchange
Closing balance as at 31
March 2014
Opening balance as at 1
April 2014
Additions on account of
Leasehold
Improveme
nts
Plant and
equipments
Furniture
and fittings
7.24
6.76
21.60
0.00*
0.32
-
7.24
Intangible Assets
Non
compete
rights
Electrical
equipments
Office
equipments
6.94
11.82
8.33
77.53
140.22
37.56
-
37.56
0.54
(0.80)
0.06
1.36
-
0.05
0.00*
0.00*
0.31
(0.21)
0.02
7.07
(0.57)
0.03
9.65
(1.58)
0.11
5.20
0.03
-
5.20
0.03
7.08
21.40
8.30
11.87
8.45
84.06
148.40
42.79
-
42.79
7.24
7.08
21.40
8.30
11.87
8.45
84.06
148.40
42.79
-
42.79
0.02
-
2.91
(0.59)
0.28
-
0.47
(0.88)
0.42
(0.10)
0.20
-
4.16
(0.06)
8.46
(1.63)
11.35
-
-
11.35
-
-
-
-
-
-
-
0.17
0.17
(0.17)
-
(0.17)
7.26
9.40
21.68
7.89
12.19
8.65
88.33
155.40
53.97
-
53.97
7.26
9.40
21.68
7.89
12.19
8.65
88.33
155.40
53.97
-
53.97
0.40
-
0.03
(0.86)
1.12
(1.24)
3.90
(3.16)
1.20
(0.01)
0.88
(0.11)
13.94
(6.52)
21.47
(11.90)
12.67
-
-
12.67
-
(0.01)
-
(0.07)
-
-
(0.01)
0.16
0.07
(0.01)
-
(0.01)
7.65
8.57
21.49
8.63
13.38
9.41
95.91
165.04
66.63
-
66.63
7.65
8.57
21.49
8.63
13.38
9.41
95.91
165.04
66.63
-
66.63
3.72
-
1.73
(0.55)
6.95
(5.10)
-
2.10
(0.17)
2.67
(1.70)
43.48
(20.33)
60.65
(27.85)
21.80
(1.05)
-
21.80
(1.05)
(0.01)
0.01
(0.04)
-
-
(0.17)
(0.04)
(0.25)
0.34
-
0.34
11.36
9.76
23.30
8.63
15.31
10.21
119.02
197.59
87.72
-
87.72
11.36
9.76
23.30
8.63
15.31
10.21
119.02
197.59
87.72
-
87.72
0.95
-
8.74
-
-
9.96
0.67
20.32
1.08
-
1.08
Vehicles
252
Computers
Total
Software
Total
All figures in ` million
Tangible Assets
Particulars
acquistions
Additions
Disposals
Effects of movement on
foreign exchange
Closing balance as at 31
March 2015
Opening balance as at 1
April 2015
Additions
Disposals
Effects of movement on
foreign exchange
Closing balance as at 30
June 2015
Accumulated
Depreciation/
Amortisation
Opening balance as at 1
April 2010
Depreciation/ Amortisation
for the year
Disposals
Adjustments
Effects of movement in
foreign exchange
Closing balance as at 31
March 2011
Opening balance as at 1
April 2011
Depreciation/ Amortisation
for the year
Disposals
Effects of movement in
foreign exchange
Closing balance as at 31
March 2012
Opening balance as at 1
Leasehold
Improveme
nts
Plant and
equipments
Furniture
and fittings
0.07
-
1.46
(0.99)
2.57
(0.34)
(0.02)
(0.01)
12.36
Intangible Assets
Non
compete
rights
Electrical
equipments
Office
equipments
-
1.30
(0.01)
6.34
(1.65)
23.88
(3.94)
35.62
(6.93)
19.60
-
23.52
-
43.12
-
0.01
-
(0.01)
0.03
0.09
0.09
0.08
-
0.08
10.22
34.28
8.63
16.59
24.89
139.72
246.69
108.48
23.52
132.00
12.36
10.22
34.28
8.63
16.59
24.89
139.72
246.69
108.48
23.52
132.00
0.01
-
(0.15)
0.91
(0.03)
2.10
(1.25)
0.17
-
0.51
(0.11)
17.49
(1.41)
21.19
(2.95)
4.51
-
-
4.51
-
-
-
(0.01)
0.01
-
(0.01)
0.03
0.02
(1.00)
-
(1.00)
12.37
10.07
35.15
9.49
16.76
25.28
155.83
264.95
111.99
23.52
135.51
5.62
5.51
19.04
5.88
10.54
7.04
68.07
121.70
26.56
-
26.56
0.59
0.81
2.48
0.78
1.28
0.75
8.79
15.48
10.70
-
10.70
-
-
(0.80)
0.06
-
(0.00)
0.00
(0.13)
0.02
(0.54)
0.03
(1.47)
0.11
0.01
-
0.01
-
-
-
-
-
-
-
-
-
-
-
6.21
6.32
20.78
6.66
11.82
7.68
76.35
135.82
37.27
-
37.27
6.21
6.32
20.78
6.66
11.82
7.68
76.35
135.82
37.27
-
37.27
1.05
1.07
0.61
0.73
0.10
0.36
4.62
8.54
8.62
-
8.62
-
(0.57)
-
(0.88)
(0.01)
-
(0.04)
(1.50)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7.26
6.82
21.39
6.51
11.91
8.04
80.93
142.86
45.89
-
45.89
7.26
6.82
21.39
6.51
11.91
8.04
80.93
142.86
45.89
-
45.89
Vehicles
253
Computers
Total
Software
Total
All figures in ` million
Tangible Assets
Particulars
April 2012
Depreciation/ Amortisation
for the year
Disposals
Effects of movement in
foreign exchange
Closing balance as at 31
March 2013
Opening balance as at 1
April 2013
Depreciation/ Amortisation
for the year
Disposals
Effects of movement in
foreign exchange
Closing balance as at 31
March 2014
Opening balance as at 1
April 2014
Accumulated depreciation
on acquisitions
Depreciation/ Amortisation
for the year
Disposals
Effects of movement in
foreign exchange
Closing balance as at 31
March 2015
Opening balance as at 1
April 2015
Depreciation/ Amortisation
for the period
Disposals
Effects of movement in
foreign exchange
Closing balance as at 30
June 2015
Carrying amounts
Leasehold
Improveme
nts
Plant and
equipments
Furniture
and fittings
0.07
0.90
0.39
-
(0.67)
(0.01)
Intangible Assets
Non
compete
rights
Electrical
equipments
Office
equipments
0.92
0.25
0.75
6.25
9.53
14.78
-
14.78
(1.24)
(3.16)
(0.01)
(0.11)
(6.52)
(11.71)
-
-
-
-
(0.06)
-
-
(0.02)
0.14
0.05
(0.01)
-
(0.01)
7.32
7.05
20.48
4.27
12.15
8.66
80.80
140.73
60.66
-
60.66
7.32
7.05
20.48
4.27
12.15
8.66
80.80
140.73
60.66
-
60.66
0.29
0.89
0.72
1.15
0.55
0.38
15.30
19.28
13.63
-
13.63
-
(0.55)
(4.72)
-
(0.17)
(1.68)
(20.33)
(27.45)
(1.05)
-
(1.05)
-
-
(0.05)
-
-
0.02
0.13
0.10
-
-
-
7.61
7.39
16.43
5.42
12.53
7.38
75.90
132.66
73.24
-
73.24
7.61
7.39
16.43
5.42
12.53
7.38
75.90
132.66
73.24
-
73.24
0.10
-
2.39
-
-
5.66
0.20
8.35
0.49
-
0.49
0.70
1.26
2.64
1.15
1.20
2.04
26.88
35.87
18.80
1.68
20.48
-
(0.94)
(0.34)
-
(0.01)
(1.64)
(3.88)
(6.81)
-
-
-
0.01
0.01
0.10
-
-
0.15
(0.18)
0.09
(0.05)
-
(0.05)
8.42
7.72
21.22
6.57
13.72
13.59
98.92
170.16
92.48
1.68
94.16
8.42
7.72
21.22
6.57
13.72
13.59
98.92
170.16
92.48
1.68
94.16
0.39
0.25
0.90
0.35
0.30
0.93
6.86
9.98
5.59
0.86
6.45
-
(0.13)
(0.03)
(1.25)
-
(0.11)
(1.41)
(2.93)
-
-
-
-
0.01
0.06
(0.01)
(0.01)
0.11
0.27
0.43
0.06
-
0.06
8.81
7.85
22.15
5.66
14.01
14.52
104.64
177.64
98.13
2.54
100.67
Vehicles
254
Computers
Total
Software
Total
All figures in ` million
Tangible Assets
Particulars
As at 31 March 2011
As at 31 March 2012
As at 31 March 2013
As at 31 March 2014
As at 31 March 2015
As at 30 June 2015
Leasehold
Improveme
nts
Plant and
equipments
Furniture
and fittings
1.03
0.33
3.75
3.94
3.56
0.76
2.58
1.52
2.37
2.50
2.22
0.62
0.29
1.01
6.87
13.06
13.00
Vehicles
1.64
1.38
4.36
3.21
2.06
3.83
Electrical
equipments
Office
equipments
0.05
0.28
1.23
2.78
2.87
2.75
0.77
0.61
0.75
2.83
11.30
10.76
255
Computers
7.71
7.40
15.11
43.12
40.80
51.19
Total
12.58
12.54
24.31
64.93
76.53
87.31
Software
5.52
8.08
5.97
14.48
16.00
13.86
Intangible Assets
Non
compete
rights
21.84
20.98
Total
5.52
8.08
5.97
14.48
37.84
34.84
Annexure XIV: Statement of Capital Work In Progress, as restated
Particulars
Capital work -in -progress
Capital work -in -progress
Total
2011
19.33
19.33
2012
16.82
16.82
256
All figures in ` million
As at 30
June 2015
2015
As at 31 March
2013
2014
16.85
16.85
-
-
-
Annexure XV: Statement of Long-Term and Short-Term Loans and Advances and Other Non-Current and
Current assets, as restated
All figures in ` million
As at 31 March
As at 30
Particulars
June
2011
2012
2013
2014
2015
2015
Long term loans and advances , (Unsecured,
considered good)
Advances to related parties
0.01
0.01
0.01
Advance income tax (net)
23.12 20.49 54.15
59.66
82.34
97.64
Service tax and vat balance receivable
9.07 10.39 12.83
19.18
54.93
62.07
Capital advances
- 11.37
5.19
2.47
4.24
3.97
Security Deposits - to related parties
0.07
0.07
0.07
0.06
Security Deposits - to others
18.24 19.02 17.31
21.90
22.88
23.00
50.44 61.28 89.56 103.28 164.46
186.74
Other Loans and advances, (unsecured, considered
doubtful)
Service Tax balance receivable
2.29
2.29
Less: Provision for doubtful receivable
2.29
2.29
Total
50.44 61.28 89.56 103.28 164.46
186.74
Other non-current assets
Margin deposits and other deposits
3.95
3.72
3.92
0.34
0.34
0.07
Bank deposits (due to mature after 12 months)
0.20
Total
3.95
3.72
4.12
0.34
0.34
0.07
Short term loans and advances, (unsecured,
considered good)
Prepaid expenses
8.94
6.26 11.40
15.34
34.46
37.42
Advances to employees
3.97
3.81
9.60
12.15
15.94
19.97
Advances to suppliers
0.10
1.73
0.62
1.46
MAT credit entitilement
74.60 74.60
Service tax balance receivable
5.84
7.70 13.56
15.14
93.35 92.37 34.66
44.36
51.02
58.85
Other Loans and advances, (unsecured, considered
doubtful)
Service Tax balance receivable
2.29
2.29
2.29
2.29
Less: Provision for doubtful receivable
2.29
2.29
2.29
2.29
Total
93.35 92.37 34.66
44.36
51.02
58.85
Other current assets
Cost and estimated earnings in excess of billings
25.83 50.32 52.20 121.69 123.85
95.42
Others
1.63
1.74
0.29
0.49
1.63
6.18
Total
27.46 52.06 52.49 122.18 125.48
101.60
Note: For balances with related parties - Refer Annexure XXIV.
257
Annexure XVI: Statement of Current and Non - Current Liabilities and Long-Term and Short-Term
Provisions, as restated
All figures in ` million
Particulars
Other long term liabilities - Employee related liabilites
Non-current liabilities - Long term provisions
Compensated absences
Total
Current liabilities - Trade payables
Other current liabilities
Advances received from customers
Billings in excess of revenue
Withholding taxes and other statutory liabilities
Employee related liabilities
Current maturities of long term borrowings
Total
Short-term provisions
Provision for employee benefits:
Gratuity
Compensated absences
Provision for income tax (net)
Provision for fringe benefit tax (net)
Total
2011
-
As at 31 March
2012
2013
2014
-
2015
22.23
10.03
10.03
34.20
12.80
12.80
34.43
17.76
17.76
56.31
25.32
25.32
75.64
31.36
31.36
63.54
30.41
30.41
55.90
1.47
15.64
10.86
70.83
98.80
1.07
29.01
2.17
81.26
113.51
1.36
39.73
12.84
88.44
142.37
1.07
105.37
65.98
95.27
267.69
1.07
100.94
42.46
135.37
47.10
326.94
9.81
65.91
55.63
86.44
47.87
265.66
9.55
3.39
15.20
0.91
29.05
0.30
4.55
63.36
0.91
69.12
0.06
4.23
51.05
0.91
56.25
16.23
3.91
51.74
0.91
72.79
14.21
4.28
50.73
0.91
70.13
17.91
6.80
59.49
0.91
85.11
Note: For balances with related parties - Refer Annexure XXIV.
258
As at 30 June 2015
22.23
Annexure XVII: Statement of long term borrowings, as restated
Particulars
Long term borrowing
Term loan from banks
HSBC Bank (Mauritius) Limited
Total
2011
2012
-
-
As at 31 March
2013
2014
-
259
-
All figures in ` million
As at 30
June
2015
2015
78.49
78.49
79.79
79.79
Annexure XVIII: Statement of Cash and Bank balances, as restated
All figures in ` million
Particulars
Cash and cash equivalents
Cash on hand
Balances with banks:
on current account
deposits with original maturity of less than three months
Other Bank balances
Deposits with original maturity of more than
three months but less than twelve months
Total
2011
2012
2013
As at 31 March
2014
2015
0.34
0.05
0.08
0.05
0.11
328.80
-
323.38
20.00
534.47
30.00
514.95
20.86
659.23
-
587.01
-
30.00
20.00
1.27
3.84
148.62
148.61
359.14
363.43
565.82
539.70
807.96
735.73
As at 30
June 2015
0.11
Notes:
1) Fixed deposits with a original maturity period of less than 3 months are classified as "Cash and cash equivalents"
and fixed deposits with a original maturity period of greater than 3 months, but with a maturity date of less than 12
months from balance sheet date are classified as "Other bank balances".
2) Deposits aggregating to INR 140.00 Million as on 30 June 2015 (31 March 2015: INR 135.00 Million) are under
lien with bank for a bank guarantee issued by bank to the Group.
260
Annexure XIX: Statement of Share Capital, as restated
Particulars
Equity Share capital
Authorized equity share capital
Issued, subscribed and fully paid up
Less: Loan recoverable from ESOP trust
All figures in ` million
As at 30
June 2015
2015
2011
As at 31 March
2012
2013
2014
200.00
200.00
200.00
200.00
200.00
200.00
199.66
(16.69)
182.97
199.66
(16.29)
183.37
199.66
(16.29)
183.37
199.66
199.66
199.66
199.66
199.66
199.66
261
Annexure XX: Statement of Reserves and Surplus, as restated
As at 31 March
Particulars
Cumulative translation reserve
At the commencement of the period
Add: Current period transfer
Closing balance
General Reserve
At the commencement of the period
Amount transferred from surplus
Closing balance
Securities premium account
Surplus (Profit and Loss balance)
At the commencement of the period
Profit for the period
Transfer to general reserve
Interim dividend
Tax on interim dividend
Closing balance
2011
2012
2013
2014
All figures in ` million
As at 30
June
2015
2015
26.37
26.37
26.37
(5.06)
21.31
21.31
(54.06)
(32.75)
(32.75)
1.08
(31.67)
(31.67)
(12.11)
(43.78)
(43.78)
18.03
(25.75)
96.17
96.17
37.71
37.71
96.17
37.71
52.45
90.16
96.17
90.16
90.16
96.17
90.16
90.16
96.17
214.88
254.82
469.70
469.70
592.24
469.70
239.13
708.83
708.83
826.31
708.83
391.00
1,099.83
(37.71)
(149.75)
(24.29)
888.08
989.21
888.08
436.57
1,324.65
(52.45)
(119.79)
(20.36)
1,132.05
1,286.71
1,132.05
373.62
1,505.67
(119.79)
(20.36)
1,365.52
1,508.07
1,365.52
68.21
1,433.73
1,433.73
1,594.31
262
Annexure XXI: Statement of Dividend Paid
(Amounts in ` million, other than share related data)
Particulars
Number of fully paid equity shares
Equity share capital
Face value (Rs. per share)
Rate of dividend %
Amount of dividend (Rs. per share)
Amount of dividend (excluding Tax
on dividend)
2011
19,965,800
199.66
10.00
-
2012
19,965,800
199.66
10.00
-
-
-
As at 31 March
2013
2014
19,965,800
19,965,800
199.66
199.66
10.00
10.00
7.50%
6.00%
7.50
6.00
Note: For balances with related parties - Refer Annexure XXIV.
263
149.75
119.79
2015
19,965,800
199.66
10.00
6.00%
6.00
As at 30
June 2015
19,965,800
199.66
10.00
-
119.79
-
Annexure XXII: Statement of Revenue from Operations, as restated
For the year ended 31 March
Particulars
2011
2012
2013
Sale of services
1,376.69
1,601.74
2,001.80
Total
1,376.69
1,601.74
2,001.80
Note: For transactions with related parties - Refer Annexure XXIV.
264
2014
2,447.79
2,447.79
All figures in ` million
For the period
from 1 April
2015 to 30 June
2015
2015
2,923.28
762.13
2,923.28
762.13
Annexure XXIII: Statement of Employee Benefits, as restated
For the year ended 31 March
Particulars
2011
2012
2013
Salaries and bonus
689.30
853.30
977.05
Contribution to provident and other
25.11
25.69
32.80
funds
Staff Welfare
3.86
3.00
4.00
Total
718.27
881.99 1,013.85
Note: For transactions with related parties - Refer Annexure XXIV.
265
2014
1,272.20
All figures in ` million
For the
period from
1 April 2015
2015
to 30 June
2015
1,665.15
479.36
42.80
57.83
15.88
5.83
1,320.83
8.49
1,731.47
2.04
497.28
Annexure XXIV: Statement of Related Party Transactions, as restated
Particulars
Holding Company
Year ended
31 March
2011
Hatch
Investments
(Mauritius)
Limited
Year ended
31 March
2013
Hatch
Investments
(Mauritius)
Limited
Nico
Technologies
Limited
Year ended
31 March
2014
Hatch
Investments
(Mauritius)
Limited
Nico
Technologies
Limited
Mr.L.C.Singh
Year ended
31 March
2012
Hatch
Investments
(Mauritius)
Limited
Nico
Technologies
Limited (from
14 December
2011)
Mr.L.C.Singh
Mr.L.C.Singh
Mr.Minoo
Dastur
Ms.Swati
Singh
Dastur
Dadhich
Kalambi
*
Mr.Minoo
Dastur
Ms.Swati
Singh
Dastur
Dadhich
Kalambi
*
Associate
-
Key management
personnel, their
relatives
and
enterprises over
which any key
managerial
personnel or their
relative
has
significant
influence, where
transactions exist
&
&
#
#
*
*
Nihilent
Employee
Welfare Trust
Nihilent
Technologies
Private
Limited
Managers
Superannuatio
n Scheme
Nihilent
Technologies
Private
Limited
Employees'
Group
Gratuity Cum
Life Assurance
Nihilent
Employee
Welfare Trust
Nihilent
Technologies
Private
Limited
Managers
Superannuatio
n Scheme
Nihilent
Technologies
Private
Limited
Employees'
Group
Gratuity Cum
Life Assurance
Three months
period ended
30 June 2015
Hatch
Investments
(Mauritius)
Limited
#
Mr.L.C.Singh
Year ended
31 March
2015
Hatch
Investments
(Mauritius)
Limited
Nico
Technologies
Limited (upto
6
February
2015)
Mr.L.C.Singh
Mr.Minoo
Dastur
Ms.Swati
Singh
Dastur
Dadhich
&
Kalambi
Ms.Nimisha
Singh
#
Mr.Minoo
Dastur
Ms.Swati
Singh
*
Mr.Minoo
Dastur
Ms.Swati
Singh
*
Mr.Minoo
Dastur
Ms.Swati
Singh
*
Ms.Nimisha
Singh
#
Ms.Nimisha
Singh
Mr.
Rahul
Bhandari
Vastu
IT
Private
Limited
Nihilent
Employee
Welfare Trust
Nihilent
Technologies
Private
Limited
Managers
Superannuatio
n Scheme
Nihilent
Technologies
Private
Limited
Employees'
Group
Gratuity Cum
Life Assurance
Vastu
Private
Limited
*
Ms.Nimisha
Singh
Mr.
Rahul
Bhandari
(from 1 April
2014)
Vastu
IT
Private
Limited
*
Nihilent
Technologies
Private
Limited
Managers
Superannuatio
n Scheme
Nihilent
Technologies
Private
Limited
Employees'
Group
Gratuity Cum
Life Assurance
Nihilent
Technologies
Private
Limited
Managers
Superannuatio
n Scheme
*
266
IT
Nihilent
Technologies
Private
Limited
Managers
Superannuatio
n Scheme
*
Mr.L.C.Singh
*
*
Particulars
Year ended
31 March
2011
Scheme
Year ended
31 March
2012
Scheme
Year ended
31 March
2013
Scheme
* No transactions during this period.
# Not a related party.
267
Year ended
31 March
2014
Year ended
31 March
2015
Scheme
Three months
period ended
30 June 2015
Annexure XXIV: Statement of transactions with related parties (in respect of parties above), as restated
All figures in ` million
For the year ended 31 March
For the
period from 1
Related party
Nature of Transactions
April 2015 to
2011
2012
2013
2014
2015
30 June 2015
Reimbursement of
1.60
1.91
2.21
2.40
2.40
professional charges
Hatch Investments
(Mauritius) Limited
Dividend paid (net of
86.77
68.77
68.77
dividend distribution tax)
Professional charges paid
1.51
Nico Technologies
Software and consultancy
Limited
2.07
6.05
5.77
services rendered
Managerial Remuneration
10.96
12.41
13.97
17.28
18.56
5.11
Dividend paid (net of
12.69
10.06
10.06
Mr. L.C.Singh
dividend distribution tax)
Guest house rent
0.13
0.16
0.15
0.18
0.20
0.05
Managerial Remuneration
8.27
8.68
9.07
10.22
12.82
3.61
Mr. Minoo Dastur
Dividend paid (net of
1.33
1.12
1.12
dividend distribution tax)
Salary to relative of
0.55
4.28
4.28
4.00
Ms. Swati Singh
director
Salary
#
#
#
#
2.46
0.76
Mr. Rahul Bhandari
Dividend paid (net of
#
#
#
#
0.02
dividend distribution tax)
Professional fees paid to
Dastur Dadhich &
0.08
0.06
relative of director
Kalambi
Dividend paid (net of
Vastu IT Private
8.78
7.03
7.03
dividend distribution tax)
Limited
Nihilent Technologies
Private Limited Managers Superannuation
3.15
3.45
4.02
4.83
5.97
1.04
Managers
Scheme – Contribution
Superannuation
Scheme
Nihilent Technologies
Employees Group Gratuity
Private Limited Cum Life Assurance
4.23
14.00
9.00
19.28
Employees' Group
Scheme – Contribution
Gratuity Cum Life
Assurance Scheme
Rent paid
0.81
0.79
0.81
0.20
Ms. Nimisha Singh
# Not a related party.
Annexure XXIV: Statement of outstanding balances with related parties, as restated
All figures in ` million
Nature of amount
Related party
Trade Receivables
Loans and Advances and
other receivables
Employees Group Gratuity
Cum
Life
Assurance
Scheme – receivable from
trust
Nico Technologies Limited
Employee Welfare Trust
Ms. Nimisha Singh
Nihilent
Technologies
Private limited
2011
16.69
0.01
268
As at 31 March
2013
2014
16.29
16.29
0.07
0.07
2012
0.01
0.01
-
2015
0.63
0.07
As at 30
June 2015
#
0.06
-
-
Annexure XXV: Capitalisation Statement, as per the restated financial information
All figures in ` million
Pre- issue as at 30
June 2015
127.66
Particulars
Total debt (A)
Shareholders funds
Share capital
Reserves and surplus
Total shareholders funds (B)
Total debt/ shareholders funds (A/B)
Post Issue
199.66
1,594.31
1,793.97
0.07
Note:
1. The figures disclosed above are based on the restated financial information of the Group.
2. Post issue details have not been provided as the issue price of the share is not known at the date of the report.
269
[●]
[●]
[●]
[●]
-
Annexure XXVI: Statement of Accounting Ratios, as per the restated financial information
(Amounts in ` million, other than share related data)
Particulars
Net worth (A)
Net profit after tax and minority
interest (B)
Weighted average number of
equity shares outstanding during
the period
For basic earnings per share (C)
(Nos.)
For diluted earnings per share (D)
(Nos.)
Earnings per share (annualised)
Basic earnings per share (Rs) (E=
B/C)
Diluted earnings per share (Rs) (F
= B/D)
Return on net worth (%) (G =
B/A) (annualised)
Number of shares outstanding at
the end of the period (H)
Net assets value per share of
Rs.10 each
(I = A/H)
Face value per share (Rs)
2011
775.21
As at 31 March
2012
2013
1,009.68
1,172.58
2014
1,486.37
2015
1,707.73
As at 30
June 2015
1,793.97
254.82
239.13
391.00
436.57
373.62
68.21
18,120,209
18,211,739
18,294,173
18,432,156
18,528,763
18,580,749
18,792,320
18,736,616
18,699,701
18,664,548
18,646,166
18,646,736
14.06
13.13
21.37
23.69
20.16
14.68
13.56
12.76
20.91
23.39
20.04
14.63
32.87%
23.68%
33.35%
29.37%
21.88%
15.21%
19,965,800
19,965,800
19,965,800
19,965,800
19,965,800
19,965,800
38.83
50.57
58.73
74.45
85.53
89.85
Rs.10
Rs.10
Rs.10
Rs.10
Rs.10
Rs.10
Notes:
1.
The above ratios are calculated as under:
a)
Earnings per share = Net profit after tax and minority interest / weighted average number of shares
outstanding during the period.
b) Return on net worth (%) = Net profit after tax and minority interest / net worth as at the end of period
c)
Net asset value (Rs) = Net worth / number of equity shares as at the end of period
d) Net worth, as restated is = Equity share capital + Reserves and surplus, as restated [including Cumulative
translation reserve, General Reserve, Securities premium account and Surplus in statement of profit and
loss].
2.
The figures disclosed above are based on the consolidated restated financial information of Nihilent
Technologies Limited ("the Group
3.
Earning per shares (EPS) calculation is in accordance with Accounting Standard (AS 20) - Earnings per share
prescribed by the Companies (Accounting Standards) Rules, 2006.
270
Annexure XXVII: Statement of Other Expenses, as restated
All figures in ` million
For the year ended 31 March
Particulars
Rent
Advertisement and publicity
Payment to auditors
Cost of professional subcontracting
Business promotion
Communication
Electricity expenses
Net loss on foreign currency transactions and
translations
Insurance
Legal and professional expenses
Membership and subscription
Rates and taxes
Repairs and maintenance
Staff recruitment
Staff training
Provision for doubtful debts
Sales commission
Vehicle expenses
Travelling and conveyance expense
Miscellaneous expenses
Loss on sale of asset (net)
Total
2011
2012
2013
2014
2015
61.31
3.32
1.49
3.35
13.17
12.65
64.38
5.84
1.65
7.30
15.76
14.51
70.90
23.22
3.35
1.17
15.64
17.42
72.26
4.50
2.68
10.83
17.80
19.64
82.17
13.68
2.52
23.58
9.68
20.92
21.07
For period from 1
April 2015 to 30
June 2015
21.76
4.50
1.91
8.53
2.86
5.91
4.70
25.15
-
28.92
17.58
69.32
13.74
9.12
38.77
3.26
2.76
10.96
7.42
3.97
3.05
21.09
10.43
149.23
7.75
388.25
12.29
46.20
4.40
4.52
13.52
4.26
3.70
3.99
22.89
13.39
130.88
8.08
377.56
11.09
68.98
4.68
6.11
14.86
5.49
5.06
8.78
27.14
14.23
99.36
8.73
435.13
10.99
92.88
8.93
8.48
16.99
9.76
5.72
9.05
33.17
14.28
108.95
15.65
0.37
480.51
16.56
67.10
9.74
7.05
20.42
14.89
6.78
6.02
23.80
20.19
142.57
15.90
0.01
593.97
5.12
12.64
3.26
6.54
5.66
5.67
1.24
0.16
3.58
3.12
47.24
8.98
167.12
Note: For transactions with related parties - Refer Annexure XXIV.
271
Annexure XXVIII: Statement of Finance Costs, as restated
For the year ended 31 March
Particulars
Interest expense on borrowings
2011
2012
2013
2014
-
-
-
-
272
All figures in ` million
For period
from 1 April
2015 to 30 June
2015
2015
1.76
1.02
1.76
1.02
Annexure XXIX: Statement of Employee Stock Options, as restated
As at 30 June 2015
During the three months period ended 30 June 2015, the Group had one Share Based Option Arrangement which
had options outstanding, as described below:
Type of Arrangement
Date of Grant
Number of shares/ options granted
Contractual Life (including vesting period and
exercise period)
Employee Stock Option Scheme - 2010
21 January 2010
474,600
7 years
Vesting Period Starts from One year from the offer date and lasts
till five years of offer date with 20% vesting every year.
Equity based
Vesting conditions
Method of Settlement
Particulars
Options outstanding at the beginning of the
period
Options granted during the period
Options forfeited during the period
Options previously considered lapsed
reinstated
Exercised during the period
Expired during the period
Options outstanding at the end of the period
Exercisable at end of the period
Employee Stock Option Scheme - 2010
66,440
1,600
64,840
64,840
273
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion of our financial condition and results of our operations should be read in conjunction with
our Restated Consolidated Financial Statements prepared in accordance with the Companies Act, Indian GAAP
and the SEBI ICDR Regulations, including the schedules, annexures and notes thereto and the reports thereon,
included in the section “Financial Statements” beginning on page 179 of this Draft Red Herring Prospectus.
References to the financial statements as at and for the three months period ended June 30, 2015 and for the
Fiscal Years ended March 31, 2015, 2014, 2013, 2012 and 2011 are to the Restated Consolidated Financial
Statements.
We prepare our standalone and consolidated financial statements in accordance with Indian GAAP, which differs in
some respects from IFRS and U.S. GAAP. Accordingly, the degree to which the Indian GAAP financial statements
included in this section 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 this Draft Red Herring Prospectus should
accordingly be limited.
Some of the information contained in the following discussion, including information with respect to our plans and
strategies, contain forward-looking statements that involve risks and uncertainties. You should read the section
“Forward Looking Statements” on page 15 for a discussion of the risks and uncertainties related to those
statements and also the section “Risk Factors” on page 16 for a discussion of certain factors that may affect our
business, results of operations or financial condition.
In this section, unless the context otherwise requires, a reference to “our Company”, “we”, “us” or “our” is a
reference to our Company, its Subsidiaries and other entities which are consolidated in the financial statements of
our Company.
OVERVIEW
We are a global business consulting and IT services solutions integration company. Our mission is to deliver
organizational change systemically for our clients. As on November 30, 2015, we had more than 1,500 employees
across 18 offices located in India, South Africa, Nigeria, Tanzania, United States, United Kingdom, Ireland and
Australia. Our Company was awarded the Excellence Award from the Institute of Economic Studies in 2015, the
Red Herring Top 100 award for Asia in 2011 and was also a finalist for the Red Herring Top 100 award globally in
2011. Our Company has also been selected as one of India’s top emerging companies in the India Emerging 20
Programme for fiscal 2015-16.
Our customer engagements comprise holistic analysis of problems which span across people, process, technology,
as well as learning and innovation. Our service offerings include:
(a) Enterprise transformation and change management that covers several aspects of businesses including
analyzing the changing customer demographics, defining and executing change strategy around people, process
and technology;
(b) Digital transformation services through which we help our clients formulate and execute their digital business
strategy by providing services on digital channels using analytics, statistical modelling, machine learning,
Natural Language Processing (“NLP”) and social marketing tools and techniques; and
(c) Enterprise IT services wherein we develop applications across wide range of hardware and software platforms,
develop solutions to integrate various applications across platforms, provide migration, re-engineering and
software maintenance services.
Our Company was incorporated on May 29, 2000 as a private limited company and was converted into a public
limited company on September 10, 2015. Nedbank Africa Investment Limited through a special purpose vehicle
274
Hatch Investments (Mauritius) Limited (“Hatch”) invested ` 300 million in our Company. For details of investment
made by Hatch, please see section titled “Capital Structure” on page 63. Subsequently, pursuant to a change in the
investment strategy of the Nedcor Group, Dimension Data Protocol B.V. (“DD Protocol”) and Adcorp Professional
Services Limited (“Adcorp Professional”) took over Hatch in 2002 and 2006 respectively and each holds 50
percent of the share capital of Hatch.
The current promoters of the Company are L.C. Singh, Hatch, DD Protocol and Adcorp Professional. Hatch is an
investment holding company which currently holds 69.16% of the total paid up equity share capital of our
Company. Adcorp Professional Services Limited (previously named Paracon Holdings Limited) is a company
offering highly specialized and diverse information and communication technology resourcing and solutions and is
currently a wholly-owned subsidiary of Adcorp Holdings Limited. Dimension Data Protocol BV has been
incorporated in the Netherlands and is a wholly owned subsidiary of Dimension Data Holdings Nederland BV
which is ultimately owned by Dimension Data Holdings Plc. Dimension Data Holdings Plc also provides ICT
solutions for businesses worldwide.
Over the years we have helped over 300 clients across in more than thirty countries and deployed solutions across
business functions. We have developed proprietary frameworks and methodologies in-house, based on competencies
gained on assignments and our understanding of businesses, to aid our service offerings. These include tools such as
MC3 TM a patented tool which helps us provide our change management solution, 14Signals a tool which is used for
evaluating perception, experience and aspirations of a customer, SightN2 a framework for digital marketing and
LAMAT through which we provide a customized dashboard to monitor performance levels against target
projections, among others.
Since our Company focused on South Africa, we still derive a majority of our revenues from South Africa where we
have long standing relations with corporate clients. As a part of our global strategy, we are expanding our operations
in other geographies such as United States, United Kingdom, Australia, Ireland, India, Nigeria and Tanzania.
Towards this, we acquired GNet Group LLC a business intelligence and analytics company based out of
Minneapolis, USA through our wholly owned subsidiary Nihilent Technologies Inc, and completed its integration
into our Company. In September 2015, we acquired 51 percent shareholding of Intellect Bizware Services Private
Limited (“Intellect”), a company based in Mumbai specializing in ERP and enterprise innovations based on SAP
and HANA to develop and strengthen our presence in the ERP space. Pursuant to a share purchase and shareholders
agreement dated September 1, 2015, our Company has an irrevocable unconditional right and option to acquire the
balance 49 percent of the shareholding of Intellect. For further details please see section titled “History and Certain
Corporate Matters” on page 139. These acquisitions complement our existing service offerings and help us provide a
wider set of solutions to our clients.
The key industries to which we provide our services include BFSI, media and entertainment, mobility and
telecommunications, life sciences and healthcare, manufacturing, retail and consumer products. We have also been
engaged by the government and public sector companies in several countries. We service our clients globally
through our branch offices located in South Africa, Ireland and United Kingdom and our subsidiaries located in
India, Nigeria, Tanzania, Unites States and Australia.
SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS
The business of our Company is subject to various risks and uncertainties, including those discussed in the section
titled “Risk Factors”.
Our results of operations have been influenced and will continue to be influenced by several factors, including the
following:
Revenues
We derive our revenues principally from consultancy and IT enabled services. Further, South Africa is our largest
market and customers located in South Africa contributed 77.05% and 66.53% of our total revenue during Fiscal
2015 and the three month period ended June 30, 2015, respectively. Our revenues are affected by economic
conditions and the levels of business activity in the industries we serve, as well as by the pace of technological
275
change and the type and level of IT spending by our clients. Our revenues also depend on our ability to secure
contracts for new engagements and to deliver services and products that meet the changing IT needs of our clients.
Our revenues are generated primarily on time-and-material basis or fixed-price or fixed-time frame basis. Revenues
from software services on fixed-price and fixed-timeframe contracts are recognized as per the percentage-ofcompletion method. On time-and-material contracts, revenue is recognized as the related services that are rendered.
When bidding for fixed-price and fixed-timeframe projects, we endeavour to accurately estimate the costs and
timing of completing the project based on the processes we plan to use, the professionals we plan to deploy to the
project and past project experiences. We bear the risk of cost and time overruns as a result of any unforeseen costs
or delays associated with the performance of these projects, including delays caused by factors outside our control.
We have experienced significant growth in the past few years. We measure key indicators of our business, such as
revenue by services and our mix of fixed price, fixed time and time and materials contracts.
Product Development
The IT consultancy and services market that we operate in is highly competitive characterised by rapid changes in
technology, user requirements, industry standards and frequent introductions and improvements of our services. As a
result, our revenue growth has been steered by our efforts to design and develop new solutions with the latest
technology that can respond to our clients specific needs. We are also required to innovate and customize our
solutions to meet client requirements and provide updates to our existing services. We have also developed
frameworks and methodologies in-house. These include tools such as MC3 TM, 14Signals and LAMAT.
We expect that our ability to anticipate technological advances, retain and recruit qualified and talented staff and
develop innovative solutions for our users to meet their requirements in a timely and cost-effective manner will have
a significant effect on our results of operations.
Competition and Pricing
Our business is highly competitive, and our success is dependent upon our ability to compete against other software
developers, including some that have greater resources than we have. While we expect these competitive pressures
to continue, we believe that our client base and our success in attracting and retaining highly skilled employees will
enable us to compete effectively in our industry.
Competitive pressures could also affect the pricing of our solutions. Greater competition for particular solutions
could have a negative impact on pricing. We will continue to seek to distinguish our offerings by providing quality
solutions at competitive prices.
Employee Benefits Expense
Employee benefits expense constitutes a substantial component of our costs and is an important factor in
determining our profitability. Our employee headcount has grown with the expansion of our business. Employee
benefits expense for the three month period ended June 30, 2015 and for Fiscal Years 2015, 2014 and 2013, was `
497.28 million, ` 1,731.47 million, ` 1,320.83 million and ` 1,013.85 million, respectively, and our employee
headcount figures as on June 30, 2015 and March 31, 2015, 2014 and 2013 were 1,404, 1,348, 1,132 and 934,
respectively.
We expect that our employee benefits expense will continue to increase over the coming years due to continued
increase in salaries and benefits as well as headcount growth.
Dependence on the growth of the South African market
We have historically derived, and believe that we will continue to derive, a significant portion of our revenues from
clients primarily located in South Africa. For the three month period ended June 30, 2015 and for Fiscal 2015, Fiscal
2014 and Fiscal 2013, approximately 66.53%, 77.05%, 85.03% and 86.14% respectively, of our total revenues were
derived from South Africa. Economic slowdowns in South Africa, declines in the value of the South African Rand,
changes in South African laws including those relating to data security and privacy, laws that impose restrictions on
276
outsourcing or immigration and other restrictions or factors that adversely affect the economic health of, or our
ability to do business in, South Africa may adversely affect our business and profitability.
Further, as we expand our business overseas, we expect to continue to earn revenue in currencies other than the
Indian Rupee, and this may increase our vulnerability to foreign exchange fluctuations.
Cost of Services
Our cost of services consists primarily of compensation of personnel engaged in providing services. It also includes
depreciation and amortisation of office equipment and software, communications expenses and other expenses. Our
cost of services also includes the costs of internally developed tools for sale.
Our cost of services also includes payments to subcontractors, who are consultants we hire on a temporary basis to
meet client demand or to address specific skill requirements. A key measure of our cost of services is “employee
cost” of personnel when engaged in providing services. Employee cost includes salaries, staff welfare costs, cost of
contribution to provident and other employee funds and statutory bonus payments.
We engage in extensive training of new hires, as well as periodic training to upgrade the skills of our IT
professionals. Training costs for employees are categorised as costs of services if the training is related to a
particular client matter if agreed to with the client; otherwise such costs are allocated to other expenses.
SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The Restated Consolidated Financial Statements have been prepared and presented under the historical cost
convention as a going concern on the accrual basis and to comply in all material aspects with all the applicable
accounting principles in India (“GAAP”) including the Accounting Standards specified under section 133 of the
Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, after making adjustments as
considered appropriate and have been prepared in accordance with Section 26 of the Companies Act, 2013 read with
the Companies (Prospectus and Allotment of Securities) Rules, 2014, and SEBI ICDR Regulations for each of the
five years ended March 31, 2015, 2014, 2013, 2012 and 2011and three months period ended June 30, 2015 in a
manner consistent with the accounting policies being adopted for the three months period ended 30 June 2015. As a
result of these adjustments, the amounts reported in the above mentioned statements are not necessarily the same as
those appearing in the financial statements of the Company for the relevant financial years. The financial statements
are presented in Indian rupees rounded off to the nearest million.
These Restated Consolidated Financial Statements have been prepared so as to contain information / disclosures and
incorporating adjustments set out below in accordance with the SEBI ICDR Regulations:
(a)
Adjustments for the material amounts in respective periods to which they relate;
(b)
Adjustments for previous periods identified and adjusted in arriving at the profits of the periods to which
they relate irrespective of the period in which the event triggering the profit or loss occurred; and
(c)
Adjustments for reclassification of the corresponding items of income, expenses, assets and liabilities, in
order to bring them in line with the groupings as per the audited consolidated financial information of the
Company and its Subsidiaries (“Group”) as at and for the period ended June 30, 2015 and the requirements
of the SEBI ICDR Regulations.
Principles of consolidation
The consolidated interim financial statements have been prepared in accordance with Accounting Standard (AS) 21consolidated financial statements and include the following Subsidiaries:
277
S.
No.
1
2
3
4
5
1
2
Name of the Subsidiary
Country of Incorporation
Direct Subsidiaries
Nihilent Technologies Inc.
Nihilent Australia Pty Ltd.
Seventh August IT Services Private Limited
Nihilent Tanzania Limited
Nihilent Nigeria Limited
Indirect subsidiaries
GNET Group LLC (Subsidiary of Nihilent Technologies
Inc.)
GNET Group (I) Private Limited (Subsidiary of GNET
Group LLC)
United States of America
Australia
India
Tanzania
Nigeria
United States of America
India
% voting power held
100%
100%
100%
95%
51%
100%
100%
The financial statements of our Company and its Subsidiaries have been consolidated on a line by line basis and all
material intercompany transactions, balances and unrealized surpluses and deficits on transactions between group
companies have been eliminated on consolidation. Consistency in application of accounting policies within the
Group is ensured to the extent practicable.
The excess of the cost to the Company of its investment in a subsidiary and the Company’s portion of equity of the
subsidiary on the date at which investment in the subsidiary is made, is described as goodwill and recognized
separately as an asset in the consolidated financial statements. The excess of the Company’s portion of equity of the
subsidiary over the cost of investment in the subsidiary is treated as capital reserve in the consolidated financial
statements. Goodwill arising on consolidation is not amortized. It is tested for impairment on a periodic basis and
written off if found impaired.
Share of minority interest in the net profit is adjusted against the income to arrive at the net income attributable to
shareholders of the parent company. Minority interest’s share of net assets is presented separately in the Balance
Sheet.
If the losses attributable to the minority in a consolidated subsidiary exceed the minority’s share in equity of the
subsidiary, then the excess, and any further losses applicable to the minority, are adjusted against the Group’s
interest except to the extent that the minority has a binding obligation to, and is able to, make good the losses. If the
subsidiary subsequently reports profits, all such profits are allocated to the Group’s interest until the minority’s share
of losses previously absorbed by the Group has been adjusted.
The consolidated interim financial statements are prepared using uniform accounting policies for like transactions
and other events in similar circumstances and necessary adjustments required for deviations, if any, are made in the
consolidated interim financial statements. The consolidated interim financial statements are presented in the same
manner as the Company’s unconsolidated interim financial statements.
Use of estimates
The preparation of the financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the
date of the financial statements and reported amounts of revenue and expenditure for the period. Actual results could
differ from those estimates. Any revision to accounting estimates is recognized prospectively in the current and
future periods.
Current–non-current classification
All assets and liabilities are classified into current and non-current.
Assets
An asset is classified as current when it satisfies any of the following criteria:
(a)
it is expected to be realised in, or is intended for sale or consumption in, the Group’s normal operating cycle;
278
(b)
(c)
(d)
it is held primarily for the purpose of being traded;
it is expected to be realised within 12 months after the reporting date; or
it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least
12 months after the reporting date.
Current assets include the current portion of non-current financial assets.
All other assets are classified as non-current.
Liabilities
A liability is classified as current when it satisfies any of the following criteria:
(a)
it is expected to be settled in the Group’s normal operating cycle;
(b)
it is held primarily for the purpose of being traded;
(c)
it is due to be settled within 12 months after the reporting date; or
(d)
the Group does not have an unconditional right to defer settlement of the liability for at least 12 months after
the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by
the issue of equity instruments do not affect its classification.
Current liabilities include current portion of non-current financial liabilities.
All other liabilities are classified as non-current.
Operating cycle
Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash
equivalents. The Group’s normal operating cycle is less than 12 months.
Fixed assets and depreciation
Fixed assets are carried at cost of acquisition or construction less accumulated depreciation. The cost of fixed assets
includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of the
respective assets.
Leasehold improvements are depreciated over the term of the lease or the estimated useful life of the asset
whichever is shorter.
Depreciation is provided on a straight line method. The rates of depreciation prescribed in Schedule II to the
Companies Act, 2013 are considered as the indicative rates. If management’s estimate of the useful life of a fixed
asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is shorter/ greater
than that envisaged in the aforesaid Schedule, depreciation is provided at a higher/ lower rate based on the
management’s estimate of the useful life / remaining useful life.
Pursuant to the policy, estimated useful lives of assets which have been consistently followed for each of the
reporting periods are as follows:
Estimated economic
useful life in years
Asset Group
Computers and networking equipment (Software forming part of computer systems are
depreciated at the rates applicable to computers)
Electrical equipment, Plant and equipment, Furniture and fittings, Office equipment
Vehicles
3 years
4 years
5 years
For certain fixed assets of the subsidiaries, the estimated economic useful life is different than the useful life of other
fixed assets as envisaged by the Group. However the same is not expected to have any material impact on the
financial statements of the Group.
279
Intangible assets and amortization
Intangible assets are recognized when the asset is identifiable, is within the control of the Group, it is probable that
the future economic benefits that are attributable to the asset will flow to the Group and cost of the asset can be
reliably measured. Acquired intangible assets representing software are recorded at their acquisition price and are
amortized over its estimated useful life of three years commencing from the date the assets are available for their
use. The estimated useful life of intangible assets is reviewed by management at each balance sheet date.
Impairment of assets
In accordance with Accounting Standard (AS 28) – Impairment of Assets, the carrying amounts of the Group's
assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any
time such indication exists, the asset’s recoverable amount is estimated, at higher of the net selling price and the
value in use.
An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its
recoverable amount. 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 reinstated at the recoverable amount subject to a
maximum of depreciable historical cost.
Investments
Long-term investments are carried 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.
Profit or loss on sale of investments is determined on the basis of weighted average carrying amount of investments
disposed off.
Revenue recognition
The Group derives its revenue primarily from rendering software service activities. Revenue from “time and
material” contracts is recognized as and when the related services are performed based on the time charged and in
accordance with the terms of the specified customer contracts. Revenue from fixed price contracts is recognized
using percentage of completion method, under which the sales value of performance including earnings thereon is
determined by relating the actual man hours of work performed to date to the estimated total man hours for each
contract. Provision for estimated losses on uncompleted contracts are recorded in the period in which such losses
become probable based on current contract estimates.
The asset, “Cost and estimated earnings in excess of billings”, represents revenues recognized in excess of amounts
billed. These amounts are billed after the milestones specified in the agreement are achieved. The liability, “Billings
in excess of revenue”, represents billings in excess of revenue recognized.
Revenue on maintenance contracts is recognized on straight-line basis over the period of the contract.
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the interest
rate applicable.
Dividend income is recognized when the right to receive payment is established.
280
Employee benefits
a)
Short term employee benefits
Employee benefits payable wholly within twelve months of rendering the service are classified as short term
employee benefits and are recognized in the period in which the employee renders the related service.
b)
Post-employment benefits - defined benefit plan
The employees’ gratuity scheme is a defined benefit plan. The present value of the obligation under such
defined benefit plan is determined at each balance sheet date based on actuarial valuation carried out by an
independent actuary using projected unit credit method. Actuarial gains and losses are recognized immediately
in the statement of profit and loss. Past service cost is recognized as an expense on a straight line basis over the
average period until the benefit becomes vested. To the extent the benefits are already vested past service cost
is recognized immediately.
c)
Post-employment benefits - defined contribution plans:
The superannuation scheme and provident fund scheme applicable to certain companies within the Group are
defined contribution plans. The contributions paid/payable under the schemes are recognized immediately in
the statement of profit and loss.
d)
Long term employee benefit
Long term employee benefit comprise of compensated absences. These are measured based on actuarial
valuation carried out by an independent actuary at the balance sheet date using projected unit credit method.
Actuarial gains and losses are recognized immediately in the statement of profit and loss. For the three months
period ended June 30, 2015, these were measured based on actuarial valuation carried out by an independent
actuary at the balance sheet date of the immediately preceding financial year using projected unit credit
method, adjusted for significant changes in earned leaves accrued, curtailments, settlements or any other
significant events.
Foreign Currency Transactions
Transactions in foreign currency are recorded at pre-determined rates to the respective functional currencies at the
exchange rates that approximate the rate prevailing on the date of the transaction. Exchange differences arising on
foreign exchange transactions settled during the period are recognized in the statement of profit and loss for the
period. Monetary assets and liabilities denominated in foreign currency as at the balance sheet date are translated at
the period-end exchange rate and the resultant exchange differences are recognized in the statement of profit and
loss.
For the purpose of consolidation, statement of profit and loss items are translated into the reporting currency at
monthly average exchange rates. Foreign currency denominated monetary and non-monetary assets and liabilities at
period-end are translated at the period-end exchange rates. Non-monetary assets and liabilities denominated in
foreign currencies that are measured in terms of historical cost in foreign currency are translated using the exchange
rate at the date of the transaction. Net exchange difference resulting from translation of items in the financial
statements of the subsidiaries and non-integral foreign operations are accumulated in foreign currency translation
reserve.
Derivative Instruments
The forward exchange contracts taken to hedge existing assets or liabilities are translated at the closing exchange
rates and resultant exchange differences are recognized in the same manner as those on the underlying foreign
currency asset or liability. The premium or discount on such forward exchange contracts are recognized over the
period of the contract.
281
Apart from forward exchange contracts taken to hedge existing assets or liabilities, the Company also uses
derivatives to hedge its foreign currency risk exposure relating to firm commitments and highly probable
transactions. In accordance with the relevant announcement of the Institute of Chartered Accountants of India, the
Company provides for losses in respect of such outstanding derivative contracts at the balance sheet date by marking
them to market. Net gain, if any, is not recognized.
Leases
Lease payments under operating lease arrangements are charged to the statement of profit and loss on a straight line
basis method over the period of lease.
Borrowing Cost
Borrowing costs are expensed in the period in which it is incurred except borrowing costs directly attributable to the
acquisition of those qualifying assets which necessarily take a substantial period of time to get ready for their
intended use are capitalized as part of cost of such assets.
Provisions and contingencies
Provision is recognized in the balance sheet when the Group has a present obligation as a result of a past event, and
it is probable that an outflow of economic benefits will be required to settle the obligation. Loss contingencies
arising from claims, litigation, assessment, fines, penalties etc. are recorded when it is probable that a liability has
been incurred, and the amount can be reasonably estimated. A disclosure for a contingent liability is made when
there is a possible or present obligation that may, but probably will not require an outflow of resources. When there
is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or
disclosure is made.
Taxation
Income-tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with the
income-tax law), and deferred tax charge or credit (reflecting the tax effect of timing differences between accounting
income and taxable income for the period).
The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax
rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized
only to the extent there is reasonable certainty that the asset can be realized in future; however, where there is
unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there
is a virtual certainty of realization of the assets. Deferred tax assets are reviewed as 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
realized.
In accordance with the Guidance Note issued by Institute of Chartered Accountants of India, the Group recognizes
Minimum Alternate Tax credit as an asset only to the extent the probability exists that the Group will become liable
to pay normal income tax during the specified period as per provision of Income Tax Act, 1961.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the
recognised amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets
and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities
representing current tax and where the deferred tax assets and deferred tax liabilities relate to taxes on income levied
by the same governing taxation laws.
Accounting for employee share based payments
The Group uses the intrinsic value method of accounting allowed by the Guidance Note “Employee Share Based
Payment” applicable for employee stock options and sweat equity granted after April 1, 2005 to account for share
based payment plans.
282
Under this method, compensation expense is recorded on the date of the grant only if the current fair value of the
underlying stock exceeds the exercise price.
Earnings per share (‘EPS’)
The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the
period by the weighted average number of equity shares outstanding during the reporting period. In computing the
basic earnings per share, the shares or stock options granted to an ESOP trust are not included in the shares
outstanding till the employees have exercised their right to obtain shares or stock options, after fulfilling the
requisite vesting conditions. Till such time, shares or stock options so granted are considered as dilutive potential
equity shares for the purpose of calculating diluted earnings per share. The number of shares used in computing
diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings
per share, and also the weighted average number of equity shares, which could have been issued on the conversion
of all dilutive potential equity shares. In computing dilutive earnings per share, only potential equity shares that are
dilutive and that decrease profit per share are included.
DESCRIPTION OF PRINCIPAL COMPONENTS OF INCOME AND EXPENDITURE
RESULTS OF OPERATIONS
The following table sets out select financial data from our restated consolidated statements of profit and loss for the
for the three month period ended June 30, 2015 and Fiscal Years 2015, 2014 and 2013, the components of which are
also expressed as a percentage of total revenue for such periods. The period-to-period comparison of results is not
necessarily indicative of results for future periods.
June 30, 2015
% of
` in
total
million
revenue
Income
Revenue
operations
Other income
Total revenue
from
Expenses
Employee
benefits
expenses
Finance costs
Depreciation
and
amortization expense
Other expenses
Total expenses
Profit before tax
Tax expense
Current tax
Deferred tax charge /
(release)
March 31, 2013
% of
` in
total
million
revenue
762.13
98.29
2,923.28
98.73
2,447.79
98.24
2,001.80
98.13
13.27
775.40
1.71
100.00
37.64
2,960.92
1.27
100.00
43.96
2,491.75
1.76
100.00
38.09
2,039.89
1.87
100.00
497.28
64.13
1,731.47
58.48
1,320.83
53.01
1,013.85
49.70
1.02
0.13
1.76
0.06
-
-
-
-
16.43
2.12
56.35
1.90
32.91
1.32
24.31
1.19
167.12
681.85
21.55
87.94
593.97
2,383.55
20.06
80.50
480.51
1,834.25
19.28
73.61
435.13
1,473.29
21.33
72.22
93.55
12.06
577.37
19.50
657.50
26.39
566.60
27.78
41.00
5.29
222.34
7.51
230.68
9.26
168.27
8.25
(2.02)
(18.28)
(0.62)
(6.32)
(0.25)
7.33
0.36
3.27
204.06
6.89
224.36
9.00
175.60
8.61
8.79
373.31
12.61
433.14
17.38
391.00
19.17
0.00
0.31
0.01
3.43
0.14
-
-
(15.63)
25.37
Profit after tax but
before
minority
interest
Add/(Less): Share of
Period Ended / Year Ended
March 31, 2015
March 31, 2014
% of
% of
` in
` in
total
total
million
million
revenue
revenue
68.18
0.03
283
June 30, 2015
% of
` in
total
million
revenue
Period Ended / Year Ended
March 31, 2015
March 31, 2014
% of
% of
` in
` in
total
total
million
million
revenue
revenue
March 31, 2013
% of
` in
total
million
revenue
loss/ (profit) of minority
Profit for the year
68.21
8.80
373.62
12.62
436.57
17.52
391.00
19.17
Our income and expenditure is reported in the following manner:
Revenue
Revenue from operations: Our revenue from operations comprises of revenue from sale of our services.
Other income: Other income primarily includes dividend and interest income during the year.
Total revenue: Includes revenue from operations and other income.
Geographic breakdown of revenue from operations:
Our Company’s activities involve predominantly providing software related services, which is considered to be a
single business segment since these are subject to similar risks and returns. Accordingly, software services comprise
the primary basis of segmental information as set out in these financial statements in accordance with AS 17 –
“Segment Reporting with respect to primary segments”. Secondary segmental reporting is identified on the basis of
the geographical location of the customers.
Our Company has identified India, South Africa, United States of America, United Kingdom, Australia and Rest of
the World as geographical segments for secondary segmental reporting. Geographical sales are segregated based on
the location of the customer who is invoiced or in relation to which the sale is otherwise recognised.
(` in million)
As at March 31
As at June 30,
Geographic Segment
2015
2015
2014
2013
India
6.71
6.17
26.61
31.53
South Africa
507.01
2,252.50
2,081.39
1,724.29
United Kingdom
55.73
193.46
179.88
152.83
United States of America
120.41
226.43
27.26
27.23
Australia
20.80
32.19
Rest of the world
51.47
212.53
132.65
65.92
Total
762.13
2,923.28
2,447.79
2,001.80
Expenses
Our expenses consist of the following:




Employee benefits expense;
Finance Costs;
Depreciation and amortization expense; and
Other expenses.
Employee benefits expenses
Employee benefits expenses refer to expenses incurred towards salaries and bonus, contribution to provident and
other funds and staff welfare expenses. Employee benefits expenses as a percentage of our total revenue was
64.13%, 58.48%, 53.01% and 49.70% for the three month period ended June 30, 2015 and the Fiscal Years 2015,
2014 and 2013, respectively.
284
Depreciation and amortization expense
Depreciation and amortization expenses includes amortization of intangible assets such as software and noncompete fees, as well as depreciation of tangible assets such as leasehold improvements, plant and equipment,
furniture and fittings electrical and office equipment, vehicles and computers. Depreciation and amortization
expenses as a percentage of our total revenue was 2.12%, 1.90%, 1.32% and 1.19% for the three month period ended
June 30, 2015 and the Fiscal Years 2015, 2014 and 2013, respectively.
Other expenses
Our other expenses are classified into several categories and include expenses incurred towards rent, advertisement
and publicity, payment to auditors, cost of professional sub-contracting, business promotion, communication
expenses, electricity expenses, losses on foreign currency transactions and translations, insurance, legal and
professional expenses, membership and subscriptions, rates and taxes, repairs and maintenance, staff recruitment
and training, sales commission, vehicle expenses, travelling and conveyance, loss on sale of assets and
miscellaneous expenses. Other expenses as a percentage of our total revenue was 21.55%, 20.06%, 19.28% and
21.33% for the three month period ended June 30, 2015 and the Fiscal Years 2015, 2014 and 2013, respectively.
QUARTERLY RESULTS OF OPERATIONS
Income
Our total revenue for the three month period ended June 30, 2015 was ` 775.40 million, primarily comprising of
revenue from operations and other income. Our revenue from operations was ` 762.13 million, which consists of
revenue derived from sale of services which is 98.29% of our total revenue for the three month period ended June
30, 2015.
Other income for the three month period ended June 30, 2015 was ` 13.27 million which is 1.71% of our total
revenue for the three month period ended June 30, 2015.
Expenses
Out total expenses for the three month period ended June 30, 2015 was ` 681.85 million. Employee benefit expenses
for the three month period ended June 30, 2015 comprised ` 497.28 million which is 72.93% of our total expenses
incurred for the said period.
Depreciation and amortization expenses and finance costs for the three month period ended June 30, 2015 were `
16.43 million and ` 1.02 million respectively. Our other expenses for the three month period ended June 30, 2015
were ` 167.12 million which is 24.51% of our total expenses primarily consisting of expenses such as rent, net loss
on foreign currency transactions, legal and professional expenses and travelling and conveyance expenses.
Profit before tax
Our profit before tax for the three month period ended June 30, 2015 was ` 93.55 million.
Tax Expenses
Our tax expense for the three month period ended June 30, 2015 was ` 25.37 million.
Profit after tax
Our profit after tax for the three month period ended June 30, 2015 was ` 68.18 million.
285
Profit after Tax, Minority Interest
Our profit after tax and after adjustment of share of loss of minority for the three month period ended June 30, 2015
was ` 68.21 million.
Fiscal Year 2015 compared to Fiscal Year 2014
Income
Revenue from operations for Fiscal Year 2015 increased by 19.43% to ` 2,923.28 million compared to ` 2,447.79
million in the Fiscal Year 2014 primarily on account of increase in sales in United States, rest of the world
(“ROW”) and South Africa which was offset by a decrease in sales in India. The increase in sales in United States
was primarily on account of acquisition of GNet Group LLC, USA.
Other income for the Fiscal Year 2015 decreased by 14.38% to ` 37.64 million compared to ` 43.96 million in the
Fiscal Year 2014 primarily on account of decrease in dividend income due to sale of mutual fund investments.
Expenses
Total expenses, excluding tax expenses, increased by 29.95% to ` 2,383.55 million in Fiscal 2015 compared to `
1,834.25 million in Fiscal 2014. This increase was primarily on account of increase in employment benefit expenses
depreciation and amortization expense and other expenses.
Employee Benefits Expenses
Employee benefits expenses increased by 31.09% to ` 1,731.47 million compared to ` 1,320.83 million in Fiscal
2014. This increase was primarily due to an increase in the number of employees and increase in salaries and bonus
paid to employees due to increments and promotions given to employees during the last 12 months.
Depreciation and amortization expenses
On a consolidated basis, we provided ` 56.35 million towards depreciation and amortization for Fiscal 2015, which
increased by 71.22% as compared for ` 32.91 million in Fiscal 2014 mainly on account of amortization due to the
additions made to computer, office equipment and software during the year.
Other expenses
Our other expenses increased by 23.61% to ` 593.97 million as compared to ` 480.51 million for Fiscal 2014. This
increase was primarily on account of:



Increase in cost of professional subcontracting towards purchase of services from external consultants to
augment the skill sets required for client projects.
Increase in net loss on foreign currency transactions and translations by 294.31% to ` 69.32 million for Fiscal
2015 as compared to ` 17.58 million for Fiscal 2014 primarily on account of depreciation of the exchange
rate of the South African Rand with respect to the Indian Rupee which was partially offset by the appreciation
of the exchange rate of the Indian Rupee with respect to USD.
Increase in general and administration expenses which include rent, advertisement and publicity, repairs and
maintenance, staff recruitment and training expenses and travelling and conveyance expenses. General
administration expenses increased by 28.57% to ` 280.51 million from ` 218.18 million for Fiscal 2014.
Tax expenses
Tax expenses decreased by 9.05% from` 224.36 million for Fiscal 2014 to ` 204.06 million for Fiscal 2015. This
decrease was primarily on account of decrease in profit before tax.
Profit for the year
286
Profit before tax
Profit before tax for Fiscal 2015 decreased by 12.19% to ` 577.37 million as compared to ` 657.50 million for the
Fiscal 2014. This decrease in profit for the year ended on March 31, 2015 was mainly due to increase in operating
cost for starting our overseas subsidiaries namely, Nihilent Nigeria Limited, Nihilent Tanzania Limited and
acquisition of GNet Group LLC, USA.
Profit after tax
Profit after tax for Fiscal 2015 decreased by 13.81% to ` 373.31 million as compared with ` 433.14 million for the
Fiscal 2014. This decrease in net profit for the year ended on March 31, 2015 was mainly due to increase in
operating cost incurred towards acquisition of our overseas subsidiary namely, GNet Group LLC, USA.
For the Fiscal Year 2014 compared to Fiscal Year 2013
Income
Revenue from operations for Fiscal Year 2014 increased by 22.28% to ` 2,447.79 million compared to ` 2,001.80
million in the Fiscal Year 2013 primarily on account of increase in sales in South Africa, United Kingdom and
ROW which was partially offset by a decrease in sales in India.
Other income for the Fiscal Year 2013 increased by 15.41% to ` 43.96 million compared to ` 38.09 million in the
Fiscal Year 2013 primarily on account of increase in dividend income consequent upon purchase of mutual fund
investments.
Expenses
Total expenses, excluding tax expenses, increased by 24.50% to ` 1,834.25 million in Fiscal 2014 compared to `
1,473.29 million in Fiscal 2013. This increase was primarily on account of the following:
Employee Benefits Expenses
Employee benefits expenses for Fiscal 2014 increased by 30.28% to ` 1,320.83 million as compared to ` 1,031.85
million for Fiscal 2013. This increase was primarily due to an increase in the number of employees and increase in
salaries and bonus paid to employees due to increments and promotions given to employees during the last 12
months.
Depreciation and amortization expenses
On a consolidated basis, we provided ` 32.91 million towards depreciation and amortization in Fiscal 2014, which
increased by 35.38% as compared for ` 24.31 million in Fiscal 2013.
Other expenses
Our other expenses increased by 10.43% to ` 480.51 million as compared to ` 435.13 million for Fiscal 2013. This
increase was primarily on account of increase in business promotion expenses, legal and professional expenses,
increase in provision of doubtful debts, travelling and conveyance expenses and rent.
Tax expenses
Tax expenses increased by 27.77% from ` 224.36 million for Fiscal 2014 to ` 175.60 million for Fiscal 2013. This
increase was primarily on account of increase in profit before tax.
287
Profit for the year
Profit before tax
Profit before tax for Fiscal 2014 increased by 16.04% to ` 657.50 million as compared to ` 566.60 million for the
Fiscal 2013. This increase in profit for the year ended on March 31, 2014 was mainly due increase in total revenue.
Profit after tax
Profit after tax for Fiscal 2014 increased by 10.78% to ` 433.14 million as compared to ` 391.00 million for the
Fiscal 2013. This increase in net profit for the year ended on March 31, 2014 was mainly due increase in total
revenue.
CASH FLOWS
The table below summarizes our cash flows for the three month period ended June 30, 2015 and the Fiscals 2015,
2014 and 2013:
(` in million)
Period Ended
June 30, 2015
March 31,
March 31,
March 31,
2015
2014
2013
Net cash from / (used in) operating
(46.40)
319.92
269.47
348.37
activities
Net cash from / (used in) investing
(32.77)
(200.93)
(177.91)
46.81
activities
Net cash used in financing activities
(1.02)
(16.32)
(123.83)
(174.04)
Effect of unrealised exchange loss / (gain)
7.97
20.81
3.58
(0.02)
on cash and cash equivalents*
Net increase / (decrease) in cash and cash
(72.22)
123.48
(28.69)
221.12
equivalents
Cash and cash equivalents as at beginning
659.34
535.86
564.55
343.43
of the year
Cash and cash equivalents as at end of the
587.12
659.34
535.86
564.55
year
* Includes amounts on account of revaluation of Monetary Assets of its non-integral operations as per Accounting Standard (AS11) - The Effects of Changes in Foreign Exchange Rates.
Operating Activities
Net cash used in operating activities was ` 46.40 million for the three month period ended June 30, 2015 while our
profit before taxation was ` 93.55 million. We had an operating profit before working capital changes of ` 115.76
million. The difference in profit before tax and operating profit before working capital changes was primarily as a
result of depreciation and amortisation expenses of ` 16.43 million and unrealised foreign exchange loss of ` 18.03
million. Our working capital adjustments to our net cash used in operating activities for the Fiscal Year 2015
primarily included an increase in trade receivables of ` 59.77 million and decrease in other current liabilities of `
61.28 million.
Net cash generated from operating activities was ` 319.92 million for the Fiscal Year 2015 while our operating
profit before tax was ` 577.37 million. We had an operating profit before working capital changes of ` 585.36
million. The difference in profit before tax and operating profit before working capital changes was primarily as a
result of depreciation and amortisation expenses of ` 56.35 million. Our working capital adjustments to our net cash
from operating activities for the Fiscal Year 2015 primarily included an increase in long term loans and advances of
` 39.01 million which was offset by an increase in other long term liabilities of ` 22.23 million.
Net cash generated from operating activities was ` 269.47 million for the Fiscal Year 2014 while our operating
profit before tax was ` 657.50 million. We had an operating profit before working capital changes of ` 649.13
288
million. The difference in profit before tax and operating profit before working capital changes was primarily as a
result of depreciation and amortisation expenses of ` 32.91 million which was offset by dividend income on mutual
funds of ` 25.70 million. Our working capital adjustments to our net cash from operating activities for the Fiscal
Year 2014 primarily included an increase in trade receivables by ` 221.90 million, increase in other current assets by
` 69.69 million which was offset by an increase in other current liabilities by ` 125.32 million.
Net cash generated from operating activities was ` 348.37 million for the Fiscal Year 2013 while our operating
profit before tax was ` 566.60 million. We had an operating profit before working capital changes of ` 497.87
million. The difference in profit before tax and operating profit before working capital changes was primarily as a
result of depreciation and amortisation expenses of ` 24.31 million which was offset by dividend income on mutual
funds of ` 20.93 million and unrealised foreign exchange gain of ` 55.41 million. Our working capital adjustments
to our net cash from operating activities for the Fiscal Year 2013 primarily included an increase in trade receivables
by ` 46.88 million which was offset by an increase in trade payables by ` 21.88 million and increase in other current
liabilities by ` 28.86 million
Investing Activities
Net cash used in investing activities was ` 32.77 million for the three month period ended June 30, 2015, primarily
consisting of purchase of investments of ` 304.23million which was offset by sale of investments of ` 288.52
million and purchase of fixed assets amounting to ` 25.43 million. The investments sold were mutual fund units and
the investments purchased were mutual fund units.
Net cash used in investing activities was ` 200.93 million for the Fiscal Year 2015, primarily consisting of purchase
of investments of ` 282.93 million, payment for acquisition of business, net of cash of ` 199.61 million, and
increase in fixed deposits with maturity beyond three months amounting to ` 144.78 million which was offset by
sale of investments of ` 471.94 million. The investments sold were mutual fund units and the investments purchased
were mutual fund units.
Net cash used in investing activities was ` 177.91 million for the Fiscal Year 2014, primarily consisting of purchase
of investments of ` 4,757.67 million and purchase of fixed assets of ` 62.88 million which was offset by sale of
investments of ` 4,600.51million. The investments sold were mutual fund units and the investments purchased were
mutual fund units.
Net cash from investing activities was ` 46.81 million for the Fiscal Year 2013, primarily consisting of sale of
investments of ` 851.64 million which was offset by purchase of investments of ` 833.97 million and purchase of
fixed assets of ` 27.99 million. The investments sold were mutual fund units and the investments purchased were
mutual fund units.
Financing Activities
Net cash used in financing activities was ` 1.02 million for the three month period ended June 30, 2015, consisting
of interest and loan processing fees paid on borrowings amounting to ` 1.02 million.
Net cash used in financing activities was ` 16.32 million for the Fiscal Year 2015, consisting of proceeds from
borrowings of ` 125.59 million which was offset by dividend paid during the year of ` 140.15 million and interest
and loan processing fees paid on borrowings of ` 1.76 million.
Net cash used in financing activities was ` 123.83 million for the Fiscal Year 2014, consisting of dividend paid
during the year of ` 140.12 million which was partially offset by loan repaid by the trust amounting to ` 16.29
million.
Net cash used in financing activities was ` 174.04 million for the Fiscal Year 2013, consisting of dividend paid
during the year of ` 174.04 million.
289
TOTAL DEBT
For details of our borrowings, please see section titled “Financial Indebtedness” on page 293.
CONTINGENT LIABILITIES
The statement of contingent liabilities of our Company for the three month period ended June 30, 2015 and for
the Fiscal Year ended March 31, 2015 as restated as at June 30, 2015 are as mentioned in the table below:
(in ` million)
Particulars
As at March 31, 2015
Guarantee issued*
135.00
As at June 30, 2015
140.75
*Guarantee issued excludes the performance guarantee issued by the Company to the State of Queensland, amount of which is
unascertainable.
There were no contingent liabilities for the Fiscal Years ended March 31, 2014, 2013, 2012 and 2011 as per our
Restated Consolidated Financial Statements.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any other off-balance sheet arrangements or other relationships with unconsolidated entities, such as
special purpose vehicles, that have been established for the purposes of facilitating off-balance sheet arrangements.
CAPITAL EXPENDITURES
Our capital expenditures are mainly related to the purchase of fixed assets located in India. The primary source of
financing for our capital expenditures has been cash generated from our operations.
Quantitative and Qualitative Disclosure about Market Risk
The following discussion summarizes our exposure to certain market risks and the steps we have taken to address
these risks. It is difficult to accurately predict changes in economic or market conditions and anticipate the effects of
such changes.
Market price risk
A portion of our current assets has in recent periods been invested in mutual fund units, which subjects us to market
price risk based principally on the interest rate movement and net asset value of these funds’ portfolio investments.
As of June 30, 2015, March 31, 2015, 2014 and 2013, our investment in mutual funds (quoted) totalled ` 278.05
million, ` 262.34 million, ` 451.35 million and ` 292.18 million, respectively. The assets of the funds we invest in
are principally comprised of investments in mutual funds. Mutual funds are subject to risks, including fluctuation in
market prices and interest rates and creditworthiness of the underlying debt.
Counterparty Credit Risk
We are exposed to the credit risk of our clients. We seek to minimize credit risk by limiting business dealings to
business partners of high creditworthiness. We also monitor our receivables on a monthly basis. As of June 30, 2015
we had current trade receivables of ` 638.16 million. We make doubtful debt provisions for trade receivables in
accordance with our policies. For the three month period ended June 30, 2015 and for the Fiscal Years ended March
31, 2015, 2014 and 2013, we carried provisions for doubtful debts and advances of ` 45.01 million, ` 44.85 million,
` 38.83 million and ` 29.78 million, respectively.
290
Foreign currency exchange rate risk
We face foreign currency exchange rate risk because 99.12% and 99.79% of our total revenues from operations for
the three month period ended June 30, 2015 and Fiscal Year ended March 31, 2015 were derived from our
customers located outside India. Further, revenues of our international Subsidiaries are denominated in foreign
currencies such as the U.S. Dollar and GBP. As our international operations grow, our risks associated with
fluctuation in currency rates may become greater, and we may consider hedging arrangements.
Our Company hedges its net exposure (i.e. foreign currency receivables less foreign currency payables) at the
overseas branches and receivables against the offshore business. The hedging is done through forward contracts
entered with authorised dealers in India.
Interest rate risk
We may become subject to interest risk if we undertake debt financing. Interest rates are highly sensitive to many
factors beyond our control, including the monetary policies of the RBI, domestic and international economic and
political conditions, inflation and other factors. Upward fluctuations in interest rates increase the cost of servicing
existing and new debts, which may affect our results of operations. Our cash and cash equivalents are placed with
banks and mutual funds schemes that the management believes to be of high quality.
Transactions with Related Parties
From time to time, we enter into transactions with our promoters, promoter group, individuals and companies which
are controlled by our Promoters and other related parties in the ordinary course of our business. For further details
on our related party transactions, please see section titled “Related Party Transactions” on page 177.
Inflation and Seasonality
According to data from the RBI, the average annual rate of inflation as measured by changes in the wholesale price
index was 7.4% in Fiscal Year 2013 and 5.9% in Fiscal Year 2014 and 3.4% in Fiscal Year 2015. High fluctuation
in inflation rates may make it more difficult for us to accurately estimate or control our costs.
Our quarterly operating results have been, and will continue to be, subject to variation, depending on several factors
that may cause us to record higher revenue in some quarters compared with others. In addition, if our rate of growth
slows over time, cyclical variations in our operations may become more pronounced, and our business, results of
operations and financial position may be adversely affected.
Our business is not seasonal in nature.
Additional Information
Material increases in revenues and sales
As described in detail under “Results of Operations - Fiscal Year 2015 compared to Fiscal Year 2014” and “Fiscal
Year 2014 compared to Fiscal Year 2013” in section titled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” on page 274, material increases in revenues and sales are primarily due to
increase in sales in United States, ROW and South Africa which was offset by a decrease in sales in India.
Total turnover of each major industry segment in which the company operated
We have one primary business activity and operate in one industry segment, which is providing software related
services.
Unusual or infrequent events or transactions
There have been no events or transactions to our knowledge which may be described as “unusual” or “infrequent”.
291
Known trends or uncertainties
Our business has been affected and we expect that it will continue to be affected by the trends identified above in
“Key Factors Affecting Our Results of Operations” and the uncertainties described in the section “Risk Factors” on
page 16. To our knowledge, except as disclosed in this Draft Red Herring Prospectus, there are no known factors
which we expect to have a material adverse effect on our income or revenue from operations.
Future relationships between costs and income
Other than as described in the sections “Risk Factors,” “Business” on pages 16 and 121, respectively, and this
section, to our knowledge there are no known factors that might affect the future relationship between cost and
revenue.
New product or business segments
Other than as described in the section “Business — Our Strategy” on page 124, we have not announced and do not
expect to announce in the near future any new products or business segments.
Competitive conditions
Our industry is competitive and we compete on the basis of a number of factors, including reliability, past
performance, strengths in various geographic markets, technological capabilities, and price. For further details,
please see section titled “Risk Factors” and “Business” on pages 16 and 121, respectively.
Significant dependence on suppliers or customers
Other than as described in the section “Risk Factors” on page 16, we do not have any material dependence on
suppliers or customers.
Significant economic changes that materially affected or are likely to affect income from continuing operations
Other than as described in the section “Risk Factors” on page 16 and as otherwise disclosed in this Draft Red
Herring Prospectus, we are not aware of any significant economic changes that materially affected or are likely to
affect income from continuing operations.
Significant developments subsequent to June 30, 2015
To our knowledge, except as otherwise disclosed below, there have been no significant developments after the date
of our financial statements contained in this Draft Red Herring Prospectus which materially affect, or are likely to
affect, our operations or profitability, or the value of our assets, or our ability to pay our material liabilities, within
the next 12 months:

Our Company held 25.1% shares in NICO Technologies Limited, Malawi (“NICO Tech”) pursuant to a
shareholders’ agreement dated August 6, 2010 entered into amongst NICO Holdings Limited, Malawi
(“NICO Holdings”), NICO Tech and our Company. Pursuant to a termination agreement dated August 17,
2015, NICO Holdings agreed to acquire our entire shareholding in NICO Tech. On September 10, 2015, our
Company made an application to the RBI in relation to the divestment of our shareholding in NICO Tech.
Our Company sold its entire shareholding in NICO Tech to NICO Holdings on October 7, 2015 pursuant to
which NICO Tech ceased to be an associate of our Company. RBI, vide its letter dated December 11, 2015
raised certain queries in relation to the disinvestment, including with regard to the valuation of the shares and
the reason for disinvesting. Our Company has submitted its reply to RBI on December 16, 2015.

Our Company acquired 51% of the equity shareholding of Intellect Bizware Services Private Limited
(“Intellect”) pursuant to a share purchase and shareholders’ agreement dated September 1, 2015 with
Intellect and its key shareholders, to effectuate the acquisition of Intellect by our company. Under the terms
of the share purchase and shareholders’ agreement, our Company is granted an irrevocable unconditional
right and option to acquire the balance 49% of the shareholding. For further details, please see section titled
“History and Certain Corporate Matters” on page 139.
292
FINANCIAL INDEBTEDNESS
Our Company has availed a term loan facility from FirstRand Bank (“FRB”) pursuant to a sanction letter dated
October 15, 2015 and a term loan agreement between our Company and FRB dated December 14, 2015 (the “FRB
Term Loan/Agremeent”). The details of our Company’s outstanding indebtedness as of December 15, 2015 are as
follows:
Principal
amount
Particulars of
Sr.
Amount outstanding
Lender
the
No.
sanctioned
as on
documentation
December
15, 2015
1. 1. FirstRand Sanction letter `120.00
`120.00
Bank
dated October million
million
Limited 15, 2015
Term
loan
agreement,
dated December
14, 2015
Agreement for
pledge
of
deposits dated
December 14,
2015
Interest rate
8.45%
annum.
per
Pursuant
to
the terms of
the
Agreement,
our Company
shall pay the
interest on the
last business
day of every
calendar
month.
Security
Purpose
Exclusive charge
on
the
fixed
deposit receipts
with
110%
margin on the
loan amount.
The
term
loan amount
shall
be
utilised
towards
expansion of
office
premises
and
our
Company’s
operations.
The following are
the details of the
fixed
deposit
receipts, pledged
pursuant to the
terms
of
the
Agreement:
(i)
FD
No.
00010403000481
for `121 million
and
(ii)
FD
No.
00010403000482
for `11 million,
aggregating to a
total of `132
million.
Repayment
schedule
Bullet
payment, at
the end of a
period of 12
months, i.e.,
December
14, 2016, in
accordance
with
the
terms of the
Agreement.
Details of terms and conditions of the FRB Term Loan
Restrictive Covenants
In accordance with the Agreement, the following actions require the prior approval of FRB.
Our Company:
1.
conveying, selling, leasing, mortgaging, disposing of or otherwise charging all or any part of its assets over
which security interest has been created;
2.
issuing any debentures, raising any loans or availing any credit facility from any other bank, financial
institution, any person, firm or company; accepting deposits from public issue equity or preferential capital
changing its capital structure; or creating a security interest other than for the exceptions provided in the
Agreement;
3.
entering into any amalgamation or merger with any third party;
293
4.
making substantial changes to the general nature of our Company’s business from that carried on at the date
of the Agreement;
5.
creating security in favour of any other person, except without prior approval of FRB;
6.
changing the nature of our business;
7.
declaring, making or paying any dividend (or from making other restricted payment towards redemption,
repurchase, retirement or otherwise acquisition of its shares) unless (i) an event of default has not occurred;
and (ii) the repayment of the facility is in accordance with the Agreement;
8.
repaying any amount in respect of any subordinate debt or preference shares before the repayment of the
FRB Term Loan;
9.
granting any loans or credit (except in the ordinary course of business) to any other person; and
10.
making any change in the control of its management;
Prepayment
The Agreement provides for a prepayment penalty of 2% to be levied on the amount being prepaid, prior to the
stipulated repayment date
Default
Under the terms of the Agreement, the events of default have been categorized to include:
1.
the failure to make payment of any sum, within 14 days of the due date when such amount is payable,
under the terms of the Agreement;
2.
on account of our Company ceasing to have title or right to possess the secured assets, under the terms of
the Agreement;
3.
on account of our Company ceasing to carry on all or a material part of its business, under the terms of the
Agreement;
4.
on account of our Company’s failure to create a security in favour of FRB;
5.
the initiation of insolvency proceedings against our Company, including the appointment of a liquidator,
enforcement of a security over any of our Company’s assets;
6.
on account of condemning, seizing, nationalising or otherwise expropriating all or any substantial part of
the assets of our Company;
7.
in case of attachment or restraint being levied on the assets of our Company or initiation of execution
proceedings for recovery of dues which are not discharged within a period of 90 days;
8.
on account of any legal proceedings instituted against our Company or on account of our Company’s
failure to pay one or more amounts, due under any judgments or decrees, which if enforced may have a
material adverse effect, under the terms of the Agreement;
9.
on account of voluntary winding up proceedings initiated by our Company, or on account of an order of a
court of law ordering for the winding up of our Company, or a declaration of our Company as bankrupt or
insolvent, without vacation within 180 days;
294
10.
the initiation of insolvency proceedings against our Company, including the appointment of a liquidator,
enforcement of a security over any or all of our Company’s assets;
11.
on account of any misrepresentation incorrect or misleading statement, in any material respect, made by our
Company;
12.
the failure to satisfy any of the obligations, as stipulated under the Agreement;
13.
in case of change in management control of our Company without prior approval from FRB;
14.
on account of revocation, termination, withdrawal, suspension or modification of any clearance or
authorisation obtained for compliance with the Agreement;
15.
any indebtedness of our Company, except towards FRB, aggregating to an amount not less than `10
million, payable on account of an event of default; and
16.
on account of invalidity of the Agreement or repudiation of the Agreement on account of any act done by
our Company.
Loans availed by our Subsidairy:
Our subsidiary, Nihilent Technologies Inc. has availed a loan of USD 2 million from HSBC Bank (Mauritius)
Limited. For further details, please see section titled “Objects of the Issue” on page 91.
295
SECTION VI: LEGAL AND OTHER INFORMATION
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS
Except as stated in this section, there are no (i) outstanding criminal proceedings; (ii) actions taken by statutory or
regulatory authorities, (iii) claims relating to direct or indirect taxes; (iv) material litigations, in each case
involving our Company, Directors, our Promoters or Subsidiaries, and (v) any litigation involving any other person
whose outcome could have a material adverse effect on the position of our Company.
In relation to (iii) above, our Board has considered such cases involving our Company, Subsidiaries, Directors and
Indian Promoters as material where the amount involved for quantifiable cases exceeds: (a) 1.5% of the total
revenue of our Company as per the audited consolidated financial statements for the year ended March 31, 2015; or
(b) whose outcome could have a material impact on the business, operations, prospects or reputation of our
Company. As per our Restated Consolidated Financial Statements disclosed on page 228, our consolidated revenue
for Fiscal 2015 was `2,960.92 million. Therefore, all outstanding cases which involved an amount exceeding
`44.41million have been considered material
With respect to our foreign Promoters, namely, Adcorp Professional Services Limited and Dimension Data Protocol
B.V., due to their large operations, the Board has considered material litigations to include any litigation that relate
to such foreign Promoters business interest in India and litigation involving the foreign Promoter which may have a
material adverse effect on the financial performance of either the Company or the foreign Promoter.
Further, except as stated in this section, there are no (i) litigation or legal actions, pending or taken, by any
Ministry or department of the Government or a statutory authority against our Promoters during the last five years;
(ii) pending proceedings initiated against our Company for economic offences; (iii) default and non-payment of
statutory dues by our Company which are outstanding; (iv) inquiries, inspections or investigations initiated or
conducted under the Companies Act, 2013 or any previous companies law in the last five years against our
Company and Subsidiaries; or (v) material frauds committed against our Company in the last five years.
Our Board considers dues owed by our Company to creditors and small scale undertakings in excess of 1.5% of our
Company’s consolidated trade payables as per Restated Consolidated Financial Statements for the year ended
March 31, 2015 as material dues of our Company. As per our Restated Consolidated Statement of Assets and
Liabilities as at March 31, 2015 disclosed in section titled “Financial Statements” on page 179, our trade payables
on a consolidated basis for Fiscal 2015 were `63.54 million. Therefore, all outstanding dues exceeding `0.95
million have been considered material.
I.
Litigations against our Company
A. Material Civil Matters
There are no material civil litigations against our Company, which are outstanding.
B. Matters pertaining to the Employee’s Provident Fund and Miscellaneous Provisions Act, 1952
1.
Our Company received summons to appear in person, pursuant to a letter dated May 14, 2015, under Section
7A of the Employee’s Provident Funds and Miscellaneous Provisions Act, 1952 (“Act”), from the Employee’s
Provident Fund Organisation (“Authority”) in relation to the applicability of the Employee’s Deposit Linked
Insurance Scheme, 1976 (“EDLI Scheme”). In the summons the Authority alleged that even though our
Company was issued a relaxation order under provision 28(7) of the EDLI Scheme, our Company started
complying as EDLI exempted without submission of documents and formal approval. Further it was alleged
that our Company failed to comply with the directions of the Authority and that an inquiry was initiated under
the provisions of the Act. Our Company pursuant to a letter dated June 10, 2015 submitted an explanation
along with a proposal for renewal and compliance confirmation. The matter is currently pending.
2.
Our Company received summons and an order for the payment of interest under the Employee’s Provident
296
Fund and Miscellaneous Provisions Act, 1952, pursuant to a letter dated June 09, 2015 (“Summons”) from the
Employee’s Provident Fund Organisation (“Authority”). In the Summons the Authority alleged that, the
remittances of the contribution to the Employees Provident fund transmitted for the period May 1, 2010 to June
30, 2014 and August 1, 2000 to May 31, 2010, respectively, was delayed and made after the respective due
dates. Therefore, the total amount by way of penalty and the amount of interest on such belated payments was
found to be `146,993 and `470,854, respectively. Our Company vide its submissions made on October 14,
2015 informed the Authority that the challans referred to in the Summons were paid for the said period and that
for the month of May of 2010, the dues were derived by the Enforcement Officer at the time of inspection as
per instructions provided by the Enforcement Officer. The matter is currently pending.
3.
Our Company received a notice pursuant to a letter dated November 21, 2014 (“Notice”) from the Employee’s
Provident Fund Organisation (“Authority”) under the Employee’s Provident Fund and Miscellaneous
Provisions Act, 1952. The Authority in the Notice, observed that the Annual Accounts of our Company were
updated up to year 2013-14 however, either the challans were not available, or the amount mentioned in the
challans differed form that mentioned in Form 3A, causing a short payment in return by our Company. Our
Company, was further directed to submit challans as well as the relevant bank statements to the Authority as
proof of payment. Our Company vide its letter dated December 16, 2014 replied stating that the relevant list of
default as mentioned in the Notice did not pertain to our Company and that there was no shortfall in remittance
on behalf of our Company. The matter is pending.
C. Matters pertaining to Taxes
We have separately disclosed claims relating to direct and indirect taxes involving our Company in a consolidated
manner giving details of number of cases and total amount involved in such claims.
Direct Tax Proceedings:
There is one Income Tax proceeding against our Company relating to tax deducted at source, where the amount
involved aggregates to approximately `1.16 million. Further there are two Income Tax appeals filed by the
Company before the Income Tax Appellate Tribunal, Pune (“ITAT”) against the order of Dispute Resolution Panel
(“DRP”) for the assessment year 2008-09 and 2009-10. The appeals have been filed to seek relief against the
income tax addition of ` 196.75 million and ` 218.51 million for assessment year 2008-09 and 2009-10
respectively. The additions were made mainly on account of transfer pricing adjustments. The amount of tax liability
involved under these 2 proceedings is unascertainable. Further, there is a Show Cause Notice (“SCN”) pending
against our Company sent by the Deputy Commissioner of Income Tax in relation to computation of arm’s length
price with respect to foreign transactions for the assessment year 2012-13. The amount of potential tax liability
involved under the SCN is unascertainable.
Indirect Tax Proceedings:
There are no Indirect Tax proceedings against our Company.
D. Past Penalties
Inspector (S&E) G/S Ward (“Authority”) visited our Company’s premises, located at 205, 2nd Floor. Kakad
Chambers, Dr. A. B. Road, Mumbai – 400 018, for inspection pursuant to the provisions of the Maharashtra Shops
and Establishment Act, 1948 and the rules made thereunder. On the basis of the observations issued post inspection,
it was found that our Company had failed to maintain the register of employment in form ‘J’, leave register in form
‘M’ and salary register in form II/A, without furnishing any exemptions granted under the terms and conditions
along with failing to maintain the visit book. Our Company has responded to this pursuant to its letter dated
February 05, 2015. Subsequently, the Authority levied a fine on our Company of `15,000, which was duly paid on
March 3, 2015.
II.
Litigations by our Company
There are no litigation filed by our Company which exceeds the abovementioned materiality threshold.
297
E. Material Litigation involving our Subsidiaries
There is no litigation involving our Subsidiaries which exceeds the abovementioned materiality threshold.
F. Material Litigation involving our Promoters
There are no material litigation involving our Promoters which exceeds the abovementioned materiality threshold.
G. Material Litigations involving our Directors
There are no litigation involving our Directors which exceeds the abovementioned materiality threshold.
H. Outstanding dues to Creditors
Our Company had net outstanding dues amounting to ` 11.03 million towards 125 creditors as on November 30,
2015. Our Board considers net outstanding dues exceeding `0.95 million to small scale undertakings and other
creditors as material dues for our Company. Our Company did not owe any small scale undertakings any amounts
exceeding ` 0.95 million as of November 30, 2015.
As on November 30, 2015, our Company, in its ordinary course of business, had two creditors with net outstanding
dues to them exceeding the threshold of ` 0.95 million. The net outstanding dues to these two creditors aggregated
to ` 8.30 million as of November 30, 2015. There are no outstanding disputes between our Company and such
creditors in relation to payments to be made to them. For further details see, www.nihilent.com.
I.
Litigation against any other person whose outcome may have a material adverse effect on the position of
our Company
As on date of this Draft Red Herring Prospectus, there are no litigations against any other person whose outcome
may have a material adverse effect on the position of our Company.
J.
Litigations or legal actions, pending or taken, by any Ministry or Department of the Government or a
statutory authority against our Promoters during the last five years.
There are no litigations or legal actions, pending or taken, by any Ministry or Department of the Government or a
statutory authority against our Promoters during the last five years.
K. Pending proceedings initiated against our Company for economic offences
There are no pending proceedings initiated against our Company for economic offences.
L. Inquiries, investigations etc. instituted under the Companies Act, 2013 or any previous companies
enactment in the last five years against our Company or any of our Subsidiaries.
There are no inquiries, investigations etc. instituted under the Companies Act or any previous companies enactment
in the last five years against our Company or any of our Subsidiaries.
M. Material Fraud against our Company in the last five years
There has been no material fraud committed against our Company in the last five years.
N. Non-Payment of Statutory Dues
Our Company does not have any outstanding statutory dues.
O. Material Developments
For details of material developments post June 30, 2015, please see section titled “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” on page 274.
298
GOVERNMENT AND OTHER APPROVALS
In view of the approvals listed below, our Company can undertake the Issue and our Company and our
Subsidiaries can undertake their current business activities, and no further major approvals from any
governmental or regulatory authority are required to undertake the Issue or continue the business activities of
our Company and our Subsidiaries. Unless otherwise stated, these approvals are valid as of the date of this
Draft Red Herring Prospectus. For details in connection with the regulatory and legal framework within which
we operate, please see section titled “Regulations and Policies” on page 135.
1.
Approvals in relation to the Issue
Corporate Approvals
(a)
Our Board of Directors have, by way of resolution dated August 25, 2015 approved the Issue.
(b)
Our Shareholders have approved the Issue under section 62(1)(c) of the Companies Act at the general
meeting dated December 11, 2015.
(c)
The Selling Shareholders are offering up to 2,438,199 Equity Shares and have authorised the Offer for
Sale pursuant to their respective authorisations, as set out in section titled “Capital Structure” on page 63.
In-principle approvals from BSE and NSE
Our Company has received in-principle approvals from the BSE and NSE for the listing of the Equity Shares
pursuant to letters dated [●] and [●], respectively.
2.
Approvals for our business and operations
We require various approvals and/or licenses under various rules and regulations to operate our business in India.
We have obtained the necessary permits, licenses and approvals from the appropriate regulatory and governing
authorities required to operate our business.
Some of the material valid approvals required by our Company to operate our business include the following:
Business related registrations
Green Card Number of our Company under the Software Technology Parks Scheme is MIT/STPI-P/2006/1440
dated August 14, 2006. The Green card is due for renewal on November 1, 2016.
Tax related registrations
(a)
Permanent account number of our Company is AABCN0867G.
(b)
Maharashtra Profession Tax registration number or our Company is 2/2/6/21/4978.
(c)
Tax Deduction Account Number of our Company is PNEN01421A.
(d)
Tax payer identification number for central sales tax of our Company is 27770309973C.
(e)
Service tax registration number of our Company is AABCN0867GST001.
(f)
Tax payer identification number for Maharashtra Value Added Tax of our Company is 27770309973V.
(g)
Local Body Tax Registration Number of our Company is PMCLBT0740026886.
299
Labour law registrations
(a)
Certificate of registration bearing number PN No 3703 under the Maharashtra Contract Labour (Regulation
and Abolition) Rules, 1971 valid until December 31, 2015.
(b)
Registration number of our Company under the Employment Exchange (Compulsory Notification of
Vacancies) Act, 1959 is 20070403E107799.
(c)
Employer code number of our Company under the Employee State Insurance Act, 1948 is
33000138520001008.
(d)
Establishment ID of our Company under the Employee Provident Fund and Miscellaneous Provisions
Act, 1952 is MH/PNE/33627.
Approvals under the Shops and Establishments Act, 1948
S.No
Location
Registration
Date of Issue
Date of Expiry
1.
Second Floor, Sadanand
Society, Block No. 678, Plot
No.
17.
Sangamnagar,
Bibwewadi, Pune – 411 037
205, 2nd Floor. Kakad
Chambers, Dr. A. B. Road,
Mumbai – 400 018
Weikfield IT Citi Infopark,
3rd Floor and 4th floor,
Nagar Road, Pune-014
Commercial
Establishment –
Bibwewadi /II / 15662
March 18, 2015
March 6, 2018
GS009494 /
Commercial II
September 5, 2001
December 31,
2015
Yerwada/II/26926
November 28,
2006
December 31,
2017
2.
3.
Other Approvals
(a)
Importer-exporter code bearing number 3100002482 dated June 26, 2000 issued by the Office of Joint
Director General of Foreign Trade, Pune.
Intellectual Property Related Approvals
Our Company
Our Company has 15 registered and valid trademark approvals for various products under various classes including
classes 9,16, 35, 36, 41 and 42 granted by the Registrar of Trademarks under the Trademarks Act, 1999 in India.
Our Company has 14 registered and valid trademark approvals for various products under various classes including
classes 9,16, 35, 38 and 42 in various countries including South Africa, Australia, United States of America and
the United Kingdom.
Further, our Company has filed 9 applications in India and 1 application in the United States of America for
renewal of various trademarks, which have expired or are about to expire.
Copyrights
Our Company also has a copyright bearing registration number L-21816/2003 granted by the Copyrights Office under
the Copyrights Act, 1957 in the literary work titled Knowledge Management Practice Manual dated September 25,
2003.
300
Patents outside India
Our Promoter, L.C. Singh has been granted two patents by the Republic of South Africa (Patent Nos. 2002/1681 and
2009/04401) in connection with inventions titled ‘A method and an apparatus for providing and creating an
organization that has in built capability of growth, learning and development’ (MC3 TM) and ‘Systems for Customer
Loyalty Evaluation’ (14Signals) respectively.
Pending Approvals
Our Company
Environmental Licenses
Our Company has made an application dated April 28, 2010 to the Sub-Regional Officer, Maharashtra Pollution
Control Board for consent to operate under the Water (Prevention and Control of Pollution) Act, 1974, Air
(Prevention and Control of Pollution) Act, 1981 and Hazardous Wastes (Management and Handling) Rules, 1989 in
connection with our registered office located at Office No. 403 and 404, 4th floor, Weikfield IT Citi Infopark, Nagar
Road, Pune - 411014. The application is pending before the Maharashtra Pollution Control Board.
Approvals outside India
We have business operations in South Africa, United States of America, Australia, Tanzania and Nigeria. We have
obtained all material approvals for our business operations in these countries.
301
OTHER REGULATORY AND STATUTORY DISCLOSURES
Authority for the Issue
Our Board of Directors has approved the Issue pursuant to the resolution passed at their meeting held on August
25, 2015 and our Shareholders have approved the Issue pursuant to a resolution passed on December 11, 2015.
The Selling Shareholders offering up to 2,438,199 Equity Shares, have authorised the Offer for Sale pursuant to
their respective authorisations, as set out in section titled “Capital Structure” on page 63.
Each of the Selling Shareholder has confirmed, severally, that the Equity Shares proposed to be offered and sold by
it in the Offer for Sale are eligible to be offered for sale under Regulation 26(6) of the SEBI ICDR Regulations and
are free from any lien, charge, encumbrance or contractual transfer restrictions. The Selling Shareholders have also
confirmed that they are the legal and beneficial owners of the Equity Shares being offered under the Offer for Sale.
Our Company received in-principle approvals from the BSE and the NSE for the listing of the Equity Shares
pursuant to letters dated [●] and [●], respectively.
Prohibition by SEBI or other Governmental Authorities
Our Company, our Promoters, our Directors, the members of the Promoter Group, the Group Companies, the
persons in control of our Company and the Selling Shareholders have not been debarred from accessing or
operating in capital markets under any order or direction passed by SEBI or any other regulatory or governmental
authority.
The companies, with which our Promoters, Directors or persons in control of our Company are or were associated
as promoter, directors or persons in control have not been debarred from accessing in capital markets under any
order or direction passed by SEBI or any other regulatory or governmental authority.
Kasaragod Ashok Kini, our Director, is also a director in SBI Capital Markets Private Limited, which is registered
with SEBI and in Edelweiss Asset Reconstruction Company Limited, which is registered with SEBI. The details of
such registration have been provided to SEBI. No action has been initiated against SBI Capital Markets Private
Limited or Edelweiss Asset Reconstruction Company Limited by SEBI.
Except as disclosed above, none of our Directors are associated with the securities market in any manner.
Prohibition by RBI
Neither our Company, nor our Promoters, relatives (as defined under the Companies Act) of our Promoters,
Directors, Group Companies, nor the Selling Shareholders have been identified as wilful defaulters by the RBI or
any other governmental authority. There are no violations of securities laws committed by them in the past or are
pending against them.
Eligibility for the Issue
We are an unlisted company not complying with the conditions specified in Regulation 26(1) of the SEBI ICDR
Regulations and are therefore required to meet the conditions detailed in Regulation 26(2) of the SEBI ICDR
Regulations.
Our Company is eligible for the Issue in accordance with the Regulation 26(2) of the SEBI ICDR Regulations,
which states as follows:
“26(2) An issuer not satisfying the condition stipulated in sub-regulation (1) may make an initial public offer if the
issue is made through the book-building process and the issuer undertakes to allot, at least seventy five percent of
the net offer to public, to qualified institutional buyers and to refund full subscription money if it fails to make the
said minimum allotment to qualified institutional buyers.”
302
We confirm that:

We are complying with Regulation 26(2) of the SEBI ICDR Regulations and at least 75% of the Issue is
proposed to be Allotted to QIBs and in the event we fail to do so, the full application monies shall be
refunded to the Bidders.

We are complying with Regulation 43(2) of the SEBI ICDR Regulations and Non-Institutional Bidders
and Retail Individual Bidders will be allocated not more than 15% and 10% of the Issuer, respectively.
Hence, we are eligible for the Issue under Regulation 26(2) of the SEBI ICDR Regulations Further, in accordance
with Regulation 26(4) of the SEBI ICDR Regulations, our Company shall ensure that the number of prospective
Allottees to whom the Equity Shares will be Allotted shall not be less than 1,000 failing which the entire application
monies shall be refunded forthwith.
DISCLAIMER CLAUSE OF SEBI
AS REQUIRED, A COPY OF THE DRAFT RED HERRING PROSPECTUS HAS BEEN SUBMITTED
TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE DRAFT RED
HERRING PROSPECTUS TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED
THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY
RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE
PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF
THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT RED HERRING
PROSPECTUS. THE BOOK RUNNING LEAD MANAGER, MOTILAL OSWAL INVESTMENT
ADVISORS PRIVATE LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT
RED HERRING PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH
SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE
REQUIREMENTS) REGULATIONS, 2009 IN FORCE FOR THE TIME BEING. THIS REQUIREMENT
IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING AN
INVESTMENT IN THE PROPOSED ISSUE.
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 AND THE SELLING
SHAREHOLDERS WILL BE RESPONSIBLE ONLY FOR THE STATEMENTS SPECIFICALLY
CONFIRMED OR UNDERTAKEN BY THEM IN THIS DRAFT RED HERRING PROSPECTUS IN
RELATION TO THEMSELVES FOR THEIR RESPECTIVE PROPORTION OF THE EQUITY SHARES
OFFERED BY WAY OF THE OFFER FOR SALE, THE BOOK RUNNING LEAD MANAGER IS
EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY AND THE
SELLING SHAREHOLDERS DISCHARGE THEIR RESPONSIBILITY ADEQUATELY IN THIS
BEHALF AND TOWARDS THIS PURPOSE, THE BOOK RUNNING LEAD MANAGER HAS
FURNISHED TO SEBI, A DUE DILIGENCE CERTIFICATE DATED DECEMBER 23, 2015 WHICH
READS AS FOLLOWS:
WE, THE BOOK RUNNING LEAD MANAGER TO THE ABOVE MENTIONED FORTHCOMING
ISSUE, STATE AND CONFIRM AS FOLLOWS:
1.
WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO
LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH
COLLABORATORS, ETC. AND OTHER MATERIAL DOCUMENTS IN CONNECTION WITH
THE FINALISATION OF THE DRAFT RED HERRING PROSPECTUS PERTAINING TO THE
SAID ISSUE;
2.
ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY,
ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, AND INDEPENDENT
VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE,
PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER
303
PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT:
(A)
THE DRHP FILED WITH THE SECURITIES AND EXCHANGE BOARD OF INDIA
(THE “SEBI”) IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND
PAPERS RELEVANT TO THE ISSUE;
(B)
ALL THE LEGAL REQUIREMENTS RELATING TO THE ISSUE AS ALSO THE
REGULATIONS, GUIDELINES, INSTRUCTIONS, ETC. FRAMED/ISSUED BY SEBI,
THE CENTRAL GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN
THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND
(C)
THE DISCLOSURES MADE IN THE DRHP ARE TRUE, FAIR AND ADEQUATE TO
ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE
INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN
ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT, THE
SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND
DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, AS AMENDED (THE “SEBI
ICDR REGULATIONS”) AND OTHER APPLICABLE LEGAL REQUIREMENTS.
3.
WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN
THIS DRHP ARE REGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATION
IS VALID.
4.
WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS
TO FULFIL THEIR UNDERWRITING COMMITMENTS. - NOTED FOR COMPLIANCE.
5.
WE CERTIFY THAT WRITTEN CONSENT FROM THE PROMOTERS HAS BEEN
OBTAINED FOR INCLUSION OF THEIR EQUITY SHARES AS PART OF PROMOTER’S
CONTRIBUTION SUBJECT TO LOCK-IN AND THE EQUITY SHARES PROPOSED TO
FORM PART OF PROMOTER’S CONTRIBUTION SUBJECT TO LOCK-IN SHALL NOT BE
DISPOSED/SOLD/TRANSFERRED BY THE PROMOTERS DURING THE PERIOD
STARTING FROM THE DATE OF FILING THE DRHP WITH THE SECURITIES AND
EXCHANGE BOARD OF INDIA TILL THE DATE OF COMMENCEMENT OF LOCK-IN
PERIOD AS STATED IN THE DRHP.
6.
WE CERTIFY THAT REGULATION 33 OF THE SEBI ICDR REGULATIONS, WHICH
RELATES TO EQUITY SHARES INELIGIBLE FOR COMPUTATION OF PROMOTERS’
CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES
AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN MADE IN THE DRAFT
RED HERRING PROSPECTUS. – COMPLIED WITH AND NOTED FOR COMPLIANCE
7.
WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C)
AND (D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE SEBI ICDR
REGULATIONS SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS
HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE
RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE
UNDERTAKE THAT AUDITORS’ CERTIFICATE TO THIS EFFECT SHALL BE DULY
SUBMITTED TO SEBI. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN
MADE TO ENSURE THAT PROMOTER’S CONTRIBUTION SHALL BE KEPT IN AN
ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE
RELEASED TO THE COMPANY ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE. –
NOT APPLICABLE
8.
WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE COMPANY FOR WHICH THE
FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN
OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION
304
OR OTHER CHARTER OF THE COMPANY AND THAT THE ACTIVITIES WHICH HAVE
BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF
ITS MEMORANDUM OF ASSOCIATION. COMPLIED WITH
9.
WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE
THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE
BANK ACCOUNT AS PER THE PROVISIONS OF SUB SECTION (3) OF SECTION 40 OF THE
COMPANIES ACT, 2013 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID
BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES
MENTIONED IN THE PROSPECTUS. WE FURTHER CONFIRM THAT THE AGREEMENT
ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE, THE COMPANY AND THE
SELLING SHAREHOLDERS SPECIFICALLY CONTAINS THIS CONDITION. - NOTED FOR
COMPLIANCE. ALL MONIES RECEIVED OUT OF THE ISSUE SHALL BE CREDITED /
TRANSFERRED TO A SEPARATE BANK ACCOUNT AS REFERRED TO IN SUB-SECTION
(3) OF SECTION 40 OF THE COMPANIES ACT, 2013.
10.
WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRHP PROSPECTUS THAT
THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR
PHYSICAL MODE. NOT APPLICABLE. UNDER SECTION 29 OF THE COMPANIES ACT,
2013, EQUITY SHARES IN THE ISSUE HAVE TO BE ISSUED IN DEMATERIALISED FORM
ONLY.
11.
WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE SEBI
ICDR REGULATIONS HAVE BEEN MADE IN ADDITION TO DISCLOSURES WHICH, IN
OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE INVESTOR TO MAKE A WELL
INFORMED DECISION.
12.
WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRHP:
(A)
AN UNDERTAKING FROM THE COMPANY THAT AT ANY GIVEN TIME, THERE
SHALL BE ONLY ONE DENOMINATION FOR THE EQUITY SHARES OF THE
COMPANY; AND
(B)
AN UNDERTAKING FROM THE COMPANY THAT IT SHALL COMPLY WITH
SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY SEBI FROM
TIME TO TIME.
13.
WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO
ADVERTISEMENT IN TERMS OF THE SEBI ICDR REGULATIONS WHILE MAKING THE
ISSUE. –NOTED FOR COMPLIANCE
14.
WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS
BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS
BACKGROUND OF THE COMPANY, SITUATION AT WHICH THE PROPOSED BUSINESS
STANDS, THE RISK FACTORS, PROMOTERS’ EXPERIENCE, ETC.
15.
WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH
THE APPLICABLE PROVISIONS OF THE SEBI ICDR REGULATIONS, CONTAINING
DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS OF
COMPLIANCE, PAGE NUMBER OF THE DRAFT RED HERRING PROSPECTUS WHERE
THE REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.
16.
WE ENCLOSE STATEMENT ON ‘PRICE INFORMATION OF PAST ISSUES HANDLED BY
MERCHANT BANKERS (WHO ARE RESPONSIBLE FOR PRICING THE ISSUE)’, AS PER
FORMAT SPECIFIED BY THE SECURITIES AND EXCHANGE BOARD OF INDIA
THROUGH CIRCULAR.
305
17.
18.
WE CERTIFY THAT PROFITS FROM RELATED PARTY TRANSACTIONS HAVE ARISEN
FROM LEGITIMATE BUSINESS TRANSACTIONS. – COMPLIED WITH TO THE EXTENT
OF THE RELATED PARTY TRANSACTIONS OF THE COMPANY, IN ACCORDANCE WITH
ACCOUNTING STANDARD 18 AND INCLUDED IN THE DRAFT RED HERRING
PROSPECTUS
WE CERTIFY THAT THE ENTITY IS ELIGIBLE UNDER 106Y (1) (A) OR (B) (AS THE CASE
MAY BE) TO LIST ON THE INSTITUTIONAL TRADING PLATFORM, UNDER CHAPTER
XC OF THESE REGULATIONS. (IF APPLICABLE) – NOT APPLICABLE
The filing of this Draft Red Herring Prospectus does not, however, absolve our Company from any liabilities under
Section 34 or Section 36 of the Companies Act, 2013 or from the requirement of obtaining such statutory or other
clearances as may be required for the purpose of the Issue. SEBI further reserves the right to take up, at any point
of time, with the BRLM any irregularities or lapses in this Draft Red Herring Prospectus, the Red Herring
Prospectus and the Prospectus.
All legal requirements pertaining to the Issue will be complied with at the time of filing of the Red Herring
Prospectus with the RoC in terms of Section 32 of the Companies Act. All legal requirements pertaining to the
Issue will be complied with at the time of registration of the Prospectus with the RoC in terms of Sections 26 and
32 of the Companies Act.
Caution - Disclaimer from our Company, the Selling Shareholders and the BRLM
Our Company, the Directors and the BRLM accept no responsibility for statements made otherwise than in this
Draft Red Herring Prospectus or in the advertisements or any other material issued by or at our Company’s
instance and anyone placing reliance on any other source of information, including our Company’s website
www.nihilent.ciom, would be doing so at his or her own risk. Each Selling Shareholder assumes responsibility
severally only for statements in this Draft Red Herring Prospectus specifically in relation to itself as a Selling
Shareholder and the Equity Shares being offered by it through the Offer for Sale. The Selling Shareholders do not
assume any responsibility for any other statement in this Draft Red Herring Prospectus, including without
limitation, any and all of the statements made by or relating to the Company or its business.
The BRLM accept no responsibility, save to the limited extent as provided in the Offer Agreement and the
Underwriting Agreement to be entered into between the Underwriters, the Selling Shareholders 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 centres or elsewhere.
None among our Company, the Selling Shareholders or any member of the Syndicate is liable for any failure in
downloading the Bids due to faults in any software/hardware system or otherwise.
Investors who Bid in the Issue will be required to confirm and will be deemed to have represented to our
Company, the Selling Shareholders, 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 the Equity Shares and will not issue, 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 the Equity Shares. Our
Company, the Selling Shareholders, Underwriters 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 the Equity Shares.
The BRLM and its respective associates and affiliates may engage in transactions with, and perform services for,
our Company, the Selling Shareholders and their respective group companies, affiliates or associates or third
parties in the ordinary course of business and have engaged, or may in the future engage, in commercial banking
and investment banking transactions with our Company, the Selling Shareholders and their respective group
companies, affiliates or associates or third parties, for which they have received, and may in the future receive,
compensation.
306
Price information of past issues handled by the BRLM
Motilal Oswal Investment Advisors Private Limited
Issue
Issue Size
Price
(₹ mn)
(₹)
Sr.
Issue Name
No.
1
2
Pennar Engineered
Building Systems Limited
Power Mech Projects
Limited
Listing Date
+/- %
change in
+/- % change in +/- % change in closing
closing price, (+/- closing price,
price, [+/- %
Opening
% change in
(+/- % change in change in
Price on
closing
closing
closing
listing date benchmark)benchmark)benchmark]30th calendar
90th calendar
180th
days from listing days from listing calendar
days from
listing
1,561.87
178.00
September 10,
2015
177.95
-5.93% (5.16%) -10.65% (-2.25%)
NA
2,732.16
640.00
August 26, 2015
600.00
-9.36% (0.98%)
NA
-0.82% (1.18%)
Source: nseindia.com
i.
The S&P CNX NIFTY is considered as the Benchmark Index.
ii.
Price on NSE is considered for all of the above calculations.
Summary statement of price information of past public issues handled by Motilal Oswal Investment Advisors Private
Limited:
Financial
Year
Total
no.
of
IPOs
April 1, 2015 2
– date of filing
of this DRHP
2014-2015
Nil
2013-2014
Nil
Total
funds
raised
(in `
million)
Nos. of IPOs trading at
discount as on 30th
calendar day from
listing date
Over Between Less
50% 25%than
50%
25%
4,294.03 NA NA
2
Nos. of IPOs trading
at premium as on
30th calendar day
from listing date
Between Less Less
25%than than
50%
25% 25%
NA
NA NA
Nos. of IPOs trading at
discount as on 180th
calendar day from
listing date
Over Between Less
50% 25%than
50%
25%
NA NA
NA
Nos. of IPOs trading
at premium as on
180th calendar day
from listing date
Over Between Less
50% 25%than
50%
25%
NA
NA
NA
Nil
Nil
Nil
Nil
Nil
Nil
NA
NA
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
NA
NA
Disclaimer in respect of Jurisdiction
This Issue is being made in India to persons resident in India (including Indian nationals resident in India who are
competent to contract under the Indian Contract Act, 1872, HUFs, companies, corporate bodies and societies
registered under the applicable laws in India and authorised to invest in shares, Indian Mutual Funds registered
with SEBI, Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to
RBI permission), or trusts under applicable trust law and who are authorised under their constitution to hold and
invest in shares, permitted insurance companies and pension funds, insurance funds set up and managed by the
army and navy and insurance funds set up and managed by the Department of Posts, India) and to FIIs, Eligible
NRIs, FPIs and other eligible foreign investors (viz. bilateral and multilateral development financial institution).
This Draft Red Herring Prospectus does not, however, constitute an invitation to subscribe to Equity Shares offered
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 dispute arising out of this Issue will be subject
to the jurisdiction of appropriate court(s) in Mumbai only.
307
NA
NA
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 this Draft Red Herring Prospectus had been filed with SEBI for its observations.
Accordingly, the Equity Shares represented thereby may not be offered or sold, directly or indirectly, and this 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 this 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, the Subsidiaries or the Selling Shareholders 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
(the “U.S Securities Act”) and may not be offered or sold within the United States (as defined in Regulation S
of the U.S Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the U.S Securities Act and applicable state securities laws. Accordingly, the
Equity Shares are only being offered and sold outside the United States in reliance on Regulation S of the U.S
Securities Act.
Disclaimer Clause of BSE
As required, a copy of this Draft Red Herring Prospectus shall be submitted to BSE. The disclaimer clause as
intimated by BSE to our Company, post scrutiny of this Draft Red Herring Prospectus, shall be included in the Red
Herring Prospectus prior to the RoC filing.
Disclaimer Clause of the NSE
As required, a copy of this Draft Red Herring Prospectus shall be submitted to NSE. The disclaimer clause as
intimated by NSE to our Company, post scrutiny of this Draft Red Herring Prospectus, shall be included in the Red
Herring Prospectus prior to the RoC filing.
Filing
A copy of this Draft Red Herring Prospectus has been filed with SEBI at Corporation Finance Department, Plot
No.C4-A,'G' Block, Bandra Kurla Complex, Bandra (East), Mumbai- 400 051.
A copy of the Red Herring Prospectus, along with the documents required to be filed under Section 32 of the
Companies Act would be delivered for registration to the RoC and a copy of the Prospectus to be filed under
Section 26 of the Companies Act would be delivered for registration with RoC at the office of the Registrar of
Companies, Mumbai.
Listing
Applications have been made to the Stock Exchanges for permission to deal in and for an official quotation of the
Equity Shares. [●] will be the Designated Stock Exchange with which the Basis of Allotment will be finalised.
If the permissions to deal in and for an official quotation of the Equity Shares are not granted by any of the Stock
Exchanges mentioned above, our Company will forthwith repay, all moneys received from the Bidders /
Applicants in pursuance of the Red Herring Prospectus / Prospectus, as required by applicable law.
Our Company shall ensure that all steps for such completion of the necessary formalities for listing and
commencement of trading at all Stock Exchanges mentioned above are taken within 12 Working Days of the
Bid/Issue Closing Date. The Selling Shareholders shall provide reasonable support and extend reasonable
cooperation as required or requested by the Company to facilitate this process. If Equity Shares are not Allotted
pursuant to the Issue within 12 Working Days from the Bid/Issue Closing Date or within such timeline as
prescribed by the SEBI, the Company shall repay without interest all monies received from applicants, failing
which interest shall be due to be paid to the applicants at the rate of 15% per annum for the delayed period. Subject
to applicable law, a Selling Shareholder shall not be responsible to pay interest for any delay, unless such delay has
been caused solely by such Selling Shareholder.
308
Consents
Consents in writing of: (a) our Directors, our Company Secretary and Compliance Officer, our Chief Financial
Officer, legal advisors, Banker/Lenders to our Company; (b) the BRLM, the Syndicate Members, the Escrow
Collection Banks and the Registrar to the Issue to act in their respective capacities, have been obtained / will be
obtained prior to filing of the Red Herring Prospectus with the RoC and filed along with a copy of the Red Herring
Prospectus with the RoC as required under the Companies Act and such consents shall not be withdrawn up to the
time of delivery of the Red Herring Prospectus for registration with the RoC.
In accordance with the Companies Act, 2013 and the SEBI ICDR Regulations, our Statutory Auditors, M/s B S R
& Co. LLP, Chartered Accountants have given their written consent to the inclusion of their examination reports
dated December 7, 2015 on restated consolidated and unconsolidated financial statements and “Statement of Tax
Benefits” dated December 21, 2015 included in this Draft Red Herring Prospectus and such consents have not been
withdrawn as on the date of this Draft Red Herring Prospectus.
Experts to the Issue
Except as stated below, our Company has not obtained any expert opinions:
Our Company has received written consent from our Statutory Auditors namely, B S R & Co. LLP., Chartered
Accountants, to include their names as required under Section 26(1)(a)(v) of the Companies Act in this Draft Red
Herring Prospectus and as “expert” as defined under section 2(38) of the Companies Act in respect of the reports
of the Statutory Auditors on the Restated Consolidated Financial Statements and Restated Standalone Financial
Statements, each dated December 7, 2015 and the “Statement of Tax Benefits” each dated December 21, 2015
and included in this Draft Red Herring Prospectus and such consents have not been withdrawn as on the date of
this Draft Red Herring Prospectus. However, the term “expert” shall not be construed to mean an “expert” as
defined under the Securities Act.
Issue Expenses
The expenses of this Issue include, among others, underwriting and management fees, selling commissions,
printing and distribution expenses, legal fees, statutory advertisement expenses, registrar and depository fees and
listing fees. For further details of Issue expenses, please see section titled “Objects of the Issue” on page 91.
Other than listing fees which shall be borne by the Company, the expenses in relation to the Issue will be borne by
our Company and the Selling Shareholders in proportion to the Equity Shares contributed to the Issue by our
Company and the Selling Shareholders, respectively.
Fees Payable to the Syndicate
The total fees payable to the Syndicate (including underwriting commission and selling commission and
reimbursement of their out-of-pocket expense) will be as per the engagement letter dated July 15, 2015 with the
BRLM and the Syndicate Agreement. Copies of the Syndicate Agreement would be made available for inspection
at the Registered Office.
Commission payable to the Registered Brokers
For details of the commission payable to the Registered Brokers, please see section titled “Objects of the Issue” on
page 91.
Fees Payable to the Registrar to the Issue
The fees payable to the Registrar to the Issue for processing of application, data entry, printing of Allotment
Advice/CAN/refund order, preparation of refund data on magnetic tape, printing of bulk mailing register will be as
309
per the agreement dated December 23, 2015 entered into, between our Company, the Selling Shareholders and the
Registrar to the Issue, a copy of which is available for inspection at the Registered Office.
The Registrar to the Issue will 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 it
to send refund orders or Allotment advice by registered post/speed post/under certificate of posting.
Particulars regarding public or rights issues by our Company during the last five years
Our Company has not made any public or rights issues during the five years preceding the date of this Draft Red
Herring Prospectus.
Previous issues of Equity Shares otherwise than for cash
Except as disclosed in “Capital Structure” on page 63, our Company has not issued any Equity Shares for
consideration otherwise than for cash.
Commission and Brokerage paid on previous issues of the Equity Shares
Since this is the initial public issue of Equity Shares, 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 the Equity Shares since our
Company’s inception.
Previous capital issue during the previous three years by listed Group Companies and subsidiaries of our
Company
Neither the Group Company nor Subsidiaries of our Company have undertaken a capital issue in the last three years
preceding the date of this Draft Red Herring Prospectus.
Performance vis-à-vis objects – Public/rights issue of our Company and/or listed Group Companies and
associates of our Company
Our Company has not undertaken any previous public issues. None of our Group Companies are listed.
Outstanding Debentures or Bonds
As on date, there are no outstanding debentures or bonds of our Company.
Outstanding Preference Shares
As on date, there are no outstanding preference shares of our Company.
Partly Paid-up Shares
The Company does not have any partly paid-up Equity Shares as on the date of this Draft Red Herring Prospectus.
Stock Market Data of Equity Shares
This being an initial public offer of our Company, the Equity Shares are not listed on any stock exchange.
Mechanism for Redressal of Investor Grievances
The agreement between the Registrar to the Issue, our Company and the Selling Shareholders provides for retention
of records with the Registrar to the Issue for a period of at least three years from the last date of despatch of the
letters of Allotment, demat credit and refund orders to enable the investors to approach the Registrar to the Issue for
redressal of their grievances.
All grievances relating to the Issue may be addressed to the Registrar to the Issue, giving full details such as name,
application number, address of the applicant, number of Equity Shares applied for, the Bid Amount paid on
submission of the Bid cum Application Form and the entity and centre where the Bid cum Application Form was
310
submitted.
All grievances relating to the ASBA process may be addressed to the Registrar to the Issue with a copy to the
relevant SCSB and the Syndicate Members at the Specified Locations or the Registered Broker with whom the Bid
cum Application Form was submitted. In addition to the information indicated above, the ASBA Bidder should also
specify the Designated Branch or the collection centre of the SCSB or the address of the centre of the Syndicate
Member at the Specified Locations or the Registered Broker at the Broker Centre where the Bid cum Application
Form was submitted by the ASBA Bidder.
Further, with respect to the Bid cum Application Forms submitted with the Registered Brokers, the investor shall
also enclose the acknowledgment from the Registered Broker in addition to the documents/information mentioned
hereinabove.
Disposal of Investor Grievances by our Company
Our Company estimates that the average time required by our Company or the Registrar to the Issue or the SCSB in
case of ASBA Bidders, for the redressal of routine investor grievances shall be 10 Working Days from the date of
receipt of the complaint. In case of non-routine complaints and complaints where external agencies are involved, our
Company will seek to redress these complaints as expeditiously as possible.
Our Company has also appointed Rahul Bhandari, Company Secretary of our Company as the Compliance Officer
for the Issue and he may be contacted in case of any pre-Issue or post-Issue related problems at the following
address:
Rahul Bhandari
Office No. 403 and 404, 4th floor
Weikfield IT Citi Infopark
Nagar Road, Pune - 411014
Tel: +91 20 398 46100
Fax: +91 20 398 46499
Email: rahul.bhandari@nihilent.com
Changes in Auditors
There has been no change in the auditors during the last three years.
Capitalisation of Reserves or Profits
Our Company has not capitalised its reserves or profits at any time during the last five years, except as stated in
“Capital Structure” beginning on page 63.
Revaluation of Assets
Our Company has not re-valued its assets at any time in the last five years.
311
SECTION VII: ISSUE INFORMATION
TERMS OF THE ISSUE
The Equity Shares being issued pursuant to this Issue are subject to the provisions of the Companies Act, the SEBI
ICDR Regulations, SCRA, SCRR, the Memorandum of Association and Articles of Association, the terms of the
Red Herring Prospectus, the Prospectus, the abridged prospectus, Bid cum Application Form, the Revision Form,
the CAN, the Allotment Advice and other terms and conditions as may be incorporated in the Allotment Advices
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, the Government of India, the Stock Exchanges,
the RBI, RoC and/or other authorities, as in force on the date of the Issue and to the extent applicable or such other
conditions as may be prescribed by the SEBI, the RBI, the Government of India, the Stock Exchanges, the RoC
and/or any other authorities while granting its approval for the Issue.
Ranking of the Equity Shares
The Equity Shares being issued in the Issue shall rank pari-passu in all respects with the existing Equity Shares
including in respect of the rights to receive dividend. The Allottees upon Allotment of Equity Shares under the
Issue, will be entitled to dividend and other corporate benefits, if any, declared by our Company after the date of
Allotment. For further details, please see section titled “Main Provisions of Articles of Association” on page 375.
Mode of Payment of Dividend
Our Company shall pay dividends, if declared, to the shareholders of our Company in accordance with the
provisions of the Companies Act, the Memorandum of Association and Articles of Association and provisions of
the Listing Regulations and the Equity Listing Agreement to be entered into with the Stock Exchanges. For further
details in relation to dividends, please see section titled “Dividend Policy” and “Main Provisions of the Articles of
Association” on pages 178 and 375 respectively.
Face Value and Issue Price
The face value of each Equity Share is ` 10 and the Issue Price is ` [●] per Equity Share. The Anchor Investor
Issue Price is ` [●] per Equity Share.
The Price Band, any discount offered to Retail Individual Investors and the minimum Bid Lot size for the Issue
will be decided by our Company in consultation with the BRLM and advertised in one English national newspaper,
in one Hindi national newspaper and in one Marathi newspaper, each with wide circulation, at least five Working
Days prior to the Bid/Issue Opening Date. The Price Band, along with the relevant financial ratios calculated at the
Floor Price and at the Cap Price, shall be pre-filled in the Bid cum Application Forms available at the websites of
the Stock Exchanges.
At any given point of time, there shall be only one denomination of Equity Shares.
Compliance with the SEBI ICDR Regulations
Our Company shall comply with all the disclosure and accounting norms as specified by SEBI from time to time.
Rights of the Equity Shareholders
Subject to applicable laws, rules, regulations and guidelines and the Articles of Association, our equity
shareholders shall have the following rights:

Right to receive dividends, if declared;

Right to attend general meetings and exercise voting rights, unless prohibited by law;

Right to vote on a poll either in person or by proxy, in accordance with the provisions of the Companies
Act;
312

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 preferential claim being satisfied;

Right of free transferability, subject to applicable laws 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 Regulations and the Equity Listing Agreements with the Stock Exchange(s)
and the Memorandum of Association and Articles of Association of our Company.
For a detailed description of the main provisions of the Articles of Association of our Company relating to voting
rights, dividend, forfeiture and lien, transfer, transmission and/or consolidation/splitting, please see section titled
“Main Provisions of Articles of Association” on page 375.
Market Lot and Trading Lot
Pursuant to Section 29 of the Companies Act, 2013, the Equity Shares shall be allotted only in dematerialised form.
As per the SEBI ICDR Regulations, the trading of the Equity Shares shall only be in dematerialised form. In this
context, two agreements have been signed among our Company, the respective Depositories and the Registrar to the
Issue:

Agreement dated August 20, 2015 between NSDL, our Company and the Registrar to the Issue;

Agreement dated August 10, 2015 between CDSL, our Company and the Registrar to the Issue.
Since trading of the Equity Shares is in dematerialised form, the tradable lot is one Equity Share. Allotment in this
Issue will be only in electronic form in multiples of one Equity Share subject to a minimum Allotment of [●] Equity
Shares.
Nomination facility to investors
In accordance with Section 72 of the Companies Act, the sole Bidder, or the first Bidder along with other joint
Bidders, 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, in accordance with Section
72 of the Companies Act, 2013. A person, being a nominee, entitled to the Equity Shares by reason of the death of
the original holder(s), shall 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 of Equity Share(s) by the person nominating. A
nomination may be cancelled, or varied by nominating any other person in place of the present nominee, by the
holder of the Equity Shares who has made the nomination, by giving a notice of such cancellation or variation to our
Company in the prescribed form.
Any person who becomes a nominee by virtue of the provisions of Section 72 of the Companies Act shall upon the
production of such evidence as may be required by the Board, elect either:
(a)
to register himself or herself as the holder of the Equity Shares; or
(b)
to make such transfer of the Equity Shares, as the deceased holder could have made.
Further, the Board may, at any time, give notice requiring any nominee to choose either to be registered himself or
herself or to transfer the Equity Shares, and if the notice is not complied with within a period of 90 days, the Board
may thereafter withhold payment of all dividends, interests, bonuses or other moneys 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 dematerialised form, there is no requirement
to make a separate nomination with our Company. Nominations registered with respective depository participant of
313
the Bidder would prevail. If the Bidder wants to change the nomination, they are requested to inform their respective
depository participant.
Minimum Subscription
If our Company does not receive (i) the minimum subscription of 90% of the Fresh Issue; and (ii) a subscription in
the Issue equivalent to at least 25% post-Issue paid up Equity Share capital of our Company (the minimum number
of securities as specified under Rule 19(2)(b)(i) of the SCRR), including devolvement of Underwriters, our
Company shall refund the entire subscription amount received, within period as prescribed under Regulation 14 of
the SEBI ICDR Regulations. If such money is not repaid within 12 Working Days of the Bid/Issue Closing Date or
within 15 days of the Bid/Issue Closing Date, whichever is earlier, then our Company shall, on and from expiry of
eight days, be liable to repay the money with interest at the rate prescribed by the Companies Act read with the
applicable rules framed thereunder. The requirement for minimum subscription is not applicable to the Offer for
Sale.
Further, our Company shall ensure that the number of prospective Allottees to whom the Equity Shares will be
Allotted shall not be less than 1,000.
Arrangements for Disposal of Odd Lots
There are no arrangements for disposal of odd lots.
Restrictions on Transfer and Transmission of Equity Shares
Except for the lock-in of the pre-Issue capital of our Company, promoter’s minimum contribution and the Anchor
Investor lock-in as provided in “Capital Structure” on page 63 and except as provided in the Articles of
Association there are no restrictions on transfer of Equity Shares. Further, there are no restrictions on the
transmission of the Equity Shares / debentures of our Company and on their consolidation/ splitting, except as
provided in the Articles of Association. For details, please see section titled “Main Provisions of the Articles of
Association” on page 375.
The Equity Shares have not been and will not be registered under the US Securities Act of 1933 (“Securities
Act”) and may not be offered or sold within the United States (as defined in Regulation S under the Securities
Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements
of the Securities Act. Accordingly, the Equity Shares are only being offered and sold outside the United States
in offshore transactions in compliance with Regulation S under the Securities Act and the applicable laws of
the jurisdiction where those offers and sales occur.
Option to receive Equity Shares in Dematerialised Form
Pursuant to Section 29 of the Companies Act, 2013, the Allotment of Equity Shares to successful Bidders will only
be in the dematerialised form. Bidders will not have the option of Allotment of the Equity Shares in physical form.
The Equity Shares on Allotment will be traded only in the dematerialised segment of the Stock Exchanges.
314
ISSUE STRUCTURE
Initial public offering of up to [●] Equity Shares for cash at price of ` [●] per Equity Share (including a premium of
` [●] per Equity Share) aggregating to ` 1,400 million comprising of a Fresh Issue of up to [●] Equity Shares
aggregating to ` [●] million by our Company and an offer for sale of up to 2,438,199 Equity Shares by the Selling
Shareholders. The Issue will constitute [●] % of the post-Issue paid-up Equity Share capital of our Company.
The Issue is being made through the Book Building Process.
QIBs(1)
Non-Institutional Bidders
Retail Individual Bidders
Number of Equity Shares
available for allocation(2)
At least [●] Equity Shares
Percentage of the Issue
Size available for
allocation
Atleast 75% of the Issue
Size
Not more than [●]
Equity
Shares
available for allocation
Not more than 15% of
the Issue Size
Not more than [●]
Equity Shares available
for allocation
Not more than 10% of
the Issue Size
Particulars
However, up to 5% of the
QIB Portion shall be
available for allocation
proportionately to Mutual
Funds only.
Basis of
allotment/allocation, if
respective category is
oversubscribed
Up to 60% of the QIB
Portion may be available
for allocation to Anchor
Investors and one-third of
the
Anchor
Investor
Portion shall be available
for allocation to domestic
Mutual Funds.(3)
Proportionate as follows
(excluding the
Anchor
Investor Portion):
(a) [●] Equity Shares,
constituting 5% of the Net
QIB Portion, shall be
available for allocation on a
proportionate
basis
to
Mutual Funds;
(b) [●] Equity Shares shall
be
allotted
on
a
proportionate basis to all
QIBs including Mutual
Funds receiving allocation
as per (a) above
Proportionate
In the event, the Bids
received from Retail
Individual
Investors
exceeds
[●]
Equity
Shares,
then
the
maximum number of
Retail
Individual
Investors who can be
Allotted the minimum
Bid lot will be computed
by dividing the total
number of Equity Shares
available for Allotment
to
Retail
Individual
Investors
by
the
minimum
Bid
lot
(“Maximum
RII
Allottees”).
The
Allotment
to
Retail
Individual Investors will
then be made in the
following manner:
a. In the event the
number of Retail
Individual Investors
315
Particulars
QIBs(1)
Non-Institutional Bidders
Retail Individual Bidders
who have submitted
valid Bids in the Issue
is equal to or less than
Maximum
RII
Allottees, (i) Retail
Individual Investors
shall be Allotted the
minimum Bid lot; and
(ii) the balance Equity
Shares,
if
any,
remaining
in
the
Retail Category shall
be Allotted on a
proportionate basis to
the Retail Individual
Investors who have
received Allotment as
per (i) above for less
than the Equity Shares
Bid by them (i.e. who
have Bid for more
than the minimum Bid
lot).
Minimum Bid
Such number of Equity
Shares and in multiples of
[] Equity Shares thereafter
such that the Payment
Amount exceeds ` 200,000.
Maximum Bid
Not exceeding the size of
the
Issue
subject
to
regulations as applicable to
the Bidder.
Such number of Equity
Shares that the Payment
Amount
exceeds
`
200,000 and in multiples
of [●] Equity Shares
thereafter.
Not exceeding the size of
the Issue subject to
regulations as applicable
to the Bidder.
Mode of Allotment
Compulsorily
in
dematerialised form.
[●] Equity Shares in
multiples of [●] Equity
Shares thereafter.
Compulsorily
in
dematerialised form.
[●] Equity Shares in
multiples of [●] Equity
Shares thereafter.
Bid Lot
316
b. In the event the
number of Retail
Individual Investors
who have submitted
valid Bids in the Issue
is
more
than
Maximum
RII
Allottees, the Retail
Individual Investors
(in that category) who
will then be Allotted
minimum Bid lot shall
be determined on
draw of lots basis.
[●] Equity Shares and in
multiples of [] Equity
Shares thereafter.
Such number of Equity
Shares in multiples of [●]
so as to ensure that the
Payment Amount does not
exceed ` 200,000.
Compulsorily
in
dematerialised form.
[●] Equity Shares in
multiples of [●] Equity
Shares thereafter.
Particulars
Allotment Lot
Trading Lot
Who can Apply(4)
Terms of Payment(5)
QIBs(1)
Non-Institutional Bidders
Retail Individual Bidders
[●] Equity Shares and in
multiples of one Equity
Share thereafter.
One Equity Share
[●] Equity Shares and in
multiples of one Equity
Share thereafter.
One Equity Share
[●] Equity Shares and in
multiples of one Equity
Share thereafter.
One Equity Share
(i) a Mutual Fund registered
with SEBI; (ii) a FII and
subaccount (other than a sub
account which is a foreign
corporate
or
foreign
individual), registered with
SEBI; (iii) a FPI other than
Category
III
foreign
portfolio investors, (iv)
public financial institution
as defined in Section 2(72)
of the Companies Act,
2013; (v) AIFs, (vi) a
scheduled commercial bank;
(vii) a multilateral and
bilateral
development
financial institution; (viii) a
state industrial development
corporation;
(ix)
an
insurance
company
registered
with
the
Insurance Regulatory and
Development Authority; (x)
a provident fund with
minimum corpus of `250
million; (xi) a pension fund
with minimum corpus of
`250 million; (xii) National
Investment Fund set up by
resolution no. F. No.
2/3/2005
DDII
dated
November 23, 2005 of the
Government
of
India
published in the gazette of
India; (xiii) insurance funds
set up and managed by
army, navy or air force of
the Union of India; and
(xiv) insurance funds set up
and managed by the
Department of Posts, India
eligible for Bidding in the
Issue.
Full Bid Amount at the time
of submission of the Bid –
cum-Application
Form
through the ASBA Process
(other than for Anchor
Investors).
Resident
Indian
individuals,
Eligible
NRIs, HUF (applying
through
the
Karta),
companies,
corporate
bodies,
scientific
institutions,
societies
trusts,
Category
III
Foreign
Portfolio
Investors.
Resident
Indian
individuals, Eligible NRIs,
HUF (applying through
the Karta).
Full Bid Amount at the
time of submission of the
Bid-cum-Application
Form through the ASBA
Process.
Full Bid Amount at the time
of submission of the Bid –
cum-Application
form
either through ASBA or
through the Non-ASBA
Process.
317
(1)
Our Company may in consultation with the BRLM, allocate up to 60% 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, 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, please see section titled “Issue Procedure” on page 321.
(2)
Pursuant to Rule 19 (2) (b) (i) of the SCRR and Regulation 41 of the SEBI ICDR Regulations, the Issue is being made for
atleast 25% of the fully diluted post- Issue equity share capital of our Company, subject to valid Bids being received at or
above the Issue Price. The Issue is being made under sub-regulation (2) of Regulation 26 and Regulation 43(2A) of the SEBI
ICDR Regulations and through a Book Building Process wherein atleast 75% of the Issue shall be available for allocation
on a proportionate basis to QIBs. 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.
Further, not more than 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional
Bidders and not more than 10% of the Issue will be available for allocation to Retail Individual Bidders. 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,
subject to valid Bids being received from them at or above the Issue Price. Under-subscription, if any, in any category
except the QIB Category would be allowed to be met with spill over from any of the category or combination of categories
at the discretion of our Company, the Book Running Lead Manager and the Designated Stock Exchange and in accordance
with applicable laws, rules, regulations and guidelines, subject to valid Bids being received at or above the Bid Price.
However, under-subscription in the QIB Category would not be allowed to be met with spill- over from any other category.
For details, please see section titled “Issue Procedure” on page 321.
(3)
Full Bid Amount shall be payable by the Anchor Investors at the time of submission of the Bid-cum-Application Forms. In
case the Anchor Investor Issue Price is lower than the Issue Price, the balance amount will be payable as per pay-in date
mentioned in the revised CAN.
(4)
In case of joint Bids, the Bid-cum-Application Form should contain only the name of the first Bidder whose name should
also appear as the first holder of the beneficiary account held in joint names. The signature of only such first Bidder would
be required in the Bid-cum-Application Form and such first Bidder would be deemed to have signed on behalf of the joint
holders.
Bidders will be required to confirm and will be deemed to have represented to our Company, the BRLM, its respective
directors, officers, agents, affiliates and representatives that they are eligible under applicable laws, rules, regulations,
guidelines and approvals to acquire the Equity Shares in this Issue.
(5)
In case of ASBA Bidders, the SCSB shall be authorised to block such funds in the bank account of the ASBA Bidder that are
specified in the Bid-cum-Application Form.
In case of oversubscription in Retail Individual Bidder Portion, maximum number of Retail Individual Bidders who
can be Allotted the minimum Bid Lot will be computed by dividing the total number of Equity Shares available for
Allotment to Retail Individual Bidders by the minimum Bid Lot (“Retail – Bid Lot Allottees”). The Allotment to
Retail Individual Bidders will then be made in the following manner:
(i)
In the event the number of Retail Individual Bidders who have submitted valid Bids in the Issue is equal to
or less than Retail – Bid Lot Allottees, (i) all such Retail Individual Bidders shall be Allotted the minimum
Bid Lot; and (ii) the available balance Equity Shares, if any, remaining in the Retail Category shall be
Allotted on a proportionate basis to those Retail Individual Bidders who have applied for more than the
minimum Bid Lot, for the balance demand of the Equity Shares Bid by them (i.e. the difference between
the Equity Shares Bid and the minimum Bid Lot).
(ii)
In the event number of Retail Individual Bidders who have submitted valid Bids in the Issue is more than
the Retail – Bid Lot Allottees, those Retail Individual Bidders, who will be Allotted the minimum Bid Lot
shall be determined the basis of draw of lots.
Withdrawal of the Issue
Our Company in consultation with the BRLM, reserve the right not to proceed with the Issue at any time prior to
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 of the Bid/Issue Closing Date or such other time as may be
318
prescribed by SEBI, 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 from the date of
receipt of such notification. Our Company shall also inform the same to the Stock Exchanges on which Equity
Shares are proposed to be listed.
If our Company withdraws the Issue after the Bid/Issue Closing Date and thereafter determine that they will
proceed with a fresh issue / offer for sale of the Equity Shares, our Company shall file a fresh draft red herring
prospectus with SEBI. Notwithstanding the foregoing, this Issue is also subject to obtaining (i) the final listing
and trading approvals of the Stock Exchanges, which our Company shall apply for after Allotment, and (ii) the
final RoC approval of the Prospectus after it is filed with the RoC.
Issue Programme
ISSUE PROGRAMME#
ISSUE OPENS ON : [●]
ISSUE CLOSES ON**: [●]
Our Company in consultation with the BRLM, may offer a discount of up to 10% (equivalent of ` [●]) on the Issue
Price to Retail Individual Investors, which shall be announced at least five Working Days prior to the Issue Opening
Date
*
#
* Our Company may in consultation with the BRLM, consider participation by Anchor Investors. The Anchor
Investor shall bid on the Anchor Investor Bidding Date i.e. one working day prior to the Bid/ Issue Opening Date.
** Our Company may in consultation with the BRLM, consider closing the Bidding by QIB Bidders one Working
Day prior to the Bid/Issue Closing Date in accordance with the SEBI ICDR Regulations.
An indicative timetable in respect of the Issue is set out below:
Event
Indicative Date
Bid/Issue Closing Date
Finalisation of Basis of Allotment with the Designated
Stock Exchange
Initiation of refunds
Credit of Equity Shares to demat accounts of Allottees
[●]
On or about [●]
Commencement of trading of the Equity Shares on the
Stock Exchanges
On or about [●]
On or about [●]
On or about [●]
The above timetable is indicative and does not constitute any obligation on our Company or the Selling
Shareholders or the BRLM.
While our 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 Exchanges 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 our Company revision of the Price Band or any delay in receiving the final listing and
trading approval from the Stock Exchanges. The commencement of trading of the Equity Shares will be
entirely at the discretion of the Stock Exchanges and in accordance with the applicable laws.
Except in relation to the Bids received from 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, “IST”) during the Bid/ Issue Period (except the Bid/Issue
Closing Date) as mentioned above at the bidding centres and the Designated Branches as mentioned on the Bid cum
Application Form. On the Bid/ Issue Closing Date, the Bids and any revision in the Bids shall be accepted only
between 10.00 a.m. and 3.00 p.m. (IST) and shall be uploaded until (i) 4.00 p.m. (IST) in case of Bids by QIBs and
Non-Institutional Bidders, and (ii) until 5.00 p.m. (IST) or such extended time as permitted by the Stock Exchanges,
in case of Bids by Retail Individual Bidders after taking into account the total number of applications received up to
the closure of timings and reported by the BRLM to the Stock Exchanges. On the Bid/Issue Closing Date, extension
of time may be granted by the Stock Exchanges only for uploading the Bids received by Retail Individual Bidders
after taking into account the total number of Bids received and as reported by the BRLM to the Stock Exchanges. It
319
is clarified that the Bids not uploaded on the electronic bidding would be rejected.
Due to limitation of time available for uploading Bids on the Bid/ Issue Closing Date, Bidders are advised to submit
their Bids one day prior to the Bid/ Issue Closing Date and no later than 1.00 p.m. (IST) on the Bid/ Issue Closing
Date. Bidders are cautioned that in the event a large number of Bids are received on Bid/ Issue Closing Date, as is
typically experienced in public offerings, some Bids may not get uploaded due to lack of sufficient time. Such Bids
that cannot be uploaded will not be considered for allocation under the Issue. Bids will be accepted only on Business
Days, i.e., Monday to Friday (excluding any public holiday). Our Company, the Selling Shareholders and the
members of Syndicate are not liable for any failure in uploading Bids due to faults in any software/hardware system
or otherwise. Any time mentioned in this Draft Red Herring Prospectus is Indian Standard Time.
In case of any 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 Exchanges 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.
Our Company in consultation with the BRLM, reserve the right to revise the Price Band during the Bid/Issue Period,
provided that 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 the Price Band shall not exceed 20% on either side i.e. the
Floor Price can move up or down to the extent of 20% of the Floor Price and the Cap Price will be revised
accordingly.
In case of revision in the Price Band, the Bid/Issue Period shall be extended for at least three additional
Working Days after such revision, subject to the Bid/Issue Period not exceeding 10 Working Days. Any
revision in Price Band, and the revised Bid/Issue Period, if applicable, shall be widely disseminated by
notification to the Stock Exchanges, by issuing a press release and also by indicating the change on the
websites of the BRLM and at the terminals of the Syndicate Members.
320
ISSUE PROCEDURE
All Bidders should review the General Information Document for investing in public issues prepared and issued in
accordance with the circular (CIR/CFD/DIL/12/2013) dated October 23, 2013 notified by SEBI (the “General
Information Document”) included below under section “- Part B – General Information Document”, which
highlights the key rules, processes and procedures applicable to public issues in general in accordance with the
provisions of the Companies Act, the Securities Contracts (Regulation) Act, 1956, the Securities Contracts
(Regulation) Rules, 1957 and the SEBI ICDR Regulations. The General Information Document has been updated
to include reference to the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014
and certain notified provisions of the Companies Act, 2013, to the extent applicable to public issue. The General
Information Document is also available on the websites of the Stock Exchanges, the BRLM. Please refer to the
relevant provisions of the General Information Document which are applicable to the Issue.
Our Company, the Selling Shareholders and the BRLM do not accept any responsibility for the completeness and
accuracy of the information stated in this section, and are not liable for any amendment, modification or change in
the applicable law which may occur after the date of this Draft Red Herring Prospectus. Bidders are advised to
make their independent investigations and ensure that their Bids are submitted in accordance with applicable laws
and do not exceed the investment limits or maximum number of the Equity Shares that can be held by them under
applicable law or as specified in this Draft Red Herring Prospectus, the Red Herring Prospectus and the
Prospectus.
PART A
The Issue is being made through the Book Building Process wherein wherein 75% of the Issue shall be available
for allocation to QIBs on a proportionate basis, provided that our Company may allocate up to 60% of the QIB
Category to Anchor Investors on a discretionary basis, in accordance with the SEBI ICDR Regulations, of which
one-third shall be reserved for domestic Mutual Funds, subject to valid Bids being received from them at or above
the price at which allocation is being made to other Anchor Investors. 5% of the QIB Category (excluding the
Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the
remainder of the QIB Category shall be available for allocation on a proportionate basis to all QIB Bidders (other
than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the Issue Price.
Further, not more than 15% of the Issue shall be available for allocation on a proportionate basis to NonInstitutional Bidders and not more than 10% of the Issue shall be available for allocation to Retail Individual
Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Issue
Price.
In case of under-subscription in the Issue category, spill-over to the extent of under-subscription shall be permitted
from the reserved category to the Issue. Under-subscription, if any in any category, except QIB Category, would be
allowed to be met with spill-over from any other category or combination of categories at the discretion of our
Company in consultation with the BRLM and the Designated Stock Exchange.
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 Exchanges.
Bid cum Application Form
Please note that there is a common Bid cum Application Form for ASBA Bidders as well as for non-ASBA Bidders.
Copies of the Bid cum Application Form and the abridged prospectus will be available at the offices of the BRLM,
the Syndicate Members, the Registered Brokers, the SCSBs and the Registered Office of our Company. An
electronic copy of the Bid cum Application Form will also be available on the websites of the SCSBs, the NSE
321
(www.nseindia.com) and the BSE (www.bseindia.com) and the terminals of the Registered Brokers. Physical Bid
cum Application Forms for Anchor Investors shall be made available at the offices of the BRLM.
QIBs (other than Anchor Investors) and Non-Institutional Bidders shall mandatorily participate in the Issue only
through the ASBA process. Retail Individual Bidders can participate in the Issue through the ASBA process as well
as the non-ASBA process.
Anchor Investors are not permitted to participate in the Issue through the ASBA process.
ASBA Bidders must provide bank account details in the relevant space provided in the Bid cum Application Form
and the Bid cum Application Form that does not contain such details are liable to be rejected. In relation to nonASBA Bidders, the bank account details shall be available from the depository account on the basis of the DP ID,
Client ID and PAN provided by the non-ASBA Bidders in their Bid cum Application Form.
Bidders shall ensure that the Bids are made on Bid cum Application Forms bearing the stamp of a member of the
Syndicate or the Registered Broker or the SCSBs, as the case may be, submitted at the Bidding centres only (except
in case of electronic Bid cum Application Forms) and the Bid cum Application Forms not bearing such specified
stamp are liable to be rejected.
The prescribed colour of the Bid cum Application Form for the various categories is as follows:
Colour of Bid cum
Application Form*
Category
Resident Indians and Eligible NRIs applying on a non-repatriation basis
White
Eligible NRIs, FIIs, FPIs or FVCIs, registered Multilateral and Bilateral
Blue
Development Financial Institutions applying on a repatriation basis
Anchor Investors**
White
* Excluding electronic Bid cum Application Form
** Bid cum Application Forms for Anchor Investors will be made available at the office of the BRLM.
Who can Bid?
In addition to the categories of Bidders set forth under “– General Information Document for Investing in Public
Issues – Category of Investors Eligible to Participate in an Issue”, the following persons are also eligible to invest in
the Equity Shares under all applicable laws, regulations and guidelines, including:

Mutual Funds registered with SEBI. Bids by asset management companies or custodians of Mutual Funds
should clearly indicate the name of the concerned scheme for which the Bid is submitted;

Venture Capital Funds and Alternative Investment Funds registered with SEBI;

Foreign Venture Capital Investors registered with SEBI;

Foreign Portfolio Investor registered with SEBI, provided that any FII who holds a valid certificate of
registration shall be deemed to be an FPI until the expiry of the block of three years for which fees have
been paid as per the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations,
1995;

State Industrial Development Corporations;

Scientific and/or industrial research organisations authorised in India to invest in the Equity Shares.

Insurance companies registered with IRDA;
322

Provident funds and pension funds with a minimum corpus of ` 250 million and who are authorised under
their constitutional documents to hold and invest in equity shares;

National Investment Fund set up by resolution no. F. No. 2/3/2005-DD-II dated November 23, 2005 of the
GoI published in the Gazette of India;

Insurance funds set up and managed by the army, navy or air force of the Union of India or by the
Department of Posts, India;

Multilateral and bilateral development financial institutions; and

Any other person eligible to Bid in the Offer under applicable laws.
Participation by associates and affiliates of the BRLM and the Syndicate Members
The BRLM and the Syndicate Member shall not be entitled to subscribe to this Issue in any manner except towards
fulfilling their underwriting obligations. Associates and affiliates of the BRLM and the Syndicate Member may
subscribe to or acquire Equity Shares in the Issue, including in the Net QIB Portion and Non-Institutional Category
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.
The BRLM and any persons related to the BRLM (other than Mutual Funds sponsored by entities related to the
BRLM) or our Promoters and the Promoter Group cannot apply in the Issue under the Anchor Investor Portion.
Bids by Mutual Funds
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, the Company reserves the right to reject any Bid without assigning any
reason thereof. Bids made by asset management companies or custodians of Mutual Funds shall specifically state
names of the concerned schemes for which such Bids are made.
No Mutual Fund scheme shall invest more than 10% of its net asset value in equity shares or equity related
instruments of any single 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.
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.
Bids by Eligible NRIs
NRIs may obtain copies of Bid cum Application Form from the offices of the BRLM, the Syndicate Members, the
Registered Brokers and the SCSBs. Only Bids accompanied by payment in Indian Rupees or freely convertible
foreign exchange will be considered for Allotment. Eligible NRIs (applying on a non-repatriation basis) should make
payments by inward remittance in foreign exchange through normal banking channels or out of funds held in NonResident External (“NRE”) Accounts or Foreign Currency Non-Resident (“FCNR”) Accounts, or out of a NonResident Ordinary (“NRO”) Account, or Non-Resident (Special) Rupee Account / Non-Resident Non-Repatriable
Term Deposit Account. NRIs Bidding on non-repatriation basis are advised to use the Bid cum Application Form for
Residents (white in colour). 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.
Eligible NRIs intending to make payment through freely convertible foreign exchange and bidding on a repatriation
basis could make payments through Indian Rupee drafts purchased abroad or cheques or bank drafts or by debits to
their NRE or FCNR accounts, maintained with banks authorised by the RBI to deal in foreign exchange. Eligible
NRIs bidding on a repatriation basis are advised to use the Bid cum Application Form meant for Non-Residents
323
(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. Payment for Bids by non-resident Bidder bidding on a repatriation basis
will not be accepted out of NRO accounts.
Non ASBA Bids by NRIs shall be submitted only in the locations specified in the Bid cum Application Form.
Bids by FPIs and FIIs
On January 7, 2014, SEBI notified the SEBI FPI Regulations pursuant to which the existing classes of portfolio
investors namely ‘foreign institutional investors’ and ‘qualified foreign investors’ will be subsumed under a new
category namely ‘foreign portfolio investors’ or ‘FPIs’. RBI on March 13, 2014 amended the FEMA Regulations
and laid down conditions and requirements with respect to investment by FPIs in Indian companies.
In terms of the SEBI FPI Regulations, an FII who holds a valid certificate of registration from SEBI shall be deemed
to be a registered FPI until the expiry of the block of three years for which fees have been paid as per the SEBI FII
Regulations. Accordingly, such FIIs can participate in this Issue in accordance with Schedule 2 of the FEMA
Regulations. An FII shall not be eligible to invest as an FII after registering as an FPI under the SEBI FPI
Regulations.
In terms of the SEBI FPI Regulations, the issue of Equity Shares to a single FPI or an investor group (which means
the same set of ultimate beneficial owner(s) investing through multiple entities) is not permitted to exceed 10% of
our post-Issue Equity Share capital. Further, in terms of the FEMA Regulations, the total holding by each FPI shall
be below 10% of the total paid-up Equity Share capital of our Company and the total holdings of all FPIs put
together shall not exceed 24% of the paid-up Equity Share capital of our Company. The aggregate limit of 24% may
be increased up to the sectoral cap by way of a resolution passed by the Board of Directors followed by a special
resolution passed by the Shareholders of our Company and subject to prior intimation to RBI. In terms of the FEMA
Regulations, for calculating the aggregate holding of FPIs in a company, holding of all registered FPIs as well as
holding of FIIs (being deemed FPIs) shall be included.
The existing individual and aggregate investment limits an FII or sub account in our Company is 10% and 24% of
the total paid-up Equity Share capital of our Company, respectively.
FPIs are permitted to participate in the Issue subject to compliance with conditions and restrictions which may be
specified by the Government from time to time.
Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of
Regulation 22 of the SEBI FPI Regulations, an FPI, other than Category III foreign portfolio investors and
unregulated broad based funds, which are classified as Category II foreign portfolio investor by virtue of their
investment manager being appropriately regulated, may issue or otherwise deal in offshore derivative instruments
(as defined under the SEBI FPI Regulations as any instrument, by whatever name called, which is issued overseas by
a FPI 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. An FPI 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.
Bids by SEBI registered VCFs, AIFs and FVCIs
The SEBI VCF Regulations and the SEBI FVCI Regulations, inter alia, prescribe the investment restrictions on the
VCFs and FVCIs registered with SEBI. Further, the SEBI AIF Regulations prescribe, among others, the investment
restrictions on AIFs.
Accordingly, the holding by any individual VCF registered with SEBI in one venture capital undertaking should not
exceed 25% of the corpus of the VCF. Further, VCFs and FVCIs can invest only up to 33.33% of the investible
funds by way of subscription to an initial public offering.
324
The category I and II AIFs cannot invest more than 25% of the corpus in one investee company. A category III AIF
cannot invest more than 10% of the corpus in one investee company. A venture capital fund registered as a category
I AIF, as defined in the SEBI AIF Regulations, cannot invest more than 1/3 rd 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 AIF Regulations shall continue to be regulated by the VCF Regulations.
Bids by limited liability partnerships
In case of 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 reject any Bid without assigning
any reason thereof.
Bids by banking companies
In case of Bids made by banking companies registered with the RBI, certified copies of: (i) the certificate of
registration issued by the RBI, and (ii) the approval of such banking company’s investment committee are required
to be attached to the Bid cum Application Form, failing which our Company reserves the right to reject any Bid
without assigning any reason therefor.
The investment limit for banking companies in non-financial services companies as per the Banking Regulation Act,
1949, as amended (the “Banking Regulation Act”), and the Master Circular dated July 1, 2015 – Para-banking
Activities, is 10% of the paid-up share capital of the investee company or 10% of the banks’ own paid-up share
capital and reserves, whichever is less. Further, the investment in a non-financial services company by a banking
company together with its subsidiaries, associates, joint ventures, entities directly or indirectly controlled by the
bank and mutual funds managed by asset management companies controlled by the banking company cannot exceed
20% of the investee company’s paid-up share capital. A banking company may hold up to 30% of the paid-up share
capital of the investee company with the prior approval of the RBI provided that the investee company is engaged in
non-financial activities in which banking companies are permitted to engage under the Banking Regulation Act.
Bids under Power of Attorney
In case of Bids made pursuant to a power of attorney or by limited companies, corporate bodies, registered
societies, FIIs, Mutual Funds, insurance companies and provident funds with a minimum corpus of ` 250 million
and pension funds with a minimum corpus of ` 250 million (in each case, subject to applicable law and in
accordance with their respective constitutional documents), 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 bye laws, as applicable must be lodged along 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.
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, as amended, are broadly set forth below:
(a)
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;
(b)
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 ULIPs); and
325
(c)
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 SCSBs
SCSBs participating in the Issue are required to comply with the terms of the SEBI circulars dated September 13,
2012 and January 2, 2013. Such SCSBs are required to ensure that for making applications on their own account
using ASBA, they should have a separate account in their own name with any other SEBI registered SCSBs.
Further, 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.
Bids by provident funds/pension funds
In case of Bids made by provident funds/pension funds, subject to applicable laws, with minimum corpus of ` 250
million, 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.
The above information is given for the benefit of the Bidders. Our Company and the BRLM are not liable
for any amendments or modification 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 any single Bid from them does not exceed the applicable investment limits or maximum
number of the Equity Shares that can be held by them under applicable law or regulation or as specified in
the Draft Red Herring Prospectus.
General Instructions
Do’s:
1.
Check if you are eligible to apply as per the terms of the Red Herring Prospectus and under applicable law;
2.
Ensure that you have Bid within the Price Band;
3.
Read all the instructions carefully and complete the Bid cum Application Form in the prescribed form;
4.
Ensure that the details about the PAN, DP ID and Client ID are correct and the Bidders depository account
is active, as Allotment of the Equity Shares will be in the dematerialised form only;
5.
Ensure that the Bids are submitted at the bidding centres only on forms bearing the stamp of the Syndicate
or Registered Broker or SCSB (except in case of electronic forms).
6.
In relation to the ASBA Bids, ensure that your Bid cum Application Form is submitted either at a
Designated Branch of a SCSB where the ASBA Account is maintained or with the Syndicate in the
Specified Locations or with a Registered Broker at the Broker Centres, and not to the Escrow Collecting
Banks (assuming that such bank is not a SCSB) or to our Company or the Selling Shareholders or the
Registrar to the Issue;
7.
With respect to the 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;
8.
QIBs (other than Anchor Investors) and the Non-Institutional Bidders should submit their Bids through the
ASBA process only;
9.
With respect to Bids by SCSBs, ensure that you have a separate account in your own name with any other
SCSB having clear demarcated funds for applying under the ASBA process and that such separate account
(with any other SCSB) is used as the ASBA Account with respect to your Bid;
326
10.
Ensure that you request for and receive a TRS for all your Bid options;
11.
Ensure that you have funds equal to the Bid Amount in the ASBA Account maintained with the SCSB
before submitting the Bid cum Application Form under the ASBA process to the respective member of the
Syndicate (in the Specified Locations), the SCSBs or the Registered Broker (at the Broker Centres);
12.
Ensure that you have funds equal to the Bid Amount in your bank account before submitting the Bid cum
Application Form under non-ASBA process to the Syndicate or the Registered Brokers;
13.
With respect to non-ASBA Bids, ensure that the full Bid Amount is paid for the Bids and with respect to
ASBA Bids, ensure funds equivalent to the Bid Amount are blocked;
14.
Instruct your respective banks to not release the funds blocked in the ASBA Account under the ASBA
process;
15.
Submit revised Bids to the same member of the Syndicate, SCSB or Registered Broker, as applicable,
through whom the original Bid was placed and obtain a revised TRS;
16.
Except for Bids (i) on behalf of the Central or State Governments and the officials appointed by the courts,
who, in terms of the SEBI circular dated June 30, 2008, may be exempt from specifying their PAN for
transacting in the securities market, and (ii) Bids by persons resident in the state of Sikkim, who, in terms of
the 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 IT Act. The exemption for the
Central or the 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;
17.
Ensure that the Demographic Details (as defined herein below) are updated, true and correct in all respects;
18.
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;
19.
Ensure that the signature of the First Bidder in case of joint Bids, is included in the Bid cum Application
Forms;
20.
Ensure that the name(s) given in the Bid cum Application Form is/are exactly the same as the name(s) in
which the beneficiary account is held with the Depository Participant. In case of joint Bids, the Bid cum
Application Form should contain only the name of the First Bidder whose name should also appear as the
first holder of the beneficiary account held in joint names;
21.
Ensure that the category and sub-category is indicated;
22.
Ensure that in case of Bids under power of attorney or by limited companies, corporate, trust etc., relevant
documents are submitted;
23.
Ensure that Bids submitted by any person outside India should be in compliance with applicable foreign
and Indian laws;
24.
Ensure that the DP ID, the Client ID and the PAN mentioned in the Bid cum Application Form and entered
into the electronic bidding of the Stock Exchanges by the Syndicate, the SCSBs or the Registered Brokers,
as the case may be, match with the DP ID, Client ID and PAN available in the Depository database;
25.
In relation to the ASBA Bids, ensure that you use the Bid cum Application Form bearing the stamp of the
Syndicate (in the Specified Locations) and/or relevant SCSB and/ or the Designated Branch and/ or the
Registered Broker at the Broker Centres (except in case of electronic forms);
327
26.
Ensure that you tick the correct investor category, as applicable, in the Bid cum Application Form to ensure
proper upload of your Bid in the online IPO system of the Stock Exchanges;
27.
Ensure that the Bid cum Application Forms are delivered by the Bidders within the time prescribed as per
the Bid cum Application Form and the Red Herring Prospectus;
28.
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 in the Specified Locations and 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 Syndicate to deposit Bid cum Application Forms (a list of such branches is
available on the website of SEBI at http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/ RecognisedIntermediaries, updated from time to time). ASBA Bidders bidding through a Registered Broker should
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 Registered Brokers to deposit Bid cum
Application Forms;
29.
Ensure that you have mentioned the correct ASBA Account number in the Bid cum Application Form;
30.
Ensure that the entire Bid Amount is paid at the time of submission of the Bid or in relation to the ASBA
Bids, ensure that you have correctly signed the authorisation/undertaking 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; and
31.
In relation to the ASBA Bids, ensure that you receive an acknowledgement from the Designated Branch of
the SCSB or from the member of the Syndicate in the Specified Locations or from the Registered Broker at
the Broker Centres, as the case may be, for the submission of your Bid cum Application Form.
The Bid cum Application Form is liable to be rejected if the above instructions, as applicable, are not complied with.
Don’ts:
1.
Do not Bid for lower than the minimum Bid size;
2.
Do not Bid/revise Bid Amount 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 Syndicate, the
SCSBs or the Registered Brokers, as applicable;
4.
Do not pay the Bid Amount in cash, by money order or by postal order or by stockinvest;
5.
If you are an ASBA Bidder, the payment of the Bid Amount in any mode other than blocked amounts in
the bank account maintained with an SCSB shall not be accepted under the ASBA process;
6.
Do not send Bid cum Application Forms by post; instead submit the same to the Syndicate, the SCSBs or
the Registered Brokers only;
7.
Do not submit the Bid cum Application Forms to the Escrow Collection Bank(s) (assuming that such
bank is not a SCSB), our Company, the Selling Shareholders or the Registrar to the Issue;
8.
Do not Bid on a physical Bid cum Application Form that does not have the stamp of the Syndicate, the
Registered Brokers or the SCSBs;
9.
Anchor Investors should not Bid through the ASBA process;
10.
Do not Bid at Cut-off Price (for Bids by QIBs and Non-Institutional Bidders);
11.
Do not Bid for a Bid Amount exceeding ` 200,000 (for Bids by Retail Individual Bidders);
12.
Do not fill up the Bid cum Application Form such that the Equity Shares Bid for exceeds the Issue size
328
and/ or investment limit or maximum number of the Equity Shares that can be held under the applicable
laws or regulations or maximum amount permissible under the applicable regulations or under the terms
of the Red Herring Prospectus;
13.
Do not submit the GIR number instead of the PAN;
14.
In case you are a Bidder other than an ASBA Bidder, do not submit the Bid without payment of the entire
Bid Amount. In case you are an ASBA Bidder, do not submit the Bid without ensuring that funds
equivalent to the entire Bid Amount are blocked in the relevant ASBA Account;
15.
In case you are an ASBA Bidder, do not instruct your respective banks to release the funds blocked in the
ASBA Account;
16.
Do not submit incorrect details of the DP ID, Client ID and PAN or provide details for a beneficiary
account which is suspended or for which details cannot be verified by the Registrar to the Issue;
17.
Do not submit Bids on plain paper or on incomplete or illegible Bid cum Application Forms or on Bid
cum Application Forms in a colour prescribed for another category of Bidder;
18.
If you are a QIB, do not submit your Bid after 3.00 pm on the Bid/Issue Closing Date for QIBs;
19.
If you are a Non-Institutional Bidder or Retail Individual Investor, do not submit your Bid after 3.00 pm
on the Bid/Issue Closing Date;
20.
Do not Bid if you are not competent to contract under the Indian Contract Act, 1872, as amended (other
than minors having valid depository accounts as per Demographic Details provided by the Depositories);
21.
Do not withdraw your Bid or lower the size of your Bid (in terms of quantity of the Equity Shares or the
Bid Amount) at any stage, if you are a QIB or a Non-Institutional Bidder;
22.
In case of ASBA Bidders, do not submit more than five Bid cum Application Forms per ASBA Account;
23.
Do not submit ASBA Bids to a member of the Syndicate at a location other than the Specified Locations
or to the brokers other than the Registered Brokers at a location other than the Broker Centres;
24.
Do not submit ASBA Bids to a member of the Syndicate in the Specified Locations unless 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 Specified Location, for the Syndicate to deposit Bid cum Application
Forms (a list of such branches is available on the website of SEBI at
http://www.sebi.gov.in/sebiweb/home/ list/5/33/0/0/Recognised-Intermediaries, updated from time to
time); and
25.
Do not submit ASBA Bids to a Registered Broker unless the SCSB where the ASBA Account is
maintained, as specified in the Bid cum Application Form, has named at least one branch in that location
for the Registered Broker to deposit the Bid cum Application Forms.
26.
For Bids by QIB Bidders and Non-Institutional Bidders, do not withdraw your Bids or lower the size of
your Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage.
The Bid cum Application Form is liable to be rejected if the above instructions, as applicable, are not complied with.
Payment instructions
In terms of RBI circular no. DPSS.CO.CHD.No./133/04.07.05/2013-14 dated July 16, 2013, non-CTS 2010 standard
compliant cheques are processed in three CTS centres twice a week till October 31, 2014 and once a week from
November 1, 2014 onwards. In order to enable listing and trading of Equity Shares within 12 Working Days of the
Bid/Issue Closing Date, investors are advised to use CTS cheques or use the ASBA facility to make payment.
INVESTORS ARE CAUTIONED THAT BID CUM APPLICATION FORMS ACCOMPANIED BY NON-
329
CTS CHEQUES ARE LIABLE TO BE REJECTED DUE TO ANY DELAY IN CLEARING BEYOND SIX
WORKING DAYS FROM THE BID/ISSUE CLOSING DATE.
PLEASE NOTE THAT IN THE EVENT OF A DELAY BEYOND SIX WORKING DAYS FROM THE
BID/ISSUE CLOSING DATE IN CLEARING THE CHEQUES ACCOMPANYING THE BID CUM
APPLICATION FORMS, FOR ANY REASON WHATSOEVER, SUCH BID CUM APPLICATION
FORMS WILL BE LIABLE TO BE REJECTED.
Payment into Escrow Account for non-ASBA Bidders
The payment instruments for payment into the Escrow Account should be drawn in favour of:
(a)
In case of resident Retail Individual Bidders: “[●]”
(b)
In case of Non-Resident Retail Individual Bidders: “[●]”
Our Company in consultation with the BRLM, in its absolute discretion, will decide the list of Anchor Investors to
whom the Allotment Advice will be sent, pursuant to which the details of the Equity Shares allocated to them in
their respective names will be notified to such Anchor Investors. For Anchor Investors, the payment instruments
for payment into the Escrow Account should be drawn in favour of:
(a)
In case of resident Anchor Investors: “[●]”
(b)
In case of Non-Resident Anchor Investors: “[●]”
Pre- Issue Advertisement
Subject to Section 30 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 (i) [●]
edition of English national newspaper [●]; (ii) [●] edition of Hindi national newspaper [●]; and (iii) [●] edition of
Marathi newspaper [●] each with wide circulation.
Signing of the Underwriting Agreement and the RoC Filing
i.
Our Company, the Selling Shareholders and the Syndicate intend to enter into an Underwriting Agreement
after the finalisation of the Issue Price.
ii.
After signing the Underwriting Agreement, an updated Red Herring Prospectus will be filed with the RoC
in accordance with the applicable law, which then would be termed as the ‘Prospectus’. The Prospectus will
contain details of the Issue Price, the Anchor Investor Issue Price, Issue size, and underwriting
arrangements and will be complete in all material respects.
Undertakings by our Company
Our Company undertakes the following that:

if our Company or Selling Shareholders do not proceed with the Issue after the Bid / Issue Closing Date,
the reason thereof shall be given as a public notice to be issued by our Company within two days of the
Bid/Issue Closing Date. The public notice shall be issued in the same newspapers where the pre- Issue
advertisements were published. The stock exchanges on which the Equity Shares are proposed to be listed
shall also be informed promptly;

if our Company and the Selling Shareholders withdraw the Issue after the Bid/Issue Closing Date, our
Company shall be required to file a fresh offer document with the RoC/ SEBI, in the event our Company
and/or any Selling Shareholders subsequently decides to proceed with the Issue;

the complaints received in respect of the Issue shall be attended to by our Company expeditiously and
satisfactorily;
330

all steps for completion of the necessary formalities for listing and commencement of trading at all the
Stock Exchanges where the Equity Shares are proposed to be listed are taken within 12 Working Days of
the Bid/Issue Closing Date;

Allotment letters shall be issued or application money shall be refunded within the specified time from the
Bid/Issue Closing Date or such lesser time specified by SEBI, else application money shall be refunded
forthwith, failing which interest shall be due to the applicants at the specified rate for the delayed period;

the funds required for making refunds to unsuccessful applicants as per the mode(s) disclosed shall be
made available to the Registrar to the Issue by our Company;

where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the
applicant within 15 days from 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;

the certificates of the securities/ refund orders to Eligible NRIs shall be dispatched within specified time;

no further issue of the Equity Shares shall be made till the Equity Shares offered through the Red Herring
Prospectus are listed or until the Bid monies are refunded on account of non-listing, under- subscription,
etc.;

adequate arrangements shall be made to collect all Bid cum Application Forms under the ASBA process
and to consider them similar to non-ASBA Bids while finalising the Basis of Allotment.
Undertakings by the Selling Shareholders
Each Selling Shareholder severally, undertakes that:
(i)
It is the legal and beneficial owner of the Equity Shares proposed to be transferred pursuant to the Offer for
Sale;
(ii)
The Equity Shares offered by it through the Offer for Sale are eligible to be offered through the Offer For
Sale in terms of Regulation 26(6) of the SEBI ICDR Regulations, and are free and clear of any liens or
encumbrances;
(iii)
It will not have recourse to the proceeds of the Offer For Sale, until approval for trading of the Equity
Shares from all Stock Exchanges where listing is sought has been received;
(iv)
That no payment, direct or indirect, in the nature of discounts, commission, allowance, or otherwise, shall
be made by it in the Issue to any person who makes a bid in the Issue and/or who receive Allotment in the
Issue, except as disclosed in the Draft Red Herring Prospectus; and
(v)
It will take all such steps as may be required to ensure that the Equity Shares being sold by it in the Offer
for Sale are available for transfer through the Offer for Sale.
Utilisation of Issue proceeds
The Board of Directors certifies that:

all monies received out of the Issue shall be credited/transferred to a separate bank account other than the
bank account referred to in sub-section (3) of Section 40 of the Companies Act;

details of all monies utilised out of the Issue shall be disclosed, and continue to be disclosed till the time
any part of the Issue proceeds remains unutilised, under an appropriate head in the balance sheet of our
Company indicating the purpose for which such monies have been utilised;
331

details of all unutilised monies out of the Issue, if any shall be disclosed under an appropriate separate
head in the balance sheet indicating the form in which such unutilised monies have been invested;

the utilisation of monies received under the Promoters’ contribution, if any, shall be disclosed, and
continue to be disclosed till the time any part of the Issue proceeds remains unutilised, under an
appropriate head in the balance sheet of our Company indicating the purpose for which such monies have
been utilised; and

the details of all unutilised monies out of the funds received under the Promoters’ contribution, if any,
shall be disclosed under a separate head in the balance sheet of our Company indicating the form in which
such unutilised monies have been invested.
The Company, along with the Selling Shareholders, declare that:

All monies received out of the Offer for Sale shall be credited/transferred to a separate bank account other
than the bank account referred to in Section (40)(3) of the Companies Act; and

The Company and the Selling Shareholders shall not have recourse to the proceeds of the Issue until the
final listing and trading approvals from all the Stock Exchanges have been obtained.
332
PART B
General Information Document for Investing in Public Issues
This General Information Document highlights the key rules, processes and procedures applicable to public
issues in accordance with the provisions of the Companies Act, 2013 (to the extent notified and in effect), the
Companies Act, 1956 (without reference to the provisions thereof that have ceased to have effect upon the
notification of the Companies Act, 2013), the Securities Contracts (Regulation) Act, 1956, the Securities
Contracts (Regulation) Rules, 1957 and the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009. Bidders/Applicants should not construe the contents of this General
Information Document as legal advice and should consult their own legal counsel and other advisors in relation
to the legal matters concerning the Issue. For taking an investment decision, the Bidders/Applicants should rely
on their own examination of the Issuer and the Issue, and should carefully read the Red Herring
Prospectus/Prospectus before investing in the Issue.
SECTION 1: PURPOSE OF THE GENERAL INFORMATION DOCUMENT (GID)
This document is applicable to the public issues undertaken through the Book-Building process as well as to the
Fixed Price Issues. The purpose of the “General Information Document for Investing in Public Issues” is to
provide general guidance to potential Bidders/Applicants in IPOs and FPOs, on the processes and procedures
governing IPOs and FPOs, undertaken in accordance with the provisions of the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (the “SEBI ICDR Regulations”).
Bidders/Applicants should note that investment in equity and equity related securities involves risk and
Bidder/Applicant should not invest any funds in the Issue unless they can afford to take the risk of losing their
investment. The specific terms relating to securities and/or for subscribing to securities in an Issue and the
relevant information about the Issuer undertaking the Issue are set out in the Red Herring Prospectus (“RHP”)/
Prospectus filed by the Issuer with the Registrar of Companies (“RoC”). Bidders/Applicants should carefully read
the entire RHP/Prospectus and the Bid cum Application Form/Application Form and the Abridged Prospectus of
the Issuer in which they are proposing to invest through the Issue. In case of any difference in interpretation or
conflict and/or overlap between the disclosure included in this document and the RHP/Prospectus, the disclosures
in the RHP/Prospectus shall prevail. The RHP/Prospectus of the Issuer is available on the websites of stock
exchanges, on the website(s) of the BRLM(s) to the Issue and on the website of Securities and Exchange Board of
India (“SEBI”) at www.sebi.gov.in.
For the definitions of capitalised terms and abbreviations used herein Bidders/Applicants may refer to “Glossary
and Abbreviations”.
SECTION 2: BRIEF INTRODUCTION TO IPOs/FPOs
2.1
Initial public offer (IPO)
An IPO means an offer of specified securities by an unlisted Issuer to the public for subscription and
may include an Offer for Sale of specified securities to the public by any existing holder of such
securities in an unlisted Issuer.
For undertaking an IPO, an Issuer is inter alia required to comply with the eligibility requirements of in
terms of either Regulation 26(1) or Regulation 26(2) of the SEBI ICDR Regulations. For details of
compliance with the eligibility requirements by the Issuer Bidders/Applicants may refer to the
RHP/Prospectus.
2.2
Further public offer (FPO)
An FPO means an offer of specified securities by a listed Issuer to the public for subscription and may
include Offer for Sale of specified securities to the public by any existing holder of such securities in a
listed Issuer.
333
For undertaking an FPO, the Issuer is inter alia required to comply with the eligibility requirements in
terms of Regulation 26/27 of the SEBI ICDR Regulations. For details of compliance with the eligibility
requirements by the Issuer Bidders/Applicants may refer to the RHP/Prospectus.
2.3
Other Eligibility Requirements:
In addition to the eligibility requirements specified in paragraphs 2.1 and 2.2, an Issuer proposing to
undertake an IPO or an FPO is required to comply with various other requirements as specified in the
SEBI ICDR Regulations, the Companies Act, 2013 (to the extent notified and in effect), the Companies
Act, 1956 (without reference to the provisions thereof that have ceased to have effect upon the
notification of the Companies Act, 2013), the Securities Contracts (Regulation) Rules, 1957 (the
“SCRR”), industry-specific regulations, if any, and other applicable laws for the time being in force.
For details in relation to the above Bidders/Applicants may refer to the RHP/Prospectus.
Types of Public Issues – Fixed Price Issues and Book Built Issues
2.4
In accordance with the provisions of the SEBI ICDR Regulations, an Issuer can either determine the
Issue Price through the Book Building Process (“Book Built Issue”) or undertake a Fixed Price Issue
(“Fixed Price Issue”). An Issuer may mention Floor Price or Price Band in the RHP (in case of a Book
Built Issue) and a Price or Price Band in the Draft Prospectus (in case of a fixed price Issue) and
determine the price at a later date before registering the Prospectus with the Registrar of Companies.
The cap on the Price Band should be less than or equal to 120% of the Floor Price. The Issuer shall
announce the Price or the Floor Price or the Price Band through advertisement in all newspapers in
which the pre-issue advertisement was given at least five Working Days before the Bid/Issue Opening
Date, in case of an IPO and at least one Working Day before the Bid/Issue Opening Date, in case of an
FPO.
The Floor Price or the Issue price cannot be lesser than the face value of the securities.
Bidders/Applicants should refer to the RHP/Prospectus or Issue advertisements to check whether the
Issue is a Book Built Issue or a Fixed Price Issue.
2.5
ISSUE PERIOD
The Issue may be kept open for a minimum of three Working Days (for all category of
Bidders/Applicants) and not more than ten Working Days. Bidders/Applicants are advised to refer to the
Bid cum Application Form and Abridged Prospectus or RHP/Prospectus for details of the Bid/Issue
Period. Details of Bid/Issue Period are also available on the website of Stock Exchange(s).
In case of a Book Built Issue, the Issuer may close the Bid/Issue Period for QIBs one Working Day prior
to the Bid/Issue Closing Date if disclosures to that effect are made in the RHP. In case of revision of the
Floor Price or Price Band in Book Built Issues the Bid/Issue Period may be extended by at least three
Working Days, subject to the total Bid/Issue Period not exceeding 10 Working Days. For details of any
revision of the Floor Price or Price Band, Bidders/Applicants may check the announcements made by
the Issuer on the websites of the Stock Exchanges and the BRLM(s), and the advertisement in the
newspaper(s) issued in this regard.
2.6
FLOWCHART OF TIMELINES
A flow chart of process flow in Fixed Price and Book Built Issues is as follows. Bidders/Applicants may
note that this is not applicable for Fast Track FPOs.:

In case of Issue other than Book Build Issue (Fixed Price Issue) the process at the following of the
below mentioned steps shall be read as:
(i)
Step 7 : Determination of Issue Date and Price
334
(ii)
Step 10: Applicant submits ASBA Application Form with Designated Branch of SCSB
and Non-ASBA forms directly to collection Bank and not to Broker.
(iii)
Step 11: SCSB uploads ASBA Application details in Stock Exchange Platform
(iv)
Step 12: Issue period closes
(v)
Step 15: Not Applicable
335
SECTION 3: CATEGORY OF INVESTORS ELIGIBLE TO PARTICIPATE IN AN ISSUE
Each Bidder/Applicant should check whether it is eligible to apply under applicable law. Furthermore, certain
categories of Bidders/Applicants, such as NRIs, FII’s, FPIs and FVCIs may not be allowed to Bid/Apply in the
Issue or to hold Equity Shares, in excess of certain limits specified under applicable law. Bidders/Applicants are
requested to refer to the RHP/Prospectus for more details.
Subject to the above, an illustrative list of Bidders/Applicants is as follows:

Indian nationals resident in India who are competent to contract under the Indian Contract Act, 1872, in
single or joint names (not more than three);

Bids/Applications belonging to an account for the benefit of a minor (under guardianship);

Hindu Undivided Families or HUFs, in the individual name of the Karta. The Bidder/Applicant should
specify that the Bid is being made in the name of the HUF in the Bid cum Application Form/Application
Form as follows: “Name of sole or first Bidder/Applicant: XYZ Hindu Undivided Family applying
through XYZ, where XYZ is the name of the Karta”. Bids/Applications by HUFs may be considered at
par with Bids/Applications from individuals;

Companies, corporate bodies and societies registered under applicable law in India and authorised to
invest in equity shares;

QIBs;

NRIs on a repatriation basis or on a non-repatriation basis subject to applicable law;

Qualified Foreign Investors subject to applicable law;

Indian Financial Institutions, regional rural banks, co-operative banks (subject to RBI regulations and the
SEBI ICDR Regulations and other laws, as applicable);

FIIs and sub-accounts registered with SEBI, other than a sub-account which is a foreign corporate or
foreign individual, bidding under the QIBs category;

Sub-accounts of FIIs registered with SEBI, which are foreign corporates or foreign individuals only under
the Non Institutional Investors (NIIs) category;

FPIs other than Category III foreign portfolio investors bidding under the QIBs category;

FPIs which are Category III foreign portfolio investors, bidding under the NIIs category;

Trusts/societies registered under the Societies Registration Act, 1860, or under any other law relating to
trusts/societies and who are authorised under their respective constitutions to hold and invest in equity
shares;

Limited liability partnerships registered under the Limited Liability Partnership Act, 2008; and

Any other person eligible to Bid/Apply in the Issue, under the laws, rules, regulations, guidelines and
policies applicable to them and under Indian laws.

As per the existing regulations, OCBs are not allowed to participate in an Issue.
SECTION 4: APPLYING IN THE ISSUE
Book Built Issue: Bidders should only use the specified Bid cum Application Form either bearing the stamp of a
member of the Syndicate or bearing a stamp of the Registered Broker or stamp of SCSBs as available or
downloaded from the websites of the Stock Exchanges.
337
Bid cum Application Forms are available with the members of the Syndicate, Registered Brokers, Designated
Branches of the SCSBs and at the registered office of the Issuer. Electronic Bid cum Application Forms will be
available on the websites of the Stock Exchanges at least one day prior to the Bid/Issue Opening Date. For further
details regarding availability of Bid cum Application Forms, Bidders may refer to the RHP/Prospectus.
Fixed Price Issue: Applicants should only use the specified cum Application Form either bearing the stamp of
Collection Bank(s) or SCSBs as available or downloaded from the websites of the Stock Exchanges. Application
Forms are available with the Branches of Collection Banks or Designated Branches of the SCSBs and at the
registered office of the Issuer. For further details regarding availability of Application Forms, Applicants may
refer to the Prospectus.
Bidders/Applicants should ensure that they apply in the appropriate category. The prescribed color of the Bid
cum Application Form for various categories of Bidders/Applicants is as follows:
Category
Resident Indian, Eligible NRIs applying on a non-repatriation basis
NRIs, FVCIs, FIIs, their Sub-Accounts (other than Sub-Accounts which are foreign
corporate(s) or foreign individuals bidding under the QIB) and FPIs on a
repatriation basis
Anchor Investors (where applicable) & Bidders/Applicants bidding/applying in the
reserved category
Color of the Bid
cum Application
Form
White
Blue
White
Securities Issued in an IPO can only be in dematerialised form in compliance with Section 29 of the Companies
Act, 2013. Bidders/Applicants will not have the option of getting the allotment of specified securities in physical
form. However, they may get the specified securities rematerialised subsequent to allotment.
4.1
INSTRUCTIONS FOR FILING THE BID CUM APPLICATION FORM/ APPLICATION
FORM
Bidders/Applicants may note that forms not filled completely or correctly as per instructions provided
in this GID, the RHP and the Bid cum Application Form/Application Form are liable to be rejected.
Instructions to fill each field of the Bid cum Application Form can be found on the reverse side of the
Bid cum Application Form. Specific instructions for filling various fields of the Resident Bid cum
Application Form and Non-Resident Bid cum Application Form and samples are provided below.
338
The samples of the Bid cum Application Form for resident Bidders and the Bid cum Application Form
for non-resident Bidders are reproduced below:
339
4.1.1
FIELD
NUMBER 1:
BIDDER/APPLICANT
NAME
AND
CONTACT
DETAILS
OF
THE
SOLE/ FIRST
(a)
Bidders/Applicants should ensure that the name provided in this field is exactly the same as the
name in which the Depository Account is held.
(b)
Mandatory Fields: Bidders/Applicants should note that the name and address fields are
compulsory and e-mail and/or telephone number/mobile number fields are optional.
Bidders/Applicants should note that the contact details mentioned in the Bid-cum Application
340
Form/Application Form may be used to dispatch communications(including refund orders and
letters notifying the unblocking of the bank accounts of ASBA Bidders/Applicants) in case the
communication sent to the address available with the Depositories are returned undelivered or are
not available. The contact details provided in the Bid cum Application Form may be used by the
Issuer, the members of the Syndicate, the Registered Broker and the Registrar to the Issue only for
correspondence(s) related to an Issue and for no other purposes.
(c)
Joint Bids/Applications: In the case of Joint Bids/Applications, the Bids /Applications should be
made in the name of the Bidder/Applicant whose name appears first in the Depository account.
The name so entered should be the same as it appears in the Depository records. The signature of
only such first Bidder/Applicant would be required in the Bid cum Application Form/Application
Form and such first Bidder/Applicant would be deemed to have signed on behalf of the joint
holders All payments may be made out in favor of the Bidder/Applicant whose name appears in
the Bid cum Application Form/Application Form or the Revision Form and all communications
may be addressed to such Bidder/Applicant and may be dispatched to his or her address as per the
Demographic Details received from the Depositories.
(d)
Impersonation: Attention of the Bidders/Applicants is specifically drawn to the provisions of
sub-section (1) of Section 38 of the Companies Act, 2013 which is reproduced below:
1.1
“Any person who:
(a)
makes or abets making of an application in a fictitious name to a company for
acquiring, or subscribing for, its securities; or
(b)
makes or abets making of multiple applications to a company in different names or in
different combinations of his name or surname for acquiring or subscribing for its
securities; or
(c)
otherwise induces directly or indirectly a company to allot, or register any transfer of,
securities to him, or to any other person in a fictitious name, shall be liable for action
under Section 447.”
The liability prescribed under Section 447 of the Companies Act, 2013 includes imprisonment
for a term which shall not be less than six months extending up to 10 years (provided that
where the fraud involves public interest, such term shall not be less than three years) and fine of
an amount not less than the amount involved in the fraud, extending up to three times of such
amount.
(e)
4.1.2
Nomination Facility to Bidder/Applicant: Nomination facility is available in accordance with
the provisions of Section 72 of the Companies Act, 2013. In case of allotment of the Equity
Shares in dematerialised form, there is no need to make a separate nomination as the nomination
registered with the Depository may prevail. For changing nominations, the Bidders/Applicants
should inform their respective DP.
FIELD NUMBER 2: PAN NUMBER OF SOLE/FIRST BIDDER/APPLICANT
(a)
PAN (of the sole/ first Bidder/Applicant) provided in the Bid cum Application Form/Application
Form should be exactly the same as the PAN of the person(s) in whose name the relevant
beneficiary account is held as per the Depositories’ records.
(b)
PAN is the sole identification number for participants transacting in the securities market
irrespective of the amount of transaction except for Bids/Applications on behalf of the Central or
State Government, Bids/Applications by officials appointed by the courts and Bids/Applications
by Bidders/Applicants residing in Sikkim (“PAN Exempted Bidders/Applicants”). Consequently,
all Bidders/Applicants, other than the PAN Exempted Bidders/Applicants, are required to
disclose their PAN in the Bid cum Application Form/Application Form, irrespective of the
Bid/Application Amount. A Bid cum Application Form/Application Form without PAN, except
341
in case of Exempted Bidders/Applicants, is liable to be rejected. Bids/Applications by the
Bidders/Applicants whose PAN is not available as per the Demographic Details available in their
Depository records, are liable to be rejected.
4.1.3
4.1.4
(c)
The exemption for the PAN Exempted Bidders/Applicants 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.
(d)
Bid cum Application Forms/Application Forms which provide the GIR Number instead of PAN
may be rejected.
(e)
Bids/Applications by Bidders whose demat accounts have been ‘suspended for credit’ are liable
to be rejected pursuant to the circular issued by SEBI on July 29, 2010, bearing number
CIR/MRD/DP/22/2010. Such accounts are classified as “Inactive demat accounts” and
demographic details are not provided by depositories.
FIELD NUMBER 3: BIDDERS/APPLICANTS DEPOSITORY ACCOUNT DETAILS
(a)
Bidders/Applicants should ensure that DP ID and the Client ID are correctly filled in the Bid
cum Application Form/Application Form. The DP ID and Client ID provided in the Bid cum
Application Form/Application Form should match with the DP ID and Client ID available in the
Depository database, otherwise, the Bid cum Application Form/Application Form is liable to
be rejected.
(b)
Bidders/Applicants should ensure that the beneficiary account provided in the Bid cum
Application Form/Application Form is active.
(c)
Bidders/Applicants should note that on the basis of DP ID and Client ID as provided in the Bid
cum Application Form/Application Form, the Bidder/Applicant may be deemed to have
authorised the Depositories to provide to the Registrar to the Issue, any requested Demographic
Details of the Bidder/Applicant as available on the records of the depositories. These
Demographic Details may be used, among other things, for giving refunds and allocation advice
(including through physical refund warrants, direct credit, NECS, NEFT and RTGS), or
unblocking of ASBA Account or for other correspondence(s) related to an Issue. Please note that
refunds on account of our Company not receiving the minimum subscription of 90% of the Fresh
Issue, shall be credited only to the bank account from which the Bid Amount was remitted to the
Escrow Bank.
(d)
Bidders/Applicants are, advised to update any changes to their Demographic Details as available
in the records of the Depository Participant to ensure accuracy of records. Any delay resulting
from failure to update the Demographic Details would be at the Bidders/Applicants’ sole risk.
FIELD NUMBER 4: BID OPTIONS
(a)
Price or Floor Price or Price Band, minimum Bid Lot and Discount (if applicable) may be
disclosed in the Prospectus/RHP by the Issuer. The Issuer is required to announce the Floor Price
or Price Band, minimum Bid Lot and Discount (if applicable) by way of an advertisement in at
least one English, one Hindi and one regional newspaper, with wide circulation, at least five
Working Days before Bid/Issue Opening Date in case of an IPO, and at least one Working Day
before Bid/Issue Opening Date in case of an FPO.
(b)
The Bidders may Bid at or above Floor Price or within the Price Band for IPOs /FPOs
undertaken through the Book Building Process. In the case of Alternate Book Building Process
for an FPO, the Bidders may Bid at Floor Price or any price above the Floor Price (For further
details bidders may refer to (Section 5.6 (e))
342
(c)
Cut-Off Price: Retail Individual Investors or Employees or Retail Individual Shareholders can
Bid at the Cut-off Price indicating their agreement to Bid for and purchase the Equity Shares at
the Issue Price as determined at the end of the Book Building Process. Bidding at the Cut-off
Price is prohibited for QIBs and NIIs and such Bids from QIBs and NIIs may be rejected.
(d)
Minimum Application Value and Bid Lot: The Issuer in consultation with the BRLM may
decide the minimum number of Equity Shares for each Bid to ensure that the minimum
application value is within the range of ` 10,000 to ` 15,000. The minimum Bid Lot is
accordingly determined by an Issuer on basis of such minimum application value.
(e)
Allotment: The allotment of specified securities to each RII shall not be less than the minimum
Bid Lot, subject to availability of shares in the RII category, and the remaining available shares,
if any, shall be allotted on a proportionate basis. For details of the Bid Lot, bidders may to the
RHP/Prospectus or the advertisement regarding the Price Band published by the Issuer.
4.1.4.1 Maximum and Minimum Bid Size
(a)
The Bidder may Bid for the desired number of Equity Shares at a specific price. Bids by Retail
Individual Investors, Employees and Retail Individual Shareholders must be for such number of
shares so as to ensure that the Bid Amount less Discount (as applicable), payable by the Bidder
does not exceed ` 200,000.
In case the Bid Amount exceeds ` 200,000 due to revision of the Bid or any other reason, the
Bid may be considered for allocation under the Non-Institutional Category, with it not being
eligible for Discount then such Bid may be rejected if it is at the Cut-off Price.
(b)
For NRIs, a Bid Amount of up to ` 200,000 may be considered under the Retail Category for the
purposes of allocation and a Bid Amount exceeding ` 200,000 may be considered under the
Non-Institutional Category for the purposes of allocation.
(c)
Bids by QIBs and NIIs must be for such minimum number of shares such that the Bid Amount
exceeds ` 200,000 and in multiples of such number of Equity Shares thereafter, as may be
disclosed in the Bid cum Application Form and the RHP/Prospectus, or as advertised by the
Issuer, as the case may be. Non-Institutional Bidders and QIBs are not allowed to Bid at ‘Cut- off
Price’.
(d)
RII may revise their bids till closure of the bidding period or withdraw their bids until
finalisation of allotment. QIBs and NII’s cannot withdraw or lower their Bids (in terms of
quantity of Equity Shares or the Bid Amount) at any stage after bidding and are required to pay
the Bid Amount upon submission of the Bid.
(e)
In case the Bid Amount reduces to ` 200,000 or less due to a revision of the Price Band, Bids by
the Non-Institutional Bidders who are eligible for allocation in the Retail Category would be
considered for allocation under the Retail Category.
(f)
For Anchor Investors, if applicable, the Bid Amount shall be least ` 10 crores. 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 price at which allocation is being done to
other Anchor Investors. Bids by various schemes of a Mutual Fund shall be aggregated to
determine the Bid Amount. A Bid cannot be submitted for more than 60% of the QIB Portion
under the Anchor Investor Portion. Anchor Investors cannot withdraw their Bids or lower the
size of their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after the
Anchor Investor Bid/ Issue Period and are required to pay the Bid Amount at the time of
submission of the Bid. In case the Anchor Investor Issue Price is lower than the Issue Price, the
balance amount shall be payable as per the pay-in-date mentioned in the revised CAN. In case
the Issue Price is lower than the Anchor Investor Issue Price, the amount in excess of the Issue
Price paid by the Anchor Investors shall not be refunded to them.
343
(g)
A Bid cannot be submitted for more than the Issue size.
(h)
The maximum Bid by any Bidder including QIB Bidder should not exceed the investment limits
prescribed for them under the applicable laws.
(i)
The price and quantity options submitted by the Bidder in the Bid cum Application Form may be
treated as optional bids from the Bidder and may not be cumulated. After determination of the
Issue Price, the number of Equity Shares Bid for by a Bidder at or above the Issue Price may be
considered for allotment and the rest of the Bid(s), irrespective of the Bid Amount may
automatically become invalid. This is not applicable in case of FPOs undertaken through
Alternate Book Building Process (For details of bidders may refer to (Section 5.6 (e))
4.1.4.2 Multiple Bids
(a)
Bidder should submit only one Bid cum Application Form. Bidder shall have the option to make
a maximum of Bids at three different price levels in the Bid cum Application Form and such
options are not considered as multiple Bids.
Submission of a second Bid cum Application Form to either the same or to another member of
the Syndicate, SCSB or Registered Broker and duplicate copies of Bid cum Application Forms
bearing the same application number shall be treated as multiple Bids and are liable to be
rejected.
(b)
(c)
4.1.5
Bidders are requested to note the following procedures may be followed by the Registrar to the
Issue to detect multiple Bids:
(i)
All Bids may be checked for common PAN as per the records of the Depository. For
Bidders other than Mutual Funds and FII sub-accounts, Bids bearing the same PAN
may be treated as multiple Bids by a Bidder and may be rejected.
(ii)
For Bids from Mutual Funds and FII sub-accounts, submitted under the same PAN, as
well as Bids on behalf of the PAN Exempted Bidders, the Bid cum Application Forms
may be checked for common DP ID and Client ID. Such Bids which have the same DP
ID and Client ID may be treated as multiple Bids and are liable to be rejected.
The following Bids may not be treated as multiple Bids:
(i)
Bids by Reserved Categories bidding in their respective Reservation Portion as well as
bids made by them in the Issue portion in public category.
(ii)
Separate Bids by Mutual Funds in respect of more than one scheme of the Mutual Fund
provided that the Bids clearly indicate the scheme for which the Bid has been made.
(iii)
Bids by Mutual Funds, and sub-accounts of FIIs (or FIIs and its sub-accounts)
submitted with the same PAN but with different beneficiary account numbers, Client
IDs and DP IDs.
(iv)
Bids by Anchor Investors under the Anchor Investor Portion and the QIB Category.
FIELD NUMBER 5 : CATEGORY OF BIDDERS
(a)
The categories of Bidders identified as per the SEBI ICDR Regulations for the purpose of
Bidding, allocation and allotment in the Issue are RIIs, NIIs and QIBs.
(b)
Up to 60.00% of the QIB Category can be allocated by the Issuer, on a discretionary basis
subject to the criteria of minimum and maximum number of anchor investors based on allocation
size, to the Anchor Investors, in accordance with the SEBI ICDR Regulations, with one- third of
the Anchor Investor Portion reserved for domestic Mutual Funds subject to valid Bids being
344
received at or above the Issue Price. For details regarding allocation to Anchor Investors, bidders
may refer to the RHP/Prospectus.
4.1.6
4.1.7
(c)
An Issuer can make reservation for certain categories of Bidders/Applicants as permitted under
the SEBI ICDR Regulations. For details of any reservations made in the Issue,
Bidders/Applicants may refer to the RHP/Prospectus.
(d)
The SEBI ICDR Regulations, specify the allocation or allotment that may be made to various
categories of Bidders in an Issue depending upon compliance with the eligibility conditions.
Details pertaining to allocation are disclosed on reverse side of the Revision Form. For Issue
specific details in relation to allocation Bidder/Applicant may refer to the RHP/Prospectus.
FIELD NUMBER 6: INVESTOR STATUS
(a)
Each Bidder/Applicant should check whether it is eligible to apply under applicable law and
ensure that any prospective allotment to it in the Issue is in compliance with the investment
restrictions under applicable law.
(b)
Certain categories of Bidders/Applicants, such as NRIs, FIIs, FPIs and FVCIs may not be
allowed to Bid/Apply in the Issue or hold Equity Shares exceeding certain limits specified under
applicable law. Bidders/Applicants are requested to refer to the RHP/Prospectus for more details.
(c)
Bidders/Applicants should check whether they are eligible to apply on non-repatriation basis or
repatriation basis and should accordingly provide the investor status. Details regarding investor
status are different in the Resident Bid cum Application Form and Non-Resident Bid cum
Application Form.
(d)
Bidders/Applicants should ensure that their investor status is updated in the Depository records.
FIELD NUMBER 7: PAYMENT DETAILS
(a)
All Bidders are required to make payment of the full Bid Amount (net of any Discount, as
applicable) along-with the Bid cum Application Form. If the Discount is applicable in the Issue,
the RIIs should indicate the full Bid Amount in the Bid cum Application Form and the payment
shall be made for Bid Amount net of Discount. Only in cases where the RHP/Prospectus
indicates that part payment may be made, such an option can be exercised by the Bidder. In case
of Bidders specifying more than one Bid Option in the Bid cum Application Form, the total Bid
Amount may be calculated for the highest of three options at net price, i.e. Bid price less
Discount offered, if any.
(b)
Bidders who Bid at Cut-off price shall deposit the Bid Amount based on the Cap Price.
(c)
QIBs and NIIs can participate in the Issue only through the ASBA mechanism.
(d)
RIIs and/or Reserved Categories bidding in their respective reservation portion can Bid, either
through the ASBA mechanism or by paying the Bid Amount through a cheque or a demand draft
(“Non-ASBA Mechanism”).
(e)
Bid Amount cannot be paid in cash, through money order or through postal order.
4.1.7.1 Instructions for non-ASBA Bidders:
(a)
Non-ASBA Bidders may submit their Bids with a member of the Syndicate or any of the
Registered Brokers of the Stock Exchange. The details of Broker Centres along with names and
contact details of the Registered Brokers are provided on the websites of the Stock Exchanges.
(b)
For Bids made through a member of the Syndicate: The Bidder may, with the submission of
the Bid cum Application Form, draw a cheque or demand draft for the Bid Amount in favour of
the Escrow Account as specified under the RHP/Prospectus and the Bid cum Application Form
345
and submit the same to the members of the Syndicate at Specified Locations.
(c)
For Bids made through a Registered Broker: The Bidder may, with the submission of the Bid
cum Application Form, draw a cheque or demand draft for the Bid Amount in favour of the
Escrow Account as specified under the RHP/Prospectus and the Bid cum Application Form and
submit the same to the Registered Broker.
(d)
If the cheque or demand draft accompanying the Bid cum Application Form is not made favoring
the Escrow Account, the Bid is liable to be rejected.
(e)
Payments should be made by cheque, or demand draft drawn on any bank (including a cooperative bank), which is situated at, and is a member of or sub-member of the bankers’ clearing
house located at the centre where the Bid cum Application Form is submitted. Cheques/bank
drafts drawn on banks not participating in the clearing process may not be accepted and
applications accompanied by such cheques or bank drafts are liable to be rejected.
(f)
The Escrow Collection Banks shall maintain the monies in the Escrow Account for and on behalf
of the Bidders until the Designated Date.
(g)
Bidders are advised to provide the number of the Bid cum Application Form and PAN on the
reverse of the cheque or bank draft to avoid any possible misuse of instruments submitted.
4.1.7.2 Payment instructions for ASBA Bidders
(a)
ASBA Bidders may submit the Bid cum Application Form either
(i)
in physical mode to the Designated Branch of an SCSB where the Bidders/Applicants
have ASBA Account, or
(ii)
in electronic mode through the internet banking facility offered by an SCSB authorising
blocking of funds that are available in the ASBA account specified in the Bid cum
Application Form, or
(iii)
in physical mode to a member of the Syndicate at the Specified Locations, or
(iv)
Registered Brokers of the Stock Exchange
(b)
ASBA Bidders may specify the Bank Account number in the Bid cum Application Form. The
Bid cum Application Form submitted by an ASBA Bidder and which is accompanied by cash,
demand draft, money order, postal order or any mode of payment other than blocked amounts in
the ASBA Account maintained with an SCSB, may not be accepted.
(c)
Bidders should ensure that the Bid cum Application Form is also signed by the ASBA Account
holder(s) if the Bidder is not the ASBA Account holder;
(d)
Bidders shall note that for the purpose of blocking funds under ASBA facility clearly demarcated
funds shall be available in the account.
(e)
From one ASBA Account, a maximum of five Bids cum Application Forms can be submitted.
(f)
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 Specified locations.
ASBA Bidders should also note that Bid cum Application Forms submitted to a member of the
Syndicate at the Specified locations may not be accepted by the Member of the Syndicate 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 on the website of SEBI at
http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised- Intermediaries).
346
(g)
ASBA Bidders bidding through a Registered Broker should note that Bid cum Application
Forms submitted to the Registered Brokers may not be accepted by the Registered Broker, 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 Registered Brokers to deposit Bid cum
Application Forms.
(h)
ASBA Bidders bidding directly through the SCSBs should ensure that the Bid cum Application
Form is submitted to a Designated Branch of a SCSB where the ASBA Account is maintained.
(i)
Upon receipt of the Bid cum Application Form, the Designated Branch of the SCSB may verify
if sufficient funds equal to the Bid Amount are available in the ASBA Account, as mentioned in
the Bid cum Application Form.
(j)
If sufficient funds are available in the ASBA Account, the SCSB may block an amount
equivalent to the Bid Amount mentioned in the Bid cum Application Form and for application
directly submitted to SCSB by investor, may enter each Bid option into the electronic bidding
system as a separate Bid.
(k)
If sufficient funds are not available in the ASBA Account, the Designated Branch of the SCSB
may not upload such Bids on the Stock Exchange platform and such bids are liable to be
rejected.
(l)
Upon submission of a completed Bid cum Application Form each ASBA Bidder may be deemed
to have agreed to block the entire Bid Amount and authorised the Designated Branch of the
SCSB to block the Bid Amount specified in the Bid cum Application Form in the ASBA
Account maintained with the SCSBs.
(m)
The Bid Amount may remain blocked in the aforesaid ASBA Account until finalisation 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 or failure of the Issue, or until withdrawal or
rejection of the Bid, as the case may be.
(n)
SCSBs bidding in the Issue must apply through an Account maintained with any other SCSB;
else their Bids are liable to be rejected.
4.1.7.2.1 Unblocking of ASBA Account
(a)
Once the Basis of Allotment is approved by the Designated Stock Exchange, the Registrar to the
Issue may provide the following details to the controlling branches of each SCSB, along with
instructions to unblock the relevant bank accounts and for successful applications transfer the
requisite money to the Public Issue Account designated for this purpose, within the specified
timelines: (i) the number of Equity Shares to be Allotted against each Bid, (ii) the amount to be
transferred from the relevant bank account to the Public Issue Account, for each Bid, (iii) the
date by which funds referred to in (ii) above may 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 or unsuccessful Bids, if any, to enable the SCSBs to unblock the respective bank
accounts.
(b)
On the basis of instructions from the Registrar to the Issue, the SCSBs may transfer the requisite
amount against each successful ASBA Bidder to the Public Issue Account and may unblock the
excess amount, if any, in the ASBA Account.
(c)
In the event of withdrawal or rejection of the Bid cum Application Form and for unsuccessful
Bids, the Registrar to the Issue may give instructions to the SCSB to unblock the Bid Amount in
the relevant ASBA Account within 12 Working Days of the Bid/Issue Closing Date.
347
4.1.7.3 Additional Payment Instructions for NRIs
The Non-Resident Indians who intend to make payment through Non-Resident Ordinary (NRO) accounts
shall use the form meant for Resident Indians (non-repatriation basis). In the case of Bids by NRIs
applying on a repatriation basis, payment shall not be accepted out of NRO Account.
4.1.7.4 Discount (if applicable)
(a)
The Discount is stated in absolute rupee terms.
(b)
Bidders applying under RII category, Retail Individual Shareholder and employees are only
eligible for discount. For Discounts offered in the Issue, Bidders may refer to the
RHP/Prospectus.
(c)
The Bidders entitled to the applicable Discount in the Issue may make payment for an amount
i.e. the Bid Amount less Discount (if applicable).
Bidder may note that in case the net payment (post Discount) is more than two lakh Rupees, the bidding
system automatically considers such applications for allocation under Non-Institutional Category. These
applications are neither eligible for Discount nor fall under RII category.
4.1.8
4.1.9
FIELD NUMBER 8: SIGNATURES AND OTHER AUTHORISATIONS
(a)
Only the First Bidder/Applicant is required to sign the Bid cum Application Form/Application
Form. Bidders/Applicants should ensure that signatures are in one of the languages specified in
the Eighth Schedule to the Constitution of India.
(b)
If the ASBA Account is held by a person or persons other than the ASBA Bidder/Applicant.,
then the Signature of the ASBA Account holder(s) is also required.
(c)
In relation to the ASBA Bids/Applications, signature has to be correctly affixed in the
authorisation/undertaking box in the Bid cum Application Form/Application Form, or an
authorisation has to be provided 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/Application Form.
(d)
Bidders/Applicants must note that Bid cum Application Form/Application Form without
signature of Bidder/Applicant and /or ASBA Account holder is liable to be rejected.
ACKNOWLEDGEMENT AND FUTURE COMMUNICATION
(a)
Bidders should ensure that they receive the acknowledgment duly signed and stamped by a
member of the Syndicate, Registered Broker or SCSB, as applicable, for submission of the Bid
cum Application Form.
(b)
Applicants should ensure that they receive the acknowledgment duly signed and stamped by an
Escrow Collection Bank or SCSB, as applicable, for submission of the Application Form.
(c)
All communications in connection with Bids/Applications made in the Issue should be addressed
as under:
(i)
In case of queries related to Allotment, non-receipt of Allotment Advice, credit of
allotted equity shares, refund orders, the Bidders/Applicants should contact the
Registrar to the Issue.
(ii)
In case of ASBA Bids submitted to the Designated Branches of the SCSBs, the
Bidders/Applicants should contact the relevant Designated Branch of the SCSB.
348
(d)
(iii)
In case of queries relating to uploading of Syndicate ASBA Bids, the
Bidders/Applicants should contact the relevant Syndicate Member.
(iv)
In case of queries relating to uploading of Bids by a Registered Broker, the
Bidders/Applicants should contact the relevant Registered Broker
(v)
Bidder/Applicant may contact the Company Secretary and Compliance Officer or the
BRLM(s) in case of any other complaints in relation to the Issue.
The following details (as applicable) should be quoted while making any queries (i)
full name of the sole or First Bidder/Applicant, Bid cum Application Form number,
Applicants’/Bidders’ DP ID, Client ID, PAN, number of Equity Shares applied for,
amount paid on application.
(ii)
name and address of the member of the Syndicate, Registered Broker or the Designated
Branch, as the case may be, where the Bid was submitted or
(iii)
In case of Non-ASBA bids cheque or draft number and the name of the issuing bank
thereof
(iv)
In case of ASBA Bids, ASBA Account number in which the amount equivalent to the
Bid Amount was blocked.
For further details, Bidder/Applicant may refer to the RHP/Prospectus and the Bid cum Application Form.
4.2
INSTRUCTIONS FOR FILING THE REVISION FORM
(a)
During the Bid/Issue Period, any Bidder/Applicant (other than QIBs and NIIs, who can only
revise their bid upwards) 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 Revision
Form, which is a part of the Bid cum Application Form.
(b)
RII may revise their bids till closure of the bidding period or withdraw their bids until
finalisation of allotment.
(c)
Revisions can be made in both the desired number of Equity Shares and the Bid Amount by
using the Revision Form.
(d)
The Bidder/Applicant can make this revision any number of times during the Bid/ Issue Period.
However, for any revision(s) in the Bid, the Bidders/Applicants will have to use the services of
the same member of the Syndicate, the Registered Broker or the SCSB through which such
Bidder/Applicant had placed the original Bid. Bidders/Applicants are advised to retain copies of
the blank Revision Form and the Bid(s) must be made only in such Revision Form or copies
thereof.
349
A sample Revision form is reproduced below:
Instructions to fill each field of the Revision Form can be found on the reverse side of the Revision Form.
Other than instructions already highlighted at paragraph 4.1 above, point wise instructions regarding filling
up various fields of the Revision Form are provided below:
350
4.2.1
FIELDS 1, 2 AND 3: NAME AND CONTACT DETAILS OF SOLE/FIRST
BIDDER/APPLICANT, PAN OF SOLE/FIRST BIDDER/APPLICANT & DEPOSITORY
ACCOUNT DETAILS OF THE BIDDER/APPLICANT
Bidders/Applicants should refer to instructions contained in paragraphs 4.1.1, 4.1.2 and 4.1.3.
4.2.2
4.2.3
FIELD 4 & 5: BID OPTIONS REVISION ‘FROM’ AND ‘TO’
(a)
Apart from mentioning the revised options in the Revision Form, the Bidder/Applicant must also
mention the details of all the bid options given in his or her Bid cum Application Form or earlier
Revision Form. For example, if a Bidder/Applicant has Bid for three options in the Bid cum
Application Form and such Bidder/Applicant is changing only one of the options in the Revision
Form, the Bidder/Applicant must still fill the details of the other two options that are not being
revised, in the Revision Form. The members of the Syndicate, the Registered Brokers and the
Designated Branches of the SCSBs may not accept incomplete or inaccurate Revision Forms.
(b)
In case of revision, Bid options should be provided by Bidders/Applicants in the same order as
provided in the Bid cum Application Form.
(c)
In case of revision of Bids by RIIs, Employees and Retail Individual Shareholders, such
Bidders/Applicants should ensure that the Bid Amount, subsequent to revision, does not exceed
` 200,000. In case the Bid Amount exceeds ` 200,000 due to revision of the Bid or for any other
reason, the Bid may be considered, subject to eligibility, for allocation under the NonInstitutional Category, not being eligible for Discount (if applicable) and such Bid may be
rejected if it is at the Cut-off Price. The Cut-off Price option is given only to the RIIs, Employees
and Retail Individual Shareholders indicating their agreement to Bid for and purchase the Equity
Shares at the Issue Price as determined at the end of the Book Building Process.
(d)
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 Category in terms of the
RHP/Prospectus. If, however, the RII 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 RII and the RII is deemed to have approved such
revised Bid at Cut-off Price.
(e)
In case of a downward revision in the Price Band, RIIs and Bids by Employees under the
Reservation Portion, who have bid at the Cut-off Price could either revise their Bid or the excess
amount paid at the time of bidding may be unblocked in case of ASBA Bidders or refunded from
the Escrow Account in case of non-ASBA Bidder.
FIELD 6: PAYMENT DETAILS
(a)
With respect to the Bids, other than Bids submitted by ASBA Bidders/Applicants, any revision
of the Bid should be accompanied by payment in the form of cheque or demand draft for the
amount, if any, to be paid on account of the upward revision of the Bid.
(b)
All Bidders/Applicants are required to make payment of the full Bid Amount (less Discount (if
applicable) along with the Bid Revision Form. In case of Bidders/Applicants specifying more
than one Bid Option in the Bid cum Application Form, the total Bid Amount may be calculated
for the highest of three options at net price, i.e. Bid price less discount offered, if any.
(c)
In case of Bids submitted by ASBA Bidder/Applicant, Bidder/Applicant may Issue instructions
to block the revised amount based on cap of the revised Price Band (adjusted for the Discount (if
applicable) in the ASBA Account, to the same member of the Syndicate/Registered Broker or the
same Designated Branch (as the case may be) through whom such Bidder/Applicant had placed
the original Bid to enable the relevant SCSB to block the additional Bid Amount, if any.
351
4.2.4
(d)
In case of Bids, other than ASBA Bids, Bidder/Applicant, may 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 ` 200,000 if the Bidder/Applicant wants to continue to Bid
at the Cut-off Price), with the members of the Syndicate / Registered Broker to whom the
original Bid was submitted.
(e)
In case the total amount (i.e., original Bid Amount less discount (if applicable) plus additional
payment) exceeds ` 200,000, the Bid may be considered for allocation under the NonInstitutional Category in terms of the RHP/Prospectus. If, however, the Bidder/Applicant 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 may be adjusted
downwards for the purpose of allotment, such that no additional payment is required from the
Bidder/Applicant and the Bidder/Applicant is deemed to have approved such revised Bid at the
Cut-off Price.
(f)
In case of a downward revision in the Price Band, RIIs, Employees and Retail Individual
Shareholders, who have bid at the Cut-off Price, could either revise their Bid or the excess
amount paid at the time of bidding may be unblocked in case of ASBA Bidders/Applicants or
refunded from the Escrow Account in case of non-ASBA Bidder/Applicant.
FIELDS 7 : SIGNATURES AND ACKNOWLEDGEMENTS
Bidders/Applicants may refer to instructions contained at paragraphs 4.1.8 and 4.1.9 for this purpose.
4.3
INSTRUCTIONS FOR FILING APPLICATION FORM IN ISSUES MADE OTHER THAN
THROUGH THE BOOK BUILDING PROCESS (FIXED PRICE ISSUE)
4.3.1
FIELDS 1, 2, 3 NAME AND CONTACT DETAILS OF SOLE/FIRST BIDDER/APPLICANT, PAN
OF SOLE/FIRST BIDDER/APPLICANT & DEPOSITORY ACCOUNT DETAILS OF THE
BIDDER/APPLICANT
Applicants should refer to instructions contained in paragraphs 4.1.1, 4.1.2 and 4.1.3.
4.3.2
FIELD 4: PRICE, APPLICATION QUANTITY & AMOUNT
(a)
The Issuer may mention Price or Price band in the draft Prospectus. However a prospectus
registered with RoC contains one price or coupon rate (as applicable).
(b)
Minimum Application Value and Bid Lot: The Issuer in consultation with the Lead Manager
to the Issue (LM) may decide the minimum number of Equity Shares for each Bid to ensure that
the minimum application value is within the range of ` 10,000 to ` 15,000. The minimum Lot
size is accordingly determined by an Issuer on basis of such minimum application value.
(c)
Applications by RIIs, Employees and Retail Individual Shareholders, must be for such number of
shares so as to ensure that the application amount payable does not exceed ` 200,000.
(d)
Applications by other investors must be for such minimum number of shares such that the
application amount exceeds ` 200,000 and in multiples of such number of Equity Shares
thereafter, as may be disclosed in the application form and the Prospectus, or as advertised by the
Issuer, as the case may be.
(e)
An application cannot be submitted for more than the Issue size.
(f)
The maximum application by any Applicant should not exceed the investment limits prescribed
for them under the applicable laws.
(g)
Multiple Applications: An Applicant should submit only one Application Form. Submission of
a second Application Form to either the same or to Collection Bank(s) or SCSB and duplicate
copies of Application Forms bearing the same application number shall be treated as multiple
352
applications and are liable to be rejected.
(h)
(i)
4.3.3
4.3.4
Applicants are requested to note the following procedures may be followed by the Registrar to
the Issue to detect multiple applications:
(i)
All applications may be checked for common PAN as per the records of the Depository.
For Applicants other than Mutual Funds and FII sub-accounts, Bids bearing the same
PAN may be treated as multiple applications by a Bidder/Applicant and may be
rejected.
(ii)
For applications from Mutual Funds and FII sub-accounts, submitted under the same
PAN, as well as Bids on behalf of the PAN Exempted Applicants, the Application
Forms may be checked for common DP ID and Client ID. In any such applications
which have the same DP ID and Client ID, these may be treated as multiple applications
and may be rejected.
The following applications may not be treated as multiple Bids:
(i)
Applications by Reserved Categories in their respective reservation portion as well as
that made by them in the Issue portion in public category.
(ii)
Separate applications by Mutual Funds in respect of more than one scheme of the
Mutual Fund provided that the Applications clearly indicate the scheme for which the
Bid has been made.
(iii)
Applications by Mutual Funds, and sub-accounts of FIIs (or FIIs and its sub- accounts)
submitted with the same PAN but with different beneficiary account numbers, Client
IDs and DP IDs.
FIELD NUMBER 5 : CATEGORY OF APPLICANTS
(a)
The categories of applicants identified as per the SEBI ICDR Regulations for the purpose of
Bidding, allocation and allotment in the Issue are RIIs, individual applicants other than RII’s and
other investors (including corporate bodies or institutions, irrespective of the number of specified
securities applied for).
(b)
An Issuer can make reservation for certain categories of Applicants permitted under the SEBI
ICDR Regulations. For details of any reservations made in the Issue, applicants may refer to the
Prospectus.
(c)
The SEBI ICDR Regulations specify the allocation or allotment that may be made to various
categories of applicants in an Issue depending upon compliance with the eligibility conditions.
Details pertaining to allocation are disclosed on reverse side of the Revision Form. For Issue
specific details in relation to allocation applicant may refer to the Prospectus.
FIELD NUMBER 6: INVESTOR STATUS
Applicants should refer to instructions contained in paragraphs 4.1.6.
4.3.5
FIELD 7: PAYMENT DETAILS
(a)
All Applicants are required to make payment of the full Amount (net of any Discount, as
applicable) along-with the Application Form. If the Discount is applicable in the Issue, the RIIs
should indicate the full Amount in the Application Form and the payment shall be made for an
amount net of Discount. Only in cases where the Prospectus indicates that part payment may be
made, such an option can be exercised by the Applicant.
(b)
RIIs and/or Reserved Categories bidding in their respective reservation portion can Bid, either
353
through the ASBA mechanism or by paying the Bid Amount through a cheque or a demand draft
(“Non-ASBA Mechanism”).
(c)
Application Amount cannot be paid in cash, through money order or through postal order or
through stock invest.
4.3.5.1 Instructions for non-ASBA Applicants:
(a)
Non-ASBA Applicants may submit their Application Form with the Collection Bank(s).
(b)
For Applications made through a Collection Bank(s): The Applicant may, with the submission of
the Application Form, draw a cheque or demand draft for the Bid Amount in favor of the Escrow
Account as specified under the Prospectus and the Application Form and submit the same to the
escrow Collection Bank(s).
(c)
If the cheque or demand draft accompanying the Application Form is not made favoring the
Escrow Account, the form is liable to be rejected.
(d)
Payments should be made by cheque, or demand draft drawn on any bank (including a cooperative bank), which is situated at, and is a member of or sub-member of the bankers’ clearing
house located at the centre where the Application Form is submitted. Cheques/bank drafts drawn
on banks not participating in the clearing process may not be accepted and applications
accompanied by such cheques or bank drafts are liable to be rejected.
(e)
The Escrow Collection Banks shall maintain the monies in the Escrow Account for and on behalf
of the Applicants until the Designated Date.
(f)
Applicants are advised to provide the number of the Application Form and PAN on the reverse
of the cheque or bank draft to avoid any possible misuse of instruments submitted.
4.3.5.2 Payment instructions for ASBA Applicants
(a)
ASBA Applicants may submit the Application Form in physical mode to the Designated Branch
of an SCSB where the Applicants have ASBA Account.
(b)
ASBA Applicants may specify the Bank Account number in the Application Form. The
Application Form submitted by an ASBA Applicant and which is accompanied by cash, demand
draft, money order, postal order or any mode of payment other than blocked amounts in the
ASBA Account maintained with an SCSB, may not be accepted.
(c)
Applicants should ensure that the Application Form is also signed by the ASBA Account
holder(s) if the Applicant is not the ASBA Account holder;
(d)
Applicants shall note that for the purpose of blocking funds under ASBA facility clearly
demarcated funds shall be available in the account.
(e)
From one ASBA Account, a maximum of five Bids cum Application Forms can be submitted.
(f)
ASBA Applicants bidding directly through the SCSBs should ensure that the Application Form
is submitted to a Designated Branch of a SCSB where the ASBA Account is maintained.
(g)
Upon receipt of the Application Form, the Designated Branch of the SCSB may verify if
sufficient funds equal to the Application Amount are available in the ASBA Account, as
mentioned in the Application Form.
(h)
If sufficient funds are available in the ASBA Account, the SCSB may block an amount
equivalent to the Application Amount mentioned in the Application Form and may upload the
details on the Stock Exchange Platform.
354
(i)
If sufficient funds are not available in the ASBA Account, the Designated Branch of the SCSB
may not upload such Applications on the Stock Exchange platform and such Applications are
liable to be rejected.
(j)
Upon submission of a completed Application Form each ASBA Applicant may be deemed to
have agreed to block the entire Application Amount and authorised the Designated Branch of the
SCSB to block the Application Amount specified in the Application Form in the ASBA Account
maintained with the SCSBs.
(k)
The Application Amount may remain blocked in the aforesaid ASBA Account until finalisation
of the Basis of allotment and consequent transfer of the Application Amount against the
Allotted Equity Shares to the Public Issue Account, or until withdrawal or failure of the Issue,
or until withdrawal or rejection of the Application, as the case may be.
(l)
SCSBs applying in the Issue must apply through an ASBA Account maintained with any other
SCSB; else their Applications are liable to be rejected.
4.3.5.3 Unblocking of ASBA Account
(a)
Once the Basis of Allotment is approved by the Designated Stock Exchange, the Registrar to
the Issue may provide the following details to the controlling branches of each SCSB, along
with instructions to unblock the relevant bank accounts and for successful applications transfer
the requisite money to the Public Issue Account designated for this purpose, within the
specified timelines: (i) the number of Equity Shares to be Allotted against each Application, (ii)
the amount to be transferred from the relevant bank account to the Public Issue Account, for
each Application, (iii) the date by which funds referred to in (ii) above may be transferred to the
Public Issue Account, and (iv) details of rejected ASBA Applications, if any, along with
reasons for rejection and details of withdrawn or unsuccessful Applications, if any, to enable
the SCSBs to unblock the respective bank accounts.
(b)
On the basis of instructions from the Registrar to the Issue, the SCSBs may transfer the
requisite amount against each successful ASBA Application to the Public Issue Account and
may unblock the excess amount, if any, in the ASBA Account.
(c)
In the event of withdrawal or rejection of the Application Form and for unsuccessful
Applications, the Registrar to the Issue may give instructions to the SCSB to unblock the
Application Amount in the relevant ASBA Account within 12 Working Days of the Issue
Closing Date.
4.3.5.4 Discount (if applicable)
4.3.6
(a)
The Discount is stated in absolute rupee terms.
(b)
RIIs, Employees and Retail Individual Shareholders are only eligible for discount. For
Discounts offered in the Issue, applicants may refer to the Prospectus.
(c)
The Applicants entitled to the applicable Discount in the Issue may make payment for an
amount i.e. the Application Amount less Discount (if applicable).
FIELD NUMBER 8: SIGNATURES AND OTHER AUTHORISATIONS &
ACKNOWLEDGEMENT AND FUTURE COMMUNICATION
Applicants should refer to instructions contained in paragraphs 4.1.8 and 4.1.9.
4.4
SUBMISSION OF BID CUM APPLICATION FORM/ REVISION FORM/APPLICATION
FORM
4.4.1
Bidders/Applicants may submit completed Bid-cum-application form / Revision Form in the
355
following manner:Mode of Application
Non-ASBA
Application
ASBA Application
Submission of Bid cum Application Form
1)
To members of the Syndicate at the Specified Locations mentioned in the
Bid cum Application Form
2)
(a)
To Registered Brokers
To members of the Syndicate in the Specified Locations or
Registered Brokers at the Broker Centres
(b)
To the Designated branches of the SCSBs where the ASBA Account is
maintained
(a)
Bidders/Applicants should not submit the bid cum application forms/ Revision Form directly to
the escrow collection banks. Bid cum Application Form/ Revision Form submitted to the
escrow collection banks are liable for rejection.
(b)
Bidders/Applicants should submit the Revision Form to the same member of the Syndicate, the
Registered Broker or the SCSB through which such Bidder/Applicant had placed the original
Bid.
(c)
Upon submission of the Bid-cum-Application Form, the Bidder/Applicant will be deemed to
have authorised the Issuer to make the necessary changes in the RHP and the Bid cum
Application Form as would be required for filing Prospectus with the Registrar of Companies
(RoC) and as would be required by the RoC after such filing, without prior or subsequent notice
of such changes to the relevant Bidder/Applicant.
(d)
Upon determination of the Issue Price and filing of the Prospectus with the RoC, the Bid-cumApplication Form will be considered as the application form.
SECTION 5: ISSUE PROCEDURE IN BOOK BUILT ISSUE
Book Building, in the context of the Issue, refers to the process of collection of Bids within the Price Band or
above the Floor Price and determining the Issue Price based on the Bids received as detailed in Schedule XI of
the SEBI ICDR Regulations. The Issue Price is finalised after the Bid/Issue Closing Date. Valid Bids received at
or above the Issue Price are considered for allocation in the Issue, subject to applicable regulations and other
terms and conditions.
5.1
SUBMISSION OF BIDS
(a)
During the Bid/Issue Period, ASBA Bidders/Applicants may approach the members of the
Syndicate at the Specified Cities or any of the Registered Brokers or the Designated Branches
to register their Bids. Non-ASBA Bidders/Applicants who are interested in subscribing for the
Equity Shares should approach the members of the Syndicate or any of the Registered Brokers,
to register their Bid.
(b)
Non-ASBA Bidders/Applicants (RIIs, Employees and Retail Individual Shareholders) bidding
at Cut-off Price may submit the Bid cum Application Form along with a cheque/demand draft
for the Bid Amount less discount (if applicable) based on the Cap Price with the members of
the Syndicate/ any of the Registered Brokers to register their Bid.
(c)
In case of ASBA Bidders/Applicants (excluding NIIs and QIBs) bidding at Cut-off Price, the
ASBA Bidders/Applicants may instruct the SCSBs to block Bid Amount based on the Cap
Price less discount (if applicable). ASBA Bidders/Applicants may approach the members of the
Syndicate or any of the Registered Brokers or the Designated Branches to register their Bids.
(d)
For Details of the timing on acceptance and upload of Bids in the Stock Exchanges Platform
356
Bidders/Applicants are requested to refer to the RHP.
5.2
5.3
5.4
5.5
ELECTRONIC REGISTRATION OF BIDS
(a)
The Syndicate, the Registered Brokers and the SCSBs may register the Bids using the on-line
facilities of the Stock Exchanges. The Syndicate, the Registered Brokers and the Designated
Branches of the SCSBs can also set up facilities for off-line electronic registration of Bids,
subject to the condition that they may subsequently upload the off-line data file into the on- line
facilities for Book Building on a regular basis before the closure of the issue.
(b)
On the Bid/Issue Closing Date, the Syndicate, the Registered Broker and the Designated
Branches of the SCSBs may upload the Bids till such time as may be permitted by the Stock
Exchanges.
(c)
Only Bids that are uploaded on the Stock Exchanges Platform are considered for allocation/
Allotment. The members of the Syndicate, the Registered Brokers and the SCSBs are given up to
one day after the Bid/Issue Closing Date to modify select fields uploaded in the Stock Exchange
Platform during the Bid/Issue Period after which the Stock Exchange(s) send the bid information
to the Registrar for validation of the electronic bid details with the Depository’s records.
BUILD UP OF THE BOOK
(a)
Bids received from various Bidders/Applicants through the Syndicate, Registered Brokers and
the SCSBs may be electronically uploaded on the Bidding Platform of the Stock Exchanges’ on a
regular basis. The book gets built up at various price levels. This information may be available
with the BRLM at the end of the Bid/Issue Period.
(b)
Based on the aggregate demand and price for Bids registered on the Stock Exchanges Platform, a
graphical representation of consolidated demand and price as available on the websites of the
Stock Exchanges may be made available at the bidding centres during the Bid/Issue Period.
WITHDRAWAL OF BIDS
(a)
RIIs can withdraw their Bids until finalisation of Basis of Allotment. In case a RII applying
through the ASBA process wishes to withdraw the Bid during the Bid/Issue Period, the same can
be done by submitting a request for the same to the concerned SCSB or the Syndicate Member or
the Registered Broker, as applicable, who shall do the requisite, including unblocking of the
funds by the SCSB in the ASBA Account.
(b)
In case a RII wishes to withdraw the Bid after the Bid/Issue Period, the same can be done by
submitting a withdrawal request to the Registrar to the Issue until finalisation of Basis of
Allotment. The Registrar to the Issue shall give instruction to the SCSB for unblocking the
ASBA Account on the Designated Date. QIBs and NIIs can neither withdraw nor lower the size
of their Bids at any stage.
REJECTION & RESPONSIBILITY FOR UPLOAD OF BIDS
(a)
The members of the Syndicate, the Registered Broker and/or SCSBs are individually responsible
for the acts, mistakes or errors or omission in relation to
(i)
the Bids accepted by the members of the Syndicate, the Registered Broker and the
SCSBs,
(ii)
the Bids uploaded by the members of the Syndicate, the Registered Broker and the
SCSBs,
(iii)
the Bid cum application forms accepted but not uploaded by the members of the
Syndicate, the Registered Broker and the SCSBs, or
357
(iv)
5.5.1
With respect to Bids by ASBA Bidders/Applicants, Bids accepted and uploaded by
SCSBs without blocking funds in the ASBA Accounts. It may be presumed that for
Bids uploaded by the SCSBs, the Bid Amount has been blocked in the relevant
Account.
(b)
The BRLM and their affiliate Syndicate Members, as the case may be, may reject Bids if all the
information required is not provided and the Bid cum Application Form is incomplete in any
respect.
(c)
The SCSBs shall have no right to reject Bids, except in case of unavailability of adequate funds
in the ASBA account or on technical grounds.
(d)
In case of QIB Bidders, only the (i) SCSBs (for Bids other than the Bids by Anchor Investors);
and (ii) the BRLM and their affiliate Syndicate Members (only in the specified locations) have
the right to reject bids. However, such rejection shall be made at the time of receiving the Bid
and only after assigning a reason for such rejection in writing.
(e)
All bids by QIBs, NIIs & RIIs Bids can be rejected on technical grounds listed herein.
GROUNDS FOR TECHNICAL REJECTIONS
Bid cum Application Forms/Application Form can be rejected on the below mentioned technical grounds
either at the time of their submission to the (i) authorised agents of the BRLM, (ii) Registered Brokers,
or (iii) SCSBs, or (iv) Collection Bank(s), or at the time of finalisation of the Basis of Allotment.
Bidders/Applicants are advised to note that the Bids/Applications are liable to be rejected, inter alia, on
the following grounds, which have been detailed at various placed in this GID:(a)
Bid/Application by persons not competent to contract under the Indian Contract Act, 1872, as
amended, (other than minors having valid Depository Account as per Demographic Details
provided by Depositories);
(b)
(c)
Bids/Applications by OCBs; and
In case of partnership firms, Bid/Application for Equity Shares made in the name of the firm.
However, a limited liability partnership can apply in its own name;
(d)
In case of Bids/Applications under power of attorney or by limited companies, corporate, trust
etc., relevant documents are not being submitted along with the Bid cum application
form/Application Form;
(e)
Bids/Applications by persons prohibited from buying, selling or dealing in the shares directly or
indirectly by SEBI or any other regulatory authority;
(f)
Bids/Applications by any person outside India if not in compliance with applicable foreign and
Indian laws;
(g)
DP ID and Client ID not mentioned in the Bid cum Application Form/Application Form;
(h)
PAN not mentioned in the Bid cum Application Form/Application Form except for
Bids/Applications by or on behalf of the Central or State Government and officials appointed by
the court and by the investors residing in the State of Sikkim, provided such claims have been
verified by the Depository Participant;
(i)
In case no corresponding record is available with the Depositories that matches the DP ID, the
Client ID and the PAN;
(j)
Bids/Applications for lower number of Equity Shares than the minimum specified for that
category of investors;
(k)
Bids/Applications at a price less than the Floor Price & Bids/Applications at a price more than
358
the Cap Price;
5.6
(l)
Bids/Applications at Cut-off Price by NIIs and QIBs;
(m)
Amount paid does not tally with the amount payable for the highest value of Equity Shares Bid
for. With respect to Bids/Applications by ASBA Bidders, the amounts mentioned in the Bid cum
Application Form/Application Form does not tally with the amount payable for the value of the
Equity Shares Bid/Applied for;
(n)
Bids/Applications for amounts greater than the maximum permissible amounts prescribed by the
regulations;
(o)
In relation to ASBA Bids/Applications, submission of more than five Bid cum Application
Forms/Application Form as per ASBA Account;
(p)
Bids/Applications for a Bid/Application Amount of more than ` 200,000 by RIIs by applying
through non-ASBA process;
(q)
Bids/Applications for number of Equity Shares which are not in multiples Equity Shares which
are not in multiples as specified in the RHP;
(r)
Multiple Bids/Applications as defined in this GID and the RHP/Prospectus;
(s)
Bid cum Application Forms/Application Forms are not delivered by the Bidders/Applicants
within the time prescribed as per the Bid cum Application Forms/Application Form, Bid/Issue
Opening Date advertisement and as per the instructions in the RHP and the Bid cum Application
Forms;
(t)
With respect to ASBA Bids/Applications, inadequate funds in the bank account to block the
Bid/Application Amount specified in the Bid cum Application Form/ Application Form at the
time of blocking such Bid/Application Amount in the bank account;
(u)
Bids/Applications where sufficient funds are not available in Escrow Accounts as per final
certificate from the Escrow Collection Banks;
(v)
With respect to ASBA Bids/Applications, where no confirmation is received from SCSB for
blocking of funds;
(w)
Bids/Applications by QIBs (other than Anchor Investors) and Non Institutional Bidders not
submitted through ASBA process or Bids/Applications by QIBs (other than Anchor Investors)
and Non Institutional Bidders accompanied with cheque(s) or demand draft(s);
(x)
ASBA Bids/Applications submitted to a BRLM at locations other than the Specified Cities and
Bid cum Application Forms/Application Forms, under the ASBA process, submitted to the
Escrow Collecting Banks (assuming that such bank is not a SCSB where the ASBA Account is
maintained), to the issuer or the Registrar to the Issue;
(y)
Bids/Applications not uploaded on the terminals of the Stock Exchanges;
(z)
Bids/Applications by SCSBs wherein a separate account in its own name held with any other
SCSB is not mentioned as the ASBA Account in the Bid cum Application Form/Application
Form.
BASIS OF ALLOCATION
(a)
The SEBI ICDR Regulations specify the allocation or Allotment that may be made to various
categories of Bidders/Applicants in an Issue depending on compliance with the eligibility
359
conditions. Certain details pertaining to the percentage of Issue size available for allocation to
each category is disclosed overleaf of the Bid cum Application Form and in the RHP /
Prospectus. For details in relation to allocation, the Bidder/Applicant may refer to the RHP /
Prospectus.
(b)
Under-subscription in Retail category is allowed to be met with spill-over from any other
category or combination of categories at the discretion of the Issuer and in consultation with the
BRLM and the Designated Stock Exchange and in accordance with the SEBI ICDR Regulations.
Unsubscribed portion in QIB category is not available for subscription to other categories.
(c)
In case of under subscription in the Issue, spill-over to the extent of such under- subscription may
be permitted from the Reserved Portion to the Issue. For allocation in the event of an undersubscription applicable to the Issuer, Bidders/Applicants may refer to the RHP.
(d)
Illustration of the Book Building and Price Discovery Process
Bidders should note that this example is solely for illustrative purposes and is not specific to the
Issue; it also excludes bidding by Anchor Investors.
Bidders can bid at any price within the Price Band. For instance, assume a Price Band of ` 20
to ` 24 per share, Issue size of 3,000 Equity Shares and receipt of five Bids from Bidders,
details of which are shown in the table below. The illustrative book given below shows the
demand for the Equity Shares of the Issuer at various prices and is collated from Bids received
from various investors.
Bid Quantity
500
1,000
1,500
2,000
2,500
Bid Amount (`)
Subscription
16.6
50.0
7%
0%
100.0
0%
166.6
7%
250.0
0%
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 Equity Shares is the price at which the book cuts
off, i.e., ` 22.00 in the above example. The Issuer, in consultation with the BRLM, may finalise
the Issue Price at or below such Cut-Off Price, i.e., at or below ` 22.00. All Bids at or above
this Issue Price and cut-off Bids are valid Bids and are considered for allocation in the
respective categories.
(e)
24
23
22
21
20
Cumulative Quantity
500
1,500
3,000
5,000
7,500
Alternate Method of Book Building
In case of FPOs, Issuers may opt for an alternate method of Book Building in which only the
Floor Price is specified for the purposes of bidding (“Alternate Book Building Process”).
The Issuer may specify the Floor Price in the RHP or advertise the Floor Price at least one
Working Day prior to the Bid/Issue Opening Date. QIBs may Bid at a price higher than the
Floor Price and the Allotment to the QIBs is made on a price priority basis. The Bidder with the
highest Bid Amount is allotted the number of Equity Shares Bid for and then the second highest
Bidder is Allotted Equity Shares and this process continues until all the Equity Shares have
been allotted. RIIs, NIIs and Employees are Allotted Equity Shares at the Floor Price and
allotment to these categories of Bidders is made proportionately. If the number of Equity Shares
Bid for at a price is more than available quantity then the allotment may be done on a
proportionate basis. Further, the Issuer may place a cap either in terms of number of specified
securities or percentage of issued capital of the Issuer that may be allotted to a single Bidder,
decide whether a Bidder be allowed to revise the bid upwards or downwards in terms of price
and/or quantity and also decide whether a Bidder be allowed single or multiple bids.
SECTION 6: ISSUE PROCEDURE IN FIXED PRICE ISSUE
360
Applicants may note that there is no Bid cum Application Form in a Fixed Price Issue. As the Issue Price is
mentioned in the Fixed Price Issue therefore on filing of the Prospectus with the RoC, the Application so
submitted is considered as the application form.
Applicants may only use the specified Application Form for the purpose of making an Application in terms of the
Prospectus which may be submitted through Syndicate Members/SCSB and/or Bankers to the Issue or Registered
Broker.
ASBA Applicants may submit an Application Form either in physical form to the Syndicate Members or
Registered Brokers or the Designated Branches of the SCSBs or in the electronic form to the SCSB or the
Designated Branches of the SCSBs authorising blocking of funds that are available in the bank account specified
in the Application Form only (“ASBA Account”). The Application Form is also made available on the websites
of the Stock Exchanges at least one day prior to the Bid/Issue Opening Date.
In a fixed price Issue, allocation in the net offer to the public category is made as follows: minimum fifty % to
Retail Individual Investors; and remaining to (i) individual investors other than Retail Individual Investors; and
(i) other Applicants including corporate bodies or institutions, irrespective of the number of specified securities
applied for. The unsubscribed portion in either of the categories specified above may be allocated to the
Applicants in the other category.
For details of instructions in relation to the Application Form, Bidders/Applicants may refer to the relevant section
of the GID.
SECTION 7: ALLOTMENT PROCEDURE AND BASIS OF ALLOTMENT
The allotment of Equity Shares to Bidders/Applicants other than Retail Individual Investors and Anchor Investors
may be on proportionate basis. For Basis of Allotment to Anchor Investors, Bidders/Applicants may refer to
RHP/Prospectus. No Retail Individual Investor is will be allotted less than the minimum Bid Lot subject to
availability of shares in Retail Individual Investor Category and the remaining available shares, if any will be
allotted on a proportionate basis. The Issuer is required to receive a minimum subscription of 90% of the Issue
(excluding any Offer for Sale of specified securities). However, in case the Issue is in the nature of Offer for Sale
only, then minimum subscription may not be applicable.
7.1
ALLOTMENT TO RIIs
Bids received from the RIIs at or above the Issue Price may be grouped together to determine the total
demand under this category. If the aggregate demand in this category is less than or equal to the Retail
Category at or above the Issue Price, full Allotment may be made to the RIIs to the extent of the valid
Bids. If the aggregate demand in this category is greater than the allocation to in the Retail Category at or
above the Issue Price, then the maximum number of RIIs who can be Allotted the minimum Bid Lot will
be computed by dividing the total number of Equity Shares available for Allotment to RIIs by the
minimum Bid Lot (“Maximum RII Allottees”). The Allotment to the RIIs will then be made in the
following manner:
7.2
(a)
In the event the number of RIIs who have submitted valid Bids in the Issue is equal to or less
than Maximum RII Allottees, (i) all such RIIs shall be Allotted the minimum Bid Lot; and (ii)
the balance available Equity Shares, if any, remaining in the Retail Category shall be Allotted on
a proportionate basis to the RIIs who have received Allotment as per (i) above for the balance
demand of the Equity Shares Bid by them (i.e. who have Bid for more than the minimum Bid
Lot).
(b)
In the event the number of RIIs who have submitted valid Bids in the Issue is more than
Maximum RII Allottees, the RIIs (in that category) who will then be allotted minimum Bid Lot
shall be determined on the basis of draw of lots.
ALLOTMENT TO NIIs
361
Bids received from NIIs at or above the Issue Price may be grouped together to determine the total
demand under this category. The allotment to all successful NIIs may be made at or above the Issue Price.
If the aggregate demand in this category is less than or equal to the Non-Institutional Category at or above
the Issue Price, full allotment may be made to NIIs to the extent of their demand. In case the aggregate
demand in this category is greater than the Non-Institutional Category at or above the Issue Price,
allotment may be made on a proportionate basis up to a minimum of the Non-Institutional Category.
7.3
ALLOTMENT TO QIBs
For the Basis of Allotment to Anchor Investors, Bidders/Applicants may refer to the SEBI ICDR
Regulations or RHP / Prospectus. Bids received from QIBs bidding in the QIB Category (net of Anchor
Portion) at or above the Issue Price may be grouped together to determine the total demand under this
category. The QIB Category may be available for allotment to QIBs who have Bid at a price that is equal
to or greater than the Issue Price. Allotment may be undertaken in the following manner:
7.4
(a)
In the first instance allocation to Mutual Funds for up to 5% of the QIB Category may be
determined as follows: (i) In the event that Bids by Mutual Fund exceeds 5% of the QIB
Category, allocation to Mutual Funds may be done on a proportionate basis for up to 5% of the
QIB Category; (ii) In the event that the aggregate demand from Mutual Funds is less than 5% of
the QIB Category then all Mutual Funds may get full allotment to the extent of valid Bids
received above the Issue Price; and (iii) Equity Shares remaining unsubscribed, if any and not
allocated to Mutual Funds may be available for allotment to all QIBs as set out at paragraph
7.4(b) below;
(b)
In the second instance, allotment to all QIBs may be determined as follows: (i) In the event of
oversubscription in the QIB Category, all QIBs who have submitted Bids above the Issue Price
may be Allotted Equity Shares on a proportionate basis for up to 95% of the QIB Category; (ii)
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 QIBs; and (iii) Under-subscription below 5% of the QIB Category, if any, from Mutual
Funds, may be included for allocation to the remaining QIBs on a proportionate basis.
ALLOTMENT TO ANCHOR INVESTOR (IF APPLICABLE)
(a)
(b)
Allocation of Equity Shares to Anchor Investors at the Anchor Investor Issue Price will be at the
discretion of the issuer subject to compliance with the following requirements:
(i)
not more than 60% of the QIB Portion will be allocated to Anchor Investors;
(ii)
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 price
at which allocation is being done to other Anchor Investors; and
(iii)
allocation to Anchor Investors shall be on a discretionary basis and subject to:

In case of allocation above ` 250 crore, a minimum of five Anchor Investors and a
maximum of 15 Anchor Investors for allocation up to ` 250 crore; and

Additionally, 10 Anchor Investors for every additional ` 250 crore or part thereof,
subject to minimum allotment of ` 5 crore per Anchor Investor.
A physical book is prepared by the Registrar on the basis of the Bid cum Application Forms
received from Anchor Investors. Based on the physical book and at the discretion of the issuer in
consultation with the BRLM, selected Anchor Investors will be sent a CAN and if required, a
revised CAN.
362
7.5
(c)
In the event that the Issue Price is higher than the Anchor Investor Issue Price: Anchor
Investors will be sent a revised 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 are then required to pay any additional amounts, being the difference
between the Issue Price and the Anchor Investor Issue Price, as indicated in the revised CAN
within the pay-in date referred to in the revised CAN. Thereafter, the Allotment Advice will be
issued to such Anchor Investors.
(d)
In the event the Issue Price is lower than the Anchor Investor Issue Price: Anchor Investors
who have been Allotted Equity Shares will directly receive Allotment Advice.
BASIS OF ALLOTMENT FOR QIBs (OTHER THAN ANCHOR INVESTORS), NIIs AND
RESERVED CATEGORY IN CASE OF OVER-SUBSCRIBED ISSUE
In the event of the Issue being over-subscribed, the Issuer may finalise the Basis of Allotment in
consultation with the Designated Stock Exchange in accordance with the SEBI ICDR Regulations.
The allocation may be made in marketable lots, on a proportionate basis as explained below:
7.6
(a)
Bidders may be categorised according to the number of Equity Shares applied for;
(b)
The total number of Equity Shares to be Allotted to each category as a whole may 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;
(c)
The number of Equity Shares to be Allotted to the successful Bidders may 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;
(d)
In all Bids where the proportionate allotment is less than the minimum bid lot decided per
Bidder, the allotment may be made as follows: the successful Bidders out of the total Bidders for
a category may be determined by a 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; and each successful Bidder may be Allotted a minimum of such Equity Shares
equal to the minimum Bid Lot finalised by the Issuer;
(e)
If the proportionate allotment to a Bidder is a number that is more than the minimum Bid lot but
is not a multiple of one (which is the marketable lot), the decimal may be rounded off to the
higher whole number if that decimal is 0.5 or higher. If that number is lower than 0.5 it may be
rounded off to the lower whole number. Allotment to all bidders in such categories may be
arrived at after such rounding off; and
(f)
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 may be first adjusted against any other category, where the Allotted Equity Shares are
not sufficient for proportionate allotment to the successful Bidders in that category. The balance
Equity Shares, if any, remaining after such adjustment may be added to the category comprising
Bidders applying for minimum number of Equity Shares.
DESIGNATED DATE AND ALLOTMENT OF EQUITY SHARES
(a)
Designated Date: On the Designated Date, the Escrow Collection Banks shall transfer the funds
represented by allocation of Equity Shares (other than ASBA funds with the SCSBs) from the
Escrow Account, as per the terms of the Escrow Agreement, into the Public Issue Account with
the Bankers to the Issue. The balance amount after transfer to the Public Issue Account shall be
transferred to the Refund Account. Payments of refund to the Bidders shall also be made from
the Refund Account as per the terms of the Escrow Agreement and the RHP.
363
(b)
Issuance of Allotment Advice: Upon approval of the Basis of Allotment by the Designated
Stock Exchange, the Registrar shall upload the same on its website. On the basis of the approved
Basis of Allotment, the Issuer shall pass necessary corporate action to facilitate the Allotment
and credit of Equity Shares. Bidders/Applicants are advised to instruct their Depository
Participant to accept the Equity Shares that may be allotted to them pursuant to the Issue.
Pursuant to confirmation of such corporate actions, the Registrar will dispatch Allotment Advice
to the Bidders/Applicants who have been Allotted Equity Shares in the Issue.
(c)
The dispatch of Allotment Advice shall be deemed a valid, binding and irrevocable contract.
(d)
Issuer will ensure that: (i) the Allotment of Equity Shares; and (ii) credit of shares to the
successful Bidders/Applicants Depository Account will be completed within 12 Working Days
of the Bid/ Issue Closing Date. The Issuer also ensures the credit of shares to the successful
Applicant’s depository account is completed within two Working Days from the date of
Allotment, after the funds are transferred from the Escrow Account to the Public Issue Account
on the Designated Date.
SECTION 8: INTEREST AND REFUNDS
8.1
COMPLETION OF FORMALITIES FOR LISTING & COMMENCEMENT OF TRADING
The Issuer may ensure that all steps for the completion of the necessary formalities for listing and
commencement of trading at all the Stock Exchanges are taken within 12 Working Days of the Bid/Issue
Closing Date. The Registrar to the Issue may give instructions for credit to Equity Shares the beneficiary
account with DPs, and dispatch the Allotment Advice within 12 Working Days of the Bid/Issue Closing
Date.
8.2
GROUNDS FOR REFUND
8.2.1
NON RECEIPT OF LISTING PERMISSION
An Issuer makes an application to the Stock Exchange(s) for permission to deal in/list and for an official
quotation of the Equity Shares. All the Stock Exchanges from where such permission is sought are
disclosed in RHP/Prospectus. The Designated Stock Exchange may be as disclosed in the
RHP/Prospectus with which the Basis of Allotment may be finalised.
If the Issuer fails to make application to the Stock Exchange(s) and obtain permission for listing of the
Equity Shares, in accordance with the provisions of Section 40 of the Companies Act, 2013, the Issuer
shall be punishable with a fine which shall not be less than ` 5 lakhs but which may extend to ` 50 lakhs
and every officer of the Issuer who is in default shall be punishable with imprisonment for a term which
may extend to one year or with fine which shall not be less than ` 50,000 but which may extend to ` 3
lakhs, or with both.
If the permissions to deal in and for an official quotation of the Equity Shares are not granted by any of
the Stock Exchange(s), the Issuer may forthwith repay, without interest, all moneys received from the
Bidders/Applicants in pursuance of the RHP/Prospectus.
If such money is not repaid within the prescribed time after the Issuer becomes liable to repay it, then the
Issuer and every director of the Issuer who is an officer in default may, on and from such expiry of such
period, be liable to repay the money, with interest at such rate, as disclosed in the RHP/Prospectus.
8.2.2
NON RECEIPT OF MINIMUM SUBSCRIPTION
In accordance with Regulation 26(4) of the SEBI ICDR Regulations, our Company shall ensure that the
number of prospective Allottees to whom the Equity Shares will be allotted under the Issue shall not be
364
less than 1,000, otherwise the entire application money will be refunded. If such money is not repaid
within 12 Working Days of the Bid/Issue Closing Date or within 15 days of the Bid/Issue Closing Date,
whichever is earlier, then our Company shall, on and from expiry of eight days, be liable to repay the
money with interest at the rate of 15% per annum on the application money, as prescribed by applicable
law.
8.2.3
MINIMUM NUMBER OF ALLOTTEES
The Issuer may ensure that the number of prospective Allottees to whom Equity Shares may be allotted
may not be less than 1,000 failing which the entire application monies may be refunded forthwith.
8.2.4
IN CASE OF ISSUES MADE UNDER COMPULSORY BOOK BUILDING
In case an Issuer not eligible under Regulation 26(1) of the SEBI ICDR Regulations comes for an Issue
under Regulation 26(2) of SEBI ICDR Regulations but fails to allot at least 75% of the Issue to QIBs, in
such case full subscription money is to be refunded.
8.3
8.3.1
MODE OF REFUND
(a)
In case of ASBA Bids/Applications: Within 12 Working Days of the Bid/Issue Closing Date,
the Registrar to the Issue may give instructions to SCSBs for unblocking the amount in ASBA
Account on unsuccessful Bid/Application and also for any excess amount blocked on
Bidding/Application.
(b)
In case of Non-ASBA Bid/Applications: Within 12 Working Days of the Bid/Issue Closing
Date, the Registrar to the Issue may dispatch the refund orders for all amounts payable to
unsuccessful Bidders/Applicants and also for any excess amount paid on Bidding/Application,
after adjusting for allocation/ allotment to Bidders/Applicants.
(c)
In case of non-ASBA Bidders/Applicants, the Registrar to the Issue may obtain from the
depositories the Bidders/Applicants’ bank account details, including the MICR code, on the basis
of the DP ID, Client ID and PAN provided by the Bidders/Applicants in their Bid cum
Application Forms for refunds. Accordingly, Bidders/Applicants are advised to immediately
update their details as appearing on the records of their DPs. Failure to do so may result in delays
in dispatch of refund orders or refunds through electronic transfer of funds, as applicable, and
any such delay may be at the Bidders/Applicants’ sole risk and neither the Issuer, the Registrar to
the Issue, the Escrow Collection Banks, or the Syndicate, may be liable to compensate the
Bidders/Applicants for any losses caused to them due to any such delay, or liable to pay any
interest for such delay. Please note that refunds on account of our Company not receiving the
minimum subscription of 90% of the Fresh Issue, shall be credited only to the bank account from
which the Bid Amount was remitted to the Escrow Bank.
(d)
In the case of Bids from Eligible NRIs, FIIs and FPIs, refunds, if any, may generally be payable
in Indian Rupees only and net of bank charges and/or commission. If so desired, such payments
in Indian Rupees may be converted into U.S. 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 may
be dispatched by registered post. The Issuer may not be responsible for loss, if any, incurred by
the Bidder/Applicant on account of conversion of foreign currency.
Mode of making refunds for Bidders/Applicants other than ASBA Bidders/Applicants
The payment of refund, if any, may be done through various modes as mentioned below:
(a)
NECS—Payment of refund may be done through NECS for Bidders/Applicants having an
account at any of the centers specified by the RBI. This mode of payment of refunds may be
subject to availability of complete bank account details including the nine-digit MICR code of
the Bidder/Applicant as obtained from the Depository;
365
(b)
NEFT—Payment of refund may be undertaken through NEFT wherever the branch of the
Bidders/Applicants’ bank is NEFT enabled and has been assigned the Indian Financial System
Code (“IFSC”), which can be linked to the MICR of that particular branch. The IFSC Code may
be obtained from the website of RBI as at a date prior to the date of payment of refund, duly
mapped with MICR numbers. Wherever the Bidders/Applicants have registered their nine-digit
MICR number and their bank account number while opening and operating the demat account,
the same may be duly mapped with the IFSC Code of that particular bank branch and the
payment of refund may be made to the Bidders/Applicants through this method. In the event
NEFT is not operationally feasible, the payment of refunds may be made through any one of the
other modes as discussed in this section;
(c)
Direct Credit—Bidders/Applicants having their bank account with the Refund Banker may be
eligible to receive refunds, if any, through direct credit to such bank account;
(d)
RTGS—Bidders/Applicants having a bank account at any of the centers notified by SEBI where
clearing houses are managed by the RBI, may have the option to receive refunds, if any, through
RTGS; and
(e)
For all the other Bidders/Applicants, including Bidders/Applicants who have not updated their
bank particulars along with the nine-digit MICR code, the refund orders may be dispatched
through speed post or registered post for refund orders. Such refunds may be made by cheques,
pay orders or demand drafts drawn on the Refund Bank and payable at par at places where Bids
are received.
Please note that refunds on account of our Company not receiving the minimum subscription of 90% of
the Fresh Issue, shall be credited only to the bank account from which the Bid Amount was remitted to
the Escrow Bank.
For details of levy of charges, if any, for any of the above methods, Bank charges, if any, for cashing such
cheques, pay orders or demand drafts at other centers etc. Bidders/Applicants may refer to
RHP/Prospectus.
8.3.2
Mode of making refunds for ASBA Bidders/Applicants
In case of ASBA Bidders/Applicants, the Registrar to the Issue may instruct the controlling branch of the
SCSB to unblock the funds in the relevant ASBA Account for any withdrawn, rejected or unsuccessful
ASBA Bids or in the event of withdrawal or failure of the Issue.
8.4
INTEREST IN CASE OF DELAY IN ALLOTMENT OR REFUND
The Issuer may pay interest at the rate of 15% per annum if 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
Bidders/Applicants or instructions for unblocking of funds in the ASBA Account are not dispatched
within the 12 Working days of the Bid/Issue Closing Date.
The Issuer may pay interest at 15% per annum for any delay beyond 15 days from the Bid/ Issue Closing
Date, if Allotment is not made.
SECTION 9: GLOSSARY AND ABBREVIATIONS
Unless the context otherwise indicates or implies, certain definitions and abbreviations used in this document may
have the meaning as provided below. References to any legislation, act or regulation may be to such legislation,
act or regulation as amended from time to time.
Term
Description
Allotment/ Allot/ Allotted
The allotment of Equity Shares pursuant to the Issue to successful
366
Term
Allottee
Allotment Advice
Anchor Investor
Anchor Investor Portion
Application Form
Application Supported
by
Blocked
Amount/ASBA
ASBA Account
ASBA Bid
ASBA Bidder/Applicant
Banker(s) to the Issue/
Escrow Collection
Bank(s)/ Collecting
Banker
Basis of Allotment
Bid
Bid /Issue Closing Date
Bid/Issue Opening Date
Bid/Issue Period
Description
Bidders/Applicants
An Bidder/Applicant to whom the Equity Shares are Allotted
Note or advice or intimation of Allotment sent to the Bidders/Applicants who
have been allotted Equity Shares after the Basis of Allotment has been approved
by the designated Stock Exchanges
A Qualified Institutional Buyer, applying under the Anchor Investor Portion in
accordance with the requirements specified in the SEBI ICDR Regulations.
Up to 60% of the QIB Category which may be allocated by the Issuer in
consultation with the BRLM, to Anchor Investors on a discretionary basis. Onethird of the Anchor Investor Portion is reserved for domestic Mutual Funds,
subject to valid Bids being received from domestic Mutual Funds at or above the
price at which allocation is being done to Anchor Investors
The form in terms of which the Applicant should make an application for
Allotment in case of issues other than Book Built Issues, includes Fixed Price
Issue
An application, whether physical or electronic, used by Bidders/Applicants to
make a Bid authorising an SCSB to block the Bid Amount in the specified bank
account maintained with such SCSB
Account maintained with an SCSB which may be blocked by such SCSB to the
extent of the Bid Amount of the ASBA Bidder/Applicant
A Bid made by an ASBA Bidder
Prospective Bidders/Applicants in the Issue who Bid/apply through ASBA
The banks which are clearing members and registered with SEBI as Banker to the
Issue with whom the Escrow Account(s) may be opened, and as disclosed in the
RHP/Prospectus and Bid cum Application Form of the Issuer
The basis on which the Equity Shares may be Allotted to successful
Bidders/Applicants under the Issue
An indication to make an offer during the Bid/Issue Period by a prospective
Bidder pursuant to submission of Bid cum Application Form or during the
Anchor Investor Bid/Issue Period by the Anchor Investors, to subscribe for or
purchase the Equity Shares of the Issuer at a price within the Price Band,
including all revisions and modifications thereto. In case of issues undertaken
through the fixed price process, all references to a Bid should be construed to
mean an Application
The date after which the Syndicate, Registered Brokers and the SCSBs may not
accept any Bids for the Issue, which may be notified in an English national daily,
a Hindi national daily and a regional language newspaper at the place where the
registered office of the Issuer is situated, each with wide circulation.
Applicants/bidders may refer to the RHP/Prospectus for the Bid/ Issue Closing
Date
The date on which the Syndicate and the SCSBs may start accepting Bids for the
Issue, which may be the date notified in an English national daily, a Hindi
national daily and a regional language newspaper at the place where the
registered office of the Issuer is situated, each with wide circulation.
Applicants/bidders may refer to the RHP/Prospectus for the Bid/ Issue Opening
Date
Except in the case of Anchor Investors (if applicable), the period between the
Bid/Issue Opening Date and the Bid/Issue Closing Date inclusive of both days
and during which prospective Bidders/Applicants (other than Anchor Investors)
can submit their Bids, inclusive of any revisions thereof. The Issuer may consider
closing the Bid/ Issue Period for QIBs one working day prior to the Bid/Issue
Closing Date in accordance with the SEBI ICDR Regulations. Applicants/bidders
may refer to the RHP/Prospectus for the Bid/ Issue Period
367
Term
Bid Amount
Bid cum Application
Form
Bidder/Applicant
Book Built Process/
Book Building Process/
Book Building Method
Broker Centres
BRLM(s)/
Book
Running
Lead
Manager(s)/Lead
Manager/ LM
Business Day
CAN/Confirmation
of Allotment Note
Cap Price
Client ID
Cut-off Price
DP
DP ID
Depositories
Demographic Details
Designated Branches
Designated Date
Description
The highest value of the optional Bids indicated in the Bid cum Application Form
and payable by the Bidder/Applicant upon submission of the Bid (except for
Anchor Investors), less discounts (if applicable). In case of issues undertaken
through the fixed price process, all references to the Bid Amount should be
construed to mean the Application Amount
The form in terms of which the Bidder/Applicant should make an offer to
subscribe for or purchase the Equity Shares and which may be considered as the
application for Allotment for the purposes of the Prospectus, whether applying
through the ASBA or otherwise. In case of issues undertaken through the fixed
price process, all references to the Bid cum Application Form should be
construed to mean the Application Form
Any prospective investor (including an ASBA Bidder/Applicant) who makes a
Bid pursuant to the terms of the RHP/Prospectus and the Bid cum Application
Form. In case of issues undertaken through the fixed price process, all references
to a Bidder/Applicant should be construed to mean an Bidder/Applicant
The book building process as provided under the SEBI ICDR Regulations, in
terms of which the Issue is being made
Broker centres notified by the Stock Exchanges, where Bidders/Applicants can
submit the Bid cum Application Forms/Application Form to a Registered Broker.
The details of such broker centres, along with the names and contact details of the
Registered Brokers are available on the websites of the Stock Exchanges.
The Book Running Lead Manager to the Issue as disclosed in the
RHP/Prospectus and the Bid cum Application Form of the Issuer. In case of
issues undertaken through the fixed price process, all references to the Book
Running Lead Manager should be construed to mean the Lead Manager or LM
Monday to Friday (except public holidays)
The note or advice or intimation sent to each successful Bidder/Applicant
indicating the Equity Shares which may be Allotted, after approval of Basis of
Allotment by the Designated Stock Exchange
The higher end of the Price Band, above which the Issue Price and the Anchor
Investor Issue Price may not be finalised and above which no Bids may be
accepted
Client Identification Number maintained with one of the Depositories in relation
to demat account
Issue Price, finalised by the Issuer in consultation with the Book Running Lead
Manager(s), which can be any price within the Price Band. Only RIIs, Retail
Individual Shareholders and employees are entitled to Bid at the Cut-off Price.
No other category of Bidders/Applicants are entitled to Bid at the Cut-off Price
Depository Participant
Depository Participant’s Identification Number
National Securities Depository Limited and Central Depository Services (India)
Limited
Details of the Bidders/Applicants including the Bidder/Applicant’s address, name
of the Applicant’s father/husband, investor status, occupation and bank account
details
Such branches of the SCSBs which may collect the Bid cum Application Forms
used by the ASBA Bidders/Applicants applying through the ASBA and a list of
which
is
available
on
http://www.sebi.gov.in/cms/sebi_data/
attachdocs/1316087201341.html
The date on which funds are transferred by the Escrow Collection Bank(s) from
the Escrow Account or the amounts blocked by the SCSBs are transferred from
the ASBA Accounts, as the case may be, to the Public Issue Account or the
Refund Account, as appropriate, after the Prospectus is filed with the RoC,
368
Term
Designated Stock
Exchange
Discount
Draft Prospectus
Employees
Equity Shares
Escrow Account
Escrow Agreement
Escrow Collection
Bank(s)
FCNR Account
First Bidder/Applicant
FII(s)
Fixed Price Issue/Fixed
Price
Process/Fixed
Price Method
Floor Price
FPIs
Foreign Venture Capital
Investors or FVCIs
IPO
Issue
Issuer/ Company
Issue Price
Maximum RII Allottees
Description
following which the board of directors may Allot Equity Shares to successful
Bidders/Applicants in the fresh Issue may give delivery instructions for the
transfer of the Equity Shares constituting the Offer for Sale
The designated stock exchange as disclosed in the RHP/Prospectus of the Issuer
Discount to the Issue Price that may be provided to Bidders/Applicants in
accordance with the SEBI ICDR Regulations.
The draft prospectus filed with SEBI in case of Fixed Price Issues and which may
mention a price or a Price Band
Employees of an Issuer as defined under the SEBI ICDR Regulations and
including, in case of a new company, persons in the permanent and full time
employment of the promoting companies excluding the promoters and immediate
relatives of the promoter. For further details Bidder/Applicant may refer to the
RHP/Prospectus
Equity shares of the Issuer
Account opened with the Escrow Collection Bank(s) and in whose favour the
Bidders/Applicants (excluding the ASBA Bidders/Applicants) may Issue cheques
or drafts in respect of the Bid Amount when submitting a Bid
Agreement to be entered into among the Issuer, the Registrar to the Issue, the
Book Running Lead Manager(s), the Syndicate Member(s), the Escrow
Collection Bank(s) and the Refund Bank(s) for collection of the Bid Amounts
and where applicable, remitting refunds of the amounts collected to the
Bidders/Applicants (excluding the ASBA Bidders/Applicants) on the terms and
conditions thereof
Refer to definition of Banker(s) to the Issue
Foreign Currency Non-Resident Account
The Bidder/Applicant whose name appears first in the Bid cum Application Form
or Revision Form
Foreign Institutional Investors as defined under the SEBI (Foreign Institutional
Investors) Regulations, 1995 and registered with SEBI under applicable laws in
India
The Fixed Price process as provided under the SEBI ICDR Regulations, in terms
of which the Issue is being made
The lower end of the Price Band, at or above which the Issue Price and the
Anchor Investor Issue Price may be finalised and below which no Bids may be
accepted, subject to any revision thereto
Foreign Portfolio Investors as defined under the Securities and Exchange Board
of India (Foreign Portfolio Investors) Regulations, 2014
Foreign Venture Capital Investors as defined and registered with SEBI under the
SEBI (Foreign Venture Capital Investors) Regulations, 2000
Initial public offering
Public Issue of Equity Shares of the Issuer including the Offer for Sale if
applicable
The Issuer proposing the initial public offering/further public offering as
applicable
The final price, less discount (if applicable) at which the Equity Shares may be
Allotted in terms of the Prospectus. The Issue Price may be decided by the Issuer
in consultation with the Book Running Lead Manager(s)
The maximum number of RIIs who can be allotted the minimum Bid Lot. This is
computed by dividing the total number of Equity Shares available for Allotment
to RIIs by the minimum Bid Lot.
369
Term
MICR
Mutual Fund
Mutual Funds Portion
NECS
NEFT
NRE Account
NRI
NRO Account
Non-Institutional
Investors or NIIs
Non-Institutional
Category
Non-Resident
OCB/Overseas
Corporate Body
Offer for Sale
Other Investors
PAN
Price Band
Pricing Date
Prospectus
Public Issue Account
QIB Category
Description
Magnetic Ink Character Recognition - nine-digit code as appearing on a cheque
leaf
A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations,
1996
5% of the QIB Category (excluding the Anchor Investor Portion) available for
allocation to Mutual Funds only, being such number of equity shares as disclosed
in the RHP/Prospectus and Bid cum Application Form
National Electronic Clearing Service
National Electronic Fund Transfer
Non-Resident External Account
NRIs from such jurisdictions outside India where it is not unlawful to make an
offer or invitation under the Issue and in relation to whom the RHP/Prospectus
constitutes an invitation to subscribe to or purchase the Equity Shares
Non-Resident Ordinary Account
All Bidders/Applicants, including sub accounts of FIIs registered with SEBI
which are foreign corporate or foreign individuals and FPIs which are Category
III foreign portfolio investors registered with SEBI, that are not QIBs or RIBs
and who have Bid for Equity Shares for an amount of more than ` 200,000 (but
not including NRIs other than Eligible NRIs)
The portion of the Issue being such number of Equity Shares available for
allocation to NIIs on a proportionate basis and as disclosed in the
RHP/Prospectus and the Bid cum Application Form
A person resident outside India, as defined under FEMA and includes Eligible
NRIs, FIIs, FPIs and FVCIs registered with SEBI
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 FEMA
Public offer of such number of Equity Shares as disclosed in the RHP/Prospectus
through an offer for sale by the Selling Shareholders.
Investors other than Retail Individual Investors in a Fixed Price Issue. These
include individual applicants other than retail individual investors and other
investors including corporate bodies or institutions irrespective of the number of
specified securities applied for.
Permanent Account Number allotted under the IT Act, 1961
Price Band with a minimum price, being the Floor Price and the maximum price,
being the Cap Price and includes revisions thereof. The Price Band and the
minimum Bid lot size for the Issue may be decided by the Issuer in consultation
with the Book Running Lead Manager and advertised, at least five working days
in case of an IPO and one working day in case of FPO, prior to the Bid/ Issue
Opening Date, in English national daily, Hindi national daily and regional
language at the place where the registered office of the Issuer is situated,
newspaper each with wide circulation
The date on which the Issuer in consultation with the Book Running Lead
Manager(s), finalise the Issue Price
The prospectus to be filed with the RoC in accordance with Section 26 of the
Companies Act, 2013 after the Pricing Date, containing the Issue Price, the size
of the Issue and certain other information
An account opened with the Banker to the Issue to receive monies from the
Escrow Account and from the ASBA Accounts on the Designated Date
The portion of the Issue being such number of Equity Shares to be Allotted to
370
Term
Qualified Institutional
Buyers or QIBs
RTGS
Red Herring Prospectus/
RHP
Refund Account(s)
Refund Bank(s)
Refunds through
electronic transfer of
funds
Registered Broker
Registrar to the Issue/RTI
Reserved Category/
Categories
Reservation Portion
Retail Individual Investors
/ RIIs
Retail Individual
Shareholders
Retail Category
Revision Form
RoC
SEBI
SEBI ICDR Regulations
Self-Certified Syndicate
Bank(s) or SCSB(s)
Specified Locations
Stock Exchanges/ SE
Syndicate
Syndicate Agreement
Description
QIBs on a proportionate basis
As defined under the SEBI ICDR Regulations
Real Time Gross Settlement
The red herring prospectus issued in accordance with Section 32 of the
Companies Act, 2013, which does not have complete particulars of the price at
which the Equity Shares are offered and the size of the Issue. The RHP may be
filed with the RoC at least three days before the Bid/Issue Opening Date and may
become a Prospectus upon filing with the RoC after the Pricing Date. In case of
issues undertaken through the fixed price process, all references to the RHP
should be construed to mean the Prospectus
The account opened with Refund Bank(s), from which refunds (excluding
refunds to ASBA Bidders/Applicants), if any, of the whole or part of the Bid
Amount may be made
Refund bank(s) as disclosed in the RHP/Prospectus and Bid cum Application
Form of the Issuer
Refunds through NECS, Direct Credit, NEFT, RTGS or ASBA, as applicable
Stock Brokers registered with the Stock Exchanges having nationwide terminals,
other than the members of the Syndicate
The Registrar to the Issue as disclosed in the RHP/Prospectus and Bid cum
Application Form
Categories of persons eligible for making application/bidding under reservation
portion
The portion of the Issue reserved for category of eligible Bidders/Applicants as
provided under the SEBI ICDR Regulations
Investors who applies or bids for a value of not more than ` 200,000.
Shareholders of a listed Issuer who applies or bids for a value of not more than `
200,000.
The portion of the Issue being such number of Equity Shares available for
allocation to RIIs which shall not be less than the minimum bid lot, subject to
availability in RII category and the remaining shares to be allotted on
proportionate basis.
The form used by the Bidders in an issue through Book Building process to
modify the quantity of Equity Shares and/or bid price indicates therein in any of
their Bid cum Application Forms or any previous Revision Form(s)
The Registrar of Companies
The Securities and Exchange Board of India constituted under the Securities and
Exchange Board of India Act, 1992
The Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009
A bank registered with SEBI, which offers the facility of ASBA and a list of
which
is
available
on
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1316087201341.html
Refer to definition of Broker Centers
The stock exchanges as disclosed in the RHP/Prospectus of the Issuer where the
Equity Shares Allotted pursuant to the Issue are proposed to be listed
The Book Running Lead Manager(s) and the Syndicate Member
The agreement to be entered into among the Issuer, and the Syndicate in relation
to collection of the Bids in this Issue (excluding Bids from ASBA
Bidders/Applicants)
371
Term
Description
Syndicate Member(s)/SM
Underwriters
Underwriting Agreement
The Syndicate Member(s) as disclosed in the RHP/Prospectus
The Book Running Lead Manager(s) and the Syndicate Member(s)
The agreement amongst the Issuer, and the Underwriters to be entered into on or
after the Pricing Date
All days other than a Sunday or a public holiday on which commercial banks are
open for business, except with reference to announcement of Price Band and
Bid/Issue Period, where working day shall mean all days, excluding Saturdays,
Sundays and public holidays, which are working days for commercial banks in
India
Working Day
372
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES
Foreign investment in Indian securities is regulated through the Industrial Policy, 1991 of the Government of India
and FEMA. Unless specifically restricted, foreign investment is freely permitted in all sectors of the Indian
economy up to any extent and without any prior approvals, but the foreign investor is required to follow certain
prescribed procedures for making such investment.
The consolidated FDI Policy issued by the Department of Industrial Policy and Promotion, Ministry of Commerce
and Industry, GoI (“DIPP”) by circular no. D/o IPP F. No. 5(1)/2015-FC-1 effective from May 12, 2015
(“Consolidated FDI Policy”), consolidates and supercedes all previous press notes, press releases and
clarifications on FDI issued by the DIPP.
Foreign investment aggregating up to 100% is permitted in our Company under the automatic route.
In terms of the Consolidated FDI Policy and the FEMA Regulations, downstream investments by Indian
companies, that are not owned and/or controlled by resident Indians, are subject to certain conditions, including (i)
requirement to notify SIA, DIPP and FIPB of downstream investment within 30 days of such investment, even if
capital instruments have not been allotted along with the modality of investment in new/existing ventures
(with/without expansion programme); (ii) induction of foreign equity in an existing Indian companies to be duly
supported by a resolution of the board of directors and a shareholders agreement; (iii)
issue/transfer/pricing/valuation of shares to be in accordance with applicable SEBI/RBI guidelines; and (iv) Indian
companies making the downstream investments would have to bring in requisite funds from abroad and not
leverage funds from the domestic market, except by raising debt in the domestic market; however downstream
investments through internal accruals are permissible, subject to certain conditions.
Under the FEMA Regulations, the FDI recipient company at the first level is required to also obtain a certificate
from its statutory auditor on an annual basis as regards status of compliance with the relevant conditions applicable
to downstream investments under the FEMA. In case the statutory auditor gives a qualified report, such report is
required to be immediately brought to the notice of the RBI regional office in whose jurisdiction the registered
office of the company is located and obtain an acknowledgment of such intimation.
Representation from the Bidders
No person shall make a Bid in the Issue, unless such person is eligible to acquire Equity Shares in accordance with
applicable laws, rules, regulations, guidelines and approvals. Investors that Bid in the Issue will be required to
confirm and will be deemed to have represented to the Company, the Selling Shareholders, the Book Running
Lead Manager and its respective directors, officers, agents, affiliates and representatives, as applicable, 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 applicable laws, rules,
regulations, guidelines and approvals to acquire Equity Shares of the Company. The Company, the Selling
Shareholders, the Book Running Lead Manager and its respective directors, officers, agents, affiliates and
representatives, as applicable, accept no responsibility or liability for advising any investor on whether such
investor is eligible to acquire Equity Shares.
There is no reservation for non-residents, NRIs, Eligible FPIs, foreign venture capital funds, multilateral and
bilateral development financial institutions and any other foreign investor. All non-residents, NRIs, Eligible FPIs
and foreign venture capital funds, multilateral and bilateral development financial institutions and any other
foreign investor applicants will be treated on the same basis with other categories for the purpose of allocation.
As per existing regulations, OCBs cannot participate in the Issue.
The Equity Shares have not been and will not be registered under the US Securities Act of 1933 (“Securities Act”)
and may not be offered or sold within the United States (as defined in Regulation S under the Securities Act), except
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
Accordingly, the Equity Shares are only being offered and sold outside the United States in offshore transactions in
compliance with Regulation S under the Securities Act and the applicable laws of the jurisdiction where those offers
373
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.
The above information is given for the benefit of the Bidders. The Company, the Selling Shareholders and the
Book Running Lead Manager are not liable for any amendments, modification, 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.
374
SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION
Capitalised terms used in this section have the meaning that has been given to such terms in the Articles of
Association of our Company. Pursuant to Schedule I of the Companies Act, 2013 and the SEBI ICDR Regulations,
the main provisions of the Articles of Association of our Company are detailed below:
PRELIMINARY
1.1
Nihilent Technologies Limited (“Company”) is established as a private limited company in accordance
with and subject to the provisions of the Companies Act, 1956 (as amended).
1.2
The authorised share capital of the Company will be as stated in Clause V of the Memorandum of
Association of the Company.
1.3
Notwithstanding anything to the contrary contained in the Articles, the provisions of the Part I Articles
shall automatically come in effect and be in force, immediately upon the Equity Shares of the Company
being listed on any stock exchange in India pursuant to the initial public offering of Equity Shares of the
Company in accordance with applicable law. Futher, upon the Part I Articles coming in effect, the Part II
Articles shall automatically terminate and cease to be in effect. In these Articles:
Part I of the Articles of Association
Authorised Share Capital
Article 4(b) provides that “the authorised Share Capital of the Company shall be such amount and be divided into
such shares as may from time to time, be provided in Clause V of Memorandum with power to reclassify, subdivide,
consolidate and increase and with power from time to time, to issue any shares of the original capital or any new
capital and upon the sub-division of shares to apportion the right to participate in profits, in any manner as between
the shares resulting from sub-division.”
Article 4(c) provides that “the share capital of the Company may be classified into Shares with differential rights as
to dividend, voting or otherwise in accordance with the applicable provisions of the Act, Rules, and Law, from time
to time.”
Increase, reduction and alteration in capital
Article 7(i) provides that “the Company, subject to provisions of these Articles and Section 61 of the Act, in general
meeting may from time to time, alter the conditions of its Memorandum as follows, that is to say, it may: ‐
(a)
increase its Share Capital by such amount as it thinks expedient;
(b)
consolidate and divide all or any of its Share Capital into shares of larger amount than its existing shares;
(c)
sub‐divide its existing shares of any of them into shares of smaller amount that is fixed by the
Memorandum so, however, that in the subdivision 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.
(d)
cancel any shares, which at the date of the passing of the resolution have not been taken or agreed to be
taken by the person and diminish the amount of its Share Capital by the amount of the shares so cancelled.”
Article 9 provides that “pursuant to a resolution of the Board, the Company may purchase its own Equity Shares or
other Securities, as may be specified by the MCA, by way of a buy-back arrangement, in accordance with Sections
68, 69 and 70 of the Act, the Rules and subject to compliance with Law.”
375
Article 8 provides that “the Company may, subject to the applicable provisions of the Act and the Companies Act,
1956, from time to time, reduce its Capital, any capital redemption reserve account and the securities premium
account in any manner for the time being authorized by Law.”
Payment of commission and brokerage
Article 5 provides that “the Company may exercise the powers of paying commissions conferred by sub-Section (6)
of Section 40, provided that the rate percent or the amount of the commission paid or agreed to be paid shall be
disclosed in the manner required by that Section and rules made there under. The rate or amount of the commission
shall not exceed the rate or amount prescribed in rules made under sub-Section (6) of Section 40.The commission
may be satisfied by the payment of cash or the allotment of fully or partly paid shares or partly in the one way and
partly in the other.”
Calls on Shares
Article 13(a) provides that “subject to the provisions of Section 49 of the Act, the Board may, from time to time,
make such calls as it thinks fit upon the members in respect of all moneys unpaid on the Shares (whether on account
of the nominal value of the Shares or by way of premium) held by them respectively and not by the conditions of
allotment thereof made payable at fixed times, and the member shall pay the amount of every call so made on him to
the person and at the time and place appointed by the Board of Directors.”
Article 13(b) provides that “a call shall be deemed to have been made at the time when the resolution of the Board
authorising such call was passed. The Board making a call may by resolution determine that the call shall be deemed
to be made on a date subsequent to the date of the resolution, and in the absence of such a provision, a call shall be
deemed to have been made on the same date as that of the resolution of the Board making such calls.”
Article 13(c) provides that “not less than thirty day‘s notice of any call shall be given specifying the time and place
of payment provided that before the time for payment of such call, the Directors may, by notice in writing to the
members, extend the time for payment thereof.”
Article 13(d) provides that “if by the terms of issue of any share or otherwise, any amount is made payable at any
fixed times, or by installments at fixed time, whether on account of the nominal value of the share or by way of
premium, every such amount or installments shall be payable as if it were a call duly made by the Board, on which
due notice had been given, and all the provisions contained herein, or in the terms of such issue, in respect of calls
shall relate and apply to such amount or installments accordingly.”
Article 13(e) provides that “if the sum called in respect of a share is not paid on or before the day appointed for
payment thereof, the holder for the time being of the share in respect of which the call shall have been made or the
installments shall fall due, shall pay interest for the same at the rate of 10 percent per annum, from the day appointed
for the payment thereof to the time of the actual payment or at such lower rate as the Directors may determine. The
Board shall also be at liberty to waive payment of that interest wholly or in part.”
Article 13(g) provides that “the Board, may, if it thinks fit, receive from any member willing to advance all of or any
part of the moneys uncalled and unpaid upon any shares held by him and upon all or any part of the moneys so
advance, the Board may (until the same would, but for such advance become presently payable) pay interest at such
rate not exceeding, unless the Company in its General Meeting shall otherwise direct, 12% per annum, as may be
agreed upon between the Board and the member paying the sum in advance but shall not in respect of such advances
confer a right to the dividend or participate in profits. The Directors may at any time repay the amount so
advanced.”
Article 13(h) provides that “The members shall not be entitled to any voting rights in respect of the moneys so paid
by them until the same would, but for such payment, become presently payable.”
Forfeiture, surrender and lien
Article 15(a) provides that “if a member fails to pay any call or installment of a call on the day appointed for the
payment not paid thereof, the Board may during such time as any part of such call or installment remains unpaid
serve a notice on him requiring payment of so much of the call or installment as is unpaid, together with any interest,
376
which may have accrued. The Board may accept in the name and for the benefit of the Company and upon such
terms and conditions as may be agreed upon, the surrender of any share liable to forfeiture and so far as the law
permits of any other share.”
Article 15(d) provides that “if the requirements of any such notice as, aforementioned are not complied with, any
share in respect of which the notice has been given may at any time thereafter, before the payment required by the
notice has been made, be forfeited by a resolution of the Board to that effect. Such forfeiture shall include all
dividends declared in respect of the forfeited shares and not actually paid before the forfeiture.”
Article 15(f) provides that “a forfeited or surrendered share may be sold or otherwise disposed off on such terms and
in such manner as the Board may think fit, and at any time before such a sale or disposal, the forfeiture may be
cancelled on such terms as the Board may think fit.”
Article 15(g) provides that “a person whose shares have been forfeited shall cease to be a member in respect of the
forfeited shares but shall, notwithstanding such forfeiture, remain liable to pay and shall forthwith pay the Company
all moneys, which at the date of forfeiture is payable by him to the Company in respect of the share, whether such
claim be barred by limitation on the date of the forfeiture or not, but his liability shall cease if and when the
Company received payment in full of all such moneys due in respect of the shares.”
Article 15(j) provides that “the provisions of these regulations as to forfeiture shall apply in the case of non-payment
of any sum which by terms of issue of a share, becomes payable at a fixed time, whether, on account of the amount
of the share or by way of premium or otherwise as if the same had been payable by virtue of a call duly made and
notified.”
Article 14(a) provides that “the fully paid Shares will be free from all liens, while in the case of partly paid Shares,
the Company's lien, if any, will be restricted to moneys called or payable at a fixed time in respect of such Shares”
Article 14(b) provides that “the Company shall have a first and paramount lien:
(i)
on every Share (not being a fully paid-up Share), for all monies (whether presently payable or not) called,
or payable at a fixed time, in respect of that Share; and
(ii)
on all Shares (not being fully paid Shares) standing registered in the name of a single person, for all monies
presently payable by him or his estate to the Company:
Provided that the Board of Directors may at any time declare any Share to be wholly or in part exempt from the
provisions of this Article.”
Article 14(c) provides that “the Company's lien, if any, on a Share shall extend to all dividends payable and bonuses
declared from time to time in respect of such Shares.”
Article 14(d) provides that “the Company may sell, in such manner as the Board of Directors thinks fit, any Shares
on which the Company has a lien.
Provided that no sale shall be made:
(i)
unless a sum in respect of which the lien exists is presently payable; or
(ii)
until the expiration of 14 days after a notice in writing stating and demanding payment of such part of the
amount in respect of which the lien exists as is presently payable, has been given to the registered holder
for the time being of the Share or the person entitled thereto by reason of his death or insolvency.”
Article 14(e) provides that “to give effect to any such sale, the Board of Directors may authorise some person to
transfer the Shares sold to the purchaser thereof.”
377
Transfer and transmission of shares
Article 17(a) provides that “the Company shall maintain a “Register of Transfers” and shall record therein fairly and
distinctly particulars of every transfer or transmission of any Share, Debenture or other Security held in a material
form.”
Article 17(e) provides that “every instrument of transfer shall be executed by both, the transferor and the transferee
and attested and the transferor shall be deemed to remain the holder of such share until the name of the transferee
shall have been entered in the Register of Shareholders in respect thereof.”
Article 17(g) provides that “subject to the provisions of Section 58 of the Act, these Articles and other applicable
provisions of the Act or any other Law for the time being in force, the Board may, refuse to register the transfer of,
or the transmission by operation of law of the right to, any securities or interest of a Shareholder in the Company.
The Company shall, within 30 (thirty) days from the date on which the instrument of transfer, or the intimation of
such transmission, as the case may be, was delivered to the Company, send a notice of refusal to the transferee and
transferor or to the person giving notice of such transmission, as the case may be, giving reasons for such refusal.
Provided that, registration of a 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 except where the
Company has a lien on shares.”
Article 17(h) provides that “subject to the applicable provisions of the Act and these Articles, the Directors shall
have the absolute and uncontrolled discretion to refuse to register a Person entitled by transmission to any shares or
his nominee as if he were the transferee named in any ordinary transfer presented for registration, and shall not be
bound to give any reason for such refusal and in particular may also decline in respect of shares upon which the
Company has a lien.”
Article 17(j) provides that “(i) on the death of a Shareholder, the survivor or survivors where the Shareholder was a
joint holder, and his nominee or nominees or legal representatives where he was a sole holder, shall be the only
persons recognised by the company as having any title to his interest in the shares. (ii) Nothing in clause (i) shall
release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by
him with other persons.”
In addition, Article 17(m) provides that “subject to the provisions of Articles, any person becoming entitled to a
share in consequence of the death or insolvency of a Shareholder may, upon such evidence being produced as may
from time to time properly be required by the Board and subject as hereinafter provided, elect, either: (a) to be
registered himself as holder of the share; or (b) to make such transfer of the share as the deceased or insolvent
member could have made. The Board shall, in either case, have the same right to decline or suspend registration as it
would have had, if the deceased or insolvent member had transferred the share before his death or insolvency.”
Borrowing Powers
Article 23(a) provides that “subject to the provisions of the Act and these Articles, the Board may from time to time
at their discretion raise or borrow or secure the payment of any such sum of money for the purpose of the Company,
in such manner and upon such terms and conditions in all respects as they think fit, and in particular, by promissory
notes or by receiving deposits and advances with or without security or by the issue of bonds, debentures, perpetual
or otherwise, including debentures convertible into shares of this or any other Company or perpetual annuities and to
secure any such money so borrowed, raised or received, mortgage, pledge or charge the whole or any part of the
property, assets or revenue of the Company present or future, including its uncalled capital by special assignment or
otherwise or to transfer or convey the same absolutely or in trust and to give the lenders powers of sale and other
powers as may be expedient and to purchase, redeem or pay off any such securities; provided however, that the
moneys to be borrowed, together with the money already borrowed by the Company apart from temporary loans
obtained from the Company’s bankers in the ordinary course of business shall not, without the sanction of the
Company by a Special Resolution at a General Meeting, exceed the aggregate of the paid up capital of the Company
and its free reserves. Provided that every Special Resolution passed by the Company in General Meeting in relation
378
to the exercise of the power to borrow shall specify the total amount up to which moneys may be borrowed by the
Board of Directors.”
Article 23(d) provides that “any bonds, debentures, debenture-stock or other Securities may if permissible in Law be
issued at a discount, premium or otherwise by the Company and shall with the consent of the Board be issued upon
such terms and conditions and in such manner and for such consideration as the Board shall consider to be for the
benefit of the Company, and on the condition that they or any part of them may be convertible into Equity Shares of
any denomination, and with any privileges and conditions as to the redemption, surrender, allotment of shares,
appointment of Directors or otherwise. Provided that debentures with rights to allotment of or conversion into
Equity Shares shall not be issued except with, the sanction of the Company in General Meeting accorded by a
special resolution.”
Conversion of shares into stock and reconversion
Article 24(a) provides that “the Company may, by Ordinary Resolution, convert all or any fully paid share(s) of any
denomination into stock and vice versa.”
Article 24(b) provides that “the holders of stock may transfer the same or any part thereof in the same manner as,
and subject to the same regulations, under which, the shares from which the stock arose might before the conversion
have been transferred, or as near thereto as circumstances admit; provided that the Board may, from time to time, fix
the minimum amount of stock transferable, so, however, that such minimum shall not exceed the nominal amount of
the shares from which the stock arose.”
Article 24(c) provides that “the holders of the stock shall, according to the amount of the stock held by them, have
the same rights, privileges and advantages as regards dividends, voting at meetings of the Company and other
matters, as if they held the shares from which the stock arose, but no such privilege or advantage (except
participation in the dividends and profits of the Company and its assets on winding up) shall be conferred by an
amount of stock which would not, if existing in shares, have conferred that privilege or advantage.
Annual General Meeting
Article 25 provides that “in accordance with the provisions of the Act, the Company shall in each year hold a
General Meeting specified as its Annual General Meeting and shall specify the meeting as such in the notices
convening such meetings. Further, not more than 15 (fifteen) months gap shall exist between the date of one Annual
General Meeting and the date of the next. All General Meetings other than Annual General Meetings shall be an
Extraordinary General Meetings.
Nothing contained in the foregoing provisions shall be taken as affecting the right conferred upon the Registrar
under the provisions of Section 96(1) of the Act to extend the time within which any Annual General Meeting may
be held.”
Article 26(a) provides that “every Annual General Meeting shall be call