BID/ ISSUE PROGRAMME *

BID/ ISSUE OPENS ON [] BID/ ISSUE CLOSES ON** []

LEAD MANAGER TO THE ISSUE
CHOICE CAPITAL ADVISORS PRIVATE LIMITED
REGISTRAR TO THE ISSUE
E-2, Ansa Industrial Estate, Sakivihar Road,
Saki Naka, Andheri (East), Mumbai - 400072.
Tel.: 022 - 4043 0200
Fax: 022 - 2847 5207
Web: www.bigshareonline.com
Email: ipo@bigshareonline.com
Contact Person: Mr. Malla S
SEBI Registration No.: INR000001385
DRAFT RED HERRING PROSPECTUS
Dated: November 7, 2011
Please read Section 60B of the Companies Act, 1956
100% Book Building Issue
THE ISSUE
PUBLIC ISSUE OF 1,00,00,000 EQUITY SHARES OF ` 10/- EACH ISSUED FOR CASH AT A PREMIUM OF ` [] PER EQUITY SHARE I.E. AT A PRICE OF
` [] PER EQUITY SHARE AGGREGATING TO ` [] (THE ISSUE OR THE NET ISSUE) BY E-ZEST SOLUTIONS LIMITED (THE COMPANY OR THE
ISSUER). THE FACE VALUE OF THE SHARE IS ` 10/- EACH AND THE ISSUE PRICE IS [] TIMES OF THE FACE VALUE. THE ISSUE TO THE PUBLIC WILL
CONSTITUTE 40.83% OF THE FULLY DILUTED POST-ISSUE EQUITY SHARE CAPITAL OF THE COMPANY.
THE FACE VALUE OF THE EQUITY SHARE IS ` 10 EACH
THE PRICE BAND AND THE MINIMUM BID LOT WILL BE DECIDED BY THE COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD
MANAGER AND ADVERTISED AT LEAST TWO WORKING DAYS PRIOR TO THE BID/ ISSUE OPENING DATE.
PRICE BAND: ` [] TO ` [] PER EQUITY SHARE. THE FLOOR PRICE IS [] TIMES OF THE FACE VALUE AND THE CAP PRICE IS [] TIMES OF THE FACE VALUE
In case of any revision in the Price Band, the Bid/ Issue Period will be extended by three additional Working Days after 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, will be widely disseminated by notification to the
Self Certified Syndicate Banks (SCCBs), Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), by issuing a Press Release and by indicating the change
on the website of the Lead Manager and at the Terminals of the other Syndicate Members.The Issue is being made under sub-regulation (1) of Regulation 26 of the SEBI (Issue
of Capital and Disclosure Requirements) Regulations, 2009 and through a Book Building Process wherein not more than 50% of the Issue shall be allotted on a proportionate
basis to Qualified Institutional Buyers. Provided that our Company in consultation with the BRLM, may allocate upto 30% of the QIB portion to Anchor Investors on a
discretionary basis out of which one- third shall be reserved for domestic Mutual Funds only. In the event of under subscription in the Anchor Investor Portion, the remaining
equity shares shall be added to the Net QIB portion.Further 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only and the
remaining QIB portion shall be available for allocation to the QIB Bidders including Mutual Funds, subject to valid Bids being received at or above the Issue Price. In
addition, not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders and not less than 15% of the Issue 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. Any Bidder may participate
in this Issue through an Application Supported by Blocked Amount (ASBA Process) providing details of the bank account in which the Bid Amount will be blocked by
the Self Certified Syndicate Banks (SCSBs). For further details refer to the chapter titled Issue Procedure beginning on Page No. 200 of the Draft Red Herring Prospectus.
(Our Company was incorporated on August 8, 2000 at Mumbai as a Private LimitedCompany under the Companies Act, 1956.
For details of changes in the name and registered office of the Company, see section titled History and Corporate Structure on Page No. 105)
Registered Office: B- 103, PushpVinod, S.V. Road, Borivali (West), Mumbai- 400 092, India.
Contact Person: Divanshu Mittal, Company Secretary and Compliance Officer.
Tel: +91 20 25459802/3, Fax: +91 20 2545 9810, Email: divanshu.mittal@e-zest.in; Website: www.e-zest.net
For changes in the Registered Office, please refer section titled History and Certain Corporate Matters on Page No. 106
E-ZEST SOLUTIONS LIMITED
RISK IN RELATION TO THE FIRST ISSUE
This being the first Issue of our Company, there has been no formal market for the securities of the Company. The Face Value of the shares is ` 10/- per share and the Floor price
is [] times of the Face Value and the Cap Price is [] times of the face value. The Issue Price (as has been determined and justified by the Company in consultation with Lead
Manager) as stated under the paragraph on Basis for the Issue Price given on Page No. 76 of this Draft Red Herring Prospectus should not be taken to be indicative of the
market price of the equity shares after the shares are listed. No assurance can be given regarding an active or sustained trading in the equity shares of our Company or regarding
the price at which the equity shares will be traded after listing.
GENERAL RISKS
Investment in Equity and Equity Related Securities involve a degree of risk and investors should not invest any funds in this offer 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 offering. For taking an investment decision investors
must rely on their own examination of the Company and the Issue, including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved
by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of contents of this Draft Red Herring Prospectus. Specific attention
of the Investors is invited to the statement of Risk Factors given on Page No. 12 of this Draft Red Herring Prospectus under the Section Risk Factors.
ISSUERS 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
the Company and the Issue, which is material in the context of the 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.
IPO GRADING
This Issue has been graded by Credit Analysis and Research Limited (CARE) and has been assigned the IPO Grade [] through their letter dated []. IPO Grade is assigned
on a five- point scale from 1 to 5, with IPO grade 5/5 indicating strong fundamentals and IPO Grade 1/5 indicating poor fundamentals. For further details in this regard, please
refer Page No. 48 of this Draft Red Herring Prospectus.
LISTING AGREEMENT
The Equity Shares offered through this Draft Red Herring Prospectus are proposed to be listed on the Bombay Stock Exchange Limited (BSE), the Designated Stock
Exchange and National Stock Exchange of India Limited (NSE). Our Company has received in-principle approvals for listing of the equity shares from BSE vide its letter
No. [] dated [] and NSE vide its letter No. [] dated [].
* Our Company may consider participation by Anchor Investors. Anchor Investor Bid/ Issue Period shall be one working day prior to the Bid/ Issue Opening Date.
** Our Company may consider closing the Bid/ Issue period one working day prior to the Bid Issue Closing Date.
Shree Shakambhari Corporate Park,
156-158, Chakravorty Ashok Society,
J. B.Nagar, Andheri (East), Mumbai 400 099.
Tel.: 022 - 6707 9999
Fax: 022 - 6707 9959
Web: www.choiceindia.com
Email: ezest.ipo@choiceindia.com
Contact Person: Mrs. Sujata Chattopadhyay
SEBI Registration No.: INM000011872
PROMOTERS OF OUR COMPANY
1) MR. DEVENDRA DESHMUKH 2) MR. AMOL PANDE 3) MR. ASHISH GUPTA AND 4) MR. SUNIL DANE
TABLE OF CONTENTS
CONTENTS PAGE NO.
SECTION I - DEFINITIONS AND ABBREVIATIONS 1
Issuer Related Terms 1
Certain Conventional and General Terms 2
Issue Related Terms 3
Industry Related Terms & Abbreviations 7
Presentation of Financial, Industry and Market Data 9
SECTION II - RISK FACTORS 12
Risk Factors specific to the Project and Internal to our Company 12
Risk Factors which are External to the Company 27
SECTION III - PROMINENT NOTES 31
SECTION IV - INTRODUCTION 33
Summary of the Industry and Business of our Company 33
Summary of Financial Information 41
Issue Details in Brief 45
General Information 46
Capital Structure 53
Notes to Capital Structure 54
SECTION V - PARTICULARS OF THE ISSUE 65
Objects of the Issue 65
Requirement of Funds 74
Means of Finance 74
Appraisal 74
Schedule of Implementation 74
Deployment of Funds 75
Sources of Financing of Funds Already Deployed 75
Deployment of Balance Funds 75
Interim use of Funds 75
Basic Terms of Issue 75
Basis of Issue Price 76
Statement of Tax Benefits 79
SECTION VI ABOUT THE ISSUER 89
Industry Overview 89
Business Overview 90
Key Industry Regulation 97
History and Corporate Structure 105
Management 108
Promoters / Principal Shareholders 123
Currency of Presentation 129
Dividend Policy 130
SECTION VII FINANCIAL INFORMATION 131
Auditors Report 131
Financial Information of the Group Companies 166
Changes in Accounting Policies in the last three years 168
Management's Discussion and Analysis of Financial Condition and Results of Operations 168
SECTION VIII - LEGAL AND OTHER INFORMATION 180
Outstanding Litigations And Material Developments 180
Government and Other Statutory Approvals 182
SECTION IX - OTHER REGULATORY AND STATUTORY DISCLOSURES 185
SECTION X OFFERING INFORMATION 197
Terms of the Issue 197
Issue Procedure 200
SECTION XI - DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES
OF ASSOCIATION
241
SECTION XII - OTHER INFORMATION 270
List of Material Contracts and Documents for Inspection 270
Declaration 273













THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK



1

SECTION I: DEFINITIONS AND ABBREVIATIONS
Unless the context otherwise indicates or implies, the following terms have the following meanings in this
Draft Red Herring Prospectus, and references to any statute or regulations or policies shall include
amendments thereto, from time to time:

Issuer Related Terms
Terms Description
e-Zest Solutions
Limited, e-Zest, our
Company, the
Company, the Issuer
Company, the Issuer
we, us, and our
Unless the context otherwise requires, refers to e-Zest Solutions Limited, a
company incorporated under the Companies Act, 1956.
Equity Shares The Equity Shares of face value of ` 10 each of e-Zest Solutions Limited.
Articles/Articles of
Association
Articles of Association of e-Zest Solutions Limited.
Auditors
The Statutory Auditors of our Company, M/s. Sajjan Kanodia & Co., Chartered
Accountants.
Board of Directors/ Board
The Board of Directors of e- Zest Solutions Limited or any Committee constituted
thereof.
Employee
Means,
(a) a permanent employee of the Company working in India or out of India; or
(b)a director of the Company, whether a whole time director, part time director or
otherwise;
or
(c) an employee as defined in sub-clauses (a) and (b) of a subsidiary, in India or
out of India or of a holding company of the Company.
Memorandum/
Memorandum of
Association/MOA
The Memorandum of Association of e-Zest Solutions Limited.
Promoters
Mr. Devendra Deshmukh, Mr. Ashish Gupta, Mr. Amol Pande and Mr. Sunil
Dane
Promoter Group
Includes such persons and entities who constitute our promoter group pursuant to
Regulation 2(1)(zb) of the SEBI ICDR Regulations and are listed in the section
titled Our Promoters - Promoter Group on Page No. 57
Registered Office of
our Company
B-103, PushpVinod, S.V. Road, Borivali (W), Mumbai- 400 092
ROC
Registrar of Companies, Maharashtra, Mumbai situated at Everest, 5th Floor, 100
Marine Drive, Mumbai 400020.
Group Entities/
Group Companies
Includes those companies, firms, ventures, etc. promoted by the Promoter,
irrespective of whether such entities are covered under section 370 (1)(B) of the
Companies Act and as enumerated in the section titled Group Companies,
beginning on Page No. 126
Investor Grievance
Committee
The committee of the Board of Directors constituted as our Companys
Shareholders/Investor Grievance Committee in accordance with Clause 49 of the
Listing Agreement to be entered into with the Stock Exchanges
KMP Key Management Personnel
MOU Memorandum of Understanding



2

Certain Conventional and General Terms
Terms Description
Companies Act The Companies Act, 1956, as amended from time to time
Depositories Act The Depositories Act, 1996, as amended from time to time
Indian GAAP Generally Accepted Accounting Principles in India
Non Residents
Eligible NRIs, FIIs, FVCIs and multilateral and bilateral development financial
institutions, who are eligible to apply in the Issue.
NRIs/Non- Resident
Indians
A person resident outside India, as defined under FEMA and who is a citizen of
India or a Person of Indian Origin under FEMA (Transfer or Offer of Security by a
Person Resident Outside India) Regulations, 2000.
Overseas Corporate
Body/OCB
A Company, partnership, society or other corporate body owned directly or
indirectly to the extent of at least 60% by NRIs including overseas trusts, in which
not less than 60% of beneficial interest is irrevocably held by NRIs directly or
indirectly as defined under Foreign Exchange Management (Transfer or Issue of
Security by a Person Resident Outside India) Regulations, 2000.
Person or Persons
Any individual, sole proprietorship, unincorporated association, unincorporated
organization, body corporate, corporation, company, partnership, limited liability
company, joint venture, or trust or any other entity or organization validly
constituted and/or incorporated in the jurisdiction in which it exists and operates, as
the context requires.
SEBI The Securities and Exchange Board of India constituted under the SEBI Act, 1992
SEBI Act Securities and Exchange Board of India Act, 1992 as amended from time to time.
SEBI (ICDR)
Regulations,2009
Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009
SEBI FII Regulations SEBI (Foreign Institutional Investors) Regulations 1995, as amended
SEBI VCF Regulations SEBI (Venture Capital Funds) Regulations, 1996 as amended
Stock Exchanges
BSE Limited (BSE) and National Stock Exchange of India Limited (NSE), referred
to as collectively.




3

Issue Related Terms
Terms Description
Allotment/ Allot/
Allotted
Unless the context otherwise requires, the allotment of Equity Shares pursuant to
the Issue
Allotment Advice
The advice or intimation of allotment of Equity Shares sent to the Bidders who are
to be allotted Equity Shares after discovery of the Issue Price in accordance to the
Book Building process.
Allottee A successful Bidder to whom Equity Shares are allotted.
Anchor Investor
A Qualified Institutional Buyer, applying under the Anchor Investor category, who
has bid for Equity Shares amounting to at least ` 1000.00 Lacs.
Anchor Investor Bid/
Issue Period
The date one day prior to the Bid/ Issue Opening Date on which bidding by Anchor
Investors shall be open and shall be completed.
Anchor Investor Bidding
Date
The date one day prior to the Bid opening date, prior to or after which the Syndicate
will not accept any bids from Anchor Investors.
Anchor Investor Issue
Price
The final price at which Equity Shares will be issued and Allotted in terms of the
Red Herring Prospectus and the Prospectus to the Anchor Investors, which will be a
price equal to or higher than the Issue Price but not higher than the Cap Price. The
Anchor Investor Issue Price will be decided by our Company in consultation with
the BRLM prior to the Bid Opening Date.
Anchor Investor Portion
Up to 30% of the QIB Portion which may be allocated by our Company 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.
Application Supported
by Blocked Amount/
ASBA
An application, whether physical or electronic, used by a Bidder to make a Bid
authorizing an SCSB to block the Bid Amount in their ASBA Account.
ASBA Account
Account maintained by an ASBA Bidder with a SCSB which will be blocked by
such SCSB to the extent of the Bid Amount as mentioned in the ASBA Bid cum
Application Form of the ASBA Bidder.
ASBA Bidder
Any Bidder, other than an Anchor Investor, who intends to apply through ASBA in
accordance with the terms of the Red Herring Prospectus and the ASBA BCAF.
ASBA Bid cum
Application Form or
ASBA BCAF
The form, whether physical or electronic, used by an ASBA Bidder to make a Bid
authorizing a SCSB to block the Bid Amount in the ASBA account maintained with
such SCSB which will be considered as the application for Allotment for the
purposes of the Red Herring Prospectus and the Prospectus.
ASBA Revision Form
The form used by the ASBA Bidders to modify the quantity of Equity Shares or the
Bid Amount in any of their ASBA Bid cum Application Forms or any previous
revision form(s).
Banker(s) to the
Issue/Escrow
Collection Bank(s)
The banks which are clearing members and registered with SEBI as Banker to the
Issue with whom the Escrow Account will be opened, in this case being [].
Basis of Allotment
The basis on which Equity Shares will be Allotted to Bidders under the Issue and
which is described in Issue Procedure Basis of Allotment on Page No. 233
Bid
An indication to make an offer during the Bidding/Issue Period by a Bidder
(including an ASBA Bidder), or on the Anchor Investor Bidding Date by an Anchor
Investor, pursuant to submission of a Bid cum Application Form to subscribe to our
Equity Shares at a price within the Price Band, including all revisions and
modifications thereto.
Bid Amount The highest value of the optional Bids indicated in the Bid cum Application Form.
Bid /Issue Opening Date
The date on which the Syndicate shall start accepting Bids for the Issue, which shall
be the date notified in [] edition of [] an English national newspaper and []



4

edition of [] a Hindi national newspaper and [] edition of [] a Marathi
newspaper, each with wide circulation.
Bid /Issue Closing Date
The date after which the Syndicate will not accept any Bids for the Issue, which
shall be notified in [] edition of [] an English national daily newspaper, []
edition of [], a Hindi national daily newspaper and [] edition of [], a Marathi
newspaper, each with wide circulation.
Bid cum Application
Form
The form used by a Bidder to make a Bid and which will be considered as the
application for Allotment for the purposes of the Red Herring Prospectus and the
Prospectus including the ASBA Bid cum Application as may be applicable.
Bidder
Any prospective investor who makes a Bid pursuant to the terms of the Red Herring
Prospectus and the Bid cum Application Form, including an ASBA Bidder and
Anchor Investor.
Bidding/Issue Period
The period between the Bid/Issue Opening Date and the Bid/Issue Closing Date
inclusive of both days and during which prospective Bidders can submit their Bids.
Book Building
Process/Method
Book building process as provided in Schedule XI of the SEBI ICDR Regulations,
in terms of which this Issue is being made
BRLMs/ Lead
Managers
Lead Managers to the Issue, in this case being Choice Capital Advisors Private
Limited.
CAN/Confirmation of
Allotment Notice
Except in relation to Anchor Investors, the note or advice or intimation of
Allotment of Equity Shares sent to the successful Bidders who have been Allotted
Equity Shares after discovery of the Issue Price in accordance with the Book
Building Process, including any revisions thereof. In relation to Anchor Investors,
the note or advice or intimation of Allotment of Equity Shares sent to the successful
Anchor Investors who have been Allotted Equity Shares after discovery of the
Anchor Investor Issue Price, including any revisions thereof.
Cap Price
The higher end of the Price Band, above which the Issue Price will not be finalized
and above which no Bids will be accepted including any revisions thereof.
Controlling Branches
Such branches of the SCSB which coordinates with the BRLM, the Registrar to the
Issue and the Stock Exchanges, a list of which is provided on
http://www.sebi.gov.in/pmd/scsb.pdf
Cut-off Price
Issue Price, finalized by our Company in consultation with the BRLM. Only Retail
Individual Bidders whos Bid Amount does not exceed ` 200,000 are entitled to Bid
at the Cut-off Price. QIBs and Non-Institutional Bidders are not entitled to Bid at
the Cut-off Price
Demographic Details
Demographic details of the ASBA Bidders obtained by Registrar to the Issue from
the Depository including address, Bidders bank account, MICR code and
occupation details
Designated Branches
Such branches of the SCSBs which shall collect the ASBA Bid cum Application
Forms used by ASBA Bidders and a list of which is available on
http://www.sebi.gov.in/pmd/scsb.pdf
Designated Date
The date on which funds are transferred from the Escrow Account to the Public
Issue Account and the amount blocked by the SCSB is transferred from the bank
account of the ASBA Bidder to the Public Issue Account, as the case may be, after
the Prospectus is filed with the RoC, following which the Board of Directors shall
Allot Equity Shares to successful Bidders.
Designated Stock
Exchange
BSE Limited (BSE)
Draft Red Herring
Prospectus/DRHP
This Draft Red Herring Prospectus dated November 7, 2011 issued in accordance
with Section 60B of the Companies Act, which does not contain complete
particulars of the price at which the Equity Shares are issued and the size (in terms
of value) of the Issue.
Eligible NRI NRIs from jurisdictions outside India where it is not unlawful to make an issue or



5

invitation under the Issue and in relation to whom the Draft Red Herring Prospectus
constitutes an invitation to subscribe to the Equity Shares Allotted herein.
Equity Shares
Equity shares of e-Zest Solutions Limited of face value of ` 10/- each, unless
otherwise specified in the context thereof.
Escrow Account
Account to be opened with the Escrow Collection Bank(s) for the Issue and in
whose favour the Bidder (excluding the ASBA Bidders) will issue cheques or drafts
in respect of the Bid Amount when submitting a Bid.
Escrow Agreement
Agreement to be entered into by our Company, the Registrar to the Issue, the
BRLM, the Syndicate Members and the Escrow Collection Bank(s) for collection of
the Bid Amounts and where applicable, refunds of the amounts collected to the
Bidders (excluding the ASBA Bidders) on the terms and conditions thereof.
First Bidder
The Bidder whose name appears first in the Bid cum Application Form or Revision
Form or the ASBA Bid cum Application Form
Floor Price
The lower end of the Price Band, at or above which the Issue Price will be finalized
and below which no Bids will be accepted.
Gross Proceeds The gross proceeds of the Issue of ` []
IPO Grading Agency Credit Analysis and Research Limited (CARE)
Issue
Public issue of 1,00,00,000 Equity Shares of our Company for cash at a price of `
[] per Equity Share aggregating to ` [] Lacs
Issue Agreement
The agreement entered into between our Company and the BRLM on October 7,
2011, pursuant to which certain arrangements are agreed to in relation to the Issue
Issue Price
The final price at which Equity Shares will be issued and allotted in terms of the
Red Herring Prospectus. The Issue Price will be decided by our Company in
consultation with the BRLM on the Pricing Date.
Issue Proceeds The proceeds of the Issue that is available to our Company.
Qualified
Institutional Buyers/
QIBs
The term Qualified Institutional Buyers or QIBs shall have the meaning
ascribed to such term under the ICDR Regulations and shall mean and include (i) a
Mutual Fund, VCF and FVCI registered with SEBI; (ii) an FII and sub-account
(other than a sub-account which is a foreign corporate or foreign individual),
registered with SEBI; (iii) a public financial institution as defined in Section 4A of
the Companies Act; (iv) a scheduled commercial bank; (v) a multilateral and
bilateral development financial institution; (vi) a state industrial development
corporation; (vii) an insurance company registered with the Insurance Regulatory
and Development Authority; (viii) a provident fund with minimum corpus of `
2500 lacs; (ix) a pension fund with minimum corpus of ` 2500 lacs; (x) 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; (xi)
insurance funds set up and managed by army, navy or air force of the Union of
India; and (xii) insurance funds set up and managed by the Department of Posts,
India eligible for Bidding in this Issue.
Refund Account(s)
The account opened with the Escrow Collection Bank(s), from which refunds, if
any, of the whole or part of the Bid Amount (excluding to the ASBA Bidder) shall
be made
Refund Banker(s) []
Refunds through
electronic transfer of
funds
Refunds through NECS, Direct Credit, NEFT, RTGS or the ASBA process, as
applicable
Registrar/Registrar to
the Issue
Big Share Services Private Limited, having its registered office at E-2 & 3, Ansa
Industrial Estate, Saki-Vihar Road, Saki Naka, Andheri(E), Mumbai - 400 072,
Maharashtra, India
Resident Retail
Individual Investor or
Retail Individual Bidder who is a person resident in India as defined under FEMA
and who has not Bid for Equity Shares for an amount more than ` 200,000 in any of



6

Resident Retail
Individual Bidder
the bidding options in the Issue
Restated Financial
Statements
Our restated standalone and consolidated financial information as at and for the
years ended March 31, 2007, 2008, 2009, 2010 and 2011, standalone financial
information as at September 30, 2011 prepared in accordance with Indian GAAP
and the SEBI (ICDR) Regulations.
Retail Individual
Bidder(s)
Individual Bidders (including HUFs applying through their Karta, Eligible NRIs
and Resident Retail Individual Bidders) who have not Bid for Equity Shares for an
amount more than ` 200,000 in any of the bidding options in the Issue
Retail Portion
The portion of the Issue being not less than 35,00,000 Equity Shares available for
allocation to Retail Individual Bidder(s)
Revision Form
The form used by the Bidders to modify the quantity of Equity Shares or the Bid
Price in any of their Bid cum Application Forms or any previous Revision Form(s).
Self-Certified Syndicate
Bank or SCSB
The Banks which are registered with SEBI under SEBI (Bankers to an Issue)
Regulations, 1994, as amended and offers services of ASBA, including blocking of
bank account and a list of which is available on http://www.sebi.gov.in
Syndicate The BRLM and the Syndicate Members (if any)
Syndicate Agreement
The agreement to be entered into between the Syndicate and our Company in
relation to the collection of Bids in this Issue (excluding Bids from the ASBA
Bidders)
Syndicate Members []
Takeover Code
SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as
amended from time to time
TRS/Transaction
Registration Slip
The slip or document issued by a member of the Syndicate or the SCSB (only on
demand), as the case may be, to the Bidder as proof of registration of the Bid.
Underwriters The BRLM and the Syndicate Members
Underwriting
Agreement
The agreement among the Underwriters and our Company to be entered into on or
after the Pricing Date.
Working Day
All days other than a Sunday or a public holiday (except during the Bid/Issue
Period where a working day means all days other than a Saturday, Sunday or a
public holiday), on which commercial banks in Mumbai are open for business.
Listing Agreement
Listing agreement to be entered into between our Company and the Stock
Exchanges.




7

Industry Related Terms & Abbreviations
Terms Description
Cloud
Computing
It is an internet based computing whereby shared servers provide resources, software and data
to computers and other devices on demand.
Platform

The foundation technology of a computer system is called a Platform. Because computers are
layered devices composed of a chip-level hardware layer, a firmware and operating system
layer, and an applications program layer, the bottommost layer of a machine is often called a
platform.
SaaS
Software that is deployed over the internet to run behind a firewall on a local area network or
personal computer.
SQL
Structured Query Language - Pronounced "S-Q-L" or "see-quill," is a standard interactive and
programming language used to interrogate and process data in a relational database.
ADM Application Development and Maintenance
AIM/AI & M Application Infrastructure and Middleware Solutions
ALM Application Life Cycle Management
BFSI Banking & Finance Service Industry
BI Business Intelligence
BPM Business Process Management
BPO Business Process Outsourcing
CAGR Compounded Annual Growth Rate
CMMi
Capability Maturity Model integration is a process improvement approach that helps
organizations improve their performance.
CMS Content Management Solution
CRM Customer Relationship Management
ERP
Enterprise Resource Planning is an integrated computer-based system used to manage internal
and external resources, including tangible assets, financial resources, materials, and human
resources. Its purpose is to facilitate the flow of information between all business functions
inside the boundaries of the organization and manage the connections to outside stakeholders.
Built on a centralized database and normally utilizing a common computing platform, ERP
systems consolidate all business operations into a uniform and enterprise-wide system
environment.
GUI Graphical User Interface
IP Intellectual Property
ISO
ISO is an international-standard-setting body composed of representatives from various
national standards organizations.
IT Information Technology
MOM Message Oriented Middleware
MSA Master Service Agreements
MS-Office Microsoft Office
MS-Outlook Microsoft Outlook
NASSCOM National Association of Software and Services Companies
ODC Offshore Delivery Centre
OLA Operating Level Agreement
OPD Outsourced Software Product Development
PKMS Pick Ticket Management System
Product Distinct product offerings to customers that are differentiated to other releases by functionality



8

Release and platforms.
R&D Research and Development
ROI Return on Investments
SAP
SAP is a corporation that is a leader in providing comprehensive business software through
enterprise applications
SCM Supply Chain Management
SIGMOD Special Interest Group on Management of Data, New York, USA
SPIN Software Process Improvement Network
SRM Strategic Relationship Management








9

PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA
Financial Data

Unless stated otherwise, the financial data in this Draft Red Herring Prospectus is derived from our restated
standalone and consolidated financial information for the financial year ended 2007, 2008, 2009, 2010, 2011
and standalone financial information for the half year ended September 30, 2011, prepared in accordance with
Indian GAAP and the Companies Act and restated in accordance with SEBI (ICDR) Regulations, 2009, as
stated in the report of our Auditors, M/s Sajjan Kanodia & company, Chartered Accountants, under Section
Financial Information beginning on Page No. 131 of the Draft Red Herring Prospectus.

Our financial year commences on April 1 and ends on March 31. In this Draft Red Herring Prospectus, any
discrepancies in any table between the total and the sums of the amounts listed are due to rounding off. All
decimals have been rounded off to two decimal points.

In this Draft Red Herring Prospectus, unless the context otherwise requires, all references to one gender also
refers to another gender and the word "Lacs" means "One hundred thousand" and the word "Million" means
"Ten Lacs" and the word "Crore" means "Ten million".

Throughout this Draft Red Herring Prospectus, all figures have been expressed in Lacs. Unless otherwise
stated, all references to India contained in this Draft Red Herring Prospectus are to the Republic of India.
Unless stated otherwise, industry data used throughout this Draft Red Herring Prospectus has been obtained
from industry publications, internal company reports, newspaper and magazine articles etc.

Such publications generally state that content therein has been obtained from sources believed to be reliable
but their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although, we
believe that the industry data used in this Prospectus is reliable, it has not been verified by any independent
source.

For additional definitions, please refer to "Definitions and Abbreviations" on Page No. 1 of this Draft Red
Herring Prospectus. In the Section titled, Description of Equity Shares and Terms of the Articles of
Association' on Page No. 241 of this Draft Red Herring Prospectus, defined terms have the meaning given to
such terms in the Articles of Association of our Company.

There are significant differences between Indian GAAP, US GAAP and IFRS. We have not attempted to
explain those differences or quantify their impact on the financials data included herein and we urge you to
consult your own advisors regarding such differences and their impact on our financial data. Accordingly, the
degree to which the Indian GAAP restated standalone & consolidated financial statements included in this
Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level
of familiarity with Indian GAAP. Any reliance by persons not familiar with Indian accounting practices on the
financial disclosures presented in this DRHP should accordingly be limited.

Currency and Units of Presentation

All references to Rupees or Rs. or ` are to Indian Rupees, the official currency of the Republic of India.
All references to US$, USD or U.S. Dollar are to United States Dollars, the official currency of the
United States of America.




10

Industry and Market Data
Unless stated otherwise, industry and market data used throughout this DRHP has been obtained from
industry publications and certain public sources. Industry publications generally state that the information
contained in those publications has been obtained from sources believed to be reliable, but that their accuracy
and completeness are not guaranteed and their reliability cannot be assured. Although our Company believes
that the industry and market data used in this DRHP is reliable, it has not been verified by us or any
independent sources. Further, the extent to which the market and industry data presented in this DRHP is
meaningful depends on the readers familiarity with and understanding of methodologies used in compiling
such data.

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 or other words or
phrases of similar import. Similarly, statements that describe our strategies, objectives, plans or goals are also
forward-looking statements. All forward-looking statements are subject to risks, uncertainties and assumptions
that could cause actual results to differ materially from those contemplated by the relevant forward-looking
statement.

Important factors that could cause actual results to differ materially from our expectations include, among
others:

General economic conditions, consumer confidence in future economic conditions and political
conditions, consumer debt, disposable consumer income, conditions in the housing market, consumer
perceptions of personal well-being and security, fuel prices, inclement weather, interest rates, sales tax
rate increases, inflation etc. and business conditions in India and other countries.
Economic downturn in the U.S. or the EU resulting in reduction in or postponement of our customer
IT spends;
Our ability to successfully implement our strategy, our growth and expansion, technological changes.
Our exposure to market risks that have an impact on our business activities or investments.
The monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest
rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial
markets in India and Globally.
Opposition to outsourcing in the U.S. and other countries;
Changes in foreign exchange rates or other rates or prices;
Our ability to anticipate global outsourcing trends and suitably expand our current service offerings
Our failure to keep pace with rapid changes in technology;
The monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest
rates;
Our ability to protect our intellectual property rights and not infringing intellectual property rights of



11

other parties;
Changes in domestic and foreign laws, regulations and taxes and changes in competition in our
industry.
Changes in the value of the Rupee and other currencies.
The occurrence of natural disasters or calamities.
Change in political condition in India.
The outcome of legal or regulatory proceedings that we are or might become involved in;
Government approvals;
Our ability to compete effectively, particularly in new markets and businesses;
Our dependence on our Key Management Personnel and Promoter;
Conflicts of interest with affiliated companies, the Group Entities and other related parties;
Other factors beyond our control; and
Our ability to manage risks that arise from these factors.

For a further discussion of factors that could cause our actual results to differ, see Risk Factors Summary of
our Business and Managements Discussion and Analysis of Financial Condition and Results of
Operations on Page Nos. 12, 33 and 168 respectively. By their nature, certain market risk disclosures are
only estimates and could be materially different from what actually occurs in the future. As a result, actual
future gains or losses could materially differ from those that have been estimated. Neither our Company, our
Directors, any member of the Syndicate nor any of their respective officers and/or affiliates 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 SEBI requirements, the BRLM and our Company will ensure that investors in India are
informed of material developments until such time as the listing and trading permission is granted by the
Stock Exchanges.




12

SECTION II: RISK FACTORS

An investment in our Equity Shares involves a high degree of risk. You should carefully consider all the
information in this Draft Red Herring Prospectus, including the risks and uncertainties described below,
before making an investment in our Equity Shares.
If any of the following risks, or other risks that are not currently known or are now deemed immaterial,
actually occur, our business, results of operations and financial condition could suffer, the price of our Equity
Shares could decline, and all or part of your investment may be lost. Unless otherwise stated, we are not in a
position to specify or quantify the financial or other risks mentioned herein. The numbering of the risk factors
has been done to facilitate ease of reading and reference and does not, in any manner, indicate a ranking of
risk factors or the importance of one risk factor over another.
This Draft Red Herring Prospectus contains forward-looking statements that involve risks and uncertainties.
Our actual results could 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.
Unless otherwise stated, the financial information of the Company used in this section is derived from our
restated financial statements included in Restated Standalone Financial Statements on Page No. 148,
prepared in accordance with Indian GAAP and requirements of the SEBI ICDR Regulations.

Materiality

The Risk Factors have been determined on the basis of their materiality. The following factors have been
considered for determining the materiality.

1. Some events may not be material individually but may be found material collectively.
2. Some events may have material impact qualitatively instead of quantitatively.
3. Some events may not be material at present but may be having material impact in future.

Note:
The risk factors as envisaged by the management along with the proposals to address the risk, if any. Unless
specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial
implication of any of the risks described in this section. In this Draft Red Herring Prospectus, any
discrepancies in any table between total and the sums of the amount listed are due to rounding off. Any
percentage amounts, as set forth in "Risk Factors" & "Management Discussion and Analysis of Financial
Conditions and Operations" as mentioned on Page No. 12 and 168 respectively in this Draft Red Herring
Prospectus unless otherwise indicated, have been calculated on the basis of the amount disclosed in the
"Financial Statements" prepared in accordance with the Indian Accounting Standards.

I. INTERNAL RISK FACTORS

RISKS RELATED TO THE COMPANY

1. Neither our Company nor our Promoters are involved in any legal proceedings.
A classification of the legal proceedings instituted against and by the Company and the monetary amount
involved in these cases is mentioned in brief below:




13

a. Proceedings initiated against the Company/Promoters/Director/Promoter group companies
Category Number of Litigations Aggregate amount involved
Criminal - Not Applicable
Civil - Not Applicable
Labour - Not Applicable
Income Tax - Not Applicable
Sales Tax - Not Applicable
Service Tax - Not Applicable
SEBI Notices / Summons - Not Applicable

b. Proceedings initiated by the Company/Promoter/Promoter group companies
Category Number of Litigations Aggregate amount involved
Criminal - Not Applicable
Civil - Not Applicable

2. None of the Promoters and Promoter Group Companies was prohibited by SEBI from accessing and
being associated with the capital markets.

3. Our Company has issued Equity Shares at a price lower than the issue price during the preceding one
year from the date of filing of this Draft Red Herring Prospectus:

Date of
Issue
Name of the Persons No. of Shares
Issue
Price
(`)
Reason for such issue
Whether
part of
Promoter
Group
28-Sept-11 Devendra B. Deshmukh 13,16,516 10 Preferential Allotment Yes
28-Sept-11 Ashish B. Gupta 8,67,854 10 Preferential Allotment Yes
28-Sept-11 Amol R. Pande 12,65,045 10 Preferential Allotment Yes
28-Sept-11 Jaywant Deshpande 2,66,847 10 Preferential Allotment Yes
28-Sept-11 Sunil Dane 1,67,467 10 Preferential Allotment Yes
28-Sept-11 Baburao W. Deshmukh 1,03,016 10 Preferential Allotment Yes
28-Sept-11 Bajranglal Gupta 4,00,111 10 Preferential Allotment Yes
28-Sept-11 Ramesh D. Pande 2,00,053 10 Preferential Allotment Yes
28-Sept-11 Padma Baburao Deshmukh 1,25,766 10 Preferential Allotment Yes
28-Sept-11 Preeti Pande 1,79,967 10 Preferential Allotment Yes
28-Sept-11 Avina Datta 4,00,111 10 Preferential Allotment Yes
28-Sept-11 Vikram Datta 25,744 10 Preferential Allotment Yes
28-Sept-11 Anuradha Bankar 89,909 10 Preferential Allotment Yes
28-Sept-11 Anil Hari Deshpande 68,267 10 Preferential Allotment Yes
28-Sept-11 Kavita Baburao Deshmukh 3,22,561 10 Preferential Allotment Yes

4. Our Company filed Compliance Certificates vide Form No. 66 with the Registrar of Companies for the
years 2008-09, 2009-10 and 2010-11 which contains certain errors.
Our Company has refiled Compliance Certificates vide Form No. 66 with the Registrar of Companies for the
years 2008-09, 2009-10 and 2010-11 which contains certain errors. Practicing Company Secretary concerned



14

has filed petition with the Company Law Board for compounding so as to rectify the errors for those years and
the company has filed petition for the year for rectification for the years 2005-06 and 2006-07.
5. As of date, we have not identified location for setting up our Software Development Center

We intend to utilize ` 2374.86 Lacs for setting up of additional Software Development Center. As on date, we
are evaluating various alternatives. It is proposed to set up the center at a suitable location on a plot at Pune.
We propose to acquire 1 Acre (4042 approx. sq. m) of land and build Software Development Center on the
same for seating 600 employees. The current price of land in the area is in the price range of ` 350 lacs per
acre to ` 400 lacs per acre. We have appointed M/s. Legion Realty Services, Vatika Businesss Centre,
Panchshil Tech Park, Yerwada as real estate consultants for assistance in identifying suitable land. Further,
we have received estimates for construction and interior fit outs of the structure from R. P. Engineers &
Project consultants (P) Ltd. for an amount of ` 1367.88 Lacs.

6. One of the objects of the Issue is to develop new Intellectual Property in the field of software Solution
Accelerators

As part of our strategy to move up the value chain, we propose to develop accelerator tools which will be used
as consulting tools. This will help us showcase our skill at developing software at an accelerated speed. We
have already built and conceptualized tools, components, solutions and practices which help our clients to
achieve overall software development time & time to work in turn. The strategy is adopted on the premise of
overall stability in the software platform being used. Innovation by our competitors may impact the demand
for the tools developed by us.

7. The Company has not entered into any purchase agreement for land and not placed orders for
hardware, software and other installations required for the proposed projects. Any delay in finalization
of land or placement of order for hardware, software and other installations may have an adverse
impact on the Companys operations.

The Company has not entered into purchase agreement for the proposed projects, which the Company
proposes to fund from the proceeds of the Issue. Non-availability of land at the desired locations / areas and
delay in placement of orders for hardware, software and other installations for proposed projects may
adversely affect the operations of the Company. Out of the total cost of the project, the managements
estimates to the extent of ` 928.56 Lacs (comprising 24.31% of the total project cost identified so far) are not
based on quotations from vendors. For details, please refer to Objects of the Issue on Page No. 65 of this
Draft Red Herring Prospectus.

8. As of the date of this Draft Red Herring Prospectus, we have not yet entered into any definitive
commitment for any acquisition, investment or joint venture.

We intend to utilize ` 200.00 Lacs of the Net Proceeds of the Issue towards acquisitions of domestic
company. The above amount is based on the managements current estimates of the amounts to be utilised
towards acquisitions. The actual deployment of funds would depend on a number of factors including the
timing of acquisitions, number of acquisitions and size of the target companies. The proceeds allocated
towards acquisition may not be the total value of the acquisition, but may provide us with leverage to enter
into binding agreements. We have shortlisted two companies already & signed non-disclosure agreement for
discussions & negotiations.




15

9. Overseas onsite and delivery offices investment to the tune of ` 303.15 Lacs is envisaged as part of the
objects to the issue. Such investment requires permission under the Foreign Exchange Management
Act from the Reserve Bank of India.

e-Zest intends to manage its global expansion by setting up sales and delivery offices in locations based in US,
UK and Australia. These offices would be opened either as branch office of the Company or as wholly owned
subsidiaries of the Company in those countries keeping in view various operational and local factors.
Overseas Subsidiary investment to the tune of ` 303.15 Lacs is envisaged as part of the objects to the issue.
Such investment requires permission under the Foreign Exchange Management Act from the Reserve Bank of
India. As on the date of this Draft Red Herring Prospectus, The Company has made an application in this
regard to Reserve Bank of India vide letter dated October 11, 2011. However, there is no assurance as to the
Company receiving the necessary clearances from the Regulatory Body.

10. The deployment of the Issue Proceeds is entirely at the discretion of our Company and is not subject to
any monitoring by any independent agency.

Our Company has not appointed any Monitoring Agency for this Issue as Regulation 16(1) of the SEBI
(ICDR) Regulations, 2009 stipulates that the requirement of Monitoring Agency is not mandatory if the Issue
size is below ` 50,000.00 Lacs. Accordingly, the deployment of the issue proceeds is entirely at the discretion
of our company and is not subject to any monitoring by any independent agency.

The deployment of the use of proceeds of the Issue is at the discretion of our Company. Further, we have not
entered into any definitive agreements to use the Net Proceeds of the Issue, nor has our intended use of
proceeds from the Issue been appraised by any bank or financial institution. Accordingly, investors in this
Issue will need to rely upon the judgment of our management with respect to the use of Issue Proceeds.

Our Audit Committee will review the use of proceeds of the Issue in conjunction with our Board and will
make recommendations to the Board on such use. Further, our Company will furnish a statement to the Stock
Exchanges indicating material deviations, if any, in the use of proceeds of the Issue from the objects stated in
this Prospectus. However, such utilization is not and will not be subject to monitoring by an independent
agency.

The net proceeds from this Issue are expected to be used in the manner stated in the Objects of the Issue on
Page No. 65.

11. Any delay in the schedule of implementation of the project would impede our future growth.

Our Companys strategy involves both organic as well as inorganic growth by way of acquisitions. Delay in
implementing the objects of the Issue would adversely impact our growth strategy. The Company has not
entered into purchase agreement of acquisition of land for the proposed projects. Further, the Company is yet
to finalise the location for setting up its onsite sales and delivery office. Non-availability of land at the desired
locations / areas and delay in placement of orders for hardware, software and other installations for proposed
projects may lead to a delay in the schedule of implementation of the project and thus adversely affect the
future growth of the Company.

12. Income of Our Company has become taxable with effect from Assessment Year 2012-13 as a result of
withdrawal of tax exemption under Section 10 A of Income Tax Act, 1961.




16

Our company is registered under the STP scheme. We were enjoying tax benefits under the STP scheme
available to 100% Export Oriented Units for the development and export of Computer Software/ IT enabled
Services. Under the provisions of section 10A of the Income Tax Act, 1961, units registered under STPI
enjoyed 100% tax exemption on income, subject to fulfillment of all the conditions specified therein.
Deduction under Section 10A has been withdrawn from the assessment year 2012-13. As a result of the
withdrawal of deduction, the income of our Company is now taxable. Our future profits will bear the impact
of tax with effect from Assessment Year 2012-13.

13. Our revenues are highly dependent on clients located in the European Union and United States.
Economic slowdowns and other factors that affect the economic health of the European Union and
United States may affect our business.
The majority of our revenues are derived from clients located in the European Union and the United States for
the year ended March 31, 2011, 31% and 24%, respectively, of our aggregate revenues were derived from the
clients located in the European Union and the United States. Consequently, in the event of any economic
slowdown in these regions, our clients may reduce or postpone their IT or software spending significantly,
which may in turn, reduces the demand for our services and negatively affects our business, financial
condition and results of operations. However, 16.7% of our revenue is generated from our domestic clients
and we have provided software solutions to countries across varied geographical locations such as Australia,
South Africa and UAE.

We intend to continue our efforts to take our existing services to newer markets, which hold significant
opportunities and synergies for a business model like ours.

14. The Company may require a number of approvals, licenses, registrations and permits for its business(s)
and the failure to obtain or renew them in a timely manner may adversely affect its operations.

The Company requires a number of approvals, licenses, registrations and permits for its business(s).
Additionally, it may need to apply for renewal of approvals which expire from time to time and as and when
required in the ordinary course. The details of approvals, licenses, registrations and permits required by the
Company is mentioned under the Chapter titled Government and Other Statutory Approvals on Page No.
182 of the DRHP.
The Companys failure to receive the approvals within the time frames anticipated or at all could result in
interruption of its operations and may have an adverse material effect on its business and financial position.

15. Our Promoters may have a conflict of interest as some of our Group companies operate in related areas
of business. In the case of any conflict, our Promoters may favour the interest of our Group companies
over us.

Some of our Promoters have interests in other companies, which are in businesses similar to ours, which may
result in a potential conflict of interest. e-Zest Infocom Pvt. Ltd. and eZest Infotech Pvt. Ltd are our Group
companies in which relatives of our promoters cumulatively hold 80% equity stake and our Company has an
20% equity stake. These companies are also engaged in Software Development Business and we have had,
and will continue to have, business transactions with these company. There are no non-compete agreements in
place between our Company and the Promoters as a result of which, companies promoted by our Promoters
may develop similar projects in the future, which may compete with us.

In the case of any conflict, our Promoters may favour the interest of their Group Companies over us.
Furthermore, our Promoters also hold directorial roles in these Group Companies, which may require a



17

substantial amount of their time and efforts. Therefore, our Promoters may not be able to devote their full time
and attention on their managerial duties in relation to us. For further information with respect to directorships
of certain of our Promoters, please see the section titled "Management" on Page No. 108 of this Draft Red
Herring Prospectus. Accordingly, potential conflicts of interest may arise out of common business objectives
shared by us and our Promoters and there can be no assurance that these or other conflicts of interest will be
resolved in an impartial manner. For further details in relation to such conflicts of interest please see
"Financial Statements Related party Transactions" on Page No. 164 of this Draft Red Herring Prospectus.
Our Company has entered into Non- Compete Agreements with each of the Promoters to prevent any conflict
of interest.

16. Our success depends significantly upon our senior management team and in an event of their leaving
us would adversely impact our business, revenues and profitability.
We are highly dependent on the senior management team and the team of highly qualified professionals who
have significant influence on our client relationships and business. Our business model is reliant on the efforts
and initiatives of our senior level management and our key managerial personnel. Attracting and retaining
talented professionals is the key to our business growth. If one or more members of our senior management
team were to leave their present positions, it may be difficult to find adequate replacements and our business
could be adversely affected. In this regard, we cannot assure you that we will be able to retain our skilled
senior management or key managerial personnel or to replace them in the event of their leaving us.

17. We face significant competition for highly skilled professionals, and our success depends largely on
our ability to attract and retain these personnel. Any inability on our part to attract and retain our key
managerial personnel and/or talented professionals may adversely affect our business and results of
operations.
Our ability to execute projects and to obtain new clients depends largely on our ability to attract, train,
motivate and retain highly skilled software professionals. The attrition rates in the industry in which we
operate have been high due to a highly competitive skilled labour market. We invest significant time and
money in training the professionals that we hire to perform the services provided by us. These professionals
are often targeted by the lateral recruitment efforts of our competitors, and in some cases by our customers.
We believe that there is also a significant competition in our industry among employers to attract software
professionals with the skills necessary to perform the services offered by us. In addition, we may have
difficulty in redeploying and retraining our software professionals to keep pace with continuing changes in
technology, evolving standards and changing client preferences. If we cannot hire and retain additional
qualified personnel, our ability to bid on and obtain new projects may be impaired and accordingly our
revenues could decline in future. In addition, we may not be able to expand our business effectively thereby
affecting both our revenues and profitability. Our average attrition rate in the last three years has been 10%.

18. The Company is promoted by first generation entrepreneurs.

The Promoters of the Company are first generation entrepreneurs and in spite of having a key executive team to
support, the Companys business may suffer if they are not able to manage the operations of the Company and
the challenges which it may face on account of the growth and competition in different segments of business.

19. Failure to protect our intellectual property rights may adversely affect our business. As a result, the
Company may have lesser recourse to initiate legal proceedings to protect the brand.

Our trademark and logo which appear on the cover page of this Draft Red Herring Prospectus are not
registered. We have applied for the registration of this trademark and logo. There can be no assurance that the



18

registration process for our trademark and logo will be completed in a timely manner or at all for reasons
beyond our control or any other reason. If we fail to protect our intellectual property rights including patents,
trademarks, trade secrets and copyrights, our business and financial condition may be adversely affected.
Furthermore, pending our application for registration, our trademark and logo shall have limited legal
protection. The Companys success with its brands depends, partly on its ability to protect and defend its
current and future intellectual property rights relating to such brands / trademarks.

For further details, please see the section titled "Government and Other Statutory Approvals on Page No. 182
of this Draft Red Herring Prospectus.

20. Any inability to manage our growth could disrupt our business and reduce our profitability.

We expect that our growth strategy will place significant demands on our managerial, financial and other
resources. It will require us to continuously develop and improve our operational, financial and internal
controls. In particular, continued expansion increases the challenges involved in financial and technical
management, recruitment, training and retaining sufficient skilled technical and management personnel and
developing and improving our internal administrative infrastructure.

Any inability to manage such growth could disrupt our business, reduce profitability and adversely affect our
results of operations and financial conditions.

21. New products and services developed by us may not be profitable by themselves.

In the highly competitive market, our growth depends on our ability to constantly innovate to beat
obsolescence. Research and development and creating new products, services, and technologies through
innovation are a major thrust area for our Company. Our success depends on many factors, including
innovativeness, customer support, and effective distribution and marketing. Needless to say, customers would
respond positively to our products only if they perceive a significant new functionality or other value. Lack of
positive response from Customers to our new products and services would have an unfavorable impact on our
revenue. As a result, the demand for our technology, products, and services and the income potential of these
businesses are unproven. We may not achieve significant revenue from new product and service investments
for a number of years, if at all. Moreover, new products and services may not be profitable, and even if they
are profitable, operating margins for new products and services in these focus areas may not be as high as the
margins we have experienced historically. In addition, our business is susceptible to the development in the
field of technology which is relatively new and rapidly evolving, as a result of which, we may make errors in
predicting and reacting to relevant business trends, which could have an adverse impact on our future growth.

22. We operate in a highly competitive environment. Any failure to compete effectively may have a material
adverse effect on our business and operations.
India has emerged as an increasingly favoured location for customized software development. The markets for
IT services are rapidly evolving and highly competitive. We face competitive pressure from a broad spectrum
of Indian and international IT services companies. We expect that competition will continue to intensify both
through the entry of new players and consolidation of existing players. Some of our competitors may have
greater financial resources, technical and marketing resources and generate greater revenues, and therefore
may be able to respond better to market changes than we can. We believe that our ability to compete depends
on a number of factors beyond our control including the ability of our competitors to attract, train, motivate
and retain highly skilled technical employees, the price at which our competitors offer comparable services



19

and the extent of our competitors responsiveness to client needs. Our inability to adequately address
competitive pressures may have a material adverse effect on our business, prospects, financial condition and
results of operations.

Our strategy for combating competition lies in our ability to innovate backed by the quality of our highly
qualified and experienced manpower which forms our major strength. Our experience is that there is niche
market for products and services that combine application frameworks, interchangeable components and
customized solutions. We believe that there will always be a market for specialized skill-sets, flexibility and
creative problem solving capabilities.

23. Our existing operations are geographically located at one place i.e. Pune.

All our operations are based in various development centers located in Pune in India. Due to the concentration
of our people and other resources at these facilities, our results of operations could be materially and adversely
affected if one or more of those facilities are damaged as a result of a natural disaster including an earthquake,
flood, fire, or other event that disrupts our business or causes material damage to our property. Although we
have back-up facilities for some of our operations, it could be difficult for us to maintain or resume our
operations quickly in the aftermath of such a disaster. We cannot assure you that our property insurance would
cover any loss or damage to our assets.

24. Failure to obtain pre-qualifications and/or certifications could adversely impact our business.

Certain customers require software services provider to undergo pre-qualification processes. These processes
evaluate both the technical ability to provide relevant products with the exact specifications needed by the
end-user, and the production capabilities of the supplier. These processes generally take time to complete and
involve the incurrence of considerable up-front expenses in learning and meeting customer qualification
requirements.

25. Significant security breaches in our computer systems and network infrastructure and fraud could
adversely impact our business.

We seek to protect our computer systems and network infrastructure from physical break-ins as well as
security breaches and other disruptive problems. Computer break-ins and power disruptions could affect the
security of information stored in and transmitted through these computer systems and networks. To address
these issues and to minimize the risk of security breaches we employ security policies, security systems,
including firewalls and intrusion detection systems, conduct periodic penetration testing for identification and
assessment of potential vulnerabilities and, use encryption technology for transmitting and storing critical data
such as passwords. However, these systems may not guarantee prevention of frauds, break-ins, damage and
failure. A significant failure in security measures could have an adverse effect on our business.

26. If the software that we develops for our clients experience serious problems or failures or if we are
unable to meet our contractual obligations, we may face legal liabilities and damage to our professional
reputation. Further, we may be liable to our clients for damages caused by system failures or breach of
security obligations.

The engagements that we perform for our clients are often critical to the software development programs of
our clients businesses and any failure in our clients software or systems could subject us to legal liability,
including substantial damages, regardless of our responsibility for such failure. The terms of our client



20

engagements are typically designed to limit our exposure to legal claims and damages relating to our services.
However, these limitations may not be enforceable under the laws of certain jurisdictions. In addition, if our
clients proprietary rights are infringed by our employees in violation of any applicable confidentiality
agreements, our customers may consider us liable for that act and seek damages from us.

Many of our contracts involve software development projects that are critical to the operations of our clients
businesses. Further, our client contracts may require us to comply with certain security obligations including
maintaining network security and back-up data, ensuring our network is virus free and verifying the integrity
of employees that work with our clients by conducting background checks. Any failure in a clients system or
breach of security relating to the services we provide to the client could damage our reputation or result in a
claim for substantial damages against us. We cannot assure you that any limitations of liability set forth in our
service contracts will be enforceable in all instances or will otherwise protect us from liability for damages in
the event of a claim for breach of our obligations.

27. We need to continuously develop new service offerings, products and revenue models to sustain our
business

Our revenue models have been evolving with time to meet the changing needs of the market and our
customers. These are increasingly being fine-tuned to adapt to diverse nature of our current engagements. Our
future success would depend on our ability to innovate in our engagement models and on our ability to deliver
solutions to our customers in competitive & cost effective manner. We cannot be certain that we will be able
to attract existing and new customers for such new offerings or effectively meet our customers needs. Larger
projects may involve multiple engagements or phases, and there is a risk that a customer may choose not to
retain us for additional phases or may cancel or delay additional planned engagements. These terminations,
cancellations or delays may result from the business or financial condition of our customers or the then
prevailing economic situation. Such cancellations or delays make it difficult to plan for project resource
requirements, which may have a negative impact on our profitability.

28. Our client contracts can typically be terminated without cause and with little or no notice or penalty
which could negatively impact our revenues and profitability.

Our clients typically retain us through master service agreements which are non-exclusive and signed with
other companies also on a non-exclusive service agreements basis. Our MSAs including those with some of
our largest customers, typically can be terminated without cause and with one month notice. Most of our
MSAs and individual projects under such MSAs can be terminated by the client with or without cause and
without termination-related penalties.

Additionally, our service agreements with clients are typically without any commitment to a specific volume
of business or future work. Our business is dependent on the decisions and actions of our clients, and there are
a number of factors relating to our clients that are outside our control that might result in the termination of a
project or the loss of a client. Our clients may demand price reductions, change their outsourcing strategy by
moving more work in-house or to our competitors or replace their existing software with packaged software
supported by licensors.

Any of these factors could adversely affect our revenues and profitability. If any of our key clients were to
take any of these courses of action, we would have no legal recourse, and could suffer a reduction in revenues.




21

29. Our revenues are dependent upon our meeting specific customer requirements largely on a case-to-
case basis. Any failure or limitation on our ability to provide customized software services may
detrimentally affect our future growth.

Our assignments for providing services largely involve us providing business and software solutions on a
case-to-case basis depending upon the needs of each customer. Our inability to provide customized software
solutions could lead to erosion of our market image and brand value, which could lead to customers
discontinuing their work with us and stagnation of our customer base, which in turn could harm our business
and profitability. Our future growth will depend on our continued evolution of specific sets of customized
services to deal with the rapidly evolving and diverse needs of our customers in a cost competitive and
effective manner.

30. Valuations in related sectors such as the software, or information technology industries may not be
sustained in future and current valuations may not be reflective of future valuations for such
industries.

The valuations in the Software/ IT industry have been varying substantially in the recent past and hence
current valuation may not be reflective of future valuations in the industry. There is no standard valuation
methodology or accounting practices in the IT related industries. The financials of the issuer are not strictly
comparable with the players in the industry. These valuations in the software/information technology industry
may not be sustained in future and current valuations may not be reflective of future valuations for the
industry.

31. We may be subject to liability in connection with our use of open source software, which could lead to
our loss of control over our software products or services and expose us and/or our customers to
intellectual property related legal disputes.

Upon receiving instructions from our customers, we help them integrate open source components into their
own platforms and products. Upon receiving instructions from our customers, we also test and certify
customer platforms that have been created with open source software. Under the various versions of the GNU
General Public License (GPL) and certain compatible licenses (GPL compatibles) that govern a large
number of open- source products, such open- source products or software code extracted there from can only
be integrated into other open-source products and proprietary software that either incorporates open source
code or is linked to or integrated with such open source code that may potentially be made subject to the GPL
or GPL Compatibles and may consequently be required to be distributed as open source software.

The use of software that is licensed under GPL and GPL Compatibles may potentially expose our customers
and our Company to the potential loss of control over revenue generating proprietary software when open
source code and proprietary software source code are mixed together in one primary software work. As a
result, this could expose our customers or us to intellectual property related legal disputes, on the grounds of
violation of license terms or as a patent or copyright infringement, which could lead to our loss of control over
our software products or services.

32. Our insurance coverage may be inadequate to fully protect us from all losses.

We maintain such insurance coverage as we believe is customary in the IT industry in India. Our insurance
policies, however, may not provide adequate coverage in certain circumstances and are subject to certain
deductions, exclusions and limitations on coverage. We maintain general insurance coverage. However, 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, if any or all of our development centers are damaged resulting in our operations



22

being interrupted or we otherwise suffer an interruption to our business, we would suffer loss of revenues, and
our results of operations may be adversely affected. A change in our insurance policies, including premium
increase or co-insurance requirement, could adversely affect our business, financial condition and results of
operations.

Our Company has the following insurance policies with United India Assurance Co Limited as on date:

Policy No
161000/11/11/11/00000588
Place of Insurance
Office No. 3 & 4 on IInd Floor, Office No. 5 & 6 on
IIIrd Floor, C.S.No 1/3+4+5B Near Karve Putala,
Near B.O.M. Kothrud, Pune-411029.
Type of Risk Covered
Earthquake (Fire & Stock)
Period
27/05/2011-26/05/2012
Sum Insured
` 2,00,00,000
Premium
` 12,322

33. For the Financial Year ended March 31 2010 and 2011, our Company has entered into certain Related
Party Transactions with the promoters, promoter group and group entities amounting to a total of `
94.68 Lacs and ` 41.04 Lacs respectively.

For the Financial Year ended March 31 2010 and 2011, our Company has entered into certain Related Party
Transactions with the promoters, promoter group and group entities amounting to a total of ` 94.68 Lacs in
F.Y. 2009-10 & ` 41.04 Lacs in F.Y. 2010-11 respectively.

34. Our Company has not followed Accounting Standard - 15 regarding Employee Benefits prescribed by
The Institute of Chartered Accountants of India (I.C.A.I) till the Financial Year 2009-10.

The Accounting Policy followed by us with respect to gratuity till the Financial Year 2009-10 was on cash
basis which is not in conformity with Accounting Standard prescribed by the Institute of Chartered
Accountants of India, regarding disclosure of Present Value of Obligation with respect to the retirement /
future benefits to be paid to the employees. The Accounting Standard stipulates that these liabilities should be
accounted for in the books of accounts on Accrual basis.

The Company has changed its Accounting Policy with regard to liability arising out of such obligation from
the Financial Year 2010- 11 in accordance with the said Accounting Standard 15. Consequently, the profits
and the reserves and surplus for Financial Year ended March 31, 2011 are lower by ` 18.99 Lacs.

35. Our Company has not followed Accounting Standard - 18 regarding Related Party Transactions
prescribed by The Institute of Chartered Accountants of India (I.C.A.I) till the Financial Year 2008-09.

Accounting Standard -18 regarding disclosure of Related Party Transactions has not been made by us till the
Financial Year 2008-09. Compliance under this Accounting Standard has been made from the Financial Year
2009-10.

36. We are subject to the restrictive loan covenants of Banks in respect of the term loans and working
capital facilities availed from them.




23

Our company has following existing liabilities with regard to term loan and working capital facilities from our
Bankers:

Name of
Lender
Date of
Sanction
Nature of
Loan/Guarantee
Sanctioned
Amount
(` in Lacs)
Amount
outstanding
as at
September
30, 2011
(` in Lacs)
Rate of
Interest
Fund Based
Citi Bank N.A
August 25, 2011
Post Shipment Export
Finance
100.00 --
Libor + 200
basis points
August 16, 2010
Annually renewable
overdraft
200.00 28.58 12.75%
June 12, 2007 Term Loan 215.00 43.56 13.50%
Punjab National
Bank
December 26,
2009
Car Loan 7.00 3.19 10.50%
Non-Fund Based
Punjab National
Bank
December 30,
2009
Bank Guarantee in favour of
the Commissioner of
Customs for import of goods.
0.10 - -
Punjab National
Bank
October 5, 2011
Bank Guarantee in favour of
the Commissioner of
Customs for import of goods.
0.90 - -

Our Bankers may impose certain restrictions on further borrowings or raising capital through equity which
may adversely affect our current operations and expansion plans and consequently results of operations,
business and profitability.

Further, changes in interest rates could affect our cost of borrowings and our results of operations and
financial condition. As on September 30, 2011, our total indebtedness was at floating rates of interest, based
on the prime lending rates/base rates of our respective lenders. If the interest rates for our existing or future
borrowings increase significantly, our cost of funds will increase. This may adversely impact our results of
operations, planned capital expenditures and cash flows.

37. Our Company has changed its Accounting Policy with respect to liability on account of leave
encashment from cash to accrual basis with effect from the Financial Year 2010-11.

We had accounted for liabilities in respect of Leave Encashment on Cash basis. However, the Company has
changed its Accounting Policy with regard to liability in respect of Leave Encashment from cash basis to
accrual basis commencing from the Financial Year 2010-11. Consequently, the profits and the reserves and
surplus for the period ended March 31, 2011 is lower by ` 4.59 Lacs.

38. The Unsecured Loans, taken by the Company can be recalled by the lenders at any time which may
have an adverse effect on the Companys business operations.

As on September 30, 2011, the Company has Unsecured Loans amounting to ` 11.00 Lacs outstanding, which
can be recalled at any given point of time from its promoters during the ordinary course of business.



24

39. Some of our Group Companies have incurred losses in one or more of the last three years. Sustained
financial losses by our Group Companies may not be perceived positively by external parties such as
customers, bankers, suppliers etc, which may affect our credibility and business operations.

The following Group Companies promoted by the Promoters has incurred losses in one or more of the last
three years:
(` in Lacs)
Name of the Company 2008-09 2009-10 2010-11
e-Zest Infocom Private
Limited
2.42 3.01 (2.94)
eZest Infotech Private
Limited
2.08 2.35 (2.83)

40. Contingent liability as on September 30, 2011.

As per the Restated Financial Statements, the Company has certain contingent liabilities which, if determined
against the Company in future, may impact its financial position adversely. Details of the contingent liabilities
of the Company as on September 30, 2011 are given in the following table:
(` in Lacs)
Particulars As at September 30, 2011
Claims against Company not acknowledged as debt 1.00
Total Contingent Liabilities 1.00

41. Our ability to pay dividends will depend upon future earnings, financial condition, cash flows, working
capital requirements, capital expenditures and other factors. There can be no assurance that we shall
have distributable funds after we commence commercial operations of the Proposed Project.

The amount of our future dividend, if any, would depend upon our future earnings, financial condition, cash
flows, working capital requirements, capital expenditure and other factors. There can be no assurance that we
shall have distributable profits or that we would declare dividend in future.

42. Members of our Promoters Group will continue to retain significant control in our Company after the
Issue, which will allow them to influence the outcome of matters submitted to shareholders for
approval in their favour.

After this Issue, members of our Promoter group will beneficially own 59.17 % of holding of post-Issue
Equity Share Capital. As a result, our Promoters Group will have the ability to exercise significant influence
over all matters requiring shareholders approval, including the election of directors and approval of
significant corporate transactions. The Promoters Group will also be in a position to influence any shareholder
action or approval requiring a majority vote, except where they are required by applicable laws to abstain
from voting. Such a concentration of ownership may also have the effect of delaying, preventing or deterring a
change in control

B. RISKS ASSOCIATED WITH THE EQUITY SHARES

43. An active trading market for the Equity Shares may not develop and the price of the Equity Shares may
be volatile.



25

An active public trading market for the Equity Shares may not develop or, if it develops, may not be
maintained after the Issue. Our Company, in consultation with the BRLM, will determine the Issue Price. The
Issue Price may be higher than the trading price of our Equity Shares following this Issue. As a result,
investors may not be able to sell their Equity Shares at or above the Issue Price or at the time that they would
like to sell. The trading price of the Equity Shares after the Issue may be subject to significant fluctuations in
response to factors such as variations in our results of operations, market conditions specific to the sectors in
which we operates, economic conditions of India and volatility of the BSE, NSE and securities markets
elsewhere in the world.

44. Economic developments and volatility in securities markets in other countries may cause the price of
the Equity Shares to decline.

The Indian economy and its securities markets are influenced by economic developments and volatility in
securities markets in other countries. Investors reactions to developments in one country may have adverse
effects on the market price of securities of companies situated in other countries, including India. For instance,
the recent financial crisis in the United States and European countries led to a global financial and economic
crisis that adversely affected the market prices in the securities markets around the world including Indian
securities markets. Negative economic developments, such as rising fiscal or trade deficits, or a default on
national debt, in other emerging market countries may affect investor confidence and cause increased
volatility in Indian securities markets and indirectly affect the Indian economy in general.

The Indian Stock Exchanges have experienced temporary exchange closures, broker defaults, settlement
delays and strikes by brokerage firm employees. In addition, the governing bodies of the Indian stock
exchanges have from time to time imposed restrictions on trading in certain securities, limitations on price
movements and margin requirements. Furthermore, from time to time, disputes have occurred between listed
companies and stock exchanges and other regulatory bodies, which in some cases may have had a negative
effect on market sentiment.

45. There is no guarantee that the Equity Shares issued pursuant to the Issue will be listed on the Stock
Exchanges in a timely manner, or at all.

In accordance with Indian law and practice, permission for listing and trading of the Equity Shares issued
pursuant to the Issue will not be granted until after the Equity Shares have been issued and allotted. Approval
for listing and trading will require all relevant documents authorizing the issuing of Equity Shares to be
submitted. There could be a failure or delay in listing the Equity Shares on either or both the Stock Exchanges.
Any failure or delay in obtaining the approval could restrict the shareholders ability to dispose of their Equity
Shares.

46. Investor(s) will not be able to immediately sell any of the Equity Shares you purchase in the Issue on
an Indian Stock Exchange.

The Equity Shares will be listed on the NSE and the BSE. Pursuant to Indian regulations, certain actions must
be completed before the Equity Shares can be listed and trading may commence. Investors book entry, or
"demat", accounts with depository participants in India are expected to be credited within two working days of
the date on which the basis of allotment is approved by NSE and BSE. Thereafter, upon receipt of final
approval from the NSE and the BSE, trading in the Equity Shares is expected to commence within seven
working days of the date on which the basis of allotment is approved by the Designated Stock Exchange. We
cannot assure you that the Equity Shares will be credited to investors demat accounts, or that trading in the



26

Equity Shares will commence, within the time periods specified above. Any failure or delay in obtaining the
approval may restrict your ability to dispose of your Equity Shares as allotted.

47. The requirements of being a listed company may strain our resources.

We are not a listed company and have not been subjected to the increased scrutiny of our affairs by
shareholders, regulators and the public at large that is associated with being a listed company. As a listed
company, we will incur significant legal, accounting, corporate governance and other expenses that we did not
incur as an unlisted company. We will be subject to the listing agreements with the Stock Exchanges, which
require us to file audited annual and unaudited quarterly reports with respect to our business and financial
condition. If we experience any delays, we may fail to satisfy our reporting obligations and/or we may not be
able to readily determine and accordingly report any changes in our results of operations as timely as other
listed companies.

Further, as a listed company we will need to maintain and improve the effectiveness of our disclosure controls
and procedures and internal control over financial reporting, including keeping adequate records of daily
transactions to support the existence of effective disclosure controls and procedures and internal control over
financial reporting. In order to maintain and improve the effectiveness of our disclosure controls and
procedures and internal control over financial reporting, significant resources and management oversight will
be required. As a result, managements attention may be diverted from other business concerns, which could
adversely affect our business, prospects, results of operations and financial condition and the price of our
Equity Shares. In addition, we may need to hire additional legal and accounting staff with appropriate listed
company experience and technical accounting knowledge, but we cannot assure you that we will be able to do
so in a timely manner.

48. Future issuances or sales of the Equity Shares by any existing shareholders could significantly affect
the trading price of the Equity Shares.

The future issuances of Equity Shares by us or the disposal of Equity Shares by any of the major shareholders
or the perception that such issuance or sales may occur may significantly affect the trading price of the Equity
Shares. There can be no assurance that we will not issue further Equity Shares or that the shareholders will not
dispose of, pledge or otherwise encumber their Equity Shares.

49. A third party could be prevented from acquiring control of us because of anti-takeover provisions
under Indian law.

There are provisions in Indian law that may delay, deter or prevent a future takeover or change in control of
the Company, even if a change in control would result in the purchase of your Equity Shares at a premium to
the market price or would otherwise be beneficial to you. These provisions may discourage or prevent certain
types of transactions involving actual or threatened change in control of us. Under the takeover regulations an
acquirer has been defined as any person who, directly or indirectly, acquires or agrees to acquire shares or
voting rights or control over a company, whether individually or acting in concert with others. Although these
provisions have been formulated to ensure that interests of investors/shareholders are protected, these
provisions may also discourage a third party from attempting to take control of the Company. Consequently,
even if a potential takeover of the Company would result in the purchase of the Equity Shares at a premium to
their market price or would otherwise be beneficial to its stakeholders, it is possible that such a takeover
would not be attempted or consummated because of Indian takeover regulations.




27

50. There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect
a shareholder's ability to sell, or the price at which it can sell Equity Shares at a particular point in
time.

Subsequent to listing, our Company will be subject to a daily circuit breaker imposed on listed companies by
all stock exchanges in India which does not allow transactions beyond certain volatility in the price of the
Equity Shares. This circuit breaker operates independently of the index based market-wide circuit breakers
generally imposed by SEBI on Indian stock exchanges. The percentage limit on our Companys circuit
breaker is set by the stock exchanges based on the historical volatility in the price and trading volume of the
Equity Shares. The stock exchanges are not required to inform our Company of the percentage limit of the
circuit breaker from time to time, and may change it without its knowledge. This circuit breaker would
effectively limit the upward and downward movements in the price of the Equity Shares. As a result of this
circuit breaker, there can be no assurance regarding the ability of shareholders to sell the Equity Shares or the
price at which shareholders may be able to sell their Equity Shares.

51. Investor(s) may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.

Sale of Equity Shares by any holder may give rise to tax liability in India, as discussed in the section titled
Statement of Tax Benefits on Page No. 79.

C. EXTERNAL FACTORS

52. Any changes in the regulatory framework could adversely affect our operations and growth prospects

We are subject to various regulations and policies. For details, see section titled Key Industry - Regulations
beginning on Page No. 97 of this DRHP. Our business and prospects could be materially adversely affected by
changes in any of these regulations and policies, including the introduction of new laws, policies or
regulations or changes in the interpretation or application of existing laws, policies and regulations. There can
be no assurance that we will succeed in obtaining all requisite regulatory approvals in the future for our
operations or that compliance issues will not be raised in respect of our operations, either of which could have
a material adverse effect on our business, financial condition and results of operations.

53. Civil disturbances, extremities of weather, regional conflicts and other political instability may have
adverse effects on our operations and financial performance.

Certain events that are beyond our control such as earthquake, fire, floods and similar natural calamities may
cause interruption in the business undertaken by us. Our operations and financial results and the market price
and liquidity of our equity shares may be affected by changes in Indian Government policy or taxation or
social, ethnic, political, economic or other adverse developments in or affecting India.Further Regional or
International hostilities, terrorist attack or other acts of violence of war could have a significant adverse
impact on international or Indian financial markets or economic conditions or on Government Policy. Such
incidents could also create a greater perception that investment in Indian Companies involves a higher degree
of risk and could have an adverse impact on our business and on the market price of our companys equity
shares.

54. Risk of force majeure

Certain events that are beyond control such as, earthquakes, fire, floods and drought and similar natural



28

calamities may cause interruption in the business of the Company that could adversely affect its results of
operation.

55. Our revenues could be significantly affected if the governments in countries in which our customers
are based restrict companies from outsourcing work to non-domestic corporations.

The issue of companies outsourcing services to organizations operating in other countries has become a topic
of political discussion in many countries. In addition, there has been recent publicity about negative
experiences associated with offshore outsourcing, such as theft and misappropriation of sensitive customer
data, particularly involving service providers in India. Current or prospective customers may elect to perform
such services themselves or may be discouraged from transferring these services from onshore to offshore
providers to avoid negative perceptions that may be associated with using an offshore provider. Any downturn
or reversal of existing industry trends toward offshore outsourcing would seriously harm our ability to
compete effectively with competitors that provide services from the other countries. Measures aimed at
limiting or restricting offshore outsourcing have been enacted in a few countries and there is currently
legislation pending in several countries. The measures that have been enacted to date generally have restricted
the ability of government entities to outsource work to offshore business process service providers and have
not significantly adversely affected our business, primarily because we do not currently work for such
governmental entities and they are not currently a focus of our sales strategy. However, pending or future
legislation in these countries that could significantly adversely affect our business, results of operations and
financial condition could be enacted.

56. We are subject to risks arising from foreign exchange rate movements.
Our exchange rate risk primarily arises from our foreign currency revenues, receivables, payables and other
foreign currency assets and liabilities. On consolidated basis, we have significant revenues and expenditures
in foreign currencies especially US$. The foreign exchange fluctuation affects both the revenues and
expenditures in absolute terms when converted into Indian rupees. To this extent, the revenues and
expenditures will be higher or lower depending on the depreciation or appreciation of Indian Rupee in foreign
currency terms. We expect that a majority of our revenues will continue to be generated in US$ for the
foreseeable future.
The exchange rate between the Indian Rupee and the United States Dollar has been volatile in recent years
and may fluctuate in the future. Therefore, changes in the exchange rate between the Indian Rupee and the
US$ may have a material adverse effect on our revenues, other income, cost of services, operating costs and
net income, which may in turn have a negative impact on our business, operating results and financial
condition.
For further details, please refer to the paragraph Foreign Exchange Risk under the chapter titled
Managements Discussion and Analysis of Financial Condition and Results of Operations beginning on
Page No. 168 of this Draft Red Herring Prospectus.
57. Instability in Indian financial markets could adversely affect the results of operations and financial
condition of the Company.

The Indian financial market and the Indian economy are influenced by economic and market conditions in
other countries, particularly in Asian emerging market countries. Financial turmoil in Asia, the United States
of America, Europe 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 adverse effects on the securities of companies in other countries, including India. A loss in investor



29

confidence in the financial systems of other markets may increase volatility in Indian financial markets and
indirectly, in the Indian economy in general.

58. Political instability or a change in economic liberalization and deregulation policies could seriously
harm business and economic conditions in India generally and our business in particular.

The Government has traditionally exercised and continues to exercise a significant influence over many
aspects of the economy. Our business and the market price and liquidity of our Equity Shares may be affected
by interest rates, changes in Government policy, taxation, social and civil unrest and other political, economic
or other developments in or affecting India. The Government of India has in recent years sought to implement
economic reforms and the current government has implemented policies and undertaken initiatives that
continue the economic liberalization policies pursued by previous governments. There can be no assurance
that liberalization policies will continue in the future. The rate of economic liberalization could change, and
specific laws and policies affecting the IT sector, foreign investment and other matters affecting investment in
our securities could change as well. Any significant change in such liberalization and deregulation policies
could adversely affect business and economic conditions in India, generally, and our business, prospects,
financial condition and results of operations, in particular.

59. Any downgrading of Indias debt rating by an international rating agency could have a negative impact
on the trading price of the Equity Shares.

Any adverse revisions to India's credit ratings for domestic and international debt by international rating
agencies may adversely impact our ability to raise additional financing, and the interest rates and other
commercial terms at which such additional financing may be available. This could have an adverse effect on
our business and future financial performance, its ability to obtain financing for capital expenditures and the
trading price of the Equity Shares.

60. Significant differences exist between Indian GAAP and other accounting principles, such as IFRS,
which may be material to investors assessments of our financial condition.

Our financial statements, including the restated financial statements provided in this Draft Red Herring
Prospectus, are prepared in accordance with Indian GAAP. US GAAP and IFRS differ in significant respects
from Indian GAAP.

As a result, our financial statements and reported earnings could be different from those which would be
reported under IFRS or US GAAP. Such differences may be material. We have not attempted to quantify the
impact of US GAAP or IFRS on the financial data included in this Draft Red Herring Prospectus, nor do we
provide a reconciliation of our financial statements to those of US GAAP or IFRS. Accordingly, the degree to
which the Indian GAAP financial statements included in this Draft Red Herring Prospectus will provide
meaningful information is entirely dependent on the readers level of familiarity with Indian accounting
practices. Had the financial statements and other financial information been prepared in accordance with IFRS
or US GAAP, the results of operations and financial position may have been materially different. Because
differences exist between Indian GAAP and IFRS or US GAAP, the financial information in respect of our
Company contained in this Draft Red Herring Prospectus may not be an effective means to compares with
other companies that prepare their financial information in accordance with IFRS or USGAAP. 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. In making an investment decision, investors must rely
upon their own examination of our Company, the terms of this Issue and the financial information relating to



30

our Company. Potential investors should consult their own professional advisers for an understanding of these
differences between Indian GAAP and IFRS or US GAAP, and how such differences might affect the
financial information contained herein.

61. We will be required to prepare our financial statements in accordance with IFRS in accordance with a
specified timeline. There can be no assurance that our adoption of IFRS will not adversely affect our
reported results of operations or financial condition and any failure to successfully adopt IFRS in
accordance with the timeline could have an adverse effect on the price of the Equity Shares.

The Institute of Chartered Accountants of India, the accounting body that regulates the accounting firms in
India, has announced a road map for the adoption of and convergence with the IFRS, pursuant to which some
public companies in India will be required to prepare their annual and interim financial statements under IFRS
beginning with the fiscal period commencing April 1, 2011.There is currently a significant lack of clarity on
the adoption of and convergence with IFRS and we currently do not have a set of established practices on
which to draw on in forming judgments regarding its implementation and application. We have not
determined with any degree of certainty the impact that such adoption will have on our financial reporting.
There can be no assurance that our financial condition, results of operations, cash flows or changes in
shareholders equity will not appear materially worse under IFRS than under Indian GAAP. As we transition
to IFRS reporting, we may encounter difficulties in the ongoing process of implementing and enhancing our
management information systems. Moreover, there is increasing competition for the small number of IFRS-
experienced accounting personnel as more Indian companies begin to prepare IFRS financial statements.
There can be no assurance that our adoption of IFRS will not adversely affect our reported results of
operations or financial condition and any failure to successfully adopt IFRS in accordance with the aforesaid
road map could have an adverse effect on the price of the Equity Shares.




31

SECTION III: PROMINENT NOTES

1. Pre and Post Issue Net Worth (Assuming full subscription to the Issue)

Pre Issue Net worth (` in Lacs)
(Based on audited accounts as re- stated on
September 30, 2011)
1685.76

Post Issue Net worth (` in Lacs) []
Issue Size
Issue of 1,00,00,000 Equity Shares of ` 10/- each at ` []/-
(including share premium of ` []) per Equity Share
aggregating to ` [] (Rupees _________________ Lacs
only)
Net Asset Value per share or Book Value
per Share
(Based on Audited Accounts as restated on
September 30, 2011)
(Face Value of ` 10/- per share)



` 19.53

2. The average cost of acquisition per Equity Share by our Promoters is as follows:

Name of Promoter
Number of Equity Shares
held
Average
Cost of Acquisition (in `)
Devendra B. Deshmukh 31,40,081 3.67
Ashish B Gupta 22,12,329 2.36
Amol Pande 29,97,348 3.56
Sunil Dane 4,28,192 6.10
Total Promoter & Promoter Group
holding
54,95,125 6.23

3. Any clarification or information relating to this Issue shall be made available by the Book Running Lead
Managers and our Company to the investors at large and no selective or additional information would be
available for a section of investors in any manner whatsoever. The Book Running Lead Managers shall be
obligated to provide information or clarifications relating to this Issue. Investors may contact the Book
Running Lead Managers and the Syndicate Members for any complaints or comments pertaining to this
Issue which the Book Running Lead Managers will attend to expeditiously.

4. All grievances relating to ASBA process may be addressed to the Registrar to the Issue, with a copy to the
relevant SCSBs or the members of the Syndicate as the case may be, giving full details such as the name
and address of the applicants, number of Equity Shares applied for, Bid Amounts blocked, ASBA
Account number and the Designated Branch of the SCSBs where the ASBA Form has been submitted by
the ASBA Bidder.

5. Except as disclosed in the section titled Financial Statements-Related Party Transactions at Page No.
164, there have been no transactions between our Company and our Group Companies and Entities, Key
Managerial Personnel during the last year.

6. Except as disclosed in the sections titled Financial Statements-Related Party Transactions and Group
Companies at Page Nos. 164 and 126 respectively, none of our Group Companies and Entities is
interested in our Company.



32

7. There are no financing arrangements pursuant to which our Promoters, Promoter Group, directors of our
company or their immediate relatives have financed the purchase of Equity Shares by any other person
during the six months preceding the date of filing of this Draft Red Herring Prospectus.

8. For information on changes in our Companys name, Registered and Corporate Office and changes in the
object clause of the MoA of our Company, see section titled History and Corporate Structure at Page
No. 105.




33

SECTION IV: INTRODUCTION

The following information should be read together with the information contained in the sections titled "Risk Factors",
"Industry Overview", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and
"Financial Statements" on Page Nos.12, 89, 168 & 134 respectively of this Draft Red Herring Prospectus.

Unless otherwise stated, the financial information of our Company used in this section is derived from our audited
consolidated financial statements under Indian GAAP, as restated. In this section, a reference to the "Company" or "e-
Zest" means e-Zest Solutions Limited. Unless the context otherwise requires, references to "we," "us," or "our" refer to e-
Zest, its Subsidiaries & its Associate taken as a whole.


SUMMARY OF INDUSTRY

Overview

The Indian information technology sector continues to
be one of the sunshine sectors of the Indian economy
showing rapid growth and promise. Poised to become a
US$ 225 billion industry by 2020, the Indian
information technology (IT) industry has played a key
role in putting India on the global map.

The software industry earns around 80 per cent of its
revenues from exports. Hence, the exchange rate has a
significant bearing on the industrys performance.
During September 2011, the rupee depreciated by 5.2
per cent vis-a-vis the USD. It was also weakened
against the Euro and the GBP. This would have a
positive impact on the rupee earnings of software exporters. It is estimated that the industrys sales have
grown by 18.5 percent during the September 2011 quarter. Sales could have grown by a much faster pace.
However, most IT companies hedge around 50 percent of their revenues against currency fluctuations for
quarters in advance.

For the year ending March 2012, it is expected that the industrys sales shall grow by 20.6 percent. Although
there are concerns over the slowdown in the US and Europe, the major export markets impacting the demand
for IT services, it may not impact the performance of IT industry in the ensuing 2-3 quarters. IT companies
usually work on multi-year projects. Most companies have bagged large deals in the recent past. IT majors
like TCS, Wipro, Infosys and HCL Tech have reassured their investors of a healthy business pipeline.

Volumes are likely to register a continuous rise as the clients urge to cut costs. It is expected to drive the
demand for offshore-based projects. Moreover, the demand from emerging markets is expected to bode well
for the industry.

The industrys PBDIT is expected to grow by 22 per cent. It is expected to earn a PBDIT margin equivalent to
28.6 per cent of its income during the year. However, asteep rise in its tax provisions will restrict the rise in
PAT to just 17.9 per cent. The industrys tax outgo is also expected to rise sharply following the expiry of the
STPI scheme and the imposition of MAT on SEZs. We expect the industrys net margin to contract by 60
basis points to 19.4 per cent in 2011-12.
(Source: Indian Industry a Monthly Review, Centre for Monitoring Indian Economy,October 2011 Update, NASSCOM)



34

The Indian software industry faced pressure on its
billing rates during the economic slowdown at two of its
major export destinations, the US and UK. Various
projects were shelved or delayed. Hence, IT companies
either reduced their billing rates or kept them stable to
sustain the order inflows. However, with an
improvement in the demand for IT services, the industry
is set to witness an uptick in billing rates in 2011-12.
The revival in demand for the IT services since the last
four quarters ending December 2010 was reflected in
the healthy top-line growth of the industry. Its sales
grew in the range of 11-19 per cent during this period.
However, a sluggish bottom line growth is still a cause
of concern for the industry. The profit margins have
been consistently registering a contraction on a y-o-y basis over the past four quarters. This was mainly on
account of a stable pricing environment coupled with a sharp rise in the industrys wage bill. The Indian IT
companies hired employees in large numbers during the past few quarters in order to meet the increased
demand for IT services. The top three IT firms by sales - TCS, Infosys and Wipro together added over
70,000 net employees during the last four quarter. With increased hiring, IT companies also faced high staff
turnover. In order to retain talent, the IT companies are giving higher wage hikes to employees. Also, with
rising inflation, wages are bound to rise. Clients are also taking Indias high inflation levels into account. IT
contracts are likely to come up with a clause that allows for fluctuations in pricing. Companies like TCS and
Infosys also expect higher discretionary spending in the coming quarter. The improved business environment
in the US will drive IT spending and offshoring in the coming quarter. The industry is also tapping emerging
markets for growth. Hence, with improved demand, rising inflation and a higher wage bill, the industry is
expected to increase the billing rates by 2-5 percent in 2011-12. Higher billing rates will not only lead to an
improvement in revenues, but will also aid an improvement in profit margins. The Indian IT industry has
followed fixed price contracts over the year. Such contracts are characterized by billing rates being based on
the number of hours contributed by each employee involved in the project. However, as companies become
larger in terms of employee strength, the revenue growth does not take place in proportion to an increase in
the headcount. Hence, companies are now focusing on the outcome and usage based models. These are non-
linear growth models which help the IT companies improve their revenues and profitability. Companies like
Infosys, TCS and Wipro are expected to generate at-least 10 per cent of their incremental revenues from non-
linear initiatives such as cloud computing services in 2011-12.
(Source: www.ibef.org viz. India Brand Equity Foundation, NASSCOM)





35

SUMMARY OF BUSINESS
Company Overview
e-Zest is a global software product engineering and enterprise application development company having
expertise in emerging technologies such as cloud computing/SaaS, business intelligence and mobility. While
serving them with best quality services, we also offer our customers the benefit of offshore delivery.
e-Zest designs, develops, enhances, migrates, tests and maintains software products and applications for its
existing customers. Its service offerings span all over the product life-cycle, which enables it to work with
wide requirements and thus gives horizontal experience of working with software products.
e-Zest has exhaustive experience of working with ISVs, IT services, healthcare, finance, manufacturing,
government, and travel business verticals. To offer value added services and cutting edge technology solutions
to customers from these verticals, e-Zest invests in emerging technologies such as cloud computing, business
intelligence and mobility. Its enhanced services offerings allow it to attract new customers and strengthen its
existing customer relationships.
e-Zest always tries to maximize customers core business by delivering high quality products in short period
that will service their end clients efficiently. e-Zests product engineering services aim to ease project
management burdens, reduce time-to-market, improve the product quality, reduce product failure and thus
improve predictability and reliability of the development process.
e-Zests customers range from enterprises to web startups. It has forged strong professionals relationships with
its customers over a period of time. e-Zest always seeks opportunities to add value to its customer business
and build new business. It offers flexible business models and pricing structure making engagement more
rewarding to its customers.
Our Competitive Strengths
e-Zest is strong player in software product engineering and enterprise application development market
segment due to its competitive strengths, which include:
i. Software product engineering culture

e-Zest has developed many products that have contributed in building the product culture. e-Zest designs,
develops, enhances, migrates, tests and maintains software products and applications for its existing
customers. Its service offerings span across all over the product life-cycle that enables it to work with wide
requirements and thus gives horizontal experience of working with software products.
e-Zests past experience has offered a sound understanding of the needs of the industries in which its
customers operate and the underlying technologies that drive those industries. As a result, e-Zest has been able
to offer its customer reduced time-to-market, improved quality of products, and reduced risk of failure with
improved predictability and reliability of the engineering process.
e-Zest is working with software companies over a decade for developing and integrating products,
components and platforms forming a strong product genealogy and culture at the company that is aligned with
its customers, employees and processes.




36

ii. Full spectrum software product services

e-Zest provides broad range of services to its customers that span all over the product life cycle. It has
different set of services for products in different stages of product life cycle addressing the customers specific
needs. Its services include research, prototyping, consulting, development, testing, support and maintenance. It
also offers product sustenance service that allows customers to leverage underperforming software products. It
offers services to all sizes of companies, right from enterprises to web startups. It also offers very flexible
business models and pricing structure to compliment it wide range of software product services.

e-Zest believes that its wide range of service offerings and offshore delivery allow it to attract new customers
and expand its existing customer relationships.
iii. Experience and knowledge in key focus areas

e-Zest understands and continuously assesses industry trends and technologies that drive its customer
businesses. It invests in building a team of experts who have an understanding of the technology, customer
business and competencies that are required. More than a decade of experience in building software products
and high technology understanding allows e-Zest to become a strategic partner for its customers It has
developed a special skill set of building high performance and highly scalable software solutions.

iv. Investment in emerging technologies

e-Zest continuously tracks and invests in new technologies and business trends. It has aligned its existing
services portfolio with new emerging technologies such as cloud computing, business intelligence and
mobility. e-Zest has recruited highly experienced people and invested in technology partnerships to make it
competent in emerging technologies and competitive in software development market. These initiatives help
e-Zest to establish thought leadership and deliver specialized services to its customers. It has established
competency centers within company. These competency centers work on cutting edge technology research or
identifying best practices in e-Zests area of interest.

v. Matured software development processes

e-Zest is in the business of development software products and applications since the last 11 years. While
improving its delivery quality to its customers it has evolved its software development process. Having
worked with customers of different sizes, e-Zest specifically knows the expectations from them. It has created
tailored processes for different sets of customer. All processes are aimed towards providing customers with
seamless solutions in reduced timeframes, enabling them to achieve operating efficiencies and realize
significant cost savings. e-Zests customer oriented approach and continuous and continual improvements to
its delivery model are a key to remain competitive.

vi. Team of highly skilled professionals

e-Zest has a team of highly skilled and well trained software professionals. The technology skill set of this
team provides e-Zest the flexibility to adapt to the needs of its customers and match up with the technology
requirements of various software projects that it undertake.

e-Zest promotes learning environment within the company. It provides challenging projects to its team
members to sharpen their technology skills and improve their software development knowledge. It also
sponsors technology certification exams for its team members.



37

vii. Agile Development

In e-Zest, we practice Scrum, Prince 2, XP agile software development methodologies. It enables analysis,
design and development phases to go in parallel and to have control over what is developed and when. Agile
method gives us chance to welcome changes frequently, thereby increasing communication between team and
client. The result is high quality product with satisfied customer in least time duration.

viii. Fast track delivery

e-Zest's provides fast track delivery service to save clients time and money by compressing the project
schedule. Fast track is a rapid application development service to give solutions quickly, within budget along
with minimal risk. This process requires close cooperation between customer and entire team in order to
achieve key business objective of client.

ix. Business and technology solution accelerators

Building solutions from ground takes lots of time and money. Thats why at e-Zest, we had developed a wide
variety of solution accelerators that can be implemented quickly and economically helping in reducing time-
to-value.

x. Various technology partnerships

Microsoft Gold Certified Partner
Sun Associate Partner
Intel
IBM
International Association of Microsoft Certified Partners
Citrix
NASSCOM
Oracle Partner
Palm

xi. Flexible business models

e-Zest offers multiple engagement models to meet diverse needs of global clients. Client can choose any
model or a combination of them for different phases of project. An appropriate engagement strategy is based
on a clear understanding of customers business drivers. e-Zest models core focus is on the customers innate
needs like:

High Quality
Fast Delivery
Low Cost
Increased project profitability
Flexible resource Allocation and management with no upfront investment
Predictable support
Handling future needs of the customer
Any of these pricing models can be applied to our suite of services in custom ways for convenience and
best value for money.
Effort based pricing or Time & Material



38

Milestone based billing
Dedicated Development Facility or Retainer
Build-Operate-Transfer (BOT) Model
Project based pricing or fixed bid.
Strategic Partner Model
Offshore Development Center (ODC)

xii. Expertise in emerging technologies SaaS/Cloud/BI/Mobile

e-Zest has experience in business model and architecture consulting architecting and deploying Software as a
Service (SaaS) applications for its customer across the globe.

Our team of professionals understands the cloud ecosystem and carries out end to end cloud assessment and
adaption services for our enterprise customers very systematically.

e-Zest realizes that BI has become integral part of every organization. We have an established Business
intelligence practice to help our customers in decision making.

We bring deep understanding of building mobile solutions for our customers across the globe to the table for
mobile consulting services. With its high quality mobile consulting services, e-Zest can help organization
understand their business needs in the area of enterprise mobile solutions, mobile applications or mobile as
access point for other applications.

xiii. Specialist in Outsourced Product Engineering Services

At e-Zest, we understand Product Development (OPD) requires the offshore team to work in very close
collaboration with the client's engineering team. In the process, partnering with e-Zest for client product
development services helps client leverage a strong value proposition, low time to market, reduced
development costs and quality manpower.

e-Zest utilizes its product development expertise and product development and engineering frameworks to
provide end-to-end product development services. We offer specialized product development services as well
as end-to-end product development services based on client needs.

Our Strategy:
Our goal is to be a leading global provider of software product engineering and enterprise application
development services. We intend to accomplish our goal by the following strategies:

i. Continued thrust on specialization:

The Companys strategy is to deepen its expertise in current domain areas with continuous investments in new
technology. New areas identified are cloud computing and mobility. The company plans to deepen its
expertise in these areas by developing Intellectual Property and increasing customer traction around the
solutions.

ii. Customer acquisition and increased penetration of existing customers:

e-Zest plans to increase its share of IT spending within current customers & acquire new customers in focus
area. Besides existing segments, company is targeting expansion in new verticals like business intelligence
and enterprise collaboration.



39

iii. Expansion in newer areas:

Besides existing segments, company is targeting expansion in new verticals like business intelligence and
enterprise collaboration.
iv. Offering unique business models:

Company plans to provide SaaS to enterprises for custom applications enabling them access to data and
application anywhere on-the-go.
Further, our Company is committed to concentrate on four areas of emerging technologies as part of its
market strategy to increase its market share.
v. Cloud Computing

Cloud computing offers end-customers the chance to consume services on subscription or pay-per-use basis. It
ensures better resource utilization through resource sharing, which promises reduced time-to-market. Cloud
computing not only reduces business costs, but also makes applications accessible from any location, and
reacts swiftly to changes in business needs. This requires software companies to redesign their products to
operate with high degree of multi-tenancy.
While inter-operability and data security issues may hinder market growth, the future of cloud computing
seems promising with IT giants such as IBM, Google, Microsoft, and Salesforce.com actively developing new
solutions to address existing issues. e-Zest is partnering with leading vendors to enable software companies to
migrate their products to the cloud platform.
The global cloud computing market is expected to grow from $37.8 billion in 2010 to $121.1 billion in 2015
at a CAGR of 26.2 percent from 2010 to 2015. SaaS is the largest segment of the cloud computing services
market accounting for 73 percent of the market's revenues 2010.
vi. Mobility

Smart phone penetration has been growing significantly since last few years. It is estimated that out of 4
billion mobile phones currently in use 1.08 billion are smart phones. Today, mobility is being considered as a
vital component for infrastructure and software applications across the markets.
Given the capabilities of enterprise mobility in extending the organizations with efficient means to improve
overall responsiveness, agility, and flexibility, the concept has truly transformed into a competitive
requirement. All types of industries across geographies have more or less started adoption of the concept.
Vertical industries such as healthcare, logistics and transport, manufacturing, distribution, wholesale,
warehousing and retail, among others are increasingly looking at enterprise mobility to deliver improved
efficiency. e-Zest Solutions has been working with leading mobile operating systems building point and
enterprise solutions for its customers.
According to GIA, the global market for enterprise mobility is projected to exceed USD 168.8 billion by
2015. Growing acceptance from large as well as medium businesses, and introduction of sophisticated mobile
devices and novel mobility solutions are likely to fuel market growth in the next few years
vii. Business Intelligence (BI)

As global data is growing at an exponential rate, data management becomes a challenge for executives to take
effective decisions. Moreover, uncertain economic conditions, intense competition and increasing volumes of



40

organizational information are forcing enterprises to seek efficient means of deriving value from information
for improving the overall efficiency of business processes. In this regard, business intelligence (BI)
technology is emerging as an essential tool for identifying new revenue-generation opportunities as well as to
control unproductive expenditures.
BI offers tools, processes and applications for facilitating organizations to analyze and consolidate data
gathered from various sources for optimizing operational performance and for improving business decision-
making. BI and analytics software helps organizations to analyze the information built up over the years,
which resides in the enterprise systems. e-Zests domain experts are extending the company's core expertise of
processing and managing large volumes of data through data mining, statistical techniques and visualization to
deliver domain-specific insights to customer.
According to a latest research report, the global BI software market is projected to reach USD 12.4 billion by
the year 2015. The primary reason for this growth is identified as a growing need to empower all stakeholders
of business with right information at the appropriate time.



41

SUMMARY OF FINANCIAL INFORMATION
The following tables set forth selected historical financial information of our Company derived from its
restated consolidated financial information for the Fiscal 2007, 2008, 2009, 2010 and 2011. The restated
summary consolidated financial information presented below should be read in conjunction with the restated
financial Information included in this Draft Red Herring Prospectus, the notes thereto and Managements
Discussion and Analysis of Financial Condition and Results of Operations on Page No. 168.

The company made strategic investment in e-Zest Infocom Private Limited and eZest Infotech Private
Limited to the extent of 51% in 2007. Thus these Companies were subsidiaries of e-Zest Solutions
Limited. On April 1, 2011, the Company divested its stake in the two Companies to the extent of 31% in
each. The present investment in the entities is now 20%. Thus e-Zest Infocom Private Limited and
eZest Infotech Private Limited are no longer subsidiaries of e-Zest Solutions Limited. Hence, the
Consolidated Statements are prepared till 31
st
March, 2011.


CONSOLIDATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED
(` in Lacs)


Particulars
As at
March 31,
2007
As at
March 31,
2008
As at
March 31,
2009
As at
March 31,
2010
As at
March 31,
2011
A. Fixed Assets:
Gross Block 352.70 687.47 729.93 818.89 854.40
Less : Depreciation 28.49 51.17 83.30 121.45 160.41
Net Block 324.21 636.29 646.63 697.44 693.99
B. Investments 0.05 0.05 0.05 0.05 0.05
C. Deferred Tax Assets - - - - -
D.
Current Assets, Loans &
Advances

Inventories 6.22 11.80 26.55 38.55 164.59
Sundry Debtors 2.80 239.10 134.91 500.08 1,166.44
Cash and Bank Balances 99.65 22.85 40.50 111.10 63.01

Other Current Assets, Loans and
Advances
142.62 57.78 54.43 97.91 260.14
Total 251.29 331.55 256.39 747.65 1,654.17
E. Miscellaneous Expenditure - 0.20 0.15 0.10 -
F. Liabilities& Provisions
Secured Loans 224.67 380.43 292.38 273.06 169.28
Unsecured Loans 37.53 31.12 26.13 7.81 11.73
Current Liabilities and Provisions 12.79 150.02 81.19 468.20 1,138.16
Minority Interest - 1.53 3.78 6.41 3.59
Total 274.99 563.10 403.48 755.49 1,322.77
Deferred Tax Liability 22.98 40.07 54.84 67.03 88.63
G. Total ( A+B+C+D-E-F ) 277.58 364.92 444.90 622.71 936.81
H. Represented by
Share Capital 24.00 264.00 264.00 481.78 489.58
Reserves and Surplus 253.58 100.92 180.90 140.94 447.24
Total 277.58 364.92 444.90 622.71 936.81

Note: The above statement should be read with significant accounting policies, notes on adjustments and
notes to account to the consolidated financial statements as stated as per Annexure IV.



42

CONSOLIDATED SUMMARY STATEMENT OF PROFITS AND LOSSES, AS RESTATED
(` in Lacs)
Particulars
Year ended
March 31,
2007
Year ended
March 31,
2008
Year ended
March 31,
2009
Year ended
March 31,
2010
Year ended
March 31,
2011
INCOME
Sales & Other Operating Income
Domestic Income 11.71 1,163.27 1,287.37 1,578.23 1,118.18
Export Income 614.24 720.38 828.29 1,023.89 940.16
Other Income 4.28 0.23 20.10 12.14 28.45
Net Sales 630.22 1,883.88 2,135.77 2,614.26 2,086.79
Increase /(Decrease) in Inventories 0.89 5.58 14.75 12.00 126.04
Total Income 631.11 1,889.46 2,150.52 2,626.26 2,212.83
EXPENDITURE
Direct Cost of Sales or Services 27.73 1,135.16 1,317.34 1,589.57 933.78
Purchases 318.36 441.07 503.58 622.71 714.75
Personnel Cost 98.47 114.99 101.21 206.77 166.27
Interest and other finance charges 25.19 50.16 50.13 38.64 25.06
Depreciation 15.15 22.68 32.13 38.14 49.34
Total 484.90 1,764.07 2,004.38 2,495.84 1,889.19
Net Profit / (Loss) before tax 146.21 125.39 146.14 130.42 323.63
Taxation ( including current deferred ,
FBT & MAT credit entitlement )
- - - - -
- Current Tax 2.23 5.79 19.36 24.15 67.20
- Fringe Benefit Tax 1.11 1.18 1.33 - -
- Income Tax For Earlier Years - - - - -
- Deferred Tax Liability/(Assets) 7.32 17.09 14.77 12.20 21.59
Net Profit \ (Loss) after tax 135.55 100.97 110.71 96.57 234.84
Add/ (Less): Adjustments on account of
restatements Short /( Excess) Provision
in respect of income tax for earlier years
- (0.36) (0.07) 2.47 (2.35)
Profit/(Loss) :Available for
Appropriation as restated
135.55 101.34 110.78 94.10 237.19
Appropriations: - - - - -
- Transferred to General Reserve 15.00 10.00 - - -
- Proposed Dividend 12.00 12.00 26.40 9.24 -
- Tax on Dividend 1.86 2.04 4.49 1.57 -
- Prior Period Expenses - - - - 0.97
-Capitalization by way of issue of Bonus
shares
- 185.00 - 156.75 -
Total Appropriations 28.86 209.04 30.89 167.56 0.97
Balance Brought Forward from earlier
year
91.88 198.58 89.84 167.48 91.39
Less/(Add) : Minority Interest - 1.04 2.25 2.63 (2.83)
Balance carried forward to Balance
Sheet as restated
198.58 89.84 167.48 91.39 330.43




43

CONSOLIDATED STATEMENT OF CASH FLOWS, AS RESTATED
(` in Lacs)
Sr.
No.
Particulars
Year ended
March 31,
2007
Year ended
March 31,
2008
Year ended
March 31,
2009
Year ended
March 31,
2010
Year ended
March 31,
2011
A.
Cash Flow From Operating
Activities:

Net Profit Before Tax and
Extraordinary Items
146.21 125.39 146.14 130.42 323.63

Adjustment for :-


Depreciation 15.15 22.68 32.13 38.14 49.34

Interest Income (4.28) (0.23) (1.11) (0.08) (0.06)

Dividend Income - - (0.01) (0.01) (0.01)

Interest charges 22.49 50.16 50.13 34.99 23.30

Profit on sale of asset - - - - (12.23)

Misc. expenses written off - 0.10 0.10 0.10 0.19

Operating Profit Before
Working Capital Changes
179.57 198.10 227.37 203.57 384.18

Adjustment for :-


Trade and other receivables (2.76) (236.31) 104.20 (365.17) (666.35)

Inventories (0.89) (5.58) (14.75) (12.00) (126.04)

Loans and advances and
Other Current Assets
(137.12) 85.20 2.64 (16.86) (124.24)

Trade payables and Other
Liabilities
(6.96) 139.52 (88.40) 378.25 605.00

Cash Generated From
Operation
31.85 180.94 231.06 187.78 72.54

Direct Tax Paid (Net) (2.52) (4.88) (2.70) (39.63) (40.61)

Earlier year taxes paid (0.16) - - - -

Preliminary Expenses - (0.49) - - (0.97)

Net Cash from Operating
Activities
29.16 175.57 228.36 148.16 30.96
B.
Cash Flow From Investing
Activities

Purchases of Fixed Assets (25.21) (334.76) (42.46) (88.96) (161.66)

sales of fixed assets - - - - 128.00

Dividend Income - - 0.01 0.01 0.01

Interest from Fixed Deposit 4.28 0.23 1.11 0.08 0.06

Sale of investment in
Subsidiary Company
- - - - -


Net Cash Used In Investing
Activities
(20.93) (334.53) (41.34) (88.87) (33.59)
C.
Cash Flow From Financing
Activities

Addition to share capital - 0.98 - 61.03 7.80

Dividend Paid (18.00) (18.00) (26.40) - -

Proceeds from Secured
borrowings
72.12 155.76 (88.05) (177.24) (103.78)

Proceeds from Unsecured (26.10) (6.41) (4.79) 139.94 3.63



44

borrowings

Increase in Share premium - - - 33.39 70.20

Financing charges (22.49) (50.16) (50.13) (34.99) (23.30)

Dividend on shares - - - (10.81)


Net Cash Used In Finance
Activities
5.54 82.17 (169.37) 11.31 (45.45)

Net Increase / (Decrease) in
cash and cash equivalent
13.77 (76.80) 17.65 70.60 (48.08)

Cash & Cash Equivalent as at
the beginning of the year
85.88 99.65 22.85 40.50 111.10

Cash & Cash Equivalent as at
the year end
99.65 22.85 40.50 111.10 63.01
Note:

1. The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in the
Accounting Standard - 3 on Cash Flow Statement issued by the Institute of Chartered Accountants of
India.

2. Cash and cash equivalent at the end of the year consist of cash in hand and balances with banks and are
net of short term loans and advances from banks as follows including fixed deposits.

(` in Lacs)
Particulars
Year ended
March 31,
2007
Year ended
March 31,
2008
Year ended
March 31,
2009
Year ended
March 31,
2010
Year ended
March 31,
2011
Cash in hand 1.11 0.50 1.52 3.15 9.20
Balances with Bank 98.54 22.35 38.98 107.95 53.81
Total 99.65 22.85 40.50 111.10 63.01





45

THE ISSUE
The following table summarizes the details of the Issue:
Equity Shares offered:

Issue to the Public
(1)
1,00,00,000 Equity Shares
of which:
A) Qualified Institutional Buyers (QIB)
portion
(2)

Not more than 50,00,000 Equity Shares

B) Non Institutional Portion Not less than 15,00,000 Equity Shares

C) Retail Portion Not less than 35,00,000 Equity Shares

Equity Shares outstanding prior to the Issue: 1,44,92,578 Equity Shares

Equity Shares outstanding post the Issue 2,44,92,578 Equity Shares

Use of Issue Proceeds:
Please refer to the section titled Objects of the Issue
beginning on Page No. 65 of this Draft Red Herring
Prospectus. Our Company will not receive any proceeds
from the Offer for Sale.

1. The Issue has been authorized by our Board by way of their Special resolution dated August 20, 2011
and by the shareholders of our Company at the extraordinary general meeting held on September 21,
2011.

2. Our Company may allocate up to 30% of the QIB Portion to Anchor Investors on a discretionary basis.
One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, 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. In the event of under-subscription in the Anchor Investor Portion, the balance
Equity Shares shall be included in the Net QIB Portion. 5% of the Net QIB Portion shall be available for
allocation to Mutual Funds. Mutual Funds participating in the Mutual Fund Portion will also be eligible
for allocation in the remaining Net QIB Portion. In the event of under-subscription in the Mutual Fund
Portion only, the unsubscribed portion would be added to the balance of the Net QIB Portion to be
allocated on a proportionate basis to the QIBs. For further details, please refer to the section titled "Issue
Procedure" on Page No. 200 of this Draft Red Herring Prospectus.

3. Subject to valid bids being received at or above the Issue Price, under-subscription, if any, in any
category, would be allowed to be met with spill-over from other categories or a combination of categories,
at the discretion of our Company in consultation with the BRLM.




46

GENERAL INFORMATION

e-Zest Solutions Limited was incorporated as e-Zest Solutions Private Limited under Companies Act, 1956 on
August 8, 2000. It is registered with the Registrar of Companies, Maharashtra, India. It got its incorporation
certificate from Deputy Registrar of Companies, Maharashtra, Mumbai as Private Limited entity. It got
converted as public limited vide special resolution passed in its members/ shareholders meeting on May 18,
2007 and obtained a fresh incorporation certificate as public limited from the Deputy Registrar of Companies,
Maharashtra, Mumbai.

The brief information for our Company is given below:-
Registered Office
Registered Office
B- 103, PushpVinod
S.V Road, Borivali (West),
Mumbai- 400 092

Corporate Office &Development Center
2
nd
and 3
rd
Floor, Anand Nilay Business Center,
Near Karve Statue, Karve Road, Kothrud
Pune 411029
Date of Incorporation August 8, 2000
Company Registration No. 11-128134 of 2000
Company Identification No. U72100MH2000PLC128134
Address of Registrar of Companies
Registrar of Companies, Maharashtra - 100, Everest, Marine Drive,
Mumbai - 400 002, Maharashtra, India.

Board of Directors of our Company

The Board of Directors comprises the following:

Name and Designation
Age
(Years)
DIN Address
Devendra Baburao
Deshmukh
Managing Director
34 years 00377971
A-902, Kapil Abhijat, Dahanukar Colony,
Kothrud, Pune- 411 029
Hasmukh Gulabchand Mehta
Chairman- Independent
53 years 00344774
32, Tanay, Sky Build Village, Behind Bhatia
High School, Kandivli (West), Mumbai- 400 067
Ashish Bajranglal Gupta
Executive Director
34 years 00378003
A-501, Kapil Abhijat, Dahanukar Colony,
Kothrud, Pune- 411 029
Amol Ramesh Pande
Executive Director
35 Years 01416538
A-503, Kapil Abhijat, Dahanukar Colony,
Kothrud, Pune- 411 029
Sunil Madhukarrao Dane
Executive Director
38 years 02794730
Flat No. 503/A, Sigma One SNO 124/3A/2, Paud
Road, BH MIT College, Kothrud, Pune- 411 038
Krishan Kumar Dwivedi
Independent Director
34 years 01207197
403, D-2, Citadel Enclave, BT Kavde Road,
Ghorpadi, Pune- 411001

For further details of the Directors, see Management on Page No. 108.



47

Company Secretary and Compliance Officer

Mr. Divanshu Mittal is the Company Secretary and Compliance Officer of our Company and his contact
details are as follows:

B- 103, PushpVinod,
S.V. Road, Borivali (West),
Mumbai- 400 092,
India.
Tel: (91) 20 2545 9802 / 03
Fax: (91) 20 2545 9810
Email: investors@e-zest.in
Investors can contact the Compliance Officer or the Registrar to the Issue in case of any pre or post-Issue
related problems, including non-receipt of letters of allotment, credit of allotted shares in the respective
beneficiary account and refund orders.
All grievances relating to the ASBA process may be addressed to the Registrar to the Issue, with a copy to the
SCSB, giving full details such as name, address of the applicant, number of Equity Shares applied for, Bid
Amount blocked, ASBA account number and the designated branch of the SCSB where the ASBA Form was
submitted by the ASBA bidders.

BOOK RUNNING LEAD MANAGERS
Choice Capital Advisors Private Limited
Shree Shakambhari Corporate Park,
156 158, Chakravorty Ashok Society,
J.B. Nagar, Andheri (East),
Mumbai 400 099,
Maharashtra, India
Tel: + 91 22 6707 9999
Fax: + 91 22 6707 9959
Email: ezest.ipo@choiceindia.com
Investor Grievance Email: investor_advisors@choiceindia.com
Website: www.choiceindia.com
Contact Person: Mrs. Sujata Chattopadhyay
SEBI Registration No.: INM000011872

Self-Certified Syndicate Banks
The lists of banks that have been notified by SEBI to act as SCSB for the ASBA Process are provided on
http://www.sebi.gov.in. For details on designated branches of SCSBs collecting the ASBA Bid cum
Application Form, please refer the above mentioned SEBI link.
Syndicate SCSB Branches
In relation to ASBA Bids submitted to a member of the Syndicate, the list of branches of the SCSBs at the
Syndicate ASBA Bidding Locations (Mumbai, Chennai, Kolkata, Delhi, Ahmedabad, Rajkot, Jaipur,
Bengaluru, Hyderabad, Pune, Vadodara and Surat) named by the respective SCSBs to receive deposits of
ASBA Forms from the members of the Syndicate is provided on http://www.sebi.gov.in/pmd/scsb-asba.html.



48

For more information on such branches collecting ASBA Forms from the members of the Syndicate at
Syndicate ASBA Bidding Locations, see the above mentioned SEBI link.

Legal Advisors
Mindspright Legal
Office No. 9, 3
rd
Floor,
7/10, Botawala Building
Horniman Circle, Fort
Mumbai- 400 023
Contact Person: Mr. Amit Bikram Dey
Tel: +91 22 4002 0665
Fax: +91 22 4002 0664
Email ID: legal@mindspright.co.in

Registrar to the Issue
Bigshare Services Private Limited
E-2, Ansa Industrial Estate,
Sakivihar Road, Andheri (East)
Mumbai- 400 072
Contact Person: Mr. Malla S
Tel: +91 22 4043 0200
Fax: +91 22 2847 5207
Email ID: ipo@bigshareonline.com

Bankers to the Issue and Escrow Collection
Banks
[]

Bankers to the Company
Citibank NA
Punjab National Bank
Refund Banker
[]

Statutory auditors to the company
Sajjan Kanodia & Co.
Chartered Accountants
403, Raj Shila Building,
597, J.S.S. Road
Near Princess Street
Mumbai - 400 002
Tel: 022 2206 8603
Fax: 022 2206 8600
Email: sajjan.kanodia@gmail.com
Inter-se Allocation of Responsibilities for the Issue
Choice Capital Advisors Private Limited, being the sole Manager to the issue, there is no inter se allocation of
responsibilities for various activities.
Brokers to the Issue
All members of the recognized Stock Exchanges would be eligible to act as Brokers to the Issue.
Credit Rating
As the Issue is of Equity Shares, credit rating is not required.
IPO Grading
Our Company has appointed Credit Analysis & Research Ltd (CARE) for Grading of this IPO and Grading is
awaited from their side. The rationale for the grade awarded by the Grading Agency will also be incorporated
after receipt of the grade from Credit Analysis & Research Limited.
Trustees
As the Issue is of Equity Shares, the appointment of trustees is not required.





49

Monitoring Agency
The objects of the Issue have not been appraised by an independent agency. As the size of the Issue is less
than ` 50,000 Lacs, the appointment of Monitoring Agency is not mandatory as per Regulation 16 of the
SEBI (ICDR) Regulations, 2009.
However, as per Clause 49 of the Listing Agreement to be entered into with the Stock Exchanges up on listing
of the equity shares and the Corporate Governance Requirements, the Audit Committee of our Company
would be monitoring the utilization of the proceeds of the Issue.

Book Building Process

Book building refers to the collection of Bids from investors, which is based on the Price Band, with the Issue
Price being finalized after the Bid/ Issue Closing Date. The principal parties involved in the Book Building
Process are:

1. Our Company;
2. The Book Running Lead Manager;
3. Syndicate Members who are intermediaries registered with SEBI or registered as brokers with the
Stock Exchange (s) and eligible to act as underwriters Syndicate members are appointed by Book
Running Lead Manager;
4. Registrar to the Issue;
5. Escrow Collection Bank(s), Refund Bank(s).
6. Self-Certified Syndicate Banks.

Regulation 43(2) of the SEBI (ICDR) Regulations, 2009 has permitted an issue of securities to the public
through the 100% Book Building Process, wherein not more than 50% of the Net Issue shall be available for
allocation to QIBs on a proportionate basis out of which upto 5% shall be available for allocation on a
proportionate basis to Mutual Funds only, and the remainder of the Qualified Institutional Buyers portion
shall be available for allocation on a proportionate basis to all Qualified Institutional Buyers, including Mutual
Funds, subject to valid Bids being received at or above Issue price. Further, not less than 15% of the Net Issue
shall be available for allotment to Non Institutional Bidders and not less than 35% of the Net Issue shall be
available for allotment to Retail Individual Bidders on a proportionate basis, subject to valid Bids being
received at or above the Issue Price.

QIBs are not allowed to withdraw their Bid(s) after the Bid /Issue Closing Date. In addition, QIBs are required
to pay 100% margin amount upon submission of their Bids and the allocation to QIBs will be on a
proportionate basis. For further details, please refer the section titled Terms of the Issue Page No. 197 of the
Draft Red Herring Prospectus

We will comply with the SEBI (ICDR) Regulations, 2009 for this Issue. In this regard, we have appointed
Choice Capital Advisors Private Limited as the BRLM to manage the Issue and procure subscriptions to the
Issue.

The process of Book Building under the SEBI (ICDR) Regulations, 2009 is subject to change from time
to time and Investors are advised to make their own judgment about investment through this process
prior to making a Bid or Application in the Issue.




50

Illustration of Book Building and Price Discovery Process
(Investors should note that the following is solely for the purpose of illustration and is not specific to this
Issue)

The Bidders can bid at any price within the Price Band. For instance, assume a Price Band of ` 40/- to ` 44/-
per Equity Share, Issue size of 4,000 Equity Shares and receipt of five Bids from the Bidders, details of which
are shown in the table below. A graphical representation of the consolidated demand and price will be made
available at the websites of the BSE (www.bseindia.com) during the Bidding/ Issue Period. The illustrative
book as set forth below shows the demand for the Equity Shares of our Company at various prices and is
collated from Bids from various investors.

Bid Quantity Bid Price (`) Cumulative Quantity Subscription
500 44 1,000 25.00%
1,000 43 2,500 62.50%
1,500 42 4,000 100.00%
2,000 41 6,000 150.00%
2,500 40 7,500 187.50%

The price discovery is a function of demand at various prices. The highest price at which our Company is able
to issue the desired quantity of Equity Shares is the price at which the book cuts off, i.e., ` 42/- in the above
example. The Issuer Company, in consultation with the BRLM, will finalize the Issue Price at or below such
cut off price, i.e., at or below ` 42. All Bids at or above this Issue Price and cut-off Bids are valid Bids and are
considered for allocation in the respective category.

Steps to be taken for bidding

1) Check eligibility for making a Bid (For details, please refer to the paragraph titled Who Can Bid
beginning on Page No. 202 under Chapter titled Issue Procedure beginning on Page No. 200 of the Red
Herring Prospectus);

2) Ensure that the Bidder has a demat account and the demat account details are correctly mentioned in the
Bid cum Application Form including ASBA Form;

3) Ensure that the Bid-cum-Application Form including ASBA Forms is duly completed as per instructions
given in the Draft Red Herring Prospectus and in the Bid-cum-Application Form including ASBA Forms;
and

4) Ensure that the Permanent Account Number is mentioned on Bid-cum-Application Form/ASBA Form.
Bidders are specifically requested not to mention their General Index Register number instead of the
Permanent Account Number as the Bid is liable to be rejected on this ground.

Withdrawal of the Issue
In accordance with the SEBI (ICDR) Regulations, 2009, the Company in consultation with the BRLM,
reserves the right not to proceed with the Offer at any time including after the Offer Opening Date, without
assigning the reasons thereof. Provided, if our Company withdraws the Offer after the Offer Closing Date, our
Company will give the reason thereof within two days of the Offer Closing Date by way of a public notice in
the same newspapers where the pre-Offer advertisement had appeared. The Stock Exchanges shall also be




51

informed promptly and the BRLM, through the Registrar to the Offer, shall notify the SCSBs to unblock the
bank accounts specified by the ASBA Bidders within one day from the date of receipt of such notification.
In the event our Company, in consultation with the BRLM, withdraws the Offer after the Offer Closing Date,
a fresh offer document will be filed with the RoC/SEBI in the event we subsequently decide to proceed with
the Offer.

Notwithstanding the foregoing, the Offer is subject to obtaining the final trading approvals of the Stock
Exchanges with respect to the Equity Shares issued in the Offer, which our Company will apply for after
Allotment and dispatch of refunds within 12 Working Days of the Offer Closing Date.

BID/ISSUE PROGRAMME

BID/ISSUE PERIOD

BID/ ISSUE OPENS ON : []
BID/ ISSUE CLOSES ON : []

Bids and any revision in Bids shall be accepted only between 10.00 am and 3.00 pm (Indian Standard Time)
during the Bidding Period as mentioned above at the bidding centers mentioned on the Bid cum Application
Form. Standardized cut-off time for uploading of bids on the bid/issue closing date is asunder:

1. A standard cut-off time of 3.00 pm for acceptance of bids.
2. A standard cut-off time of 4.00 pm for uploading of bids received from non-retail applicants i.e. QIBs and
HNIs.
3. A standard cut-off time of 5.00 pm for uploading of bids received from retail applicants, where the Bid
Amount is up to ` 2,00,000 which may be extended up to such time as deemed fit by Stock Exchanges. Bids
by ASBA Bidders shall be uploaded by the SCSB in the electronic system to be provided by BSE and NSE.
In case of discrepancy in the data entered in the electronic book vis--vis the data contained in the physical
Bid form, for a particular bidder, the details as per physical application form of that Bidder maybe taken as the
final data for the purpose of allotment. In case of discrepancy in the data entered in the electronic book vis--
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 for rectified data from the SCSB. Due to limitation of time available for
uploading the Bids on the Bid/ Issue Closing Date, the Bidders are advised to submit their Bids one day prior
to the Bid/Issue Closing Date and, in any case, not later than the times mentioned above. All times mentioned
in the Draft Red Herring Prospectus are Indian Standard Time (IST). Bidders are cautioned that due to
clustering of last day applications, as is typically experienced in public offerings, some Bids may not get
uploaded on the last day. Such Bids that cannot be uploaded will not be considered for allocation under the
Issue. If such Bids are not uploaded, our Company, the BRLM and the Syndicate Member shall not be
responsible. On the Bid/Issue Closing Date, extension of time will be granted by the Stock Exchanges only for
uploading the Bids received from Retail Individual Bidders after taking into account the total number of Bids
received upto the closure of timings for acceptance of Bid cum Application Forms as stated herein and
reported by the BRLM to the Stock Exchanges within half an hour of such closure.

Investors please note that as per letter no. List/smd/sm/2006 dated July 3, 2006 and letter no.
NSE/IPO/25101-6 dated July 6, 2006 issued by BSE and NSE respectively, bids and any revision in Bids
shall not be accepted on Saturdays and holidays as declared by the Exchanges.






52

The Price Band and the minimum Bid lot size for the Issue will be decided by our Company, in consultation
with the BRLM, and advertised at least two working days prior to the Bid/Issue Opening Date. The
announcement on the Price Band shall also be made available on the websites of the BRLM and at the
terminals of the Syndicate.

We reserve the right to revise the Price band during the Bidding Period in accordance with SEBI (ICDR)
Regulations, 2009. The cap on the Price Band should not be more than 20% of the floor of the Price band.
Subject to compliance with the immediately preceding sentence, the floor of the Price band can move up or
down to the extent of 20%.

In case of revision in the Price Band, the Bidding/Issue Period will be extended for three additional days after
revision of Price Band subject to the Bidding/Issue Period not exceeding 10 working days. Any revision in the
Price Band and the revised Bidding/Issue Period, if applicable, will be widely disseminated by notification to
the BSE and the NSE, by issuing a press release, and also by indicating the change on the web sites of the
BRLM and at the terminals of the Syndicate and to the SCSBs.
Underwriting Agreement
After the determination of the Issue Price and allocation of the Equity Shares, but prior to the filing of the
Prospectus with the ROC, our Company 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 shall be responsible for bringing in the amount devolved in the event
that the Syndicate Members do not fulfill their underwriting obligations. The underwriting shall be to the
extent of the Bids uploaded by the Underwriters including through its Syndicate/Sub Syndicate. Pursuant to
the terms of the Underwriting Agreement Dated [], the obligations of the Underwriters are several and are
subject to certain conditions as specified therein.

The Underwriters have indicated its intention to underwrite the following number of Equity Shares:
(This portion has been intentionally left blank and will be filled in before filing of the Prospectus with the
ROC.)

Name and Address of the
Underwriter
Indicated Number of Equity
Shares to be underwritten
Amount Underwritten
Choice Capital Advisors Pvt. Ltd.
Shree Shakambhari Corporate Park,
156-158, Chakravorty Ashok Society,
J.B. Nagar, Andheri (E),
Mumbai 400 099
Maharashtra, India
[] []

The above mentioned is indicative underwriting and this would be finalized after the pricing and actual
allocation.

In the opinion of our Board of Directors (based on a certificate given by the Underwriters), we declare that the
resources of the above mentioned Underwriters are sufficient to enable them to discharge their respective
underwriting obligations in full. The Underwriters are registered with the SEBI or have been granted a
Certificate of Registration by the SEBI to act as an underwriter in accordance with the SEBI (Underwriters)
Regulations 1993 or the SEBI (Stock-Brokers and Sub-Brokers) Regulations 1992 or the SEBI (Merchant
Bankers) Regulations 1992 and such certificate is valid and in existence and the Underwriters are hence



53

entitled to carry on business as underwriters or registered as brokers with the Stock Exchange(s). Our Board
of Directors, at its meeting held on [], has accepted and entered into the Underwriting Agreement with the
Underwriters.

Allocation among the Underwriters may not necessarily be in proportion to their underwriting commitments
set forth in the table above. Notwithstanding the above table, the Underwriters shall be responsible for
ensuring payment with respect to Equity Shares allocated to investors procured by them. In the event of any
default in payment, the respective Underwriter, in addition to other obligations defined in the Underwriting
Agreement, will also be required to procure subscriptions for/subscribe to Equity Shares to the extent of the
defaulted amount.

The underwriting arrangements mentioned above shall not apply to the subscriptions by the ASBA Bidders in
this Issue.
CAPITAL STRUCTURE:
Our Equity Share Capital before the Issue and after giving effect to the Issue, as at the date of this Draft Red
Herring Prospectus, is set forth below:
Sr.
No.
Particulars

Aggregate Nominal
Value (`)
Aggregate Value at Issue
Price (`)
A
Authorized Capital
1,60,00,000 Equity Shares of ` 10/- each

16,00,00,000
B
Issued, Subscribed and Paid Up share Capital
before the Issue
1,44,92,578 Equity Shares of ` 10/- each

14,49,25,780
C
Present Issue
1,00, 00,000 Equity Shares of ` 10/- each

10,00,00,000 []
D
Net Offer to the Public in terms of this
Draft Prospectus

1,00, 00,000 Equity Shares of ` 10/- each. 10,00,00,000 []

Out of which:
i. QIB Portion of not more than 50,00,000
Equity Shares
ii. Non Institutional Portion of not less than
15,00,000 Equity Shares.
iii. Retail Portion of not less than 35, 00,000
Equity Shares.

5,00,00,000

1,50,00,000

3,50,00,000
[]
E
Issued, Subscribed and Paid Up share Capital
after the Issue

2,44,92,578 Equity Shares of ` 10/- each 24,49,25,780 []
F
Share Premium Account
Before the Issue 1,41,31,577 -
After the Issue [] []

1. The Issue has been authorized by a resolution of our Board of Directors dated August 20, 2011 and by a
resolution passed pursuant to section 81(1A) of the Companies Act, 1956 at the Extra Ordinary General
Meeting of the Shareholders of our Company held on September 21, 2011.

2. The Security Premium Account after the Issue shall be determined after the Book Building Process.



54

Details of change in Authorized Share Capital of our Company:
Date of
Shareholders
Meeting Resolution
Particulars of Increase
From To
On Incorporation- --
` 1,00,000 divided into 10,000 Equity
Shares of ` 10/- each
October 20, 2003
` 1,00,000 divided into 10,000 Equity
Shares of ` 10/- each
` 10,00,000 divided into 1,00,000 Equity
Shares of ` 10/- each
August 1, 2005
` 10,00,000 divided into 1,00,000
Equity Shares of ` 10/- each
` 25,00,000 divided into 2,50,000 Equity
Shares of ` 10/- each 25,00,000
March 21, 2007
` 25,00,000 divided into 2,50,000
Equity Shares of ` 10/- each
` 90,00,000 divided into 9,00,000 Equity
Shares of ` 10/- each
February 22, 2008
` 90,00,000 divided into 9,00,000
Equity Shares of ` 10/- each
` 3,00,00,000 divided into 30,00,000
Equity Shares of ` 10/- each
September 30, 2009
` 3,00,00,000 divided into 30,00,000
Equity Shares of ` 10/- each
` 3,50,00,000 divided into 35,00,000
Equity Shares of ` 10/- each
March 15, 2010
` 3,50,00,000 divided into 35,00,000
Equity Shares of ` 10/- each
` 9,16,00,000 divided into 91,60,000
Equity Shares of ` 10/- each
June 17, 2011
` 9,16,00,000 divided into 91,60,000
Equity Shares of ` 10/- each
` 16,00,00,000 divided into 1,60,00,000
Equity Shares of ` 10/- each

NOTES TO THE CAPITAL STRUCTURE:
1) Build up History of Paid-up Capital of our Company

Date of
Allotment/
Fully Paid up
Number
of Equity
Shares
Allotted
Face
Value
(`)
Issue
Price
(`)
Nature of
Consideration
Nature of
Allotment
Cumulative
No. of
Equity
Shares
Cumulative
Paid up
Share
Capital (`)
Cumulative
Share
Premium
(`)
On
Incorporation-
30 10 10 Cash
Subscriber to
Memorandum
30 300 Nil
December 04,
2002
9,970 10 10 Cash
Further
Allotment
10,000 1,00,000 Nil
March 31,
2004
30,000 10 10 Cash
Further
Allotment
40,000 4,00,000 Nil
August 24,
2005
2,00,000 10 10 Bonus Shares* Bonus 2,40,000 24,00,000 Nil
March 31,
2008
24,00,000 10 --
Bonus
Shares**
Bonus 26,40,000 2,64,00,000 Nil
Feb 15, 2010 4,95,000 10 10 Cash
Preferential
Allotment
31,35,000 3,13,50,000 Nil
March 22,
2010
15,67,500 10 --
Bonus
Shares***
Bonus 47,02,500 4,70,25,000 Nil
March 22,
2010
78,144 10 38 Cash
Preferential
Allotment
47,80,644 4,78,06,440 21,88,032
March 22,
2010
37,115 10 41 Cash
Preferential
Allotment
48,17,759 4,81,77,590 33,38,597
March 30,
2011
78,000 10 100 Cash Right Issue 48,95,759 4,89,57,590 1,03,58,597
June 24, 2011 36,71,819
Bonus
Shares****
Bonus 85,67,578 8,56,75,780 1,03,58,597
September 28,
2011
57,99,234 10 10 Cash
Preferential
Allotment
1,43,66,812 14,36,68,120 1,03,58,597
September 28,
2011
1,25,766 10 40 Cash
Preferential
Allotment
1,44,92,578 14,49,25,780 1,41,31,577



55

* Pursuant to EGM held on 24
th
August, 2005, our company has issued 2,00,000 Bonus Shares in the ratio of
five share each for every one share held.(5:1).
** Pursuant to EGM held on 31
st
March, 2008, our company has issued 24,00,000 Bonus Shares in the ratio of
ten share each for every one share held.(10:1).
*** Pursuant to EGM held on 22
nd
March, 2010, our company has issued 15,67,500 Bonus Shares in the ratio
of one share each for every two share held.(1:2).
****Pursuant to AGM held on 17
th
June, 2011, our company has issued 36,71,819 Bonus Shares in the ratio
of three share each for every four share held.(3:4).
2) We have not issued any Shares for consideration other than cash or out of revaluation reserves at any
point of time.

3) We have not allotted any shares under Section 391 394 of the Companies Act, 1956.

4) Our Company has not re-valued its assets since inception and has not issued any shares out of the
revaluation reserves.

5) We do not have any Employee Stock Option Scheme and have not issued any shares under the Employee
Stock Option Schemes at any point of time.

6) Our Company has not issued any Equity Shares at a price lower than the issue price during the preceding
one year from the date of filing of this Draft Red Herring Prospectus except as mentioned below:

Date of
Issue
Name of the Persons No. of Shares
Issue
Price
(`)
Reason for such issue
Whether
part of
Promoter
Group
28-Sept-11 Devendra B. Deshmukh 13,16,516 10 Preferential Allotment Yes
28-Sept-11 Ashish B. Gupta 8,67,854 10 Preferential Allotment Yes
28-Sept-11 Amol R. Pande 12,65,045 10 Preferential Allotment Yes
28-Sept-11 Jaywant Deshpande 2,66,847 10 Preferential Allotment Yes
28-Sept-11 Sunil Dane 1,67,467 10 Preferential Allotment Yes
28-Sept-11 Baburao W. Deshmukh 1,03,016 10 Preferential Allotment Yes
28-Sept-11 Bajranglal Gupta 4,00,111 10 Preferential Allotment Yes
28-Sept-11 Ramesh D. Pande 2,00,053 10 Preferential Allotment Yes
28-Sept-11 Padma Baburao Deshmukh 1,25,766 10 Preferential Allotment Yes
28-Sept-11 Preeti Pande 1,79,967 10 Preferential Allotment Yes
28-Sept-11 Avina Datta 4,00,111 10 Preferential Allotment Yes
28-Sept-11 Vikram Datta 25,744 10 Preferential Allotment Yes
28-Sept-11 Anuradha Bankar 89,909 10 Preferential Allotment Yes
28-Sept-11 Anil Hari Deshpande 68,267 10 Preferential Allotment Yes
28-Sept-11 Kavita Baburao Deshmukh 3,22,561 10 Preferential Allotment Yes

7) We have no intention or purpose to alter our Capital structure by way of split or consolidation of the
denomination of the shares, or issue of specified securities on a preferential basis or issue of bonus or
rights or further public issue of specified securities or qualified institutions placement, within a period of
six months from the date of opening of the present issue.



56

8) Promoters Shareholding Build-up:
Date of
Allotment
/ Transfer/
When
made fully
paid up
Nature of
Consideration
Nature of
Transaction
No. of
Equity
Shares
Face
Value
Issue/
Transfer
Price*
Cumulative
Shareholding
% of
Pre-
Issue
Paid
up
capital
% of
Post-
Issue
Paid up
capital
Lock in Period
Devendra B. Deshmukh
2-Aug-00 Cash
Subscription
to the
Memorandum
10 10 10 10 0.00 0.00
18,02,288
shares for
3 years
&
13,37,793
shares for
1 year
4-Dec-02 Cash Allotment 3,324 10 10 3,334 0.02 0.01
15-Dec-03 Cash Transfer -334 10 10 3,000 0.02 0.01
31-Mar-04 Cash Allotment 10,000 10 10 13,000 0.09 0.05
24-Aug-05 Bonus Allotment 65,000 10 - 78,000 0.54 0.32
6-Sep-06 Cash Transfer 1,800 10 10 79,800 0.55 0.33
31-Mar-08 Bonus Allotment 7,98,000 10 - 8,77,800 6.06 3.58
15-Dec-08 Cash Transfer -110 10 10 8,77,690 6.06 3.58
1-Mar-10 Cash Transfer -1,91,104 10 10 6,86,586 4.74 2.80
22-Mar-10 Bonus Allotment 3,43,293 10 - 10,29,879 7.11 4.20
13-Jun-11 Cash Transfer 12,159 10 10 10,42,038 7.19 4.25
24-Jun-11 Bonus Allotment 7,81,527 10 - 18,23,565 12.58 7.45
28-Sept-11 Cash
Preferential
Allotment
13,16,516 10 10 31,40,081 21.67 12.82
Ashish B Gupta
2-Aug-00 Cash
Subscription
to the
Memorandum
10 10 10 10 0.00 0.00
13,23,200
shares for
3 years
&
8,89,129
shares for
1 year
4-Dec-02 Cash Allotment 3,323 10 10 3,333 0.02 0.01
15-Dec-03 Cash Transfer -333 10 10 3,000 0.02 0.01
31-Mar-04 Cash Allotment 10,000 10 10 13,000 0.09 0.05
24-Aug-05 Bonus Allotment 65,000 10 - 78,000 0.54 0.32
6-Sep-06 Cash Transfer 1,800 10 10 79,800 0.55 0.33
31-Mar-08 Bonus Allotment 7,98,000 10 - 8,77,800 6.06 3.58
15-Dec-08 Cash Transfer -110 10 10 8,77,690 6.06 3.58
1-Mar-10 Cash Transfer -3,73,614 10 10 5,04,076 3.48 2.06
22-Mar-10 Bonus Allotment 2,52,038 10 - 7,56,114 5.22 3.09
13-Jun-11 Cash Transfer 12,158 10 10 7,68,272 5.30 3.14
24-Jun-11 Bonus Preferential 5,76,203 10 - 13,44,475 9.28 5.49
28-Sept-11 Cash Allotment 8,67,854 10 10 22,12,329 15.27 9.03
Amol Pande
2-Aug-00 Cash
Subscription
to the
Memorandum
10 10.00 10.00 10 0.00 0.00
17,11,028
shares for
3 years
&
12,86,320
shares for
1 year
4-Dec-02 Cash Allotment 3,323 10.00 10.00 3,333 0.02 0.01
15-Dec-03 Cash Transfer -333 10.00 10.00 3,000 0.02 0.01
31-Mar-04 Cash Allotment 10,000 10.00 10.00 13,000 0.09 0.05
24-Aug-05 Bonus Allotment 65,000 10.00 - 78,000 0.54 0.32
6-Sep-06 Cash Transfer 1,800 10.00 10.00 79,800 0.55 0.33
31-Mar-08 Bonus Allotment 7,98,000 10.00 - 8,77,800 6.06 3.58
15-Dec-08 Cash Transfer -110 10.00 10.00 8,77,690 6.06 3.58
1-Mar-10 Cash Transfer -2,25,870 10.00 10.00 6,51,820 4.50 2.66
22-Mar-10 Bonus Allotment 3,25,910 10.00 - 9,77,730 6.75 3.99
13-Jun-11 Cash Transfer 12,158 10.00 10.00 9,89,888 6.83 4.04
24-Jun-11 Bonus Allotment 7,42,415 10.00 - 17,32,303 11.95 7.07
28-Sept-11 Cash
Preferential
Allotment
12,65,045 10.00 10.00 29,97,348 20.68 12.24



57

Sunil Dane
15-Dec-03 Cash Transfer 500 10.00 10.00 500 0.00 0.00
2,60,726
shares for
3 years
&
1,67,466
shares for
1 year
24-Aug-05 Bonus Allotment 2,500 10.00 - 3,000 0.02 0.01
6-Sep-06 Cash Transfer -2,700 10.00 10.00 300 0.00 0.00
31-Mar-08 Bonus Allotment 3,000 10.00 - 3,300 0.02 0.01
15-Feb-10 Cash
Preferential
Allotment
2,47,500 10.00 10.00 2,50,800 1.73 1.02
1-Mar-10 Cash Transfer -1,51,476 10.00 10.00 99,324 0.69 0.41
22-Mar-10 Bonus
Preferential
Allotment
49,662 10.00 - 1,48,986 1.03 0.61
24-Jun-11 Bonus Allotment 1,11,739 10.00 - 2,60,725 1.80 1.06
28-Sept-11 Cash
Preferential
Allotment
1,67,467 10.00 10.00 4,28,192 2.95 1.75
Note: There are no shares pledged by the Promoters of our Company.

9) Share Holding pattern of our Company before and after the Issue:

Sr. No. Name of Promoters
Pre-IPO No
of Shares
% of Total
Shares
Post-IPO No of
Shares
% of Total
Shares
1 Devendra B. Deshmukh 31,40,081 21.67% 31,40,081 12.82%
2 Amol R. Pande 29,97,348 20.68% 29,97,348 12.24%
3 Ashish B. Gupta 22,12,329 15.27% 22,12,329 9.03%
4 Sunil Dane 4,28,192 2.95% 4,28,192 1.75%
Promoter Group


5 Anil Hari Deshpande 11,41,846 7.88% 11,41,846 4.66%
6 Bajranglal Gupta 8,56,383 5.91% 8,56,383 3.50%
7 Avina Datta 8,56,383 5.91% 8,56,383 3.50%
8 Kavita Baburao Deshmukh 7,13,654 4.92% 7,13,654 2.91%
9 Preeti Pande 5,70,922 3.94% 5,70,922 2.33%
10 Ramesh D. Pande 4,28,191 2.95% 4,28,191 1.75%
11 Baburao W. Deshmukh 2,85,460 1.97% 2,85,460 1.17%
12 Sonal Devendra Deshmukh 2,85,460 1.97% 2,85,460 1.17%
13 Padma Baburao Deshmukh 2,85,460 1.97% 2,85,460 1.17%
14 Vikram Datta 71,366 0.49% 71,366 0.29%
15 Others 2,19,503 1.52% 2,19,503 0.88%
Total 1,44,92,578 100.00% 2,44,92,578 59.17%

10) Except as stated below, our Promoters, Directors and Promoter Group have not undertaken any
transaction in Equity Shares during a period of six months preceding the date on which this Draft
Red Herring Prospectus is filed with SEBI:

Sr.
No.
Name of the Director /
Promoter / Promoter
Group
Date of the
Transaction
No. of
Equity
Shares
Total
Consideration
(`)
Price per
Equity Share
(`)
Nature of
Transaction
1. Devendra Deshmukh June 13, 2011
12,159 1,21,590
10 Purchase
2. Ashish B Gupta June 13, 2011
12,158 1,21,580
10 Purchase
3. Amol Gupta June 13, 2011
12,158 1,21,580
10 Purchase
Note: During the last six months, the maximum and minimum price for all transaction was ` 10



58

11) None of our Promoters, Promoter Group Entities, Directors or the relatives thereof have financed the
purchase of the Equity Shares of our Company by any other person or entity during the period of six
months immediately preceding the date of this Draft Red Herring Prospectus.

12) Promoters Contribution and Locked-in for three years:

Pursuant to Regulation 32 and 36 of the SEBI (ICDR) Regulation, 2009 an aggregate of 20% of the Post issue
capital of our Company held by the Promoters shall be locked in for a period of three years from the date of
allotment.

The details of such lock-in are as follow:
Date of
Allotment
/ Transfer/
When
made fully
paid up
Nature of
Consideration
Nature of
Transaction
No. of
Equity
Shares
Face
Value
Issue/
Transfer
Price*
Cumulative
Shareholding
% of
Pre-
Issue
Paid up
capital
% of
Post-
Issue
Paid up
capital
Lock in
Period(3
years)
Devendra B. Deshmukh
2-Aug-00 Cash Subscription to
Memorandum
10 10 10 10 0.00% 0.00%
18,02,288
shares


4-Dec-02 Cash Allotment 2,990 10 10 3000 0.02% 0.01%
31-Mar-04 Cash Rights Issue 10,000 10 10 13000 0.09% 0.05%
24-Aug-05 Bonus Allotment 65,000 10 - 78000 0.54% 0.32%
6-Sep-06 Cash Transfer 1,800 10 10 79800 0.55% 0.33%
31-Mar-08 Bonus Allotment 606786 10 - 686586 4.74% 2.80%
22-Mar-10 Bonus Allotment 343293 10 - 1029879 7.11% 4.20%
24-Jun-11 Bonus Allotment 772409 10 - 1802288 12.44% 7.36%
Ashish B Gupta
2-Aug-00 Cash Subscription to
Memorandum
10 10 10 10 0.00% 0.00%
13,23,200
shares
4-Dec-02 Cash Allotment 2,990 10 10 3000 0.02% 0.01%
31-Mar-04 Cash Rights Issue 10,000 10 10 13000 0.09% 0.05%
24-Aug-05 Bonus Allotment 65,000 10 - 78000 0.54% 0.32%
6-Sep-06 Cash Transfer 1,800 10 10 79800 0.55% 0.33%
31-Mar-08 Bonus Allotment 424276 10 - 504076 3.48% 2.06%
22-Mar-10 Bonus Allotment 252038 10 - 756114 5.22% 3.09%
24-Jun-11 Bonus Preferential 567085 10 - 1323200 9.13% 5.40%
Amol Pande
2-Aug-00 Cash Subscription to
Memorandum
10 10 10 10 0.00% 0.00%
1711028
shares

4-Dec-02 Cash Allotment 2,990 10 10 3000 0.02% 0.01%
31-Mar-04 Cash Rights Issue 10,000 10 10 13000 0.09% 0.05%
24-Aug-05 Bonus Allotment 65,000 10 - 78000 0.54% 0.32%
6-Sep-06 Cash Transfer 1,800 10 10 79800 0.55% 0.33%
31-Mar-08 Bonus Allotment 572020 10 - 651820 4.50% 2.66%
22-Mar-10 Bonus Allotment 325910 10 - 977730 6.75% 3.99%
24-Jun-11 Bonus Allotment 733297 10 - 1711028 11.81% 6.99%



59

Sunil Dane
15-Dec-03 Cash Transfer 300 10 10 300 0.00% 0.00%
260726
Shares
31-Mar-08 Bonus Allotment 3,000 10 - 3300 0.02% 0.01%
15-Feb-10 Cash
Preferential
Allotment
96024 10 10
99324 0.69% 0.41%
22-Mar-10 Bonus
Preferential
Allotment
49,662 10 -
148986 1.03% 0.61%
24-Jun-11 Bonus Allotment 111739 10 - 260726 1.80% 1.06%

Total 5097242

35.17% 20.81%
Note: The Equity shares that are being locked-in are eligible for computation of Promoters Contribution under
regulation 33(1) of the SEBI (ICDR) Regulation and are being locked-in under Regulation 36 of SEBI (ICDR)
Regulation.
The specific written consent has been obtained from the Promoters for inclusion of such number of their existing shares
and further subscription in the Issue, if any, to ensure minimum Promoters contribution subject to lock-in to the extent of
20% of Post-Issue Paid-up Equity Share Capital.

Shares acquired by the promoter in the secondary market:

Date Name
No. of Equity
Shares
Price
Value
(in `)
Nature of
Transaction
13-Jun-11
Devendra
Deshmukh
12,159 10 1,21,590 Purchase
13-Jun-11 Ashish Gupta 12,158 10 1,21,580 Purchase
13-Jun-11 Amol Pande 12,158 10 1,21,580 Purchase
6-Sep-06
Devendra
Deshmukh
1,800 10 18,000 Purchase
6-Sep-06 Ashish Gupta 1,800 10 18,000 Purchase
6-Sep-06 Amol Pande 1,800 10 18,000 Purchase
15-Dec-03 Sunil Dane 500 10 5,000 Purchase

13) The Promoters Contribution has been brought in to the extent of not less than the specified
minimum amount and from persons defined as promoters under the SEBI Regulations. All Equity
Shares which are to be locked-in as Promoters Contribution are eligible for computation of
Promoters Contribution in accordance with the SEBI Regulations. In relation to this, we confirm
that the minimum Promoters contribution of 20% of the post-Issue Capital, which is subject to
lock-in for three years, does not consist of:

i) Equity Shares acquired within three years before the filing of this Red Herring Prospectus with SEBI for
consideration other than cash and revaluation of assets or Capitalization of intangible assets or resulting
from a bonus issued by utilization of revaluation reserves or unrealized profits of our Company or from
bonus issue against Equity Shares which are ineligible for minimum Promoters contribution.

ii) Securities acquired by our Promoters, during the preceding one year at a price lower than the price at
which Equity Shares are being offered to the public in the Issue.

iii) Private placement made by solicitation of subscription from unrelated persons either directly or through



60

any intermediary

iv) Equity Shares issued to our Promoters on conversion of partnership firms into limited company.

v) Promoters contribution has been brought in to the extent of not less than the specified minimum lot and
from persons defined as promoters under SEBI (ICDR) Regulations, 2009.

vi) Equity Shares for which specific written consent has not been obtained from the respective shareholders
for inclusion of their subscription in the minimum Promoters contribution subject to lock-in.

vii) Pledged Equity Shares held by our Promoters.

Details of Shares Locked in for 1 Year:

In terms of regulation 37 of the SEBI (ICDR) Regulations, 2009, in addition to the Equity Shares proposed to
be locked-in as part of promoters contribution as stated above, the entire pre-issue equity share capital of the
Company consisting of 93,95,337 Equity Shares will be locked in for a period of one year from the date of
allotment in the Issue.

14) The Equity Shares forming part of Promoters contribution do not consist of any private placement made
by solicitation of subscription from unrelated persons, either directly or through any intermediary.

15) The securities which are subject to lock-in shall carry the inscription non-transferable and the non-
transferability details shall be informed to the Depositories. The details of lock-in shall also be provided to
the stock exchanges, where the shares are to be listed, before the listing of the securities.

16) Equity Shares held by promoters and locked-in can be pledged with any scheduled commercial bank or
public financial institution as collateral security for loan granted by such bank or institution provided that
the pledge of the Equity Shares is one of the terms of sanction of the loan. Further, the Equity Shares
constituting 20% of the post issue capital of our Company held by the promoters that are locked in for a
period of three years from the date of Allotment, may be pledge, only if, in addition to complying with the
aforesaid conditions, the loan has granted by the bank or financial institution for the purpose of financing
one or more of the objects of the issue.

17) In term of Regulation 40 of SEBI (ICDR) Regulations, the Equity Shares held by Promoter, which are
locked in for a period of three years from the date of Allotment, may be transferred to another promoter or
any other person of the Promoter Group or to a new Promoter(s) or persons in control of our Company
and the Equity Shares held by persons other than Promoters, which are locked in for a period of one year
from the date of Allotment, may be transferred to any other person holding shares prior to the Issue,
subject to continuation of lock-in with transferees for the remaining period and compliance with the SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

18) Our Promoters, Directors and Book Running Lead Manager to the Issue have not entered into any buy-
back, standby or similar arrangements with any person for any of the securities being issued through this
DRHP.

19) An over-subscription to the extent of 10% of the net offer to public can be retained for the purpose of
rounding off to the nearest integer during finalizing the allotment, subject to minimum allotment being



61

equal to [] Equity Shares, which is the minimum bid lot in this Issue.

Consequently, the actual allotment may go up by a maximum of 10% of the Net Issue to Public, as a result
of which, the post-issue paid up capital after the Issue would also increase by the excess amount of
allotment so made. In such an event, the Equity Shares held by the Promoter 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.

20) Since the entire application money is being called on application i.e. ` 10/- on Face Value and ` []
toward share premium, all the successful applications, shall be issued fully paid shares only.

21) The Pre-Issue and Post-Issue Shareholding Pattern of Promoters Group is as under:

Particulars
Pre-Issue Post-Issue

No. of
Shares
` 10/- each
% Holding
No. of
Shares
` 10/- each
% Holding
(a) Promoters 87,77,950 60.57% 87,77,950 35.84%
(b) Promoters Group

57,14,628

39.43%

57,14,628

23.33%
(c) Companies in which 10% or more of the share
capital is held by the Promoters/an immediate
relative of the Promoters/ a firm or HUF in which
the Promoters or any one or more of his immediate
Relatives is a member
-- -- -- --
(d) Companies in which Company mentioned in (c)
above holds 10% or more of the share capital
-- -- -- --
(e) HUF or firm in which the aggregate share of the
Promoters and his immediate relatives is equal to or
more than 10% of the total
-- -- -- --
(f) All persons whose shareholding is aggregated
for the purpose of disclosing in the DRHP as
"Shareholding of the Promoters Group".
-- -- -- --
(g) Others -- -- -- --
Total 1,44,92,578 100.00% 1,44,92,578 59.17%

22) The Pre-Issue and Post-Issue Shareholding Pattern of Our Company is as under:

Category of Shareholders
No. of
Shareholders
Pre Issue Post Issue
Number of
shares
%
Number of
shares
%
A. Shareholding of Promoter
and Promoter Group

1. Indian
Individuals/Hindu Undivided
Family
33 1,44,92,578 100.00% 2,44,92,578 59.17%
Central Government / State
Government(s)
- - - - -



62

Bodies Corporate - - - - -
Financial Institutions/Banks - - - - -
Any other - - - - -
Sub-Total (A)(1)
33 1,44,92,578 100.00% 2,44,92,578 59.17%
2. Foreign
Individuals (Non-resident
Individuals/Foreign Individuals)
- - - - -
Bodies Corporate - - - - -
Institutions - - - - -
Any other - - - - -
Sub-Total (A)(2) - - - - -
Total Shareholding of Promoter
and Promoter Group
(A)=(A)(1)+(A)(2)
33 1,44,92,578 100.00% 2,44,92,578 59.17%
B. Public Shareholding
1. Institutions - - - [] []
Mutual Funds/UTI - - - [] []
Financial Institutions/Banks - - - [] []
Central Government / State
Government(s)
- - - [] []
Venture Capital Funds - - - [] []
Insurance Companies - - - [] []
Foreign Institutional Investors - - - [] []
Foreign Venture Capital Investors - - - [] []
Any other - - - [] []
Sub-Total (B)(1) - - - [] []
2. Non-institutions - - -
Bodies Corporate - - - [] []
Individuals
i. Individual Shareholders holding
nominal share Capital up to ` 1
lac.
- - - [] []
ii. Individual shareholders holding
nominal share capital in excess of
` 1 Lac.
- - - [] []
Any other - - - [] []
Sub-Total (B)(2) - - - [] []
Total Public Shareholding (B) =
(B)(1) + (B)(2)
- - - [] []
C. Shares held by Custodians
and against which Depository
Receipts have been issued
- - - [] []
GRAND TOTAL (A)+(B)+(C)
33 1,44,92,578 100.00% 2,44,92,578 59.17%

23) As on the date of filing of this DRHP with SEBI, there are no outstanding warrants, options or rights to
convert debentures, loans or other financial instruments into our Equity Shares. The shares locked for 3
years by the Promoters are not pledged to any party/Bank/FI. The Promoters may pledge the Equity
Shares with banks or Financial Institutions as additional security for loan whenever availed by them from



63

banks/Financial Institutions, provided that pledge of shares is one of the terms of sanction of loan.
However, securities which are locked in for 3 years as minimum promoters contribution may be pledged,
only if, the loan has been granted by such banks or financial institutions for the purpose of financing one
or more of the objects of the issue.

24) In case of over-subscription in all categories, not more than 50% of the Net Issue to the Public shall be
available for allocation on a proportionate basis to Qualified Institutional Buyers (including specific
allocation of 5% within the category of QIBs for Indian Mutual Funds). Further a not less than 15% of the
Net Issue to the Public shall be available for allocation on a proportionate basis to Non- Institutional
Bidders and not less than 35% of the Issue shall be available for allocation on a proportionate basis to
Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price.

25) Under subscription, if any, in the Qualified Institutional Buyers Portion, Non-institutional Portion and
Retail Portion shall be allowed to be met with spill over from the other categories, at the sole discretion of
our Company and BRLM. However, if the aggregate demand by Mutual Funds is less than 5% of QIB
Portion, the balance share available for allocation in the Mutual Fund Portion will first be added to the
QIB Portion and be allocated proportionately to QIB Bidders

26) As on date of filing of the Red Herring Prospectus with SEBI, the entire Issued Share Capital of our
Company is fully paid-up.

27) Equity shares held by top ten shareholders:

(a) As on date of filing this Draft Red Herring Prospectus with SEBI:

Sr. No. Name of Shareholder
No. of Equity Shares
held
Percentage (%)
1. Devendra B. Deshmukh 31,40,081 21.67%
2. Amol R. Pande 29,97,348 20.68%
3. Ashish B. Gupta 22,12,329 15.27%
4. Anil Hari Deshpande 11,41,846 7.88%
4. Bajranglal Gupta 8,56,383 5.91%
5. Avina Datta 8,56,383 5.91%
7. Kavita Baburao Deshmukh 7,13,654 4.92%
8. Preeti Pande 5,70,922 3.94%
9. Sunil Dane 4,28,192 2.95%
10. Ramesh D. Pande 4,28,191 2.95%
TOTAL 1,33,45,329 92.08%

(b) Two year prior to the date of filing this Draft Red Herring Prospectus with SEBI:

Sr. No. Name of Shareholder
No. of Equity Shares
held
Percentage (%)
1. Devendra Deshmukh 8,77,690 33.25%
2. Amol Pande 8,77,690 33.25%
3. Ashish B Gupta 8,77,690 33.25%
4. Jaywant Deshpande 3,300 0.13%
5. Sunil Dane 3,300 0.12%
6. Baburao Wamanrao Deshmukh 110 -
7. Bajranglal Nandlal Gupta 110 -
8. Ramesh Damodar Pande 110 -
TOTAL 26,40,000 100.00%



64

(c) Ten Days prior to the date of filing this Draft Red Herring Prospectus with SEBI:

Sr. No. Name of Shareholder
No. of Equity Shares
held
Percentage (%)
1. Devendra B. Deshmukh 31,40,081 21.67%
2. Amol R. Pande 29,97,348 20.68%
3. Ashish B. Gupta 22,12,329 15.27%
4. Anil Hari Deshpande 11,41,846 7.88%
5. Bajranglal Gupta 8,56,383 5.91%
6. Avina Datta 8,56,383 5.91%
7. Kavita Baburao Deshmukh 7,13,654 4.92%
8. Preeti Pande 5,70,922 3.94%
9. Sunil Dane 4,28,192 2.95%
10. Ramesh D. Pande 4,28,191 2.95%
TOTAL 1,33,45,329 92.08%

28) The BRLM and their associates do not hold any shares in our Company.

29) There has been no sale or purchase of shares of the relatives of the promoters in the last six months.

30) Our Company has not raised any bridge loan against the proceeds of this Issue.

31) There would be no further issue of capital whether by way of issue of bonus shares, preferential allotment,
rights issue or in any other manner during the period commencing from submission of the Red Herring
Prospectus with SEBI until the Equity Shares issued through the Prospectus are listed or application
moneys refunded on account of failure of Issue.

32) Our Promoters and members of our Company will not participate in the Issue.

33) Our Company undertakes that at any given time, there shall be only one denomination for the Equity
shares of our Company and our Company shall comply with such accounting and disclosure norms as
specified by SEBI from time to time.

34) There is no Employees Stock Option Scheme or Employees Stock Purchase Scheme of Issuer Company.

35) The total number of members of our Company as on date of filing of DRHP with SEBI is 33.

36) The Promoters, Directors and Book Running Lead Manager to the Issue will not pay any amount, whether
directly or indirectly and in cash or kind, in the nature of discount, commission, allowance or otherwise to
any person for the subscription of this Initial Public Issue.

37) Our Company shall comply with such Disclosures and Accounting norms specified by SEBI from time to
time.




65

SECTION V: PARTICULARS OF THE ISSUE

e-Zest is a SEI-CMMi Level-3
*
and ISO 9001:2008
**
certified offshore software outsourcing company. As
part of our growth strategy, we propose to set up software development centre for 600 employees,
development product, overseas sales and delivery office and strategic investment in domestic company.
(A) OBJECTS OF THE ISSUE
(a) Setting up of Software Development Center
(b) Product/IP Development
(c) Setting up of an Overseas Sales and Delivery Offices
(d) Acquisition of Domestic Company
(e) Up-gradation of existing IT infrastructure
(f) Meeting IPO expenses

The main object clause of Memorandum of Association of our Company enables us to undertake the existing
activities and the activities for which the funds are being raised by us through the present Issue. Further, we
confirm that the activities which we have been carrying out till date are in accordance with the object clause of
our Memorandum of Association.

Particulars
Amount
(` in Lacs)
1. Software Development Center 2,374.86
Land and Site Development 450.00
Civil Works 764.00
Interior (seating of 600 employees) 603.88
IT Hardware & Software 556.98
2. Product/IP Development 765.96
3. Overseas Sales and Delivery Offices 303.15
4. Acquisition Of Domestic Co. 200.00
5. IT Infrastructure Up-Gradation 175.64
6. IPO Expenses []
Total []

1. Software Development Center
The break-down of the expenditure is as set forth below:
Land and Site development

The Company currently owns an office of two floors (2
nd
and 3
rd
Floor) admeasuring 7,245 sq feet at
Anand Nilay Business Center at Kothrud, Pune from where the company conducts its business. It
proposes to expand its existing facilities to increase its ability to accommodate additional personnel and
create additional space for its business in and around Pune. The company is still in the process of
identifying land ad-measuring approximately 1 acre for the same. The facilities will allow the company
to accommodate approximately 600 employees and it proposes to use the facilities for software
development and related activities. For the purpose of identification of land & its cost, the company has
appointed M/s. Legion Realty Services as real estate consultants, vide letter dated October 05, 2011. We
have been apprised by our consultants that the market price in & near the area of our choice i.e.
Hinjewadi & nearby (i.e. West Pune) and Kharadi & nearby (i.e. East Pune) in Pune, is approximately `
400 Lacs per acre. We will incur approx. ` 50 Lacs on Site Development activities for which we have
received estimates from R.P. Engineers and Projects Consultants Pvt. Ltd.



66

Building
The company proposes to construct a software development centre on the aforesaid space to
accommodate 600 employees and the estimated cost for such construction is ` 764 Lacs.

Interior and Fit Outs
The company proposes to expend a consolidated amount of ` 603.88 Lacs towards interior and fit out
expenses including expenditures towards electrical installations and power back up systems, furniture
and fixtures, air conditioning and ozone equipment, communications and networking equipment. We
have obtained estimates for construction of the building and interior fit outs of the structure from R P
Engineers & Project Consultants (P) Ltd vide their letter dated Sept 27, 2011 for an amount of `
1,367.88 Lacs.

The details of the estimate received are as follows:
Sr.
No.
Description
Rate/
Sq.
Meter
Area in
Sq. Meter
Total
(` in Lacs)
1 RCC framed structure 19,668.00
2,322.6
456.81
2
Making stronger foundations to take load of one additional
floor at a later date (on area of additional floor only )
1,862.50
43.26

3 Resisting Earthquake forces 938.70 21.80
4
Stronger structural members to take heavy load above 500
Kgs/sq.m upto 1000 Kgs/sq.m
1,266.50
29.42

5 Larger modules over 35 sq.m 1,475.10 34.26
6 With sprinkler system 670.50

15.57
7 Automatic Fire Alarm System 447.00 10.38
8 Internal water supply & sanitary installations 649.64 15.09
9 External service connections 812.05 18.86
10 Internal electric installations 2,030.13 47.15
11 Power wiring and plugs 649.64

15.09
12 Telephone conduits 81.21 1.89
13 Computer conducting 81.21 1.89
14 Quality assurance 162.41 3.77
15 Lifts (2 Lifts) 40.00
16 Water Tank ( 600 * 100 * 9 / Litres) 2.70
17 Site Development 75.00 6.07
18 Interiors 26,000.00 2,322.6 603.88
Total 1,367.88

IT Hardware & Software
The Company shall require adequate number and latest versions of servers, computers, printers, software,
and other office equipment. A brief set of the estimated requirements for the above items are as follows.
We have obtained quotations from M/s. Askari Infotech Pvt. Ltd., vide quotation dated October 11,
2011 for the following:



67

Particulars Quantity
Amount
(` in Lacs)
Technology and equipment cost
IT Hardware
Computer Desktops 550 253.52
Laptops 50 27.86
Servers 8 19.99
Firewall, network switches and routers 59.05
Storage 1 11.74
Computing Software
Microsoft Licenses (Windows, Windows Server, Exchange,
SharePoint, Visual Studio, MS CRM, System Center, SQL Server, Lync
Server )
182.52
Oracle Database Licenses 1 1.90
Adobe tools Licenses (Dreamweaver, Photoshop, Flash platform) 1 0.40
Office Communications Equipment 5.00
Total 556.98

2. Product Development (Solution Accelerators)
With an experience of over a decade, e-Zest has recently built and conceptualized tools, components,
solutions and practices which helps its clients to reduce the overall software development time and time to
market. It terms all these artifacts as Solution Accelerators.

It has piloted and practiced some of these accelerators and is very confident that if it invests more in building
and packaging them, it will help client and e-Zest further in the following ways:
Development Acceleration: It will help accelerate the software development of what e-Zest is having its
core business, since the company will be starting the development from partially build solution as against
development from scratch there will be significant lead in development.
High Margin business: The Company will be able to charge premium for the value delivery by e-Zest in
client application/ product (including reduction of time to market). Clients who cannot afford to wait
longer for their IT systems will be willing to pay e-Zest premium rates.
IP creation for long term revenue: These solution Accelerators will be e-Zests Intellectual property.
Also, e-Zest will put it into use so that long term continuous (pay per use) billing can be achieved
wherever these accelerators are implemented.
Unique positioning: Showcasing the expertise to prospects regarding the domain maturity and technical
competency as a winning edge over other competitors. This will help the company in positioning itself as
a niche player since it will be having the USP of delivering the solution faster in more reliable manner.
Consulting business opportunities: Having these accelerators will be handy in showcasing the
company as knowledgeable players whenever software development is to be done faster. This way e-Zest
will move up on a value chain since these accelerator tools will be used as consulting tools.
e-Zest want to build some more solution accelerators to Fast track the development specifically in
emerging technology areas viz. Cloud based SaaS, Semantic Web Applications, Mobile and Application
Migration.



68

Brief description of some of these accelerators is as below:
(i) Cloud rusher: These will be SaaS platform accelerators for multi tenancy, personalization, subscription,
security and billing services that allow quick implementation on cloud development or migration. It will
be a collection of Tools/ practices and frameworks that help one assess and test performance of the
application deployed in cloud. These accelerators will have cloud vendor neutral deployment tools to
help seamless migration from one cloud to another.
(ii) Data Skimmer: This is a tool that is capable of data extraction (including data scraping), data
transformation, data enrichment, and data re-presentation. This tool in full or in parts can be used for any
sector where information is available in discrete sources, formats and is required to structure it, correlate
it and make it usable for decision making.
(iii) Web-UI modernizer Accelerator: This is a migration tool that allows quicker migration of user
interface from older technologies into a new technology. Struts to Flex, Struts to GWT led user interface
building, excel to flex, converting user interface/ reports into web-service/ APIs are the examples of
migrations where this tool will be able to provide the efforts and schedule compression of more than
50%.
(iv) eZeLife: This is a collection of components/ tools/ utilities/ applications/ workflows that are required for
the collaboration in any medium to big size organization. Be it a research institute, non-profit
organization, bigger enterprise, pharmaceutical company or any other knowledge driven industry. These
solutions are built on the mature platforms like MS-SharePoint, Liferay and Moodle.
(v) Domain and Technology Accelerators: Many re-usable components like business application related
modules, its subscription, billing management, multi-tenant application and database isolation models are
developed and used across multiple projects.
(vi) Methodology Accelerators: Software Development methodology specially targeted for developing the
software fastest possible ways. Fine tuning of tools like Code generator for automatic code writing for
simple logic. In addition to that tuning of architecture, project management practices, and organizational
practices for handling the development that can be turned around in the fastest possible way.
The company shall require ` 765.96 Lacs of investment to realize this unique differentiation of solution
accelerators. This investment will be consumed in terms of human resource requirements and other office
supporting activities. A briefly set out of estimated requirements for the above items are discussed below:
Rationale for Capitalization of expenses
As per Accounting Standard 26 on Intangible Assets issued by the Council of the Institute of Chartered
Accountants of India, the expenses planned to be incurred by the company fall within the purview of
development on account of the following reasons:
The company has intentions and capabilities to complete the product and sell it.
The products so developed are expected to generate long term financial benefits and there is a mature and
developed market for the product so developed.
(` in Lacs)
Description F.Y. 2012-13
Salaries /Human Resources/Recruitment Expenses 616.96
Office maintenance and expenses 47.00
Office Rent 72.00
Marketing/ Brand Building Expenses 30.00
Total 765.96



69

The development and commercialization of Solution Accelerators would involve outlay of funds in the form
of pre-operative expenses towards human resources, office rent and maintenance expenses, marketing fees etc.
These expenses being in the nature of product development expenditure, whose benefit will accrue to our
company over the useful life-period of the products are proposed to be capitalized as asset of the company.

(i) Detailed break-up of the above cost-estimates are as under:
(` in Lacs)
Profile \ No of employees F.Y. 2012-13
Management (Sr. / middle level) 108.00
Development (Programmers) 240.00
Testing 86.40
Design (Designers) 30.60
DBA (Administrator) 30.00
Hardware (Engineers) 14.40
Content & Communication 6.48
Sales & Marketing 36.48
Customer Care & after sales 15.00
HR and Administration 12.60
Recruitment Agency 37.00
TOTAL 616.96

Management (senior / middle level): The company would be employing 3 officials in the senior
management category, including CEO and 5 other officials in the middle level management.
Development (Programmers): E-zest intends to hire 50 programmers for the development of solution
accelerators. The programmers would be on full time basis for various applications related to solution
accelerators.
Testing: It would require 12 specialist engineers for testing and implementation of solution accelerators.
Design (Designers): Designers are required for developing and maintaining user interfaces for internet
and intranet web applications and also creating and designing logos, icons, presentations, Brochures,
Reports, Demo Slides, and CD Covers etc. The company would be requiring 1 senior designer and 3
other designer.
DBA (Administrator): 5 administrators are required for managing SQL Servers, Oracle, My SQL and
DB2 platforms.
Network Engineers: An Administrator and 3 Engineer is proposed for the maintenance of the system
and network support. They would be responsible for the smooth functioning of the entire system and
ensure continuous up gradation depending upon the requirements.
Content and Communication: For creating awareness, company proposes to employ 3 executives for
various public relations and technical write-ups on the functioning of the company.
Sales and Marketing: It intends to employ about 8 executives in various levels for product marketing
and market research including for international market.
Customer Care and after sales: For after sales service and client relationship, the company proposes to
have 5 executives including for global market. Their prime responsibility would be to ensure client
satisfaction and be available on call.
HR and Administration: A senior executive is proposed for managing the HR and one more is
proposed for Administration of our solution accelerator team.




70

Recruitment agency: We utilize the service of M/s MDK Consultancy Services having registered office
at 201, Picasso Kedari Icon, Salunke Vihar Road, Kondhawa, Pune for full filling its manpower
requirements. We shall continue using the service for meeting our future requirements as well. In
addition to the services of the recruitment agency .we shall also be recruiting suitable personnel who
apply directly on our website, through Campus recruitment or through referrals.

(ii) Office maintenances and expenses
(` in Lacs)
Particulars F.Y. 2012-13
Office consumables 6.00
Travel Expenses 21.00
Repairs & Maintenance 6.00
Electricity & Electricals 12.00
Telephone & Communication 2.00
Total 47.00

(iii) Office Rent

The company proposes to operate from rented furnished premises admeasuring 10,000 Sq.Ft. We have
received estimated rental from M/s. Legion Realty Services as real estate consultants, vide letter dated
October 05, 2011. We have been apprised by our consultants that the estimated rental in & near the area of our
choice i.e. Hinjewadi & nearby (i.e. West Pune) and Kharadi & nearby (i.e. East Pune) in Pune, is
approximately ` 60/- per sq.ft. Based on the above, the license fee for the FY 2012-13 works out to ` 72 Lacs.
(iv) Marketing & Brand Building Fees

We intend to engage a marketing agency for product marketing and market research for international market
for the promotion of the newly developed software IP solution Accelerators. Our Company has appointed
Iternia - Branding & Communication as marketing and brand building agency to achieve higher visibility
and gain wider geographical reach internationally.

3. Investment in Setting Up Overseas Sales And Delivery Offices:
e-Zest intends to manage its global expansion by setting up sales and delivery offices in locations based in US,
UK and Australia. These offices would be opened either as branch office of the Company or as wholly owned
subsidiaries of the Company in those countries keeping in view various operational and local factors. The
company has already made an application in this regard to Reserve Bank of India vide Letter dated October
11, 2011.
The objective and functions of these operations are / shall be as follows:
Direct Sales and supporting to large customers.
Developing and managing a network of business partners and strategic alliances.
Marketing and brand building including participation in tradeshows / business events.
Considering current client base, in-house market survey and inputs from various investment bodies, it has
finalized Chicago IL, in USA, London in UK and Sydney NSW in Australia as prospective subsidiary
locations.
These offices are expected to stabilize their functions and establish themselves in about 1 year from the date
of start-up spanning Fiscals 2012. Therefore, all the outgoings in running and maintaining these offices up-to



71

March 31, 2013 have been made a part of the outlay of the present Project. These include hardware
installations, rent and salaries of personnel to be recruited and posted in those places.
(` in Lacs)
Description F.Y. 2012-13
Office Rent and Deposits for acquiring office spaces in US,UK and Australia 34.40
Salaries of Onsite leadership and Sales Team representatives 264.60
Hardware/Software Installations 4.15
Total 303.15

i. Office Rent & Deposits thereof
The company proposes to operate from rented furnished premises admeasuring 350-420 Sq.Ft at Chicago IL,
in USA, London in UK and Sydney NSW in Australia. We have received estimated rental from M/s. Global
Realty Management Inc. as real estate consultants, vide letter dated October 15, 2011 ranging approximately
` 200-300/- per sq.ft. Based on the above, the Office Rent for the FY 2012-13 at the above mentioned
overseas location works to be approximately ` 31.75 Lacs and a deposit of one month rental is envisaged.

Country Currency Rate per Sq. Ft. per month
US USD ($) $2.50 - $2.75
UK GBP () 3.40 - 3.60
Australia AUD ($) $3.20 - $3.35

ii. Salaries of Onsite leadership and Sales Team representatives

Detailed break-up of the above cost-estimates are as under:
(` in Lacs)
Profile \ No of employees F.Y. 2012-13
Management (Sr. / middle level) 108.00
Sales & Marketing 36.48
Customer Care & after sales 15.00
TOTAL 616.96

Management (senior / middle level):The company would be employing 3 senior management
Personnel (one at each site)

Sales and Marketing: It intends to employ about 9 executives (three at each site) for product
marketing and market research for international market.

Customer Care and after sales: For after sales service and client relationship, the company proposes
to have 6 executives(two at each site) for global market. Their prime responsibility would be to ensure
client satisfaction and be available on call.

The companys overall strategy for business growth is envisioned around a three-dimensional model
Consolidation, Globalization and Verticalization . The company has developed capability in the field of
Mobile application development services in the recent past.
As part of growth strategies of Globalization and Verticalization, the company intends to enhance its
capabilities and continue developing industry expertise, technical expertise and geographic coverage.
However, the company strongly believes that strategic investments and acquisitions at a right valuation may
act as an enabler to growing business and consolidate its position and accelerate its drive to establish the
company as a prominent IT solutions provider. It continuously monitors, to identify strategic opportunities
that would fit with its business. The recent acquisitions will enhance the companys presence and deliverance



72

capabilities across broader domain and further seek to enhance its position as a specialized player in IT
solution and services industry.
4. Acquisitions And Other Strategic Initiatives
Our Company intends to raise funds for proposed Acquisitions. It is a key component of our strategy to grow
through acquisitions and strategic partnerships. The acquisition will be by way of acquiring the equity of the
target or in any other manner as may be deemed feasible. These initiatives will be governed by medium to
long term goals and other business objectives. Accordingly, we intend to earmark and use a part of the Issue
proceeds (` 200 Lacs) for strategic investments in domestic companies by way of equity participation.
The company has shortlisted two companies already & signed non-disclosure agreement for discussions &
negotiations. The companys growth strategy involves gaining new clients and expanding its service offerings,
both organically and through strategic acquisitions.
It seeks to further enhance its position in the outsourced product engineering and enterprise IT services
industry and widen its service offerings through strategic acquisitions in existing or new industry sectors.
Towards the end, the company proposes to target companies in India and overseas which have expertise in the
domain in which they operate in and which have strong client base.
The companys acquisition strategy is to target IPR focused and niche companies having a strong customer
base and market share with a strong management bandwidth. It may use a combination of cash and stock, if
required, to make these acquisitions.
In order to achieve the above it has already identified and initiated discussions with certain target companies
that have strong service offerings and IPR mainly in the following verticals:
Usability and Design led development capabilities
Cloud computing related produce or services companies
In pursuit of which it continuously evaluate opportunities based on several factors including: -foray into
certain geographies / access newer markets with potential to enhance our global positioning, -augment our
service offerings, etc.
Towards this end, company proposes to target companies that:
have expertise in the domain it operates in
offer strong strategic fit to its existing business(es) or serving connected extensions
have new customers that it can serve with its existing capabilities
newer technological platform synergies with the companys domain
have new capabilities to serve existing customers
have a good client base
enhancing its geographical reach.

It has not yet entered into any definitive commitment for any acquisition, investment or joint venture.
It proposes to utilize such part of the Net Proceeds allocated for acquisition purposes by March 31, 2013.
5. Infrastructure Up-gradation
To keep pace with the planned growth and to be able to manage the growth systematically, e-Zest operations
at all locations need to have state of the art and secure facilities.
The Company has earmarked ` 175.64 Lacs from the net proceeds of the Issue for upgrading IT Infrastructure
of current software development Centre and ISO 27001 Certification.



73

It plans to procure upgraded hardware and software required in order to carry out software development
activities more efficiently in the current premises at 2
nd
and 3
rd
Floor at Anand Nilay Business Center at
Kothrud, Pune.
Adequate security measures are taken to ensure the information and physical security of the companys IT
infrastructure. CCTVs and other security measures will be deployed at all locations to ensure best possible
physical security. Checkpoint Firewall is deployed at Central office on the Internet link to protect its
countrywide network from external attacks and threats.
The company will get certified its business operations to ISO 27001 to meet various compliance requirements
which are essential for global operations. These certifications will also help the company to achieve
Operational Excellence and Customer Delight.
It shall require adequate number and latest versions of servers, computers, printers, software for which we
have obtained quotations from M/s. Askari Infotech Pvt. Ltd., vide quotation dated October 11, 2011. It
briefly sets out its estimated requirements for the above items:
Sr.
No.
Description Quantity
Amount
(` in Lacs)
1. ISO 27000 Consulting and Certification 10.00
2. Computer Desktops 110 50.70
3. Computers Laptops 45 25.07
4.
Servers (Mail server, Database servers, Communication server, system
server)
6 14.99
5. Storage 1 11.74
6. Other Softwares (Graphics and Designs etc.)

Microsoft Licenses (Windows, Windows Server, Exchange, SharePoint,
Visual Studio, MS CRM, System Center, SQL Server, Lync Server )
1 60.83
Oracle Database Licenses 1.90
Adobe tools Licenses (Dreamweaver, Photoshop, Flash platform) 0.40
Total 175.64

6. IPO Expenses:
The initial public offer for shares shall involve various costs like Merchant Bankers fees, Fees to financial
advisors, Fees to auditors and solicitors, Listing fees and Offer marketing expenses. This fee is expected to be
` [] Lacs with the under mentioned details:

Sr. No. Description
Amount
(` in Lacs)
1 Lead Managers and Financial Advisors Fees []
2 Registrars Fees []
3 Financial and Legal Advisors Fees []
4 IPO Grading Expenses []
5 Printing, Stationary, Postage and dispatch []
6 Issue advertisement and Publicity expenses []
7 Other Expenses including SEBI, BSE, NSE, NSDL, CDSL etc. []
8 Broking Expenses []
9 Contingencies []
Total []



74

Working capital requirement
The Net Proceeds of this Issue will not be used to meet our working capital requirements as we expect
sufficient internal accruals and availability of working capital facilities to meet our working capital
requirements. However, in the event that there is surplus of funds after deployment from the Net Proceeds of
the Issue, the funds may be utilized towards reducing our reliance on working capital facilities.
Project Consultants and Statutory Approvals
Our Company has appointed R. P. Engineers & Project consultants (Pvt.) Ltd., a consulting engineering
company offering project implementation services, as their civil engineers and contractors for implementing
the entire projects. The contractors have successfully completed a number of projects earlier. The scope of
their services includes concept planning to commercial construction including technology planning.
(B) REQUIREMENT OF FUNDS
The fund requirement and deployment are based on internal management estimates and have not been
appraised by any bank or financial institution. These are based on current conditions and are subject to change
in light of changes in external circumstances or costs, other financial conditions, business or strategy, as
discussed further below.
In case of variations in the actual utilization of funds allocated 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 Issue. If surplus funds are unavailable, the required
financing will be through our internal accruals and/or debt. We shall recoup the expenses incurred up to the
listing of the Equity Shares towards the objects of the Issue from the Net Proceeds.
(C) MEANS OF FINANCE
Particulars Amount (` in Lacs)
Proceeds from the IPO []
Internal Accruals []
Total []
(D) APPRAISAL
The funds requirement and funding plans are our own estimates and have not been appraised by any bank/
financial institution or appraising agency.
(E) SCHEDULE OF IMPLEMENTATION
(` in Lacs)
Deployment Schedule
Till
November 3,
2011
FY 2012 FY 2013 Total
1. Setting up of Software development
Centre
(No of Seats envisaged-600)
- 400.00 1974.86 2374.86
2. Acquisition and other Strategic - - 200.00 200.00
3. Overseas deployment of funds - - 303.15 303.15
4. IT Infrastructure Up gradation - 175.64 - 175.64
5. IPO Issue Expenses 40.02 [] [] []
6. Product Development - - 765.96 765.96
Total 40.02 [] [] []



75

(F) DEPLOYMENT OF FUNDS
We may make payments toward our Objects of the Fresh Issue, before we obtain proceeds from the Fresh
Issue, through other means and source of financing, including loan or other financial arrangements, which
then will be repaid from the proceeds of the Fresh Issue.
(G) SOURCES OF FINANCING OF FUNDS ALREADY DEPLOYED
The funds already deployed have been financed through internal accruals.
(H) DEPLOYMENT OF FUNDS IN THE PROJECT
As on the date of this Draft Red Herring Prospectus, we have incurred an amount of ` 40.02 Lacs towards
Issue Expenses which has been certified by Sajjan Kanodia & Co., Chartered Accountants vide their
certificate dated November 3, 2011.
(I) INTERIM USE OF FUNDS
Pending utilization of the Fresh Issue proceeds for the Objects of the Issue, we intend to temporarily invest the
Fresh Issue proceeds in high quality interest bearing liquid instruments including money market mutual funds,
deposits with banks, for the necessary duration as permitted under the SEBI Regulation.
Such investments and other utilizations would be in accordance with investment policies approved by our
Board or any committee thereof duly empowered, from time to time. Our Company confirms that pending
utilization of the Issue proceeds; it shall not use the funds for any investments in the equity markets.
Monitoring Utilization of Funds
Our Audit Committee will also monitor the utilization of the Issue Proceeds. We will disclose the utilization
of the Issue proceeds under separate head in our balance sheet for the Financial Year 2012 and 2013.
Further, on an annual basis, our Company shall prepare a statement of funds utilized for purposes other than
those stated in the Draft Red Herring Prospectus and place it before the Audit Committee. The said disclosure
shall be made till such time that the full money raised through the Issue has been fully spent.Further, our
Company will furnish to the Stock Exchanges on a quarterly basis, a statement indicating material deviations,
if any, in the use of Issue Proceeds from the Objects stated in the Draft Red Herring Prospectus. Pursuant to
Clause 49 of the listing agreement, our Company shall on a quarterly basis disclose to the Audit Committee
the uses and application of the Issue Proceeds.We will also, in our balance sheet till such time the Issue
Proceeds have been utilized, provide details, if any, in relation to all such Issue Proceeds that have not been
utilized thereby also indicating investments, if any, of such unutilized Issue Proceeds.
No part of the Issue Proceeds of this issue will be paid as consideration to our Promoters, Directors, Key
managerial employees or Group Concerns/Companies promoted by our Promoters.
(J) BASIC TERMS OF ISSUE
The Equity Shares being offered are subject to the provisions of the Companies Act, our Memorandum and
Articles of Association, the terms of this DRHP, the DRHP, Bid cum Application Form, the Revision Form,
the Confirmation of Allocation Note 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, 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.



76

(K) BASIS FOR ISSUE PRICE
The Issue Price of ` [] will be determined by our Company in consultation with the BRLM, on the basis of
assessment of market demand from the investors for the offered Equity Shares by way of Book Building
Process. The face value of the Equity Shares is ` 10 and the Issue Price is [] times the face value at the lower
end of the Price Band and [] times the face value at the higher end of the Price Band.
Qualitative Factors
Some of the qualitative factors which form the basis for computing the prices are:
Broad product development services offering including value-added products and services.
Long-term relationships with customers.
Depth of experience and knowledge in targeted industry segments/verticals.
Investment in new technology areas.
Track record of well-established sophisticated processes.
Strong team of highly skilled professionals and management.
Quantitative Factors
Information presented in this section is derived from our restated consolidated audited financial information
prepared in accordance with Indian GAAP.

Some of the quantitative factors which may form the basis for computing the Issue Price are as follows:
Basic and Diluted Earnings per Share (EPS)
i. As per our restated Consolidated audited financial statements:
Particulars Weight Consolidated
Basic EPS (`) Diluted EPS (`)
Year ended March 31, 2009 1 1.60 1.60
Year ended March 31, 2010 2 1.18 1.18
Year ended March 31, 2011 3 2.79 2.79
Weighted Average EPS 2.06 2.06

ii. As per our restated Standalone audited financial statements
Particulars Weight Standalone
Basic EPS (`) Diluted EPS (`)
Year ended March 31, 2009 1 1.53 1.53
Year ended March 31, 2010 2 1.12 1.12
Year ended March 31, 2011 3 2.81 2.81

Weighted Average EPS
2.03 2.03
6 Months ended Sept 30, 2011 (Annualized) 2.96 2.96

Note:
a) Earnings per share calculations are in accordance with Accounting Standard 20 Earnings per Share.



77

b) The face value of each Equity Share is ` 10/-.
c) The Basic/Diluted earnings per share (`) are calculated by dividing the net profit after tax for the period
attributable to equity shareholders by the weighted average number of equity shares outstanding during the
period.

iii. Price Earnings Ratio (P/E) in relation to the Issue Price of ` [] per share
P/E ratio in relation to the Floor Price [] times
P/E ratio in relation to the Cap Price [] times
P/E based on the EPS as per our restated standalone financial
statements for the period ended September 30, 2011
[] times
P/E ratio based on weighted average EPS [] times
Peer Group P/E [] times
*P/E Ratio will be determined on conclusion of book building process.

Industry P/E Name of the Company P/E
Highest Cura Technologies Ltd 47.4
Lowest E-dserv SoftSytems Limited 3.7
Average Hexaware Technologies 19.9
Source: Capital Market, Volume XXVI/17, Oct17Oct 30, 2011. (Industry Computers Software Medium /Small)

iv. Return on Average (RoNW) as per restated Indian GAAP financials (RoNW):
As per our restated audited financial statements
Particulars Weights
Based on consolidated
audited financials
Based on Standalone
audited financials
Year Ended March 31, 2009 1 27.37% 26.52%
Year Ended March 31, 2010 2 17.63% 16.93%
Year Ended March 31, 2011 3 30.42% 31.54%
Weighted Average Net Worth 25.65% 25.83%
6 Months ended September 30,
2011(Annualized)
19.09%

Minimum Return on Increased Net Worth required for maintaining pre-issue EPS is [].
v. Net Asset Value Per Share*
(a) Net Asset Value per Equity Share as of March 31, 2011 is ` 11.03 based on restated consolidated
audited financials and Net Asset Value per Equity Share as of September 30, 2011 on standalone Basis
is ` 19.53.
(b) After the Issue : ` []
(c) Issue Price # : ` []
* Net Asset Value per Equity Share represents net worth, as restated, divided by the number of Equity
Shares outstanding at the end of the period. The NAV is post-bonus.
# Issue Price will be determined on the conclusion of the Book Building Process.



78

Comparison with Industry Peers

The Company cannot be compared with the other listed companies, as the company doesnt have apparent
listed competitor in the segment, in which it is operating. The comparable ratios of the companies which are to
some extent similar in business and could be relevant to a limited extent are as given below:

Name of the Company
Year/
Period
Ended
Sales
(` in Lacs)
Face
Value
(`)
EPS
(`)
P/E
Ratio
RoNW
(%)
NAV
(`)
Axis IT & T March 2011 3720 5 3.10 39.5 - 12.9
Cura Technologies Ltd. March 2011 1300 10 3.20 47.4 8.2 86.9
Soft sol India Ltd. March 2011 1070 10 3.30 16.8 9.9 103.3
Source: Capital Market, Volume XXVI/17, Oct17 Oct 30, 2011. (Industry Computers Software Medium /Small)
Note: EPS, RONW and NAV figures are based on the latest audited results and P/E is based on trailing twelvemonths (TTM).
The face value of our Equity Shares is ` 10 each and the Issue Price is [] times of the face value of our
Equity Shares.
The Issue is being made through a 100% Book Building Process. The Issue Price of ` [] has been determined
by the Company, in consultation with the BRLM on the basis of the demand from investors for the Equity
Shares through the Book-Building Process and is justified based on the above accounting ratios. For further
details, see the Risk Factors on Page No. 12 and the financials of our Company including important
profitability and return ratios, as set out in the Financial Statements on Page No. 134 to have a more
informed view.




79

(L) STATEMENT OF TAX BENEFITS

To,
The Board of Directors,
e-Zest Solutions Limited,
Mumbai 400 092.

Sub: Certification of statement of Possible Tax Benefits in connection with Initial Public Offering by e-
Zest Solutions Limited (the Company) under Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations 2009 (the Regulations)

We, Sajjan Kanodia and Co, the statutory auditors of the Company have been requested by the management of
the Company having its registered office at the above mentioned address to certify the statement of tax
benefits to the Company and its Shareholders under the provisions of the Income Tax Act, 1961, Wealth Tax
Act, 1957 and Gift Tax Act, 1958 presently in force in India as of date in connection with the proposed Initial
Public Offerings of the Company.

Several of these benefits are dependent on the Company or its Shareholders fulfilling the conditions
prescribed under the relevant tax laws and their interpretations. Hence, the ability of the Company or its
Shareholders to derive tax benefits is dependent upon fulfilling such conditions, which based on business
imperatives the Company faces in the future, the Company may or may not choose to fulfill.

The benefits discussed in the enclosed statement are not exhaustive nor conclusive. The contents stated in the
annexure are based on the information, explanations and representations obtained from the Company. This
statement is only intended to provide general information and to guide the investors and is neither designed
nor intended to be a substitute for professional tax advice. A shareholder is advised to consult his/ her/ their
own tax consultant with respect to the tax implications of an investment in the equity shares particularly in
view of the fact that certain recently enacted legislation may not have a direct legal precedent or may have a
different interpretation on the benefits, which an investor can avail. Further, we have also incorporated the
amendments brought out by the Finance Act, 2011 where applicable. 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; the conditions prescribed for availing the benefits have been / would be met with; or the revenue
authorities/ courts will concur with the views expressed herein.

Our views are based on the existing provisions of law and its interpretations, which are subject to change from
time to time. We do not assume responsibility to up-date the views of such changes.

This report is intended solely for your information and for inclusion in the Offer Document in connection with
the proposed Initial Public Offering of the Company and is not to be used, referred to or distributed for any
other purpose without our prior written consent.

For Sajjan Kanodia & Co.
Chartered Accountants
Sd/-
CA. Yogesh Palsania

Partner
Membership No.124760
Firm Registration No.114587W
Place: Mumbai
Date: October 11, 2011



80

ANNEXURE

Statement of Special Tax Benefits:

1. The Company has set up a 100% Export Oriented Unit under the STP scheme for the development and
export of Computer Software/ IT enabled Services. The Company is availing exemption under Section 10A,
subject to fulfillment of all the conditions specified therein, of the Income Tax Act, 1961 for the same. No
deduction under Section 10A shall be allowed to any undertaking from the assessment year 2012-13.

There are no special tax benefits available to the shareholders.

Statement of General Tax Benefits available to the Company & its Shareholder under the Income Tax
Act, 1961 (ITA) and other Direct Tax Laws presently in force in India:

I. Benefits available to the Company

1. As per Section 10(34) of the ITA, any income by way of dividends referred to in Section 115 O (i.e.
dividends declared, distributed or paid on or after 1st April, 2003 by domestic companies) received on the
shares of any company is exempt from tax. Moreover, the company will also be entitled to avail the credit of
dividend received by it from its subsidiaries in accordance with the provisions of section 115-O (1A) on which
tax on distributed profits has been paid by the subsidiary. Furthermore, the amount of above said dividend
shall be reduced by amount of dividend paid to any person for the New Pension System Trust referred to in
clause (44) of section 10 of the ITA.

As per Section 10(35) of the ITA, the following income will be exempt in the hands of the Company;
(a) Income received in respect of the units of a Mutual Fund specified under clause (23D) of Section 10; or
(b) Income received in respect of units from the Administrator of the specified undertaking; or
(c) Income received in respect of units from the specified company.

However, this exemption does not apply to any income arising from transfer of units of the Administrator of
the specified undertaking or of the specified Company or of a mutual fund, as the case may be.

For this purpose (i) Administrator means the Administrator as referred to in Section 2(a) of the Unit Trust
of India (Transfer of Undertaking and Repeal) Act, 2002 and (ii) Specified Company means a Company as
referred to in Section 2(h) of the said Act.

2. As per Section 2(29A) read with Section 2(42A), shares held in a company or a Unit of a Mutual Fund
specified under clause (23D) of Section 10 are treated as long term capital asset if the same are held by the
assessee for more than twelve months period immediately preceding the date of its transfer. Accordingly, the
benefits enumerated below in respect of long term capital assets would be available if the shares in a company
or a Unit of a Mutual Fund specified under clause (23D) of Section 10 are held for more than twelve months.

3. As per Section 10(38) of the ITA, long term capital gains arising to the company from the transfer of long
term capital asset being an equity share in a company or a unit of an equity oriented fund where such
transaction is chargeable to securities transaction tax will be exempt in the hands of the Company.

For this purpose, Equity Oriented Fund means a fund:
i. where the investible funds are invested by way of equity shares in domestic companies to the extent of more
than sixty five percent of the total proceeds of such funds; and



81

ii. which has been set up under a scheme of a Mutual Fund specified under Section 10(23D) of the ITA. As
per Section 115JB, while calculating book profits, the Company will not be able to reduce the long term
capital gains to which the provisions of Section 10(38) of the ITA apply and will be required to pay Minimum
Alternate Tax @ 18.5% (plus applicable surcharge and education cess) of the book profits.

4. As per Section 54EC of the ITA and subject to the conditions and to the extent specified therein, long-term
capital gains (in cases not covered under Section 10(38) of the ITA) arising on the transfer of a long-term
capital asset will be exempt from capital gains tax to the extent such capital gains are invested in a long term
specified asset within a period of 6 months after the date of such transfer. It may be noted that investment
made on or after April 1, 2007 in the long term specified asset by an assessee during any financial year cannot
exceed ` 50 Lacs.

However, if the assessee transfers or converts the long term specified asset into money within a period of three
years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable
to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted
into money.

A. long term specified asset for making investment under this section on or after 1st April 2007 means any
bond, redeemable after three years and issued on or after the 1st April 2007 by:

(i) National Highways Authority of India constituted under Section 3 of the National Highways Authority of
India Act, 1988; or

(ii) Rural Electrification Corporation Limited, a company formed and registered under The Companies Act,
1956.

5. As per Section 111A of the ITA, short term capital gains arising to the Company from the sale of equity
share or a unit of an equity oriented fund transacted through a recognized stock exchange in India, where such
transaction is chargeable to securities transaction tax, will be taxable at the rate of 15% (plus applicable
surcharge and education cess).

6. As per Section 112 of the ITA, taxable long-term capital gains, if any, on sale of listed securities or units or
zero coupon bonds will be charged to tax at the concessional rate of 20% (plus applicable surcharge and
education cess) after considering indexation benefits in accordance with and subject to the provisions of
Section 48 of the ITA or at 10% (plus applicable surcharge and education cess) without indexation benefits, at
the option of the Company. Under Section 48 of the ITA, the long term capital gains arising out of sale of
capital assets excluding bonds and debentures (except Capital Indexed Bonds issued by the Government) will
be computed after indexing the cost of acquisition/ improvement.

7. Under Section 115JAA(1A) of the ITA, credit is allowed in respect of any Minimum Alternate Tax (MAT)
paid under Section 115JB of the ITA for any assessment year commencing on or after April 1, 2006. Tax
credit eligible to be carried forward will be the difference between MAT paid and the tax computed as per the
normal provisions of the ITA for that assessment year. Such MAT credit is allowed to be carried forward for
set off purposes for up to 10 years succeeding the year in which the MAT credit is allowable.

8. The company will be entitled to amortize preliminary expenses being the expenditure incurred on public
issue of shares, under Section 35D(2)(c)(iv) of the Act, subject to the limit specified in Section 35D(3) and
fulfillment of requirements u/s 35(1) (ii).



82

9. Deduction under Section 32: As per provisions of Section 32(1)(iia) of the Act, the company is entitled to
claim additional depreciation of 20% of the actual cost of any new machinery or plant which has been
acquired and installed after 31st March, 2005 subject to fulfillment of conditions prescribed therein.

10. Short-term capital loss suffered during the year shall be set off against income if any under the head
capital gain; balance loss, if any, could be carried forward for set off against capital gains of future years up to
eight subsequent assessment years.

11. Long-term capital loss suffered during the year is allowed to be set-off only against long-term capital
gains; balance loss, if any, could be carried forward for eight years for claiming set-off against subsequent
years long-term capital gain.

II. Tax Benefits available to shareholders of the Company under the Income Tax Act, 1961
A. Resident shareholders

1. Under Section 10(32) of the IT Act, any income of minor children who is a shareholder of the Company
clubbed in the total income of the parent under Section 64(1A) of the IT Act, will be exempt from tax to the
extent of ` 1,500 per minor child whose income is so included in the income of the parent.

2. The Company is required to pay a dividend distribution tax currently at the rate of 16.223% (including
applicable surcharge and education cess) on the total amount distributed or declared or paid as dividend
(interim/final). Under Section 10(34) of the IT Act, income by way of dividend referred to in Section 115-O
of the IT Act, received on the shares of the Company is exempt from income tax in the hands of shareholders.
However, it is pertinent to note that Section 14A of the IT Act restricts claims for deduction of expenses
incurred in relation to exempt income. Thus, any expenses incurred to earn the dividend income are not an
allowable expenditure.

3. The characterization of the gains/losses, arising from transfer of shares, as capital gains or business income
would depend on the nature of holding (whether for investment or carrying on trading in shares) in the hands
of the shareholder and various other factors.

4. (a) The long-term capital gains (under section 2(29B) of the IT Act) accruing to the shareholders of the
Company on sale of the Companys shares in a transaction carried out through a recognized stock exchange in
India, and where such transaction is chargeable to securities transaction tax (STT), is exempt from tax as per
provisions of Section 10(38) of the IT Act.

(b) The short-term capital gains (under section 2(42A) of the IT Act) accruing to the shareholders of the
Company on transfer of the Companys equity shares in a transaction carried out through a recognized stock
exchange in India, and where such transaction is chargeable to STT, tax will be chargeable at 15% (plus
applicable surcharge and education cess) as per provisions of Section 111A of the IT Act. Further no
deduction under Chapter VI-A of the IT Act, would be allowed in computing such short term capital gains
subjected to tax under Section 111A. In other cases, where the transaction is not subjected to STT, the short
term capital gains would be chargeable as a part of the total income and the tax rates would depend on the
income slab.

(c) As per the provisions of Section 112 of the IT Act, long term gains accruing/ arising to the shareholders of
the Company from the transfer of shares/ securities of the Company being listed in recognized stock
exchanges, where no security transaction tax is paid then it is chargeable to tax at 10% (plus applicable



83

surcharge and education cess) after deducting from the sale proceeds the cost of acquisition without
indexation or chargeable to tax at the rate of 20% (plus applicable surcharge and education cess) after
claiming the benefit of indexation , surcharge and education cess, whichever is lower. Under Section 48 of the
IT Act, the long term capital gains arising out of sale of capital assets excluding bonds and debentures (except
Capital Indexed Bonds issued by the Government) will be computed after indexing the cost of acquisition /
improvement.

(d) Shareholders are entitled to claim exemption in respect of tax on long term capital gains (other than those
exempt under Section 10(38) of the IT Act) under Section 54EC of the IT Act, if the amount of capital gains is
invested in certain specified bonds / securities within six months from the date of transfer, subject to the
fulfillment of the conditions specified therein. The maximum investment permissible on and after April 1,
2007 for the purposes of claiming the exemption in the notified bonds, by any person in a financial year, is `
50 Lacs. However, according to Section 54EC(2) of the IT Act, if the shareholder transfers or converts the
notified bonds into money within a period of three years from the date of their acquisition, the amount of
capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which
such bonds are transferred or otherwise converted into money.

(e) Shareholders that are individuals or Hindu undivided families can avail of an exemption under Section 54F
of the IT Act, by utilization of the net consideration arising from the transfer of the Companys share held for
a period of more than 12 months (which is not exempt under Section 10(38)), for purchase / construction of a
residential house within the specified time period and subject to the fulfillment of the conditions specified
therein.

5. As per Section 74 Short-term capital loss suffered during the year is allowed to be set-off against short-term
as well as long-term capital gains of the said year. Balance loss, if any, could be carried forward for eight
years for claiming set-off against subsequent years short term as well as long term capital gains. Long-term
capital loss suffered during the year is allowed to be set-off against long term capital gains. Balance loss, if
any, could be carried forward for eight years for claiming set-off against subsequent years long-term capital
gains.

6. As per section 56 (2) (vii) Where an individual or a Hindu undivided family receives from any person on or
after the 1st day of October, 2009, any property, (moveable/immovable property includes shares & securities
[being capital asset of the assessee],

(i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of
the aggregate fair market value of such property shall be chargeable to income-tax under the head Income
from other sources;

(ii) for a consideration which is less than the aggregate fair market value of the property by an amount
exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such
consideration shall be chargeable to income-tax under the head Income from other sources.

Provided that this clause shall not apply to any property received:
(a) from any relative;
(b) on the occasion of the marriage of the individual;
(c) under a will or by way of inheritance;
(d) in contemplation of death of the payer or donor, as the case may be;



84

(e) from any local authority as defined in the Explanation to clause (20) of Section 10 of the IT Act;
(f) from any fund or foundation or university or other educational institution or hospital or other medical
institution or any trust or institution referred to in clause (23C) of Section 10 of the IT Act; or
(g) from any trust or institution registered under Section 12AA of the IT Act.

B. Non-resident shareholders other than Foreign Institutional Investors
1. Under Section 10(32) of the IT Act, any income of minor children, who is a shareholder of the Company,
which is clubbed with the total income of the parent under Section 64(1A) of the IT Act, will be exempt from
tax to the extent of ` 1,500 per minor child whose income is so included.
2. The Company is required to pay a dividend distribution tax currently at the rate of 16.223% (including
applicable surcharge and education cess) on the total amount distributed or declared or paid as dividend.
Dividend (whether interim or final) declared, distributed or paid, under Section 115-O of the IT Act, by the
Company are exempt in the hands of shareholders as per the provisions of Section 10(34) of the IT Act.
However, it is pertinent to note that Section 14A of the IT Act restricts claim for deduction of expense
incurred in relation to exempt income. Thus, any expenses incurred to earn the dividend income are not an
allowable expenditure.
3. The characterization of the gains/losses, arising from transfer of shares, as capital gains or business income
would depend on the nature of holding (whether for investment or carrying on trading in shares) in the hands
of the shareholder and various other factors.
4. The long-term capital gains accruing/ arising to a shareholder of the Company, being a non-resident, on
transfer of the Companys equity shares in a transaction carried out through a recognized stock exchange in
India, and where such transaction is chargeable to STT, is exempt from tax as per provisions of Section 10(38)
of the IT Act.
5. The short-term capital gains accruing/ arising to a shareholder of the Company on transfer of the
Companys equity shares in a transaction carried out through a recognized stock exchange in India, and where
such transaction is chargeable to STT, tax is chargeable at 15% (plus applicable surcharge and education cess)
as per provisions of Section 111A of the IT Act. Further, no deduction under Chapter VI-A and rebate would
be allowed in computing such short term capital gains subjected to tax under Section 111A. In other case, i.e.
where the transaction is not subjected to STT, the short term capital gains would be chargeable as a part of the
total income and the tax rate would depend on the income slab.
6. As per the provisions of Section 112 of the IT Act, long term gains accruing/ arising to the shareholders of
the Company from the transfer of shares/ securities of the Company being listed in recognized stock
exchanges, where no security transaction tax is paid then it is chargeable to tax at 10% (plus applicable
surcharge and education cess) after deducting from the sale proceeds the cost of acquisition without
indexation or chargeable to tax at the rate of 20% (plus applicable surcharge and education cess) after
claiming the benefit of indexation surcharge and education cess, whichever is lower.
7. Under the provisions of Section 90(2) of the IT Act, if the provisions of the Double Taxation Avoidance
Agreement (DTAA) between India and the country of residence of the non-resident are more beneficial, then
the provisions of the DTAA shall be applicable.
8. The shareholders are entitled to claim exemption in respect of tax on long term capital gains other than
those exempt under Section 10(38) of the IT Act under Section 54EC of the IT Act, if the amount of capital
gains is invested in certain specified bonds / securities within six months from the date of transfer subject to



85

the fulfillment of the conditions specified therein. The maximum investment permissible for the purposes of
claiming the exemption in the notified bonds by any person in a financial year is ` 50 Lacs. However,
according to Section 54 EC(2) of the IT Act, if the shareholder transfers or converts (otherwise than by
transfer) the notified bonds into money within a period of three years from the date of their acquisition, the
amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the
year in which such bonds are transferred or otherwise converted (otherwise than by transfer) into money.
9. Individual shareholders can avail of an exemption under Section 54F by utilization of the net consideration
arising from the sale of companys share held for a period more than 12 months (which is not exempt under
Section 10(38)), for purchase/construction of a residential house within the specified time period and subject
to the fulfillment of the conditions specified therein.
10. As per the first proviso to section 48, capital gains arising from the transfer of shares of the Company,
shall be computed by converting the cost of acquisition, expenditure incurred wholly and exclusively in
connection with such transfer and the full value of the consideration received or accruing as a result of the
transfer of the capital asset into the same foreign currency as was initially utilised in the purchase of the
shares. Cost Indexation benefit will not be available in such a case. The capital gains so computed in such
foreign currency shall be reconverted into Indian currency and such manner of computation of capital gains
shall be applicable in respect of capital gains accruing or arising from every reinvestment thereafter in, and
sale of, shares of the Company.
11. As per Section 74 Short-term capital loss suffered during the year is allowed to be set-off against short-
term as well as long-term capital gains of the said year. Balance loss, if any, could be carried forward for eight
years for claiming set-off against subsequent years short term as well as long term capital gains. Long-term
capital loss suffered during the year is allowed to be set-off against long term capital gains. Balance loss, if
any, could be carried forward for eight years for claiming set-off against subsequent years long-term capital
gains.
12. As per section 56 (2) (vii) where an individual or a Hindu undivided family receives from any person on
or after the 1st day of October, 2009, any property, (moveable/immovable property which includes shares &
securities [being capital asset of the assessee],
(i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of
the aggregate fair market value of such property shall be chargeable to income-tax under the head Income
from other sources;
(ii) for a consideration which is less than the aggregate fair market value of the property by an amount
exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such
consideration shall be chargeable to income-tax under the head Income from other sources.
Provided that this clause shall not apply to any property received:
(a) from any relative; or
(b) on the occasion of the marriage of the individual; or
(c) under a will or by way of inheritance; or
(d) in contemplation of death of the payer or donor, as the case may be; or
(e) from any local authority as defined in the Explanation to clause (20) of Section 10 of the IT Act; or
(f) from any fund or foundation or university or other educational institution or hospital or other medical
institution or any trust or institution referred to in clause (23C) of Section 10 of the IT Act; or
(g) from any trust or institution registered under Section 12AA of the IT Act.



86

13. As per Section 115E of the ITA, in the case of a shareholder being a Non-Resident Indian, and subscribing
to the shares of the Company in convertible foreign exchange, in accordance with and subject to the
prescribed conditions, long term capital gains arising on transfer of the shares of the Company (in cases not
covered under Section 10(38) of the ITA) will be subject to tax at the rate of 10% (plus applicable surcharge
and education cess), without any indexation benefit.
14. As per Section 115F of the ITA and subject to the conditions specified therein, in the case of a shareholder
being a Non-Resident Indian, gains arising on transfer of a long term capital asset being shares of the
Company will not be chargeable to tax if the entire net consideration received on such transfer is invested
within the prescribed period of six months in any specified asset or savings certificates referred to in Section
10(4B) of the ITA. If part of such net consideration is invested within the prescribed period of six months in
any specified asset or savings certificates referred to in Section 10(4B) of the ITA then such gains would not
be chargeable to tax on a proportionate basis. Further, if the specified asset or savings certificate in which the
investment has been made is transferred within a period of three years from the date of investment, the amount
of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in
which such specified asset or savings certificates are transferred.
15. As per Section 115G of the ITA, Non-Resident Indians are not obliged to file a return of income under
Section 139(1) of the ITA, if their only source of income is income from specified investments or long term
capital gains earned on transfer of such investments or both, provided tax has been deducted at source from
such income as per the provisions of Chapter XVII-B of the ITA.
16. As per Section 115H of the ITA, where Non-Resident Indian becomes assessable as a resident in India, he
may furnish a declaration in writing to the Assessing Officer, along with his return of income for that year
under Section 139 of the ITA to the effect that the provisions of Chapter XIIA shall continue to apply to him
in relation to such investment income derived from the specified assets for that year and subsequent
assessment years until such assets are converted into money.
17. As per Section 115I of the ITA, a Non-Resident Indian may elect not to be governed by the provisions of
Chapter XII-A for any assessment year by furnishing a declaration along with his return of income for that
assessment year under Section 139 of the ITA, that the provisions of Chapter XII-A shall not apply to him for
that assessment year and accordingly his total income for that assessment year will be computed in accordance
with the other provisions of the ITA.
For the purpose of aforesaid clauses Non-Resident Indian means an Individual, being a citizen of India or a
person of Indian origin who is not a resident. A person shall be deemed to be of Indian origin if he, or either of
his parents or any of his grand-parents, was born in undivided India.
C. Non-resident shareholders Foreign Institutional Investors
1. The Company is required to pay a dividend distribution tax currently at the rate of 16.223% (including
applicable surcharge and education cess) on the total amount distributed or declared or paid as dividend
(interim/final). Under Section 10(34) of the IT Act, income by way of dividend referred to in Section 115-O
received on the shares of the Company is exempt from income tax in the hands of shareholders. However it is
pertinent to note that Section 14A of the IT Act restricts claim for deduction of expenses incurred in relation
to exempt income.
2. The characterization of the gains/losses, arising from sale of shares, as capital gains or business income
would depend on the nature of holding (whether for investment or trading in Equity Shares) in the hands of



87

the shareholder and various other factors.
3. (a) The long-term capital gains accruing to the shareholders of the Company on sale of the Companys
shares in a transaction carried out through a recognized stock exchange in India, and where such transaction is
chargeable to STT, is exempt from tax as per provisions of Section 10(38).
(b) The short-term capital gains accruing / arising to the members of the Company on sale of the Companys
equity shares in a transaction carried out through a recognized stock exchange in India, and where such
transaction is chargeable to STT, tax will be chargeable at 15% (plus applicable surcharge and education cess)
as per provisions of Section 111A. In other case, i.e. where the transaction is not subjected to STT, as per the
provisions of Section 115AD of the Act, the short term capital gains would be chargeable to tax at 30% plus
applicable surcharge and education cess.
(c) As per the provisions of Section 115AD of the Act, long term gains accruing to the shareholders of the
Company from the transfer of shares of the Company being listed in recognized stock exchanges and
purchased in foreign currency, otherwise than as mentioned in point 3(a) above, are chargeable to tax at 10%
(plus applicable surcharge and education cess). The benefit of indexation and the adjustment with respect to
fluctuation in foreign exchange rate would not be allowed to such shareholders. The filing of return under
section 139(1) for income computed under Section 115AD is mandatory. Further, where the Gross Total
Income (GTI) of the members includes any income on which tax has been paid as per special rates provided
under Section 115AD, then the GTI shall be reduced by the amount of such income and deduction under
chapter VIA shall be allowed in respect of reduced GTI.
(d) The shareholders are entitled to claim exemption in respect of tax on long term capital gains under Section
54EC of the IT Act, if the amount of capital gains is invested in certain specified bonds /securities within six
months from the date of transfer subject to the fulfillment of the conditions specified therein. The maximum
investment permissible for the purposes of claiming the exemption in the notified bonds by any person in a
financial year is ` 50 Lacs. However, according to section 54 EC(2) of the IT Act, if the shareholder transfers
or converts (otherwise than by transfer) the notified bonds into money within a period of three years from the
date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long
term capital gains in the year in which such bonds are transferred or otherwise converted (otherwise than by
transfer) into money.
4. Under the provisions of Section 90(2) of the IT Act, if the provisions of the DTAA between India and the
country of residence of the non-resident are more beneficial, then the provisions of the DTAA shall be
applicable.
5. As per Section 74 Short-term capital loss suffered during the year is allowed to be set-off against short-term
as well as long-term capital gains of the said year. Balance loss, if any, could be carried forward for eight
years for claiming set-off against subsequent years short term as well as long term capital gains. Long-term
capital loss suffered during the year is allowed to be set-off against long term capital gains. Balance loss, if
any, could be carried forward for eight years for claiming set-off against subsequent years long-term capital
gains.

III. Tax Benefits available to the shareholders under the Wealth Tax Act, 1957
Equity Shares of company held by the shareholder will not be treated as an asset within the meaning of
Section 2(ea) of Wealth Tax Act, 1957. Hence no Wealth Tax will be payable on the market value of shares of
the Company held by the shareholder of the Company.



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IV. Tax Benefits available to the shareholders under the Gift Tax Act, 1958
Gift Tax is not leviable in respect of any gifts made on or after 1st October, 1998. Therefore, any gift of shares
of the Company will not attract gift tax.
V. Benefits available to Mutual Funds
As per the provisions of Section 10(23D) of the IT Act, any income of Mutual Funds registered under the
SEBI Act, 1992 or regulations made thereunder, Mutual Funds set up by public sector banks or public
financial institutions or Mutual Funds authorised by RBI would be exempt from income tax, subject to the
conditions as the Central Government may by notification in the Official Gazette specify in this behalf.
VI. Tax Deduction at Source
No income-tax is deductible at source from income by way of capital gains under the present provisions of the
IT Act, in case of residents. However, as per the provisions of section 195 of the IT Act, any income by way
of capital gains, payable to non-residents (other than long-term capital gains exempt under section 10(38) of
the IT Act), may be eligible to the provisions of with-holding tax, subject to the provisions of the relevant tax
treaty. Accordingly income tax may have to be deducted at source in the case of a non- resident at the rate
under the domestic tax laws or under the tax treaty, whichever is beneficial to the assessee unless a lower
withholding tax certificate is obtained from the tax authorities. As per section 196D, no tax is to be deducted
from any income, by way of capital gains arising from the transfer of shares payable to Foreign Institutional
Investor.
Notes: The above Statement of Possible Direct Tax Benefits sets out the provisions of law in a summary
manner only and is not a complete analysis or listing of all potential tax consequences of the purchase,
ownership and disposal of equity shares; The above Statement of Possible Direct Tax Benefits sets out the
possible tax benefits available to the Company and its shareholders under the current tax laws presently in
force in India;
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, the changing tax laws, each investor is advised to consult his or her own tax consultant with
respect to the specific tax implications arising out of their participation in the issue;
In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further subject
to any benefits available under the Double Taxation Avoidance Agreement, if any, between India and the
country in which the non-resident has fiscal domicile; and The stated benefits will be available only to the
sole/first named holder in case the shares are held by joint shareholders.



89

SECTION VI: ABOUT THE ISSUER

A. INDUSTRY OVERVIEW

Overview

The Indian information technology sector continues to be one of the sunshine sectors of the Indian economy
showing rapid growth and promise. Poised to become a US$ 225 billion industry by 2020, the Indian
information technology (IT) industry has played a key role in putting India on the global map.
The Indian Software Industry has been a remarkable success story. It has grown more than 30 % annually for
the past 20 years. Indian software firms quickly moved up the value chain, from performing low cost
programming abroad to providing comprehensive software development services from India for overseas
clients. An abundant pool of Indian technical manpower, due to early government investment in technical
education, created a series of elite technical and management institutes that responded to a severe global
shortage of technical manpower.
Intense quality and productivity improvements built client value and today these Indian companies deliver a
wider range of software development tasks, as well as benefits in new service segments such as product
design and information science (IS) outsourcing. Many firms have met top certification requirements for
quality standards in demand around the world. New frontiers in data protection practices are moving quickly
to the top of the agenda.
As per estimates of Center for Monitoring Indian Economy report, the software industrys net sales to grow by
a healthy 17.8 per cent in 2011-12. This growth will be over and above a 16.8 per cent sales growth estimated
in 2010-11. Higher business volumes and a rise in billing rates will drive the growth in sales. With an
improvement in the demand for IT services, the Indian IT industry isset to register higher client additions
during the year. The industry is also expected to witness a rise in discretionary spending by existing clients.
Billing rates are expected to increase by 2-5 per cent in the wake of improved demand, rising inflation and
higher wages. Increased revenue from non-linear business models will also aid to the industrys sales
growth.The industrys wage bill, the largest cost head, is likely to rise in line with the growth in sales in 2011-
12, increasing by 17.5 per cent. IT companies are expected to increase hiring in order to meet the rise in
demand. TCS and Infosys plan to take onboard over 60,000 campus recruits in 2011-12. They are also likely
to hike the wages of existing employees to combat the rise in attrition. However, the revenue per employee is
likely to improve with a rise in sales realisations. Consequently, it is expected that the PBDIT margin to
remain flat at 29 per cent.The PAT margin is, however, likely to contract by 100 basis points to 19.3 per cent
in2011-12, mainly on account of a sharp 40.6 per cent rise in the industrys tax outgo.With the expiry of STPI
scheme in March 2011 and the imposition of MAT at 18.5percent on the book profits of SEZ developers as
well as units, the industrys tax expense is expected to rise in 2011-12
(Source: Indian Industry a Monthly Review, Centre for Monitoring Indian Economy, February 2011 Update)

The Indian software industry faced pressure on its billing rates during the economic slowdown at two of its
major export destinations, the US and UK. Various projects were shelved or delayed. Hence, IT companies
either reduced their billing rates or kept them stable to sustain the order inflows. However, with an
improvement in the demand for IT services, the industry is set to witness an uptick in billing rates in 2011-12.
The revival in demand for the IT services since the last four quarters ending December 2010 was reflected in
the healthy top-line growth of the industry. Its sales grew in the range of 11-19 per cent during this period.
However, a sluggish bottom line growth is still a cause of concern for the industry. The profit margins have
been consistently registering a contraction on a y-o-y basis over the past four quarters. This was mainly on



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account of a stable pricing environment coupled with a sharp rise in the industrys wage bill. The Indian IT
companies hired employees in large numbers during the past few quarters, in order to meet the increased
demand for IT services. The top three IT firms by sales - TCS, Infosys and Wipro together added over
70,000 net employees during the last four quarter. With increased hiring, IT companies also faced high staff
turnover. In order to retain talent, the IT companies are giving higher wage hikes to employees. Also, with
rising inflation, wages are bound to rise. Clients are also taking Indias high inflation levels into account. IT
contracts are likely to come up with a clause that allows for fluctuations in pricing. Companies like TCS and
Infosys also expect higher discretionary spending in the coming quarter. The improved business environment
in the US will drive IT spending and offshoring in the coming quarter. The industry is also tapping emerging
markets for growth. Hence, with improved demand, rising inflation and a higher wage bill, the industry is
expected to increase the billing rates by 2-5 percent in 2011-12. Higher billing rates will not only lead to an
improvement in revenues, but will also aid an improvement in profit margins. The Indian IT industry has
followed fixed price contracts over the year. Such contracts are characterized by billing rates being based on
the number of hours contributed by each employee involved in the project. However, as companies become
larger in terms of employee strength, the revenue growth does not take place in proportion to an increase in
the headcount. Hence, companies are now focusing on the outcome and usage based models. These are non-
linear growth models which help the IT companies improve their revenues and profitability. Companies like
Infosys, TCS and Wipro are expected to generate at-least 10 per cent of their incremental revenues from non-
linear initiatives such as cloud computing services in 2011-12.
(Source: www.ibef.org viz. India Brand Equity Foundation)

B. BUSINESS OVERVIEW
Company Overview
e-Zest is a global software product engineering and enterprise application development company having
expertise in emerging technologies such as cloud computing/SaaS, business intelligence and mobility. While
serving them with best quality services, we also offer our customers the benefit of offshore delivery.
e-Zest designs, develops, enhances, migrates, tests and maintains software products and applications for its
existing customers. Its service offerings span all over the product life-cycle, which enables it to work with
wide requirements and thus gives horizontal experience of working with software products.
e-Zest has exhaustive experience of working with ISVs, IT services, healthcare, finance, manufacturing,
government, and travel business verticals. To offer value added services and cutting edge technology solutions
to customers from these verticals, e-Zest invests in emerging technologies such as cloud computing, business
intelligence and mobility. Its enhanced services offerings allow it to attract new customers and strengthen its
existing customer relationships.
e-Zest always tries to maximize customers core business by delivering high quality products in short period
that will service their end clients efficiently. e-Zests product engineering services aim to ease project
management burdens, reduce time-to-market, improve the product quality, reduce product failure and thus
improve predictability and reliability of the development process.
e-Zests customers range from enterprises to web startups. It has forged strong professionals relationships with
its customers over a period of time. e-Zest always seek opportunities to add value to its customer business and
build new business. It offers flexible business models and pricing structure making engagement more
rewarding to its customers.



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Our Location:
Existing:
Our Corporate Office & Software Development Center operates from 2nd and 3rd Floor, Anand Nilay
Business Center, Near Karve Statue, Karve Road, Kothrud, Pune 411029. Our Registered Office is located
at B-103, PushpVinod, S.V. Road, Borivali (W), Mumbai - 400092.
Project:
Our proposed locations for our project are:
a) Software Development Centre - Pune.
b) Onshore Delivery Centre Chicago (USA), London (UK) and Sydney (Australia).

1.) Plant and Machinery for Software Delivery Centre
Supplier: M/s. Askari Infotech Pvt Ltd,
Quotation Date: October 11, 2011
Particulars Quantity
Amount
(` in Lacs)
Technology and equipment cost

IT Hardware

Computer Desktops 550 253.52
Laptops 50 27.86
Servers 8 19.99
Firewall, network switches and routers 59.05
Storage 1 11.74
Computing Software
Microsoft Licenses (Windows, Windows Server, Exchange,
SharePoint, Visual Studio, MS CRM, System Center, SQL
Server, Lync Server )
182.52
Oracle Database Licenses 1 1.90
Adobe tools Licenses (Dreamweaver, Photoshop, Flash
platform)
1 0.40
Office Communications Equipment 5.00
Total 556.98

2.) Plant and Machinery for IT Infrastructure Upgradation
Supplier: M/s. Askari Infotech Pvt Ltd,
Quotation Date: October 11, 2011
Sr.
No.
Description Quantity
Amount
(` in Lacs)
1. ISO 27000 Consulting and Certification 10.00
2. Computer Desktops 110 50.70
3. Computers Laptops 45 25.07
4.
Servers (Mail server, Database servers, Communication server, system
server)
6 14.99



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5. Storage 1 11.74
6. Other Softwares (Graphics and Designs etc.)

Microsoft Licenses (Windows, Windows Server, Exchange, SharePoint,
Visual Studio, MS CRM, System Center, SQL Server, Lync Server )
1 60.83
Oracle Database Licenses 1.90
Adobe tools Licenses (Dreamweaver, Photoshop, Flash platform) 0.40
Total 175.64

3.) Plant and Machinery for Overseas Sales and Delivery Offices
The expenditure on hardware and software for overseas sales and delivery office is estimated at ` 4.15 Lacs.
Note: No order for plant and machinery has yet been placed.

Collaboration
Our Company has not entered into any collaboration with any third party as per regulation (VIII) (B)(1)(c) of
part A Schedule VIII of SEBI Regulations.
Our Products and Services:
a) Custom Application Development

e-Zest is a Custom Application Development Service provider having clients all across the globe. Over a
period of last 11 years, e-Zest has been responsible for executing Custom Application Development projects
for different clients ranging from SMEs to leaders in different verticals.
b) Outsourced Product Development

At e-Zest, we understand product development (OPD) requires the offshore team to work in very close
collaboration with the client's engineering team. In the process, partnering with e-Zest for client product
development services helps client leverage a strong value proposition, low time to market, reduced
development costs and quality manpower. e-Zest specializes in following key offerings covering entire
product development lifecycle including:
New Product Design and Development
Feature Enhancement
Product Platform Migration
Software Product Testing
Software Product Maintenance and Support
Product Release and License Management
Product Packaging for distribution
Over a period of last 11 years we have successfully developed and re-engineered multiple products right
from inception to release in ERP, CRM, e-Learning and GRC domains.

c) Business and Technology Consulting Services
With strong and proven expertise in Business and Technology consulting services, we have been able to
deliver value for varied businesses with different business models. e-Zest Business and Technology
Consulting services focuses on generating higher returns on investment for the clients. e-Zest's Business



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Consulting is directed towards IT initiatives that companies wish to take up in the quest to sustain and grow
the business. e-Zest team members help in evaluating customer needs and develop a firm foundation to
implement any IT solution.
e-Zest's tag-line 'Employing Technology, Empowering People' indicates its commitment to adopt the cutting
edge technology for delivering business values to our clients. We perceive technology as an instrument to help
businesses. Technology in itself is not the end.Technology is useful only if it helps businesses in improving
or growing or sustaining.
Coming from the core of the technology background, e-Zest's team members are a group of first generation
entrepreneurs, we are the group of talented individuals who understand the technology, its capabilities and has
been successfully advising our clients on how, which and where technology should be used to get the
maximum business value.
Our Business and Technology consulting service portfolio includes:
1. Strategy and Road map formulation
2. Assessment and evaluation
3. Solution architecture consulting
4. Solution building or integration
5. Portal development consulting
6. Software As a Service (SaaS) delivery consulting
7. e-Business consulting
8. Product development consulting
9. Analytics design and implementation
10. Upgrade / migration services
11. Operations, maintenance and support services

d) Cloud Development Services

With changing global economy, cloud computing has become obvious technology choice of the enterprises
and ISVs. Besides being seen as Green Computing initiative, cloud computing reduces infrastructure spending
by moving from CAPEX to OPEX.
A cloud is a simple, cost effective method that provides a flexible platform to grow at the right time. It takes
the burden of managing the scale of growth of IT infrastructure off of an ISV. It also takes care of upgrades
and security.
e-Zest understands this metamorphosis very well and thus established its center of excellence in Cloud
computing. It constantly endeavors to build strong cloud applications that enable customers to drive efficiency
and respond to market dynamics. It facilitates its customers to migrate their existing applications to cloud with
ease and reduce complexity drastically. e-Zest's cloud computing offerings are below:



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Consulting
o Cloud Readiness Assessment in terms of value and ROI by moving to cloud.
Cloud Platform Assessment
Cloud Service Assessment
Business Case Assessment
o Cloud Security
o Backup and Data protection
ISV Oriented Cloud Services
o Application Development
o Application Migration and Integration
o Platform Development
o Identity Management
o SaaS Enablement Consulting
o Metering and Billing
o Product Testing
o Sustenance
Enterprise Oriented Cloud Services
o End to End Delivery of Cloud Solutions like Cloud Assessment, Design, Implementation and
Operations Planning
o Sustenance
IV&V and Performance Engineering
o Scalability Testing
o Security Compliance and Penetration Testing
o Performance Testing
o Technical Writing
Technical Writing
o End User Documentation
o Technical Documentation
o Marketing Communication
Professional Cloud Services

e) Mobile Development Services:

Mobile has become the future of world and e-Zest offers application development services to cater to
increasing demand of mobile applications. e-Zest has developed mobile technical capabilities through
acquisition in addition to internal skills development. With strong expertise, and proven skills we have been



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able to meet the demands of companies globally ranging from ISVs to Fortune 500 Companies. Below are the
lists of mobile application development services are:
iPhone & iPAD App. Development
Android Application Development
Blackberry Application Development
Windows Phone 7 Application Development

Our Strategy
Our goal is to be a leading global provider of software product engineering and enterprise application
development services. We intend to accomplish our goal by the following strategies:
i. Continued thrust on specialization:
The Companys strategy is to deepen its expertise in current domain areas with continuous investments in new
technology. New areas identified are cloud computing and mobility. The company plans to deepen its
expertise in these areas by developing Intellectual Property and increasing customer traction around the
solutions.
ii. Customer acquisition and increased penetration of existing customers:
e-Zest plans to increase its share of IT spending within current customers & acquire new customers in focus
area. Besides existing segments, company is targeting expansion in new verticals like business intelligence
and enterprise collaboration.
iii. Expansion in newer areas:
Besides existing segments, company is targeting expansion in new verticals like business intelligence and
enterprise collaboration.
iv. Offering unique business models:
Company plans to provide SaaS to enterprises for custom applications enabling them access to data and
application anywhere on-the-go.
Further, our Company is committed to concentrate on following areas of emerging technologies as part
of its market strategy to increase its market share:
Cloud computing
Cloud computing offers end-customers the chance to consume services on subscription or pay-per-use basis. It
ensures better resource utilization through resource sharing, which promises reduced time-to-market. Cloud
computing not only reduces business costs, but also makes applications accessible from any location, and
reacts swiftly to changes in business needs. This requires software companies to redesign their products to
operate with high degree of multi-tenancy.
While interoperability and data security issues may hinder market growth, the future of cloud computing
seems promising with IT giants such as IBM, Google, Microsoft, and Salesforce.com actively developing new



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solutions to address existing issues. e-Zest is partnering with leading vendors to enable software companies to
migrate their products to the cloud platform.
The global cloud computing market is expected to grow from $37.8 billion in 2010 to $121.1 billion in 2015
at a CAGR of 26.2 percent from 2010 to 2015. SaaS is the largest segment of the cloud computing services
market, accounting for 73 percent of the market's revenues 2010.
Mobility
Smart phone penetration has been growing significantly since last few years. It is estimated that out of 4
billion mobile phones currently in use 1.08 billion are smart phones. Today mobility is being considered as a
vital component for infrastructure and software applications across the markets.
Given the capabilities of enterprise mobility in extending the organizations with efficient means to improve
overall responsiveness, agility, and flexibility, the concept has truly transformed into a competitive
requirement. All types of industries across geographies have more or less started adoption of the concept.
Vertical industries such as healthcare, logistics and transport, manufacturing, distribution, wholesale,
warehousing and retail, among others are increasingly looking at enterprise mobility to deliver improved
efficiency. e-Zest Solutions has been working with leading mobile operating systems building point and
enterprise solutions for its customers.
According to Global Industry Analysts (GIA), a worldwide business strategy and market intelligence source,
the global market for enterprise mobility is projected to exceed USD 168.8 billion by 2015. Growing
acceptance from large as well as medium businesses, and introduction of sophisticated mobile devices and
novel mobility solutions are likely to fuel market growth in the next few years
Business intelligence
As global data is growing at an exponential rate, data management becomes a challenge for executives to take
effective decisions. Moreover, uncertain economic conditions, intense competition and increasing volumes of
organizational information are forcing enterprises to seek efficient means of deriving value from information
for improving the overall efficiency of business processes. In this regard, business intelligence (BI)
technology is emerging as an essential tool for identifying new revenue-generation opportunities as well as to
control unproductive expenditures.
BI offers tools, processes and applications for facilitating organizations to analyze and consolidate data
gathered from various sources for optimizing operational performance and for improving business decision-
making.
BI and analytics software helps organizations to analyze the information built up over the years, which resides
in the enterprise systems. e-Zests domain experts are extending the company's core expertise of processing
and managing large volumes of data through data mining, statistical techniques and visualization to deliver
domain-specific insights to customer
Intellectual Property Rights

Our trademark and logo which appear on the pages of this Draft Red Herring Prospectus are not registered.
We have, we have applied for registration of trademark vide an application dated October 21, 2011. Pending
our application for registration, our trademark has limited legal protection. For further details, please see the
section titled "Government and Other Statutory Approvals" on Page No. 182 of this Draft Red Herring
Prospectus.



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Marketing and Branding Exercise:
Our Company has appointed Iternia - Branding & Communication, A4, Ashiayna Park, North Main Road,
Above Fabindia Showroom, Koregaon Park, Pune 411 001, India as marketing and brand building agency to
achieve higher visibility and gain wider geographical reach internationally for solution accelerators.

Our Property

The brief details of our existing properties are as under:-

Sr.
No.
Description of Property Details of Agreement /Deed Usage
1. 2nd and 3rd Floor, Anand
Nilay Business Center,
Near Karve Statue, Karve
Road, Kothrud
Pune 411029
Agreement of sale dated 22
nd
day of March,
2007 entered into by and between M/S
SAPRE BUILDERS R/o 657, Sadashiv
Peth, Rangrekha, Pune 411030 and our
Company.
For Corporate Office
2. B- 103, PushpVinod
S.V Road, Borivili (West),
Mumbai- 400 092
Leave and License Agreement dated
October 20, 2011 entered into by and
between Smt. Varsha Mehta and our
Company.
For Registered Office
Land
The Company currently owns an office of two floors (2
nd
and 3
rd
Floor) admeasuring 7,245 sq. feet at Anand
Nilay Business Center at Kothrud, Pune from where the company conducts its business. It proposes to expand
its existing facilities to increase its ability to accommodate additional personnel and create additional space for
its business in and around Pune. The company is still in the process of identifying land admeasuring
approximately 1 acres for the same. The facilities will allow the company to accommodate approximately 600
employees and it proposes to use the facilities for software development and related activities. For the purpose
of identification of land & its cost, the company has appointed M/s Legion Realty Services as a real estate
consultant, vide letter dated October 05, 2011. We have been apprised by our consultants that the market price
in the area of our choice i.e. Hinjewadi and Magarpatta in Pune, is approximately ` 400 Lacs per acre.

C. KEY INDUSTRY-REGULATION

The following description is a summary of the relevant regulations and policies as prescribed by the Government of
India, Government of Maharashtra, certain international treaties and conventions to which India is a signatory and
the respective bye laws framed by the local bodies incorporated under the laws of India. The information detailed
in this chapter has been obtained from the various legislations, international treaties and conventions, and the bye
laws of the respective local authorities that are available in the public domain.





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Information technology laws

Information Technology Act, 2000 is principally based on the UNCITRAL model law. The object is to give
effect to the resolution of the United Nations which recommended giving favorable consideration to the said
model law while enacting or revising their laws so that uniformity of law, applicable to the alternatives to the
paper based methods of communication and storage of information is achieved. Its other object is to promote
efficient delivery of government services by means of reliable electronic records. It therefore provides for:

1. Legal recognition for transactions carried out by means of electronic data interchange and other means for
electronic communication, commonly referred to as electronic commerce, which involve the use of
alternatives to paper based methods of communication and storage of information;
2. Facilitating electronic filing of documents with the government agencies and for matters connected
therewith or incidental thereto.

The Information Technology Act, 2000 was enacted with the purpose of providing legal recognition to
electronic transactions in addition to providing for the recognition of electronic records, creating a mechanism
for the authentication of electronic documentation through digital signatures. The IT Act of 2000 regulates
Information Technology i.e. it governs information storage, processing and communication. The use of
modern means of communications such as e-mail and electronic data interchange has been rapidly increasing.
However, the communication of legally significant information in the form of paperless messages may be
hindered by legal obstacles to the use of such messages, or uncertainty to their legal effect and validity. The
purpose of the Information Technology Act, 2000 is to remove such obstacles and to create a more secure
legal environment for what has now become known as electronic commerce. The Information Technology
Act, 2000 provides legal recognition of electronic records and electronic signatures, their use, retention,
attribution and security. Penalties are provided for cyber-crimes which include tampering with computer
source document and electronic publishing of obscene information, in addition to provision of compensation
in certain cases. The Information Technology Act, 2000 also provides punishment for offences committed
outside India if the act involves a computer system or computer network outside India.

The Information Technology Act, 2000 facilitates regulation of e-commerce, provides a legal framework to
digital documents and helps in preventing cyber-crimes. In a nutshell, the Information Technology Act, 2000,
as amended by the Information Technology (Amendment) Act, 2008, and the rules prescribed thereunder
provide for:

1. Legal recognition of electronic record;
2. Admissibility of electronic data/evidence in courts;
3. Data protection obligations in relation to sensitive information;
4. Legal acceptance of electronic signatures; and
5. Punishment for cyber obscenity and crimes including fraudulent use of computer systems, offensive and
obscene communications, identity theft and cyber terrorism;
6. Establishment of a Cyber Regulatory Advisory Committee and a Cyber Regulatory Appellate Tribunal;
7. Regulatory control including provisions for interception, monitoring and decryption of information and
blocking public access to any information.

State level incentives, waivers and subsidies

Most state governments in India have announced special promotional schemes offering various packages of
tax, financial and other incentives and procedural waivers for the IT-ITES sector. Despite these schemes being



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made at the state government, there is a fair degree of uniformity across states as they are mainly modeled on
the basis of the schemes existing in other states, where the same had been successful. These schemes focus on
the key issues of infrastructure, electronic governance, IT education and increased IT proliferation in the
respective states.

Incentives offered to promote IT-ITES in India

To promote the growth of IT-ITES in India, the central and state governments have introduced a range of
incentives, concessions, subsidies and simplification of procedural requirements for companies operating in
India. These include relaxation of policies relating to inbound and outbound investments, relaxations under
foreign exchange control, incentives for units located in a Domestic Tariff Area or under Export Oriented
Units /Software Technology Parks /SEZs and Electronic Hardware Technology Park schemes; and state level
incentives, waivers and subsidies.

The Software Technology Parks Scheme (STP Scheme)

The STP Scheme was introduced by the Government of India with the objective of encouraging, promoting
and boosting the software exports from India.

The STP Scheme provides infrastructure 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 addition to the infrastructure support, an STP unit enjoys the
following Fiscal benefits, rendering it attractive for entrepreneurs:

1. All hardware and software imports are exempt from customs duties;
2. No deduction under Section 10A shall be allowed to any undertaking from the assessment year 2012-13;
3. Domestic purchases by STP units are eligible for the benefit of deemed exports to suppliers;
4. Capital goods purchased from the domestic tariff area (an area within India but outside a notified STP) are
entitled for exemption from excise duty and reimbursement of central sales tax;
5. The sales in the domestic tariff area shall be permissible upto 50% of the export in value terms;
6. 100% depreciation on capital goods over a period of five years.

Many state governments have also added to the basket of incentives by providing for low rates of sales tax on
products in the information technology sector, besides providing concessional tariff on electricity.

Setting up an STP unit

In order to avail the benefits as envisaged by the Government of India, a company is required to register itself
with the jurisdictional STPI (the body which administers the STP Scheme). The registration of a unit will
normally be granted in about 25 days.

A company desirous of obtaining the STP registration is also required to obtain an Importer-Exporter Code
from the Director General of Foreign Trade. Upon approval of the application, a company is required to
execute an agreement with the STPI agreeing to comply with conditions prescribed in the STP approval, inter
alia the export obligations and customs bonding of the premises.

Private warehouse license

Following the approval under the STP, a company is required to obtain an approval from the Customs
authorities for setting up a Private Bonded Warehouse and also an In-Bond Manufacturing order to store the
Capital goods obtained free of Customs / Excise duty and to carry on the manufacture of computer software.





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Compliances under the Scheme

The principal compliance required of a company accorded approval under the STP Scheme is the fulfilment of
the export obligation. 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 and the CIF value of imported goods and
foreign currency spent on incidental expenses.

Intellectual property

Our intellectual property includes our registered intellectual property rights, including patents and patent
applications made by us in relation to various inventive products and processes and registered, as well as
unregistered rights in intellectual property including copyrights in relation to software. The salient features of
the legal regime governing the acquisition and protection of intellectual property in India are briefly outlined
below.

Patent protection
The Patents Act, 1970 (Patents Act) is the primary legislation governing patent protection in India. In
addition to broadly requiring 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 term
of a patent granted under the Patents Act is for a period of twenty years from the date of filing of application
for the patent. The Patents Act deems that computer programs per se are not inventions and are therefore,
not entitled to patent protection. This position was diluted by The Patents Amendment Ordinance, 2004,
which included as patentable subject matter:
1. Technical applications of computer programs to industry; and
2. Combinations of computer programs with the hardware.

However, the Patents Amendment Act, 2005, does not include this specific amendment and consequently, the
Patents Act, as it currently stands, disentitles computer programs per se from patent protection. The public use
or publication of an invention prior to the making of an application for a patent, may disentitle the said
invention to patent protection on grounds of lack of novelty. Under the Patents Act, an invention will be
regarded as having ceased to be novel (and hence not patentable), inter alia, by the existence of:

1. Any earlier patent on such invention in any country;
2. Prior publication of information relating to such invention;
3. An earlier product showing the same invention; or
4. A prior disclosure or use of the invention that is sought to be patented.
Following its amendment by the Patents Amendment Act, 2005, the Patents Act permits opposition to grant of
a patent to be made, both pre-grant and post-grant. The grounds for such patent opposition proceedings, inter
alia, include lack of novelty, inventiveness and industrial applicability, non-disclosure or incorrect mention of
source and geographical origin of biological material used in the invention and anticipation of invention by
knowledge (oral or otherwise) available within any local or indigenous community in India or elsewhere. The
Patents Act also prohibits any person resident in India from applying for patent for an invention outside India
without making an application for the invention in India. Following a patent application in India, a resident
must wait for six weeks prior to making a foreign application or may obtain the written permission of the
Controller of Patents to make foreign applications prior to this six week period. The Controller of Patents is



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required to obtain the prior consent of the Central Government before granting any such permission in respect
of inventions relevant for defense purpose or atomic energy.
This prohibition on foreign applications does not apply, however, to an invention for which a patent
application has first been filed in a country outside India by a person resident outside India.
International patent protection mechanisms
The extent of patent protection granted by any national patent law is limited to the jurisdiction of the country
of registration of the said patent. Therefore, the protection of patents on an international scale ordinarily
requires that patent applications be filed and granted in multiple jurisdictions. In order to avoid multiplicity of
applications, mechanisms under various international treaties have evolved providing for the effective filing of
simultaneous patent applications in multiple jurisdictions by filing of a single international application. The
Patent Co-operation Treaty, 1970, (PCT) creates one such mechanism whereby filing an application under
the PCT results in the effective filing of a separate application in each of several designated countries under
the PCT. An application under the PCT procedure is processed in two phases, i.e.:
1. An international phase wherein an international application is filed in the International Bureau; and
2. A national phase consisting of the conversion of the application into national patent applications in
designated countries.
A PCT application may be filed by a national or resident of a state which is a signatory to the PCT at the
patent office of such state at the WIPO International Bureau. At the filing stage, the applicant indicates those
contracting states in which he wishes his application to form an effective filing. Upon filing, the invention,
which is claimed under the application, is subjected to an international search which is carried out by an
International Searching Authority identified by the patent filing office. In the event that the international
search results in any evidence of prior art, which resembles the claim being searched for, the applicant has the
option to either withdraw his application, or defend the claim at the national level with each national patent
office. If the application is not withdrawn, it is published in the International Bureau along with the
international search report and communicated to the patent office in each designated country. Subsequently,
upon the applicant electing to do so, patent applications are submitted to the national phase wherein the
claimed invention is examined by the national patent offices of the designated countries for grant of the
patent.
Another international treaty governing international patent protection is the Paris Convention for the
Protection of Industrial Property, 1883 (Paris Convention). The Paris Convention requires its member
countries to guarantee to the citizens of the other countries the same rights in patent and trademark matters
that it gives to its own citizens. Further, in case of patent filings in multiple jurisdictions, this treaty grants a
right of priority to the applicant which means that the applicant who has filed an application in any contracting
states, may apply for protection in any other contracting states within 12 months and claim priority over other
applications which have been filed by other applicants during the said 12 months period.
Copyright protection
The Copyright Act, 1957 (Copyright Act) governs copyright protection in India. Under the Copyright Act,
copyright may subsist in original literary, dramatic, musical or artistic works, cinematograph films, and sound
recordings. Software, both in source and object code, constitutes a literary work under Indian law and is
afforded copyright protection. Following the issuance of the International Copyright Order, 1999, subject to
certain exceptions, the provisions of the Copyright Act apply to nationals of all member states of the World



102

Trade Organization.
While copyright registration is not a prerequisite for acquiring or enforcing a copyright in an otherwise
copyrightable work, registration constitutes prima facie evidence of the particulars entered therein and creates
a rebuttable presumption favoring the ownership of the copyright by the registered owner. Copyright
registration may expedite infringement proceedings and reduce delay caused due to evidentiary
considerations. Once registered, copyright protection of a work lasts for a period of sixty years following 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 copyright are all acts which expressly amount to an
infringement of copyright. With respect to computer software, in addition to the above, any unauthorized sale
and commercial rental of software also amount to infringement of copyright. The Copyright Act also
prescribes certain fair use exceptions which permit certain acts, which are otherwise considered copyright
infringement. In respect of computer software, these fair use exceptions would include:
1. The making of copies or adaptations of a computer program by the lawful possessor of a copy of such
computer program in order that it may be utilized for the purposes for which it was supplied;

2. The right of the lawful possessor to obtain any other essential information for interoperability of an
independently created computer program, if that information is not otherwise readily available;

3. The observation, study, or test of functioning of the computer program in order to determine the ideas and
principle which underline any elements of the program while performing such acts necessary for the
functions for which the computer program is supplied; and

4. The making of copies or adapting the computer program from a personal legally obtained copy for any non-
commercial personal use.

The remedies available in the event of infringement of copyright under the Copyright Act include civil
proceedings for damages, account of profits, injunction and the delivery of the infringing copies to the
copyright owner.

The Copyright Act also provides for criminal remedies including imprisonment of the accused and the
imposition of fines and seizures of infringing copies. A third set of remedies are administrative or quasi-
judicial remedies, which are prosecuted before the Registrar of Copyright to ban the import of infringing
copies into India and the confiscation of infringing copies.

International treaties for copyright protection
India is a signatory to the Convention of International Union for the Protection of Literary and Artistic Works
(the Berne Convention), the Universal Copyright Convention, 1952, (the UCC) the Rome Convention
for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, 1961 and as a
member of the World Trade Organization is a signatory to the Agreement on Trade Related aspects of
Intellectual Property Rights (the TRIPS Agreement). The TRIPS Agreement embodies a set of minimum
standards that all signatories have to adhere to in respect of all forms of intellectual property protection,
including copyright.



103

The Berne Convention requires that the signatory countries provide the same rights to foreigners from other
member countries as to their own nationals and mandates automatic protection not subject to procedural
formalities. It also provides for minimum substantive standards of protection, dealing with the duration of
copyright and the exclusive rights which the author shall hold. While the Berne Convention does not prescribe
what works are required to be protected under it, computer software has been brought under its purview by
means of Article 10 of the TRIPS Agreement.
The UCC provides for similar protection, including national treatment and minimum substantive rights to be
granted to copyright holder. The substantive provisions include the right of foreign national of a signatory
country whose work was first published outside a signatory state to claim copyright protection in that
signatory state under the UCC upon the printing of a copyright symbol and certain other information.
Trademarks
The Trade Marks Act, 1999 (the Trade Marks Act) governs the statutory protection of trademarks in India.
Indian trademarks law permits registration of trademarks for goods and services. Certification trademarks and
collective marks can also be registered under the Trade Marks Act.
An application for trademark registration may be made by any person claiming to be the proprietor of a
trademark and can be made on the basis of either current use or intention to use a trademark in the future. The
registration of certain types of trademarks is absolutely prohibited, including trademarks that are not
distinctive and which indicate the kind or quality of the goods.
Applications for a trademark registration may be made for in one or more classes. Once granted, trademark
registration is valid for ten years, unless cancelled. The registration can be renewed for further period of ten
years. If not renewed after ten years, the mark lapses and the registration for such mark have to be obtained
afresh.
While both registered and unregistered trademarks are protected under Indian law, the registration of
trademarks offers significant advantages to the registered owner, particularly with respect to proving
infringement. Registered trademarks may be protected by means of an action for infringement, whereas
unregistered trademarks may only be protected by means of the common law remedy of passing off. In case of
the latter, the plaintiff must, prior to proving passing off, first prove that he is the owner of the trademark
concerned. In contrast, the owner of a registered trademark is prima facie regarded as the owner of the mark
by virtue of the registration obtained.

Trade secrets and confidential information
In India, Trade Secrets and confidential information enjoy no special statutory protection and are protected
under Common Law.
Relaxation of policies relating to inbound investments
Indias economic policies are designed to attract significant capital inflows into India on a sustained basis and
to encourage technology collaborations between Indian and foreign entities. The government has permitted up
to 100 per cent foreign investments in the IT sector through the automatic route. Accordingly, unlike some
other sectors, a foreign investor is not required to seek active support of joint venture partners for investing in
a new IT-ITES venture.




104

Major applicable labour laws
There are various legislations in India which have defined employee and workman based on factors which
inter alia include nature of work and remuneration. People who come under the definition of workman or
employee are entitled to various statutory benefits including gratuity, bonus, retirement benefits and insurance
protection.
Termination of the employment of a non-workman is governed by the terms of the relevant employment
contract. As regards a workman, the Industrial Disputes Act, 1947 sets out certain requirements in relation to
the termination of services. These include a detailed procedure prescribed for resolution of disputes with
labour, removal and certain financial obligations upon retrenchment. The applicability of such laws depends
on the number of workers employed and their monthly remuneration.
Shops and commercial establishments legislation
The conditions of service of employees of IT companies are regulated, inter alia, by the relevant shops and
establishments law.
Bombay Shops and Commercial Establishments Act, 1961
The Bombay Shops and Commercial Establishments Act, 1961 provides for the regulation of the conditions of
work and employment in shops and commercial establishments. With a view to achieve this, it prescribes
regulations in relation to hours of work, annual leave, wages, employment of women, maintenance of records
etc.
Safety of women
Under the Shops and Commercial Establishments Act ,as it existed prior to the 2002 amendment, women were
prohibited from working in night shifts. However, a relaxation was provided to information technology and
information technology enabled services establishments from compliance with this provision subject to prior
approval from the labour department and adherence to guidelines framed by the department in this respect.
Accordingly, the labour department has issued guidelines which seek to clearly define the level and nature of
security arrangements to be provided for women employed during the night in the IT/ITES sector. The
guidelines provide, inter alia, for establishment of a control room to monitor the movement of vehicles,
posting of adequate female security guards, verification of antecedents of drivers etc to ensure the safety and
security of women employees working on night shifts.

In addition to the above, pursuant to a decision of the Supreme Court, certain mandatory obligations have
been imposed on employers in work places to prevent occurrence of sexual harassment. These include, inter
alia, the setting up of an appropriate complaint mechanism for speedy redressal of complaints relating to
sexual harassment.
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 also required to register itself under the ESI Act and maintain prescribed
records and registration.



105

Payment of Gratuity Act, 1972
The Payment of Gratuity Act, 1972 provides for payment of gratuity to employees employed in factories,
shops and other establishments who have put in a continuous service of five years, in the event of their
superannuation, retirement, resignation, death or disablement due to accidents or diseases. The rule of five
year continuous service is however relaxed in case of death or disablement of an employee. Gratuity is
calculated at the rate of 15 days wages for every completed year of service with the employer. Presently, an
employer is obliged for a maximum gratuity payout of ` 3,50,000 for an employee.
Payment of Bonus Act, 1965
Pursuant to the Payment of Bonus Act, 1965, as amended, an employee in a factory or in any establishment
where 20 or more persons are employed on any day during an accounting year, who has worked for at least 30
working days in a year, is eligible to be paid a bonus. Contravention of the provisions of the Payment of
Bonus Act, 1965 by a company is punishable with imprisonment or a fine, against persons in charge of, and
responsible to the company for the conduct of the business of the company at the time of contravention.
Employees Provident Fund and Miscellaneous Provisions Act, 1952
The Employees Provident Fund and Miscellaneous Provisions Act, 1952 (the EPF Act) provides for the
institution of compulsory provident fund, pension fund and deposit linked insurance funds for the benefit of
employees in factories and other establishments. A liability is placed both on the employer and the employee
to make certain contributions to the funds mentioned above.
The Maternity Benefit Act, 1961
The purpose of the Maternity Benefit Act, 1961 is to regulate the employment of pregnant women and to
ensure that they get paid leave for a specified period during and after their pregnancy. It provides, inter alia,
for payment of maternity benefits, medical bonus and enacts prohibitions on dismissal, reduction of wages
paid to pregnant women, etc.
The Contract Labour (Regulation and Abolition) Act, 1970
The purpose of the Contract Labour (Regulation and Abolition) Act, 1970 is to regulate the employment and
protect the interests of labourers who are hired on the basis of individual contracts. In the event that any aspect
of the activity is outsourced and is carried out by labourers hired on a contractual basis, then compliance with
the Contract Labour (Regulation and Abolition) Act, 1970 will also be necessary.

D. HISTORY AND CORPORATE STRUCTURE OF THE ISSUER

I. History
Our company was originally incorporated as e-Zest Solutions Private Limited on August 08, 2000 under the
Companies Act, 1956 at vide Certificate of Incorporation bearing Registration Number 11-128134 of 2000
issued by the Registrar of Companies, Maharashtra, Mumbai. Subsequently, our Company was converted into
a public limited company and its name was changed to e-Zest Solutions Limited vide fresh Certificate of
Incorporation dated May 18, 2007.




106

Changes in Registered Office of our Company:
Date From To Reason for Change
September 19,
2003
35/1900, M.H.B. Colony,
Kher Nagar, Bandra (East),
Mumbai- 400051.
Room No. 2, Ground Floor,
607, J.S. Seth Road, Chira
Bazar, Mumbai - 400002.
For Bigger and Better
Infrastructure
April 25, 2011
Room No. 2, Ground Floor,
607, J.S. Seth Road, Chira
Bazar, Mumbai-400002.
B-103, Push Vinod, S.V.
Road, Borivali (West),
Mumbai- 400092.
For Bigger and Better
Infrastructure

Amendments to our Memorandum of Association
The Amendments in our Memorandum of Association are as follows:
Change in Memorandum of Association of the Company Date of General Meeting
The Authorised share capital of ` 1,00,000 divided into 10,000 Equity Shares
of ` 10/- each was increased to ` 10,00,000 divided into 1,00,000 Equity
Shares of ` 10/- each
October 20, 2003
Change of Name of the Company from e-Zest Solutions Private Limited to e-
Zest Solutions Limited
April 12, 2007
The Authorised share capital of ` 10,00,000 divided into 1,00,000 Equity
Shares of ` 10/- each to ` 25,00,000 divided into 2,50,000 Equity Shares of `
10/- each
August 1, 2005
The Authorised share capital of ` 25,00,000 divided into 2,50,000 Equity
Shares of ` 10/- each to ` 90,00,000 divided into 9,00,000 Equity Shares of `
10/- each
March 21, 2007
The Authorised share capital of ` 90,00,000 divided into 9,00,000 Equity
Shares of ` 10/- each to ` 3,00,00,000 divided into 30,00,000 Equity Shares of
`10/- each
February 22, 2008
The Authorised share capital of ` 3,00,00,000 divided into 30,00,000 Equity
Shares of ` 10/- each to ` 3,50,00,000 divided into 35,00,000 Equity Shares of
` 10/- each
September 30, 2009
The Authorised share capital of ` 3,50,00,000 divided into 35,00,000 Equity
Shares of ` 10/- each to `9,16,00,000 divided into 91,60,000 Equity Shares of `
10/- each
March 15, 2010
The Authorised share capital of ` 9,16,00,000 divided into 91,60,000 Equity
Shares of ` 10/- each to ` 16,00,00,000 divided into 1,60,00,000 Equity Shares
of ` 10/- each
June 17, 2011
Major Events and Milestones of Our Company
Year Key Events
August, 2000 Incorporated as a Private Limited company
January, 2005 Achieved ISO 9001:2000 Certification
March, 2005 Joined Sun iForce Partner Program
January, 2007 Attained Gold Certified Partner Status in Microsoft Partner Program
February, 2007 Became International Association of Microsoft Certified Partners member
March, 2007 Participated at CeBIT for the first time
July, 2007 Converted into public limited company
October, 2007 Joined Oracle partner network



107

January, 2010 Achieved ISO 9001: 2008 Certification
February, 2010 Organized agile development seminar in Pune for the first time
March, 2010 Successful "SEI CMMI (Capability Maturity Model Integration) Level 3 assessment
April, 2010 Set up mobile competency center to offer mobile development services
April, 2011 Setup dedicated Cloud Computing & BI Practice
June,2011 Became VMware Professional Level Solution Provider Partner
II. Main Objects of Our Company
The main objects of the Company as contained in Memorandum of Association are:
1. To develop, formulate, process, research, or otherwise deal in computer training, computer education,
computer technology, computer programming, computer graphics, computer languages, e-commerce, web-
designing, web-hosting, enterprise resource planning, customer relation management, outsourcing or
computer software in general and to manufacture, assemble, process, market, service, repair, modifying,
buying, selling, or otherwise deal in computer machines, computer spare parts, network consultancy and
integration and computer hardware of all types and to provide consultancy service thereof.
2. To develop software for various organizations, including computer Government or Industry, hospitals and
health oriented organizations, education oriented organizations and institutions business agencies of all
types and all types of services oriented organizations in India and abroad and to conduct training
programmers and to undertake research studies in computer services and management.
Defaults or Rescheduling of Borrowing
Our company has not defaulted or rescheduled its borrowings. Furthermore, none of our Companys loans
have been converted into equity in the past.
Strikes and lock-outs
Our company has not been subject to any strikes or lock-outs.
Corporate Profile of our Company
Please refer to Section on Industry Overview and Business Overview beginning on Page Nos. 89 and 90
respectively, of this Draft Red Herring Prospectus.
Injunction or Restraining orders
There are no injunction/restraining orders that have been passed against our Company.

III. Details of our Subsidiaries:
Our Company has no subsidiaries as on the date of this Draft Red Herring Prospectus.
Holding company
Our Company is not a subsidiary of any company.
Shareholders
As on the date of this Draft Red Herring Prospectus, the total number of shareholders is 33 (Thirty Three).




108

IV. Shareholders Agreement
There is no shareholders agreement existing as on date of filing this Draft Red Herring Prospectus.
V. Other Agreements
Our Company has shortlisted two companies for acquisitions & signed non-disclosure agreement for
discussions & negotiations.
VI. Strategic/ Financial Partners
There is no financial or strategic partner in our Business.

E) MANAGEMENT:
I. Board of Directors
As per Article 96 of Articles of Association, our Company must have a minimum of three and a maximum of
twelve Directors. As on the date of this Draft Red Herring Prospectus, our Company has Six Directors out of
which two are Independent Directors.
The following table sets forth details regarding our Board of Directors as on the date of this Draft Red Herring
Prospectus:

Name, Designation, DIN, Nationality, Address,
Occupation, Term
Age
(in Yrs.)
Other Directorship
Mr. Devendra Deshmukh
S/o Baburao Deshmukh
Managing Director
DIN No. 00377971
Nationality: Indian
Address: A-902, Kapil Abhijat, Dahanukar Colony,
Kothrud, Pune- 411 029, Maharashtra
Occupation: Business
Term: Appointed as Managing Director for period of five
years from June 20, 2011 to June 19, 2016.
(Not liable to retire by rotation for such time as he holds the
office of Managing Director)
34 years
Loft Bpo Services Private
Limited

Mr. Ashish Gupta
S/o Bajaranglal Gupta
Executive Director
DIN No. 00378003
Nationality: Indian
Address: A-501, Kapil Abhijat, Dahanukar Colony,
Kothrud, Pune- 411 029, Maharashtra
Occupation: Business
Term: Appointed since Date of Incorporation.
(Liable to retire by rotation)
34 years
Nil



109

Mr. Amol Pande
S/o Ramesh Pande
Executive Director
DIN No. 01416538
Nationality: Indian
Address: A-503, Kapil Abhijat, Dahanukar Colony,
Kothrud, Pune- 411 029, Maharashtra
Occupation: Business
Term: Appointed since Date of Incorporation.
(Liable to retire by rotation)
35 Years
Nil
Mr. Sunil Dane
S/o Madhukarrao Dane
Executive Director
DIN No. 02794730
Nationality: Indian
Address: Flat No. 503/A, Sigma One SNO 124/3A/2, Paud
Road, BH MIT College, Kothrud, Pune- 411 038,
Maharashtra
Occupation: Business
Term: Appointed on November 02, 2009.
(Liable to retire by rotation)
38 years Nil
Mr. Hasmukh Mehta
S/o Gulabchand Mehta
Independent Director
DIN No. 00344774
Nationality: Indian
Address: 32,Tanay, Sky Build Village, Behind Bhatia High
School, Kandivali (West), Mumbai- 400067, Maharashtra
Occupation: Business
Term: Appointed on June 17, 2011
(Liable to retire by rotation)
52 years
1. Empirical Technologies
(India) Pvt. Ltd.
2. Someshwara Multiproject
Finance Ltd.
3. Amruta Consultancy Pvt.
Ltd.
4.Prakhyat ComputechPvt.Ltd.
5. Probity Trading Pvt. Ltd.
6. Sai Prasad Multitrade Pvt.
Ltd.
7. Sai Drishti Developers Pvt.
Ltd.
8. Choice Infraventures Ltd.
Mr. Krishan Dwivedi
S/o Raman Dwivedi
Independent Director
DIN No. 01207197
Nationality: Indian
Address: 403, D-2, Citadel Enclave, BT Kavde Road,
Ghorpadi, Pune- 411001, Maharashtra
Occupation: Business
Term: Appointed on June 17, 2011
(Liable to retire by rotation)
34 years
Peacock Financial Advisors
Pvt. Ltd.
Note: None of the above mentioned Directors are on the RBI List of willful defaulters as on the date of the
Draft Red Herring Prospectus.



110

Further, neither our Company nor our Promoters, persons forming part of our Promoter Group, Directors or
persons in control of our Company are debarred from accessing the capital market by SEBI.
None of the Promoters, Directors or persons in control of our Company, has been or is involved as a promoter,
director or person in control of any other company, which is debarred from accessing the capital market under
any Order or Directions made by the SEBI.
Our Company has not entered into any service contracts with any Directors which provide for any benefits to
the said Directors upon termination of employment. Our Company has not entered into any arrangement or
understanding with its major shareholders, customers, suppliers or others pursuant to which any of the
directors were selected as a director or member of senior management. Further, except for statutory benefits
upon termination of their employment in our Company or upon retirement, no officer of our Company,
including our Directors and our key managerial persons, are entitled to any benefits upon termination of
employment with our Company.
Except as disclosed below, none of the Directors are related to each other.

Sr. No. Name Nature of relationship
1. Mr. Devendra Deshmukh Wifes Brother of Mr. Sunil Dane
2. Mr. Sunil Dane Sisters Husband of Mr. Devendra Deshmukh
Brief Profiles of our Directors:
Devendra Deshmukh, Managing Director is one of the founders of our company. He holds a master's degree
in business administration with information systems as specialization from Welingkar Institute of
Management Development & Research (Mumbai University) and an engineering degree in electronics and
telecommunication from Amravati University. He is certified on 'Gemba Kaizen' from JMAM (Japan) and
Charter member of TIE (The Indus Entrepreneur) (The Indus Entrepreneur). He has an experience of working
with Indian software companies in both the operational and business development functions. As a member of
the leadership team, Devendra is actively involved in key alliances, strategic business planning, capacity
growth, process initiatives, and business development. His current mission is to build e-Zest into a world-
class, multinational company by bringing together outstanding individuals worldwide to be a part of the e-Zest
team. Devendra regularly delivers lectures on entrepreneurship at various forums & conferences.
Ashish Gupta is one of the founders of our Company. He holds an engineering degree in electronics and
telecommunication. He also has postgraduate diploma in Software Application Engineering and postgraduate
diploma in business administration. He is an IRCA, UK certified ISO 9001:2000 lead auditor. He has also
done CRM certification from Symbiosis, Pune. He represents the top leadership in quality management
aspects of the organization. He brings-in the knowledge management document management, content
management and CRM domain expertise. Ashish heads R&D at e-Zest. He is responsible for focusing e-Zest's
technology resources in developing the most advanced solutions. He has an extensive technology background
gained through years of experience in providing consulting and design for a variety of industries. Ashish has
also worked on systems related technologies like CTI (Computer Telephony Integration), Voice technologies,
Business Process Automation and distributed application development. He also plays role in nurturing new
business from existing accounts& new prospects. He envisions e-Zest to be traversing along the cutting edge
technology so that e-Zests customer's benefit the most from it. Ashish is an avid chess player and received
best chess player award on all India university level.



111

Amol Pande is one of the founders of our Company. He holds an engineering degree in electronics and
telecommunication. He is an industry expert in e-business architecture design and implementation. He has
domestic and international functional expertise and experience of around 12 year. As the top leadership
member, Amols responsibilities include strategic planning and modeling, and implementing information
technology solutions. He has management skills, including raising capital and enhancing top-to-bottom line
results. Apart from looking after the over-all operations of project execution, he is specialized in financial
reporting and also guides the system administration team for looking into the IT security aspects of e-Zest.
Amol works closely with e-Zest's clients who use offshore software development model to execute software
development and maintenance projects.
Sunil Dane holds a Bachelor of Engineering degree as well as a diploma in advanced computing from C-
DAC. He is a SCRUM AGILE certified SCRUM master. Sunil has studied Human Factors and Team
Dynamics under Project Management from the University of California - Berkeley. He has more than 12 years
of experience in the IT industry. Between 2000 and 2008, he went on a long sabbatical and gained experience
in various IT corporations such as Otis Inc., General Motors, American Express, Charles Schwab, Wells
Fargo Bank and Barclays Global Investor. His past experiences include consulting, project management,
design/architecture and implementation of high volume applications. An avid marathon runner, Sunil has run
an entire marathon (42 KMs) at California international Marathon at Sacramento, California in Dec '08 and
prior to this; he ran the half marathon at Silicon Valley Marathon in San Jose, California. He ran these for a
charitable organization called "Team Asha" that gathers charity for the education of underprivileged children
in India. Sunil hopes to promote the same culture of staying healthy within e-Zest by sharing the social
responsibility and giving something back to the society. Currently, his key focus areas are improving customer
experience, improving various aspects of delivery such as value delivered to customer, operations and
services. His responsibilities also include fostering teamwork, innovation, and work values within the
organization.

Hasmukh Mehta is the independent director of our company. He holds a degree of Bachelor of Commerce.
He is a senior consultant with over 25 years of extensive experience in the field of indirect taxation viz. Sales,
service tax and is rendering his consultancy services to various industries and sector including large corporate
houses. He offers complete Solution under one roof to new as well as established industries with rich
professional experience and expert team.

Krishan Dwivedi is an independent director of our company. He holds a Masters Degree in Marketing from
Welingkars Institute, Mumbai. He is a first generation entrepreneur. He pioneered the concept of online
insurance by launching the first insurance portal dedicated for consumers in early 2008. Prior to launching his
own venture, he held the position of Vice President and was heading the Wealth Management Division for
Pioneer Investcorp Ltd. (PINC MONEY) in 2008. He has more than 9 years of experience in Investment
Banking, Debt Markets, Portfolio Management & Financial Services domain. He has started his corporate
journey with Centrum Capital Ltd. as an Investment Banker and moved on to join Pioneer Investcorp Pvt. Ltd
in the Treasury Dealing Division. He has a keen interest in Internet Technologies & Online Marketing of
Financial Products.
Details of borrowing powers
The borrowing powers of our Directors are regulated by Article of Association of the company. The Board of
Directors of our Company has power to borrow up to ` 5000 Lacs as per the members resolution passed in
the EGM of our Company held on May 22, 2007.





112

II. Details of Compensation of Directors:

Mr. Devendra Deshmukh has been appointed as Managing Director of the Company with effect from June 20,
2011 for a period of five years, the remuneration payable to him as a Managing Director shall be an amount
not exceeding ` 1,50,000/- per month.

Perquisites such as house rent allowance, house maintenance allowances/expenses, reimbursement of actual
medical expense, travel concession / assistance (domestic & overseas),reimbursement of membership fee for
the clubs, personal accident insurance policy, gratuity, leave with full pay or encashment thereof, conveyance
facilities, telephone, telefax & other communication facilities at residence, contribution to provident fund and
superannuation fund and other perquisites subject to overall ceiling on remuneration.
Compensation paid by the Company to the executive directors for the financial year 2010-11:
Name of Directors Amount (` in Lacs)
Mr. Ashish Gupta 10.75
Mr. Amol Pande 10.75
Mr. Sunil Dane 10.75
Remuneration to Independent and Non-Executive Directors
We have not entered into any formal arrangements with our Non-Executive Directors. There are no other
payments made to them apart from their sitting fees for attending meetings of the Board or Committee and
reimbursement of travelling and other incidental expenses, if any.
III. Shareholding of Directors & Key Managerial Personnel
As per our Articles of Association, our Directors are not required to hold any Equity Shares to qualify as
Directors of our Company. The shareholding of our Directors as of the date of this Draft Red Herring
Prospectus as stated below:
Name of Director Number of Equity Shares held
Mr. Devendra Deshmukh 31,40,081
Mr. Ashish Gupta 22,12,329
Mr. Amol Pande 29,97,348
Mr. Sunil Dane 4,28,192
Mr. Hasmukh Mehta NIL
Mr. Krishan Dwivedi NIL
Key Managerial Personnel Number of Equity Shares held
Mr. Satish Chavan 5,635
Mr. Vinay Pandey 300
Mr. Shailesh Kulkarni 300
Mr. Satish Kumar Agrawal 20,001



113

None of our Directors are/have been directors in companies whose shares are/were suspended from trading on
the BSE/NSE, for a period beginning from five years prior to the date of this Draft Red Herring Prospectus.
None of our Directors are/have been directors in companies which have been/were delisted from any stock
exchange in India.
None of the Key Managerial Personnel of the Company other than those mentioned above hold any Equity
Shares of the Company as on the date of filing of this Draft Red Herring Prospectus.
Details of service contracts
There is no service contracts entered into with any Directors for provision of benefits or payments of any
amount upon termination of employment.
IV. Interest of Directors
All Directors of the Company may be deemed to be interested to the extent of fees, if any, payable to them for
attending meetings of the Board or a Committee. The Managing Director and Executive Directors will be
interested to the extent of remuneration paid to them for services rendered by them as officer of the Company.
All our directors may also be deemed to be interested to the extent of Equity Shares, if any, already held by
them or their relatives in the Company, or that may be subscribed for and allotted to them, out of the present
Issue in terms of the DRHP and also to the extent of any dividend payable to them and other distributions in
respect of the said Equity Shares.
None of our Directors, other than the Promoters who are Directors, is interested in the promotion of our
Company.
The Directors have no interest in any property acquired by our Company within two years from the date of
this Draft Red Herring Prospectus or proposed to be acquired by our Company as of the date of this Draft Red
Herring Prospectus.
Our Company has not entered into any contract, agreements or arrangements during the preceding two years
from the date of the Red Herring Prospectus in which the directors are interested directly or indirectly and no
payments have been made to them in respect of these contracts, agreements or arrangements or are proposed
to be made to them.
V. Changes in the Board of Directors in the last three years

The following are the changes in the Board of Directors of the Company in the last three years preceding the
date of filing this Draft Red Herring Prospectus.
Name of the Director
Date of
Appointment
Date of
Cessation
Remarks
Mr. Sunil Dane
November 02,
2009
- Appointment
Mr. Jaywant Deshpande February 01, 2011 July 04, 2011 Resignation
Mr. Hasmukh Mehta June 17, 2011 - Appointment
Mr. KrishanDwivedi June 17, 2011 - Appointment
Mr. Akash Singhvi June 17, 2011 July 04, 2011 Resignation



114

Confirmations

Our Promoters have confirmed that:

They have not been declared as wilful defaulters by the RBI or any other governmental authority and
there are no violations of securities laws committed by them in the past and no proceedings pertaining to
such penalties are pending against them.
None of Our Promoters have been restrained from accessing the capital markets for any reasons by the
SEBI or any other authorities.
None of the Promoters was or is a Promoter, Director or person in control of any other company which is
debarred from accessing the capital market under any order or directions made by the Board.






115

VI. Management Organization Structure




116

VII. Corporate Governance
The provisions of the Listing Agreement to be entered into with the Stock Exchange with respect to Corporate
Governance and the SEBI (ICDR) Regulations, 2009 in respect of Corporate Governance would become
applicable to the Company at the time of seeking in-principle approval for listing of our Companys equity
shares with the Stock Exchange. The Company has complied with such provisions, including with respect to
the appointment of Independent Directors to the Board and the constitution of the committees of the Board
such as the Audit Committee, the Remuneration Committee and the Shareholders/Investors Grievance
Committee. The Company undertakes to take all necessary steps to comply with applicable requirements on
Corporate Governance and adopt the Corporate Governance Code as specified under Clause 49 of the listing
agreement to be entered into with the Stock Exchange.
I. Committees of the Board in accordance with the Listing Agreement

A. Audit Committee
The present constitution of the Audit Committee is as follows:
Sr.
No.
Name of the Director Designation
Position in the
Committee
1. Mr. Hasmukh Mehta Non-Executive & Independent Chairman cum Member
2. Mr. Krishan Dwivedi Non-Executive & Independent Member
3. Mr. Devendra Deshmukh Executive & Non Independent Member
The Company Secretary shall act as a Secretary of the Audit Committee.
The scope and function of the Audit Committee is in accordance with Section 292A of the Companies Act and
Clause 49 of the Listing Agreement and its terms of reference include the following:
The powers of the Audit Committee shall include the following:
1. To investigate any activity within its terms of reference.
2. To seek information from any employee.
3. To obtain outside legal or other professional advice.
4. To secure attendance of outsiders with relevant expertise, if it considers necessary.
The Audit Committee shall mandatorily review the following information:
1. Management discussion and analysis of financial condition and results of operations;

2. Statement of significant related party transactions (as defined by the audit committee), submitted by
management;

3. Management letters / letters of internal control weaknesses issued by the statutory auditors;

4. Internal audit reports relating to internal control weaknesses; and

5. The appointment, removal and terms of remuneration of the Chief Internal Auditor shall be subject to
review by the Audit Committee.



117

The role of the Audit Committee shall include the following:
1. Oversight of the companys financial reporting process and the disclosure of its financial information to
ensure that the financial statement is correct, sufficient and credible.
2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or
removal of the statutory auditor and the fixation of audit fees.
3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.

4. Reviewing, with the management, the annual financial statements before submission to the board for
approval, with particular reference to:

a. Matters required to be included in the Directors Responsibility Statement to be included in the Boards
report in terms of clause (2AA) of section 217 of the Companies Act, 1956
b. Changes, if any, in accounting policies and practices and reasons for the same
c. Major accounting entries involving estimates based on the exercise of judgment by management
d. Significant adjustments made in the financial statements arising out of audit findings
e. Compliance with listing and other legal requirements relating to financial statements
f. Disclosure of any related party transactions
g. Qualifications in the draft audit report.

5. Reviewing, with the management, the quarterly financial statements before submission to the board for
approval

6. Reviewing, with the management, the statement of uses / application of funds raised through an issue
(public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than
those stated in the offer document/prospectus/notice and making appropriate recommendations to the
Board to take up steps in this matter.

7. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the
internal control systems.

8. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit
department, staffing and seniority of the official heading the department, reporting structure coverage and
frequency of internal audit.

9. Discussion with internal auditors any significant findings and follow up there on.

10. Reviewing the findings of any internal investigations by the internal auditors into matters where there is
suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting
the matter to the board.



118

11. 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.

12. To 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.

13. To review the functioning of the Whistle Blower mechanism, in case the same as existing.

14. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

15. Any other function mentioned in the terms of reference of the Audit Committee.

B. Remuneration Committee

The members of the Remuneration Committee are:

Sr.
No.
Name of the Director Designation
Position in the
Committee
1. Mr. Hasmukh Mehta Non-Executive & Independent Chairman cum Member
2. Mr. Krishan Dwivedi Non-Executive & Independent Member
3. Mr. Sunil Dane Non-Executive & Independent Member

The Company Secretary shall act as a Secretary of the Remuneration Committee.

The scope of the Remuneration Committee includes:

1. Reviewing the overall compensation policy, service agreements and other employment conditions of
Managing/Executive Directors and senior executives just below the Board of Directors;
2. Deciding on the overall compensation policy for Non-Executive Directors and Independent
Directors;
3. Deciding on the increments in the remuneration of the Directors;
4. Assisting the Board in developing and evaluating potential candidates for senior executive positions
and to oversee the development of executive succession plans;
5. Reviewing and approving on an annual basis the corporate goals and objectives with respect to
compensation for the senior executives;
6. Evaluating at least once a year the senior executive officers performance in light of these established
goals and objectives and based upon these evaluations shall set the senior executive officers annual
compensation, including salary, bonus and equity and non-equity incentive compensation;
7. Reviewing and approving on an annual basis the evaluation process and compensation structure for
our Companys officers just below the level of Board of Directors;
8. Evaluating the performance of our Companys senior executives just below the level of Board of
Directors and approving the annual compensation, including salary, bonus and equity and non-equity



119

incentive compensation, for such senior executives, based on initial recommendations from the
Managing Director;
9. Providing oversight of managements decisions concerning the performance and compensation of
other officers of our Company;
10. Reviewing incentive compensation arrangements to confirm that incentive pay does not encourage
unnecessary risk taking and reviewing and discussing, at least annually, the relationship between risk
management policies and practices, corporate strategy and senior executive compensation; and
11. Maintaining regular contact with the leadership of our Company, including interaction with our
Companys human resource department, review of data from the employee survey and regular
review of the results of the annual leadership evaluation process.

C. Shareholders/Investors Grievance Committee

The members of the Shareholders/Investors Grievance Committee are:-
Sr.
No.
Name of the Director Designation
Position in the
Committee
1. Mr. Krishan Dwivedi Non-Executive & Independent Chairman cum Member
2. Mr. Ashish Gupta Executive & Non Independent Member
3. Mr. Amol Pande Executive & Non Independent Member

The Company Secretary shall act as a Secretary of the Shareholders / Investors Grievance Committee.

The terms of reference of the Shareholders/Investors Grievance Committee of our Company include the
redressal of shareholders and investors complaints. The Committee shall have the authority to supervise and
ensure:

1. Efficient transfer of shares including review of cases for refusal of transfer / transmission of shares
and debentures;
2. Redressal of shareholder and investor complaints like transfer of shares, non-receipt of balance sheet,
non-receipt of declared dividends, etc.;
3. Issue of duplicate / split / consolidated share certificates;
4. Allotment and listing of shares;
5. Review of cases for refusal of transfer / transmission of shares and debentures;
6. Reference to statutory and regulatory authorities regarding investor grievances; and
7. Otherwise ensure proper and timely attendance and redressal of investor queries and grievances.

VIII. Key management personnel

The details of the key management personnel other than our Executive Directors, as of the date of this Draft
Red Herring Prospectus, are as follows:



120

Sr.
No.
Name, Designation,
Age
Qualifica-
tion
Date of
Joining
Experience
(Years)
Compensation
paid during
the last
Financial Year
(` in Lacs )
Functional
Responsibility
Previous
Employment
1.
Mr. Devendra
Deshmukh
Managing Director
34 Years
BE (Elec. &
Tele.) and
MMS from
Welingkar
Institute -
Mumbai,
Gemba
Kaizen from
JMAM
(Japan).
August
2000
10 18.00
Head of Finance,
Sales, Legal and
Marketing
First
Employment
2.
Mr. Ashish Gupta
Executive Director
33 Years
BE (Elec. &
Tele.), PG
Diploma in
Software
Application
Engineering
and PG
Diploma in
Business
Administrati
on
August
2000
10.75
Head Solution
Accelerators SBU
First
Employment
3.
Mr. Amol Pande
Executive Director
35 Years
BE (Elec. &
Tele.)
August
2000
12 10.75
Head
Professional
Services SBU &
HR
First
Employment
4.
Mr. Sunil Dane
Executive Director
38 Years
BE (Elec. &
Tele.)
November
2009
14 10.75
Head
Professional
Engineering SBU
Wells Fargo Bank
5.
Mr. Jaywant
Deshpande
Head Enterprise
Solution SBU
BE (Elec &
Tele)
5-Jul-
2011
12 10.75
President
Enterprise
Solution SBU
Friends Provident
(U.K)
6.
Mr. Satish Chavan
"Vice President
Solution
Consulting"
32years
BCS,
PGDBA
1-Dec- 03 10 10.20
Heads Pre-Sales
& Solution
architecting at e-
Zest
Dynamic
Logistics Pvt. Ltd.
7.
Mr. Vinay Pandey
"Principal Business
Analyst"
34years
BCA, MCA 5-Jan-04 7.5 10.56
Heads Business
Analysis
Practice at
e-Zest
NA
8.
Mr. Shailesh Kulkarni
Account Manager
34years
BE (Elec.) 1-Mar-04 10.5 11.34
Manager delivery
&client
relationship
management of
Domain Systems



121

1. All the persons named as our Key Managerial Personnel are the permanent employees of our Company.
2. There is no understanding with major shareholders, customers, suppliers or any others pursuant to
which any of the above mentioned personnel have been recruited.
3. None of the above mentioned Key Managerial Personnel are related to each other except for Mr.
Devendra Deshmukh who is the brother of Mr. Sunil Danes wife.

Bonus or profit sharing plan of the key management personnel
Our Company does not have a performance linked bonus or a profit sharing plan for the key management
Personnel.
Interests 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 the
reimbursement of expenses incurred by them during the ordinary course of business and to the extent of their
shareholding which is as follows:
Name of key management personnel Number of Shares held
Mr. Devendra Deshmukh 31,40,081
Mr. Ashish Gupta 22,12,329
Mr. Amol Pande 29,97,348
Mr. Sunil Dane 4,28,192
Mr. Satish Chavan 5,635
Mr. Vinay Pandey 300
Mr. Shailesh Kulkarni 300
Mr. Satish Kumar Agrawal 20,001
multiple projects
9.
Mr. Nikunj Natu
"VP Mobile
Solutions "
35years
BE 1-Apr-11 12 10.50
Heads Mobile
Practice

Maestro Mobile
Services
10.
Mr. Satish Kumar
Agrawal
"VP Cloud
Computing Practice"
38years
"M.SC.
(Computer
Science)"
17-May-
11
16 18.00
Heads Cloud
Computing
Practice

Persistent
Systems Ltd.
11.
Ms. Anagha Jagade
Chief Financial
Officer
31 years
FCA, DTL,
M.Com
05-Oct-11 7 -- Head of Finance
Foundation 9
Entertainment
India Pvt. Ltd.
12.
Mr. Divanshu Mittal
Company Secretary &
Compliance Officer
24 years
CS, B.Com
16-June-
11
0.4 --
Legal and
Secretarial
Compliance
--




122

Changes in the Key Managerial Personnel in the last three years:
There have been no changes in the Key Managerial Personnel in our Company during the last three years
except as stated below:

Name Designation Date of change Reason for change
Mr. Jaywant Deshpande
President Enterprise
Solution SBU
July 5, 2011 Appointment
Mr. Nikunj Natu VP Mobile Solutions April 1, 2011 Appointment
Mr. Satish Kumar Agrawal
VP Cloud Computing
Practice
May 17, 2011 Appointment
Mr. Divanshu Mittal
Company Secretary &
Compliance Officer
June 16, 2011 Appointment
Ms. Anagha Jagade Chief Financial Officer October 05, 2011 Appointment

Employees Share Purchase Scheme / Employees Stock Option Scheme to Employees

Presently, we do not have ESOP/ESPS scheme for our employees.

IX. Employees:

The present strength of employees of our Company as on date is as follows:

Sr. No Particular Employees
1. Finance 3
2. HR & Admin 6
3. Legal 1
4. QA 2
5. Sales, Marketing, SA and BA 16
6. Technical 129
Grand Total 157

Payment or benefit to officers of our Company

No non-salary related amount or benefit has been paid or given within two years from the date of this Draft
Red Herring Prospectus, or is intended to be paid or given, to any officer of our Company (including Directors
and key management personnel).




123

F) PROMOTERS

Our Promoters:

The following individuals are the Promoters of our Company:

Name Mr. Devendra Deshmukh
Age 34 Years
Qualification
Bachelor of Engineering (Electronics &
Telecommunications) from Amravati University,
Master in Management Studies from Welingkar
Institute of Management Development & Research,
Mumbai, Gemba Kaizen from JMAM (Japan).
Experience 10 years
Driving license No E 0486855
Voter ID Number: MT/21/125/301044
Passport No B3149041
PAN AGZPD8902B
Bank Account No 27011066080
Name of the Bank
& Branch
Standard Chartered Bank, Jungalee Maharaj Road,
Pune
Name Mr. Ashish Gupta
Age 34 years
Qualification
Bachelor of Engineering (Electronics &
Telecommunications) from Amravati University, PG
Diploma in Software Application Engineering and
PG Diploma in Business Administration
Experience 10 years
Driving license No MH12/05/666524
Voter ID Number: DRD 1701689
Passport No B 5473663
PAN AHLPG7383G
Bank Account No 27011066099
Name of the Bank
& Branch
Standard Chartered Bank, Jungalee Maharaj Road,
Pune
Name Mr. Amol Pande
Age 35 years
Qualification
Bachelor of Engineering (Electronics &
Telecommunications) from Amravati University
Experience 12 years
Driving license No MH12/03/419184
Voter ID Number: E-499116
Passport No E0198844
PAN AKQPP9427N
Bank Account No 27011066064
Name of the Bank
&Branch
Standard Chartered Bank, Jungalee Maharaj Road,
Pune



124


Name Mr. Sunil Dane
Age 38 years
Qualification
Bachelor of Engineering (Electronics &
Telecommunications) from Amravati
University
Experience 14 years
Driving license No 18997/00
Voter ID Number: NA
Passport No G9768164
PAN AEDPD6580P
Bank Account No 27011066072
Name of the Bank &
Branch
Standard Chartered Bank, Jungalee
Maharaj Road, Pune

For a complete profile of each of our Promoters, i.e. their age, personal address, educational qualifications,
experience, positions / posts held in the past and other directorships of our Promoters, please refer to the
section titled Management beginning on Page No. 108 of this Draft Red Herring Prospectus.

We confirm that the details of the PAN, bank account numbers and passport numbers will be submitted to the
Stock Exchanges at the time of filing this Draft Red Herring Prospectus with the Stock Exchanges.

Further, our Promoters, Group Companies (mentioned below), and relatives of the Promoters, have confirmed
that they have not been declared as willful defaulters by the RBI or any other Governmental authority.

Other than as disclosed in this section and in the section titled Outstanding Litigation and Material
Developments there are no violations of securities laws committed by our Promoters, relatives of our
Promoters, Promoter Group or Group Companies in the past or are pending against them. None of our
Promoters or members of our Promoter Group or any company of which they are promoters, directors or
persons in control of our Promoter Group have been restricted from accessing the capital markets for any
reasons, by SEBI or any other authorities.

Interest of our Promoters

Our Promoters are interested in the promotion of our Company and are also interested to the extent of their
shareholding, for which they are entitled to receive the dividend declared, if any, by our Company. Further,
our Promoters may be deemed to be interested to the extent of remuneration and/or reimbursement of
expenses payable to them.
Name of Director Number of Equity Shares held
Mr. Devendra Deshmukh 31,40,081
Mr. Ashish Gupta 22,12,329
Mr. Amol Pande 29,97,348
Mr. Sunil Dane 4,28,192
Mr. Hasmukh Mehta Nil
Mr. Krishan Dwivedi Nil



125

Our Promoters may be deemed to be interested to the extent of the equity shares held by them, their friends
and relatives, and benefits arising from his holding directorship / employment in our Company. They may also
be deemed to be interested in the transactions entered into by our Company and the ventures where he is
interested as a Promoter, Director or otherwise.

Name of Directors Amount (` in Lacs)
Mr. Devendra Deshmukh 18.00
Mr. Ashish Gupta 10.75
Mr. Amol Pande 10.75
Mr. Sunil Dane 10.75

Except as mentioned hereinabove, our Promoters do not have any other interest in any property acquired by
our Company in a period of two years before filing of this Draft Red Herring Prospectus or proposed to be
acquired by us as on date of filing the Draft Red Herring Prospectus.

Except as stated hereinabove and as stated in Related Party Transactions appearing under section titled
Financial Information on Page No. 134 of the Draft Red Herring Prospectus, we have not entered into any
contract, agreements or arrangements during the preceding two years from the date of the Draft Red Herring
Prospectus in which the Promoters are directly or indirectly interested and no payments have been made to
them in respect of these contracts, agreements or arrangements which are proposed to be made to them.

Except as stated in "Related Party Transactions" beginning on Page No. 164 of Draft Red Herring Prospectus,
and as stated herein, our Promoters or any of the Promoter Group Entities do not have any other interest in our
business.

Payment of benefits to our Promoters and Promoter Group during the last two years

Except as stated in the section titled Financial Statements Related Party Transactions beginning on Page
No. 164 of this Draft Red Herring Prospectus, there has been no payment of benefits to our Promoters or the
members of our Promoter Group during the last two years from the date of this Draft Red Herring Prospectus.

Disassociation by our Promoters in the last three years

Except as stated below, none of our Promoters have disassociated from any company or firm in the last three
years preceding the date of this Draft Red Herring Prospectus. Our Promoter(s) have disassociated from these
entities as the Promoters could not devote time for performance of their duties.

Name of
Promoter
Name of entity
Nature of
Interest
Manner of
Disassociation
Date of
resignation /
transfer of
shares
Current
Status as on
30
th
Sept, 2011
Mr. Devendra
Deshmukh
Total Attorneys Legal
Support Services Private
Limited
Director Resignation 10.03.2011 Nil
Shareholder Transfer 31.07.2011 Nil
Stractive Consulting
Private Limited
Director Resignation 02.03.2011 Nil
Shareholder Transfer 26.03.2011 Nil



126

Choice Infra Ventures
Limited
Director Resignation 07.05.2011 Nil
e-Zest Infocom Pvt. Ltd.
Director Resignation 01.04.2011 Nil
Shareholder Transfer 01.04.2011 Nil
eZest Infotech Pvt. Ltd.
Director Resignation 01.04.2011 Nil
Shareholder Transfer 01.04.2011 Nil
Mr. Ashish
Gupta
Total Attorneys Legal
Support Services Private
Limited
Director Resignation 01.03.2011 Nil
Shareholder Transfer 31.07.2011 Nil
Choice Infra Ventures
Limited
Director Resignation 07.05.2011
e-Zest Infocom Pvt. Ltd.
Director Resignation 01.04.2011 Nil
Shareholder Transfer 01.04.2011 Nil
eZest Infotech Pvt. Ltd.
Director Resignation 01.04.2011 Nil
Shareholder Transfer 01.04.2011 Nil
Mr. Amol Pande

Total Attorneys Legal
Support Services Private
Limited
Director Resignation
10.03.2011


Nil

Shareholder Transfer 31.07.2011 Nil
Choice Infra Ventures
Limited
Director Resignation 07.05.2011
e-Zest Infocom Pvt. Ltd.
Director Resignation 01.04.2011 Nil
Shareholder Transfer 01.04.2011 Nil
eZest Infotech Pvt. Ltd.
Director Resignation 01.04.2011 Nil
Shareholder Transfer 01.04.2011 Nil
Mr. Sunil Dane
Total Attorneys Legal
Support Services Private
Limited
Director Resignation 01.03.2011 Nil
Shareholder Transfer 31.07.2011 Nil
Group Companies
As specified in the ICDR Regulations, the entities promoted by our Promoters i.e. our Group Companies are
set out below:
1. e-Zest Infocom Private Limited
Corporate Information:
Date of Incorporation 03/02/2007
CIN U72200PN2007PTC129551
Registered Office
Anand Nilay Co-Op. Housing Society, 3rd Floor,
Near Karve Statue, Karve Road, Kothrud, Pune.
Bank Account 1394002101001774
PAN AABCE7339J
Nature of Business IT Software development



127

Interests of our Promoters as on the date of this Draft Red Herring Prospectus:
None of our promoters have interest in this group company.

Particulars of Shareholding:
Sr.
No.
Name Designation
No. of Shares
as on 31
st

March, 2011
Shareholding
as on 31
st

March, 2011
No. of Shares
as on 30
th

Sept, 2011
Shareholding
as on 30
th

Sept, 2011
1.
e-Zest Solutions
Limited
Shareholder 5,100 51% 2,000 20.00%
2. Sonal Deshmukh Shareholder Nil Nil 2,667 26.67%
3. Avina Datta Shareholder
Nil Nil
2,666 26.66%
4. Ramesh Pande Shareholder
Nil Nil
2,667 26.67%
5.
Devendra
Deshmukh
Shareholder 1,633 16% Nil Nil
6. Amol pande Shareholder 1,634 16%
Nil Nil
7. Ashish Gupta Shareholder 1,633 17%
Nil Nil

Financial Performance :
The summary of audited financial information for the last three fiscal years is as follows:
(` in Lacs)
Particulars March 31, 2009 March 31, 2010 March 31, 2011
Total Income 1242.23 1559.44 924.82
Profit/Loss after Tax 2.42 3.01 (2.94)
Equity Share Capital 1.00 1.00 1.00
Reserves & Surplus 3.61 6.62 3.67
NAV 46.07 76.22 46.78
EPS (Basic & Diluted) 24.20 30.10 (29.40)

Other Details:-

1. The Company has not become a sick company within the meaning of the Sick Industrial Companies
(Special Provisions) Act, 1985 or is not under winding up.
2. The Company incurred a loss in the immediately preceding financial year.
3. There are no defaults in meeting any statutory/bank/institutional dues.
4. No proceedings have been initiated for economic offences against this Company.
5. No proceedings have been initiated by SEBI or other regulatory authorities for violation of any
Securities laws against this company.

2. eZest Infotech Private Limited
Corporate Information:




128

Date of Incorporation 02/02/2007
CIN U72900PN2007PTC129548
Registered Office
Anand Nilay Co-Op. Housing Society, 2nd Floor,
Near Karve Statue, Karve Road, Kothrud, Pune.
Bank Account 1394002101001765
PAN AABCE7338K
Nature of Business IT Software development

Interests of our Promoters as on the date of this Draft Red Herring Prospectus:
None of our promoters have interest in this group company.

Particulars of Shareholding:

Sr.
No.
Name Designation
No. of Shares
as on 31
st

March, 2011
Shareholding
as on 31
st

March, 2011
No. of Shares
as on 30
th

Sept, 2011
Shareholding
as on 30
th

Sept, 2011
1.
e-Zest Solutions
Limited
Shareholder 5,100 51% 2,000 20.00%
2. Sonal Deshmukh Shareholder Nil Nil 2,667 26.67%
3. Avina Datta Shareholder
Nil Nil
2,666 26.66%
4. Ramesh Pande Shareholder
Nil Nil
2,667 26.67%
5.
Devendra
Deshmukh
Shareholder 1,633 16% Nil Nil
6. Amol pande Shareholder 1,634 16%
Nil Nil
7. Ashish Gupta Shareholder 1,633 17%
Nil Nil

Financial Performance
The summary of audited financial information for the last three fiscal years is as follows:
(` in Lacs)
Particulars March 31, 2009 March 31, 2010 March 31, 2011
Total Income 45.14 30.79 5.64
Profit/Loss after Tax 2.08 2.35 (2.83)
Equity Share Capital 1.00 1.00 1.00
Reserves & Surplus 3.01 5.36 2.54
NAV 37.92 62.16 35.39
EPS (Basic & Diluted) 20.80 23.50 (28.30)

Other Details:-

1. The Company has not become a sick company within the meaning of the Sick Industrial Companies
(Special Provisions) Act, 1985 or is not under winding up.
2. The Company incurred a loss in the immediately preceding financial year.
3. There are no defaults in meeting any statutory/bank/institutional dues.
4. No proceedings have been initiated for economic offences against this Company.
5. No proceedings have been initiated by SEBI or other regulatory authorities for violation of any
Securities laws against this company.



129

3. Loftbpo Services Private Limited
Corporate Information
Date of Incorporation 23/03/2011
CIN U72200PN2011PTC138972
Registered Office
3-4, Aishwarya Sankul, S. No. 17, G.A. Kulkarni
Path, Opposite Joshi Railway Museum, Kothrud.
Pune 411 038
Nature of Business Outsourcing Services

Interests of our Promoters as on the date of this Draft Red Herring Prospectus:

Our Promoter, Mr. Devendra Deshmukh, holds 1 equity share of Loftbpo Services Private Limited.

Particulars of Shareholding:

Sr.
No.
Name Designation
No. of Shares
as on 31
st

March, 2011
Shareholding
as on 31
st

March, 2011
No. of Shares
as on 30
th

Sept, 2011
Shareholding
as on 30
th

Sept, 2011
1.
Devendra
Deshmukh
Shareholder 1 00.01 % 1 00.01 %
2.
Ameet Madhukar
Gokhale
Shareholder 9,999 99.99 % 9,999 99.99 %

Financial Performance

The company was incorporated on March 23, 2011. It was yet to commence its business till 31st March 2011.
Hence, there is no financial data for previous years.

Other Details:-

Not Applicable

G) CURRENCY OF PRESENTATION

In this Red Herring Prospectus, unless the context otherwise requires, all references to the word Lac or
Lac, means One Hundred Thousand and the word million means Ten Lacs and the word Crore
means Ten Million and the word billion means One thousand million and the word trillion means
One thousand billion.

In this Red Herring Prospectus, all references to Rupees or ` or INR are to Indian Rupees, the official
currency of the Republic of India and all references to $, US$, U.S.$, USD, U.S. Dollar(s) or US
Dollar(s), if any, are to United States Dollars, the official currency of the United States of America.

For the convenience of the Shareholders, throughout this Red Herring Prospectus, the reporting unit has been
maintained as Rupees in Lacs (Rupees in Hundred Thousands), except when stated otherwise.



130

H) DIVIDEND POLICY
Under the Companies Act, our Company can pay dividends upon a recommendation by its board of directors
and approval by a majority of the shareholders at the annual general meeting, who have the right to decrease
but not to increase the amount of the dividend recommended by the board of directors. The dividends may be
paid out of profits of a company in the year in which the dividend is declared or out of the undistributed
profits or reserves of previous Fiscal years or out of both. The Articles of Association of our Company also
gives the discretion to the Board of Directors to declare and pay interim dividends without shareholders
approval at an annual general meeting. All dividend payments are made in cash to the shareholders of our
Company.

We have paid out the following dividends during the last five fiscal years:

Financial Year Dividend per Equity Share of ` 10 each Amount (` in Lacs)
2005-06 10.00 24.00
2006-07 5.00 12.00
2007-08 5.00 12.00
2008-09 1.00 26.40
2009-10 0.35 9.24
2010-11 - -
* Dividend includes Interim Dividend.

The amounts paid as dividends in the past are not necessarily indicative of our dividend policy or dividend
amounts, if any, in the future.




131

VII. FINANCIAL INFORMATION OF THE ISSUER

A. Auditors Report on Restated Consolidated Financial Information

To,
The Board of Directors,
e-Zest Solutions Limited
B-103, PushpVinod,
S.V. Road, Borivali (W),
Mumbai- 400 092
Maharashtra.

Subject: Financial Information of e-Zest Solutions Limited

Dear Sir,

At your request, M/s Sajjan Kanodia & Co., Chartered Accountants, statutory auditors of e-Zest Solutions
Limited have examined the Consolidated Summary Statement of Assets and Liabilities (Annexure I), as
restated of e-Zest Solutions Limited (the Company) and its subsidiaries as stated in paragraph 3(b) below,
(collectively referred to as the Group) as at March 31, 2011, March 31, 2010, March 31, 2009, March 31,
2008 and March 31, 2007 and the related Consolidated Summary Statement of Profits and Losses (Annexure
II), as restated and Consolidated Statement of Cash Flows (Annexure III), as restated for the financial years
ended March 31, 2011, March 31, 2010, March 31, 2009, March 31, 2008 and March 31, 2007. These
Consolidated Summary Statements have been prepared by the Group and approved by the Board of Directors
for the proposed Public Offer.

These statements reflect the Profit or Loss and Assets and Liabilities for the relevant period as extracted
from the Profit & Loss Account and the Balance Sheet for the year ending March 31, 2007 to March 31, 2010
audited and reported by S.K. Patodia & Associates, Chartered Accountants. The accounts of the Company for
the year ended March 31 2011 have been audited and reported by us in accordance with:

I. Paragraph B of Part II of Schedule II of the Companies Act, 1956 (the Act), and the amendments thereof

II. The Securities and Exchange Board of India (Issue of Capital & Disclosure Requirement Regulation) 2009
issued by the Securities and Exchange Board of India (SEBI) and amendments made there to from time to
time in pursuance of section 11 of the Securities and Exchange Board of India Act, 1992; and

III. Our engagement with the Company requesting us to examine the financial information referred to above
and proposed to be included in the offer document of the Company in connection with its Proposed Issue.

IV. In terms of Schedule VIII, Clause IX (9) of the SEBI (ICDR) Regulations, 2009 and other provisions
relating to consolidated accounts of the e-Zest Solutions Limited, we, M/s, Sajjan Kanodia & Co, Chartered
Accountants, have been subjected to the peer review process of the Institute of Chartered Accountants of India
(ICAI) and hold a valid certificate issued by the Peer Review Board of the ICAI.

V. The company made strategic investment in e-Zest Infocom Private Limited and eZest Infotech Private
Limited to the extent of 51% in 2007. Thus, these Companies were subsidiaries of e-Zest Solutions Limited.
On April 1, 2011, the Company divested of its stake in the two Companies to the extent of 31% in each. The
present investment in the entities is now 20%. Thus, e-Zest Infocom Private Limited and eZest Infotech
Private Limited are no longer subsidiaries of e-Zest Solutions Limited. Hence, the consolidated statements are
prepared till 31
st
March, 2011.

VI. This report, in so far as it relates to the amounts included for the year ended March 31,2011 is concerned,
is based on the Financial Statements of the e-Zest and its group Companies which were solely audited by
Sajjan Kanodia & Co, Chartered Accountants.



132

VII. The Proposed public issue will be for a fresh issue by the company of 1,00,00,000 Equity Shares of ` 10
each, at such premium by way of book building process, as may be decided by the Board of Directors
(referred to as the Issue) in consultation with the Book Running Lead Manager. The Offer is made through
the 100% Book Building process.

We have examined:

1. The attached summary statement of Restated Assets & Liabilities of the Company as at March 31 2007,
2008, 2009, 2010 and 2011 as prepared by the Company and approved by the Board of Directors. (Annexure
- I).

2. The accompanying summary statement of Restated Profits & Losses of the Company for the financial years
ended March 31 2007, 2008, 2009, 2010 and 2011 as prepared by the Company and approved by the Board of
Directors. (Annexure II)

3. The accompanying summary statement of cash flow of the Company for the financial year ended March 31
2007, 2008, 2009, 2010 and 2011 as prepared by the Company and approved by the Board of Directors
(Annexure III)

VIII. Based on our examination of these summary statements, we confirm that the restated financial
information has been made in accordance with the provisions of sub-clause (B) of clause (IX) of Part A of
Schedule VIII of the SEBI (ICDR) Regulations, and after incorporating:

a. Adjustments suggested in paragraph 9 of sub-clause (B) of clause (IX) of Part A of Schedule VIII of the
SEBI (ICDR) Regulations,

b. The prior period items which are required to be adjusted are properly stated.

c. There are no extra-ordinary items that need to be disclosed separately in the accounts.

d. The accounting policies applied for each of the years ended March 31 2007, 2008, 2009, 2010 and 2011 are
materially consistent with the existing Accounting Standards. (Annexure IV)

e. The Restated profits have been arrived at after charging all expenses including depreciation and after
making such adjustments and regrouping as in our opinion are appropriate in the year to which they are
related as described in restated Financial Statement.

f. Other Financial information
We have also examined the following financial information relating to the Company prepared by the
management and approved by the Board of Directors for the purpose of inclusion in the Offer Document:

i. Statement of Other Income as appearing in Annexure V to this report.

ii. Statement of Accounting & Other Ratios as appearing in Annexure VI to this report.

iii. Statement of Capitalization of the company as appearing in Annexure VII to this report

iv. Statement of Secured Loans as appearing in Annexure VIII to this report.

v. Statement of Unsecured Loans as appearing in Annexure IX to this report.
vi. Statement of Sundry Debtors as appearing in Annexure X to this report.

vii. Statement of Loans and Advances as appearing in Annexure XI to this report.

viii. Statement of Contingent Liabilities & Capital Commitments as appearing in Annexure XII to this



133

report.

ix. Statement of Related Party Transaction as appearing in Annexure XIII to this report.

x. Statement of Dividend paid as appearing in Annexure XIV to this report

xi. Statement of Investments as appearing Annexure XV to this report.

xii. Details of Qualification in Auditors Report as Appearing in Annexure XVI to this report.

xiii. Details of Changes in significant Policies as Appearing in Annexure XVII to this report

IX. In our opinion, the above financial information of the Company read with Significant Accounting Policies
& Notes to Accounts attached in Annexure IV to this report, after making adjustments and regrouping as
considered appropriate has been prepared in accordance with Part II of the Schedule II of the Act and the
SEBI (ICDR) Regulations issued by SEBI, as amended from time to time subject to and read with other notes.

X. This report should not be in any way construed as a re-issuance or re-dating of any of the previous audit
reports issued by us or other statutory auditor, nor should this report be construed as a new opinion on any of
the financial statements referred therein.

XI. This report is intended solely for your information and for inclusion in the Offer document in connection
with the issue of Equity shares of the Company and is not be used, referred to or distributed for any other
purpose without our written consent.

Thanking you

For M/s. Sajjan Kanodia & Co.
Chartered Accountants


Sd/-
CA. Yogesh Palsania

Membership No: 124760
Firm Registration No: 114587W
Place: Mumbai
Date: October 10, 2011












134

ANNEXURE-I
B. CONSOLIDATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED
(` in Lacs)


Particulars
As at
March 31,
2007
As at
March 31,
2008
As at
March 31,
2009
As at
March 31,
2010
As at
March 31,
2011
A. Fixed Assets:
Gross Block 352.70 687.47 729.93 818.89 854.40
Less : Depreciation 28.49 51.17 83.30 121.45 160.41
Net Block 324.21 636.29 646.63 697.44 693.99
B. Investments 0.05 0.05 0.05 0.05 0.05
C. Deferred Tax Assets - - - - -
D.
Current Assets, Loans &
Advances

Inventories 6.22 11.80 26.55 38.55 164.59
Sundry Debtors 2.80 239.10 134.91 500.08 1,166.44
Cash and Bank Balances 99.65 22.85 40.50 111.10 63.01

Other Current Assets, Loans and
Advances
142.62 57.78 54.43 97.91 260.14
Total 251.29 331.55 256.39 747.65 1,654.17
E. Miscellaneous Expenditure - 0.20 0.15 0.10 -
F. Liabilities& Provisions
Secured Loans 224.67 380.43 292.38 273.06 169.28
Unsecured Loans 37.53 31.12 26.13 7.81 11.73
Current Liabilities and Provisions 12.79 150.02 81.19 468.20 1,138.16
Minority Interest - 1.53 3.78 6.41 3.59
Total 274.99 563.10 403.48 755.49 1,322.77
Deferred Tax Liability 22.98 40.07 54.84 67.03 88.63
G. Total ( A+B+C+D-E-F ) 277.58 364.92 444.90 622.71 936.81
H. Represented by
Share Capital 24.00 264.00 264.00 481.78 489.58
Reserves and Surplus 253.58 100.92 180.90 140.94 447.24
Total 277.58 364.92 444.90 622.71 936.81

Note: The above statement should be read with significant accounting policies, notes on adjustments and
notes to account to the consolidated financial statements as stated as per Annexure IV.





135

ANNEXURE-II
CONSOLIDATED SUMMARY STATEMENT OF PROFITS AND LOSSES, AS RESTATED
(` in Lacs)
Particulars
Year ended
March 31,
2007
Year ended
March 31,
2008
Year ended
March 31,
2009
Year ended
March 31,
2010
Year ended
March 31,
2011
INCOME
Sales & Other Operating Income
Domestic Income 11.71 1,163.27 1,287.37 1,578.23 1,118.18
Export Income 614.24 720.38 828.29 1,023.89 940.16
Other Income 4.28 0.23 20.10 12.14 28.45
Net Sales 630.22 1,883.88 2,135.77 2,614.26 2,086.79
Increase /(Decrease) in Inventories 0.89 5.58 14.75 12.00 126.04
Total Income 631.11 1,889.46 2,150.52 2,626.26 2,212.83
EXPENDITURE
Direct Cost of Sales or Services 27.73 1,135.16 1,317.34 1,589.57 933.78
Purchases 318.36 441.07 503.58 622.71 714.75
Personnel Cost 98.47 114.99 101.21 206.77 166.27
Interest and other finance charges 25.19 50.16 50.13 38.64 25.06
Depreciation 15.15 22.68 32.13 38.14 49.34
Total 484.90 1,764.07 2,004.38 2,495.84 1,889.19
Net Profit / (Loss) before tax 146.21 125.39 146.14 130.42 323.63
Taxation ( including current deferred ,
FBT & MAT credit entitlement )
- - - - -
- Current Tax 2.23 5.79 19.36 24.15 67.20
- Fringe Benefit Tax 1.11 1.18 1.33 - -
- Income Tax For Earlier Years - - - - -
- Deferred Tax Liability/(Assets) 7.32 17.09 14.77 12.20 21.59
Net Profit \ (Loss) after tax 135.55 100.97 110.71 96.57 234.84
Add/ (Less): Adjustments on account of
restatements Short /( Excess) Provision
in respect of income tax for earlier years
- (0.36) (0.07) 2.47 (2.35)
Profit/(Loss) :Available for
Appropriation as restated
135.55 101.34 110.78 94.10 237.19
Appropriations: - - - - -
- Transferred to General Reserve 15.00 10.00 - - -
- Proposed Dividend 12.00 12.00 26.40 9.24 -
- Tax on Dividend 1.86 2.04 4.49 1.57 -
- Prior Period Expenses - - - - 0.97
-Capitalization by way of issue of Bonus
shares
- 185.00 - 156.75 -
Total Appropriations 28.86 209.04 30.89 167.56 0.97
Balance Brought Forward from earlier
year
91.88 198.58 89.84 167.48 91.39
Less/(Add) : Minority Interest - 1.04 2.25 2.63 (2.83)
Balance carried forward to Balance
Sheet as restated
198.58 89.84 167.48 91.39 330.43





136

ANNEXURE-III

CONSOLIDATED STATEMENT OF CASH FLOWS, AS RESTATED
(` in Lacs)
Sr.
No.
Particulars
Year ended
March 31,
2007
Year ended
March 31,
2008
Year ended
March 31,
2009
Year ended
March 31,
2010
Year ended
March 31,
2011
A.
Cash Flow From Operating
Activities:

Net Profit Before Tax and
Extraordinary Items
146.21 125.39 146.14 130.42 323.63

Adjustment for :-


Depreciation 15.15 22.68 32.13 38.14 49.34

Interest Income (4.28) (0.23) (1.11) (0.08) (0.06)

Dividend Income - - (0.01) (0.01) (0.01)

Interest charges 22.49 50.16 50.13 34.99 23.30

Profit on sale of asset - - - - (12.23)

Misc. expenses written off - 0.10 0.10 0.10 0.19

Operating Profit Before
Working Capital Changes
179.57 198.10 227.37 203.57 384.18

Adjustment for :-


Trade and other receivables (2.76) (236.31) 104.20 (365.17) (666.35)

Inventories (0.89) (5.58) (14.75) (12.00) (126.04)

Loans and advances and
Other Current Assets
(137.12) 85.20 2.64 (16.86) (124.24)

Trade payables and Other
Liabilities
(6.96) 139.52 (88.40) 378.25 605.00

Cash Generated From
Operation
31.85 180.94 231.06 187.78 72.54

Direct Tax Paid (Net) (2.52) (4.88) (2.70) (39.63) (40.61)

Earlier year taxes paid (0.16) - - - -

Preliminary Expenses - (0.49) - - (0.97)

Net Cash from Operating
Activities
29.16 175.57 228.36 148.16 30.96
B.
Cash Flow From Investing
Activities

Purchases of Fixed Assets (25.21) (334.76) (42.46) (88.96) (161.66)

sales of fixed assets - - - - 128.00

Dividend Income - - 0.01 0.01 0.01

Interest from Fixed Deposit 4.28 0.23 1.11 0.08 0.06

Sale of investment in
Subsidiary Company
- - - - -


Net Cash Used In Investing
Activities
(20.93) (334.53) (41.34) (88.87) (33.59)
C.
Cash Flow From Financing
Activities

Addition to share capital - 0.98 - 61.03 7.80

Dividend Paid (18.00) (18.00) (26.40) - -

Proceeds from Secured
borrowings
72.12 155.76 (88.05) (177.24) (103.78)



137


Proceeds from Unsecured
borrowings
(26.10) (6.41) (4.79) 139.94 3.63

Increase in Share premium - - - 33.39 70.20

Financing charges (22.49) (50.16) (50.13) (34.99) (23.30)

Dividend on shares - - - (10.81)


Net Cash Used In Finance
Activities
5.54 82.17 (169.37) 11.31 (45.45)

Net Increase / (Decrease) in
cash and cash equivalent
13.77 (76.80) 17.65 70.60 (48.08)

Cash & Cash Equivalent as at
the beginning of the year
85.88 99.65 22.85 40.50 111.10

Cash & Cash Equivalent as at
the year end
99.65 22.85 40.50 111.10 63.01

3. The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in the
Accounting Standard - 3 on Cash Flow Statement issued by the Institute of Chartered Accountants of
India.
4. Cash and cash equivalent at the end of the year consist of cash in hand and balances with banks and are
net of short term loans and advances from banks as follows including fixed deposits
(` in Lacs)
Particulars
Year ended
March 31,
2007
Year ended
March 31,
2008
Year ended
March 31,
2009
Year ended
March 31,
2010
Year ended
March 31,
2011
Cash in hand 1.11 0.50 1.52 3.15 9.20
Balances with Bank 98.54 22.35 38.98 107.95 53.81
Total 99.65 22.85 40.50 111.10 63.01


ANNEXURE-IV
NOTES TO RESTATED ACCOUNTS

I. Significant Accounting Policies& Notes to accounts as restated
A. Basis of Consolidation:
The Consolidated financials results comprise of the results of e-Zest Solutions Limited (hereinafter
referred to as the Company and its subsidiaries, eZest Infotech Private limited and e-Zest Infocom
Private Limited, which are consolidated in accordance with Accounting Standard - 21 on Consolidated
Financial Statements issued by the Institute of Chartered Accountants of India (ICAI).

The financial statements of the Company and its subsidiary has been combined on a line-by-line basis by
adding together the balances of like items of assets, liabilities, income and expenditure after fully
eliminating the intra- group balances and intra-group transactions resulting in unrealized profit or loss.

The consolidated financial statements have been prepared using uniform accounting policies for like
transactions and other events in similar circumstances and are presented to the extent possible, in the
same manner as the Companys separate financial statements.

The excess of cost to the Company of its investments in the subsidiaries over its portion of equity of
subsidiaries at the dates they become subsidiaries is recognized in the financial statements as goodwill.
When the cost to the parent of its investment in subsidiaries is less than the parents portion of equity, the
difference is recognized in the financial statements as capital reserve.




138

B. Basis of Accounting:
The financial statements are prepared under the historical cost convention, on a going concern concept
and in compliance with the Accounting Standards notified by the Companies (Accounting Standard)
Rules, 2006 and the relevant provisions of the Companies Act 1956. Accounting policies not specifically
referred to otherwise, are consistent and in consonance with the generally accepted accounting principles
C. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on
the date of the financial statements and reported amounts of revenues and expenses during the reporting
period. Differences between actual results and estimates are recognized in the period in which the results
are known / materialise.
D. Recognition of Income
Revenue is recognised when it is earned and no significant uncertainty exists as to its realisation or
collection.
The Company follows the accrual basis of accounting except in case of insurance claim and dividend
income, where the same are recorded on cash basis on ascertainment of right and obligation.
E. Fixed Assets
Fixed Assets are stated at actual cost of acquisition less accumulated depreciation and impairment, if any.
Cost includes all incidental expenses related to acquisition and attributable cost of bringing the asset to
its working condition for its intended use.
F. Impairment of Fixed Assets
At the end of each year, the Company determines whether a provision should be made for impairment
loss on fixed assets by considering the indication that an impairment loss may have occurred in
accordance with Accounting Standard 28 on Impairment of Assets. Where the recoverable amount of
any fixed assets is lower than its carrying amount, a provision for impairment loss on fixed assets is
made.
G. Depreciation
i) Depreciation on Fixed Assets has been provided on Straight Line Method as per the rates specified
in Scheduled XIV of the Companies Act, 1956.

ii) Depreciation on assets acquired/sold during the year is provided on pro-rata basis.
H. Investments
Investments that are intended to be held for more than a year, from the date of acquisition, are classified
as long term investment and are carried at cost less any provision for permanent diminution in value.
Investments other than long term investments being current investments are valued at cost or fair market
value whichever is lower.

I. Employee Benefits
The Company has both defined contribution and defined benefit plans of which some have assets in
special funds or similar securities. The plans are financed by the Company and in case of some defined
contribution plans, by the Company along with its employees.

Gratuity
In accordance with the Payment of Gratuity Act, 1972, the company provides for a lump sum payment to
eligible employees, at retirement or termination of employment based on the last drawn salary and years
of employment with the company. The Companys gratuity benefit scheme is a defined benefit plan. The



139

companys obligation in respect of the gratuity plan is provided by for based on actuarial valuation
carried out by an independent actuary using the projected unit credit method. The Company recognises
actuarial gains and losses immediately in the profit and loss account.

Provident fund, State Insurance, Labour Welfare Fund, Professional Tax
These are the defined contribution plans in which the Company pays pre-defined amounts to separate
funds. The Companys contributions to these funds are reported as an expense during the period in which
the employees perform services that the payment covers.

Compensated Absences
The employees of the Company are entitled to compensate absence. The employees can carry forward a
portion of the unutilized accrued compensated absence and utilize it in future periods or receive cash
compensation at retirement or termination of employment for the unutilized accrued compensated
absence. The company follows the cash basis of accounting for recording the obligation of leave
encashment. In other words, the company records an obligation for compensated absences in the period
in which it has been encashed by the employees.

J. Valuation of inventories

Inventories are valued at lower of cost or net realizable value.
K. Miscellaneous Expenditure

Preliminary expenses are amortised in the year in which they are incurred.
L. Foreign Currency Transactions

The transactions in foreign currencies are stated at the rate of exchange prevailing on the date of
transactions.
The difference on account of fluctuation in the rate of exchange prevailing on the date of transaction and
the date of realization is charged to the Profit and Loss Account.

Differences on translations of Current Assets and Current Liabilities remaining unsettled at the year-end
are recognized in the Profit and Loss Account.

M. Treatment of Contingent Liabilities

Contingent liabilities are disclosed by way of notes to accounts. Disputed demands in respect of income
tax and other proceeding are disclosed as contingent liabilities. Payments in respect of such demands, if
any are shown as advances.
N. Accounting for Taxation of Income
Current taxes
Provision for current income-tax is recognized in accordance with relevant tax regulation.
Deferred taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing
differences that result between the profits offered for income taxes and the profits as per the financial
statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that
have been enacted or substantially enacted at the balance sheet date. The effect of a change in tax
rates on deferred tax and assets or liabilities are recognized in the period that includes the enactment
date. Deferred tax Assets are recognized only to the extent there is virtual certainty that the assets can
be realized in the future. Deferred Tax Assets are reviewed as at each Balance Sheet date.



140

II. Notes on Accounts
Companies considered in the consolidated financial statement are :
Name of the Company
Date of
Becoming
Country of
Incorporation
% voting power held
As on
31.03.2011
As on
31.03.2010
eZest Infotech Private Limited 2-Feb-2007 India 51.00 51.00
e-Zest Infocom Private Limited 3-Feb-2007 India 51.00 51.00

The audited financial statements of the Company and its subsidiaries are drawn for the twelve-month period
ending on 31st March, 2011.
The Restated Financial Statements relate to the Company and have been prepared specifically for inclusion in
the document to be filed by the Company with the Securities and Exchange Board of India (SEBI) in
connection with its proposed Initial Public Offering.

The Restated Financial Statements have been prepared to comply in all material respects with the
requirements of Schedule II to the Companies Act, 1956 (The Act) and the Securities and Exchange Board
of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (the SEBI Regulations) notified
by SEBI on August 26, 2009, and as amended from time to time.

The Restated Financial Statements have been prepared in respect of five years (for the accounting year ended
31st March 2007, 2008, 2009, 2010, 2011)

Prior year figures have been regrouped, rearranged & recast where considered necessary to confirm with the
current periods classification.

2. Earnings Per Share (As per AS 20)
In accordance with Accounting Standard 20- Earning per Share, the computation of earning per share is set out
below:
Sr.
No.
Particulars
Year
ended
March
31, 2007
Year
ended
March
31, 2008
Year
ended
March
31, 2009
Year
ended
March
31, 2010
Year
ended
March
31, 2011
i)
Weighted average number of Equity
Shares of ` 10/- each

a)
Number of shares at the beginning of the
period
2,40,000 2,40,000 26,40,000 26,40,000 48,17,759
b) Number of shares at the end of the period 2,40,000 26,40,000 26,40,000 48,17,759 48,95,759
c)
Weighted average number of shares
outstanding during the period
69,30,000 69,30,000 69,30,000 79,43,504 84,90,006
ii)
Net Profit after tax available for equity
shareholders (` in Lacs)
135.55 101.34 110.78 94.10 237.19
iii) Basic Earning Per Share (in `) 1.96 1.46 1.60 1.18 2.79

The Company does not has any dilutive potential equity shares. Consequently, the basic and diluted earning per
share of the Company remain the same.




141

3. Taxes on Income

In terms of Accounting Standard 22 on Accounting for Taxes on Income as notified by the Companies
(accounting Standard ) Rules , 2006 the Company has recognized Deferred Tax Liability/Assets in the Profit
& Loss A/c in all accounting years.

The accumulated balance in Net Deferred Tax Liability / (Assets) comprises of:-
(` in Lacs)
Particulars
As at
March 31,
2007
As at
March 31,
2008
As at
March 31,
2009
As at
March 31,
2010
As at
March 31,
2011
Difference due to Book & Tax
Depreciation
22.98 40.07 54.84 67.03 96.46
Difference due to Gratuity & Leave
Encashment
- - - - (7.84)
Deferred Tax Liability/ (Assets)
22.98 40.07 54.84 67.03 88.63

4. Details of counter guarantees and fixed deposits pledged with banks:
(` in Lacs)
Particulars
As at
March 31,
2007
As at
March 31,
2008
As at
March 31,
2009
As at
March 31,
2010
As at
March 31,
2011
Counter guarantees in respect of
guarantees given.
- 1.00 1.00 1.00 1.00
Pledged of fixed deposits with the bank
against the above bank guarantees.
- 1.00 1.00 1.00 1.00

5. Details of Auditors Remuneration:
(` in Lacs)
Particulars
Year
ended
March 31,
2007
Year
ended
March 31,
2008
Year
ended
March 31,
2009
Year
ended
March 31,
2010
Year
ended
March 31,
2011
Audit Fees & Tax Audit Feess 1.12 1.35 1.66 1.75 2.33
Other Services 0.11 0.23 0.25 0.40 0.43
Total 1.23 1.58 1.91 2.15 2.76

6. Details of Managerial Remuneration:
(` in Lacs)
Particulars
Year
ended
March 31,
2007
Year
ended
March 31,
2008
Year
ended
March 31,
2009
Year
ended
March 31,
2010
Year
ended
March 31,
2011
Directors Remuneration
(excluding sitting fees)
14.40 14.40 18.35 28.50 36.04

7. Employee Benefits: The Company have the policy for recognizing Employee benefits on annual basis.

i. Gratuity
The Company has provided for Gratuity, covering eligible employees, in accordance with the Payment of
Gratuity Act, 1972 during the financial year 2010-11. Accordingly, the previous years figures relating to
actuarial assumptions and liabilities have not been given below. In accordance with revised AS-15,



142

Employee Benefits, the company has provided the liability on actuarial basis. As per the actuarial
certificate, the details of unfunded post-employment defined benefit plan in respect of Gratuity are as follows:

Actuarial assumptions:
Particulars 2010-2011
Mortality Table (LIC) LIC 94-96 Ultimate
Withdrawal Rate 2.00% p.a. (18 to 60 Years)
Discount rate 8.25 % per annum
Salary Escalation 5.00 % per annum
The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factor, such as demand and supply in employment market.

ii. Leave Encashment (Including compensated Absence)
The Company has used the Projected Unit Credit (PUC) actuarial method to assess the Plans liabilities,
including those related to death-in-service and incapacity benefits. Under the PUC method a projected accrued
benefit is calculated at the beginning of the year and again at the end of the year for each benefit that will
accrue for all active members of the Plan. The projected accrued benefit is based on the Plans accrual formula
and upon service as of the beginning or end of the year, but using final compensation, projected to the age at
which the employee is assumed to leave active service. The Plan Liability is the actuarial present value of the
projected accrued benefits as of the beginning of the year for active members
Actuarial assumptions:
Period 01
st
April, 2010 to 31
st
March, 2011
Discount rate 8.25 % per annum
Salary Growth Rate 5.00 % per annum
Mortality LIC 94-96 Ultimate
Expected rate of return 0
Withdrawal rate (Per Annum) 2.00% p.a. (18 to 60 Years)
8. Amounts due to Micro, Small and Medium Enterprises:
The Company has not received any intimation from the suppliers under the Micro, Small & Medium
Enterprises Development Act 2006 and therefore disclosures, if any, relating to amounts unpaid as at the year-
end together with interest paid/payable as required under the said Act have not been given.

ANNEXURE-V
STATEMENT OF OTHER INCOME
(` in Lacs)
Particulars
Year
ended
March 31,
2007
Year
ended
March 31,
2008
Year
ended
March 31,
2009
Year
ended
March 31,
2010
Year
ended
March 31,
2011
Profit on sale of asset Non Recurring - - 18.98 - 12.23
Net Foreign Exchange Fluctuation - - - - 15.05
Rebate & Discounts - - - 0.05 0.01
Dividend received - - 0.01 0.01 0.01
Interest income 4.28 0.23 1.11 0.08 0.06
Other Receipts - - - 12.00 1.09
Total 4.28 0.23 20.10 12.14 28.45
Note: The classification of Other Income as Recurring/Non Recurring is based on the current operations and
business activities of the company as determined by the management.



143

ANNEXURE-VI
STATEMENT OF ACCOUNTING AND OTHER RATIOS

Particulars
As at
March 31,
2007
As at
March 31,
2008
As at
March 31,
2009
As at
March 31,
2010
As at
March
31, 2011
Net Profit Attributable to Equity
Shareholders
Earnings Per Share (EPS) (`)

- Basic/Diluted 1.96 1.46 1.60 1.18 2.79
Return on Net Worth (%) 62.54% 31.55% 27.37% 17.63% 30.42%
Net Asset Value Per Share(`) 4.01 5.26 6.42 7.84 11.03
Weighted Average No. of Equity Shares
(Nos.)
69,30,000 69,30,000 69,30,000 79,43,504 84,90,006
No. of Equity Shares outstanding (Nos.) 2,40,000 26,40,000 26,40,000 48,17,759 48,95,759
Net Profit after tax adjustments (` Lacs) 135.55 101.34 110.78 94.10 237.19
Net Worth/Net Asset (` Lacs) 277.58 364.72 444.76 622.61 936.81


ANNEXURE-VII
CAPITALIZATION OF STATEMENT
(` in Lacs)
Particulars
Pre issue as at 31st
March, 2011
Adjusted for the Issue
Borrowings
Short Term Debt 106.45 []
Long Term Debt 74.57
TOTAL DEBT 181.02
Shareholder's Funds
Share Capital 489.58
Reserves & Surplus 447.24 []
TOTAL SHAREHOLDER'S FUNDS 936.81
Total Capitalization
Long Term Debt/Equity Ratio 0.08 -
TOTAL DEBT/EQUITY RATIO 0.19 -

Note:-
Share Capital and reserve and surplus can be calculated only after conclusion of book building process.
Short term debts are debts maturing within next one year.




144

ANNEXURE-VIII
STATEMENT OF SECURED LOANS
(` in Lacs)
Name of the
Lender
As at
March
31, 2007
As at
March
31, 2008
As at
March
31, 2009
As at
March
31, 2010
As at
March
31, 2011
Sanction
Amount
Repayment
Schedule
Rate of Interest
p.a. (%)
A. Term Loans


Punjab
National Bank
126.21 98.52 64.75 - -


Citi Bank* - 238.42 179.57 132.54 69.48 215.00
Term Loan
Monthly EMI
13.50%
Total Term
Loans
126.21 336.95 244.32 132.54 69.48

B. Working
Capital
Facilities


Citi Bank** - - - 134.01 95.45
200.00
&
100.00
CC Monthly
Interest & Yearly
Renewal
12.75% &
LIBOR plus 200
Basis Points
Punjab
National Bank
98.46 43.48 48.06 - -

Total
Working
Capital
Facilities
98.46 43.48 48.06 134.01 95.45

C. Vehicle
loan***
- - - 6.51 4.35

Monthly EMI
Total Secured
Loan
224.67 380.43 292.38 273.06 169.28


1.*Equitable Mortgage of Building Premises located at Anand Nilay, Kothrud, Pune (Maharashtra) &
Personal Guarantee of directors, Mr. Devendra Deshmukh, Ashish Gupta and Amol Pande.

2.** Equitable Mortgage of Building Premises located at Anand Nilay, Kothrud, Pune (Maharashtra) &
Personal Guarantee of Directors Mr. Devendra Deshmukh, Ashish Gupta and Amol Pande & Hypothecation
of book debts.

3. ***Security offered Hypothecation of Car

ANNEXURE-IX

STATEMENT OF UNSECURED LOANS
(` in Lacs)
Particulars
As at
March 31,
2007
As at
March 31,
2008
As at
March 31,
2009
As at
March 31,
2010
As at
March 31,
2011
From Directors & Shareholders 31.76 28.95 26.13 7.81 11.73
From Banks & Financial Institutions 5.77 2.17 - - -
Others - - - - -
Total 37.53 31.12 26.13 7.81 11.73
Note:-All the above Unsecured Loans are repayable on demand basis and there is no fixed repayment
schedule.



145

ANNEXURE-X
STATEMENT OF SUNDRY DEBTORS
(` in Lacs)
Particulars
As at
March 31,
2007
As at
March 31,
2008
As at
March 31,
2009
As at
March 31,
2010
As at
March 31,
2011
Unsecured Considered good
More than Six Months - - - - 77.37
Others 2.80 239.10 134.91 500.08 1,089.07
Total 2.80 239.10 134.91 500.08 1,166.44
Note: There are no debtors related to the directors or promoters of e-Zest Solutions Limited as per the
management and are duly relied upon by the auditors. The auditors have not performed any procedures to
determine whether this list is accurate.

ANNEXURE-XI
STATEMENT OF LOANS & ADVANCES
(` in Lacs)
Particulars
As at
March 31,
2007
As at
March 31,
2008
As at
March 31,
2009
As at
March 31,
2010
As at
March 31,
2011
VAT Refundable - 3.10 4.45 -

Advances to staff 9.86 2.85 3.76 - -
Prepaid Expenses 0.13 0.14 0.31 - -
Advance against property 61.00 -

- -
Loans against capital goods 55.00 25.00 10.00 - -
Clients' Expenses Reimbursement 0.14 0.57 - - -
Advance recoverable in cash or
kind or for value to be received
- - - 30.14 30.07
Advances to Creditors 2.52 0.22 10.44 6.47 69.39
Deposits 0.25 0.25 1.95 3.84 17.11
Advance Tax & TDS & FBT 13.66 25.65 21.36 57.46 93.06
Service Tax Refundable - - 2.16 - -
Other Advances - - - - 50.51
Accrued Interest 0.05 - - - -
Total 142.62 57.78 54.43 97.91 260.14
Notes: The list of persons/entities classified as promoter group and group companies has been determined by
the management and relied upon by auditors. The auditors have not performed any procedures to determine
whether this list is accurate.

ANNEXURE-XII
STATEMENT OF CONTINGENT LIABILITIES
Details of counter guarantees and fixed pledged with banks
(` in Lacs)
Particulars As at
March
31, 2007
As at
March
31, 2008
As at
March
31, 2009
As at
March
31, 2010
As at
March
31, 2011
Counter guarantees in respect of guarantees given. - 1.00 1.00 1.00 1.00
Pledge of fixed deposits with the bank against the
above bank guarantees.
- 1.00 1.00 1.00 1.00



146

ANNEXURE-XIII

Related Party Disclosure in Accordance with AS-18
Party Relationship
Devendra Deshmukh Key Managerial Personnel
Amol Pande Key Managerial Personnel
Ashish Gupta Key Managerial Personnel
Sunil Dane Key Managerial Personnel
Jaywant Deshpande Key Managerial Personnel
e-Zest Infocom Private Limited Subsidiary
eZest Infotech Private Limited Subsidiary

(` in Lacs)
Details of transactions with related parties
Key Management Personnel
Directors
Remuneration
Loans &
Advances
Granted
Loans &
Advances
Received
Back
Unsecured
Loan
Taken
Unsecured
Loan Paid
2011

Devendra Deshmukh
7.65 - - - -
Amol Pande
7.65 - - - -
Ashish Gupta
7.65 - - 5.00 -
Sunil Dane
7.65 - - - -
Jaywant Deshpande
5.44 - - - -
2010

Devendra Deshmukh
7.50 - - - -
Amol Pande
7.50 - - 6.00 -
Ashish Gupta
7.50 - - 10.00 10.00
Sunil Dane
6.00 - - 26.75 13.39
2009

Devendra Deshmukh
6.12 - - - -
Amol Pande
6.12 - - - -
Ashish Gupta
6.12 - - - -
2008

Devendra Deshmukh
4.80 - - - -
Amol Pande
4.80 - - - -
Ashish Gupta
4.80 - - - -
2007

Devendra Deshmukh
4.80 - - 0.70 4.73
Amol Pande
4.80 - - 0.79 5.38
Ashish Gupta
4.80 - - 0.89 6.02

Note: Related Parties as disclosed by Management and relied upon by auditors.




147

ANNEXURE-XIV
Statement of Dividend Paid:
Particulars
As at March
31, 2007
As at March
31, 2008
As at March
31, 2009
As at March
31, 2010
As at March
31, 2011
No. of Equity Shares 2,40,000 26,40,000 26,40,000 48,17,759 48,95,759
Face Value (`) 10 10 10 10 10
Interim Dividend Rate 50% 50% 10% 3.5% -
Final Dividend Rate - - - - -
Amount in ` (Lacs) 12.00 12.00 26.40 9.24

ANNEXURE-XV
Schedule of Investments

Non Trade, Unquoted
5,000 Equity shares of Ichalkaranji Janata Sahakari Bank of the Face Value of ` 10 each.


ANNEXURE-XVI

Details of Qualification in Auditors Report

There were no qualifications in the Auditors report for the year ending on March 31, 2007, 2008, 2009, 2010
and 2011 except Accounting Standard -15 (Revised 2005) relating to Employee Retirement Benefits in year
march 2010.


ANNEXURE-XVII

Changes in the Significant Accounting Policies

Till FY 2009-10, the company had not provided for gratuity liability. The Company changed its accounting
policy form FY 2010-11 by providing gratuity liability on the basis of actuarial valuation.























148

SELECTED STANDALONE FINANCIAL AND OPERATING DATA

Auditors Report on Restated Standalone Financial Information

To,
The Board of Directors,
e-Zest Solutions Limited
B-103, PushpVinod,
S.V. Road, Borivali (W),
Mumbai- 400 092
Maharashtra.

Subject: Financial Information of e-Zest Solutions Limited

Dear Sir,

At your request, M/s Sajjan Kanodia & Co., Chartered Accountants, Statutory auditors of e-Zest Solutions
Limited have examined the Summary Statement of Assets and Liabilities (Annexure I) , as restated of e-Zest
Solutions Limited (the Company) as at September 30, 2011, March 31, 2011, March 31, 2010, March 31,
2009, March 31, 2008 and March 31, 2007 and the related Summary Statement of Profits and Losses
(Annexure II), as restated and Cash Flows (Annexure III) , as restated for the half year ending 30
th
September
2011 and financial year ending March 31, 2011, March 31, 2010, March 31, 2009, March 31, 2008 and March
31, 2007. These Summary Statements have been prepared by the Company and approved by the Board of
Directors for the proposed Public Offer.

These statements reflect the Profit or Loss and Assets and Liabilities for the relevant period as extracted
from the Profit & Loss Account and the Balance Sheet for the year ending March 31, 2007 to March 31, 2010
audited and reported by S.K. Patodia & Associates, Chartered Accountants. The accounts of the Company for
the year ended March 31 2011 and for the period ended September 30 2011 have been audited and reported by
us, which has been prepared in accordance with the requirements of:

I. Paragraph B, of Part II of Schedule II of the Companies Act, 1956 (the Act), and the amendments thereof

II. The Securities and Exchange Board of India (Issue of Capital & Disclosure Requirement Regulation) 2009
issued by the Securities and Exchange Board of India (SEBI) and amendments made thereto from time to
time in pursuance of section 11 of the Securities and Exchange Board of India Act, 1992; and

III. Our engagement with the Company requesting us to examine the financial information referred to above
and proposed to be included in the offer document of the Company in connection with its Proposed Issue.

IV. In terms of Schedule VIII, Clause IX (9) of the SEBI (ICDR) Regulations, 2009 and other provisions
relating to accounts of the e-Zest Solutions Limited, we, M/s. Sajjan Kanodia & Co, Chartered Accountants,
have been subjected to the peer review process of the Institute of Chartered Accountants of India (ICAI) and
hold a valid certificate issued by the Peer Review Board of the ICAI.

V. Audit of the financial statements for the years ended 31
st
March 2010, 31
st
March 2009, 31
st
March 2008
and 31
st
March 2007 has been conducted by Companys Statutory Auditor, M/s. S K Patodia & Co, Chartered
Accountants. Further, financial statements for the year ended 31
st
March 2011 and period ended 30
th
September, 2011 were audited by M/s Sajjan Kanodia & Co. This report, in so far as it relates to the amounts
included for the financial years ended 31
st
March 2010, 31
st
March 2009, 31
st
March 2008, and 31
st
March
2007 is based on the audited financial statements of the Company which were audited by the Statutory
Auditor, M/s. S K Patodia and Associates, Chartered Accountants and whose Audit report has been relied
upon by us for the said periods.

VI. The Proposed public issue will be for a fresh issue by the company of 1,00,00,000 Equity Shares of ` 10



149

each, at such premium by way of book building process, as may be decided by the Board of Directors in
consultation with the Book Running Lead Manager. The Offer is made through the 100%Book Building
process.

VII. Financial Information of the Company

We have examined:

1. The attached summary statement of Restated Assets & Liabilities of the Company as at March 31 2007,
2008, 2009, 2010, 2011 and 30
th
September 2011 as prepared by the company and approved by the Board of
Directors. (Annexure - I).

2. The accompanying summary statement of Restated Profits & Losses of the Company for the financial years
ended March 31 2007, 2008, 2009, 2010, 2011 and half year ended 30
th
September 2011 as prepared by the
Company and approved by the Board of Directors. (Annexure II)

3. The accompanying summary statement of cash flow of the company for the financial year ended March 31
2007, 2008, 2009, 2010, 2011 and half year ended 30
th
September 2011 as prepared by the Company and
approved by the Board of Directors (Annexure III)

VIII. Based on our examination of these summary statements, we confirm that the restated financial
information has been made in accordance with the provisions of sub-clause (B) of clause (IX) of Part A of
Schedule VIII of the SEBI (ICDR) Regulations, and after incorporating:

a. Adjustments suggested in paragraph 9 of sub-clause (B) of clause (IX) of Part A of Schedule VIII of the
SEBI (ICDR) Regulations,

b. The prior period items which are required to be adjusted are properly stated.

c. There are no extra-ordinary items that need to be disclosed separately in the accounts.

d. The accounting policies applied for each of the years ended March 31 2007, 2008, 2009, 2010, 2011 and
half year ended 30
th
September 2011 is materially consistent with the existing Accounting Standards.
(Annexure IV)

e. The Restated profits have been arrived at after charging all expenses including depreciation and after
making such adjustments and regrouping as in our opinion are appropriate in the year to which they are
related as described in restated Financial Statement.

f. There was no qualification in the audit reports issued by the statutory auditors for the respective years which
would require adjustment in these Restated Financial Statements

g. Other Financial information
We have also examined the following financial information relating to the Company prepared by the
management and approved by the Board of Directors for the purpose of inclusion in the Offer Document:

i. Statement of Other Income as appearing in Annexure V to this report.

ii. Statement of Accounting & Other Ratios as appearing in Annexure VI to this report.

iii. Statement of Capitalization of the company as appearing in Annexure VII to this report

iv. Statement of Tax Shelters as appearing in Annexure VIII to this report.

v. Statement of Secured Loans as appearing in Annexure IX to this report.



150


vi. Statement of Unsecured Loans as appearing in Annexure X to this report.

vii. Statement of Sundry Debtors as appearing in Annexure XI to this report.

viii. Statement of Loans and Advances as appearing in Annexure XII to this report.

ix. Statement of Contingent Liabilities & Capital Commitments as appearing in Annexure XIII to this report.

x. Statement of Related Party Transaction as appearing in Annexure XIV to this report.

xi. Statement of Dividend paid as appearing in Annexure XV to this report

xii. Statement of Investments as appearing Annexure XVI to this report.

xiii. Details of Qualification in Auditors Report as Appearing in Annexure XVII to this report.

xiv. Details of Changes in significant Policies as Appearing in Annexure XVIII to this report

IX. In our opinion, the above financial information of the Company read with Significant Accounting Policies
& Notes to Accounts attached in Annexure IV to this report, after making adjustments and regrouping as
considered appropriate has been prepared in accordance with Part II of the Schedule II of the Act and the
SEBI (ICDR) Regulations issued by SEBI, as amended from time to time subject to and read with other notes.

X. This report should not be in any way construed as a re-issuance or re-dating of any of the previous audit
reports issued by us or other statutory auditor, nor should this report be construed as a new opinion on any of
the financial statements referred therein.

XI. This report is intended solely for your information and for inclusion in the Offer document in connection
with the issue of Equity shares of the Company and is not be used, referred to or distributed for any other
purpose without our written consent.


Thanking you

For M/s. Sajjan Kanodia & Co.
Chartered Accountants

Sd/-
CA. Yogesh Palsania

Membership No: 124760
Firm Registration No: 114587W
Place: Mumbai
Date: October 11, 2011










151

ANNEXURE-I

Standalone Statement of Assets and Liabilities as restated
(` in Lacs)


Particulars
As at
March
31, 2007
As at
March
31, 2008
As at
March
31, 2009
As at
March
31, 2010
As at
March
31, 2011
As at
Sept 30,
2011
A. Fixed Assets:
Gross Block 352.70 687.47 729.93 818.89 834.40 744.41
Less : Depreciation 28.49 51.17 83.30 121.45 157.75 178.57
Net Block 324.21 636.29 646.63 697.44 676.64 565.85
B. Investments 0.05 1.07 1.07 1.07 1.07 0.45
C. Deferred Tax Assets
D.
Current Assets, Loans &
Advances

Inventories 6.22 11.80 26.55 38.55 164.59 221.84
Sundry Debtors 2.80 121.49 123.67 194.15 306.45 381.87
Cash and Bank Balances 99.65 14.51 24.60 13.36 51.93 11.14

Other Current Assets, Loans
and Advances
142.62 52.00 32.79 81.25 165.97 911.11
Total 251.29 199.80 207.60 327.32 688.94 1,525.96
E Liabilities& Provisions
Secured Loans 224.67 380.43 292.38 273.06 169.28 75.33
Unsecured Loans 37.53 30.04 24.87 6.00 11.00 11.00

Current Liabilities and
Provisions
12.79 23.87 45.18 69.36 170.27 238.37
Total 274.99 434.34 362.42 348.42 350.55 324.69
Deferred Tax Liability 22.98 40.07 54.84 67.03 85.74 81.81
F Total ( A+B+C+D-E) 277.58 362.76 438.04 610.37 930.36 1,685.76
G Represented by
Share Capital 24.00 264.00 264.00 481.78 489.58 1,449.26
Reserves and Surplus 253.58 98.76 174.04 128.60 440.79 236.50
Total 277.58 362.76 438.04 610.37 930.36 1,685.76

Note: The above statement should be read with significant accounting policies, notes on adjustments and
notes to account to the consolidated financial statements as stated as per Annexure IV.












152

ANNEXURE-II
Standalone summary Statement of Profit and Loss, as restated
(` in Lacs)
Particulars
Year
ended
March
31, 2007
Year
ended
March
31, 2008
Year
ended
March
31, 2009
Year
ended
March 31,
2010
Year
ended
March 31,
2011
Half Year
ending
Sept 30,
2011
Income
Sales & Other Operating Income 625.95 766.21 828.29 1,023.89 1,128.66 682.07
-Domestic Sales 614.24 720.38 828.29 1,023.89 940.16 465.53
-Export Income 11.71 45.83 - - 188.50 216.54
Other Income 4.28 0.23 20.10 0.14 27.67 23.61
Of the Products Traded 204.00
Net Sales 630.22 766.44 848.39 1,024.03 1,156.33 909.68
Increase /(Decrease) in Inventories 0.89 5.58 14.75 12.00 126.04 57.25
Total Income 631.11 772.02 863.14 1,036.03 1,282.37 966.92
Expenditure
Direct Cost of Sales or Services 27.73 25.63 42.72 21.46 16.76 20.65
Purchases 193.50
Personnel Cost 318.36 441.07 503.58 622.71 714.75 396.89
Administrative Selling & Other
Expenses
98.47 110.28 95.13 192.77 152.61 136.72
Interest and other finance charges 25.19 50.16 50.13 38.64 25.06 14.48
Depreciation 15.15 22.68 32.13 38.14 46.69 32.98
Total 484.90 649.82 723.68 913.72 955.86 795.23
Net Profit / (Loss) before tax 146.21 122.20 139.46 122.31 326.51 171.69
Taxation ( including current
deferred , FBT & MAT credit
entitlement )

- Current Tax 2.23 5.20 17.20 18.90 67.20 44.70
- Fringe Benefit Tax 1.11 1.16 1.30 - -
- Deferred Tax Liability/(Assets) 7.32 17.09 14.77 12.20 18.71 (3.93)
Net Profit \ (Loss) after tax 135.55 98.75 106.19 91.21 240.61 130.93
Add/ (Less): Adjustments on
account of restatements Short /(
Excess) Provision in respect of
income tax for earlier years
- (0.46) 0.03 2.47 (2.35) -
Profit/(Loss) :Available for
Appropriation as restated
135.55 99.22 106.17 88.73 242.96 130.93
Appropriations:
- Transferred to General Reserve 15.00 10.00 - - - -
- Proposed Dividend 12.00 12.00 26.40 9.24 - -
- Tax on Dividend 1.86 2.04 4.49 1.57 - -
- Prior Period Expenses - - - - 0.97 3.38
Capitalization by way of issue of
Bonus shares
- 185.00 - 156.75 - -
Total Appropriations 28.86 209.04 30.89 167.56 0.97 3.38
Balance Brought Forward from
earlier year
91.89 198.58 88.76 164.04 85.21 327.20
Balance carried forward to
Balance Sheet as restated
198.58 88.76 164.04 85.21 327.20 454.74
Note: The above statement should be read with significant accounting policies, notes on adjustments and
notes to account to the consolidated financial statements as stated as per Annexure IV.



153

ANNEXURE-III

Standalone Summary Statement of Cash Flow
(` in Lacs)
Sr.
No.
Particulars
Year ended
March 31,
2007
Year ended
March 31,
2008
Year ended
March 31,
2009
Year ended
March 31,
2010
Year ended
March 31,
2011
Half Year
ending
Sept 30,
2011
A
Cash Flow From
Operating Activities:


Net Profit Before Tax and
Extraordinary Items
146.21 122.20 139.46 122.31 326.51 171.69

Adjustment for :-



Depreciation 15.15 22.68 32.13 38.14 46.69 32.98

Interest Income (4.28) (0.23) (1.11) (0.08) (0.06) -

Dividend Income - - (0.01) (0.01) (0.01) -

Financing charges 22.49 50.16 50.13 34.99 23.30 10.71

Profit on sale of asset - - - - (12.23) 19.98

Operating Profit Before
Working Capital Changes
179.57 194.81 220.60 195.35 384.21 235.36

Adjustment for :-



Trade and other receivables (2.76) (118.69) (2.17) (70.49) (112.29) (75.42)

Inventories (0.89) (5.58) (14.75) (12.00) (126.04) (57.25)

Loans and advances and
Other Current Assets
(137.12) 91.09 19.18 (17.86) (44.53) (727.41)

Trade payables and Other
Liabilities
(6.96) 13.57
(0.05)

8.58 36.47
23.40


Cash Generated From
Operation
31.85 175.19 222.80 103.58 137.82 (601.32)

Direct Tax Paid (Net) (2.52) (4.88) (1.63) (36.37) (40.61) (20.10)

Earlier year taxes paid (0.16) - - - -

Preliminary Expenses - - - - (0.97) (3.38)

Net Cash from Operating
Activities
29.16 170.31 221.17 67.21 96.24 (624.80)
B
Cash Flow From
Investing Activities


Purchases of Fixed Assets (25.21) (334.76) (42.46) (88.96) (141.66) (36.17)

sales of fixed assets - - - - 128.00 94.00

Dividend Income - - 0.01 0.01 0.01 -

Interest from Fixed Deposit 4.28 0.23 1.11 0.08 0.06 -

Investment in non-current
assets
-
(1.02)

- - - -

Sale of investment in
Subsidiary Company
- - - - - 0.62


Net Cash Used In
Investing Activities
(20.93) (335.55) (41.34) (88.87) (13.59) 58.45
C
Cash Flow From
Financing Activities


Addition to share capital - - - 61.03 7.80
592.50


Dividend Paid (18.00) (18.00) (26.40) (10.81) - -

Proceeds from Secured
borrowings
72.12 155.76 (88.05) (177.24) (103.78) (93.96)

Proceeds from Unsecured (26.10) (7.49) (5.17) 139.05 5.00 -



154

borrowings

Increase in Share premium - - - 33.39 70.20 37.73

Financing charges (22.49) (50.16) (50.13) (34.99) (23.30) (10.71)

Net Cash Used In Finance
Activities
5.54 80.11 (169.75) 10.42 (44.08) 525.56

Net Increase / (Decrease) in
cash and cash equivalent
13.77 (85.14) 10.08 (11.23) 38.57 (40.79)

Cash & Cash Equivalent
as at the beginning of the
year
85.88 99.65 14.51 24.60 13.36 51.93

Cash & Cash Equivalent
as at the year end
99.65 14.51 24.60 13.36 51.93 11.14

1. The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in the
Accounting Standard - 3 on Cash Flow Statement issued by the Institute of Chartered Accountants of India.


ANNEXURE-IV

Significant Accounting Policies, Notes on Adjustments & Notes to Accounts as Restated.
A. Basis of Accounting
The financial statements are prepared under the historical cost convention, on a going concern concept
and in compliance with the Accounting Standards notified by the Companies (Accounting Standard)
Rules, 2006 and the relevant provisions of the Companies Act 1956. Accounting policies not
specifically referred to otherwise, are consistent and in consonance with the generally accepted
accounting principles.

The preparation of the financial statements in conformity with generally accepted accounting
principles ('GAAP') in India requires management to make estimates and assumptions that affect the
reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the
financial statements. Management believes that the estimates made in the preparation of financial
statements are prudent and reasonable. Actual results could differ from those estimates. Any revision
to accounting estimates is recognized prospectively in current and future periods.

B. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires estimates and assumptions to be made that affect the reported amount of assets and liabilities
on the date of the financial statements and reported amounts of revenues and expenses during the
reporting period. Differences between actual results and estimates are recognized in the period in
which the results are known / materialised.

C. Recognition of Income
Revenue is recognised when it is earned and no significant uncertainty exists as to its realisation or
collection. The Company follow the accrual basis of accounting except in case of Insurance Claim and
dividend Income, where the same are recorded on cash basis on ascertainment of right and obligation.




155

D. Fixed Assets
Fixed Assets are stated at actual cost of acquisition less accumulated depreciation and impairment, if
any. Cost includes all incidental expenses related to acquisition and attributable cost of bringing the
asset to its working condition for its intended use.

E. Impairment of Fixed Assets

At the end of each year, the Company determines whether a provision should be made for impairment
loss on fixed assets by considering the indication that an impairment loss may have occurred in
accordance with Accounting Standard 28 on Impairment of Assets. Where the recoverable amount
of any fixed assets is lower than its carrying amount, a provision for impairment loss on fixed assets is
made.

F. Depreciation

i) Depreciation on Fixed Assets has been provided on Straight Line Method as per the rates
specified in Scheduled XIV of the Companies Act, 1956.

ii) Depreciation on assets acquired/sold during the year is provided on pro-rata basis.

G. Investments
Investments that are intended to be held for more than a year, from the date of acquisition, are
classified as long term investment and are carried at cost less any provision for permanent diminution
in value. Investments other than long term investments being current investments are valued at cost
or fair market value whichever is lower.
H. Employee Benefits
The Company has both defined contribution and defined benefit plans of which some have assets in
special funds or similar securities. The plans are financed by the Company and, in case of some
defined contribution plans, by the Company along with its employees.

Gratuity
In accordance with the Payment of Gratuity Act, 1972, the company provides for a lump sum
payment to eligible employees, at retirement or termination of employment based on the last drawn
salary and years of employment with the company. The Companys gratuity benefit scheme is a
defined benefit plan. The companys obligation in respect of the gratuity plan is provided by for
based on actuarial valuation carried out by an independent actuary using the projected unit credit
method. The Company recognises actuarial gains and losses immediately in the profit and loss
account.

Provident fund, State Insurance, Labour Welfare Fund, Professional Tax
These are the defined contribution plans in which the Company pays pre-defined amounts to separate
funds. The Companys contributions to these funds are reported as an expense during the period in
which the employees perform services that the payment covers.

Compensated Absences
The employees of the Company are entitled to compensate absence. The employees of the Company
are entitled to leave as per the leave policy of the Company. The liability in respect of unutilised
leave balances is provided based on an actuarial valuation carried out by an independent actuary as at
the year end and charged to the Profit and Loss Account.




156

I. Valuation of inventories
Inventories are accounted for at cost, or net realizable value, whichever is less.
J. Miscellaneous Expenditure
Preliminary expenses are amortised in the year in which they are incurred.
K. Foreign Currency Transactions
The transactions in foreign currencies are recorded at the rate of exchange prevailing on the date of
transactions. The difference on account of fluctuation in the rate of exchange prevailing on the date
of transaction and the date of realization is charged to the Profit and Loss Account. Differences on
translations of Current Assets and Current Liabilities remaining unsettled at the year-end are
recognized in the Profit and Loss Account.

L. Treatment of Contingent Liabilities

Contingent liabilities are disclosed by way of notes to accounts. Disputed demands in respect of
income tax and other proceeding are disclosed as contingent liabilities. Payments in respect of such
demands, if any are shown as advances.

M. Accounting for Taxation of Income

Current taxes

Provision for current income-tax is recognized in accordance with the provisions of Indian Income-
tax Act, 1961 and is made annually based on the tax liability after taking credit for tax allowances and
exemptions.
Deferred taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing
differences that result between the profits offered for income taxes and the profits as per the financial
statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that
have been enacted or substantially enacted at the balance sheet date. The effect of a change in tax
rates on deferred tax and assets or liabilities are recognized in the period that includes the enactment
date. Deferred tax Assets are recognized only to the extent there is virtual certainty that the assets can
be realized in the future. Deferred Tax Assets are reviewed as at each Balance Sheet date.
Minimum Alternative Tax Credit

Minimum Alternative Tax (MAT) paid in accordance with tax laws, which give rise to future
economic benefits in the form of adjustment of future tax liability, is recognized as an asset only
when, based on convincing evidence, it is probable that the future economic benefits associated with it
will flow to the company and the asset can be measured reliably.
N. Segment Reporting
The Companys activities predominantly revolve around computer Software Development services.
Considering the nature of Companys business and operations, there is only one reportable segment
(business and / or geographical) in accordance with the requirements of the Accounting Standard 17
Segment Reporting notified in the Companies (Accounting Standards) Rules 2006.






157

II. Notes on Accounts
The Restated Financial Statements relate to the Company and have been prepared specifically for inclusion in
the document to be filed by the Company with the Securities and Exchange Board of India (SEBI) in
connection with its proposed Initial Public Offering.

The Restated Financial Statements have been prepared to comply in all material respects with the
requirements of Schedule II to the Companies Act, 1956 (The Act) and the Securities and Exchange Board
of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (the SEBI Regulations) notified
by SEBI on August 26, 2009, and as amended from time to time.

The Restated Financial Statements have been prepared in respect of five years (for the accounting year ended
31st March 2007, 2008, 2009, 2010, 2011) and for a period of six months ended September 30, 2011.

Prior year Figures have been regrouped, rearranged & recast where considered necessary to confirm with the
current periods classification.

1. Earnings Per Share (As per AS 20)
In accordance with Accounting Standard 20- Earning per Share, the computation of earning per share is set out
below:
Sr.
No.
Particulars
Year
ended
March
31, 2007
Year
ended
March
31, 2008
Year
ended
March
31, 2009
Year
ended
March
31, 2010
Year
ended
March
31, 2011
Half Year
ended
September
30, 2011
i)
Weighted average number of
Equity Shares of ` 10/- each

a)
Number of shares at the
beginning of the period
2,40,000 2,40,000 26,40,000 26,40,000 48,17,759 48,95,759
b)
Number of shares at the end
of the period
2,40,000 26,40,000 26,40,000 48,17,759 48,95,759 1,44,92,578
c)
Weighted average number of
shares outstanding during the
period
69,30,000 69,30,000 69,30,000 79,43,504 84,90,006 86,32,688
ii)
Net Profit after tax available
for equity shareholders
(` in Lacs)
135.55 99.22 106.17 88.73 242.96 130.93
iii)
Basic Earning Per Share (in
`)
1.96 1.43 1.53 1.12 2.86 1.48
The Company does not have any dilutive potential equity shares. Consequently the basic and diluted earning per
share of the Company remain the same.

2. Taxes on Income
In terms of Accounting Standard 22 on Accounting for Taxes on Income as notified by the Companies
(Accounting Standard) Rules, 2006, the Company has recognized Deferred Tax Liability/Assets in the Profit
& Loss A/c in all accounting years.

The accumulated balance in Net Deferred Tax Liability / (Assets) comprises of:-




158

(` in Lacs)
Particulars
As at
March 31,
2007
As at
March 31,
2008
As at
March 31,
2009
As at
March 31,
2010
As at
March 31,
2011
As at
September
30, 2011
Difference due to Book & Tax
Depreciation
22.98 40.07 54.84 67.03 93.58 88.83
Due to Gratuity & Leave
Encashment
- - - - (7.84) (7.03)
Deferred Tax Liability/ (Assets) 22.98 40.07 54.84 67.03 85.74 81.81

3. Details of counter guarantees and fixed deposits pledged with banks:
(` in Lacs)
Particulars
As at
March 31,
2007
As at
March 31,
2008
As at
March 31,
2009
As at
March 31,
2010
As at
March 31,
2011
As at
September
30, 2011
Counter guarantees in respect of
guarantees given.
- 1.00 1.00 1.00 1.00 1.00
Pledged of fixed deposits with the
bank against the above bank
guarantees.
- 1.00 1.00 1.00 1.00 1.00

4. Details of Auditors Remuneration
(` in Lacs)
Particulars
Year
ended
March 31,
2007
Year
ended
March 31,
2008
Year
ended
March 31,
2009
Year
ended
March 31,
2010
Year
ended
March 31,
2011
Half Year
ended
September
30, 2011
Audit Fees & tax Audit Fess 1.12 1.12 1.10 1.03 1.50 0.74
Other Services 0.11 0.23 0.25 0.40 0.43 -
Total 1.23 1.35 1.35 1.43 1.93 0.74

5. Details of Managerial Remuneration
(` in Lacs)
Particulars
Year
ended
March 31,
2007
Year
ended
March 31,
2008
Year
ended
March 31,
2009
Year
ended
March 31,
2010
Year
ended
March 31,
2011
Half Year
ended
September
30, 2011
Directors Remuneration
(excluding sitting fees)
14.40 14.40 18.35 28.50 36.04 27.48

6. Employee Benefits: The Company has the policy for recognizing Employee benefits on annual basis.

I. Gratuity

The Company has provided for Gratuity, covering eligible employees, in accordance with the Payment of
Gratuity Act, 1972 during the financial year 2010-11. Accordingly, the previous years figures relating to
actuarial assumptions and liabilities have not been given below. In accordance with revised AS-15,
Employee Benefits, the company has provided the liability on actuarial basis. As per the actuarial certificate
the details of unfunded post-employment defined benefit plan in respect of Gratuity are as follows:



159

Actuarial assumptions:
Particulars 2010-2011
Mortality Table (LIC) LIC 94-96 Ultimate
Withdrawal Rate 2.00% p.a. (18 to 60 Years)
Discount rate 8.25 % per annum
Salary Escalation 5.00 % per annum
The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factor, such as demand and supply in employment market.

II. Leave Encashment (Including compensated Absence)
The Company has used the Projected Unit Credit (PUC) actuarial method to assess the Plans liabilities,
including those related to death-in-service and incapacity benefits. Under the PUC method a projected accrued
benefit is calculated at the beginning of the year and again at the end of the year for each benefit that will
accrue for all active members of the Plan. The projected accrued benefit is based on the Plans accrual formula
and upon service as of the beginning or end of the year, but using final compensation, projected to the age at
which the employee is assumed to leave active service. The Plan Liability is the actuarial present value of the
projected accrued benefits as of the beginning of the year for active members
Actuarial assumptions:
Period 01
st
April, 2010 to 31
st
March, 2011
Discount rate 8.25 % per annum
Salary Growth Rate 5.00 % per annum
Mortality LIC 94-96 Ultimate
Expected rate of return 0
Withdrawal rate (Per Annum) 2.00% p.a. (18 to 60 Years)
7. Amounts due to Micro, Small and Medium Enterprises:
The Company has not received any intimation from the suppliers under the Micro, Small & Medium
Enterprises Development Act 2006 and therefore disclosures, if any, relating to amounts unpaid as at the year-
end together with interest paid/payable as required under the said Act have not been given.

ANNEXURE-V
Statement of Other Income
(` in Lacs)
Particulars
Year ended
March 31,
2007
Year ended
March 31,
2008
Year ended
March 31,
2009
Year ended
March 31,
2010
Year ended
March 31,
2011
Half Year
ended
September
30, 2011
Profit on sale of asset
(Non-Recurring)
- - 18.98 - 12.23 23.51
Net Foreign Exchange
Fluctuation
- - - - 15.05 -
Rebate & Discounts - - - 0.05 0.01 -
Dividend received - - 0.01 0.01 0.01 -
Interest income 4.28 0.23 1.11 0.08 0.06 -
Other Receipts - - - - 0.32 0.10
Total 4.28 0.23 20.10 0.14 27.67 23.61
Note: The classification of Other Income as Recurring/Non Recurring is based on the current operations and business
activities of the company as determined by the management.



160

ANNEXURE-VI

Statement of Accounting and other Ratios


Particulars
As at
March 31,
2007
As at
March 31,
2008
As at
March 31,
2009
As at
March 31,
2010
As at
March 31,
2011
As at
Sept 30,
2011

Net Profit Attributable to
Equity Shareholders




Earnings Per Share (EPS)



- Basic/Diluted (`) 1.96 1.43 1.53 1.12 2.81 *1.48

Return on Net Worth (%) 62.54% 30.99% 26.52% 16.93% 31.54% 19.09%

Net Asset Value Per Share (`) 4.01 5.23 6.32 7.68 10.96 19.53

Weighted Average No. of
Equity Shares(No)*
69,30,000 69,30,000 69,30,000 79,43,504 84,90,006 86,32,688

No. of Equity Shares
outstanding (No)
2,40,000 26,40,000 26,40,000 48,17,759 48,95,759 1,44,92,578

Net Profit after tax
adjustments (` in Lacs)
135.55 99.22 106.17 88.73 242.96 261.85

Net Worth /Net Asset
(` in Lacs)
277.58 362.76 438.04 610.37 930.36 1,685.76

1.Computation of Earnings per share (Basic and diluted) and return on net worth for the period ended 30
th

September 2011 are for six months and has not been annualized.
2. Net profit, as restated & as appearing in the summary statement of profit and losses, of the company has
been considered for the purpose of computing the above ratios.
3.Earnings per share and Net Assets Value per share have been restated for the change in the number of
equity share occurred after balance sheet date on account of bonus for all the periods for which the earnings
per share and net assets value have been presented.
*For the purpose of weighted average no of equity shares calculation, the bonus issue made in the subsequent
years is also considered.

ANNEXURE-VII
Capitalization Statement
(` in Lacs)
PARTICULARS
Pre issue as at 30
th

September, 2011
Adjusted for the Issue
Borrowings
Short Term Debt 39.58 []
Long Term Debt 46.75 -
Total Debt 86.33 -
Shareholder's Funds
Share Capital 1,449.26 -
Reserves & Surplus 236.50 -
Total Shareholder's Funds 1,685.76 []
Total Capitalization
Long Term Debt/Equity Ratio 0.03 -
Total Debt/Equity Ratio 0.05 -
Note:-
Share Capital and reserve and surplus can be calculated only after conclusion of book building process.
Short term debts are debts maturing within next one year.





161

ANNEXURE-VIII
Statement of Tax Shelter
(` in Lacs)
Particulars
Year
ended
March 31,
2007
Year
ended
March 31,
2008
Year
ended
March 31,
2009
Year
ended
March 31,
2010
Year
ended
March 31,
2011
Half Year
ended
September
30, 2011
Tax Rate 30% 30% 30% 30% 30% 30%
Surcharge 10% 10% 10% 10% 8% 5%
Educational Cess 2% 3% 3% 3% 3% 3%
Effective Tax Rate 33.66% 33.99% 33.99% 33.99% 33.22% 32.45%
Net Profit before Tax, as
Restated
146.21 122.20 139.46 122.31 325.79 171.69
Tax at Notional Rate 49.22 41.54 47.40 41.57 108.22 55.71
Adjustments :


Timing Difference


Difference between Tax
Depreciation and Book
Depreciation
(25.75) (55.30) (47.79) (39.48) (52.54) (12.07)
Expenses disallowed u/s 40 (a)
(ia) (Net)
9.51 8.78 - - - -
Gratuity - - - - 18.99 (1.93)
Expenses Disallowed due to
non-payment of statutory
liabilities on time u/s 43B
- - 0.55 - - -
Leave Encashment - - - - 4.59 -
Total Timing Difference (A) (16.24) (46.52) (47.24) (39.48) (28.95) (14.00)
Permanent Difference


Exemption Claimed U/s Sec
10A
(123.35) (71.05) (91.11) (83.88) (257.39) -
Loss on sale/discard of fixed
Assets
- - - - - (19.98)
Interest on FBT - 0.12 - - - -
ROC expenses - - - 1.14 - -
Miscellaneous Income - - - (0.01) (0.01) -
Total Permanent Difference (B) (123.35) (70.93) (91.10) (82.75) (257.40) (19.98)
Total Difference (A+B) (139.59) (117.45) (138.34) (122.22) (286.35) (33.98)
Tax Saving/(Shield)
Differences in Book profit &
Tax Profit for the year
(46.98) (39.92) (47.02) (41.54) (95.12) (11.03)
Total Tax Saving/(Shield)
thereon
(46.98) (39.92) (47.02) (41.54) (95.12) (11.03)
Total Taxation excluding
Interest (I)
2.23 1.62 0.38 0.03 13.10 44.68
Interest u/s 234 A/B/C (II) 0.08 0.05 - - 2.96 -
Total Taxation (I+II) 2.31 1.66 0.38 0.03 16.06 44.68
Taxable Income 285.80 239.64 277.80 0.08 39.44 137.71
Tax as per MAT 1.49 5.20 15.65 18.90 67.20 34.35
Tax as per Income Tax Returns 2.31 5.20 15.65 18.90 67.20 44.68
Note: The above tax adjustments have been considered based on the information from income tax computation as
provided by the tax auditors of the company and the return filed by the tax authorities for all years. Information
pertaining to the period ended 30
th
September, 2011 is as per draft computation prepared as return of income is
not yet due for filing.




162

ANNEXURE-IX

Statement of Secured Loans
(` in Lacs)
Name of the
Lender
As at
March
31,
2007
As at
March
31,
2008
As at
March
31,
2009
As at
March
31,
2010
As at
March
31,
2011
As at
Sept 30,
2011
Sanction
Amount
Repayment
Schedule
Rate of
Interest
p.a. (%)
A. Term Loans



Punjab National
Bank
126.21 98.52 64.75 - -

Citi Bank* - 238.42 179.57 132.54 69.48 43.56 215.00
Term Loan
Monthly EMI 13.50%
Total Term
Loans
126.21 336.95 244.32 132.54 69.48 43.56

B. Working
Capital
Facilities




Citi Bank** - - - 134.01 95.45 28.58
200.00
&
100.00
CC Monthly
Interest &
Yearly
Renewal
12.75% &
LIBOR plus
200 Basis
Points
Punjab National
Bank
98.46 43.48 48.06 - - -

Total Working
Capital
Facilities
98.46 43.48 48.06 134.01 95.45 28.58

C. Vehicle
loan***
- - - 6.51 4.35 3.19

Monthly EMI
Total Secured
Loan
224.67 380.43 292.38 273.06 169.28 75.33


1.*Equitable Mortgage of Building Premises located at Anand Nilay, Kothrud, Pune (Maharashtra) &
Personal Guarantee of directors , Mr. Devendra Deshmukh , Mr. Ashish Gupta and Mr. Amol Pande.
2.** Equitable Mortgage of Building Premises located at Anand Nilay, Kothrud, Pune (Maharashtra) &
Personal Guarantee of Directors Mr. Devendra Deshmukh, Mr. Ashish Gupta and Mr. Amol Pande &
Hypothecation of book debts.
3. ***Security offered Hypothecation of Car

ANNEXURE-X

Statement of Unsecured loans
(` in Lacs)
Particulars
As at
March
31, 2007
As at
March
31, 2008
As at
March
31, 2009
As at
March
31, 2010
As at
March
31, 2011
As at
Sept 30,
2011
From Directors &
Shareholders
31.76 27.87 24.87 6.00 11.00 11.00
From Banks & Financial
Institutions
5.77 2.17 - - - -
Others - - - - - -
Total 37.53 30.04 24.87 6.00 11.00 11.00
Note:-All of the above Unsecured Loans are repayable on demand basis and there is no fixed repayment schedule.



163

ANNEXURE-XI

Statement of Sundry debtors
(` in Lacs)
Particulars
As at
March 31,
2007
As at
March
31, 2008
As at
March
31, 2009
As at
March
31, 2010
As at
March
31, 2011
As at Sept
30, 2011
Unsecured Considered good
More than Six Months - - - - 79.12 112.22
Others 2.8 121.49 123.67 194.15 227.33 269.65
Total 2.8 121.49 123.67 194.15 306.45 381.87


ANNEXURE-XII

Statement of Loans & Advances
(` in Lacs)
Particulars
As at
March 31,
2007
As at
March 31,
2008
As at
March 31,
2009
As at
March 31,
2010
As at
March 31,
2011
As at Sept
30, 2011
VAT Refundable - 3.10 4.45 - - -
Advances to staff 9.86 2.85 3.76 - - -
Prepaid Expenses 0.13 0.14 0.31 - - -
Advance against property 61.00 - - - -
640.23

Loans against capital goods 55.00 25.00 10.00 - - -
Clients' Expenses
Reimbursement
0.14 0.57 - - - -
Advance recoverable in cash
or kind or for value to be
received
- - - 30.14 30.07 39.71
Advances to Creditors 2.52 0.22 - 6.47
37.81

108.19
Deposits 0.25 0.25 1.95 3.84 17.11 24.27
Advance Tax & TDS & FBT 13.66 19.86 9.96 40.56 80.75 98.47
Service Tax Refundable - - 2.16 - - -
Loans to Subsidiary - - 0.20 0.24 0.24 0.24
Accrued Interest 0.05
Total 142.62 52.00 32.79 81.25 165.97 911.11

ANNEXURE-XIII

Statement of Contingent liabilities

Details of counter guarantees and fixed pledged with banks:
(` in Lacs)
Particulars As at
March 31,
2007
As at
March 31,
2008
As at
March 31,
2009
As at
March 31,
2010
As at
March 31,
2011
As at Sept
30, 2011
Counter guarantees in
respect of guarantees given.
- 1.00 1.00 1.00 1.00 1.00
Pledged of fixed deposits
with the bank against the
above bank guarantees.
- 1.00 1.00 1.00 1.00 1.00



164

ANNEXURE-XIV

Related Party Disclosure in Accordance with AS-18

Party Relationship
Devendra Deshmukh Key Managerial Personnel
Amol Pande Key Managerial Personnel
Ashish Gupta Key Managerial Personnel
Sunil Dane Key Managerial Personnel
Jaywant Deshpande Key Managerial Personnel
e-Zest Infocom Private Limited Subsidiary
eZest Infotech Private Limited Subsidiary
Details of transaction with related parties (` in Lacs)
Key Management Personnel
Directors
Remuneration
Loans &
Advances
Granted
Loans &
Advances
Received
Back
Unsecured
Loan
Taken
Unsecured
Loan Paid

Investments
Sept-2011


Devendra Deshmukh 5.50 - - - - -
Amol Pande 5.50 - - - - -
Ashish Gupta 5.50 - - - - -
Sunil Dande 5.50 - - - - -
Jaywant Deshpande 5.48 - - - - -
e-Zest Infocom Private Limited - - - - - 0.31
eZest Infotech Private Limited - - - - - 0.31
2011


Devendra Deshmukh 7.65 - - - - -
Amol Pande 7.65 - - - - -
Ashish Gupta 7.65 - - 5.00 - -
Sunil Dane 7.65 - - - - -
Jaywant Deshpande 5.44 - - - - -
2010


Devendra Deshmukh 7.50 - - - - -
Amol Pande 7.50 - - 6.00 - -
Ashish Gupta 7.50 - - 10.00 10.00 -
Sunil Dane 6.00 - - 26.75 13.39 -
e-Zest Infocom Private Limited - 0.04 - - - -
2009


Devendra Deshmukh 6.12 - - - - -
Amol Pande 6.12 - - - - -
Ashish Gupta 6.12 - - - - -
e-Zest Infocom Private Limited - 0.20 - - - -
eZest Infotech Private Limited - 13.50 13.50 - - -
2008


Devendra Deshmukh 4.80 - - - - -
Amol Pande 4.80 - - - - -
Ashish Gupta 4.80 - - - - -
2007


Devendra Deshmukh 4.80 - - 0.70 4.73 -
Amol Pande 4.80 - - 0.79 5.38 -
Ashish Gupta 4.80 - - 0.89 6.02 -
Note: Related Parties as disclosed by Management and relied upon by auditors.



165

ANNEXURE-XV

Statement of Dividend Paid

Particulars
Year ended
March 31,
2007
Year ended
March 31,
2008
Year ended
March 31,
2009
Year ended
March 31,
2010
Year ended
March 31,
2011
Half Year
ended
September
30, 2011
Equity Shares 2,40,000 26,40,000 26,40,000 48,17,759 48,95,759 144,92,578
Face Value (`) 10 10 10 10 10 10
Interim Dividend Rate 50% 50% 10% 3.5% - -
Final Dividend Rate - - - - - -
Amount in ` (Lacs) 12.00 12.00 26.40 9.24 - -


ANNEXURE-XVI

Schedule of Investments

Non Trade, Unquoted
5,000 Equity shares of Ichalkaranji Janata Sahakari Bank of the face value of ` 10 each.
2,000 Equity shares of e-Zest Infocom Private Limited of the face value of ` 10 each.
2,000 Equity shares of eZest Infotech Private Limited of the face value of ` 10 each.

ANNEXURE-XVII

Details of Qualification in Auditors Report

There were no qualifications in the Auditors report for the year ending on March 31, 2007, 2008, 2009, 2010,
2011 and September 30, 2011 except Accounting Standard -15 (Revised 2005) relating to Employee
Retirement Benefits in year march 2010.


ANNEXURE-XVIII

Changes in the Significant Accounting Policies

Till FY 2009-10, the company had not provided for gratuity liability. The Company changed its accounting
policy form FY 2010-11 by providing gratuity liability on the basis of actuarial valuation.











166

C. FINANCIAL INFORMATION OF GROUP COMPANIES

1. e-Zest Infocom Private Limited
Date of Incorporation 03/02/2007
CIN U72200PN2007PTC129551
Registered Office
AnandNilay Co-Op. Housing Society, 3rd Floor,
Near Karve Statue, Karve Road, Kothrud, Pune.
Bank Account 1394002101001774
PAN AABCE7339J
Nature of Business Computer Software and Hardware business

Particulars of Shareholding:
Sr.
No.
Name Designation
No. of Shares
as on 31
st

March, 2011
Shareholding
as on 31
st

March, 2011
No. of Shares
as on 30
th

Sept, 2011
Shareholding
as on 30
th

Sept, 2011
1.
e-Zest Solutions
Limited
Shareholder 5,100 51% 2,000 20.00%
2. Sonal Deshmukh Shareholder Nil Nil 2,667 26.67%
3. Avina Datta Shareholder
Nil Nil
2,666 26.66%
4. Ramesh Pande Shareholder
Nil Nil
2,667 26.67%
5.
Devendra
Deshmukh
Shareholder 1,633 16% Nil Nil
6. Amol pande Shareholder 1,634 16%
Nil Nil
7. Ashish Gupta Shareholder 1,633 17%
Nil Nil

The Brief financials are given below:
(` in Lacs)
Particulars March 31, 2009 March 31, 2010 March 31, 2011
Total Income 1242.23 1559.44 924.82
Profit/Loss after Tax 2.42 3.01 (2.94)
Equity Share Capital 1.00 1.00 1.00
Reserves & Surplus 3.61 6.62 3.67
NAV 46.07 76.22 46.78
EPS (Basic & Diluted) 24.20 30.10 (29.40)

Other Details:-

6. The Group Company has not become a sick company within the meaning of the Sick Industrial
Companies (Special Provisions) Act, 1985 or is not under winding up.
7. The Group Company incurred a loss in the immediately preceding financial year.
8. There are no defaults in meeting any statutory/bank/institutional dues.
9. No proceedings have been initiated for economic offences against this Company.
10. No proceedings have been initiated by SEBI or other regulatory authorities for violation of any Securities
laws against this company.



167

2. eZest Infotech Private Limited
Date of Incorporation 02/02/2007
CIN U72900PN2007PTC129548
Registered Office
Anand Nilay Co-Op. Housing Society, 2nd Floor,
Near Karve Statue, Karve Road, Kothrud, Pune.
Bank Account 1394002101001765
PAN AABCE7338K
Nature of Business Computer Software development
Particulars of Shareholding:

Sr.
No.
Name Designation
No. of
Shares as on
31
st
March,
2011
Shareholding
as on 31
st

March, 2011
No. of Shares
as on 30
th

Sept, 2011
Shareholding
as on 30
th

Sept, 2011
1.
e-Zest Solutions
Limited
Shareholder 5,100 51% 2,000 20.00%
2. Sonal Deshmukh Shareholder Nil Nil 2,667 26.67%
3. Avina Datta Shareholder
Nil Nil
2,666 26.66%
4. Ramesh Pande Shareholder
Nil Nil
2,667 26.67%
5.
Devendra
Deshmukh
Shareholder 1,633 16% Nil Nil
6. Amol pande Shareholder 1,634 16%
Nil Nil
7. Ashish Gupta Shareholder 1,633 17%
Nil Nil

The brief financials are given below:

(` in Lacs)
Particulars March 31, 2009 March 31, 2010 March 31, 2011
Total Income 45.14 30.79 5.64
Profit/Loss after Tax 2.08 2.35 -2.83
Equity Share Capital 1.00 1.00 1.00
Reserves & Surplus 3.01 5.36 2.54
NAV 37.92 62.16 35.39
EPS (Basic & Diluted) 20.80 23.50 (28.30)

Other Details:-

1. The Group Company has not become a sick company within the meaning of the Sick Industrial Companies
(Special Provisions) Act, 1985 or is not under winding up
2. The Group Company incurred a loss in the immediately preceding financial year.
3. There are no defaults in meeting any statutory/bank/institutional dues
4. No proceedings have been initiated for economic offences against this Company.
5. No proceedings have been initiated by SEBI or other regulatory authorities for violation of any Securities
laws against this company.




168

3. Loft BPO services Private Limited
Date of Incorporation 23/03/2011
CIN U72200PN2011PTC138972
Registered Office
3-4, Aishwarya Sankul, S. No. 17, G.A. Kulkarni
Path, Opposite Joshi Railway Museum, Kothrud.
Pune 411 038
Nature of Business Outsourcing Services

Particulars of Shareholding:
Sr.
No.
Name Designation
No. of Shares
as on 31
st

March, 2011
Shareholding
as on 31
st

March, 2011
No. of Shares
as on 30
th

Sept, 2011
Shareholding
as on 30
th

Sept, 2011
1.
Devendra
Deshmukh
Shareholder 1 00.01 % 1 00.01 %
2.
Ameet Madhukar
Gokhale
Shareholder 9,999 99.99 % 9,999 99.99 %

The brief financials are given below:
The company was incorporated on March 23, 2011. It was yet to commence its business till 31
st
March 2011.
Hence, there is no financial data for previous years.

Other Details:-
Not Applicable

D. CHANGES IN ACCOUNTING POLICIES IN THE LAST THREE YEARS-
There has been no major change in the accounting policy of the Company except the following:

The Accounting Policy followed by the Company in respect of gratuity till the Financial Year 2009-10 was on
Cash basis which is not in conformity with Accounting Standard prescribed by the Institute of Chartered
Accountants of India. The Company has changed its Accounting Policy with regard to liability arising out of
such obligation from the Financial Year 2010- 11 in accordance with the said Accounting Standard 15.
Consequently, the profits and the reserves and surplus Financial Year ended March 31, 2011 is lower by `
18.99 Lacs.

The Company had accounted for liabilities in respect of Leave Encashment on Cash basis upto the Financial
Year 2009-10. It has changed its Accounting Policy with regard to liability in respect of Leave Encashment
from cash basis to accrual basis commencing from the Financial Year 2010-11. Consequently, the profits and
the reserves and surplus for the period ended March 31, 2011 is lower by ` 4.59 Lacs.

E. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OFOPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS

You should read the following discussion of our financial condition and results of operations together with
our restated consolidated financial statements included in this Draft Red Herring Prospectus. You should also
read the section entitled Risk Factors, which discusses a number of factors, risks and contingencies that
could affect our financial condition and results of operations. The following discussion relates to our
Company on a consolidated basis, and, unless otherwise stated, is based on our restated consolidated



169

financial statements, which have been prepared in accordance with Indian GAAP, the Companies Act and the
SEBI Regulations. Portions of the following discussion are also based on internally prepared statistical
information and on other sources. Our fiscal year ends on March 31 of each year, so all references to a
particular fiscal year

(Fiscal Year) are to the twelve-month period ended March 31 of that year.

The effects of change in accounting policy in the restated financials are given in Annexure-V Notes to
Accounts.

Business Overview

e-Zest Solutions Limited was incorporated in the year 2000 in Mumbai.

Our core focus areas are as below:

i. Software product engineering culture

e-Zest has developed many products that have contributed in building the product culture. e-Zest designs,
develops, enhances, migrates, tests and maintains software products and applications for its existing
customers. Its service offerings span all over the product life-cycle that enables it to work with wide
requirements and thus gives horizontal experience of working with software products.
e-Zests past experience has offered a sound understanding of the needs of the industries in which its
customers operate and the underlying technologies that drive those industries. As a result, e-Zest has been able
to offer its customer reduced time-to-market, improved quality of products, and reduced risk of failure with
improved predictability and reliability of the engineering process.
e-Zest is working with software companies over a decade for developing and integrating products,
components and platforms forming a strong product genealogy and culture at the company that is aligned with
its customers, employees and processes.
ii. Full spectrum software product services

e-Zest provides broad range of services to its customers that span all over the product life cycle. It has
different set of services for products in different stages of product life cycle addressing the customers specific
needs. It services includes research, prototyping, consulting, development, testing, support and maintenance. It
also offers product sustenance service that allows customers to leverage underperforming software products. It
offers services to all sizes of companies, right from enterprises to web startups. It also offers very flexible
business models and pricing structure to compliment it wide range of software product services.
e-Zest believes that its wide range of service offerings and offshore delivery allow it to attract new customers
and expand its existing customer relationships.
iii. Experience and knowledge in key focus areas

e-Zest understands and continuously assesses industry trends and technologies that drive its customer
businesses. It invests in building a team of experts who have an understanding of the technology, customer
business and competencies that are required. More than a decade of experience in building software products
and high technology understanding allows e-Zest to become a strategic partner for its customers It has
developed a special skill set of building high performance and highly scalable software solutions.




170

iv. Investment in emerging technologies

e-Zest continuously tracks and invests in new technologies and business trends. It has aligned its existing
services portfolio with new emerging technologies such as cloud computing, business intelligence and
mobility. e-Zest has recruited highly experienced people and invested in technology partnerships to make it
competent in emerging technologies and competitive in software development market. These initiatives help
e-Zest to establish thought leadership and deliver specialized services to its customers. It has established
competency centers within company. These competency centers work on cutting edge technology research or
identifying best practices in e-Zests area of interest.

v. Matured software development processes

e-Zest is in the business of development software products and applications since last 11 years while
improving its delivery quality to its customers it has evolved its software development process. Having
worked with customers of different sizes, e-Zest specifically knows the expectations from them. It has created
tailored processes for different sets of customer. All processes are aimed towards providing customers with
seamless solutions in reduced timeframes, enabling them to achieve operating efficiencies and realize
significant cost savings. e-Zests customer oriented approach and continuous and continual improvements to
its delivery model are a key to remain competitive.

vi. Team of highly skilled professionals

e-Zest has a team of highly skilled and well trained software professionals. The technology skill set of this
team provides e-Zest the flexibility to adapt to the needs of its customers and match up with the technology
requirements of various software projects that it undertake.

e-Zest promotes learning environment within the company. It provides challenging projects to its team
members to sharpen their technology skills and improve their software development knowledge. It also
sponsors technology certification exams for its team members
vii. Agile Development

In e-Zest, we practice Scrum, Prince 2, XP agile software development methodologies. It enables analysis,
design and development phases to go in parallel and to have control over what is developed and when. Agile
method gives us chance to welcome changes frequently, increasing communication between team and client.
The result is high quality product with satisfied customer in least time duration.

viii. Fast track delivery

e-Zest's provides fast track delivery service to save clients time and money by compressing the project
schedule. Fast track is a rapid application development service to give solutions quickly within budget along
with minimal risk. This process requires close cooperation between customer and entire team in order to
achieve key business objective of client.

ix. Business and technology solution accelerators

Building solutions from ground takes lots of time and money. Thats why at e-Zest we developed a wide
variety of solution accelerators that can be implemented quickly and economically helping in reducing time-
to-value.





171

x. Various technology partnerships

Microsoft Gold Certified Partner
Sun Associate Partner
Intel
IBM
International Association of Microsoft Certified Partners
Citrix
NASSCOM
Oracle Partner
Palm

xi. Flexible business models

e-Zest offers multiple engagement models to meet diverse needs of global clients. Client can choose any
model or a combination of them for different phases of project. An appropriate engagement strategy is based
on a clear understanding of customers business drivers. e-Zest models core focus is on the customers innate
needs like:

High Quality
Fast Delivery
Low Cost
Increased project profitability
Flexible resource Allocation and management with no upfront investment
Predictable support
Handling future needs of the customer
Any of these pricing models can be applied to our suite of services in custom ways for
convenience and best value for money.
Effort based pricing or Time & Material
Milestone based billing
Dedicated Development Facility or Retainer
Build-Operate-Transfer (BOT) Model
Project based pricing or fixed bid.
Strategic Partner Model
Offshore Development Center (ODC)

xii. Expertise in emerging technologies SaaS/Cloud/BI/Mobile

e-Zest has experience in business model and architecture consulting architecting and deploying Software as a
Service (SaaS) applications for its customer across the globe.

Our team of professionals understands the cloud ecosystem and carries out end to end cloud assessment and
adaption services for our enterprise customers very systematically.

e-Zest realizes that BI has become integral part of every organization. We have an established Business
intelligence practice to help our customers in decision making.

We bring deep understanding of building mobile solutions for our customers across the globe to the table for
mobile consulting services. With its high quality mobile consulting services, e-Zest can help organization
understand their business needs in the area of enterprise mobile solutions, mobile applications or mobile as
access point for other applications.



172

xiii. Specialist in Outsourced Product Engineering Services

At e-Zest, we understand product development (OPD) requires the offshore team to work in very close
collaboration with the client's engineering team. In the process, partnering with e-Zest for client product
development services helps client leverage a strong value proposition, low time to market, reduced
development costs and quality manpower.

e-Zest utilizes its product development expertise and product development and engineering frameworks to
provide end-to-end product development services. We offer specialized product development services as well
as end-to-end product development services based on client needs.

Significant developments subsequent to the last financial year:

The company made strategic investment in e-Zest Infocom Private Limited and eZest Infotech Private Limited
to the extent of 51% in 2007. Thus these Companies were subsidiaries of e-Zest Solutions Limited. On April
1, 2011, our Company divested its stake in the two Companies to the extent of 31% in each. The present
investment in the entities is now 20%. Thus e-Zest Infocom Private Limited and eZest Infotech Private
Limited are no longer subsidiaries of e-Zest Solutions Limited.

KEY FACTORS AFFECTING THE RESULTS OF OPERATION:

Our Companys future results of operations could be affected potentially by the following factors:

General economic and business conditions:
The demand for our products and services is dependent on general economic conditions in the country. Our
operations would be affected by any adverse change in the Government Policies, Rules & Regulations.

Demand:
The prospects and earnings growth of the customers will have an impact on our ability to generate revenues.

Competition:
Selling prices of our services and products may be affected if competition intensifies. Further, as a result of
increase in scale of operations, adoption of aggressive pricing strategies by our competitors in order to gain
market share or new competitors entering the markets, may adversely affect our operations and financial
results.

Interest Rate Risk:
Increase in operations would require additional working capital. If we are required to finance our operations
by raising working capital borrowings at fixed /floating rates of interest, our cost of servicing such debt will
increase, thereby adversely impacting our results of operations, planned capital expenditures and cash flows.
Our profits will also be impacted by interest rate variation.

Sundry Debtors /Recovery of receivables:
Any delay in the recovery of outstanding receivables may affect our results of operation, as we may then have
to resort to increased borrowings for our working capital requirements, which may further exert pressure on
outgo towards interest thereby reducing our profits.

Employees and employee costs
A principal component of our ability to compete effectively is our ability to attract and retain qualified
employees. We have increased the number of employees (including those under contractual employment with
the Company.

The principal component of the cost of our production is the wage cost of our technical staff such as those in
software development engineers. Wage costs in India, including the technology services industry, have
historically been significantly lower than wage costs in the United States and Europe for comparably skilled



173

professionals. However, if wages in India continue to increase at a faster rate than in the United States due to
competitive pressures, we may experience a greater increase in our employee costs, particularly for staff such
as project managers and other mid-level professionals, thereby eroding one of our principal cost advantages
over OPD companies in US and other developed countries. Our gross margin depends in part on our billing
rates, our offshore and onsite utilisation of our technical staff, our team mix on projects, any growth in
personnel expenses, particularly salary increases, and foreign currency rates especially US Dollar and the
Indian Rupee.

Foreign exchange rates and regulations
Our financial statements under Indian GAAP are reported in Indian Rupees. A substantial portion of our
income from the sale of software services and products is generated in US Dollars while a large part of our
expenses are incurred in Indian Rupees. Consequently, our results from operations are affected to the extent
the value of the Indian Rupee fluctuates against the US Dollar. In particular, a significant appreciation of the
Indian Rupee against the US Dollar and other foreign currencies (such as the Euro and Pound Sterling) has the
effect of reducing the Indian Rupee value of our foreign currency denominated revenues, thereby adversely
affecting our results of operations.

As per the Foreign Exchange Management Act (FEMA), as amended, an Indian company is required to take
all reasonable steps to realise and repatriate into India all foreign exchange earned by the company outside
India, in accordance with the rules specified by the Reserve Bank of India (RBI). FEMA also imposes certain
restriction on capital account transactions by Indian companies. Although these regulations do not
significantly impact our operations at present, there can be no assurance that this will be the case in future
periods.

Other factors include:

Non-receipt of pending approvals, if any.
Prevailing trends in the industry in which we operate.
Companys ability to successfully implement their marketing, business and growth strategies.
Changes, if any, in the regulations / regulatory framework / economic policies in India and / or in foreign
countries, which affect international trade.

OUR SIGNIFICANT ACCOUNTING POLICIES

For Significant accounting policies please refer Significant Accounting Policies under Chapter titled
Auditors Report and Financial Information of our company

Discussion on Results of Operation:

The following discussion on results of operations should be read in conjunction with the audited financial
results of our Company for the years ended 31st March 2007, 2008, 2009, 2010 and 2011.

Results of Our Operations

The company made strategic investment in e-Zest Infocom Private Limited and eZest Infotech Private Limited
to the extent of 51% in 2007. Thus these Companies were subsidiaries of e-Zest Solutions Limited. On April
1, 2011, our Company divested its stake in the two Companies to the extent of 31% in each. The present
investment in the entities is now 20%. Thus, e-Zest Infocom Private Limited and eZest Infotech Private
Limited are no longer the subsidiaries of e-Zest Solutions Limited. Hence, the Consolidated statements are
prepared till 31st March, 2011.The below mentioned results of operations does not include figures for half
year ending 30th September 2011 for comparison.




174

Profit & Loss
Account
Year ended
March 31, 2007
Year ended
March 31, 2008
Year ended
March 31, 2009
Year ended
March 31, 2010
Year ended
March 31, 2011
` in
Lacs
%
` in
Lacs
%
` in
Lacs
%
` in
Lacs
%
` in
Lacs
%
Software
Development
Services
627 100% 772 100% 843 100% 1,036 100% 1,255 100%
Y-o-Y growth in
%
22%

8%

24%

10%
Less:

Product Cost
28 4% 26 3% 43 5% 21 2% 17 1%
Personnel Expenses
318 51% 441 57% 504 60% 623 60% 715 57%
Operating and
Other Expenses
98 16% 110 14% 95 11% 193 19% 153 12%
EBIDTA
182 29% 195 25% 202 24% 199 19% 371 30%
Less:

Interest and
Financial Charges
25 4% 50 6% 50 6% 39 4% 25 2%
Depreciation /
Amortization
15 2% 23 3% 32 4% 38 4% 47 4%
Add:

Other Income (Net)
4 1% 0 0% 20 2% 0 0% 28 2%
Profits Before Tax
146 23% 122 16% 139 17% 122 12% 327 26%
Tax
11 2% 23 3% 33 4% 34 3% 84 7%
Profits After Tax
136 22% 99 13% 106 13% 89 9% 243 19%

Adjustments:

Financial Market Risks

We are exposed to financial market risks from changes in borrowing costs, interest rates and inflation.

Interest Rate Risk

Our interest rate risk results from changes in interest rates, which may affect our finance expenses. We bear
interest rate risk with respect to the debts, which we have for the year ended March 31, 2011, since the interest
rates could fluctuate in the near future. Any rise in interest rates would result in higher interest bearing debts.

Effect of Inflation

We are affected by inflation as it has an impact on the operating cost, staff costs etc. In line with changing
inflation rates, we rework our margins so as to absorb the inflationary impact.





175

Factors that may affect the Results of the Operations:

As required under (2)(IX)(E)(5) of Part A of schedule VIII to the SEBI (ICDR) Regulations.

1. Unusual or infrequent events or transactions including unusual trends on account of business
activity, unusual items of income, change of accounting policies and discretionary reduction of expenses
etc.

There have been no unusual or infrequent events or transactions that have taken place.

2. Significant economic changes that materially affected or are likely to affect income from continuing
operations.

There are no significant economic changes that may materially affect or likely to affect income from
continuing operations.

3. Known trends or uncertainties that have had or are expected to have a material adverse impact on
sales, revenue or income from continuing operations.

Apart from the risks as disclosed under Section titled Risk Factors in the Draft Red Herring Prospectus, in
our opinion there are no other known trends or uncertainties that have had or are expected to have a material
adverse impact on revenue or income from continuing operations.

4. Future changes in relationship between costs and revenues, in case of events such as future increase
in labour or material costs or prices that will cause a material change are known.

Our Companys future costs and revenues will be determined by demand/supply situation,
government/regulatory policies and prices quoted by service providers.

5. Extent to which material increases in net sales or revenue are due to increased sales volume,
introduction of new products or services or increased sales prices.

Increases in revenues are by and large linked to increases in volume of business and entrant in new trading
business by the company in the current year

6. Status of any publicly announced new products or business segment.

Our Company has not announced any new product and segment other than through the Draft Red Herring
Prospectus.

8. The extent to which business is seasonal.

Our Companys business is not seasonal in nature.

9. Any significant dependence on a single or few suppliers or customers.

We do not have any dependence on any single customer or a set of customers for our business.

10. Competitive conditions.

Competitive conditions are as described under the Chapters titled Industry Overview and Business
Overview, respectively of the Draft Red Herring Prospectus.






176

Comparison of Standalone accounts: FY 2011 with FY 2010

Income from operations

The Income from operations for the FY 2011 is ` 1128.66 Lacs as compared to ` 1023.89 Lacs during the FY
2010 showing increase of 10.23 %, wherein the Domestic Income from operations for the FY 2011 is showing
an increasing trend i.e ` 188.50 Lacs as compared to Nil sales during the FY 2010. However the Export
Income from operations has decreased by 8.18% for the FY 2011 i.e. ` 940.16 Lacs as compared to ` 1023.89
Lacs during the FY 2010.

Total Income

The Total Income for the FY 2011 is ` 1282.37 Lacs as compared to ` 1036.03 Lacs during the FY 2010
showing increase of 23.78%.

Expenditure:

Direct Cost of Sales and Services

Direct Cost of Sales and Services increase to ` 731.51 Lacs for FY 2011 from ` 644.17 Lacs for FY2010
showing an increase of 13.56 %. This includes Direct Operational cost comprising of computer peripherals
and softwares and Internet Expenses of ` 16.76 Lacs, Personnel and technical staff emolutions cost of `
714.75 Lacs for FY 2011 as against computer peripherals and softwares and Internet Expenses of ` 21.46 Lacs
and Personnel and technical staff emolutions cost of ` 622.71 Lacs for FY 2010.

Administrative and Selling Expenses

Administrative and selling expenses decreased from ` 192.77 Lacs for FY 2010 to ` 152.61 Lacs for FY 2011
showing decrease of 20.83%.

Profit before Depreciation, Interest and Tax (PBDIT)

PBDIT increased from ` 199.09 Lacs for FY 2010 to ` 398.26 Lacs for FY 2011 showing the increase of
100.04%, mainly on account of decrease in administrative and selling expenses due to benefit of increased
scale of operations.

Interest and Financial Charges

Interest and Financial Charges decreased from ` 38.64 Lacs for FY 2010 to ` 25.06 Lacs for the FY 2011
showing decrease of 35.15%. Interest and Financial expenses mainly include interest and other financial and
bank charges, which accounted for 2.00% of income from operations during FY 2011 as against 3.73% in the
year 2010.

Depreciation

Depreciation on fixed assets was 3.72% of income from operations during FY 2011 as compared to 3.68%
during FY 2010. The total depreciation during FY 2010 was ` 38.14 Lacs and during FY 2011 it was ` 46.69
Lacs. This increase was mainly due to few additions in the fixed assets of the Company.

Profit after Tax (PAT)

PAT increased from ` 88.73 Lacs for the FY 2010 to ` 242.96 Lacs in FY 2011 showing an increase of 170%.
This increase was due to decrease in direct cost, personnel cost, administrative and selling expenses, and the
other reasons as details above. During FY 2011, our Company recorded PAT margin of 19.10% as against
8.56% for FY 2010.



177

Comparison of FY 2010 with FY 2009:

Income from operations

The Income from operations for the FY 2010 is ` 1023.89 Lacs as compared to ` 828.29 Lacs during the FY
2009 showing increase of 23.61 %, which comprises of only export income during both financial years.

Total Income

The Total Income for the FY 2010 is ` 1036.03 Lacs as compared to ` 863.14 Lacs during the FY 2009
showing increase of 20.03%.

Expenditure:

Direct Cost of Sales and Services

Direct Cost of Sales and Services increase to ` 644.17 Lacs for FY 2010 from ` 546.30 Lacs for FY 2009
showing an increase of 17.92 %. This includes Direct Operational cost comprising of computer peripherals
and softwares and Internet Expenses of ` 21.46 Lacs, Personnel and technical staff emolutions cost of `
622.71 Lacs for FY 2010 as against computer peripherals and softwares and Internet Expenses of ` 42.72 Lacs
and Personnel and technical staff emolutions cost of ` 503.58 Lacs for FY 2009.

Administrative and Selling Expenses

Administrative and selling expenses increased from ` 95.13 Lacs for FY 2009 to ` 192.77 Lacs for FY 2010
showing tremendous increase of 102.63%.

Profit before Depreciation, Interest and Tax (PBDIT)

PBDIT decreased from ` 221.72 Lacs for FY 2009 to ` 199.09 Lacs for FY 2010 showing a decrease of
10.21%, mainly on account of increase in Staff and Personnel Costs.

Interest and Financial Charges

Interest and Financial Charges increased from ` 32.13 Lacs for FY 2009 to ` 38.14 Lacs for the FY 2010
showing increase of 18.72%. Interest and Financial expenses mainly include interest and other financial and
bank charges, which accounted for 3.73% of income from operations during FY 2010 as against 5.95% in the
year 2009.
Depreciation

Depreciation on fixed assets was 3.68% of income from operations during FY 2010 as compared to 3.81%
during FY 2009.The total depreciation during FY 2010 was ` 38.14 Lacs and during FY 2009 it was ` 32.13
Lacs. This increase was mainly due additions in the fixed assets of the Company.
Profit after Tax and restatement adjustment (PAT)

As a result of the foregoing, PAT decreased from ` 106.17 Lacs for the FY 2009 to ` 88.73 Lacs in FY 2010
showing a decrease of 16.44%. During FY 2010, the Company recorded PAT margin of 8.56% as against
12.59% for FY 2009.






178

Comparison of FY 2009 with FY 2008:

Income from operations

The Income from operations for the FY 2009 is ` 828.29 Lacs as compared to ` 766.21 Lacs during the FY
2008 showing increase of 8.10 %, FY 2008 comprises of Income from wherein the Domestic Income from
operations for the FY 2008 is ` 45.83 Lacs. The Export Income from operations has increased by 14.98%
from FY 2008 i.e. ` 720.38 Lacs to ` 828.29 Lacs during the FY 2009.

Total Income

The Total Income for the FY 2009 is ` 863.14 Lacs as compared to ` 772.02 Lacs during the FY 2008
showing increase of 11.80%.

Expenditure:

Direct Cost of Sales and Services

Direct Cost of Sales and Services increase to `546.30 Lacs for FY 2009 from ` 466.69 Lacs for FY 2008
showing an increase of 17.06 %. This includes Direct Operational cost comprising of computer peripherals
and softwares and Internet Expenses of ` 42.72 Lacs, Personnel and technical staff emolutions cost of `
503.58 Lacs for FY 2009 as against computer peripherals and softwares and Internet Expenses of ` 25.63 Lacs
and Personnel and technical staff emolutions cost of ` 441.07 Lacs for FY 2008.

Administrative and Selling Expenses

Administrative and selling expenses decreased from ` 110.28 Lacs for FY 2008 to ` 95.13 Lacs for FY 2007
showing decrease of 13.74%.

Profit before Depreciation, Interest and Tax (PBDIT)

PBDIT increased from ` 195.04 Lacs for FY 2008 to ` 221.72 Lacs for FY 2009 showing the increase of
13.67%, mainly on account of decrease in administrative and selling expenses due to benefit of increased
scale of operations.

Interest and Financial Charges

Interest and Financial Charges decreased by a marginal sum of ` 0.03 Lacs from FY 2008 to ` 50.13 Lacs for
the FY 2009. Interest and Financial expenses mainly include interest and other financial and bank charges,
which accounted for 5.95% of income from operations during FY 2009 as against 6.50% in the year 2008.
Depreciation

Depreciation on fixed assets was 3.81% of income from operations for FY 2009 as against 2.94% for the FY
2008. The total depreciation during FY 2009 was ` 32.13 Lacs and during FY 2008 it was ` 22.68 Lacs. This
increase was mainly due additions in the fixed assets of the Company.
Profit after Tax and restatement adjustment (PAT)

As a result of the foregoing, PAT increased from ` 99.22 Lacs for the FY 2008 to ` 106.17 Lacs in FY 2009
showing an increase of 7.00%. During FY 2009, the Company recorded PAT margin of 12.59% as against
12.86% for FY 2008.




179

Comparison of FY 2008 with FY 2007:

Income from operations

The Income from operations for the FY 2008 is ` 766.21 Lacs as compared to ` 625.95 Lacs during the FY
2007 showing increase of 22.41 %, wherein the Domestic Income from operations for the FY 2008 is showing
an increasing trend i.e. ` 45.83 Lacs as compared to ` 11.71 Lacs during the FY 2007. Also the Export
Income from operations has increased during the period by 17.28% from FY 2007 i.e. ` 14.24 Lacs as
compared to ` 720.38 Lacs during the FY 2008.

Total Income

The Total Income for the FY 2008 is ` 772.02 Lacs as compared to ` 631.11 Lacs during the FY 2007
showing increase of 22.33%.

Expenditure:

Direct Cost of Sales and Services

Direct Cost of Sales and Services increase to ` 466.69 Lacs for FY 2008 from ` 346.09 Lacs for FY2007
showing an increase of 34.85 %. This includes Direct Operational cost comprising of computer peripherals
and softwares and Internet Expenses of ` 25.63 Lacs, Personnel and technical staff emolutions cost of `
441.07 Lacs for FY 2008 as against computer peripherals and softwares and Internet Expenses of ` 27.73 Lacs
and Personnel and technical staff emolutions cost of ` 318.36 Lacs for FY 2007.

Administrative and Selling Expenses

Administrative and selling expenses increased from ` 98.47 Lacs for FY 2007 to ` 110.28 Lacs for FY 2008
showing increase of 12.00%.

Profit before Depreciation, Interest and Tax (PBDIT)

PBDIT increased from ` 186.55 Lacs for FY 2007 to ` 195.04 Lacs for FY 2008 showing the increase of
4.55%, mainly on account of increased scale of operations.

Interest and Financial Charges

Interest and Financial Charges increased from ` 25.19 Lacs for FY 2007 to ` 50.16 Lacs for the FY 2008
showing increase of 99.14%. Interest and Financial expenses mainly include interest and other financial and
bank charges, which accounted for 6.50% of income from operations during FY 2008 as against 4.02% in the
year 2007.
Depreciation

Depreciation on fixed assets was 2.94% of income from operations for the FY 2008 and was 2.42% for the FY
2007. The total depreciation during FY 2008 was `22.68 Lacs and during FY 2007 it was ` 15.15 Lacs. This
increase was mainly due additions in the fixed assets of the Company.
Profit after Tax and restatement adjustment (PAT)

As a result of high operating cost, PAT decreased from ` 135.55 Lacs for the FY 2007 to ` 99.22 Lacs in FY
2008 showing a decrease of 26.81%. During FY 2008, the Company recorded PAT margin of 12.86% as
against 21.62% for FY 2007.




180

SECTION VIII: LEGAL AND OTHER INFORMATION
A. Outstanding Litigations and Material Developments

Our Company certifies that except as stated herein, there are no outstanding or pending litigations, suits,
economic offences, criminal or civil prosecutions, proceedings, proceedings initiated for offences (irrespective
of whether specified in paragraph (I) of Part I of Schedule XIII of the Companies Act) or litigations for tax
liabilities against our Company, our Directors or our Promoter or Promoters Group companies and there are
no defaults to banks/financial institutions, non-payment of or overdue statutory dues, or dues towards holders
of any debentures, bonds and fixed deposits and arrears of preference shares, other unclaimed liabilities of our
Company and no disciplinary action has been taken by SEBI or any stock exchanges against our Company,
our Promoters, the Directors and Promoter Group Companies.

Further, there are no past cases in which penalties have been imposed on our Company except as mentioned
below, the Promoters, the Directors or the Promoters Group Companies, and there is no outstanding litigation
against any other Company whose outcome could have a material adverse effect on the position of our
Company. Further, there are no cases of litigations, defaults etc. in respect of Companies/firms/Ventures with
which the Promoters were associated in the past but are no longer associated, in respect of which the name(s)
of the Promoters continues to be associated.

The Company had during the period FY 2004-05 to FY 2007-08 made excess DTA sales to the tune of `
86.32 Lacs without the necessary approvals from STPI regulatory body. A penalty of ` 40,000/- was imposed
in pursuance of the provisions of the Foreign Trade (D & R) Act, 1992 vide letter No.
STP/P/VIII(A)(855)/2003/A 5732, dated January 28, 2011.

Part I - Litigations relating to our Company and Contingent Liabilities of Our Company

a) Litigations by our Company

1. Sales Tax Cases: Nil
2. Income Tax Cases: Nil
3. Excise and Service Tax Cases: Nil
4. Cases under Negotiable Instruments Act: Nil
5. Civil Court Cases: Nil
6. Cases under Securities Laws: Nil
7. Cases under the Workmens Compensation Act, 1933: Nil
8. Criminal Cases: Nil
9. Cases filed by the Directors: Nil
10. Past cases in which penalties were imposed on our Company and Directors: Nil

b) Litigations against our Company

11. Sales Tax Cases: Nil
12. Income Tax Cases: Nil
13. Excise and Service Tax Cases: Nil
14. Cases under Negotiable Instruments Act: Nil
15. Civil Court Cases: Nil
16. Cases under Securities Laws: Nil



181

17. Cases under the Workmens Compensation Act, 1933: Nil
18. Criminal Cases: Nil
19. Past cases in which penalties were imposed on our Company and Directors: Nil
20. Cases against the Directors: Nil
21. Petition before the Company Law Board:
Our Company has filed Compliance Certificates vide Form No. 66 with the Registrar of Companies for
the years 2008-09, 2009-10 and 2010-11 which contains certain errors, for which the Practicing Company
Secretary has filed petition with the Company Law Board for compounding so as to rectify the errors.

c) Show Cause Notices/Legal Notices issued by/against our Company:

Nil

d) Contingent Liabilities of our Company

There are no contingent liabilities outstanding as on March 31, 2011.

Part II - Litigations relating to our Promoters
As on the date of filing this Draft Red Herring Prospectus there are no cases filed by/against our Promoters.

Part III - Litigations relating to our Directors other than Promoters
As on the date of filing of this Draft Red Herring Prospectus, there are no cases filed by/ against our Directors

Part IV - Litigations relating to our Group Companies / Ventures of Promoters
As on the date of filing of this Draft Red Herring Prospectus, there are no cases filed by/ against our Group
Companies

Part V - Past cases in which Penalties have been imposed
There are no cases in the last five years in which penalties have been imposed on our Company.

Part VI - Adverse Events
Nil

Amounts Owed to Small Scale Undertakings and other Creditors

Our Company has not received any information from its suppliers regarding their registration under the
Micro, Small and Medium Enterprises Development Act, 2006. Hence the information required to be
disclosed under section 22 of the Micro, Small and Medium Enterprises Development Act, 2006; i.e. amounts
owed to creditors including small scale undertakings, which is outstanding for more than 30 days as on March
31, 2011 is not disclosed.

Material Developments

Except as stated under the Chapter titled Managements Discussion and Analysis of financial condition and
Results of Operations of this Draft Red Herring Prospectus and our Financial Statements included herein, no
Material Developments have taken place after March 31, 2011, the date of the latest balance sheet, that would
materially adversely affect the performance or prospects of our company. In accordance with SEBI
requirements, our Company and the Lead Manager will ensure that investors are informed of material
developments until such time as the grant of Listing and Trading permission by the Stock Exchange.



182

B. Government and Other Statutory Approvals

Except for pending approvals mentioned under this heading, our Company has received the necessary material
consents, licenses, permissions and approvals from the Government/RBI and various Government agencies
required for our present business. Further, except for pending approvals as detailed herein, our Company can
undertake all our present activities in view of the present approvals and no further material approvals from any
statutory body are required by our Company to undertake the present activities. Except as mentioned in this
Section, we have not applied for any licenses/ approvals in relation to the Objects of the Issue. It must,
however, be distinctly understood that in granting the above approvals, the Government and another
authorities do not take any responsibility for the financial soundness of our Company or for the correctness of
any of the statements or any commitments made or opinions expressed.

I. Approvals in relation to our Companys Incorporation

a) Certificate of Incorporation dated 8
th
August, 2000, bearing number U72100MH2000PLC128134 of 2000
issued in the name of e-Zest Solutions Private Limited by the Deputy Registrar of Companies, Maharashtra,
and Mumbai.

b) Fresh Certificate of Incorporation dated May 18, 2007 bearing Corporate Identification Number
U72100MH2000PLC128134, issued by the Deputy Registrar of Companies, Maharashtra, Mumbai,
consequent upon change of name on conversion to public limited company from e-Zest Solutions Private
Limited to e-Zest Solutions Limited.

II. Approvals related to this Issue

a) Our Board of Directors has pursuant to a resolution passed at its meeting held on August 20, 2011
authorized the Issue subject to the approval by the shareholders of our Company under Section 81 (1A) of
the Companies Act, such other authorities as may be necessary.

b) The shareholders of our Company have approved this Issue under Section 81 (1A) of the Companies Act,
1956 vide a Special Resolution passed at our Companys Extraordinary General Meeting held on
September 21, 2011.

c) Observation letter no. [], dated [] issued by SEBI.

d) In-principle approval for listing from the Bombay Stock Exchange Limited dated [].

e) In-principle approval for listing from The National Stock Exchange of India Limited dated [].

III. Tax related approvals

a) Permanent Account Number (PAN) being AAACE7998Q granted by the Income Tax Department to our
Company.

b) Tax Deduction Account Number (TAN) being MUME05982E granted by the Income Tax Department to
our Company.
c) Import Export Code (IEC) being 0300052022 granted by the Director General of Foreign Trade.




183

d) Certificate of Registration under the Service Tax Rules, 1994, bearing Registration no.
AAACE7998QSD002 issued by Central Board of Excise & Customs, Ministry of Finance, Department of
Revenue.

e) Certificate of Enrolment under the Maharashtra Value Added Tax bearing number 27430008102V and
Central Sales Tax No. 27430008102C, granted by Profession Tax Officer, Mumbai, to our Company.

f) Certificate of Registration under the Maharashtra State Tax on Professions, Trades, Callings and
Employments Act, 1975, bearing number PTEC/27430008102P granted by Professional Tax Officer to
our Company.

IV. Employer related approvals

a) Registration Code 33-00012-69700-00911 issued by the Assistant Director, Employee State Insurance
Corporation, under the ESI Act, 1948.

b) Registration Code MH/120434 issued by the Assistant Commissioner, Regional Provident Fund, Sub
Regional Office, Pane, under the Employees Provident Fund and Miscellaneous Provision Act,1952.

V. Other business related approvals

a) Registration Certificate of Establishment under Bombay Shops and Establishments Act, 1948for our
Registered Office bearing registration no. Kothrud/II/32380, issued by the Inspector under the Bombay
Shops and Establishments Act, 1948, valid upto November 12, 2013.

b) STP approval granted under STP scheme by Assistant Director, Software Technology Park of India, DIT,
Ministry of Communication and Information Technology, Government of India vide letter no.
STP/P/VIII(A)(855)/2003/2427 dated December 02, 2003.

c) Certificate bearing no. 04 100 057324-E3 issued by TUV Nord to our Company for Sales, design,
development, Release, Support, Maintenance and enhancement of custom built software applications and
products ISO9001:2008, valid up to January 06, 2014.

d) Certificate bearing CMMI-DEV V 1.2 Maturity Level 3 granted by Software Engineering Institute as
appraised by Nihilent Technologies Private Limited to our Company for Software development process.

VI. Approvals applied/to be applied/pending renewal

a) Application has been made for Trademark Registry vide. Application No. 224130 dated October 21, 2011
under Class 42.

b) Application has been made under the Shops and Establishments Act for our registered office located at
B- 103, PushpVinod, S.V. Road, Borivali (West), Mumbai- 400 092, India

c) The company has made an application for approval for setting up Overseas Sales And Delivery Offices to
Reserve Bank of India vide Letter dated October 11, 2011.




184

To be applied

1) Certification to our Company for services such as Background screening of employees, risk
mitigation activities, claim investigation and HR services, conforming to Management System
Standard ISO 27001:2005.

2) Application for approval under the Bombay Shops and Establishment Act, for the proposed Software
Development Center.

We shall apply for the following Licenses / Approvals for our proposed project:

We do not envisage any major approvals required for expanding our business operations, except the local
shops & establishment licenses from the local municipal authorities, which shall be applied in due course of
time.





























185

SECTION IX: OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Issue

The Issue has been authorized by a resolution of our Board of Directors dated August 20, 2011 and by special
Resolution adopted pursuant to Section 81(1A) of the Companies Act at an EGM of our Company held on
September 21, 2011.

Prohibition by SEBI

Our Company, Promoters, Directors, Promoter Company, or entities with which our Companys Directors are
associated as directors / Promoters / partners have not been prohibited from accessing or operating in the
capital markets or restrained from buying, selling or dealing in securities under any order or Direction passed
by SEBI or any other authorities.

Prohibition by RBI

Our Company, Promoters, Directors, Promoter Company, have not been identified as willful defaulters by
RBI/government authorities and there are no violations of securities laws committed by them in the past or
pending against them.

Eligibility for the Issue

The Company is eligible for the Issue in accordance with Regulation 26(1) of the SEBI ICDR Regulations. As
explained under, with the eligibility criteria calculated in accordance with Restated Financial Statements:

The Company has net tangible assets of at least ` 300 Lacs in each of the preceding 3 full years (of 12
Months each), of which not more than 50% is held in monetary assets;

The Company has a track record of distributable profits in terms of section 205 of the Companies Act, 1956,
for at least (3) out of immediately preceding five (5) years;

The Company has a net worth of at least ` 100 Lacs in each of the preceding three (3) full years (of 12
Months each);

The Company has not changed its name within the last one year but has converted from Private to Public
Limited;

The aggregate of the proposed issue and all previous issues made in the same financial year in terms of Size
does not exceed five (5) times its pre-issue net worth as per the last available audited accounts. The pre-
issue net worth, distributable profits and net tangible assets in terms of section 205 of the Companies Act, of
the Company for the last 5 completed years are as under:
(` in Lacs)
Particulars
As at
March 31,
2007
As at
March 31,
2008
As at
March 31,
2009
As at
March 31,
2010
As at
March 31,
2011
Distributable Profits*** 136 99 104 91 233
Net worth# 278 363 438 613 928
Net Tangible Assets* 576 837 855 1028 1364
Monetary Assets** 100 15 25 13 52
Monetary Assets as a
percentage of the Net
Tangible Assets (in %)
17% 2% 3% 1% 4%



186

Notes:
* Net tangible assets is defined as the sum of all net assets of the Company, excluding intangible assets as
defined in Accounting Standard 26 (AS 26), Intangible Assets issued by the Institute of Chartered
Accountants of India. A net tangible asset is the sum of fixed assets (including capital work in progress and
excluding revaluation reserves),investments, current assets (excluding deferred tax assets) less current
liabilities (excluding deferred tax liabilities and long term liabilities), and net of provision for diminution in
value;

**Monetary assets include cash on hand and bank balances;

***Distributable profits are as defined under Section 205 of the Companies Act.
# Net worth is defined as the aggregate of equity share capital and reserves and surplus.

Further, in accordance with Regulation 26(4) of the SEBI Regulations, the Company shall ensure that the
number of prospective allottees to whom the Equity Shares will be allotted will be not less than 1,000;
otherwise the entire application money will be refunded forthwith. If such application money is not repaid
within eight days after the Company becomes liable to repay it (i.e., from the date of refusal or within 15 days
from the Bid Closing Date, whichever is earlier), the Company will, on and from the expiry of eight days, be
liable to repay such application money with interest thereon at the rate of 15.0% p.a., as prescribed under
Section 73 of the Companies Act.




187

DISCLAIMER CLAUSE

AS REQUIRED, A COPY OF THIS DRAFT RED HERRING PROSPECTUS HAS BEEN SUBMITTED
TO SEBI.

IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THIS DRAFT RED
HERRING PROSPECTUS TO SECURITIES AND EXCHANGE BOARD OF INDIA (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 THIS OFFER DOCUMENT. THE BOOK RUNNING LEAD
MANAGER, CHOICE CAPITAL ADVISORS PRIVATE LIMITED, HAS CERTIFIED THAT THE
DISCLOSURES MADE IN THIS DRAFT RED HERRING PROSPECTUS ARE GENERALLY
ADEQUATE AND ARE IN CONFORMITY WITH SEBI (ISSUE OF CAPITAL AND DISCLOSURE
REQUIREMENT) 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 OUR COMPANY IS
PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF
ALL RELEVANT INFORMATION IN THIS OFFER DOCUMENT, THE BOOK RUNNING LEAD
MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT OUR
COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND
TOWARDS THIS PURPOSE, THE BOOK RUNNING LEAD MANAGERS, CHOICE CAPITAL
ADVISORS PRIVATE LIMITED HAVE FURNISHED TO SEBI, A DUE DILIGENCE
CERTIFICATE DATED NOVEMBER 07, 2011 IN ACCORDANCE WITH THE SEBI (MERCHANT
BANKERS) REGULATIONS, 1992, WHICH READS AS FOLLOWS:
1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO
LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH
COLLABORATORS ETC. AND OTHER MATERIALS 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
I SSUER COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES,
INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF
THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND
OTHER PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT:
a. THE DRAFT RED HERRING PROSPECTUS FILED WITH THE BOARD IS IN
CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT
TO THE ISSUE;
b. ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE ISSUE AS ALSO THE
GUIDELINES, INSTRUCTIONS, ETC. FRAMED/ ISSUED BY THE BOARD, THE
CENTRAL GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS
BEHALF HAVE BEEN DULY COMPLIED WITH; AND



188

c. THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS 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, 1956, THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE
REQUIREMENTS) REGULATIONS, 2009 AND OTHER APPLICABLE LEGAL
REQUIREMENTS.
3. WE CONFIRM THAT, BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN
THE DRAFT RED HERRING PROSPECTUS ARE REGISTERED WITH SEBI AND THAT
TILL DATE SUCH REGISTRATION IS VALID.
4. WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS
TO FULFILL THEIR UNDERWRITING COMMITMENTS - NOTED FOR COMPLIANCE.
5. WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS HAS BEEN OBTAINED
FOR INCLUSION OF THEIR SPECIFIED SECURITIES AS PART OF PROMOTERS
CONTRIBUTION SUBJECT TO LOCK-IN AND THE SPECIFIED SECURITIES PROPOSED
TO FORM PART OF THE PROMOTERS CONTRIBUTION SUBJECT TO LOCK-IN, SHALL
NOT BE DISPOSED/ SOLD/ TRANSFERRED BY THE PROMOTERS DURING THE PERIOD
STARTING FROM THE DATE OF FILING THE DRAFT RED HERRING PROSPECTUS
WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS
STATED IN THE DRAFT RED HERRING PROSPECTUS.
6. WE CERTIFY THAT CLAUSE 33 OF THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE
REQUIREMENTS) REGULATIONS, 2009 WHICH RELATES TO SPECIFIED SECURITIES
INELIGIBLE FOR COMPUTATION OF PROMOTERS CONTRIBUTION, HAS BEEN DULY
COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE
CLAUSE HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS.
7. WE UNDERTAKE THAT SUB REGULATION (4) OF REGULATION (32) AND CLAUSE (C)
AND (D) OF SUB REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND
EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS)
REGULATIONS 2009 SHALL BE COMPLIED WITH. SINCE THE PRE ISSUE HOLDING OF
THE PROMOTERS/ PROMOTERS GROUP IS 100% AND WOULD BE 59.17% OF THE
PROPOSED POST ISSUE CAPITAL RESPECTIVELY, THE REQUIREMENT OF ENSURING
THAT PROMOTERS CONTRIBUTION SHALL BE RECEIVED AT LEAST ONE DAY
BEFORE THE OPENING OF THE ISSUE IS 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
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.
9. WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE
THAT THE MONEY RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE
BANK ACCOUNT AS PER THE PROVISIONS OF SUB-SECTION (3) OF SECTION 73 OF THE
COMPANIES ACT, 1956 AND THAT SUCH MONEY SHALL BE RELEASED BY THE SAID
BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES
MENTIONED IN THE DRAFT RED HERRING PROSPECTUS/ LETTER OF OFFER. WE



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FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE
BANKERS TO THE ISSUE AND THE ISSUER COMPANY SPECIFICALLY CONTAINS THIS
CONDITION. NOTED FOR COMPLIANCE

10. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT RED HERRING
PROSPECTUS THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE
SHARES IN DEMAT OR PHYSICAL MODE. NOT APPLICABLE AS THE ISSUE SIZE IS
MORE THAN ` 1,000 LACS, HENCE UNDER SECTION 68B OF THE COMPANIES ACT, THE
ALLOTMENT WILL BE MADE ONLY IN DEMAT FORM.
11. WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE
SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE
REQUIREMENTS) REGULATIONS, 2009 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
DRAFT RED HERRING PROSPECTUS:
a. AN UNDERTAKING FROM THE I SSUER THAT AT ANY GIVEN TIME, THERE
SHALL BE ONLY ONE DENOMINATION FOR THE SHARES OF THE ISSUER AND
b. AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH
DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME
TO TIME.
13. WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO
ADVERTISEMENT IN TERMS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
(ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 WHILE
MAKING THE ISSUE.
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
OR THE ISSUER, 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 SECURITIES AND EXCHANGE BOARD OF
INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009,
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 IS RESPONSIBLE FOR PRICING THIS ISSUE) , AS PER
FORMAT SPECIFIED BY THE BOARD THROUGH THE CIRCULAR. NOT APPLICABLE AS
THIS ISSUE BEING THE FIRST ISSUE OF THE MERCHANT BANKER.
THE FILING OF THIS DRAFT RED HERRING PROSPECTUS DOES NOT, HOWEVER,
ABSOLVE OUR COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF
THE COMPANIES ACT, 1956 OR FROM THE REQUIREMENT OF OBTAINING SUCH



190

STATUTORY OR OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE
PROPOSED ISSUE. SEBI FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF
TIME; WITH THE BRLM ANY IRREGULARITIES OR LAPSES IN THIS DRAFT RED HERRING
PROSPECTUS.
Note:
All legal requirements pertaining to the Issue will be complied with at the time of filing of the Red Herring Prospectus
with the Registrar of Companies, Mumbai in terms of section 60B 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 Registrar of
Companies, Mumbai in terms of sections 56, 60 and 60B of the Companies Act.
DISCLAIMER STATEMENT FROM THE COMPANY AND THE BOOK RUNNING LEAD
MANAGER
1. Our Company, its Directors and the Book Running Lead Manager accepts no responsibility for
statements made otherwise than in this Draft Prospectus or in the advertisement or any other material
issued by or at instance of the Company and that anyone placing reliance on any other source of
information, including our website: www.e-zest.net would be doing so at his or her own risk.
2. The Book Running Lead Manager accepts no responsibility, save to the limited extent as provided in
the Memorandum of Understanding entered into between the Book Running Lead Manager viz. Choice
Capital Advisors Private Limited and the Company dated October 7, 2011.
3. All information shall be made available by the Book Running Lead Manager and the Company to the
public and investors at large and no selective or additional information would be available for a section
of investors in any manner whatsoever including road show presentations, research or sales reports or at
collection centers or elsewhere. We shall not be liable to the Bidders for any failure in uploading the
Bids due to faults in any software/hardware system or otherwise
Caution
Neither our Company nor the Book Running Lead Manager or any other member of the Syndicate is liable to
the Bidders for any failure in downloading the Bids due to faults in any software/hardware system or
otherwise.

The Book Running Lead Manager and its associates and affiliates may engage in transactions with, and
perform services for, our Company and Promoter Group Entities, affiliates or associates of our Company in
the ordinary course of business and have engaged, and/or may in future engage, in the provision of financial
services for which they have received, and/or may in future receive, compensation.

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 majors, HUFs, companies, corporate bodies and societies registered under the applicable laws in India and
authorized 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), trusts registered
under the Societies Registration Act, 1860, as amended from time to time, or any other trust law and who are
authorized under their constitution to hold and invest in shares) and to NRIs, FIIs and Foreign Venture Capital
Funds Registered with SEBI. The Draft Red Herring Prospectus does not, however, constitute an invitation to
subscribe to shares issued hereby in any other jurisdiction to any person to whom it is unlawful to make an
Issue or invitation in such jurisdiction. Any person into whose possession the 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.




191

No action has been or will be taken to permit a public offering in any jurisdiction where action would be
required for that purpose, except that the Draft Red Herring Prospectus was submitted to SEBI for its
observations and SEBI has given its observation. Accordingly, the Equity Shares represented thereby may not
be offered or sold, directly or indirectly, and the Draft Red Herring Prospectus may not be distributed, in any
jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the
delivery of the Draft Red Herring Prospectus nor any sale hereunder shall under any circumstances create any
implication that there has been no change in the affairs of our Company since the date hereof or that the
information contained herein is correct as of any time subsequent to this date.

Disclaimer Clause of the Bombay Stock Exchange Limited (BSE)

[] As required, a copy of the Draft Red Herring Prospectus has been submitted to BSE. The disclaimer
clause as intimated by BSE to our Company, post scrutiny of the Draft Red Herring Prospectus, shall
be included in the Red Herring Prospectus prior to the RoC filing.

Disclaimer Clause of National Stock Exchange of India Limited (NSE)

[] As required, a copy of the Draft Red Herring Prospectus has been submitted to NSE. The disclaimer
clause as intimated by NSE to our Company, post scrutiny of the Draft Red Herring Prospectus, shall
be included in the Red Herring Prospectus prior to the RoC filing.

Filing of the offer document with the Board and ROC
A copy of the Draft Red Herring Prospectus has been filed with the Corporation Finance Department of SEBI
at: Plot No. C4/A, G - Block, Bandra-Kurla Complex, Bandra (East), Mumbai 400 051.
A copy of the Draft Red Herring Prospectus is filed with the Designated Stock Exchange:
Bombay Stock Exchange Limited,
P. J. Towers, Dalal Street,
Fort, Mumbai 400 001.

National Stock Exchange of India Limited
Exchange Plaza,
Plot no. C/1, G Block,
Bandra-Kurla Complex, Bandra (E)
Mumbai - 400 051.

A copy of the Red Herring Prospectus, along with the documents required to be filed under Section 60B
of the Companies Act shall be filed with the Registrar of Companies, Maharashtra situated at Everest
House, 100 Marine Drive, Mumbai 400 002. The Red Herring Prospectus shall be filed with the
Corporate Finance department of SEBI and the ROC at their respective aforesaid addresses upon
closure of the issue and finalisation of the Issue price.

Grading
[]





192

DISCLAIMER CLAUSE OF IPO GRADING AGENCY Credit Analysis and Research (CARE) Ltd.

Credit Analysis and Research (CARE) Ltd.
IPO grading is a one-time assessment and the analysis draws heavily from the information provided by the
Company as well as information obtained from sources believed by CARE to be accurate and reliable.
However, CARE, does not guarantee the accuracy, adequacy or completeness of any information and is not
responsible for any errors or omissions or for the results obtained from the use of such information. CAREs
IPO Grading does not take cognizance of the price of the security and it is not a recommendation to buy, sell
or hold shares/securities. It is also not a comment on the offer price or the listed price of the scrip. It does not
imply that CARE performs an audit function or forensic exercise to detect fraud. It is also not a forecast of the
future market performance and the earnings prospects of the Company; also it does not indicate
compliance/violation of various statutory requirements. CARE shall not be liable for any losses incurred by
users from any use of the IPO grading.

Listing
Applications have been made to the Bombay Stock Exchange Limited and the National Stock Exchange of
India Limited for permission to deal in and for an official quotation of our Equity Shares. Our existing Equity
Shares are not listed on any Stock Exchanges in India.
BSE shall be the Designated Stock Exchange with which the basis of allotment will be finalized for the QIB,
Non Institutional and Retail portion. If the permission to deal in and for an official quotation of the Equity
Shares is not granted by any of the Stock Exchanges, we shall forthwith repay, without interest, all moneys
received from the applicants in pursuance of the Draft Red Herring Prospectus. If such money is not repaid
within eight days after we become liable to repay it, i.e., from the date of refusal or within 70 days from the
date of Bid/Issue Closing Date, whichever is earlier, then we and all our directors jointly and severally shall,
on and from expiry of eight days, be liable to repay the money, with interest at the rate of 15% per annum on
application money, as prescribed under Section 73 of the Companies Act, 1956.

Our Company has received in-principle approval from:
BSE vide its letter no. [] Dated []
NSE vide its letter no. [] Dated []
The Company with the assistance of the Book Running Lead Manager shall ensure that all steps for the
completion of necessary requirements for listing and commencement of trading at the Stock Exchanges
mentioned above are taken within seven days of finalization of the Basis of Allotment for the Issue.

Consents
Necessary Consents for the issue have been obtained from the following:

1. Directors of our Company
2. Bankers to our Company
3. Auditors to our Company
4. Book Running Lead Manager to the Issue
5. Legal Advisor to the Issue
6. Registrar to the Issue
7. IPO Grading Agency
8. Company Secretary cum Compliance Officer



193

The Company has not appointed any Escrow Banker for the Issue. The name and their consent will be taken in
due course as and when the Company will appoint them.
The said consents would be filed along with a copy of the Red Herring Prospectus with the Registrar of
Companies, Maharashtra, as required under Sections 60 and 60B of the Companies Act, 1956 and such
consents have not been withdrawn up to the time of delivery of the Red Herring Prospectus, for registration
with the Registrar of Companies, Maharashtra.

Expert Opinion
Except the statements of two benefits in the Draft Red Herring Prospectus, we have not obtained any expert
opinion.

Public Issue Expenses
The total expenses of the Issue are estimated at approximately ` [] Lacs. The expenses of this Issue include
Book Running Lead Manager Fees, Registrar Fees, Legal Advisors Fees, Auditors Fees, Underwriting Fees,
Printing and Stationery Fees, Advertising Fees, IPO Grading Fees and Listing Fess. All expenses with respect
to the Issue would be paid by our Company.

Fees Payable to the Book Running Lead Manager
The total fees payable to the Book Running Lead Manager including for the Issue will be as per the
Memorandum of Understanding executed between the Company and the Book Running Lead Manager dated
October 7, 2011 copy of which is available for inspection at the Registered Office of the Company.

Fees Payable to the Registrar
The total fees payable to the Registrar to the Issue will be as per the Memorandum of Understanding executed
between the Company and the Registrar to the Public Issue dated October 10, 2011, a copy of which is
available for inspection at the Registered Office of the Company. Adequate funds will be provided to the
Registrar to the Issue to enable them to send refund order(s) or allotment advice by registered post or speed
post or under certificate of posting.

Fees Payable to the Bankers to the Issue: ` [] Lacs

Fees Payable to the IPO Grading Agency
The total fees payable to the IPO Grading Agency for the Issue is as per the Engagement Letter between the
Company and the IPO Grading Agency dated October 11, 2011 copy of which is available for inspection at
the Registered Office of the Company.

Underwriting Commission
The present issue is not being underwritten and hence no underwriting commission is payable.

Brokerage and Selling Commission
The Brokerage for the Issue will be paid not more than [] % of the Issue Price of the Equity Shares by e-Zest
Solutions Limited on the basis of the allotments made against the applications bearing the stamp of a member
of any recognized Stock Exchange in India in the Broker column. Brokerage at the same rate will also be
payable to the Bankers to the Issue in respect of the allotments made against applications procured by them
provided the respective forms of application bear their respective stamp in the Broker column. In case of
tampering or over- stamping of Brokers / Agents codes on the application form, the Companys decision to
pay brokerage in this respect will be final and no further correspondence will be entertained in this matter. The
Company, at its sole discretion, may consider payment of additional incentive in the form of kitty or otherwise
to the performing brokers on such terms and mode as may be decided by the Company.



194

Others
The total fees payable to the Legal Advisor, Auditor and Tax Auditor will be as per their respective
engagement letters.

Previous Public or Rights Issues in the last 5 years
Our Company has not made any public or rights issue of Equity Shares/Debentures in the last 5 years.

Previous Issue of Shares otherwise than for Cash
Our Company has not issued any Equity Shares for consideration other than cash except as mentioned in the
Chapter titled Capital Structure

Commission or Brokerage on Previous Issues
Since this is the initial public offering of the Equity Shares, no sum has been paid or is payable as commission
or brokerage for subscribing to or procuring for, or agreeing to procure subscription for any of the Equity
Shares of our Company since its inception.

Details of capital issue made during last three years in regard to the issuer company and other listed
companies under the same management within the meaning of section 370(1)(B) of the Companies Act,
1956.
There have been no capital issues during last 3 years by us. There are no other listed companies under the
same management within the meaning of Sec 370 (1) (B) of the Act at present or during the last three years.

Promise vis--vis Performance Last 5 issues
Our Company has not made any Public Issue in the last 5 years.

Listed ventures of Promoters
There are no listed ventures of our Promoters.

Promise vis--vis Performance Last One Issue of Group Companies
There are no listed ventures of our Promoters.

Outstanding debentures or bonds and redeemable preference shares and other instruments issued and
outstanding as on the date of the Draft Red Herring Prospectus and terms of Issue
There are no outstanding debentures or bonds or redeemable preference shares and other instruments
outstanding as on the date of filing of the Draft Red Herring Prospectus.

Stock Market Data
This being an initial public offering of our Company, the Equity Shares of our Company are not listed on any
stock exchange.

Mechanism for Redressal of Investors grievance
Our Company has constituted a Shareholders Grievance Committee to look into the redressal of shareholder/
investor complaints such as Issue of duplicate/split/consolidated share certificates, allotment and listing of
shares and review of cases for refusal of transfer/transmission of shares and debentures, complaints for non-
receipt of dividends etc.

For further details on this committee, please refer paragraph titled Shareholders/Investors Grievance
Committee under the Chapter titled Management of the Draft Red Herring Prospectus.



195

To expedite the process of share transfer, our Company has appointed Bigshare Services Private Limited as
the Registrar and Share Transfer Agents of our Company.

All grievances relating to the ASBA process may be addressed to the Registrar with a copy to the relevant
SCSB, giving full details such as name, address of the applicant, number of Equity Shares applied for, amount
paid on application and the Designated Branch of the SCSB where the ASBA Form was submitted by the
ASBA Bidders.

Disposal of Investors Grievances and Redressal Mechanism
We have appointed Bigshare Services Private Limited as the Registrar to the Issue, to handle the investor
grievances in co-ordination with our Compliance officer. All grievances relating to the present issue may be
addressed to the Registrar with a copy to the Compliance officer, giving full details such as name, address of
the applicant, number of Equity Shares applied for, amount paid on application and bank and Branch. We will
monitor the work of the Registrar to ensure that the investor grievances are settled expeditiously and
satisfactorily.

A fortnightly status report of the complaints received and redressed by the Registrar to the Issue would be
forwarded to us. We would also coordinate with the Registrar to the Issue in attending to the investors
grievances.

We assure that any complaints received, shall be disposed of as per the following schedule:

Sr.
No.
Nature of Complaint Time Taken
1. Non receipt of the refund
Within 7 days of receipt, subject to production of satisfactory
evidence
2. Change of Address Within 7 days of receipt of information
3.
Any other complaint in
relation to public issue
Within 7 days of receipt of compliant with all relevant details

We have appointed Mr. Divanshu Mittal as the Compliance Officer who would directly liaise with SEBI with
respect to implementation/compliance of various laws, rules, regulations and other directives issued by SEBI
and matters related to investor complaints. The investors may contact the compliance officer/registrar in case
of any pre issue/post issue related problems at the following address:

Company Secretary and Compliance Officer
Contact Person: Mr. Divanshu Mittal
B- 103, PushpVinod, S.V. Road,
Borivali (West),
Mumbai- 400 092, India
Tel. No.: +91 20 2545 9802 /3
Fax No.: +91 20 2545 9810
Website: www.e-zest.net
Email: divanshu.mittal@ezest.in

Registrar
Contact Person - Mr. Malla S,
Bigshare Services Private Limited
E-2, Ansa Industrial Estate, Sakivihar Road,
Saki Naka, Andheri (East)
Mumbai - 400072
Tel: 022 4043 0200, Fax: 022 2847 5207
Web: www.bigshareonline.com
Email:ipo@bigshareonline.com

Our Company has not received any investor complaints during the three years preceding the filing of the Draft
Red Herring Prospectus with SEBI. Further, no investor complaints are pending as on the date of filing the
Draft Red Herring Prospectus with SEBI.



196

Change in Auditors
M/s. Sajjan Kanodia and Co., Chartered Accountants are the Statutory Auditor of the Company w.e.f
November 17, 2010. Prior to them, M/s. S.K Patodia and Associates, Chartered Accountants were the
Statutory Auditors of the Company from incorporation to November 17, 2010 and resigned due to their Pre-
commitments.

Capitalization of Reserves or Profits during last five years
Except as stated in the Chapter titled Capital Structure of the Draft Red Herring Prospectus, our Company
has not capitalized its reserves or profits at any time since inception.

Revaluation of Assets during the last five years
There has not been any revaluation of Assets during the last five years.




197

SECTION X: OFFERING INFORMATION
1. TERMS OF THE ISSUE
The Equity Shares being issued pursuant to the Issue shall be subject to the provisions of the Companies Act,
the Memorandum and Articles of Association, the terms of this Draft Red Herring Prospectus, the Red
Herring Prospectus and the Prospectus, Bid cum Application Form, ASBA Bid cum Application Form, the
Revision Form, the CAN 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, guidelines, notifications and regulations relating to the issue of capital and listing and trading
of securities issued from time to time by SEBI, the Government, Stock Exchanges, RoC, RBI and/or other
authorities, as in force on the date of the Issue and to the extent applicable.

Ranking of Equity Shares
The Equity Shares being issued in the Issue shall be subject to the provisions of the Companies Act and the
Memorandum and Articles of Association and shall rank pari passu with the existing equity shares of our
Company including rights in respect of dividend. The Allotees in receipt of Allotment of Equity Shares under
this Issue will be entitled to dividends and other corporate benefits, if any, declared by our Company after the
date of Allotment.

For further details, see Description of Equity Shares and Terms of the Articles of Association on Page No.
241 of this Draft Red Herring Prospectus.

Mode of Payment of Dividend
Our Company shall pay dividends, if declared, to its shareholders in accordance with the provisions of the
Companies Act and the Memorandum and Articles of Association.

Face Value and Issue Price
The Face Value of each Equity Share is ` 10. The Floor Price of the Equity Shares is ` [] per Equity Share
and the Cap Price is ` [] per Equity Share. The Issue Price is [] times the Face Value of the Equity Shares.

At any given point of time there shall be only one denomination for the Equity Shares.

Price Band
The Price Band shall be from ` [] to ` [] per Equity Share of face value of ` 10 each.

Compliance with SEBI (ICDR) Regulations
Our Company shall comply with all disclosure and accounting norms as specified by SEBI from time to time.

Rights of the Equity Shareholder
Subject to applicable laws, the equity shareholders shall have the following rights:

1. Right to receive dividend, if declared;
2. Right to attend general meetings and exercise voting powers, unless prohibited by law;
3. Right to vote on a poll either in person or by proxy;
4. Right to receive offers for rights shares and be allotted bonus shares, if announced;
5. Right to receive surplus on liquidation, subject to any statutory and preferential claim being satisfied;



198

6. Right of free transferability subject to applicable law, including any RBI rules and regulations; and
7. Such other rights, as may be available to a shareholder of a listed public company under the Companies
Act, the terms of the listing agreement executed with the Stock Exchanges and our Companys
Memorandum and Articles of Association.

For a detailed description of the main provisions of the Articles of Association relating to voting rights,
dividend, forfeiture and lien and/or consolidation/splitting, please refer to the chapter titled Description of
Equity Shares and Terms of the Articles of Association on Page No. 241 of this Draft Red Herring
Prospectus.

Market Lot and Trading Lot
In terms of Section 68B of the Companies Act, the Equity Shares shall be allotted only in dematerialized
form. As per the SEBI (ICDR) Regulations, the trading of the Equity Shares shall only be in dematerialized
form for all investors. Since trading of the Equity Shares is in dematerialized form, the tradable lot is one
Equity Share. Allotment in this Issue will be only in electronic form in multiples of one (1) Equity Share
subject to a minimum allotment of [] Equity Shares.

The Price Band and the minimum Bid Lot size for the Issue will be decided by our Company in consultation
with the BRLM and advertised in [] edition of English national daily [], [] edition of Hindi national daily
[] and [] edition of Marathi language newspaper [] at least two working days prior to the Bid/ Issue
Opening Date.

Jurisdiction
Exclusive jurisdiction for the purpose of this Issue is with the competent courts/authorities in Mumbai, India.

Nomination Facility to Investor
In accordance with Section 109A of the Companies Act, the sole or 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. A person,
being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall in
accordance with Section 109A of the Companies Act, be entitled to the same advantages to which he or she
would be entitled if he or she were the registered holder of the Equity Share(s). Where the nominee is a minor,
the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled to
Equity Share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a
sale of equity share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the
manner prescribed. Fresh nomination can be made only on the prescribed form available on request at the
Registered Office/Corporate Office of our Company or to the Registrar and Transfer Agent of our Company.

In accordance with Section 109A of the Companies Act, any person who becomes a nominee by virtue of
Section 109A of the Companies Act, shall upon the production of such evidence as may be required by the
Board, elect either:
To register himself or herself as the holder of the Equity Shares; or
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 ninety
days, the Board may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect



199

of the Equity Shares, until the requirements of the notice have been complied with.
Since the Allotment of Equity Shares in the Issue will be made only in dematerialized form, there is no need
to make a separate nomination with our Company. Nominations registered with respective depository
participant of the applicant would prevail. If the investors require changing their nomination, they are
requested to inform their respective depository participant.

Bidding Period
Bidders may submit their Bids only in the Bidding Period. The Bid/Issue Opening Date is [] and the
Bid/Issue Closing Date is [].
*Our Company may consider closing the Bidding by QIB Bidders one Working Day prior to the Bid/Issue Closing Date
subject to the Bid/Issue period being for a minimum of three Working Days

Minimum Subscription
If we does not receive the minimum subscription of 90% of the offer through offer document on the date of
closure of the issue, or if the subscription level falls below ninety percent after the closure of issue on account
of cheques having being returned unpaid or withdrawal of applications, our Company shall forthwith refund
the entire subscription amount received. If there is a delay beyond eight days after our Company becomes
liable to pay the amount, our Company shall pay interest as per section 73 of the Companies Act, 1956.

Further, in accordance with Clause 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 will be not less than 1,000.

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.

Arrangement for disposal of Odd Lots
The Equity Shares will be traded in dematerialized form only and therefore the marketable lot is one (1)
Equity Share. Hence, there is no possibility of any odd lots.

Application by Eligible NRIs, FIIs and Foreign Venture Capital Funds registered with SEBI

As per the extant policy of the Government of India, OCBs cannot participate in this Issue. The current
provisions of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside
India) Regulations, 2000, there exists a general permission for the NRIs, FIIs and foreign venture capital
investors registered with SEBI to invest in shares of Indian companies by way of subscription in an IPO.
However, such investments would be subject to other investment restrictions under the Foreign Exchange
Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, RBI and/
or SEBI regulations as may be applicable to such investors. It is to be distinctly understood that there is no
reservation for NRIs, FIIs or FCVIs registered with SEBI, applicants will be treated on the same basis with
other categories for the purpose of allocation.

The allotment of the Equity Shares to Non-Residents shall be subject to the conditions, if any, as may
be prescribed by the Government of India/RBI while granting such approvals.

Restriction on transfer of Equity Shares
Except for lock-in of the pre-Issue Equity Shares, promoters minimum contribution and Anchor Investor
lock-in in the Issue as detailed in the section Capital Structure beginning on Page No. 53 of this Draft Red
Herring Prospectus, and except as provided in the Articles of Association, there are no restrictions on transfers



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of Equity Shares. There are no restrictions on transmission of shares and on their consolidation/splitting
except as provided in the Articles of Association. For details, see Description of Equity Shares and Terms of
the Articles of Association on Page No. 241 of this Draft Red Herring Prospectus.

Issue of Equity Shares in dematerialized form in the Issue
In accordance with the SEBI (ICDR) Regulations, Equity Shares will be issued, allotted and transferred only
in the dematerialized form to the Allottees. Allottees will have the option to re-materialize the Equity Shares,
if they so desire, as per the provisions of the Companies Act and the Depositories Act.

2. ISSUE PROCEDURE

This section applies to all Bidders. Please note that all Bidders can participate in the Issue through the ASBA process.
ASBA Bidders should note that the ASBA process involves application procedures that maybe different from the
procedure applicable to Bidders other than the ASBA Bidders. Bidders applying through the ASBA process should
carefully read the provisions applicable to such applications before making their application through the ASBA process.
Please note that all the Bidders are required to make payment of the full Bid Amount along with the Bid cum Application
Form. In case of ASBA Bidders, an amount equivalent to the full Bid Amount will be blocked by the SCSB. Also, please
note that the Semicircular no. CIR/CFD/DIL/8/2010 dated October 12, 2010 shall not be applicable to this Issue until
further clarification on the procedure for Syndicate Members to procure ASBA forms from the ASBA Bidders.

Book Building Procedure
This Issue is being made in compliance with Rule 19(2)(b) of SCRR, wherein not less than 25% of the Post
Issue Paid up Capital shall be offered for subscription to the public through Red Herring Prospectus. The Issue
is being made through a 100% Book Building Process wherein not more than 50% of the Issue shall be
available for allocation to QIBs on a proportionate basis. Out of the QIB Portion (excluding the Anchor
Investor Portion), 5% will be available for allocation on a proportionate basis to Mutual Funds only. The
remainder will be available for allocation on a proportionate basis to QIBs and Mutual Funds, subject to valid
Bids being received from them at or above the Issue Price. Further, not less than 15% of the Issue will be
available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the
Issue will be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid
Bids being received at or above the Issue Price. Allocation to Anchor Investors shall be on a discretionary
basis and not on a proportionate basis.

All Bidders other than the ASBA Bidders are required to submit their Bids through the Syndicate. ASBA
Bidders are required to submit their Bids through the SCSBs. Bids by QIBs will only have to be submitted
through the BRLM or its affiliates or the Syndicate Members. The QIBs who bid through the ASBA process
shall submit their Bids to the designated branch of the SCSBs and should intimate the BRLM.

Members of the Syndicate or the sub Syndicate may procure ASBA Bid cum Application Forms from ASBA
Bidders and submit it to the SCSBs. The Syndicate or sub Syndicate Members who acquire such ASBA Bid
cum Application Forms will upload the Bids and other relevant details of such ASBA Bid cum Application
Form in the bidding platform provided by the Stock Exchanges. The SCSBs shall carry out further action for
such ASBA Bid cum Application Form such as signature verification, blocking of funds etc and forwarding of
such ASBA Bid cum Form to the Registrar.

Investors should note that the Equity Shares will be allotted to all successful Bidders only in
dematerialized form. The Bid cum Application Forms which do not have the details of the Bidders
depository account, including DPID, PAN and Beneficiary Account Number, shall be treated as
incomplete and will be rejected. Bidders will not have the option of being Allotted Equity Shares in
physical form.



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Illustration of Book Building and Price Discovery Process:
(Investors should note that this example is solely for illustrative purposes and is not specific to the Issue)

Bidders (excluding the ASBA bidders who can only bid at cut-off price) can bid at any price within the Price
Band.
For instance, assume a price band of ` 20 to ` 24 per equity share, Issue Size of 3,000 equity shares and
receipt of five (5) bids from bidders, details of which are shown in the table below. A graphical representation
of the consolidated demand and price would be made available at the bidding centers during the bidding
period. The illustrative book below shows the demand for the equity shares of the issuer company at various
prices and is collated from bids received from various investors.

Bid Quantity Bid Price (`) Cumulative Quantity Subscription
500 24 500 16.67%
1,000 23 1,500 50.00%
1,500 22 3,000 100.00%
2,000 21 5,000 166.67%
2,500 20 7,000 250.00%
The price discovery is a function of demand at various prices. The highest price at which the issuer is able to
issue the desired number of shares is the price at which the book cuts off, i.e., ` 22 in the above example. The
issuer, in consultation with the BRLM, will finalize the issue price at or below such cut-off price, i.e., at or
below ` 22. All bids at or above this issue price are valid bids and are considered for allocation in the
respective categories.

Bid cum Application Form and ASBA Form
The prescribed colour of the Bid cum Application Form for the various categories is as follows:

Category Color of Bid cum Application Form
Resident Indians and Eligible NRIs applying on a
non-repatriation basis
White
Eligible NRIs, FIIs or Foreign Venture Capital
Funds, registered Multilateral and Bilateral
Development Financial Institutions applying
on a repatriation basis
Blue
Resident ASBA Bidders Green
Non-Resident ASBA Bidders Pink

*Bid cum Application forms for ASBA Bidders will also be available on the website of the NSE (www.nseindia.com) and
BSE (www.bseindia.com)
**Bid cum Application forms for Anchor Investors hves been made available at the offices of the BRLM.

Bidders (other than ASBA Bidders) are required to submit their Bids through the Syndicate. Such Bidders
shall only use the specified Bid cum Application Form bearing the stamp of a member of the Syndicate for the
purpose of making a Bid in terms of the Red Herring Prospectus. The Bidder shall have the option to make a
maximum of three Bids in the Bid cum Application Form and such options shall not be considered as multiple
Bids.

ASBA Bidders shall submit an ASBA Bid cum Application Form through the SCSBs authorizing blocking of
funds that are available in the bank account specified in the ASBA Bid cum Application Form only.




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QIBs participating in the Anchor Investor Portion cannot submit their Bids in the Anchor Investor Portion
through the ASBA process. No separate receipts shall be issued for the money payable on the submission of
Bid cum Application Form or Revision Form. However, the collection center of the Syndicate will
acknowledge the receipt of the Bid cum Application Forms or Revision Forms by stamping and returning to
the Bidder the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the Bid cum
Application Form for the records of the Bidder.

Upon the allocation of Equity Shares, dispatch of the CAN and filing of the Prospectus with the ROC, the Bid
cum Application Form shall be considered as the application form. Upon completion and submission, the Bid
cum Application Form to the Syndicate (and in the case of an ASBA Bid cum Application form, to the SCSB
or a Syndicate / sub Syndicate Member) the Bidder is deemed to have authorized us to make the necessary
changes in the Red Herring Prospectus and the Bid cum Application Form as would be required for filing the
Prospectus with the ROC and as would be required by SEBI and / or the ROC after such filing, without prior
or subsequent notice of such changes to the Bidder.

Bidders can also submit their Bids through the ASBA by submitting ASBA Forms, either in physical or
electronic mode, to the SCSB with whom the ASBA Account is maintained. An ASBA Bidder shall use the
ASBA Form obtained from the Designated Branches for the purpose of making a Bid. ASBA Bidders can
submit their Bids, either in physical or electronic mode. In case of application in physical mode, the ASBA
Bidder shall submit the ASBA Form at the relevant Designated Branch. In case of application in electronic
form, the ASBA Bidder shall submit the ASBA Form either through the internet banking facility available
with the SCSB, or such other electronically enabled mechanism for bidding and blocking funds in the ASBA
Account held with SCSB, and accordingly registering such Bids. The SCSB shall block an amount in the
ASBA Account equal to the Bid Amount specified in the ASBA Form. Upon completing and submitting the
ASBA Form to the SCSB, the ASBA Bidder is deemed to have authorised our Company to make the
necessary changes in the Red Herring Prospectus and the ASBA Form, as would be required for filing the
Prospectus with the RoC and as would be required by RoC after such filing, without prior or subsequent
notice of such changes to the ASBA Bidder.

Who can Bid?
Indian nationals resident in India who are not minor, in single or joint names (not more than three);
Hindu Undivided Families (HUFs), in the individual name of the Karta. The Bidder should specify that
the Bid is being made in the name of the HUF in the Bid cum Application Form as follows: Name of sole
or First Bidder: XYZ Hindu Undivided Family applying through the Karta XYZ, where XYZ is the
name of the Karta. Bids by HUFs would be considered at par with those from individuals;
Companies, corporate bodies and societies registered under the applicable laws in India and authorized to
invest in equity shares;
Mutual Funds registered with SEBI;
Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI
regulations and SEBI regulations, as applicable);
Multilateral and bilateral development financial institution;
Venture capital funds registered with SEBI;
Foreign venture capital investors registered with SEBI subject to compliance with applicable laws, rules,
regulations, guidelines and approvals in the Issue;
FIIs and sub-accounts registered with SEBI other than a sub-account which is a foreign corporate or
foreign individual subject to compliance with applicable laws, rules, regulations, guidelines and approvals
in the Issue;
Sub-accounts of FIIs registered with SEBI, which are foreign corporates or foreign individuals only under
the Non-Institutional Bidders category;



203

State Industrial Development Corporations; Insurance companies registered with the Insurance Regulatory
and Development Authority;
Provident funds with a minimum corpus of ` 2,500 Lacs and who are authorized under their constitution
to hold and invest in equity shares;
Pension funds a with minimum corpus of ` 2,500 Lacs and who are authorized under their constitution to
hold and invest in equity shares;
National Investment Fund set up by resolution F. No. 2/3/2005-DDII dated November 23, 2005 of the GoI
published in the Gazette of India;
Trusts / societies registered under the Societies Registration Act, 1860, as amended, or under any other
law relating to trusts and who are authorized under their respective constitutions to hold and invest in
equity shares;
Eligible NRIs on a repatriation basis or on a non-repatriation basis subject to applicable local laws. NRIs
other than Eligible NRIs are not eligible to participate in the Issue;
Scientific and / or industrial research organizations authorized under their constitution to invest in equity
shares;
Insurance funds set up and managed by army, navy or air force of the Union of India; and
Any other QIBs permitted to invest, subject to compliance with applicable laws, rules, regulations,
guidelines and approvals in the Issue.

Note: Nonresidents such as FVCIs, multilateral and bilateral development financial institutions are not permitted to
participate in the Issue. As per the existing regulations, OCBs cannot participate in this Issue.

Participation by associates and affiliates of the BRLM and the Syndicate Members
The BRLM and the Syndicate Members shall not be allowed to subscribe to this Issue in any manner except
towards fulfilling their underwriting obligations. However, the associates and affiliates of the BRLM and the
Syndicate Members may, subject to applicable regulatory requirements subscribe to or purchase Equity Shares
in the Issue, either in the QIB Portion or in Non-Institutional Portion as may be applicable to such Bidders,
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 or the Promoter and the Promoter Group cannot apply in the
Issue under the Anchor Investor Portion.

Bids by Mutual Funds

As per the current regulations, the following restrictions are applicable for investments by Mutual Funds:

An eligible Bid by a Mutual Fund shall first be considered for allocation proportionately in the Mutual Fund
Portion. In the event that the demand in the Mutual Funds portion is greater than [] Equity Shares, allocation
shall be made to Mutual Funds proportionately, to the extent of the Mutual Fund Portion. The remaining
demand by the Mutual Funds shall, as part of the aggregate demand by QIBs, be available for allocation
proportionately out of the remainder of the QIB Portion, after excluding the allocation in the Mutual Fund
Portion.
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.
One-third of the Anchor Investor Portion shall be reserved for allocation to 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.

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



204

as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid has been
made.
No Mutual Fund scheme shall invest more than 10% of its net asset value in 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 companys paid-up share capital carrying voting rights.

Bids by Eligible NRIs

NRI Bidders to comply with the following:

1. Individual NRI Bidders can obtain the Bid cum Application Forms (blue in colour) from our Registered
Office, Members of the Syndicate or the Registrar to the Issue.

2. Eligible NRIs may please note that only such applications as are accompanied by payment in free foreign
exchange or by debit to their Non Resident External Account (NRE Account) / Foreign Currency Non
Resident Account (FCNR Account) shall be considered for Allotment under the Eligible NRI category on
repatriable basis. The NRIs who intend to make payment through Non Resident Ordinary Account (NRO
Account), that is, on non-repatriation basis accounts shall use the Bid cum Application Form meant for
resident Indians and shall not use the forms meant for Eligible NRIs.

3. Bids by Eligible NRIs for a Bid Amount of up to ` 200,000 would be considered under the Retail Portion
for the purposes of allocation and Bids for a Bid Amount of more than ` 2,00,000 would be considered under
Non-Institutional Portion for the purposes of allocation.

Bids by FIIs

As per the current regulations, the following restrictions are applicable for investments by FIIs.

The issue of Equity Shares to a single FII should not exceed 10% of total post-Issue paid-up share capital. (i.e.
10% of [] Equity Shares). In respect of an FII investing in our Equity Shares on behalf of its sub-accounts,
the investment on behalf of each sub-account shall not exceed 10% of our total paid-up share capital or 5% of
our total paid-up share capital in case such sub-account is a foreign corporate or a foreign individual. In
accordance with the foreign investment limits applicable to our Company, such investment must be made out
of funds raised or collected or brought from outside through normal banking channels and the investment
must not exceed the overall ceiling specified for FIIs. Under the portfolio investment scheme, the aggregate
issue of equity shares to FIIs and their sub-accounts should not exceed 24% of post-issue paid-up equity
capital of a company. However, this limit can be increased to the permitted sectoral cap/statutory limit, as
applicable to our Company after obtaining approval of its Board of Directors followed by a special resolution
to that effect by its shareholders in their general meeting. As of the date of the Draft Red Herring Prospectus,
our Company has not passed such resolution and the total foreign investment including FII investment cannot
exceed 24% of our total issued capital unless approved by the shareholders of our Company.

A sub account of a FII which is a foreign corporate or foreign individual shall not be considered to be a
Qualified Institutional Buyer, as defined under the SEBI Regulations, for the Issue.

Subject to compliance with all applicable Indian laws, rules, regulations guidelines and approvals in terms of
Regulation 15A(1) of the Securities and Exchange Board of India (Foreign Institutional Investors)Regulations,



205

1995, as amended (the SEBI FII Regulations), an FII, as defined in the SEBI FII Regulations, may issue or
otherwise deal in or hold, offshore derivative instruments (as defined under the SEBI FII Regulations as any
instrument, by whatever name called, which is issued overseas by a FII against securities held by it that are
listed or proposed to be listed on any recognised stock exchange in India, as its underlying) directly or
indirectly, only in the event (i) such offshore derivative instruments are issued only to persons who are
regulated by an appropriate regulatory authority; and (ii) such offshore derivative instruments are issued after
compliance with know your client norms. An FII is also required to ensure that no further issue or transfer of
any offshore derivative instrument is made by or on behalf of it to any persons that are not regulated by an
appropriate foreign regulatory authority as defined under the SEBI FII Regulations. Associates and affiliates
of the underwriters including the BRLM and the Syndicate Members that are FIIs may issue offshore
derivative instruments against Equity Shares Allotted to them in the Issue. Any such Offshore Derivative
Instrument does not constitute any obligation or claim on or an interest in, our Company.

Bids by Non-Residents including Eligible NRIs and FIIs on a repatriation basis

Bids and revision to Bids must be made in the following manner:
1. On the Bid cum Application Form or the Revision Form, as applicable ( blue in colour), and completed
in full in BLOCK LETTERS in ENGLISH in accordance with the instructions contained therein.

2. In a single name or joint names (not more than three and in the same order as their Depositary
Participant Details).

3. Bids on a repatriation basis shall be in the names of individuals, or in the name of FIIs but not in the
names of minors, OCBs, firms or partnerships, foreign nationals (excluding NRIs) or their nominees.
Bids by SEBI registered Venture Capital Funds and Foreign Venture Capital Investors

The SEBI (Venture Capital Funds) Regulations, 1996 and SEBI (Foreign Venture Capital Investors)
Regulations, 2000 as amended inter alia prescribe the investment restrictions on VCFs registered with SEBI.

Accordingly, the holding by any individual VCF registered with SEBI in one venture capital undertaking
should not exceed 25% of the corpus of the venture capital fund. Further, venture capital funds can invest only
up to 33.33% of the investible funds by way of subscription to an initial public offering of a venture capital
undertaking whose shares are proposed to be listed.

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 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 or ASBA Bid cum
Application Form. Failing this, our Company reserves the right to reject any Bid, without assigning any reason
thereof.



206

The exposure norms for insurers, prescribed under the Insurance Regulatory and Development Authority
(Investment) Regulations, 2000, as amended (the IRDA Investment Regulations), are broadly set forth
below:
(a) equity shares of a company: the least of 10% of the investee companys 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

(c) The industry sector in which the investee company operates: 10% of the insurers total investment
exposure to the industry sector (25% in case of ULIPS).

In addition, the IRDA partially amended the exposure limits applicable to investments in public limited
companies in the infrastructure and housing sectors, i.e. December 26, 2008, providing, among other things,
that the exposure of an insurer to an infrastructure company may be increased to not more than 20%, provided
that in case of equity investment, a dividend of not less than 4% including bonus should have been declared
for at least five preceding years. This limit of 20% would be combined for debt and equity taken together,
without sub-ceilings. Further, investments in equity including preference shares and the convertible part of
debentures shall not exceed 50% of the exposure norms specified under the IRDA Investment Regulations.

Bids under Power of Attorney

In case of Bids (including ASBA 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 ` 2500 Lacs (subject to applicable law) and pension funds with a minimum corpus of `
2500 Lacs, a certified copy of the power of attorney or the relevant resolution or authority, as the case may be,
along with a certified copy of the memorandum of association and articles of association and/or bye laws 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 reason thereof.

In addition to the above, certain additional documents are required to be submitted by the following entities:

(a). With respect to Bids by FIIs and Mutual Funds, a certified copy of their SEBI registration certificate must
be lodged along with the Bid cum Application Form.
(b). With respect to Bids by insurance companies registered with the Insurance Regulatory and Development
Authority, in addition to the above, a certified copy of the certificate of registration issued by the
Insurance Regulatory and Development Authority must be lodged along with the Bid cum Application
Form.
(c). With respect to Bids made by provident funds with a minimum corpus of ` 2500 Lacs (subject to
applicable law) and pension funds with a minimum corpus of ` 2500 Lacs, a certified copy of certificate
from a chartered accountant certifying the corpus of the provident fund/pension fund must be lodged
along with the Bid cum Application Form.

Our Company in its absolute discretion, reserves the right to relax the above condition of simultaneous
lodging of the power of attorney along with the Bid cum Application form, subject to such terms and
conditions that our Company and the BRLM may deem fit. Our Company in its absolute discretion, reserves
the right to permit the holder of the power of attorney to request the Registrar to the Issue to use the
Demographic Details given on the Bid cum Application Form (and not those obtained from the Depository of
the Bidder) for the purpose of printing particulars on the refund order and mailing of the refund order / CANs



207

/ allocation advice. In such cases, the Registrar to the Issue shall use Demographic Details as given in the Bid
cum Application Form instead of those obtained from the depositories.

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 the independent
investigations and Bidders are advised to ensure that any single Bid from them does not exceed the
applicable investment limits or maximum number of Equity Shares that can be held by them under
applicable law or regulation or as specified in the Draft Red Herring Prospectus.

Maximum and Minimum Bid Size:

(a) For Retail Individual Bidders: The Bid must be for a minimum of [] Equity Shares and in multiples
of [] Equity Shares thereafter, so as to ensure that the Bid Amount payable by the Bidder does not
exceed ` 2,00,000. In case of revision of Bids, the Retail Individual Bidders have to ensure that the Bid
Amount does not exceed ` 2,00,000. In case the Bid Amount is over ` 2,00,000 due to revision of the
Bid or revision of the Price Band or on exercise of Cut-off Price option, the Bid would be considered for
allocation under the Non-Institutional Portion. The Cutoff Price option is an option given only to the
Retail Individual Bidders indicating their agreement to Bid for and purchase the Equity Shares at the
final Issue Price as determined at the end of the Book Building Process.

(b) For Other Bidders (Non-Institutional Bidders and QIBs): The Bid must be for a minimum of such
number of Equity Shares such that the Bid Amount exceeds ` 2,00,000 and in multiples of [] Equity
Shares thereafter. A Bid cannot be submitted for more than the Issue size. However, the maximum Bid
by a QIB investor should not exceed the investment limits prescribed for them by the regulatory or
statutory authorities governing them.

A QIB Bidder cannot withdraw its Bid after the Bid/Issue Closing Date and is required to pay the
entire Bid Amount upon submission of the Bid. The Company may close Bid/Issue Period for
QIBs one working Day prior to the Bid/Issue Closing Date.

In case of revision in Bids, the Non-Institutional Bidders, who are individuals, have to ensure that the
Bid Amount is greater than ` 2,00,000 for being considered for allocation in the Non-Institutional
Portion. In case the Bid Amount reduces to ` 2,00,000 or less due to a revision in Bids or revision in the
Price Band, Bids by Non-Institutional Bidders who are eligible for allocation in the Non-Institutional
Portion would be considered for allocation under the Retail Portion. Non-Institutional Bidders and QIBs
are not allowed to Bid at Cut-off Price.

(c) For Bidders in the Anchor Investor Portion: The Bid must be for a minimum of such number of
Equity Shares such that the Bid Amount is at least ` 1000 Lacs and in multiples of [] Equity Shares
thereafter. Bids by Anchor Investors under the Anchor Investor Portion and the QIB Portion shall not be
considered as multiple Bids. A Bid cannot be submitted for more than 30% of the QIB Portion under the
Anchor Investor Portion.

Anchor Investors cannot withdraw their Bids 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
Price is lower than the Issue Price, the balance amount shall be payable as per the pay-in-date
mentioned in the revised Anchor Investor Allocation Notice.



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Information for the Bidders:

(a) Our Company and the BRLM shall declare the Bid/Issue Opening Date and Bid/Issue Closing Date in
the Red Herring Prospectus to be registered with the RoC and also publish the same in two national
newspapers (one each in English and Hindi) and in one Marathi daily newspaper with wide circulation.
This advertisement shall be in the prescribed format.

(b) Our Company will file the Red Herring Prospectus with the RoC at least three days before the Bid/Issue
Opening Date.

(c) Copies of the Bid cum Application Form and copies of the Red Herring Prospectus will be available
with the Syndicate. For ASBA Bidders, Bid cum Application Forms will be available on the websites of
NSE and BSE.

(d) Any eligible Bidder who would like to obtain the Red Herring Prospectus and/ or the Bid cum
Application Form can obtain the same from the Registered Office of our Company or from the members
of the Syndicate or the SCSBs.

(e) Eligible Bidders who are interested in subscribing for the Equity Shares should approach any of the
BRLM or Syndicate Members or their authorised agent(s) to register their Bids. Bidders (other than
Anchor Investors) who wish to use the ASBA process should approach the Designated Branches of the
SCSBs to register their Bids.

(f) The Bids should be submitted on the prescribed Bid cum Application Form only. Bid cum Application
Forms (other than the ASBA Bid cum Application Forms) should bear the stamp of the Syndicate,
otherwise they will be rejected. Bids by ASBA Bidders shall be accepted by the Designated Branches of
the SCSBs or the members of the Syndicate or sub Syndicate in accordance with the SEBI ICDR
Regulations and any circulars issued by SEBI in this regard. Bidders (other than Anchor Investors)
applying through the ASBA process also have an option to submit the ASBA Bid cum Application
Form in electronic form.

(g) The demat accounts of Bidders for whom PAN details have not been verified, excluding persons
resident in the state of Sikkim, who, may be exempted from specifying their PAN for transacting in the
securities market, shall be suspended for credit and no credit of Equity Shares pursuant to the Issue
will be made into the accounts of such Bidders.

The applicants may note that in case the DP ID or Client ID and PAN mentioned in the Bid cum
Application Form and entered into the electronic bidding system of the Stock Exchanges by the
Syndicate do not match with the DP ID or Client ID and PAN available in the database of Depositories,
the application is liable to be rejected.





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Information specific to ASBA Bidders

(a) ASBA Bidders who would like to obtain the Red Herring Prospectus and/or the ASBA Form can obtain
the same from the Designated Branches. ASBA Bidders can also obtain a copy of this Draft Red
Herring Prospectus and/or the ASBA Form in electronic form on the websites of the SCSBs.

(b) The Bids should be submitted to the SCSBs on the prescribed ASBA Form. SCSBs may provide the
electronic mode of bidding either through an internet enabled bidding and banking facility or such other
secured, electronically enabled mechanism for bidding and blocking funds in the ASBA Account.

(c) The SCSBs shall accept Bids only during the Bid/Issue Period and only from the ASBA Bidders.

(d) The Book Running Lead Managers shall ensure that adequate arrangements are made to circulate copies
of the Red Herring Prospectus and ASBA Form to the SCSBs. The SCSBs will then make available
such copies to investors intending to apply in this Offer through the ASBA process. Additionally, the
Book Running Lead Managers shall ensure that the SCSBs are provided with soft copies of the abridged
prospectus as well as the ASBA Forms and that the same are made available on the websites of the
SCSBs.

(e) The ASBA Form shall bear the stamp of the SCSBs and/or the Designated Branch, if not, the same shall
be rejected.

Method and Process of Bidding:

(a) Our Company in consultation with the BRLM will decide the Price Band and the minimum Bid lot size
for the Issue and the same shall be advertised in two national newspapers (one each in English and Hindi)
and in one Marathi daily newspaper with wide circulation at least two working days prior to the Bid/ Issue
Opening Date. The Syndicate and the SCSBs shall accept Bids from the Bidders during the Bid/Issue
Period.

(b) The Bid/Issue Period shall be for a minimum of three working days and shall not exceed 10 working days
(including the days for which the Issue is open in case of revision in Price Band). The Bid/ Issue Period
maybe extended, if required, by at least an additional three working days, subject to the total Bid/Issue
Period not exceeding 10 working days. Any revision in the Price Band and the revised Bid/ Issue Period,
if applicable, will be published in two national newspapers (one each in English and Hindi) and one
Marathi daily newspaper with wide circulation and also by indicating the change on the websites of the
BRLM and at the terminals of the Syndicate.

(c) During the Bid/Issue Period, Bidders, other than QIBs, who are interested in subscribing for the Equity
Shares should approach the Syndicate or their authorised agents to register their Bids. The Syndicate shall
accept Bids from all Bidders and have the right to vet the Bids during the Bid/Issue Period in accordance
with the terms of the Red Herring Prospectus. Bidders (other than Anchor Investors) who wish to use the
ASBA process should approach the Designated Branches of the SCSBs to register their Bids.

(d) Each Bid cum Application Form will give the Bidder the choice to Bid for up to three optional prices (for
details refer to the paragraph titled Bids at Different Price Levels below) within the Price Band and
specify the demand (i.e., the number of Equity Shares Bid for) in each option. The price and demand
options submitted by the Bidder in the Bid cum Application Form will be treated as optional demands



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from the Bidder and will not be cumulated. After determination of the Issue Price, the maximum number
of Equity Shares Bid for by a Bidder at or above the Issue Price will be considered for
allocation/Allotment and the rest of the Bid(s), irrespective of the Bid Amount, will become automatically
invalid.

(e) The Bidder cannot Bid on another Bid cum Application Form after Bids on one Bid cum Application
Form have been submitted to any member of the Syndicate or the SCSBs. Submission of a second Bid
cum Application Form to either the same or to another member of the Syndicate or SCBS will be treated
as multiple Bids and is liable to be rejected either before entering the Bid into the electronic bidding
system, or at any point of time prior to the allocation or Allotment of Equity Shares in this Issue.
However, the Bidder can revise the Bid through the Revision Form, the procedure for which is detailed
under the paragraph entitled Buildup of the Book and Revision of Bids.

(f) Except in relation to the Bids received from the Anchor Investors, the Syndicate/the SCSBs will enter
each Bid option into the electronic bidding system as a separate Bid and generate a Transaction
Registration Slip, (TRS), for each price and demand option and give the same to the Bidder. Therefore,
a Bidder can receive up to three TRSs for each Bid cum Application Form.

(g) The BRLM shall accept the Bids from the Anchor Investors during the Anchor Investor Bid/Issue Period
i.e. one working day prior to the Bid/ Issue Opening Date. Bids by QIBs under the Anchor Investor
Portion and the QIB Portion shall not be considered as multiple Bids.

(h) Along with the Bid cum Application Form, all Bidders (other than ASBA Bidders) will make payment in
the manner described in Escrow Mechanism - Terms of payment and payment into the Escrow
Accounts in the section Issue Procedure beginning on Page No. 200 of the Draft Red Herring
Prospectus.

(i) Members of the Syndicate or the sub Syndicate may procure ASBA Bid cum Application Forms from
ASBA Bidders and submit it to the SCSBs. The Syndicate or sub Syndicate Members who acquire such
ASBA Bid cum Application Forms will upload the Bids and other relevant details of such ASBA Bid cum
Application Form in the bidding platform provided by the Stock Exchanges. The SCSBs shall carry out
further action for such ASBA Bid cum Application Form such as signature verification, blocking of funds
etc. and forwarding of such ASBA Bid cum Form to the Registrar.

(j) Upon receipt of the ASBA Bid cum Application Form, submitted whether in physical or electronic mode,
the Designated Branch of the SCSB shall verify if sufficient funds equal to the Bid Amount are available
in the ASBA Account, as mentioned in the ASBA Bid cum Application Form, prior to uploading such
Bids with the Stock Exchanges.

(k) If sufficient funds are not available in the ASBA Account, the Designated Branch of the SCSB shall reject
such Bids and shall not upload such Bids with the Stock Exchanges.

(l) If sufficient funds are available in the ASBA Account, the SCSB shall block an amount equivalent to the
Bid Amount mentioned in the ASBA Bid cum Application Form and will enter each Bid option into the
electronic bidding system as a separate Bid and generate a TRS for each price and demand option. The
TRS shall be furnished to the ASBA Bidder on request.




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(m) The Bid Amount shall 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/failure of the Issue or until withdrawal/rejection of the ASBA Bid cum
Application Form, as the case may be. Once the Basis of Allotment is finalized, the Registrar to the Issue
shall send an appropriate request to the SCSB for unblocking the relevant ASBA Accounts and for
transferring the amount allocable to the successful Bidders to the Public Issue Account. In case of
withdrawal/failure of the Issue, the blocked amount shall be unblocked on receipt of such information
from the Registrar to the Issue.

Bids at Different Price Levels and Revision of Bids

(a) Our Company in consultation with the BRLM and without the prior approval of, or intimation, to the
Bidders, reserves 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 Price Band shall not exceed 20% on the either side i.e.
the floor price can move up or down to the extent of 20% of the floor price disclosed at least two days
prior to the Bid/ Issue Opening Date and the Cap Price will be revised accordingly.

(b) Our Company, in consultation with the BRLM, will finalise the Issue Price within the Price Band, without
the prior approval of, or intimation, to the Bidders.

(c) Our Company, in consultation with the BRLM, can finalise the Anchor Investor Issue Price within the
Price Band, without the prior approval of, or intimation, to the Anchor Investors.

(d) The Bidders can Bid at any price within the Price Band. The Bidder has to Bid for the desired number of
Equity Shares at a specific price. Retail Individual Bidders may Bid at the Cut-off Price. However,
bidding at Cut-off Price is prohibited for QIB and Non-Institutional Bidders and such Bids from QIB and
Non-Institutional Bidders shall be rejected.

(e) Retail Individual Bidders, who bid at Cut-off Price, agree that they shall purchase the Equity Shares at any
price within the Price Band. Retail Individual Bidders shall submit the Bid cum Application Form along
with a cheque/demand draft for the Bid Amount based on the Cap Price with the Syndicate. In case of
ASBA Bidders (excluding Non-Institutional Bidders and QIB Bidders) bidding at Cut-off Price, the
ASBA Bidders shall instruct the SCSBs to block an amount based on the Cap Price.

(f) In case of an upward revision in the Price Band announced as above, Retail Individual Bidders who had
bid at Cut-Off Price could either (i) revise their Bid or (ii) make additional payment based on the cap of
the revised Price Band, with the members of the Syndicate or the SCSBs to whom the original Bid was
submitted. In case the total amount (i.e. original Bid Amount plus additional payment) exceeds `
2,00,000, the Bid will be considered for allocation under the Non Institutional Bidders category in terms
of the Draft Red Herring Prospectus. If, however, the Bidder does not either revise the Bid or make
additional payment and the Issue Price is higher than the cap of the Price Band prior to revision, the
number of Equity Shares Bid for shall be adjusted for the purpose of allocation, such that no additional



212

payment would be required from the Bidder and the Bidder is deemed to have approved such revised Bid
at Cut-off.
(g). In case of a downward revision in the Price Band, Retail Individual Bidders who have bid at Cut-off
Price could either revise their Bid or the excess amount paid at the time of bidding would be refunded
from the Refund Account(s) or unblocked by the SCSBs, as applicable.

(h). Our Company, in consultation with the BRLM, shall decide the minimum number of Equity Shares for
each Bid to ensure that the minimum application value is within the range of ` [] to ` [].

IN ACCORDANCE WITH THE SEBI (ICDR) REGULATIONS, EQUITY SHARES WILL BE
ISSUED, TRANSFERRED AND ALLOTMENT SHALL BE MADE ONLY IN THE
DEMATERIALISED FORM TO THE ALLOTTEES. ALLOTTEES WILL HAVE THE OPTION
TO RE-MATERIALISE THE EQUITY SHARES, IF THEY SO DESIRE, AS PER THE
PROVISIONS OF THE COMPANIES ACT AND THE DEPOSITORIES ACT IT IS MANDATORY
FOR ALL THE BIDDERS TO GET THEIR EQUITY SHARES IN DEMATERIALISED FORM.
ALL BIDDERS SHOULD MENTION THEIR DEPOSITORY PARTICIPANTS NAME,
DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT
NUMBER IN THE BID CUM APPLICATION FORM. INVESTORS MUST ENSURE THAT
THE NAME GIVEN IN THE BID CUM APPLICATION FORM IS EXACTLY THE SAME AS
THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE BID CUM
APPLICATION FORM IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT
THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN
THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE BID CUM APPLICATION FORM.

The trading of the Equity Shares of our Company would be in dematerialised form only for all investors
in the demat segment of the respective Stock Exchanges. Bidders are advised to ensure that any single Bid
from them does not exceed the investment limits or maximum number of Equity Shares that can be held by
them under the relevant laws, rules, regulations, guidelines and approvals.

Investments by Insurance Companies

The exposure norms for insurers, prescribed under the Insurance Regulatory and Development Authority
(Investment) Regulations, 2000, as amended (the "IRDA Investment Regulations"), 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
(c) The industry sector in which the investee company operates: 10% of the insurer's total investment
(d) exposure to the industry sector (25% in case of ULIPS).
Further, w.e.f. August 1, 2008, no investment may be made in an initial public offer ("IPO") if the issue size,
including offer for sale, is less than ` 20,000 Lacs. In addition, the IRDA partially amended the exposure
limits applicable to investments in public limited companies in the infrastructure and housing sectors, w.e.f.
December 26, 2008, providing, among other things, that the exposure of an insurer to an infrastructure



213

company may be increased to not more than 20%, provided that in case of equity investment, a dividend of
not less than 4% including bonus should have been declared for at least five preceding years. In case of an
IPO of a wholly owned subsidiary of a corporate or public sector enterprise, the above track record would be
applied to the holding company. This limit of 20% would be combined for debt and equity taken together,
without sub-ceilings. Further, investments in equity including preference shares and the convertible part of
debentures shall not exceed 50% of the exposure norms specified under the IRDA Investment Regulations.

Investments by Banking Companies

The investment limit for banking companies as per the Banking Regulation Act, 1949, as amended, is 30% of
the paid-up share capital of the investee company or 30% of the banks own paid-up share capital and reserves,
whichever is less (except in case of certain specified exceptions, such as setting up or investing in a subsidiary
company, which requires RBI approval). Additionally, any investment by a bank in equity shares must be
approved by such bank's investment committee set up to ensure compliance with the applicable prudential
norms for classification, valuation and operation of investment portfolio of banks(currently reflected in the
RBI Master Circular of July 1, 2010).

Escrow mechanism, Terms of Payment and Payment into the Escrow Accounts

For details of the escrow mechanism and payment instructions, see Payment Instructions on Page No. 223
in this section.

Electronic Registration of Bids

1. The members of the Syndicate or sub Syndicate and the SCSBs will register the Bids using the online
facilities of the Stock Exchanges. The Syndicate or sub Syndicate Members who acquire such ASBA
Bid cum Application Forms will upload the Bids and other relevant details of such ASBA Bid cum
Application Form in the bidding platform provided by the Stock Exchanges. The SCSBs shall carry
out further action for such ASBA Bid cum Application Form such as signature verification, blocking
of funds etc and forwarding of such ASBA Bid cum Form to the Registrar. There will be at least one
online connectivity to each city where a stock exchange is located in India and where the Bids are being
accepted. The BRLM, our Company and the Registrar to the Issue are not responsible for any acts,
mistakes or errors or omission and commissions in relation to, (i) the Bids accepted by the members of
the Syndicate or sub Syndicate and the SCSBs, (ii) the Bids uploaded by the members of the Syndicate
or sub Syndicate and the SCSBs, (iii) the Bids accepted but not uploaded by the members of the
Syndicate and the SCSBs or (iv) with respect to ASBA Bids, Bids accepted and uploaded without
blocking funds in the ASBA Accounts. However, the respective member of the Syndicate and / or the
SCSBs shall be responsible for any errors in the Bid details uploaded by them. It shall be presumed that
for the Bids uploaded by the SCSBs, the Bid Amount has been blocked in the relevant ASBA Account.

2. The Stock Exchanges will offer a screen-based facility for registering Bids for the Issue. This facility
will be available on the terminals of the members of the Syndicate, their authorized agents and the
SCSBs during the Bid / Issue Period. The Syndicate Member and the Designated Branches can also set
up facilities for off-line electronic registration of Bids subject to the condition that they will
subsequently download the off-line data file into the on-line facilities for book building on a regular
basis. On the Bid / Issue Closing Date, the members of the Syndicate and the Designated Branches of
the SCSBs shall upload the Bids till such time as may be permitted by the Stock Exchanges. This
information will be available with the BRLM on a regular basis. Bidders are cautioned that a high
inflow of bids typically experienced on the last day of the bidding may lead to some Bids received on
the last day not being uploaded due to lack of sufficient uploading time, and such Bids that could not
uploaded will not be considered for allocation. Bids will only be accepted on working days, i.e.,
Monday to Friday (excluding any public holiday).



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3. The aggregate demand and price for Bids registered on the electronic facilities of NSE and BSE will be
downloaded on a regular basis, consolidated and displayed online at all bidding centers. A graphical
representation of the consolidated demand and price would be made available at the bidding centers
and the websites of the Stock Exchanges during the Bid / Issue Period along with category wise details.

4. At the time of registering each Bid (other than the ASBA Bidder), the member of the Syndicate shall
enter the following details of the Bidder in the online system:

Name of the Bidder(s): Bidders should ensure that the name given in the Bid cum Application
Form is exactly the same as the name in which the Depository account is held. In case the Bid cum
Application Form is submitted in joint names, Bidders should ensure that the Depository account
is also held in the same joint names and are in the same sequence in which they appear in the Bid
cum Application Form;
Investor category such as Individual, corporate, NRI, FII or Mutual Fund, etc.;
Numbers of Equity Shares Bid for;
Bid Amount
Price option;
Cheque amount;
Cheque number;
Bid cum Application Form number;
Depository Participant identification number and Client identification number of the demat account
of the Bidder; and
PAN, except for Bids on behalf of the Central and State Governments, residents of the state of
Sikkim and officials appointed by the courts.

With respect to ASBA Bids, at the time of registering each Bid, the Designated Branches of the SCSBs
shall enter the following information pertaining to the Bidder into the electronic bidding system:

Name of the Bidder(s);
ASBA Bid cum Application Form Number;
PAN (of First Bidder if more than one Bidder);
Investor Category and Sub-Category:

Retail Non-Institutional QIBs
(No sub
category)
- Individual - Mutual Funds;
- Corporate - Financial Institutions;
- Other - Insurance companies;
- FIIs other than corporate and individual sub accounts;
- Sub accounts
- Others

DP ID and client identification number;
Quantity;
Price;
Bank account number;
Cheque number; and
Cheque amount.




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5. A system generated TRS will be given to the Bidder as a proof of the registration of each of the bidding
options. It is the Bidders responsibility t o request and obtain the TRS from the member of the
Syndicate or the Designated Branches of the SCSBs. The registration of the Bid by the member of the
Syndicate or the Designated Braches of the SCSBs does not guarantee that the Equity Shares shall be
allocated either by the BRLM or the Syndicate Member or our Company.

6. Such TRS will be non-negotiable and by itself will not create any obligation of any kind.

7. In case of QIB Bidders, bidding in the Net QIB Portion, the BRLM or Syndicate Members can reject the
Bids at the time of accepting the Bid provided that the reason for such rejection is provided in writing.
Bids under the Non-Institutional Portion and Bids under the Retail Individual Portion would not be
rejected except on the technical grounds listed in the Draft Red Herring Prospectus. The members of
the Syndicate may also reject Bids if all the information required is not provided and the Bid cum
Application Form is incomplete in any respect. The SCSB shall have no right to reject Bids except on
technical grounds.

8. It is to be distinctly understood that the permission given by the Stock Exchanges to use their
network and software of the online IPO system should not in any way be deemed or construed to mean
that the compliance with various statutory and other requirements by our Company and the BRLM are
cleared or approved by the Stock Exchanges; nor does it in any manner warrant, certify or endorse the
correctness or completeness of any of the compliance with the statutory and other requirements nor
does it take any responsibility for the financial or other soundness of our Company, our Promoter, our
management or any scheme or project of our Company; nor does it in any manner warrant, certify or
endorse the correctness or completeness of any of the contents of the Draft Red Herring Prospectus; nor
does it warrant that the Equity Shares will be listed or will continue to be listed on the Stock Exchanges.

9. Only Bids that are uploaded on the online IPO system of the Stock Exchanges shall be considered for
allocation/Allotment. The members of the Syndicate will be given up to one day after the Bid / Issue
Closing Date to verify DP ID and client identification number uploaded in the online IPO system during
the Bid / Issue Period after which the data will be sent to the Registrar to the Issue for reconciliation. In
case of discrepancy of data between BSE or NSE and the members of the Syndicate or the Designated
Branches of the SCSBs, the decision of our Company, in consultation with the BRLM and the Registrar
to the Issue, shall be final and binding on all concerned.

Buildup of the book and revision of Bids

(a) Bids received from various Bidders through the Syndicate and the SCSBs shall be electronically
uploaded to the Stock Exchanges mainframe on a regular basis.

(b) The book gets built up at various price levels. This information will be available with the BRLM at the
end of the Bid/Issue Period.

(c) During the Bid/Issue Period, any Bidder who has registered his or her interest in the Equity Shares at a
particular price level is free to revise his or her Bid within the Price Band using the printed Revision
Form, which is a part of the Bid cum Application Form.

(d) Revisions can be made in both the desired number of Equity Shares and the Bid Amount by using the
Revision Form. Apart from mentioning the revised options in the Revision Form, the Bidder must also
mention the details of all the options in his or her Bid cum Application Form or earlier Revision Form.
For example, if a Bidder has Bid for three options in the Bid cum Application Form and such Bidder is
changing only one of the options in the Revision Form, the Bidder must still fill the details of the other
two options that are not being revised, in the Revision Form. The Syndicate and the Designated
Branches of the SCSBs will not accept incomplete or inaccurate Revision Forms.



216

(e) The Bidder can make this revision any number of times during the Bid/Issue Period. However, for any
revision(s) in the Bid, the Bidders will have to use the services of the same member of the Syndicate or
the SCSB through whom such Bidder had placed the original Bid. Bidders are advised to retain copies
of the blank Revision Form and the revised Bid must be made only in such Revision Form or copies
thereof.

(f) In case of an upward revision in the Price Band announced as above, Retail Individual Bidders who had
Bid at Cut-off Price could either
(i) revise their Bid or
(ii) shall make additional payment based on the cap of the revised Price Band (such that the total
amount i.e., original Bid Amount plus additional payment does not exceed ` 200,000 if the Bidder
wants to continue to Bid at Cutoff Price), with the Syndicate to whom the original Bid was
submitted. In case the total amount (i.e., original Bid Amount plus additional payment) exceeds `
200,000, the Bid will be considered for allocation under the Non-Institutional Portion in terms of
this Red Herring Prospectus. If, however, the Bidder does not either revise the Bid or make
additional payment and the Issue Price is higher than the cap of the Price Band prior to revision, the
number of Equity Shares Bid for shall be adjusted downwards for the purpose of allocation, such
that no additional payment would be required from the Bidder and the Bidder is deemed to have
approved such revised Bid at Cutoff Price.

(g) In case of a downward revision in the Price Band, announced as above, Retail Individual Bidders who
have Bid at Cut-off Price could either revise their Bid or the excess amount paid at the time of bidding
would be refunded from the Escrow Account.

(h) Our Company in consultation with the BRLM shall decide the minimum number of Equity Shares for
each Bid to ensure that the minimum application value is within the range of ` 5,000 to ` 7,000.

(i) Any revision of the Bid shall be accompanied by payment in the form of cheque or demand draft for the
incremental amount, if any, to be paid on account of the upward revision of the Bid. With respect to the
Bids by ASBA Bidders, if revision of the Bids results in an incremental amount, the relevant SCSB
shall block the additional Bid Amount. In case of Bids, other than ASBA Bids, the Syndicate shall
collect the payment in the form of cheque or demand draft if any, to be paid on account of the upward
revision of the Bid at the time of one or more revisions by the QIB Bidders. In such cases, the Syndicate
will revise the earlier Bids details with the revised Bid and provide the cheque or demand draft number
of the new payment instrument in the electronic book. The Registrar will reconcile the Bid data and
consider the revised Bid data for preparing the Basis of Allotment.

(j) When a Bidder revises his or her Bid, he or she should surrender the earlier TRS request for a revised
TRS from the Syndicate or the SCSB, as proof of his or her having revised the previous Bid.

(k) The Syndicate Members may modify selected fields (viz. DP ID and client identification number) in
the Bid details already uploaded upto one day post the Bid / Issue Closing Period.

Price Discovery and Allocation

After the Bid / Issue Closing Date, the BRLM will analyze the demand generated at various price levels and
discuss pricing strategy with our Company. Our Company, in consultation with BRLM, shall finalise the
Issue Price, the number of Equity Shares to be allotted and the allocation to successful Bidders.



217


1. Not more than 50% of the Issue (including 5% of Net QIB Portion specifically reserved for Mutual
Funds) would be available for allocation on a proportionate basis to QIBs after consultation with the
Designated Stock Exchange, subject to valid Bids being received at or above the Issue Price.

2. Not less than 15% and not less than 35% of the Issue, would be available for allocation on a
proportionate basis to Non-Institutional Bidders and Retail Individual Bidders, respectively, in
consultation with the Designated Stock Exchange, subject to valid Bids being received at or above the
Issue Price.

3. Under-subscription, if any, in Non-Institutional and Retail Individual Investors category would be
allowed to be met with spill over from any of the other categories at the discretion of our Company in
consultation with the BRLM. However, if the aggregate demand by Mutual Funds is less than []
Equity Shares, the balance Equity Shares available for allocation in the Mutual Fund Portion will first
be added to the Net QIB Portion and be allocated proportionately to the QIB Bidders. In the event that
the aggregate demand in the Net QIB Portion has not been met, the entire application money shall be
refunded forthwith.

4. Allocation to Eligible NRIs or FIIs or FVCIs registered with SEBI, multilateral and bilateral
development financial institutions applying on repatriation basis will be subject to applicable laws,
rules, regulations, guidelines and approvals.

5. Our Company reserves the right to cancel the Issue any time after the Bid / Issue Closing Date but
before Allotment and the reasons thereof shall be given as a public notice within two days of the
cancellation of the Bid / Issue Closing Date. The public notice will be issued in the same newspapers
where the statutory pre-Issue advertisements had appeared. Further the Stock Exchanges will also be
informed promptly.

6. In terms of SEBI (ICDR) Regulations, QIB Bidders bidding in the Net QIB Portion shall not be
allowed to withdraw their Bid after the Bid / Issue Closing Date. Further, the Anchor Investors shall not
be allowed to withdraw their Bids after the Anchor Investor Bid/Issue Period.

7. The Basis of Allotment details shall be put up on the website of the Registrar to the Issue.

Signing of the Underwriting Agreement and the RoC Filing

(a) Our Company, the BRLM and the Syndicate Members shall enter into an Underwriting Agreement on
or immediately after the finalisation of the Issue Price and allocation(s) to the Bidders.

(b) After signing the Underwriting Agreement, our Company will update and file the updated Red Herring
Prospectus 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.

Filing with the ROC
Our Company will file a copy of the Red Herring Prospectus and Prospectus with the ROC in terms of
Section 56, Section 60 and Section 60B of the Companies Act.

Pre-Issue Advertisement
Subject to Section 66 of the Companies Act, our Company shall, after registering the Red Herring Prospectus
with the RoC, publish a pre-Issue advertisement, in the form prescribed by the SEBI ICDR Regulations, in
one English language national daily newspaper, one Hindi language national daily newspaper and one Marathi
language daily newspaper, each with wide circulation.



218

Advertisement regarding Issue Price and Prospectus

Our Company will issue a statutory advertisement after the filing of the Prospectus with the RoC in an
English national daily newspaper, a Hindi national daily newspaper and a Marathi daily newspaper, each with
wide circulation. This advertisement, in addition to the information that has to be set out in the statutory
advertisement, shall indicate the Issue Price and the Anchor Investor Issue Price. Any material updates
between the date of the Red Herring Prospectus and the date of Prospectus will be included in such statutory
advertisement.

Issuance of Confirmation of Allotment Note (CAN)

1. Upon approval of the Basis of Allotment by the Designated Stock Exchange, the Registrar to the
Issue shall send to the BRLM and Syndicate Members a list of their Bidders who have been allocated
Equity Shares in the Issue. The approval of the Basis of Allotment by the Designated Stock Exchange
for QIB Bidders may be done simultaneously with or prior to the approval of the Basis of Allotment
for the Retail and Non-Institutional Bidders. However, Bidders should note that our Company shall
ensure that (i) the Allotment of the Equity Shares and (ii) the instructions by our Company for the
demat credit of the Equity Shares, to all Bidders in the Issue shall be done on the same date.

2. The Registrar to the Issue will then dispatch the CAN to the Bidders who have been allocated Equity
Shares in the Issue. The dispatch of the CAN shall be deemed a valid, binding and irrevocable contract
for the Bidder to pay the entire Issue Price for the Allotment to such Bidder.

3. The Issuance of CAN shall be deemed a valid, binding and irrevocable contract for the Allotment of
Equity Shares to such Bidder.

4. Bidders who have been allocated Equity Shares and who have already paid the Bid Amount into the
Escrow Account(s) at the time of bidding shall directly receive the CAN from the Registrar to the Issue
subject, however, to realisation of his or her cheque or demand draft paid into the Escrow Account(s).
The dispatch of a CAN shall be deemed a valid, binding and irrevocable contract for the Bidder.

The Issuance of CAN shall be deemed a valid, binding and irrevocable contract for the allotment of equity
shares to such bidders.

Notice to Anchor Investors: Allotment Reconciliation and CANs

A physical book will be 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 our Company in consultation with
the BRLM, selected Anchor Investors will be sent an Anchor Investor Allocation Notice and if required, a
revised Anchor Investor Allocation Notice. All Anchor Investors will be sent Anchor Investor Allocation
Notice post Anchor Investor Bid/Issue Period and in the event that the Issue Price is higher than the Anchor
Investor Issue Price, the Anchor Investors will be sent a revised Anchor Investor Allocation Notice within one
day of the Pricing Date indicating the number of Equity Shares allocated to such Anchor Investor and the pay-
in date for payment of the balance amount. Anchor Investors should note that they shall be required to pay any
additional amounts, being the difference between the Issue Price and the Anchor Investor Issue Price, as
indicated in the revised Anchor Investor Allocation Notice within the paying date referred to in the revised
Anchor Investor Allocation Notice. The revised Anchor Investor Allocation Notice will constitute a valid,
binding and irrevocable contract (subject to the issue of CAN) for the Anchor Investor to pay the difference
between the Issue Price and the Anchor Investor Issue Price and accordingly the CAN will be issued to such
Anchor Investors. In the event the Issue Price is lower than the Anchor Investor Issue Price, the Anchor
Investors who have been Allotted Equity Shares will directly receive CAN. The CAN shall be deemed a valid,



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binding and irrevocable contract for the Allotment of Equity Shares to such Anchor Investors. The final
allocation is subject to the physical application being valid in all respect along with receipt of stipulated
documents, the Issue Price being finalised at a price not higher than the Anchor Investor Issue Price and
Allotment by the Board of Directors.

Designated Date and Allotment of Equity Shares:
(a) Our Company will ensure that:
(i) the allotment of Equity Shares; and
(ii) credit to the successful Bidders depositary account will be completed within 12 Working Days of
the Bid/Issue Closing Date. After the funds are transferred from the Escrow Account to the Public
Issue Account on the Designated Date, our company will ensure the credit to the successful
Bidders depository account is completed within two working days from the date of Allotment.

(b) In accordance with the SEBI ICDR Regulations, Equity Shares will be issued and allotment shall be
made only in the dematerialised form to the Allottees.

(c) Allottees will have the option to re-materialize the Equity Shares so allotted as per the provisions of the
Companies Act and the Depositories Act.

Investors are advised to instruct their Depository Participant to accept the Equity Shares that maybe
allocated/ Allotted to them pursuant to this Issue.

GENERAL INSTRUCTIONS
Dos:

(a) Check if you are eligible to apply;

(b) Ensure that you have Bid within the Price Band;

(c) Read all the instructions carefully and complete the Bid cum Application Form;

(d) Ensure that the details about the Depository Participant and the beneficiary account are correct as
Allotment of Equity Shares will be in the dematerialised form only;

(e) Ensure that the Bids are submitted at the bidding centers only on forms bearing the stamp of a member of
the Syndicate or with respect to ASBA Bidders, ensure that your Bid is submitted at a Designated Branch
of the SCSB where the ASBA Bidder or the person whose bank account will be utilised by the Bidder for
bidding has a bank account;

(f) With respect to Bids by ASBA Bidders ensure that the ASBA 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 ASBA Bid cum Application Form;

(g) Ensure that you request for and receive a TRS for all your Bid options;

(h) Ensure that you have funds equal to the Bid Amount in your bank account maintained with the SCSB
before submitting the ASBA Bid cum Application Form to the respective Designated Branch of the
SCSB;




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(i) Ensure that the full Bid Amount is paid for the Bids submitted to the Syndicate and funds equivalent to
the Bid Amount are blocked in case of any Bids submitted though the SCSBs.

(j) Instruct your respective banks to not release the funds blocked in the bank account under the ASBA
process;

(k) Submit revised Bids to the same member of the Syndicate through whom the original Bid was placed and
obtain a revised TRS;

(l) Except for Bids submitted on behalf of the Central Government or the State Government and officials
appointed by a court, all Bidders should mention their PAN allotted under the IT Act;

(m) Ensure that the Demographic Details (as defined herein below) are updated, true and correct in all
respects;

(n) Ensure that the name(s) given in the Bid cum Application Form is exactly the same as the name(s) in
which the beneficiary account is held with the Depository Participant. In case the Bid cum Application
Form is submitted in joint names, ensure that the beneficiary account is also held in same joint names
and such names are in the same sequence in which they appear in the Bid cum Application Form.

(o) Ensure that you mention your PAN allotted under the IT Act with the Bid cum Application Form,
except for Bids on behalf of the Central and State Governments, residents of the state of Sikkim and
officials appointed by the courts;

Donts:

(a) Do not Bid for lower than the minimum Bid size;

(b) Do not Bid/ revise Bid Amount to less than the Floor Price or higher than the Cap Price;

(c) Do not Bid on another Bid cum Application Form after you have submitted a Bid to the Syndicate or the
SCSBs, as applicable;

(d) Do not pay the Bid Amount in cash, by money order or by postal order or by stock invest;

(e) Do not send Bid cum Application Forms by post; instead submit the same to a member of the Syndicate or
the SCSBs only;

(f) Do not Bid at Cut-off Price (for QIB Bidders and Non-Institutional Bidders, for Bid Amount in excess of
` 200,000);

(g) Do not Bid for a Bid Amount exceeding ` 200,000 (for Bids by Retail Individual Bidders);

(h) Do not fill up the Bid cum Application Form such that the Equity Shares Bid for exceeds the Issue Size
and/ or investment limit or maximum number of Equity Shares that can be held under the applicable laws
or regulations or maximum amount permissible under the applicable regulations;

(i) Do not submit the GIR number instead of the PAN as the Bid is liable to be rejected on this ground; and

(j) Do not submit the Bids without the full Bid Amount.




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INSTRUCTIONS SPECIFIC TO ASBA BIDDERS
Dos:
(a) Check if you are eligible to Bid under ASBA.

(b) Ensure that you use the ASBA Form specified for the purposes of ASBA.

(c) Read all the instructions carefully and complete the ASBA Form.

(d) Ensure that your ASBA Form is submitted at a Designated Branch where the ASBA Account is
maintained and not to the Escrow Collecting Banks (assuming that such bank is not a SCSB), to our
Company, or the Registrar to the Offer or the Book Running Lead Managers.

(e) Ensure that the ASBA Form is signed by the ASBA Account holder in case the ASBA Bidder is not the
account holder.

(f) Ensure that you have mentioned the correct ASBA Account number in the ASBA Form.

(g) Ensure that you have funds equal to the Bid Amount in the ASBA Account before submitting the ASBA
Form to the respective Designated Branch.

(h) Ensure that you have correctly checked the authorization box in the ASBA Form, or have otherwise
provided an authorization to the SCSB via the electronic mode, for the Designated Branch to block funds
in the ASBA Account equivalent to the Bid Amount mentioned in the ASBA Form.

(i) Ensure that you receive an acknowledgement from the Designated Branch for the submission of your
ASBA Form.

(j) Ensure that the name(s) given in the ASBA Form is exactly the same as the name(s) in which the
beneficiary account is held with the Depository Participant. In case the ASBA Form is submitted in joint
names, ensure that the beneficiary account is also held in same joint names and such names are in the
same sequence in which they appear in the ASBA Form.

Don'ts:
(a) Do not Bid on another ASBA Form or on a Bid cum Application Form after you have submitted a Bid to a
Designated Branch.

(b) Payment of Bid Amounts in any mode other than through blocking of Bid Amounts in the ASBA
Accounts shall not be accepted under the ASBA.

(c) Do not send your physical ASBA Form by post. Instead submit the same to a Designated Branch.

INSTRUCTIONS FOR COMPLETING THE BID CUM APPLICATION FORM
Bids and revision to Bids must be made in the following manner:

(a) Made only in the prescribed Bid cum Application Form or Revision Form, as applicable.




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(b) Completed in full, in BLOCK LETTERS in ENGLISH and in accordance with the instructions contained
herein, in the Bid cum Application Form or in the Revision Form. Incomplete Bid cum Application Forms
or Revision Forms are liable to be rejected. Bidders should note that the Syndicate and / or the SCSBs, as
appropriate, will not be liable for errors in data entry due to incomplete or illegible Bid cum Application
Forms or Revision Forms.

(c) Information provided by the Bidders will be uploaded in the online IPO system by the Syndicate and the
SCSBs, as the case may be, and the electronic data will be used to make allocation/Allotment. The
Bidders should ensure that the details are correct and legible.

(d) For Retail Individual Bidders, the Bid must be for a minimum of [] Equity Shares and in multiples of []
thereafter subject to a maximum Bid Amount of ` 200,000.

(e) For Non-Institutional Bidders and QIB Bidders, Bids must be for a minimum of such number of Equity
Shares that the Bid Amount exceeds ` 200,000 and in multiples of [] Equity Shares thereafter. Bids
cannot be made for more than the Issue size. Bidders are advised to ensure that a single Bid from them
should not exceed the investment limits or maximum number of Equity Shares that can be held by them
under the applicable laws or regulations.

(f) For Anchor Investors, Bids must be for a minimum of such number of Equity Shares that the Bid Amount
exceeds or equal to ` 1000 Lacs and in multiples of [] Equity Shares thereafter.

(g) In single name or in joint names (not more than three, and in the same order as their Depository
Participant details).

(h) Thumb impressions and signatures other than in the languages specified in the Eighth Schedule to the
Constitution of India must be attested by a Magistrate or a Notary Public or a Special Executive
Magistrate under official seal.

Bidders PAN, Depository Account and Bank Account Details:

Bidders should note that on the basis of PAN of the Bidders, DP ID and beneficiary account number provided
by them in the Bid cum Application Form, the Registrar will obtain from the Depository the demographic
details including address, Bidders bank account details, MICR code and occupation (hereinafter referred to as
Demographic Details). These bank account details would be used for giving refunds (including through
physical refund warrants, direct credit, NECS, NEFT and RTGS) or unblocking of ASBA Account. Hence,
Bidders are advised to immediately update their bank account details as appearing on the records of the
Depository Participant. Please note that failure to do so could result in delays in dispatch/ credit of refunds to
Bidders or unblocking of ASBA Account at the Bidders sole risk and neither the BRLM or the Registrar or the
Escrow Collection Banks or the SCSBs nor our Company shall have any responsibility and undertake any
liability for the same. Hence, Bidders should carefully fill in their Depository Account details in the Bid cum
Application Form.

These Demographic Details would be used for all correspondence with the Bidders including mailing of the
refund orders/CANs/allocation advice and printing of bank particulars on the refund orders or for refunds
through electronic transfer of funds, as applicable. The Demographic Details given by Bidders in the Bid cum
Application Form would not be used for any other purpose by the Registrar. Hence, Bidders are advised to
update their Demographic Details as provided to their Depository Participants and ensure that they are true



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and correct. By signing the Bid cum Application Form, the Bidder would have deemed to authorize the
depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as
available on its records.

By signing the Bid cum Application Form, the Bidder would be deemed to have authorised the Depositories to
provide, upon request, to the Registrar, the required Demographic Details as available on its records.

Refund orders/ CANs would be mailed at the address of the Bidder as per the Demographic Details
received from the Depositories. Bidders may note that delivery of refund orders/ CANs may get delayed
if the same once sent to the address obtained from the Depositories are returned undelivered. In such
an event, the address and other details given by the Bidder (other than ASBA Bidders) in the Bid cum
Application Form would be used only to ensure dispatch of refund orders. Please note that any such
delay shall be at such Bidders sole risk and neither our Company, the Escrow Collection Banks,
Registrar, the BRLM shall be liable to compensate the Bidder for any losses caused to the Bidder due to
any such delay or liable to pay any interest for such delay.

In case no corresponding record is available with the Depositories, which matches the two parameters,
namely, PAN of the Bidder and the DP ID/Client ID, then such Bids are liable to be rejected.

Refunds, dividends and other distributions, if any, will be payable in Indian Rupees only and net of
bank charges and / or commission. In case of Bidders who remit money through Indian Rupee drafts
purchased abroad, such payments in Indian Rupees will be converted into US Dollars or any other
freely convertible currency as may be permitted by the RBI at the rate of exchange prevailing at the
time of remittance and will be dispatched by registered post or if the Bidders so desire, will be credited
to their NRE accounts, details of which should be furnished in the space provided for this purpose in
the Bid cum Application Form. Our Company will not be responsible for loss, if any, incurred by the
Bidder on account of conversion of foreign currency.

There is no reservation for Eligible NRIs and FIIs and all Bidders will be treated on the same basis with
other categories for the purpose of allocation.

PAYMENT INSTRUCTIONS

Escrow Mechanism for Bidders other than ASBA Bidders

Our Company and the Syndicate shall open Escrow Account(s) with one or more Escrow Collection Bank(s)
in whose favour the Bidders shall make out the cheque or demand draft in respect of his or her Bid and/or
revision of the Bid. Cheques or demand drafts received for the full Bid Amount from Bidders would be
deposited in the Escrow Account. The Escrow Collection Banks will act in terms of the Red Herring
Prospectus and the Escrow Agreement to be entered into amongst our Company, the BRLM, Escrow
Collection Bank(s) and Registrar to the Issue.

The Escrow Collection Banks for and on behalf of the Bidders shall maintain the monies in the Escrow
Account until the Designated Date. The Escrow Collection Banks shall not exercise any lien whatsoever over
the monies deposited therein and shall hold the monies therein in trust for the Bidders. On the Designated
Date, the Escrow Collection 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



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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 Draft Red Herring Prospectus.

The Bidders should note that the escrow mechanism is not prescribed by SEBI and has been established as an
arrangement between our Company, the Syndicate, the Escrow Collection Banks and the Registrar to facilitate
collections from the Bidders.

Payment mechanism for ASBA Bidders

The ASBA Bidders shall specify the bank account number in the ASBA Bid cum Application Form and the
SCSB shall block an amount equivalent to the Bid Amount in the bank account specified in the ASBA Bid
cum Application Form. The SCSB shall keep the Bid Amount in the relevant bank account blocked until
withdrawal/ rejection of the ASBA Bid or receipt of instructions from the Registrar to unblock the Bid
Amount. In the event of withdrawal or rejection of the ASBA Bid cum Application Form or for unsuccessful
ASBA Bid cum Application Forms, the Registrar shall give instructions to the SCSB to unblock the
application money in the relevant bank account within one day of receipt of such instruction. The Bid Amount
shall remain blocked in the ASBA Account until finalisation of the Basis of Allotment in the Issue and
consequent transfer of the Bid Amount to the Public Issue Account, or until withdrawal/failure of the Issue or
until rejection of the Bids by ASBA Bidder, as the case may be.

Payment into Escrow Account for Bidders other than ASBA Bidders

Each Bidder shall draw a cheque or demand draft or remit the funds electronically through the RTGS
mechanism for the Bid Amount payable on the Bid as per the following terms:

1. All Bidders would be required to pay the full Bid Amount at the time of the submission of the Bid cum
Application Form.

2. The Bidders shall, with the submission of the Bid cum Application Form, draw a payment instrument for
the Bid Amount in favour of the Escrow Account and submit the same to the Syndicate. If the payment is not
made favoring the Escrow Account along with the Bid cum Application Form, the Bid of the Bidder shall be
rejected.

3. The payment instruments for payment into the Escrow Account should be drawn in favour of:

(a) In case of Resident QIB Bidders: []

(b) In case of Non-Resident QIB Bidders: []

(c) In case of Resident Retail and Non-Institutional Bidders: []

(d) In case of Non Resident Retail & Non-Institutional Bidders: []

4. Anchor Investors would be required to pay the Bid Amount at the time of submission of the Bid cum
Application Form. In the event of the Issue Price being higher than the price at which allocation is made to
Anchor Investors, the Anchor Investors shall be required to pay such additional amount to the extent of
shortfall between the price at which allocation is made to them and the Issue Price as per the pay-in date
mentioned in the revised Anchor Investor Allocation Notice. If the Issue Price is lower than the price at which



225

allocation is made to Anchor Investors, the amount in excess of the Issue Price paid by Anchor Investors shall
not be refunded to them.

5. 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: []

6. In case of Bids by NRIs applying on repatriation basis, the payments must be made through Indian Rupee
drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted through
normal banking channels or out of funds held in Non-Resident External (NRE) Accounts or Foreign Currency
Non-Resident (FCNR) Accounts, maintained with banks authorized to deal in foreign exchange in India,
along with documentary evidence in support of the remittance. Payment will not be accepted out of Non-
Resident Ordinary (NRO) Account of Non-Resident Bidder bidding on a repatriation basis. Payment by drafts
should be accompanied by bank certificate confirming that the draft has been issued by debiting to NRE
Account or FCNR Account as the case maybe.
7. In case of Bids by NRIs applying on non-repatriation basis, the payments must be made through Indian
Rupee Drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted
through normal banking channels or out of funds held in Non-Resident External (NRE) Accounts or Foreign
Currency Non-Resident (FCNR) Accounts, maintained with banks authorised to deal in foreign exchange in
India, along with documentary evidence in support of the remittance or out of a Non-Resident Ordinary
(NRO) Account of a Non-Resident Bidder bidding on a non-repatriation basis. Payment by drafts should be
accompanied by a bank certificate confirming that the draft has been issued by debiting an NRE or FCNR or
NRO Account as the case maybe.

8. In case of Bids by FIIs, the payment should be made out of funds held in a Special Non Resident Rupee
Account (the SPNR Account) along with documentary evidence in support of the remittance. Payment by
drafts should be accompanied by a bank certificate confirming that the draft has been issued by debiting the
Special Rupee Account.

9. The monies deposited in the Escrow Account will be held for the benefit of the Bidders (other than ASBA
Bidders) till the Designated Date.

10. On the Designated Date, the Escrow Collection Banks shall transfer the funds from the Escrow Account as
per the terms of the Escrow Agreement into the Public Issue Account with the Bankers to the Issue.

11. No later than 12 working days from the Bid / Issue Closing Date, the Refund Bank shall refund all
amounts payable to unsuccessful Bidders (other than ASBA Bidders) and also the excess amount paid on
Bidding, if any, after adjusting for allocation to the successful Bidders.

12. Payments should be made by cheque, or a demand draft drawn on any bank (including a co-operative
bank), which is situated at, and is a member of or sub- member of the bankers clearing house located at the
centre where the Bid cum Application Form is submitted. Outstation cheques / bank drafts drawn on banks not
participating in the clearing process will not be accepted and applications accompanied by such cheques or
bank drafts are liable to be rejected. Cash / stock invest / money orders / postal orders will not be accepted.




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13. Bidders are advised to mention the number of the Bid cum Application Form on the reverse of the cheque
demand draft to avoid misuse of instruments submitted along with the Bid cum Application Form.

14. In case clear funds are not available in the Escrow Accounts as per final certificates from the Escrow
Collection Bank(s), such Bids are liable to be rejected.

Payment by Stock invest

In terms of Reserve Bank of India, Circular No. DBOD No. FSC BC 42 / 24.47.00 / 2003 -04 dated November
05, 2003, the option to use the stock invest instrument in lieu of cheques or bank drafts for payment of bid
money has been withdrawn. Hence, payment through stock invest would not be accepted in this Issue.

Payment by cash / money order

Payment through cash / money order shall not be accepted in the Issue.

Submission of Bid cum Application Form and ASBA Forms

All Bid cum Application Forms or Revision Forms duly completed and accompanied by account payee
cheques or drafts shall be submitted to the members of the Syndicate at the time of submission of the Bid.
With respect to the ASBA Bidders, the ASBA Form or the ASBA Revision Form shall be submitted to the
Designated Branches. No separate receipts shall be issued for the money payable on the submission of Bid
cum Application Form or Revision Form. However, the collection Centre of the members of the Syndicate
will acknowledge the receipt of the Bid cum Application Forms or Revision Forms by stamping and returning
to the Bidder the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the Bid cum
Application Form for the records of the Bidder.

OTHER INSTRUCTIONS

Joint Bids in the case of Individuals

Bids may be made in single or joint names (not more than three). In the case of joint Bids, all payments will
be made out in favour of the Bidder whose name appears first in the Bid cum Application Form or Revision
Form. All communications will be addressed to the First Bidder and will be dispatched to his or her address as
per the Demographic Details received from the Depository.

Multiple Bids

A Bidder should submit only one (and not more than one) Bid. Two or more Bids will be deemed to be
multiple Bids if the sole or First Bidder is one and the same. Our Company reserves the right to reject, in its
absolute discretion, all or any multiple Bids in any or all categories. It is clarified, however, that Bidders shall
have the option to make a maximum of three Bids in the Bid cum Application Form and such options shall not
be considered multiple Bids.

In this regard, the procedures which would be followed by the Registrar to the Issue to detect multiple
applications are given below:

All Bids will be checked for common PAN and Bids with common PAN will be accumulated and
taken to a separate process file which would serve as a multiple master. In this master, a check will be



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carried out for the same PAN. In cases where the PAN is different, the same will be deleted from this
master.

The Bids will be scrutinized for DP ID and beneficiary account numbers. In case applications bear the
same DP ID and beneficiary account numbers, these will be treated as multiple applications.

In case of a Mutual Fund, a separate Bid may be made in respect of each scheme of the Mutual Fund and such
Bids in respect of over 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 QIBs under the Anchor
Investor Portion and the QIB Portion (excluding the Anchor Investor Portion) will not be treated as multiple
Bids.

After submitting a bid using an ASBA Bid cum Application Form either in physical or electronic mode, where
such ASBA Bid has been submitted to the SCSBs and uploaded with the Stock Exchanges, an ASBA Bidder
cannot Bid, either in physical or electronic mode, whether on another ASBA Bid cum Application Form, to
either the same or another Designated Branch of the SCSB, or on a non-ASBA Bid cum Application Form.
Submission of a second Bid in such manner will be deemed a multiple Bid and would be rejected. However,
ASBA Bidders may revise their Bids through the Revision Form, the procedure for which is described in
Build Up of the Book and Revision of Bids appearing on Page No.215.

More than one ASBA Bidder may Bid for Equity Shares using the same ASBA Account, provided that the
SCSBs will not accept a total of more than five ASBA Bid cum Application Forms with respect to any single
ASBA Account.
Duplicate copies of ASBA Bid cum Application Forms downloaded and printed from the website of the Stock
Exchanges bearing the same application number shall be treated as multiple Bids and are liable to be rejected.

Our Company, in consultation with the BRLM, reserves the right to reject, in its absolute discretion, all or all
except one of such multiple Bid(s) in any or all categories. In this regard, the procedures which would be
followed by the Registrar to the Issue to detect multiple Bids are provided below:

1. All Bids will be checked for common PAN as per the records of Depository. For Bidders other than Mutual
Funds and FII sub-accounts, Bids bearing the same PAN will be treated as multiple Bids and will be rejected.

2. For Bids from Mutual Funds and FII sub-accounts, which are submitted under the same PAN, as well as
Bids on behalf of the Central or State Government, an official liquidator or receiver appointed by a court and
residents of Sikkim, for whom the submission of PAN is not mandatory, the Bids are scrutinized for DP ID
and Beneficiary Account Numbers. In case such Bids bore the same DP ID and Beneficiary Account
Numbers, these would be treated as multiple Bids and will be rejected.

Permanent Account Number or PAN

Except for Bids on behalf of the Central or State Government and the officials appointed by the courts, the
Bidders, or in the case of a Bid in joint names, each of the Bidders, should mention his/ her PAN allotted
under the I.T. Act. 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.





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Any Bid cum Application Form without the PAN is liable to be rejected, except for residents in the state
of Sikkim, may be exempted from specifying their PAN for transactions in the securities market. It is to
be specifically noted that Bidders should not submit the GIR number instead of the PAN as the Bid is
liable to be rejected on this ground.

Withdrawal of ASBA Bids

ASBA Bidders can withdraw their Bids during the Bid/ Issue Period by submitting a request for the same to
the SCSBs who shall do the requisite, including deletion of details of the withdrawn ASBA Form from the
electronic bidding system of the Stock Exchanges and unblocking of the funds in the ASBA Account.

In case an ASBA Bidder (other than QIB bidding through an ASBA Form) wishes to withdraw the Bid after
the Offer Closing Date, the same can be done by submitting a withdrawal request to the Registrar to the Offer.
The Registrar to the Offer shall delete the withdrawn Bid from the Bid file and give instruction to the SCSB
for unblocking the ASBA Account after approval of the Basis of Allotment.

Rejection of Bids

In case of QIB Bidders, our Company, in consultation with the BRLM, may reject Bids provided that the
reasons for rejecting the same shall be provided to such Bidders in writing. In case of Non-Institutional
Bidders and Retail Individual Bidders, our Company has a right to reject Bids based on technical grounds.
Consequent refunds shall be made by RTGS/NEFT/NECS/Direct Credit/Cheque or pay order or draft and will
be sent to the Bidders address at the Bidders risk. With respect to Bids by ASBA Bidders, the Designated
Branches of the SCSBs shall have the right to reject Bids by ASBA Bidders if at the time of blocking the Bid
Amount in the Bidders bank account, the respective Designated Branch of the SCSB ascertains that sufficient
funds are not available in the Bidders bank account maintained with the SCSB. Subsequent to the acceptance
of the Bid by ASBA Bidder by the SCSB, our Company would have a right to reject the ASBA Bids only on
technical grounds.

Grounds for Technical Rejections

Bidders are advised to note that Bids are liable to be rejected inter alia on the following technical grounds:

Amount paid does not tally with the amount payable for the highest value of Equity Shares Bid for.
With respect to Bids by ASBA Bidders, the amounts mentioned in the ASBA Bid cum Application
Form does not tally with the amount payable for the value of the Equity Shares Bid for;

In case of partnership firms, Equity Shares may be registered in the names of the individual partners
and no firm as such shall be entitled to apply;

Bid by persons not competent to contract under the Indian Contract Act, 1872, as amended including
minors, insane persons;

PAN not mentioned in the Bid cum Application Form;

GIR number furnished instead of PAN;

Bids for lower number of Equity Shares than specified for that category of investors;



229


Bids at a price less than the Floor Price;

Bids at a price more than the Cap Price;

Signature of sole and/or joint Bidders missing;

Submission of more than five ASBA Bid cum Application Forms per bank account;

Submission of Bids by Anchor Investors through ASBA process

Bids at Cut-off Price by Non-Institutional and QIB Bidders;

Bids for number of Equity Shares which are not in multiples of [];

Category not indicated;

Multiple Bids as defined in the Draft Red Herring Prospectus;

In case of Bids under power of attorney or by limited companies, corporate, trust etc., relevant
documents are not submitted;

Bids accompanied by Stock invest/money order/postal order/cash;

Bid cum Application Forms does not have the stamp of the BRLM or Syndicate Members or the
SCSB;

Bid cum Application Forms does not have Bidders depository account details;

Bid cum Application Forms are not delivered by the Bidders within the time prescribed as per the Bid
cum Application Forms, Bid/Issue Opening Date advertisement and the Red Herring Prospectus and
as per the instructions in the Red Herring Prospectus and the Bid cum Application Forms;

In case no corresponding record is available with the Depositories that matches the Depository
Participants identity (DP ID) and the beneficiarys account number;

With respect to ASBA Bids, inadequate funds in the bank account to block the Bid Amount specified
in the ASBA Bid cum Application Form at the time of blocking such Bid Amount in the bank
account;

Bids for amounts greater than the maximum permissible amounts prescribed by the regulations;

Bids where clear funds are not available in Escrow Accounts as per final certificate from the Escrow
Collection Banks;

Bids by QIBs not submitted through the BRLM or in case of ASBA Bids for QIBs not intimated to
the BRLM;



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Bids by persons in the United States excluding qualified institutional buyers as defined in Rule
144A of the Securities Act or other than in reliance of Regulation S under the Securities Act;

Bids by any person outside India if not in compliance with applicable foreign and Indian Laws;

Bids not uploaded on the terminals of the Stock Exchanges;

Bids by persons prohibited from buying, selling or dealing in the shares directly or indirectly by SEBI
or any other regulatory authority.

ASBA Applications made by using duplicate copy of ASBA Bid cum Application Form downloaded
from the website of the Stock Exchanges (i.e. two ASBA Bid cum Application Forms bearing the
same unique identification number);

Bids or revision thereof by QIB Bidders and Non-Institutional Bidders where the Bid amount is in
excess of ` 2,00,000 uploaded after 4.00 p.m. on the Bid / Issue Closing Date; and

Bids by NRIs not disclosing their residential status


IN CASE THE DP ID, CLIENT ID AND PAN MENTIONED IN THE BID CUM APPLICATION
FORM AND ENTERED INTO THE ELECTRONIC BIDDING SYSTEM OF THE STOCK
EXCHANGES BY THE SYNDICATE/THE SCSBs DO NOT MATCH WITH THE DP ID, CLIENT
ID AND PAN AVAILABLE IN THE RECORDS WITH THE DEPOSITARIES, THE APPLICATION
IS LIABLE TO BE REJECTED.

Equity shares in Dematerialised Form with NSDL or CDSL
As per the provisions of Section 68B of the Companies Act, the Allotment of Equity Shares in this Issue shall
be only in a de-materialized form, (i.e., not in the form of physical certificates but be fungible and be
represented by the statement issued through the electronic mode).

In this context, two agreements have been signed among our Company, the respective Depositories and the
Registrar:
Agreement dated September 20, 2011 among NSDL, our Company and the Registrar;
Agreement dated September 05, 2011 among CDSL, our Company and the Registrar.

Bidders can seek Allotment only in de-materialised mode. Bids from any Bidder without relevant details of
his or her depository account are liable to be rejected.

(a) A Bidder applying for Equity Shares must have at least one beneficiary account with either of the
Depository Participants i.e, NSDL or CDSL prior to making the Bid.

(b) The Bidder must necessarily fill in the details (including the Beneficiary Account Number and Depository
Participants identification number) appearing in the Bid cum Application Form or Revision Form.

(c) Allotment to a successful Bidder will be credited in electronic form directly to the beneficiary account
(with the Depository Participant) of the Bidder.




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(d) Names in the Bid cum Application Form or Revision Form should be identical to those appearing in the
account details in the Depository. In case of joint holders, the names should necessarily be in the same
sequence as they appear in the account details in the Depository.

(e) If incomplete or incorrect details are given under the heading, Bidders Depository Account Details in the
Bid cum Application Form or Revision Form, it is liable to be rejected.

(f) The Bidder is responsible for the correctness of his or her Demographic Details given in the Bid cum
Application Form vis--vis those with his or her Depository Participant.

(g) Equity Shares in electronic form can be traded only on the Stock Exchanges having electronic connectivity
with NSDL and CDSL. All the Stock Exchanges where the Equity Shares are proposed to be listed have
electronic connectivity with CDSL and NSDL.

(h) The trading of the Equity Shares of our Company would be in dematerialised form only for all Bidders in
the demat segment of the respective Stock Exchanges.

(i) Nontransferable advice or refund orders will be directly sent to the Bidders by the Registrar to the Issue.

Communications

All future communications in connection with Bids made in this Issue should be addressed to the Registrar
quoting the full name of the sole or First Bidder, Bid cum Application Form number, Bidders Depository
Account Details, number of Equity Shares applied for, date of Bid cum Application Form, name and address
of the member of the Syndicate or the Designated Branch of the SCSBs where the Bid was submitted and
cheque or draft number and issuing bank thereof or with respect to ASBA Bids, bank account number in
which the amount equivalent to the Bid Amount was blocked.

Bidders can contact the Compliance Officer or the Registrar in case of any pre-Issue or post-Issue
related problems such as non-receipt of letters of Allotment, credit of Allotted shares in the respective
beneficiary accounts, refund orders etc. In case of ASBA Bids submitted to the Designated Branches of
the SCSBs, the Bidders can contact the Designated Branches of the SCSBs.

IMPERSONATION

Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68 A of
the Companies Act, which is reproduced below:

Any person who:

(a) Makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares
therein, or

(b) Otherwise induces a company to allot, or register any transfer of shares, therein to him, or any other
person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five
years.




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BASIS OF ALLOTMENT

a. For Retail Individual Bidders

Bids received from the Retail Individual Bidders at or above the Issue Price shall be grouped together
to determine the total demand under this category. The Allotment to all the successful Retail
Individual Bidders will be made at the Issue Price.

The Issue size less Allotment to Non-Institutional and QIB Bidders will be available for Allotment to
Retail Individual Bidders who have Bid in the Issue at a price that is equal to or greater than the Issue
Price.

If the aggregate demand in this category is less than or equal to [] Equity Shares at or above the
Issue Price, full Allotment shall be made to the Retail Individual Bidders to the extent of their valid
Bids.

If the aggregate demand in this category is greater than [] Equity Shares at or above the Issue Price,
the Allotment shall be made on a proportionate basis up to a minimum of [] Equity Shares. For the
method of proportionate Basis of Allotment, refer below.

b. For Non-Institutional Bidders

Bids received from Non-Institutional Bidders at or above the Issue Price shall be grouped together to
determine the total demand under this category. The Allotment to all successful Non-Institutional
Bidders will be made at the Issue Price.

The Issue size less Allotment to QIBs and Retail will be available for Allotment to Non- Institutional
Bidders who have Bid in the Issue at a price that is equal to or greater than the Issue Price.

If the aggregate demand in this category is less than or equal to [] Equity Shares at or above the
Issue Price, full Allotment shall be made to Non-Institutional Bidders to the extent of their demand.

In case the aggregate demand in this category is greater than [] Equity Shares at or above the Issue
Price, Allotment shall be made on a proportionate basis up to a minimum of [] Equity Shares, and in
multiples of [] Equity Shares thereafter. For the method of proportionate Basis of Allotment refer
below.

c. For QIBs (other than Anchor Investors)

Bids received from the QIB Bidders at or above the Issue Price shall be grouped together to determine
the total demand under this portion. The Allotment to all the successful QIB Bidders will be made at
the Issue Price.

The Net QIB Portion will be available for Allotment to QIB Bidders who have Bid in the Issue at a
price that is equal to or greater than the Issue Price.

Allotment shall be undertaken in the following manner:



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(a) In the first instance allocation to Mutual Funds for up to 5% of the QIB Portion (excluding
Anchor Investor Portion) shall be determined as follows:

(i) In the event that Bids by Mutual Fund exceeds 5% of the QIB Portion(excluding Anchor Investor
Portion), allocation to Mutual Funds shall be done on a proportionate basis for up to 5% of the
QIB Portion(excluding Anchor Investor Portion).

(ii) In the event that the aggregate demand from Mutual Funds is less than5% of the QIB Portion
excluding Anchor Investor Portion) then all Mutual Funds shall get full Allotment to the extent of
valid Bids received above the Issue Price.

(iii) Equity Shares remaining unsubscribed, if any, not allocated to Mutual Funds will be available for
Allotment to all QIB Bidders as set out in(b) below;

(b) In the second instance Allotment to all QIBs shall be determined as follows:

(i) In the event that the oversubscription in the QIB Portion, all QIB Bidders who have submitted Bids
above the Issue Price shall be allotted Equity Shares on a proportionate basis for up to 95% of the
QIB Portion.
(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 QIB Bidders.
(iii) Under-subscription below 5% of the QIB Portion (excluding Anchor Investor Portion), if any,
from Mutual Funds, would be included for allocation to the remaining QIB Bidders on a
proportionate basis.

(c) The aggregate Allotment (other than spill over in case of under-subscription in other
categories) to QIB Bidders shall be up to [] Equity Shares.

d. For Anchor Investor Portion

Allocation of Equity Shares to Anchor Investors at the Anchor Investor Issue Price will be at the
discretion of our Company in consultation with the BRLM, subject to compliance with the following
requirements:

not more than 30% of the QIB Portion will be allocated to Anchor Investors;

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

allocation to Anchor Investors shall be on a discretionary basis and subject to a minimum
number of two Anchor Investors for allocation upto ` 25,000 Lacs and minimum number of
five Anchor Investors for allocation more than ` 25,000 Lacs.




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The number of Equity Shares allocated to Anchor Investors and the Anchor Investor Issue Price, shall
be made available in the public domain by the BRLM before the Bid/ Issue Opening Date by intimating
the same to the Stock Exchanges.

Method of Proportionate Basis of Allotment in the Issue

In the event of the Issue being over-subscribed, our Company shall finalise the Basis of Allotment in
consultation with the Designated Stock Exchange. The executive director (or any other senior official
nominated by them) of the Designated Stock Exchange along with the BRLM and the Registrar shall be
responsible for ensuring that the Basis of Allotment is finalised in a fair and proper manner. The Allotment
shall be made in marketable lots, on a proportionate basis as explained below:

a) Bidders will 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 shall be arrived at on a
proportionate basis, which is the total number of Equity Shares applied for in that category(number of
Bidders in the category multiplied by the number of Equity Shares applied for)multiplied by the inverse
of the over-subscription ratio.

c) Number of Equity Shares to be allotted to the successful Bidders will be arrived at on a proportionate
basis, which is total number of Equity Shares applied for by each Bidder in that category multiplied by
the inverse of the over-subscription ratio.

d) In all Bids where the proportionate Allotment is less than [] Equity Shares per Bidder, the Allotment
shall be made as follows:

(a) The successful Bidders out of the total Bidders for a category shall be determined by draw of lots
in a manner such that the total number of Equity Shares Allotted in that category is equal to the
number of Equity Shares calculated in accordance with (b) above; and

(b) Each successful Bidder shall be Allotted a minimum of [] Equity Shares.

e) If the proportionate Allotment to a Bidder is a number that is more than [] but is not a multiple of one
(which is the marketable lot), the decimal would 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 would be rounded off to the lower whole
number. Allotment to all in such categories would be arrived at after such rounding off.

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 shall 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 will be added to the category comprising Bidders applying for
minimum number of Equity Shares.

g) Subject to valid Bids being received, allocate on of Equity Shares to Anchor Investors shall be at the
sole discretion of our Company, in consultation with the BRLM.





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Illustration of Allotment to QIBs and Mutual Funds (MF)

A. Issue Details
(No. of Equity Shares in Lacs)
Particulars Issue details
Issue size 2000
Allocation to QIB (up to 50% of the Issue) 1000
Of which:
a. Reservation For Mutual Funds, (5%) 50
b. Balance for all QIBs including Mutual Funds 950
Number of QIB applicants 100
Number of Equity Shares applied for 5000

B. Details of QIB Bids
(No. of Equity Shares in Lacs)
Sr. No. Type of QIBs* No. of Shares bid for
1 A1 500
2 A2 200
3 A3 1300
4 A4 500
5 A5 500
6 MF1 400
7 MF2 400
8 MF3 800
9 MF4 200
10 MF5 200
Total 500
* A1-A5: (QIBs other than Mutual Funds), MF1-MF5 (QIBs which are Mutual Funds) Details of Allotment to QIBs Applicants

C. Details of Allotment to QIB Bidders/ Applicants
(No. of Equity Shares in Lacs)
Type of QIB Share Bids for
Allocation of 5%
Equity Shares
Allocation of 95%
Equity Shares
Aggregate
allocation to
Mutual
Funds
A1 500 25 475 500
A2 200 10 190 200
A3 1300 65 1235 1300
A4 500 25 475 500
A5 500 25 475 500
MF1 400 20 380 400
MF2 400 20 380 400
MF3 800 40 760 800
MF4 200 10 190 200
MF5 200 10 190 200
500 25 475 500
5225 5500



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Please note:
1. The illustration presumes compliance with the requirements specified in this DRHP in the section titled
The Issue at Page No. 45.

2. Out of 1000 Lacs Equity Shares allocated to QIBs, 50 Lacs (i.e., 5%) will be Allotted on a proportionate
basis among five Mutual Fund applicants who applied for 2000 Lacs Equity Shares in the QIB Portion.

3. The balance 950 Lacs Equity Shares i.e., 100 -5 (available for Mutual Funds only) will be Allotted on a
proportionate basis among 10 QIB Bidders who applied for 5000 Lacs Equity Shares (including 5 Mutual
Fund applicants who applied for 2000 Lacs Equity Shares).

4. The figures in the fourth column entitled Allocation of balance 950 Lacs Equity Shares to QIBs
proportionately in the above illustration are arrived at as explained below:
For QIBs other than Mutual Funds (A1 to A5) = Number of Equity Shares Bid for 95/495
For Mutual Funds (MF1 to MF5) = (No. of shares bid for (i.e., in column II of the table above) less
Equity Shares Allotted (i.e., column III of the table above) 95/495
The numerator and denominator for arriving at the allocation of 950 Lacs Equity Shares to the 10
QIBs are reduced by 50 Lacs shares, which have already been Allotted to Mutual Funds in the
manner specified in column III of the table above.

Payment of Refund

Bidders other than ASBA Bidders must note that on the basis of Bidders DP ID and beneficiary account
number provided by them in the Bid cum Application Form, the Registrar will obtain, from the Depositories,
the Bidders bank account details, including the nine digit Magnetic Ink Character Recognition (MICR)
code as appearing on a cheque leaf to make refunds.

On the Designated Date and no later than 12 Working Days from the Bid/Issue Closing Date, the Escrow
Collection Bank shall dispatch refund orders for all amounts payable to unsuccessful Bidders (other than
ASBA Bidders) and also the excess amount paid on bidding, if any, after adjusting for allocation/Allotment to
such Bidders.

Mode of making refunds for Bidders other than ASBA Bidders

The payment of refund, if any, for Bidders other than ASBA Bidders would be done through various modes in
the following order of preference:

1. NECS Payment of refund would be done through NECS for applicants having an account at any of the
centers where such facility has been made available. This mode of payment of refunds would be subject to
availability of complete bank account details including the MICR code as appearing on a cheque leaf, from
the Depositories. The payment of refunds is mandatory for applicants having a bank account at any of the
centers where clearing houses are managed by the RBI, except where the applicant is eligible and opts to
receive refund through direct credit or RTGS.

2. Direct Credit Applicants having bank accounts with the Refund Bank (s), as mentioned in theBid cum
Application Form, shall be eligible to receive refunds through direct credit. Charges, if any, levied by the
Refund Bank(s) for the same would be borne by our Company.



237

3. RTGS Applicants having a bank account at any of the centers where clearing houses are managed by the
RBI and whose refund amount exceeds ` 200,000 will be considered to receiver fund through RTGS. For such
eligible applicants, IFSC code will be derived based on the MICR code of the Bidder as per depository
records/RBI master. In the event the same is not available as per depository records/RBI master, refund shall
be made through NECS. Charges, if any, levied by the Refund Bank(s) for the same would be borne by our
Company. Charges, if any, levied by the applicants bank receiving the credit would be borne by the applicant.

4. NEFT Payment of refund shall be undertaken through NEFT wherever the applicants bank has been
assigned the Indian Financial System Code (IFSC), which can be linked to a MICR, if any, available to that
particular bank branch. IFSC will be obtained from the website of RBI as on a date immediately prior to the
date of payment of refund, duly mapped with MICR numbers. Wherever the applicants have registered their
nine digit MICR number and their bank account number while opening and operating the demat account, the
same will be duly mapped with the IFSC of that particular bank branch and the payment of refund will be
made to the applicants through this method.

5. For all other applicants, including those who have not updated their bank particulars with the MICR code,
the refund orders will be dispatched under certificate of posting for value upto ` 1,500 and through Speed
Post/ Registered Post for refund orders of ` 1,500 and above. Such refunds will be made by cheques, pay
orders or demand drafts drawn on the Escrow Collection Banks and payable at par at places where Bids are
received. Bank charges, if any, for cashing such cheques, pay orders or demand drafts at other centers will be
payable by the Bidders.

Mode of making refunds for ASBA Bidders

In case of ASBA Bidders, the Registrar shall instruct the SCSBs to unblock the funds in the relevant ASBA
Accounts to the extent of the Bid Amount specified in the ASBA Bid cum Application Forms for withdrawn,
rejected or unsuccessful or partially successful ASBA Bids within 12 Working Days of the Bid/Issue Closing
Date.

Disposal of Applications and Application Moneys

With respect to Bidders other than ASBA Bidders, our Company shall ensure dispatch of Allotment advice,
refund orders (except for Bidders who receive refunds through electronic transfer of funds) and give benefit
to the beneficiary account with Depository Participants and submit the documents pertaining to the Allotment
to the Stock Exchanges within 12 working days of the Bid / Issue Closing Date.

In case of applicants who receive refunds through NECS, direct credit or RTGS, the refund instructions will
be given to the clearing system within 12 working days from the Bid / Issue Closing Date. A suitable
communication shall be sent to the Bidders receiving refunds through this mode within 12 working days of
Bid / Issue Closing Date, giving details of the bank where refunds shall be credited along with amount and
expected date of electronic credit of refund.

Our Company shall use best efforts to ensure that all steps for completion of the necessary formalities for
listing and commencement of trading at 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.

In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI Regulations,
our Company further undertakes that:

Allotment of Equity Shares shall be made only in dematerialised form, including the credit of
Allotted Equity Shares to the beneficiary accounts of the Depository Participants, within 12 working days



238

of the Bid / Issue Closing Date;

With respect to Bidders other than ASBA Bidders, dispatch of refund orders or in a case where the
refund or portion thereof is made in electronic manner, the refund instructions are given to the
clearing system within 12 working days of the Bid / Issue Closing Date would be ensured. With
respect to the ASBA Bidders, instructions for unblocking of the ASBA Bidders Bank Account shall
be made within 12 working days from the Bid / Issue Closing Date.

Our Company shall pay interest at 15% p.a. for any delay beyond the 12 days from the Bid / Issue Closing
Date as mentioned above, if Allotment is not made and refund orders are not dispatched or if, in a case where
the refund or portion thereof is made in electronic manner, the refund instructions have not been given to the
clearing system in the disclosed manner and / or demat credits are not made to investors within 15 days after
the Bid / Issue Closing Date or the date of refusal by the Stock Exchange(s), whichever is earlier. If such
money is not repaid within 12 days after the Bid / Issue Closing Date, our Company and every officer in
default shall be liable to repay the money with interest at the rate of 15% as prescribed under section 73 of the
Companies Act.

Letters of Allotment or Refund Orders or instructions to the SCSBs

Our Company will ensure dispatch of any refund orders of value up to ` 1,500 under certificate of posting,
and will dispatch any refund orders above ` 1,500 by speed or registered post at the sole or first Bidders sole
risk within 12 Working Days from the Bid Closing Date. Bidders to whom refunds are made through
electronic transfer of funds will be sent a letter by ordinary post, intimating them of the mode of credit of
refund within 12 Working Days from the Bid Closing Date.

In the case of ASBA Bidders, the Registrar will instruct the relevant SCSBs to unblock the funds in the
relevant ASBA Accounts to the extent of the Bid Amounts specified in the ASBA Bid cum Application Forms
for withdrawn, rejected or unsuccessful or partially successful ASBA Bids, within 12 Working Days of the
Bid Closing Date.

Interest in case of delay in Dispatch of Allotment Letters or Refund Orders/instruction to SCSB by the
Registrar

Allotment of Equity Shares in the Issue, including the credit of Allotted Equity Shares to the beneficiary
accounts of the Depository Participants, will be made not later than 12 Working Days of the Bid/Issue Closing
Date. If Allotment letters/refund orders have not been dispatched to the Bidders or if, in a case where the
refund or portion thereof is made in electronic manner through direct credit, NEFT, RTGS or NECS, the
refund instructions have not been issued to the clearing system in the disclosed manner and/or demat credits
are not made to investors within eight days from the day our Company becomes liable to repay, our Company
and every officer in default will, on and from the expiry of such eight days, be jointly and severally liable to
repay the money with interest at 15% per annum, as prescribed under sub-section (2) and (2A) of section 73 of
the Companies Act.

Refunds will be made by cheques, pay-orders or demand drafts drawn on a bank appointed by our Company
as a Refund Bank and payable at par at places where Bids are received. Any bank charges for encashing such
cheques, pay orders or demand drafts at other centers will be payable by the respective Bidders.

Undertakings by our Company

Our Company undertakes the following:



239

i. That the complaints received in respect of this Issue shall be attended to by our Company
expeditiously and satisfactorily;
ii. That 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 within 12 Working Days of
the Bid/Issue Closing Date;
iii. That 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 the Issuer;
iv. That where refunds are made through electronic transfer of funds, a suitable communication shall be
sent to the applicant within 12 Working Days of the Bid/ Issue Closing Date, as the case may be,
giving details of the bank where refunds shall be credited along with amount and expected date of
electronic credit of refund;
v. That the promoters contribution in full, wherever required, shall be brought in advance before the
Issue opens for public subscription and the balance, if any, shall be brought in pro-rata basis before
the calls are made on publicNot Applicable.
vi. That the certificates of the securities/ refund orders to Eligible NRIs shall be dispatched within
specified time;
vii. That no further issue of 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.; and
viii. That adequate arrangement shall be made to collect all ASBA Bid cum Application Forms and to
consider them similar to non-ASBA applications while finalizing the Basis of Allotment.
Utilisation of Issue proceeds

The Board of Directors certify that:

i. 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 73 of the Companies Act, 1956;

ii. details of all monies utilised out of Issue shall be disclosed, and continue to be disclosed till the time
any part of the issue proceeds remains unutilized, under an appropriate head in our balance sheet
indicating the purpose for which such monies have been utilised;

iii. 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;

Withdrawal of the Issue

Our Company in consultation with the BRLM, reserve the right not to proceed with the Issue at any time after
the Bid/Issue Opening Date but before Allotment. If our Company withdraws the Issue, our Company will
issue a public notice within two days, providing reasons for not proceeding with the Issue. The BRLM,
through the Registrar, will notify the SCSBs to unblock the ASBA Accounts within one Working Day from
the day of receipt of such notification. The notice of withdrawal will be issued in the same newspapers where
the pre-Issue advertisements have appeared and the Stock Exchanges will also be informed promptly.



240

If our Company withdraws the Issue after the Bid/Issue Closing Date and thereafter determines that they will
proceed with a further public offering of Equity Shares, they will file a fresh offer document with SEBI or the
Stock Exchanges, as the case may be.

Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final listing and trading approvals
of the Stock Exchanges, which our Company will apply for only after Allotment; and (ii) the final RoC
approval of the Prospectus after it is filed with the Stock Exchanges.

Restrictions on Foreign Ownership of Indian Securities
Foreign investment in Indian securities is regulated through the Industrial Policy, 1991 (the Industrial
Policy) of the GoI and FEMA. While the Industrial Policy prescribes the limits and the conditions subject to
which foreign investment can be made in different sectors of the Indian economy, FEMA regulates the
precise manner in which such investment may be made. Under the Industrial Policy, unless specifically
restricted, foreign investment is freely permitted in all sectors of 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. FIIs are permitted to subscribe to shares of an Indian company in a public offer
without the prior approval of the RBI, so long as the price of the equity shares to be issued is not less than the
price at which the equity shares are issued to residents.

The transfer of shares between an Indian resident and a non-resident does not require the prior approval of the
FIPB or RBI, provided that

(i) the activities of the investee company are under the automatic route under the foreign direct
investment (FDI) Policy and transfer does not attract the provisions of the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997

(ii) the non-resident shareholding is within the sectoral limits under the FDI policy; and (iii) the pricing
is in accordance with the guidelines prescribed by SEBI/ RBI.

As per the existing policy of the Government of India, OCBs cannot participate in this Issue.

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. 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 the 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.







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SECTION XI: DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES OF
ASSOCIATION

1. Main Provision of Articles of Association of the Issuer Company

1. Capitalized 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 II of the Companies Act and the SEBI ICDR Regulations, the main provisions of the
Articles of Association of our Company are detailed below:

The following clauses numbers corresponding the numbers of the cited article in our Articles of Association

SHARE CAPITAL

2. Authorised Share Capital
(a) The Authorised Share Capital of the company shall be as per Clause V (A) of the Memorandum of
Association of the Company. The Company shall have the power to increase or decrease the share capital
subject to the provisions of the Companies Act, 1956.
(b) The paid up capital of the Company shall be minimum of ` 5,00,000/- (Five Lacs Only).

3. Allotment of Shares
Subject to the provisions of these Articles the shares shall be under the control of the Board who may allot or
otherwise dispose of the same to such persons on terms and conditions, and at such time, as the Board think fit
and, if so authorized by the company in General Meeting give to any person the call of any shares either at par
or at a premium and for such time and for such consideration as the Board may think fit. Provided that where
at any time (subsequent to the first allotment of shares) it is proposed to increase the subscribed capital of the
Company by the issue of new shares, then, subject to any directions to the Contrary which may be given by
the Company in General Meeting, the Board shall issue shares in the manner set outing the Section 81(1) of
the Act.

4. Return of Allotments
As regards all allotments made from time to time the Company shall duly comply with Section 75 of the Act.

5. Preference Shares
Subject to the provisions of Section 80, any preference shares may, with the sanction of ordinary resolution,
be issued on the terms that they are or at the option of the Company are liable, to be redeemed on such terms
and in such manner as the Company before the issue of the shares may, by special resolution, determine.

6. Buy Back of its own shares
Subject to the provisions of the section 77 A of the Companies Act, 1956 including amendment or re-
enactment thereof and other applicable provision of the Companies Act, 1956 and rules made there under, the
company shall have the power to purchase its own securities from time to time.

7. Issue of Sweat Equity
Subject to the provisions of the section 79A of the Companies Act, 1956 including amendment or re-
enactment thereof and other applicable provision of the Companies Act, 1956 and rules made there under, the
company shall have the power to issue sweat equity shares to any class or classes of employees or directors as



242

it may deem expedient and proper.

8. Commission and Brokerage
(1) The Company may exercise the powers of paying commissions conferred by Section 76 provided that the
rate per cent, or the amount of the commission paid or agreed to be paid shall be disclosed in the manner
required by that section.
(2) The rate of the commission shall not exceed the rate five percent of the price at which the shares are issued
or any amount equal to five percent of such price, and in case of Debentures two and half percent of the
price at which debentures are issued, as the case may be.
(3) The commission may be satisfied by the payment of cash or the allotment of fully or partly said shares or
partly in the one way and partly in the other.
(4) The company may also on any issue of shares and debentures pay such brokerage as may be lawful.

9. Shares at a Discount
With the previous authority of the Company in General Meeting and the sanction of the Company Law Board
and upon otherwise complying with section 79 of the Act the Board may issue a discount shares of a class
already issued.

10. Installments on Shares to be duly paid
If by the condition of allotment of any shares, the whole or part of the amount of issue price thereof shall be
payable by installments, every such installment shall, when due, paid to the company by the person who for
the time being shall be the registered holder of the share or by his executor or administrator.

11. Liability of joint holders of shares
The joint-holders of a share shall be severally as well as jointly liable for the payment of all installments and
calls due in respect of such shares.

12. Trust not recognized
Except as required by law, no person shall be recognised by the Company as holding any share upon any way
to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any
share, or any interest in any fractional part of a share, or (except only as by these regulations or by law
otherwise provided) any other rights in respect any share except an absolute right to be entirety thereof in the
registered holder.

13. Who may be registered:
Shares may be registered in the name of any person, company or other body corporate, not more than four
persons shall be registered as joint-holders of any share.

CERTIFICATES

14. Certificates
The certificate of title to shares and duplicate thereof when necessary shall be issued under the seal of the
Company and signed by two Directors and the Secretary of the Company or some other person appointed by
the Directors.

15. Members right to certificate
Every member shall be entitled free of charge to one certificate for all the shares of each class registered in his
name or if any members so wishes to several certificates each for one or more of such share but in respect of



243

each additional certificate, which does not comprise shares in lots of the market unit of trading, the Board may
charge a fee of ` 2/- or such less sum as it may determine. Unless the conditions of issue of any shares
otherwise provide.

The company shall, either within three months after the date of allotment and on surrender to the company of
its letter making the allotment or it its fractional coupons or requisite value (save in the case of issue against
letter or acceptance of renunciation or in case of issue of bonus shares)or within two months or receipt of the
application for registration of the transfer, subdivision, consolidation or renewal of any of its shares, as the
case may be complete and have ready for delivery the certificates of such shares in respect of any shares held
jointly by several persons, the company shall not be bound to issue more than one certificate and delivery of a
certificate to one of several joint holders shall be sufficient delivery to all such holders. For every certificate
issued in replacement of an existing certificate save for those which are issued on a splitting or consideration
or share certificates into loss of the market unit of which are old, decrepit, worn out or where the cages on the
reverse for recording transfers have been fully utilized and for every other duplicate certificate the Board may
charge a fee of ` 2/- or such smaller sum together with such out of pocket expenses incurred by the Company
in investigating evidence as it may determine.

16. Issue of new certificate in place of one defaced, lost or destroyed
The issue of share certificate and duplicates and the issue of new share certificates on consolidation or sub-
division or in replacement of share certificates which are surrendered for cancellation due to their being
defaced, torn, old decrepit, or worn out or the cages for recording transfers having been utilized or of share
certificate which are lost or destroyed shall be in accordance with the provisions of the companies (issue of
Share Certificate) Rules, 1960, or any statutory modification of or reenactment thereof. In any share
certificate be lost or destroyed, then upon proof thereof to the satisfaction of the Board and on in lien thereof
shall be given to the party entitled to the shares to which such lost or destroyed certificate shall relate.

DEMATERIALISATION OF SECURITIES

17. Dematerialisation of Securities
Notwithstanding anything contained in these Articles, the company shall be entitled to dematerialize its
securities and to offer securities in a dematerialised form pursuant to the Depositories Act, 1996.

18. Options for Investors
Every person subscribing to securities offered by the Company shall have the option to receive security
certificates or to hold the securities with a depository. Such a person who is the beneficial owner of the
securities can at any time opt out of a depository, if permitted by the law, in respect of any securities in the
manner provided by the Depositories Act, and the Company shall, in the manner and within the time
prescribed, issue to the beneficial owner the required certificates of securities.

19. If a person opts to hold his security with a depository, the Company shall intimate such depository the
details of allotment of the security, and on receipt of the information, the depository shall enter in its record
the name of the allotees as the beneficial owner of the security.

20. All securities held by a depository shall be dematerialized and be in fungible form. Nothing contained in
Sections 153, 153A, 153B, 187B, 187C and 372 of the Act shall apply to a depository in respect of the
securities held by it on behalf of the beneficial owners.

21. Rights of depositories and beneficial owners



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Notwithstanding anything to the contrary contained in the Act or these Articles, a depository shall be deemed
to be the registered owner for the purpose of effecting transfer of ownership of security on behalf of the
beneficial owner.

Save as otherwise provided in (a) above, the depository as the registered owner of the securities shall not have
any voting rights or any other rights in respect of the securities held by it.

Every person holding securities of the Company and whose name is entered as the beneficial owner in the
records of the depository shall be deemed to be a member of the Company. The beneficial owner of securities
shall be entitled to all the rights and benefits and be subject to all the liabilities in respect of his securities
which are held by a depository.

22. Service of documents
Notwithstanding anything contained in the Act or these Articles to the contrary, where securities are held in a
depository, the records of the beneficial ownership may be depository of the Company by means of electronic
made or by delivery of floppies of discs.

23. Transfer of Securities
Nothing contained in Section 108 of the Act or these Articles shall apply to a transfer of securities affected by
a transferor and transferee both of who are entered as beneficial owners in the records of a depository.

24. Allotment of securities dealt with in a depository
Nothing contained in the Act or these Articles, where securities are dealt with in a depository, the company
shall intimate the details of allotment of securities to the depository immediately on allotment of such
securities.

25. Distinctive numbers of Securities held in a depository
Nothing contained in the Act or these Articles regarding the necessity of having distinctive numbers for
securities issued by the Company shall apply to securities held with a depository.

26. Register and Index of beneficial owners
The Register and Index of beneficial owners maintained by the depository under the Depositories Act, 1996,
shall be deemed to the Register and Index of Members and Securities holder of the purpose of these Articles.

CALLS

27. Calls
The members may from time to time by resolution passed at the general meeting but subject to the conditions
of allotment, make such calls as it thinks fit upon the members in respect of all money unpaid on the shares
held by them respectively whether on account of the nominal value of the shares or by the way of premium
and each member shall pay the amount of every call so made on him to the person and at the times and places
appointed by the Members in General Meeting. A call may be made payable by installments.

28. When interest on call or installment payable
If the sum payable in respect of any call or installment be not paid on or before the day appointed for payment
thereof, the holder for time being of the share in respect of which the call shall have been made or the
installment shall be due shall pay interest for the same at the rate of 12 per cent per annum form the day
appointed for the payment thereof to the time of the actual payment or at such lower rate (if any) as the Board



245

may determine.

29. Amount payable at fixed times or payable by installments as calls
If by the terms of issue of any share or otherwise any amount is made payable at any fixed time or by
installments at fixed items, whether on account of the amount of the share or by way or premium every such
amount or installment shall be payable as if it were a call duty made by the Board and of which due notice had
been given and all the provisions herein contained in respect of calls shall relate to such amount of installment
accordingly.

30. Evidence in actions by Company against share holders
On the trial or hearing of any action or suit brought by the Company against any Shareholder or his
representatives to recover any debt or money claimed the due to the Company in respect of his shares, it shall
be sufficient to prove that the name of the defendant is, or was when the claimed arose on the Register as a
holder, or one of the holders, of the number of shares in respect of which such claim is made, and that the
amount claimed is not entered as paid in the books of the company and it shall not be necessary to prove the
appointment of the Board who made any call, nor that a quorum was present at the Board meeting at which
any call was made nor that the meeting at which any call was made duly convened or constituted, nor any
other mater whatsoever, but the proof of the matters aforesaid shall be conclusive evidence of the debt.

31. Payment of calls in advance
The Board may, if they think fit, receive from any member willing to advance the same, all or any part of the
shares held by him beyond the sums actually called for, and upon the money so paid or satisfied in advance, or
so much thereof as from time to time exceeds the amount of the calls then made upon the shares in respect of
which such advance has been made, the Company may pay interest at such rate not exceeding 6 per cent per
annum as the member playing such sum in advance and the Board agree upon. Money so paid in excess of the
amount of calls shall not rank for dividends or to participate in profits. The Board may at any time repay the
amount so advanced upon giving to such member not less than three months notice in writing.

32. Revocation of call
A call may be revoked or postponed at the direction of the Board.

FORFEITURE AND LIEN

33. If call or installment not paid notice may be given
If any member fails to pay any call or installment on or before the day appointed for the payment for the same
the Board may at any time there after during such time as the call or installment remains unpaid, serve a notice
on such member requiring him to pay the same, together with any interest that may have accrued and all
expenses that may have been incurred by the company by reason of such non-payment.

34. Form of Notice
The notice shall name a day (not being less than fourteen days from the date of the notice) and a place or
places on and at which such call or installment and such interest and expenses as aforesaid are to be paid. The
notice shall also state that in the event of non-payment at or before the time and at the place appointed, the
shares in respect of which such call was made or installment is payable will be liable to be forfeited.

35. If notice not complied with shares may be forfeited
If the requisitions of any such notice as aforesaid be not complied with any shares in respect or which such
notice has been given may, at any time thereafter, before payment of all calls or installments, interest and



246

expenses, due in respect thereof 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 nor actually paid before the forfeiture.

36. Notice after forfeiture
When any share shall have been so forfeited, notice of the resolution shall be given to the member in whose
name is stood immediately prior to the forfeiture and an entry of the forfeiture, with the date thereof, shall
forthwith be made in the Register, but no forfeiture shall be in any manner invalidated by any omission or
neglect to give such notice or to make such entry as aforesaid.

37. Forfeiture shares to become property of the Company
Any share so forfeited shall be deemed to be the property of the Company, and the Board may sell, re-allot or
otherwise dispose of the same in such manner as they think fit.

38. Power to annul forfeiture
The Board may, at any time before any share so forfeited shall have been sold, re-allotted or otherwise
disposed of, annul the forfeiture thereof upon such condition as they think fit.

39. Liability on forfeiture
A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but
shall, notwithstanding, remain liable to pay, and shall forthwith pay to the Company, all calls, or installments
interest, and expenses, owing upon or in respect of such shares at the time of the forfeiture, together with
interest thereon, from the time of forfeiture until payment, at 12 per cent per annum and the Board may
enforce the payment thereof, or any part thereof, without any deduction or allowance for the value of the
shares at the time of forfeiture, but shall not be under any obligation to do so.

40. Evidence of forfeiture
A duty verified declaration in writing that the declarant is a Director of the Company , and that certain shares
in the Company have been duly forfeited on a date stated in the declaration shall be conclusive evidence of the
facts therein stated against all persons claiming to be entitled to the shares and such declaration and the receipt
of the Company for the consideration, if any, given for the shares on the sale of disposition thereof shall
constitute a good title for the shares on the sale or disposition thereof shall constitute a good title to such
shares, and the person to whom the shares are sold shall be registered as the holder of such shares and the
person to whom the shares are sold shall be registered as the holder of such shares and shall not be bound to
see to the application of the irregularity or invalidity in the proceedings in reference to such forfeiture, sale or
disposition.

41. Companys lien on shares
To company shall have a first and paramount lien upon all the shares not being fully paid up registered in the
name of each member (whether solely or jointly with others), and upon the proceeds of sale thereof for
moneys called or payable at a fixed time in respect of such shares whether the time for the payment thereof
shall have actually arrived or not and no equitable interest in any share shall be created except upon the
footing and condition that Article 12 hereof is to have full effect. Such lien shall extend to all dividends from
time to time declared in respect of such shares. Unless otherwise agreed, the registration of a transfer or shares
shall operate as a waiver of the Companys lien, if any, on such shares.

42. As to enforcing lien by sale
For the purpose or enforcing such lien the Board may sell the shares subject thereto such manner as they fit,
but no sale shall be made until such time for payment as aforesaid shall have arrived and until notice in



247

writing or the intention to sell have been served on such member, his executor or administrator or his
committee, curator bonus or other legal representative as the case may be and default shall have been made by
him or them in the payment of the moneys called or payable or payable at a fixed time in respect or such
shares for days after the date of such notice.

43. Application of proceeds of sale
The net proceeds of the sale shall be received by the Company and applied in or towards payment of such part
of the amount in respect of which the line exists as is presently payable, and the residue. If any, shall (subject
to a like for sum not presently payable as existed upon the shares before the sale) be paid to the person entitled
to the shares at the date of the sale.

44. Validity of sales in exercise of lien and after forfeiture
Upon any sale after forfeiture or for enacting a lien in purported exercise of the powers herein before given,
the Board may appoint some person to execute an instrument of transfer of the shares sold and cause the
purchasers name to be entered in the Register in respect of the shares sold, and the purchaser shall not be
bound to see to the regularity of the proceedings, nor to the application of the purchase money, and after his
name has been entered in the Register in respect of such the validity of the sale shall not be impeached by any
person, and the remedy of any person aggrieved by the sale be in damages only against the Company
exclusively.

45. Board may issue new certificates
Where any shares under the powers in that behalf herein contained are sold by the Board and the certificate in
respect thereof has not been delivered up to the Company by the former holder of such shares, the Board may
issue a new certificate for such shares distinguishing it in such manner as they may think fit from the
certificate not so delivered up.

TRANSFER AND TRANSMISSION

46. In that case Board may refuse to register transfer
The Board shall not refuse to register any properly executed transfer of shares on which company has no lien
and in the case of a share not fully paid up, may refuse to register a transfer to a transferee of whom the board
does not approve. Provided that registration of a transfer being either alone or jointly with any other person or
persons indebted to the company on any account whatsoever.

47. Execution of transfer etc.
Save as provided in section 108 of the Act, on transfer of shares shall be registered unless a proper instrument
of transfer duly stamped and executed by or on behalf of the transferor and by or no behalf of the transferee
has been delivered to the Company together with the certificate or if no such certificate is in existence the
letter of Allotment of the shares. The instrument of transfer of any shares shall specify the name, address, and
occupation (if any) both of the transferor and of the transferee, and the transferor shall be deemed to remain
the holder of such share until the name of the transferee is entered in the Register in respect thereof. Each
signature to such transfer shall be duly attested by the signature of one witness who shall add his address and
occupation.

48. Application by transferor
Application for the registration of the transfer of a share may be made either by the transferor of the
transferee, provided that, where such application is made by the transfer no registration shall in the case of
partly paid shares be effected unless the company give notice of the application to the transferee in the manner



248

prescribed by Section 110 of the Act, and subject to the provisions of the Articles the Company shall unless
objection is made by the transferee within two weeks form the date of receipt of the notice, enter in the
Register the name of the transferee in the same manner and subject to the same conditions as if the application
for registration of the transfer was made by the transferee.

49. Form of transfer
The instrument of transfer shall be in the form prescribed by the Act.

50. No transfer to infant etc.
No transfer shall be made to an infant or person of unsound mind.

51. Transfer to be left at office when to be retained
Every instrument of transfer shall be left at the office for registration, accompanied by the certificate of the
shares to be transferred, or if no such certificate is in existence, by the Letter of Allotment of the shares and
such other evidence as the Board may require to prove the title of the transfer or his right to transfer the
shares. All instrument of transfer which shall be registered, shall be retained by the Company, but any
instrument of transfer which the Board may decline to register shall be returned to the person depositing the
same.

52. Notice of refusal to register transfer
If the Board refuses to register the transfer of any shares, the company shall within two months from the date
on which the instrument of transfer was lodged with the Company, send to the transferee and the transferor
notice of the refusal.

53. Fee on registration of transfer, probate etc.
No fee shall be charged for the registration of any transfer, grant or probate or letters of administration,
certificate of death or marriage, power of attorney or other instruments.

54. As to transfer of shares of insane, infant, deceased or bankrupt members
The executor or administrator of a deceased member (not being one of several joint-holders)shall be the only
person recognized by the Company as having any title to the shares registered in the name of such member,
and in case of death of any one or more of the joint-holders of any registered shares, the survivor shall be the
only person recognized by the Company as having any title to or interest in such shares, but nothing here in
contained shall be taken to release the estate of a deceased joint-holder form any liability on shares held by
him jointly with any other person. Before recognizing any executor or administrator the Board may require
him to obtain a grant of Probate or Letters of Administration or other legal representation as the case may be,
from some competent Court in India and having effect in West Bengal. Provided nevertheless that in any case
where the Board in their absolute discretion think fit it shall be lawful for the Board to dispense with the
production of Probate or Letters of Administration or such other legal representation upon such terms as to
indemnity or otherwise as the Board, in their absolute discretion, may consider adequate.

55. Transmission of registered shares
Any person becoming entitled to or to transfer shares in consequence of the death or bankruptcy or insolvency
of any member upon producing such evidence that the sustains the character in respect of which be proposes
to act under this Article or of his title as Board think sufficient may, with the consent of the Board (which the
Board shall not be bound to give ) be registered as a member in respect of such shares, or may, subject to the
regulations as to transfer herein before contained, transfer such shares. This Article is hereinafter referred to
as The Transmission Article.



249

56. Election under the Transmission Article
(1) If the person so becoming entitled under the Transmission Article shall elect to be registered as holder of
the shares himself, he shall deliver or send to Company a notice in writing signed by him static that he so
elects.
(2) If the person aforesaid shall elect to transfer the shares, he shall satisfy his election by executing an
instrument of transfer of the shares.
(3) All the limitations, restrictions and provisions of these Articles relating to the right to transfer and the
registration of instruments of transfer of shares shall be applicable to any such notice or transfer as
aforesaid as if the death, lunacy, bankruptcy or insolvency of the member had not occurred and notice or
Transfer were a transfer signed by that member.

57. Rights of persons entitled to shares under the Transmission Article
A person so becoming entitled under the Transmission Article to share by reason of the death, lunacy,
bankruptcy or insolvency of the holder shall, subject to the provisions of Article 79 and of Section 206 of the
Act, be entitled to the same dividends and other advantages to which he would be entitled if he were the
registered holder of the shares.
Provided that the Board may at any time give notice require in any such person to elect either to be registered
himself or to transfer the shares, and if the notice is not complied with within ninety days, the Board may
thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the shares, until
the requirements of the notice have been complied with.

INCREASE OF CAPTIAL

58. Power to increase capital
The Company in General Meeting may from time to time increase the capital by the creation of new shares of
such amount as may be deemed expedient.

59. On what conditions new shares may be issued
Subject to any special rights or privileges for the time being attached to any shares in the capital of the
Company then issued the new shares may be issued upon such terms and conditions, and with such rights and
privileges attached thereto as the General Meeting resolving upon the creation thereof, shall direct, and if no
direction be given, as the Board shall determine, and in particular such shares may be issued with a
preferential or qualified right to dividends and in the distribution of assets of the Company.

60. Provisions relating to the issue
Before the issue of any new shares, Company in General Meeting may make provisions as to the allotment
and issue of the new shares, and in particular may determine to whom the same shall be offered in the first
instance and whether at par or at a premium or, subject to the provisions of Section 79 of the Act, at a
discount, in default of any such provision, or so far as the same shall not extend, the new shares may be dealt
with as if they formed part of the shares in the Original Capital, and the provision of Article of shall them
apply.

61. How far new shares to rank with shares in original capital
Except so far as otherwise provided by the conditions of issue of by these presents, any capital raised by the
creation of new shares shall be considered part of the Original capital and shall be subject to the provisions
herein contained with reference to the payment of calls and installment, transfer and transmission, forfeiture,
lien and otherwise.




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62. Inequality in number of new shares
If, owing to and inequality in the number of new shares to be issued, and the number of shares held by
members entitled to have offer of such new shares, any difficulty shall arise in the apportionment of such new
shares or any of them amongst the members. Such difficulty shall in the absence of any direction in the
resolution creation the shares by the Company in General Meeting be determined by the Board.

ALTERATION AND REDUCTION OF CAPITAL

63. Reduction of capital etc.
The Company may from time to time by Special Resolution reduce its capital and capital redemption reserve
fund or shares premium account in any manner and with and subject to any incident authorization and consent
required by law.

64. Power to sub-divide and consolidate shares
The Company in General Meeting may:-
(a) consolidate and divide all or any of its shares capital into shares or larger amount than its existing shares;
(b) Sub-divide its existing shares or any of them into shares of smaller amount than is fixed by the
memorandum so however. That in the sub-division the proportion between the amount paid and the paid
and the amount if any, unpaid on each reduced share shall be the same as it was in the case of the share
form which the reduced share is derived
(c) cancel any shares which at the date of the passing of the resolution, have not been taken or agreed to be
taken by the person and diminish the amount of its share capital by the amount of the shares so cancelled.
(d) Convert any fully paid us shares into stock and reconvert any stock into fully paid up shares of any
denominations.

65. Sub-division into Preferred and Ordinary
The resolution whereby any shares is subdivided may determine that, as between the holders of the shares
resulting from such subdivision, one or more of such shares shall have some preference or special advantage
as regards dividend, capital, voting or otherwise over or as compared with the others or other subject,
nevertheless, to the provisions of Section 87, 88 and 106 of the Act.

66. Surrender of shares
Subject to the provisions of Section 100 to 105 inclusive of the Act, the Board may accept form any member
the surrender on such terms and conditions as shall be agreed of all or any of his shares.

MODIFICATION OF RIGHTS

67. Power to modify rights

(1) If at any time the share capital is divided into different classes of shares, the rights attached to any
class (unless otherwise provided by the terms of issue of the shares of that class) may, subject to the
provisions of section 106 and 107, and whether or not the company is being wound up, be varied with the
consent in writing of the holders of three fourths of the issued shares of that class, or with the sanction of a
special resolution passed at a separate general meeting of the holders of the shares of that class.

(2) To every such separate general meeting the provisions of these regulations relating to general meetings
shall mutatis mutandis apply, but so that the necessary quorum shall be two persons at least holding or
representing by proxy one-third of the issued shares of the class in question.



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BORROWING POWERS

68. Power to borrow
The Board may from time to time, at their discretion subject to the provisions of Section 58A, 292, 293 and
370 or the Act, raise or borrow, either from the Directors or form elsewhere and secure the payment of any
sum of sums of money for the purposes of the Company

69. Conditions on which money may be borrowed
The Directors may raise or secure the repayment of such sum or sums in such manner and upon such terms
and conditions in all respects as they think fit, and in particular, by the issue or bonds, perpetual or
redeemable, debentures or debenture-stock, or any mortgage, or other security on the undertaking or the whole
or any part of the property of the Company (both present and future) including its uncalled capital for the time
being.

70. Issue at discount, etc or with special privileges
Any debentures, debenture-stock, bonds, or other securities may be issued at a discount, premium or
otherwise and with any special privileges as to redemption, surrender, drawings, allotment of shares,
appointment of Directors and otherwise. Debentures, debenture-stock, bonds and other securities may be
made assignable free form any equities between the Company and the person to whom the same may be
issued.

71. Instrument of transfer
Save as provided in section 108 of the Act, no transfer of debentures shall be registered unless a proper
instrument of transfer duly stamped and executed by the transferor and transferee has been delivered to the
Company together with the certificate or certificates of the debentures.

72. Notice of refusal to register transfer
If the Board refuses to register the transfer of any debentures, the Company shall, within two months from the
date on which the instrument of transfer was lodged with the Company, send to the transferee and to be
transferor notice of the refusal.

GENERAL MEETINGS

73. When Annual General Meetings to be held
In addition to any other meeting, general meetings of the Company shall be held within such intervals as are
specified in section 166(1) of the Act and subject to the provisions of section 166(2) of the Act at such times
and place as may be determined by the Board. Such general meetings shall be called annual general
meetings and shall be specified as such in the notice convening the meeting. All other meetings of the
Company shall be carried extraordinary general meetings.

74. When Extra Ordinary Meetings to be called
The Board may whenever they think fit call an extraordinary general meeting, and they shall on the requisition
of such member of number as they hold, at the date of the deposit of the Company as at that date carried the
right of voting in regard to the matter to be considered at the meeting, forthwith proceed to call an
extraordinary general meeting and in the case of such requisition the following provisions shall apply:-

(1) The requisition shall state the matters for the consideration of which the meeting is to be called, shall be
signed by the requisitionists and shall be deposited at the office. The requisition may consist of several



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documents in liked form each signed by one or more requisitionists.
(2) Where two or more distinct matters are specified in the requisition, the requisition shall be valid by in
respect of these matters in regard to which the requisition has been signed by the member or members
hereinbefore specified.
(3) If the Board does not, within twenty-one days from the date of deposit of a valid requisition in regard to
any matters, proceed duly to call a meeting for the consideration of these matters on a day not later than
forty-five days from the date of deposit the requisitionists or such of them as are enabled so to do by
virtue of Section 169(6) of the Act may themselves call the meeting but any meeting so called shall not be
commenced after three months from the date of deposit.
(4) Any meeting called under this Article by the requisitionists as shall be called in the same manner as nearly
as possible as that in which meetings are to be called by the Board but shall be held at the office.
(5) Where two or more persons held any shares jointly a requisition or notice calling a meeting signed by one
or some only of them shall for the purposes of this Article have the same force and effect as if it had been
signed by all of them.
(6) Any reasonable expenses incurred by the requisitionists by reason of the failure of the Board duly to call a
meeting shall be repaid to the requisitionists by the Company and any sum so repaid shall be retained by
the Company out of any sum due or so become due from the Company by way of fees or other
remuneration for their services to such of the Directors as are in default.

75. Circulation of members resolutions
The Company shall comply with the provisions of Section 188 of the Act as to giving notice of resolutions
and circulating statements on the requisition of members.

76. Notice of Meeting
Save as provided in sub-section (2) of section 171 of the Act not less than twenty-one days notice shall be
given of every general meeting of the Company, every notice of a meeting shall specify the place and the day
and hour of the meeting and shall contain a statement of the business as to be transacted there at, where any
such business consists of special business as hereinafter defined there shall be annexed to the notice a
statement complying with section 173(2) and (3) of the Act. However a general meeting may be called after
giving a shorter notice than 21 days, if consent is accorded thereto:

i. In the case of an Annual General Meeting, by all the members entitled to vote thereat &
ii. In the case of any other meeting by members of the company holding not less than 95 % of such part
of the paid-up share capital of the company as gives right to vote at that meeting.

Notice of every meeting of the Company shall be given to every member of the Company, to the Auditors of
the Company and to any persons entitled to a share in consequence of the death or insolvency of a member in
any manner hereinafter authorized for the giving of notice to such persons.

The accidental commission to give any such notice to or the non-receipt by any member or other person to
whom it should be given shall not invalidate the proceedings of the meeting.

PROCEEDINGS AT GENERAL MEETINGS

77. Business of Meetings
The Ordinary business of an annual General meeting shall be receive and consider the profit and Loss
Account, the Balance Sheets and the Reports of the Directors and of the auditors, to elect directors in the
place of those retiring by rotation, to appoint Auditors and fix their remuneration and to declare dividends.



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All other business transacted at an Annual General meeting and all business transacted at an Extraordinary
Meeting shall be deemed special business.

78. Quorum to be present when business commenced
No. business shall be transacted at any general meeting unless quorum of members is present at the time when
the meeting proceeds to business. Save as herein otherwise provided five members present in person shall a
quorum.

79. Resolution to be passed by Company in General Meeting
Any act or resolution which, under the provisions of these Articles or of the Act, permitted or required to be
done or passed by the Company in General meeting shall be sufficiently so done or passed if effected by an
Ordinary Resolution as defined in Section 189(1) of the Act to be done or resolution passed by a Special
Resolution as defined in Section, 189(2) of the Act.

80. Chairman of General Meeting
The chairman of the Board shall be entitled to take the chair at every general meeting. If there be no such
chairman, or if any meeting he shall not be present within minutes after the time appointed for holding such
meeting or unwilling to act the members present shall choose another Directors as Chairman, and if no
director be present, or all the Directors present decline to take the chair, then the members present shall, on a
show of hands or on a poll if property demanded, elect ode of their number, being a member entitled to vote,
to be Chairman.

81. When if quorum not present, Meeting to be dissolved and when to be adjourned
If within half-an-hour from the time appointed for the meeting a quorum be not present, the meeting, if
convened upon such requisition as aforesaid shall be dissolved; but in any other case is shall stand adjourned
to the same day in the next week, at the same time and place, or to such other day and at such time and place
as the Board may by notice appoint.

82. How questions to be decided at Meetings
Every question submitted to a meeting shall be decided in the first instance by a show of hands, and in the
case of an equality of votes, both on a show of hands and on a poll, the Chairman of the meeting shall have
casting vote in addition to the vote to which may be entitled as a member.

83. What is to be evidence of the passing of a resolution where poll not demanded
At any general meeting, unless a poll is (before on the declaration of the result of the show of hands)
demanded in accordance with provisions of section 179 of the Act, a declaration by the Chairman that the
resolution has or has not been carried or has or has not been carried either unanimously or by particular
majority and an entry to that effect in the book containing the minutes of the proceedings of the Company
shall be conclusive evidence of the fact, without proof of number of proportion of the votes cast in favor or
against resolution.

84. Poll
(1) If a poll be demanded as aforesaid it shall be taken forthwith on as question of adjournment or election of
a Chairman and in any other case in such manner and such time, not being later, than forty-eight hours
from the time when demand was made, and at such place as the Chairman of the meeting directs and,
subject as aforesaid, either at once or after in interval or adjournment or otherwise, and the result of the
poll shall deemed to be the decision or the meeting on the resolution on which the poll was demanded.




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(2) The demand of a poll may be withdrawn at any time.
(3) Where a poll is to be taken the Chairman of the meeting shall appoint two scrutinizers, one at least of
whom shall be a member (not being an office or employee of the Company) present at the meeting
provided such a member is available and willing to be appointed, to scrutinize the votes given on the poll
and to report to him thereon.
(4) On a poll a member entitled to more than one vote, or his proxy or other person entitled to vote for him, as
the case may be, need not if he votes, use all his votes or cast in the same way all the votes he uses.
(5) The demanded of a poll shall not prevent the continuance of a meeting for the transaction of any business
other than the question on which a poll has been demanded.

85. Power to adjourn General Meeting and determine right to vote
(1) The Chairman of a General meeting may with the consent of the meeting adjourn the same from time to
time and from place to place but no business shall be transacted at any adjourned meeting other than the
business left unfinished at the meeting from which the adjournment took place.
(2) When a meeting is adjourned for thirty-days or more notice of the adjourned meeting shall be given as in
the case of an original meeting. Save as aforesaid and as provided in Article 73 it shall not be necessary to
give any notice of an adjournment or of the business to be transacted at any adjourned meeting.

VOTES OF MEMBERS

86. Votes of Members
On a show of hands every member present in person shall have one vote and upon a poll every member
present in person or by proxy shall have one vote every share held by him, provided that no company shall
vote by proxy so long as a resolution of its Director under the provision of Section 187 of the Act is in force.

87. Procedure where a company is a member of the Company
Where a company or a body corporate (hereinafter called member Company) is a member of the company, a
person, duly appointed by resolution in accordance with the provision of Section 187 of the Act to represent
such member company at a meeting of the company, shall not by reason of such appointment be deemed to be
proxy and the production at the meeting of a copy of such, resolution duly signed by one director of such
member of the company and certified by him as being true copy of the resolution shall, on production at the
meeting, be accepted by the Company as sufficient evidence of the validity of his appointment. Such a person
shall be entitled to exercise the same right and power, including the right to vote by proxy on behalf of the
member company, which the represents, as that member company could exercise

88. Vote in respect of deceased, insane and insolvent members
Any person entitled under Transmission Article to transfer any shares may vote at any General meeting in
respect thereof in the same manner as if he were the registered holder of such shares, provided that forty eight
hours at least before the time of holding the meeting or adjourned meeting as the case may be, at which he
proposes to vote he shall satisfy the Board of his right to transfer such shares, unless the Board shall have
previously admitted his right to vote at such meeting in respect thereof. If any member be lunatic, idiot or
non-compos mentis, he may vote whether by a show of hands or at a poll by his committee, curator bonus or
other legal curator and such least-mentioned persons may give their votes by proxy.

89. Joint Holders
Where there are joint registered holders of any shares any one of such persons may vote at any meeting either
personally or by proxy in respect of such shares as if he were solely entitled there to and if more than one of
such joint-holders be present at nay meeting either personally or by proxy, that one of the said persons so



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present whose name stands first on the Resister in respect of such share shall alone be entitled to vote in
respect thereof. Several executors or administrators of a deceased member in whose name any share stands
shall for the purpose of this Article be deemed joint-holder thereof.

90. Proxies permitted
On a poll votes may be given either personally or by proxy, or in the case of a body corporate, by a
representative duly authorized as aforesaid.

91. Instrument appointing proxy to be in writing, proxies may be general or special
The instrument appointing a proxy shall be in writing under the hands of the appointer or of his Attorney duly
authorized in writing or if such appointer is a body of corporate be under his common seal or the hand of its
officer or Attorney duly authorized. A proxy who is appointed for specified meeting only shall be called
Special Proxy. Any other proxy shall be called a General Proxy.

A person may be appointed a proxy though he is not a member of the Company and every notice convening a
meeting of the meeting of the Company shall states this and that member entitled to attend and vote at the
meeting is entitled to appoint a proxy to attend and vote instead of him.

92. Instrument appointing a proxy to be deposited at the office
The instrument appointing a proxy and the power-of-Attorney or other authority (if any) under which it is
signed or a notarially certified copy that power of authority shall be deposited at the office not less than forty-
eight hours before the time for holding the meeting at which the person named in the instrument purports to
vote in respect thereof and default the instrument of proxy shall not be treated as valid.

93. When vote by proxy valid though authority revoked
A vote given in accordance with the terms of an instrument appointing a proxy shall be valid notwithstanding
the previous death or insanity of the principal, or revocation of the instrument, transfer of the share in respect
of which the vote if given, provided no intimation in writing of the death, insanity revocation or transfer of the
share shall have been received by the company at the office before the vote is given. Provided nevertheless
that the Chairman of any meeting shall be entitled to require such evidence as he may in his discretion think
fit of the due execution of an instrument of proxy and that the same has not been revoked.

94. Restriction of voting
No member shall be entitled to exercise any voting rights either personally or by proxy at any meeting of the
Company in respect of any shares registered in his name on which any calls or other sums presently payable
by him have not been paid or in regard to which the Company has and has exercise any right of lien.

95. Admission or rejection of votes
(1) Any objection as to the admission or rejection of a vote, either on a show hands, or on a poll made in due
time, shall be referred to the chairman who shall forthwith determine the same, and such determination
made in good faith shall be final and conclusive.

(2) No objection shall be raised to the qualification of any voter expect at the meeting or adjourned meeting at
which the vote objected to is given or tendered and every vote not disallowed at such meeting shall be
valid for all purposes.





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DIRECTORS

96. Number of Directors
Until otherwise determined by special Resolution the number of the Directors of the company shall not be less
than three or more than twelve.

The First Director of the company shall be:
1. MR. DEVENDRA BABURAO DESHMUKH
2. MR. ASHISH BAJRANGLAL GUPTA
3. MR. AMOL RAMESH PANDE

97. Proportion to retire by rotation
Not less than two-thirds of the total number of Directors other than Managing Director shall be persons whose
period of office is liable to retirement by rotation.

98. Power of Directors to add their number
The Directors shall have power at any time and from time to time to appoint any person as a Director as an
addition to the Board but so that the total numbers of Directors shall not any at any time exceeds the
maximum number fixed by these Articles. Any Director so appointed shall hold office only until the next
Annual General Meeting of the Company and shall then be eligible for re-election.

99. Qualifications of Directors
A Director shall not be required to hold any qualification share.

100. Director can act before acquiring qualification
Without prejudice to the restrictions imposed by Section 266 of the Act, a Director who is required to hold
qualification shares may act as a Director before acquiring such shares but shall, if he is not already qualified,
obtain his qualification, and every Director other than technical Directors or a Director appointed by the
Central or a State Government shall file with the Company a declaration specifying the qualification shares
held by him, within two months from his appointment as a Directors.

101. Directors fees, remuneration and expenses
Unless otherwise determined by the Company in General meeting each Director shall be entitled to receive
out of the funds for the Company for his services in attending meetings of the Board a fee of ` 250/- per
meeting of the Board attended by him. All other remuneration, if any payable by the company to each
Directors, whether in respect of his services as a Managing Director or a Director in the whole or part time
employment of the Company shall be determined in accordance with and subject to the provisions of these
Articles and of the Act, The Directors shall be entitled to be paid their reasonable travelling and hotel and
other expenses incurred in consequence of their attending at Board and Committee meetings and otherwise in
the execution of their duties as Directors.

102. Remuneration for extra services
Subject to the provisions of the act: If any director, being willing, shall be called upon to perform extra
services or to make any special exertions in going or residing ways from the place of his ordinary residence
for any of the purpose of the Company or in giving special attention to the business of the Company or as a
member of a Committee of the Board then, subject to sections 198, 309 and 310 of the Act, the Board may
remunerate the Director so doing either by a fixed sum or by a percentage of profit or otherwise and such
remuneration may be either in addition to or in substitution for any other remuneration to which he may be



257

entitled.

103. Board may act notwithstanding vacancy
The continuing Directors may act notwithstanding any vacancy in their body; but so that if the number falls
below the minimum above fixed the Board shall not except for the purpose of filling vacancies, act so long as
the number is below the minimum.

104. Vacation of office of Director
(1) The office of a Director shall ipso facto be vacated if:-
(a) He is found to be of unsound mind by a Court of Competent jurisdiction; or
(b) He applies to be adjudicated an insolvent; or
(c) He is adjudged an insolvent; so
(d) He is in convicted by a Court in India of any offence and is sentenced in respect thereof to
imprisonment for not less than six months; or
(e) He fails to pay any calls in respect of shares of the Company held by him, whether alone or jointly
with others, within six months from the last date fixed for the payment of the calls; or
(f) He absents himself from three consecutive meeting of the Board or from all meeting of the Board
for a continuous period of three months, whichever is the longer, without obtaining leave of
absence from the Board ; or
(g) He, or any him firm of which he is a partner, or any private company of which he is a directors,
accepts a loan, or any guarantees or security for a loan, from the Company in contravention of
section 295 of Act; or
(h) He acts in contravention of section 299 of the Act, or
(i) He becomes disqualified by an order of Court under Section 203 of the Act; or
(j) He be removed from office in pursuance of Section 284 of the Act; or
(k) Be notice in writing to the Company he resigns his office; or
(l) He or any partner relative of his or any firm of which he or his relative is partner or any private
company of which he is a director or member without the previous sanction of the Company
accorded by Special Resolution, accepts or holds by office or place of profit under the company or
under any subsidiary of the company in contravention of section 314 of the act.

(2) Notwithstanding any matter of thing in sub-clauses (c), (d) and (i) of clause (j), the disqualification
referred to in those sub-clauses shall not take effect:
(a) For thirty days from the date of adjudication, sentence or order; or
(b) where an appeal or petition is preferred within the thirty days aforesaid against the adjudication,
sentence or conviction resulting in the sentence or order, until the expiry of seven days from the
date on which such appeal or petition is disposed of ; or
(c) Where Director or other person referred to in section 314 of the Act, may be appointed to hold
any office on place of profit under the Company or under any subsidiary of the company in
accordance with the provisions of section 314 of the Act.

105. Holding of office or place of profit under the company or its subsidiary
Any Director or other person referred to in section 314 of the Act may be appointed to hold any office on
place of profit under the Company or under any subsidiary of the company in accordance with the provisions
of Section 314 of the Act.

106. Conditions under which Directors may contract with Company
Subject to the provisions of section 297 of the Act a Director shall not be disqualified from contracting with



258

the company either as vendor, purchaser or otherwise for goods materials or services or for underwriting the
subscription of any shares in or debentures of the Company nor shall any such contract or arrangement entered
into by or on behalf of the Company with a relative of such Director, or a firm which such Director or relative
is a partner or with any other partner in such firm or with a private company of which such director is a
member or director be avoided nor shall any Director so contracting or being such member so interested be
liable to account to the company for any profit realised by any such contract or arrangement by reason of such
Director holding office or of the fiduciary relation thereby established.

107. Disclosure of a Directors interest
Every Director who is in any way, whether directly or indirectly, concerned or interested in a contract or
arrangement, entered into or to be entered into, by or on behalf of the company shall disclose the nature of his
concern or interest at a meeting of the Board as required by section 299 of the Act. A general notice,
renewable in the last months of each financial year of the company, that a Director is a director or member of
any specified body corporate or is member of any special firm and is to be regarded as concerned or interested
in any subsequent contract or arrangement with that body corporate or firm shall be sufficient so made and
after such general notice i shall nor be necessary to give special notice relating to any particular contract or
arrangement with such body corporate or firm shall be sufficient is closure of concern or interest in relation to
any contract or arrangement so made and after such general notice, it shall note necessary to give special
notice relating to any particular contract or arrangement with such body corporate or firm provided such
general notice is given at a meeting of the Board or the Director concerned takes reasonable step at secure that
it is brought up and read at the first meeting of the board after it is given.

108. No Director shall, as a Director take any part in the discussion of or vote on any contract or arrangement
in which he is in any way whether directly or indirectly concerned or interest, nor shall his presence count for
the purpose of forming a quorum at the time of such discussion or vote. This prohibition shall not apply to (a)
any contract or indemnity against any loss which the Directors or any of them may suffer by reason of
becoming or being sureties or a surety for the company; or (b) any contract or arrangement entered into or to
be entered into by the company with a public company or with a private company which is a subsidiary of a
public company in which the interest of the Director consists solely in his being a director or such company
and the holder of not mote than shares of such number or value there in as is requisite to qualify him for
appointing as a director or thereof, he having been nominated as such director by the company.

109. Nominee Director
(a) Notwithstanding anything to the contrary contained in these Articles, so long as any moneys remain owing
by the Company to the Industrial Development Bank of India (IDBI), Industrial Finance Corporation of
India (IFCI). The Industrial Credit and Investment Corporation of India Limited (ICICI), Life Insurance
Corporation of India (UC), Gujarat Industrial Investment Corporation Limited (GIIC) or to any other
Finance Corporation or Credit Corporation or to any other Financing Company or body or any Bank out of
any loans granted by them to the Company or so long as IDBI, IFCI, LIC, GIIC. GSFC and Unit Trust of
India (UTI) or any other Financing Corporation or Credit Corporation or any other Financing Company or
body or any Bank) each of which IDBI, IFCI, ICICI, UC, GIIC, GSFC and UTI or any other Finance
Corporation or Credit Corporation or any other Financing Company or Body or any Bank is hereinafter in
this Article referred to as the Corporation") continue to hold debentures in the company by direct
subscription or private placement, or so long as the Corporation holds shares in the Company as a result of
underwriting or direct subscription or so long as any liability of the Company arising out of guarantee
furnished by the Corporation on behalf of the Company remains outstanding, the Corporation shall have a
right to appoint from time to time any person or persons as a Director or Directors, whole-time or non-
whole time, (which Director or Directors is/are hereinafter referred to as 'Nominee Director/s") on the



259

Board of the Company and to remove from such office any person or persons so appointed and to appoint
any person or persons in his or their places.

(b) The Board of Directors of the Company shall have no power to remove from office the Nominee Directors.
At the option of the Corporation such Nominee Director/s shall not be required to hold any share
qualification in the Company. Also at the option of the Corporation, such Nominee Director/s shall not be
liable to retirement by rotation of Directors. Subject as aforesaid, Nominee Director/s shall be entitled to
the same rights and privileges and be subject to the same obligation as any other Director of the Company.

(c ) The Nominee Director/s so appointed shall hold the said office only so long as any money remain owing by
the Company to the Corporation or so long as the Corporation holds Debentures in the Company as result
of direct subscription or private placement or so long as the Corporate holds shares In the Company as a
result of underwriting or direct subscription or the liability of the Company arising out of any Guarantee is
outstanding and the Nominee Director/s so appointed in exercise of the said power shall ipso facto vacate
such office immediately the moneys owing by the Company to the Corporation is paid off or on the
Corporation ceasing to hold Debentures/shares in the Company or on the satisfaction of the liability of the
Company arising out of any Guarantee furnished by Corporation.

(d) The Nominee Director/s appointed under this Article shall be entitled to receive all notices of and attend all
General Meetings. Board Meetings and Meetings of the Committee of which the Nominee Director/s is/are
member/s as also the minutes of such meetings. The Corporation shun also be entitled to receive all such
notices and minutes.

(e) The Company shall pay to the Nominee Director/s sitting fees and expenses which the either Directors of
the Company are entitled, but if any other fees, commission moneys or remuneration in any form is
payable to the Directors of the Company, the fees, commission, moneys and remuneration in relation to
such Nominee Director/s shall accrue to the Corporation and the same shall accordingly be paid by the
Company directly to the Corporation. Any expenses that may be incurred by the Corporation or such
Nominee Director/s in connection with their appointment or Directorship shall also be paid or reimbursed
by the Company to the Corporation or as the case may be to such Nominee Directors/s.

(f) Provided that if any such Nomine Director/s an Officer of the Corporation the sitting tees, in relation to such
Nominee Director/s shall also accrue to the Corporation and the same shall accordingly be paid by the
Company directly to the Corporation.

110. Alternate Directors
The Board may appoint any person to act as an alternate director for a director during the latters absence for a
period of not less than three months from the state in which meetings of the Board are ordinarily held and
such appointment shall have effect and such appointee. Whilst he holds office as an alternate director, shall be
entitled to notice of meetings of the Board and to attend and vote thereat accordingly; but he shall not require
any qualification and shall ipso facto vacate office if and when the absent Director returns to the State in
which meeting of the Board are ordinarily held or the absent Director vacates office as a Director.

111. Casual Vacancy
Subject to the provisions of the Act and these Articles if the office of any Director is vacated before his term
of office will expire in the normal course, the resulting casual vacancy may be filled by the Board of Directors
at a meeting of the Board. Any person so appointed shall hold office only upto the date which the Director in
whose place he is appointed would have held office, If the vacancy has not occurred.



260

112. Additional Director
Subject to the provisions of the Act, the Board shall have power at any time and from time to time to appoint a
person or persons as an Additional Director or Directors. Such Additional Director shall hold office only upto
the date of the next Annual General Meeting of the Company, but shall be eligible for re-election in that
meeting as a Director, provided that the number of Directors and the Additional Directors together, shall not
exceed the strength fixed by the board.

PROCEEDINGS OF DIRECTORS

113. Meetings of Directors
The Board shall meet together at least once in every three months for the dispatch of business and may
adjourn and otherwise regulate their meetings and proceedings as they think fit. Notice in writing of every
meeting of the Board shall be given to every other Director. Unless otherwise determined from time to time
and any time by the consent of all the Directors for the time being in India, meeting of the Board shall take
place at the office.

114. Director may summon meeting
A Director may at any time, convene a meeting of the board.

115. Chairman
The Board may appoint a chairman of its meetings and determine the period for which he is to hold office, If
no such Chairman is appointed or if at any meeting of the Board the Chairman be not present within fifteen
minutes after the time appointed for holding the same the Director present shall Choose some of their member
to be Chairman of same meeting.

116. Quorum
The quorum for a meeting of the Board shall be determined from time to time in accordance with the
provisions of Section 287 of the Act, if a quorum shall not be present within fifteen minutes from the time
appointed for holding a meeting of the Board, it shall be adjourned until such date and time as the Chairman
of the Board shall appoint.

117. Power of quorum
A meeting of the board at which a quorum be present shall be competent to exercise all or any of the
authorities, powers and discretion by or under these Article for the time being vested or exercisable by the
Board.

118. How questions to be decided
Subject to the provisions of section 316, 372 (4) and 386 of the Act, questions arising at any meeting shall be
decided by a majority of votes, and in case of an equality of votes, the chairman shall have a second or casting
vote.

119. Power to appoint Committees and to delegate
The Board, may, subject to the provision of the Act, from time to time and at any time delegate any of its
powers to a committee consisting of such director or directors as it thinks fit, and may from time to time
revoke such delegation. Any committee so formed shall in the exercise of the powers so delegated, conform to
any regulations that may from time to time be imposed upon it by the Board.





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120. Proceedings of Committee
The Meeting and proceedings of any such committee consisting of two or more members shall be governed by
the provisions herein contained for regulating the meeting and proceedings of the Board so far as the same are
applicable there to, and are not superseded by any regulations made by the Board under the last preceding
Article.

121. When acts of a Director valid notwithstanding defective appointment etc.
Acts done by a person a director shall be valid, notwithstanding that it may afterwards be discovered that his
appointment was invalid by reason of any defect or disqualified or has terminated by virtue of any provisions
contained in the Act or in these Articles. Provided that nothing in this article shall be deemed to give validity
to acts done by a Director after his appointment has been shown to the Company to be invalid or to have
terminated.

122. Resolution without Board Meeting
Save in those cases where a resolution is required by Sections 262,292,297,316,372 (4)and 386 of the Act, to
be passed at a meeting of the Board , a resolution shall be as valid and effectual as it had been passed at a
meeting of the Board or Committee of the Board , as the case may be, duly called and constituted, if any, to
call the Directors, or to all the members of the Committee of the Board, as the case may be, then in Indian (not
being less in number than the quorum fixed for a meeting of the Board or Committee, as the case may be) and
to all other director of members of the Committee at their usual address in India, and has been approved by
such of them as are then in India or by a majority of such of them, as are entitled to vote on the resolution.

MINUTES

123. Minutes to be made
(1) The Board shall cause Minutes to be duly entered in books provided for the purposes;
(a) of the names of the Directors present at each meeting of the Board and of any Committee of the Board
and in the case of each resolution passed at the meeting, the names of the Directors, if any, dissenting
from or not concurring in the resolution;
(b) Of all order made by the Board and Committee of the board;
(c) Of all appointments of Directors and other officers of the Company; and
(d) Of all proceedings of General Meeting of the Company and of meeting of the Board Committee of the
Board.

The minutes of each meeting shall contain a fair and correct summary of the proceedings there at.
Provided that no matter need be included in any such Minutes which the Chairman of the meeting in his
absolute discretion is of opinion:

(a) is, or could reasonably be regarded as, defamatory of any persons;
(b) is irrelevant or immaterial to the proceedings;
(c) is detrimental to the interests of the Company.

(2) Any such Minutes if any meeting of the Board Meeting if purporting to be signed by the Chairman of
such meeting or by the Chairman of the next succeeding meeting shall be evidence of the matters stated in
such minutes.
The Minutes Books of General Meetings of the Company shall be kept at the office and shall be open to
inspection by members on business days between the hours of 10.30 A.M. and 05.30 P.M.




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POWERS OF DIRECTORS

124. General Power of Company vested in Directors
Subject to the provisions of the Act, the control of the Company shall be vested in the Board who shall be
entitled to exercise all such powers, and do all such acts and things as the company is authorized to exercise
and to, provided that the Board shall not exercise any power or do any act or thing which is directed or
required, whether by the Act or any other statute or by the Memorandum of the Company or by these Articles
or otherwise, to be exercised any such power or doing any such act or thing, the Board shall be subject to the
provisions in that behalf contained in the act or nay other statute or in the Memorandum of the Company or in
these Articles or in any regulations not inconsistent therewith duly made there under, including regulation
made by the Company in General Meeting, but no regulation made by the Company in general meeting shall
invalidate any prior act of the Board which would have been valid if that regulation had not been made.

MANAGING DIRECTORS

125. Power to appoint Managing Directors
Subject to the provisions of the Act. The Board may from time to time appoint one or more Directors to be
Managing Director or Managing Directors of the company either for a fixed terms not exceeding for a period
of five years for which he or they is or are to hold such office.

126. To what provisions be shall be subject
A Managing Director shall (subject to the provisions of any contract between him and the company) be
subject to the same provisions as to resignation and removal as the other Directors, and he shall, ipso facto and
immediately cease to be a Managing Director if he ceases to hold the office of Director from any cause.

127. Remuneration of Managing Director
Subject to the provisions of the Act a Managing Director shall receive such remuneration as may from time to
time be sanctioned by the company and may be by way of monthly payment or participation in profits or by
any or all of these modes or any other mode not expressly prohibited by the Companies Act.

128. Powers of Managing Director
Subject to the provisions of the Act in particular to the prohibition and restrictions contained in section 292
thereof the Board may from time to time entrust to and confer upon a Managing Director for the time being
such of the powers exercisable under these presents by the Directors as they may think fit, any may confer
such powers for such and to be exercised for such objects and purposes, and upon such terms and conditions
and with such restrictions as they think fit; and they may confer such powers either collaterally with or the
exclusion of, and in substitution for all or any of the powers of the Directors in that behalf, and may from time
to time to time revoke, withdraw, after or vary all or any of such power.

THE SEAL

129. Custody of Seal
The Board shall provide for the safe custody of the seal and the seal shall never be used except by the
authority previously given of the Board or a Committee of the Board authorized by the Board in that behalf
and two Directors at least and the Secretary of Company if any shall sign every instrument to which the seal is
affixed. Provided, nevertheless, that any instrument bearing the seal of the Company notwithstanding any
irregularity touching the authority of the Board to issue the same.




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ANNUAL RETURNS

130. Annual Returns
The Company shall comply with the provisions of section 159 and 161 of the act as to the making Annual
Returns.

DIVIDENDS AND RESERVES

131. Declaration of Dividend
Subject to the provisions of the Act the Company in General Meeting may declare dividends, but no dividend
shall exceed the amount recommended by the Board.

132. Interim Dividends
The Board may from time to time pay to the members such interim dividends as appear to it to be justified by
the profits of the Company.

133. Setting aside reserve out of profits
(1) Subject to the provisions of the Act. The Board may before recommending any dividend, set aside out of
the profits of the Company such sums as it thinks proper as a reserve or reserves which shall, at the
discretion of the Board be applicable for any purpose to which the profits of the Company may be
properly applied, including provisions for meeting contingencies or for equalising dividends; and pending
such application may, at the like discretion, either be employees in the business of the company as the
Board may from time to time think fit.
(2) The Board may also carry forward any profits which it may think prudent not to divide without setting
them aside as a reserve.

134. Calculation of Dividends
(1) Subject to the rights of persons, if any, entitled to share with special rights as to dividends, all dividends
shall be declared and paid according to the amounts paid or credited as paid on the shares in respect
whereof the dividend is paid, but if and so long as nothing is paid, upon any of the shares in the Company,
dividends may be declared and paid according to the amounts of the shares.
(2) No amount paid or credited as said on a share in advance of calls shall be treated for the purposes of this
regulation as paid on the share.
(3) All dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the
shares during any portion or portions of the period in respect of which the dividend is paid; but if any
share is issued on terms providing that it shall rank for dividend as from a particular date such share shall
rank for dividend accordingly.

135. Deduction of calls etc. from dividend
The Board may deduct from any dividend payable to any member all sums of money, if any, presently
payable by him to the Company on account of calls or otherwise in relation to the Shares of the Company.

136. Payment of dividend or bonus by distribution of specific assets
(1) Any general meeting declaring a dividend or bonus may direct payment of such dividend or bonus, wholly
or partly, by the distribution of specific assets, and the Board shall give effect to the resolution.
(2) Where any difficulty arises in regard to such distribution, the Board may settle the same as it thinks
expedient and in particular may issue fractional certificates and fix the value for distribution of such
specific assets or any part thereof and may determine that cash payments shall be made to any members



264

upon the footing of the value so fixed in order to adjust the rights of all parties and may vest any such
specific assets in trustees as may be seem expedient to the Board.

137. Payment of dividend by Cheque or warrant
(1) Any dividend, interest or other moneys payable in cash in respect of shares may be paid by Cheque or
warrant sent through the post directed to the registered address of the holder or, in the case or joint-
holders, to the registered address of that one of the joint holders who is first named on the register of
members, or to such person and to such address as the holder or joint holders may in writing direct.

(2) Every such Cheque or warrant shall be made payable to the order of the person to whom it is sent.

138. Receipts in case of Joint-holders
Any one of two or more joint holders of a share may give effectual receipts for any dividend bonuses or other
moneys payable in respect of such share.

139. Notice of declaration of dividend
Notice of any dividend that may have been declared shall be given to the persons entitled to share therein in
the manner mentioned in the Act.

140. Dividends not to bear interest
No dividend shall bear interest against the Company.

141. Unclaimed Dividends
(1) Where the Company has declared a dividend but which has not been paid or the dividend warrant in
respect thereof has not been posted within 30 days from the date of declaration to any shareholders to any
shareholders entitled to the payment of the dividend, the Company shall within seven days from the date
of expiry of the said period of 30 days, open a special account in that behalf in any scheduled bank called
account called Unpaid Dividend A/c of e-Zest Solutions Limited and transfer to the said account, the
total amount of dividend which remain unpaid or in relation to which no dividend has been posted.

(2) Any money transferred to the unpaid dividend account of the Company which remain unpaid or
unclaimed for a period of seven years from the date of such transfer, shall be transferred by the Company
to the general revenue account of the Central Government. A claim to any money so transferred to the
general revenue account may be preferred to the Central Government by the shareholders to whom the
money is due. No unclaimed or unpaid dividend shall be forfeited by the Board.

142. Capitalisation
Any General Meeting may resolve that any moneys, investments, or other assets forming part of the undivided
profits ( including profits or surplus moneys arising from realization of any capital assets of the Company) of
the Company standing to the credit of the Reserve Fund, or any Capital Redemption Reserve Fund, or any
other fund of the Company, or in the hands of the Company and available for dividend or representing
premiums received on the issue of shares and standing to the credit of the Share Premium Account, be
Capitalized.

143. Special Provision in reference to dividends
Any General Meeting, sanctioning or declaring a dividend in terms of these Articles, shall as regards payment
of such dividend, wholly or in part, have regard to and shall make the payment thereof in accordance with the
provisions of Section 205 of the act.



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INSPECTION

144. Inspection of accounts and books
(1) The Board shall from time to time determine whether and to what extent and at what times and places and
under what conditions or regulations, the accounts and books of the Company, or any of them, shall be
opened to the inspection of members not being Directors.

(2) No member (not being a Director) shall have any right of inspection any account or book or document of
the Company except as conferred by law or authorized by the Board or by the Company in general
Meeting

CAPITALISATION OF PROFITS

145. Capitalisation of profits and distribution thereof
(1) The Company in general meeting may, upon the recommendation of the Board resolve;

i. that it is desirable to capitalize any part of the amount for the time being standing to the credit of any of
the Companies reserve accounts, or to the credit of the profit and loss account , or otherwise available
for distribution ; and
ii. that such sum be accordingly set for distribution in the manner specified in clause (2) amongst the
member who would have been entitled thereto, if distributes by way of dividend and in the same
proportions.

(2) the sum aforesaid shall not be paid in cash but shall be applied subject to the provision contained in clause
(3), either in or towards.

(i) paying up any amounts for the time being unpaid on any shares held by such members respectively;
(ii) paying up in full, unissued shares or debentures of the company to be allotted and distribute , credited as
fully paid up to and amongst such members in the proportion aforesaid;
(iii) partly in the way specified in sub-clause (i) and partly in that specified in sub clause (ii);

(3) a share premium account and a redemption reserve fund may , for the purposes of this regulation only be
applied in the paying up of unissued shares to be issued to members of the Company as fully paid bonus
shares.

(4) The Board shall give effect to the resolution passed by the Company in pursuance of this regulation.

146. Appropriations, application and allotments of capitalised profits.
(1) Whenever such a resolution as aforesaid shall have been passed the Board shall:-

(a) make all appropriations and application of the undivided profits resolved to be capitalized thereby and
all allotments and issues of fully paid shares or debentures, if any; and
(b) generally do all acts and things required to give effect thereto

(2) The Board shall have full power:-
(a) to make such provisions, by the issue of fractional certificates or by payment in cash or otherwise as it
thinks fit for the case of shares or debentures becoming distributable in fractions; and also,
(b) to authorize any person to enter, on behalf of all the members entitled thereto, into an agreement with



266

the Company providing for the allotment to them respectively, credited as fully paid up, of any further
shares or debentures to which they may be entitled upon such capitalization, or (as the case may require)
for the payment by the Company on their behalf , by the application thereto of their respective
proportions of the Profits resolved to be capitalized of the amounts or any part of the amounts remaining
unpaid on their existing shares.

(3) Agreement made under such authority shall be effective and binding on all such members.

BOOKS AND DOCUMENTS

147. Books of accounts to be preserved
The books of accounts of the Company relating to a period of not less than eight years immediately preceding
the current year together with the vouchers relevant to any entry in such books of accounts shall be preserved
in good order.


148. Where to be kept
The books of accounts shall be kept at the Office or such other place in India as the Board think fit, and shall
be open to inspection by any Director during business hour.

149. Inspection of members
The Board shall from time to time determine whether and to what extent timed and places and under what
conditions or regulations the books of account and books and documents other than those referred to in Article
133(2) shall be open to the inspection of the members not being Directors; and no member (not being a
Director) shall have any right of inspecting any books of account or book or document of the Company except
as conferred by law or authorized by the Board of by the company in General Meeting.

150. Profit and loss account and Balance Sheet
At every Annual General Meeting the Board shall lay before the Company a Balance Sheet and Profit and
Loss Account made up in accordance with the provisions of Section 210 of the Act and such Balance Sheet
and Profit and Loss Account shall comply with the requirements of Sections 210, 211, 212, 215 and 216 of
Schedule VI to the Act so far as they are applicable to the company, but save as aforesaid, the Board shall not
be bound to disclose greater details of the result or extent of the trading and transaction of the Company than
they may deem expedient.

151. Annual Report of Directors
There shall be attached to every Balance Sheet laid before the Company a report by the Board Complying
with Section 217 of the Act.

152. Copies to be sent to members and others
A copy or every Balance Sheet (including the Profit and Loss Account the Auditors, Report and every
document required by law to be annexed or attached to the Balance Sheet) shall as provided by Section 219 of
the Act not less than twenty one days before the meeting be sent to every such member, debenture-holder
trustee and other person to whom the same is required to be sent by the said section.

153. Copies of Balance Sheets etc. to be filed
The Company shall comply with Section 220 of the Act as to filing copies of the Balance Sheet with the
Registrar.



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SERVICE OF NOTICE AND DOCUMENTS

154. How notice to be served on members
(1) A notice or other document may be given by the Company to any member either personally or by sending
it by post to him to his registered address or (if he has no registered address in India) to the address, if any
within India supplied by him to the Company for the giving of the notice to him.

(2) Where a notice or other document is sent by post:
(a) service thereof shall be deemed to be effected by properly addressing, prepaying and posting a letter
containing the notice or document, provided that where a member has intimated to the Company in
advance that notice or documents should be sent to him under a certificate of posting or by registered
post with or without acknowledgement due and had deposited with the Company a sufficient sum to
defray the expenses of doing so, service of the notice or document shall not be deemed to be effected
unless it is sent in the manner intimated by the member; and
(b) unless the contrary is proved, such service shall be deemed to have been effected:-
(i) in the case of a notice of a meeting at the expiration of forty-eight hours after the letter containing
the same is posted, and
(ii) in any other case, at the time at which the letter would be delivered in the ordinary course of
post.

155. Notice to members who have not supplied addresses
A notice or other document advertised in a newspaper circulating in the neighborhood of the office shall be
deemed to be duly served on the day on which the advertisement appears on every member of the Company
who has no registered address in India and has not supplied to the Company and address within India shall if
so required to do by the Company, supply the Company with an address in India for the giving of notices to
him.

156. Notice on joint-holders
A notice or other document may be served by the Company on the joint-holders of a share by giving the
notice to the joint-holder named first in the Register in respect of the share.

157. Notice to persons entitled by transmission
A notice or other document may be served by the Company on the persons entitled to a share in consequence
of the death or insolvency of a member by sending it through the post in a prepaid letter addressed to them by
name, or by the title of representatives of the deceased, or assignees to the insolvent or by any like
description, at the address in India, supplied for the purpose by the persons claiming to be so entitled, or, until
such an address has been so supplied, by giving the notice in any manner in which the same might have been
given if the death or insolvency had not occurred.

158. When notice may be given by advertisement
Any notice required to be given by the Company to the members or any of them and no expressly provided for
by these Articles or by the Act shall be sufficiently given by advertisement.

159. How to be advertised
Any notice required being or which may be given by advertisement shall be advertised once in one more
newspapers circulating in the neighborhood of the office.

160. When notice by advertisement deemed to be served



268

Any notice given by advertisement shall be deemed to have been given on the day on which the advertisement
shall first appear.

161. Transferee etc. bound by prior notices
Every person who by operation of law, transfer or other than what so ever shall become entitled to any share
shall be bound by every notice in respect of such share which previously to his name and address being
entered on the Register shall be duly given to the person form whom he derives his title to such share.

162. Notice valid through member deceased
Subject to the provisions of Article 150 any notice or document delivered or sent by post to or left at the
registered address of any member in pursuance of these Articles shall notwithstanding such member be then
deceased and whether or not the Company have notice of his decease, be deemed to have been duly served in
respect of any registered shares, whether held solely or jointly with other persons by such member, until some
other person be registered in his stead as the holder or joint-holder thereof and such service shall for all
purpose of these presents be deemed a sufficient service of such notice or document on his or her heirs,
executors or administrators and all persons if any jointly interested with him or her in any such share.

163. Service of process in winding up
Subject to the provisions of Section 497 and 509 of the Act, in the event of winding-up of the Company, every
member of the Company who is not for the time being in the neighborhood of the Office shall be bound,
within eight weeks after the assign of an effective resolution to wind up the Company voluntarily or the
making of an order for winding-up of the Company, to serve notice in writing on the Company appointing
some householder residing in the neighborhood of the office upon whom. All summonses notices, process,
orders and judgments in relation to or under the winding-up of the Company may be served and in default of
such nomination the Liquidator of the Company shall be at liberty on behalf of such member to appoint some
such person and service upon any such appointee whether appointed by the member or the Liquidator shall
be deemed to be good personal service on such member for all purpose, and where the Liquidator makes any
such member by advertisement in some daily newspaper circulating in the neighborhood of Office or by a
registered letter sent by post and addressed to such member at his address as registered in the Register and
such notice shall be deemed to be served on the day on which the advertisement appears or the letter would be
delivered in the ordinary course of the post. The provisions of this article shall not prejudice the right of the
Liquidator of the Company to serve any notice or other document in any other manner prescribed by the
Articles.

RECONSTRUCTION

164. Reconstruction
On any sale of the undertaking of the Company the Board or the Liquidators on a winding-up may, if
authorised by a special Resolution, accept fully paid or partly paid up shares, debentures or securities of any
other company, whether incorporated in India or not either then existing or to be formed for the purchase in
whole for in part of the property of the company, and the Board (if the profits of the Company permit) or the
Liquidators (in a winding-up) may distribute such shares or securities, or any other property of the Company
amongst the members without realization, or vest the same in tresses for them, and any Special Resolution
may provide for the distribution or appropriation of the cash, shares or other securities, benefit or property,
otherwise than in accordance with the strict legal right of the members or contributories of the Company, and
for the valuation of any such securities or property at such price and in such manner as the meeting may
approve and all holders of shares shall be bound to accept and shall be bound by any valuation or distribution
so authorized, and waive all rights in relation thereto, save only in case the Company is proposed to be or is in



269

the course of being would up such statutory rights (if any) under Section 494 of the Act as are incapable of
being varied or excluded by these Articles.

SECRECY CLAUSE

165. Secrecy Clause
Every Director, Manager, Secretary, Trustee for the Company its members or debenture-holder , member of a
committee, officer, servant, agent, accountant, or other person employed in or about the business of the
Company shall, if so required by the Board before entering upon his duties, sign a declaration pledging
himself to observe a strict secrecy respecting all transactions of the Company with its customers and the state
of accounts with individuals and in matters relating thereto, and shall by such declaration pledge himself hot
to reveal any foe the matters which may come to his knowledge in the discharge or by a court of law and
except so far as may be necessary in order to comply with any of the provisions in these Article contained.

166. No share-holder to enter the premises of the Company without permission
No member or other person (not being a Director ) shall be entitled to enter upon the property of the
Company or to inspect or examine the Companys premises or properties of the Company without the
permission of the board for either discovery of any information or details of the trading of the Company or
any matter which is or may be in the nature of a trade secret, mystery of trade, or secret process whatsoever
which may relate to the conduct of the business of the Company and which in the opinion of the Board it will
be against the interest of the Company.

WINDING-UP

167. Distribution of assets
If the Company shall wound up and assets available for distribution among the members as such shall be
insufficient to pay the whole of the paid up capital such shall be distributed so that as nearly as may be the
loses shall be borne by the members in proportion to the capital paid up or which ought to have been pad up
the commencement of the winding-up on the shares held by them respectively. And if in winding-up the assets
available for distribution among the members shall be more than sufficient to repay the whole of the capital
paid up at the commencement of the winding-up the excess shall be distributed amongst the members in
proportion to the capital at the commencement of the winding-up paid up or which ought to have been paid up
on the shares held by them respectively. But this article is to be without prejudice to the rights of the holders is
shares issued upon special terms and conditions.

168. Distribution of assets in specie
If the company shall would-up, whether voluntarily or other-wise the liquidators may, with the sanction of
special Resolution, divide among the contributories, in specie or kind any part of the assets of the company
any way with the line sanction, vest any part of the assets of the company in Trustees upon such trusts for the
benefit of the contributories or any of them as the liquidators, with the like sanction, shall think it.

INDEMNITY
169. Indemnity
Every Director, Manager, Secretary or Officer of the Company or any person (whether an officer of the
Company or not) employed by the Company as shall be indemnified out of the funds of the Company against
all liability incurred by him as such Director, Manager, Secretary or Officer or Auditor in defending any
proceedings, whether civil or criminal, in which judgment is given in his favor or in which he is acquitted, or
in connection with any application under Section 633 of the Act in which relies is granted to him by the Court.



270

SECTION XII: OTHER INFORMATION

1. MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts (not being contracts entered into in the ordinary course of business carried on by our
Company or entered into more than two years before the date of this Draft Red Herring Prospectus) which are
or may be deemed material have been entered or will be entered into by our Company. These contracts, copies
of which will be attached to the copy of the Red Herring Prospectus, delivered to the Registrar of Companies
for registration and also the documents for inspection referred to hereunder, may be inspected at our
Registered Office from 11.00 a.m. to 5.00 p.m. on Working Days from the date of the Red Herring Prospectus
until the Issue Closing Date.

Material contracts

1) Memorandum of Understanding dated October 7, 2011 entered into by the Issuer Company i.e. e-Zest
Solutions Limited with the Book Runner Lead Manager to the Issue Choice Capital Advisors
Private Limited.

2) Memorandum of Understanding dated October 10, 2011 entered into by the Issuer Company with
Bigshare Services Private Limited, to act as the Registrar to the Issue.

3) Tripartite Agreement dated September 5, 2011 between the CDSL, the Issuer Company and the
Registrar.

4) Tripartite Agreement dated September 20, 2011 between the NSDL, the Issuer Company and the
Registrar.

5) Agreement dated [] between our Company and [] as Bankers to the Issue.

6) Escrow Agreement dated [] between and the Escrow Collection Banks.

7) Syndicate Agreement dated [] between our Company, the BRLM and the Syndicate Members.

8) Underwriting agreement dated [] entered into by the Issuer Company with [] to act as the
underwriters to the Issue.

Material documents

1) Memorandum and Articles of Association of our Company as amended till date;

2) Certificate of Incorporation dated August 08, 2000 and Copy of Fresh Certificate of Incorporation
dated May 18, 2007, issued by Registrar of Companies, consequent to the change in the name of
company from e-Zest Solution Private Limited to e-Zest Solution Limited that is conversion of
Private Limited Company to Public Limited Company.

3) Memorandum and Articles of Associations of our Group Companies - e-Zest Infocom Pvt. Ltd., eZest
Infotech Pvt. Ltd. & LoftBpo Services Pvt. Ltd.- as amended from time to time.




271

4) Certificates of Incorporation issued by the Registrar of Companies, Maharashtra issued to our Group
Companies - e-Zest Infocom Pvt. Ltd., eZest Infotech Pvt. Ltd. & LoftBpo Services Pvt. Ltd..

5) Resolution of the Board dated August 20, 2011 authorising the Fresh Issue;

6) Shareholders resolution dated September 21, 2011 in relation to the Fresh Issue and other related
matters;

7) Copy of the Tax Benefits Certificate dated October 11, 2011 by M/s. Sajjan Kanodia & Co.,
Chartered Accountants.

8) Auditors report dated October 10, 2011 (as required by Part II of Schedule II of the Companies Act)
issued by M/s. Sajjan Kanodia & Co., Chartered Accountants, and mentioned in this Draft Red
Herring Prospectus together with copies of the balance sheet and profit and loss account for the period
ended September 30, 2011 of our Company;

9) Copies of annual reports of our Company for FY 2010-11, FY 2009-10, FY 2008-09, FY 2007-08 and
FY 2006-07;

10) Copies of annual reports of our Group Company e-Zest Infocom Private Limited for F.Y. 2010-11,
2009-10, 2008-09 and 2007-08;

11) Copies of annual reports of our Group Company Ezest Infotech Private Limited for F.Y. 2010-11,
2009-10, 2008-09 and 2007-08;

12) A Copy of the Project Report approved by the Board of Directors of the Issuer Company.

13) Consents of Auditors, Bankers to our Company, Book Running Lead Manager, Syndicate Members
[], Registrar to the Issue, Escrow Collection Banks [], Refund Banks [], Public Issue Account
Banks [], Domestic Legal Advisors to our Company, Credit Rating Agency (CARE), Directors of
our Company, the Company Secretary & Compliance Officer and Chief Financial Officer as referred
to in their respective capacities;

14) Copy of Agreement dated June 20, 2011 between the Company and Mr. Devendra Deshmukh to
appoint him as Managing Director of the company;

15) Leave and License Deed dated October 21, 2011 made by and between the Issuer Company and the
owner of the premises of the Registered Office of the Company- B-103, Pushp Vinod, S.V. Road,
Borivali (West), Mumbai- 400 092.

16) IPO grading report dated [] by [];

17) In-principle listing approvals dated [] and [] from the NSE and BSE, respectively;

18) Due diligence certificate dated November 07, 2011 to SEBI from the BRLM;




272

19) Legal Due Diligence Report dated November 7, 2011 from Mindspright Legal, the Legal Advisors to
our Company

20) SEBI observation letters dated [] and dated [] and our in-seriatim replies to the same dated[] and
[];

Any of the contracts or documents mentioned in this Draft Red Herring Prospectus may be amended or
modified at any time if so required in the interest of our Company or if required by the other parties, without
reference to the shareholders subject to compliance with applicable laws.

TIME AND PLACE AT WHICH THE CONTRACTS, TOGETHER WITH DOCUMENTS, WILL BE
AVAILABLE FOR INSPECTION FROM THE DATE OF OFFER DOCUMENT UNTIL THE DATE
OF CLOSING OF THE SUBSCRIPTION LIST:

e-Zest Solutions Ltd.
B-103, Pushp Vinod
S.V. Road
Borivali (West)
Mumbai-400092

Contact Info:
Mr. Divanshu Mittal
Company Secretary and Compliance Officer
Tel: +91-20-25459802/3
Fax: +91-20-25459804
E-mail : info@e-zest.net
URL : www.e-zest.net




273

DECLARATION

We, the Directors of the Company, hereby certify that all relevant provisions of the Companies Act, 1956, and
the guidelines issued by the Government of India or the Regulations issued by the Securities and Exchange
Board of India, established under Section 3 of the Securities and Exchange Board of India Act, 1992, as the
case may be, have been complied with and no statement made in this Draft Red Herring Prospectus is contrary
to the provisions of the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992 or rules
made or guidelines issued thereunder, as the case may be and that all approvals and permissions required to
carry on our business have been obtained, are currently valid and have been complied with.

We further certify that all the statements in this Draft Red Herring Prospectus are true and correct.

We accept no responsibility for statements made otherwise than in the Draft Red Herring Prospectus or in the
advertisements or any other material issued by or at the instance of the Issuer and that anyone placing reliance
on any other source of information would be doing so at his/ her own risk.

Signed by the Board of Directors, CEO and Compliance Officer of the Company:

1. Mr. Devendra Deshmukh
Managing Director

Sd/-

2. Mr. Hasmukh Mehta
Chairman and Independent Director

Sd/-

3. Mr. Ashish Gupta
Director

Sd/-

4. Mr. Amol Pande
Director

Sd/-

5. Mr. Sunil Dane
Director

Sd/-

6. Mr. Krishan Kumar Dwivedi
Independent Director

Sd/-

7. Ms. Anagha Jagade
Chief Financial Officer

Sd/-

8. Mr. Divanshu Mittal
Compliance Officer

Sd/

Date: November 07, 2011

Place: Mumbai