|
o
|
No
fee required.
|
|
þ
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
|
|
|
(1)
|
Title
of each class of securities to which transaction
applies: Common stock, par value $0.0001 per
share
|
|
|
(2)
|
Aggregate
number of securities to which transaction applies: 0 shares
(cash transaction)
|
|
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is
calculated and state how it was determined): Not
applicable.
|
|
|
(4)
|
Proposed
maximum aggregate value of transaction: $70,569,972(1)*
|
|
|
(5)
|
Total
fee paid: $2,166.50
|
|
£
|
Fee
paid previously with preliminary
materials:
|
|
£
|
Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid
previously. Identify the previous filing by registration statement
number,
or the form or schedule and the date of its
filing.
|
|
|
(1)
|
Amount
previously paid:
_________________________________
|
|
|
(2)
|
Form,
Schedule or Registration Statement
No.: ________________
|
|
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is
calculated and state how it was determined): Not
applicable.
|
|
|
(4)
|
Date
Filed: _________________
|
|
•
|
to
approve the “Acquisition Proposal” of IGC acting directly or indirectly
through one or more newly formed affiliates, consisting of the following
proposed acquisitions: a) acquisition of a 63% equity interest in
Sricon
Infrastructures, Limited (“Sricon”), b) the acquisition of convertible
preference shares, and a direct equity interest in Techni Bharathi
(“TBL”), c) the acquisition from Odeon Limited of convertible preference
shares of TBL, which when converted along with the convertible preference
shares purchased directly from TBL would result in IGC owning a 77%
equity
interest in TBL and d) the acquisition of a wind energy farm to be
built
by Chiranjjeevi Wind Energy Limited
(“CWEL”),
|
|
•
|
to
elect Sudhakar Shenoy and Suhail Nathani to IGC’s board of directors to
hold office as Class A directors for a period to expire at the fourth
annual meeting of stockholders;
|
|
•
|
to
adopt the IGC 2008 Omnibus Incentive Plan (“Stock Plan”);
and
|
|
•
|
to
approve any adjournments or postponements of the special meeting
to a
later date or dates, if necessary, for the purpose of soliciting
additional proxies.
|
|
•
|
to
approve the “Acquisition Proposal” of IGC acting directly or indirectly
through the IGC Group, consisting of the following proposed acquisitions:
a) acquisition of a 63% equity interest in Sricon Infrastructures,
Limited
(“Sricon”), b) the acquisition of convertible preference shares, and a
direct equity interest in Techni Bharathi (“TBL”), c) the acquisition from
Odeon Limited of convertible preference shares of TBL, which when
converted along with the convertible preference shares purchased
directly
from TBL would result in IGC owning a 77% equity interest in TBL
and d)
the acquisition of a wind energy farm to be built by Chiranjjeevi
Wind
Energy Limited (“CWEL”);
|
|
•
|
to
elect Sudhakar Shenoy and Suhail Nathani to IGC’s board of directors to
hold office as Class A directors for a period to expire at the fourth
annual meeting of stockholders;
|
|
•
|
to
adopt the IGC 2008 Omnibus Incentive Plan;
and
|
|
•
|
to
approve any adjournments or postponements of the special meeting
to a
later date or dates, if necessary, for the purpose of soliciting
additional proxies.
|
|
1
|
|
|
2
|
|
|
6
|
|
|
12
|
|
|
19
|
|
|
22
|
|
|
22
|
|
|
24
|
|
|
26
|
|
|
28
|
|
|
29
|
|
|
33
|
|
|
54
|
|
|
67
|
|
|
68
|
|
|
68
|
|
|
71
|
|
|
71
|
|
|
72
|
|
|
74
|
|
|
78
|
|
|
78
|
|
|
89
|
|
|
90
|
|
|
106
|
|
|
106
|
|
|
115
|
|
|
118
|
|
|
119
|
|
|
119
|
|
|
119
|
|
|
119
|
|
|
F-1
to F-105
|
|
|
120
|
|
|
138
|
|
|
158
|
|
|
175
|
|
|
196
|
|
|
105
|
|
|
212
|
|
|
215
|
|
•
|
“IGC,”
“we,” “our,” and “us” refers to India Globalization Capital, Inc. or its
wholly owned subsidiaries;
|
|
•
|
“IGC-M”
refers to the IGC wholly owned subsidiary incorporated in
Mauritius.
|
|
•
|
“Sricon”
refers to Sricon Infrastructures
Limited;
|
|
•
|
“TBL”
refers to Techni Bharathi Limited;
|
|
•
|
“Odeon”
refers to Odeon Limited;
|
|
•
|
“CWEL”
refers to Chiranjjeevi Wind Energy
Limited;
|
|
•
|
“IGC-Power”
refers to a wholly-owned subsidiary of IGC that will hold the wind
energy
farm being acquired from CWEL; and
|
|
•
|
“Transaction
Documents” means the documents appended as Annexes A-G and such other
documents as may be required in order to consummate the Acquisition
Proposal.
|
|
March
31, 2007
|
March
31, 2006
|
March
31, 2005
|
March
31, 2004
|
March
31, 2003
|
March
31, 2002
|
||||||||||||||||||
|
INR
Rate at end of period
|
43.1
|
44.48
|
43.62
|
43.40
|
47.53
|
48.83
|
|||||||||||||||||
|
1.
|
To
approve the “Acquisition Proposal” of IGC acting directly or indirectly
through the IGC Group, consisting of the following proposed acquisitions:
a) acquisition of a 63% equity interest in Sricon, b) the acquisition
of
convertible preference shares, and a direct equity interest in
Techni
Bharathi (“TBL”), c) the acquisition from Odeon Limited of convertible
preference shares of TBL, which when converted along with the convertible
preference shares purchased directly from TBL would result in IGC
owning a
77% equity interest in TBL and d) the acquisition of a wind
energy farm to be built by
CWEL.
|
|
2.
|
To
elect Sudhakar Shenoy and Suhail Nathani to IGC’s board of directors to
hold office as Class A directors for a period to expire at the fourth
annual meeting of stockholders.
|
|
3.
|
To
adopt the IGC 2008 Omnibus Incentive
Plan.
|
|
4.
|
To
approve any adjournments or postponements of the special meeting
to a
later date or dates, if necessary, for the purpose of soliciting
additional proxies.
|
|
1.
|
Attract
and retain qualified executives and other employees, and to provide
such
persons with an opportunity to acquire an equity interest in
us.
|
|
2.
|
Create
incentives designed to motivate our employees and employees of our
subsidiaries to significantly contribute to our growth and
profitability.
|
|
3.
|
Provide
our executives, directors, advisors and other employees and persons
who,
by their position, ability and diligence, are able to make important
contributions to our growth and profitability with an incentive to
assist
us in achieving our long-term
objectives.
|
|
1)
|
the
building of high quality road, airport, seaport, railroad and other
basic
infrastructure, and
|
|
2)
|
the
production of adequate sustainable energy, and in particular renewable
clean energy, to power the anticipated growth in the Indian
economy.
|
|
1)
|
high
projected growth rates,
|
|
2)
|
valuations
that management believes provide an arbitrage comparable to similar
public
companies in the Indian markets,
and
|
|
3)
|
a
potential “early well-funded mover” advantage for these companies to
become sector leaders, with U.S. level of corporate governance and
reporting.
|
|
•
|
Lane
capacity is insufficient and most highways are still two lanes or
less.
|
|
•
|
The
national highway system in India currently carries 40% of the total
traffic, but constitutes only two percent of the total road
network.
|
|
•
|
Seventy
percent of India’s population lives in rural areas and forty percent of
villages do not have access to all weather roads and remain cut off
during
the monsoon season.
|
|
•
|
Currently,
only one third of routine road maintenance needs are being
met.
|
|
•
|
By
the year 2011, the state and national highways will need to be widened
and
maintained at a cost of around $39
billion.
|
|
•
|
Sricon
currently has 2,932,159 shares of issued, fully diluted common
stock.
|
|
•
|
IGC
will purchase 351,840 shares from the Promoters (present owners)
of Sricon
for a total consideration of Indian Rupees 120,000,000 (approximately
$3.0
million and approximately $8.53 per
share).
|
|
•
|
IGC
will concurrently purchase 4,041,676 of newly issued shares from
Sricon
for Indian Rupees 1,030,000,000 (approximately $25.75 million and
approximately $6.37 per
share).
|
|
•
|
At
the end of the transaction Sricon will have approximately 6,973,835
shares
issued and outstanding on a fully diluted basis. Of this, IGC
will own about 63% or 4,393,516 shares. The promoters and
management of Sricon will own the remaining
shares.
|
|
•
|
Under
the terms of the SSPA, IGC has the right to execute the purchase
agreement
or assign the SSPA to a subsidiary. IGC expects to purchase the
shares through its Mauritius subsidiary
IGC-M.
|
|
•
|
The
promoters of Sricon and the management of IGC will provide customary
representations and warranties to each
other.
|
|
•
|
Mr.
R. L. Srivastava will be the Chairman of the board for a period of
five
years renewable through mutual
consent.
|
|
•
|
The
SHA provides for deferred contingent consideration payable to the
Promoters of Sricon in the form of shares of common stock (“Earn Out
Shares”) based on Sricon meeting certain earnings targets. The
targets and the number of Earn Out shares are set out as
follows:
|
|
FY
ending March 31,
|
2008
|
2009
|
2010
|
|
Revenue
|
$32
m
|
$95
m
|
$175
m
|
|
Earnings
|
$5.25
m
|
$15.5
m
|
$25.0
m
|
|
Earn
Out shares
|
139,477
|
139,477
|
139,477
|
|
•
|
If
Sricon’s earnings for a given fiscal year are equal to at least 85% of
such target, but are less than 100% of the target for that year,
the
Promoters shall receive a pro rated portion of the maximum share
award for
that fiscal year. If the earnings achieved in a fiscal year are
less than 85% of the target, then no Earn Out Shares will be
awarded.
|
|
•
|
TBL
and Odeon Share Purchase Agreement (SPA): The TBL and Odeon SPAs
set out the terms and conditions for IGC’s purchase of the common stock of
TBL and the preferred convertible debenture from Odeon. The
agreements are incorporated by reference and summarized
here:
|
|
•
|
TBL
currently has 4,287,500 shares of common stock issued and
outstanding.
|
|
•
|
Odeon
owns a preferred convertible debenture, which may be converted to
5,000,000 shares of common stock.
|
|
•
|
At
closing, IGC will purchase the
following:
|
|
•
|
7,150,000
shares of common stock from TBL for INR 275,000,000 (approximately
$6.9
million);
|
|
•
|
the
preferred convertible debenture from Odeon for $2.0 million;
and
|
|
•
|
new
convertible preferred shares (CPS) from TBL for INR 125,000,000
(approximately $3.13 million). The instrument will carry a dividend
of 6%
and may be converted to 2,100,000 shares of common
stock.
|
|
•
|
In
summary, at closing, there will be 18,537,500 shares issued and
outstanding on a fully diluted basis. Of these, IGC will own
approximately 14,250,000 shares, or approximately 77%, under the
assumption that IGC elects to convert both convertible
instruments.
|
|
•
|
Under
the terms of the SPAs, IGC has the right to execute the purchase
agreement
or assign the SPA to a subsidiary. IGC expects to execute the
purchases through its Mauritius subsidiary,
IGC-M.
|
|
•
|
The
promoters of TBL and the management of IGC will provide customary
representations and warranties to each
other.
|
|
•
|
The
promoters of Odeon will not provide any representations or warrantees
about TBL, but will provide customary warranties relating to
Odeon. The agreement with Odeon has a deadline of January 31,
2008, unless extended by mutual
consent.
|
|
•
|
TBL
Share Holders Agreement (SHA): The agreements are
incorporated by reference and summarized
here.
|
|
•
|
Mr.
V.C. Antony will be the Chairman of the
board.
|
|
•
|
Mr.
Jortin Antony (son of V. C. Antony) will be the managing
director.
|
|
•
|
The
TBL SHA provides for deferred contingent consideration payable to
the
Promoters of TBL in the form of shares of common stock (“TBL Earn Out
Shares”) based on TBL meeting certain earnings targets. The
targets and the number of TBL Earn Out shares are set out as
follows:
|
|
FY
ending
March
31,
|
2008
|
2009
|
2010
|
2011
|
2012
|
||||||||||||||
|
(In
millions of US dollars, except share data)
|
|||||||||||||||||||
|
Revenue
|
$ |
18.8
|
$ |
35.0
|
$ |
56.3
|
$ |
81.3
|
$ |
125.0
|
|||||||||
|
Earnings
|
$ |
2.6
|
$ |
4.0
|
$ |
5.6
|
$ |
8.1
|
$ |
12.5
|
|||||||||
|
TBL
Earn Out shares
|
140,800
|
265,800
|
265,800
|
265,800
|
265,800
|
||||||||||||||
|
•
|
If
TBL’s earnings for a given fiscal year are equal to at least 85% of such
target, but are less than 100% of the target for that year, the Promoters
shall receive a pro rated portion of the maximum share award for
that
fiscal year. If the earnings achieved in a fiscal year are less
than 85% of the target, then no TBL Earn Out Shares will be
awarded.
|
|
•
|
IGC
will acquire a 24-mega watt wind energy farm located in Karnataka,
India.
|
|
•
|
The
acquisition price is about INR 1,140,000,000 (approximately $28.5
m). The final price is subject to revision based on the prices
of major components at closing.
|
|
•
|
The
payments made to CWEL will be spread over 12
months.
|
|
•
|
CWEL
will install 96-250kw wind energy turbines. The wind energy
farm is expected to be fully operational between nine and twelve
months
after the first payment is made to
CWEL.
|
|
•
|
CWEL
will be responsible for all licenses and all government
clearances.
|
|
•
|
CWEL
will be contracted for the day-to-day operations, maintenance, and
security of the wind farm.
|
|
•
|
As
part of the maintenance contract, CWEL will guarantee a minimum
performance of 550,000 units of power per year plus or minus
10%. If the aggregate generation is lower than the guaranteed
level then CWEL will reimburse IGC by effectively buying the shortfall
at
the prevailing rate.
|
|
•
|
each
person known by us to be the beneficial owner of more than 5% of
our
outstanding shares of common stock;
|
|
•
|
each
of our executive officers, directors and our special
advisors; and
|
|
•
|
all
of our officers and directors as a
group.
|
|
Name
and Address of Beneficial Owner (1)
|
Number
of
Shares
of
Common
Stock
Owned
(2)
|
Percent
of
Common
Stock
Owned
|
||||||
|
Ranga
Krishna
|
350,000
|
2.5 | % | |||||
|
Ram
Mukunda
|
1,675,000 | (3) | 11.99 | % | ||||
|
Sudhakar
Shenoy
|
50,000
|
*
|
||||||
|
Suhail
Nathani
|
50,000
|
*
|
||||||
|
Larry
Pressler
|
25,000
|
*
|
||||||
|
P.G.
Kakodkar
|
12,500
|
*
|
||||||
|
Shakti
Sinha
|
12,500
|
*
|
||||||
|
Dr. Prabuddha
Ganguli
|
12,500
|
*
|
||||||
|
Dr. Anil
K. Gupta
|
25,000
|
*
|
||||||
|
The
Baupost Group, L.L.C.
|
1,066,800 | (4) | 7.6 | % | ||||
|
Fir
Tree, Inc.
|
1,383,000 | (5) | 9.9 | % | ||||
|
HBK
Investments L.P.
|
1,075,695 | (6) | 7.7 | % | ||||
|
D.B.
Zwirn & Co., L.P
|
1,485,404 | (7) | 10.63 | % | ||||
|
Andrew
M. Weiss, Ph.D
|
1,031,100 | (8) | 7.38 | % | ||||
|
Executive
officers and directors (4 persons)
|
2,125,000
|
15.21 | % | |||||
|
(1)
|
Unless
otherwise noted, the business address of each of the following is
4336
Montgomery Avenue, Bethesda, Maryland,
20814.
|
|
(2)
|
Unless
otherwise noted, the nature of the ownership is common stock of the
Company.
|
|
(3)
|
Includes
425,000 shares owned by Mr. Mukunda’s wife, Parveen
Mukunda.
|
|
(4)
|
Based
on a Schedule 13G jointly filed with the SEC on February 13, 2007
by The
Baupost Group, L.L.C. (“Baupost”), SAK Corporation and Seth A.
Klarman. SAK Corporation is the Manager of Baupost, a
registered investment adviser. Seth A. Klarman, as the sole Director
of
SAK Corporation and a controlling person of Baupost, may be deemed
to have
beneficial ownership of the securities beneficially owned by Baupost.
The
securities reported as being beneficially owned by Baupost include
securities purchased on behalf of various investment limited partnerships.
The address for each of the foregoing parties is 10 St. James Avenue,
Suite 2000, Boston, Massachusetts
02116.
|
|
(5)
|
Based
on an amended Schedule 13G jointly filed with the SEC on February
14, 2007
by Sapling, LLC (“Sapling”), Fir Tree Recovery Master Fund, L.P (“Fir Tree
Recovery”) and Fir Tree, Inc. (“Fir Tree”). Fir Tree is the
investment manager of Sapling and Fir Tree Recovery. As disclosed
in the
amended Schedule 13G, Sapling and Fir Tree Recovery are the beneficial
owners of 969,378 shares of common stock (6.9%) and 413,622 shares
of
common stock (3%), respectively. Fir Tree may be deemed to
beneficially own all of the shares held by Sapling and Fir Tree Recovery
(1,383,000 shares) as a result of being the investment manager of
Sapling
and Fir Tree Recovery. The address for each of the foregoing
parties is 4336 Montgomery Avenue, Bethesda, Maryland
20814.
|
|
(6)
|
Based
on a Schedule 13G jointly filed with the SEC on June 15, 2007 by
HBK
Investments L.P., HBK Services LLC, HBK Partners II L.P., HBK Management
LLC, and HBK Master Fund L.P. (collectively, “HBK”). The
address for HBK is 300 Crescent Court, Suite 799, Dallas, Texas
75201.
|
|
(7)
|
Based
on an amended Schedule 13G jointly filed with the SEC on October
15, 2007
by D.B. Zwirn & Co., L.P.,D.B. Zwirn Special
Opportunities Fund, Ltd., D.B. Zwirn Special Opportunities Fund,
L.P., DBZ
GP, LLC, Zwirn Holdings, LLC, and Daniel B. Zwirn, each of which
may be
deemed the beneficial owner of (i) 582,286 shares of common
stock (4.17%) owned by D.B. Zwirn Special Opportunities Fund, L.P.
and
(ii) 903,118 shares of common stock (6.46%) owned by
D.B. Zwirn Special Opportunities Fund, Ltd. (each entity
referred to in (i) through (iii) is herein referred to as a
“Fund” and, collectively, as the “Funds”). D.B. Zwirn & Co., L.P.
is the manager of each of the Funds, and consequently has voting
control
and investment discretion over the common stock held by each of the
Funds.
Daniel B. Zwirn is the managing member of and thereby controls, Zwirn
Holdings, LLC, which in turn is the managing member of and thereby
controls D.B. Zwirn & Co., L.P. The address of each of D.B.
Zwirn & Co., L.P., DBZ GP, LLC, Zwirn Holdings, LLC, and Daniel
B. Zwirn is 745 Fifth Avenue, 18th Floor, New York, NY
10151.
|
|
(8)
|
Based
on a Schedule 13G jointly filed with the SEC on August 20, 2007 by
Weiss
Asset Management LLC, Weiss Capital, LLC and Andrew M. Weiss Ph.
D., each
of which may be deemed the beneficial owner of
(i) 299,668 shares of common stock (2.14%) owned by Weiss
Capital, LLC and (ii) 731,432 shares of common
stock (5.23%) owned by Weiss Asset Management
LLC (each entity referred to in (i) through (ii) is
herein referred to as a “Fund” and, collectively, as the “Funds”). Andrew
M. Weiss Ph. Dais the managing member of each of the Funds, and
consequently has voting control and investment discretion over the
common
stock held by each of the Funds. The address of each of Weiss Asset
Management LLC, Weiss Capital, LLC and Andrew M. Weiss Ph. D. is
29
Commonwealth Avenue, 10th Floor, Boston, Massachusetts
02116.
|
|
•
|
No
governmental entity shall have enacted, issued, promulgated, enforced
or
entered any statute, rule, regulation, executive order, decree, injunction
or other order (whether temporary, preliminary or permanent) that
is in
effect and that has the effect of making the acquisition illegal
or
otherwise prohibiting consummation of the acquisition substantially
on the
terms contemplated by the Share Holders and Purchase
Agreement.
|
|
•
|
The
IGC stockholders shall have approved the transactions outlined in
the
Acquisition Proposal and holders of 20% or more of the shares common
stock
of IGC issued in IGC’s initial public offering and outstanding immediately
before the closing shall not have exercised their rights to convert
their
shares into a pro rata share of the trust
fund.
|
|
•
|
Sricon
and TBL and their stockholders must have performed in all material
respects all obligations that are to be performed by each of them
under
the Share Holders and Purchase
Agreements.
|
|
•
|
IGC,
Sricon, TBL, Odeon and CWEL’s respective representations and warranties
must be true and correct in all material respects as of the date
of
completion of the acquisition.
|
|
•
|
No
action, suit or proceeding shall exist that is reasonably likely
to
prevent the acquisition or cause rescission of the acquisition following
closing.
|
|
•
|
IGC
shall have obtained all consents, waivers, permits and approvals
required
in connection with the consummation of the acquisition if failure
to
obtain the same would be reasonably expected to cause a material
adverse
effect.
|
|
•
|
There
must not have occurred, since the date of the respective SPAs, any
material adverse effect on IGC, Sricon, TBL or
CWEL.
|
|
•
|
Sricon
and TBL must have provided to IGC (i) the stockholder list of Sricon
and
TBL (indicating the category of equity participation of residents
and
non-resident Indians) after the proposed acquisition of Shares by
IGC; and
(ii) a certificate from a chartered accountant indicating the “fair value”
of the Shares calculated in accordance with the Guidelines for Valuation
of Shares and Fixation of Premia (“Indian Pricing
Guidelines”).
|
|
•
|
The
current stockholders of Sricon and TBL must have obtained written
consents
from all banks, financial institutions, lenders to Sricon and TBL
as may
be required for change in shareholding of Sricon and TBL in form
and
substance satisfactory to IGC.
|
|
•
|
Sricon
and TBL must have provided details of the bank accounts of Sricon
and TBL
maintained with the authorized dealer to
IGC.
|
|
•
|
Each
of IGC’s, Sricon’s and TBL’s obligations to effect the acquisition is
subject to the satisfaction or waiver of specified conditions before
completion of the Acquisition.
|
|
•
|
Each
of IGC’s and CWEL’s obligations to effect the acquisition is subject to
the satisfaction or waiver of specified conditions before completion
of
the Acquisition.
|
|
•
|
All
or part of each of the SSPA and SPAs may be terminated at any time
prior
to the consummation of the Acquisition, whether before or after receipt
of
the IGC stockholder approval, by mutual written consent of IGC on
the one
hand and each of Sricon, TBL, Odeon, and Promoters, as the case may
be on
the other hand.
|
|
•
|
The
Odeon SPA will terminate on January 31, 2008 unless extended by mutual
agreement between IGC and Odeon.
|
|
•
|
The
agreements between IGC and CWEL will terminate on March 31, 2008
unless
extended by mutual agreement between IGC and
CWEL.
|
|
•
|
Ranga
Krishna, our chairman, will remain as the chairman of
IGC.
|
|
•
|
Ram
Mukunda will be the executive chairman, chief executive officer and
president.
|
|
•
|
Richard
Prins will remain as a director on the
board.
|
|
•
|
Sudhakar
Shenoy and Suhail Nathani, if elected, will remain as directors on
the
board.
|
|
•
|
Ravindra
Lal Srivastava will remain as the chairman and managing
director.
|
|
•
|
Sankataprasad
Srivastava (brother of R. L. Srivastava) will remain as a
director.
|
|
•
|
Indravatidevi
Srivastava (wife of R.L. Srivastava) will remain as a
director.
|
|
•
|
Ram
Mukunda, who is currently the chief executive officer of IGC, will
be
elected to the board of Sricon.
|
|
•
|
Richard
Prins, who is a director on the board of IGC, will be elected to
the board
of Sricon.
|
|
•
|
Velankalathil
Chandy Antony will remain as the
chairman.
|
|
•
|
Jortin
Antony (son of V.C. Antony) will remain as the managing
director.
|
|
•
|
George
Thomas will remain as a director.
|
|
•
|
Ram
Mukunda, who is currently the chief executive officer of IGC, will
be
elected to the board of TBL.
|
|
•
|
Richard
Prins, who is a director on the board of IGC, will be elected to
the board
of TBL.
|
|
(Amounts
in US Dollars, except share data and as stated
otherwise)
|
From
Inception
(April 29, 2005) to March 31, 2006 |
Year
Ended
March 31, 2007 |
Six
Months Ended September 30, 2006
|
Six
Months Ended September 30, 2007
|
||||||||||||
|
Interest
income
|
$ |
210,584
|
$ |
3,171,818
|
$ |
1,580,124
|
$ |
1,298,063
|
||||||||
|
Income
(loss) before income taxes
|
(398,840 | ) |
2,302,855
|
1,284,755
|
71,935
|
|||||||||||
|
Provision
for Income taxes
|
(45,000 | ) | (784,858 | ) | (437,600 | ) | (24,604 | ) | ||||||||
|
Net
income (loss)
|
(443,840 | ) |
1,517,997
|
847,155
|
47,331
|
|||||||||||
|
Weighted
average shares outstanding – basic and diluted
|
3,191,000
|
13,974,500
|
13,974,500
|
13,974,500
|
||||||||||||
|
Net
income (loss) per share – basic and diluted
|
$ | (0.14 | ) | $ |
0.11
|
$ |
0.06
|
$ |
0.00
|
|||||||
|
March
31, 2006
|
March
31, 2007
|
September
30, 2006
|
|||||||||
|
ASSETS
|
|
|
|
||||||||
|
Investments
held in trust fund
|
$ |
65,825,016
|
$ |
66,104,275
|
$ |
67,091,690
|
|||||
|
LIABILITES
|
|||||||||||
|
Common
stock subject to possible conversion
|
12,762,785
|
12,762,785
|
12,762,785
|
||||||||
|
Total
stockholders’ equity
|
$ |
50,170,702
|
$ |
52,923,699
|
$ |
52,971,030
|
|||||
|
Year
Ended
|
Six
months ended
|
|||||||||||||||||||||||||||
|
(Amounts
in Thousand US Dollars except share data and as stated
otherwise)
|
March
31, 2003
|
March
31, 2004
|
March
31, 2005
|
March
31, 2006
|
Mar31,
2007
|
September
30, 2006
|
September
30, 2007
|
|||||||||||||||||||||
|
Revenue
including interest and other income
|
$ |
4,580
|
$ |
15,298
|
$ |
11,600
|
$ |
11,134
|
$ |
10,770
|
$ |
4,462
|
$ |
7,294
|
||||||||||||||
|
Income
before income taxes
|
320
|
646
|
907
|
668
|
778
|
232
|
1,059
|
|||||||||||||||||||||
|
Income
taxes
|
(69
|
) |
(199
|
) |
(363
|
) |
(186
|
) |
(368
|
) |
(58
|
) |
(328
|
) | ||||||||||||||
|
Net
Income
|
251
|
446
|
544
|
482
|
410
|
174
|
731
|
|||||||||||||||||||||
|
Earning
per share - basic and diluted
|
$ |
0.12
|
$ |
0.11
|
$ |
0.19
|
$ |
0.16
|
$ |
0.14
|
$ |
0.06
|
$ |
0.25
|
||||||||||||||
|
Weighted
average number of shares outstanding
|
95,200
|
183,259
|
2,932,159
|
2,932,159
|
2,932,159
|
2,932,159
|
2,932,159
|
|||||||||||||||||||||
|
As
of
|
|||||||||||||||||||||||
|
(Amounts
in Thousand US Dollars)
|
March
31, 2003
|
March
31, 2004
|
March
31, 2005
|
March
31, 2006
|
March
31, 2007
|
September
30, 2007
|
|||||||||||||||||
|
ASSETS
|
|
|
|
|
|
||||||||||||||||||
|
Accounts
receivables
|
$ |
234
|
$ |
2,223
|
$ |
2,128
|
$ |
2,083
|
$ |
2,751
|
$ |
6,574
|
|||||||||||
|
Unbilled
receivables
|
357
|
984
|
974
|
2,980
|
2,866
|
2,442
|
|||||||||||||||||
|
Inventories
|
43
|
71
|
154
|
248
|
71
|
146
|
|||||||||||||||||
|
Property
and equipment, net
|
1,461
|
3,098
|
3,424
|
4,347
|
4,903
|
4,977
|
|||||||||||||||||
|
BOT
Project under progress
|
-
|
0
|
0
|
1,584
|
3,080
|
-
|
|||||||||||||||||
|
LIABILITES
|
-
|
||||||||||||||||||||||
|
Short-term
borrowings and current portion of long-term debt
|
-
|
359
|
5,103
|
3,868
|
3,646
|
3,570
|
|||||||||||||||||
|
Due
to related parties
|
217
|
1,553
|
1,724
|
1,604
|
2,264
|
1,744
|
|||||||||||||||||
|
Long-term
debt, net of current portion
|
404
|
1,089
|
1,278
|
1,855
|
2,182
|
2,479
|
|||||||||||||||||
|
Other
liabilities
|
462
|
1,267
|
1,307
|
697
|
1,913
|
896
|
|||||||||||||||||
|
Total
stockholders’ equity
|
$ |
1,189
|
$ |
2,822
|
$ |
2,760
|
$ |
3,740
|
$ |
4,289
|
$ |
5,400
|
|||||||||||
|
Year
Ended
|
Six
months ended
|
|||||||||||||||||||||||||||
|
(Amounts
in Thousand US Dollars, except share data and as stated
otherwise)
|
March
31, 2003
|
March
31, 2004
|
March
31, 2005
|
March
31, 2006
|
March
31, 2007
|
September
30, 2006
|
September
30, 2007
|
|||||||||||||||||||||
|
Revenue
including interest and other income
|
$ |
13,145
|
$ |
8,773
|
$ |
9,922
|
$ |
2,850
|
$ |
4,866
|
$ |
505
|
$ |
5,542
|
||||||||||||||
|
Income
(loss) before income taxes
|
722
|
(2,609 | ) | (3,823 | ) | (2,369 | ) |
401
|
(867 | ) |
2,812
|
|||||||||||||||||
|
Income
taxes
|
322
|
(63 | ) |
515
|
62
|
135
|
12
|
(83 | ) | |||||||||||||||||||
|
Net
(loss)/income
|
400
|
(2,672 | ) | (3,308 | ) | (2,307 | ) |
536
|
(855 | ) |
2,729
|
|||||||||||||||||
|
Earnings
(loss) per share
|
||||||||||||||||||||||||||||
|
Basic
|
$ |
0.09
|
$ | (0.62 | ) | $ | (0.77 | ) | $ | (0.54 | ) | $ |
0.13
|
$ | (0.20 | ) | $ |
0.62
|
||||||||||
|
Diluted
|
$ |
0.09
|
$ | (0.62 | ) | $ | (0.77 | ) | $ | (0.54 | ) | $ |
0.13
|
$ | (0.20 | ) | $ |
0.34
|
||||||||||
|
Weighted
average number of shares outstanding
|
||||||||||||||||||||||||||||
|
Basic
|
4,287,500
|
4,287,500
|
4,287,500
|
4,287,500
|
4,287,500
|
4,287,500
|
4,287,500
|
|||||||||||||||||||||
|
Diluted
|
4,287,500
|
4,287,500
|
4,287,500
|
4,287,500
|
4,287,500
|
4,287,500
|
8,037,500
|
|||||||||||||||||||||
|
As
of
|
||||||||||||||||||||||||
|
(Amounts
in Thousand US Dollars)
|
March
31, 2003
|
March
31, 2004
|
March
31, 2005
|
March
31, 2006
|
March
31, 2007
|
September
30, 2007
|
||||||||||||||||||
|
ASSETS
|
|
|
|
|
|
|||||||||||||||||||
|
Cash
and cash equivalents
|
$ |
200
|
$ |
107
|
$ |
83
|
$ |
69
|
$ |
1,208
|
$ |
100
|
||||||||||||
|
Inventories
|
4,728
|
4,922
|
4,459
|
4,182
|
1,284
|
1,784
|
||||||||||||||||||
|
Prepaid
and other assets
|
1,777
|
2,070
|
1,765
|
1,275
|
1,231
|
798
|
||||||||||||||||||
|
Property,
plant and equipment (net)
|
3,622
|
3,985
|
3,463
|
2,417
|
2,265
|
2,352
|
||||||||||||||||||
|
LIABILTIES
|
||||||||||||||||||||||||
|
Short
term borrowings and current portion of long-term loan
|
1,495
|
6,614
|
6,291
|
8,125
|
6,079
|
-
|
||||||||||||||||||
|
Trade
payable
|
3,348
|
2,738
|
3,341
|
987
|
1,502
|
3,168
|
||||||||||||||||||
|
Long
term debts, net of current portion
|
4,883
|
2,892
|
3,897
|
3,656
|
2,333
|
3,870
|
||||||||||||||||||
|
Advance
from customers
|
1,488
|
2,755
|
3,057
|
2,997
|
1,877
|
884
|
||||||||||||||||||
|
Total
Stockholders' equity
|
$ |
2,927
|
$ |
320
|
$ | (3,032 | ) | $ | (5,438 | ) | $ | (4,895 | ) | $ | (1,504 | ) | ||||||||
|
•
|
Fluctuations
in revenue due to seasonality: For example, during the monsoon
season, the heavy rains slow down road building and during the summer
months the winds are not strong enough to power the wind
turbines. This results in uneven revenue and operating results
over the year.
|
|
•
|
Commencement,
completion and termination of contracts during any particular
quarter.
|
|
•
|
Additions
and departures of key personnel.
|
|
•
|
Claims
filed against the contractee for delays and changes in scope, among
others, can sometimes enter arbitration and take time to
settle. This could result in a tightening of working
capital.
|
|
•
|
Strategic
decisions made by us and our competitors, such as acquisitions,
divestitures, spin-offs, joint ventures, strategic investments and
changes
in business strategy.
|
|
•
|
we
do not achieve the perceived benefits of the Acquisition as rapidly
as, or
to the extent anticipated by, financial or industry analysts;
or
|
|
•
|
the
effect of the Acquisition on our financial statements is not consistent
with the expectations of financial or industry
analysts.
|
|
•
|
The
number of our stockholders voting against the Acquisition
Proposal.
|
|
•
|
Competition
in the road building and energy
sectors.
|
|
•
|
Legislation
by the government of India.
|
|
•
|
General
economic conditions and the Indian growth
rates.
|
|
•
|
Our
ability to win licenses, contracts and
execute.
|
|
•
|
approve
the Acquisition Proposal,
|
|
•
|
adopt
the IGC 2008 Employee, Directors and Consultant Stock Option
Plan,
|
|
•
|
elect
two members to the board of IGC,
and
|
|
•
|
adopt
the Adjournment Proposal for adjourning or postponing the special
meeting
to a later date.
|
|
•
|
has
unanimously determined that the Acquisition Proposal is fair to and
in the
best interests of IGC and its
stockholders;
|
|
•
|
has
unanimously determined that the aggregate fair market value of the
Acquisition Proposal will exceed 80% of our net assets at the time
of the
Acquisition;
|
|
•
|
has
unanimously approved and declared advisable the Acquisition Proposal,
the
election of two individuals to the board of IGC, the 2008 Stock Option
Plan Proposal, and the Adjournment
Proposal;
|
|
•
|
unanimously
recommends that IGC common stockholders vote “FOR“ the
Acquisition Proposal;
|
|
•
|
unanimously
recommends that IGC common stockholders vote “FOR” the
Stock Plan Proposal;
|
|
•
|
unanimously
recommends that IGC common stock holders vote “FOR” the
election of Messr. Shenoy and Nathani to the board of IGC ;
and
|
|
•
|
unanimously
recommends that IGC common stockholders vote “FOR“ the
adjournment proposal.
|
|
•
|
You
can vote by signing and returning the enclosed proxy card. If you
vote by
proxy card, your “proxy,” whose name is listed on the proxy card, will
vote your shares as you instruct on the proxy card. If you sign
and return the proxy card, but do not give instructions on how to
vote
your shares, your shares will be voted, as recommended by our board,
“FOR”
the approval of the Acquisition Proposal, “FOR” the 2008 Stock Option Plan
Proposal, “FOR” the election of the proposed nominees to the board of IGC
and “FOR” the Adjournment Proposal.
|
|
•
|
You
can vote by telephone or the Internet by following the telephone
or
Internet voting instructions that are included with your proxy card.
If
you vote by telephone or the Internet, you should not return the
proxy
card. The deadline for voting by telephone or electronically is
9:30 a.m. Eastern Time on _________________,
2008.
|
|
•
|
You
can attend the special meeting and vote in person. We will give you
a
ballot when you arrive. However, if your shares are held in the name
of
your broker, bank or another nominee, you must get a proxy from the
broker, bank or other nominee. That is the only way we can be sure
that
the broker, bank or nominee has not already voted your
shares.
|
|
•
|
You
may send another proxy card with a later
date,
|
|
•
|
You
may notify Ram Mukunda, our CEO, in writing before the special meeting
that you have revoked your proxy, with such written notification
addressed
to us at India Globalization Capital, Inc. 4336 Montgomery
Avenue, Bethesda, Maryland, 20814,
or
|
|
•
|
You
may attend the special meeting, revoke your proxy and vote in
person.
|
|
1.
|
acquire
a total of 63% of the issued and outstanding securities of Sricon
Infrastructure for around $29m in cash, this transaction will be
in two
parts:
|
|
•
|
we
will purchase a 58% equity interest in Sricon, on a fully diluted
basis,
directly from Sricon for about $26m
and
|
|
•
|
we
will purchase an additional 5% equity interest in Sricon, on a
fully
diluted basis, from the promoters of Sricon for about
$3m;
|
|
2.
|
acquire
a total of 77% of the issued and outstanding securities of Techni
Bharathi
(TBL) for around $12m. This transaction will be in three
parts:
|
|
•
|
for
approximately $6.9 m, we will purchase a 38.7% equity interest
directly
from TBL,
|
|
•
|
for
$2 m, we will purchase from Odeon Limited, a holder of TBL securities,
a
convertible preferred debenture, which may be converted to approximately
a
26.9% equity interest in TBL (IGC intends to exercise the conversion
of
this instrument),
|
|
•
|
for
approximately $3.13 m, we will purchase directly from TBL a new
convertible preferred stock, which may be converted to 11.3% equity
interest of TBL.
|
|
3.
|
pursuant
to the Wind Farm Purchase Agreement, IGC will fund the development
of a
24-mega watt wind energy farm. IGC will acquire 100% of the
farm. CWEL is the contractor that will be responsible for the
development and construction of the energy
farm.
|
|
•
|
our
top down analysis and why the selected industries are
attractive;
|
|
•
|
high
growth prospects for the industries and the opportunities they
present;
|
|
•
|
the
specific acquisitions and why they are
attractive;
|
|
•
|
valuation
and potential discount to public market multiples;
and
|
|
•
|
the
management teams and their commitment to corporate governance, and
the
ability of the company to potentially comply with SOX
404.
|
|
Indian
Roads and Highways
|
||||||||
|
Category
|
Length
(miles)
|
%
|
||||||
|
Expressways
|
124
|
*
|
||||||
|
National
Highways
|
41,352
|
2 | % | |||||
|
State
Highways
|
79,488
|
4 | % | |||||
|
Major
District Roads
|
291,870
|
14 | % | |||||
|
Rural
Roads
|
1,645,650
|
80 | % | |||||
|
Total
Length
|
2,058,485
|
|||||||
|
*less
than 1%
|
||||||||
|
•
|
Lane
capacity is insufficient and most highways are still two lanes or
less.
|
|
•
|
A
quarter of all highways are congested to the point that truck traffic
is
greatly impeded.
|
|
•
|
Currently,
only one third of routine road maintenance needs are being
met.
|
|
•
|
Seventy
percent of India’s population lives in rural areas and forty percent of
villages do not have access to all weather roads and are cut off
during
the monsoon season.
|
|
•
|
In
urban centers the dramatic growth in vehicle ownership (around 15%
a year
during the past decade) has reduced rush hour speeds to less than
10 mph
in the central areas of major
cities.
|
|
•
|
The
continued anticipated growth in the India economy will only exacerbate
these trends unless significant new capital is deployed
quickly.
|
|
Indian
Road and Highway Assets
|
|||||||
|
Source:
World Bank (WB)
|
Period
2001-2011 Investment
|
Period
2011-2021 Investment
|
|||||
|
(Amounts
in USD millions)
|
|||||||
|
Expressways
|
$ |
6,742
|
$ |
15,730
|
|||
|
National
Highways:
|
|||||||
|
Widening/maintenance
|
$ |
23,596
|
$ |
25,157
|
|||
|
Expansion
of NH system
|
$ |
3,371
|
$ |
4,045
|
|||
|
State
Highways:
|
|||||||
|
Widening/maintenance
|
$ |
15,730
|
$ |
25,843
|
|||
|
Expansion
of SH system
|
$ |
1,124
|
$ |
2,247
|
|||
|
Total
|
$ |
50,562
|
$ |
73,022
|
|||
|
•
|
The
NHAI identifies the end points and creates plans for a toll road,
and
solicits bids for these roads.
|
|
•
|
The
bidders must show prior experience, technical expertise, financial
strength, appropriate inventory of equipment, experienced personal
and
logistics support among other factors, to qualify as a viable
bidder.
|
|
•
|
Once
technically qualified the financial bids are opened and
awarded.
|
|
•
|
the
potential bidder can ask the government to subsidize the cost of
building
the highway by asking for concessions,
or
|
|
•
|
the
potential bidder can subsidize the government by offering to share
the
toll revenue, or
|
|
•
|
the
bidder can offer to do neither.
|
|
1)
|
tax
incentives on income from designated infrastructure
projects;
|
|
2)
|
deregulation
of complimentary industries that are essential to such
projects;
|
|
3)
|
independent
government oversight for the bidding process;
and
|
|
4)
|
fast
track clearance for foreign investors in qualifying
projects.
|
|
•
|
The
National Highways Act, 1956 has been amended to permit private
entrepreneurs to undertake National Highway (NH) projects on a Build
Operate and Transfer (BOT), sometimes referred to as Build Own Operate
and
Transfer (BOOT), basis and collect tolls. Under this Act, a simplified
procedure has been prescribed for acquisition of land for the building,
maintenance, management or operation of highways and separate provisions
have been made for the levy and collection of fees for both public
and
private funded highways.
|
|
•
|
State
legal framework: The Indian Toll Act, 1851, makes it possible for
State Governments to levy and collect tolls on any road or bridge
that has
been made or repaired at the expense of the Central Government or
any
State Government. However, the Act still needs to be amended by respective
State Governments to allow the private sector to levy and collect
tolls on
State roads and bridges. Some State Governments have amended the
Act – for
example Uttar Pradesh and Madhya Pradesh, and others have taken legal
steps in order to promote private sector participation. In
addition to amending the Indian Toll Act, some states (e.g. Andhra
Pradesh, Gujarat, etc.) have taken steps to enact a uniform law for
infrastructure development.
|
|
1)
|
Automatic
approval for foreign equity investments up to 100 per cent, and foreign
commercial borrowing to the extent of 30 per cent of the project
cost.
|
|
2)
|
Granting
road building the status of an
“Industry.”
|
|
3)
|
Exemption
from import duty on identified high quality construction plant and
equipment, including duty free import of bitumen (used to make
“asphalt”).
|
|
4)
|
The
restriction on the maximum equity holding by a foreign company in
an
Indian joint venture has been
lifted.
|
|
•
|
Sricon
is one of a few companies in India that has the expertise to construct
and
overhaul high temperature cement
plants;
|
|
•
|
Sricon
is also one of a few companies with expertise in the construction
of
jetties for overhauling ships on sea
ports;
|
|
•
|
Sricon
has expertise in the mining of coal and iron ore;
and
|
|
•
|
Sricon
is an ISO 9001:2000 accredited
company.
|
|
Indicative
Customer list
|
|
National
Highway Authority of India (NHAI)
|
|
National
Thermal Power Corporation (NTPC)
|
|
Maharashtra-
PWD, Gujarat- PWD, Orrisa- PWD, MP- PWD/RDA, among
others.
|
|
•
|
Customers:
Over the past 10 years Sricon has qualified in all
states in
India and has worked in several, including Maharashtra, Gujarat,
Orissa
and Madhya Pradesh. The National Highway Authority of India
(NHAI) awards contracts on a national level (interstate highways)
and the
National Thermal Power Corporation (NTPC) awards contacts for the
civil
works associated with power plants. NCL awards mining contracts.
Intra-state contracts are awarded by agencies within the state. The
table
titled “Indicative Customer List” sets out some of Sricon’s present and
former customers. In the table, MP is the state of Madhya
Pradesh and PWD stands for Public Works Department and RDA stands
for Road
Development Authority. Each state and some cities have a
PWD/RDA and Sricon is registered across India and is qualified to
bid on
contracts anywhere in India.
|
|
•
|
Human
Resources: Sricon currently has a team of 282 technical and
skilled individuals and deploys a labor force of around 600 unskilled
individuals. It is located in the center of India, with easy access
to all
major metros around the country.
|
|
•
|
Strategic
differentiation: Sricon obtains all of its work through a
process of bidding with agencies of the Indian federal, state, and
local
governments. Over the past 10 years, Sricon has created core competencies
that differentiate it from its competition. Sricon established
a national reach and an expertise in the building of jetties and
docks at
river and sea ports. It also established an expertise in the
building and maintenance of high tech chimneys and high temperature
cement
plants, as well as mining of coal, limestone and iron ore. It then
established a national presence and a brand in road maintenance and
building, including the equipment and processes that today has resulted
in
brand equity among its key customers. Sricon has a track record
of successful projects that in the aggregate establishes its technical
qualifications on most future projects. From a technical
qualifications perspective, management believes that Sricon is well
positioned to specialize in certain areas, consistently win contracts
in
the road, highway sector, mining, construction of airports, sea ports
and
rapidly scale its operations, provided that it gets an adequate influx
of
capital.
|
|
•
|
Contract
bidding process: In order to create transparency,
the Indian government has centralized the process for awarding contracts
for the building of inter-state roads. The process is as
follows:
|
|
•
|
At
the “federal” level, as an example, the National Highway Authority of
India (NHAI) puts out a Statement of Work. The statement of
work has a detailed description of the work to be performed as well
as the
time frame.
|
|
•
|
Two
proposals are submitted, the first sets out technical capabilities,
prior
experience, specialized machinery and manpower, among other criteria
and
the second proposal sets out a financial
bid.
|
|
•
|
The
NHAI evaluates the technical bids and short lists technically qualified
companies.
|
|
•
|
The
short list of technically qualified companies are then invited to
place a
financial bid and show financial strength through revenue, net worth,
and
balance sheet. The financial bids are opened and typically the lowest
bid
wins the contract.
|
|
•
|
The
process of bidding on a contract is capital intensive on the contractor
as
it must have the following financial resources: 1) earnest money
deposit
to show financial strength of between 2% to 10% of the project cost,
2)
performance guarantee of between 5% and 10%, 3) working capital and
4)
capital for plant and machinery.
|
|
•
|
Technical
expertise, stable of equipment combined with financial resources
can
enable the company to bid on large highway construction contracts
as well
as the building of airports and sea ports, where the environment
is
frequently less competitive, technical expertise is greater and the
margins are larger.
|
|
•
|
The
financial qualifications for bidding on larger projects are also
determined by a limit that NHAI places on its contractors. As
the contractor executes larger highways, the ceiling is
lifted. For example, currently Sricon’s ceiling is fairly
high. It can bid on highway construction projects worth $114
million each, if it has the adequate financial resources. As
and when it executes a $114 million highway successfully, the ceiling
will
be lifted. We believe that the current ceiling is a competitive
advantage, as Sricon can bid on highway, airport and sea port construction
projects in the $100 million range, providing substantial growth
opportunities.
|
|
•
|
Management: Sricon
is currently a traditional Indian family-owned and managed business
that
is transitioning to a professionally run business. The officers
and directors of the business have over a decade of road building
and
heavy construction experience. They have led the company from a
small subcontractor, to a medium sized business. Our board of
directors, after evaluating over 150 companies and associated management
teams in India, believe that the management of Sricon, in particular
its
leadership team, is in large part poised to be successful in what
we
expect will be a meteoric raise in road building and BOT
activity. We expect to combine Sricon’s extensive in-country
experience and road building expertise with our strategic, financing,
structuring, and business process experience to lead the company
in an
exciting and dynamic environment. The leadership of Sricon is set
out
below:
|
|
•
|
Mr.
Rabindralal B. Srivastava (54) is Founder and Chairman. In 1974,
he started his career in Larsen and Toubro (L&T), one of India’s
premier engineering and construction companies. In 1994, he
became a civil engineering sub-contractor to L&T, as Vijay
Engineering. He worked as a sub-contractor for L&T in
Haldia, West Bengal and Tuticorin in South India among
others. Under his leadership, Vijay Engineering expanded to
include civil engineering and construction of power plants, water
treatment plants, steel mills, sugar plants and mining. In
1996, Mr. Srivastava founded Srivastava Construction Limited, which
in
2004 changed its name to Sricon Infrastructure to address the larger
infrastructure needs in India like highway construction. He merged
Vijay
Engineering and Sricon in 2004. Mr. Srivastava graduated with a
BSc. from Banaras University in
1974.
|
|
•
|
Mr.
Srivastava founded Hi-tech Pro-Oil Complex in 1996. The company
is involved in the extraction of soy bean
oil.
|
|
•
|
He
founded Aurobindo Laminations Limited in 2003. The company
manufactures laminated
particleboards.
|
|
•
|
Mr.
Abhay Wakhare (36) has been the General Manager of Finance and
Accounting and the company secretary since 2004 where he is responsible
for finance, accounting, human resources, and is the corporate secretary
of the company. Mr. Wakhare has broad experience, having worked in
several
industries. From 2002-2004 he was the General Manager Finance, for
the
ammunitions manufacturing division of the Eros Group of companies.
From
1999-2002, he was an entrepreneur having founded a perfume company.
From
1996-1999, he was the chief executive officer of Disani Agro Limited,
a
$50m pesticide and herbicide manufacturer. From 1994-1996, he was
the
Assistant General Manager Finance, at Hindustan Lever. Mr.
Wakhare’s education and qualifications are as follows: Bachelor
of Commerce, 1990, Masters of Commerce, 1992, Nagpur University.
1993
Indian Institute of Cost Accountants. 1993, Chartered Financial
Analyst. 1993, Bachelor of Law, Pune
University. MBA, 1994, SIMB, Pune. Masters in Law
1996, Osmaniya University. MSc. Finance, 1997,
Business School of Hyderabad.
|
|
•
|
Mr.
Ajay Dhiman, (40), is Project Manager. He joined
Sricon in 2006 and is responsible for the planning and oversight
of
highway construction. From 1994 to 2006, he held various
positions including as the AE-Superintendent with the Border Road
Organization, which is responsible for the construction and maintenance
of
all border roads in India. Mr. Dhiman graduated in 1994 from
the Associate Member Institute of Engineers, Delhi with the equivalent
of
a B.E. (civil).
|
|
•
|
S.K.
Dubey, (39), is General Manager (Projects). Since
1995, he has been responsible for Planning & Execution of Civil &
Mechanical Engineering Projects. From 1992 to 1995, he was a
Project Engineer with Reva Engineering Industries Pvt. Ltd. New Delhi.
Mr.
Dubey graduated from Pune University in 1990 with a
BE.
|
|
•
|
Gross
margins: Over the past two years Sricon borrowed money in order to
buy
heavy construction equipment, which in turn has allowed it to improve
gross margin and position itself for the future. We expect to
continue to purchase plant and machinery in order to further increase
gross margins. Its gross margins for FY 2005, FY 2006, and FY
2007 were approximately 19.2%, 21.9% and 23.6%,
respectively.
|
|
•
|
EBITDA
margins: Sricon’s EBITDA margins for FY 2005, 2006 and FY 2007 were
approximately 11.2%, 10.7% and 13.1%,
respectively.
|
|
•
|
Depreciation:
There is a significant difference in the way that IGAAP treats
depreciation and the way USGAAP treats depreciation. Under
Indian accounting standards, companies depreciate assets over much
longer
periods. For example, buildings are depreciated over 58 years
and 25 years in IGAAP and USGAAP respectively. Other
differences include vehicles, furniture, and office equipment, which
are
depreciated over 20 years and 5 years in IGAAP and USGAAP
respectively. This creates a difference in the earnings
reported under IGAAP and USGAAP. Earnings will be reported in
USGAAP subsequent to the
Acquisition
|
|
•
|
Interest:
Sricon pays an average of 13.5% interest on its loans. In addition,
it
pays an average of
16.5% interest on plant and
equipment that it leases. Not including lease payments, Sricon
paid $312 thousand, $389 thousand and $533 thousand in interest for
FY
2005, 2006 and 2007, respectively.
|
|
•
|
Sricon’s
earnings for FY 2005, 2006, and 2007 are about $544 thousand, $482
thousand and $410 thousand, respectively. The decline in
earnings over the past three years has been due to the increase in
finance
costs. It is our belief that by lowering the cost of capital
and providing liquidity to the company, there will be a substantial
improvement in earnings.
|
|
•
|
The
projected revenue for the fiscal year ending March 31, 2008 is around
$33
million with after tax earnings of around $5.3
million.
|
|
•
|
The
projected revenue for the fiscal year ending March 31, 2009 is around
$92
million with after tax earnings of around $14.8 million, with the
increase
from 2008 expected to come from increased execution of the contracts
into
which Sricon has already entered.
|
|
•
|
Sricon
has a backlog of contracts to be completed worth approximately $195
million not including the BOT. The major contracts are as
follows:
|
|
•
|
for
the construction of the Seoni-Lakhanadaon section of National Highway
number seven (NH-7) valued at around $18.25 million over the next
eighteen
months,
|
|
•
|
for
the construction of the Seoni-Mandala section of NH-7 valued at around
$19.25 million over the next eighteen
months,
|
|
•
|
for
the construction and expansion of a part of the Nagpur to Hyderabad
section of NH-7 valued at around $35 million over the next 21
months,
|
|
•
|
the
Northern Coal Limited contract for evacuation and partial mining
of coal
valued at around $62.5 million over the next 36 months,
and
|
|
•
|
three
cement plant contracts with a total back log of around $60 million
over 36
months.
|
|
•
|
At
the end of FY 2009 (March 31, 2009), we anticipate that the backlog
of
current contracts will be around $69.25 million. The following
shows the projected revenue, by project, of the backlogged work for
fiscal
years 2008 and 2009, and the projected earnings from these projects
in
total:
|
|
First
half FY 2008 April 1-September 30, 2007
(Actual)
|
Second
half FY 2008 (October 07-March 2008)
|
FY
2008 (ending
March
31, 2008)
|
FY
2009
(ending
March
31, 2009)
|
||||||||||||
|
Rajeshree
cement plant
|
$ |
0.00m
|
$ |
0.75m
|
$ |
0.75m
|
$ |
5.00m
|
|||||||
|
Rajula
cement plant
|
$ |
1.61m
|
$ |
4.45m
|
$ |
6.06m
|
$ |
7.50m
|
|||||||
|
Avapur
cement plant
|
$ |
2.00m
|
$ |
3.20m
|
$ |
5.20m
|
$ |
7.50m
|
|||||||
|
Northern
coal limited
|
$ |
0.40m
|
$ |
8.31m
|
$ |
8.71m
|
$ |
20.0m
|
|||||||
|
Part
of NH 7- bridge
|
$ |
0.00m
|
$ |
0.00m
|
$ |
0.00m
|
$ |
11.25m
|
|||||||
|
Part
of NH-7
|
$ |
2.85m
|
$ |
7.25m
|
$ |
10.1m
|
$ |
13.75m
|
|||||||
|
Seoni-Lakhadaon
HH-7
|
$ |
0.00m
|
$ |
1.00m
|
$ |
1.00m
|
$ |
13.75m
|
|||||||
|
Seoni-Mandala
HH-7
|
$ |
0.00m
|
$ |
1.00m
|
$ |
1.00m
|
$ |
13.75m
|
|||||||
|
Other
Income
|
$ |
0.43m
|
$ |
0.43m
|
|||||||||||
|
Projected
revenue
|
$ |
7.29m
|
$ |
25.96m
|
$ |
33.25m
|
$ |
92.5m
|
|||||||
|
Projected
earnings
|
$ |
5.30m
|
$ |
14.8m
|
|||||||||||
|
•
|
Short
Term Margin Expansion: We project an improvement
in earnings margins from 3-5% to between 14-18% on a post tax basis
for
the following reasons:
|
|
•
|
Typically,
Sricon pays between 1% and 2% a month more on raw materials because
it
does not have the cash to pre-pay or pay vendors on a current
basis. Adequate capital provides leverage with vendors that
results in purchasing power. Sricon expects to reduce its
overall cost of raw materials, which would result in an increase
in
margins of about 5%.
|
|
•
|
Sricon
expects to become more vertical by adding machinery like crushers,
which
would allow Sricon to make its own aggregate. This increases
cost efficiency and productivity, which translates into added
margin. It is estimated that this will result in an overall
improvement in margins of approximately
3%.
|
|
•
|
Sricon
expects to reduce its overall cost of capital. It expects to reduce
its
interest rate from an average 13.5% to around 9% through an improved
balance sheet resulting from the infusion of capital from the acquisition
and the ability to access less expensive lending sources in the United
States. It also expects to reduce the cost of
leasing equipment by purchasing plant and machinery. We project
an increase in margins of between 5-7% from a reduction of the overall
cost of capital.
|
|
TBL
Indicative Customer list
|
|
National
Highway Authority of India (NHAI)
|
|
Konkan
Railway Corporation and the Southern Railway.
|
|
Karnataka-
PWD, Kerala- PWD, Assam- PWD, Tamilnadu PWD, among
others.
|
|
National
Thermal Power Corporation.
|
|
Cochin
International airport Limited
|
|
•
|
Customers:
Over the past 10 years, TBL has focused on four states:
Karnataka, Tamilnadu, Kerala and Assam. The table titled “TBL Indicative
Customer List” sets out some of TBL’s present and former
customers.
|
|
•
|
Human
Resources: TBL currently has a team of 110 technical and
skilled individuals and deploys a labor force of around 250 unskilled
individuals. It is located in the south of India, with easy access
to all
major Indian metropolitan areas.
|
|
•
|
Strategic
differentiation: TBL obtains all of its work through a
process of bidding with agencies of the Indian federal, state and
local
governments. Over the past 25 years, TBL has created core competencies
that differentiate it from the competition. It has core
competencies in the construction of highways, irrigation projects
and
railroads. From a technical qualifications perspective,
management believes that TBL is well positioned to specialize in
certain
areas and consistently win contracts in the road, highway, irrigation,
railroad and power sectors and rapidly scale its operations, provided
that
it gets an adequate influx of
capital.
|
|
•
|
Management: TBL
is currently a traditional Indian family-owned and managed business
that
is transitioning to a professionally run business. The officers
and directors of the business have over a decade of road building
and
heavy construction experience. They have led the company from a
small sub-contractor, to a medium sized business. Our board of
directors, after evaluating over 150 companies and associated management
teams in India, believe that the management of TBL, in particular
its
leadership team, is in large part poised to be successful in what
we
expect will be a significant raise in road building, BOT and heavy
construction activity. We expect to combine TBL’s extensive
in-country experience with IGC’s strategic, financing, structuring, and
business process experience to lead the company in an exciting and
dynamic
environment. The leadership of TBL is set out
below:
|
|
•
|
Mr.
V.C Antony (76) is Chairman. Mr. Antony brings over 50
years of experience in the construction of highways, bridges, dams,
railroads and offshore platforms. He is the founder of TBL and became
its
Chairman in 1991. In 1976 he became Founder, Chairman and
Managing Director of Bhagheeratha Engineering. In 1990 he took it
public
on the Bombay Stock Exchange. Under his leadership,
Bhagheeratha grew to be one of the 10 largest construction companies
in
India. He expanded Bhagheeratha into the Middle East,
specifically Iraq, UAE, Qatar and Yemen. Mr. Antony retired as
the Managing Director in 1997. Mr. Antony became the South Zone
Chairman of the Confederation of Indian Industry (CII) in
1991. He is currently on the board of the Lakeshore Hospital
and Research Centre in Kerala,
India.
|
|
•
|
Mr.
Jortin Antony (40) is the son of V.C. Antony. He has
been the Managing Director of TBL since 2000. Prior to that he
held various positions at Bhagheeratha starting as a management trainee
in
1991. From 1997 to 2000 he was the Director of Projects at
Bhagheeratha. In 2003, Mr. Jortin Antony was awarded the Young
Entrepreneur Award from the Rashtra Deepika. He graduated with
a B.Eng, in 1991, from Bangalore Institute of Technology, University
of
Bangalore.
|
|
•
|
Mr.
Benoi Madhavan (44) joined Techni Bharathi Limited as General
Manager (Technical) in December 2006. He has been responsible
for preparing bids, budgets and technical monitoring of
contracts. From February 2004 to December 2006, he was the
Deputy General Manager in Aarvee Associates, Hyderabad, a company
engaged
as a consultant to the National Highways Authority of India
(NHAI). From 1998 to 2004, he was with TBL as Manager
(Contracts & Projects). Mr. Madhavan graduated in 1987 from the
University of Calicut, Kerala with a BEng in Civil
Engineering. He is a member of the Institution of Engineers and
the Indian Road Congress.
|
|
•
|
Mr.
Alex Antony (40) is a cousin of Jortin Antony. He has
been with TBL since 1995. Since 2004, he has been Vice
President (Contracts), responsible for contract administration and
co-ordination of various projects of the company. From 1995 –
2004, he was Vice President (Operations). From 1992 – 1995, he
worked as General Manager, Kairali Orchids Private Limited a floriculture
business. Mr. Alex Antony graduated in 1987 from Gandhi University,
Kerala, India.
|
|
•
|
Mr.
M Santhosh Kumar (41) has been with TBL since
1991. Since 2002, he has been the Deputy Manager (Finance and
Accounting). From 2000 to 2002, he was the Marketing Executive
for Techni Soft (India) Limited, a subsidiary of Techni Bharathi
Limited. From 1991 to 2000, he held various positions at TBL in
the Finance and Accounting department. From 1986 to 1991, he
worked as an accountant in the Chartered Accounting firm of Balan
and
Company. In 1986, Mr. Santhoshkumar graduated with a BA in
Commerce from Gandhi University, Kerala,
India.
|
|
•
|
Gross
Margins: For FY 2005, 2006 and 2007, TBL’s gross margins were
($1.1 million), ($0.3 million) and $1.7 million,
respectively.
|
|
•
|
EBITDA
margins: TBL’s EBITDA for FY 2005, 2006 and FY 2007 were approximately
($2.4 million), ($0.9 million) and $1.2 million,
respectively.
|
|
•
|
Interest:
TBL pays an average of 14% interest on its loans. In addition, it
pays an
average of 16% on plant and equipment that it leases. Not
including lease payments, TBL paid $1.9 million, $1.5 million and
$1.1
million in interest for FY 2005, 2006 and 2007,
respectively. As a percentage of revenue interest payment in FY
2005, 2006 and FY 2007 were about 21%, 67% and 26%,
respectively. It is our belief that by appropriately reducing
the leverage and reducing the cost of capital, TBL will be able to
increase its profitability.
|
|
•
|
Bank
Loans: TBL has been restructuring and continues to restructure its
debt. In FY 2005, FY 2006 and FY 2007 the long-term component
of debt was $3.9 million, $3.7 million and $2.3 million,
respectively. TBL’s total liabilities at FYE 2006, FYE 2007 and
September 30, 2007 were approximately $16 million, $12 million and
$8
million, respectively. The reduction of was achieved through :
1) the sale of real estate assets, 2) the sale of shares to Odeon
and 3)
discounts obtained from banks for one time
settlements.
|
|
•
|
TBL’s
earnings for FY 2005, 2006, and 2007 were about ($3.3 million), ($2.3
million) and $0.5 million, respectively. It is our belief that
by lowering the cost of capital and providing liquidity to the company,
there will be a substantial improvement in
earnings.
|
|
•
|
The
projected revenue for the fiscal year ending March 31, 2008 is around
$16
million with after tax earnings of around $3.23
million.
|
|
•
|
The
projected revenue for the fiscal year ending March 31, 2009 is around
$28
million with after tax earnings of around $4
million.
|
|
•
|
TBL
has a backlog of contracts to be completed of approximately $53
million. The major contracts are as
follows:
|
|
•
|
for
the partial construction of NH 54 in Assam, valued around $36 million
over
the next eighteen months,
|
|
•
|
for
the partial construction of the Tiruneivi road, valued at around
$11
million over the next eighteen months,
and
|
|
•
|
for
the construction of runways at the Cochin International Airport,
valued at
around $6.5 million over the next 18
months.
|
|
•
|
The
following is a projection of the revenue and earnings of TBL, based
on the
current back log, and IGC funding, through fiscal year
2009:
|
|
First
half FY 2008
April
1-September 30, 2007 (Actual)
|
Second
half FY 2008 (October 07-March 2008)
|
FY
2008 (ending March 31, 2008)
|
FY
2009 (ending March 31, 2009)
|
||||||||||||
|
(In
millions of US dollars)
|
|||||||||||||||
|
Anuva
Anganali road
|
$ |
0.35
|
$ |
0.00
|
$ |
0.30
|
$ |
0.00
|
|||||||
|
Cochin
International Airport
|
$ |
2.50
|
$ |
0.00
|
$ |
1.50
|
$ |
5.00
|
|||||||
|
NH
54 Assam road
|
$ |
0.00
|
$ |
0.00
|
$ |
0.00
|
$ |
6.50
|
|||||||
|
NH
54 Assam road (JV)
|
$ |
0.00
|
$ |
4.00
|
$ |
4.00
|
$ |
12.50
|
|||||||
|
Tirunelvi
road
|
$ |
0.00
|
$ |
6.50
|
$ |
6.50
|
$ |
4.25
|
|||||||
|
Other
Income
|
$ |
2.69
|
$ |
0.00
|
$ |
3.63
|
$ |
0.00
|
|||||||
|
Projected
revenue
|
$ |
5.54
|
$ |
10.50
|
$ |
16.04
|
$ |
28.25
|
|||||||
|
Projected
earnings
|
$ |
3.23
|
$ |
3.98
|
|||||||||||
|
•
|
Typically,
TBL pays between 1 and 3 percent a month more on raw materials because
it
does not have the cash to pre-pay or pay vendors on a current
basis. Adequate capital provides leverage with vendors that
result in purchasing power, and an anticipated increase in margin
of an
estimated 5%.
|
|
•
|
TBL
expects to add plant and machinery enhancing productivity and resulting
in
an estimated margin improvement of around
3%.
|
|
•
|
In
FY 2007, TBL’s interest payments were around 26% of revenue. We
expect to decrease interest costs through a progressive improvement
of the
balance sheet, reduced debt levels resulting from the infusion of
capital
from IGC and our ability to access less expensive lending sources
in the
United States. We expect these efforts to result in margin improvement
of
approximately 5%.
|
|
•
|
We
expect to increase G&A in the short term by an additional 3% of
revenue.
|
|
•
|
In
determining the valuation of Sricon and TBL, we took into consideration
several factors including their access to the Indian capital
markets. Both companies had private equity firms interested in
them. The infrastructure sector in India has received a lot of
liquidity from large private equity firms and both these companies
were in
active dialogue with private equity firms. We concluded that we
were bidding against private equity
firms.
|
|
•
|
We
assessed through our contacts in private equity approximate valuations
that similar companies would receive. We then looked at what we
considered to be comparable companies that were trading in the Indian
stock market. Some of these included the following Indian
companies:
|
|
•
|
B.L
Kashyap, Madhucon, Sadbhav Engineering, JMC Projects, Patel Engineering,
Simplex, Hindustan Construction, Gammon India, Nagarjuna Construction
and
IVRCL Infrastructure and Projects
Limited.
|
|
•
|
We
determined that this group of Indian infrastructure companies was
trading
at an average FYE 2009 P/E ratio of between 15 and 23 and 20.1 as
determined on October 11, 2007.
|
|
•
|
We
also made an observation that the infrastructure companies with
specialized civil engineering skills commanded higher market multiples,
as
did companies with revenue in excess of $500 million. Nodia
Toll, while not a peer, is a pure play company with a focus on BOTs
and
its market multiple is significantly
higher.
|
|
•
|
Both
Sricon and TBL have specialized skills (cement factory, coal mining,
sea
ports, airports, civil engineering of high temperature chimneys and
cooling towers, etc.) and Sricon has experience with
BOTs. Further, both have fairly high earnings visibility for
FYE 2009 based on their backlog of
orders.
|
|
•
|
Our
strategy is to inject enough capital into Sricon and TBL and leverage
their experience in the construction of highways, seaports, railroads
and
airports. We believe that this will significantly enhance their
value and further enhance their competitive
advantage.
|
|
•
|
Further,
these acquisitions allow us to value the companies collectively and
not
individually, as we can combine them at a future date, which we believe
may produce economies of scale.
|
|
•
|
We
also took into consideration that we were acquiring a controlling
interest
in these companies, which we found to be difficult in India and in
our
experience carries a control premium with respect to
valuation.
|
|
•
|
The
geographic coverage offered by the two companies is of strategic
importance as the logistics will allow us to create a portfolio of
BOTs in
highways and power plants, which would then fetch market multiples
and
returns that are significantly
higher.
|
|
•
|
Based
on the backlog, market reputation of both companies, potential for
very
high growth and potential for building a portfolio of BOTs, we negotiated
a valuation for each of the companies. After several rounds of
negotiations, the parties agreed that our offer was fair and we determined
it was in the best interests of our
stockholders.
|
|
•
|
Based
on the projected earnings inclusive of other income, for the current
FYE
ending March 31, 2008 of around $5.3 million, Sricon was valued at
around
8.6 times earnings.
|
|
•
|
Based
on the average earnings of FYE 2007 and projected earnings of FYE
2008,
the price earnings multiple would be around
16.
|
|
•
|
Based
on the projected 2009 earnings, the price earnings ratio would be
around
3.1
|
|
•
|
We
believe that the fair market value based on market multiples and
on the
back log of orders is between $196 million and $252
million. This is based on the projected earnings of around $14
million for FYE 2009 and market multiples of 14 and 18. As we
are purchasing around 63% of Sricon, our share of the fair value
would be
between $123 million and $159
million.
|
|
•
|
We
believe that we are providing our stockholders an arbitrage between
public
and private multiples.
|
|
•
|
Based
on the projected earnings inclusive of other income, for the current
FYE
ending March 31, 2008, of around $3.23 million, TBL was valued at
around
4.8 times earnings (3.7 times earnings assuming that only the Odeon
convertible is converted, resulting in 74%
ownership)
|
|
•
|
Based
on the average earnings of FY 2007 and FY 2008, the price earnings
multiple would be around 8.3 (6.4 assuming that only the Odeon convertible
is converted resulting in 74%
ownership)
|
|
•
|
Based
on the projected 2009 earnings, the price earnings multiple would
be
around 4 (3 assuming that only the Odeon convertible is converted
resulting in 74% ownership)
|
|
•
|
Other
factors that we considered in our valuation of TBL: We took
into account that the convertible preference shares would be eligible
for
dividends. We took into account that TBL had land that was
recorded on its books at its original value, which in today’s market was
valued significantly higher. We considered that by selling the
land most of TBL’s debt could be retired. Further, there was an
opportunity to restructure the debt, as the banks appeared willing
to
write off un-paid interest. We also took into consideration
that there were uncollected receivables arising from claims reflected
on
the IGAAP books, which are not on the USGAAP
books.
|
|
•
|
TBL
currently has around $7 million in delay claims that it has filed
with
various authorities. It is expected that some of these claims
will materialize over the next two to three years. While it is
not possible to ascertain how much will be realized and when, TBL’s
management and TBL’s Indian statutory auditors believe that around $3.5
million could be realized in the next 18 months. These claims
are presently not reflected in the USGAAP statements and are also
not part
of the projections.
|
|
•
|
We
anticipated that the debt would be substantially be paid down from
a) the
sale of land assets (around $6.5 million), b) the expected collection
of
claims of around $3.5 million, c) the sale of disputed receivables
to the
promoters ($750 thousand) and d) a negotiated settlement with the
banks.
|
|
•
|
We
believe that the fair value based on market multiples, the backlog
of
orders, the value of land and the potential to substantially pay
down the
debt is between $56 million and $72 million. This is based on
using projected earnings of around $4 million for FYE 2009 and market
multiples of between 14 and 18. As we are purchasing around 77%
of the outstanding equity securities of TBL, our share of the fair
market
value would be between $43 million and $55
million.
|
|
•
|
We
believe that we are providing our stockholders an arbitrage between
public
and private multiples.
|
|
•
|
The
basis and rationale listed above is not meant to be exhaustive, but
includes material information and factors considered by our
board. For example, one of the factors that the board also took
into consideration is that most of our investment was being used
to expand
the capital base of these companies and very little money would not
be
reflected on the balance sheet. For example, $2 million is
going to Odeon for the purchase of TBL and $3 million is going to
the
promoters of Sricon.
|
|
•
|
Both
Sricon and TBL’s reasons for the Acquisition are that each company’s
management believes that a combination with us would give them a
significantly stronger capital position than their present position,
or
that obtained by selling a minority interest to a private equity
fund. We expect that the combination will create significant
value for their existing stockholders through top line growth, bottom
line
margin expansion, best of breed practices, and participation in the
creation of a portfolio of BOTs, all of which is expected to lead
to an
expansion of market multiples.
|
|
•
|
Among
the potentially negative factors that they considered were the sale
of a
controlling interest, increased cost and process engineering associated
with USGAAP, SEC reporting and Sarbanes Oxley
compliance.
|
|
•
|
De-licensing
of captive power plants;
|
|
•
|
Allowing
captive plants to sell surplus
power;
|
|
•
|
Opening
access in distribution and
transmission;
|
|
•
|
Introducing
the concept of power trading as a distinct activity;
and
|
|
•
|
Unbundling
of State Electricity Boards (SEB) on the basis of
functions.
|
|
•
|
Ratified
the Kyoto Protocol in August 2002;
|
|
•
|
Established
the National Clean Development Mechanism Authority (NCDMA) in December
2003, with the mandate to formulate appropriate guideline and approve
green projects.
|
|
•
|
Become
a Member of the Asia Pacific Partnership on Clean Development and
Climate;
|
|
•
|
Become
a Member of the Carbon Sequestration Leadership Forum, which assists
in
the development of cost-effective technologies for carbon dioxide
capture
and storage; and
|
|
•
|
Become
the first country to join the USA on the government steering committee
for
building the world’s first coal-based power plant that removes and stores
carbon dioxide.
|
|
1)
|
The
environmental (Protection) Act and Rules
(1986).
|
|
2)
|
The
Environmental Impact Assessment (EIA) Notification including public
hearings.
|
|
3)
|
Forest
(Conservation) Act 1980.
|
|
4)
|
The
Air (Prevention and Control of Pollution) Act, Rules and Amendment,
1981,
1982, 1983, 1987.
|
|
5)
|
The
Factories Act and Amendment 1947,
1987.
|
|
6)
|
The
Water (Prevention and Control of Pollution) Cess Act and Rules 1977,
1978,
1991.
|
|
•
|
The
24 megawatts wind energy farm will be based in Arsinagundi, Chitradurga,
in the state of Karnataka.
|
|
•
|
The
land covering the wind farm is about 40 acres and is around 749 meters
above mean sea level.
|
|
•
|
The
land for the wind farm will be leased from the government of Karnataka
for
a period of 30 years.
|
|
•
|
No
displacement of population is
expected.
|
|
•
|
We
surveyed the manufactures of wind energy equipment in India and determined
the price points of each one. We also got bids, both informal
and formal for similar wind farms. We determined that the price
we negotiated was between 25% and 30% less than competing wind
farms.
|
|
•
|
We
surveyed market multiples of alternative energy generating
companies. As an example, Canadian Hydro Developers, Inc (KHD)
owns and operates hydro electric, wind and bio mass generating facilities
in Canada. Their 2006 revenue was around $41 million with net
income of $7.7 million and a PE of 85. Other companies
considered are Boralex Incorporated (BLX), with facilities in the
United
States, Canada and France; TransAlta Corporation (TAC), with facilities
in
the United States, Canada, New Zealand and Australia; and Algonquin
Power
Income Fund (APF.UN), with facilities in the United States and
Canada. These companies have PE ratios in the range of 22 to
97.
|
|
•
|
The
acquisition price is about $28.5 million (Rs. 114 crore) for a 24
MW wind
farm. Although, no firm commitments have been made with banks
for financing the wind energy farm, IGC expects that between 70%
and 80%
of the purchase price will be financed through debt. We will
file a Current Report on Form 8-K when we finalize the terms of the
financing. The purchase price is a turnkey installed price,
including the acquisition of land, all licenses, environmental clearances,
etc. It is expected that the assets will be in production 9-12
months after the consummation of the transaction. In the first
year, the assets are expected to generate between $4.5-$5 million
in
revenue and EBITDA around
$4.3 million.
|
|
•
|
It
is expected that based on similar wind energy farms, the ratio of
EBITDA
to enterprise value in the first year of operations is expected to
be
around 6.6.
|
|
•
|
INR
120,000,000 (US $3.0 million at current exchange rates) in cash at
closing
for the Sale Shares, representing a price per share of INR 341.06
(roughly
$8.53 at current exchange rates);
and
|
|
•
|
INR
1,030,000,000 (US $25.75 million at current exchange rates) in cash
at
closing for the New Sricon Shares, representing a price per share
of INR
254.84 (roughly $6.37 at current exchange
rates).
|
|
·
|
corporate
power and authority to execute and deliver the share subscription
agreement and perform their respective obligations under, and complete
the
transactions contemplated by, the
agreement;
|
|
·
|
proper
authorization of the execution and delivery of, and proper execution
and
delivery of, the agreement;
|
|
·
|
corporate
organization, good standing and
capitalization;
|
|
·
|
the
receipt, prior to closing, of all government approvals and other
necessary
third party consents;
|
|
·
|
the
absence of violations of certain laws and regulations and of their
respective charter documents; and
|
|
·
|
the
absence of material litigation.
|
|
·
|
the
fair presentation, in all material respects, in their audited financial
statements, of Sricon’s and the financial condition, results of operations
and cash flows of Sricon and its affiliates as of the date prepared;
that
they were prepared in accordance with Indian GAAP and that Sricon
has no
undisclosed liabilities that are required to be reflected in the
financial
statements;
|
|
·
|
the
absence of material adverse changes or events since the date of the
audited financial statements;
|
|
·
|
the
intellectual property owned or otherwise used by
Sricon;
|
|
·
|
the
validity of, and absence of any material default under Sricon’s
significant contracts;
|
|
·
|
the
timely filing of tax returns, payment of taxes and creation of
reserves;
|
|
·
|
the
possession of all necessary licenses required to permit Sricon to
conduct
their respective operations;
|
|
·
|
the
real property owned or leased by
Sricon;
|
|
·
|
employee
benefit matters;
|
|
·
|
environmental
matters and compliance with environmental
laws;
|
|
·
|
the
insurance policies carried by
Sricon;
|
|
·
|
the
maintenance of internal accounting
controls;
|
|
·
|
the
absence of restrictive practices and arrangements and related competition
matters; and
|
|
·
|
the
absence of certain related party
transactions.
|
|
•
|
no
order or injunction enjoining the Sricon
Acquisition;
|
|
•
|
no
statute, rule, order or decree shall have been enacted or promulgated
which would prohibit the Sricon Acquisition or limit the ownership
of
Sricon;
|
|
•
|
receipt
of certain consents;
|
|
•
|
a
lack of material adverse changes to Sricon and its
business;
|
|
•
|
IGC’s
completion of due diligence to its satisfaction;
and
|
|
•
|
the
satisfaction by IGC of all other conditions for it to consummate
a
business combination.
|
|
•
|
at
any time, by mutual written
agreement;
|
|
•
|
by
IGC, if it is not satisfied with its due diligence review of Sricon
by
October 31, 2007, which date has now passed;
and
|
|
•
|
by
IGC, if on the closing date it is not satisfied that there has been
no
material adverse change in Sricon’s business, operations, financial
condition or prospect.
|
|
•
|
certain
confidentiality and indemnification obligations will survive the
termination; and
|
|
•
|
with
respect to termination by mutual agreement or for failure to close
within
the timeframe set forth in the Sricon Subscription Agreement, such
termination shall not create liability for either
party.
|
|
•
|
the
Promoters and IGC will each have the right to designate representatives
on
Sricon’s board of directors. The Promoters will have the right
to nominate three of the five directors initially comprising the
Board
after the Acquisition;
|
|
•
|
R.L.
Srivastava will be designated as the Managing Director and Chairman
of
Sricon; and
|
|
•
|
IGC
will be entitled to designate the chief financial officer of
Sricon.
|
|
•
|
Any
capital expenditure or indebtedness (including giving of security
for or
guaranteeing debts) beyond 15% of the budget in the business plan
that is
approved by the Board of Directors;
|
|
•
|
Investments
in any other companies;
|
|
•
|
Amendments
to Sricon’s charter documents;
|
|
•
|
Commencement
of any new line of business or acquisition of shares of a company,
which
is unrelated to the business of
Sricon;
|
|
•
|
Entering
into agreements with Sricon’s promoters, directors, key employees and
their respective affiliates;
|
|
•
|
Winding
up and/or liquidation of Sricon;
|
|
•
|
Sale,
license or pledge of Sricon’s assets, including, without limitation, its
intellectual property, other than in the normal course of
business;
|
|
•
|
Any
agreement, arrangement, transaction to sell or assignment of intellectual
property rights including those relating to copyrights, trademarks,
patents and designs belonging to Sricon, other than in the normal
course
of business and on normal and reasonable commercial
terms;
|
|
•
|
Any
new scheme or plan for grant of employee stock options, or sweat
equity
shares to any person or entity, including any modification to any
new
scheme; and
|
|
•
|
The
making by Sricon or its subsidiaries of any arrangement with its
creditors
and the moving for insolvency, receivership or bankruptcy or applying
for
the appointment of a receiver or an administrator or similar officer
over
the Company’s assets.
|
|
•
|
INR
275,000,000 ($6.9 million at current exchange rates) in cash at closing
for the equity shares, representing a price per share of INR 38.46
(roughly $0.96 at current exchange rates);
and
|
|
•
|
INR
125,000,000 ($3.1 million at current exchange rates) in cash at closing
for the New Shares, representing a price per share of INR 10.00
(roughly $0.25 at current exchange
rates).
|
|
·
|
corporate
power and authority to execute and deliver the share subscription
agreement and perform their respective obligations under, and complete
the
transactions contemplated by, the
agreement;
|
|
·
|
proper
authorization of the execution and delivery of, and proper execution
and
delivery of, the agreement;
|
|
·
|
corporate
organization, good standing and
capitalization;
|
|
·
|
the
receipt, prior to closing, of all government approvals and other
necessary
third party consents;
|
|
·
|
the
absence of violations of certain laws and regulations and of their
respective charter documents; and
|
|
·
|
the
absence of material litigation.
|
|
·
|
the
fair presentation, in all material respects, in their audited financial
statements, of TBL’s and the financial condition, results of operations
and cash flows of TBL and its affiliates as of the date prepared;
that
they were prepared in accordance with Indian GAAP and that TBL has
no
undisclosed liabilities that are required to be reflected in the
financial
statements;
|
|
·
|
the
absence of material adverse changes or events since the date of the
audited financial statements;
|
|
·
|
the
intellectual property owned or otherwise used by
TBL;
|
|
·
|
the
validity of, and absence of any material default under TBL’s significant
contracts;
|
|
·
|
the
timely filing of tax returns, payment of taxes and creation of
reserves;
|
|
·
|
the
possession of all necessary licenses required to permit TBL to conduct
their respective operations;
|
|
·
|
the
real property owned or leased by
TBL;
|
|
·
|
employee
benefit matters;
|
|
·
|
•environmental
matters and compliance with environmental
laws;
|
|
·
|
•the
insurance policies carried by TBL;
|
|
·
|
•the
maintenance of internal accounting
controls;
|
|
·
|
•the
absence of restrictive practices and arrangements and related competition
matters; and
|
|
·
|
•the
absence of certain related party
transactions.
|
|
•
|
no
order or injunction enjoining the
Acquisition;
|
|
•
|
no
statute, rule, order or decree shall have been enacted or promulgated
that
would prohibit the Acquisition or limit the ownership of
TBL;
|
|
•
|
receipt
of certain consents;
|
|
•
|
a
lack of material adverse changes to TBL and its
business;
|
|
•
|
IGC’s
completion of due diligence to its satisfaction;
and
|
|
•
|
the
satisfaction by IGC of all other conditions for it to consummate
a
business combination.
|
|
•
|
at
any time, by mutual written
agreement;
|
|
•
|
by
IGC, if it is not satisfied with its due diligence review of TBL
by
October 31, 2007, which date has passed;
or
|
|
•
|
by
IGC, if on the closing date it is not satisfied that there has been
no
material adverse change in TBL’s business, operations, financial condition
or prospects.
|
|
•
|
certain
confidentiality and indemnification obligations will survive the
termination; and
|
|
•
|
with
respect to termination by mutual agreement or for failure to close
within
the timeframe set forth in the Subscription Agreement, such termination
shall not create liability for either
party.
|
|
•
|
the
Promoters and IGC will each have the right to designate representatives
on
TBL’s board of directors. The Promoters will have the right to
nominate a majority of the
directors;
|
|
•
|
Jortin
Antony will be designated as the Managing Director of TBL;
and
|
|
•
|
IGC
will be entitled to designate the chief financial officer of
TBL.
|
|
•
|
Any
capital expenditure or indebtedness (including giving of security
for or
guaranteeing debts) beyond 15% of the budget in the business plan
that is
approved by the board;
|
|
•
|
Investments
in any other companies;
|
|
•
|
Amendments
to TBL’s charter documents;
|
|
•
|
Commencement
of any new line of business or acquisition of shares of a company,
which
is unrelated to the business of
TBL;
|
|
•
|
Entering
into agreements with TBL’s promoters, directors, key employees and their
respective affiliates;
|
|
•
|
Winding
up and/or liquidation of TBL;
|
|
•
|
Sale,
license or pledge of TBL’s assets, including, without limitation, its
intellectual property, other than in the normal course of
business;
|
|
•
|
Any
agreement, arrangement, transaction to sell or assignment of intellectual
property rights including those relating to copyrights, trademarks,
patents and designs belonging to TBL, other than in the normal course
of
business and on normal and reasonable commercial
terms;
|
|
•
|
Any
new scheme or plan for grant of employee stock options, or sweat
equity
shares to any person or entity, including any modification to any
new
scheme; and
|
|
•
|
The
making by TBL or its subsidiaries of any arrangement with its creditors
and the moving for insolvency, receivership or bankruptcy or applying
for
the appointment of a receiver or an administrator or similar officer
over
TBL’s assets.
|
|
•
|
at
any time, by mutual written agreement;
and
|
|
•
|
if
the Odeon Acquisition is not completed by January 31,
2008.
|
|
•
|
certain
confidentiality and indemnification obligations will survive the
termination; and
|
|
•
|
with
respect to termination by mutual agreement or for failure to close
within
the timeframe set forth in the Odeon Purchase Agreement, such
termination shall not create liability for either
party.
|
|
•
|
the
determination of which employees, directors and consultants will
be
granted options and other awards;
|
|
•
|
the
number of shares subject to options and other
awards;
|
|
•
|
the
exercise price of each option, which may not be less than fair market
value on the date of grant;
|
|
•
|
the
schedule upon which options become
exercisable;
|
|
•
|
the
terms and conditions of other awards, including conditions for repurchase,
termination or cancellation, issue price and repurchase price;
and
|
|
•
|
all
other terms and conditions upon which each award may be granted in
accordance with the Stock Plan.
|
|
•
|
provide
that all outstanding options shall be assumed or substituted by the
successor corporation;
|
|
•
|
upon
written notice to a participant, (i) provide that the participant’s
unexercised options or awards will terminate immediately prior to
the
consummation of such transaction unless exercised by the participant;
or
(ii) terminate all unexercised outstanding options immediately prior
to
the consummation of such transaction unless exercised by the
optionee;
|
|
•
|
in
the event of a merger pursuant to which holders of our common stock
will
receive a cash payment for each share surrendered in the merger,
make or
provide for a cash payment to the optionees equal to the difference
between the merger price times the number of shares of our common
stock
subject to such outstanding options, and the aggregate exercise price
of
all such outstanding options, in exchange for the termination of
such
options;
|
|
•
|
provide
that all or any outstanding options shall become exercisable in full
immediately prior to such event;
and
|
|
•
|
provide
that outstanding awards shall be assumed or substituted by the successor
corporation, become realizable or deliverable, or restrictions applicable
to an award will lapse, in whole or in part, prior to or upon the
reorganization
event.]
|
|
Incentive
Stock Options:
|
Incentive
stock options are intended to qualify for treatment under Section 422
of the Code. An incentive stock option does not result in taxable
income
to the optionee or deduction to the company at the time it is granted
or
exercised, provided that no disposition is made by the optionee of
the
shares acquired pursuant to the option within two years after the
date of
grant of the option nor within one year after the date of issuance
of
shares the optionee (referred to as the “ISO holding period”). However,
the difference between the fair market value of the shares on the
date of
exercise and the option price will be an item of tax preference includible
in “alternative minimum taxable income.” Upon disposition of the shares
after the expiration of the ISO holding period, the optionee will
generally recognize long term capital gain or loss based on the difference
between the disposition proceeds and the option price paid for the
shares.
If the shares are disposed of prior to the expiration of the ISO
holding
period, the optionee generally will recognize taxable compensation,
and we
will have a corresponding deduction, in the year of the disposition,
equal
to the excess of the fair market value of the shares on the date
of
exercise of the option over the option price. Any additional gain
realized
on the disposition will normally constitute capital gain. If the
amount
realized upon such a disqualifying disposition is less than fair
market
value of the shares on the date of exercise, the amount of compensation
income will be limited to the excess of the amount realized over
the
optionee’s adjusted basis in the shares.
|
|
Non-Qualified
Options:
|
Options
otherwise qualifying as incentive stock options, to the extent the
aggregate fair market value of shares with respect to which such
options
are first exercisable by an individual in any calendar year exceeds
$100,000, and options designated as non-qualified options will be
treated
as options that are not incentive stock options.
|
|
A
non-qualified option ordinarily will not result in income to the
optionee
or deduction to us at the time of grant. The optionee will recognize
compensation income at the time of exercise of such non-qualified
option
in an amount equal to the excess of the then value of the shares
over the
option price per share. Such compensation income of optionees may
be
subject to withholding taxes, and a deduction may then be allowable
to us
in an amount equal to the optionee’s compensation
income.
|
|
|
An
optionee’s initial basis in shares so acquired will be the amount paid on
exercise of the non-qualified option plus the amount of any corresponding
compensation income. Any gain or loss as a result of a subsequent
disposition of the shares so acquired will be capital gain or
loss.
|
|
|
Stock
Grants:
|
With
respect to stock grants under the Stock Plan that result in the issuance
of shares that are either not restricted as to transferability or
not
subject to a substantial risk of forfeiture, the grantee must generally
recognize ordinary income equal to the fair market value of shares
received. Thus, deferral of the time of issuance will generally result
in
the deferral of the time the grantee will be liable for income taxes
with
respect to such issuance. We generally will be entitled to a deduction
in
an amount equal to the ordinary income recognized by the
grantee.
|
|
With
respect to stock grants involving the issuance of shares that are
restricted as to transferability and subject to a substantial risk
of
forfeiture, the grantee must generally recognize ordinary income
equal to
the fair market value of the shares received at the first time the
shares
become transferable or are not subject to a substantial risk of
forfeiture, whichever occurs earlier. A grantee may elect to be taxed
at
the time of receipt of shares rather than upon lapse of restrictions
on
transferability or substantial risk of forfeiture, but if the grantee
subsequently forfeits such shares, the grantee would not be entitled
to
any tax deduction, including as a capital loss, for the value of
the
shares on which he previously paid tax. The grantee must file such
election with the Internal Revenue Service within 30 days of the
receipt of the shares. We generally will be entitled to a deduction
in an
amount equal to the ordinary income recognized by the
grantee.
|
|
Name
|
Age
|
||
|
Sudhakar
Shenoy
|
59
|
||
|
Suhail
Nathani
|
40
|
||
|
(Amounts
in US Dollars, except share data and as stated
otherwise)
|
Six
Months Ended September 30, 2006
|
Six
Months Ended September 30, 2007
|
||||||
|
Revenue
|
$ |
1,580,124
|
$ |
1,298,063
|
||||
|
Earnings
before Income Taxes
|
1,284,755
|
71,935
|
||||||
|
Income
Taxes
|
(437,600 | ) | (24,604 | ) | ||||
|
Net
Income
|
847,155
|
47,331
|
||||||
|
Weighted
average shares outstanding – basic and diluted
|
13,974,500
|
13,974,500
|
||||||
|
Net
income per share – basic and diluted
|
$ |
0.06
|
$ |
0.00
|
||||
|
(Amounts
in US Dollars, except share data and as stated
otherwise)
|
As
of
March 31, 2007 |
As
of
September
30, 2007
|
|||||
|
ASSETS
|
|||||||
|
Investments
held in trust fund
|
$ |
66,104,275
|
$ |
67,091,690
|
|||
|
LIABILITES
|
|||||||
|
Common
stock subject to possible conversion
|
12,762,785
|
12,762,785
|
|||||
|
Total
stockholders’ equity
|
$ |
52,923,699
|
$ |
52,971,030
|
|||
|
(Amounts
in Thousand US Dollars, except
share data and as stated otherwise)
|
Six
months ended
September
30, 2006
|
Six
months ended
September
30, 2007
|
||||||
|
Revenues
:
|
||||||||
|
Revenue
|
$ |
4,422
|
$ |
7,251
|
||||
|
Interest
income, net
|
32
|
36
|
||||||
|
Other
income
|
8
|
7
|
||||||
|
Total
Revenues
|
4,462
|
7,294
|
||||||
|
Expenses
:
|
||||||||
|
Operating
Expenses
|
(3,450 | ) | (5,124 | ) | ||||
|
Selling,
general and administrative expenses
|
(432 | ) | (601 | ) | ||||
|
Depreciation
|
(116 | ) | (157 | ) | ||||
|
Interest
expense, net
|
(232 | ) | (353 | ) | ||||
|
Total
Expenses
|
(4,230 | ) | (6,235 | ) | ||||
|
Net
income before income taxes
|
232
|
1,059
|
||||||
|
Income
Taxes
|
(58 | ) | (328 | ) | ||||
|
Net
Income
|
174
|
731
|
||||||
|
Earnings
per share:
|
||||||||
|
Basic
and diluted
|
$ |
0.06
|
$ |
0.25
|
||||
|
Weighted
average number of shares outstanding
|
2,932,159
|
2,932,159
|
||||||
|
•
|
Road
construction and maintenance
|
|
•
|
Canal
and earth work
|
|
•
|
Maintenance
of cement plant, including refractory
work
|
|
•
|
Civil
work for power and steel plants
|
|
•
|
Limestone
and coal mining
|
|
•
|
With
MECON Limited: MECON Limited is a public enterprise having vast experience
in engineering and turnkey execution of civil construction and
infrastructure projects. Under the terms of the technical
alliance, MECON would assist Sricon in undertaking projects in the
GCC
(Gulf Cooperation Council) countries on turnkey
basis.
|
|
•
|
With
Hindustan Steelworks Construction Limited (“HSCL”): HSCL is a Government
undertaking having vast experience in turnkey execution of civil
construction and infrastructure projects. Under the terms of the
technical
alliance, HSCL would assist Sricon in participating in various packages
of
NHAI in Maharashtra and Madhya
Pradesh.
|
|
•
|
With
Systems America Inc.: Systems America Inc. is an American company
engaged
in construction and development of infrastructure
projects. Under the terms of the technical alliance, Systems
America Inc. would support Sricon in large highways
projects.
|
|
•
|
National
Highway Authority of India
|
|
•
|
Projects
on BOT basis
|
|
•
|
National
Thermal Power Corporation
|
|
•
|
Maharashtra
Jeevan Pradhikaran
|
|
•
|
Western
Coalfields Limited
|
|
•
|
Larsen
and Tubro Limited
|
|
•
|
Public
Works Department
|
|
•
|
Nagpur
Municipal Corporation
|
|
•
|
Nagpur
Improvement Trust
|
|
•
|
Bharat
Heavy Electricals Limited
|
|
•
|
Hindustan
Steelworks Construction Limited
|
|
•
|
Pradhan
Mantri Gram Sadak Yojana
|
|
•
|
Central
Public Works Department
|
|
•
|
National
Building Construction Corporation
Limited
|
|
•
|
Engineers
Project India Limited
|
|
•
|
Mecon
|
|
•
|
Hindusthan
Construction Limited
|
|
•
|
National
Project Construction Limited
|
|
•
|
Sardar
Sarovar Narmada Nigam Limited
|
|
•
|
R
& B Division, Amveli
|
|
•
|
Nagpur
Municipal Corporation
|
|
•
|
Nagpur
Improvement Trust
|
|
Sector
|
FY2001-04
USD
millions
|
FY2004-07
USD
millions
|
|||||
|
Roads
|
$ |
7,656.61
|
$ |
14,617.16
|
|||
|
Power
|
9,280.74
|
19,721.57
|
|||||
|
Oil
and Gas
|
8,816.70
|
15,313.22
|
|||||
|
Ports/Airports/Shipping
|
2,088.16
|
3,712.29
|
|||||
|
Railways
|
7,424.59
|
11,136.89
|
|||||
|
Telecom
|
15,313.22
|
16,937.35
|
|||||
|
Total
|
$ |
50,580.02
|
$ |
81,438.48
|
|||
|
Funding
Agency/Source
|
No.
of Projects
|
Total
Value
|
|||||
|
(USD
in Millions)
|
|||||||
|
NHAI
|
50
|
$ |
2,218.46
|
||||
|
World
Bank
|
15
|
1,043.20
|
|||||
|
Asian
Development Bank
|
8
|
290.14
|
|||||
|
Annuity
|
8
|
546.10
|
|||||
|
BOT
|
7
|
768.90
|
|||||
|
Total
|
88
|
$ |
4,866.80
|
||||
|
•
|
Competition
from the local companies that have a small regional footprint - These
types of companies typically compete for small local
contracts.
|
|
•
|
Marketing
/Business Development - Construction contracts are offered by the
Government sector including the Central and the State Governments.
Funds
for these are allocated through their budgets as well as through
international and domestic financial institutions such as the World
Bank,
Asian Development Bank, Japan Bank for International Co-operation,
Housing
& Urban Development Corporation, National Bank for Agricultural &
Rural Development. In view of the nature of our market, the major
sources
of information of ensuing tenders for construction contracts are
newspapers and government gazettes. In addition, construction contracts
are also offered by the private sector. While there is
increased transparency in the bid process, a change in the methodology
of
bidding and award of contracts could adversely affect the
Company.
|
|
(Amounts
in Thousand US Dollars)
|
As
of
March 31, 2007 |
As
of
September 30, 2007 |
|||||
|
Total
Assets
|
$ |
15,358
|
$ |
15,580
|
|||
|
Total
liabilities and stockholders’ equity
|
$ |
15,358
|
$ |
15,580
|
|||
|
(Amounts
in Thousand US Dollars)
|
As
of
March 31, 2007 |
As
of
September
30, 2007
|
|||||
|
ASSETS
|
|||||||
|
Accounts
receivables
|
$ |
2,751
|
$ |
6,574
|
|||
|
Unbilled
receivables
|
2,866
|
2,442
|
|||||
|
Inventories
|
71
|
146
|
|||||
|
BOT
Project under progress
|
3,080
|
-
|
|||||
|
LIABILITES
|
|||||||
|
Short-term
borrowings and current portion of long-term debt
|
3,646
|
3,570
|
|||||
|
Due
to related parties
|
2,264
|
1,744
|
|||||
|
Long-term
debt, net of current portion
|
2,182
|
2,479
|
|||||
|
Other
liabilities
|
1,913
|
896
|
|||||
|
Total
stockholders’ equity
|
$ |
4,289
|
$ |
5,400
|
|||
|
For
the six months ended
|
||||||||
|
(Amounts
in Thousand US Dollars)
|
September
30, 2006
|
September
30, 2007
|
||||||
|
Revenue
(including interest and other income)
|
$ |
4,462
|
$ |
7,294
|
||||
|
Expenses
|
(4,230 | ) | (6,235 | ) | ||||
|
Net
Income
|
$ |
174
|
$ |
731
|
||||
|
For
the six months ended
|
||||||||
|
(Amounts
in Thousand US Dollars)
|
September
30, 2006
|
September
30, 2007
|
||||||
|
Revenue
(including interest and other income)
|
$ |
4,462
|
$ |
7,294
|
||||
|
Net
income before income taxes
|
232
|
1,059
|
||||||
|
Income
Taxes
|
(58 | ) | (328 | ) | ||||
|
Net
Income
|
174
|
731
|
||||||
|
Income
(loss) per share: basic and diluted
|
$ |
0.06
|
$ |
0.25
|
||||
|
(Amounts
in Thousand US Dollars,
except
share data and as stated otherwise)
|
Six
months ended September 30, 2006
|
Six
months ended September 30, 2007
|
||||||
|
Revenues:
|
||||||||
|
Revenue
|
$ |
316
|
$ |
2,855
|
||||
|
Interest
Income (net)
|
-
|
26
|
||||||
|
Other
Income
|
189
|
2,661
|
||||||
|
Total
|
505
|
5,542
|
||||||
|
Expenses:
|
||||||||
|
Operating
Expenses
|
(633 | ) | (2,017 | ) | ||||
|
Selling,
General and Administration Expenses
|
(151 | ) | (280 | ) | ||||
|
Depreciation
|
(180 | ) | (102 | ) | ||||
|
Interest
Expenses(net)
|
(408 | ) | (331 | ) | ||||
|
Total
Expenses
|
(1,372 | ) | (2,730 | ) | ||||
|
Net
(loss)/income before income taxes
|
(867 | ) |
2,812
|
|||||
|
Income
taxes
|
12
|
(83 | ) | |||||
|
Net
(loss)/income after income taxes
|
(855 | ) |
2,729
|
|||||
|
Provision
for Dividend on Preference Stock and tax thereon
|
-
|
(78 | ) | |||||
|
Net
(loss)/income
|
(855 | ) |
2,651
|
|||||
|
Earnings
per share:
|
||||||||
|
Basic
|
$ | (0.20 | ) | $ |
0.64
|
|||
|
Diluted
|
$ | (0.20 | ) | $ |
0.34
|
|||
|
Weighted
average number of shares outstanding – Basic
|
4,287,500
|
4,287,500
|
||||||
|
Weighted
average number of shares outstanding - Diluted
|
4,287,500
|
8,037,500
|
||||||
|
·
|
Roads
and bridges
|
|
·
|
Mechanized
earthworks
|
|
·
|
Hydro-electric
project
|
|
·
|
High-rise
building complexes and townships
|
|
·
|
Dams
and tunnels
|
|
·
|
Irrigation
projects
|
|
·
|
Airport
runways and other infrastructure
|
|
·
|
Turnkey
projects
|
|
·
|
Railroad
construction
|
|
As
of
|
|||||||
|
(Amounts
in US Dollars ‘000)
|
March
31, 2007
|
September
30, 2007
|
|||||
|
Total
Assets
|
$ |
7,098
|
$ |
6,442
|
|||
|
Total
Liabilities and Stockholders' Equity
|
$ |
7,098
|
$ |
6,442
|
|||
|
As
of
|
||||||||
|
(Amounts
in US Dollars ‘000)
|
March
31, 2007
|
September
30, 2007
|
||||||
|
ASSETS
|
||||||||
|
Cash
and cash equivalents
|
$ |
1,208
|
$ |
100
|
||||
|
Inventories
|
1,284
|
1,784
|
||||||
|
Prepaid
and other assets
|
1,231
|
798
|
||||||
|
Property,
plant and equipment (net)
|
2,265
|
2,352
|
||||||
|
LIABILITIES
|
||||||||
|
Short
term borrowings and current portion of long tern loan
|
6,079
|
-
|
||||||
|
Trade
payable
|
1,502
|
3,168
|
||||||
|
Long
term debts, net of current portion
|
2,333
|
3,870
|
||||||
|
Advance
from customers
|
1,877
|
884
|
||||||
|
Total
Stockholders' equity
|
$ | (4,895 | ) | $ | (1,504 | ) | ||
|
For
the six months ended
|
||||||||
|
(Amounts
in US Dollars ‘000)
|
September
30, 2006
|
September
30, 2007
|
||||||
|
Revenues
(including interest and other income)
|
$ |
505
|
$ |
5,542
|
||||
|
Expenses
|
(1,372 | ) | (2,730 | ) | ||||
|
Net
Income (Loss)
|
$ | (855 | ) | $ |
2,651
|
|||
|
For
the six months ended
|
||||||||
|
(Amounts
in US Dollars ‘000)
|
September
30, 2006
|
September
30, 2007
|
||||||
|
Revenue
(including interest and other income)
|
$ |
505
|
$ |
5,542
|
||||
|
(Loss)/Income
Before Income Taxes
|
(867 | ) |
2,812
|
|||||
|
Income
Taxes
|
(12 | ) | (83 | ) | ||||
|
(Loss)/Income
after Income Taxes
|
(855 | ) |
2,729
|
|||||
|
Provision
for dividend on Preference Shares and Tax thereon
|
-
|
(78 | ) | |||||
|
Net
(Loss)/Income
|
(855 | ) |
2,651
|
|||||
|
Earning
per Share - Basic
|
(0.20 | ) |
0.64
|
|||||
|
Earning
per Share - Diluted
|
$ | (0.20 | ) | $ |
0.34
|
|||
|
·
|
Assuming
No Exercise of Redemption Rights: This presentation assumes that
none of
the IGC stockholders exercise their redemption rights;
and
|
|
·
|
Assuming
Maximum Exercise of Redemption Rights: This presentation assumes
that
stockholders holding 2,259,770 common stock exercise their redemption
rights.
|
|
Consolidated
|
Consolidated
|
||||||
|
Assuming
No
|
Assuming
Maximum
|
||||||
|
Exercise
of
|
Exercise
of
|
||||||
|
Redemption
Rights
|
Redemption
Rights
|
||||||
|
Total
Current Assets
|
$ |
65,057,804
|
$ |
52,085,381
|
|||
|
Property
and equipment, net
|
35,829,787
|
35,829,787
|
|||||
|
Goodwill
|
16,319,262
|
16,319,262
|
|||||
|
Total
Assets
|
119,842,840
|
106,870,417
|
|||||
|
Long-term
debt, net of current portion
|
28,449,334
|
28,449,334
|
|||||
|
Minority
Interest
|
13,490,582
|
13,490,582
|
|||||
|
Total
stockholders’ equity
|
$ |
65,435,439
|
$ |
52,463,016
|
|||
|
Consolidated
|
Consolidated
|
||||||||||||||||||||||||||||
|
Assuming
No
|
Assuming
Maximum
|
||||||||||||||||||||||||||||
|
Pro
Forma
|
Exercise
of
|
Pro
Forma
|
Exercise
of
|
||||||||||||||||||||||||||
|
Sricon
|
TBL
|
IGC
|
Adjustments
|
Redemption
Rights
|
Adjustments
|
Redemption
Rights
|
|||||||||||||||||||||||
|
ASSETS
|
|||||||||||||||||||||||||||||
|
Current
Assets:
|
|||||||||||||||||||||||||||||
|
Cash
and cash equivalents
|
$ |
45,909
|
$ |
99,874
|
$ |
258,628
|
67,091,690
|
(a)
|
$ |
49,214,047
|
(12,762,785 | ) |
(h)
|
$ |
36,241,624
|
||||||||||||||
|
41,900,000
|
(a)
|
(209,638 | ) |
(h)
|
|||||||||||||||||||||||||
| (41,900,000 | ) |
(a)
|
|||||||||||||||||||||||||||
| (5,000,000 | ) |
(a)
|
|||||||||||||||||||||||||||
| (6,150,000 | ) |
(c)
|
|||||||||||||||||||||||||||
| (604,910 | ) |
(d)
|
|||||||||||||||||||||||||||
| (3,156,494 | ) |
(e)
|
|||||||||||||||||||||||||||
| (1,769,400 | ) |
(f)
|
|||||||||||||||||||||||||||
| (1,601,250 | ) |
(g)
|
|||||||||||||||||||||||||||
|
Accounts
Receivable
|
6,573,862
|
92,553
|
-
|
6,666,415
|
6,666,415
|
||||||||||||||||||||||||
|
Unbilled
Receivables
|
2,441,568
|
-
|
-
|
2,441,568
|
2,441,568
|
||||||||||||||||||||||||
|
Inventories
|
145,997
|
1,783,950
|
-
|
1,929,947
|
1,929,947
|
||||||||||||||||||||||||
|
Investments
held in Trust Fund
|
-
|
-
|
67,091,690
|
(67,091,690 | ) |
(a)
|
-
|
-
|
|||||||||||||||||||||
|
Interest
Receivable - Convertible Debenture
|
-
|
-
|
157,479
|
157,479
|
157,479
|
||||||||||||||||||||||||
|
Convertible
debenture in MBL
|
-
|
-
|
3,000,000
|
3,000,000
|
3,000,000
|
||||||||||||||||||||||||
|
Prepaid
expenses and other current assets
|
506,422
|
798,415
|
21,766
|
1,326,603
|
1,326,603
|
||||||||||||||||||||||||
|
Due
from related parties
|
207,632
|
114,113
|
-
|
321,745
|
321,745
|
||||||||||||||||||||||||
|
Total
Current Assets
|
9,921,390
|
2,888,905
|
70,529,563
|
65,057,804
|
52,085,381
|
||||||||||||||||||||||||
|
Property
and equipment, net
|
4,977,384
|
2,352,403
|
-
|
|
7,329,787
|
7,329,787
|
|||||||||||||||||||||||
| Deposit towards Wind PPE | 28,500,000 |
(c)
|
28,500,000 | 28,500,000 | |||||||||||||||||||||||||
|
Goodwill
|
-
|
-
|
-
|
16,319,262
|
(a)
|
16,319,262
|
16,319,262
|
||||||||||||||||||||||
|
Investment
- joint ventures
|
40,978
|
-
|
-
|
40,978
|
40,978
|
||||||||||||||||||||||||
|
Investment
– others
|
23,231
|
77,987
|
-
|
101,218
|
101,218
|
||||||||||||||||||||||||
|
Deposit
to CWEL
|
-
|
-
|
250,000
|
(250,000 | ) |
(c)
|
-
|
-
|
|||||||||||||||||||||
|
Restricted
cash, non-current
|
238,168
|
282,692
|
-
|
520,860
|
520,860
|
||||||||||||||||||||||||
|
Deferred
acquisition costs
|
-
|
-
|
252,167
|
1,601,250
|
(g)
|
128,726
|
128,726
|
||||||||||||||||||||||
| (1,724,691 | ) |
(a)
|
|||||||||||||||||||||||||||
|
Deferred
tax assets, net of valuation allowance
|
-
|
350,867
|
625,640
|
976,507
|
976,507
|
||||||||||||||||||||||||
|
Other
assets
|
378,490
|
489,208
|
-
|
867,698
|
867,698
|
||||||||||||||||||||||||
|
Total
Assets
|
$ |
15,579,641
|
$ |
6,442,062
|
$ |
71,657,370
|
$ |
119,842,840
|
$ |
106,870,417
|
|||||||||||||||||||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||||||||||||||||||||||||
|
Current
Liabilities:
|
|||||||||||||||||||||||||||||
|
Short-term
borrowings and current portion of long-term debt
|
3,569,927
|
-
|
-
|
3,569,927
|
3,569,927
|
||||||||||||||||||||||||
|
Trade
payables
|
312,213
|
3,168,361
|
-
|
3,480,574
|
3,480,574
|
||||||||||||||||||||||||
|
Accrued
expenses
|
-
|
-
|
458,097
|
(59,910 | ) |
(d)
|
241,693
|
241,693
|
|||||||||||||||||||||
| (156,494 | ) |
(e)
|
|||||||||||||||||||||||||||
|
Notes
payable to stockholders
|
-
|
-
|
545,000
|
(545,000 | ) |
(d)
|
-
|
-
|
|||||||||||||||||||||
|
Taxes
payable
|
-
|
-
|
449,434
|
449,434
|
449,434
|
||||||||||||||||||||||||
|
Deferred
trust interest
|
-
|
-
|
209,638
|
(209,638 | ) |
(h)
|
-
|
-
|
|||||||||||||||||||||
|
Note
Payable to Oliveira Capital, LLC
|
-
|
-
|
2,491,985
|
(2,491,985 | ) |
(e)
|
-
|
-
|
|||||||||||||||||||||
|
Due
to Underwriters
|
-
|
-
|
1,769,400
|
(1,769,400 | ) |
(f)
|
-
|
-
|
|||||||||||||||||||||
|
Due
to related parties
|
1,743,603
|
-
|
-
|
1,743,603
|
1,743,603
|
||||||||||||||||||||||||
|
Other
current liabilities
|
205,678
|
24,138
|
-
|
229,816
|
229,816
|
||||||||||||||||||||||||
|
Total
current liabilities
|
5,831,421
|
3,192,499
|
5,923,554
|
9,715,047
|
9,715,047
|
||||||||||||||||||||||||
|
Long-term
debt, net of current portion
|
2,479,367
|
3,869,967
|
-
|
22,100,000
|
(c)
|
28,449,334
|
28,449,334
|
||||||||||||||||||||||
|
Advance
from Customers
|
-
|
883,998
|
-
|
883,998
|
883,998
|
||||||||||||||||||||||||
|
Deferred
taxes on income
|
595,179
|
-
|
-
|
595,179
|
595,179
|
||||||||||||||||||||||||
|
Security
Deposit from joint ventures
|
377,358
|
-
|
-
|
377,358
|
377,358
|
||||||||||||||||||||||||
|
Other
liabilities
|
895,903
|
-
|
-
|
895,903
|
895,903
|
||||||||||||||||||||||||
|
Total
Liabilities
|
$ |
10,179,228
|
$ |
7,946,464
|
$ |
5,923,554
|
$ |
40,916,819
|
$ |
40,916,819
|
|||||||||||||||||||
|
Minority
Interest
|
-
|
-
|
-
|
13,490,582
|
(a)
|
13,490,582
|
13,490,582
|
||||||||||||||||||||||
|
Common
stock subject to possible conversion, 2,259,770 at conversion
value
|
-
|
-
|
12,762,785
|
(12,762,785 | ) |
(h)
|
-
|
|
-
|
||||||||||||||||||||
|
STOCKHOLDERS’
EQUITY
|
|||||||||||||||||||||||||||||
|
Preferred
Stock
|
-
|
1,182,033
|
-
|
(1,182,033 | ) |
(a)
|
-
|
-
|
|||||||||||||||||||||
|
Common
stock
|
674,000
|
988,000
|
1,397
|
(1,662,000 | ) |
(a)
|
1,623
|
1,397
|
|||||||||||||||||||||
|
226
|
(h)
|
||||||||||||||||||||||||||||
|
Additional
paid-in capital
|
726,000
|
199,000
|
51,848,146
|
42,150,000
|
(a)
|
64,610,705
|
(12,762,785 | ) |
(h)
|
51,848,146
|
|||||||||||||||||||
| (43,075,000 | ) |
(a)
|
|||||||||||||||||||||||||||
|
12,762,559
|
(h)
|
||||||||||||||||||||||||||||
|
Retained
earnings
|
3,550,077
|
(3,297,435 | ) |
1,121,488
|
(252,642 | ) |
(a)
|
823,111
|
(209,638 | ) |
(h)
|
613,473
|
|||||||||||||||||
| (508,015 | ) |
(e)
|
|||||||||||||||||||||||||||
|
209,638
|
(h)
|
||||||||||||||||||||||||||||
|
Accumulated
other comprehensive (loss) income
|
450,336
|
(576,000 | ) |
-
|
125,664
|
(a)
|
-
|
-
|
|||||||||||||||||||||
|
Total
stockholders’ equity
|
5,400,413
|
(1,504,402 | ) |
52,971,031
|
65,435,439
|
52,463,016
|
|||||||||||||||||||||||
|
Total
liabilities and stockholders’ equity
|
$ |
15,579,641
|
$ |
6,442,062
|
$ |
71,657,370
|
$ |
119,842,840
|
$ |
106,870,417
|
|||||||||||||||||||
|
(a)
|
|
Amount
released from escrow
|
$ |
67,091,690
|
|
|
Described
in Note b
|
$ |
41,900,000
|
|
|
$2,000,000
for the purchase of CPS from Odeon and $3,000,000 for the purchase
of
shares from the promoters of Sricon.
|
$ |
5,000,000
|
|
Sricon
|
TBL
|
IGC-Power
|
Total
|
||||||||||||
|
New
Equity Shares
|
$ |
25,750,000
|
$ |
6,875,000
|
$ |
6,400,000
|
$ |
39,025,000
|
|||||||
|
New
Preference Shares
|
-
|
3,125,000
|
-
|
3,125,000
|
|||||||||||
|
Equity
Shares Purchased from existing shareholders
|
3,000,000
|
-
|
-
|
3,000,000
|
|||||||||||
|
Preference
Shares Purchased from existing shareholders
|
-
|
2,000,000
|
-
|
2,000,000
|
|||||||||||
|
Allocation
of estimated acquisition costs
|
689,973
|
338,006
|
696,712
|
1,724,691
|
|||||||||||
| $ |
29,439,973
|
$ |
12,338,006
|
$ |
7,096,712
|
$ |
48,874,691
|
||||||||
|
Amount
paid for the subscription of new equity shares
|
$ |
39,025,000
|
|
|
Amount
paid for new preference shares
|
$ |
3,125,000
|
|
|
Total
|
$ |
42,150,000
|
|
|
Amount
transferred from CWEL
|
$ |
250,000
|
|
|
Total
shown in Pro forma
|
$ |
41,900,000
|
|
Sricon
|
TBL
|
IGC-Power
|
Total
|
|||||||||||||
|
Current
assets
|
$ |
22,472,976
|
$ |
9,907,857
|
$ |
-
|
$ |
32,380,833
|
||||||||
|
Property
and equipment, net
|
3,135,752
|
1,808,321
|
28,500,000
|
33,444,072
|
||||||||||||
|
Other
non current assets
|
428,946
|
923,034
|
-
|
1,351,980
|
||||||||||||
|
Goodwill
|
9,815,213
|
5,807,337
|
696,712
|
16,319,262
|
||||||||||||
|
Short-term
borrowings and current portion of
long- term
debt
|
(2,249,054 | ) |
-
|
-
|
(2,249,054 | ) | ||||||||||
|
Other
Current liabilities
|
(1,424,741 | ) | (2,454,113 | ) |
-
|
(3,878,854 | ) | |||||||||
|
Long-term
debt, net of current portion
|
(1,562,001 | ) | (2,974,890 | ) | (22,100,000 | ) | (26,636,891 | ) | ||||||||
|
Other
non-current liabilities
|
(1,177,118 | ) | (679,540 | ) |
-
|
(1,856,657 | ) | |||||||||
|
Total
|
$ |
29,439,973
|
$ |
12,338,006
|
$ |
7,096,712
|
$ |
48,874,691
|
||||||||
|
Consolidated
|
Consolidated
|
|||||||||||||||||||||||||||||
|
Assuming
No
|
Assuming
Maximum
|
|||||||||||||||||||||||||||||
|
Pro
Forma
|
Exercise
of
|
Exercise
of
|
||||||||||||||||||||||||||||
|
Sricon
|
TBL
|
IGC
|
Adjustments
|
Redemption
Rights
|
Redemption
Rights
|
|||||||||||||||||||||||||
|
Revenue
|
$ |
7,251,166
|
$ |
2,855,255
|
$ |
-
|
$ |
-
|
$ |
10,106,421
|
$ |
10,106,421
|
||||||||||||||||||
|
Cost
of revenue
|
(5,124,293 | ) | (2,017,534 | ) |
-
|
(7,141,827 | ) | (7,141,827 | ) | |||||||||||||||||||||
|
Gross
profit
|
2,126,873
|
837,721
|
-
|
2,964,594
|
2,964,594
|
|||||||||||||||||||||||||
|
Selling,
general and administrative expenses
|
(600,851 | ) | (279,715 | ) |
-
|
(880,566 | ) | (880,566 | ) | |||||||||||||||||||||
|
Depreciation
|
(156,944 | ) | (101,670 | ) |
-
|
(258,614 | ) | (258,614 | ) | |||||||||||||||||||||
|
Operating
income
|
1,369,078
|
456,336
|
-
|
1,825,414
|
1,825,414
|
|||||||||||||||||||||||||
|
Legal
and formation, travel and other start up costs
|
-
|
-
|
(384,528 | ) | (384,528 | ) | (384,528 | ) | ||||||||||||||||||||||
|
Interest
expense
|
(352,642 | ) | (331,287 | ) | (841,600 | ) |
18,710
|
(i)
|
(1,329,707 | ) | (1,329,707 | ) | ||||||||||||||||||
|
177,112
|
(j)
|
|||||||||||||||||||||||||||||
|
Interest
income
|
35,598
|
25,933
|
1,298,063
|
(353,714 | ) |
(k)
|
1,005,880
|
(250,985 | ) |
(k)
|
754,895
|
|||||||||||||||||||
|
Other
Income
|
7,255
|
2,661,125
|
-
|
2,668,380
|
2,668,380
|
|||||||||||||||||||||||||
|
Income
before income taxes
|
1,059,289
|
2,812,107
|
71,935
|
3,785,439
|
3,534,454
|
|||||||||||||||||||||||||
|
Provision
for income taxes, net
|
(327,211 | ) | (83,227 | ) | (24,604 | ) |
54,004
|
(l)
|
(381,038 | ) |
85,845
|
(l)
|
(295,193 | ) | ||||||||||||||||
|
Income
after income taxes
|
732,078
|
2,728,880
|
47,331
|
3,404,401
|
3,239,261
|
|||||||||||||||||||||||||
|
Provision
for Dividend on Preference Stock and its Tax
|
-
|
(78,340 | ) |
-
|
(78,340 | ) | (78,340 | ) | ||||||||||||||||||||||
| Minority Interest | (880,493 | ) |
(p)
|
(880,493 | ) | (880,493 | ) | |||||||||||||||||||||||
|
Net
Income
|
$ |
732,078
|
$ |
2,650,540
|
$ |
47,331
|
$ |
2,445,568
|
$ |
2,280,428
|
||||||||||||||||||||
|
Net
income per share: basic
|
$ |
0.00
|
$ |
0.18
|
$ |
0.19
|
||||||||||||||||||||||||
|
Net
income per share: diluted
|
$ |
0.00
|
$ |
0.15
|
$ |
0.16
|
||||||||||||||||||||||||
|
Consolidated
|
Consolidated
|
|||||||||||||||||||||||||||||
|
Assuming
No
|
Assuming
Maximum
|
|||||||||||||||||||||||||||||
|
Pro
Forma
|
Exercise
of
|
Exercise
of
|
||||||||||||||||||||||||||||
|
Sricon
|
TBL
|
IGC
|
Adjustments
|
Redemption
Rights
|
Redemption
Rights
|
|||||||||||||||||||||||||
|
Revenue
|
$ |
10,604,093
|
$ |
4,318,000
|
$ |
-
|
$ | $ |
14,922,093
|
$ |
14,922,093
|
|||||||||||||||||||
|
Cost
of revenue
|
(8,100,559 | ) | (2,656,000 | ) |
-
|
(10,756,559 | ) | (10,756,559 | ) | |||||||||||||||||||||
|
Gross
profit
|
2,503,534
|
1,662,000
|
-
|
4,165,534
|
4,165,534
|
|||||||||||||||||||||||||
|
Selling,
general and administrative expenses
|
(1,114,548 | ) | (458,000 | ) |
-
|
(1,572,548 | ) | (1,572,548 | ) | |||||||||||||||||||||
|
Depreciation
|
(243,309 | ) | (207,000 | ) |
-
|
(450,309 | ) | (450,309 | ) | |||||||||||||||||||||
|
Operating
income
|
1,145,677
|
997,000
|
-
|
2,142,677
|
2,142,677
|
|||||||||||||||||||||||||
|
Legal
and formation, travel and other start up costs
|
-
|
-
|
(765,047 | ) | (765,047 | ) | (765,047 | ) | ||||||||||||||||||||||
|
Interest
expense
|
(532,717 | ) | (1,144,000 | ) | (103,916 | ) |
41,200
|
(m)
|
(1,706,907 | ) | (1,706,907 | ) | ||||||||||||||||||
|
32,526
|
(n)
|
|||||||||||||||||||||||||||||
|
Interest
income
|
65,874
|
16,000
|
3,171,818
|
(898,129 | ) |
(o)
|
2,355,563
|
(613,945 | ) |
(o)
|
1,741,618
|
|||||||||||||||||||
|
Other
Income
|
99,945
|
532,000
|
-
|
631,945
|
631,945
|
|||||||||||||||||||||||||
|
Income
before income taxes
|
778,779
|
401,000
|
2,302,855
|
2,658,231
|
2,044,286
|
|||||||||||||||||||||||||
|
Provision
for income taxes, net
|
(368,485 | ) |
135,000
|
(784,858 | ) |
280,973
|
(b)
|
(737,370 | ) |
209,244
|
(b)
|
(528,126 | ) | |||||||||||||||||
| Minority Interest | (275,089 | ) |
(p)
|
(275,089 | ) | (275,089 | ) | |||||||||||||||||||||||
|
Net
Income
|
$ |
410,294
|
$ |
536,000
|
$ |
1,517,997
|
$ |
1,645,772
|
$ |
1,241,071
|
||||||||||||||||||||
|
Net
income per share: basic
|
$ |
0.11
|
$ |
0.12
|
$ |
0.11
|
||||||||||||||||||||||||
|
Net
income per share: diluted
|
$ |
0.11
|
$ |
0.10
|
$ |
0.08
|
||||||||||||||||||||||||
|
Name
|
Age
|
Position
|
|
Dr.
Ranga Krishna
|
43
|
Chairman
of the Board
|
|
Ram
Mukunda
|
48
|
Chief
Executive Officer, President and Director
|
|
John
Selvaraj
|
63
|
Treasurer
|
|
Sudhakar
Shenoy
|
59
|
Director
|
|
Richard
Prins
|
50
|
Director
|
|
Suhail
Nathani
|
40
|
Director
|
|
Larry
Pressler
|
64
|
Special
Advisor
|
|
Howard
Gutman
|
50
|
Special
Advisor
|
|
P.G.
Kakodkar
|
70
|
Special
Advisor
|
|
Shakti
Sinha
|
49
|
Special
Advisor
|
|
Dr.
Prabuddha Ganguli
|
57
|
Special
Advisor
|
|
Dr.
Anil K. Gupta
|
56
|
Special
Advisor
|
|
Name
|
Age
|
Position
|
|
Ravindralal
Srivastava
|
54
|
Chairman
and Managing Director
|
|
Abhay
Wakhare
|
37
|
GM
Finance and Accounting
|
|
Richard
Prins
|
50
|
Director
|
|
Ram
Mukunda
|
48
|
Director
|
|
Name
|
Age
|
Position
|
|
V.
C. Antony
|
76
|
Chairman
of the Board
|
|
Jortin
Antony
|
40
|
Managing
Director
|
|
M.
Santhosh Kumar
|
41
|
Manager
Finance and Accounting
|
|
Richard
Prins
|
50
|
Director
|
|
Ram
Mukunda
|
48
|
Director
|
|
Summary
compensation of executive of Sricon
|
|||
|
FY
2005
|
FY
2006
|
FY
2007
|
|
|
Mr.
R Srivastava
|
INR
600,000
|
INR
600,000
|
INR
600,000
|
|
USD
15,000
|
USD
15,000
|
USD
15,000
|
|
|
Summary
compensation of executive of TBL
|
|||
|
FY
2005
|
FY
2006
|
FY
2007
|
|
|
Mr.
Jortin Antony
|
INR
480,000
|
INR
480,000
|
INR
480,000
|
|
USD
12,000
|
USD
12,000
|
USD
12,000
|
|
|
•
|
Upon
the completion of the Acquisition, we expect to enter into an employment
agreement with Ram Mukunda, the terms of which have not been completely
decided, pursuant to which Mr. Mukunda will serve as our Executive
Chairman, Chief Executive Officer and President. We expect that
the agreement will provide for compensation commensurate with industry
practice and standards, standard confidentiality and noncompetition
provisions and a requirement that Mr. Mukunda devote his best efforts
and
as much time as is required to execute his responsibilities and
duties
under the agreement to us. We anticipate that the Agreement
will be terminable by us at any time either with or without
cause.
|
|
March
31, 2007
|
March
31, 2006
|
||||||
|
Audit
Fees
|
$ |
84,725
|
$ |
80,
800
|
|||
|
Audit-Related
Fees
|
0
|
0
|
|||||
|
Tax
Fees(1)
|
3,837
|
0
|
|||||
|
All
Other Fees(2)
|
—
|
—
|
|||||
|
Total
|
$ |
88,562
|
$ |
80,800
|
|||
|
(1)
|
Tax
Fees relate to tax compliance, tax planning and advice. These
services include tax return preparation and advice on state and
local tax
issues.
|
|
(2)
|
There
were no services rendered other than those identified in the above
categories.
|
|
Name
|
Number
of Shares (1)
|
Relationship
to Us
|
|||
|
Dr.
Ranga Krishna
|
250,000
|
Chairman
of the Board
|
|||
|
Ram
Mukunda
|
1,250,000
|
Chief
Executive Officer, President and Director
|
|||
|
John
Cherin
|
250,000
|
Chief
Financial Officer and Director (2)
|
|||
|
Name
|
Number
of Shares(1)(3)(4)
|
Relationship
to Us
|
|||
|
Parveen
Mukunda(5)
|
425,000
|
Secretary
|
|||
|
Sudhakar
Shenoy
|
37,500
|
Director
|
|||
|
Suhail
Nathani
|
37,500
|
Director
|
|||
|
Shakti
Sinha
|
12,500
|
Special
Advisor
|
|||
|
Dr.
Prabuddha Ganguli
|
12,500
|
Special
Advisor
|
|||
|
Dr.
Anil K. Gupta
|
25,000
|
Special
Advisor
|
|||
|
(1)
|
The
share numbers and per share purchase prices in this section reflect
the
effects of a 1-for-2 reverse split effected September 29,
2005.
|
|
(2)
|
John
Cherin resigned as our CFO, Treasurer, and Director on November
27,
2006.
|
|
(3)
|
The
shares were issued to our officers, directors and Special Advisors
in
consideration of services rendered or to be rendered to
us.
|
|
(4)
|
On
September 7, 2005, one stockholder surrendered to us 62,500 shares,
and on
February 3, 2006, a stockholder surrendered to us 137,500 shares.
These
were reissued as set forth below.
|
|
(5)
|
Parveen
Mukunda is the wife of Ram Mukunda.
|
|
Name
|
Number
of Shares
|
Relationship
to Us
|
|||
|
Dr.
Ranga Krishna
|
100,000
|
Chairman
of the Board
|
|||
|
John
Cherin
|
37,500
|
Chief
Financial Officer, Treasurer and Director
|
|||
|
Larry
Pressler
|
25,000
|
Special
Advisor
|
|||
|
P.G.
Kakodkar
|
12,500
|
Special
Advisor
|
|||
|
Sudhakar
Shenoy
|
12,500
|
Director
|
|||
|
Suhail
Nathani
|
12,500
|
Director
|
|||
|
Common
Stock
|
Warrants
|
Units
|
|||||||||||||||||||||
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
||||||||||||||||||
|
2006
Second Quarter (from May 24, 2006)
|
$ |
5.66
|
$ |
5.33
|
|||||||||||||||||||
|
2006
Fourth Quarter
|
$ |
5.88
|
$ |
5.80
|
$ |
0.88
|
$ |
0.80
|
$ |
7.74
|
$ |
7.55
|
|||||||||||
|
2007
First Quarter
|
$ |
5.84
|
$ |
5.55
|
$ |
0.69
|
$ |
0.67
|
$ |
6.85
|
$ |
6.85
|
|||||||||||
|
2007
Second Quarter
|
$ |
5.74
|
$ |
5.69
|
$ |
0.63
|
$ |
0.60
|
$ |
7.19
|
$ |
6.77
|
|||||||||||
|
2007
Third Quarter
|
$ |
5.90
|
$ |
5.73
|
$ |
0.63
|
$ |
0.58
|
$ |
6.67
|
$ |
6.67
|
|||||||||||
|
2007
Fourth Quarter (through November 15, 2007
|
$ |
5.80
|
$ |
5.69
|
$ |
0.60
|
$ |
0.34
|
$ |
6.81
|
$ |
6.39
|
|||||||||||
|
INDIA
GLOBALIZATION CAPITAL INC.
|
|
|
Unaudited
Condensed Financial Statements:
|
|
|
F-2
|
|
|
F-3
|
|
|
F-4
|
|
|
F-5
|
|
|
F-6
|
|
|
Financial
Statements:
|
|
|
F-13
|
|
|
F-14
|
|
|
F-15
|
|
|
F-16
|
|
|
F-17
|
|
|
F-18
|
|
|
SRICON
INFRASTRUCTURE PRIVATE LIMITED
|
|
|
Unaudited
Condensed Financial Statements:
|
|
|
F-26
|
|
|
F-27
|
|
|
F-28
|
|
|
F-29
|
|
|
F-30
|
|
|
F-31
|
|
|
Audited
Financial Statements:
|
|
|
F-43
|
|
|
F-44
|
|
|
F-45
|
|
| Statements of Shareholders’ Equity for the years ended March 31, 2005, 2006 and 2007 | F-46 |
|
F-47
|
|
|
F-48
|
|
|
TECHNI
BHARATHI LIMITED
|
|
|
Unaudited
Condensed Financial Statements:
|
|
|
F-70
|
|
|
F-71
|
|
|
F-72
|
|
|
F-73
|
|
| Condensed Statements of Cash Flows for the six months ended September 30, 2006 and 2007 | F-74 |
|
F-75
|
|
|
Audited
Financial Statements:
|
|
|
F-85
|
|
|
F-86
|
|
|
F-87
|
|
|
F-88
|
|
|
F-89
|
|
|
F-90
|
|
September
30, 2007
|
March
31, 2007
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
|
|
||||||
|
Current
Assets:
|
|
|
||||||
|
Cash
and cash equivalents
|
$ |
258,628
|
$ |
1,169,422
|
||||
|
Investments
held in Trust Fund
|
67,091,690
|
66,104,275
|
||||||
|
Interest
Receivable - Convertible Debenture
|
157,479
|
37,479
|
||||||
|
Convertible
debenture in MBL
|
3,000,000
|
3,000,000
|
||||||
|
Prepaid
expenses and other current assets
|
21,766
|
74,197
|
||||||
|
|
||||||||
|
Total
Current Assets
|
70,529,563
|
70,385,373
|
||||||
|
|
||||||||
|
Deposit
to CWEL
|
250,000
|
-
|
||||||
|
Deferred
acquisition costs
|
252,167
|
158,739
|
||||||
|
Deferred
tax assets – Federal and State, net of valuation allowance
|
625,640
|
142,652
|
||||||
|
|
||||||||
|
Total
Assets
|
$ |
71,657,370
|
$ |
70,686,764
|
||||
|
|
||||||||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Current
Liabilities:
|
||||||||
|
Accrued
expenses
|
$ |
458,098
|
$ |
237,286
|
||||
|
Notes
payable to stockholders
|
545,000
|
870,000
|
||||||
|
Taxes
payable
|
449,434
|
296,842
|
||||||
|
Deferred
trust interest
|
209,638
|
32,526
|
||||||
|
Note
Payable to Oliveira Capital, LLC
|
2,491,985
|
1,794,226
|
||||||
|
Due
to Underwriters
|
1,769,400
|
1,769,400
|
||||||
|
Total
current liabilities
|
5,923,555
|
5,000,280
|
||||||
|
Common
stock subject to possible conversion, 2,259,770 at conversion
value (Note
A)
|
12,762,785
|
12,762,785
|
||||||
|
COMMITMENTS
AND CONTINGENCY
|
||||||||
|
STOCKHOLDERS’
EQUITY
|
||||||||
|
Preferred
stock $.0001 par value; 1,000,000 shares authorized; none
issued and
outstanding
|
-
|
-
|
||||||
|
Common
stock — $.0001 par value; 75,000,000 shares authorized; issued and
outstanding 13,974,500 (including 2,259,770 shares subject
to possible
conversion)
|
1,397
|
1,397
|
||||||
|
Additional
paid-in capital
|
51,848,145
|
51,848,145
|
||||||
|
Income
accumulated during the development stage
|
1,121,488
|
1,074,157
|
||||||
|
|
||||||||
|
Total
stockholders’ equity
|
52,971,030
|
52,923,699
|
||||||
|
|
||||||||
|
Total
liabilities and stockholders’ equity
|
$ |
71,657,370
|
$ |
70,686,764
|
||||
|
April
29, 2005
|
||||||||||||||||||||
|
Three
Months
|
Three
Months
|
Six
Months
|
Six
Months
|
(Date
of Inception)
|
||||||||||||||||
|
Ended
September
30
|
Ended
September
30
|
Ended
September 30
|
Ended
September 30
|
Through
September 30,
|
||||||||||||||||
|
2007
|
2006
|
2007
|
2006
|
2007
|
||||||||||||||||
|
Legal
and formation, travel and other start up costs
|
$ | (204,684 | ) | $ | (157,556 | ) | $ | (384,528 | ) | $ | (277,869 | ) | $ | (1,217,758 | ) | |||||
|
Compensation
expense
|
-
|
-
|
-
|
(535,741 | ) | |||||||||||||||
|
Interest
expense
|
(381,722 | ) | (9,200 | ) | (841,600 | ) | (17,500 | ) | (951,016 | ) | ||||||||||
|
Interest
income
|
603,145
|
796,323
|
1,
298,063
|
1,580,124
|
4,680,465
|
|||||||||||||||
|
Income
before income taxes
|
16,739
|
629,567
|
71,935
|
1,284,755
|
1,975,950
|
|||||||||||||||
|
Provision
for income taxes, net
|
5,691
|
214,800
|
24,604
|
437,600
|
854,462
|
|||||||||||||||
|
|
||||||||||||||||||||
|
Net
income
|
$ |
11,048
|
$ |
414,767
|
$ |
47,331
|
$ |
847,155
|
$ |
1,121,488
|
||||||||||
|
|
||||||||||||||||||||
|
Net
income per share: basic and diluted
|
$ |
0.00
|
$ |
0.03
|
$ |
0.00
|
$ |
0.06
|
||||||||||||
|
|
||||||||||||||||||||
|
Weighted
average number of shares outstanding-basic and diluted
|
13,974,500
|
13,974,500
|
13,974,500
|
13,974,500
|
||||||||||||||||
|
Earnings
|
||||||||||||||||||||
|
(Deficit)
|
||||||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Additional
|
during
the
|
Total
|
||||||||||||||||||
|
Common
Stock
|
Paid-in
|
Development
|
Stockholders’
|
|||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Stage
|
Equity
|
||||||||||||||||
|
Issuance
of common stock to Founders at $.01 per share
|
||||||||||||||||||||
|
(1,750,000
shares on May 5, 2005 and 750,000 shares on June 20, 2005)
|
2,500,000
|
$ |
250
|
$ |
24,750
|
$ |
-
|
$ |
25,000
|
|||||||||||
|
Surrendered
shares (on September 7, 2005 and
|
||||||||||||||||||||
|
February
5, 2006 of 62,500 and 137,500 respectively)
|
(200,000 | ) | (20 | ) |
20
|
-
|
-
|
|||||||||||||
|
|
||||||||||||||||||||
|
Issuance
of common stock to Founders at $.01 per share
|
||||||||||||||||||||
|
on
February 5, 2006
|
200,000
|
20
|
537,721
|
-
|
537,741
|
|||||||||||||||
|
Issue
of 170,000 units in a private placement
|
170,000
|
17
|
1,019,983
|
-
|
1,020,000
|
|||||||||||||||
|
Issue
of 11,304,500 units, net of underwriters’ discount
|
||||||||||||||||||||
|
and
offering expenses (including 2,259,770 shares
|
||||||||||||||||||||
|
subject
to possible conversion) and $100 from
|
||||||||||||||||||||
|
underwriters
option
|
11,304,500
|
1,130
|
61,793,456
|
-
|
61,794,586
|
|||||||||||||||
|
Proceeds
subject to possible conversion of shares
|
-
|
-
|
(12,762,785 | ) |
-
|
(12,762,785 | ) | |||||||||||||
|
Net
loss for the period
|
-
|
-
|
-
|
(443,840 | ) | $ | (443,840 | ) | ||||||||||||
|
Balance
at March 31, 2006
|
13,974,500
|
1,397
|
50,613,145
|
(443,840 | ) |
50,170,702
|
||||||||||||||
|
Fair
value of 425,000 warrants issued to Oliveira Capital, LLC
|
-
|
-
|
1,235,000
|
-
|
1,235,000
|
|||||||||||||||
|
Net
Income
|
-
|
-
|
-
|
1,517,997
|
1,517,997
|
|||||||||||||||
|
Balance
at March 31,2007
|
13,974,500
|
1,397
|
51,848,145
|
1,074,157
|
52,923,699
|
|||||||||||||||
|
Unaudited:
|
||||||||||||||||||||
|
Net
income for the six months ended September 30, 2007
|
-
|
-
|
-
|
47,331
|
47,331
|
|||||||||||||||
|
Balance
at September 30, 2007
|
13,974,500
|
$ |
1,397
|
$ |
51,848,145
|
$ |
1,121,488
|
$ |
52,971,030
|
|||||||||||
|
April
29, 2005
|
||||||||||||
|
(Date
of Inception)
|
||||||||||||
|
Six
Months ended
|
Six
Months ended
|
through
|
||||||||||
|
September
30, 2007
|
September
30, 2006
|
September
30, 2007
|
||||||||||
|
Cash
flows from operating activities:
|
|
|
|
|||||||||
|
Net
income
|
$ |
47,331
|
$ |
847,155
|
$ |
1,121,488
|
||||||
|
Adjustment
to reconcile net income (loss) to net cash used in operating
activities:
|
||||||||||||
|
Interest
earned on Treasury Bills
|
(1,342,086 | ) | (1,545,132 | ) | (4,643,877 | ) | ||||||
|
Non-cash
compensation expense
|
-
|
-
|
535,741
|
|||||||||
|
Deferred
taxes
|
(482,988 | ) | (46,400 | ) | (625,640 | ) | ||||||
|
Amortization
of debt discount on Oliveira debt
|
697,759
|
-
|
726,985
|
|||||||||
|
Changes
in:
|
||||||||||||
|
Prepaid
expenses and other current assets
|
52,431
|
42,656
|
(21,766 | ) | ||||||||
|
Interest
receivable - convertible debenture
|
(120,000 | ) |
-
|
(157,479 | ) | |||||||
|
Deferred
interest liability
|
177,112
|
-
|
209,638
|
|||||||||
|
Accrued
expenses
|
245,812
|
(192,760 | ) |
418,098
|
||||||||
|
Taxes
payable
|
152,592
|
484,000
|
449,434
|
|||||||||
|
Net
cash used in operating activities
|
(572,037 | ) | (410,481 | ) | (1,987,378 | ) | ||||||
|
|
||||||||||||
|
Cash
flows from investing activities:
|
||||||||||||
|
Purchase
of treasury bills
|
(199,725,789 | ) | (393,686,250 | ) | (1,053,495,803 | ) | ||||||
|
Maturity
of treasury bills
|
200,079,157
|
395,112,851
|
991,048,488
|
|||||||||
|
Decrease
(increase) in cash held in trust
|
1,304
|
172,567
|
(497 | ) | ||||||||
|
Purchase
of convertible debenture
|
-
|
-
|
(3,000,000 | ) | ||||||||
|
Deposit
to CWEL
|
(250,000 | ) |
-
|
(250,000 | ) | |||||||
|
Payment
of deferred acquisition costs
|
(118,429 | ) |
-
|
(212,168 | ) | |||||||
|
Net
cash (used in) provided by investing activities
|
(13,757 | ) |
1,599,168
|
(65,909,980 | ) | |||||||
|
Cash
flows from financing activities:
|
||||||||||||
|
Issuance
of common stock to Founders
|
-
|
-
|
27,000
|
|||||||||
|
Payments
of offering costs
|
-
|
-
|
(4,263,114 | ) | ||||||||
|
Proceeds
from notes payable to stockholders
|
275,000
|
-
|
1,145,000
|
|||||||||
|
Proceeds
from notes payable to stockholders
|
(600,000 | ) |
-
|
(600,000 | ) | |||||||
|
Proceeds
from issuance of underwriters option
|
-
|
-
|
100
|
|||||||||
|
Gross
proceeds from initial public offering
|
-
|
-
|
67,827,000
|
|||||||||
|
Proceeds
from private placement
|
-
|
-
|
1,020,000
|
|||||||||
|
Proceeds
from note payable to Oliveira Capital, LLC
|
-
|
-
|
3,000,000
|
|||||||||
|
Net
cash (used in) provided by financing activities
|
(325,000 | ) |
-
|
68,155,986
|
||||||||
|
Net
(decrease) increase in cash and cash equivalent
|
(910,794 | ) |
1,188,687
|
258,628
|
||||||||
|
Cash
and cash equivalent at the beginning of the period
|
1,169,422
|
2,210
|
-
|
|||||||||
|
Cash
and cash equivalent at the end of the period
|
$ |
258,628
|
$ |
1,190,897
|
$ |
258,628
|
||||||
|
|
||||||||||||
|
Supplemental
schedule of non cash financing activities:
|
||||||||||||
|
Accrual
of deferred underwriters’ fees
|
-
|
-
|
$ |
1,769,400
|
||||||||
|
Accrual
of deferred acquisition costs
|
$ |
40,000
|
$ |
-
|
$ |
40,000
|
||||||
|
|
||||||||||||
|
Supplemental
disclosure of cash flow information:
|
-
|
-
|
||||||||||
|
Issuance
of warrants in connection with Oliveira Debt
|
-
|
-
|
$ |
1,235,000
|
||||||||
|
|
|
September
30, 2007 (Unaudited)
|
|
|
March
31, 2007 (Audited)
|
||
|
Investment
held for the benefit of the Company
|
|
$
|
63,845,850
|
|
|
$
|
63,845,850
|
|
Investment
held for the benefit of the Underwriter
|
|
|
1,769,400
|
|
|
|
1,769,400
|
|
Investment
earnings (available to fund Company expenses up to a maximum
of $2,150,000, net of taxes)(1)
|
|
|
1,476,440
|
|
|
|
489,025
|
|
|
|
$
|
67,091,690
|
|
|
$
|
66,104,275
|
|
(1)
|
Through
March 31, 2007, the Company has transferred approximately
$2,150,000 of
investment earnings (the maximum amount permitted pursuant
to the terms of
the Public Offering) from the Trust Fund into its operating
account.
|
|
March
31,
|
||||||||
|
2007
|
2006
|
|||||||
|
ASSETS
|
||||||||
|
Current
Assets:
|
||||||||
|
Cash
and cash equivalents
|
$ |
1,169,422
|
$ |
2,210
|
||||
|
Investments
held in Trust Fund
|
66,104,275
|
65,825,016
|
||||||
| Interest Receivable—Convertible Debenture | 37,479 | - | ||||||
|
Convertible
debenture in MBL
|
3,000,000
|
-
|
||||||
|
Prepaid
expenses and other current assets
|
74,197
|
76,766
|
||||||
|
Total
Current Assets
|
70,385,373
|
65,903,992
|
||||||
|
Deferred
acquisition costs
|
158,739
|
- | ||||||
|
Deferred
tax assets—Federal and State, net of valuation allowance
|
142,652
|
25,000
|
||||||
|
Total
Assets
|
$ |
70,686,764
|
$ |
65,928,992
|
||||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Current
Liabilities:
|
||||||||
|
Accrued
expenses
|
$ |
237,286
|
$ |
286,105
|
||||
|
Notes
payable to stockholders
|
870,000
|
870,000
|
||||||
|
Taxes
payable
|
296,842
|
70,000
|
||||||
|
Deferred
trust interest
|
32,526
|
-
|
||||||
|
Note
Payable to Oliveira Capital, LLC
|
1,794,226
|
-
|
||||||
|
Due
to underwriter
|
1,769,400
|
1,769,400
|
||||||
|
Total
current liabilities
|
$ |
5,000,280
|
$ |
2,995,505
|
||||
|
Common
stock subject to possible conversion, 2,259,770 at conversion
value (Note
A)
|
12,762,785
|
12,762,785
|
||||||
|
COMMITMENTS
AND CONTINGENCY
|
||||||||
|
STOCKHOLDERS’
EQUITY
|
||||||||
|
Preferred
stock $.0001 par value; 1,000,000 shares authorized; none
issued and
outstanding
|
—
|
—
|
||||||
|
Common
stock — $.0001 par value; 75,000,000 shares authorized; issued and
outstanding 13,974,500
|
1,397
|
1,397
|
||||||
|
Additional
paid-in capital
|
51,848,145
|
50,613,145
|
||||||
|
Income
(Deficit) accumulated during the development stage
|
1,074,157
|
(443,840 | ) | |||||
|
Total
stockholders’ equity
|
$ |
52,923,699
|
$ |
50,170,702
|
||||
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ |
70,686,764
|
$ |
65,928,992
|
||||
|
|
|
|
April
29, 2005
|
|
April
29, 2005
|
|
||||
|
|
|
|
(Date
of Inception)
|
|
(Date
of Inception)
|
|
||||
|
|
Year
Ended
|
|
|
through
|
|
Through
|
|
|||
|
|
March
31, 2007
|
|
|
March
31, 2006
|
|
March
31, 2007
|
|
|||
|
Legal
and formation, travel and other start up costs
|
$
|
(765,047
|
)
|
|
$
|
(68,183
|
)
|
$
|
(833,230
|
)
|
|
Compensation
expense
|
|
—
|
|
|
|
(535,741
|
)
|
|
(535,741
|
)
|
|
Interest
expense
|
|
(103,916
|
)
|
|
|
(5,500
|
)
|
|
(106,416
|
)
|
|
Interest
income
|
|
3,171,818
|
|
|
|
210,584
|
|
|
3,382,402
|
|
|
|
|
|
|
|
|
|
|
|||
|
Income
(loss) before income taxes
|
|
2,302,855
|
|
|
|
(398,840
|
)
|
|
1,904,015
|
|
|
Provision
for income taxes, net
|
|
784,858
|
|
|
|
45,000
|
|
|
829,858
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
$
|
1,517,997
|
|
|
$
|
(443,840
|
)
|
$
|
1,074,157
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) per share: basic and diluted
|
$
|
0.11
|
|
|
$
|
(0.14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Weighted
average number of shares
|
|
|
|
|
|
|
|
|
|
|
|
outstanding-basic
and diluted
|
|
13,974,500
|
|
|
|
3,191,000
|
|
|
|
|
|
Common
Stock
|
||||||||||||||
|
Shares
|
Amount
|
Additional
Paid-in Capital |
Income
(Deficit) Accumulated
During
the Development Stage
|
Total
Stockholders’
Equity
|
||||||||||
|
Issuance
of common stock to founders at $.01 per share (1,750,000
shares on
May 5, 2005 and 750,000 shares on June 20, 2005)
|
2,500,000
|
$ |
250
|
$ |
24,750
|
—
|
$ |
25,000
|
||||||
|
|
||||||||||||||
|
Surrendered
shares (on September 7, 2005 and February 5, 2006 of 62,500 and
137,500 respectively)
|
(200,000 | ) | (20 | ) |
20
|
—
|
—
|
|||||||
|
|
||||||||||||||
|
Issuance
of common stock to founders at $.01 per share on February 5,
2006
|
200,000
|
20
|
537,721
|
—
|
537,741
|
|||||||||
|
|
||||||||||||||
|
Issue
of 170,000 units in a private placement
|
170,000
|
17
|
1,019,983
|
—
|
1,020,000
|
|||||||||
|
|
||||||||||||||
|
Issue
of 11,304,500 units, net of underwriters’ discount and offering expenses
(including 2,259,770 shares subject to possible conversion)
and $100 from
underwriters option
|
11,304,500
|
1,130
|
61,793,456
|
—
|
61,794,586
|
|||||||||
|
|
||||||||||||||
|
Proceeds
subject to possible conversion of shares
|
(12,762,785 | ) |
—
|
(12,762,785
|
) | |||||||||
|
|
||||||||||||||
|
Net
loss for the period
|
—
|
—
|
—
|
$ | (443,840 | ) |
(443,840
|
) | ||||||
|
|
||||||||||||||
|
Balance
at March 31, 2006
|
13,974,500
|
$ |
1,397
|
$ |
50,613,145
|
$ | (443,840 | ) | $ |
50,170,702
|
||||
|
|
||||||||||||||
|
Fair
value of 425,000 warrants issued to Oliveira Capital, LLC
|
—
|
—
|
1,235,000
|
—
|
1,235,000
|
|||||||||
|
Net
income
|
—
|
—
|
—
|
$ |
1,517,997
|
1,517,997
|
||||||||
|
Balance
at March 31, 2007
|
13,974,500
|
$ |
1,397
|
$ |
51,848,145
|
$ |
1,074,157
|
$ |
52,923,699
|
|||||
|
Year ended
March 31, 2007 |
April
29, 2005
(Date of Inception)Through March 31, 2006 |
April
29, 2005
(Date
of Inception)
Through
March
31, 2007
|
|||||||
| Cash flows from operating activities: | |||||||||
| Net income (loss) | $ |
1,517,997
|
$ | (443,840 | ) | $ |
1,074,157
|
||
| Adjustment to reconcile net income (loss) to net cash used in operating activities: | |||||||||
| Interest earned on Treasury Bills | (3,098,769 | ) | (203,022 | ) | (3,301,791 | ) | |||
| Non-cash compensation expense | - |
535,741
|
535,741
|
||||||
| Deferred taxes | (117,652 | ) | (25,000 | ) | (142,652 | ) | |||
| Amortization of debt discount on Oliveira debt |
29,226
|
- |
29,226
|
||||||
| Changes in: | |||||||||
|
Prepaid
expenses and other current assets
|
2,569
|
(76,766 | ) | (74,197 | ) | ||||
|
Interest
receivable - convertible debenture
|
(37,479 | ) | - | (37,479 | ) | ||||
|
Deferred
interest liability
|
32,526
|
- |
32,526
|
||||||
|
Accrued
expenses
|
(113,819 | ) |
47,679
|
(66,140 | ) | ||||
|
Taxes
payable
|
226,842
|
70,000
|
296,842
|
||||||
| Net cash used in operating activities | (1,558,559 | ) | (95,208 | ) | (1,653,767 | ) | |||
| Cash flows from investing activities: | |||||||||
| Purchase of treasury bills | (722,540,587 | ) | (131,229,427 | ) | (853,770,014 | ) | |||
| Maturity of treasury bills |
725,189,331
|
65,780,000
|
790,969,331
|
||||||
| Decrease (increase) in cash held in trust |
170,766
|
(172,567 | ) | (1,801 | ) | ||||
| Purchase of convertible debenture | (3,000,000 | ) | - | (3,000,000 | ) | ||||
| Payment of deferred acquisition costs | (93,739 | ) | - | (93,739 | ) | ||||
| Net cash used in investing activities | (274,229 | ) | (65,621,994 | ) | (65,896,223 | ) | |||
| Cash flows from financing activities: | |||||||||
| Issuance of common stock to founders |
27,000
|
27,000
|
|||||||
| Payments of offering costs | (4,024,688 | ) | (4,024,688 | ) | |||||
| Proceeds from notes payable to stockholders |
870,000
|
870,000
|
|||||||
| Proceeds from issuance of underwriters option |
100
|
100
|
|||||||
| Proceeds from initial public offering |
67,827,000
|
67,827,000
|
|||||||
|
Proceeds
from private placement
|
1,020,000
|
1,020,000
|
|||||||
|
Proceeds
from note payable to Oliveira Capital, LLC
|
3,000,000
|
- |
3,000,000
|
||||||
|
Net
cash provided by financing activities
|
3,000,000
|
65,719,412
|
68,719,412
|
||||||
|
Net
increase in cash and cash equivalent
|
1,167,212
|
2,210
|
1,169,422
|
||||||
|
Cash
and cash equivalent at the beginning of the
period
|
2,210
|
- | - | ||||||
|
Cash
and cash equivalent at the end of the period
|
$ |
1,169,422
|
$ |
2,210
|
$ |
1,169,422
|
|||
|
Supplemental
schedule of non cash financing activities:
|
|||||||||
| Accrual of offering costs | $ |
-
|
$ |
238,426
|
$ |
238,426
|
|||
|
Accrual
of deferred underwriters’ fees
|
$ |
-
|
$ |
1,769,400
|
$ |
1,769,400
|
|||
|
Accrual
of deferred acquisition costs
|
$ |
65,000
|
$ | - | $ | 65,000 | |||
|
Supplemental
disclosure of cash flow information:
|
|||||||||
|
Interest
paid
|
$ |
-
|
$ | - | $ | - | |||
| Income taxes paid | $ |
675,668
|
$ | - | $ |
675,668
|
|||
|
Fair
value of warrants included in additional paid in
capital
|
$ |
1,235,000
|
$ | - | $ |
1,235,000
|
|||
|
|
March
31,
|
||||||
|
|
2007
|
2006
|
|||||
|
Investment
held for the benefit of the Company
|
$ |
63,845,850
|
$ |
63,845,850
|
|||
|
Investment
held for the benefit of the Underwriter
|
1,769,400
|
1,769,400
|
|||||
|
Investment
earnings (available to fund Company expenses up to a maximum
of
$2,150,000, net of taxes)(1)
|
489,025
|
209,766
|
|||||
|
|
|
|
|||||
|
|
$ |
66,104,275
|
$ |
65,825,016
|
|||
|
(1)
Through March 31, 2007, the Company has transferred approximately
$2,150,000 of Investment Earnings from the Trust Account
into its
operating account.
|
|
|
|||||
|
|
March
31,
|
||||||
|
2007
|
2006
|
||||||
|
Current:
|
|
||||||
|
Federal
|
$ |
902,510
|
$ |
70,000
|
|||
|
Deferred:
|
|||||||
|
Federal
|
(117,652
|
) | (25,000 | ) | |||
|
|
|||||||
|
Total
tax provision
|
$ |
784,858
|
$ |
45,000
|
|||
|
|
March
31,
|
||||||
|
2007
|
2006
|
||||||
|
Statutory
Federal income tax rate
|
34 | % | 34 | % | |||
| Non-cash compensation expense | (45.7 | )% | |||||
|
State
tax benefit net of federal tax
|
(1.3 | )% | (1.3 | )% | |||
|
Increase
in state valuation allowance
|
1.3 | % | 1.3 | % | |||
|
Other
|
-
|
.4 | % | ||||
|
|
|||||||
|
Effective
income tax rate
|
34 | % | (11.3 | )% | |||
|
March
31,
|
|||||||
|
2007
|
2006
|
||||||
| Operating costs deferred for income tax purposes | $ |
242,015
|
$ |
30,000
|
|||
|
Interest
income deferred for reporting purposes
|
11,059
|
- | |||||
| Difference between accrual accounting for reporting purposes and cash accounting for tax purposes | (75,514 | ) | - | ||||
| Less: Valuation Allowance | (34,908 | ) | (5,000 | ) | |||
| Net deferred tax asset | $ |
142,652
|
$ |
25,000
|
|||
|
As
of
|
|||||||
|
|
As
of
March 31, 2007 |
September
30, 2007
(Unaudited)
|
|||||
|
ASSETS
|
|||||||
|
Cash
and cash equivalents
|
$ |
89
|
$ |
46
|
|||
|
Accounts
receivables
|
2,751
|
6,574
|
|||||
|
Unbilled
receivables
|
2,866
|
2,442
|
|||||
|
Inventories
|
71
|
146
|
|||||
|
Prepaid
and other assets
|
674
|
506
|
|||||
|
Due
from related parties
|
259
|
208
|
|||||
|
Total
Current Assets
|
6,710
|
9,921
|
|||||
|
Property
and equipment, net
|
4,903
|
4,977
|
|||||
|
BOT
Project under Progress
|
3,080
|
-
|
|||||
|
Investment
- joint ventures
|
-
|
41
|
|||||
|
Investment
– others
|
387
|
23
|
|||||
|
Restricted
cash, non-current
|
62
|
238
|
|||||
|
Other
assets
|
216
|
378
|
|||||
|
Total
Assets
|
15,358
|
15,580
|
|||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities
|
|||||||
|
Short-term
borrowings and current portion of long-term debt
|
3,646
|
3,570
|
|||||
|
Trade
payables
|
139
|
312
|
|||||
|
Due
to related parties
|
2,264
|
1,744
|
|||||
|
Other
current liabilities
|
39
|
206
|
|||||
|
Deferred
taxes on income
|
-
|
||||||
|
Total
current liabilities
|
6,088
|
5,831
|
|||||
|
Long-term
debt, net of current portion
|
2,182
|
2,479
|
|||||
|
Deferred
taxes on income
|
538
|
595
|
|||||
|
Security
Deposit from joint ventures
|
348
|
377
|
|||||
|
Other
liabilities
|
1,913
|
896
|
|||||
|
Total
liabilities
|
11,069
|
10,179
|
|||||
|
Stockholders'
equity
|
|||||||
|
Common
stock, par value USD 0.23 (INR 10) per share
|
674
|
674
|
|||||
|
Additional
Paid in Capital
|
726
|
726
|
|||||
|
Retained
earnings
|
2,818
|
3,550
|
|||||
|
Accumulated
other comprehensive (loss) income
|
71
|
450
|
|||||
|
Total
stockholders' equity
|
4,289
|
5,400
|
|||||
|
Total
liabilities and stockholders' equity
|
$ |
15,358
|
$ |
15,580
|
|||
|
Six
months ended
|
Six
months ended
|
|||||||
|
September
30, 2006
|
September
30, 2007
|
|||||||
|
Revenue
|
$ |
4,422
|
$ |
7,251
|
||||
|
Cost
of revenue
|
(3,450 | ) | (5,124 | ) | ||||
|
Gross
profit
|
972
|
2,127
|
||||||
|
Selling,
general and administrative expenses
|
(432 | ) | (601 | ) | ||||
|
Depreciation
|
(116 | ) | (157 | ) | ||||
|
Operating
income
|
424
|
1,369
|
||||||
|
Interest
expense (net)
|
(232 | ) | (353 | ) | ||||
|
Interest
income (net)
|
32
|
36
|
||||||
|
Other
income
|
8
|
7
|
||||||
|
Operating
income before income taxes
|
232
|
1,059
|
||||||
|
Income
tax gain / (expense)
|
(54 | ) | (322 | ) | ||||
|
Fringe
Benefit tax expense
|
(4 | ) | (6 | ) | ||||
|
Net
Income:
|
174
|
731
|
||||||
|
Earnings
per share
|
0.06
|
0.25
|
||||||
|
Basic
and diluted
|
0.06
|
0.25
|
||||||
|
Weighted
average number of common shares outstanding:
|
||||||||
|
Basic
and diluted
|
$ |
2,932,159
|
$ |
2,932,159
|
||||
|
|
|
Common
Stock
|
||||||||||||||||||||||||
|
Shares
|
Par
value
|
Additional
Paid in Capital
|
Retained
Earnings
|
Accumulated
other comprehensive income / (loss)
|
Total
|
|||||||||||||||||||
|
Balance
as of April 1, 2006
|
2,932,159
|
674
|
726
|
2,408
|
(68 | ) |
3,740
|
|||||||||||||||||
|
Loss
on foreign currency translation
|
-
|
-
|
-
|
-
|
(120 | ) | (120 | ) | ||||||||||||||||
|
Net
Income for the period
|
-
|
-
|
-
|
174
|
-
|
174
|
||||||||||||||||||
|
Balance
as of September 30, 2006
|
2,932,159
|
674
|
726
|
2,582
|
(188 | ) |
3,794
|
|||||||||||||||||
|
Balance
as at April 1, 2007
|
2,932,159
|
674
|
726
|
2,818
|
71
|
4,289
|
||||||||||||||||||
|
Gain
on foreign currency translation
|
-
|
-
|
-
|
-
|
379
|
379
|
||||||||||||||||||
|
Net
Income for the period
|
-
|
-
|
-
|
731
|
-
|
731
|
||||||||||||||||||
|
Balance
as of September 30, 2007
|
2,932,159
|
674
|
726
|
3.550
|
450
|
5,400
|
||||||||||||||||||
|
|
|
Six
months ended
|
Six
months ended
|
|||||||
|
September
30,2006
|
September
30,2007
|
|||||||
|
Cash
flows from operating activities
|
||||||||
|
Net
income
|
$ |
174
|
$ |
731
|
||||
|
Adjustments
to reconcile net income to net cash
|
-
|
-
|
||||||
|
provided
(used) in operating activities:
|
-
|
-
|
||||||
|
Depreciation
|
116
|
157
|
||||||
|
Deferred
tax expense
|
50
|
12
|
||||||
|
Loss
on sale of property and equipment
|
-
|
63
|
||||||
|
340
|
963
|
|||||||
|
Changes
in assets and liabilities
|
||||||||
|
Accounts
receivable
|
274
|
(3,506 | ) | |||||
|
Unbilled
Receivable
|
344
|
651
|
||||||
|
Inventories
|
149
|
(68 | ) | |||||
|
Prepaid
expenses and other current assets
|
(91 | ) |
219
|
|||||
|
Trade
payables
|
(125 | ) |
157
|
|||||
|
Other
current liabilities
|
167
|
160
|
||||||
|
Security
Deposit from joint ventures
|
-
|
-
|
||||||
|
Other
non-current liabilities
|
(312 | ) | (1,150 | ) | ||||
|
Non-current
assets
|
318
|
(64 | ) | |||||
|
BOT
Project under Progress
|
(833 | ) |
3,260
|
|||||
|
Net
cash used in (provided by) operating activities
|
231
|
622
|
||||||
|
Cash
flows from investing activities
|
||||||||
|
Purchase
of property and equipment
|
(372 | ) | (11 | ) | ||||
|
Proceeds
from sale of property and equipment
|
-
|
122
|
||||||
|
Non
Current Investments
|
(295 | ) |
387
|
|||||
|
Investment
in joint ventures
|
13
|
(116 | ) | |||||
|
Restricted
cash
|
295
|
(166 | ) | |||||
|
Net
cash (used in) provided by investing activities
|
(359 | ) |
216
|
|||||
|
Cash
flows from financing activities
|
||||||||
|
Net
movement in cash credit and bank overdraft
|
(370 | ) |
85
|
|||||
|
Proceeds
from other short-term borrowings
|
(1 | ) |
11
|
|||||
|
Proceeds
from long-term borrowings
|
763
|
328
|
||||||
|
Repayment
of long-term borrowings
|
(475 | ) | (687 | ) | ||||
|
Due
to related parties, net
|
(253 | ) | (623 | ) | ||||
|
Net
cash provided by financing activities
|
(336 | ) | (886 | ) | ||||
|
Effect
of exchange rate changes on cash and cash equivalents
|
(17 | ) |
5
|
|||||
|
Net
increase (decrease) in cash and cash equivalents during the
year
|
(481 | ) | (43 | ) | ||||
|
Add:
Balance as at the beginning of the period
|
539
|
89
|
||||||
|
Balance
as at the end of the period
|
$ |
58
|
$ |
46
|
||||
|
Supplementary
information to Cash flow Statement
|
Six
Months ended
|
Six
Months ended
|
|||||
|
September
30, 2006
|
September
30, 2007
|
||||||
|
Cash
paid during the year
|
|||||||
|
Income
tax
|
$ |
167
|
$ |
416
|
|||
|
Interest
|
$ |
204
|
$ |
303
|
|||
|
Six
months ended
|
Month
end Average
Rate
(P&L rate)
|
Period
end rate
(Balance
sheet rate)
|
|
September
30, 2006
|
INR
45.80 per USD
|
INR
45.95 per USD
|
|
September
30, 2007
|
INR
40.72 per USD
|
INR
39.75 per USD
|
|
Category
|
Years
|
|
Buildings
|
25
|
|
Plant
and Machinery
|
20
|
|
Computer
Equipment
|
3
|
|
Office
Equipment
|
5
|
|
Furniture
and Fixtures
|
5
|
|
Vehicles
|
5
|
|
Leasehold
Improvements
|
Over
the period of lease or useful life (if
less)
|
|
As
of
|
As
of
|
||||||
|
Particulars
|
March
31, 2007
|
September
30, 2007
|
|||||
|
Land
|
45
|
48
|
|||||
|
Buildings
|
49
|
48
|
|||||
|
Plant
& Machinery
|
5,468
|
5,623
|
|||||
|
Computers
|
58
|
64
|
|||||
|
Furniture
and Fixture
|
56
|
62
|
|||||
|
Office
equipment
|
25
|
28
|
|||||
|
Vehicles
|
165
|
180
|
|||||
|
Leasehold
Improvements
|
160
|
178
|
|||||
|
Total
|
6,026
|
6,231
|
|||||
|
Less:
Accumulated depreciation
|
1,123
|
1,254
|
|||||
|
Net
|
4,903
|
4,977
|
|||||
|
As
of
|
As
of
|
||||||
|
Particulars
|
March
31, 2007
|
September
30, 2007
|
|||||
|
Furniture
and Fixture
|
19
|
28
|
|||||
|
Office
equipment
|
11
|
12
|
|||||
|
Leasehold
Improvements
|
17
|
34
|
|||||
|
Vehicles
|
86
|
112
|
|||||
|
Total
|
133
|
186
|
|||||
|
Six
Months ended September 30,
|
|||||||
|
2006
|
2007
|
||||||
|
Current
Tax Expense
|
5
|
310
|
|||||
|
Deferred
Tax Expenses / (Income)
|
50
|
12
|
|||||
|
Income
Tax Expense / (Income)
|
54
|
322
|
|||||
|
As
of
|
||||||||
|
March
31, 2007
|
September
30, 2007
|
|||||||
|
Net
Income before Taxes
|
779
|
912
|
||||||
|
Enacted
Tax Rates in India
|
33.9900 | % | 33.9900 | % | ||||
|
Computed
Tax Expense / (Income)
|
(265 | ) | (310 | ) | ||||
|
Increase
/ (reduction) in taxes on account of:
|
||||||||
|
Effect
of changes in tax rate
|
1
|
-
|
||||||
|
Timing
Differences
|
620
|
632
|
||||||
|
Income
tax expense / (income) reported
|
357
|
322
|
||||||
|
As
of
|
As
of
|
|||||||
|
March
31, 2007
|
September
30, 2007
|
|||||||
|
Deferred
Tax Assets
|
||||||||
|
Retirement
Benefits
|
11
|
14
|
||||||
|
11
|
14
|
|||||||
|
Deferred
Tax Liabilities
|
||||||||
|
Property
and equipment
|
(549 | ) | (609 | ) | ||||
| (549 | ) | (609 | ) | |||||
|
Net
deferred tax liability
|
(538 | ) | (595 | ) | ||||
|
As
of
|
As
of
|
||||||
|
March
31, 2007
|
September
30, 2007
|
||||||
|
Secured
|
2,069
|
2,330
|
|||||
|
Unsecured
|
278
|
314
|
|||||
|
Total
|
2,347
|
2,644
|
|||||
|
Add:
|
-
|
||||||
|
Current
portion of long term debt
|
1,299
|
926
|
|||||
|
Total
|
3,646
|
3,570
|
|||||
|
As
of
|
As
of
|
||||||
|
March
31, 2007
|
September
30, 2007
|
||||||
|
Secured
|
|||||||
|
Term
loans
|
1,568
|
1,571
|
|||||
|
Loan
for assets purchased under capital lease
|
1,913
|
1,834
|
|||||
|
Total
|
3,481
|
3,405
|
|||||
|
Less:
Current portion (Payable within 1 year)
|
1,299
|
926
|
|||||
|
Total
|
2,182
|
2,479
|
|||||
|
|
Six
Month ended September 30,
2007
|
|||||||||||
|
Relationship
|
Key
Management Personnel
|
Joint
Venture Entities
|
Other
Related Parties
|
|||||||||
|
Fund
Transfer For Exp.
|
-
|
167
|
457
|
|||||||||
|
Fund
Received For Exp.
|
-
|
-
|
(238 | ) | ||||||||
|
Purchase
of Assets
|
-
|
-
|
-
|
|||||||||
|
Sale/transfer
of Assets
|
-
|
-
|
28
|
|||||||||
|
Employee
related transaction by the group
|
-
|
-
|
-
|
|||||||||
|
Employee
related transaction for the group
|
-
|
-
|
(30 | ) | ||||||||
|
Exp.
Incurred by the group
|
-
|
-
|
-
|
|||||||||
|
Exp.
Incurred for the group
|
-
|
-
|
(4 | ) | ||||||||
|
|
||||||||||||
|
Closing
Balance receivable / (payable)
|
86
|
(322 | ) | (1,549 | ) | |||||||
|
As
of
|
As
of
|
||||||
|
March
31, 2006
|
March
31, 2007
|
||||||
|
ASSETS
|
|||||||
|
Cash
and cash equivalents
|
$ |
539
|
$ |
89
|
|||
|
Accounts
receivables
|
2,083
|
2,751
|
|||||
|
Unbilled
receivables
|
2,980
|
2,866
|
|||||
|
Inventories
|
248
|
71
|
|||||
|
Prepaid
and other assets
|
617
|
674
|
|||||
|
Due
from related parties
|
241
|
259
|
|||||
|
Total
Current Assets
|
6,708
|
6,710
|
|||||
|
Property
and equipment, net
|
4,347
|
4,903
|
|||||
|
BOT
Project under Progress
|
1,584
|
3,080
|
|||||
|
Investment
- joint ventures
|
43
|
-
|
|||||
|
Investment
– others
|
148
|
387
|
|||||
|
Restricted
cash, non-current
|
724
|
62
|
|||||
|
Other
assets
|
407
|
216
|
|||||
|
Total
Assets
|
13,961
|
15,358
|
|||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
liabilities
|
|||||||
|
Short-term
borrowings and current portion of long-term debt
|
3,868
|
3,646
|
|||||
|
Trade
payables
|
1,366
|
139
|
|||||
|
Due
to related parties
|
1,604
|
2,264
|
|||||
|
Other
current liabilities
|
53
|
39
|
|||||
|
Deferred
taxes on income
|
|||||||
|
Total
current liabilities
|
6,891
|
6,088
|
|||||
|
Long-term
debt, net of current portion
|
1,855
|
2,182
|
|||||
|
Deferred
taxes on income
|
441
|
538
|
|||||
|
Security
Deposit from joint ventures
|
337
|
348
|
|||||
|
Other
liabilities
|
697
|
1,913
|
|||||
|
Total
liabilities
|
10,221
|
11,069
|
|||||
|
Stockholders'
equity
|
|||||||
|
Common
stock, par value USD 0.23 (INR10) per share
|
674
|
674
|
|||||
|
Additional
Paid in Capital
|
726
|
726
|
|||||
|
Retained
earnings
|
2,408
|
2,818
|
|||||
|
Accumulated
other comprehensive (loss) / income
|
(68 | ) |
71
|
||||
|
Total
stockholders' equity
|
3,740
|
4,289
|
|||||
|
Total
liabilities and stockholders' equity
|
$ |
13,961
|
$ |
15,358
|
|||
|
Year
ended
|
Year
ended
|
Year
ended
|
||||||||||
|
March
31, 2005
|
March
31, 2006
|
March
31, 2007
|
||||||||||
|
Revenue
|
$ |
11,477
|
$ |
11,011
|
$ |
10,604
|
||||||
|
Cost
of revenue
|
(9,271 | ) | (8,596 | ) | (8,101 | ) | ||||||
|
Gross
profit
|
2,206
|
2,415
|
2,503
|
|||||||||
|
Selling,
general and administrative expenses
|
(920 | ) | (1,241 | ) | (1,115 | ) | ||||||
|
Depreciation
|
(190 | ) | (240 | ) | (243 | ) | ||||||
|
Operating
income
|
1,096
|
934
|
1,145
|
|||||||||
|
Interest
expense (net)
|
(312 | ) | (389 | ) | (533 | ) | ||||||
|
Interest
income (net)
|
60
|
50
|
66
|
|||||||||
|
Other
income
|
63
|
73
|
100
|
|||||||||
|
Operating
income before income taxes
|
907
|
668
|
778
|
|||||||||
|
Income
tax gain / (expense)
|
(363 | ) | (179 | ) | (357 | ) | ||||||
|
Fringe
Benefit tax expense
|
-
|
(7 | ) | (11 | ) | |||||||
|
Net
Income:
|
544
|
482
|
410
|
|||||||||
|
Earnings
per share
|
||||||||||||
|
Basic
and diluted
|
0.19
|
0.16
|
0.14
|
|||||||||
|
Weighted
average number of common shares outstanding:
|
||||||||||||
|
Basic
and diluted
|
$ |
2,932,159
|
$ |
2,932,159
|
$ |
2,932,159
|
||||||
|
Common
Stock
|
Additional
Paid in Capital
|
Retained
Earnings
|
Accumulated
other comprehensive income / (loss)
|
Total
|
||||||||||||||||||||
|
Shares
|
Par
value
|
|||||||||||||||||||||||
|
Balance
as of April 1, 2004
|
183,259
|
44
|
1,356
|
1,383
|
(2 | ) |
2,781
|
|||||||||||||||||
|
Gain
on foreign currency translation
|
-
|
-
|
-
|
-
|
1
|
1
|
||||||||||||||||||
|
Bonus
Shares issued
|
2,748,900
|
630
|
(630 | ) |
-
|
-
|
-
|
|||||||||||||||||
|
Net
Income for the period
|
-
|
-
|
-
|
544
|
-
|
544
|
||||||||||||||||||
|
Balance
as of March 31, 2005
|
2,932,159
|
674
|
726
|
1,926
|
(1 | ) |
3,326
|
|||||||||||||||||
|
Loss
on foreign currency translation
|
-
|
-
|
-
|
-
|
(67 | ) | (68 | ) | ||||||||||||||||
|
Net
Income for the period
|
-
|
-
|
-
|
482
|
-
|
482
|
||||||||||||||||||
|
Balance
as of March 31, 2006
|
2,932,159
|
674
|
726
|
2,408
|
(68 | ) |
3,740
|
|||||||||||||||||
|
Gain
on foreign currency translation
|
-
|
-
|
-
|
-
|
139
|
139
|
||||||||||||||||||
|
Net
Income for the period
|
-
|
-
|
-
|
410
|
-
|
410
|
||||||||||||||||||
|
Balance
as at March 31, 2007
|
2,932,159
|
674
|
726
|
2,818
|
71
|
4,289
|
||||||||||||||||||
|
Year
ended
|
Year
ended
|
Year
ended
|
||||||||||
|
March
31,2005
|
March
31,2006
|
March
31,2007
|
||||||||||
|
Cash
flows from operating activities
|
||||||||||||
|
Net
income
|
$ |
544
|
$ |
482
|
$ |
410
|
||||||
|
Adjustments
to reconcile net income to net cash
|
||||||||||||
|
provided
(used) in operating activities:
|
||||||||||||
|
Depreciation
|
190
|
240
|
243
|
|||||||||
|
Deferred
tax expense
|
168
|
34
|
79
|
|||||||||
|
Loss
on sale of property and equipment
|
(26 | ) |
5
|
(67 | ) | |||||||
|
Changes
in assets and liabilities
|
||||||||||||
|
Accounts
receivable
|
82
|
4
|
(574 | ) | ||||||||
|
Unbilled
Receivable
|
5
|
(2,039 | ) |
200
|
||||||||
|
Inventories
|
(81 | ) | (98 | ) |
177
|
|||||||
|
Prepaid
expenses and other current assets
|
39
|
(473 | ) | (37 | ) | |||||||
|
Trade
payables
|
(469 | ) |
792
|
(1,214 | ) | |||||||
|
Other
current liabilities
|
314
|
(302 | ) | (15 | ) | |||||||
|
Security
Deposit from joint ventures
|
-
|
340
|
-
|
|||||||||
|
Other
non-current liabilities
|
11
|
528
|
1,140
|
|||||||||
|
Non-current
assets
|
(111 | ) | (91 | ) |
126
|
|||||||
|
BOT
Project under Progress
|
-
|
(1,595 | ) | (1,380 | ) | |||||||
|
Net
cash used in (provided by) operating activities
|
666
|
(2,173 | ) | (911 | ) | |||||||
|
Cash
flows from investing activities
|
||||||||||||
|
Purchase
of property and equipment
|
(517 | ) | (1,415 | ) | (727 | ) | ||||||
|
Proceeds
from sale of property and equipment
|
42
|
26
|
10
|
|||||||||
|
Non
Current Investments
|
(285 | ) |
506
|
(224 | ) | |||||||
|
Investment
in joint ventures
|
-
|
(43 | ) |
111
|
||||||||
|
Restricted
cash
|
104
|
(483 | ) |
654
|
||||||||
|
Net
cash (used in) provided by investing activities
|
(656 | ) | (1,409 | ) | (176 | ) | ||||||
|
Cash
flows from financing activities
|
||||||||||||
|
Net
movement in cash credit and bank overdraft
|
156
|
2,294
|
(628 | ) | ||||||||
|
Proceeds
from other short-term borrowings
|
58
|
44
|
165
|
|||||||||
|
Proceeds
from long-term borrowings
|
248
|
2,343
|
1,497
|
|||||||||
|
Repayment
of long-term borrowings
|
(426 | ) | (752 | ) | (966 | ) | ||||||
|
Due
to related parties, net
|
20
|
(63 | ) |
572
|
||||||||
|
Net
cash provided by financing activities
|
56
|
3,866
|
640
|
|||||||||
|
Effect
of exchange rate changes on cash and cash equivalents
|
1
|
(7 | ) | (4 | ) | |||||||
|
Net
increase (decrease) in cash and cash equivalents during the
year
|
67
|
277
|
(450 | ) | ||||||||
|
Add:
Balance as at the beginning of the year
|
195
|
262
|
539
|
|||||||||
|
Balance
as at the end of the year
|
$ |
262
|
$ |
539
|
$ |
89
|
||||||
|
Supplementary
information to Cash flow Statement
|
Year
ended
March 31, 2005 |
Year
ended
March 31, 2006 |
Year
ended
March 31, 2007 |
||||||||
|
Cash
paid during the year
|
|||||||||||
|
Income
tax
|
184
|
270
|
170
|
||||||||
|
Interest
|
248
|
293
|
386
|
||||||||
|
Non
– Cash Items:
|
|||||||||||
|
Common
stock issued on conversion of additional paid in capital
|
630
|
-
|
-
|
||||||||
|
1.
|
BACKGROUND
|
|
(USD
in Millions)
|
|||||||
|
Sector
|
FY20
01-04
|
|
FY20
04-07
|
||||
|
Roads
|
$ |
7,656.61
|
$ |
14,617.16
|
|||
|
Power
|
9,280.74
|
19,721.57
|
|||||
|
Oil
& Gas
|
8,816.70
|
15,313.22
|
|||||
|
Ports/
Airports/ Shipping
|
2,088.16
|
3,712.29
|
|||||
|
Railways
|
7,424.59
|
11,136.89
|
|||||
|
Telecom
|
15,313.22
|
16,937.35
|
|||||
|
Total
|
$ |
50,580.02
|
$ |
81,438.48
|
|||
|
(USD
in Millions)
|
|||||||
|
Funding
Agency/Source
|
No.
of Projects
|
Total
Value
|
|||||
|
NHAI
|
$ |
50
|
$ |
2,218.46
|
|||
|
World
Bank
|
15
|
1,043.20
|
|||||
|
Asian
Development Bank
|
8
|
290.14
|
|||||
|
Annuity
|
8
|
546.10
|
|||||
|
BOT
|
7
|
768.90
|
|||||
|
Total
|
$ |
88
|
$ |
4,866.80
|
|||
|
Year
|
Month
end Average Rate (P&L rate)
|
Year
end rate (Balance sheet rate)
|
|
2004-05
|
INR
44.85 per USD
|
INR
43.62 per USD
|
|
2005-06
|
INR
44.18 per USD
|
INR
44.48 per USD
|
|
2006-07
|
INR
45.11 per USD
|
INR
43.10 per USD
|
|
Category
|
Years
|
|
Buildings
|
25
|
|
Plant
and Machinery
|
20
|
|
Computer
Equipment
|
3
|
|
Office
Equipment
|
5
|
|
Furniture
and Fixtures
|
5
|
|
Vehicles
|
5
|
|
Leasehold
Improvements
|
Over
the period of lease or useful life (if
less)
|
|
|
As
of
|
As
of
|
|||||
|
Particulars
|
March
31, 2006
|
March
31, 2007
|
|||||
|
Land
|
43
|
45
|
|||||
|
Buildings
|
43
|
49
|
|||||
|
Plant
& Machinery
|
4,658
|
5,468
|
|||||
|
Electrical
Installation
|
-
|
-
|
|||||
|
Roads
|
-
|
-
|
|||||
|
Computers
|
53
|
58
|
|||||
|
Furniture
and Fixture
|
54
|
56
|
|||||
|
Office
equipment
|
23
|
25
|
|||||
|
Vehicles
|
160
|
165
|
|||||
|
Leasehold
Improvements
|
155
|
160
|
|||||
|
Total
|
5,189
|
6,026
|
|||||
|
Less:
Accumulated depreciation
|
842
|
1,123
|
|||||
|
Net
|
4,347
|
4,903
|
|||||
|
|
As
of
|
As
of
|
|||||
| Particulars |
March
31, 2006
|
March
31, 2007
|
|||||
|
Furniture
and Fixture
|
15
|
19
|
|||||
|
Office
equipment
|
10
|
11
|
|||||
|
Vehicles
|
14
|
eri17
|
|||||
|
Leasehold
Improvements
|
44
|
86
|
|||||
|
Total
|
83
|
133
|
|||||
|
Year
ended March 31,
|
|||||||||||
|
2005
|
2006
|
2007
|
|||||||||
|
Current
Tax Expense
|
195
|
145
|
278
|
||||||||
|
Deferred
Tax Expenses / (Income)
|
168
|
34
|
79
|
||||||||
|
Income
Tax Expense / (Income)
|
363
|
179
|
357
|
||||||||
|
Year
ended March 31,
|
||||||||||||
|
2005
|
2006
|
2007
|
||||||||||
|
Net
Income before Taxes
|
907
|
668
|
779
|
|||||||||
|
Enacted
Tax Rates in India
|
36.5925 | % | 33.6600 | % | 33.9900 | % | ||||||
|
Computed
Tax Expense / (Income)
|
(332 | ) | (225 | ) | (265 | ) | ||||||
|
Increase
/ (reduction) in taxes on account of:
|
||||||||||||
|
Effect
of changes in tax rate
|
2
|
(12 | ) |
1
|
||||||||
|
Timing
Differences
|
693
|
416
|
620
|
|||||||||
|
Income
tax expense / (income) reported
|
363
|
179
|
357
|
|||||||||
|
As
of
|
As
of
|
|||||||
|
March
31, 2006
|
March
31, 2007
|
|||||||
|
Deferred
Tax Assets
|
||||||||
|
Retirement
Benefits
|
9
|
11
|
||||||
|
9
|
11
|
|||||||
|
Deferred
Tax Liabilities
|
||||||||
|
Property
and equipment
|
(450 | ) | (549 | ) | ||||
| (450 | ) | (549 | ) | |||||
|
Net
deferred tax liability
|
(441 | ) | (538 | ) | ||||
|
As
of
|
As
of
|
||||||
|
March
31, 2006
|
March
31, 2007
|
||||||
|
Secured
|
2,787
|
2,069
|
|||||
|
Unsecured
|
102
|
278
|
|||||
|
Total
|
2,889
|
2,347
|
|||||
|
Add:
|
|||||||
|
Current
portion of long term debt
|
979
|
1,299
|
|||||
|
Total
|
3,868
|
3,646
|
|||||
|
As
of
|
As
of
|
||||||
|
March
31, 2006
|
March
31, 2007
|
||||||
|
Secured
|
87
|
109
|
|||||
|
As
of
|
As
of
|
||||||
|
March
31, 2006
|
March
31, 2007
|
||||||
|
Change
in Projected Benefit Obligation
|
|||||||
|
Accumulated
Benefit Obligation
|
9
|
13
|
|||||
|
Projected
Benefit obligation at the beginning of the year
|
13
|
22
|
|||||
|
Current
Service Cost
|
2
|
3
|
|||||
|
Interest
Cost
|
1
|
2
|
|||||
|
Benefits
paid
|
-
|
-
|
|||||
|
Actuarial
(gain)/ loss
|
5
|
2
|
|||||
|
Projected
Benefit obligation at the end of the year
|
21
|
29
|
|||||
|
Net
amount recognized
|
21
|
29
|
|||||
|
For
Year Ended
|
||||||||||||
|
March
31, 2005
|
March
31, 2006
|
March
31, 2007
|
||||||||||
|
Current
Service Cost
|
2
|
2
|
3
|
|||||||||
|
Interest
Cost
|
1
|
1
|
2
|
|||||||||
|
Recognized
actuarial (gain)/loss
|
-
|
(5 | ) | (2 | ) | |||||||
|
Net
Gratuity Cost
|
2
|
(1 | ) |
2
|
||||||||
|
As
of
|
As
of
|
||||||
|
March
31, 2006
|
March
31, 2007
|
||||||
|
Net
Gratuity Liability
|
21
|
29
|
|||||
|
Year
ended
March 31, 2006 |
Year
ended
March 31, 2007 |
|||||||
|
Discounting
Rate
|
8.00 | % | 8.00 | % | ||||
|
Rate
of Compensation increase
|
5.50 | % | 5.50 | % | ||||
|
Year
ended
March 31, 2006 |
Year
ended
March 31, 2007 |
|||||||
|
Discounting
Rate
|
8.00 | % | 8.00 | % | ||||
|
Rate
of Compensation increase
|
5.50 | % | 5.50 | % | ||||
|
Return
on plan asset
|
0.00 | % | 0.00 | % | ||||
|
As
of
|
|||
|
March
31, 2007
|
|||
|
Year
Ending March 31, 2008
|
1
|
||
|
Year
Ending March 31, 2009
|
2
|
||
|
Year
Ending March 31, 2010
|
2
|
||
|
Year
Ending March 31, 2011
|
2
|
||
|
Year
Ending March 31, 2012
|
1
|
||
|
Year
Ending March 31, 2013 - 17
|
22
|
||
|
Total
|
30
|
||
|
As
of
|
As
of
|
||||||
|
March
31, 2006
|
March
31, 2007
|
||||||
|
Secured
|
|||||||
|
Term
loans
|
890
|
1,568
|
|||||
|
Loan
for assets purchased under capital lease
|
1,944
|
1,913
|
|||||
|
Total
|
2,834
|
3,481
|
|||||
|
Less:
Current portion (Payable within 1 year)
|
979
|
1,299
|
|||||
|
Total
|
1,855
|
2,182
|
|||||
|
Year
|
As
of
March
31, 2007
|
||
|
2008
|
1,299
|
||
|
2009
|
1,073
|
||
|
2010
|
782
|
||
|
2011
|
326
|
||
|
2012
|
-
|
||
|
Total
|
3,481
|
||
|
As
of
|
As
of
|
||||||
|
March
31,
2006 |
March
31, 2007
|
||||||
|
Term
Loans
|
2,932
|
2,376
|
|||||
|
Year
ended March 31,2005
|
||||||||
|
Relationship
|
Key
Management Personnel
|
Other
Related Parties
|
||||||
|
Fund
Transferred
|
-
|
90
|
||||||
|
Fund
Received
|
-
|
(151 | ) | |||||
|
Purchase
of Assets
|
-
|
(269 | ) | |||||
|
Sale/transfer
of Assets
|
-
|
130
|
||||||
|
Employee
related transaction by the Company
|
-
|
1
|
||||||
|
Employee
related transaction for the Company
|
-
|
-
|
||||||
|
Expenses
incurred by the Company
|
114
|
446
|
||||||
|
Expenses
incurred for the Company
|
(33 | ) | (891 | ) | ||||
|
Closing
Balance receivable / (payable)
|
(266 | ) | (1,188 | ) | ||||
|
Year
ended March 31, 2006
|
||||||||||||
|
Relationship
|
Key
Management Personnel
|
Joint
Venture
|
Other
Related Parties
|
|||||||||
|
Fund
Transferred
|
-
|
(193 | ) |
437
|
||||||||
|
Fund
Received
|
-
|
-
|
(913 | ) | ||||||||
|
Purchase
of Assets
|
(39 | ) |
-
|
(2 | ) | |||||||
|
Sale/transfer
of Assets
|
-
|
-
|
1
|
|||||||||
|
Employee
related transaction by the Company
|
-
|
2
|
1
|
|||||||||
|
Employee
related transaction for the Company
|
-
|
(0 | ) | (2 | ) | |||||||
|
Expenses
incurred by the Company
|
168
|
169
|
818
|
|||||||||
|
Expenses
incurred for the Company
|
(63 | ) | (82 | ) | (9 | ) | ||||||
|
Closing
Balance receivable / (payable)
|
(190 | ) |
42
|
(1,173 | ) | |||||||
|
Year
ended March 31, 2007
|
||||||||||||
|
Relationship
|
Key
Management Personnel
|
Joint
Venture
|
Other
Related Parties
|
|||||||||
|
Fund
Transferred
|
-
|
15
|
780
|
|||||||||
|
Fund
Received
|
-
|
(151 | ) | (1,258 | ) | |||||||
|
Purchase
of Assets
|
-
|
(1 | ) |
-
|
||||||||
|
Sale/transfer
of Assets
|
-
|
-
|
1
|
|||||||||
|
Employee
related transaction by the Company
|
-
|
-
|
-
|
|||||||||
|
Employee
related transaction for the Company
|
-
|
(1 | ) |
-
|
||||||||
|
Expenses
incurred by the Company
|
634
|
21
|
150
|
|||||||||
|
Expenses
incurred for the Company
|
(172 | ) | (32 | ) | (73 | ) | ||||||
|
Closing
Balance receivable / (payable)
|
79
|
(455 | ) | (1,630 | ) | |||||||
|
As
of
|
As
of
|
|||||||
|
ASSETS
|
March
31, 2007
|
September
30, 2007
|
||||||
|
Current
Assets
|
||||||||
|
Cash
& Cash Equivalents
|
$ |
1,208
|
$ |
100
|
||||
|
Accounts
Receivables
|
43
|
93
|
||||||
|
Inventories
|
1,284
|
1,784
|
||||||
|
Prepaid
and Other Assets
|
1,231
|
798
|
||||||
|
Due
from related Parties
|
218
|
114
|
||||||
|
Total
Current Assets
|
3,984
|
2,889
|
||||||
|
Investment
- Subsidiary
|
-
|
-
|
||||||
|
Investment
- Others
|
72
|
78
|
||||||
|
Property,
Plant & Equipment (net)
|
2,265
|
2,352
|
||||||
|
Deferred
Tax Asset
|
199
|
351
|
||||||
|
Restricted
Cash & Cash Equivalents
|
371
|
283
|
||||||
|
Other
Assets
|
207
|
489
|
||||||
|
TOTAL
ASSETS
|
7,098
|
6,442
|
||||||
|
Liabilities
and Shareholder's Equity
|
||||||||
|
Current
Liabilities
|
||||||||
|
Short
Term Borrowings and current portion of long term loan
|
6,079
|
-
|
||||||
|
Trade
Payable
|
1,502
|
3,168
|
||||||
|
Other
Current Liabilities
|
144
|
24
|
||||||
|
Total
Current Liabilities
|
7,725
|
3,192
|
||||||
|
Long
Term Debts, net of current portion
|
2,333
|
3,870
|
||||||
|
Other
Liabilities
|
58
|
-
|
||||||
|
Advance
from Customers
|
1,877
|
884
|
||||||
|
Total
Liabilities
|
11,993
|
7,946
|
||||||
|
Share
Holders Equity
|
||||||||
|
Common
Stock
|
988
|
988
|
||||||
|
Preferred
stock
|
-
|
1,182
|
||||||
|
Additional
Paid in capital
|
199
|
199
|
||||||
|
Retained
Earnings
|
(5,948 | ) | (3,297 | ) | ||||
|
Accumulated
Other Comprehensive Income / (Loss)
|
(134 | ) | (576 | ) | ||||
|
Total
Stockholders Equity
|
(4,895 | ) | (1,504 | ) | ||||
|
Total
Liabilities and Shareholder's Equity
|
$ |
7,098
|
$ |
6,442
|
||||
|
Six
months ended
|
Six
months ended
|
|||||||
|
September
30, 2006
|
September
30, 2007
|
|||||||
|
Revenue
|
$ |
316
|
$ |
2,855
|
||||
|
Cost
of Revenue
|
(633 | ) | (2,017 | ) | ||||
|
Gross
Profit/ (Loss)
|
(317 | ) |
838
|
|||||
|
Selling,
General & Administration Expenses
|
(151 | ) | (280 | ) | ||||
|
Depreciation
|
(180 | ) | (102 | ) | ||||
|
Operating
Earnings / (Loss)
|
(648 | ) |
456
|
|||||
|
Interest
Income (Net)
|
-
|
26
|
||||||
|
Interest
Expenses (Net)
|
(408 | ) | (331 | ) | ||||
|
Other
Income
|
189
|
2,661
|
||||||
|
Operating
Income / (Loss) Before Income Taxes
|
(867 | ) |
2,812
|
|||||
|
Income
Tax Expense
|
-
|
(44 | ) | |||||
|
Fringe
Benefit Tax Expense
|
-
|
(4 | ) | |||||
|
Deferred
Tax Expense
|
12
|
(35 | ) | |||||
|
Income
/ (Loss) after Income Taxes
|
(855 | ) |
2,729
|
|||||
|
Provision
for Dividend on Preference Stock
|
-
|
(70 | ) | |||||
|
Tax
on Preference Share Dividend
|
-
|
(8 | ) | |||||
|
Net
(Loss) / Income
|
(855 | ) |
2,651
|
|||||
|
(Loss)
/ Earnings per Share
|
||||||||
|
Basic
|
$ | (0.20 | ) | $ |
0.64
|
|||
|
Diluted
|
$ | (0.20 | ) | $ |
0.34
|
|||
|
Weighted
average number of common shares outstanding:
|
||||||||
|
Basic
|
4,287,500
|
4,287,500
|
||||||
|
Diluted
|
4,287,500
|
8,037,500
|
||||||
|
Accumulated
|
||||||||||||||||||||||||||||||||
|
Additional
|
other
|
|||||||||||||||||||||||||||||||
|
Common
stock
|
Preference
Stock
|
paid
in
|
comprehensive
|
|||||||||||||||||||||||||||||
|
Particulars
|
Shares
|
Par
Value
|
Shares
|
Par
Value
|
Capital
|
Retained
Earnings
|
income
/ (Loss)
|
Total
|
||||||||||||||||||||||||
|
Balance
as on April 1, 2006
|
428,750
|
988
|
-
|
-
|
199
|
(6,484 | ) | (141 | ) | (5,438 | ) | |||||||||||||||||||||
|
Net
Income/(Loss) for the period
|
-
|
-
|
-
|
-
|
-
|
(855 | ) |
-
|
(855 | ) | ||||||||||||||||||||||
|
Gain
/ Loss on Foreign Currency Translation
|
-
|
-
|
-
|
-
|
-
|
-
|
166
|
166
|
||||||||||||||||||||||||
|
Balance
as on September 30, 2006
|
428,750
|
988
|
199
|
(7,339 | ) |
25
|
(6,127 | ) | ||||||||||||||||||||||||
|
Balance
as on April 1, 2007
|
4,287,500
|
988
|
199
|
(5,948 | ) | (134 | ) | (4,895 | ) | |||||||||||||||||||||||
|
Net
Income/ (Loss) for the period
|
-
|
-
|
-
|
-
|
-
|
2,651
|
-
|
2,651
|
||||||||||||||||||||||||
|
New
Preference Share Capital Issued
|
-
|
-
|
5,000,000
|
1,182
|
-
|
-
|
-
|
1,182
|
||||||||||||||||||||||||
|
Gain/(Loss)
on Foreign
|
||||||||||||||||||||||||||||||||
|
Currency
Translation
|
-
|
-
|
-
|
-
|
-
|
-
|
(442 | ) | (442 | ) | ||||||||||||||||||||||
|
Balance
as on September 30, 2007
|
4,287,500
|
988
|
5,000,000
|
1,182
|
199
|
(3,297 | ) | (576 | ) | (1,504 | ) | |||||||||||||||||||||
|
Six
months ended
September
30,2006
|
Six
months ended
September
30,2007
|
||||||||
|
Cash
From Operating Activities
|
|||||||||
|
Net
Income/(Loss)
|
$ | (855 | ) | $ |
2,651
|
||||
|
Adjustments
to reconcile net Income to net cash from
|
|||||||||
|
Operating
activities
|
|||||||||
|
Depreciation
|
180
|
102
|
|||||||
|
Deferred
Tax (income) /Expense
|
(12 | ) |
35
|
||||||
| (687 | ) |
2,788
|
|||||||
|
Changes
in Assets and liabilities
|
|||||||||
|
Restricted
cash
|
232
|
88
|
|||||||
|
Accounts
Receivable
|
12
|
(50 | ) | ||||||
|
Inventories
|
432
|
(500 | ) | ||||||
|
Prepaid
and other Assets
|
146
|
433
|
|||||||
|
Long
term other assets
|
133
|
(282 | ) | ||||||
|
Trade
Payable
|
2,233
|
1,586
|
|||||||
|
Other
Current liabilities
|
(78 | ) | (120 | ) | |||||
|
Advance
from Customer
|
(2,075 | ) | (993 | ) | |||||
|
Other
liabilities
|
(2 | ) | (58 | ) | |||||
|
Net
cash provided by/ (used in) operating activities
|
346
|
2,892
|
|||||||
|
Cash
flow from Investing Activities
|
|||||||||
|
Purchase
of property and equipment
|
-
|
(7 | ) | ||||||
|
Proceeds
from Sale of Investments
|
11
|
-
|
|||||||
|
Net
cash provided by/ (used in) Investing activities
|
11
|
(7 | ) | ||||||
|
Cash
flow from Financing Activities
|
|||||||||
|
Due
from Related Parties
|
40
|
-
|
|||||||
|
Issue
of preference shares
|
-
|
1,182
|
|||||||
|
Debts
- net
|
(413 | ) | (5,231 | ) | |||||
|
Net
Cash provided by/ (used in ) financing Activities
|
(373 | ) | (4,049 | ) | |||||
|
Net
(decrease) / increase in cash and cash equivalents during the
year
|
(16 | ) | (1,164 | ) | |||||
|
Effect
of exchange rate in Cash Equivalents
|
10
|
56
|
|||||||
|
Add:
Balance at beginning of year
|
69
|
1,208
|
|||||||
|
Balance
at end of the year
|
$ |
63
|
$ |
100
|
|||||
|
March
31, 2007
|
September
30, 2007
|
||||
|
Authorized
common stock
|
8,000,000
shares of INR 100 per
share
|
8,000,000
shares of INR 10 per share
|
|||
|
Issued
and outstanding common
stock
|
4,287,500
shares of INR 10 per
share
|
4,287,500
shares of INR 10 per share
|
|||
|
Authorized
preference stock
|
7,000,000
shares of INR 10 per
share
|
7,000,000
shares of INR 10 per
share
|
|||
|
Issued
and outstanding preference
stock
|
-
|
5,000,000
shares of INR 10 per
share.
|
|||
|
Six
months ended
|
Month End
Average Rate
(P
& L rate)
|
Period
end rate (Balance Sheet rate)
|
|
30
September, 2006
|
INR
45.80 per USD
|
INR
45.95 per USD
|
|
30
September, 2007
|
INR
40.72 per USD
|
INR
39.75 per USD
|
|
Asset
Type
|
Useful
Life
|
|
Building
(Flat)
|
25
years
|
|
Computer
Equipment
|
3
years
|
|
Furniture
and Fixtures
|
5
years
|
|
Vehicles
|
5
years
|
|
Plant
and Equipment
|
20
years
|
|
Particulars
|
As
of
March 31, 2007 |
As
of
September 30, 2007 |
|||||
|
Land
|
2
|
2
|
|||||
|
Building
(Flat)
|
23
|
24
|
|||||
|
Machineries
& Equipment
|
4,177
|
4,537
|
|||||
|
Furniture
& Fixtures
|
75
|
81
|
|||||
|
Vehicles
|
698
|
756
|
|||||
|
Total
|
4,975
|
5,400
|
|||||
|
Less:
Accumulated Depreciation
|
2,710
|
3,048
|
|||||
|
Net
|
2,265
|
2,352
|
|||||
|
Particulars
|
As
of
March 31, 2007 |
As
of
September 30, 2007 |
|||||
|
Short
Term Borrowings and current portion of long term
debts
|
|||||||
|
Secured
Loan:- Cash
Credit Loan & WCTL from Bank
|
6,079
|
-
|
|||||
|
Long
Term Debts, net of current portion
|
|||||||
|
Term
loan
|
1,656
|
1,390
|
|||||
|
Loan
for assets purchased under Capital lease
|
-
|
-
|
|||||
|
Unsecured
Loan – Directors
|
1
|
94
|
|||||
|
Unsecured
Loan – Others
|
676
|
1,250
|
|||||
|
Secured
Loan - Cash Credit
|
-
|
1,136
|
|||||
|
Total
|
8,412
|
3,870
|
|||||
|
Assets
|
March
31, 2006
|
March
31, 2007
|
||||||
|
Current
Assets
|
||||||||
|
Cash
& Cash Equivalents
|
$ |
69
|
$ |
1,208
|
||||
|
Accounts
Receivable
|
307
|
43
|
||||||
|
Inventories
|
4,182
|
1,284
|
||||||
|
Prepaid
and Other Assets
|
1,275
|
1,231
|
||||||
|
Due
from Related Parties
|
139
|
218
|
||||||
|
Total
Current Assets
|
5,972
|
3,984
|
||||||
|
Investment-Subsidiary
|
382
|
-
|
||||||
|
Investment-Others
|
76
|
72
|
||||||
|
Property,
Plant & Equipment (net)
|
2,417
|
2,265
|
||||||
|
Deferred
Tax Asset
|
203
|
199
|
||||||
|
Restricted
Cash & Cash Equivalents
|
589
|
371
|
||||||
|
Other
Assets
|
805
|
207
|
||||||
|
Total
Assets
|
10,444
|
7,098
|
||||||
|
Liabilities
and Shareholder's Equity
|
||||||||
|
Current
Liabilities
|
||||||||
|
Short
Term Borrowings and current portion of long term loan
|
8,125
|
6,079
|
||||||
|
Trade
Payable
|
987
|
1,502
|
||||||
|
Current
maturities of Long Term Debts
|
-
|
-
|
||||||
|
Other
Current Liabilities
|
78
|
144
|
||||||
|
Deferred
Tax Liability
|
-
|
-
|
||||||
|
Total
Current Liabilities
|
9,190
|
7,725
|
||||||
|
Long
Term Debts, net of current portion
|
3,656
|
2,333
|
||||||
|
Other
Liabilities
|
39
|
58
|
||||||
|
Deferred
Tax Liability
|
-
|
-
|
||||||
|
Advance
from Customers
|
2,997
|
1,877
|
||||||
|
Total
Liabilities
|
15,882
|
11,993
|
||||||
|
Share
Holders Equity
|
||||||||
|
Common
Stock
|
988
|
988
|
||||||
|
Additional
Paid in Capital
|
199
|
199
|
||||||
|
Retained
Earnings
|
(6,484 | ) | (5,948 | ) | ||||
|
Accumulated
Other Comprehensive Income/(Loss)
|
(141 | ) | (134 | ) | ||||
|
Total
Stockholders Equity
|
(5,438 | ) | (4,895 | ) | ||||
|
Total
Liabilities and Shareholder's Equity
|
$ |
10,444
|
$ |
7,098
|
||||
|
Year
ended
March 31, 2005 |
Year
ended
March 31, 2006 |
Year
ended
March 31, 2007 |
||||||||||
|
Revenue
|
$ |
8,954
|
$ |
2,285
|
$ |
4,318
|
||||||
|
Cost
of Revenue
|
(10,010 | ) | (2,567 | ) | (2,656 | ) | ||||||
|
Gross
(Loss) / Profit
|
(1,056 | ) | (282 | ) |
1,662
|
|||||||
|
Selling,
General & Administration Expenses
|
(1,388 | ) | (615 | ) | (458 | ) | ||||||
|
Depreciation
|
(483 | ) | (513 | ) | (207 | ) | ||||||
|
Operating
(Loss) / Income
|
(2,927 | ) | (1,410 | ) |
997
|
|||||||
|
Interest
Income(net)
|
97
|
49
|
16
|
|||||||||
|
Interest
Expenses(net)
|
(1,864 | ) | (1,524 | ) | (1,144 | ) | ||||||
|
Other
Income
|
871
|
516
|
532
|
|||||||||
|
Net
operating (loss) / income before income taxes
|
(3,823 | ) | (2,369 | ) |
401
|
|||||||
|
Income
Tax Income
|
515
|
67
|
140
|
|||||||||
|
Fringe
Benefit Tax Expense
|
-
|
(5 | ) | (5 | ) | |||||||
|
Net
(Loss) / Income
|
(3,308 | ) | (2,307 | ) |
536
|
|||||||
|
(Loss)
/ Earnings per Share
|
||||||||||||
|
Basic
and diluted
|
$ | (0.77 | ) | $ | (0.54 | ) | $ |
0.13
|
||||
|
Weighted
average number of common shares outstanding:
|
||||||||||||
|
Basic
and diluted
|
4,287,500
|
4,287,500
|
4,287,500
|
|||||||||
|
Year
Ended
March 31, 2005 |
Year
Ended
March 31, 2006 |
Year
Ended
March 31, 2007 |
||||||||||
|
Cash
flows from operating activities
|
||||||||||||
|
Net
(Loss) / Income
|
$ | (3,308 | ) | $ | (2,307 | ) | $ |
536
|
||||
|
Adjustments
to reconcile net Income
|
||||||||||||
|
to
net cash from operating activities
|
||||||||||||
|
Depreciation
|
483
|
506
|
207
|
|||||||||
|
Deferred
Tax (income)
|
(651 | ) | (87 | ) | (192 | ) | ||||||
|
Loss
on sale on property and equipment-net
|
382
|
119
|
3
|
|||||||||
|
Loss
on sale of Investment-net
|
313
|
-
|
||||||||||
|
Other
non cash expenditure
|
64
|
268
|
219
|
|||||||||
|
Changes
in Assets and liabilities
|
||||||||||||
|
Restricted
cash
|
(45 | ) |
279
|
219
|
||||||||
|
Accounts
Receivable
|
(374 | ) |
1,010
|
261
|
||||||||
|
Inventories
|
402
|
274
|
2,898
|
|||||||||
|
Prepaid
and other Assets
|
558
|
385
|
-
|
|||||||||
|
Long
term other assets
|
826
|
(134 | ) | (12 | ) | |||||||
|
Accounts
Payable
|
226
|
(71 | ) |
937
|
||||||||
|
Advance
from Customer
|
53
|
(978 | ) | (214 | ) | |||||||
|
Other
liabilities
|
9
|
(21 | ) |
85
|
||||||||
|
Net
cash (used in) provided by operating activities
|
(1,062 | ) | (757 | ) |
4,947
|
|||||||
|
Cash
flow from Investing Activities
|
||||||||||||
|
Purchase
of property and equipment
|
(7 | ) | (4 | ) | (3 | ) | ||||||
|
Proceeds
from sale of property and equipment
|
-
|
433
|
13
|
|||||||||
|
Purchase
of Investments
|
-
|
-
|
-
|
|||||||||
|
Proceeds
from Sale of Investments
|
148
|
125
|
401
|
|||||||||
|
Net
cash provided by Investing activities
|
141
|
554
|
411
|
|||||||||
|
Cash
flow from Financing Activities
|
||||||||||||
|
Debts
– net
|
907
|
199
|
(4,275 | ) | ||||||||
|
Net
Cash provided by (used in) financing Activities
|
907
|
199
|
(4,275 | ) | ||||||||
|
Effect
of exchange rate on cash equivalents
|
(7 | ) | (9 | ) |
56
|
|||||||
|
Net
(decrease) increase in cash and cash equivalents during the
year
|
(14 | ) | (4 | ) |
1,083
|
|||||||
|
Add:
Balance at beginning of year
|
104
|
82
|
69
|
|||||||||
|
Balance
at end of the year
|
$ |
83
|
$ |
69
|
$ |
1,208
|
||||||
|
Common
Stock
|
||||||||||||||||||||||||
|
Shares
|
Par
value
|
Additional
Paid in Capital
|
Retained
Earnings
|
Accumulated
other Comprehensive Income/(Loss)
|
Total
|
|||||||||||||||||||
|
Balance
as of April 1, 2004
|
428,750
|
988
|
199
|
(869 | ) |
2
|
320
|
|||||||||||||||||
|
Net
Loss for the period
|
-
|
-
|
-
|
(3,308 | ) |
-
|
(3,308 | ) | ||||||||||||||||
|
Loss on
Foreign Currency Translation
|
-
|
-
|
-
|
-
|
(44 | ) | (44 | ) | ||||||||||||||||
|
Balance
as of March 31, 2005
|
428,750
|
988
|
199
|
(4,177 | ) | (42 | ) | (3,032 | ) | |||||||||||||||
|
Net
Loss for the period
|
-
|
-
|
-
|
(2,307 | ) |
-
|
(2,307 | ) | ||||||||||||||||
|
Loss on
Foreign Currency Translation
|
-
|
-
|
-
|
-
|
(99 | ) | (99 | ) | ||||||||||||||||
|
Balance
as of March 31, 2006
|
428,750
|
988
|
199
|
(6,484 | ) | (141 | ) | (5,438 | ) | |||||||||||||||
|
Net
Income for the period
|
-
|
-
|
-
|
536
|
-
|
536
|
||||||||||||||||||
|
Gain
on Foreign Currency Translation
|
-
|
-
|
-
|
-
|
7
|
7
|
||||||||||||||||||
|
Balance
as of March 31, 2007
|
4,287,500
|
988
|
199
|
(5,948 | ) | (134 | ) | (4,895 | ) | |||||||||||||||
|
Sector
|
FY20
01-04
|
FY20
04-07
|
|||||
|
Roads
|
$ |
7,656.61
|
$ |
14,617.16
|
|||
|
Power
|
9,280.74
|
19,721.57
|
|||||
|
Oil
& Gas
|
8,816.70
|
15,313.22
|
|||||
|
Ports/
Airports/ Shipping
|
2,088.16
|
3,712.29
|
|||||
|
Railways
|
7,424.59
|
11,136.89
|
|||||
|
Telecom
|
15,313.22
|
16,937.35
|
|||||
|
Total
|
$ |
50,580.02
|
$ |
81,438.48
|
|||
|
Funding
Agency/Source
|
No.
of Projects
|
Total
Value
USD in Millions |
|||||
|
NHAI
|
50
|
$ |
2,218.46
|
||||
|
World
Bank
|
15
|
1,043.20
|
|||||
|
Asian
Development Bank
|
8
|
290.14
|
|||||
|
Annuity
|
8
|
546.10
|
|||||
|
BOT
|
7
|
768.90
|
|||||
|
Total
|
88
|
$ |
4,866.80
|
||||
|
Year
|
Month
end Average Rate (P&L rate)
|
Year
end rate (Balance sheet rate)
|
|
2004-05
|
INR
44.85 per USD
|
INR
43.62 per USD
|
|
2005-06
|
INR
44.18 per USD
|
INR
44.48 per USD
|
|
2006-07
|
INR
45.11 per USD
|
INR
43.10 per USD
|
|
Category
|
Useful
Life (years)
|
|
Building
(Flat)
|
25
|
|
Plant
and Machinery
|
20
|
|
Computer
Equipment
|
3
|
|
Office
Equipment
|
5
|
|
Furniture
and Fixtures
|
5
|
|
Vehicles
|
5
|
|
Leasehold
Improvements
|
Over
the period of lease or useful life (if
less)
|
|
March
31, 2006
|
March
31, 2007
|
||||||
|
Authorized
Common Stock
|
500,000
shares of INR 100 per
share
|
8,000,000
shares of INR 10 per share
|
|||||
|
Issued
and Outstanding Common
Stock
|
428,750
shares of INR 100 per
share
|
4,287,500
shares of INR 10 per share
|
|||||
|
Authorized
preference stock
|
-
|
7,000,000
of INR 10 per share
|
|||||
|
Issued
and Outstanding Preference
stock
|
-
|
-
|
|||||
|
As
at
|
March
31, 2006
|
March
31, 2007
|
|||||
|
Land
|
2
|
2
|
|||||
|
Building
(Apartment)
|
22
|
23
|
|||||
|
Machineries
& Equipment
|
4,045
|
4,177
|
|||||
|
Furniture
& Fixtures
|
72
|
75
|
|||||
|
Vehicles
|
699
|
698
|
|||||
|
Total
|
4,840
|
4,975
|
|||||
|
Less:
Accumulated Depreciation
|
2,423
|
2,710
|
|||||
|
Net
|
2,417
|
2,265
|
|
As
of
|
As
of
|
||||||
|
Particulars
|
March
31, 2006
|
March
31, 2007
|
|||||
|
Secured
|
|||||||
|
Cash
Credit Loan & WCTL from Bank
|
8,125
|
6,079
|
|||||
|
Total
|
8,125
|
6,079
|
|||||
|
As
of
|
As
of
|
||||||
|
Particulars
|
March
31, 2006
|
March
31, 2007
|
|||||
|
Earned
leave
|
17
|
11
|
|||||
|
Provident
Fund
|
(1 | ) |
13
|
||||
|
Gratuity
|
23
|
34
|
|||||
|
Total
|
39
|
58
|
|||||
|
As
at
|
March
31, 2006
|
March
31, 2007
|
|||||
|
Term
loan
|
1,644
|
1,656
|
|||||
|
Loan
for assets purchased under Capital lease
|
582
|
-
|
|||||
|
Unsecured
Loan – Directors
|
205
|
1
|
|||||
|
Unsecured
Loan – Others
|
1,225
|
676
|
|||||
|
Total
|
3,656
|
2,333
|
|
Transactions
|
Key
Management personnel
|
Associate
Companies
|
|||||
|
Contract
Income
|
Zero
|
208
|
|||||
|
Investment
|
Zero
|
23
|
|||||
|
Managerial
Remuneration
|
16
|
Zero
|
|||||
|
Key
Management personnel
|
Associate
Companies
|
|||
|
Payables
|
Zero
|
71
|
||
|
A.
|
The
Company is inter alia engaged in the business of infrastructure
development specialising in construction of
roads (the
“Business”);
|
|
B.
|
The
Investor is currently engaged in making investments in India especially
in
sectors such as power, infrastructure, etc. and wishes to make
a foray
into the Business;
|
|
C.
|
The
Company has, at the date of this Agreement, an authorised share
capital of
INR 3,00,00,000 consisting of 30,00,000 equity
shares of par value INR 10 each. As of date 2932159
Equity Shares have been issued and are held by the persons in the
number
and proportion as set out in Schedule
2;
|
|
D.
|
The
Promoters have requested the Investor and the Investor proposes
to invest
in the Company in accordance with the terms and subject to the
conditions
of this Agreement;
|
|
E.
|
The
Promoters are the existing shareholders of the Company as indicated
in
Schedule 2, and Mr. R. L. Srivastava is the legal and beneficial
owner of
351,840 shares as set forth in Annexure 1 (the “Sale
Shares”). The Investor wishes to acquire the Sale Shares of the
Company from Mr. R. L. Srivastava;
|
|
F.
|
The
Parties hereto wish to record in the manner herein mentioned the
terms and
conditions on which the Investor shall acquire and Mr. R. L. Srivastava
shall sell the Sale Shares of the Company to the Investor and the
Investor
shall subscribe to the Equity Shares of the
Company.
|
|
1.
|
DEFINITIONS
AND INTERPRETATION
|
|
1.1
|
Definitions
|
|
(a)
|
'Act'
shall mean the Indian Companies Act, 1956 and any amendment thereto
or any
other succeeding enactment for the time being in
force.
|
|
(b)
|
‘Affiliate’
means when used in respect of a specified legal person,
each
legal person that directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under common
control
with the person specified. In this definition “control” (and its
derivatives) means both (i) holding beneficially more than fifty
per cent
(50%) of equity interests and (ii) the ability to cast more than
fifty
(50%)per cent of the voting rights attaching to voting securities
or (iii)
power to direct the management or policies of such entity by contract
or
otherwise. The term ‘Affiliate’, when used in respect of an individual
party mean such party’s Relative as defined in section 6 of the
Act.
|
|
(c)
|
'Agreement'
shall mean this Share Subscription cum Purchase Agreement, as from
time to
time amended, supplemented or replaced or otherwise modified and
any
document which amends, supplements, replaces or otherwise modifies
this
Agreement, together with the recitals and all the Annexes, Appendices
and
Schedules attached hereto.
|
|
(d)
|
“Applicable
Law” shall mean all applicable laws, statutes, ordinances,
regulations, rules, orders, bye laws, administrative interpretation,
writ,
injunction, directive, protocols, codes, policies, notices, directions,
judgment or decree or other instrument or other requirements of
any
Governmental Authority in any relevant jurisdiction applicable
to any
Party from time to time.
|
|
(e)
|
‘Articles’
means the Articles of Association of the Company to be duly amended
to
reflect the terms of the Shareholders Agreement (as from time to
time
amended, modified or supplemented in accordance with the provisions
thereof) to the extent permitted under
law.
|
|
(f)
|
'Authorised
Dealer' shall mean Allahabad Bank,
Manishnagar Branch, Somalwada Branch, Wardha Road, Nagpur -
25.
|
|
(g)
|
‘Audited
Accounts’ means, the Company’s audited accounts as at March 31,
2007 for the financial year ended March 31,
2007.
|
|
(h)
|
'Board'
shall mean the board of directors of the
Company.
|
|
(i)
|
‘Claim’
includes any notice, demand, assessment, letter or other document
issued
or action taken by any tax, fiscal or other statutory or governmental
authority, body or official whatsoever (whether of India or elsewhere
in
the world) whereby the Company is or may be placed or sought to
be placed
under a liability to make a payment or deprived of any relief,
allowance,
credit or repayment otherwise
available.
|
|
(j)
|
'Completion'
shall mean completion of the events specified in
Clause4.3 below and the Investor being
registered as a member in respect of the Subscription Shares and
the Sale
Shares in the register of members of
Company.
|
|
(k)
|
‘Completion
Date' shall mean date mentioned in
Clause4.3
hereof.
|
|
(l)
|
'Conditions
Precedent' shall mean the conditions precedent mentioned in
Clause 3 of this
Agreement.
|
|
(m)
|
‘Derivative
Securities’ means any subscriptions, options, debentures, bonds,
conversion rights, warrants, or similar agreements, Securities
or
commitments of any kind obligating the Company to issue, grant,
deliver or
sell, or cause to be issued, granted, delivered or sold (i) any
shares in
the share capital or any derivative securities of the Company;
(ii) any
securities convertible into or exchangeable for any shares in the
share
capital of the Company; (iii) any obligations measured by the price
or
value of the shares in the share capital of the Company; or (iv)
any
rights to participate in the equity or income of the Company or
to
participate in or direct the election of any directors or officers
of the
Company.
|
|
(n)
|
'Encumbrances'
means any encumbrance, lien, charge, security interest, mortgage,
pledge,
easement, conditional sale or other title retention or non-disposal
agreement or other restriction of a similar kind, and all other
easements,
encroachments and title defects of every type and nature, or any
conditional sale, contract, title, retention contract, or other
contract
to give or to refrain from giving any of the
foregoing.
|
|
(o)
|
‘Fully
Diluted’ or‘Fully Diluted Basis’ means all the
Shares of the Company, including the Shares proposed to be issued
pursuant
to this Agreement, all the Shares comprised in a proposed issue
and the
Shares underlying all Derivative Securities after making adjustments
for
stock splits, bonus issues, consolidation of shares
etc.
|
|
(p)
|
‘INR’
means the lawful currency of India.
|
|
(q)
|
‘Intellectual
Property’ shall mean all forms of intellectual property rights
subsisting under any law or equity and all analogous rights subsisting
under the laws of all jurisdictions and shall include any product
or
process of the human intellect whether registrable as patents,
trade
marks, copyrights, designs or otherwise such as an invention, or
derivative works of the same expression or literary creation, unique
name,
trade secret, business method, database, industrial process, computer
program, source code, process, presentation,
etc.
|
|
(r)
|
‘Issue
Price’ means the price of Rs. 254.84 per Subscription
Share.
|
|
(s)
|
‘Liabilities’
means any and all contingent, current, deferred or long-term liabilities,
obligations, payables, forms of taxation whether of India or elsewhere
in
the world, past, present and deferred (including, without limitation,
income tax, stamp duty, customs and other import or export duties)
and all
other statutory or governmental impositions, duties and levies
and all
penalties, charges, costs and interest relating to any
Claim.
|
|
(t)
|
‘Memorandum’
means the Memorandum of Association of the
Company.
|
|
(u)
|
'Party'
shall mean the Investor, the Promoters or the Company referred
to
individually and 'Parties' shall mean the Investor, the
Promoters and the Company referred to
collectively.
|
|
(v)
|
'Person'
shall include an individual, an association, a corporation, a partnership,
a joint venture, a trust, an unincorporated organisation, a joint
stock
company or other entity or organisation, including a government
or
political subdivision, or an agency or instrumentality thereof
and/or any
other legal entity.
|
|
(w)
|
'Representations
and Warranties' shall mean the representations and warranties
given by the Company and/or the Promoters in this Agreement, in
particular
Clause 5 hereto.
|
|
(x)
|
‘Sale
Shares’ shall mean 351840 Shares, held by Mr. R. L. Srivastava,
free from Encumbrances, as specified in Annexure 1 hereto
representing 12% of the total issued and paid up share capital
of the
Company on Completion.
|
|
(y)
|
‘Sale
Consideration’ means an aggregate amount of Rs. 12,00,00,000 [Rs.
Twelve crores only] to be paid by the Investor for purchase of
the Sale
Shares.
|
|
(z)
|
‘Securities’
means, with respect to any person, such person's equity capital,
registered capital, joint venture or other ownership interests
(including,
without limitation, in the case of the Company, shares) or any
options,
warrants, loans or other securities that are directly or indirectly
convertible into, at or exercisable or exchangeable for, at the
sole
option of such person, such equity capital, registered capital,
joint
venture or other ownership interests (whether or not such Derivative
Securities are issued by such
person).
|
|
(aa)
|
'Shares'
or “Equity Shares” shall mean the equity shares of
Company.
|
|
(bb)
|
'Shareholder'
or 'Shareholders' shall mean any Person who holds any
Shares.
|
|
(cc)
|
‘Shareholders
Agreement’ means the agreement of even date entered into between
the Promoters, the Company, the Investor in relation to the management
and
governance of the Company on the terms and conditions mentioned
therein.
|
|
(dd)
|
‘Subscription
Shares’ mean 4041676 Equity Shares proposed to be issued by the
Company to the Investor at the Issue Price, which would upon such
issue
entitle the Investor to 51 % of the post issue share capital of
the
Company on a Fully Diluted Basis at the Completion
Date.
|
|
(ee)
|
‘Subscription
Price’ means an aggregate amount of Rs. 103,00,00,000 [Rs. One
Hundred and Three crores only] to be paid by the Investor for subscription
to the Subscription Shares.
|
|
(ff)
|
‘Tax’
or collectively ‘Taxes’ shall mean (i) any and all taxes
imposed by any governmental body, assessments and other governmental
charges, duties, impositions and liabilities, including sales tax,
excise
duties, service tax, wealth tax, dividend tax, value added tax,
other
taxes based upon or measured by gross receipts, income, profits,
use and
occupation, ad valorem, transfer, franchise, withholding, payroll,
employment and property taxes, together with all interest, penalties
and
additions imposed with respect to such amounts; (ii) any liability
for the
payment of any amounts of the type described in clause (i) as a
result of
being or ceasing to be a member of an affiliated, consolidated,
combined
or unitary group for any period; and (iii) any liability for the
payment
of any amounts of the type described in clause (i) or (ii) as a
result of
any express or implied obligation to indemnify any other Person
or as a
result of any obligations under any agreements or arrangements
with any
other Person with respect to such amounts and including any liability
for
taxes of a predecessor entity or a
transferor.
|
|
(gg)
|
‘Transaction
Documents’ shall mean any and all deeds, documents; letters
executed or proposed to be executed between the Parties to achieve
Completion, including this Agreement and the Shareholders
Agreement.
|
|
(hh)
|
‘Warrantors’
means the Company and the Promoters and ‘Warrantor’ means
any one of them.
|
|
1.2
|
Other
Defined Terms:
|
|
(i)
|
‘Business
Days’ means the days on which the banks are open for business
in
Mumbai, India.
|
|
(ii)
|
‘Dispute’
shall have the meaning as ascribed to it in Clause 10.1
of this Agreement.
|
|
(iii)
|
‘Losses’
shall have the meaning as ascribed to it in Clause 6.1 of
this Agreement.
|
|
1.3
|
Interpretation
|
|
1.3.1
|
The
terms referred to in this Agreement shall, unless defined otherwise
or
inconsistent with the context or meaning thereof, bear the meaning
ascribed to it under the relevant
statute/legislation.
|
|
1.3.2
|
All
references in this Agreement to statutory provisions shall be construed
as
meaning and including references
to:
|
|
|
(a)
|
Any
statutory modification, consolidation or re-enactment (whether
before or
after the date of this Agreement) for the time being in
force;
|
|
|
(b)
|
All
statutory instruments or orders made pursuant to a statutory provision;
and
|
|
|
(c)
|
any
statutory provisions of which these statutory provisions are a
consolidation, re-enactment or
modification.
|
|
1.3.3
|
Words
denoting the singular shall include the plural and words denoting
any
gender shall include all genders.
|
|
1.3.4
|
Headings
to clauses, sub-clauses and paragraphs are for information only
and shall
not form part of the operative provisions of this Agreement or
the
Schedules and shall be ignored in construing the
same.
|
|
1.3.5
|
References
to recitals, clauses or schedules are, unless the context otherwise
requires, are references to recitals, to clauses of or schedules
to this
Agreement.
|
|
1.3.6
|
Reference
to days, months and years are to Gregorian days, months and calendar
years
respectively.
|
|
1.3.7
|
Any
reference to the words “hereof,” “herein”, “hereto” and “hereunder” and
words of similar import when used in this Agreement shall refer
to clauses
or annexures of this Agreement as specified
therein.
|
|
1.3.8
|
Any
expression importing a natural person includes any company, trust,
partnership, joint venture, association, body corporate or governmental
agency.
|
|
1.3.9
|
Where
a word or phrase is given a defined meaning, another part of speech
or
other grammatical form in respect of that word or phrase has a
corresponding meaning.
|
|
1.3.10
|
Reference
to “Investor”, unless repugnant to the context shall for the purpose of
this Agreement, mean and include the Affiliates of the
Investor.
|
|
1.5.11
|
The
words “include” and “including” shall be construed without
limitation.
|
|
1.5.12
|
The
rule of construction, if any, that a contract should be interpreted
against the Party responsible for the drafting and preparation
thereof,
shall not apply to this Agreement.
|
|
2.
|
SUBSCRIPTION
AND SALE ON COMPLETION
DATE
|
|
2.1
|
Subject
to the terms of this Agreement, and relying on the Representations
and
Warranties and the indemnities given by the Promoters and the Company
under this Agreement, the Investor agrees on the Completion Date
to
subscribe for and the Company agrees to issue and allot to the
Investor
the Subscription Shares in consideration of the Subscription
Price.
|
|
2.2
|
The
Subscription Shares shall be issued free from all Encumbrances
and
together with all rights, title and interests now or hereafter
attaching
thereto. The Subscription Shares shall rank pari passu with all
the existing Shares of the Company.
|
|
2B.
|
SALE
AND PURCHASE OF SALE
SHARES
|
|
2.1
|
Subject
to the terms of this Agreement, and relying on the Representations
and
Warranties and the indemnities given by the Promoters and the Company
jointly and severally under this Agreement, Mr. R.L. Srivastava
has agreed
to sell, transfer or convey the Sale Shares and the Investor has
agreed to
purchase, acquire and accept the Sale Shares (together with all
benefits
and rights attaching thereto), free of all Encumbrances, for the
Sale
Consideration.
|
|
2.2
|
Mr.
R.L. Srivastava shall be responsible for all taxes, levies and
dues,
including without limitation, income tax assessed, if any, paid
or payable
in connection with the sale, transfer or conveyance of Sale
Shares.
|
|
2.3
|
Mr.
R.L. Srivastava hereby waives any pre-emption rights he may have
in
relation to any of the Sale Shares under the Articles of Association
of
the Company or otherwise.
|
|
3.
|
CONDITIONS
PRECEDENT
|
|
3.1
|
The
Parties agree that the obligation of the Investor to subscribe
to the
Subscription Shares and to acquire the Sale Shares in the manner
provided
herein, is conditional upon (i) the fulfilment of the following
conditions
to the satisfaction of the Investor, unless specifically waived
in writing
by the Investor; and (ii) only if all the Representations and Warranties
continue to be true and correct on the Completion
Date:
|
|
3.1.1
|
The
passing by the Board, in accordance with the Act and the Articles,
of
resolutions approving, initialling and
authorizing:
|
|
|
a)
|
the
execution of the Transaction Documents and the performance of the
transactions contemplated therein;
|
|
|
b)
|
the
draft of the amendments to the Memorandum and Articles of Association
of
the Company, to reflect, to the extent permitted by law, the provisions
of
the Shareholders Agreement, in the form approved by the Investor,
subject
to obtaining approval of the shareholders of the
Company;
|
|
|
c)
|
the
issue of the Subscription Shares pursuant to the terms of this
Agreement;
|
|
3.1.2
|
Execution
of the Shareholders Agreement;
|
|
3.1.3
|
Completion
of a business, financial, accounting, tax, technical, legal and
regulatory
due diligence on the Company by the Investor and resolution of
all issues
arising therefrom to the satisfaction of the Investor on or before
45
Business Days from the date of this
Agreement;
|
|
3.1.4
|
Mr.
R.L. Srivastava signing
a consent letter, in the form and content as specified in Annexure
II, consenting to the transfer of the Sale Shares to the
Investor
and the price at which such Sale Shares are proposed to be transferred
to
the Investor;
|
|
3.1.5
|
The
Company providing to the Investor the shareholding pattern of Company
(indicating the category wise equity participation of residents
and non
residents) after the proposed acquisition of Sale Shares by the
Investor;
and (ii) a certificate from a chartered accountant indicating the
‘fair
value’ of the Shares calculated in accordance with the Guidelines for
Valuation of Shares and Fixation of Premia (‘Pricing
Guidelines’);
|
|
3.1.6
|
A
resolution being passed at a duly constituted meeting of the board
of
directors of Investor and a resolution being passed at duly constituted
meeting of the shareholders of the Investor, approving the subscription
to
the Subscription Shares and the purchase of the Sale Shares and
the
satisfaction of all other conditions for the Investor to effect
a Business
Combination as set forth in the Investor's Prospectus dated March
3, 2006
as filed with the US Securities and Exchange
Commission;
|
|
3.1.7
|
The
Promoters obtaining written consents from all banks, financial
institutions, lenders of the Company and all other third parties
as may be
required for change in shareholding of the Company in form and
substance
satisfactory to the Investor;
|
|
3.1.8
|
There
shall not have been any change, effect or circumstance from the
date hereof to the Completion Date, which has or may reasonably
be
expected to have an adverse effect on the Company, the Company’s
prospects/profits/profitability/financial position/ financial condition/
operations/businesses/ assets and/or the
Business;
|
|
3.1.9
|
Providing
details of the bank account of the Company maintained with the
Authorised
Dealer to the Investor for the purpose of receiving the Subscription
Price
under this Agreement;
|
|
3.1.10
|
Providing
details of the bank account of Mr. R.L. Srivastava maintained with
the
Authorised Dealer to the Investor for the purpose of receiving
the Sale
Consideration under this Agreement;
|
|
3.1.11
|
The
Parties obtaining all statutory consents and approvals required
or
desirable under any and all applicable laws and regulations (i)
for the
subscription, issue and allotment of the Subscription Shares pursuant
to
the terms of this Agreement; and (ii) to give effect to the transactions
contemplated herein and under the Transaction Documents having
been
obtained and remaining in full force and
effect;
|
|
3.1.12
|
Each
of the Promoters delivering to the Investor a no-objection certificate
in
the form contained in Schedule 4 hereto and a no-objection certificate
from the Company in the form contained in Schedule 4A
hereto;
|
|
3.1.13
|
Investor
receiving from the Promoters and the Company three year financial
statements for the period ended March 31, 2007, March 31, 2006
and March
31, 2005 converted into US GAAP and audited by a Public Company
Accounting
Oversight Board (www.pcaob.com) and unaudited US GAAP financial
statements
for the period commencing April 1, 2007 and ending September 30,
2007 or
as of such later period, which shall not be earlier than 7 days
prior to
the Completion Date.
|
|
3.2
|
Upon
fulfilment of the Conditions Precedent, the Promoters and the Company
shall notify the Investor of the same in
writing.
|
|
3.3
|
If
the Conditions Precedent mentioned in Clause 3.1.3 above
is not fulfilled or satisfied to the satisfaction of the Investor
or
waived in writing by the Investor within 45 days of the date of
this
Agreement or such other date as may be mutually agreed between
the Parties
in writing, the Investor shall have the right to terminate this
Agreement
forthwith. The termination of this Agreement shall not in any way
affect
or prejudice any right accrued to any Party against the other prior
to
such termination. The Promoters however hereby confirm, undertake
and
agree, that they shall cause the Company to provide to the Investor
and/or
its advisors, all relevant information relating to the Company,
including
accounting, financial, tax, marketing, technical, human resources
and
legal information, whether or not requested by the Investor and/or
its
advisors, latest by the completion of 45 days from the date of
this
Agreement. The Promoters acknowledge and confirm that the Investor
and/or
its advisors shall be entitled to request for any information that
they
deem necessary and material in relation to the Company for the
purpose of
conducting the due diligence exercise. The Promoters shall provide
full
and complete access to the Investor and/or its advisors to all
of the
records, facilities, employees, suppliers and customers of the
Company,
along with answers and clarifications to questions raised by the
Investor
and/or its advisors and will cooperate fully with them in the completion
of the due diligence exercise. The Parties acknowledge and confirm
that
the quantum and payment of the Subscription Price for the Subscription
Shares and the Sale Consideration for the Sale Shares shall be
subject to
the satisfactory results of the due diligence exercise to be conducted
by
the Investor, at the sole satisfaction of the Investor and in the
event,
the Investor is not satisfied with the results of the due diligence
exercise conducted by the Investor but has waived the requirement
of the
Condition Precedent mentioned in Clause 3.1.3 above, the
Parties shall mutually agree on a revised Subscription Price and
Sale
Consideration.
|
|
3.4
|
The
Promoters and the Company undertake to use all best efforts to
ensure that
all the Conditions Precedent are satisfied as soon as possible
and the
Condition Precedent as mentioned in Clause 3.1.3 is
satisfied no later than the date mentioned in Clause 3.3
above.
|
|
3.5
|
The
Promoters and the Company shall co-operate and provide all information
and
reasonable assistance to the Investor and/or its advisors and authorised
representatives to enable them to verify the records/documents
of the
Company.
|
|
4.
|
COMPLETION
|
|
4.1
|
The
Promoters and the Company shall notify the Investor of the fulfilment
of
the Conditions Precedent and provide to the Investor, all the requisite
documents evidencing fulfilment of such Conditions Precedent applicable
to
the Promoters and/or the Company. The Investor through its
advisors/counsel shall then satisfy itself as to the fulfilment
of the
Conditions Precedent. The Investor shall notify the Promoters and
the
Company within 7 days from the date of receipt of all the
documents/information from the Promoters of its satisfaction or
dissatisfaction with the same or of waiving the fulfilment of any
of the
Conditions Precedent applicable to the Promoters and/or
Company.
|
|
4.2
|
In
case the Investor notifies the Promoters or the Company of its
dissatisfaction under Clause 4.1 above, the Promoters
shall fulfil the unfulfilled Conditions Precedent within 7 days
of receipt
of such notice and shall provide to the Investor, all requisite
documents
evidencing fulfilment of that Condition Precedent. Subject to Clause
3.3
above, the procedure referred to in Clause 4.1 above
shall be followed thereafter until the fulfilment of all Conditions
Precedent applicable to the Promoters and/or Company, to the satisfaction
of the Investor.
|
|
4.3
|
Upon
fulfilment of all the Conditions Precedent to the satisfaction
of the
Investor or if specifically waived in writing by the Investor,
the Parties
shall proceed to complete the issue of the Subscription Shares
to the
Investor and the sale of the Sale Shares to the Investor
(‘Completion’) in the manner provided in this Clause.
Such Completion shall take place on a date set by the Investor
(the
‘Completion Date’), which date shall not be later than 15
days from the fulfilment of all the Conditions Precedent to the
satisfaction of the Investor. This date may however be extended
upon
mutual agreement between the
Parties.
|
|
4.4
|
The
Completion shall take place at the office of Economic Laws Practice,
1502
Dalamal Towers, Nariman Point, Mumbai -
400021.
|
|
4.5
|
On
the Completion Date, the Investor shall file Form FC-TRS, in quadruplicate
with the Authorised Dealer along with the following
documents:
|
|
|
4.5.1
|
All
documents received by the Investor from Mr. R.L. Srivastava and/or
the Company under Clauses 3.1.4 and 3.1.5
above;
|
|
|
4.5.2
|
Consent
letter of the Investor agreeing to purchase the Sale Shares and
indicating
the Sale Consideration to be paid by the Investor for such purpose;
and
|
|
|
4.5.3
|
An
undertaking specifying that (i) the Investor is eligible to acquire
the
Sale Shares under the Foreign Direct Investment Policy of the Government
of India from Indian resident shareholders; (ii) such acquisition
is
within the existing sectoral caps specified thereunder; and (iii)
the
price per Share is in compliance with the Pricing
Guidelines.
|
|
4.6
|
Immediately
thereafter, Mr. R.L. Srivastava shall deliver the following documents
to
the Investor:
|
|
|
4.6.1
|
A
certificate signed by Mr. R.L. Srivastava to the effect that the
Representations and Warranties contained in this Agreement, continue
to be
true and correct as on the Completion Date with the same effect
as though
such Representations and Warranties had been made as of such
date;
|
|
|
4.6.2
|
Original
share certificates evidencing the Sale Shares (‘Sale Share Certificates’);
and
|
|
|
4.6.3
|
The
Share Transfer Forms duly stamped and executed by
him.
|
|
4.7
|
Upon
filing Form FC-TRS with the Authorised Dealer and fulfilment of
the
provisions of Clause 4.5 above, the Investor shall remit the Sale
Consideration, for further credit to the account of Mr. R.L. Srivastava
as
intimated to the Investor in accordance with Clause 3.1.10 hereof.
All
such payments to be made by Investor to Mr. R.L. Srivastava shall
be
subject to such withholdings/deductions of tax as may be required
under
the Applicable Laws.
|
|
4.8
|
Immediately
upon the Investor receiving the certificate annexed to Form FC-TRS
from
the Authorised Dealer, the Investor shall lodge the Share Transfer
Forms
and the Sale Share Certificates with the Company for transfer of
the Sale
Shares in the name of the Investor. The Company shall, upon receipt
of the
said documents from the Investor, do the
following:
|
|
|
(i)
|
Immediately
convene a meeting of the Board, wherein the Board shall pass the
necessary
resolutions:
|
|
|
(a)
|
approving
the transfer of the Sale Shares from Mr. R.L. Srivastava to the
name of
the Investor; and
|
|
|
(b)
|
approving
the Investor as a member of Company in respect of the Sale Shares
and
entering the name of the Investor in the register of
members.
|
|
|
(ii)
|
Enter
the name of the Investor as the legal and beneficial owner of the
Sale
Shares, free of all Encumbrances, in the register of members of
Company;
|
|
|
(iii)
|
Make
the necessary endorsements on the Sale Share Certificates, indicating
the
name of the Investor as the legal and beneficial owner of the Sale
Shares
evidenced thereunder; and
|
|
|
(iv)
|
Return
the original Sale Share Certificates, duly endorsed in the name
of the
Investor, to the Investor or its authorised representative as it
may
direct.
|
|
4.9
|
Upon
satisfaction of the events referred to in Clause 4.8, the Company
shall
deliver or cause to be delivered to the
Investor:
|
|
|
a)
|
certified
true copies of the Board Resolutions referred to in clause
3.1.1;
|
|
|
b)
|
written
confirmation from the Company and each of the Promoters that as
at the
Completion Date:
|
|
·
|
no
change, effect or circumstance has occurred, which has or may reasonably
be expected to have an adverse effect on the Company, the Company’s
prospects/profits/profitability/financial position/ financial condition/
operations/businesses/ assets and/or the operations/businesses
and/or the
Business; and
|
|
·
|
the
Representations and Warranties are true, accurate and complete
and that it
is not aware of any matter or thing which is in breach of or inconsistent
with any of the Representations and
Warranties;
|
|
|
c)
|
the
no-objection certificates referred to in clause
3.1.11.
|
|
4.10
|
Immediately
thereafter, a meeting of the Board shall be held at which, the
Board shall
pass resolutions:
|
|
|
(i)
|
approving
the allotment of the Subscription Shares to the Investor with the
corresponding certificates;
|
|
|
(ii)
|
approving
the appointment of the directors, as specified by the Investor
on the
Board; and
|
|
|
(iii)
|
convening
an extra-ordinary general meeting of the Company in accordance
with the
Articles of the Company to amend the Memorandum and Articles of
the
Company to incorporate the provisions of the Shareholders Agreement
in the
form approved by the Board under Clause 3.1.1(b)
above.
|
|
4.11
|
Immediately
thereafter, a meeting of the shareholders shall be held at short
notice,
at which the following resolutions shall be
passed:
|
|
|
(ii)
|
approving
the amendments to the Memorandum and Articles of Association in
the form
approved by the Board under Clause
3.1.1(b).
|
|
4.12
|
Immediately
thereafter the Company shall (i) issue and deliver to the authorised
representative of the Investor the original certificates duly stamped,
signed and sealed for the Subscription Shares subscribed to by
the
Investor; and (ii) incorporate the name of the Investor as the
legal and
beneficial owner of the Subscription Shares in the register of
members of
the Company.
|
|
4.13
|
Notwithstanding
the above, on the Completion Date the Investor shall also have
a right to
review the books and accounts of the Company to verify to the satisfaction
of the Investor, that no event has occurred which has or may have
an adverse effect on the Business, operations, financial
condition or prospects of the Business. In the event, the Investor
is not
satisfied with the results of its review; the Investor shall have
the
right to terminate this Agreement forthwith. The termination of
this
Agreement shall not in any way affect or prejudice any right accrued
to
any Party against the other prior to such
termination.
|
|
4.14
|
On
the Completion Date the Investor
shall:
|
|
|
a)
|
deliver
an application in writing for the Subscription Shares to be subscribed
by
them on the Completion Date; and
|
|
|
b)
|
pay
to the Company the Subscription Price by way of telegraphic
transfer.
|
|
4.15
|
Immediately
after subscription to the Subscription Shares and the purchase
of the Sale
Shares by the Investor, the equity shareholding of the Company
on a Fully
Diluted Basis shall be as follows:
|
|
Shareholders
|
No.
of Shares held
|
Approximate
% of the total paid up Equity Shares on a Fully Diluted
Basis
|
|
Investor
|
4393516
|
63
|
|
Ravindra
Lal Srivastava
|
1227871
|
17.61
|
|
Indravati
Devi Srivastava
|
1152640
|
16.53
|
|
Sankata
Srivastava
|
96640
|
1.39
|
|
Bihari
Lal Srivastava
|
16000
|
0.23
|
|
Ramdulare
Srivastava
|
55168
|
0.79
|
|
Ramdulari
Devi Srivastava
|
32000
|
0.45
|
|
Total:
|
6973835
|
100%
|
|
4.16
|
The
Parties to this Agreement agree to take all measures that may be
required
to ensure to the extent possible, that all the events contemplated
in
Clause 4 above on the Completion Date are completed on
the same day.
|
|
4.17
|
Notwithstanding
the provisions of Clause 4.16 hereto, all proceedings to
be taken and all documents to be executed and delivered by the
Parties at
Completion shall be deemed to have been taken and executed simultaneously
to the extent possible and no proceedings shall be deemed to have
been
taken nor documents executed or delivered until all have been taken,
executed and delivered.
|
|
4.18
|
Immediately
after the Board meetings of the Company and passing of the resolutions
mentioned above, the Parties shall ensure that the Company shall
record
the necessary entries in its registers and carry out all the actions
that
have been resolved to be carried out in order to effectively achieve
Completion.
|
|
4.19
|
The
Company shall ensure that within 30 days from the Completion Date,
the
relevant forms of the Company are filed with the concerned regulatory
authorities including the Registrar of Companies, Reserve Bank
of India,
etc. in accordance with the provisions of Applicable
Law
|
|
4.20
|
Investor’s
Remedy
|
|
4.20.1
|
If
after having received the Subscription Price and the Sale Consideration
from the Investor pursuant to Clause 4.7 and 4.14 above, the provisions
of
this Clause 4 are not complied with by the Company and/or the Promoters
on
the Completion Date, the Investor shall have the right to obligate
the
Company and/or the Promoters and if so required, by the Investor,
the
Company and/or Mr. R. L. Srivastava shall forthwith refund to the
Investor
the Subscription Price and the Sale Consideration received from
the
Investor pursuant to Clause 4.10 above together with interest thereon
calculated at the rate of the then applicable State Bank of India
prime
lending rate (“SBI PLR”) plus 10% from the date the Investor paid the
Subscription Price and the Sale Consideration to the date of actual
refund
by the Company with interest (“Liquidated Damages”). The Parties agree and
acknowledge that the Liquidated Damages is a genuine pre estimate
of the
loss that may be suffered by the Investor as a result of non-compliance
by
the Company and/ or the Promoters of the obligations specified
in this
Agreement.
|
|
4.20.2
|
The
Parties agree and acknowledge that this obligation of the Company
to
refund the Subscription Price, and Mr. R.L.
Srivastava to refund the Sale
Consideration, to the Investor shall be without prejudice to any
other
right, which the Investor may have under this Agreement and in
law or in
equity.
|
|
5.1
|
True
and Accurate: The Warrantors represent, warrant and
undertake to the Investor, that each of the statements set out
in this
Clause and Schedule 3 hereof, as applicable to the Warrantors,
is now and
will be true and accurate at the Completion Date. The Warrantors
acknowledge that the Investor, in entering into this Agreement,
is relying
on such representations, warranties and undertakings and shall
be entitled
to treat the same as conditions of the
Agreement.
|
|
5.2
|
Investor
Representation:The Investor hereby represents and warrants that it has
the corporate power and authority to execute, deliver and perform
this
Agreement and the Transaction Documents and the transactions contemplated
herein. The execution, delivery and performance by Investor of
the
Transaction Documents have been duly authorized and approved by
its board
of directors.
|
|
5.3
|
Separate
and Independent: Each of the Representations and Warranties
shall be separate and independent and, save as expressly provided
to the
contrary, shall not be limited by reference to or inference from
any other
Representations and Warranty or any other term of this Agreement,
which is
not expressly referenced to the Representations and Warranty
concerned.
|
|
5.4
|
Knowledge:
If any Representation or Warranty is qualified by knowledge, then
it means
that the Representation or Warranty has been made to the best knowledge
of
the Warrantors, after the Warrantors have made and caused to be
made such
due and proper inquiries as may be required in respect of the relevant
matter to obtain informed
knowledge.
|
|
5.5
|
Undertaking: None
of the Warrantors shall do, allow or procure any act or omission
before
the Completion Date which would respectively constitute a breach
of any of
the Representations and Warranties if they were given at the Completion
Date, or which would make any of the Representations and Warranties
inaccurate or misleading if they were so
given.
|
|
5.6
|
Notification
of breach: Each of the Warrantors hereby agree to disclose
promptly to the Investor in writing immediately upon becoming aware
of the
same, any matter, event or circumstance (including any omission
to act)
which may arise or become known to it after the date of this Agreement
which:
|
|
|
5.6.1
|
would
render any of the Representations and Warranties to be inaccurate;
or
|
|
|
5.6.2
|
has,
or is likely to have, an adverse effect on the financial
position/prospects/profits/profitability/financial condition/
operations/businesses/ assets and/or the Business of the
Company.
|
|
5.7
|
Survival: The
Representations and Warranties provided in this Agreement shall
survive
the Completion Date.
|
|
5.8
|
The
Company and the Promoter hereby agree and acknowledge that the
Investor
has agreed to subscribe to the Subscription Shares and purchase
the Sale
Shares inter alia relying upon the Representations and
Warranties.
|
|
6.1
|
Without
prejudice to any other right available to the Investor in law or
under
equity, the Promoters shall jointly and severally indemnify, defend
and
hold harmless the Investor, their Affiliates, directors, advisors,
officers, employees and agents, or, if so desired by the Investor,
the
Promoters shall indemnify the Company, from and against any and
all
liabilities, damages, demands, Claims (including third party Claims),
actions, judgments or causes of action, assessments, interest,
fines,
penalties, and other costs or expenses (including, without limitation,
amounts paid in settlement, court costs and all reasonable attorneys'
fees
and out of pocket expenses) (“Losses”) directly based
upon, arising out of, or in relation to or otherwise in respect
of:
|
|
i.
|
any
inaccuracy in or any breach of any Representation and Warranty,
covenant
or agreement of the Promoters or Company contained in this Agreement
or
any document or other papers delivered by any of them to the Investor
in
connection with or pursuant to this
Agreement;
|
|
ii.
|
any
liability arising out of non compliance of any obligation undertaken
by
the Company or the Promoters;
|
|
iii.
|
any
liabilities and obligations of whatever nature relating to any
litigation,
Claim or governmental investigation pending or relating to the
Business or
operations of the Promoters or the Business of the Company prior
to the
date of execution of this Agreement and as on the Completion
Date;
|
|
iv.
|
any
liability due to any non-compliance of any applicable law, rules
or
regulations prior to the date of execution of this Agreement and
as on the
Completion Date.
|
|
6.2
|
Any
compensation or indemnity as referred to in Clause 6.1 above shall
be such
as to place the Investor in the same position as it would have
been in,
had there not been any such breach and as if the Representation
and
Warranty under which Investor is to be indemnified, had been
correct.
|
|
7.1
|
The
Investor and/or the Promoters and their designated officers, employees,
accountants and attorneys shall have the right, at any time and
from time
to time during normal business hours and upon notice which may
be of at
least 3 (three) days, to carry out inspection of documents, records,
premises and all other properties of the Company at their own cost
as long
as they hold any Shares in the
Company.
|
|
7.2
|
The
Investor and their designated officers, employees, accountants
and
attorneys shall have the right to consult with the officers, employees,
accountants and attorneys of the Company for the purpose of affording
the
Investor full opportunity to make such investigation as it may
desire and
to collect such information, data, documents, evidence as may be
required
for the purpose of and in the course of such inspection in connection
therewith. Such investigations and/or audit, however, shall not
affect the
Representations and Warranties made by the Promoters or the
Company.
|
|
8.
|
INTERIM
MANAGEMENT AND ACCESS
|
|
8.1
|
During
the period beginning from the execution of this Agreement and continuing
until the Completion Date, the Company shall, and the Promoters
shall
cause the Company to carry on its Business in the usual, regular
and
ordinary course in substantially the same manner as heretofore
conducted,
to pay its debts and Taxes when due, to pay or perform other obligations
when due, and, to the extent consistent with such businesses, to
use its
best efforts consistent with past practice and policies to preserve
intact
their present business organizations, keep available the services
of their
present officers and employees and preserve their relationships
with
customers, suppliers, distributors, licensors, licensees and others
having
business dealings with them, all with the goal of preserving their
goodwill and ongoing businesses at the Completion
Date.
|
|
8.2
|
The
Promoters shall cause the Company to provide the Investor and its
officers, agents, advisors, consultants and other representatives
reasonable access to (i) all of the properties, books, contracts,
commitments and records of the Company, (ii) all other information
concerning the Business, properties and personnel (subject to restrictions
imposed by Applicable Law) of the Company as the Investor may request,
and
(iii) all employees of the Company. The Promoters shall cause the
Company
to provide such information within 5 days of making a request for
the
same.
|
|
8.3
|
During
the period beginning from the execution of this Agreement and continuing
until the Completion Date the Company and/or the
Promoters (including their respective Affiliates,
representatives and/or advisors) shall not, without the prior written
consent of the Investor:
|
|
(i)
|
solicit,
encourage, entertain, initiate or participate in any inquiry, negotiations
or discussions or disclose any information pertaining to the Company
or
enter into any agreement with respect to any offer or proposal
to, acquire
or merge or restructure (including through business transfer, asset
transfer, amalgamation, demerger, hiving off or in any other manner
whatsoever) or dispose off, alienate or Encumber any assets or
business of
the Company or parts thereof (an ‘Acquisition
Proposal’);
|
|
(ii)
|
assist
or cooperate with any Person to make any Acquisition Proposal;
or
|
|
(iii)
|
solicit,
negotiate or enter into any agreement with any Person with respect
to an
Acquisition Proposal;
|
|
(iv)
|
In
the event the Company or the Promoters receive, prior to the Completion
Date, any Acquisition Proposal, the Company or the Promoters receiving
such Acquisition Proposal shall immediately suspend any discussions
with
such offeror or party with regard to such Acquisition Proposal
and
immediately inform the Investor as to any such Acquisition Proposal,
including information as to the principal terms of such Acquisition
Proposal or request, as the case may be, and any other information
that
the Investor may request;
|
|
(v)
|
sell,
license or transfer to any Person any rights to any Intellectual
Property
or enter into any agreement with respect to Intellectual Property
with any
Person;
|
|
(vi)
|
amend
or change its Articles of Association and/or Memorandum of Association
in
any manner whatsoever;
|
|
(vii)
|
adopt
or change accounting methods or practices other than as required
by the
Indian GAAP or revalue any of its assets, including writing down
value of
inventory or writing off notes or accounts
receivable;
|
|
(viii)
|
issue,
sell, or grant, contract to issue, sell or grant, or authorize
the
issuance, delivery, sale or purchase of any Securities of the Company
or
any other securities, including securities convertible into, or
exercisable or exchangeable for Shares in the
Company;
|
|
(ix)
|
declare,
set aside or pay any dividends on or make any other distributions
(whether
in cash, stock or property) in respect of any shares of the Company,
or
split, combine or reclassify any shares of the Company, or issue
or
authorize the issuance of any other securities in respect of, in
lieu of
or in substitution for shares of the Company or repurchase, redeem,
or
otherwise acquire, directly or indirectly, any shares of the Company
(or
options, warrants or other rights convertible into, exercisable
or
exchangeable therefor);
|
|
(x)
|
grant
any severance or termination, pay (cash, equity or otherwise) to
any
director or officer or to any employee of the Company, or increase
(by way
of cash, equity or otherwise) the salary or other compensation
payable or
to become payable by the Company to any of their officers, directors,
employees or advisors, or declare, pay or make any commitment or
obligation of any kind for the payment (in the form of cash, equity
or
otherwise) by the Company of a bonus or other additional salary
or
compensation to any such Person, or adopt or amend any employee
benefit
plan (except as necessary to comply with applicable law) or enter
into any
agreement with any Person which guarantees employment with the
Company for
a specific period of time or enter into any settlement or compromise
agreement with any employees of the
Company;
|
|
(xi)
|
waive
any share repurchase rights, accelerate, amend or change the period
of
exercisability of options or restricted shares, or reprice options
granted
to any employee, consultant, director or other stock plans or authorize
cash payments in exchange for any options granted under any employment
stock option plans;
|
|
(xii)
|
sell,
lease, license, Encumber or otherwise dispose off any of the assets
or
properties of the Company;
|
|
(xiii)
|
enter
into/agree to enter into any new contract not in the ordinary course
of
business and/or on terms that are beyond normal and reasonable
commercial
terms including amending or otherwise modifying (or agreeing to
do so), or
violating the terms of any of the contracts entered into by the
Company;
|
|
(xiv)
|
commence,
compromise or settle any pending or threatened litigation, debt
or other
legal proceedings;
|
|
(xv)
|
make
or change any election in respect of Taxes, adopt or change any
accounting
method in respect of Taxes, enter into any closing agreement, settle
any
Claim or assessment in respect of Taxes, or consent to any extension
or
waiver of the limitation period applicable to any Claim or assessment
in
respect of Taxes;
|
|
(xvi)
|
cause
any increase in liabilities of the Business including by way of
incurring
any indebtedness in the Business in the form of loans or financial
assistance from any lending agency or bank or repaying or incurring
any
additional indebtedness or making any advance payments other than
what has
been contractually agreed upon (upon disclosure and consent to/of
the
Investor);
|
|
(xvii)
|
amending
any terms of any agreement with any of the
creditors/debtors;
|
|
(xviii)
|
enter
into/agree to enter into any new contract, agreement, arrangement
with any
related party of the Company;
|
|
(xix)
|
undertake
any expenditure, transaction or commitment other than in the
normal course of business; or
|
|
(xx)
|
take
or agree in writing or otherwise to take any of the actions described
in
the preceding clauses of this Clause 8 or any other
action that would prevent the Company from performing or cause
the Company
not to perform its covenants hereunder or that would prejudice
the
consummation of any of the transactions contemplated in the Transaction
Documents.
|
|
|
Amicable
Settlement
|
|
10.1
|
If
any dispute arises between Investor and/or the Promoters and/or
Company
during the subsistence of this Agreement or thereafter, in connection
with
the validity, interpretation, implementation or alleged breach
of any
provision of this Agreement or regarding a question, including
the
question as to whether the termination of this Agreement by one
Party
hereto has been legitimate (“Dispute”), the disputing
Parties hereto shall endeavour to settle such Dispute amicably.
The
attempt to bring about an amicable settlement shall be considered
to have
failed if not resolved within 60 days from the date of the
Dispute.
|
|
|
Conciliation
|
|
10.2
|
If
the Parties are unable to amicably settle the Dispute in accordance
with
Clause 10.1 within the period specified therein, the
Parties shall forthwith but not later than 30 days after expiry
of the
aforesaid period, refer the Dispute to Mr. Ram Mukunda and Mr.
R.L.
Srivastava for resolution of the said Dispute. The attempt to bring
about
such resolution shall be considered to have failed if not resolved
within
30 days from the date of receipt of a written notification in this
regard.
|
|
|
Arbitration
|
|
10.3
|
If
the Parties are unable to amicably settle the Dispute in accordance
with
Clause 10.2 within the period specified therein, any
Party to the Dispute shall be entitled to serve a notice invoking
this
Clause and making a reference to an arbitration panel of three
arbitrators. Each party to the dispute shall appoint one arbitrator
within
30 days of receipt of the notice of the Party making the reference,
and
the two arbitrators, so appointed shall appoint a third
arbitrator. The Arbitration proceedings shall be held in
accordance with the Arbitration and Conciliation Act, 1996. The
decision
of the arbitration panel shall be binding on all the Parties to
the
Dispute.
|
|
10.7
|
The
Arbitrator’s award shall be substantiated in writing. The court of
arbitration shall also decide on the costs of the arbitration proceedings.
The cost of arbitration shall be borne by the
Company.
|
|
10.8
|
The
award shall be binding on the Parties subject to the Applicable
Laws in
force and the award shall be enforceable in any competent court
of
law.
|
|
10.9
|
The
Mumbai court (including any appellant court) in India shall have
exclusive
jurisdiction.
|
|
11.1
|
Any
notice or other communication that may be given by one Party to
the other
shall always be in writing and shall be served either by (i) hand
delivery
duly acknowledged; or (ii) sent by registered post with acknowledgment
due; or (iii) by facsimile at the respective addresses set out
herein
below or at such other address as may be subsequently intimated
by one
party to the other in writing as set out herein. If the notice
is sent by
facsimile, the said notice shall also be sent by registered post
acknowledgment due.
|
|
11.2
|
All
notices shall be deemed to have been validly given on (i) the business
date immediately after the date of transmission with confirmed
answer
back, if transmitted by facsimile transmission, or (ii) the business
date
of receipt, if sent by courier or hand delivery; or (iii) the expiry
of
seven days after posting, if sent by registered
post.
|
|
11.3
|
Any
Party may, from time to time, change its address or representative
for
receipt of notices provided for in this Agreement by giving to
the other
Party not less than 10 days prior written
notice.
|
|
13.1
|
The
Parties recognise that each of them will be given and have access
to
confidential and proprietary information of the other Parties.
The Parties
undertake not to use any of such confidential information for their
own
corporate purposes without the prior written consent of the Party
owning
such information and shall keep confidential and not to disclose
to any
third party any of the other Parties’ confidential and proprietary
information for a period of one year from the date hereof. The
Parties
shall also cause their respective directors, employees, officers
and any
other persons to whom the above mentioned information is disclosed
to
execute a letter of confidentiality to the effect provided in this
Clause.
The obligations of confidentiality shall not apply to any information
that:
|
|
|
(b)
|
was
known to the Party prior to its disclosure by the disclosing
Party;
|
|
|
(c)
|
has
become generally available to the public (other than by virtue
of its
disclosure by the receiving Party);
|
|
|
(d)
|
may
be required in any report or statement that is required to be submitted
by
the Company to any governmental or regulatory
body;
|
|
|
(e)
|
may
be required in response to any summons or subpoena or in connection
with
any litigation; or
|
|
|
(f)
|
was
approved by both the Parties (for the avoidance of doubt, disclosure
to
the Affiliates of the Investor shall be
permitted);
|
|
|
(g)
|
is
required by a regulatory authority or the regulations of any recognized
stock exchange;
|
|
|
(h)
|
is
reasonably required for disclosure to professional advisers of
the Party,
who shall have given undertakings of strict
confidentiality;
|
|
|
(i)
|
may
be required to comply with any law, order, regulation or ruling
applicable
to any Party hereto.
|
|
13.2.
|
Upon
termination of this Agreement, the Parties shall cause the Company
to
either (i) return to the Investor and Promoters, as applicable,
and the
Parties shall return to each other, all documents and information
belonging to such Person and all copies thereof in the possession
or under
the control of a Party which does not own such property, and all
confidential information in whatever media; or (ii) destroy all
documents
and information belonging to the other Party and all copies thereof
in the
possession or under the control of a Party. Provided that the Investor
and/or its advisors may retain, in a secure location, copies of
such
documents and records for purposes of defending any legal proceeding
or as
is required to be maintained in order to satisfy any law, rule,
regulation, or accounting or financial reporting standards to which
the
Investor may be subject.
|
|
13.3.
|
The
Parties acknowledge and agree that the covenants and obligations
with
respect to confidentiality set forth in this Clause relate to special,
unique and extraordinary matters, and that a violation of any of
the terms
of such covenants and obligations will cause the Company and the
owner of
such property irreparable injury for which adequate remedies are
not
available at law. Therefore, the Parties agree that the Party entitled
to
enforce the covenants set forth above, shall be entitled to an
injunction,
restraining order or such other equitable relief as a court of
competent
jurisdiction may deem necessary or appropriate to restrain the
other Party
from committing any violation of the covenants and obligations
contained
in this Clause. These injunctive remedies are cumulative and are
in
addition to any other rights and remedies the concerned Party may
have at
law or in equity.
|
|
14.
|
AUTHORISED
PERSON
|
|
15.1
|
Grounds
for Termination: Save and except the rights and obligations of
the Parties
that terminate as provided in the specific clauses in this Agreement,
this
Agreement shall continue in full force and effect until terminated
in
accordance with the provisions of this
Clause.
|
|
15.2
|
This
Agreement can be terminated at any time prior to the subscription
by the
Investor in the manner set out in Clause 4 of this Agreement, by
mutual
written agreement of the Parties.
|
|
15.3
|
This
Agreement shall stand terminated under Clause 4 if the Completion
does not
take place as per Clause 4.3.
|
|
15.4
|
Effect
of Termination: Termination of this Agreement under Clauses 15.2
to 15.3
shall be without liability of any Party (or any shareholder, director,
officer, agent, employee, consultant or representative of such
Party) to
the other Parties.
|
|
15.5
|
The
provisions of Clause 6 (Indemnity), 10 (Arbitration), 11 (Notices),
and 13
(Confidentiality) shall survive the termination hereof pursuant
to Clause
15.1.
|
|
|
16.13.1
The Parties agree that if the transactions contemplated in this
Agreement
cannot be completed in the manner set forth herein, then the Parties
shall
use reasonable endeavours to enter into other transactions that
(a) would
result in a substantially similar outcome and (b) do not prejudice
any of
the Parties. Each of the Parties further agrees that, during
any such negotiations, it shall refrain from initiating any legal
actions
against the other Parties; and
|
|
|
16.13.2
Each Party agrees to perform (or procure the performance of) all
further
acts and things, and execute and deliver (or procure the execution
and
delivery of) such further documents, as may be required by law
or as the
other Parties may reasonably require, whether on or after the date
of this
Agreement, to implement and/or give effect to this Agreement and
the
transactions contemplated by it and for the purpose of vesting
in the
Investor the full benefit of the assets, rights and benefits to
be
transferred to the Investor under this
Agreement.
|
|
SIGNED
AND DELIVERED
|
)
|
|
BY
THE WITHINNAMED " Investor "
|
)
|
|
BY
THE HAND OF MR. RAM MUKUNDA
|
)
|
|
(Authorised
Signatory)
|
)
|
|
ON
THE 15th DAY OF SEPTEMBER 2007
|
)
|
|
IN
THE PRESENCE OF:
|
)
|
|
WITNESS:
|
)
|
|
NAME
AND ADDRESS:
|
)
|
|
SIGNED
AND DELIVERED
|
)
|
|
BY
THE WITHINNAMED "SRICON INFRASTRUCTURE PVT.
LTD"
|
)
|
|
BY
THE HAND OF MR. R.L. SRIVASTAVA
|
)
|
|
(AUTHORISED
SIGNATORY) PURSUANT TO THE
|
)
|
|
RESOLUTION
PASSED BY THE BOARD
|
)
|
|
ON
THE 15th DAY OF SEPTEMBER 2007
|
)
|
|
IN
THE PRESENCE OF:
|
)
|
|
WITNESS:
|
)
|
|
ADDRESS:
|
)
|
|
SIGNED
AND DELIVERED
|
)
|
|
BY
THE WITHINNAMED "Promoter"
|
)
|
|
MR.
R. L. SRIVASTAVA
|
)
|
|
ON
THE 15th DAY OF SEPTEMBER 2007
|
)
|
|
IN
THE PRESENCE OF:
|
)
|
|
WITNESS:
|
)
|
|
ADDRESS:
|
|
|
A.
|
The
Company is engaged in the business of infrastructure development
specialising in construction of roads (the
“Business”);
|
|
B.
|
IGC
is currently engaged in making investments in India especially
in sectors
which inter alia includes power, infrastructure, and wishes to
make a foray into the Business;
|
|
C.
|
The
Parties have entered into a Share Subscription cum Purchase Agreement
(“SSPA”) of even date, setting out the terms and
conditions subject to which IGC shall subscribe to Shares in the
Company
and acquire Shares from the Promoters of the Company. Pursuant
to the
SSPA, IGC has agreed to subscribe to and acquire Shares of the
Company,
such that post subscription and acquisition, IGC shall hold 63%
of the
issued and paid up share capital of the Company subject to the
conditions
set out therein;
|
|
D.
|
The
Parties have agreed to enter into this Agreement for the purposes
of
regulating their relationship with each other as members of the
Company
and regulating, as between themselves, certain aspects of the affairs
of
the Company.
|
|
1.
|
DEFINITIONS
AND INTERPRETATION
|
|
1.1
|
Definitions
|
|
(a)
|
“Act
or Companies Act” shall mean the Indian Companies Act, 1956 and
any amendment thereto or any other succeeding enactment for the
time being
in force.
|
|
(b)
|
”Affiliate”
means (i) when used in respect of a specified legal person, each
legal
person that directly or indirectly through one or more intermediaries,
Controls or is Controlled by, or is under common Control with the
person
specified (ii) when used in respect of an individual party, such
person’s
relative within the meaning of section 6 of the Act. In this definition
“Control” (and its derivatives) means both (i) holding beneficially more
than fifty per cent (50%) of equity interests and (ii) the ability
to cast
more than fifty (50%) per cent of the voting rights attaching to
voting
shares or (iii) power to direct the management or policies of such
entity
by contract or otherwise.
|
|
(c)
|
“Agreement”
shall mean this Shareholders Agreement together with the
annexures thereto as from time to time made, amended, supplemented
or
replaced or otherwise modified in accordance with the terms of
this
Agreement.
|
|
(d)
|
“Applicable
Law(s)” means any statute, law, regulation, ordinance, rule,
judgment, order, decree, bye-law, approval, directive, guideline,
policy,
requirement or other governmental restriction or any similar form
of
decision of, or determination by, or any interpretation or administrative
order having the force of law of any of the foregoing, by any Government
Authority having jurisdiction over the matter in
question.
|
|
(e)
|
”Board”
shall mean the board of directors of the
Company.
|
|
(f)
|
“Budget”
means the budget of the Company from time to time approved
by the
Shareholders in accordance with the provisions of this
Agreement.
|
|
(g)
|
“Business”
has the meaning given in recital A.
|
|
(h)
|
“Business
Plan” means the operating and capital budget for the Company
prepared on an annual basis for a Financial Year, with reference
to the
Business, which business plan shall identify and set out, inter
alia, the time scales and financial projections with key assumptions
listed, including all planned commitments, borrowings, amount and
timing
of capital contributions to be made by the Shareholders, projected
profit
and loss, balance sheet, cash flow for such Financial Year in a
form to be
mutually agreed in writing between the
Parties.
|
|
(i)
|
”Claim”
includes any notice, demand, assessment, letter or other document
issued
or action taken by any tax, fiscal or other statutory or governmental
authority, body or official whatsoever (whether of India or elsewhere
in
the world) whereby the Company is or may be placed or sought to
be placed
under a liability to make a payment or deprived of any relief,
allowance,
credit or repayment otherwise
available.
|
|
(j)
|
“Company”
means Sricon Infrastructure Private Limited, incorporated under
the laws
of India (registration number 11-106275) whose registered office
is at
Sricon House 25, Pragati Layout, Rajeev Nagar, Nagpur,
India.
|
|
(k)
|
“Completion”
and “Completion Date” shall have the meanings ascribed to
it in the SSPA.
|
|
(l)
|
“Confidential
Information” means the provisions of this Agreement and (i) any
information concerning the organisation, business, technology,
trade
secrets, know-how, finance, transactions or affairs of the Company,
any
subsidiary or any other Shareholder or any of their respective
Affiliates,
directors, officers or employees (whether conveyed in written,
oral or in
any other form and whether such information is furnished before,
on or
after the date hereof) and (ii) any information or materials prepared
by a
Party or its Representatives that contains or otherwise reflects,
or is
generated from, Confidential
Information.
|
|
(m)
|
“Directors”
means the directors of the Company and
“Director” means any one of them (as the context
requires).
|
|
(n)
|
“Effective
Date” shall mean the date of execution of this Agreement by
the
Parties.
|
|
(o)
|
“Encumbrances”
means any encumbrance, lien, charge, security interest, mortgage,
pledge,
easement, conditional sale or other title retention or non-disposal
agreement or other restriction of a similar kind, and all other
easements,
encroachments and title defects of every type and nature, or any
conditional sale contract, title retention contract, or other contract
to
give or to refrain from giving any of the
foregoing.
|
|
(p)
|
“Financial
Year” means the financial year of the Company ending 31st March
or other financial year agreed by the Shareholders at a general
meeting.
|
|
(q)
|
“Government
Authority” or “Government Authorities” means (a)
central, state, city, municipal or local government, governmental
authority or political subdivision thereof having jurisdiction;
or (b) any
agency or instrumentality of any of the authorities referred to
in Clause
(a); or (c) any regulatory or administrative authority, body or
other
organisation having jurisdiction, to the extent that the rules,
regulations, standards, requirements, procedures or orders of such
authority, body or other organisation have the force of Applicable
Laws;
or (d) any court or tribunal having
jurisdiction.
|
|
(r)
|
“IGC
Competitor” means any person (alone or together with any of its
affiliates and successors and permitted assigns of such person)
who is
engaged in similar Business.
|
|
(s)
|
‘INR’
means the lawful currency of India.
|
|
(t)
|
‘Key
Employees’ shall mean the Managing Director, the Chief Financial
Officer and the Chief Executive Officer of the
Company.
|
|
(u)
|
‘Liabilities’
means any and all current liabilities, obligations, payables, forms
of
taxation whether of India or elsewhere in the world, past, present
and
deferred (including, without limitation, income tax, stamp duty,
customs
and other import or export duties) and all other statutory or governmental
impositions, duties and levies and all penalties, charges, costs
and
interest relating to any Claim.
|
|
(v)
|
“Management
Committee” has the meaning assigned in Clause
4.2.
|
|
(w)
|
'Party'
shall mean IGC, the Company or the Promoters referred to individually
and
'Parties' shall mean IGC, the Company and the Promoters
referred to collectively.
|
|
(x)
|
'Person'
shall include an individual, an association, a corporation, a partnership,
a joint venture, a trust, an unincorporated organisation, a joint
stock
company or other entity or organisation, including a government
or
political subdivision, or an agency or instrumentality thereof
and/or any
other legal entity.
|
|
(y)
|
“Pro
Rata Share” means, with respect to any Shareholder, the
proportion that the number of fully paid up Shares held by such
Shareholder bears to the aggregate number of fully paid up Shares
held by
all Shareholders, in each case on a fully diluted
basis.
|
|
(z)
|
“Sale
Shares” means such number of Shares of the Company agreed to
be
acquired by IGC from the Promoters representing 12 percent of the
total
issued and paid up share capital of the Company as of the Effective
Date.
|
|
(aa)
|
“Securities”
means, with respect to any person, such person's equity capital,
registered capital, joint venture or other ownership interests
(including,
without limitation, in the case of the Company, shares) or any
options,
warrants, loans or other securities that are directly or indirectly
convertible into, at or exercisable or exchangeable for, at the
sole
option of such person, such equity capital, registered capital,
joint
venture or other ownership interests (whether or not such Derivative
Securities are issued by such
person).
|
|
(bb)
|
'Shares'
shall mean the equity and/or the preference shares of the
Company.
|
|
(cc)
|
"Share
Capital” means the amount derived by multiplying the total number
of Shares by Rs. Ten (10).
|
|
(dd)
|
'Shareholder'
or 'Shareholders' shall mean IGC and the Promoters and /
or any person to whom Shares are issued or transferred in accordance
with
the terms of this Agreement.
|
|
(ee)
|
“Shareholding”
in relation to a Shareholder, means ownership of the Shares by
such
Shareholder, at any time.
|
|
(ff)
|
“Share
Subscription cum Purchase Agreement” or “SSPA” shall have the
meaning ascribed to it in Recital
C.
|
|
(gg)
|
“Subscribed
Shares” shall mean such number of Shares of the Company agreed
to
be subscribed by IGC such that when taken together with the Sale
Shares,
IGC’s total shareholding shall represent 63 percent of the total issued
and paid up share capital of the Company on
Completion.
|
|
(hh)
|
“Transfer”
means to sell, gift, assign, amalgamate, merge, transmit
(whether
by operation of Law or otherwise) or create any Encumbrance on
any Shares
or any right, title or interest therein or otherwise to dispose
of the
Shares in any manner whatsoever.
|
|
(ii)
|
‘Warrantors’
means the Company and the Promoters and ‘Warrantor’ means
any one of them.
|
|
1.2
|
Other
Defined Terms:
|
|
(i)
|
‘Business
Days’ means the days on which the banks are open for business
in
India.
|
|
(ii)
|
‘Dispute’
shall have the meaning as ascribed to it in Clause 16.1
of this Agreement.
|
|
(iii)
|
‘Losses’
shall have the meaning as ascribed to it in Clause 14.1
of this Agreement.
|
|
1.3
|
Interpretation
|
|
|
|
|
1.3.1
|
In
this Agreement (unless the context requires otherwise), any express
reference to an enactment (which includes any legislation in any
jurisdiction) includes references
to:
|
|
|
(i)
|
that
enactment as amended, extended or applied by or under any other
enactment
before, on or after the date of this
Agreement;
|
|
|
(ii)
|
any
enactment which that enactment re-enacts (with or without modification);
and
|
|
|
(iii)
|
any
subordinate legislation (including regulations) made (before, on
or after
the date of this Agreement) under that enactment, as re-enacted,
amended,
extended or applied as described in paragraph (i) above, or under
any
enactment referred to in paragraph (ii)
above.
|
|
|
1.3.2
|
In
this Agreement, reference to including and include shall be construed
to
mean “including without limitation” and “include without limitation”
respectively.
|
|
|
1.3.3
|
In
this Agreement, references to a person shall be construed so
as to include
any individual, firm, company, unincorporated association of
persons,
government, state or agency of a state or any joint venture,
association,
partnership, or employee representative body (whether or not
having
separate legal personality).
|
|
1.3.4
|
Where
there is any inconsistency between the definitions set out in this
Clause
l and the definitions set out in any other clause or schedule,
then for
the purposes of construing such clause or schedule, the definitions
set
out in such clause or schedule shall
prevail.
|
|
|
1.3.5
|
In
this Agreement:
|
|
|
(i)
|
words
importing the singular shall include the plural and vice versa;
and
|
|
|
(ii)
|
references
to IGC unless repugnant to the context shall for the purpose of
this
Agreement mean and include the Affiliates of
IGC.
|
|
|
1.3.6
|
The
headings in this Agreement do not affect its interpretation and
are for
convenience only. Any schedule or annex to this Agreement shall
take
effect as if set out in this Agreement and references to this Agreement
shall include its schedules and
annexure.
|
|
|
1.3.7
|
In
this Agreement, unless the contrary intention appears, a reference
to a
Recital, Clause, Subclause, paragraph, subparagraph, Schedule or
item is a
reference to a Recital, Clause, sub-clause, paragraph, subparagraph,
Schedule or item of this Agreement.
|
|
|
1.3.8
|
For
the purposes of any calculation under this Agreement any fraction
will be
rounded off to the next integer.
|
|
|
1.3.9
|
Any
time period prescribed for the performance of any obligation of
IGC and/or
any of its Affiliate under this Agreement to Transfer or subscribe
to
Shares of the Company shall be extended by as many days as necessary
in
order to facilitate IGC and/or its Affiliate to obtain all such
approvals
(if any) from Government Authorities required under Applicable
Laws in
order to fulfil such obligations not being in any event more than
90 days
from the date hereof or such longer period as may specifically
be agreed
between the Parties.
|
|
2.1
|
The
Company has, at the date of this Agreement, an authorised Share
Capital of
INR 3,00,00,000 consisting of 30,00,000 Equity Shares of par value
INR 10
each. As of date 2932159 Equity Shares have been issued and are
held by
the persons in the number and proportion as set out in Schedule
2A.
|
|
2.2
|
Upon
Completion, the Shareholding pattern of the Company shall be as
set out in
Schedule 2B.
|
|
2.3
|
Promoters
and IGC agree that on Completion, the Parties would have only partly
funded the Company and that both Parties hereby agree to further
fund the
Company, as and when required to the maximum extent as specified
in the
Business Plan in proportion to their Shareholding in the Company.
The
Parties shall mutually agree on the manner and time of such future
funding.
|
|
2.4
|
In
the event the Company does not have adequate resources to fund
its
operations as envisaged in the Business Plan as amended or revised
with
approval of the Board or the Shareholders, and provided the Shareholders
have funded their full share of funding commitment as set forth
in the
Business Plan, the Company shall raise such additional funds
(“Additional Funds”) (i) through external commercial
borrowings from IGC on reasonable effort basis, in compliance with
the
exchange control regulations or alternatively, through other modes
of
non-convertible debt on terms and conditions to be satisfactory
to IGC
within a period of 45 days from the requirement of the Additional
Funds;
or (ii) if the Board determines that the Company is not able to
raise
external commercial borrowing or non-convertible debt as referred
to
herein, by an offering of Shares (“Additional Shares”)
to the Shareholders in proportion to their respective
Pro Rata
Share in the Company and on terms and conditions to be mutually
agreed
between the Parties. Such Additional Shares to be issued upon subscription
to the Shareholders shall be fully paid up by the respective Shareholder
in cash. In the event any Shareholder does not subscribe entirely
to its
Pro Rata Share of Additional Shares, the other Shareholder shall
have the
right to subscribe to the unsubscribed portion of the Pro Rata
Share of
the unsubscribing Shareholder in the Additional Shares
(“Unsubscribed Additional Shares”). In the
event that any Shareholder nominates an Affiliate to subscribe
to the
Additional Shares or the Unsubscribed Additional Shares, such Shareholder
shall cause such Affiliate to execute an Affiliate Deed of Adherence
in
the form set out in Schedule 4 and the Company shall not
issue the Additional Shares or the Unsubscribed Additional Shares
to such
Affiliate unless a duly executed (by all parties thereto) Affiliate
Deed
of Adherence has been lodged with
it.
|
|
|
The
Company shall purchase key man insurance policy of such amounts
as may be
decided by the Board, with benefits payable to the Company, covering
the
Key Employees and such of the Promoters as may be identified by
the
Company.
|
|
4.
|
BOARD
OF DIRECTORS CONSTITUTION, APPOINTMENT, NOMINATION AND
MANAGEMENT
|
|
4.1
|
Constitution,
Appointment and Nomination
|
|
|
|
|
(a)
|
Subject
to the provisions of this Agreement and the Companies Act, the
Board shall
be responsible for the management, supervision, direction and control
of
the Company. Subject to Applicable Laws, the Board shall
initially consist of five (5) Directors but may be increased up
to seven
(7) Directors subject to a maximum of twelve (12)
Directors and such Directors shall be appointed in accordance with
this
Agreement.
|
|
|
(b)
|
Composition
of the Board. The Parties agree that subject to Applicable Laws,
the Promoters shall be entitled to nominate three (3) Directors,
out of
which one shall be Mr R.L. Srivastava and IGC shall be entitled
to
nominate two (2) Directors on the Board. All Directors shall be
persons
whose period of office shall be liable to determination by retirement
of
directors by rotation and shall be required to be appointed by
the Company
in a general meeting. On the restructuring of the Board, Mr R.
L.
Srivastava, shall be appointed as the Managing Director of the
Company.
|
|
|
(c)
|
Appointment
and Removal of Directors. Subject to the Applicable
Laws, Mr R. L. Srivastava shall serve a term of five (5) years.
Subject to
the mutual consent of the Board and Mr R. L. Srivastava, the five
(5) year
term of Mr R. L. Srivastava may be extended to a further term not
exceeding 5 years at any one time.
|
|
|
|
|
(d)
|
Alternate
Directors. Any Director may, by prior written notice to the other
Shareholders and the Company, nominate one alternate at any time
to act on
his behalf as a Director in circumstances and for such period as
may be
valid under the Companies Act, and the Shareholders shall procure
that the
Board shall approve any such nomination and appoint the relevant
individual to act as alternate Director. The Shareholders shall
procure that the Board will, unless the nominating Director instructs
the
Board otherwise, automatically reappoint any nominated alternate
if, for
any reason, the nominated alternate's office is deemed to have
been
vacated. An alternate Director shall be entitled to receive notice
of all
meetings of the Board, to attend and vote at any such meeting at
which the
Director appointing him is not personally present and at the meeting
to
exercise and discharge all the functions, powers and duties of
his
appointee or as a Director. An alternate Director shall automatically
vacate his office as an alternate Director if the Director who
appointed
him ceases to be a Director.
|
|
|
(e)
|
Voting.
Subject to quorum requirements under Clause 4.1(i) being met each
Director
shall have one vote on the Board and, except as otherwise specifically
provided in Clause 4.5 below and/or as specifically required by
the
Companies Act, all decisions of the Board shall be taken by a simple
majority of the Directors present and voting or deemed to be present
at
the meeting or in the case of resolution by circulation by majority
of
Directors to whom the resolution is circulated in accordance with
Clause
4.1(k) below. Notwithstanding anything to the contrary contained
herein, a
resolution in respect of Fundamental Issue shall require the affirmative
vote of a Director nominated by IGC, for it to be validly
passed.
|
|
|
(f)
|
Chairman.
The Chairman of the Board shall from the Completion Date be Mr.
R.L.
Srivastava and shall have a term of two (2) years. The Chairman
shall
thereafter be elected by the majority of the Board. In case the
Chairman
is unavailable, any IGC Director may be appointed by the Board
as the
Chairman for that particular meeting to act as the Chairman of
the Board.
The Chairman shall not have a casting
vote.
|
|
|
(g)
|
Meeting
and Minutes of Board Meeting. The Board shall meet as may be
necessary to discharge its duties but in any case no less frequently
than
holding at least one meeting every three calendar months. The
minutes of the Board shall be circulated within ten (10) Business
Days of
the date of the meeting of the Board. At the beginning of each
meeting of the Board, the Board minutes of the previous meeting
shall be
approved if agreed to by all
Directors.
|
|
|
(h)
|
Notice.
At least fifteen (15) Business Days' notice of each Board meeting
shall be
given to each Director unless, in any particular case, all of the
Directors otherwise agree in writing. The notice of the meeting
of the
Board shall be accompanied by an agenda of the business to be transacted
at that meeting together with all papers to be circulated or presented
to
the same. No business shall be discussed at a Board meeting unless
such
business was included in the
agenda.
|
|
|
(i)
|
Quorum.
The quorum at meetings of the Board shall be comprised in accordance
with
the provisions of the Companies Act, and provided further that
it also
comprisesof one Director nominated by IGC and/or its
Affiliates.
|
|
|
(j)
|
Determination
of Quorum. If within two (2) hours from the time appointed for
the holding of a meeting of the Board a quorum as set forth in
Clause
4.1(i) is not present, the meeting of the Board shall stand adjourned
to
the next day in the same week (or if that day is a public holiday,
to the
next Business Day thereafter) at the same time and place as the
original
meeting, or to such other day and at such other time and place
as the
Board may determine. If at such adjourned meeting a quorum is
not present within one (1) hour from the time fixed for holding
the
meeting, the meeting shall stand adjourned to the same day in the
next
week (or if that day is a public holiday, to the next Business
Day
thereafter), at the same time and place as the reconvened meeting,
or to
such other day and such other time and place as the Board may determine.
If at such re-adjourned meeting a quorum is not present within
one (1)
hour from the time fixed for holding the meeting notwithstanding
anything
mentioned in Clause 4.1(i) or elsewhere in this Agreement, the
Directors
present shall constitute a quorum at such meeting.
|
|
|
(k)
|
Resolution
by Circulation. A resolution by circulation must be circulated to
all Directors and approved by majority of the Directors subject
to Clause
4.4 in accordance with Applicable Laws and shall be as valid and
effectual
as if it had been passed at a meeting of Directors duly convened
and
constituted. The resolution may be contained in one document or
in several documents in like form each signed or approved by one
or more
Directors concerned, but a resolution signed or approved by an
alternate
Director need not also be signed or approved by the Director appointing
such alternate Director and, if it is signed or approved by a Director
who
has appointed an alternate Director, it need not be signed or approved
by
the alternate Director in that
capacity.
|
|
|
(l)
|
Shareholders
Meeting Quorum. The quorum at meetings of the Shareholders shall
be as required by the Companies Act and shall comprise of at least
one (1)
representative of IGC and/or its
Affiliates.
|
|
|
(m)
|
Determination
of Quorum for Shareholders Meeting. In the event the quorum is
not present at any Shareholders meeting, the meeting shall be reconvened
in accordance with the provisions of the Companies Act and provisions
of
the Companies Act shall apply to the adjourned meeting. Voting
at a
meeting of the Shareholders shall only be by
poll.
|
|
|
(n)
|
Shareholders
Meeting: Notwithstanding anything to the contrary contained
herein, if at a general meeting a resolution in respect of Fundamental
Issue is proposed to be passed such resolution shall require the
affirmative vote of the authorised representative of IGC for it
to be
validly passed.
|
|
4.2
|
Management
and other Committees
|
|
|
4.2.1
|
The
Board shall constitute a Managing Committee chaired by the Managing
Director and two other persons as members, one to be appointed
by the
Managing Director and the second to be appointed by IGC. The Management
Committee shall be responsible for framing of the management and
operational policies including but not limited to policies relating
to
human resources, remuneration, salaries, purchase, processes and
procedures.
|
|
|
4.2.2
|
If
the Board finds it necessary to constitute further other working
committee
or committees, the powers of such working committee or committees
shall be
determined by the Board. The members of any such working committee
or
committees shall not decide the powers of such committee unless
delegated
by the Board or otherwise required by
law.
|
|
|
4.2.3
|
Subject
to Applicable Laws, each Party shall have the right to nominate
one person
each on all the working committees constituted by the
Board.
|
|
4.3.1
|
IGC
shall have the sole and absolute right to appoint the CFO of the
Company,
including the right to decide on the terms of employment, duties,
scope of
work and the key responsibilities of the CFO including but not
limited to
financial planning, financial control, audit and treasury functions
of the
Company. The CFO shall report to the Managing
Director. The CFO’s employment may not be terminated under any
circumstances without prior written approval from
IGC.
|
|
4.3.2
|
The
Company and the Promoters acknowledge that IGC as a company follows
stringent compliance, reporting and audit requirements including
but not
limited to timely and accurate closure and reporting of financial
statements compliant with US GAAP and the appointment and removal
of the
statutory auditors and internal auditors shall not be without the
affirmative vote of IGC, including the right of the IGC Director
to
nominate an auditor at the Board
meeting.
|
|
4.3.3
|
Subject
to the terms of this Agreement, the Company shall not without the
prior
approval of IGC
|
|
4.3.3.1
|
Authorize,
create, alter the rights attaching to or issue any Securities that
are
dilutive of IGC’s ownership of the Subscribed Shares, on an as-converted,
fully diluted basis or that have rights, preferences, or privileges
senior
to or on a parity with the Subscribed Shares;
or
|
|
4.3.3.2
|
Authorize,
create, alter or issue any Securities that are dilutive of IGC’s economic
interest in the Company.
|
|
4.3.4
|
IGC
shall have the right to receive US GAAP financial statements of
the
Company reviewed by the statutory auditor of the Company within
10 days of
the end of each financial quarter. IGC shall also have the right
to
receive the US GAAP financial statements audited by the statutory
auditor
of the Company within 45 days of the end of each financial
year.
|
|
(i)
|
Any
capital expenditure or indebtedness (including giving of security
for or
guaranteeing debts) beyond 15% of the Budget in the
Business Plan (including a revised Business Plan) that is approved
by the
Board of Directors.
|
|
(ii)
|
Investments
in any other companies / assets /
entities.
|
|
(iii)
|
Amendments
or any proposal to amend the Memorandum or Articles of Association
of the
Company including change in the number of Board members of the
Company.
|
|
(iv)
|
Commencement
of any new line of business or acquisition of shares of a company,
which
is unrelated to the Business of the Company, including spending/lending
any funds or furnishing any guarantee or credit or any type of
assistance
to any party which carries on or proposes to carry on any business
unrelated to the Business of the
Company.
|
|
(v)
|
Commencement
or settlement of litigation in any particular Financial Year other
than
those arising as part of the Company’s normal course of
business.
|
|
(vi)
|
Changes
to material tax policies or practices other than those required
by
Applicable Laws.
|
|
(vii)
|
Recommend,
giving or renewing of security for or the guaranteeing of debts
or
obligations of the Company or any subsidiary and / or Affiliates
of any
Person, other than in the normal course of
business.
|
|
(viii)
|
Any
change in the Financial Year for preparation of audited accounts
of the
Company.
|
|
(ix)
|
Winding
up and / or liquidation of the
Company.
|
|
(x)
|
Divestment
of or sale or Encumbrances of assets, investments, lease, license
or
exchange or pledge in any other way, proposing to dispose off any
assets
or undertaking of the Company, other than in the normal course
of business
and on normal and reasonable commercial terms and
conditions.
|
|
(xi)
|
Any
agreement, arrangement, transaction to sell or assignment of intellectual
property rights including those relating to copyrights, trademarks,
patents and designs belonging to the Company, other than in the
normal
course of business and on normal and reasonable commercial
terms.
|
|
(xii)
|
Shifting
of registered office, outside the city of
Nagpur.
|
|
(xiii)
|
Commencement
of new business/unit/division outside India, or applying for
pre-qualification for bids and appointing representatives for liaison
in a
foreign country.
|
|
(xiv)
|
Any
increase in the issued, subscribed or paid up equity or preference
Share
Capital of the Company or its subsidiary or any other company where
it has
a substantial investment, or re-organization of the Share Capital
of the
Company or its subsidiary or any other company where it has investment,
including new issue of Shares or other Securities of the Company
or its
subsidiary or any other company where it has investment or any
preferential issue of Shares or redemption of any Shares, issuance
of
convertible warrants, or grant of any options over its Shares by
the
Company or its subsidiary or any other company where it has
investment.
|
|
(xv)
|
Any
transfer of Equity Shares of the Company otherwise than contemplated
by
this Agreement.
|
|
(xvi)
|
Approval
of any new scheme or plan for grant of employee stock options,
or sweat
equity shares to any person or entity, including any modification
to any
new scheme.
|
|
(xvii)
|
Granting
of loan and/or procuring, selling to or any other dealings with
any
subsidiary or related Party or Affiliates or Promoters of the Company,
which has or is likely to have an actual or potential effect on
the
financials of the Company.
|
|
(xviii)
|
Save
as required by Applicable Laws any adoption or change of the dividend
or
distribution policy or accounting principle or policy (e.g., depreciation,
asset devaluation, etc.) which has a material impact on the Shareholding
of the Shareholders.
|
|
(xix)
|
Creation,
allotment, issue, acquisition, reduction, repayment, conversion
or
redemption of any share or loan capital, including but not limited
to the
issue or otherwise, of options, warrants, or other Shares or of
any
instrument convertible into, exercisable or exchangeable for Shares;
or
entering into an agreement, arrangement or undertaking to do any
of those
things, or any action which alters the Share Capital of the Company,
or
the variation of rights of any Shares of the Company, except raising
of
Additional Funds by issuance of Additional Shares as contemplated
under
Clause 2.4.
|
|
(xx)
|
Borrowing
by the Company other than as agreed in Clause 2.4 of the
Agreement.
|
|
(xxi)
|
Entering
into or amendments of any existing agreements, joint venture
agreements, partnership or consortium agreements as well as new
mergers, acquisitions, consolidations or amalgamations with other
entity.
|
|
(xxii)
|
Change
in the number of Directors, creation or modification of an executive
committee or Management Committee or any other working
committee.
|
|
(xxiii)
|
Any
commitment or agreement to do any of the
foregoing.
|
|
(xxiv)
|
Delegation
of powers to the Managing Committee and other working committees
constituted by the Board.
|
|
(xxv)
|
Approval
of or modification to the Business
Plan.
|
|
(xxvi)
|
Determination
of the remuneration and the other employment terms of the Key Employees,
Directors, and/or officers including
revisions/amendments.
|
|
(xxvii)
|
Any
significant change to the HR policy of the
Company.
|
|
(xxviii)
|
Appointment
of the Managing Director, Chairman or members of the Managing Committee,
in the event the existing Chairman is absent for any
reason.
|
|
(xxix)
|
Capital
expenditure, including constructions and leases, and indebtedness
in
excess of the levels agreed upon in the annual Business Plan /
Budgets of
the Company;
|
|
(xxx)
|
Any
substantial deviation in operations and strategies compared to
Business
Plan of the Company;
|
|
(xxxi)
|
Affiliated
or related party transactions, agreements or arrangements between
the
Company and the Promoters, directors, officers, Key Employees or
their
Affiliates;
|
|
(xxxii)
|
Formation
of or entry by the Company or its subsidiaries into joint venture,
consortium, partnership or similar arrangement with any other person
or
business;
|
|
(xxxiii)
|
Adoption
of a dividend policy, declaration of any dividend outside the dividend
policy or amending any dividend policy of the
Company;
|
|
(xxxiv)
|
Make
any application of any insurance proceeds or compensation for compulsory
acquisition or expropriation in each of the aforementioned
cases;
|
|
(xxxv)
|
The
making by the Company or its subsidiaries of any arrangement with
its
creditors and the moving for insolvency, receivership or
bankruptcy;
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|
(xxxvi)
|
Timing,
size, split between new and existing Shares, and final pricing
of any
Initial Public Offering (including appointment of advisers and
their terms
of appointment), or follow on offering, rights issue or any offer
for
sale;
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|
(xxxvii)
|
Applying
for the appointment of a receiver or an administrator or similar
officer
over the Company's assets;
|
|
(xxxix)
|
To
sub-let or assign or dispose of or create any Encumbrance on any
other
material asset of the Company;
|
|
(xl)
|
To
take any decisions relating to the employment of any person or
take any
decision relating to any seconded
person;
|
|
(xli)
|
To
approve, enter into, revoke or vary any material insurance
policies;
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|
(xlii)
|
Appointment
of the statutory and internal auditors to the
Company.
|
|
|
No
Shareholder shall Transfer or attempt to Transfer any Shares or
any right,
title or interest therein except as expressly permitted by the
provisions
of Clauses 6 (Transfer), 7 (Sale to Third Party Pre-emption Rights),
8
(Drag Along Rights), 9 (Tag Along Rights) ,10 (Term and Termination)
and
18 (Lock-in). Any Transfer of Shares pursuant to Clauses 6, 7,
8, 9,10 and 18 shall comply with the conditions of this Clause
6.
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|
|
A
Transfer of Shares shall be valid only if the transferee executes
Transferee Deed of Adherence together with a no objection certificate
substantially similar to the form contained in Schedule 3
or if the transferee is an Affiliate of the Transferor then an
Affiliate
Deed of Adherence substantially similar to the form contained in
Schedule 4.
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|
|
(b)
|
Transfer
to a Competitor: Notwithstanding anything to the contrary
contained in this Agreement, for so long as IGC (or any of its
Affiliates)
is a Shareholder, no Shareholder (other than IGC and/or its Affiliate)
shall Transfer or attempt to Transfer any Shares to an IGC
Competitor.
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|
|
|
|
(c)
|
Transfer
to an Affiliate: Notwithstanding the restriction on Transfer of
Shares set forth in Clauses 6, 7, 8, 9, 10 and 18, anytime during
the term
of this Agreement, any Shareholder may Transfer Shares held by
it to its
respective Affiliates, (“Permitted Transferee”) provided
such Permitted Transferee executes the deed of adherence in the
format
prescribed in Schedule 4 hereto (the “Affiliate
Deed of Adherence”).
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|
(d)
|
Notice
of Sale to a Permitted Transferee: At least five (5) Business
Days prior to the permitted Transfer under Clause 6(c), any Shareholder
intending to Transfer any of its Shares to a Permitted Transferee
shall
send a notice to the other Shareholders stating the date on which
the
intended Transfer is to occur, the name of the Permitted Transferee,
the
number and class of Shares involved and attaching (i) a completed
and duly
executed (by the Permitted Transferee and the transferor Shareholder)
Affiliate Deed of Adherence and (ii) copies of all approvals and
consents
required to be obtained under Law. Each Shareholder shall, within
three
(3) days of the receipt of such notice, execute the Affiliate Deed
of
Adherence and file the same with the Company. Provided however
that nothing contained herein shall require a Shareholder to execute
an
Affiliate Deed of Adherence in relation to a Transfer of Shares
in
contravention of this Agreement.
|
|
(e)
|
The
Company shall register a Transfer of Shares to a Permitted Transferee
only
upon the receipt (a) of a valid Affiliate Deed of Adherence duly
executed
by all parties thereto and (b) a copy of all consents required
under Law
sanctioning such transfer and documentary proof that conditions
stipulated
by Government Authority, if any, for such Transfer have been
fulfilled.
|
|
(f)
|
Within
five (5) Business Days of registering any Transfer by a Shareholder
of
Shares to a Permitted Transferee in its register of members, the
Company
shall send a notice to the other Shareholders stating that such
Transfer
has taken place and setting forth the name of the transferor, the
name of
the Permitted Transferee and the number of Shares
transferred.
|
|
(g)
|
Any
Transfer or attempt to Transfer the Shares in contravention of
the
provisions of this Agreement, including without a proper and duly
executed
Affiliate Deed of Adherence shall constitute a material breach
of this
Agreement.
|
|
(a)
|
The
Transfer Notice shall inter alia provide: (i) the sale price (on
a 'per
Share’ basis) (“Offer Price”) (ii) the number of Shares
proposed to be sold by the Seller (the “Transfer Shares”)
(iii) the terms of the
Transfer (collectively with the Offer Price the
“Transfer Terms”). A Transfer Notice shall be
irrevocable. The Parties agree that the Offer Price shall only
be a cash
price.
|
|
(b)
|
If
a Seller issues a Transfer Notice, the Offeree shall have the right
(but
not the obligation), exercisable within thirty (30) days from receipt
of
the Transfer Notice (“Offer Period”),
to:
|
|
|
(i)
|
accept
the Transfer Terms, by issuing a letter of acceptance (“Acceptance
Notice”) to the Seller, in which case, Clause 7(c) shall apply; and
|
|
|
(ii)
|
issue
a Tag Along Notice in accordance with Clause 8 below and accordingly
Clause 8 shall apply.
|
|
|
(c)
|
If
the Acceptance Notice is issued the Offeree shall be obliged to
purchase
all the Transfer Shares and the sale and purchase of the Transfer
Shares
in favour of the Offeree shall be completed within thirty (30)
days from
the date of issue of the Acceptance Notice by the Offeree. At such
completion, the Seller shall deliver to the Offeree certificates
and other
documents representing its title to the Transfer Shares, accompanied
by
duly executed and valid instruments of transfer. Such Transfer
Shares
shall be free and clear of any Encumbrance (other than Encumbrances
specifically permitted hereunder), and the Seller shall so represent
and
warrant and shall further represent and warrant that it is the
legal and
beneficial owner of such Transfer Shares. The Offeree shall at
such
completion deliver payment in full of the Offer Price in accordance
with
the terms set forth in the Transfer Notice. In the event that the
Offeree
nominates an Affiliate or a nominee for the purpose of purchasing
the
Transfer Shares or part thereof, it shall cause such Affiliate
or nominee
to execute a Deed of Adherence in the format contained in
Schedule 3 (“Transferee Deed of
Adherence”). At such
completion, all of the Parties to the transaction shall execute
such
additional documents as may be necessary or appropriate to effect
the sale
of the Transfer Shares to the Offeree. Any stamp duty payable
on the transfer of any Transfer Shares shall be borne and paid
by the
Offeree.
|
|
|
(d)
|
The
failure of an Offeree to give the Acceptance Notice or the Tag
Along
Notice within the Offer Period shall be deemed to be a waiver of
such
Offeree's right of first refusal or its tag along
right.
|
|
|
(e)
|
If
no Acceptance Notice or Tag Along Notice, as the case may be, is
issued by
an Offeree within the Offer Period, then subject to Clause 6(b)
the Seller
shall be entitled to Transfer the Transfer Shares to a Proposed
Transferee
on terms no more favourable than the Transfer Terms within thirty
(30)
days of the expiry of the Offer Period. Provided that the Proposed
Transferee duly executes a Transferee Deed of Adherence. In the
event the
Seller is IGC (and/or its Affiliates or nominees holding Shares
in the
Company) then so long as IGC, together with its Affiliates and
nominees
holding Shares in the Company (“IGC Group”), is the
majority shareholder in the Company and so long as it wishes to
Transfer
all (but not less than all) of the outstanding Shares held by IGC
Group,
IGC shall have a further right (but not an obligation) to require
the
Promoters and its Affiliates and nominees holding Shares in the
Company
(“Promoters Group Shareholders”) to
sell to such Proposed Transferee all the then outstanding Shares
held by
Promoters Group Shareholders (“Promoters Outstanding
Shares”) in accordance with Clause 8 below.
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|
|
(f)
|
If
the Seller fails to Transfer the Transfer Shares to the Proposed
Transferee within the said period of thirty (30) days calculated
as above,
it will not be entitled to Transfer the Transfer Shares thereafter
to any
person, without re-offering the Transfer Shares to the Offeree
in
accordance with provisions of this Clause 7.
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|
|
(g)
|
Any
Transfer of the Transfer Shares pursuant to this Clause 7 shall
be valid
only upon the execution of a Transferee Deed of Adherence and shall
be
registered by the Company upon a validly and duly executed (by
all parties
thereto) Transferee Deed of Adherence being lodged with it. The
other
Shareholders undertake to execute such Transferee Deed of Adherence,
as
may be required in order to give effect to such Transfer of the
Transfer
Shares to the Offeree, its Affiliate, or a proposed
transferee. Provided however that nothing contained herein
shall require a Shareholder to execute a Transferee Deed of Adherence
where the Transfer is in contravention of the provisions of this
Agreement.
|
|
|
(a)
|
Subject
to Clause 7(e) above and notwithstanding anything to the contrary
stated
in Clause 9 below if at any time IGC Group wishes to Transfer all
(but not
less than all) of the Shares held collectively by IGC Group to
a Proposed
Transferee as provided under Clause 7 above, IGC shall have a right
(but
not an obligation) to serve a written notice on the Promoters
(“Drag Along Notice”) requiring the Promoters Group
Shareholders to Transfer all (but not less than all) the Shares
held by
the Promoters Group Shareholders to the Proposed Transferee identified
by
IGC under Clause 7 aboveon the Transfer Terms.
|
|
|
(b)
|
If
a Drag Along Notice is issued by IGC, the Transfer and purchase
of the IGC
Transfer Shares and Promoter Outstanding Shares shall, subject
to Clause
8(b), be completed within thirty (30) days from the date of issue
of the
Drag Along Notice by IGC, the time taken to obtain any regulatory
approval
being excluded for the calculation. At such closing, IGC and Promoter
Group Shareholders shall deliver certificates and other documents
representing their title to the IGC Transfer Shares and the Promoter
Outstanding Shares, respectively, accompanied by duly executed
and valid
instruments of transfer, to the Proposed Transferee. IGC shall
procure that the third party shall deliver at such closing, payment
in
full of the Offer Price in accordance with the terms set forth
in the
Transfer Notice and execute the Transferee Deed of
Adherence. At such closing, all of the Parties to the
transaction shall execute such additional documents as may be necessary
or
appropriate to effect the sale of the IGC Transfer Shares and Promoter
Outstanding Shares to the Proposed Transferee. Any stamp duty
or transfer charges payable on the transfer of any IGC Transfer
Shares and
the Promoter Outstanding Shares shall be borne in accordance with
the
Transfer Terms.
|
|
|
(c)
|
Any
Transfer of the IGC Transfer Shares pursuant to this Clause 8 shall
be
valid only upon the execution of a Transferee Deed of Adherence
and shall
be registered by the Company upon a validly and duly executed (by
all
parties thereto) Transferee Deed of Adherence being lodged with
it.
|
|
|
(a)
|
Subject
to Clause7(b)(ii) above, if at any time any Shareholder (“Proposed
Transferor”) intends to Transfer its Transfer Shares to the
Proposed Transferee, each of the other Shareholders shall have
a right but
not an obligation to serve a written notice on the Proposed Transferor
(“Tag Along Notice”) stating that the Proposed Transferor
procures an offer from the Proposed Transferee to purchase such
number of
Shares from each of the other Shareholders as is calculated in
accordance
with paragraph (c) below (“Tag Along Shares”) on the
Transfer Terms. Each of the Shareholders who exercise such a right
and the
Proposed Transferor shall be collectively referred to as the Transferors.
Accordingly, the number of shares purchased by the Proposed Transferee
from each of the Transferors shall be amount calculated under paragraph
(c).
|
|
|
(b)
|
A
Transfer of the Transfer Shares by IGC to the Proposed Transferee
under
this Clause 9 shall not be registered unless the Tag Along Shares
are
purchased by the Proposed Transferee simultaneously with the Transfer
Shares and the Proposed Transferee has executed a Transferee Deed
of
Adherence. The sale and purchase of the Transfer Shares and the
Tag Along
Shares shall be completed within thirty (30) days from the date
of issue
of the Tag Along Notice and the time taken to obtain any regulatory
approval being excluded for the calculation. At such closing, IGC
and such
Shareholders shall deliver certificates and other documents representing
their title to the Transfer Shares and the Tag Along Shares, respectively,
accompanied by duly executed and valid instruments of transfer,
to the
Proposed Transferee. IGC shall procure that the Proposed
Transferee shall deliver, at such closing, payment in full of the
Offer
Price in accordance with the terms set forth in the Transfer and
shall
execute a Transferee Deed of Adherence. At such closing, all of
the parties to the transaction shall execute such additional documents
as
may be necessary or appropriate to effect the sale of the Transfer
Shares
and the Tag Along Shares to the Proposed Transferee. IGC shall
procure
that any stamp duty or transfer charges payable on the transfer
of any
Transfer Shares and the Tag Along Shares shall be borne by the
Proposed
Transferee.
|
|
|
(c)
|
The
number of Tag Along Shares shall be calculated in the following
manner:
|
|
|
For
Transferors 1 to N
|
|
|
(d)
|
Any
Transfer of the Transfer Shares pursuant to this Clause 9 shall
be valid
only upon the execution of a Transferee Deed of Adherence and shall
be
registered by the Company upon a validly and duly executed (by
all parties
thereto) a Transferee Deed of Adherence being lodged with it.
|
|
10.
|
TERM
AND TERMINATION BY DEFAULT
|
|
(a)
|
This
Agreement shall come into effect on the Completion
Date. Notwithstanding anything to the contrary contained herein,
all
rights available to the Promoters and/or their Affiliates under
this
Agreement shall terminate upon (i) the Shareholding of the Promoters
and/or their Affiliates falling below 37% or such other percent
as the
case may be, in the event the Promoters receive their entitlement
referred
to in Clause 4.5 or (ii) the Shares of the Company getting listed
on any
recognised stock exchange, whichever is
earlier.
|
|
(b)
|
In
the event that any Shareholder (a“Defaulting
Shareholder”) suffers the following
event(a“Default”), the other Shareholder
(“Non-Defaulting Shareholder”) shall be entitled to
exercise the options specified under Clause10(c) below, the Defaulting
Shareholder is in material breach of this Agreement and such default
has
not been cured within 30 days of the issuance of a written notice
of such
default by a Non-Defaulting Shareholder. For the purposes of this
Agreement the term ‘material breach’ shall include a breach of the
obligations under clauses 2.4 (future funding), 4.1(n) (shareholders
meeting), 6 (restrictions on transfer of shares) and 13 (representations
and warranties).
|
|
(c)
|
Upon
the occurrence of a Default, any Non-Defaulting Shareholder may
for so
long as such default subsists issue a default notice to the Defaulting
Shareholders (the “Default Notice”) together with a copy
to every other Shareholder and the Company specifying the nature
of the
Default. Upon the issuance of the Default Notice, the
Non-Defaulting Shareholders shall have following
options:
|
|
|
(i)
|
to
purchase all (but not less than all) the Shares held by the Defaulting
Shareholder and its Affiliates (as the case maybe) (the “Default
Shares”) at the Default Price to be determined in accordance
with
Clause 10 (k) ; or
|
|
|
(ii)
|
subject
to Clause 6 Transfer its entire Shareholding to the Proposed Transferee
(not being an IGC Competitor) on the Transfer Terms with a right
(but not
an obligation) to require the Defaulting Shareholder to Transfer
the
Default Shares held by Defaulting Shareholders and its Affiliates
(as the
case maybe) at the Default Price to be determined in accordance
with
Clause 10 (k) to such Proposed Transferee.
|
|
(d)
|
Any
Non-Defaulting Shareholder desirous of purchasing the Default Shares
or
requiring the Transfer of the Default Shares shall, no later than
three
months (“Default Option Period”) from the issuance of the
Default Notice, issue a notice to the other Non-Defaulting Shareholders,
the Defaulting Shareholders and the Company of its intention to
purchase
all (but not part of the Default Shares) at Default Price (the
“Default Purchase Notice”) or its intention of
Transferring its entire Shareholding with/without requiring the
Defaulting
Shareholder to Transfer its Default Shares to the Proposed
Transferee (the “Non Default Purchase
Notice”). Provided however that where more than one
Non-Defaulting Shareholder chooses to exercise: (i) their option
under
Clause 10(c)(i) the Default Shares shall be sold to such Non-Defaulting
Shareholders pro rata to their Shareholding; or (ii) their option
under
Clause 10(c)(ii) the Non Defaulting Shareholders shall have an
option but
not an obligation to require the Defaulting Shareholder to Transfer
their
Default Shares on a proportionate basis, to be calculated in accordance
with the formula specified under Clause 7(k). The Defaulting Shareholder
shall be obligated to sell the Default Shares to the Non-Defaulting
Shareholders who exercise their option (the “Opting Non-Default
Shareholders”) either to purchase the Default Shares by issuing
the Default Purchase Notice or to the Proposed Transferee identified
in
the Default Purchase Notice by an Opting Non-Default
Shareholder.
|
|
(e)
|
The
Transfer of the Default Shares to the Opting Non-Default
Shareholders/Proposed Transferee shall occur on a date to be specified
by
the Opting Non-Defaulting Shareholder (the “Default Option
Settlement Date”) in a written notice, which date shall be no
less than seven days after the date of such notice provided that
such
notice shall be issued no later than three months after the last
day of
the Default Option Period. On the Default Option Settlement Date,
the
Defaulting Shareholder shall either sell the Default Shares to
the Opting
Non-Default Shareholders or to the Proposed Transferee depending
upon the
option exercised by the Opting Non-Defaulting Shareholder in accordance
with Clause 10.
|
|
(f)
|
On
the Default Option Settlement Date, the Defaulting Shareholder
shall
deliver, or cause to be delivered, to Opting Non-Default
Shareholders/Proposed Transferee the
following:
|
|
(g)
|
The
Defaulting Shareholder shall warrant that the Defaulting Shareholder
and/or its Affiliate, as the case maybe, is the owner of the Default
Shares and that such Default Shares are free from
Encumbrances.
|
|
(h)
|
On
the Default Option Settlement Date the Non-Defaulting Shareholders/third
party shall deliver or cause to be delivered to the Defaulting
Shareholder
their Pro Rata Share of the Default Price by way of a bank cheque
payable
to the Defaulting Shareholder. The Opting Non-Defaulting Shareholders
further covenant that in the event that they opt to purchase the
Defaulting Shares through an Affiliate, they shall cause such
Affiliate to execute an Affiliate Deed of Adherence or if through
a third
party, they shall cause such third party to execute a Transferee
Deed of
Adherence as the case may be and the Company shall not register
such a
Transfer unless a validly executed Affiliate Deed of Adherence
or the
Transferee Deed of Adherence is lodged with
it.
|
|
(i)
|
Upon
the transfer of the Default Shares to the Opting Non-Defaulting
Shareholders or the third party, the Defaulting Shareholder shall
cease to
have any rights hereunder.
|
|
(j)
|
In
the event that a transferee nominated by an Opting Non-Default
Shareholder
fails to perform its obligations to complete the sale of the Default
Shares the person nominating such transferee shall be liable to
complete
such Transfer.
|
|
(k)
|
Default
Price for the purposes of this Clause 10 means a price being an
amount
equivalent to 90% of the FMV Price. For the
purposes of this Agreement, “FMV Price” shall mean the
fair market value of Shares as determined by any of the big 4 accounting
firms (“Valuer(s)”) as set forth in this Clause
10 Should none of these Valuers be available to perform
the valuation exercise, a reputable international bank or Indian
bank
shall be appointed.
|
|
(l)
|
The
FMV Price shall be determined on the basis
of:
|
|
(m)
|
The
Shareholders shall engage an independent Valuer of international
repute to
determine the fair market value of the Company Assets. Company
Assets’ in this Clause means all the assets of the Company. The terms of
the appointment of the Valuer shall be decided by
IGC.
|
|
(n)
|
The
provisions of Clauses 13 (Representations and warranties), 14 (Indemnity),
16 (Resolution of Disputes), 17 (Notices), and 19 (Confidentiality)
shall
survive the termination hereof pursuant to Clause
10.1.
|
|
11.
|
NON-COMPETE
|
|
11.1
|
The
Promoters and/or any of them or their Affiliates for so long as
IGC and
the Promoters and/or any of them or their Affiliates are Shareholders
in
the Company, shall not carry on or engage directly or indirectly,
whether
through partnership or as a shareholder, joint venture partner,
collaborator, consultant or agent or in any other manner whatsoever,
whether for profit or otherwise, in any business which competes
directly
or indirectly with the whole or any part of the Business or any
other
activity/business directly or indirectly carried on by the Company
or
which can reasonably be construed as being same or similar to the
Business
of the Company.
|
|
|
11.2 The
Promoters and/or any of them or their Affiliates hereby agree and
acknowledge that as long as IGC and/or any of its Affiliates and
Promoters
and/or any of them or their Affiliates are Shareholders in the
Company,
they shall carry on any activity/business in the nature of Business,
in
present or in future, solely and exclusively through the
Company.
|
|
|
11.3 The
Promoters agree and acknowledge that the covenants and obligations
under
Clauses 11.1 and 11.2 above relate to special, unique and extraordinary
matters, and that a violation of any of the terms of such covenants
and
obligations will cause the other Parties irreparable injury. Therefore,
IGC and/or any of its Affiliates shall be entitled to an interim
injunction, restraining order or such other equitable relief as
a court of
competent jurisdiction may deem necessary or appropriate to restrain
the
Promoters and/or any of them or their Affiliates from committing
any
violation of the covenants and obligations contained in this
Agreement.
|
|
|
11.4 The
Parties acknowledge and agree that the above restrictions are considered
reasonable for the legitimate protection of the business and goodwill
of
the Company, but in the event such restriction shall be found to
be void,
but would be valid, if some part thereof was deleted or the scope,
period
or area of application were reduced, the above restriction shall
apply
with the deletion of such words or such reduction of scope, period
or area
of application as may be required to make the restrictions contained
in
this Clause valid and effective. Notwithstanding the limitation
of this
provision by any law for the time being in force, the Parties undertake,
at all times to observe and be bound by the spirit of this Clause.
Provided however, that on the revocation, removal or diminution
of the law
or provisions, as the case may be, by virtue of which the restrictions
contained in this Clause were limited as provided hereinabove,
the
original restrictions would stand renewed and be effective to their
original extent, as if they had not been limited by the law or
provisions
revoked.
|
|
|
11.5 The
covenants of the Promoters and/or their Affiliates under this Clause
11
shall survive for a period of 5 years from the date they cease
to be
Shareholders of the Company or unless as specifically waived by
IGC or its
nominees/assignees.
|
|
12
|
PLEDGE
OR ENCUMBRANCE OF SHARES OF
PROMOTERS
|
|
|
The
Promoters shall not pledge, mortgage, hypothecate, charge or otherwise
Encumber any of the Shares of the Company either directly or indirectly
nor otherwise use such Shares as collateral for any purpose which
could
result in an involuntary Transfer of such Shares or any right,
title or
interest therein in favour of any person, including but not limited
to,
any lenders of the Company except with the prior written consent
of
IGC. The Promoters shall also be entitled to pledge their
shares in favour of lenders i.e. banks and financial institutions
only
with the prior written consent of
IGC.
|
|
|
(a)
|
such
Party has the full power and authority to enter into, execute and
deliver
this Agreement and to perform the transactions contemplated hereby
and, if
such Party is not a natural person, such Party is duly incorporated
or
organised with limited liability and existing under the Laws of
the
jurisdiction of its incorporation or
organisation;
|
|
|
(b)
|
the
execution and delivery by such Party of this Agreement and the
performance
by such Party of the transactions contemplated hereby have been
duly
authorised by all necessary corporate or other action of such
Party;
|
|
|
(c)
|
assuming
the due authorisation, execution and delivery hereof by the other
Parties,
this Agreement constitutes the legal, valid and binding obligation
of such
Party, enforceable against such Party in accordance with its terms,
except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganisation, moratorium or similar laws affecting
creditors' rights generally;
|
|
|
(d)
|
the
execution, delivery and performance of this Agreement by such Party
and
the consummation of the transactions contemplated hereby will not
(i)
violate any provision of the organisational or governance documents
of
such Party; (ii) require such Party to obtain any consent, approval
or
action of, or make any filing with or give any notice to, any Government
Authority in such Party's country of organisation or any other
person
pursuant to any instrument, contract or other agreement to which
such
Party is a party or by which such Party is bound, other than such
filing
required as a result of the transactions contemplated herein; (iii)
conflict with or result in any material breach or violation of
any of the
terms and conditions of, or constitute (with notice or lapse of
time or
both constitute) a default under, any instrument, contract or other
agreement to which such Party is a party or by which such Party
is bound;
(iv) violate any order, judgment or decree against, or binding
upon, such
Party or upon its respective shares, properties or businesses;
or (v)
violate any Law of such Party's country of organisation or any
other
country in which it maintains its principal
office;
|
|
|
(e)
|
there
exists no Encumbrance on any of the Shares of the
Company;
|
|
|
(f)
|
The
Parties reiterate and confirm the representations, warranties and
undertakings and each statement made in Schedule 3 of the SSPA,
as
applicable to the Parties, and confirm that the same are is now
and will
be true and accurate at the Completion
Date.
|
|
13A.
|
COMPANY
WARRANTIES
|
|
|
(a)
|
The
Company shall ensure that under the terms of this Agreement, it
shall
perform its obligations so as to ensure that upon
Completion, Shares constituting 63% of the paid up Share
Capital of the Company are transferred and registered to nominees
of IGC
being [names of the nominees] at the face value of Shares Rs. 10
per
Share.
|
|
|
(b)
|
The
Company warrants that as on the date hereof the Company has not
done or
committed to do any act, matter or thing or has not assumed any
liability,
other than in the ordinary course of business.
|
|
14.1
|
Without
prejudice to any other right available to IGC in law or under equity,
the
Company and the Promoters shall jointly and severally indemnify,
defend
and hold harmless IGC, their Affiliates, directors, advisors, officers,
employees and agents, or, if so desired by IGC, the Promoters shall
indemnify the Company, from and against any and all liabilities,
damages,
demands, Claims (including third party Claims), actions, judgments
or
causes of action, assessments, interest, fines, penalties, and
other costs
or expenses (including, without limitation, amounts paid in settlement,
court costs and all reasonable attorneys' fees and out of pocket
expenses)
(“Losses”) directly based upon, arising out of, or in
relation to or otherwise in respect
of:
|
|
i.
|
any
inaccuracy in or any breach of any Representation and Warranty,
covenant
or agreement of the Promoters or Company contained in this Agreement
or in
the SSPA or any document or other papers delivered by any of them
to IGC
in connection with or pursuant to this
Agreement;
|
|
ii.
|
any
liability arising out of non compliance of any obligation undertaken
by
the Company or the Promoters; save and except as may be disclosed
in the
audited financial statements of the Company which have been disclosed
to
IGC prior to the Completion Date;
|
|
iii.
|
any
liabilities and obligations of whatever nature relating to any
litigation,
Claim or governmental investigation pending or relating to the
Business or
operations of the Promoters or the Business of the Company prior
to the
date of execution of this Agreement and as on the Completion Date;
save
and except as may be disclosed in the audited financial statements
of the
Company which have been disclosed to IGC prior to the Completion
Date;
|
|
iv.
|
any
liability due to any non-compliance of any applicable law, rules
or
regulations prior to the date of execution of this Agreement and
as on the
Completion Date; save and except as may be disclosed in the audited
financial statements of the Company which have been disclosed to
IGC prior
to the Completion Date.
|
|
14.2
|
Any
compensation or indemnity as referred to in Clause 14.1 above shall
be
such as to place IGC in the same position as it would have been
in, had
there not been any such breach and as if the Representation and
Warranty
under which IGC is to be indemnified, had been
correct.
|
|
16.2
|
Conciliation
|
|
16.3
|
Arbitration
|
|
|
(a)
|
If
the Parties are unable to amicably settle the Dispute in accordance
with
Clause 16.2 within the period specified therein, any Party to the
Dispute
shall be entitled to serve a notice invoking this Clause and making
a
reference to an arbitration panel of three arbitrators. Each party
to the
dispute shall appoint one arbitrator within 30 days of receipt
of the
notice of the Party making the reference, and the two arbitrators,
so
appointed shall appoint a third arbitrator. The Arbitration
proceedings shall be held in accordance with the Arbitration and
Conciliation Act, 1996. The decision of the arbitration panel shall
be
binding on all the Parties to the
Dispute.
|
|
|
(b)
|
The
place of the arbitration shall be Mumbai,
India.
|
|
|
(c)
|
The
proceedings of arbitration shall be in the English
language.
|
|
|
(d)
|
The
arbitration proceedings shall be governed by the laws of India
and the
Mumbai courts (including any appellant court) in India shall have
exclusive jurisdiction.
|
|
|
(e)
|
Notwithstanding
the foregoing, the Parties agree that any of them may seek interim
measures including injunctive relief in relation to the provisions
of this
agreement or the Parties' performance of it from any court of competent
jurisdiction. Each Party shall co-operate in good faith to expedite
(to
the maximum extent practicable) the conduct of any arbitral proceedings
commenced under this Agreement.
|
|
|
(f)
|
The
costs and expenses of the arbitration, including, without limitation,
the
fees of the arbitration and the Arbitrator, shall be borne equally
by each
Party to the dispute or claim and each Party shall pay its own
fees,
disbursements and other charges of its counsel, except as may be
otherwise
determined by the Arbitrator. The Arbitrator would have the power
to award
interest on any sum awarded pursuant to the arbitration proceedings
and
such sum would carry interest, if awarded, until the actual payment
of
such amounts.
|
|
|
(g)
|
Any
award made by the Arbitrator shall be final and binding on each
of the
Parties that were parties to the dispute. The Parties expressly
agree to
waive the applicability of any Applicable Laws and regulations
that would
otherwise give the right to appeal the decisions of the Arbitrator
so that
there shall be no appeal to any court of Law for the award of the
Arbitrator, except a Party shall not challenge or resist any enforcement
action taken by any other Party in any court of Law in whose favour
an
award of the Arbitrator was
given.
|
|
17.1
|
Any
notice or other communication that may be given by one Party to
the other
shall always be in writing and shall be served either by (i) hand
delivery
duly acknowledged; or (ii) sent by registered post with acknowledgment
due; or (iii) by facsimile at the respective addresses set out
herein
below or at such other address as may be subsequently intimated
by one
party to the other in writing as set out herein. If the notice
is sent by
facsimile, the said notice shall also be sent by registered post
acknowledgment due.
|
|
17.2
|
All
notices shall be deemed to have been validly given on (i) the business
date immediately after the date of transmission with confirmed
answer
back, if transmitted by facsimile transmission, or (ii) the business
date
of receipt, if sent by courier or hand delivery; or (iii) the expiry
of
seven days after posting, if sent by registered
post.
|
|
17.3
|
Any
Party may, from time to time, change its address or representative
for
receipt of notices provided for in this Agreement by giving to
the other
Party not less than 10 days prior written
notice.
|
|
|
19.1
|
General
Obligation. Each Party undertakes that it shall not
reveal, and shall ensure that its directors, officers, managers,
partners,
members, employees, legal, financial and professional advisors
and bankers
(collectively, “Representatives”) do not reveal, to any
third party any Confidential Information without the prior written
consent
of the Company or the concerned Party, as the case may be regardless
of
whether this Agreement is terminated or
not.
|
|
|
19.2
|
Exceptions.
The provisions of Clause 19.1 shall not apply
to:
|
|
|
(a)
|
disclosure
of Confidential Information that is or becomes generally available
to the
public other than as a result of disclosure by or at the direction
of a
Party or any of its Representatives in violation of this
Agreement;
|
|
|
(b)
|
disclosure
by a Party to its Representatives and Affiliates (and their officers
and
directors) or to transferee of Shares in accordance with this Agreement
provided such Representatives, Affiliates and transferees are bound
by
similar confidentiality
obligations;
|
|
|
(c)
|
disclosure
by the Company of Confidential Information concerning the Company
that is
reasonably necessary in the ordinary course of business or otherwise
in
connection with transactions or proposed transactions of the Company;
and
|
|
|
(d)
|
obligations
disclosure, after giving prior notice to the other Parties to the
extent
practicable under the circumstances and subject to any practicable
arrangements to protect confidentiality, to the extent required
under the
rules of any stock exchange or by Applicable Laws or governmental
regulations or generally accepted accounting principles applicable
to any
Party or judicial or regulatory process or in connection with any
judicial
process regarding any legal action, suit or proceeding arising
out of or
relating to this Agreement.
|
|
22.12.1
|
The
Parties agree that if the understanding contemplated in this Agreement
cannot be completed in the manner set forth herein, then the Parties
shall
use reasonable endeavours to enter into such understanding that
(a) would
result in a substantially similar outcome and (b) do not materially
prejudice any of the Parties. Each of the Parties further
agrees that, during any such negotiations, it shall refrain from
initiating any legal actions against the other Parties;
and
|
|
22.12.2
|
Each
Party agrees to perform (or procure the performance of) all further
acts
and things, and execute and deliver (or procure the execution and
delivery
of) such further documents, as may be required by law or as the
other
Parties may reasonably require, whether on or after the date of
this
Agreement, to implement and/or give effect to this Agreement and
the
understanding contemplated by it and for the purpose of vesting
in IGC the
full benefit of the assets, rights and benefits to be transferred
to IGC
under this Agreement.
|
|
22.16
|
Survival.
In the event of termination of this Agreement pursuant to Clause
10,
notwithstanding anything mentioned herein, Clauses which by their
nature
survive termination shall survive the termination of this
Agreement.
|
|
22.17
|
Consent
to Specific Performance. The Parties declare that it is
impossible to measure in money the damages that would be suffered
by a
Party by reason of the failure by any other Party to perform any
of the
obligations hereunder. Therefore, if any Party shall institute
any action or proceeding to seek specific performance or enforcement
of
the provisions hereof any Party against whom such action or proceeding
is
brought hereby waives any claim or defence therein that the other
Party
has an adequate remedy at Law.
|
|
22.18
|
Covenants
Reasonable. The Parties agree that, having regard to
all the circumstances, the covenants contained herein are reasonable
and
necessary for the protection of the Parties and their
Affiliates. If any such covenant is held to be void as going
beyond what is reasonable in all the circumstances, but would be
valid if
amended as to scope or duration or both, the covenant will apply
with such
minimum modifications regarding its scope and duration as may be
necessary
to make it valid and effective
|
|
22.19
|
No
Implied Representation. Each of the Parties acknowledges that, in
agreeing to enter into this Agreement, it has not relied on any
representation, warranty, collateral contract or other assurance
except
those set out in this Agreement and the documents referred to in
made by
or on behalf of the other Party before the signature of this
Agreement.
|
|
22.20
|
Without
prejudice The Parties agree that the rights and remedies of the
Parties hereunder are in addition to their rights at Law or
equity.
|
|
SIGNED
AND DELIVERED
|
)
|
|
BY
THE WITHINNAMED " INDIA GLOBILIZATION CAPTIAL INC.,
USA"
|
)
|
|
BY
THE HAND OF MR. RAM MUKUNDA
|
)
|
|
(Authorised
Signatory)
|
)
|
|
ON
THE 15TH DAY
OF SEPTEMBER 2007
|
)
|
|
IN
THE PRESENCE OF:
|
)
|
|
WITNESS:
|
)
|
|
NAME
AND ADDRESS:
|
)
|
|
SIGNED
AND DELIVERED
|
)
|
|
BY
THE WITHINNAMED "SRICON INFRASTRUCTURE PRIVATE LIMITED
"
|
)
|
|
BY
THE HAND OF MR. R.L. SRIVASTAVA
|
)
|
|
(AUTHORISED
SIGNATORY) PURSUANT TO THE
|
)
|
|
RESOLUTION
PASSED BY THE BOARD
|
)
|
|
ON
THE 15TH DAY
OF SEPTEMBER 2007
|
)
|
|
IN
THE PRESENCE OF:
|
)
|
|
WITNESS:
|
)
|
|
ADDRESS:
|
)
|
|
SIGNED
AND DELIVERED
|
)
|
|
BY
THE WITHINNAMED "PROMOTERS"
|
)
|
|
MR.
R.L. SRIVASTAVA
|
)
|
|
ON
THE 15TH DAY
OF SEPTEMBER 2007
|
)
|
|
IN
THE PRESENCE OF:
|
)
|
|
WITNESS:
|
)
|
|
ADDRESS:
|
|
|
)
|
|
|
A.
|
The
Company is a public limited company inter alia engaged in the
business of infrastructure development specialising in construction
of
roads over the last two decades (the
“Business”);
|
|
B.
|
The
Investor is currently engaged in making investments in India especially
in
sectors such as power, infrastructure, etc. and wishes to make
a foray
into the Business;
|
|
C.
|
The
Company has, at the date of this Agreement, an authorised share
capital of
INR 15,00,00,000 consisting of 80,00,000 equity
shares of par value INR 10 each and 70,00,000 15%
redeemable preference shares of par value INR 10 each. As of
date 4287500 Equity Shares have been issued and are held by the
persons in
the number as set out in Schedule 2 A and 5,000,000
convertible preference shares have been issued (“Sale
Shares”);
|
|
D.
|
The
Promoters have requested the Investor and the Investor proposes
to invest
in the Company in accordance with the terms and subject to the
conditions
of this Agreement.
|
|
1.
|
DEFINITIONS
AND INTERPRETATION
|
|
1.1
|
Definitions
|
|
(a)
|
'Act'
shall mean the Indian Companies Act, 1956 and any amendment thereto
or any
other succeeding enactment for the time being in
force.
|
|
(b)
|
‘Affiliate’
means when used in respect of a specified legal person,
each
legal person that directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under common
control
with the person specified. In this definition “control” (and its
derivatives) means both (i) holding beneficially more than fifty
per cent
(50%) of equity interests and (ii) the ability to cast more than
fifty
(50%)per cent of the voting rights attaching to voting securities
or (iii)
power to direct the management or policies of such entity by contract
or
otherwise. The term ‘Affiliate’, when used in respect of an individual
party mean such party’s Relative as defined in section 6 of the
Act.
|
|
(c)
|
'Agreement'
shall mean this Share Subscription Agreement, as from time to time
amended, supplemented or replaced or otherwise modified and any
document
which amends, supplements, replaces or otherwise modifies this
Agreement,
together with the recitals and all the Annexes, Appendices and
Schedules
attached hereto.
|
|
(d)
|
‘Applicable
Law’ shall mean all applicable laws, statutes, ordinances,
regulations, rules, orders, bye laws, administrative interpretation,
writ,
injunction, directive, protocols, codes, policies, notices, directions,
judgment or decree or other instrument or other requirements of
any
Governmental Authority in any relevant jurisdiction applicable
to any
Party from time to time.
|
|
(e)
|
‘Articles’
means the Articles of Association of the Company to be duly amended
to
reflect the terms of the Shareholders Agreement (as from time to
time
amended, modified or supplemented in accordance with the provisions
thereof) to the extent permitted under
law.
|
|
(f)
|
'Authorised
Dealer' shall mean the banker of the
Company.
|
|
(g)
|
'Board'
shall mean the board of directors of the
Company.
|
|
(h)
|
‘Claim’
includes any notice, demand, assessment, letter or other document
issued
or action taken by any tax, fiscal or other statutory or governmental
authority, body or official whatsoever (whether of India or elsewhere
in
the world) whereby the Company is or may be placed or sought to
be placed
under a liability to make a payment or deprived of any relief,
allowance,
credit or repayment otherwise
available.
|
|
(i)
|
'Completion'
shall mean completion of the events specified in
Clause4.3 below and the Investor being
registered as a member in respect of the Subscription Shares in
the
register of members of Company.
|
|
(j)
|
‘Completion
Date' shall mean date mentioned in
Clause4.3
hereof.
|
|
(k)
|
‘CPS’
means 1,25,00,000 compulsorily convertible preference shares of
the face
value of INR 10 each with the terms and conditions as listed in
Schedule 5 hereto proposed to be issued by the Company
to
the Investor pursuant to the terms of this
Agreement.
|
|
(l)
|
‘CPS
Consideration’ means INR 125000000 to be paid by the Investor to
the Company for the CPS.
|
|
(m)
|
'Conditions
Precedent' shall mean the conditions precedent mentioned in
Clause 3 of this
Agreement.
|
|
(n)
|
‘Derivative
Securities’ means any subscriptions, options, debentures, bonds,
conversion rights, warrants, or similar agreements, Securities
or
commitments of any kind obligating the Company to issue, grant,
deliver or
sell, or cause to be issued, granted, delivered or sold (i) any
shares in
the share capital or any derivative securities of the Company;
(ii) any
securities convertible into or exchangeable for any shares in the
share
capital of the Company; (iii) any obligations measured by the price
or
value of the shares in the share capital of the Company; or (iv)
any
rights to participate in the equity or income of the Company or
to
participate in or direct the election of any directors or officers
of the
Company.
|
|
(o)
|
'Encumbrances'
means any encumbrance, lien, charge, security interest, mortgage,
pledge,
easement, conditional sale or other title retention or non-disposal
agreement or other restriction of a similar kind, and all other
easements,
encroachments and title defects of every type and nature, or any
conditional sale, contract, title, retention contract, or other
contract
to give or to refrain from giving any of the
foregoing.
|
|
(p)
|
‘INR’
means the lawful currency of India.
|
|
(q)
|
‘Intellectual
Property’ shall mean all forms of intellectual property rights
subsisting under any law or equity and all analogous rights subsisting
under the laws of all jurisdictions and shall include any product
or
process of the human intellect whether registrable as patents,
trade
marks, copyrights, designs or otherwise such as an invention, or
derivative works of the same expression or literary creation, unique
name,
trade secret, business method, database, industrial process, computer
program, source code, process, presentation,
etc.
|
|
(r)
|
‘Investor
Shares’ mean 7,15,00,000 Equity Shares proposed to be issued
by
the Company to the Investor at the Issue
Price.
|
|
(s)
|
‘Investor
Consideration’ means INR 275000000 to be paid by the Investor to
the Company for the Investor
Shares.
|
|
(t)
|
‘Issue
Price’ means the price of Rs. 38.46 per Investor
Share.
|
|
(u)
|
‘Liabilities’
means any and all contingent, current, deferred or long-term liabilities,
obligations, payables, forms of taxation whether of India or elsewhere
in
the world, past, present and deferred (including, without limitation,
income tax, stamp duty, customs and other import or export duties)
and all
other statutory or governmental impositions, duties and levies
and all
penalties, charges, costs and interest relating to any
Claim.
|
|
(v)
|
‘Memorandum’
means the Memorandum of Association of the
Company.
|
|
(w)
|
'Party'
shall mean the Investor, the Promoters or the Company referred
to
individually and 'Parties' shall mean the Investor, the
Promoters and the Company referred to
collectively.
|
|
(x)
|
'Person'
shall include an individual, an association, a corporation, a partnership,
a joint venture, a trust, an unincorporated organisation, a joint
stock
company or other entity or organisation, including a government
or
political subdivision, or an agency or instrumentality thereof
and/or any
other legal entity.
|
|
(y)
|
'Representations
and Warranties' shall mean the representations and warranties
given by the Company and/or the Promoters in this Agreement, in
particular
Clause 5 hereto.
|
|
(z)
|
‘Securities’
means, with respect to any person, such person's equity capital,
registered capital, joint venture or other ownership interests
(including,
without limitation, in the case of the Company, shares) or any
options,
warrants, loans or other securities that are directly or indirectly
convertible into, at or exercisable or exchangeable for, at the
sole
option of such person, such equity capital, registered capital,
joint
venture or other ownership interests (whether or not such Derivative
Securities are issued by such
person).
|
|
(aa)
|
'Shares'
shall mean the equity shares or preference shares of the
Company.
|
|
(bb)
|
'Shareholder'
or 'Shareholders' shall mean any Person who holds any
Shares.
|
|
(cc)
|
‘Shareholders
Agreement’ means the agreement of even date entered into between
the Promoters, the Company, the Investor in relation to the management
and
governance of the Company on the terms and conditions mentioned
therein.
|
|
(dd)
|
‘Subscription
Price’ means an aggregate of the Investor Consideration and
the
CPS Consideration.
|
|
(ee)
|
‘Subscription
Shares’ means an aggregate of the Investor Shares and the
CPS.
|
|
(ff)
|
‘Tax’
or collectively ‘Taxes’ shall mean (i) any and all taxes
imposed by any governmental body, assessments and other governmental
charges, duties, impositions and liabilities, including sales tax,
excise
duties, service tax, wealth tax, dividend tax, value added tax,
other
taxes based upon or measured by gross receipts, income, profits,
use and
occupation, ad valorem, transfer, franchise, withholding, payroll,
employment and property taxes, together with all interest, penalties
and
additions imposed with respect to such amounts; (ii) any liability
for the
payment of any amounts of the type described in clause (i) as a
result of
being or ceasing to be a member of an affiliated, consolidated,
combined
or unitary group for any period; and (iii) any liability for the
payment
of any amounts of the type described in clause (i) or (ii) as a
result of
any express or implied obligation to indemnify any other Person
or as a
result of any obligations under any agreements or arrangements
with any
other Person with respect to such amounts and including any liability
for
taxes of a predecessor entity or a
transferor.
|
|
(gg)
|
‘Transaction
Documents’ shall mean any and all deeds, documents; letters
executed or proposed to be executed between the Parties to achieve
Completion, including this Agreement and the Shareholders
Agreement.
|
|
(hh)
|
‘Warrantors’
means the Company and the Promoters and ‘Warrantor’ means
any one of them.
|
|
1.2
|
Other
Defined Terms:
|
|
(i)
|
‘Business
Days’ means the days on which the banks are open for business
in
Mumbai, India.
|
|
(ii)
|
‘Dispute’
shall have the meaning as ascribed to it in Clause 10.1
of this Agreement.
|
|
(iii)
|
‘Losses’
shall have the meaning as ascribed to it in Clause 6.1 of
this Agreement.
|
|
1.3
|
Interpretation
|
|
1.3.1
|
The
terms referred to in this Agreement shall, unless defined otherwise
or
inconsistent with the context or meaning thereof, bear the meaning
ascribed to it under the relevant
statute/legislation.
|
|
1.3.2
|
All
references in this Agreement to statutory provisions shall be construed
as
meaning and including references
to:
|
|
|
(a)
|
Any
statutory modification, consolidation or re-enactment (whether
before or
after the date of this Agreement) for the time being in
force;
|
|
|
(b)
|
All
statutory instruments or orders made pursuant to a statutory provision;
and
|
|
|
(c)
|
any
statutory provisions of which these statutory provisions are a
consolidation, re-enactment or
modification.
|
|
1.3.3
|
Words
denoting the singular shall include the plural and words denoting
any
gender shall include all genders.
|
|
1.3.4
|
Headings
to clauses, sub-clauses and paragraphs are for information only
and shall
not form part of the operative provisions of this Agreement or
the
Schedules and shall be ignored in construing the
same.
|
|
1.3.5
|
References
to recitals, clauses or schedules are, unless the context otherwise
requires, are references to recitals, to clauses of or schedules
to this
Agreement.
|
|
1.3.6
|
Reference
to days, months and years are to Gregorian days, months and calendar
years
respectively.
|
|
1.3.7
|
Any
reference to the words “hereof,” “herein”, “hereto” and “hereunder” and
words of similar import when used in this Agreement shall refer
to clauses
or annexures of this Agreement as specified
therein.
|
|
1.3.8
|
Any
expression importing a natural person includes any company, trust,
partnership, joint venture, association, body corporate or governmental
agency.
|
|
1.3.9
|
Where
a word or phrase is given a defined meaning, another part of speech
or
other grammatical form in respect of that word or phrase has a
corresponding meaning.
|
|
1.3.10
|
Reference
to “Investor”, unless repugnant to the context shall for the purpose of
this Agreement, mean and include the Affiliates of the
Investor.
|
|
1.5.11
|
The
words “include” and “including” shall be construed without
limitation.
|
|
1.5.12
|
The
rule of construction, if any, that a contract should be interpreted
against the Party responsible for the drafting and preparation
thereof,
shall not apply to this Agreement.
|
|
2.
|
SUBSCRIPTION
ON COMPLETION DATE
|
|
2.1
|
Subject
to the terms of this Agreement, and relying on the Representations
and
Warranties and the indemnities given by the Promoters and the Company
under this Agreement, the Investor agrees on the Completion Date
to
subscribe for and the Company agrees to issue and allot to the
Investor
the Subscription Shares in consideration of the Subscription
Price.
|
|
2.2
|
The
Subscription Shares shall be issued free from all Encumbrances
and
together with all rights, title and interests now or hereafter
attaching
thereto. The Subscription Shares shall in accordance with Applicable
Laws
and as the context may require, rank pari passu with all the
existing Shares of the Company.
|
|
3.
|
CONDITIONS
PRECEDENT
|
|
3.1
|
The
Parties agree that the obligation of the Investor to subscribe
to the
Subscription Shares in the manner provided herein, is conditional
upon (i)
the fulfilment of the following conditions to the satisfaction
of the
Investor, unless specifically waived in writing by the Investor;
and (ii)
only if all the Representations and Warranties continue to be true
and
correct on the Completion Date:
|
|
3.1.1
|
The
passing by the Board, in accordance with the Act and the Articles,
of
resolutions approving, initialling and
authorizing:
|
|
|
a)
|
the
execution of the Transaction Documents and the performance of the
transactions contemplated therein;
|
|
|
b)
|
the
draft of the amendments to the Memorandum and Articles of Association
of
the Company, to reflect, to the extent permitted by law, the provisions
of
the Shareholders Agreement, in the form approved by the Investor,
subject
to obtaining approval of the shareholders of the
Company;
|
|
|
c)
|
the
issue of the Subscription Shares pursuant to the terms of this
Agreement;
|
|
|
d)
|
the
approval of the resignation of Mr. K.V. Thomas, Mr. Jose Thomas
and Mr. N.
Sunder from the Board;
|
|
3.1.2
|
Execution
of the Shareholders Agreement;
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|
3.1.3
|
Completion
of a business, financial, accounting, tax, technical, legal and
regulatory
due diligence on the Company by the Investor and resolution of
all issues
arising therefrom to the satisfaction of the Investor on or before
45
Business Days from the date of this
Agreement;
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|
3.1.4
|
A
resolution being passed at a duly constituted meeting of the board
of
directors of Investor and a resolution being passed at duly constituted
meeting of the shareholders of the Investor, approving the subscription
to
the Subscription Shares and the satisfaction of all other conditions
for
the Investor to effect a Business Combination as set forth in the
Investor's Prospectus dated March 3, 2006 as filed with the US
Securities
and Exchange Commission;
|
|
3.1.5
|
The
Promoters obtaining written consents from all banks, financial
institutions, lenders of the Company and all other third parties
as may be
required for change in shareholding of the Company in form and
substance
satisfactory to the Investor;
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|
3.1.6
|
There
shall not have been any change, effect or circumstance from the
date hereof to the Completion Date, which has or may reasonably
be
expected to have an adverse effect on the Company, the Company’s
prospects/profits/profitability/financial position/ financial condition/
operations/businesses/ assets and/or the
Business;
|
|
3.1.7
|
Providing
details of the bank account of the Company maintained with the
Authorised
Dealer to the Investor for the purpose of receiving the Subscription
Price
under this Agreement;
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|
3.1.8
|
The
Parties obtaining all statutory consents and approvals required
or
desirable under any and all applicable laws and regulations (i)
for the
subscription, issue and allotment of the Subscription Shares pursuant
to
the terms of this Agreement; and (ii) to give effect to the transactions
contemplated herein and under the Transaction Documents having
been
obtained and remaining in full force and
effect;
|
|
3.1.9
|
Each
of the Promoters delivering to the Investor a no-objection certificate
in
the form contained in Schedule 4 hereto and a no-objection certificate
from the Company in the form contained in Schedule 4A
hereto;
|
|
3.1.10
|
Investor
receiving from the Promoters and the Company three year financial
statements for the period ended March 31, 2007, March 31, 2006
and March
31, 2005 converted into US GAAP and audited by a Public Company
Accounting
Oversight Board (www.pcaob.com) and unaudited US GAAP financial
statements
for the period commencing April 1, 2007 and ending September 30,
2007 or
as of such later period, which shall not be earlier than 7 days
prior to
the Completion Date;
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|
3.1.11
|
The
purchase of the Sale Shares by the Investor and the incorporation
of the
name of the Investor in the register of members in respect to the
Sale
Shares.
|
|
3.2
|
Upon
fulfilment of the Conditions Precedent, the Promoters and the Company
shall notify the Investor of the same in
writing.
|
|
3.3
|
If
the Conditions Precedent mentioned in Clause 3.1.3 above
is not fulfilled or satisfied to the satisfaction of the Investor
or
waived in writing by the Investor within 45 days of the date of
this
Agreement or such other date as may be mutually agreed between
the Parties
in writing, the Investor shall have the right to terminate this
Agreement
forthwith. The termination of this Agreement shall not in any way
affect
or prejudice any right accrued to any Party against the other prior
to
such termination. The Promoters however hereby confirm, undertake
and
agree, that they shall cause the Company to provide to the Investor
and/or
its advisors, all relevant information relating to the Company,
including
accounting, financial, tax, marketing, technical, human resources
and
legal information, whether or not requested by the Investor and/or
its
advisors, latest by the completion of 45 days from the date of
this
Agreement. The Promoters acknowledge and confirm that the Investor
and/or
its advisors shall be entitled to request for any information that
they
deem necessary and material in relation to the Company for the
purpose of
conducting the due diligence exercise. The Promoters shall provide
full
and complete access to the Investor and/or its advisors to all
of the
records, facilities, employees, suppliers and customers of the
Company,
along with answers and clarifications to questions raised by the
Investor
and/or its advisors and will cooperate fully with them in the completion
of the due diligence exercise. The Parties acknowledge and confirm
that
the quantum and payment of the Subscription Price for the Subscription
Shares shall be subject to the satisfactory results of the due
diligence
exercise to be conducted by the Investor, at the sole satisfaction
of the
Investor and in the event, the Investor is not satisfied with the
results
of the due diligence exercise conducted by the Investor but has
waived the
requirement of the Condition Precedent mentioned in Clause 3.1.3
above, the Parties shall mutually agree on a revised Subscription
Price.
|
|
3.4
|
The
Promoters and the Company undertake to use all best efforts to
ensure that
all the Conditions Precedent are satisfied as soon as possible
and the
Condition Precedent as mentioned in Clause 3.1.3 is
satisfied no later than the date mentioned in Clause 3.3
above.
|
|
3.5
|
The
Promoters and the Company shall co-operate and provide all information
and
reasonable assistance to the Investor and/or its advisors and authorised
representatives to enable them to verify the records/documents
of the
Company.
|
|
4.
|
COMPLETION
|
|
4.1
|
The
Promoters and the Company shall notify the Investor of the fulfilment
of
the Conditions Precedent and provide to the Investor, all the requisite
documents evidencing fulfilment of such Conditions Precedent applicable
to
the Promoters and/or the Company. The Investor through its
advisors/counsel shall then satisfy itself as to the fulfilment
of the
Conditions Precedent. The Investor shall notify the Promoters and
the
Company within 7 days from the date of receipt of all the
documents/information from the Promoters of its satisfaction or
dissatisfaction with the same or of waiving the fulfilment of any
of the
Conditions Precedent applicable to the Promoters and/or
Company.
|
|
4.2
|
In
case the Investor notifies the Promoters or the Company of its
dissatisfaction under Clause 4.1 above, the Promoters
shall fulfil the unfulfilled Conditions Precedent within 7 days
of receipt
of such notice and shall provide to the Investor, all requisite
documents
evidencing fulfilment of that Condition Precedent. Subject to Clause
3.3
above, the procedure referred to in Clause 4.1 above
shall be followed thereafter until the fulfilment of all Conditions
Precedent applicable to the Promoters and/or Company, to the satisfaction
of the Investor.
|
|
4.3
|
Upon
fulfilment of all the Conditions Precedent to the satisfaction
of the
Investor or if specifically waived in writing by the Investor,
the Parties
shall proceed to complete the issue of the Subscription Shares
to the
Investor (‘Completion’) in the manner provided
in this Clause. Such Completion shall take place on a date set
by the
Investor (the ‘Completion Date’), which date shall not be
later than 15 days from the fulfilment of all the Conditions Precedent
to
the satisfaction of the Investor. This date may however be extended
upon
mutual agreement between the
Parties.
|
|
4.4
|
The
Completion shall take place at the office of Economic Laws Practice,
1502
Dalamal Towers, Nariman Point, Mumbai -
400021.
|
|
4.5
|
On
the Completion Date, the Company shall deliver or cause to be delivered
to
the Investor:
|
|
|
a)
|
certified
true copies of the Board Resolutions referred to in clause
3.1.1;
|
|
|
b)
|
written
confirmation from the Company and each of the Promoters that as
at the
Completion Date:
|
|
•
|
no
change, effect or circumstance has occurred, which has or may reasonably
be expected to have an adverse effect on the Company, the Company’s
prospects/profits/profitability/financial position/ financial condition/
operations/businesses/ assets and/or the operations/businesses
and/or the
Business; and
|
|
•
|
the
Representations and Warranties are true, accurate and complete
and that it
is not aware of any matter or thing which is in breach of or inconsistent
with any of the Representations and
Warranties;
|
|
|
c)
|
the
no-objection certificates referred to in clause
3.1.9.
|
|
4.6
|
Immediately
thereafter, a meeting of the Board shall be held at which, the
Board shall
pass resolutions:
|
|
|
(i)
|
approving
the allotment of the Subscription Shares to the Investor with the
corresponding certificates;
|
|
|
(ii)
|
approving
the appointment of the directors, as specified by the Investor
on the
Board; and
|
|
|
(iii)
|
convening
an extra-ordinary general meeting of the Company in accordance
with the
Articles of the Company to amend the Memorandum and Articles of
the
Company to incorporate the provisions of the Shareholders Agreement
in the
form approved by the Board under Clause 3.1.1(b) above and to approve
the
issue of the Subscription Shares to the Investor pursuant to section
81(1A) of the Act.
|
|
4.7
|
Immediately
thereafter, a meeting of the shareholders shall be held at short
notice,
at which the following resolutions shall be
passed:
|
|
|
(ii)
|
approving
the amendments to the Memorandum and Articles of Association in
the form
approved by the Board under Clause
3.1.1(b).
|
|
4.8
|
Immediately
thereafter the Company shall (i) issue and deliver to the authorised
representative of the Investor the original certificates duly stamped,
signed and sealed for the Subscription Shares subscribed to by
the
Investor; and (ii) incorporate the name of the Investor as the
legal and
beneficial owner of the Subscription Shares in the register of
members of
the Company.
|
|
4.9
|
Notwithstanding
the above, on the Completion Date the Investor shall also have
a right to
review the books and accounts of the Company to verify to the satisfaction
of the Investor, that no event has occurred which has or may have
an adverse effect on the Business, operations, financial
condition or prospects of the Business. In the event, the Investor
is not
satisfied with the results of its review; the Investor shall have
the
right to terminate this Agreement forthwith. The termination of
this
Agreement shall not in any way affect or prejudice any right accrued
to
any Party against the other prior to such
termination.
|
|
4.10
|
On
the Completion Date the Investor
shall:
|
|
|
a)
|
deliver
an application in writing for the Subscription Shares to be subscribed
by
them on the Completion Date; and
|
|
|
b)
|
pay
to the Company the Subscription Price by way of telegraphic
transfer.
|
|
4.11
|
Immediately
after subscription to the Subscription Shares by the Investor,
the equity
shareholding of the Company shall be as set out in Schedule
2B.
|
|
4.12
|
The
Parties to this Agreement agree to take all measures that may be
required
to ensure to the extent possible, that all the events contemplated
in
Clause 4 above on the Completion Date are completed on
the same day.
|
|
4.13
|
Notwithstanding
the provisions of Clause 4.12 hereto, all proceedings to
be taken and all documents to be executed and delivered by the
Parties at
Completion shall be deemed to have been taken and executed simultaneously
to the extent possible and no proceedings shall be deemed to have
been
taken nor documents executed or delivered until all have been taken,
executed and delivered.
|
|
4.14
|
Immediately
after the Board meetings of the Company and passing of the resolutions
mentioned above, the Parties shall ensure that the Company shall
record
the necessary entries in its registers and carry out all the actions
that
have been resolved to be carried out in order to effectively achieve
Completion.
|
|
4.15
|
The
Company shall ensure that within 30 days from the Completion Date,
the
relevant forms of the Company are filed with the concerned regulatory
authorities including the Registrar of Companies, Reserve Bank
of India,
etc. in accordance with the provisions of Applicable
Law
|
|
4.16
|
Investor’s
Remedy
|
|
4.16.1
|
If
after having received the Subscription Price from the Investor
pursuant to
Clause 4.10 above, the provisions of this Clause 4 are not complied
with
by the Company and/or the Promoters on the Completion Date, the
Investor
shall have the right to obligate the Company and/or the Promoters
and if
so required, by the Investor, the Company and/or the Promoters
shall
forthwith refund to the Investor the Subscription Price received
from the
Investor pursuant to Clause 4.10 above together with interest thereon
calculated at the rate of the then applicable State Bank of India
prime
lending rate (“SBI PLR”) plus 10% from the date the Investor paid the
Subscription Price to the date of actual refund by the Company
with
interest (“Liquidated Damages”). The Parties agree and acknowledge that
the Liquidated Damages is a genuine pre estimate of the loss that
may be
suffered by the Investor as a result of non-compliance by the Company
and/
or the Promoters of the obligations specified in this
Agreement.
|
|
4.16.2
|
The
Parties agree and acknowledge that this obligation of the Company
to
refund the Subscription Price to the Investor shall be without
prejudice
to any other right, which the Investor may have under this Agreement
and
in law or in equity.
|
|
5.1
|
True
and Accurate: The Warrantors represent, warrant and
undertake to the Investor, that each of the statements set out
in this
Clause and Schedule 3 hereof, as applicable to the Warrantors,
is now and
will be true and accurate at the Completion Date. The Warrantors
acknowledge that the Investor, in entering into this Agreement,
is relying
on such representations, warranties and undertakings and shall
be entitled
to treat the same as conditions of the
Agreement.
|
|
5.2
|
Investor
Representation:The Investor hereby represents and warrants that it has
the corporate power and authority to execute, deliver and perform
this
Agreement and the Transaction Documents and the transactions contemplated
herein. The execution, delivery and performance by Investor of
the
Transaction Documents have been duly authorized and approved by
its board
of directors.
|
|
5.3
|
Separate
and Independent: Each of the Representations and Warranties
shall be separate and independent and, save as expressly provided
to the
contrary, shall not be limited by reference to or inference from
any other
Representations and Warranty or any other term of this Agreement,
which is
not expressly referenced to the Representations and Warranty
concerned.
|
|
5.4
|
Knowledge:
If any Representation or Warranty is qualified by knowledge, then
it means
that the Representation or Warranty has been made to the best knowledge
of
the Warrantors, after the Warrantors have made and caused to be
made such
due and proper inquiries as may be required in respect of the relevant
matter to obtain informed
knowledge.
|
|
5.5
|
Undertaking: None
of the Warrantors shall do, allow or procure any act or omission
before
the Completion Date which would respectively constitute a breach
of any of
the Representations and Warranties if they were given at the Completion
Date, or which would make any of the Representations and Warranties
inaccurate or misleading if they were so
given.
|
|
5.6
|
Notification
of breach: Each of the Warrantors hereby agree to disclose
promptly to the Investor in writing immediately upon becoming aware
of the
same, any matter, event or circumstance (including any omission
to act)
which may arise or become known to it after the date of this Agreement
which:
|
|
|
5.6.1
|
would
render any of the Representations and Warranties to be inaccurate;
or
|
|
|
5.6.2
|
has,
or is likely to have, an adverse effect on the financial
position/prospects/profits/profitability/financial condition/
operations/businesses/ assets and/or the Business of the
Company.
|
|
5.7
|
Survival: The
Representations and Warranties provided in this Agreement shall
survive
the Completion Date.
|
|
5.8
|
The
Company and the Promoter hereby agree and acknowledge that the
Investor
has agreed to subscribe to the Subscription Shares inter alia
relying upon the Representations and
Warranties.
|
|
6.1
|
Without
prejudice to any other right available to the Investor in law or
under
equity, the Promoters shall jointly and severally indemnify, defend
and
hold harmless the Investor, their Affiliates, directors, advisors,
officers, employees and agents, or, if so desired by the Investor,
the
Promoters shall indemnify the Company, from and against any and
all
liabilities, damages, demands, Claims (including third party Claims),
actions, judgments or causes of action, assessments, interest,
fines,
penalties, and other costs or expenses (including, without limitation,
amounts paid in settlement, court costs and all reasonable attorneys'
fees
and out of pocket expenses) (“Losses”) directly based
upon, arising out of, or in relation to or otherwise in respect
of:
|
|
i.
|
any
inaccuracy in or any breach of any Representation and Warranty,
covenant
or agreement of the Promoters or Company contained in this Agreement
or
any document or other papers delivered by any of them to the Investor
in
connection with or pursuant to this
Agreement;
|
|
ii.
|
any
liability arising out of non compliance of any obligation undertaken
by
the Company or the Promoters;
|
|
iii.
|
any
liabilities and obligations of whatever nature relating to any
litigation,
Claim or governmental investigation pending or relating to the
Business or
operations of the Promoters or the Business of the Company prior
to the
date of execution of this Agreement and as on the Completion
Date;
|
|
iv.
|
any
liability due to any non-compliance of any applicable law, rules
or
regulations prior to the date of execution of this Agreement and
as on the
Completion Date.
|
|
6.2
|
Any
compensation or indemnity as referred to in Clause 6.1 above shall
be such
as to place the Investor in the same position as it would have
been in,
had there not been any such breach and as if the Representation
and
Warranty under which Investor is to be indemnified, had been
correct.
|
|
7.1
|
The
Investor and/or the Promoters and their designated officers, employees,
accountants and attorneys shall have the right, at any time and
from time
to time during normal business hours and upon notice which may
be of at
least 3 (three) days, to carry out inspection of documents, records,
premises and all other properties of the Company at their own cost
as long
as they hold any Shares in the
Company.
|
|
7.2
|
The
Investor and their designated officers, employees, accountants
and
attorneys shall have the right to consult with the officers, employees,
accountants and attorneys of the Company for the purpose of affording
the
Investor full opportunity to make such investigation as it may
desire and
to collect such information, data, documents, evidence as may be
required
for the purpose of and in the course of such inspection in connection
therewith. Such investigations and/or audit, however, shall not
affect the
Representations and Warranties made by the Promoters or the
Company.
|
|
8.
|
INTERIM
MANAGEMENT AND ACCESS
|
|
8.1
|
During
the period beginning from the execution of this Agreement and continuing
until the Completion Date, the Company shall, and the Promoters
shall
cause the Company to carry on its Business in the usual, regular
and
ordinary course in substantially the same manner as heretofore
conducted,
to pay its debts and Taxes when due, to pay or perform other obligations
when due, and, to the extent consistent with such businesses, to
use its
best efforts consistent with past practice and policies to preserve
intact
their present business organizations, keep available the services
of their
present officers and employees and preserve their relationships
with
customers, suppliers, distributors, licensors, licensees and others
having
business dealings with them, all with the goal of preserving their
goodwill and ongoing businesses at the Completion
Date.
|
|
8.2
|
The
Promoters shall cause the Company to provide the Investor and its
officers, agents, advisors, consultants and other representatives
reasonable access to (i) all of the properties, books, contracts,
commitments and records of the Company, (ii) all other information
concerning the Business, properties and personnel (subject to restrictions
imposed by Applicable Law) of the Company as the Investor may request,
and
(iii) all employees of the Company. The Promoters shall cause the
Company
to provide such information within 5 days of making a request for
the
same.
|
|
8.3
|
During
the period beginning from the execution of this Agreement and continuing
until the Completion Date the Company and/or the
Promoters (including their respective Affiliates,
representatives and/or advisors) shall not, without the prior written
consent of the Investor:
|
|
(i)
|
solicit,
encourage, entertain, initiate or participate in any inquiry, negotiations
or discussions or disclose any information pertaining to the Company
or
enter into any agreement with respect to any offer or proposal
to, acquire
or merge or restructure (including through business transfer, asset
transfer, amalgamation, demerger, hiving off or in any other manner
whatsoever) or dispose off, alienate or Encumber any assets or
business of
the Company or parts thereof (an ‘Acquisition
Proposal’);
|
|
(ii)
|
assist
or cooperate with any Person to make any Acquisition Proposal;
or
|
|
(iii)
|
solicit,
negotiate or enter into any agreement with any Person with respect
to an
Acquisition Proposal;
|
|
(iv)
|
In
the event the Company or the Promoters receive, prior to the Completion
Date, any Acquisition Proposal, the Company or the Promoters receiving
such Acquisition Proposal shall immediately suspend any discussions
with
such offeror or party with regard to such Acquisition Proposal
and
immediately inform the Investor as to any such Acquisition Proposal,
including information as to the principal terms of such Acquisition
Proposal or request, as the case may be, and any other information
that
the Investor may request;
|
|
(v)
|
sell,
license or transfer to any Person any rights to any Intellectual
Property
or enter into any agreement with respect to Intellectual Property
with any
Person;
|
|
(vi)
|
amend
or change its Articles of Association and/or Memorandum of Association
in
any manner whatsoever;
|
|
(vii)
|
adopt
or change accounting methods or practices other than as required
by the
Indian GAAP or revalue any of its assets, including writing down
value of
inventory or writing off notes or accounts
receivable;
|
|
(viii)
|
issue,
sell, or grant, contract to issue, sell or grant, or authorize
the
issuance, delivery, sale or purchase of any Securities of the Company
or
any other securities, including securities convertible into, or
exercisable or exchangeable for Shares in the
Company;
|
|
(ix)
|
declare,
set aside or pay any dividends on or make any other distributions
(whether
in cash, stock or property) in respect of any shares of the Company,
or
split, combine or reclassify any shares of the Company, or issue
or
authorize the issuance of any other securities in respect of, in
lieu of
or in substitution for shares of the Company or repurchase, redeem,
or
otherwise acquire, directly or indirectly, any shares of the Company
(or
options, warrants or other rights convertible into, exercisable
or
exchangeable therefore);
|
|
(x)
|
grant
any severance or termination, pay (cash, equity or otherwise) to
any
director or officer or to any employee of the Company, or increase
(by way
of cash, equity or otherwise) the salary or other compensation
payable or
to become payable by the Company to any of their officers, directors,
employees or advisors, or declare, pay or make any commitment or
obligation of any kind for the payment (in the form of cash, equity
or
otherwise) by the Company of a bonus or other additional salary
or
compensation to any such Person, or adopt or amend any employee
benefit
plan (except as necessary to comply with applicable law) or enter
into any
agreement with any Person which guarantees employment with the
Company for
a specific period of time or enter into any settlement or compromise
agreement with any employees of the
Company;
|
|
(xi)
|
waive
any share repurchase rights, accelerate, amend or change the period
of
exercisability of options or restricted shares, or reprice options
granted
to any employee, consultant, director or other stock plans or authorize
cash payments in exchange for any options granted under any employment
stock option plans;
|
|
(xii)
|
sell,
lease, license, Encumber or otherwise dispose off any of the assets
or
properties of the Company;
|
|
(xiii)
|
enter
into/agree to enter into any new contract not in the ordinary course
of
business and/or on terms that are beyond normal and reasonable
commercial
terms including amending or otherwise modifying (or agreeing to
do so), or
violating the terms of any of the contracts entered into by the
Company;
|
|
(xiv)
|
commence,
compromise or settle any pending or threatened litigation, debt
or other
legal proceedings;
|
|
(xv)
|
make
or change any election in respect of Taxes, adopt or change any
accounting
method in respect of Taxes, enter into any closing agreement, settle
any
Claim or assessment in respect of Taxes, or consent to any extension
or
waiver of the limitation period applicable to any Claim or assessment
in
respect of Taxes;
|
|
(xvi)
|
cause
any increase in liabilities of the Business including by way of
incurring
any indebtedness in the Business in the form of loans or financial
assistance from any lending agency or bank or repaying or incurring
any
additional indebtedness or making any advance payments other than
what has
been contractually agreed upon (upon disclosure and consent to/of
the
Investor);
|
|
(xvii)
|
amending
any terms of any agreement with any of the
creditors/debtors;
|
|
(xviii)
|
enter
into/agree to enter into any new contract, agreement, arrangement
with any
related party of the Company;
|
|
(xix)
|
undertake
any expenditure, transaction or commitment other than in the
normal course of business; or
|
|
(xx)
|
take
or agree in writing or otherwise to take any of the actions described
in
the preceding clauses of this Clause 8 or any other
action that would prevent the Company from performing or cause
the Company
not to perform its covenants hereunder or that would prejudice
the
consummation of any of the transactions contemplated in the Transaction
Documents.
|
|
|
Amicable
Settlement
|
|
10.1
|
If
any dispute arises between Investor and/or the Promoters and/or
Company
during the subsistence of this Agreement or thereafter, in connection
with
the validity, interpretation, implementation or alleged breach
of any
provision of this Agreement or regarding a question, including
the
question as to whether the termination of this Agreement by one
Party
hereto has been legitimate (“Dispute”), the disputing
Parties hereto shall endeavour to settle such Dispute amicably.
The
attempt to bring about an amicable settlement shall be considered
to have
failed if not resolved within 60 days from the date of the
Dispute.
|
|
|
Conciliation
|
|
10.2
|
If
the Parties are unable to amicably settle the Dispute in accordance
with
Clause 10.1 within the period specified therein, the
Parties shall forthwith but not later than 30 days after expiry
of the
aforesaid period, refer the Dispute to Mr. Ram Mukunda and Mr.
Jortin
Antony for resolution of the said Dispute. The attempt to bring
about such
resolution shall be considered to have failed if not resolved within
30
days from the date of receipt of a written notification in this
regard.
|
|
|
Arbitration
|
|
10.3
|
If
the Parties are unable to amicably settle the Dispute in accordance
with
Clause 10.2 within the period specified therein, any
Party to the Dispute shall be entitled to serve a notice invoking
this
Clause and making a reference to an arbitration panel of three
arbitrators. Each party to the dispute shall appoint one arbitrator
within
30 days of receipt of the notice of the Party making the reference,
and
the two arbitrators, so appointed shall appoint a third
arbitrator. The Arbitration proceedings shall be held in
accordance with the Arbitration and Conciliation Act, 1996. The
decision
of the arbitration panel shall be binding on all the Parties to
the
Dispute.
|
|
10.7
|
The
Arbitrator’s award shall be substantiated in writing. The court of
arbitration shall also decide on the costs of the arbitration proceedings.
The cost of arbitration shall be borne by the
Company.
|
|
10.8
|
The
award shall be binding on the Parties subject to the Applicable
Laws in
force and the award shall be enforceable in any competent court
of
law.
|
|
10.9
|
The
Mumbai court (including any appellant court) in India shall have
exclusive
jurisdiction.
|
|
11.1
|
Any
notice or other communication that may be given by one Party to
the other
shall always be in writing and shall be served either by (i) hand
delivery
duly acknowledged; or (ii) sent by registered post with acknowledgment
due; or (iii) by facsimile at the respective addresses set out
herein
below or at such other address as may be subsequently intimated
by one
party to the other in writing as set out herein. If the notice
is sent by
facsimile, the said notice shall also be sent by registered post
acknowledgment due.
|
|
11.2
|
All
notices shall be deemed to have been validly given on (i) the business
date immediately after the date of transmission with confirmed
answer
back, if transmitted by facsimile transmission, or (ii) the business
date
of receipt, if sent by courier or hand delivery; or (iii) the expiry
of
seven days after posting, if sent by registered
post.
|
|
11.3
|
Any
Party may, from time to time, change its address or representative
for
receipt of notices provided for in this Agreement by giving to
the other
Party not less than 10 days prior written
notice.
|
|
13.1
|
The
Parties recognise that each of them will be given and have access
to
confidential and proprietary information of the other Parties.
The Parties
undertake not to use any of such confidential information for their
own
corporate purposes without the prior written consent of the Party
owning
such information and shall keep confidential and not to disclose
to any
third party any of the other Parties’ confidential and proprietary
information for a period of one year from the date hereof. The
Parties
shall also cause their respective directors, employees, officers
and any
other persons to whom the above mentioned information is disclosed
to
execute a letter of confidentiality to the effect provided in this
Clause.
The obligations of confidentiality shall not apply to any information
that:
|
|
|
(b)
|
was
known to the Party prior to its disclosure by the disclosing
Party;
|
|
|
(c)
|
has
become generally available to the public (other than by virtue
of its
disclosure by the receiving Party);
|
|
|
(d)
|
may
be required in any report or statement that is required to be submitted
by
the Company to any governmental or regulatory
body;
|
|
|
(e)
|
may
be required in response to any summons or subpoena or in connection
with
any litigation; or
|
|
|
(f)
|
was
approved by both the Parties (for the avoidance of doubt, disclosure
to
the Affiliates of the Investor shall be
permitted);
|
|
|
(g)
|
is
required by a regulatory authority or the regulations of any recognized
stock exchange including the reporting requirements of the Investor
to
SEC;
|
|
|
(h)
|
is
reasonably required for disclosure to professional advisers of
the Party,
who shall have given undertakings of strict
confidentiality;
|
|
|
(i)
|
may
be required to comply with any law, order, regulation or ruling
applicable
to any Party hereto.
|
|
13.2.
|
Upon
termination of this Agreement, the Parties shall cause the Company
to
either (i) return to the Investor and Promoters, as applicable,
and the
Parties shall return to each other, all documents and information
belonging to such Person and all copies thereof in the possession
or under
the control of a Party which does not own such property, and all
confidential information in whatever media; or (ii) destroy all
documents
and information belonging to the other Party and all copies thereof
in the
possession or under the control of a Party. Provided that the Investor
and/or its advisors may retain, in a secure location, copies of
such
documents and records for purposes of defending any legal proceeding
or as
is required to be maintained in order to satisfy any law, rule,
regulation, or accounting or financial reporting standards to which
the
Investor may be subject.
|
|
13.3.
|
The
Parties acknowledge and agree that the covenants and obligations
with
respect to confidentiality set forth in this Clause relate to special,
unique and extraordinary matters, and that a violation of any of
the terms
of such covenants and obligations will cause the Company and the
owner of
such property irreparable injury for which adequate remedies are
not
available at law. Therefore, the Parties agree that the Party entitled
to
enforce the covenants set forth above, shall be entitled to an
injunction,
restraining order or such other equitable relief as a court of
competent
jurisdiction may deem necessary or appropriate to restrain the
other Party
from committing any violation of the covenants and obligations
contained
in this Clause. These injunctive remedies are cumulative and are
in
addition to any other rights and remedies the concerned Party may
have at
law or in equity.
|
|
14.
|
AUTHORISED
PERSON
|
|
15.1
|
Grounds
for Termination: Save and except the rights and obligations of
the Parties
that terminate as provided in the specific clauses in this Agreement,
this
Agreement shall continue in full force and effect until terminated
in
accordance with the provisions of this
Clause.
|
|
15.2
|
This
Agreement can be terminated at any time prior to the subscription
by the
Investor in the manner set out in Clause 4 of this Agreement, by
mutual
written agreement of the Parties.
|
|
15.3
|
This
Agreement shall stand terminated under Clause 4 if the Completion
does not
take place as per Clause 4.3.
|
|
15.4
|
Effect
of Termination: Termination of this Agreement under Clauses 15.2
to 15.3
shall be without liability of any Party (or any shareholder, director,
officer, agent, employee, consultant or representative of such
Party) to
the other Parties.
|
|
15.5
|
The
provisions of Clause 6 (Indemnity), 10 (Arbitration), 11 (Notices),
and 13
(Confidentiality) shall survive the termination hereof pursuant
to Clause
15.1.
|
|
|
16.13.1
The Parties agree that if the transactions contemplated in this
Agreement
cannot be completed in the manner set forth herein, then the Parties
shall
use reasonable endeavours to enter into other transactions that
(a) would
result in a substantially similar outcome and (b) do not prejudice
any of
the Parties. Each of the Parties further agrees that, during
any such negotiations, it shall refrain from initiating any legal
actions
against the other Parties; and
|
|
|
16.13.2
Each Party agrees to perform (or procure the performance of) all
further
acts and things, and execute and deliver (or procure the execution
and
delivery of) such further documents, as may be required by law
or as the
other Parties may reasonably require, whether on or after the date
of this
Agreement, to implement and/or give effect to this Agreement and
the
transactions contemplated by it and for the purpose of vesting
in the
Investor the full benefit of the assets, rights and benefits to
be
transferred to the Investor under this
Agreement.
|
|
SIGNED
AND DELIVERED
|
)
|
|
BY
THE WITHINNAMED " Investor "
|
)
|
|
BY
THE HAND OF MR. RAM MUKUNDA
|
)
|
|
(Authorised
Signatory)
|
)
|
|
ON
THE 16th DAY OF SEPTEMBER 2007
|
)
|
|
IN
THE PRESENCE OF:
|
)
|
|
WITNESS:
|
)
|
|
NAME
AND ADDRESS:
|
)
|
|
SIGNED
AND DELIVERED
|
)
|
|
BY
THE WITHINNAMED "TECHNI BHARATHI LTD"
|
)
|
|
BY
THE HAND OF MR. JORTIN ANTONY
|
)
|
|
(AUTHORISED
SIGNATORY) PURSUANT TO THE
|
)
|
|
RESOLUTION
PASSED BY THE BOARD
|
)
|
|
ON
THE 16th DAY OF SEPTEMBER 2007
|
)
|
|
IN
THE PRESENCE OF:
|
)
|
|
WITNESS:
|
)
|
|
ADDRESS:
|
)
|
|
SIGNED
AND DELIVERED
|
)
|
|
BY
THE WITHINNAMED "Promoter"
|
)
|
|
MR.
JORTIN ANTONY
|
)
|
|
ON
THE 16th DAY OF SEPTEMBER 2007
|
)
|
|
IN
THE PRESENCE OF:
|
)
|
|
WITNESS:
|
)
|
|
ADDRESS:
|
|
|
A.
|
The
Company is engaged in the business of infrastructure development
specialising in construction of roads (the
“Business”);
|
|
B.
|
IGC
is currently engaged in making investments in India especially
in sectors
which inter alia includes power, infrastructure, and wishes to
make a foray into the Business;
|
|
C.
|
The
Parties have entered into a Share Subscription Agreement
(“SSPA”) of even date, setting out the terms and
conditions subject to which IGC shall subscribe to certain Equity
Shares
and convertible preference shares in the
Company;
|
|
D.
|
The
Parties have agreed to enter into this Agreement for the purposes
of
regulating their relationship with each other as members of the
Company
and regulating, as between themselves, certain aspects of the affairs
of
the Company.
|
|
1.
|
DEFINITIONS
AND INTERPRETATION
|
|
1.1
|
Definitions
|
|
(a)
|
“Act
or Companies Act” shall mean the Indian Companies Act, 1956 and
any amendment thereto or any other succeeding enactment for the
time being
in force.
|
|
(b)
|
”Affiliate”
means (i) when used in respect of a specified legal person, each
legal
person that directly or indirectly through one or more intermediaries,
Controls or is Controlled by, or is under common Control with the
person
specified (ii) when used in respect of an individual party, such
person’s
relative within the meaning of section 6 of the Act. In this definition
“Control” (and its derivatives) means both (i) holding beneficially more
than fifty per cent (50%) of equity interests and (ii) the ability
to cast
more than fifty (50%) per cent of the voting rights attaching to
voting
shares or (iii) power to direct the management or policies of such
entity
by contract or otherwise.
|
|
(c)
|
“Agreement”
shall mean this Shareholders Agreement together with the
annexures thereto as from time to time made, amended, supplemented
or
replaced or otherwise modified in accordance with the terms of
this
Agreement.
|
|
(d)
|
“Applicable
Law(s)” means any statute, law, regulation, ordinance, rule,
judgment, order, decree, bye-law, approval, directive, guideline,
policy,
requirement or other governmental restriction or any similar form
of
decision of, or determination by, or any interpretation or administrative
order having the force of law of any of the foregoing, by any Government
Authority having jurisdiction over the matter in
question.
|
|
(e)
|
”Board”
shall mean the board of directors of the
Company.
|
|
(f)
|
“Budget”
means the budget of the Company from time to time approved
by the
Shareholders in accordance with the provisions of this
Agreement.
|
|
(g)
|
“Business”
has the meaning given in recital A.
|
|
(h)
|
“Business
Plan” means the operating and capital budget for the Company
prepared on an annual basis for a Financial Year, with reference
to the
Business, which business plan shall identify and set out, inter
alia, the time scales and financial projections with key assumptions
listed, including all planned commitments, borrowings, amount and
timing
of capital contributions to be made by the Shareholders, projected
profit
and loss, balance sheet, cash flow for such Financial Year in a
form to be
mutually agreed in writing between the
Parties.
|
|
(i)
|
”Claim”
includes any notice, demand, assessment, letter or other document
issued
or action taken by any tax, fiscal or other statutory or governmental
authority, body or official whatsoever (whether of India or elsewhere
in
the world) whereby the Company is or may be placed or sought to
be placed
under a liability to make a payment or deprived of any relief,
allowance,
credit or repayment otherwise
available.
|
|
(j)
|
“Company”
means Techni Bharathi Limited, incorporated under the laws of India
having
its registered office is at By pass road, Edappally, Kochi – 682 024,
India.
|
|
(k)
|
“Completion”
and “Completion Date” shall have the meanings ascribed to
it in the SSA.
|
|
(l)
|
“Confidential
Information” means the provisions of this Agreement and (i) any
information concerning the organisation, business, technology,
trade
secrets, know-how, finance, transactions or affairs of the Company,
any
subsidiary or any other Shareholder or any of their respective
Affiliates,
directors, officers or employees (whether conveyed in written,
oral or in
any other form and whether such information is furnished before,
on or
after the date hereof) and (ii) any information or materials prepared
by a
Party or its Representatives that contains or otherwise reflects,
or is
generated from, Confidential
Information.
|
|
(m)
|
“CPS”
means the convertible preference shares subscribed to by IGC pursuant
to
the provisions of the SSA.
|
|
(n)
|
“Directors”
means the directors of the Company and
“Director” means any one of them (as the context
requires).
|
|
(o)
|
“Effective
Date” shall mean the date of execution of this Agreement by
the
Parties.
|
|
(p)
|
“Encumbrances”
means any encumbrance, lien, charge, security interest, mortgage,
pledge,
easement, conditional sale or other title retention or non-disposal
agreement or other restriction of a similar kind, and all other
easements,
encroachments and title defects of every type and nature, or any
conditional sale contract, title retention contract, or other contract
to
give or to refrain from giving any of the
foregoing.
|
|
(q)
|
“Financial
Year” means the financial year of the Company ending 31st March
or other financial year agreed by the Shareholders at a general
meeting.
|
|
(r)
|
“Government
Authority” or “Government Authorities” means (a)
central, state, city, municipal or local government, governmental
authority or political subdivision thereof having jurisdiction;
or (b) any
agency or instrumentality of any of the authorities referred to
in Clause
(a); or (c) any regulatory or administrative authority, body or
other
organisation having jurisdiction, to the extent that the rules,
regulations, standards, requirements, procedures or orders of such
authority, body or other organisation have the force of Applicable
Laws;
or (d) any court or tribunal having
jurisdiction.
|
|
(s)
|
“IGC
Competitor” means any person (alone or together with any of its
affiliates and successors and permitted assigns of such person)
who is
engaged in similar Business.
|
|
(t)
|
‘INR’
means the lawful currency of India.
|
|
(u)
|
‘Key
Employees’ shall mean the Managing Director, the Chief Financial
Officer and the Chief Executive Officer of the
Company.
|
|
(v)
|
‘Liabilities’
means any and all current liabilities, obligations, payables, forms
of
taxation whether of India or elsewhere in the world, past, present
and
deferred (including, without limitation, income tax, stamp duty,
customs
and other import or export duties) and all other statutory or governmental
impositions, duties and levies and all penalties, charges, costs
and
interest relating to any Claim.
|
|
(w)
|
'Party'
shall mean IGC, the Company or the Promoters referred to individually
and
'Parties' shall mean IGC, the Company and the Promoters
referred to collectively.
|
|
(x)
|
'Person'
shall include an individual, an association, a corporation, a partnership,
a joint venture, a trust, an unincorporated organisation, a joint
stock
company or other entity or organisation, including a government
or
political subdivision, or an agency or instrumentality thereof
and/or any
other legal entity.
|
|
(y)
|
“Pro
Rata Share” means, with respect to any Shareholder, the
proportion that the number of fully paid up Shares held by such
Shareholder bears to the aggregate number of fully paid up Shares
held by
all Shareholders, in each case on a fully diluted
basis.
|
|
(z)
|
“Securities”
means, with respect to any person, such person's equity capital,
registered capital, joint venture or other ownership interests
(including,
without limitation, in the case of the Company, shares) or any
options,
warrants, loans or other securities that are directly or indirectly
convertible into, at or exercisable or exchangeable for, at the
sole
option of such person, such equity capital, registered capital,
joint
venture or other ownership interests (whether or not such Derivative
Securities are issued by such
person).
|
|
(aa)
|
'Shares'
shall mean the equity shares of the
Company.
|
|
(bb)
|
"Share
Capital” means the amount derived by multiplying the total number
of Shares by Rs. Ten (10).
|
|
(cc)
|
'Shareholder'
or 'Shareholders' shall mean IGC and the Promoters and /
or any person to whom Shares are issued or transferred in accordance
with
the terms of this Agreement.
|
|
(dd)
|
“Shareholding”
in relation to a Shareholder, means ownership of the Shares by
such
Shareholder, at any time.
|
|
(ee)
|
“Share
Subscription Agreement” or “SSA” shall have the meaning ascribed
to it in Recital C.
|
|
(ff)
|
“Subscribed
Shares” shall mean such number of Shares of the Company agreed
to
be subscribed by IGC pursuant to the provisions of the
SSA.
|
|
(gg)
|
“Transfer”
means to sell, gift, assign, amalgamate, merge, transmit
(whether
by operation of Law or otherwise) or create any Encumbrance on
any Shares
or any right, title or interest therein or otherwise to dispose
of the
Shares in any manner whatsoever.
|
|
(hh)
|
‘Warrantors’
means the Company and the Promoters and ‘Warrantor’ means
any one of them.
|
|
1.2
|
Other
Defined Terms:
|
|
(i)
|
‘Business
Days’ means the days on which the banks are open for business
in
Mumbai, India.
|
|
(ii)
|
‘Dispute’
shall have the meaning as ascribed to it in Clause 16.1
of this Agreement.
|
|
(iii)
|
‘Losses’
shall have the meaning as ascribed to it in Clause 14.1
of this Agreement.
|
|
1.3
|
Interpretation
|
|
|
|
|
1.3.1
|
In
this Agreement (unless the context requires otherwise), any express
reference to an enactment (which includes any legislation in any
jurisdiction) includes references
to:
|
|
|
(i)
|
that
enactment as amended, extended or applied by or under any other
enactment
before, on or after the date of this
Agreement;
|
|
|
(ii)
|
any
enactment which that enactment re-enacts (with or without modification);
and
|
|
|
(iii)
|
any
subordinate legislation (including regulations) made (before, on
or after
the date of this Agreement) under that enactment, as re-enacted,
amended,
extended or applied as described in paragraph (i) above, or under
any
enactment referred to in paragraph (ii)
above.
|
|
|
1.3.2
|
In
this Agreement, reference to including and include shall be construed
to
mean “including without limitation” and “include without limitation”
respectively.
|
|
|
1.3.3
|
In
this Agreement, references to a person shall be construed so as
to include
any individual, firm, company, unincorporated association of persons,
government, state or agency of a state or any
|
joint
venture, association, partnership, or employee representative body
(whether or not having separate legal
personality).
|
|
1.3.4
|
Where
there is any inconsistency between the definitions set out in this
Clause
l and the definitions set out in any other clause or schedule,
then for
the purposes of construing such clause or schedule, the definitions
set
out in such clause or schedule shall
prevail.
|
|
|
1.3.5
|
In
this Agreement:
|
|
|
(i)
|
words
importing the singular shall include the plural and vice versa;
and
|
|
|
(ii)
|
references
to IGC unless repugnant to the context shall for the purpose of
this
Agreement mean and include the Affiliates of
IGC.
|
|
|
1.3.6
|
The
headings in this Agreement do not affect its interpretation and
are for
convenience only. Any schedule or annex to this Agreement shall
take
effect as if set out in this Agreement and references to this Agreement
shall include its schedules and
annexure.
|
|
|
1.3.7
|
In
this Agreement, unless the contrary intention appears, a reference
to a
Recital, Clause, Subclause, paragraph, subparagraph, Schedule or
item is a
reference to a Recital, Clause, sub-clause, paragraph, subparagraph,
Schedule or item of this Agreement.
|
|
|
1.3.8
|
For
the purposes of any calculation under this Agreement any fraction
will be
rounded off to the next integer.
|
|
|
1.3.9
|
Any
time period prescribed for the performance of any obligation of
IGC and/or
any of its Affiliate under this Agreement to Transfer or subscribe
to
Shares of the Company shall be extended by as many days as necessary
in
order to facilitate IGC and/or its Affiliate to obtain all such
approvals
(if any) from Government Authorities required under Applicable
Laws in
order to fulfil such obligations not being in any event more than
90 days
from the date hereof or such longer period as may specifically
be agreed
between the Parties.
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2.1
|
The
Company has, at the date of this Agreement, an authorised share
capital of
INR 15,00,00,000 consisting of 80,00,000 equity
shares of par value INR 10 each and 70,00,000 15%
redeemable preference shares of par value INR 10 each. As of
date 4287500 Equity Shares have been issued and are held by the
persons in
the number as set out in Schedule 2 A and 5,000,000
convertible preference shares have been
issued.
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2.2
|
Upon
Completion, the Shareholding pattern of the Company shall be as
set out in
Schedule 2B and the CPS shall be issued to
IGC.
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2.3
|
Promoters
and IGC agree that on Completion, the Parties would have only partly
funded the Company and that both Parties hereby agree to further
fund the
Company, as and when required to the maximum extent as specified
in the
Business Plan in proportion to their Shareholding in the Company.
The
Parties shall mutually agree on the manner and time of such future
funding.
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2.4
|
In
the event the Company does not have adequate resources to fund
its
operations as envisaged in the Business Plan as amended or revised
with
approval of the Board or the Shareholders, and provided the Shareholders
have funded their full share of funding commitment as set forth
in the
Business Plan, the Company shall raise such additional funds
(“Additional Funds”) (i) through external commercial
borrowings from IGC on reasonable effort basis, in compliance with
the
exchange control regulations or alternatively, through other modes
of
non-convertible debt on terms and conditions to be satisfactory
to IGC
within a period of 45 days from the requirement of the Additional
Funds;
or (ii) if the Board determines that the Company is not able to
raise
external commercial borrowing or non-convertible debt as referred
to
herein, by an offering of Shares (“Additional Shares”)
to the Shareholders in proportion to their respective
Pro Rata
Share in the Company and on terms and conditions to be mutually
agreed
between the Parties. Such Additional Shares to be issued upon subscription
to the Shareholders shall be fully paid up by the respective Shareholder
in cash. In the event any Shareholder does not subscribe entirely
to its
Pro Rata Share of Additional Shares, the other Shareholder shall
have the
right to subscribe to the unsubscribed portion of the Pro Rata
Share of
the unsubscribing Shareholder in the Additional Shares
(“Unsubscribed Additional Shares”). In the
event that any Shareholder nominates an Affiliate to subscribe
to the
Additional Shares or the Unsubscribed Additional Shares, such Shareholder
shall cause such Affiliate to execute an Affiliate Deed of Adherence
in
the form set out in Schedule 4 and the Company shall not
issue the Additional Shares or the Unsubscribed Additional Shares
to such
Affiliate unless a duly executed (by all parties thereto) Affiliate
Deed
of Adherence has been lodged with
it.
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|
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The
Company shall purchase key man insurance policy of such amounts
as may be
decided by the Board, with benefits payable to the Company, covering
the
Key Employees and such of the Promoters as may be identified by
the
Company.
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|
4.
|
BOARD
OF DIRECTORS CONSTITUTION, APPOINTMENT, NOMINATION AND
MANAGEMENT
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|
4.1
|
Constitution,
Appointment and Nomination
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|
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(a)
|
Subject
to the provisions of this Agreement and the Companies Act, the
Board shall
be responsible for the management, supervision, direction and control
of
the Company. Subject to Applicable Laws, the Board shall
initially consist of five (5) Directors but may be increased up
to seven
(7) Directors subject to a maximum of twelve (12)
Directors and such Directors shall be appointed in accordance with
this
Agreement.
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(b)
|
Composition
of the Board. The Parties agree that subject to Applicable Laws,
the Promoters shall be entitled to nominate three (3) Directors,
out of
which one shall be Mr Jortin Antony and IGC shall be entitled to
nominate
two (2) Directors on the Board. All Directors shall be persons
whose
period of office shall be liable to determination by retirement
of
directors by rotation and shall be required to be appointed by
the Company
in a general meeting. On the restructuring of the Board, Mr Jortin
Antony,
shall be appointed as the Managing Director of the
Company.
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(c)
|
Appointment
and Removal of Directors. Subject to the Applicable
Laws, Mr Jortin Antony shall serve a term of five (5) years. Subject
to
the mutual consent of the Board and Mr Jortin Antony, the five
(5) year
term of Mr Jortin Antony may be extended to a further term not
exceeding 5
years at any one time.
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(d)
|
Alternate
Directors. Any Director may, by prior written notice to the other
Shareholders and the Company, nominate one alternate at any time
to act on
his behalf as a Director in circumstances and for such period as
may be
valid under the Companies Act, and the Shareholders shall procure
that the
Board shall approve any such nomination and appoint the relevant
individual to act as alternate Director. The Shareholders shall
procure that the Board will, unless the nominating Director instructs
the
Board otherwise, automatically reappoint any nominated alternate
if, for
any reason, the nominated alternate's office is deemed to have
been
vacated. An alternate Director shall be entitled to receive notice
of all
meetings of the Board, to attend and vote at any such meeting at
which the
Director appointing him is not personally present and at the meeting
to
exercise and discharge all the functions, powers and duties of
his
appointee or as a Director. An alternate Director shall automatically
vacate his office as an alternate Director if the Director who
appointed
him ceases to be a Director.
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(e)
|
Voting.
Subject to quorum requirements under Clause 4.1(i) being met each
Director
shall have one vote on the Board and, except as otherwise specifically
provided in Clause 4.5 below and/or as specifically required by
the
Companies Act, all decisions of the Board shall be taken by a simple
majority of the Directors present and voting or deemed to be present
at
the meeting or in the case of resolution by circulation by majority
of
Directors to whom the resolution is circulated in accordance with
Clause
4.1(k) below. Notwithstanding anything to the contrary contained
herein, a
resolution in respect of Fundamental Issue shall require the affirmative
vote of a Director nominated by IGC, for it to be validly
passed.
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(f)
|
Chairman.
The Chairman of the Board shall be elected by the majority of the
Board.
In case the Chairman is unavailable, any IGC Director may be appointed
by
the Board as the Chairman for that particular meeting to act as
the
Chairman of the Board. The Chairman shall not have a casting
vote.
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(g)
|
Meeting
and Minutes of Board Meeting. The Board shall meet as may be
necessary to discharge its duties but in any case no less frequently
than
holding at least one meeting every three calendar months. The
minutes of the Board shall be circulated within ten (10) Business
Days of
the date of the meeting of the Board. At the beginning of each
meeting of the Board, the Board minutes of the previous meeting
shall be
approved if agreed to by all
Directors.
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(h)
|
Notice.
At least fifteen (15) Business Days' notice of each Board meeting
shall be
given to each Director unless, in any particular case, all of the
Directors otherwise agree in writing. The notice of the meeting
of the
Board shall be accompanied by an agenda of the business to be transacted
at that meeting together with all papers to be circulated or presented
to
the same. No business shall be discussed at a Board meeting unless
such
business was included in the
agenda.
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(i)
|
Quorum.
The quorum at meetings of the Board shall be comprised in accordance
with
the provisions of the Companies Act, and provided further that
it also
comprises of one Director nominated by IGC and/or its
Affiliates.
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(j)
|
Determination
of Quorum. If within two (2) hours from the time appointed for
the holding of a meeting of the Board a quorum as set forth in
Clause
4.1(i) is not present, the meeting of the Board shall stand adjourned
to
the next day in the same week (or if that day is a public holiday,
to the
next Business Day thereafter) at the same time and place as the
original
meeting, or to such other day and at such other time and place
as the
Board may determine. If at such adjourned meeting a quorum is
not present within one (1) hour from the time fixed for holding
the
meeting, the meeting shall stand adjourned to the same day in the
next
week (or if that day is a public holiday, to the next Business
Day
thereafter), at the same time and place as the reconvened meeting,
or to
such other day and such other time and place as the Board may determine.
If at such re-adjourned meeting a quorum is not present within
one (1)
hour from the time fixed for holding the meeting notwithstanding
anything
mentioned in Clause 4.1(i) or elsewhere in this Agreement, the
Directors
present shall constitute a quorum at such meeting.
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(k)
|
Resolution
by Circulation. A resolution by circulation must be circulated to
all Directors and approved by majority of the Directors subject
to Clause
4.4 in accordance with Applicable Laws and shall be as valid and
effectual
as if it had been passed at a meeting of Directors duly convened
and
constituted. The resolution may be contained in one document or
in several documents in like form each signed or approved by one
or more
Directors concerned, but a resolution signed or approved by an
alternate
Director need not also be signed or approved by the Director appointing
such alternate Director and, if it is signed or approved by a Director
who
has appointed an alternate Director, it need not be signed or approved
by
the alternate Director in that
capacity.
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(l)
|
Shareholders
Meeting Quorum. The quorum at meetings of the Shareholders shall
be as required by the Companies Act and shall comprise of at least
one (1)
representative of IGC and/or its
Affiliates.
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(m)
|
Determination
of Quorum for Shareholders Meeting. In the event the quorum is
not present at any Shareholders meeting, the meeting shall be reconvened
in accordance with the provisions of the Companies Act and provisions
of
the Companies Act shall apply to the adjourned meeting. Voting
at a
meeting of the Shareholders shall only be by
poll.
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|
(n)
|
Shareholders
Meeting: Notwithstanding anything to the contrary contained
herein, if at a general meeting a resolution in respect of Fundamental
Issue is proposed to be passed such resolution shall require the
affirmative vote of the authorised representative of IGC for it
to be
validly passed.
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4.2.1
|
If
the Board finds it necessary to constitute further other working
committee
or committees, the powers of such working committee or committees
shall be
determined by the Board. The members of any such working committee
or
committees shall not decide the powers of such committee unless
delegated
by the Board or otherwise required by
law.
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4.2.2
|
Subject
to Applicable Laws, each Party shall have the right to nominate
one person
each on all the working committees constituted by the Board, but
the
Chairman shall be appointed by IGC.
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4.3.1
|
IGC
shall have the sole and absolute right to appoint the CFO of the
Company,
including the right to decide on the terms of employment, duties,
scope of
work and the key responsibilities of the CFO including but not
limited to
financial planning, financial control, audit and treasury functions
of the
Company. The CFO shall report to the Managing
Director. The CFO’s employment may not be terminated under any
circumstances without prior written approval from
IGC.
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|
4.3.2
|
The
Company and the Promoters acknowledge that IGC as a company follows
stringent compliance, reporting and audit requirements including
but not
limited to timely and accurate closure and reporting of financial
statements compliant with US GAAP and the appointment and removal
of the
statutory auditors and internal auditors shall not be without the
affirmative vote of IGC, including the right of the IGC Director
to
nominate an auditor at the Board
meeting.
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|
4.3.3
|
Subject
to the terms of this Agreement, the Company shall not without the
prior
approval of IGC
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|
4.3.3.1
|
Authorize,
create, alter the rights attaching to or issue any Securities that
are
dilutive of IGC’s ownership of the Subscribed Shares or the CPS, on an
as-converted, fully diluted basis or that have rights, preferences,
or
privileges senior to or on a parity with the Subscribed Shares
or the CPS;
or
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|
4.3.4
|
IGC
shall have the right to receive US GAAP financial statements of
the
Company reviewed by the statutory auditor of the Company within
10 days of
the end of each financial quarter. IGC shall also have the right
to
receive the US GAAP financial statements audited by the statutory
auditor
of the Company within 45 days of the end of each financial
year.
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|
(i)
|
Any
capital expenditure or indebtedness (including giving of security
for or
guaranteeing debts) beyond 15% of the Budget in the
Business Plan (including a revised Business Plan) that is approved
by the
Board of Directors.
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|
(ii)
|
Investments
in any other companies / assets /
entities.
|
|
(iii)
|
Amendments
or any proposal to amend the Memorandum or Articles of Association
of the
Company including change in the number of Board members of the
Company.
|
|
(iv)
|
Commencement
of any new line of business or acquisition of shares of a company,
which
is unrelated to the Business of the Company, including spending/lending
any funds or furnishing any guarantee or credit or any type of
assistance
to any party which carries on or proposes to carry on any business
unrelated to the Business of the
Company.
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|
(v)
|
Commencement
or settlement of litigation in any particular Financial Year other
than
those arising as part of the Company’s normal course of
business.
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|
(vi)
|
Changes
to material tax policies or practices other than those required
by
Applicable Laws.
|
|
(vii)
|
Recommend,
giving or renewing of security for or the guaranteeing of debts
or
obligations of the Company or any subsidiary and / or Affiliates
of any
Person, other than in the normal course of
business.
|
|
(viii)
|
Any
change in the Financial Year for preparation of audited accounts
of the
Company.
|
|
(ix)
|
Winding
up and / or liquidation of the
Company.
|
|
(x)
|
Divestment
of or sale or Encumbrances of assets, investments, lease, license
or
exchange or pledge in any other way, proposing to dispose off any
assets
or undertaking of the Company, other than in the normal course
of business
and on normal and reasonable commercial terms and
conditions.
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|
(xi)
|
Any
agreement, arrangement, transaction to sell or assignment of intellectual
property rights including those relating to copyrights, trademarks,
patents and designs belonging to the Company, other than in the
normal
course of business and on normal and reasonable commercial
terms.
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|
(xii)
|
Shifting
of registered office, outside the city of
Nagpur.
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|
(xiii)
|
Commencement
of new business/unit/division outside India, or applying for
pre-qualification for bids and appointing representatives for liaison
in a
foreign country.
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|
(xiv)
|
Any
increase in the issued, subscribed or paid up equity or preference
Share
Capital of the Company or its subsidiary or any other company where
it has
a substantial investment, or re-organization of the Share Capital
of the
Company or its subsidiary or any other company where it has investment,
including new issue of Shares or other Securities of the Company
or its
subsidiary or any other company where it has investment or any
preferential issue of Shares or redemption of any Shares, issuance
of
convertible warrants, or grant of any options over its Shares by
the
Company or its subsidiary or any other company where it has
investment.
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|
(xv)
|
Any
transfer of Equity Shares of the Company otherwise than contemplated
by
this Agreement.
|
|
(xvi)
|
Approval
of any new scheme or plan for grant of employee stock options,
or sweat
equity shares to any person or entity, including any modification
to any
new scheme.
|
|
(xvii)
|
Granting
of loan and/or procuring, selling to or any other dealings with
any
subsidiary or related Party or Affiliates or Promoters of the Company,
which has or is likely to have an actual or potential effect on
the
financials of the Company.
|
|
(xviii)
|
Save
as required by Applicable Laws any adoption or change of the dividend
or
distribution policy or accounting principle or policy (e.g., depreciation,
asset devaluation, etc.) which has a material impact on the Shareholding
of the Shareholders.
|
|
(xix)
|
Creation,
allotment, issue, acquisition, reduction, repayment, conversion
or
redemption of any share or loan capital, including but not limited
to the
issue or otherwise, of options, warrants, or other Shares or of
any
instrument convertible into, exercisable or exchangeable for Shares;
or
entering into an agreement, arrangement or undertaking to do any
of those
things, or any action which alters the Share Capital of the Company,
or
the variation of rights of any Shares of the Company, except raising
of
Additional Funds by issuance of Additional Shares as contemplated
under
Clause 2.4.
|
|
(xx)
|
Borrowing
by the Company other than as agreed in Clause 2.4 of the
Agreement.
|
|
(xxi)
|
Entering
into or amendments of any existing agreements, joint venture
agreements, partnership or consortium agreements as well as new
mergers, acquisitions, consolidations or amalgamations with other
entity.
|
|
(xxii)
|
Change
in the number of Directors, creation or modification of an executive
committee or any other working
committee.
|
|
(xxiii)
|
Any
commitment or agreement to do any of the
foregoing.
|
|
(xxiv)
|
Delegation
of powers to the working committees constituted by the
Board.
|
|
(xxv)
|
Approval
of or modification to the Business
Plan.
|
|
(xxvi)
|
Determination
of the remuneration and the other employment terms of the Key Employees,
Directors, and/or officers including
revisions/amendments.
|
|
(xxvii)
|
Any
significant change to the HR policy of the
Company.
|
|
(xxviii)
|
Appointment
of the Managing Director, Chairman or members of the working committees,
in the event the existing Chairman is absent for any
reason.
|
|
(xxix)
|
Capital
expenditure, including constructions and leases, and indebtedness
in
excess of the levels agreed upon in the annual Business Plan /
Budgets of
the Company;
|
|
(xxx)
|
Any
substantial deviation in operations and strategies compared to
Business
Plan of the Company;
|
|
(xxxi)
|
Affiliated
or related party transactions, agreements or arrangements between
the
Company and the Promoters, directors, officers, Key Employees or
their
Affiliates;
|
|
(xxxii)
|
Formation
of or entry by the Company or its subsidiaries into joint venture,
consortium, partnership or similar arrangement with any other person
or
business;
|
|
(xxxiii)
|
Adoption
of a dividend policy, declaration of any dividend outside the dividend
policy or amending any dividend policy of the
Company;
|
|
(xxxiv)
|
Make
any application of any insurance proceeds or compensation for compulsory
acquisition or expropriation in each of the aforementioned
cases;
|
|
(xxxv)
|
The
making by the Company or its subsidiaries of any arrangement with
its
creditors and the moving for insolvency, receivership or
bankruptcy;
|
|
(xxxvi)
|
Timing,
size, split between new and existing Shares, and final pricing
of any
Initial Public Offering (including appointment of advisers and
their terms
of appointment), or follow on offering, rights issue or any offer
for
sale;
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|
|
(xxxvii)
Applying for the appointment of a receiver or an administrator
or similar
officer over the Company's assets;
|
|
(xxxix)
|
To
sub-let or assign or dispose of or create any Encumbrance on any
other
material asset of the Company;
|
|
(xl)
|
To
take any decisions relating to the employment of any person or
take any
decision relating to any seconded
person;
|
|
(xli)
|
To
approve, enter into, revoke or vary any material insurance
policies;
|
|
(xlii)
|
Appointment
of the statutory and internal auditors to the
Company;
|
|
(xliii)
|
The
administration, setting of exercise of any
ESOP.
|
|
|
No
Shareholder shall Transfer or attempt to Transfer any Shares or
any right,
title or interest therein except as expressly permitted by the
provisions
of Clauses 6 (Transfer), 7 (Sale to Third Party Pre-emption Rights),
8
(Drag Along Rights), 9 (Tag Along Rights) ,10 (Term and Termination)
and
18 (Lock-in). Any Transfer of Shares pursuant to Clauses 6, 7,
8, 9, 10 and 18 shall comply with the conditions of this Clause
6.
|
|
|
A
Transfer of Shares shall be valid only if the transferee executes
Transferee Deed of Adherence together with a no objection certificate
substantially similar to the form contained in Schedule 3
or if the transferee is an Affiliate of the Transferor then an
Affiliate
Deed of Adherence substantially similar to the form contained in
Schedule 4.
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|
|
(b)
|
Transfer
to a Competitor: Notwithstanding anything to the contrary
contained in this Agreement, for so long as IGC (or any of its
Affiliates)
is a Shareholder, no Shareholder (other than IGC and/or its Affiliate)
shall Transfer or attempt to Transfer any Shares to an IGC
Competitor.
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|
|
|
|
(c)
|
Transfer
to an Affiliate: Notwithstanding the restriction on Transfer of
Shares set forth in Clauses 6, 7, 8, 9, 10 and 18, anytime during
the term
of this Agreement, any Shareholder may Transfer Shares held by
it to its
respective Affiliates, (“Permitted Transferee”) provided
such Permitted Transferee executes the deed of adherence in the
format
prescribed in Schedule 4 hereto (the “Affiliate
Deed of Adherence”).
|
|
(d)
|
Notice
of Sale to a Permitted Transferee: At least five (5) Business
Days prior to the permitted Transfer under Clause 6(c), any Shareholder
intending to Transfer any of its Shares to a Permitted Transferee
shall
send a notice to the other Shareholders stating the date on which
the
intended Transfer is to occur, the name of the Permitted Transferee,
the
number and class of Shares involved and attaching (i) a completed
and duly
executed (by the Permitted Transferee and the transferor Shareholder)
Affiliate Deed of Adherence and (ii) copies of all approvals and
consents
required to be obtained under Law. Each Shareholder shall, within
three
(3) days of the receipt of such notice, execute the Affiliate Deed
of
Adherence and file the same with the Company. Provided however
that nothing contained herein shall require a Shareholder to execute
an
Affiliate Deed of Adherence in relation to a Transfer of Shares
in
contravention of this Agreement.
|
|
(e)
|
The
Company shall register a Transfer of Shares to a Permitted Transferee
only
upon the receipt (a) of a valid Affiliate Deed of Adherence duly
executed
by all parties thereto and (b) a copy of all consents required
under Law
sanctioning such transfer and documentary proof that conditions
stipulated
by Government Authority, if any, for such Transfer have been
fulfilled.
|
|
(f)
|
Within
five (5) Business Days of registering any Transfer by a Shareholder
of
Shares to a Permitted Transferee in its register of members, the
Company
shall send a notice to the other Shareholders stating that such
Transfer
has taken place and setting forth the name of the transferor, the
name of
the Permitted Transferee and the number of Shares
transferred.
|
|
(g)
|
Any
Transfer or attempt to Transfer the Shares in contravention of
the
provisions of this Agreement, including without a proper and duly
executed
Affiliate Deed of Adherence shall constitute a material breach
of this
Agreement.
|
|
(a)
|
The
Transfer Notice shall inter alia provide: (i) the sale price (on
a 'per
Share’ basis) (“Offer Price”) (ii) the number of Shares
proposed to be sold by the Seller (the “Transfer Shares”)
(iii) the terms of the
Transfer (collectively with the Offer Price the
“Transfer Terms”). A Transfer Notice shall be
irrevocable. The Parties agree that the Offer Price shall only
be a cash
price.
|
|
(b)
|
If
a Seller issues a Transfer Notice, the Offeree shall have the right
(but
not the obligation), exercisable within thirty (30) days from receipt
of
the Transfer Notice (“Offer Period”),
to:
|
|
|
(i)
|
accept
the Transfer Terms, by issuing a letter of acceptance (“Acceptance
Notice”) to the Seller, in which case, Clause 7(c) shall apply; and
|
|
|
(ii)
|
issue
a Tag Along Notice in accordance with Clause 8 below and accordingly
Clause 8 shall apply.
|
|
|
(c)
|
If
the Acceptance Notice is issued the Offeree shall be obliged to
purchase
all the Transfer Shares and the sale and purchase of the Transfer
Shares
in favour of the Offeree shall be completed within thirty (30)
days from
the date of issue of the Acceptance Notice by the Offeree. At such
completion, the Seller shall deliver to the Offeree certificates
and other
documents representing its title to the Transfer Shares, accompanied
by
duly executed and valid instruments of transfer. Such Transfer
Shares
shall be free and clear of any Encumbrance (other than Encumbrances
specifically permitted hereunder), and the Seller shall so represent
and
warrant and shall further represent and warrant that it is the
legal and
beneficial owner of such Transfer Shares. The Offeree shall at
such
completion deliver payment in full of the Offer Price in accordance
with
the terms set forth in the Transfer Notice. In the event that the
Offeree
nominates an Affiliate or a nominee for the purpose of purchasing
the
Transfer Shares or part thereof, it shall cause such Affiliate
or nominee
to execute a Deed of Adherence in the format contained in Schedule
3 (“Transferee Deed of
Adherence”). At such
completion, all of the Parties to the transaction shall execute
such
additional documents as may be necessary or appropriate to effect
the sale
of the Transfer Shares to the Offeree. Any stamp duty payable
on the transfer of any Transfer Shares shall be borne and paid
by the
Offeree.
|
|
|
(d)
|
The
failure of an Offeree to give the Acceptance Notice or the Tag
Along
Notice within the Offer Period shall be deemed to be a waiver of
such
Offeree's right of first refusal or its tag along
right.
|
|
|
(e)
|
If
no Acceptance Notice or Tag Along Notice, as the case may be, is
issued by
an Offeree within the Offer Period, then subject to Clause 6(b)
the Seller
shall be entitled to Transfer the Transfer Shares to a Proposed
Transferee
on terms no more favourable than the Transfer Terms within thirty
(30)
days of the expiry of the Offer Period. Provided that the Proposed
Transferee duly executes a Transferee Deed of Adherence. In the
event the
Seller is IGC (and/or its Affiliates or nominees holding Shares
in the
Company) then so long as IGC, together with its Affiliates and
nominees
holding Shares in the Company (“IGC Group”), is the
majority shareholder in the Company and so long as it wishes to
Transfer
all (but not less than all) of the outstanding Shares held by IGC
Group,
IGC shall have a further right (but not an obligation) to require
the
Promoters and its Affiliates and nominees holding Shares in the
Company
(“PromotersGroup Shareholders”) to sell
to such Proposed Transferee all the then outstanding Shares held
by
Promoters Group Shareholders (“Promoters Outstanding
Shares”) in accordance with Clause 8 below.
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(f)
|
If
the Seller fails to Transfer the Transfer Shares to theProposed
Transferee
within the said period of thirty (30) days calculated as above,
it will
not be entitled to Transfer the Transfer Shares thereafter to any
person,
without re-offering the Transfer Shares to the Offeree in accordance
with
provisions of this Clause 7.
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(g)
|
Any
Transfer of the Transfer Shares pursuant to this Clause 7 shall
be valid
only upon the execution of a Transferee Deed of Adherence and shall
be
registered by the Company upon a validly and duly executed (by
all parties
thereto) Transferee Deed of Adherence being lodged with it. The
other
Shareholders undertake to execute such Transferee Deed of Adherence,
as
may be required in order to give effect to such Transfer of the
Transfer
Shares to the Offeree, its Affiliate, or a proposed
transferee. Provided however that nothing contained herein
shall require a Shareholder to execute a Transferee Deed of Adherence
where the Transfer is in contravention of the provisions of this
Agreement.
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|
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(a)
|
Subject
to Clause 7(e) above and notwithstanding anything to the contrary
stated
in Clause 9 below if at any time IGC Group wishes to Transfer all
(but not
less than all) of the Shares held collectively by IGC Group to
a Proposed
Transferee as provided under Clause 7 above, IGC shall have a right
and an
obligation to serve a written notice on the Promoters (“Drag Along
Notice”) requiring the Promoters Group Shareholders to Transfer
all (but not less than all) the Shares held by the Promoters Group
Shareholders to the Proposed Transferee identified by IGC under
Clause 7
above on the Transfer Terms.
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|
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(b)
|
If
a Drag Along Notice is issued by IGC, the Transfer and purchase
of the IGC
Transfer Shares and Promoter Outstanding Shares shall, subject
to Clause
8(b), be completed within thirty (30) days from the date of issue
of the
Drag Along Notice by IGC, the time taken to obtain any regulatory
approval
being excluded for the calculation. At such closing, IGC and Promoter
Group Shareholders shall deliver certificates and other documents
representing their title to the IGC Transfer Shares and the Promoter
Outstanding Shares, respectively, accompanied by duly executed
and valid
instruments of transfer, to the Proposed Transferee. IGC shall
procure that the third party shall deliver at such closing, payment
in
full of the Offer Price in accordance with the terms set forth
in the
Transfer Notice and execute the Transferee Deed of
Adherence. At such closing, all of the Parties to the
transaction shall execute such additional documents as may be necessary
or
appropriate to effect the sale of the IGC Transfer Shares and Promoter
Outstanding Shares to the Proposed Transferee. Any stamp duty
or transfer charges payable on the transfer of any IGC Transfer
Shares and
the Promoter Outstanding Shares shall be borne in accordance with
the
Transfer Terms.
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(c)
|
Any
Transfer of the IGC Transfer Shares pursuant to this Clause 8 shall
be
valid only upon the execution of a Transferee Deed of Adherence
and shall
be registered by the Company upon a validly and duly executed (by
all
parties thereto) Transferee Deed of Adherence being lodged with
it.
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(a)
|
Subject
to Clause 7(b)(ii) above, if at any time any Shareholder
(“Proposed Transferor”) intends to Transfer its Transfer
Shares to the Proposed Transferee, each of the other Shareholders
shall
have a right but not an obligation to serve a written notice on
the
Proposed Transferor (“Tag Along Notice”) stating that the
Proposed Transferor procures an offer from the Proposed Transferee
to
purchase such number of Shares from each of the other Shareholders
as is
calculated in accordance with paragraph (c) below (“Tag Along
Shares”) on the Transfer Terms. Each of the Shareholders who
exercise such a right and the Proposed Transferor shall be collectively
referred to as the Transferors. Accordingly, the number of shares
purchased by the Proposed Transferee from each of the Transferors
shall be
amount calculated under paragraph
(c).
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|
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(b)
|
A
Transfer of the Transfer Shares by IGC to the Proposed Transferee
under
this Clause 9 shall not be registered unless the Tag Along Shares
are
purchased by the Proposed Transferee simultaneously with the Transfer
Shares and the Proposed Transferee has executed a Transferee Deed
of
Adherence. The sale and purchase of the Transfer Shares and the
Tag Along
Shares shall be completed within thirty (30) days from the date
of issue
of the Tag Along Notice and the time taken to obtain any regulatory
approval being excluded for the calculation. At such closing, IGC
and such
Shareholders shall deliver certificates and other documents representing
their title to the Transfer Shares and the Tag Along Shares, respectively,
accompanied by duly executed and valid instruments of transfer,
to the
Proposed Transferee. IGC shall procure that the Proposed
Transferee shall deliver, at such closing, payment in full of the
Offer
Price in accordance with the terms set forth in the Transfer and
shall
execute a Transferee Deed of Adherence. At such closing, all of
the parties to the transaction shall execute such additional documents
as
may be necessary or appropriate to effect the sale of the Transfer
Shares
and the Tag Along Shares to the Proposed Transferee. IGC shall
procure
that any stamp duty or transfer charges payable on the transfer
of any
Transfer Shares and the Tag Along Shares shall be borne by the
Proposed
Transferee.
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|
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(c)
|
The
number of Tag Along Shares shall be calculated in the following
manner:
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|
|
For
Transferors 1 to N
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|
|
(d)
|
Any
Transfer of the Transfer Shares pursuant to this Clause 9 shall
be valid
only upon the execution of a Transferee Deed of Adherence and shall
be
registered by the Company upon a validly and duly executed (by
all parties
thereto) a Transferee Deed of Adherence being lodged with it.
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|
10.
|
TERM
AND TERMINATION BY DEFAULT
|
|
(a)
|
This
Agreement shall come into effect on the Completion
Date. Notwithstanding anything to the contrary contained herein,
all
rights available to the Promoters and/or their Affiliates under
this
Agreement shall terminate upon (i) the Shareholding of the Promoters
and/or their Affiliates falling below 23% or such other percent
as the
case may be, in the event Mr. Jortin Antony receives his entitlement
referred to in Clause 4.5 or (ii) the Shares of the Company getting
listed
on any recognised stock exchange, whichever is
earlier.
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|
(b)
|
In
the event that any Shareholder (a“Defaulting
Shareholder”) suffers the following event
(a“Default”), the other Shareholder
(“Non-Defaulting Shareholder”) shall be entitled to
exercise the options specified under Clause10(c) below, the Defaulting
Shareholder is in material breach of this Agreement and such default
has
not been cured within 30 days of the issuance of a written notice
of such
default by a Non-Defaulting Shareholder. For the purposes of this
Agreement the term ‘material breach’ shall include a breach of the
obligations under clauses 2.4 (future funding), 4.1(n) (shareholders
meeting), 6 (restrictions on transfer of shares) and 13 (representations
and warranties).
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|
(c)
|
Upon
the occurrence of a Default, any Non-Defaulting Shareholder may
for so
long as such default subsists issue a default notice to the Defaulting
Shareholders (the “Default Notice”) together with a copy
to every other Shareholder and the Company specifying the nature
of the
Default. Upon the issuance of the Default Notice, the
Non-Defaulting Shareholders shall have following
options:
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|
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(i)
|
to
purchase all (but not less than all) the Shares held by the Defaulting
Shareholder and its Affiliates (as the case maybe) (the “Default
Shares”) at the Default Price to be determined in accordance
with
Clause 10 (k) ; or
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|
|
(ii)
|
subject
to Clause 6 Transfer its entire Shareholding to the Proposed Transferee
(not being an IGC Competitor) on the Transfer Terms with a right
(but not
an obligation) to require the Defaulting Shareholder to Transfer
the
Default Shares held by Defaulting Shareholders and its Affiliates
(as the
case maybe) at the Default Price to be determined in accordance
with
Clause 10 (k) to such Proposed Transferee.
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|
(d)
|
Any
Non-Defaulting Shareholder desirous of purchasing the Default Shares
or
requiring the Transfer of the Default Shares shall, no later than
three
months (“Default Option Period”) from the issuance of the
Default Notice, issue a notice to the other Non-Defaulting Shareholders,
the Defaulting Shareholders and the Company of its intention to
purchase
all (but not part of the Default Shares) at Default Price (the
“Default Purchase Notice”) or its intention of
Transferring its entire Shareholding with/without requiring the
Defaulting
Shareholder to Transfer its Default Shares to the Proposed
Transferee (the “Non Default Purchase
Notice”). Provided however that where more than one
Non-Defaulting Shareholder chooses to exercise: (i) their option
under
Clause 10(c)(i) the Default Shares shall be sold to such Non-Defaulting
Shareholders pro rata to their Shareholding; or (ii) their option
under
Clause 10(c)(ii) the Non Defaulting Shareholders shall have an
option but
not an obligation to require the Defaulting Shareholder to Transfer
their
Default Shares on a proportionate basis, to be calculated in accordance
with the formula specified under Clause 10(k). The Defaulting Shareholder
shall be obligated to sell the Default Shares to the Non-Defaulting
Shareholders who exercise their option (the “Opting Non-Default
Shareholders”) either to purchase the Default Shares by issuing
the Default Purchase Notice or to the Proposed Transferee identified
in
the Default Purchase Notice by an Opting Non-Default
Shareholder.
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|
(e)
|
The
Transfer of the Default Shares to the Opting Non-Default
Shareholders/Proposed Transferee shall occur on a date to be specified
by
the Opting Non-Defaulting Shareholder (the “Default Option
Settlement Date”) in a written notice, which date shall be no
less than seven days after the date of such notice provided that
such
notice shall be issued no later than three months after the last
day of
the Default Option Period. On the Default Option Settlement Date,
the
Defaulting Shareholder shall either sell the Default Shares to
the Opting
Non-Default Shareholders or to the Proposed Transferee depending
upon the
option exercised by the Opting Non-Defaulting Shareholder in accordance
with Clause 10.
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|
(f)
|
On
the Default Option Settlement Date, the Defaulting Shareholder
shall
deliver, or cause to be delivered, to Opting Non-Default
Shareholders/Proposed Transferee the
following:
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|
(g)
|
The
Defaulting Shareholder shall warrant that the Defaulting Shareholder
and/or its Affiliate, as the case maybe, is the owner of the Default
Shares and that such Default Shares are free from
Encumbrances.
|
|
(h)
|
On
the Default Option Settlement Date the Non-Defaulting Shareholders/third
party shall deliver or cause to be delivered to the Defaulting
Shareholder
their Pro Rata Share of the Default Price by way of a bank cheque
payable
to the Defaulting Shareholder. The Opting Non-Defaulting Shareholders
further covenant that in the event that they opt to purchase the
Defaulting Shares through an Affiliate, they shall cause such
Affiliate to execute an Affiliate Deed of Adherence or if through
a third
party, they shall cause such third party to execute a Transferee
Deed of
Adherence as the case may be and the Company shall not register
such a
Transfer unless a validly executed Affiliate Deed of Adherence
or the
Transferee Deed of Adherence is lodged with
it.
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|
(i)
|
Upon
the transfer of the Default Shares to the Opting Non-Defaulting
Shareholders or the third party, the Defaulting Shareholder shall
cease to
have any rights hereunder.
|
|
(j)
|
In
the event that a transferee nominated by an Opting Non-Default
Shareholder
fails to perform its obligations to complete the sale of the Default
Shares the person nominating such transferee shall be liable to
complete
such Transfer.
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|
(k)
|
Default
Price for the purposes of this Clause 10 means a price being an
amount
equivalent to 90% of the FMV Price. For the
purposes of this Agreement, “FMV Price” shall mean the
fair market value of Shares as determined by any of the big 4 accounting
firms (“Valuer(s)”) as set forth in this Clause
10 Should none of these Valuers be available to perform
the valuation exercise, a reputable international bank or Indian
bank
shall be appointed.
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|
(l)
|
The
FMV Price shall be determined on the basis
of:
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|
(m)
|
The
Shareholders shall engage an independent Valuer of international repute to
determine the fair market value of the Company Assets. Company
Assets’ in this Clause means all the assets of the Company. The terms of
the appointment of the Valuer shall be decided by
IGC.
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|
(n)
|
The
provisions of Clauses 13 (Representations and warranties), 14 (Indemnity),
16 (Resolution of Disputes), 17 (Notices), and 19 (Confidentiality)
shall
survive the termination hereof pursuant to Clause
10.1.
|
|
11.
|
NON-COMPETE
|
|
11.1
|
The
Promoters and/or any of them or their Affiliates for so long as
IGC and
the Promoters and/or any of them or their Affiliates are Shareholders
in
the Company, shall not carry on or engage directly or indirectly,
whether
through partnership or as a shareholder, joint venture partner,
collaborator, consultant or agent or in any other manner whatsoever,
whether for profit or otherwise, in any business which competes
directly
or indirectly with the whole or any part of the Business or any
other
activity/business directly or indirectly carried on by the Company
or
which can reasonably be construed as being same or similar to the
Business
of the Company. Mr. V.C. Antony is required to resign as director
either
from the Company or from Bhagheeratha Engineering Limited,
Kochi.
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|
|
11.2 The
Promoters and/or any of them or their Affiliates hereby agree and
acknowledge that as long as IGC and/or any of its Affiliates and
Promoters
and/or any of them or their Affiliates are Shareholders in the
Company,
they shall carry on any activity/business in the nature of Business,
in
present or in future, solely and exclusively through the
Company.
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|
|
11.3 The
Promoters agree and acknowledge that the covenants and obligations
under
Clauses 11.1 and 11.2 above relate to special, unique and extraordinary
matters, and that a violation of any of the terms of such covenants
and
obligations will cause the other Parties irreparable injury. Therefore,
IGC and/or any of its Affiliates shall be entitled to an interim
injunction, restraining order or such other equitable relief as
a court of
competent jurisdiction may deem necessary or appropriate to restrain
the
Promoters and/or any of them or their Affiliates from committing
any
violation of the covenants and obligations contained in this
Agreement.
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|
|
11.4 The
Parties acknowledge and agree that the above restrictions are considered
reasonable for the legitimate protection of the business and goodwill
of
the Company, but in the event such restriction shall be found to
be void,
but would be valid, if some part thereof was deleted or the scope,
period
or area of application were reduced, the above restriction shall
apply
with the deletion of such words or such reduction of scope, period
or area
of application as may be required to make the restrictions contained
in
this Clause valid and effective. Notwithstanding the limitation
of this
provision by any law for the time being in force, the Parties undertake,
at all times to observe and be bound by the spirit of this Clause.
Provided however, that on the revocation, removal or diminution
of the law
or provisions, as the case may be, by virtue of which the restrictions
contained in this Clause were limited as provided hereinabove,
the
original restrictions would stand renewed and be effective to their
original extent, as if they had not been limited by the law or
provisions
revoked.
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|
|
11.5 The
covenants of the Promoters and/or their Affiliates under this Clause
11
shall survive for a period of 5 years from the date they cease
to be
Shareholders of the Company or unless as specifically waived by
IGC or its
nominees/assignees.
|
|
12.
|
PLEDGE
OR ENCUMBRANCE OF SHARES OF
PROMOTERS
|
|
|
The
Promoters shall not pledge, mortgage, hypothecate, charge or otherwise
Encumber any of the Shares of the Company either directly or indirectly
nor otherwise use such Shares as collateral for any purpose which
could
result in an involuntary Transfer of such Shares or any right,
title or
interest therein in favour of any person, including but not limited
to,
any lenders of the Company except with the prior written consent
of
IGC. The Promoters shall also be entitled to pledge their
shares in favour of lenders i.e. banks and financial institutions
only
with the prior written consent of
IGC.
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|
|
(a)
|
such
Party has the full power and authority to enter into, execute and
deliver
this Agreement and to perform the transactions contemplated hereby
and, if
such Party is not a natural person, such Party is duly incorporated
or
organised with limited liability and existing under the Laws of
the
jurisdiction of its incorporation or
organisation;
|
|
|
(b)
|
the
execution and delivery by such Party of this Agreement and the
performance
by such Party of the transactions contemplated hereby have been
duly
authorised by all necessary corporate or other action of such
Party;
|
|
|
(c)
|
assuming
the due authorisation, execution and delivery hereof by the other
Parties,
this Agreement constitutes the legal, valid and binding obligation
of such
Party, enforceable against such Party in accordance with its terms,
except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganisation, moratorium or similar laws affecting
creditors' rights generally;
|
|
|
(d)
|
the
execution, delivery and performance of this Agreement by such Party
and
the consummation of the transactions contemplated hereby will not
(i)
violate any provision of the organisational or governance documents
of
such Party; (ii) require such Party to obtain any consent, approval
or
action of, or make any filing with or give any notice to, any Government
Authority in such Party's country of organisation or any other
person
pursuant to any instrument, contract or other agreement to which
such
Party is a party or by which such Party is bound, other than such
filing
required as a result of the transactions contemplated herein; (iii)
conflict with or result in any material breach or violation of
any of the
terms and conditions of, or constitute (with notice or lapse of
time or
both constitute) a default under, any instrument, contract or other
agreement to which such Party is a party or by which such Party
is bound;
(iv) violate any order, judgment or decree against, or binding
upon, such
Party or upon its respective shares, properties or businesses;
or (v)
violate any Law of such Party's country of organisation or any
other
country in which it maintains its principal
office;
|
|
|
(e)
|
there
exists no Encumbrance on any of the Shares of the
Company;
|
|
|
(f)
|
The
Parties reiterate and confirm the representations, warranties and
undertakings and each statement made in Schedule 3 of the SSPA,
as
applicable to the Parties, and confirm that the same are is now
and will
be true and accurate at the Completion
Date.
|
|
13A
|
COMPANY
WARRANTIES
|
|
|
(a)
|
The
Company shall ensure that under the terms of this Agreement, it
shall
perform its obligations so as to ensure that upon
Completion, the Subscribed Shares and the CPS are
transferred and registered to nominees of IGC being [names of the
nominees] at the face value of Shares Rs. 10 per
Share.
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|
|
(b)
|
The
Company warrants that as on the date hereof the Company has not
done or
committed to do any act, matter or thing or has not assumed any
liability,
other than in the ordinary course of business.
|
|
14.1
|
Without
prejudice to any other right available to IGC in law or under equity,
the
Company and the Promoters shall jointly and severally indemnify,
defend
and hold harmless IGC, their Affiliates, directors, advisors, officers,
employees and agents, or, if so desired by IGC, the Promoters shall
indemnify the Company, from and against any and all liabilities,
damages,
demands, Claims (including third party Claims), actions, judgments
or
causes of action, assessments, interest, fines, penalties, and
other costs
or expenses (including, without limitation, amounts paid in settlement,
court costs and all reasonable attorneys' fees and out of pocket
expenses)
(“Losses”) directly based upon, arising out of, or in
relation to or otherwise in respect
of:
|
|
i.
|
any
inaccuracy in or any breach of any Representation and Warranty,
covenant
or agreement of the Promoters or Company contained in this Agreement
or in
the SSPA or any document or other papers delivered by any of them
to IGC
in connection with or pursuant to this
Agreement;
|
|
ii.
|
any
liability arising out of non compliance of any obligation undertaken
by
the Company or the Promoters; save and except as may be disclosed
in the
audited financial statements of the Company which have been disclosed
to
IGC prior to the Completion Date;
|
|
iii.
|
any
liabilities and obligations of whatever nature relating to any
litigation,
Claim or governmental investigation pending or relating to the
Business or
operations of the Promoters or the Business of the Company prior
to the
date of execution of this Agreement and as on the Completion Date;
save
and except as may be disclosed in the audited financial statements
of the
Company which have been disclosed to IGC prior to the Completion
Date;
|
|
iv.
|
any
liability due to any non-compliance of any applicable law, rules
or
regulations prior to the date of execution of this Agreement and
as on the
Completion Date; save and except as may be disclosed in the audited
financial statements of the Company which have been disclosed to
IGC prior
to the Completion Date.
|
|
14.2
|
Any
compensation or indemnity as referred to in Clause 14.1 above shall
be
such as to place IGC in the same position as it would have been
in, had
there not been any such breach and as if the Representation and
Warranty
under which IGC is to be indemnified, had been
correct.
|
|
16.2
|
Conciliation
|
|
16.3
|
Arbitration
|
|
|
(a)
|
If
the Parties are unable to amicably settle the Dispute in accordance
with
Clause 16.2 within the period specified therein, any Party to the
Dispute
shall be entitled to serve a notice invoking this Clause and making
a
reference to an arbitration panel of three arbitrators. Each party
to the
dispute shall appoint one arbitrator within 30 days of receipt
of the
notice of the Party making the reference, and the two arbitrators,
so
appointed shall appoint a third arbitrator. The Arbitration
proceedings shall be held in accordance with the Arbitration and
Conciliation Act, 1996. The decision of the arbitration panel shall
be
binding on all the Parties to the
Dispute.
|
|
|
(b)
|
The
place of the arbitration shall be Mumbai,
India.
|
|
|
(c)
|
The
proceedings of arbitration shall be in the English
language.
|
|
|
(d)
|
The
arbitration proceedings shall be governed by the laws of India
and the
Mumbai courts (including any appellant court) in India shall have
exclusive jurisdiction.
|
|
|
(e)
|
Notwithstanding
the foregoing, the Parties agree that any of them may seek interim
measures including injunctive relief in relation to the provisions
of this
agreement or the Parties' performance of it from any court of competent
jurisdiction. Each Party shall co-operate in good faith to expedite
(to
the maximum extent practicable) the conduct of any arbitral proceedings
commenced under this Agreement.
|
|
|
(f)
|
The
costs and expenses of the arbitration, including, without limitation,
the
fees of the arbitration and the Arbitrator, shall be borne equally
by each
Party to the dispute or claim and each Party shall pay its own
fees,
disbursements and other charges of its counsel, except as may be
otherwise
determined by the Arbitrator. The Arbitrator would have the power
to award
interest on any sum awarded pursuant to the arbitration proceedings
and
such sum would carry interest, if awarded, until the actual payment
of
such amounts.
|
|
|
(g)
|
Any
award made by the Arbitrator shall be final and binding on each
of the
Parties that were parties to the dispute. The Parties expressly
agree to
waive the applicability of any Applicable Laws and regulations
that would
otherwise give the right to appeal the decisions of the Arbitrator
so that
there shall be no appeal to any court of Law for the award of the
Arbitrator, except a Party shall not challenge or resist any enforcement
action taken by any other Party in any court of Law in whose favour
an
award of the Arbitrator was
given.
|
|
17.1
|
Any
notice or other communication that may be given by one Party to
the other
shall always be in writing and shall be served either by (i) hand
delivery
duly acknowledged; or (ii) sent by registered post with acknowledgment
due; or (iii) by facsimile at the respective addresses set out
herein
below or at such other address as may be subsequently intimated
by one
party to the other in writing as set out herein. If the notice
is sent by
facsimile, the said notice shall also be sent by registered post
acknowledgment due.
|
|
17.2
|
All
notices shall be deemed to have been validly given on (i) the business
date immediately after the date of transmission with confirmed
answer
back, if transmitted by facsimile transmission, or (ii) the business
date
of receipt, if sent by courier or hand delivery; or (iii) the expiry
of
seven days after posting, if sent by registered
post.
|
|
17.3
|
Any
Party may, from time to time, change its address or representative
for
receipt of notices provided for in this Agreement by giving to
the other
Party not less than 10 days prior written
notice.
|
|
|
19.1
|
General
Obligation. Each Party undertakes that it shall not
reveal, and shall ensure that its directors, officers, managers,
partners,
members, employees, legal, financial and professional advisors
and bankers
(collectively, “Representatives”) do not reveal, to any
third party any Confidential Information without the prior written
consent
of the Company or the concerned Party, as the case may be regardless
of
whether this Agreement is terminated or
not.
|
|
|
19.2
|
Exceptions.
The provisions of Clause 19.1 shall not apply
to:
|
|
|
(a)
|
disclosure
of Confidential Information that is or becomes generally available
to the
public other than as a result of disclosure by or at the direction
of a
Party or any of its Representatives in violation of this
Agreement;
|
|
|
(b)
|
disclosure
by a Party to its Representatives and Affiliates (and their officers
and
directors) or to transferee of Shares in accordance with this Agreement
provided such Representatives, Affiliates and transferees are bound
by
similar confidentiality
obligations;
|
|
|
(c)
|
disclosure
by the Company of Confidential Information concerning the Company
that is
reasonably necessary in the ordinary course of business or otherwise
in
connection with transactions or proposed transactions of the Company;
and
|
|
|
(d)
|
obligations
disclosure, after giving prior notice to the other Parties to the
extent
practicable under the circumstances and subject to any practicable
arrangements to protect confidentiality, to the extent required
under the
rules of any stock exchange or by Applicable Laws or governmental
regulations or generally accepted accounting principles applicable
to any
Party or judicial or regulatory process or in connection with any
judicial
process regarding any legal action, suit or proceeding arising
out of or
relating to this Agreement.
|
|
22.12.1
|
The
Parties agree that if the understanding contemplated in this Agreement
cannot be completed in the manner set forth herein, then the Parties
shall
use reasonable endeavours to enter into such understanding that
(a) would
result in a substantially similar outcome and (b) do not materially
prejudice any of the Parties. Each of the Parties further
agrees that, during any such negotiations, it shall refrain from
initiating any legal actions against the other Parties;
and
|
|
22.12.2
|
Each
Party agrees to perform (or procure the performance of) all further
acts
and things, and execute and deliver (or procure the execution and
delivery
of) such further documents, as may be required by law or as the
other
Parties may reasonably require, whether on or after the date of
this
Agreement, to implement and/or give effect to this Agreement and
the
understanding contemplated by it and for the purpose of vesting
in IGC the
full benefit of the assets, rights and benefits to be transferred
to IGC
under this Agreement.
|
|
22.16
|
Survival.
In the event of termination of this Agreement pursuant to Clause
10,
notwithstanding anything mentioned herein, Clauses which by their
nature
survive termination shall survive the termination of this
Agreement.
|
|
22.17
|
Consent
to Specific Performance. The Parties declare that it is
impossible to measure in money the damages that would be suffered
by a
Party by reason of the failure by any other Party to perform any
of the
obligations hereunder. Therefore, if any Party shall institute
any action or proceeding to seek specific performance or enforcement
of
the provisions hereof any Party against whom such action or proceeding
is
brought hereby waives any claim or defence therein that the other
Party
has an adequate remedy at Law.
|
|
22.18
|
Covenants
Reasonable. The Parties agree that, having regard to
all the circumstances, the covenants contained herein are reasonable
and
necessary for the protection of the Parties and their
Affiliates. If any such covenant is held to be void as going
beyond what is reasonable in all the circumstances, but would be
valid if
amended as to scope or duration or both, the covenant will apply
with such
minimum modifications regarding its scope and duration as may be
necessary
to make it valid and effective
|
|
22.19
|
No
Implied Representation. Each of the Parties acknowledges that, in
agreeing to enter into this Agreement, it has not relied on any
representation, warranty, collateral contract or other assurance
except
those set out in this Agreement and the documents referred to in
made by
or on behalf of the other Party before the signature of this
Agreement.
|
|
22.20
|
Without
prejudice The Parties agree that the rights and remedies of the
Parties hereunder are in addition to their rights at Law or
equity.
|
|
SIGNED
AND DELIVERED
|
)
|
|
BY
THE WITHINNAMED " INDIA GLOBILIZATION CAPTIAL INC.,
USA"
|
)
|
|
BY
THE HAND OF MR. RAM MUKUNDA
|
)
|
|
(Authorised
Signatory)
|
)
|
|
ON
THE 16TH DAY
OF SEPTEMBER 2007
|
)
|
|
IN
THE PRESENCE OF:
|
)
|
|
WITNESS:
|
)
|
|
NAME
AND ADDRESS:
|
)
|
|
SIGNED
AND DELIVERED
|
)
|
|
|
BY
THE WITHINNAMED "TECHNI BHARATHI LIMITED
"
|
)
|
|
|
BY
THE HAND OF MR. JORTIN ANTONY
|
)
|
|
|
(AUTHORISED
SIGNATORY) PURSUANT TO THE
|
)
|
|
|
RESOLUTION
PASSED BY THE BOARD
|
)
|
|
|
ON
THE 16TH DAY
OF SEPTEMBER 2007
|
)
|
|
|
IN
THE PRESENCE OF:
|
)
|
|
|
WITNESS:
|
)
|
|
|
ADDRESS:
|
)
|
|
|
SIGNED
AND DELIVERED
|
)
|
|
|
BY
THE WITHINNAMED "PROMOTERS"
|
)
|
|
| MR. JORTIN ANTONY |
)
|
|
|
ON
THE 16TH DAY
OF SEPTEMBER 2007
|
)
|
|
|
IN
THE PRESENCE OF:
|
)
|
|
|
WITNESS:
|
)
|
|
|
ADDRESS:
|
||
|
)
|
||
|
A.
|
The
Seller is the owner of Five Million (5,000,000) convertible preference
shares of the face value of INR 10 each with the terms and conditions
as
listed in Schedule 1 hereto (the
“Shares”) in Techni Bharathi Limited, a public limited
company organised and existing under the laws of India with its
registered
office and principle place of business at By pass road, Edappally,
Kochi –
682 024, India
(“Company”).
|
|
B.
|
The
Seller has agreed to sell the Shares to the Purchaser and the Purchaser
has agreed to purchase the Shares from the Seller in accordance
with the
provisions of this Agreement.
|
|
1.
|
DEFINITIONS
AND INTERPRETATION
|
|
1.1
|
Definitions
|
|
(a)
|
‘Affiliate’
means when used in respect of a specified legal person,
each
legal person that directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under common
control
with the person specified. In this definition “control” (and its
derivatives) means both (i) holding beneficially more than fifty
per cent
(50%) of equity interests and (ii) the ability to cast more than
fifty
(50%)per cent of the voting rights attaching to voting
securities.
|
|
(b)
|
'Agreement'
shall mean this Share Purchase Agreement, as from time to time
amended,
supplemented or replaced or otherwise modified and any document
which
amends, supplements, replaces or otherwise modifies this Agreement,
together with the recitals and all the Schedules attached
hereto.
|
|
(c)
|
“Applicable
Law” shall mean all applicable laws, statutes, ordinances,
regulations, rules, orders, bye laws, administrative interpretation,
writ,
injunction, directive, protocols, codes, policies, notices, directions,
judgment or decree or other instrument or other requirements of
any
Governmental Authority in any relevant jurisdiction applicable
to any
Party from time to time.
|
|
(d)
|
‘Articles’
means Articles of Association of the
Company.
|
|
(e)
|
‘Board’
means Board of Directors of the
Company.
|
|
(f)
|
‘Claim’
includes any notice, demand, assessment, letter or other document
issued
or action taken by any tax, fiscal or other statutory or governmental
authority, body or official whatsoever (whether of India or elsewhere
in
the world) whereby the Company is or may be placed or sought to
be placed
under a liability to make a payment or deprived of any relief,
allowance,
credit or repayment otherwise
available.
|
|
(g)
|
'Completion'
shall mean completion of the events specified in
Clause4.1 below and the Purchaser being
registered as a member in respect of the Shares in the register
of members
of Company.
|
|
(h)
|
‘Completion
Date' shall mean date mentioned in
Clause4.1
hereof.
|
|
(i)
|
'Conditions
Precedent' shall mean the conditions precedent mentioned in
Clause 3 of this
Agreement.
|
|
(j)
|
“CPS”
means 6% compulsorily convertible preference shares of
the
Company agreed to be subscribed by the Purchaser in terms of the
Share
Subscription Agreement.
|
|
(k)
|
'Encumbrances'
means any encumbrance, lien, charge, security interest, mortgage,
pledge,
easement, conditional sale or other title retention or non-disposal
agreement or other restriction of a similar kind, and all other
easements,
encroachments and title defects of every type and nature, or any
conditional sale contract, title, retention contract, or other
contract to
give or to refrain from giving any of the
foregoing.
|
|
(l)
|
‘INR’
means the lawful currency of India.
|
|
(m)
|
“Investor
Shares” means 7,150,000 equity shares of the Company agreed to
be
subscribed by the Purchaser in terms of the Share Subscription
Agreement.
|
|
(n)
|
'Party'
shall mean the Seller and the Purchaser referred to individually
and
'Parties' shall mean the Seller and the Purchaser
referred to collectively.
|
|
(o)
|
‘Purchase
Price’ means an aggregate amount of USD 2 million to be paid
by
the Purchaser to the Seller for acquiring
Shares.
|
|
(p)
|
'Person'
shall include an individual, an association, a corporation, a partnership,
a joint venture, a trust, an unincorporated organisation, a joint
stock
company or other entity or organisation, including a government
or
political subdivision, or an agency or instrumentality thereof
and/or any
other legal entity.
|
|
(q)
|
“Promoters”
shall have the meaning ascribed to the term in the Share
Subscription Agreement.
|
|
(r)
|
Representations and Warranties means
the representations and warranties of the Seller as set out in
Recital A
and clauses 5.1.1 to 5.1.5 (both
inclusive).
|
|
(s)
|
“Share
Subscription Agreement” means the agreement to be executed
between the Purchaser, the Company and the
Promoters.
|
|
1.2
|
Interpretation
|
|
1.2.1
|
The
terms referred to in this Agreement shall, unless defined otherwise
or
inconsistent with the context or meaning thereof, bear the meaning
ascribed to it under the relevant
statute/legislation.
|
|
1.2.2
|
All
references in this Agreement to statutory provisions shall be construed
as
meaning and including references
to:
|
|
|
(a)
|
Any
statutory modification, consolidation or re-enactment (whether
before or
after the date of this Agreement) for the time being in
force;
|
|
|
(b)
|
All
statutory instruments or orders made pursuant to a statutory provision;
and
|
|
|
(c)
|
any
statutory provisions of which these statutory provisions are a
consolidation, re-enactment or
modification.
|
|
1.2.3
|
Words
denoting the singular shall include the plural and words denoting
any
gender shall include all genders.
|
|
1.2.4
|
Headings
to clauses, sub-clauses and paragraphs are for information only
and shall
not form part of the operative provisions of this Agreement or
the
Schedules and shall be ignored in construing the
same.
|
|
1.2.5
|
References
to recitals, clauses or schedules are, unless the context otherwise
requires, are references to recitals, to clauses of or schedules
to this
Agreement.
|
|
1.2.6
|
Reference
to days, months and years are to Gregorian days, months and calendar
years
respectively.
|
|
1.2.7
|
Any
reference to the words “hereof,” “herein”, “hereto” and “hereunder” and
words of similar import when used in this Agreement shall refer
to clauses
or annexures of this Agreement as specified
therein.
|
|
1.2.8
|
Any
expression importing a natural person includes any company, trust,
partnership, joint venture, association, body corporate or governmental
agency.
|
|
1.2.9
|
Where
a word or phrase is given a defined meaning, another part of speech
or
other grammatical form in respect of that word or phrase has a
corresponding meaning.
|
|
1.2.10
|
Reference
to “Purchaser”, unless repugnant to the context shall for the purpose of
this Agreement, mean and include the Affiliates of the
Purchaser.
|
|
2.
|
PURCHASE
AND SALE OF SHARES
|
|
2.1
|
Subject
to the terms and conditions hereof, on the Completion Date the
Seller
shall sell, assign, transfer, convey and deliver to the Purchaser
the
ownership and possession of the Shares, free and clear of all Encumbrances
and restrictions of any kind, with all rights attached or accruing
thereto
(including without limitation, accrued dividends if any) and the
Purchaser
shall purchase the Shares from the Seller for the Purchase
Price.
|
|
3.
|
CONDITIONS
PRECEDENT
|
|
3.1
|
The
Parties agree that the obligation of the Purchaser to purchase
the Shares
in the manner provided herein, is conditional upon (i) the Purchaser
subscribing to the Investor Shares and the CPS; and (ii) only if
all the
Representations and Warranties continue to be true and correct
on the
Completion Date.
|
|
3.2
|
Upon
fulfilment of the Conditions Precedent, the Purchaser shall notify
the
Seller of the same in writing.
|
|
4.
|
COMPLETION
|
|
4.1
|
Upon
fulfilment of all the Conditions Precedent to the satisfaction
of the
Purchaser or if specifically waived in writing by the Purchaser,
the
Parties shall proceed to complete the sale of the Shares to the
Purchaser
(‘Completion’) in the manner provided in this Clause.
Such Completion shall take place on a date set by the Purchaser
(the
‘Completion Date’), which date shall not be later than 15
days from the fulfilment of all the Conditions Precedent to the
satisfaction of the Purchaser. Such Completion Date shall however
in no
event be later than January 31, 2008 unless extended upon mutual
agreement
between the Parties.
|
|
4.2
|
The
Completion shall take place at Economic Laws Practice, 1502, Dalamal
Towers, Nariman Point, Mumbai – 400021 or such other place as may be
mutually agreed upon by the
Parties.
|
|
4.3
|
On
the Completion Date, the Seller shall deliver or cause to be delivered
to
the Purchaser:
|
|
|
a)
|
written
confirmation from the Seller that as at the Completion Date the
Representations and Warranties are true, accurate and complete
and that it
is not aware of any matter or thing which is in breach of or inconsistent
with any of the Representations and
Warranties;
|
|
|
b)
|
duly
signed share transfer forms and the original share certificates
respecting
the Shares.
|
|
4.4
|
On
the Completion Date, a meeting of the Board shall be held at which,
the
Board shall pass resolutions approving the transfer of the Shares
held by
the Seller to the Purchaser, endorse share certificates in the
name of the
Purchaser and deliver the share certificates to the Purchaser and
record
such transfer in the register of members maintained by the Company
and
incorporate the name of the Purchaser as the legal and beneficial
owner of
the Shares in the register of members of the
Company.
|
|
4.5
|
On
the Completion Date the Purchaser shall pay to the Seller the Purchase
Price by way of telegraphic
transfer.
|
|
4.6
|
The
Parties to this Agreement agree to take all measures that may be
required
to ensure to the extent possible, that all the events contemplated
in
Clause 4 above on the Completion Date are completed on
the same day1.
|
|
5.1
|
True
and Accurate: The Seller represents, warrants and
undertakes to the Purchaser, that each of the statements set out
in this
Clause hereunder, as applicable to the Seller, is now and will
be true and
accurate at the Completion Date. The Seller acknowledges that the
Purchaser, in entering into this Agreement, is relying on such
representations, warranties and undertakings and shall be entitled
to
treat the same as conditions of the
Agreement.
|
|
5.1.1
|
Ownership
of Shares: The Seller is the sole recorded and beneficial owner of
Shares.
|
|
5.1.2
|
No
liens or Encumbrances: The Seller has good and marketable title to the
Shares, free and clear of all
Encumbrances.
|
|
5.1.3
|
Right
to transfer Shares: The Seller has full capacity, right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby and thereby to transfer and deliver the Shares
to the
Purchaser, in the manner provided in this Agreement, the Purchaser
will
receive good and marketable title to the Shares, free and clear
of all
Encumbrances.
|
|
5.1.4
|
No
liability: The Seller has no asserted or unasserted liability or Claim
whatsoever towards the Company.
|
|
5.1.5
|
Non-contravention:
The execution, delivery and performance of this Agreement, the
consummation by the Seller of the transactions contemplated hereby
and
thereby and compliance by the Seller with the provisions hereof
or thereof
do not and will not (a) subject to the conditions precedent set
out
herein, require any filing by the Seller with, or the permit,
authorization, consent or approval of, any court, arbitrator or
arbitral
tribunal, administrative agency or commission or other governmental
or
regulatory authority or agency (a “Governmental Entity”), (b) conflict
with or violate any order, writ, injunction, decree, statute, rule
or
regulation applicable to, binding upon or enforceable against the
Seller,
(c) constitute a breach of any duty owed by the Seller or any person
acting in a representative or fiduciary capacity with respect to
the
Seller, or (d) result in a violation or breach of, or constitute
(with or
without notice or lapse of time or both) a default under or give
rise to
any right of termination, amendment, cancellation or
acceleration.
|
|
5.2
|
Purchaser
Representation:The Purchaser hereby represents and warrants that it
has the corporate power and authority to execute, deliver and perform
this
Agreement and the transactions contemplated herein. The execution,
delivery and performance by the Purchaser of thus Agreement has
been duly
authorized and approved by its board of
directors.
|
|
5.3
|
Separate
and Independent: Each of the Representations and Warranties
shall be separate and independent and, save as expressly provided
to the
contrary, shall not be limited by reference to or inference from
any other
Representations and Warranty or any other term of this Agreement,
which is
not expressly referenced to the Representations and Warranty
concerned.
|
|
5.4
|
Undertaking: The
Seller shall not do, allow or procure any act or omission before
the
Completion Date which would respectively constitute a breach of
any of the
Representations and Warranties if they were given at the Completion
Date,
or which would make any of the Representations and Warranties inaccurate
or misleading if they were so
given.
|
|
5.6
|
Notification
of breach: The Seller hereby agrees to disclose promptly to
the Purchaser in writing immediately upon becoming aware of the
same, any
matter, event or circumstance (including any omission to act) which
may
arise or become known to it after the date of this Agreement which
would
render any of the Representations and Warranties to be
inaccurate.
|
|
5.7
|
Survival: The
Representations and Warranties provided in this Agreement shall
survive
the Completion Date.
|
|
6.1
|
Without
prejudice to any other right available to the Purchaser in law
or under
equity, the Seller shall indemnify, defend and hold harmless the
Purchaser, their Affiliates, directors, advisors, officers, employees
and
agents, from and against any and all liabilities, damages, demands,
Claims
(including third party Claims), actions, judgments or causes of
action,
assessments, interest, fines, penalties, and other costs or expenses
(including, without limitation, amounts paid in settlement, court
costs
and all reasonable attorneys' fees and out of pocket expenses)
(“Losses”) directly based upon, arising out of, or in
relation to or otherwise in respect of
|
|
i.
|
any
inaccuracy in or any breach of any Representation and Warranty,
covenant
or agreement of the Seller contained in this Agreement or any document
or
other papers delivered by Seller to the Purchaser in connection
with or
pursuant to this Agreement;
|
|
ii.
|
any
liability arising out of non compliance of any obligation undertaken
by
the Seller.
|
|
6.2
|
Any
compensation or indemnity as referred to in Clause 6.1 above shall
be such
as to place the Purchaser in the same position as it would have
been in,
had there not been any such breach and as if the Representation
and
Warranty under which Purchaser is to be indemnified, had been
correct.
|
|
7.1
|
Any
notice or other communication that may be given by one Party to
the other
shall always be in writing and shall be served either by (i) hand
delivery
duly acknowledged; or (ii) sent by registered post with acknowledgment
due; or (iii) by facsimile at the respective addresses set out
herein
below or at such other address as may be subsequently intimated
by one
party to the other in writing as set out herein. If the notice
is sent by
facsimile, the said notice shall also be sent by registered post
acknowledgment due.
|
|
7.2
|
All
notices shall be deemed to have been validly given on (i) the business
date immediately after the date of transmission with confirmed
answer
back, if transmitted by facsimile transmission, or (ii) the business
date
of receipt, if sent by courier or hand delivery; or (iii) the expiry
of
seven days after posting, if sent by registered
post.
|
|
7.3
|
Any
Party may, from time to time, change its address or representative
for
receipt of notices provided for in this Agreement by giving to
the other
Party not less than 10 days prior written
notice.
|
|
10.1
|
Grounds
for Termination: Save and except the rights and obligations of
the Parties
that terminate as provided in the specific clauses in this Agreement,
this
Agreement shall continue in full force and effect until terminated
in
accordance with the provisions of this
Clause.
|
|
10.2
|
This
Agreement can be terminated at any time prior to the sale of the
Shares in
the manner set out in Clause 4 of this Agreement, by mutual written
agreement of the Parties.
|
|
10.3
|
This
Agreement shall stand terminated if the Completion does not take
place as
per Clause 4.1.
|
|
10.4
|
Effect
of Termination: Termination of this Agreement under Clauses 10.2
to 10.3
shall be without liability of any Party (or any shareholder, director,
officer, agent, employee, consultant or representative of such
Party) to
the other Party.
|
|
10.5
|
The
provisions of Clause 6 (Indemnity), 7 (Notices), and 9 (Confidentiality)
shall survive the termination hereof pursuant to Clause
10.1.
|
|
SIGNED
AND DELIVERED
|
)
|
|
BY
THE WITHINNAMED " Purchaser "
|
)
|
|
BY
THE HAND OF MR. RAM MUKUNDA
|
)
|
|
(Authorised
Signatory)
|
)
|
|
ON
THE 16TH DAY OF SEPTEMBER 2007
|
)
|
|
IN
THE PRESENCE OF:
|
)
|
|
WITNESS:
|
)
|
|
NAME
AND ADDRESS:
|
)
|
|
SIGNED
AND DELIVERED
|
)
|
|
BY
THE WITHINNAMED "Seller"
|
)
|
|
BY
THE HAND OF MR. BEN LIM CHOON KEE
|
)
|
|
(AUTHORISED
SIGNATORY) PURSUANT TO THE
|
)
|
|
RESOLUTION
PASSED BY THE BOARD
|
)
|
|
ON
THE 16TH DAY OF SEPTEMBER 2007
|
)
|
|
IN
THE PRESENCE OF:
|
)
|
|
WITNESS:
|
)
|
|
ADDRESS:
|
)
|
|
1.
|
In
this agreement words and expressions shall have the same meanings
as are
respectively assigned to them in the conditions of the contract
herein
referred to.
|
|
2.
|
Section
headings appearing in this Agreement are inserted for convenience
of
reference only, and shall in no way be construed to be interpretations
of
the provisions hereof.
|
|
3.
|
The
following documents shall be deemed to form and be read and construed
as
part of this Agreement:
|
|
4.
|
In
consideration of the payments to be made by the Employer to the
Contractor
as hereinafter mentioned, the Contractor hereby covenants with
the
Employer to execute and complete the Works and remedy any defects
therein,
in conformity with the provisions of the Agreement.
|
|
5.
|
The
Employer hereby covenants to pay the Contractor, in consideration
of the
execution and completion of the Works and the remedying of defects
therein, the Contract Price at the time and in the manner prescribed
in
Schedule 1 of this Agreement.
|
|
6.
|
AMTL
and MAIL agree that they shall transfer their capacity Allotment
to CWEL
or as per the advise of CWEL at the time of commissioning.
|
|
7.
|
It
is agreed between the Parties that the capacity of the wind farm
shall be
24 MW consisting of 96 (ninety six) 250KW WEGs and the wind energy
farm
will be set up in the State of Karnataka in the land and capacity
allotted
to the Contractor or their associate companies. The technical
specifications of the Contractor 250 KW wind electrical generator
shall
be:
|
|
8.1.1
|
Design,
manufacture and supply of WEGs including Tower, Nacelle, Rotor,
Cables and
Control Panels and including providing all spares at cost during
the life
of the WEGs, being 20 (twenty)
years..
|
|
8.1.2
|
Packing,
handling, loading and unloading and transportation of all equipment
to the
Site.
|
|
8.1.3
|
Formation
of roads suitable for transporting all the machines and materials
through
heavy vehicles like cranes, trucks, trailers, etc.
|
|
8.1.4
|
Site
clearance and Platform
construction.
|
|
8.1.5
|
Liaison
and obtaining all the clearances from Karnataka Renewable Energy
Development Limited (KREDL), Karnataka Power Transmission Corporation
Limited (KPTCL), Karnataka Electricity Regulatory Commission
(KERC) and
other government and private agencies,
including,
without limitation, those referenced in Schedules 2 and 4, in
order for
the Employer to own and operate (or have operated on its behalf)
the
Project.
|
|
8.1.6
|
Foundation
work for the WEGs.
|
|
8.1.7
|
Supply
and erection of all high-tension electrical works including transformer,
Meter, Metering Set, etc., including the Yard.
|
|
8.1.8
|
Obtaining
Grid Tie up and evacuation and Synchronization
Clearances.
|
|
8.1.9
|
Over
Head Line work from Meter point to the tapping point/SS of
KPTCL.
|
|
8.1.10
|
Assembly
and erection of WEGs at site.
|
|
8.1.11
|
Test
run of all the WEGs after grid is
provided.
|
|
8.1.12
|
Commissioning
of the WEGs after providing the
grid.
|
|
8.1.13
|
Doing
all acts necessary to ensure that the Project is completed and
operated
and maintained in accordance with the
Agreement.
|
|
8.1.14
|
The
Contractor shall be deemed to have satisfied himself as to the
sufficiency
of and all conditions and circumstances affecting the Contract
Price, the
Site and its surroundings, climatic conditions, the extent and
nature of
the Works, the labour, Plant and the Contractor’s Equipment required for
the Works and generally as to all other circumstances, risks
and
contingencies which may be relevant to the performance of the
Contractor’s
Obligations under the Agreement and/or to the payments to be
made in
respect thereof. The Contractor therefore accepts total responsibility
for
having foreseen all difficulties and costs and expenses for successfully
executing the Works and that subject to Clause 9 hereof, no increase
in
the Agreement Price and no extension of the Time other than provided
under
Clause 13.2 for Completion shall be made, based in whole or in
part upon
any discrepancy between actual circumstances encountered by the
Contractor
and those anticipated or considered.
|
|
8.1.15
|
The
Contractor acknowledges that the Employer has made available
to the
Contractor, certain data and information solely for the convenience
of the
Contractor, the verification and interpretation of which is
the sole risk
and responsibility of the Contractor. The Contractor agrees
that the
Employer shall have no liability to the Contractor for the
adequacy,
accuracy or completeness of such data and information and shall
protect,
indemnify and hold the Employer harmless from and against any
and all
losses arising directly or indirectly from or incurred by reason
of the
use of any such data and information or any part thereof. Further,
the
Contractor hereby waives any claims it may otherwise have against
persons
who may have prepared, compiled, provided or prepared any such
data and
information and by other persons to whom the Contractor has
supplied such
data and information.
|
|
11.1
|
The
Price in Clause 9 above, shall be paid to the Contractor as per
Schedule 1
and subject to Clause 11.2
|
|
11.2
|
The
Parties agree that the Employer will have a right to make payments
directly to the major vendors and contractors specified in Schedule
3 as
per the instructions from the contractor and in accordance with
the
contract with such vendors from time to time such payment being
part of
the down payment mentioned in Schedule
1.
|
|
11.3
|
The
employer shall pay a sum of Rs.100 Lakhs ( Rupees One Hundred
Lakhs Only )
on or before 15th
May 2007 to the Contractor as interest free deposit to facilitate
implementation of the project. Only 75% ( Seventy Five percentage)
of this
amount will be refunded by the Contractor to the Employer in
case, the
Employer fails to perform their obligations by
30.09.2007.
|
|
11.4
|
The
Parties further agree that the Contractor shall create at the
cost of the
Employer security interest in favour of the Employer over all
major goods
and components purchased by the Contractor for the purpose of
the Project.
The Contractor shall create at the cost of the Employer a security
interest in favour of the Employer over all major goods and components
imported by the Contractor immediately after the goods and components
have
cleared customs in India.
|
|
11.5
|
The
security interest created by the Contractor under Clause 11.4
shall be
released at the cost of the employer once the ownership of the
secured
goods and components passes to the Employer in accordance with
this
contract.
|
| 11.6 |
The
Contractor shall assign all its rights under all agreements entered
into
between the Contractor and any vendor for the goods and components
purchased for the purpose of the Project to the
Employer.
|
| 11.7 |
The
Contractor shall submit a Corporate Guarantee in the agreed form
to the
Employer for the amount received till completion of the project
on
pro-rata basis. The said Guarantee will automatically get diminished
depending upon the implementation of the
project.
|
|
12.1
|
The
Employer’s obligations are conditional upon the satisfaction or waiver
(if
applicable) of all of the following
conditions:
|
| 12.1.1 | A resolution being passed at a duly constituted meeting of the board of directors of the Employer and a resolution being passed at duly constituted meeting of the shareholders of the Employer, approving the development of a wind energy farm in Karnataka and the satisfaction of all other conditions for the Employer to effect a Business Combination as set forth in the Employer’s Prospectus dated March 3, 2006 as filed with the US Securities and Exchange Commission. |
|
12.1.2
|
The
Contractor obtaining the necessary capacity allotment through
its
associate companies AMTL and MAIL, as per schedule 4 from the
Government
of Karnataka.
|
|
12.1.3
|
The
Contractor providing IGC with documentary proof that AMTL and
MAIL have
entered into a valid agreement as per Government Order No. DE
26 NCE 99,
Bangalore dated 3 May 1999, EN 259 NCE 2004 Bangalore dated 18.03.2005
and
EN 260 NCE 2004 Bangalore dated 26.08.2004 with the Government
of
Karnataka through KREDL for 24 MW and that both AMTL and MAIL
have
fulfilled all the conditions under their respective agreements
and are not
in breach of their respective agreements;
|
|
12.1.4
|
AMTL
and MAIL transferring their capacity allotment and all rights
there under
to the Contractor concurrent with the required down payment.
The
Contractor will provide Employer documentary proof of the
same.
|
|
12.1.5
|
The
Parties entering into an agreement for the operation and maintenance
of
the wind energy farm;
|
|
12.1.7
|
The
Contractor shall obtain all necessary consents, approvals and
licenses for
the Employer to generate and sell the power generated as permissible
under
applicable laws and including but not limited to those specified
in
Schedules 2 and 4 in the form and content as per statutory
requirements;
|
|
13.1
|
All
the WEGs shall be supplied, installed and commissioned within
12 (twelve)
months from the Effective Date (“Time
for Completion”).
The employer should make the down payment on or before 30.09.2007
so as to
enable the contractor to implement the project successfully in
time.
|
|
13.2
|
The
Employer will extend the Time for Completion for a further period
of 3
(three) months (“Extended
Time for Completion”)
if the Contractor completes Milestone VI of the Project as specified
in
Schedule 1
|
|
13.3
|
In
the event the commissioning of all the 96 WEG’s is not completed within
the Extended Time for Completion, the Contractor will refund
the excess
amount received after deducting the value of completed WEGs and
also the
expenses incurred by the Contractor in connection with the implementation
of the project.
|
|
13.4
|
The
Project shall be completed as per the milestones provided in
Schedule
1.
|
|
13.5
|
The
Employer shall take-over each WEG on the day of commissioning
of that WEG.
The Parties agree that on the day of commissioning of the WEG
or earlier
if permitted under applicable law, the Contractor shall procure
that the
Parties shall enter into a sub-lease agreement with the Government
of
Karnataka in form and content as per the statutory requirement,
under
which the land relating to that WEG shall be subleased to the
Employer.
|
|
13.6
|
The
Contractor shall begin the operation and maintenance of each
WEG from the
date of its commissioning as per the terms and conditions of
the
operations and maintenance contract between the
Parties.
|
|
13.7
|
The
Contractor shall ensure that there is in place a power purchase
agreement
between the Employer and BESCOM for all the power generated by
a WEG as on
the date of commissioning of that WEG unless modified in writing
by the
Employer prior to completion either to the electricity board
or as a sale
to a third party if so decided by the Employer, in accordance
with
prevailing Govt. rules.
|
|
14.1
|
Without
limiting any other provisions of the Agreement, the Contractor
shall
perform the Work with due care and in a professional manner,
using sound
engineering and design principles and project management and
supervisory
and warrant procedures, in accordance with and consistent with
industry
standards and all applicable Laws. The Works done by the Contractor
shall
be fit for purpose. The Contractor represents and warrants that
it has the
requisite skills, experience, expertise and capacity to perform
the Work
in the foregoing manner and to satisfy and fulfill all of its
obligations
and responsibilities under the
Agreement.
|
|
14.2
|
The
time is of an essence of the Agreement. This condition will apply
to both
Parties relating to payments and project
implementation.
|
|
16.1
|
Each
Party represents, severally and not jointly, to the other Party
hereto
that:
|
|
16.1.1
|
Such
Party has the full power and authority to enter into, execute
and deliver
the Agreement and to perform the transactions contemplated hereby
and such
Party is duly incorporated or organized with limited liability
and
existing under the laws of the jurisdiction of its incorporation
or
organization;
|
|
16.1.2
|
The
execution and delivery by such Party of the Agreement and the
performance
by such Party of the transactions contemplated hereby have been
duly
authorized by all necessary corporate or other action of such
Party;
|
|
16.1.3
|
Assuming
the due authorization, execution and delivery hereof by the other
Parties,
the Agreement constitutes the legal, valid and binding obligation
of such
Party, enforceable against such Party in accordance with its
terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally; and
|
|
16.1.4
|
The
execution, delivery and performance of the Agreement by such
Party and the
consummation of the transactions contemplated hereby will not
(i) violate
any provision of the organizational or governance documents of
such Party;
(ii) require such Party to obtain any consent, approval or action
of, or
make any filing with or give any notice to, any Government Authority
in
India or any other person pursuant to any instrument, Agreement
or other
agreement to which such Party is a party or by which such Party
is bound
save for those provided in Schedule 2; (iii) conflict with or
result in
any material breach or violation of any of the terms and conditions
of, or
constitute (with notice or lapse of time or both constitute)
a default
under, any instrument, Agreement or other agreement to which
such Party is
a party or by which such Party is bound; (iv) violate any order,
judgment
or decree against, or binding upon, such Party or upon its respective
securities, properties or businesses; or (v) subject to the novation
of
the Agreement, violate any Laws of India or the Laws of its place
of
incorporation or organization any other country in which it maintains
its
principal office.
|
|
16.2
|
The
Contractor represents and warrants to the Employer
that:
|
|
16.2.1
|
It
is fully experienced in the planning, programming, design and
execution
and co-ordination of construction activities wind energy farms
of the
scope, complexity, size and technical sophistication of the Works
and that
it possesses the level of skill and expertise commensurate with
such
experience, upon which the Employer is
reliant;
|
|
16.2.2
|
It
shall be responsible for the design and execution of the Works
and the
said design and execution of the Works will meet in all respects
the
requirements of the Agreement;
|
|
16.2.3
|
It
shall undertake and develop the design of the Works so as to
procure a
complete detailed design which both as a whole and as individual
parts
will be adequate, accurate and sufficient and will meet and comply
in all
respects with the Specifications, applicable Laws and industry
practice
and that such detailed design will be such that the Works as
a whole and
as each individual part will be in all respects fit for its purpose
in
accordance with the Specifications, applicable Laws and industry
practice;
|
|
16.2.4
|
The
Works will be designed and executed and defects remedied in accordance
with industry practice and all applicable Laws and the functional
and
other requirements of the Agreement and when completed the Works
shall be
fit for the purpose for which the Works are intended, as specified
or as
may be inferred from the Agreement;
|
|
16.2.5
|
The
Works have a rate of deterioration reasonably to be expected
of a high
quality, reliable and well-designed, engineered and constructed
wind
energy farm with minimal lifecycle costs and shall be free of
structural
defects and deficiencies;
|
|
16.2.6
|
The
personnel to be employed by the Contractor in or about the design
and
execution of the Works will be properly skilled, competent and
experienced
having regard to the nature and extent of the
Works;
|
|
16.2.7
|
The
Contractor has not and will not use substances or materials
generally
known at the time of their use to be deleterious to health
or safety
during the execution or the design life of the Works or to
be likely
adversely to affect the operation or design life of the Permanent
Works or
persons using or employed or engaged on the same or to be likely
to cause
the Contractor or the Employer to be in breach of any applicable
Laws;
|
|
16.2.8
|
It
will ensure that the Works will comprise only equipment which
is new
and/or unused and complies with the Agreement and which is manufactured
and prepared in accordance with the applicable Laws and with
industry
practice; and
|
|
16.2.9
|
It
will obtain all the necessary approvals and permits under applicable
law
for the successful completion and operation of the Project including
without limitation approvals and permits as detailed in Schedule
2 during
the execution of the Project.
|
|
16.2.10
|
The
Contractor shall undertake the Operations, Maintenance and
Security
Services Agreement (OMS Agreement) as detailed in Schedule
5
|
|
(a)
|
Understanding
that it constitutes a legal, valid and binding obligation of
the
Contractor, enforceable in accordance with its term, except as
such
enforceability may be limited by bankruptcy, insolvency, or similar
events
which may arise in future.
|
|
(b)
|
Confirming
that it is not a party to any legal, administrative, arbitral,
investigation or other proceeding or controversy which is pending,
or, to
the best of the Contractor’s knowledge, threatened, which would adversely
affect the Contractor’s ability to perform under the OMS
Agreement
|
|
(c)
|
The
Contractor has examined the requirements of OMS Agreement in
depth and is
familiar with
|
|
(i)
|
its
terms
|
|
(ii)
|
the
necessary experience and proper qualifications to perform
the service
contemplated hereunder
|
|
(iii)
|
reviewed
and examined all applicable laws, codes and standards (including
safety,
environmental and security requirements of the Project);
and
|
|
(iv)
|
carefully
reviewed all documents, plans, drawings and other information
that it
deems necessary regarding the Project and its performance of
the services
hereunder that are available as of the date
hereof.
|
|
17.1
|
Commencing
from the date of this Agreement, and on receipt of the first
down payment
the Contractor shall ensure that neither it nor any of its employees,
officers or advisers or representatives directly or indirectly
solicit,
encourage or initiate any expression of interest, offer or proposal
by any
person other than the Employer for the matter and wind energy
farm
contemplated under this Agreement, provided all the terms & conditions
including the payment terms are fulfilled in accordance with
this contract
|
|
18.1
|
The
equipment relating to each WEG is warranted by the Contractor
for a period
of 12 months from the date of commissioning of each WEG against
any
defects owing to faulty design or manufacture, excluding normal
wear and
tear of components, consumables and electronic
components.
|
|
19.1
|
During
the warranty period and during the term of the operation and
maintenance
contract, the Contractor will provide an annual generation guarantee
of
5.50 lakhs units per WEG per year (“Assured Generation”) with a permitted
variation of up to 10% due to wind pattern variations from the
data
published by MNES/IITM/KREDL.
|
|
19.2
|
If
the average of the aggregate actual generation is below the Assured
Generation during the warranty period and during the term of
the operation
and maintenance contract, the Contractor undertakes to reimburse
the
shortfall at Rs.3.40 (prevailing KPTCL Power Purchase Agreement
rate or
any higher rate as stipulated in the power purchase agreement)
per unit to
the Employer.
|
|
19.3
|
To
substantiate the above, the Contractor will provide a personal
guarantee
of CMD & ED, being Mr. Marimuthu of the Contractor to the Employer in
a form and content acceptable to
Employer.
|
|
20.1
|
The
Contractor shall disclose all such required or necessary confidential
and
other information as the Employers representative may reasonably
require
in order to verify the Contractor’s compliance with the Agreement.
|
|
20.2
|
The
Parties shall treat the details of the Agreement as private and
confidential, except to the extent necessary to carry out obligations
under it or to comply with applicable Laws. The Parties shall
not publish,
permit to be published, or disclose any particulars of the Works
in any
trade or technical paper or elsewhere without the previous agreement
of
the other Party. Provided however that the Employer may publish
or permit
to be published or disclose the Agreement, without the consent
of the
Contractor, to comply with U.S Securities and Exchange Commission
rules
and regulations.
|
|
21.1
|
Only
during the period of continuous Operation and Maintenance services
by the
Contractor, the Contractor shall indemnify and hold harmless
the Employer,
any of its directors, officers, employees, agents or assignees,
against
and from all claims, damages, losses and expenses (including
legal fees
and expenses) in respect of
|
|
21.1.1
|
bodily
injury, sickness, disease or death, of any person whatsoever
arising out
of or in the course of or by reason of the Contractor’s design (if any),
the execution and completion of the Works and the remedying of
any
defects, unless directly and solely attributable to any negligence,
willful act or willful breach of the Agreement by the Employer,
and
|
|
21.1.2
|
damage
to or loss of any property, real or personal, to the extent that
such
damage or loss:
|
|
(a)
|
arises
out of or in the course of or by reason of the Contractor’s design, the
execution and completion of the Works and the remedying of any
defects,
and
|
|
(b)
|
is
attributable to any negligence, willful act or breach of the
Agreement by
the Contractor, any of its directors, officers, employees, agents
or
assignees.
|
|
21.2
|
Contractor
shall, indemnify and hold harmless Employer, its partner, its
officers,
employees, agents, affiliates and representative from and against
any and
all direct actual and indirect damages, liabilities, fines, penalties,
as
maybe payable under applicable law arising out of, resulting
from, or
relating to the operation of the wind farm or negligence or misconduct
of
the Contractor in performing or failing to perform its obligations
under
this Operations, Maintenance and Security Services Agreement
detailed in
Schedule 5.
|
|
21.3
|
Employer
agrees that in case of any loss or damage to the WEGs arising
due to
reasons outside the scope of the Operations, Maintenance and
Services
Agreement , Contractor will not be made liable to make good such
losses
provided that Contractor has not contributed in any respect to
such loss
or damage. Contractor shall not be liable in case of any loss
or damage
caused to WEGs by reason of natural calamities, act of God and
Force
Majeure. Contractor will be held liable for loss/damages due
to its
negligence, omissions and failure to perform its contractual
obligations
|
|
21.4
|
The
Employer shall indemnify and hold harmless the Contractor, any
of its
directors, officers, employees, agents or assignees, against
and from all
claims, damages, losses and expenses (including legal fees and
expenses)
in respect of bodily injury, sickness, disease or death, which
is directly
and solely attributable to any negligence, willful act or willful
breach
of the Agreement by the Employer, any of its directors, officers,
employees, agents or assignees.
|
|
22.1
|
The
Contractor shall undertake per Schedule 5 the Operation Services,
Maintenance Services and Security Services of the 24 MW Wind
Farm to be
installed at Chitradurga District, Karnataka at the rate of Rs1,12,500
per
WEG per year from the date of commissioning of that WEG with
an annual
escalation of 5 % on the above amount after the expiration of
two years
from the date of commissioning of that
WEG.
|
|
22.2
|
The
Contractor will impart training to nominated persons of the Employer,
as
and when required.
|
|
23.1
|
The
Employer may assign/ Novate the entire benefit and obligations
of the
Agreement to its subsidiaries only without prior written consent
of the
Contractor but with prior notice and subject to the rights of
the
contractor for continuously implementing the project till completion
without hindrance. Upon completion of the entire project by the
contractor, the employer has the right to novate /assign the
WEGs to any
parties subject to the settlement of dues payable to the contractor,
if
any.
|
|
23.2
|
The
Contractor shall not assign or purport to assign the benefit
of the
Agreement without the prior written consent of the
Employer.
|
|
24.1.1
|
Any
notice or other communication to be given under the Agreement
shall be in
writing and may be delivered in person or sent by fax or by recognized
international mail delivery such as DHL registered or certified
mail
addressed to the relevant Party as follows to the Contractor
at:
|
|
(a)
|
if
delivered in person, at the time of delivery; or
|
|
(b)
|
if
sent by fax, at the expiration of two hours after the time of
dispatch, if
dispatched before 3.00 p.m. Indian Standard Time on any business
day, and
in any other case at 10.00 a.m. Indian Standard Time on the next
business
day following the date of dispatch.
|
|
24.1.3
|
In
proving service of a notice or document it shall be sufficient
to prove
that delivery was made or that the fax was properly addressed
and
sent.
|
|
24.2
|
Governing
Law: This Agreement shall be governed in accordance with the
laws of
India;
|
|
24.3
|
Integration:
This
Agreement and the documents referenced in Clause 3 is the
entire agreement
between the parties and supersedes any other agreement or
understanding
between the parties, whether oral or
written.
|
|
24.4.
|
Costs:
Save as otherwise provided in the Agreement, each Party shall
pay the
costs and expenses incurred by it in connection with the entering
into and
completion of the Agreement.
|
|
24.5.
|
Severability:
The provisions contained in the Agreement shall be enforceable
independent
of each of the others and its validity shall not be affected
if any of the
other provisions are invalid. If any of those provisions are
void but
would be valid if some part of the provision were deleted, the
provision
in question shall apply with such modification as may be necessary
to make
it valid.
|
|
24.6
|
Survival:
In the event of termination of the Agreement notwithstanding
anything
mentioned herein, Clauses which by their nature survive termination
shall
survive the termination of the
Agreement.
|
|
24.7.
|
Amendment:
No variation, waiver, amendment or modification of any of the
terms of the
Agreement shall be valid, unless it is made in writing and mutually
agreed
upon by the Parties. Provided however, the Parties may mutually
decide in
writing to extend the scope of the Agreement .
|
|
24.8.
|
Partnership:
Nothing in the Agreement shall be deemed to constitute a partnership
between the Parties or constitute either Party as the agent of
the other
Party for any purpose.
|
|
24.9.
|
Independent
Contractor: CWEL shall perform its duties under this Agreement
as an
independent contractor, and not as an agent of IGC.
|
|
24.10
|
Waiver:
No failure or delay by either Party in exercising any right,
power or
remedy under the Agreement shall operate as a waiver thereof,
nor shall
any single or partial exercise of the same preclude any further
exercise
thereof or the exercise of any other right, power or remedy.
Without
limiting the foregoing, no waiver by either Party of any breach
of any
provision of the Agreement shall be deemed to be a waiver of
any
subsequent breach of that or any other provision of the Agreement
.
|
|
24.11
|
Covenants
Reasonable: The Parties agree that, having regard to all the
circumstances, the covenants contained herein are reasonable
and necessary
for the protection of the Parties. If any such covenant is held
to be void
as going beyond what is reasonable in all the circumstances,
but would be
valid if amended as to scope or duration or both, the covenant
will apply
with such minimum modifications regarding its scope and duration
as may be
necessary to make it valid and
effective.
|
|
24.12
|
Counter-Parts:
Each Party shall execute one copy of the Agreement in
original.
|
|
24.13
|
Whole
Agreement: As on the date of the Agreement, the Agreement contains
the
whole agreement between the Parties relating to the transactions
contemplated by the Agreement and supersedes all previous agreements
between the Parties relating to these
transactions.
|
|
24.14
|
No
Implied Representation: Each of the Parties acknowledges that,
in agreeing
to enter into the Agreement , it has not relied on any representation,
warranty, collateral contract or other assurance except those
set out in
the Agreement and the documents referred to in made by or on
behalf of the
other Party before the execution of the
Agreement.
|
|
24.15
|
Without
Prejudice: The Parties agree that the rights and remedies of
the Parties
hereunder are in addition to their rights at law or equity.
|
|
24.16
|
Further
Assurance: Each Party agrees to do all such actions, including
execution
of all such deeds and documents, as may be reasonable required
by the
other Party to give effect to the transaction contemplated in
the
Agreement.
|
|
25.1.
|
The
Contractor will not be responsible, if during the continuance
of this
Agreement , the performance in whole or part of any obligation
under the
Agreement shall be prevented or delayed by any of the following
conditions:
25.1.1 Fire,
floods, epidemic, earthquake, storms, heavy winds, untimely
rains,
quarantine restrictions, etc.
25.1.2. War,
embargo, invasion, hostility, riots, acts of public enmity,
sabotages,
explosions, strikes, lockouts, revolution, act of god, acts
of civil
commotion etc.
25.1.3.
Government
orders and / or restrictions, changes in the government's policy
etc.
25.1.4. In
such a case neither party shall be entitled to cancel the
Agreement nor
shall any claims be made for such damages against the other
party in
respect of such delay or non-performance and the performance and
delivery of the Agreement will be resumed as soon as practicable
after
such eventuality has come to an end or ceased to exist.
|
|
26.1.
|
In
the event of any dispute or difference between the Parties arising
out of
relating to this Agreement (“Dispute”), the Parties shall make endeavors
to settle the “Dispute” amicably.
|
|
26.2.
|
If
within 30 days of the Dispute, there is no amicable settlement,
the
Dispute shall, at the request of either Party, be referred to
arbitration
under the rules (“Rules”) of the International Arbitration Association
before an arbitrator who shall be appointed by the Parties by
mutual
consent. In the event that the Parties are unable to mutually
agree to the
appointment of an arbitrator within fifteen (15) days of one
of the Party
to the Dispute notifying its intention to refer the Dispute to
arbitration
(“Arbitration Notice”), each Party to the dispute shall appoint one person
as the proposed arbitrator, who has the relevant expertise given
the
nature of the Dispute, within fifteen (15) days of the issuance
of the
Arbitration Notice and the appointed arbitrators shall appoint
the final
arbitrator who shall act as the presiding arbitrator. The place
of the
arbitration shall be Bangalore/Coimbatore /Singapore and the
language of
the arbitration shall be English.
|
|
26.3.
|
Notwithstanding
the foregoing, the Parties agree that any of them may seek interim
measures including injunctive relief in relation to the provisions
of this
agreement or the Parties' performance of it from any court of
competent
jurisdiction. Each Party shall co-operate in good faith to expedite
(to
the maximum extent practicable) the conduct of any arbitral proceedings
commenced under this Agreement.
|
| 26.4. | The costs and expenses of the arbitration, including, without limitation, the fees of the arbitration and the Arbitrator, shall be borne equally by each Party to the dispute or claim and each Party shall pay its own fees, disbursements and other charges of its counsel, except as may be otherwise determined by the arbitrators. The arbitrators would have the power to award interest on any sum awarded pursuant to the arbitration proceedings and such sum would carry interest, if awarded, until the actual payment of such amounts. |
|
26.5
|
Any
award made by the arbitrators shall be final and binding on ach
of the
Parties that were parties to the dispute subject to the rights
of appeal.
The Parties expressly agree to waive the applicability of any
Laws and
regulations that would otherwise give the right to appeal the
decisions of
the arbitrators so that there shall be no appeal to any court
of Law for
the award of the arbitrators, except a Party shall not challenge
or resist
any enforcement action taken by any other Party in any court
of Law in
whose favour an award of the arbitrators was
given.
|
|
27.1.
|
In
the event of litigation to enforce the provisions of this Agreement,
the
prevailing party in such litigation shall be entitled to reasonable
attorney’s fees as fixed by the Court from the opposite party.
|
|
SIGNED
by:
|
SIGNED
by:
|
|
For
INDIA
GLOBALIZATION CAPITAL INC
RAM
MUKUNDA
CHIEF
EXECUTIVE OFFICER & PRESIDENT
|
For
CHIRANJJEEVI WIND ENERGY LIMITED
R.V.S.MARIMUTHU
CHAIRMAN
& MANAGING DIRECOTR
|
|
For
ARUL MARIAMMAN TEXTILES LIMITED
M.A.KANAGARAJ
DIRECTOR
|
|
|
FOR
MARUDHAVEL INDUSTRIES LIMITED
K.KUMARAVEL
DIRECTOR
|
|
|
Witness:
|
Witness:
|
|
Name:
|
Name:
|
|
Address:
|
Address:
|
|
Date:
|
Date:
|
|
1.
|
Amendment
to Clause 11.3– Clause 11.3 is hereby amended in its entirety to read as
follows:
|
|
2.
|
Amendment
to Clause 13.1 – Clause 13.1 is hereby amended in its entirety to read as
follows:
|
|
3.
|
Except
to the extent specifically modified by this Amendment, all the
terms of
the Agreement shall survive and continue to remain valid and
binding on
the Parties.
|
|
SIGNED
by: /s/ Ram
Mukunda
|
SIGNED
by: /s/ R.V.S.
Marimuthu
|
|
For
INDIA GLOBALIZATION CAPITAL INC.
RAM
MUKUNDA
CHIEF
EXECUTIVE OFFICER & PRESIDENT
|
For
CHIRANJJEEVI WIND ENERGY LIMITED
R.V.S.MARIMUTHU
CHAIRMAN
& MANAGING DIRECOTR
|
|
For
ARUL MARIAMMAN TEXTILES LIMITED
/s/
M.A.
Kanagaraj
M.A.KANAGARAJ
DIRECTOR
|
|
|
FOR
MARUDHAVEL INDUSTRIES LIMITED
/s/
K.
Kumaravel
K.KUMARAVEL
DIRECTOR
|
|
|
Witness:
|
Witness:
|
|
Name:
|
Name:
|
|
Address:
|
Address:
|
|
Date:
|
Date:
|
|
ARTICLE
1.
|
217
|
|
|
ARTICLE
2.
|
217
|
|
|
ARTICLE
3.
|
221
|
|
|
ARTICLE
4.
|
221
|
|
|
ARTICLE
5.
|
233
|
|
|
ARTICLE
6.
|
225
|
|
|
ARTICLE
7.
|
226
|
|
|
ARTICLE
8.
|
226
|
|
|
ARTICLE
9.
|
228
|
|
|
ARTICLE
10.
|
229
|
|
|
ARTICLE
11.
|
230
|
|
|
ARTICLE
12.
|
231
|
|
|
ARTICLE
13.
|
231
|
|
|
ARTICLE
14.
|
232
|
|
|
ARTICLE
15.
|
232
|
|
|
ARTICLE
16.
|
233
|
|
|
ARTICLE
17.
|
233
|
|
|
ARTICLE
18.
|
234
|
|
|
ARTICLE
19.
|
234
|
|
|
ARTICLE
20.
|
234
|
|
|
ARTICLE
21.
|
234
|
|
ARTICLE
1.
|
ESTABLISHMENT,
PURPOSE, AND DURATION
|
|
ARTICLE
2.
|
DEFINITIONS
|
|
(a)
|
“Affiliate”
shall mean any corporation or other entity (including, but not
limited to,
a partnership or limited liability company) that is affiliated
with the
Company through stock or equity ownership such that it controls
or is
controlled by, or is under common control with, the
Company.
|
|
(b)
|
“Agreement”
means an agreement entered into by each Participant and the Company,
setting forth the terms and provisions applicable to Awards granted
to
Participants under this Plan.
|
|
(c)
|
“Award”
means, individually or collectively, a grant under this Plan
of Incentive
Stock Options, Nonqualified Stock Options, Stock Appreciation
Rights,
Restricted Stock, Restricted Stock Units, Performance Shares,
Performance
Units, Other Stock-Based Awards and Cash-Based
Awards.
|
|
(d)
|
“Beneficial
Owner” or “Beneficial Ownership” shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and
Regulations
under the Exchange Act.
|
|
(e)
|
“Board”
or “Board of Directors” means the Board of Directors of the
Company.
|
|
(f)
|
“Cause”
means (i) the same definition for “cause” set forth in any employment
agreement between the Participant and the Company, Subsidiary
and/or
Affiliate in effect when the event(s) occur, or, (ii) in the
absence of
such an employment agreement, the Participant’s conduct that is (A) the
Participant’s engaging in any act or omission in the capacity of his or
her employment with the Company, Subsidiary and/or Affiliate
constituting
dishonesty, theft, fraud, embezzlement, moral turpitude or other
wrongdoing or malfeasance; or, (B) the Participant’s conviction of a
felony under federal or state law; or, (C) the Participant’s engaging in
any act or omission constituting gross misuse of his or her authorities,
gross or continual dereliction of his or her duties to the Company,
Subsidiary and/or Affiliate, or that is materially injurious
or
embarrassing to any such entity’s business, operations or reputation; or,
(D) the Participant breaching the noncompetition, nonsolicitation,
or
confidentiality provisions of any written agreement with the
Company,
Subsidiary and/or Affiliate prohibiting such conduct. Solely
for purposes of this Plan, the Plan Administrator may use the
designation
of “Cause,” or without “Cause,” determined by the Company (or any
subsidiary that is the “employer” of the Participant) or the Plan
Administrator may make an independent designation of “Cause” with respect
to employment termination in accordance with the terms of this
Plan. The designation of the Plan Administrator with respect to
“Cause” under this Plan shall not be used for any other purpose and shall
not be used against either the Company or any
Participant.
|
|
(g)
|
“Change
in Control” has meaning set forth in Article 15 of
this Plan.
|
|
(h)
|
“Code”
means the Internal Revenue Code of 1986, as amended from time
to time, or
any successor act thereto.
|
|
(i)
|
“Committee”
means the Compensation Committee of the Board of Directors appointed
by
the Board to administer the Plan with respect to grants of Awards,
as
specified in Article 3, and to perform the functions set
forth therein; or in the absence of such appointment, the Board
itself.
|
|
(j)
|
“Common
Stock” means the common stock of the
Company.
|
|
(k)
|
“Company”
means India Globalization Capital, Inc., a Maryland corporation,
or any
successor thereto as provided in Article
20.
|
|
(l)
|
“Covered
Employee” means any key Employee who is or may become a “Covered
Employee,” as defined in Code Section 162(m), and who is designated,
either as an individual Employee or class of Employees, by the
Committee
within the shorter of: (i) ninety (90) days after the beginning of
the Performance Period, or (ii) twenty-five percent (25%) of
the
Performance Period has elapsed, as a “Covered Employee” under this Plan
for such applicable Performance
Period.
|
|
(m)
|
“Detrimental
Activity” means the violation of any agreement between the Company,
Subsidiary and/or Affiliate and the Participant pertaining to
(a) the
disclosure of confidential information or trade secrets of any
such
entity, (b) the solicitation of employees, customers, suppliers,
licensees, licensors or contractors of any such entity, or (c)
the
performance of competitive services with respect to the business
of the
Company, Subsidiary and/or Affiliate; provided, that the Committee
may
provide in the Agreement that only certain of the restrictions
provided
above apply for purposes of the
Agreement.
|
|
(n)
|
“Director”
means any individual who is a member of the Board of Directors
of the
Company or any Parent, Subsidiary, or Affiliate and who is not
an
Employee.
|
|
(o)
|
“Disability”
shall have the meaning ascribed in such term in the Company’s long-term
disability plan covering the Participant, or in the absence of
such plan,
a meaning consistent with Code Section 22(e)(3), unless otherwise
specified in an employment agreement between the Company, Subsidiary
and/or Affiliate and a Participant. The existence of Disability
shall be determined by the Committee in good faith. To the
extent an Award constitutes “deferred compensation” subject to Code
Section 409A and provides for payment upon disability, the Agreement
shall
define “disability” pursuant to Treasury Regulation Section
1.409A-3(i)(4).
|
|
(p)
|
“Employee”
means any employee of the Company or any Parent, Subsidiary,
or
Affiliate.
|
|
(q)
|
“Exchange
Act” means the Securities Exchange Act of 1934, as amended from
time
to time, or any successor act
thereto.
|
|
(r)
|
“Fair
Market Value” shall be determined as
follows:
|
|
(i)
|
If,
on the relevant date, the Shares are traded on a national or
regional
securities exchange or on The American Stock Exchange (“AMEX”) and closing
sale prices for the Shares are customarily quoted, on the basis
of the
closing sale price on the principal securities exchange on which
the
Shares may then be traded or, if there is no such sale on the
relevant
date, then on the immediately preceding day on which a sale was
reported;
|
|
(ii)
|
If,
on the relevant date, the Shares are not listed on any securities
exchange
or traded on AMEX, but nevertheless are publicly traded and reported
on
AMEX without closing sale prices for the Shares being customarily
quoted,
on the basis of the mean between the closing bid and asked quotations
in
such other over-the-counter market as reported by AMEX; but,
if there are
no bid and asked quotations in the over-the-counter market as
reported by
AMEX on that date, then the mean between the closing bid and
asked
quotations in the over-the-counter market as reported by AMEX
on the
immediately preceding day such bid and asked prices were quoted;
and
|
|
(iii)
|
If,
on the relevant date, the Shares are not publicly traded as described
in
(i) or (ii), on the basis of the good faith determination of
the
Committee.
|
|
(s)
|
“Grant
Price” means the price established when the Committee approves the
grant of a SAR pursuant to Article 7, used to determine
whether there is any payment due upon exercise of the
SAR.
|
|
(t)
|
“Incentive
Stock Option” or “ISO” means an option to purchase Shares
granted under Article 6 to an Employee which is
designated as an Incentive Stock Option and is intended to meet
the
requirements of Section 422 of the Code, or any successor
provision.
|
|
(u)
|
“Insider”
shall mean an individual who is, on the relevant date, an officer
or a
director, or a ten percent (10%) Beneficial Owner of any class
of the
Company’s equity securities that is registered pursuant to Section 12
of
the Exchange Act or any successor provision, as “officer” and “director”
are defined under Section 16 of the Exchange
Act.
|
|
(v)
|
“Nonqualified
Stock Option” or “NQSO” means an option to purchase Shares
granted under Article 6, and which is not intended to
meet the requirements of Code Section 422 or which fails to meet
such
requirements.
|
|
(w)
|
“Non-Tandem
SAR” means a SAR that is granted independently of any Option,
as
described in Article
7.
|
|
(x)
|
“Option”
means an Incentive Stock Option or a Nonqualified Stock Option,
as
described in Article
6.
|
|
(y)
|
“Option
Price” means the price at which a Share may be purchased by a
Participant pursuant to an Option, as determined by the
Committee.
|
|
(z)
|
“Other
Stock-Based Award” means an equity-based or equity-related Award not
otherwise described by the terms of this Plan, granted pursuant
to
Article 10.
|
|
(aa)
|
“Parent”
means a “parent corporation,” whether now or hereafter existing as defined
in Code Section 424(e).
|
|
(bb)
|
“Participant”
means an Employee, a Director, consultant or other person who
performs
services for the Company or a Parent, Subsidiary, or Affiliate
of the
Company, who has been granted an Award under the Plan which is
outstanding.
|
|
(cc)
|
“Performance-Based
Compensation” means compensation under an Award that is intended to
satisfy the requirements of Code Section 162(m) for certain
performance-based compensation paid to Covered
Employees. Notwithstanding the foregoing, nothing in this
Plan shall be construed to mean that an Award which does not
satisfy the
requirements for performance-based compensation under Code
Section 162(m) does not constitute performance-based compensation for
other purposes, including Code
Section 409A.
|
|
(dd)
|
“Performance-Based
Exception” means the exception for Performance-Based Compensation from
the tax deductibility limitations of Code
Section 162(m).
|
|
(ee)
|
“Performance
Measures” means measures as described in Article 11
on which the performance goals are based and which are approved
by the
Company’s shareholders pursuant to this Plan in order to qualify Awards
as
Performance-Based Compensation.
|
|
(ff)
|
“Performance
Period” means the period of time during which the performance goals
must be met in order to determine the degree of payout and/or
vesting with
respect to an Award.
|
|
(gg)
|
“Performance
Share” means an Award under Article 9 and subject to
the terms of this Plan, denominated in fully paid Shares, the
value of
which at the time it is payable is determined as a function of
the extent
to which corresponding performance criteria or Performance Measure(s),
as
applicable, have been achieved.
|
|
(hh)
|
“Performance
Unit” means an Award under Article 9 and subject to
the terms of this Plan, denominated in units, the value of which
at the
time it is payable is determined as a function of the extent
to which
corresponding performance criteria or Performance Measure(s),
as
applicable, have been achieved.
|
|
(ii)
|
“Period
of Restriction” means the period when Restricted Stock or Restricted
Stock Units are subject to a substantial risk of forfeiture (based
on the
passage of time, the achievement of performance goals, or the
occurrence
of other events as determined by the Committee, in its
discretion).
|
|
(jj)
|
“Person”
shall have the meaning ascribed to such term in Section 3(a)(9)
of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including
a
“group” as defined in Section 13(d)
thereof.
|
|
(kk)
|
“Plan”
means this India Globalization Capital, Inc. Omnibus Incentive
Plan,
including any amendments thereto.
|
|
(ll)
|
“Restricted
Stock” means an Award of Common Stock granted in accordance with
the
terms of Article 8 and the other provisions of the Plan,
and which is nontransferable and subject to a substantial risk
of
forfeiture. Shares of Common Stock shall cease to be Restricted
Stock when, in accordance with the terms hereof and the applicable
Agreement, they become transferable and free of substantial risk
of
forfeiture.
|
|
(mm)
|
“Restricted
Stock Unit” means an Award to a Participant pursuant to
Article 8, except that no Shares are actually awarded
to
the Participant on the Grant Date.
|
|
(nn)
|
“Shares”
means the shares of Common Stock of the Company (including any
new,
additional or different stock or securities resulting from the
changes
described in Section 4.2).
|
|
(oo)
|
“Stock
Appreciation Right” or “SAR” means an Award, designated as a
SAR, pursuant to the terms of Article 7
herein.
|
|
(pp)
|
“Subsidiary”
means (i) in the case of an ISO, any company during any period
in which it
is a “subsidiary corporation” (as that term is defined in Code
Section 424(f)), and (ii) in the case of all other Awards, in
addition to a “subsidiary corporation” as defined above, a partnership,
limited liability company, joint venture or other entity in which
the
Company as fifty percent (50%) or more of the voting power or
equity
interests.
|
|
(qq)
|
“Tandem
SAR” means a SAR that is granted in connection with a related
Option
pursuant to Article 7, the exercise of which shall
require forfeiture of the right to purchase a Share under the
related
Option (and when a Share is purchased under the Option, the Tandem
SAR
shall similarly be forfeited).
|
|
(rr)
|
“Third-Party
Service Provider” means any consultant, agent, advisor, or independent
contractor who renders services to the Company, any Parent, any
Subsidiary, or an Affiliate that: (i) are not in connection with
the offer
or sale of the Company’s securities in a capital raising transaction; and
(ii) do not directly or indirectly promote or maintain a market
for the
Company’s securities.
|
|
ARTICLE
3.
|
ADMINISTRATION
|
|
ARTICLE
4.
|
SHARES
SUBJECT TO THE PLAN
|
|
(a)
|
The
grant of an Award shall reduce the Shares available for grant
under the
Plan by the number of Shares subject to the
Award.
|
|
(b)
|
While
an Award is outstanding, Shares subject to the Award shall be
counted
against the authorized pool of Shares, regardless of vested
status.
|
|
(c)
|
Any
Shares related to Awards which terminate by expiration, forfeiture,
cancellation, or otherwise without the issuance of such Shares,
are
settled in cash in lieu of Shares, or are exchanged with the
Committee’s
permission, prior to the issuance of Shares, for Awards not involving
Shares, shall be available again for grant under this
Plan.
|
|
(d)
|
If
the Option Price of any Option granted under this Plan is satisfied
by
tendering Shares to the Company (by either actual delivery or
by
attestation and subject to Section 6.7),
or if a SAR is exercised, only the number of Shares issued, net
of the
Shares tendered, if any, will be delivered for purposes of determining
the
maximum number of Shares available for delivery under this
Plan.
|
|
(a)
|
Options. The
maximum aggregate number of Shares subject to Options granted
in any one
Plan Year to any one Participant shall be three million (3,000,000)
as
adjusted pursuant to Sections 4.4 and/or
17.2.
|
|
(b)
|
SARs. The
maximum number of Shares subject to Stock Appreciation Rights
granted in
any one Plan Year to any one Participant shall be three million
(3,000,000), as adjusted pursuant to Sections 4.4 and/or
17.2.
|
|
(c)
|
Restricted
Stock Units or Restricted Stock. The maximum aggregate
grant with respect to Awards of Restricted Stock Units or Restricted
Stock
that a Participant may receive in any one Plan Year shall be
three million
(3,000,000) Shares, as adjusted pursuant to Sections 4.4 and/or
17.2,
or equal to the value of three million (3,000,000) Shares,
as adjusted
pursuant to Sections 4.4 and/or
17.2.
|
|
(d)
|
Performance
Units or Performance Shares. The maximum aggregate
Award of Performance Units or Performance Shares that a Participant
may
receive in any one Plan Year shall be three million (3,000,000)
Shares, as
adjusted pursuant to Sections 4.4 and/or
17.2,
or equal to the value of three million (3,000,000) Shares, as
adjusted
pursuant to Sections 4.4 and/or
17.2,
determined as of the date of vesting or payout, as
applicable.
|
|
(e)
|
Cash-Based
Awards. The maximum aggregate amount awarded or
credited with respect to Cash-Based Awards to any one Participant
in any
one Plan Year may not exceed the greater of the value of eighteen million
dollars ($18,000,000) or three million (3,000,000) Shares, as
adjusted
pursuant to Sections 4.4 and/or
17.2,
determined as of the date of vesting or payout, as
applicable.
|
|
(f)
|
Other
Stock-Based Awards. The maximum aggregate grant with
respect to Other Stock-Based Awards pursuant to Section 10.2 in
any one Plan Year to any one Participant shall be three
million (3,000,000) Shares, as adjusted pursuant to
Sections 4.4 and/or
17.2.
|
|
ARTICLE
5.
|
ELIGIBILITY
AND PARTICIPATION
|
|
ARTICLE
6.
|
STOCK
OPTIONS
|
|
ARTICLE
7.
|
STOCK
APPRECIATION RIGHTS
|
|
(a)
|
The
excess of the Fair Market Value of a Share on the date of exercise
over
the Grant Price; by
|
|
(b)
|
The
number of Shares with respect to which the SAR is
exercised.
|
|
ARTICLE
8.
|
RESTRICTED
STOCK AND RESTRICTED STOCK
UNITS
|
|
(a) The
Participant shall not be entitled to delivery of a certificate
until the
expiration or termination of the Period of Restriction for the
Shares
represented by such certificate and the satisfaction of any and
all other
conditions prescribed in the Agreement or by the Committee or
Board;
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|
(b) None
of the Shares of Restricted Stock may be sold, transferred, assigned,
pledged or otherwise encumbered or disposed of during the Period
of
Restriction and until the satisfaction of any and all other conditions
prescribed in the Agreement or by the Committee or Board (including
satisfaction of any applicable tax withholding obligations);
and
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(c) All
of the Shares of Restricted Stock that have not vested shall
be forfeited
and all rights of the Participant to such Shares of Restricted
Stock shall
terminate without further obligation on the part of the Company,
unless
the Participant has remained an employee of (or Director of or
active
Third-Party Service Provider providing services to) the Company
or any of
its Subsidiaries, until the expiration or termination of the
Period of
Restriction and the satisfaction of any and all other conditions
prescribed in the Agreement or by the Committee or Board applicable
to
such Shares of Restricted Stock. Upon the forfeiture of any
Shares of Restricted Stock, such forfeited Shares shall be transferred
to
the Company without further action by the Participant and shall,
in
accordance with Section 4.2,
again be available for grant under the Plan. If the Participant
paid any amount for the Shares of Restricted Stock that are forfeited,
the
Company shall pay the Participant the lesser of the Fair Market
Value of
the Shares on the date they are forfeited or the amount paid
by the
Participant.
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ARTICLE
9.
|
PERFORMANCE
UNITS/PERFORMANCE SHARES
|
|
ARTICLE
10.
|
CASH-BASED
AWARDS AND OTHER STOCK-BASED
AWARDS
|
|
ARTICLE
11.
|
PERFORMANCE
MEASURES
|
|
(a)
|
Net
earnings or net income (before or after
taxes);
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|
(b)
|
Earnings
per share (basic or fully diluted);
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|
(c)
|
Net
sales or revenue growth;
|
|
(d)
|
Net
operating profit;
|
|
(e)
|
Return
measures (including, but not limited to, return on assets, capital,
invested capital, equity, sales, or
revenue);
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|
(f)
|
Cash
flow (including, but not limited to, operating cash flow, free
cash flow,
cash flow return on equity, and cash flow return on
investment);
|
|
(g)
|
Earnings
before or after taxes, interest, depreciation, and/or
amortization;
|
|
(h)
|
Gross
or operating margins;
|
|
(i)
|
Productivity
ratios;
|
|
(j)
|
Share
price (including, but not limited to, growth measures and total
shareholder return);
|
|
(k)
|
Expense
targets;
|
|
(l)
|
Leverage
targets (including, but not limited to, absolute amount of consolidated
debt, EBITDA/consolidated debt ratios and/or debt to equity
ratios);
|
|
(m)
|
Credit
rating targets;
|
|
(n)
|
Margins;
|
|
(o)
|
Operating
efficiency;
|
|
(p)
|
Market
share;
|
|
(q)
|
Developing
new products and lines of revenue;
|
|
(r)
|
Reducing
operating expenses;
|
|
(s)
|
Developing
new markets;
|
|
(t)
|
Meeting
completion schedules;
|
|
(u)
|
Developing
and managing relationships with regulatory and other governmental
agencies;
|
|
(v)
|
Managing
cash;
|
|
(w)
|
Managing
claims against the Company, including litigation;
and
|
|
(x)
|
Identifying
and completing strategic
acquisitions
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|
ARTICLE
12.
|
DIVIDEND
EQUIVALENTS
|
|
ARTICLE
13.
|
BENEFICIARY
DESIGNATION
|
|
ARTICLE
14.
|
RIGHTS
OF PARTICIPANTS
|
|
ARTICLE
15.
|
CHANGE
IN CONTROL AND
OTHER
REORGANIZATIONS
|
|
(a)
|
provide
that all outstanding Options shall be assumed or substituted
by the
successor corporation;
|
|
(b)
|
in
the event of a Change in Control or merger pursuant to which
holders of
the Company's common stock will receive a cash payment for
each share
surrendered in the merger, make or provide for a cash payment
to the
Participants equal to the difference between the merger price
times the
number of shares of the Company's common stock subject to such
outstanding
Options, and the aggregate Option Price of all such outstanding
Options,
in exchange for the termination of such
Options;
|
|
(c)
|
upon
written notice to a Participant, (i) provide that the Participant’s
unexercised Options or Awards will terminate immediately prior
to the
consummation of such transaction unless exercised by the Participant;
or
(ii) terminate all unexercised outstanding Options immediately
prior to
the consummation of such transaction unless exercised by the
Participant;
|
|
(d)
|
provide
that all or any outstanding Options shall become exercisable
in full
immediately prior to such event;
and
|
|
(e)
|
provide
that outstanding Awards shall be assumed or substituted by
the successor
corporation, become realizable or deliverable, or restrictions
applicable
to an Award will lapse, in whole or in part, prior to or upon
the Change
in Control, merger or other reorganization event, as the case
may
be.
|
|
(a)
|
The
closing of the sale of all or substantially all of Company’s assets as an
entirety to any person or related group of persons other than
an existing
holder or existing holders of Company’s
equity;
|
|
(b)
|
The
merger or consolidation of Company with or into another entity
or the
merger or consolidation of another entity with or into Company,
in either
case with the effect that immediately after such transaction
the equity
holders of Company immediately prior to such transaction hold
less than a
majority in interest of the total voting power of the outstanding
voting
interests of the entity surviving such merger or consolidation;
or
|
|
(c)
|
The
closing of a transaction pursuant to which beneficial ownership
of more
than fifty percent (50%) of Company’s outstanding voting equity is
transferred to any person or related group of persons other
than an
existing holder or existing holders of Company’s
equity.
|
|
ARTICLE
16.
|
CANCELLATION
OF AWARDS
|
|
ARTICLE
17.
|
AMENDMENT,
MODIFICATION AND
TERMINATION
|
|
ARTICLE
18.
|
WITHHOLDING
|
|
ARTICLE
19.
|
INDEMNIFICATION
|
|
ARTICLE
20.
|
SUCCESSORS
|
|
ARTICLE
21.
|
GENERAL
PROVISIONS
|
|
(a)
|
Determine
which Affiliates and Subsidiaries shall be covered by this
Plan;
|
|
(b)
|
Determine
which Employees, Directors, and/or Third-Party Service Providers
outside
the United States are eligible to participate in this
Plan;
|
|
(c)
|
Modify
the terms and conditions of any Award granted to Employees and/or
Third-Party Service Providers outside the United States to comply
with
applicable foreign laws;
|
|
(d)
|
Establish
subplans and modify exercise procedures and other terms and procedures,
to
the extent such actions may be necessary or advisable. Any
subplans and modifications to Plan terms and procedures established
under
this Section 21.6 by the Committee shall be attached
to this Plan document as appendices;
and
|
|
(e)
|
Take
any action, before or after an Award is made, that it deems advisable
to
obtain approval or comply with any necessary local government
regulatory
exemptions or approvals.
|