PROSPECTUS

Dated: October 08, 2020

Please read Section 26 & 32 of the Companies Act, 2013
100% Book Built Issue

LIKHITHA INFRASTRUCTURE LIMITED

Our Company was incorporated under the provisions of the Companies Act, 1956 as “Likhitha Constructions Private Limited” on August 06, 1998, as a private
limited company vide Certificate of Incorporation issued by RoC, Hyderabad, Andhra Pradesh. Our Company’s name was subsequently changed to “Likhitha
Infrastructure Private Limited” pursuant to a Fresh Certificate of Incorporation consequent upon change of name dated March 30, 2011 issued by RoC, Hyderabad,
‘Andhra Pradesh, Subsequently, our Company was converted into a public limited company and the name of our Company changed to “Likhitha Infrastructure
Limited” pursuant to a shareholders’ resolution passed at the Extra-Ordinary General Meeting of our Company held on January 11, 2019 and a Fresh Certificate of
Incorporation dated February 12, 2019 was issued by the RoC, Hyderabad. The Corporate Identity Number of our Company is U45200TG1998PLC029911. For
details on change of name and registered office of our Company, please refer to chapter titled “History and Certain Corporate Matters” beginning on page 145 of this
Prospectus.

Registered office: Flat No. 701, Plot No.8-3-940 and 8-3-940/A to E, Tirumala Shah Residency, Yellareddy Guda, Ameerpet, Hyderabad-500073, Telangana, India,

Tel: +91 40-23752657, Contact Person: Mr. Santhosh Kumar Gunemoni
E-mail: cs@likhitha.in; Website: www.likhitha.co.in

 

 

 

FUT CUE N OM Ae nUTE aS

 

pee

PUBLIC ISSUE OF 51,00,000* EQUITY SHARES OF FACE VALUE OF RS. 10/- EACH OF LIKHITHA INFRASTRUCTURE LIMITED (THE
“COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF RS. 120/- PER EQUITY SHARE INCLUDING A SHARE PREMIUM OF RS. 110/-
PER EQUITY SHARE (THE “ISSUE PRICE”) AGGREGATING TO RS. 6,120.00 LAKHS (“THE ISSUE”). THE ISSUE WILL CONSTITUTE,
25.86% OF THE POST ISSUE PAID UP EQUITY SHARE CAPITAL OF OUR COMPANY.

Subject to finalization of basis of allotment

In terms of Rule 19(2)(b)(i) of the Securities Contracts (Regulations) Rules, 1957, as amended (the “SGRR”) the Issue was made for at least 25% of the post
paid-up Equity Share capital of our Company. The Issue is being made through the Book Building Process, in compliance with Regulation 6(1) of the Secur
Exchange Board of India (Issue Capital and Disclosure Requirements) Regulations, 2018, as amended (“SEBI ICDR Regulations”) wherein up to 1% of the Issue
‘was made available for allocation on a proportionate basis to Qualified Institutional Buyers (“QIBs”, and such portion, the “QIB Portion”). Further, not less than
64% of the Issue was made available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue was made available for
allocation to RIls (defined hereinafter) in accordance with SEBI ICDR Regulations, subject to valid Bids being received at or above the Issue Price. All Bidders
‘were required to participate in the Issue only through the Application Supported by Block Amount (“ASBA”) process by providing details of their respective bank
account (including UPI ID for RIls using UPI Mechanism) (UPI ID, Ris, and UPI Mechanism are defined hereinafter) wherein the Bid Amounts were blocked by
SCSBs or under the UPI Mechanism, as the case may be, to the extent of respective Bid Amounts. For details, please refer to “Issue Procedure” beginning on page
284 of this Prospectus.

‘This being the first issue of the Issuer, there has been no formal market for the securities of the Issuer. The face value of the equity shares is Rs. 10 each. The Issue
Price, Floor Price and Cap Price as determined and justified by our Company, in consultation with the BRLM, in accordance with the SEBI ICDR Regulations, as
stated under “Basis for Issue Price” on page 92 should not be indicative of the market price of Equity Shares after the Equity Shares are listed on the Stock
Exchanges. No assurance can be given regarding an active or sustained trading in the Equity Shares, nor regarding the price at which the Equity Shares will be traded
after listing

   

 

  

 

GENERAL RISKS
Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the
risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment.
decision, investors must rely on their own examination of our Company and the Issue including the risks involved. The Equity Shares issued in the Issue have
neither been recommended nor approved by Securities and Exchange Board of India (“‘SEBI”), nor does SEBI guarantee the accuracy or adequacy of the contents
of the Prospectus. Specific attention of the investors is invited to the chapter titled “Risk Factors” on page 31 of this Prospectus.

PSEA NONE
‘The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus contains all information with regard to our Company
and the Issue, which is material in the context of the Issue, that the information contained in this Prospectus is true and correct in all material aspects and is not
‘misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes
this Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.
LISTING
‘The Equity Shares offered through this Prospectus are proposed to be listed on BSE and NSE. Our Company has received in-principal approvals letter from BSE
and NSE for the listing of the Equity Shares pursuant to letters dated January 23, 2020 and February 19, 2020 respectively. For the purpose of this Issue, the
designated Stock Exchange will be BSE. A signed copy of the Red Herring Prospectus has been filed, and a signed copy of the Prospectus shall be filed with the
RoC in accordance with Section 26(4) of the Companies Act, 2013. For details of the material contracts and documents made available for inspection from the date
of the Red Herring Prospectus up to the Bid/ Issue Closing Date, see “Material Contracts and Documents for Inspection” on page 338 of this Prospectus.
RDU NNN PRS ee

 

 

 

 

 

 

 

 

 

 

UNISTONE CAPITAL PRIVATE LIMITED BIGSHARE SERVICES PRIVATE LIMITED
12, Floor no. 02, Shashank CHS Ltd, 1st Floor, Bharat Tin Works Building

Manmala Tank Road, (Opp. Vasant Oasis, Makwana Road,

‘Near Starcity Cinema Mahim, ‘Marol, Andheri (East), Mumbai 400059, India

+91 22 6263 8200
91 22 6263 8280

Mumbai 400 016, India.
‘Telephone: +91 9322997964

  

   

 

 

 

 

 

 

Email: mb@unistonecapital.com Email: ipo@bigsharconline.com
Investor grievance email: compliance @unistonecapital.com Investor grievance email: investor @bigshareonline.com
Contact Person: Mr. Brijesh Parekh Contact Person: Mr. Ashish Bhope
Website: www,unistonecapital.com Website: www bigsharconline.com
‘SEBI registration number: INM000012449 SEBI Registration Number: INR000001385
(CIN: U65999MH2019PTC330850 CIN: U99999MH1994PTCO76534U6
ISSUE PROGRAMME
ISSUE OPENED ON: TUESDAY, SEPTEMBER 29, 2020 ISSUE CLOSED ON: WEDNESDAY, OCTOBER 07, 2020"

 

* The Issue was scheduled ro close on October 01, 2020. In accordance with SEBI ICDR Regulations, pursuant to revision in the price band, the Bid’ Issue Period was extended by three (3)
working days
TABLE OF CONTENTS

SECTION I -GENERAL ....

DEFINITIONS AND ABBREVIATIONS..
CURRENCY CONVENTIONS, CURRENCY OF PRESENTATION, USE OF FINANCIAL,
INFORMATION, INDUSTRY AND MARKET DATA.
FORWARD LOOKING STATEMENTB.....
OFFER DOCUMENT SUMMARY...

SECTION II —- RISK FACTORS ..
SECTION III: INTRODUCTION.

THE ISSUE...
SUMMARY OF FINANCIAL INFORMATION
GENERAL INFORMATION
CAPITAL STRUCTURE ..
OBJECTS OF THE ISSUE
BASIS FOR ISSUE PRICE

 

 

 
 
 

 

 

 
  
 
 
 
 
 
  
 
 
 

SECTION IV —- ABOUT THE COMPANY ......

OUR INDUSTRY.
OUR BUSINESS
KEY INDUSTRY REGULATIONS AND POLICIES ..
HISTORY AND CERTAIN CORPORATE MATTERS.
OUR MANAGEMENT......
OUR PROMOTER AND PROMOTER GROUP.
OUR GROUP COMPANIEG..........
DIVIDEND POLICY......

 

 

 

SECTION V - FINANCIAL INFORMATION ...

RESTATED FINANCIAL STATEMENTS .
OTHER FINANCIAL INFORMATION.
CAPITALISATION STATEMENT...
MANAGEMENT?’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS ...
FINANCIAL INDEBTEDNESS

 

 

 

SECTION VI - LEGAL AND OTHER INFORMATION .....

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENT:
GOVERNMENT AND OTHER APPROVALS ..
OTHER REGULATORY AND STATUTORY DISCLOSURES

SECTION VII - ISSUE RELATED INFORMATION ..

TERMS OF THE ISSUE.
ISSUE STRUCTURE...
ISSUE PROCEDURE...
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES

 

  
 
 

 

 

 
 
 
 
  

 

SECTION VIII - MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION ....
SECTION IX - OTHER INFORMATION.......

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION...
DECLARATION ......

 
W%

SECTION I -GENERAL
DEFINITIONS AND ABBREVIATIONS

This Prospectus uses certain definitions and abbreviations which, unless the context otherwise indicates
or implies or unless otherwise specified, shall have the meaning as provided below. References to any
legislation, act, regulation, rules, guidelines or the Articles of Association, the Memorandum of
Association, or policies shall be to such legislation, act, regulation, rules, guidelines, documents or
policies as amended, supplemented, or re-enacted from time to time and any reference to a statutory
provision shall include any subordinate legislation made from time to time under that provision.

The words and expressions used in this Prospectus, but not defined herein shall unless the context
otherwise requires, have the meaning ascribed to such terms under the SEBI Regulations, the Companies
Act, the SCRA, the Depositories Act, and the rules and regulations made thereunder.

Notwithstanding the foregoing, the terms not defined but used in the chapters “Main Provisions of the
Articles of Association”, “Statement of Tax Benefits”, “Industry Overview”, “Basis for Issue Price”,
“Key Regulations and Policies in India”, “Financial Information”, “Outstanding Litigation and
Material Developments” and “Issue Procedure” will have the meaning ascribed to such terms in those

respective sections.

CONVENTIONAL OR GENERAL TERMS

Ma as bYotaa eC

“our Company” or “the| Likhitha Infrastructure Limited, a public limited company incorporated
Company” or “the Issuer” | under the Companies Act,1956, having its registered office at Flat No.701,
Plot No 8-3-940 and 8-3-940/A to E, Tirumala Shah Residency, Yellareddy
Guda, Ameerpet, Hyderabad 500 073, Telangana, India.

“we” or “us” or “our” Unless the context otherwise indicates or implies, refers to our Company.

 

 

 

 

 

ISSUE RELATED TERMS

Kai) bbytae ey)

Abridged Prospectus Abridged Prospectus to be issued under Regulation 34 of SEBI ICDR
Regulations and appended to the Application Form.

 

 

Acknowledgement Slip The slip or document issued by the Designated Intermediary to an
Applicant/ Bidder as proof of registration of the Bid cum Application Form.
Addendum The Addendum to the Corrigendum dated October 6, 2020 issued by the

Company and published in all editions of English national daily newspaper,
Business Standard, all editions of Hindi national daily newspaper, Business
Standard and in Telugu edition of the Telugu daily newspaper Nava
Telangana (Telugu being the regional language of Hyderabad, where our
Registered Office is located) each with wide circulation

 

Allot/ Allotment/ | Unless the context otherwise requires, allotment of the Equity Shares
Allotted pursuant to the Issue of the Equity Shares to the successful Applicants/
Bidders.

 

 

 

 
0

 

Term
Allotment Advice

bbYra eit)
A note or advice or intimation of Allotment sent to the successful
Applicants/ Bidders who have been or are to be Allotted Equity Shares after
the Basis of Allotment has been approved by the Designated Stock
Exchange.

 

 

by Blocked Amount
/ASBA

Allottee (s) A successful Applicant/ Bidder to whom the Equity Shares are being
Allotted.
Application Supported | An application, whether physical or electronic, used by ASBA Bidders, to

make a Bid by authorizing a SCSB to block the Bid Amount in the ASBA.
Account and will include applications made by RIIs using UPI Mechanism,
where the Bid Amount shall be blocked upon acceptance of UPI Mandate
Request by RIIs using UPI Mechanism

 

 

Applicant/ASBA Any prospective investor(s)/ applicant(s) in this Issue who made an
Applicant application pursuant to the terms of the Red Herring Prospectus
Application An indication to make an offer during the Issue Period by an Applicant,

pursuant to submission of Application Form, to subscribe for or purchase
our Equity Shares at the Issue Price including all revisions and
modifications thereto, to the extent permissible under the SEBI ICDR
Regulations.

 

Application Amount

The number of Equity Shares applied for and as indicated in the Application
Form multiplied by the price per Equity Share payable by the Applicants
on submission of the Application Form.

 

 

 

 

ASBA Account A bank account linked maintained by an ASBA Bidder with an SCSB, as
specified in the ASBA Form submitted by ASBA Bidder for blocking the
Bid Amount mentioned in the ASBA Form and includes the account of an
RIB which is blocked upon acceptance of a UPI Mandate Request made by
the RIBs using the UPI Mechanism.

ASBA Bidder(s) All Bidders except Anchor Investors

ASBA Form(s) An application form, whether physical or electronic, used by ASBA
Bidders to submit Bids, which was considered as an application for
Allotment in terms of the Red Herring Prospectus and the Prospectus

Banker to the Issue/ | Bank which are clearing members and registered with SEBI as Banker to

Public Issue Bank(s) / | an Issue and with whom the Public Issue Account will be opened, in this

Refund Banker(s) case being ICICI Bank Limited.

 

Basis of Allotment

The basis on which the Equity Shares will be Allotted to successful
Applicants/ Bidders under the Issue, as described in the chapter titled “Issue
Procedure — Basis of Allotment” beginning on page 92 of this Prospectus.

 

Bid(s)

 

 

An indication to make an offer during the Bid/Issue Period by an ASBA
Bidder pursuant to submission of the ASBA Form, to subscribe to or
purchase the Equity Shares at a price within the Price Band, including all
revisions and modifications thereto as permitted under the SEBI ICDR
Regulations and in terms of this Prospectus and Bid cum Application Form.

 

 
W%

 

 

Wa) bbYra eit)
The term “Bidding” shall be construed accordingly.
Bid Amount The highest value of optional Bids indicated in the Bid cum Application

Form and in the case of Retail Individual Bidders Bidding at Cut Off Price,
the Cap Price multiplied by the number of Equity Shares Bid for by such
Retail Individual Bidder and mentioned in the Bid cum Application Form
and payable by the Retail Individual Bidder or blocked in the ASBA

 

Bid Cum Application
Form

The ASBA Form

 

Bid/ Issue Opening Date

The date on which the Designated Intermediaries started accepting Bids,
which was notified in all edition of the Business Standard (a widely
circulated English national daily newspaper), all editions of Business
Standard (a widely circulated Hindi national daily newspaper) and in
Telugu edition of Nava Telangana (a widely circulated Telugu newspaper,
Telugu being the regional language of Hyderabad, Telangana, where our
Registered Office is located), each with wide circulation.

 

Bid/ Issue Closing Date

The date after which the Designated Intermediaries did not accept any Bids,
which was notified in all edition of the Business Standard (a widely
circulated English national daily newspaper), all editions of Business
Standard (a widely circulated Hindi national daily newspaper) and in
Telugu edition of Nava Telangana (a widely circulated Telugu newspaper,
Telugu being the regional language of Hyderabad, Telangana, where our
Registered Office is located), each with wide circulation and in case of
revision, the extended Bid/Issue Closing Date was notified on the
respective websites and terminals of the Syndicate Members, the BRLM
and the Stock Exchanges, as required under the SEBI ICDR Regulations,
and communicated to the Designated Intermediaries and the Sponsor Bank.

Our Company, in consultation with the BRLM, may consider closing the
Bid/Issue Period for QIBs one Working Day prior to the Bid/Issue Closing
Date, in accordance with the SEBI Regulations.

 

Bid Period/ Issue Period

The period between the Bid/Issue Opening Date and the Bid/Issue Closing
Date, inclusive of both days, during which prospective Bidders can submit
their Bids, including any revisions thereof in accordance with the SEBI
ICDR Regulations: Provided however that the Bidding/ Issue Period shall
be kept open for a minimum of three Working Days for all categories of
Bidders.

 

Bidder(s)

Any prospective investor who has made a Bid pursuant to the terms of the
Red Herring Prospectus and the Bid cum Application Form and unless
otherwise stated or implied and excludes an Anchor Investor.

 

Bid Lot

125 Equity shares and in multiples of 125 Equity Shares thereafter.

 

 

Bidding
Collecting Centre

Centre or

 

The centres at which the Designated Intermediaries shall accept the ASBA
Forms, i.e., Designated Branches for SCSBs, Specified Locations for

 

 
0

 

 

Wa) bbYra eit)
members of Syndicate, Broker Centres for Registered Brokers, Designated
RTA Locations for RTAs and Designated CDP Locations for CDPs.
Book Building Process Book building process, as provided in Schedule XIII of the SEBI ICDR

Regulations, in terms of which the Issue is being made.

 

Book Running Lead
Manager or BRLM

The Book Running Lead Manager to the Issue namely Unistone Capital
Private Limited, a SEBI Registered Category I Merchant Banker.

 

Broker Centres

Broker centres notified by the Stock Exchanges where Bidders can submit
the ASBA Forms to a Registered Broker, and in case of RIIs only ASBA.
Forms with UPI.

The details of such Broker Centres, along with the names and contact
details of the Registered Brokers are available on the respective websites of
the Stock Exchanges (www.bseindia.com and www.nseindia.com).

 

Broker to the Issue

All recognized members of the stock exchange would be eligible to act as
the Broker to the Issue.

 

CAN or Confirmation of
Allocation Note

Confirmation of allotment notice i.e., a note or advise or intimation of
allocation of the Equity Shares sent to the Bidders to whom Equity Shares
have been Allotted.

 

 

 

Participant or CDP

Cap Price The higher end of the Price Band, above which the Issue Price will not be
finalised and above which no Bids (or a revision thereof) will be accepted.

Client ID Client Identification Number maintained with one of the Depositories in
relation to demat Account

Collecting Depository A depository participant as defined under the Depositories Act, 1996,

registered with SEBI and who is eligible to procure Bids from relevant
Bidders at the Designated CDP Locations in terms of SEBI circular no.
CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 and
SEBI/HO/CFD/DIL2/CIR/P/2018/138 dated November 01, 2018 issued by
SEBI.

 

Collecting Registrar and
Share Transfer Agent

Registrar to an Issue and share transfer agents registered with SEBI and
eligible to procure Bids at the Designated RTA Locations in terms of
circular no. CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015

 

Controlling Branches of
SCSBs

Such branches of the SCSBs which co-ordinate with the BRLM, the
Registrar to the Issue and the Stock Exchanges, a list of which is provided
on http://www.sebi.gov.in or at such other website as may be prescribed by
SEBI from time to time.

 

Corrigendum

 

 

The Corrigendum dated October 1, 2020 issued by the Company and
published in all editions of English national daily newspaper, Business
Standard, all editions of Hindi national daily newspaper, Business Standard
and in Telugu edition of the Telugu daily newspaper Nava Telangana
(Telugu being the regional language of Hyderabad, where our Registered
Office is located) each with wide circulation,

 

 
Term
Cut-off Price

SS

 

sofa gC)
The Issue Price finalised by our Company, in consultation with the BRLM
which shall be any price within the Price Band. Only RIBs are entitled to
Bid at the Cut off Price. QIBs and Non-Institutional Bidders are not entitled

to Bid at the Cut-off Price

 

 

Demographic Details The demographic details of the Bidders such as their address, name of the
father/ husband, status, occupation, bank account details, PAN and UPI ID,
where applicable.

Depository/ A depository registered with SEBI under the SEBI (Depositories and

Depositories Participant) Regulations, 1996 as amended from time to time, being NSDL

and CDSL.

 

Depository Participant/
DP

A depository participant as defined under the Depositories Act, 1966.

 

Designated
Intermediaries
/Collecting Agent

In relation to ASBA Forms submitted by RIIs authorizing an SCSB to block
the Bid Amount in the ASBA Account, Designated Intermediaries shall
mean SCSBs.

In relation to ASBA Forms submitted by RIIs where the Bid Amount will
be blocked upon acceptance of UPI Mandate Request by such RII using the
UPI Mechanism, Designated Intermediaries shall mean syndicate members,
sub-syndicate members, Registered Brokers, CDPs and RTAs.

In relation to ASBA Forms submitted by QIBs and NIBs, Designated
Intermediaries shall mean SCSBs, syndicate members, sub-syndicate
members, Registered Brokers, CDPs and RTAs.

 

Designated RTA

Locations

Such centres of the RTAs where relevant ASBA Bidder could submit the
Bid cum Application Forms. The details of such Designated RTA
Locations, along with the names and contact details of the RTAs are
available on the respective websites of the Stock Exchanges
(www.bseindia.com and www.nseindia.com) and updated from time to
time.

 

Designated CDP

Locations

Such locations of the CDPs where ASBA Bidders can submit the ASBA
Forms. The details of such Designated CDP Locations, along with names
and contact details of the CDPs eligible to accept ASBA Forms are
available on the websites of the Stock Exchanges (www.bseindia.com and
www.nseindia.com)

 

 

Designated Date

 

The date on which the instructions are given to the SCSBs to unblock the
ASBA Accounts including the accounts linked with UPI ID and transfer the
amounts blocked by SCSBs, as the case may be, to the Public Issue
Account, as appropriate in terms of the Red Herring Propsectus and this
Prospectus and the aforesaid transfer and instructions shall be issued only
after finalisation of the Basis of Allotment in consultation with the
Designated Stock Exchange.

 

 
0

 

Term

pPrta sheet
The date on which the funds blocked by the SCSBs and Sponsor Bank are
transferred from the ASBA Accounts, as the case may be, to the Public
Issue Account, as appropriate, after finalisation of the Basis of Allotment,
in terms of the Prospectus following which the Equity Shares will be
Allotted in the Issue.

 

Designated Stock

Exchange

BSE Limited

 

Draft Red Herring
Prospectus

The draft red herring prospectus dated January 11, 2020 filed with SEBI
and issued in accordance with the SEBI ICDR Regulations, which does not
contain complete particulars of the price at which the Equity Shares will be
Allotted and the size of the Issue, including any addenda or corrigenda
thereto.

 

DP ID

Depository Participant’s Identity Number.

 

Eligible FPI(s)

FP\(s) from such jurisdictions outside India where it is not unlawful to make
an offer / invitation under the Offer and in relation to whom the Bid cum
Application Form and the Red Herring Prospectus constituted an invitation
to subscribe to the Equity Shares

 

Eligible NRI(s)

NRI(s) eligible to invest under Schedule III and Schedule IV of the Foreign
Exchange Management (Non-debt Instruments) Rules, 2019, from
jurisdictions outside India where it is not unlawful to make an offer or
invitation under the Issue and in relation to whom the Bid cum Application
Form and the Red Herring Prospectus will constitute an invitation to
subscribe to the Equity Shares.

 

Escrow Account(s)

The ‘no-lien’ and ‘non-interest bearing’ account(s) opened with the Escrow
Collection Bank and in whose favour the Bidders (excluding the ASBA
Bidders) transferred money through direct credit/NEFT/RTGS/NACH in
respect of the Bid Amount when submitting a Bid

 

 

Bank Agreement

Escrow Collection | Bank(s) which are clearing members and registered with SEBI as a banker

Bank(s) to an issue and with whom the Escrow Account will be opened, in this case
being ICICI Bank Limited

Escrow and Sponsor |The escrow and sponsor bank agreement entered into between our

Company, the Book Running Lead Manager, the Registrar to the Issue, the
Banker(s) to the Issue and the Syndicate Members for, inter alia, transfer
of funds to the Public Issue Account and where applicable, on the terms and
conditions thereof, in accordance with the UPI Circulars

 

 

FIL / Foreign _| Foreign Institutional Investor (as defined under SEBI (Foreign Institutional
Institutional Investors) Regulations, 1995, as amended) registered with SEBI under
Investors applicable laws in India.

First/Sole Bidder The Applicant whose name appears first in the Application Form or

Revision Form.

 

Floor Price

 

 

The lower end of the Price Band, subject to any revision thereto, at or above
which the Issue Price will be finalised and below which no Bids will be
accepted.

 

 
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Term sofa gC)

Fugitive Economic _ | An individual who is declared a fugitive economic offender under Section

Offender 12 of the Fugitive Economic Offenders Act, 2018

General Information | The General Information Document for investing in public issues, prepared

Document/ GID and issued in accordance with the circular
(SEBI/HO/CFD/DIL1/CIR/P/2020/37) dated March 17, 2020 ( and UPI
Circulars, as amended from time to time. The General Information
Document shall be available on the websites of the Stock Exchanges and
the BRLM.

Issue/Bid Period The period between the Issue/Bid Opening Date and the Issue/Bid Closing

Date inclusive of both days and during which prospective applicants could
submit their application.

 

Issue / Issue Size /Initial
Public Issue/ _ Initial
Public Offer/ Initial
Public Offering/IPO

Public issue of 51,00,000* Equity Shares of face value of Rs. 10.00/- each
of our Company for cash at a price of Rs. 120/- per Equity Share (including
a share premium of Rs. 110/- per Equity Share) aggregating to Rs. 6,120.00
Lakhs by our Company, in terms of the Red Herring Prospectus.

*Subject to finalization of basis of allotment

 

Issue Agreement

The issue agreement dated January 09, 2020 between our Company and the
BRLM, pursuant to which certain arrangements have been agreed to in
relation to the Issue and shall include any amendments made thereto.

 

Issue Price

The final price at which Equity Shares will be Allotted to the successful
Bidders, being Rs. 120/-.

 

Issue Proceeds

The proceeds of the Issue that will be available to our Company. For further
details on the use of Issue Proceeds from the Issue, see “Objects of the
Issue” beginning on page 85of this Prospectus.

 

Listing Agreement

Unless the context specifies otherwise, this means the Equity Listing
Agreement to be signed between our Company and the Stock Exchanges
on which the Equity Shares of our Company are to be listed.

 

Merchant Banker

Merchant Banker as defined under the Securities and Exchange Board of
India (Merchant Bankers) Regulations, 1992

 

Mutual Funds

Mutual funds registered with SEBI under the Securities and Exchange
Board of India (Mutual Funds) Regulations, 1996

 

National Payments of
Corporation of India
(NPCI)

NPCI, a Reserve Bank of India (RBI) initiative, is an umbrella organization
for all retail payments in India. It has been set up with the guidance and
support of the Reserve Bank of India (RBI) and Indian Banks Association

 

Net Proceeds

The Issue Proceeds, less the Issue related expenses, received by the
Company.

 

NIF

National Investment Fund set up by resolution F. No. 2/3/2005-DD-II dated
November 23, 2005 of Government of India published in the Gazette of
India

 

 

Non-Institutional
Investors/_ Bidders or

NIIs

 

All Applicants/ Bidders, including sub-accounts of FIIs registered with
SEBI which are foreign corporate or foreign individuals, that are not QIBs
or Retail Individual Investors and who have applied for Equity Shares for

 

 
0

 

Term

bbYra eit)
an amount of more than Rs. 2.00 Lakhs (but not including NRIs other than
Eligible NRIs)

 

Non-Institutional
Portion

The portion of the Issue being not less than 64% of the Issue comprising
32,64,000* Equity Shares which shall be available for allocation on a
proportionate basis to Non-Institutional Bidders, subject to valid Bids being
received at or above the Issue Price

* Subject to finalization of basis of allotment

 

Non-Resident

A person resident outside India, as defined under FEMA and includes NRIs,
FPIs and FVCIs

 

Non-Resident Indians or

A non-resident Indian as defined under the FEMA

 

NRI(s)
Overseas Corporate | A company, partnership, society or other corporate body owned directly or
Body / OCB indirectly to the extent of at least 60% by NRIs, including overseas trusts

in which not less than 60% of beneficial interest is irrevocably held by NRIs
directly or indirectly as defined under the Foreign Exchange Management
(Deposit) Regulations, 2016, as amended from time to time. OCBs are not
allowed to invest in this Issue.

 

Other Investors

Investors other than retail individual investors. These include individual
Bidders other than retail individual investors and other investors including
corporate bodies or institutions.

 

Payment through
electronic transfer of
funds

Payment through NECS, NEFT or Direct Credit, as applicable

 

Person/ Persons

Any individual, sole proprietorship, unincorporated association,
unincorporated organization, body corporate, corporation, company,
partnership, limited liability company, joint venture, or trust, or any other
entity or organization validly constituted and/or incorporated in the
jurisdiction in which it exists and operates, as the context requires.

 

Price Band

Price band of a minimum price of Rs. 116/- per Equity Shares (Floor Price)
and the maximum price of Rs. 120/- per Equity Shares (Cap Price).

The Price Band and the minimum Bid Lot for the Issue was decided by our
Company, in consultation with the Book Running Lead Manager and
advertised in all editions of English national daily newspaper, Business
Standard, all editions of Hindi national daily newspaper, Business Standard
and in Telugu edition of the Telugu daily newspaper Nava Telangana
(Telugu being the regional language of Hyderabad, where our Registered
Office is located) each with wide circulation, at least two Working Days
prior to the Bid/Issue Opening Date and shall be available to the stock
exchanges for the purpose of uploading on their respective websites.

 

Pricing date

 

 

The date on which our Company in consultation with the BRLM, finalised
the Issue Price.

 

 
bbYra eit)

 

Term

Prospectus

This Prospectus dated October 08, 2020, to be filed with the RoC in
accordance with the provisions of Section 26 & 32 of the Companies Act
and SEBI ICDR Regulation containing, inter alia, the Issue Price that is
determined at the end of the Book Building Process, the size of the Issue
and certain other information including any addenda or corrigenda thereto.

 

Public Issue Account

The ‘no-lien’ and ‘non-interest bearing’ account opened in accordance with
Section 40 of the Companies Act, 2013 with the Public Issue Bank where
the funds shall be transferred by the SCSBs from bank accounts of the
ASBA Investors.

 

Public Issue Account
Agreement/ Banker to
the Issue Agreement/

Escrow and Sponsor Bank Agreement entered on September 08, 2020
amongst our Company, Book Running Lead Manager, the Registrar to the
Issue, Public Issue Bank/Banker to the Issue/Sponsor Bank

 

Sponsor Bank

Agreement

Qualified Institutional _| A qualified institutional buyer as defined under Regulation 2(1) (ss) of the
Buyers / QIBs SEBI ICDR Regulations.

 

QIB Portion

The portion of the Issue being upto 1% of the Issue comprising of 51,000*
Equity Shares which shall be allocated to QIBs, subject to valid Bids being
received at or above the Issue Price

* Subject to finalization of basis of allotment

 

Red Herring Prospectus
or RHP

The Red Herring Prospectus dated September 17, 2020 issued by our
Company in accordance with Section 32 of the Companies Act, 2013, and|
the provisions of the SEBI ICDR Regulations, which did not have complete
particulars of the price at which the Equity Shares will be issued and the size|
of the Issue, read with the Corrigendum and the Addendum.

The Bid/Issue Opening Date shall be at least three Working Days after the
registration of the Red Herring Prospectus with the ROC and will become
the Prospectus upon filing with the ROC on or after the Pricing Date

 

Refund Account(s)

The ‘no-lien’ and ‘non-interest bearing’ account opened with the Refund
Bank(s), from which refunds, if any, of the whole or part of the Bid Amount
to the shall be made.

 

Refund Bank(s)/ Refund
Banker(s)

Bank which is / are clearing member(s) and registered with the SEBI as
Bankers to the Issue at which the Refund Account will be opened, in this
case being ICICI Bank Limited.

 

 

 

Refund through | Refunds through NECS, direct credit, RTGS or NEFT, as applicable.
electronic transfer of

funds

Registered Broker The stock brokers registered with the stock exchanges having nationwide

 

terminals, other than the members of the Syndicate and eligible to procure
Bids from relevant Bidders in terms of SEBI circular number
CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI

 

 
0

 

Term
Registrar and Share
Transfer Agents or
RTAs

bbYra eit)
The registrar and the share transfer agents registered with SEBI and eligible
to procure Bids at the Designated RTA Locations in terms of circular no.
CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by
SEBI as per the list available on the websites of BSE and NSE.

 

Registrar /Registrar to
the Issue

Registrar to the Issue being Bigshare Services Private Limited

 

Registrar Agreement

The agreement dated January 06, 2020, entered into between the Company
and the Registrar to the Issue in relation to the responsibilities and
obligations of the Registrar to the Issue pertaining to the Issue.

 

 

Regulations Unless the context specifies something else, this means the SEBI ICDR
Regulations, as amended from time to time.

Retail Individual | Individual investors/Bidders (including HUFs, in the name of Karta and

Bidders/ Eligible NRIs) who apply for the Equity Shares of a value of not more than

Retail Individual | Rs 2.00 lakhs.

Investor(s)/ RII(s)/

RIB(s)

 

Retail Portion

The portion of the Issue being not less than 35% of the Net Issue, consisting
of 17,85,000* Equity Shares, available for allocation to Retail Individual
Bidders.

*Subject to finalization of basis of allotment

 

Revision Form

Form used by the Bidders, to modify the quantity of the Equity Shares or
the Bid Amount in any of their Bid cum Application Forms or any previous
Revision Form(s), as applicable.

Pursuant to the issue of the Corrigendum read with the Addendum, all
Bidders were given the option to withdraw their Bids until Bid/Issue
Closing Date.

 

Reservation Portion

The portion of the Issue reserved for category of eligible Bidders as
provided under the SEBI ICDR Regulations

 

Reserved
Categories

Category/

Categories of persons eligible for making Bids under reservation portion.

 

Resident Indian

A person resident in India, as defined under FEMA.

 

SCSB/ Self Certified
Syndicate Banker

A Self Certified Syndicate Bank registered with SEBI under the SEBI
(Bankers to an Issue) Regulations, 1994 and offers the facility of ASBA,
including blocking of bank account. A list of all SCSBs is available at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi

=yes&intmld=34

or at such other website as may be prescribed by SEBI from time to time

 

 

Specified Locations

 

 

Collection centres where the SCSBs accepted Bid cum Application Forms
from relevant Bidders, a list of which is available on the website of the
SEBI (www.sebi.gov.in) and updated from time to time.

 

10

 
W%

 

 

Bai) pPrta sheet
Sponsor Bank Sponsor Bank means a Banker to the Issue registered with SEBI which is
appointed by the Issuer to act as a conduit between the Stock Exchanges
and NPCI in order to push the mandate collect requests and / or payment
instructions of the retail investors into the UPI and in our case being ICICI
Bank Limited
Syndicate Agreement The syndicate agreement dated September 08, 2020 entered into among our

Company, the BRLM and the Syndicate Members in relation to the
collection of Bid cum Application Forms by the Syndicate

 

Syndicate Members or
Members of the
Syndicate

Intermediaries registered with SEBI who are permitted to accept bids,
applications and place orders with respect to Issue, and carry out activities
as an underwriter, as may be appointed by the Company in consultation
with the BRLM.

 

Syndicate

The BRLM and the Syndicate Members

 

TRS or Transaction
Registration Slip

The slip or document issued by the Syndicate, or the SCSB (only on
demand), as the case may be, to the Bidder as proof of registration of the
Bid.

 

Underwriter

Underwriter to the issue is Unistone Capital Private Limited

 

Underwriting
Agreement

The Underwriting Agreement dated October 08, 2020 entered into between
the Underwriter and our Company

 

Unified
Interface (UPI)

Payments

Unified Payments Interface (UPI) is an instant payment system developed
by the NPCI. It enables merging several banking features, seamless fund
routing & merchant payments into one hood. UPI allows instant transfer of
money between any two persons bank accounts using a payment address
which uniquely identifies a person’s bank a/c.

 

UPI Circulars

SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2018/138 dated November
1, 2018, SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2019/50 dated
April 3, 2019, SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2019/76
dated June 28, 2019, SEBI circular no.
SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26, 2019 SEBI circular no.
SEBI/HO/CFD/DCR2/CIR/P/2019/133 dated November 8, 2019, and any
subsequent circulars or notifications issued by SEBI in this regard

 

UPIID

ID created on UPI for single window mobile payment system developed by
the NPCI.

 

UPI PIN

Password to authenticate UPI transaction

 

UPI ID Linked bank
account

Account of the RIIs, bidding in the Issue using the UPI mechanism, which
will be blocked upon acceptance of UPI Mandate request by RIIs to the
extent of the appropriate Bid Amount and subsequent debit of funds in case

 

 

UPI Mandate Request

 

A request (intimating the RII by way of a notification on the UPI
application and by way of a SMS directing the RII to such UPI application)
to the RII initiated by the Sponsor Bank to authorise blocking of funds on
the UPI application equivalent to Bid Amount and subsequent debit of
funds in case of Allotment

 

11

 
Term

 

UPI Mechanism

pPrta sheet
The bidding mechanism that may be used by a RII to make a Bid in the
Offer in accordance with SEBI circular
(SEBI/HO/CFD/DIL2/CIR/P/2018/138) dated November 1, 2018.

 

Wilful Defaulter

A company or person, as the case may be, declared as a wilful defaulter by
any bank or financial institution or consortium thereof, in accordance with
the guidelines on wilful defaulters issued by the RBI and includes any
company whose director or promoter is categorised as such

 

Working Day

In accordance with Regulation 2(1)(mmm) of SEBI ICDR Regulations,
‘working days’ means all days on which commercial banks in Mumbai are
open for business.

1. However, in respect of announcement of price band and Bid/ Issue
Period, ‘Working Day’ shall mean all days, excluding Saturdays,
Sundays and public holidays, on which commercial banks in
Mumbai are open for business.

25 In respect to the time period between the Bid/ Issue Closing Date
and the listing of the specified securities on the stock exchange,
“Working Day’ shall mean all trading days of the stock exchange,
excluding Sundays and bank holidays in accordance with circular
issued by SEBI

 

 

You, your or yours

 

Prospective investors to this Issue.

 

ISSUER AND INDUSTRY RELATED TERMS

Term byte eye)

Articles or Articles of
Association/AOA

Articles of Association of our Company

 

Audit Committee

The audit committee of our Company, constituted in accordance with
Section 177 of the Companies Act, 2013 and the SEBI LODR Regulations.

 

Auditors
Auditors

or Statutory

The Statutory Auditors of our Company being M/s. NSVR & Associates
LLP, Chartered Accountants, having their office at Flat no. 101, Nestcon
Gayatri, Plot no. 28, near South Indian Bank, Panchavati Co-operative
Society, Road no. 10, Banjara Hills, Hyderabad 500034, Telangana, India.

 

Banker(s) to our Company

ICICI Bank Limited

 

Board of Director(s) or the
Board

Board of directors of our Company, and unless the context otherwise
indicates or implies, including a duly constituted committee thereof.

 

Chairman

The Chairman of our Company being Mr. Sivasankara Parameshwara Kurup
Pillai

 

Chief Executive Officer

The Chief Executive Officer of our Company being Mr. Sudhanshu Shekhar

 

Chief Financial Officer or
CFO

 

 

The Chief Financial Officer of our Company being Mr. Sambasiva Rao
Ketineni

 

12

 

 
W%

 

Term
CIN

bbYrau eC)

Corporate Identification Number

 

Companies Act or the Act

Companies Act, 1956 or the Companies Act, 2013, and rules framed
thereunder, as applicable

 

Company Secretary &
Compliance Officer or CS

The Company Secretary and Compliance Officer of our Company being Mr.
Santhosh Kumar Gunemoni

 

Corporate Social

Responsibility Committee

The corporate social responsibility committee of our Company, constituted
in accordance with section 135 of the Companies Act

 

CTO

Commercial Tax Officer

 

Depositories Act

The Depositories Act, 1996, as amended from time to time

 

 

 

Director(s) Director(s) of our Company as appointed from time to time

Equity Shares Equity Shares of our Company of face value Rs. 10/- each, unless otherwise
specified in the context thereof

Equity Shareholders Persons/ Entities holding Equity Shares of our Company.

 

Group Companies

The companies included under the definition of “Group Companies” under
the SEBI ICDR Regulations and other companies as considered material by
our Board, as identified by our Company in its Materiality Policy. For further
details, please refer to chapter titled “Group Companies” beginning on page
176 of this Prospectus.

 

IPO Committee

IPO committee constituted by the Board

 

Independent Director(s)

The independent directors of our Company as per the Companies Act and
the SEBI LODR Regulations

 

ISIN

International Securities
INE060901019

Identification Number, in this case being

 

Key Managerial Personnel
or KMP

Key Managerial Personnel of our Company in terms of Regulation 2(1)(bb)
of the SEBI ICDR Regulations and Section 2(51) of the Companies Act,
2013 and as more particularly set out in the chapter titled “Our
Management” beginning on page 150 of this Prospectus

 

Materiality Policy

The policy adopted by our Board at its meeting held on December 10, 2019
for determining (i) Our Group Companies; (ii) outstanding Material
Litigation involving our Company, our Directors and our Promoters; and
(iii) outstanding Material Dues to creditors in respect of our Company, in
terms of the SEBI ICDR Regulations, 2018 for the purposes of disclosure in
the offer documents.

 

MD or Managing Director

Managing Director of our Company being Mr. Srinivasa Rao Gaddipati

 

MOA or Memorandum or

Memorandum of Association of our Company, as amended from time to

 

 

Memorandum of| time
Association

a The nomination and remuneration committee of our Company, constituted
Nomination and

Remuneration Committee

 

in accordance with Section 178 of the Companies Act, 2013 and the SEBI
LODR Regulations.

 

13

 
Term

Order Book

 

solar Ci)

Order Book as of any particular date represents the total contract value of all
existing contracts of our Company as reduced by revenue received by our
Company for works undertaken with respect to such existing contracts

 

Promoters

The promoters of our Company being Mr. Srinivasa Rao Gaddipati and Ms.
Likhitha Gaddipati.

 

Promoter Group

Companies, individuals and entities (other than companies) as set out in the
chapter titled “Our Promoter and Promoter Group” beginning on page
171of this Prospectus.

 

Registered Office

The registered office of our Company, located at Flat No.701, Plot No 8-3-
940 and 8-3-940/A to E, Tirumala Shah Residency, Yellareddy Guda,
Ameerpet, Hyderabad 500 073, Telangana, India.

 

Restated Financial

Statement

Our restated financial statements of assets and liabilities as at and for the
Financial Years ended March 31, 2018 and March 31, 2019 and March 31,
2020 and our restated statements of profit and loss and cash flow for the
Financial Years ended March 31, 2018, March 31, 2019 and March 31, 2020,
together with the annexures and notes thereto and the examination report,
thereon, as prepared and presented in accordance with Ind AS, in each case
restated in accordance with the requirements of Section 26 of the Companies
Act, the SEBI ICDR Regulations and the Guidance Note on “Reports in
Company Prospectuses (Revised 2019)” issued by ICAI.

We have adopted Ind AS from April 1, 2017 onwards with a transition date
of April 1, 2016, we have prepared our Restated Financial Statements for the
Financial Years ended March 31, 2018,March 31, 2019 and March 31, 2020
in accordance with the Indian Accounting Standards notified under Section
133 of the Companies Act, 2013, read with the Companies (Indian
Accounting Standards) Rules, 2015 and restated in accordance with the
SEBI ICDR Regulations and the Guidance Note on Reports in Company
Prospectuses (Revised 2019), issued by the ICAI

 

ROC
Companies

or Registrar of

Registrar of Companies, Hyderabad located at 2 Floor, Corporate Bhawan,
GSI Post, Tattiannaram Nagole, Bandlaguda Hyderabad — 500 068

 

Stakeholders’ Relationship
Committee

The committee of the Board of Directors constituted as the Company’s
Stakeholders’ Relationship Committee in accordance with Section 178(5) of
the Companies Act, 2013 and SEBI LODR Regulations.

 

Stock Exchanges

 

 

Unless the context otherwise requires, refer to BSE Limited and National
Stock Exchange of India Limited

 

14

 
IN

 

 

 

 

 

 

 

Bei soya ee)
SOR Schedule of Rights
TCP/PCP Temporary Cathodic Protection/ Permanent Cathodic Protection
TPI Third Party Inspection
TRS Transaction Registration Slip
GENERAL ABBREVIATIONS:
gyal sDJ=ergtpyeceyey

“Rs.” or “Rupee(s)” or
“INR”

 

Indian Rupees, the official currency of the Republic of India

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACIT Assistant Commissioner of Income Tax

Alc Account

AGM Annual General Meeting
The alternative investment funds, as defined in, and registered with SEBI

AIF(s) under the Securities and Exchange Board of India (Alternative Investment
Funds) Regulations, 2012

AoA Articles of Association

A.Y./AY Assessment Year

AS Accounting Standards as issued by the Institute of Chartered Accountants
of India

ASBA Application Supported by Blocked Amount.

BIFR Board for Industrial and Financial Reconstruction.

Bn Billion

BPO Business Process Outsourcing

BRS Bank Reconciliation Statement

BSE BSE Limited

BT Billion Tonnes

Category I AIF AIFs who are registered as “Category I Alternative Investment Funds”

under the SEBI AIF Regulations

 

Category II AIF

AIFs who are registered as “Category II Alternative Investment Funds”
under the SEBI AIF Regulations

 

Category III AIF

AIFs who are registered as “Category III Alternative Investment Funds”
under the SEBI AIF Regulations

 

Category I Foreign
Portfolio Investor(s)

FPIs who are registered as “Category I foreign portfolio investor” under
the SEBI FPI Regulations

 

Category II Foreign
Portfolio Investor(s)

FPIs who are registered as “Category II foreign portfolio investor” under
the SEBI FPI Regulations

 

cc

Cash Credit

 

 

 

 

CDSL Central Depository Services (India) Limited.
CFO Chief Financial Officer.

CEO Chief Executive Officer.

CIT Commissioner of Income Tax

 

Companies Act, 2013

Companies Act, 2013, to the extent in force pursuant to the notification of
sections of the Companies Act, 2013, along with the relevant rules framed
thereunder

 

 

cs

 

Company Secretary

 

 

 
W%

TECHNICAL AND INDUSTRY RELATED ABBREVIATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BY borage)
BOM Bill of Measurement
BOQ Bill of Quantities
CAGR Compounded Annual Growth Rate
CCP Cross Country Pipeline
CP/TCP/PCP Cathodic Protection/ Temporary Cathodic Protection / Permanent Cathodic
Protection
CGD City Gas Distribution
CGS City Gas Station
DRS District Regulating Station
FCAW Flux-Cored Arc Welding
GAIL Gail (India) Limited
GSPL Gujarat State Petronet Limited
HDD Horizontal Directional Drilling
KG-D6 Krishna Godavari Dhirubhai 6
3LPE/PE Three Layer Polyethylene/ Polyethylene
MBPD Thousand Barrels Per Day
MDPE Medium-Density Polyethylene
MMSCMD Million Metric Standard Cubic Meter Per Day
MMT Million Metric Tonnes
MMTPA Million Metric Ton Per Annum
MoPNG Ministry of Petroleum and Natural Gas
NDT Non-destructive testing
QAP Quality Assurance Procedure
O&M Services Operations and Maintenance Services
OFC Optical Fiber Cables
PCC/CC Plain Cement Concrete/ Cement Concrete
PNGRB Petroleum and Natural Gas Regulatory Board
PRS Pressure Reduction Station
PSU Public Sector Undertaking
QAP Quality Assurance Plan
RCC Reinforced Cement Concrete
RFQ Request for Quotation
RGPL Reliance Gas Pipelines Limited
RGTIL Reliance Gas Transportation Infrastructure Limited
RLNG Regasified Liquefied Natural Gas
ROU Right of Use
ROW Right of Way
SEZ Special Economic Zone
SOP Standard Operating Procedure

 

 

 

15

 
aX

 

CST

SS

eye

 

Central Sales Tax

 

Competition Act

The Competition Act, 2002

 

Consolidated FDI Policy

Consolidation FDI Policy dated August 28, 2017 issued by the Department
of Industrial Policy and Promotion, Ministry of Commerce and Industry,
Government of India, and any modifications thereto or substitutions
thereof, issued from time to time.

 

Contract Act

The Indian Contract Act, 1872

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COVID-19 A public health emergency of international concern as declared by the
World Health Organization on January 30, 2020 and as a pandemic on
March 11, 2020

CPI Consumer Price Index

CSR Corporate Social Responsibility

Depositories Act The Depositories Act, 1996

Depositories NSDL and CDSL, the Depositories registered with the SEBI under the
Securities and Exchange Board of India (Depositories and Participants)
Regulations, 1996, as amended from time to time.

DIN Director Identification Number

DIPP Department of Industrial Policy & Promotion.

DP Depository Participant.

DP ID Depository Participant’s Identity.

EBIDTA Earnings before interest, depreciation, tax, amortization and extraordinary
items.

ECS Electronic Clearing System.

EGM Extraordinary General Meeting

EPFA The Employees’ Provident Funds and Miscellaneous Provisions Act,
1952.

EPFO Employees’ Provident Fund Organization

EPS Earnings Per Share.

ESIC Employee State Insurance Corporation.

ESOP Employee Stock Option Plan.

ESPS Employee Stock Purchase Scheme.

FCNR Account Foreign Currency Non-Resident Account

FDI Foreign Direct Investment

 

FDI Circular

Consolidated foreign direct investment policy circular of 2017, effective
from August 28, 2017, issued by the DIPP.

 

Foreign Exchange Management Act, 1999 read with rules and regulations

 

 

 

 

 

 

 

 

 

 

FEMA

framed thereunder
FEMA Rules Foreign Exchange Management (Non-debt Instruments) Rules, 2019
FII(s) Foreign Institutional Investors as defined under the SEBI FPI Regulations.
Financial Year/ Fiscal/ | Period of twelve (12) months ended on March 31 of that particular year,
Fiscal Year/ F.Y./ FY unless otherwise stated
Foreign Portfolio | Foreign Portfolio Investors, as defined under the SEBI FPI Regulations
Investor or FPI and registered with SEBI under applicable laws in India.
Fugitive economic | An individual who is declared a fugitive economic offender under section
offender 12 of the Fugitive Economic Offenders Act, 2018
FTP Foreign Trade Policy
FV Face Value
FVCI Foreign Venture Capital Investor, registered under the FVCI Regulations

 

Ty

 
0

FVCI Regulations

aX

 

eye
Securities and Exchange Board of India (Foreign Venture Capital
Investors) Regulations, 2000

 

 

 

 

 

FTP Foreign Trade Policy.

GAAP/Indian GAAP Generally Accepted Accounting Principles.
GDP Gross Domestic Product.

GIR Number General Index Registry number.

 

Gol/ Government

Government of India.

 

GPS

Global Positioning System

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GST Goods and Services Tax
HNI High Net-worth Individual.
HUF Hindu Undivided Family.
1&B Code Insolvency & Bankruptcy Code, 2016
IP Index of Industrial Production
ILO International Labour Organization
IT Information Technology
LT. Act/ IT Act The Income Tax Act, 1961, as amended
ICAI Institute of Chartered Accountants of India.
The new Indian Accounting Standards notified by Ministry of Corporate
Ind AS Affairs on February 16, 2015, applicable from Financial Year
commencing April 1, 2016 as amended.
IPO Initial Public Offering
IFRS International Financial Reporting Standards.
IRDA Insurance Regulatory and Development Authority.
IST Indian Standard Time
ITAT Income Tax Appellate Tribunal
IT Authorities Income Tax Authorities.
IT Rules The Income Tax Rules, 1962, as amended from time to time.
Ltd. Limited.
Kg Kilogram
Kms Kilometres
LLP Act The Limited Liability Partnership Act, 2008
MCA The Ministry of Corporate Affairs, Gol
MCI Ministry of Commerce and Industry, Gol
MoA Memorandum of Association.
MoF Ministry of Finance, Government of India.
MoU Memorandum of Understanding.
MSME Micro, Small and Medium Enterprise

 

Mutual Funds

Mutual funds registered with the SEBI under the Securities and
Exchange Board of India (Mutual Funds) Regulations, 1996

 

 

 

 

 

 

 

 

 

 

NA Not Applicable

NCLT National Company Law Tribunal

NCR National Capital Regions

NCT National Capital Territory

Net Worth The aggregate of the paid up share capital, share premium account, and
reserves and surplus (excluding revaluation reserve) as reduced by the
aggregate of miscellaneous expenditure (to the extent not adjusted or
written off) and the debit balance of the profit and loss account.

NPV Net Present Value

NI Act Negotiable Instruments Act, 1881.

NITI National Institute for Transforming India

 

18

 
 

SS

eye

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOC No Objection Certificate.

NR Non-Resident.

NRI Non-Resident Indian, is a person resident outside India, who is a citizen of
India or a person of Indian origin and shall have the same meaning as
ascribed to such term in the FEMA Regulations, as amended from time to
time.

NRE Account Non-resident (External) account

NRO Account Non-resident (Ordinary) account

NSDC National Skill Development Council

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited.

NS-EW North, South, East, West

OCB Overseas Corporate Bodies.

p.a. per annum.

PE Private Equity

P/E Ratio Price Earnings Ratio.

PAN Permanent Account Number.

PAT Profit After Tax.

PBT Profit Before Tax.

PMI Purchasing Managers’ Index

Pvt. Private

QIB Qualified Institutional Buyer.

RBI Reserve Bank of India.

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

RoC Registrar of Companies.

RoNW Return on Net Worth.

RTGS Real Time Gross Settlement.

SARFAESI The Securitization and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002.

SCRA Securities Contracts (Regulation) Act, 1956

SCRR Securities Contracts (Regulation) Rules, 1957

SCSB Self-Certified Syndicate Bank.

SEBI re Securities and Exchange Board of India, constituted under the SEBI

ct

SEBI Act Securities and Exchange Board of India Act, 1992

 

SEBI AIF Regulations

Securities and Exchange Board of India (Alternative Investment Funds)
Regulations, 2012

 

SEBI FII Regulations

Securities and Exchange Board of India (Foreign Institutional Investors)
Regulations, 1995

 

SEBI FPI Regulations

Securities and Exchange Board of India (Foreign Portfolio Investors)
Regulations, 2019

 

SEBI FVCI Regulations

Securities and Exchange Board of India (Foreign Venture Capital
Investors) Regulations, 2000

 

Securities and Exchange Board of India (Issue of Capital and Disclosure

 

 

 

 

SEBLICDR Regulations Requirements) Regulations, 2018, as amended from time to time.
SEBI Insider Trading | The SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended
Regulations from time to time, including instructions and clarifications issued by SEBI
from time to time.

EBL . TODR: SEBI (Listing Obligations and Disclosure Requirements) Regulations,
Regulations/ SEBI : f : oe

2, 2 2015, as amended from time to time, and includes the listing agreement to
Listing Regulations

 

19

 
0

 

 

be entered into between our Company and the Stock Exchange in relation
to listing of Equity Shares on such Stock Exchange.

 

 

SEBI Takeover | Securities and Exchange Board of India (Substantial Acquisition of Shares
Regulations and Takeovers) Regulations, 2011
SEBI VCF Regulations The erstwhile Securities and Exchange Board of India (Venture Capital

Funds) Regulations, 1996

 

SEBI Merchant Bankers

Securities and Exchange Board of India (Merchant Bankers) Regulations,

 

 

 

Regulations 1992

Sec Section.

Securities Act U.S. Securities Act of 1933, as amended

SICA Sick Industrial Companies (Special Provisions) Act, 1985, as amended

from time to time.

 

SSI Undertaking

Small Scale Industrial Undertaking.

 

State Government

The government of a state of the Union of India

 

Stock Exchange

National Stock Exchange of India Limited.

 

STT

Securities Transaction Tax

 

Sub-account

Sub-accounts registered with SEBI under the SEBI FII Regulations other
than sub-accounts which are foreign corporates or foreign individuals

 

 

 

 

 

 

 

 

TAN Tax Deduction Account Number.

TIN Taxpayers Identification Number.

TNW Total Net Worth.

TVATAT Telangana Sales Tax and VAT Appellate Tribunal

U.S. GAAP Generally accepted accounting principles in the United States of America
ws Under Section

UIN Unique Identification Number

UO! Union of India

 

US/ U.S. / USA/ United
States

United States of America

 

 

 

 

 

 

 

 

 

USD / US$/$ United States Dollar, the official currency of the United States of America
VAT Value Added Tax
Venture Capital Funds as defined and registered with SEBI under the SEBI
‘VCFs .
VCF Regulations
w.e.f. With effect from
WDV Written Down Value
WID Whole-time Director
YoY ‘Year over year

 

20

 
W%

CURRENCY CONVENTIONS, CURRENCY OF PRESENTATION, USE OF FINANCIAL,
INFORMATION, INDUSTRY AND MARKET DATA

Certain Conventions

All references in this Prospectus to “India” are to the Republic of India and its territories and possessions
and all references herein to the “Government”, “Indian Government”, “GOI”, “Central Government” or
the “State Government” are to the Government of India, central or state, as applicable. All references to
the “U.S.”, “US”, “U.S.A” or “United States” are to the United States of America and its territories and
possessions.

Unless otherwise specified, any time mentioned in this Prospectus is in Indian Standard Time (“IST”).
Unless indicated otherwise, all references to a year in this Prospectus are to a calendar year.

Unless the context requires otherwise, all references to page numbers in this Prospectus are to the page
numbers of this Prospectus.

Financial Data

Unless otherwise stated or context requires otherwise, the financial data included in this Prospectus is
derived from our Restated Financial Information as at and for the Fiscals 2018, 2019 and 2020, prepared
in accordance with Ind AS. The Restated Financial Statements have been examined by our Statutory
Auditor in accordance with the Companies Act and relevant rules framed thereunder and restated under
the SEBI ICDR Regulations. As at and for the Fiscals ended March 31, 2018, 2019 and 2020, our
Company did not have any subsidiary and, consequently, the Restated Financial Statements included in
this Prospectus have been prepared on a standalone basis. Certain other financial information pertaining
to our Group Company is derived from its respective audited financial statements, as may be available.

While for statutory reporting purposes, we have adopted Ind AS from April 1, 2017 onwards with a
transition date of April 1, 2016, we have prepared our Restated Financial Statements for the Financial
Years ended March 31, 2018, March 31, 2019 and March 31, 2020 in accordance with the Indian
Accounting Standards notified under Section 133 of the Companies Act, 2013, read with the Companies
(Indian Accounting Standards) Rules, 2015 and restated in accordance with the SEBI ICDR Regulations
and the Guidance Note on Reports in Company Prospectuses (Revised 2019), issued by the ICAI. For
further information, see “Financial Information” beginning on page 179 of this Prospectus.

Our Company’s Financial Year commences on April 01st and ends on March 31st of the next year.
Accordingly, all references in this Prospectus to a particular Financial Year, Fiscal or Fiscal Year, unless
stated otherwise, are to the 12 months period ended on March 31st of that particular year.

There are significant differences between Ind AS, Indian GAAP, US GAAP and IFRS. Our Company
does not provide reconciliation of its financial information to IFRS or US GAAP. Our Company has not
attempted to explain those differences or quantify their impact on the financial data included in this
Prospectus and it is urged that you consult your own advisors regarding such differences and their impact
on our Company’s financial data. Accordingly, the degree to which the financial information included
in this Prospectus will provide meaningful information is entirely dependent on the reader’s level of
familiarity with Indian accounting policies and practices, the Companies Act, Ind AS, the Indian GAAP
and the SEBI ICDR Regulations. Any reliance by persons not familiar with Indian accounting policies

21
W%

and practices on the financial disclosures presented in this Prospectus should, accordingly, be limited.
For risks relating to significant differences between Ind AS, Indian GAAP and other accounting
principles, see “Risk Factors— Significant differences exist between Ind AS, Indian GAAP and other
accounting principles, such as US GAAP and International Financial Reporting Standards (“IFRS”),
which investors may be more familiar with and consider material to their assessment of our financial
condition” beginning on page 31 of this Prospectus.

Unless the context requires otherwise, any percentage amounts, as set forth in “Risk Factors”, “Our
Business” and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” beginning on pages 31, 114 and 233 respectively, and elsewhere in this Prospectus have
been calculated on the basis of the Restated Financial Information.

Currency and Units of Presentation

All references to:
“Rupees” or “Rs.” or “INR” are to Indian Rupee, the official currency of the Republic of India; and

“USD” or “US$” are to United States Dollar, the official currency of the United States. Except otherwise
specified, our Company has presented certain numerical information in this Prospectus in “Lakh” units.

However, where any figures that may have been sourced from third-party industry sources are expressed
in denominations other than Lakhs, such figures appear in this Prospectus in such denominations as
provided in the respective sources.

In this Prospectus, any discrepancies in any table between the total and the sums of the amounts listed
are due to rounding off. All figures in decimals, including percentage figures, have been rounded off to
the second decimal.

Exchange Rates

This Prospectus contains conversion of certain other currency amounts into Indian Rupees that have been
presented solely to comply with the SEBI ICDR Regulations. These conversions should not be construed
as a representation that these currency amounts could have been, or can be converted into Indian Rupees,
at any particular rate or at all.

The following table sets forth, for the periods indicated, information with respect to the exchange rate
between the Rupee and the US$:
(in Rs.)
As on March 31, AsonMarch31, AsonMarch31, As on March 31,
2020 2019 2018 PAW

75.39 69.17 65.04 64.84

Currency

 

 

*Source: www.rbi.org.in and www.fbil.org.in

In case March 31, of any of the respective years is a public holiday, the previous Working Day has been
considered.

22
Industry and Market Data

Unless stated otherwise, industry and market data used in this Prospectus has been obtained or derived
from publicly available information as well as various industry publications and sources. These
publications typically state that the information contained therein has been obtained from sources
believed to be reliable but their accuracy and completeness are not guaranteed and their reliability cannot
be assured. Accordingly, no investment decisions should be made based on such information. Although
we believe the industry and market data used in this Prospectus is reliable, it has not been independently
verified by us or the BRLM or any of their respective affiliates or advisors. The data used in these sources
may have been reclassified by us for the purposes of presentation. Data from these sources may also not
be comparable.

The extent to which the market and industry data used in this Prospectus is meaningful depends on the
reader’s familiarity with and understanding of the methodologies used in compiling such data. There are
no standard data gathering methodologies in the industry in which we conduct our business and
methodologies and assumptions may vary widely among different industry sources.

Such data involves risks, uncertainties and numerous assumptions and is subject to change based on

various factors including those discussed in chapter titled “Risk Factors” on page 31 of this Prospectus.
Accordingly, investment decisions should not be based solely on such information.

23
FORWARD LOOKING STATEMENTS

This Prospectus contains certain “forward-looking statements”. These forward-looking statements
generally can be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”,

“estimate”, “intend”, “objective”, “plan”, “propose”, “project”, “will”, “will continue”, “will pursue” or
other words or phrases of similar import. Similarly, statements that describe our Company’s strategies,

objectives, plans or goals are also forward-looking statements.

All forward-looking statements are subject to risks, uncertainties, expectations and assumptions about
us that may vary, some or all of which could cause actual results to differ materially from those
contemplated by the relevant forward- looking statement.

Actual results may differ materially from those suggested by forward-looking statements due to risks or
uncertainties associated with expectations relating to and including, regulatory changes pertaining to the
industries in India in which we operate and our ability to respond to them, our ability to successfully
implement our strategy, our growth and expansion, technological changes, our exposure to market risks,
general economic and political conditions in India which have an impact on its business activities or
investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in
interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the
financial markets in India and globally, changes in domestic laws, regulations and taxes and changes in
competition in the industries in which we operate.

Important factors that could cause actual results to differ materially from our Company’s expectations

assumptions include, but are not limited to, the following:

1. The novel coronavirus (COVID-19) outbreak could materially adversely affect our financial
condition and results of operations.

2. General economic and business conditions in the markets in which we operate and in the local,
regional and national economies;

3. Dependence on business transaction with the government entities and agencies for a significant
portion of our revenue;

Competitive bidding process;

Competition from other oil and gas infrastructure companies;

Delays or cost overruns in the execution of the projects;

Changes in technology and our ability to manage any disruption or failure of our technology systems;

Our ability to attract and retain qualified personnel;

So Sp gt oe

Changes in political and social conditions in India, the monetary and interest rate policies, inflation,
deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

10. The performance of the financial markets in India and globally;
11. Market fluctuations and industry dynamics beyond our control;
12. Changes in foreign exchange rates or other rates or prices;

13. Inability to collect our dues and receivables from, or invoice our unbilled services to, our customers,
our results of operations;

14.Changes in domestic and foreign laws, regulations and taxes and changes in competition in our
industry;

24
15. Termination of clients/works contracts without cause and with little or no notice or penalty;

16. Inability to obtain, maintain or renew requisite statutory and regulatory permits and approvals or non-
compliance with and changes in, safety, health and environmental laws and other applicable
regulations, may adversely affect our business, financial condition, results of operations and
prospects.

For further discussion of factors that could cause the actual results to differ from the expectations, please
refer to the chapter titled “Risk Factors”, “Our Business” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” beginning on pages 31, 114 and 233 respectively of
this Prospectus. By their nature, certain market risk disclosures are only estimates and could be materially
different from what actually occurs in the future. As a result, actual gains or losses could materially differ
from those that have been estimated.

We cannot assure Bidders that the expectations reflected in these forward-looking statements will prove
to be correct. Given these uncertainties, Bidders are cautioned not to place undue reliance on such
forward-looking statements and not to regard such statements as a guarantee of future performance.

Forward-looking statements reflect the current views of our Company as of the date of this Prospectus
and are not a guarantee of future performance. These statements are based on the management’s beliefs
and assumptions, which in turn are based on currently available information. Although we believe the
assumptions upon which these forward-looking statements are based are reasonable, any of these
assumptions could prove to be inaccurate, and the forward-looking statements based on these
assumptions could be incorrect. Our Company, our Directors, members of the Syndicate or any of their
respective affiliates or advisors do not have any obligation to, and do not intend to, update or otherwise
revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence
of underlying events, even if the underlying assumptions do not come to fruition.

In accordance with SEBI ICDR Regulations, our Company and the BRLM will ensure that investors in

India are informed of material developments from the date of the Red Herring Prospectus until the time
of the grant of listing and trading permission by the Stock Exchanges for the Issue.

25
W%

The following is a general summary of the terms of the Issue. This summary should be read in
conjunction with, and is qualified in its entirety by, the more detailed information appearing elsewhere
in this Prospectus, including “Risk Factors”, “Objects of the Issue”, “Our Business”, “Industry
Overview”, “Financial Information” “Outstanding Litigation and Material Developments”, “Main
Provisions of Articles of Association” and “Issue Procedure” beginning on pages 31, 85,114, 97, 179,
251, 307 and 281, respectively.

OFFER DOCUMENT SUMMARY

Primary business of our Company

Weare an oil & gas infrastructure service provider in India, focused on laying pipeline networks along
with construction of associated facilities and providing Operations & Maintenance Services for City
Gas Distribution (“CGD”) projects in India.

Industry in which our Company operates

Our business broadly falls under the scope of the oil and gas industry and more minutely, pipeline
infrastructure and servicing.

Promoters of our Company
The Promoters of our Company are Mr. Srinivasa Rao Gaddipati and Ms. Likhitha Gaddipati.
Size of the Issue

Public issue of 51,00,000* Equity Shares of face value of Rs.10/- each for cash at a price of Rs. 120/- per
equity share including a share premium of Rs. 110/- per equity share (the “Issue Price”) aggregating to
Rs. 6,120.00 Lakhs (“the Issue’)

*subject to finalization of basis of allotment

Objects of the Issue:
The proceeds of the Issue are to be utilized for financing the following objects:

(Rs. in lakhs)

 

 

 

Sr. No. ae aiaui cre evs
1. Working capital requirements 4,700.00
General corporate purpose 600.00
3. To meet issue expenses 820.00
Total 6,120.00*

 

 

 

 

 

*Subject to finalisation of Basis of Allotment

Aggregate pre-Issue shareholding of the Promoter and Promoter Group members

 

 

Cento a i Number of Equity Shares Percentage of pre-Issue
tate paid up capital
Promoters 1,42,52,875 97.46%
Promoter Group 3,65,625 2.50%

 

 

 

 

 

26
W%

The following table sets forth summary financial information derived from the restated Financial
Statements, prepared in accordance with Ind AS and the Companies Act for the Financial Years ended
March 31, 2018, March 31, 2019 and March 31, 2020.

Financial Information:

(Rs. in lakhs)

Particulars

BC) am Co on cer)

  

2019

   

 

 

 

 

 

 

 

 

 

Share Capital 1,462.50 450.00 450.00
Net Worth 6,995.58 5031.23 3242.94
Total Income 16,279.02 14054.68 8860.56
Profit/ (loss) after tax 1,987.93 1,785.51 716.22
Basic and Diluted EPS (in Rs.)- before bonus 13.59 39.68 15.92
Basic and Diluted EPS (in Rs.)- after bonus 13.59 12.21 4.90
Net asset value per share (in Rs.) — before bonus 47.83 111.81 72.07
Net asset value per share (in Rs.) — after bonus 47.83 34.40 22.17

Total borrowings 234.50 985.34 | 1391.49

 

 

 

 

 

The restated Financial Statements for the Financial Years ended March 31, 2018 and March 31, 2019
and March 31, 2020 referred to above are presented under “Financial Information” on page 179 of
this Prospectus.

Auditor Qualifications which have not been given effect to in the restated Financial Statements

No reservations, qualifications and adverse remarks have been made by our Auditors in their reports
which have not been given effect to in the restated Financial Statements for the Financial Years ended
March 31, 2018, March 31, 2019 and March 31, 2020.

Outstanding Litigations:

A summary of outstanding tax proceedings involving our Company, Directors and Promoters as on the
date of this Prospectus is provided below.

 

 

 

Outstanding Litigations omg Financial implications to
Cases the extent quantifiable
(Rs. in lakhs)
1 Filed against our Company 8* 201.44
2 Filed against our Directors 1 0.49
3. Filed against our Promoters 3 B28

 

 

 

 

 

 

*In addition to the above litigations, we also receive notices from various statutory authorities during
the course of our business primarily related to alleged non-compliance with certain labour legislations.
There has been no development in the matters subsequent to receipt of the said notices.

27
W%

The amounts mentioned above may be subject to additional interest/ penalties being levied by the
concerned authorities for delay in making payment or otherwise. The amount of interest/ penalties that
may be levied is unascertainable as on date of this Prospectus. For further details regarding these tax
proceedings, please refer to chapter titled ‘Outstanding Litigations and Material Developments’ on
page 251 of this Prospectus.

Risk Factors

An investment in Equity Shares involves a high degree of financial risk. You should carefully consider
all information in this Prospectus, including the risks described below, before making an investment in
our Equity Shares. The risk factors set forth below do not purport to be complete or comprehensive in
terms of all the risk factors that may arise in connection with our business or any decision to purchase,
own or dispose of the Equity Shares. The section addresses general risks associated with the industry
in which we operate and specific risks associated with our Company. For further details, please refer
to chapter titled ‘Risk Factors’ on page 31 of this Prospectus.

Contingent Liabilities:

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the
existence of which will be confirmed only by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the Company or a present obligation that arise
from past events where it is either not probable that an outflow of resources will be required to settle
the obligation or a reliable estimate of the amount cannot be made.

As of March 31, 2020, our Company had the following contingent liabilities:

I Guarantees Issued by the banks:
(Rs. in Lakhs,
Sr. Particulars As at March 31, 2020
Os
1 Guarantees issued by banks 6,003.66

 

IL. Disputed demands:
(Rs. in Lakhs,

 

 

 

Sr. Particulars As at March 31, 2020
NCH
Telangana Value Added Tax Act, 2005
1 Demand under Rule 17(1)(e) of the APVAT Rules, 2005 6.14
Financial Year 2008-09 (Rs.307,190/- was paid under
protest)
2 Demand under Rule 17(1)(e) of the APVAT Rules, 2005 15.36
Financial Year 2009-10 (Rs.767,828/- was paid under
protest)
3 Demand under Section 143(3) of the IT Act for 176.02

 

 

 

Assessment Year 2017-18

 

 

For further details, please see the “Annexure VI, Note 31(D) — Commitments and Contingent Liabilities
to the extent not provided” under the chapter “Financial Information” on page 179 of this Prospectus.
W%

Following are the details of related party transactions for the last three Financial Years as disclosed in
the Restated Financial Statements:

Related Party Transactions:

(Rs. in Lakhs)

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars As at As at AE
March 31, March March
PAA) by ys ES) 31, 2018

Remuneration and Commission

G. Srinivasa Rao 360.00 520.00 480.00

G. Sri Lakshmi 0.00 200.00 240.00

Narasimha Sekhar Narahari (Ex CFO) 6.41 - -

Santhosh Kumar Gunemoni 1.60 - -

Sudhanshu Sekhar 10.19

Rent

G Kutumba Rao (including Hire Charges) 1.80 1.80 5.15

G. Srinivasa Rao 24.00

Web Designing charges

Veriedge Technologies Pvt Ltd - - 15.93

Professional Charges

G. Likhitha - 19.00 18.00

 

 

 

 

 

 

For details of related party transactions of our Company, as per the requirements under Ind AS 24
‘Related Party Disclosures’ for the Financial Years ended March 31, 2018 and March 31, 2019 and
March 31, 2020 , please see “Annexure VI, Note 31(G) — Related Party Transaction” under the chapter
“Financial Information” on page 179of this Prospectus.

Financing Arrangements

There have been no financing arrangements whereby the Promoters, members of the Promoter Group,
our Directors and their relatives have financed the purchase, by any other person, of securities of our
Company other than in the normal course of the business of the financing entity during the period of
six months immediately preceding the date of the Prospectus.

Weighted average price

The weighted average price at which Equity Shares were acquired by our Promoters in the last one year
is set forth in the table below:

Name of Promoters No. of Equity Shares | Weighted Average Price
acquired in last one year | (in Rs.)*

from the date of this
bea satis)
Mr. Srinivas Rao Gaddipati 98,66,250 Nil
Ms. Likhitha Gaddipati 1,125 Nil
*Since only Bonus shares issued during the one year.

 

 

 

 

 

 

 

29
0

Average Cost of Acquisition

The average cost of acquisition per Equity Share by our Promoters is set forth in the table below:

 

 

 

MATICK seo No. of Equity Shares Average cost of acquisition
(oe)

Mr. Srinivasa Rao Gaddipati 1,42,51,250 0.68

Ms. Likhitha Gaddipati 1,625 Nil*

 

 

 

 

 

*Since shares received as gift and bonus shares issued on said gift shares
Pre-IPO Placement

Our Company does not contemplate any pre-IPO placement of Equity Shares from the date of this
Prospectus till the listing of the Equity Shares.

Issue of Equity Shares for consideration other than cash in the last one year

Our Company has issued Equity Shares for consideration other than cash during the last one year
immediately preceding the date of filing the Prospectus details of which are given below:

 

arta pet Beta ttcy
Value Price eta at ie) PC
En Neu? Gs aa sa City Nature
Allotment eee Equity Equity Company a NEO U AACE
BES) allotment
(Rs.) (Rs.)
December 1,01,25,000 10 NA Bonus 1.Mr. Srinivasa Rao
23, 2019 issue of Gaddipati

2.25 for 2.Mrs. Sri Lakshmi
every 1 Gaddipati
Equity 3.Ms. Likhitha
Share Gaddipati
Capitalization held 4.Mr. Nandu Babu
of Profit Gaddipati
5.Mr. Nagaraju
Ravulapati
6.Mr. Chandra
Sekhar Mallisetty
7.Mr. Karri Kalyan
Manikanta

 

Split/ consolidation of Equity Shares in the last one year

Our Company has not split/consolidated equity shares during the last one year immediately preceding
the date of filing the Prospectus.

30
SECTION II - RISK FACTORS

An investment in Equity Shares involves a high degree of risk. You should carefully consider all the
information in this Prospectus, including the risks and uncertainties described below, before making
an investment in our Equity Shares. In making an investment decision, prospective investors must rely
on their own examination of our Company and the terms of this Issue including the merits and risks
involved. Any potential investor in, and subscriber of, the Equity Shares should also pay particular
attention to the fact that we are governed in India by a legal and regulatory environment in which
some material respects may be different from that which prevails in other countries. The risks and
uncertainties described in this section are not the only risks and uncertainties we currently face.
Additional risks and uncertainties not known to us or that we currently deem immaterial may also have
an adverse effect on our business. If any of the following risks, or any other risks that are not currently
known or are currently deemed immaterial, actually occur, our business, results of operations and
financial condition could suffer, the price of our Equity Shares could decline, and you may lose all or
any part of your investment. Additionally, our business operations could also be affected by additional
factors that are not presently known to us or that we currently consider as immaterial to our
operations.

Unless otherwise stated in the relevant risk factors set forth below, we are not in a position to specify
or quantify the financial or other implications of any of the risks mentioned herein. Unless otherwise
stated, the financial information of our Company used in this section is derived from our Restated
Standalone Financial Information prepared in accordance with Ind AS and the Companies Act and
restated in accordance with the SEBI ICDR Regulations. To obtain a better understanding, you should
read this section in conjunction with the chapters titled “Our Business” beginning on page 114, “Our
Industry” beginning on page 97and “Management's Discussion and Analysis of Financial Condition
and Results of Operations” beginning on page 233respectively, of this Prospectus as well as other
financial information contained herein. For capitalized terms used but not defined in this chapter,
refer to the chapter titled “Definitions and Abbreviation” beginning on page 1 of this Prospectus.

Materiality:

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

. Some events may not be material individually but may be found material collectively;
. Some events may have material impact qualitatively instead of quantitatively; and
. Some events may not be material at present but may have material impact in future.

The financial and other related implications of risks concerned, wherever quantifiable, have been
disclosed in the risk factors mentioned below. However, there are risk factors where the impact may
not be quantifiable and hence the same has not been disclosed in such risk factors. The numbering of
the risk factors has been done to facilitate ease of reading and reference and does not in any manner
indicate the importance of one risk factor over another.

In this Prospectus, any discrepancies in any table between total and sums of the amount listed are due
to rounding off.
In this section, unless the context requires otherwise, any reference to “we”, “us” or “our” refers to

Likhitha Infrastructure Limited.

The risk factors are classified as under for the sake of better clarity and increased understanding:

31
W%

INTERNAL RISK FACTORS:

1. There are certain outstanding legal proceedings pending against our Company, our Promoters
and our Directors. Any adverse outcome in any of these proceedings may adversely affect our
profitability and reputation and may have an adverse effect on our results of operations and
financial condition.

Our Company, Promoter and Directors are currently involved in certain tax proceedings in India
which are pending at different levels of adjudication before the concerned authority/ forum. We
cannot assure you that these tax proceedings will be decided in favour of our Company, Promoter or
Directors, as the case may be. Any adverse decision in such proceedings may render us liable to
penalties and may have a material adverse effect on our reputation, business, financial condition and
results of operations. Additionally, during the course of our business we are subject to risk of
litigation in relation to contractual obligations, employment and labour law related, personal injury
and property damage, etc.

A classification of these outstanding litigations is given in the following table:

Outstanding Litigations CME d sa hiene tle
Outstanding Prine teste Cy

Matters icons
quantifiable
(Rs. in Lakhs)

   

Against our Company
a. Tax Proceedings

i. Direct tax proceedings 6 179.94
ii. Indirect Tax 2 21.50

 

 

 

 

 

2: Against our Directors (other than
Promoters)
a. Tax Proceedings

i. Direct tax proceeding 1 0.49

 

 

 

 

3. Against our Promoter
a. Tax Proceedings
i. Direct tax proceedings 3 3.93

 

 

 

 

 

 

 

 

The amounts mentioned above may be subject to additional interest/ penalties being levied by the
concerned authorities for delay in making payment or otherwise.

For further details pertaining to outstanding litigations, kindly refer to the chapter titled “Outstanding
Litigations and Material Developments” beginning on page 251of this Prospectus.

32
2. Our business is dependent on a few clients and the loss of, or a significant reduction in purchase
orders from such clients could adversely affect our business and financials. We depend on a
limited number of clients for a significant portion of our revenue. The loss of any of our major
client due to any adverse development or significant reduction in business from our major client
may adversely affect our business, financial condition, results of operations and future prospects.

There are limited players in the oil and gas distribution business and we have derived a significant
portion and we may continue to derive a significant portion of our revenue from limited number of
client groups. As per our Restated Financial Statements, our revenue from our few client groups
constituted whole or substantially whole of our total revenue for the Fiscals 2020, 2019 and 2018.
As our business is currently concentrated to a select number of client groups, any adverse
development with such client groups, including as a result of a dispute with or disqualification by
such major client group, may result in us experiencing significant reduction in our cash flows and
liquidity. If our client groups are able to fulfil their requirements through any of our existing or new
competitors, providing services with better quality and / or cheaper cost, we may lose significant
portion of our business. Furthermore, we do not have firm commitment in the form of long-term
supply agreements with our client groups and instead rely on work orders and long-term framework
agreements to govern the volume and other terms. There can be no assurance that upon expiry of the
long-term framework agreements, our clients will re-enter into such agreements with us in a timely
manner and at terms favorable to us or at all. Consequently, there is no commitment on the part of
our major client groups to continue to give new orders to us and as a result, our cash flow and
consequent revenue may fluctuate significantly from time to time.

Such concentration of our business on a few projects or clients may have an adverse effect on our
results of operations.

3. The contracts entered into by us are usually standard in nature and may contain terms that favour
our clients, which may enable them to terminate our contracts prematurely under various
circumstances beyond our control and as such, we have limited ability to negotiate terms of such
contracts and may have to accept unusual or onerous provisions.

The work contracts entered into by us are usually in the form and manner as approved by our clients.
As a result, we have a limited scope to negotiate the terms of such work contracts, some of which
terms may be more favourable to our clients.

The contractual terms may present risks to our business, including:

- risks we must assume and lack of recourse to our client where defects in site or geological
conditions were unforeseen or latent from our preliminary investigations, design and
engineering prior to submitting a bid;

- liability for defects arising after the termination of the agreement;

- clients’ discretion to grant time extensions, which may result in project delays and/or cost
overruns;

- our liability as a contractor for consequential or economic loss to our clients;

- Commitment of the government to secure encumbrance free land, utility shifting and delay in
obtaining approvals.

Such onerous conditions in the contracts may affect the efficient execution of these projects and may
have adverse effects on our profitability.

33
Our business is dependent on a continuing relationship with our clients.

Our business is dependent on oil and gas exploration, development, production and transportation
projects undertaken by large conglomerates and governmental authorities. Our business is therefore
significantly dependent on developing and maintaining relationships and pre-qualified status with
certain major clients and obtaining a share of contracts from such clients. Our business and results
of operations will be adversely affected if we are unable to develop and maintain a continuing
relationship or pre-qualified status with certain of our key clients. The loss of a significant client or
a number of significant clients may have a material adverse effect on our results of operations.

We may not be able to realize the amounts reflected in our order book which may materially and
adversely affect our business, prospects, reputation, profitability, cash flows, financial condition
and results of operation.

As on July 31, 2020, our Company’s order book size was approx. Rs. 66,258.97 Lakhs. Future
revenue related to the performance of projects in the order book may not be realized and although
the projects in the order book represent business that is considered firm, cancellations or scope or
schedule adjustments may occur. We may also encounter problems executing the project as ordered
or executing it on a timely basis. Moreover, factors beyond our control or the control of our clients
may postpone a project or cause its cancellation, including delays or failure to obtain necessary
permits, authorizations, permissions, right-of-way, COVID- 19 related difficulties and other types
of difficulties or obstructions. Due to the possibility of cancellations or changes in scope and
schedule of projects, resulting from our clients’ discretion or problems we encounter in project
execution or reasons outside our control or the control of our clients, we cannot predict with certainty
when, if or to what extent a project forming part of our order book will be performed. Delays in the
completion of a project can lead to clients delaying or refusing to pay the amount, in part or full, that
we expect to be paid in respect of such project. Even relatively short delays or surmountable
difficulties in the execution of a project could result in our failure to receive, on a timely basis or at
all, the payments due to us from under a work contract. Any delay, reduction in scope, cancellation,
execution difficulty, payment postponement or payment default in regard to our order book projects
or any other incomplete projects, or disputes with clients in respect of any of the foregoing, could
adversely affect our cash flow position, revenues and earnings.

Our actual cost in executing a project may vary from the assumptions underlying our bid. We may
or may not be unable to recover all or some of the additional expenses, which may have a material
adverse effect on our results of operations, cash flows and financial condition.

Under the terms and conditions of work order, we generally agree to pay to, or receive contract price
on the basis of quotation given at the time of bidding (subject to contract variations covering changes
in the client’s project requirements). Our actual expense in executing the contracts may vary
substantially from the assumptions underlying our bid for various reasons such as unanticipated
increases in the cost of construction materials, fuel, labour or other inputs, unforeseen conditions,
including the inability of the client to obtain requisite approvals resulting in delays and increased
costs, delays caused by local weather conditions and suppliers’ failures to perform, etc. Our ability
to pass on any increase in the costs to the client may be limited under the contracts with limited or
no price escalation provisions and we cannot assure you that these variations in cost will not lead to
financial losses to us. Further, other risks generally inherent to the oil and gas infrastructure may
result in our profits from a project being less than as originally estimated or may result in us
experiencing losses due to cost and time overruns, which could have a material adverse effect on our
cash flows, business, financial condition and results of operations.

34
We are required to furnish financial and performance bank guarantees as part of our business.
Our inability to arrange such guarantee or the invocation of such guarantees may result in
forfeiture of bid security or earnest money deposit and termination of the relevant contract thereby
affecting results of our operations, financial condition and other prospects.

As per the terms of the work contracts executed by us, we are required to provide financial and
performance bank guarantees in favor of the clients to secure our financial/performance obligations
under the respective contracts for our projects and are also required to ensure that the performance
bank guarantees are valid and enforceable until the expiry of the contract or until we remedy any
defects during the defects liability period or until such other period as is stipulated under the relevant
contract. As on March 31, 2020, we have provided bank guarantees amounting to Rs. 6,003.66
Lakhs, towards securing our financial/performance obligations under our ongoing projects. We may
be unable to fulfil any or all of our obligations under the contracts entered into by us in relation to
our ongoing projects due to unforeseen circumstances which may result in a default under our
contracts resulting in invocation of the bank guarantees issued by us. If any or all the bank guarantees
are invoked, it may result in a material adverse effect on our business and financial condition.

Further, if we are not able to provide/extend the performance bank guarantee within the stipulated
period with respect to the project, then the relevant contract may be terminated and the bid security
or the earnest money deposit provided can be encashed, which could have a material adverse effect
on our prospects.

We may not be able to continue obtaining new financial and performance bank guarantees in
sufficient quantities to match our business requirements. If we are unable to provide sufficient
collateral to secure the financial bank guarantees, performance bank guarantees, our ability to enter
into new contracts or obtain adequate supplies could be limited. Providing security to obtain financial
and performance bank guarantees also increases our working capital requirements.

Some or all of our ongoing projects may not be completed within their agreed completion dates.
Such delays may adversely affect our business, results or operations and financial conditions.

The industry in which our Company operates is prone to time and cost over-runs. The development
of our projects involves various implementation risks including construction delays, delay or
disruption in supply of raw materials, delays in obtaining certain property rights and government
approvals and consents, unanticipated cost increases, adverse environmental and weather conditions,
natural disasters, pandemics, force majeure events or delays in securing required licenses,
authorizations or permits.

In the past, we have experienced delays in implementation of some of our projects and work orders.
Further, there have been instances of time over-run in the execution of our ongoing projects. While,
till date there has been no litigation consequent to such delay in execution of our ongoing projects
however, we cannot assure you that no penalties or liquidated damages may not be levied upon us
on account of such extension for completion. Similarly, our future projects may also be subject to
delays and time and cost over-run on account of reasons which are beyond our control. Such
modification and changes to the project completion timelines may have significant impact on our
ongoing and future projects and consequently, we may be penalized and be required to pay damages
to our clients, which may have an adverse effect on our business, clients relations, our credibility,
results of operation and financial conditions. While we may seek to minimize the risks from any
unanticipated events, it cannot be assured that all potential delays can be mitigated and that we will
be able to prevent any time and cost over-runs and any loss of profits resulting from such delays,
shortfalls and disruptions.

35
9.

10.

11.

12.

Our contracts in hand may be delayed which could have a material adverse effect on our cash
flow position, revenues and earnings.

Our contracts in hand do not necessarily indicate future earnings. We may also face problems in
executing the project as agreed under the contract. Moreover, sometimes factors beyond our control
or the control of our clients may delay a project or cause change of scope, including delays or failures
to obtain necessary permits, authorizations, permissions and other types of difficulties or
obstructions. We cannot predict with certainty when, if or to what extent a contract will be
performed. Delays in the completion of a project can lead to delayed payments from our clients. Any
delay, reduction in scope, execution, difficulty or delay in payment in respect of our contract or any
disputes with clients in respect of any of the foregoing could have a material adverse effect on our
cash flow position, revenues and earnings.

We could become liable to clients, suffer adverse publicity and incur substantial costs as a result
of defects in our services, which in turn could adversely affect our reputation and our future
prospects could be affected if we are associated with negative publicity.

Any failure or defect in our services could result in a claim against us for damages, regardless of our
responsibility for such a failure or defect. Although we attempt to maintain quality standards, we
cannot assure that all our project related services would be of uniform quality, which in turn could
adversely affect the value of our reputation and future prospects could be adversely affected if we
are associated with negative publicity. Also, our business is dependent on the trust that our clients
have in the quality of our project related services. Any negative publicity regarding our Company,
reputation or project related services, including those arising from a drop-in quality of our vendors
or any unforeseen event, could affect our reputation and our results from operations.

Our business is subject to seasonal fluctuations.

Our business operations may be affected by seasonal factors which may restrict our ability to carry
on activities related to our projects and fully utilize our resources. Heavy or sustained rainfalls or
other extreme weather conditions such as cyclones could result in delays or disruptions to our
operations during the critical periods of our projects and cause severe damages to equipment. In
particular, the monsoon season may restrict our ability to carry on activities related to execution of
our projects and fully utilize our resources, which may affect our revenues and consequently, profit
recognition to subsequent quarters. Adverse seasonal developments may also require the evacuation
of personnel, suspension or curtailment of operations, resulting in damage to sites or delays in the
delivery of materials. Such fluctuations may adversely affect our revenues, cash flows, results of
operations and financial conditions.

We face competition in our business from other oil and gas infrastructure companies.

We operate in a competitive environment. Our competition varies depending on the size, nature and
complexity of the project and on the geographical region in which the project is to be executed. We
compete against major as well as smaller regional oil and gas infrastructure companies. While
service quality, technological capacity and performance, health and safety records and personnel, as
well as reputation and experience, are important considerations in client decisions, price is a major
factor in most tender awards.

We are currently qualified to bid for projects up to a certain value and therefore, are unable to
compete with large pipeline infrastructure conglomerates for high value contracts. Some of our
competitors are larger than us and have greater financial resources. They may also benefit from
greater economies of scale and operating efficiencies. Competitors may, whether through

36
13.

14,

15.

consolidation or growth, present more credible integrated and/or lower cost solutions than we do,
causing us to win fewer tenders. If we do not succeed in being awarded the contracts for projects,
we could fail to increase, or maintain, our volume of order intake and operating revenues. There can
be no assurance that we can continue to effectively compete with our competitors in the future and
failure to compete effectively may have an adverse effect on our business, financial condition and
results of operations.

Given the long-term nature of many of our projects, we face various implementation risks and
our inability to successfully manage such risks may have an adverse impact on the functioning of
our business.

Most of the projects that we undertake are by their nature long term and consequently expose us to
a variety of implementation risks, including construction delays, delay or disruption in supply of raw
materials, unanticipated cost increases, and cost overruns. While we believe that we have
successfully managed the implementation risks we have faced in the past, there can be no assurance
that we will be able to continue to effectively manage any future implementation risks, which may
or may not be of a nature familiar to us. Our future results of operations may be adversely affected
if we are unable to effectively manage the implementation risks we face.

We rely on effective and efficient project management. Any adverse change in our project
management procedures could affect our ability to complete projects on a timely basis or at all,
which may cause us to incur liquidated damages for time overruns pursuant to our contracts.

Our project-based businesses depend on the proper and timely management of our projects. Although
we focus on project management in a number of ways, including by appointing project managers at
our sites and by obtaining progress reports periodically, ineffective or inefficient project
management could increase our costs and expenses and thus, materially and adversely affect our
profitability.

We typically enter into contracts which provide for liquidated damages for time overruns.
Additionally, in some contracts, in case of delay, our clients may have the right to appoint a third
party to complete the work and to deduct additional costs or charges incurred for completion of the
work from the contract price payable to us. In case we are unable to meet the performance criteria
as prescribed by the clients and if penalties or liquidated damages are levied, our financial condition
and results of operations could be materially and adversely affected.

We have not sought consents from some of our Promoter group members of the Company for
including their names in this RHP or Prospectus

Certain persons have been disclosed as part of our Promoter group on the basis of them being an
immediate relative of our Promoters. Such persons however do not maintain any relationship,
arrangement, dealing with our Company, neither have they entered into any financial transactions
with us nor have any interest in the business activities of our Company and no consent has been
sought from such Promoter group members for being named in the RHP or the Prospectus or to make
accurate disclosures in relation to them in the RHP or the Prospectus. Our Company has vide its
letter dated February 07, 2020 made an application under Regulation 300 of SEBI ICDR Regulations
to SEBI for seeking relaxation from the strict enforcement of Regulation 2(1)(pp) of SEBI ICDR
Regulations by treating the aforesaid persons not as a part of the promoter group of our Company
for the purpose of the Issue and for all future circumstances in relation to the listing of our
Company’s shares. On July 17, 2020, our Company has received the necessary exemption/ relaxation
from SEBI in relation to the aforesaid application. In the absence of consent from them, there can be
no assurance regarding the accuracy of information in the RHP or the Prospectus pertaining to such
Promoter group members or that they will not object to their name being included in the RHP or the

37
16.

17.

Prospectus without their consent. For further information, kindly refer to the chapter “Promoters
and Promoter Group” on page 171 of this Prospectus.

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

We have experienced high growth in recent years and expect our business to grow significantly as a
result of favorable government policies and increased demand of oil and natural gas. We expect this
growth to place significant demands on us and require us to continuously evolve and improve our
operational, financial and internal controls across the organization. In particular, continued
expansion increases the challenges involved in:

¢ maintaining high levels of client satisfaction;

¢ recruiting, training and retaining sufficient skilled management, technical and marketing
personnel;

e adhering to health, safety and environment and quality and process execution standards that meet
client expectations;

preserving a uniform culture, values and work environment in operations within India; and

e developing and improving our internal administrative infrastructure, particularly our financial,
operational, communications and other internal systems.

Any inability to manage our growth may have an adverse effect on our business and results of
operations.

We may be unable to obtain the requisite approvals, licenses, registrations and permits to develop
and operate our businesses or may be unable to renew them in a timely manner, which may affect
our operations adversely

We are governed by various laws and regulations for our business and operations. We are required,
and will continue to be required, to obtain and hold relevant licenses, approvals and permits at the
local, state and central government levels for doing our business. While we believe that we have
obtained the necessary and material approvals, licenses, registrations and permits from the relevant
authorities, there could be instances where we may not have applied/ applied with a delay for certain
requisite approvals, applicable to us. We also need to apply for renewal, from time to time, of certain
approvals, licenses, registrations and permits, which expire or seek fresh approvals, as and when
required, in the ordinary course of our business.

There can be no assurance that the relevant authority will issue an approval or renew expired
approvals within the applicable time period or at all. Any delay in receipt or non-receipt of such
approvals, licenses, registrations and permits could adversely affect our related operations. Further,
under such circumstances, the relevant authorities may initiate penal action against us, restrain our
operations, impose fines/penalties or initiate legal proceedings for our inability to renew/obtain
approvals in a timely manner or at all.

Furthermore, we cannot assure you that the approvals, licenses, registrations and permits issued to
us will not be suspended or cancelled or revoked in the event of non-compliance or alleged non-
compliance with any terms or conditions thereof, or pursuant to any regulatory action. We have, in
the past, received notices from statutory authorities in relation to alleged non-compliance with
certain labour legislations which pre-dominantly include non-maintenance of registers, under

38
18.

applicable laws, non-display of copy of license at our work sites, etc. Further, we have not, in the
past, taken registration as required under the applicable professional tax statute(s). We cannot assure
you that non-compliances will not occur in the future or that we may not be subject to any penalties
in relation to such non-compliances which may affect our profitability, business, financial condition
and results of operations. Further, any suspension or revocation of any of the approvals, licenses,
registrations and permits that has been or may be issued to us may adversely affect our business and
results of operations.

For further information, please refer to chapter titled “Outstanding Litigations and Material
Developments” and “Government and Other Approvals” beginning on page 251 and 258 of this
Prospectus.

Our business is manpower intensive and we are dependent on the supply and availability of a
sufficient pool of contract labourers from sub-contractors at our project locations. Unavailability
or shortage of such a pool of contract labour or any strikes, work stoppages, increased wage
demands by workmen or changes in regulations governing contractual labour may have an
adverse impact on our cash flows and results of operations.

Our business is manpower intensive and we are dependent on the availability of a sufficient pool of
contract labour from our sub-contractors to execute our projects. The number of contracts labourers
employed by us varies from time to time based on the nature and extent of work contracted to us and
the availability of contract labour. We may not be able to secure the required number of contractual
labourers required for the timely execution of our projects for a variety of reasons including
possibility of disputes with sub-contractors, strikes, less competitive rates to our sub-contractors as
compared to our competitors, COVID- 19 related challenges or changes in labour regulations that
may limit availability of contractual labour. We are subject to laws and regulations relating to
employee welfare and benefits such as minimum wage, working conditions, employee insurance,
and other such employee benefits and any changes to existing labour legislations, including upward
revision of wages required to be paid under statutes to the workmen, limitations on the number of
hours of work or provision of improved facilities, such as food or safety equipment, may adversely
affect our business and results of our operations.

There can be no assurance that disruptions in our business will not be experienced if there are strikes,
work stoppages, disputes or other problems with sub-contractors or contract labourers deployed at
our projects. This may adversely affect our business and cash flows and results of operations.

In respect of labour cost and overhead cost components in such contracts, based on our internal
estimates and belief, we include appropriate escalation provisions in the cost estimates at the time of
bidding for a project and our contracts do not usually contain any clause for price adjustment for
increase in labour costs. Any such increase in labour costs or any circumstances that render our
estimates inaccurate or incorrect, may have an adverse impact on our profitability.

Tf our labour does not complete its obligations in a timely and satisfactory manner, our costs could

increase and our reputation, business, cash flows and results of operations could be adversely
affected.

39
0

19. Our Company does not have any formal long-term arrangements with its suppliers. Any
significant variation in the supply may adversely affect the operations and profitability of our
Company.

Major raw materials used for our operational activities include electrodes, coating sleeves, and
warning mats etc. These raw materials are procured from various local manufacturers traders from
whom we conduct business on regular basis and sometimes certain raw materials are also imported
based on the client’s requirements. Our Company maintains a list of registered and unregistered
suppliers from whom we procure the materials on order basis. Owing to wide availability of
suppliers and traders across India and the said materials being easily available, we have not entered
any long-term arrangement or contracts with any of the parties which oblige them to maintain their
business with us. Our ability to maintain close and satisfactory relationships with our suppliers
may impact our supplies and affect our production process. Further, there is no assurance that the
suppliers will continue to supply raw materials to us on reasonably acceptable terms.

20. Our results of operations could be adversely affected by any disputes with our employees.

As of July 31, 2020, we employed directly work force of approximately 908 employees on our
payroll. In addition to the above, we also hire temporary contract labour at our project sites
depending on the project requirements. While we believe that we maintain good relationships with
our employees and contract labor, there can be no assurance that we will not experience future
disruptions to our operations due to disputes or other problems with our work force, which may
adversely affect our business and results of operations. The number of contract laborers vary from
time to time based on the nature and extent of work contracted to independent contractors. We enter
into contracts with independent contractors to complete specified assignments. All contract laborers
engaged at our facilities are assured minimum wages that are fixed by local government authorities.
Any upward revision of wages required by such governments to be paid to such contract laborers or
offer of permanent employment or the unavailability of the required number of contract laborers,
may adversely affect our business and results of our operations.

21. We have certain contingent liabilities which may adversely affect our financial condition.

As on March 31, 2020, our Company had the following contingent liabilities:

 

 

 

 

Sas Particulars yV TG
(Rs. In Lakhs)

1 Guarantees issued by Banks 6,003.66

2 Demand under Rule 17(1)(e) of the APVAT Rules, 2005 6.14
Financial Year 2008-09 (Rs.307,190/- was paid under protest)

3 Demand under Rule 17(1)(e) of the APVAT Rules, 2005 15.36
Financial Year 2009-10 (Rs.767,828/- was paid under protest)

4 Demand under Section 143(3) of the IT Act 176.02
for Assessment Year 2017-18

 

 

 

 

 

In the event that any of these contingent liabilities materialize, our financial condition may be
adversely affected. For further information, please refer chapter titled “Financial Information”
beginning on page 179 of this Prospectus.

40
22.Our success largely depends upon the knowledge and experience of our Key Management
Personnel. Any loss of our Key Management Personnel or our ability to attract and retain them
could adversely affect our business, operations and financial conditions.

We depend on the management skills and guidance of our Key Management Personnel for
development of business strategies, monitoring its successful implementation and meeting future
challenges. The success of our business is dependent upon its ability to attract and retain qualified
and experienced staff (including senior and middle management with professional qualifications).
We are led by a dedicated senior management team with several years of industry experience. In
addition, we have an experienced and qualified team of employees. We are dependent on our
experienced Promoter, management team and employees and also the ability to attract, retain and
motivate skilled personnel to effectively implement our Company’s strategy and serve our clients.

Many of our personnel possess skills that would be valuable to other companies engaged in one or
more of our business lines. Whilst we offer compensation in line with the demand for such skills
some of our competitors may be able to pay our employees more than we are able to pay to retain
them. Our ability to profitably operate is substantially dependent upon our ability to locate, hire,
train and retain our personnel. We may, therefore, incur additional costs in order to attract talented
individuals and to retain existing experienced staff. Although we may not have experienced difficulty
locating, hiring, training or retaining our employees to date, there can be no assurance that we will
be able to retain our current personnel, or that we will be able to attract and assimilate other qualified
personnel in the future. If we are unable to attract or retain qualified and experienced staff, our ability
to operate and expand our business may be affected and our operating costs may increase. The loss
of any of the members of our senior management team or other key personnel or our inability to
recruit and retain qualified and experienced staff or to manage the attrition levels in different
employee categories may limit our competitiveness, interrupt our operations and/or cause client
dissatisfaction, any of which could reduce our revenue and profitability.

23.Our indebtedness and the conditions and restrictions imposed by our financing agreements could
adversely affect our ability to conduct our business and operations.

As of July 31, 2020, we had total outstanding fund based debt (excluding auto loans) of Rs. 175.50
Lakhs and total bank guarantee of Rs. 5811.96 Lakhs. In addition to the above, we may incur
additional indebtedness in the future. Our indebtedness could have several important consequences,
including but not limited to the following:

¢ a portion of our cash flow may be used towards repayment of our existing debt, which will reduce
the availability of our cash flow to fund working capital, capital expenditures, acquisitions and
other general corporaterequirements;

our ability to obtain additional financing in the future at reasonable terms may be restricted;

fluctuations in market interest rates may affect the cost of our borrowings, as some of our
indebtedness are at variable interest rates;

there could be a material adverse effect on our business, financial condition and results of
operations if we are unable to service our indebtedness or otherwise comply with financial and
other covenants specified in the financing agreements; and

we may be more vulnerable to economic downturns, may be limited in our ability to withstand

competitive pressures and may have reduced flexibility in responding to changing business,
regulatory and economic conditions.

41
24,

25.

26.

Most of our financing arrangements are secured by the lenders by creating a charge over our movable
and immovable assets. These loans are repayable in accordance with any agreed repayment schedule
and may be recalled by the relevant lenders at any time. Any such unexpected demand or accelerated
repayment may have a material adverse effect on our business, cash flows and financial condition.
Many of our financing agreements also include various conditions and covenants that require us to
obtain lender consents prior to carrying out certain activities and entering into certain transactions.
Failure to meet these conditions or obtain these consents could have significant consequences on our
business and operations. Specifically, we require, and may be unable to obtain, lender consents to
incur additional debt, issue equity, change our capital structure, increase or modify our capital
expenditure plans, undertake any expansion, provide additional guarantees, change our management
structure, or merge with or acquire other companies, whether or not there is any failure by us to
comply with the other terms of such agreements.

We believe that our relationships with our lenders are good and we have in the past obtained consents
from them to undertake various actions and have informed them of our activities from time to time.
Compliance with the various terms is, however, subject to interpretation and we cannot assure you
that we have requested or received all consents from our lenders that are required by our financing
documents. As a result, it is possible that a lender could assert that we have not complied with all
terms under our existing financing documents. Any failure to comply with the requirement to obtain
a consent or other condition or covenant under our financing agreements that is not waived by our
lenders or is not otherwise cured by us, may lead to a termination of our credit facilities, acceleration
of all amounts due under such facilities and trigger cross default provisions under certain of our other
financing agreements and may adversely affect our ability to conduct our business and operations or
implement our business plans.

One of our Promoters has limited experience in our line of business

One of our Promoters, namely Ms. Likhitha Gaddipati has limited experience in our present line of
business which may affect the profitability of our business and may make it more difficult to attract
and retain our customers which could have a material adverse effect on or business prospects.

The erstwhile statutory auditors of our Company were not holding certificate issued by the peer
review board of ICAI.

M/s. Siva Krishna & Narayan, Chartered Accountants, who had been appointed as our statutory
auditors for the period October 03, 2003 to January 25, 2019, were not holding certificate issued
by the peer review board of ICAI. Our Company was not a listed company during the relevant
period and therefore, the requirement to appoint a peer reviewed auditor was not applicable to us.

Members of our Promoter group will continue to retain majority control in the Company after the
Issue, which will enable them to influence the outcome of matters submitted to shareholders for
approval.

Upon completion of this Issue, members of the Promoter group will have substantial shareholding
of our post-Issue equity share capital. As a result, the Promoter group will have the ability to control
our business including matters relating to any sale of all or substantially all of our assets, the timing
and distribution of dividends and the election or termination of appointment of our officers and
directors. This control could delay, defer or prevent a change in control of the Company, impede a
merger, consolidation, takeover or other business combination involving the Company, or
discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control
of the Company even if it is in the Company’s best interest. In addition, for so long as the Promoter
group continues to exercise significant control over the Company, they may influence the material

42
27.

28.

29.

W%

policies of the Company in a manner that could conflict with the interests of our other shareholders.
The Promoter group may have interests that are adverse to the interests of our other shareholders and
may take positions with which we or our other shareholders do not agree.

Our Group Company has incurred loss in the last three financial years

Our Group Company have incurred losses in the last three financial years. The profit/ (loss) figures
for the preceding three financial years of such Group Company are as follows:

(Rs. in lakhs)

 

Name of loss-making group Profit/(loss) after tax for the fiscal
Ce rh PAIYA 1) 2019 2018
Veriedge Technologies _ Private (10.03) (1.18) (0.40)
Limited

 

We cannot assure that our Group company will not incur losses in the future. For further details of
our Group Companies, please see chapter titled "Our Group Companies" beginning on page 176 of
this Prospectus.

Our Promoters and Promoter group members have provided guarantees for loans availed by us.

Our Promoter, Mr. Srinivasa Rao Gaddipati, and some Promoter group members have issued
personal guarantees in relation to certain borrowings availed by our Company. In the event of default
on such borrowings, these guarantees may be invoked by our lenders thereby adversely affecting the
respective Promoter and Promoter group members’ ability to manage the affairs of our Company
which in turn, could adversely affect our business, prospects, financial condition and results of
operations. Further, if any of these guarantees are revoked by our Promoter and Promoter group
members, our lenders may require alternate securities or guarantees and may seek early repayment
or terminate such facilities. Any such event could adversely affect our financial condition and results
of operations. For further details of loans availed by us, please refer the chapter titled “Financial
Indebtedness” beginning on page 247 of this Prospectus.

Our Promoter and members of the Promoter group have received and may continue receive
remuneration from the Company in the future. The ratio of remuneration of our Promoter/
Promoter Group to the total employee benefit has been more than 25% in the past financial years.
There can be no assurance that such transactions, individually or in the aggregate, will not have
an adverse effect on our financial condition and results of operations.

Our Company has paid remuneration to our Promoters/Promoter Group members in the Fiscals
2017, 2018, 2019 and 2020 for an aggregate sum of Rs. 270 Lakhs, Rs. 720 Lakhs, Rs. 720 Lakhs
and Rs. 360 Lakhs respectively, representing 27.55%, 46.98%, 29.67% and 12.40% respectively
of the total employee benefit of our Company. For further details, see Note 31(F) in Annexure VI
and note no. 28 to the Restated Financial Statements in “Financial Information” beginning on page
182 of this Prospectus.

As can be noticed from above, the remuneration of our Promoter/ Promoter Group to the total
employee benefit is below 25% for the Fiscal 2020 but has exceeded the said percentage in the
past financial years. While we believe that all such payments have been made on the basis of their
contribution to the Company, there can be no assurance that our Promoter and Promoter group
members could not have benefited from such transactions in comparison to our other employees.
There can be no assurance that such transactions, individually or in the aggregate, will not have an
adverse effect on our financial condition and results of operations.

43
30. We have in the past entered into related party transactions and may continue to do so in the future.

31,

32.

33,

We have in the past entered into transactions with certain Promoters/relatives of our
Promoters/entities promoted by our Promoters. Furthermore, it is likely that we may enter into
related party transactions in the future. While we believe that all such transactions have been/would
be conducted on an arm's length basis, there can be no assurance that we might not have
achieved/may not achieve more favorable terms had such transactions not been entered into with
related parties. There can be no assurance that such transactions, individually or in the aggregate,
will not have an adverse effect on our financial condition and results of operations. For further
details, please see note Annexure VI, Note 31(G) to our Restated Financial Statements appearing
under chapter titled “Financial Information” beginning on page 179 of this Prospectus.

Our Registered Office is not owned by us, if we are required to vacate the same, due to any reason
whatsoever, it may adversely affect our business operations.

Our Company’s registered office is situated at Flat No. 701, Plot No.8-3-940 and 8-3-940/A to E,
Tirumala Shah Residency, Yellareddy Guda, Ameerpet, Hyderabad-500073, Telangana, India, that
is owned by Mr. Kutumba Rao Gaddipati, member of our Promoter group and director of our
Company. The premises have been taken on leasehold /rental / leave and license basis by our
Company. There can be no assurance that the term of the agreements in relation to the above
premises will be continued/ renewed and in the event of expiry, non-renewal or early termination of
the lease/ leave and license arrangement or in case of disassociation of our Promoter Group Member
with our Promoters, we may be required to vacate the above premises and identify alternative
premises which may have an adverse impact on our business and operations. For further details,
please refer to the chapter titled "Our Business " beginning on page 114of this Prospectus.

Certain agreements may be inadequately stamped or may not have been registered or may not
have necessary disclosure as a result of which our operations may be adversely affected.

Few of our agreements such as those relating to immovable properties, may not be stamped
adequately or registered or may not have the necessary disclosures. The effect of inadequate
stamping is that the document is not admissible as evidence in legal proceedings and parties to that
agreement may not be able to legally enforce the same, except after paying a penalty for inadequate
stamping. The effect of non-registration of documents required to be registered, is that such
document will not have any effect on the property or be eligible to be received as evidence in legal
proceedings. Any potential dispute due to non-compliance of local laws relating to stamp duty and
registration may adversely impact the operations of our Company.

We do not have access to records and data pertaining to certain secretarial information in relation
to certain disclosures

Our Company does not have access to records pertaining to certain historical and secretarial data or
information as the same are not available with us or with the Registrar of Companies, Hyderabad.
Certain annual filing forms, forms for change in directors and financial statements of the Company
prior to 2004 are not available with the Company or with the ROC. We cannot assure you of the
accuracy and completeness of such internal records maintained by our Company.

44
34,

35.

36.

There have been some instances of non-filing/ delayed filing/ incorrect filings in the past with the
Registrar of Companies. Further, our Company may not have complied with certain statutory
provisions under the Companies Act. Such non-compliances/ lapses may attract penalties.

Our Company is required to make filings under various rules and regulations as applicable under the
Companies Act, few of which may either have not been done or have been done with certain
discrepancies/ inaccuracies/ clerical mistakes and/ or delays in filing within the stipulated time
period. In case of delay in filing the statutory forms with RoC, the Company had made the
requisite filings along with additional fees, as specified by RoC.

Although, there have been no penalty levied on the Company for such delays/ defaults, however, it
cannot be assured that even in future no such penalty shall be levied. Therefore, if the concerned
authorities impose monetary penalties on us or take certain punitive actions against our Company or
its directors / officers in relation to the same, our business, financial condition and results of
operations could be adversely affected.

There may be possible conflicts of interest between us and our Promoters or our Group Company,
or with entities in which our Promoters & directors are interested.

Our Promoter, Mr. Srinivasa Rao Gaddipati, is actively involved in the management of both our
business and the business operations of our Promoter Group Companies. Any diversion of attention
by our Promoter to our Promoter Group Companies may distract or dilute management attention
from our business, which could adversely affect our business, financial condition and results of
operations. Though our Promoter Group Companies are not having business objects similar to
those of our Company, there can be no assurance that our Promoters or Promoter Group
Companies, in future, will not provide comparable services, expand their presence or acquire
interests in competing ventures in the locations in which we operate. Further, we do not enjoy
contractual protection by way of a non-compete or other agreement or arrangement with such
Promoter Group Companies. Such eventualities may lead to conflict of interest between our
Company and our Promoter Group Companies which have been promoted and / or controlled by
our Promoters. For more details regarding our Promoters and Group Companies, please refer
chapters titled "Our Promoters and Promoter Group" and "Group Companies" beginning on page
171 and 176 respectively of this Prospectus respectively.

Our Company’s logo is not registered as on date of this Prospectus. However, an application for
registration our trademark has been filed with the trademarks authority. We may be unable to
adequately protect our intellectual property and/or be subject to claims alleging breach of third-
party intellectual property rights.

As on date of this Prospectus, we have made application under the Trademarks Act, 1999 for

 

registration of our logo ", for getting it registered in the name of our Company by the
trademark authority and hence, we do not enjoy the statutory protections accorded to a registered
logo and the same has been marked as objected by the relevant authority. We cannot assure you
that our application for registration of our logo will be granted by the relevant authorities in a
timely manner or at all. Our logo is significant to our business and operations. The use of our logo
by third parties could adversely affect our reputation, which could in turn adversely affect our
business and results of operations. In the event, our application is rejected by trademarks registry,
our business, results of operation and financial condition would be adversely affected. Obtaining,
protecting and defending intellectual property rights can be time consuming and expensive, and

45
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38.

39.

40.

may require us to incur substantial costs, including the diversion of the time and resources of
management and technical personnel.

Further, while we endeavour to ensure that we comply with the intellectual property rights of
others, there can be no assurance that we will not face any intellectual property infringement claims
brought by third parties that may require us to introduce changes to our operations. Any claims of
infringement, regardless of merit or resolution of such claims, could force us to incur significant
costs in responding to, defending and resolving such claims, and may divert the efforts and
attention of our management and technical personnel away from our business. We could be
required to pay third party infringement claims. In such cases, our financial conditions and business
operations may be adversely impacted.

Our insurance coverage may not be adequate and this may have as adverse effect on our business
and revenue.

We have not taken any insurance coverage for our Registered Office premises. Further, our existing
insurance policies may not be sufficient to cover all damages, whether foreseeable or not. Our
insurance policies are also subject to certain deductibles, exclusions and limits on coverage. We
cannot assure you that the terms of our insurance policies will be adequate to cover any damage or
loss suffered by us or that such coverage will continue to be available on reasonable terms or will
be available in sufficient amounts to cover one or more large claims, or that the insurer will not
disclaim coverage as to any future claim. A successful assertion of one or more large claims against
us that exceeds our available insurance coverage or changes in our insurance policies, including
premium increases or the imposition or a larger deductible or co-insurance requirement, could
adversely affect our business, financial condition and results of operations and could cause the
price of our Equity Shares to decline. For details on insurance policies taken by our Company
please see page 114 in chapter titled “Our Business” of Prospectus.

Our Company has during the preceding one year from the date of the Prospectus have allotted
Equity Shares at a price which is lower than the Issue Price.

In the last twelve months, we have made allotments of Equity Shares through bonus issue of shares
to the shareholders, which are given without any consideration to the shareholders. For details
relating to number of shares issued, date of allotment etc. please refer to chapter titled “Capital
Structure” beginning on page 71 of this Prospectus.

The average cost of acquisition of Equity Shares by our Promoters could be lower than the floor
price.

Our Promoters average cost of acquisition of Equity Shares in our Company could be lower than
the Floor Price of the Price Band as may be decided by the Company in consultation with the Book
Running Lead Manager. For further details regarding average cost of acquisition of Equity Shares
by our Promoters in our Company and build-up of Equity Shares by our Promoters in our
Company, please refer chapter titled “Capital Structure” beginning on page 71 of this Prospectus.

Some of our immovable properties may have certain irregularities in title, which may adversely
affect us

There may be certain irregularities in respect of our title to some of the immovable properties
owned by or leased to us. In certain cases, we may not have clear and absolute title to certain
immovable properties. Though we generally obtain title certificates and title opinions while

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executing definitive agreements, we cannot assure you that the persons with whom we enter into
such agreements have clear title to such properties. We may not be able to assess or identify all
risks and liabilities associated with the immovable properties including lands. As each transfer in
a chain of title may be subject to defects, our title to the immovable properties may be subject to
defects of which we are not aware which may become a subject matter of litigation in future.

There is no monitoring agency appointed by our Company and the deployment of funds are at the
discretion of our Management and our Board of Directors, though it shall be monitored by our
Audit Committee

As per SEBI ICDR Regulations, appointment of monitoring agency is required only for Issue size
above Rs. 10,000.00 Lakhs. Hence, we have not appointed any monitoring agency to monitor the
utilization of Issue proceeds. However, the audit committee of our Board will monitor the
utilization of Issue proceeds in terms of SEBI LODR Regulations. Further, our Company shall
inform about material deviations in the utilization of Issue proceeds to the stock exchanges and
shall also simultaneously make the material deviations / adverse comments of the audit committee
public.

External Risk Factors

42.

The occurrence of natural or man-made disasters including global outbreak of an infectious
disease such as COVID-19 or any other serious public health concerns in India or elsewhere may
adversely affect our business, financial condition, results of operations and cash flows.

The occurrence of natural disasters, including hurricanes, floods, tsunamis, earthquakes, tornadoes,
fires, explosions, pandemic disease and man-made disasters, including acts of terrorism and
military actions, may adversely affect our financial condition or results of operations. The potential
impact of a natural disaster on our results of operations and financial position is speculative and
would depend on numerous factors. In addition, an outbreak of a communicable disease in India
or in the particular region in which we have projects would adversely affect our business and
financial conditions and the result of operations.

Since December 2019, there is an ongoing outbreak of the 2019 novel coronavirus (“COVID-19”)
which has affected countries globally. On January 30, 2020, the World Health Organization
declared the COVID-19 outbreak a “Public Health Emergency of International Concern” and on
March 11, 2020, it was declared a pandemic. Between January 30, 2020 and the date of this
Prospectus, the COVID-19 disease has spread to many other countries, with the number of reported
cases and related deaths increasing daily and, in many countries, exponentially.

There have been border controls, lockdowns and travel restrictions imposed by various countries,
including India, as a result of the COVID-19 outbreak. Several countries’ governments and
numerous companies have imposed increasingly stringent restrictions to help avoid, or slow down,
the spreading of COVID-19, imposition of lockdown measures such as closure of nonessentials
services. Such outbreak of an infectious disease together with these restrictions and measures have
resulted in protracted volatility in domestic and international markets and/or may result in a global
recession and may adversely impact our operations, revenues, cashflows and profitability. In
particular, the COVID-19 outbreak has caused stock markets worldwide to lose significant value
and has impacted global economic activity.

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W%

A number of governments have revised gross domestic product growth forecasts for 2020
downwards in response to the economic slowdown caused by the spread of COVID-19, and it is
possible that the outbreak of COVID-19 will cause a prolonged global economic crisis or recession.

A countrywide lockdown to contain the spread of COVID-19 has been in force in India since
March 24, 2020, which was further extended with phase-wise relaxations. and many other
economic activities have remained largely suspended like complete stoppage of movement of non-
essential goods and restricted movement of people and thus delaying and hampering our operations
at project sites. As a result, we may face delays associated with collection of payments from our
clients, which are in the infrastructure sector, due to such lockdown or economic slowdown caused
by COVID-19, which may adversely affect our cashflows.

Due to the lock-down imposed on account of COVID-19, the financial performance of our
Company has been impacted to the extent of about 50% of total turnover (unaudited) during the
first quarter ended June 30, 2020 in comparison to the previous financial year. The impact on
account of COVID-19 cannot however be assessed with certainty on the overall financial
performance and profitability of our Company for the financial year 2020-21. Post June 01, 2020,
majority of the Company’s operations have normalized. The execution schedule for completion
has also been extended for majority of the ongoing projects.

It is estimated that the overall turnover (unaudited) for the first half-year of FY 2020-21 may get
impacted to the extent of 15% as against the comparative half-year of the previous financial year.
In view of implementation of various measures to prevent and control the spread of Covid-19, it is
estimated that the expenses incurred by our Company may increase which in turn may impact the
overall profitability to the extent of 0.10% to 0.15% p.a.

Risks arising on account of COVID-19 can also threaten the safety of operation at our project sites,
causing disruption of operational activities, environmental harm, loss of life, injuries and impact
the wellbeing of our employees/ labour. These risks could have an adverse effect on our business,
results of operations, cash flows and financial condition.

As of the date of this Prospectus, there is significant uncertainty relating to the severity of the near-
and long-term adverse impact of the COVID-19 pandemic on the global economy, global financial
markets and the Indian economy. We are unable to accurately predict the duration or scope of the
COVID-19 pandemic or the near-term or long-term impact of the COVID-19 pandemic on our
business. To the extent the COVID-19 pandemic adversely affects our business and financial
results, it may also have the effect of heightening many of the other risks described in this
Prospectus, including those relating to cash flows.

We cannot assure prospective investors that such events will not occur in the future or that our
business, financial condition, results of operations and cash flows will not be adversely affected
by such events.

The outbreak of a pandemic or an infectious disease in India or elsewhere or any other serious
public health concern, around the world could have a negative impact on economies, financial
markets and business activities worldwide and which in turn could have a material adverse effect
on our business, financial condition and results of operations.

48
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44,

45.

W%

Financial instability in other countries, particularly countries with emerging markets, could
disrupt Indian markets and our business and cause the trading price of the Equity Shares to
decrease.

The Indian financial markets and the Indian economy are influenced by economic and market
conditions in other countries, particularly emerging market countries in Asia. Although economic
conditions are different in each country, investors’ reactions to developments in one country can
have adverse effects on the securities of companies in other countries, including India. A loss of
investor confidence in the financial systems of other emerging markets may cause volatility in
Indian financial markets and in the Indian economy. Any worldwide financial instability could also
have a negative effect on the Indian economy. Accordingly, any significant financial disruption
could have an adverse effect on our business, financial condition and results of operations.

Significant differences exist between Ind AS, Indian GAAP and other accounting principles, such
as US GAAP and International Financial Reporting Standards (“IFRS”), which investors may
be more familiar with and consider material to their assessment of our financial condition.

Our restated summary statements of assets and liabilities as at March 31, 2019 and restated
summary statements of profit and loss (including other comprehensive income), cash flows and
changes in equity for the Fiscals 2019 have been prepared in accordance with the Indian
Accounting Standards notified under Section 133 of the Companies Act, 2013, read with the Ind
AS Rules and restated in accordance with the SEBI ICDR Regulations, the SEBI Circular and the
Prospectus Guidance Note.

We have not attempted to quantify the impact of US GAAP, IFRS or any other system of
accounting principles on the financial data included in this Prospectus, nor do we provide a
reconciliation of our financial statements to those of US GAAP, IFRS or any other accounting
principles. US GAAP and IFRS differ in significant respects from Ind AS and Indian GAAP.
Accordingly, the degree to which the Restated Financial Information included in this Prospectus
will provide meaningful information is entirely dependent on the reader’s level of familiarity with
Ind AS, Indian GAAP and the SEBI ICDR Regulations. Any reliance by persons not familiar with
Indian accounting practices on the financial disclosures presented in this Prospectus should
accordingly be limited.

Changing laws, rules and regulations and legal uncertainties, including adverse application of
corporate and tax laws, may adversely affect our business, results of operations, financial
condition and prospects.

The regulatory and policy environment in India is evolving and subject to change. Such changes
in applicable law and policy in India, including the instances described below, may adversely affect
our business, financial condition, results of operations, performance and prospects in India, to the
extent that we are not able to suitably respond to and comply with such changes. For instance, in
November 2016, the Government of India demonetized certain high-value denominations of
currency. Trading and retail businesses in India were impacted for a limited period of time on
account of such demonetization. Such businesses have subsequently needed to introduce additional
point of sale instruments to improve their collection process. The Government of India
implemented a comprehensive national goods and services tax (“GST”) regime that combines taxes
and levies by the central and state governments into a unified rate structure from July 1, 2017,
which we believe will result in fundamental changes to India’s third-party logistics industry. The

49
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47.

implementation of the new GST regime has increased the operational and compliance burden for
Indian companies and has also led to various uncertainties. Any future increases and amendments
to the GST regime may further affect the overall tax efficiency of companies operating in India
and may result in significant additional taxes becoming payable. Our business and financial
performance could be adversely affected by any unexpected or onerous requirements or regulations
resulting from the introduction of GST or any changes in laws or interpretation of existing laws,
or the promulgation of new laws, rules and regulations relating to GST, as it is implemented.
Further, as GST is implemented, there can be no assurance that we will not be required to comply
with additional procedures and/or obtain additional approvals and licenses from the government
and other regulatory bodies or that they will not impose onerous requirements and conditions on
our operations. Any such changes and the related uncertainties with respect to the implementation
of GST may have a material adverse effect on our business, financial condition and results of
operations.

Civil unrest, acts of violence including terrorism or war involving India or other countries could
materially and adversely affect the financial markets and our business.

Any major hostilities involving India or other countries or other acts of violence, including civil
unrest including acts of terrorism or similar events that are beyond our control, could have a
material adverse effect on the Indian and/or global economies and our business. Terrorist attacks
and other acts of violence may adversely affect the Indian stock markets, where our Equity Shares
will trade and the global equity markets generally. Such events could also potentially lead to a
severe economic recession, which could adversely affect our business, results of operations,
financial condition and cash flows, and more generally, any of these events could lower confidence
in India's economy.

India has witnessed civil disturbance in recent years and it is possible that future civil unrest as
well as other social, economic and political events in India could have a negative impact on our
business. Such incidents could also create a greater perception that investment in Indian companies
involves a higher degree of risk and could have an adverse impact on our business and the price of
our Equity Shares.

Political instability and significant changes in Government policy could adversely affect
economic conditions in India generally and our business in particular.

Changes in exchange rates and controls, interest rates, Government policies, taxation, social and
ethnic instability and other political and economic developments in and affecting India may have
an adverse effect on our results of operations.

India has a mixed economy with a large public sector and an extensively regulated private sector.
The role of the Government and that of the state governments in the Indian economy and their
effect on producers, consumers, service providers and regulators has remained significant over the
years. Both state and central governments have, in the past, among other things, imposed controls
on the prices of a broad range of goods and services, restricted the ability of businesses to expand
existing capacity and reduce the number of their employees and determined the allocation to
businesses of raw materials and foreign exchange. Since 1991, successive Governments have
pursued policies of economic liberalization, including significantly relaxing restrictions in the
private sector. Nevertheless, the role of the Government and state governments in the Indian
economy as producers, consumers and regulators has remained significant. There can be no
assurance that the Government’s past liberalization policies or political stability will continue in
the future. Elimination or substantial change of such policies or the introduction of policies that

50
48.

negatively affect the security service industry could have an adverse effect on our business. Any
significant change in India’s economic liberalization and deregulation policies could disrupt
business and economic conditions in India generally and our business in particular.

We are subject to regulatory, economic and social and political uncertainties and other factors
beyond our control.

We are incorporated in India and we conduct our corporate affairs and our business in India. Our
Equity Shares are proposed to be listed on the BSE and the NSE, subject to the receipt of the final
listing and trading approvals from the respective Stock Exchanges. Consequently, our business,
operations, financial performance and the market price of our Equity Shares will be affected by
interest rates, government policies, taxation, social and ethnic instability and other political and
economic developments affecting India.

Factors that may adversely affect the Indian economy, and hence our results of operations may
include:

+ the macroeconomic climate, including any increase in Indian interest rates or inflation

* any exchange rate fluctuations, the imposition of currency controls and restrictions on the right
to convert or repatriate currency or export assets;

* any scarcity of credit or other financing in India, resulting in an adverse effect on economic
conditions in India and scarcity of financing for our expansions;

* prevailing income conditions among Indian clients and Indian corporations;

* political instability, terrorism, military conflict, epidemic or public health issues in India or in
countries in the region or globally, including in India’s various neighboring countries;

* macroeconomic factors and central bank regulation, including in relation to interest rates
movements which may in turn adversely impact our access to capital and increase our borrowing
costs;

+ Instability in financial markets and volatility in, and actual or perceived trends in trading activity
on, India’s principal stock exchanges;

* decline in India’s foreign exchange reserves which may affect liquidity in the Indian economy;

+ downgrading of India’s sovereign debt rating by rating agencies;

* difficulty in developing any necessary partnerships with local businesses on commercially
acceptable terms and/or a timely basis.

* changes in India’s tax, trade, fiscal or monetary policies; and

* other significant regulatory or economic developments in or affecting India or its logistics sector.

Moreover, a fall in the purchasing power of our clients, for any reason whatsoever, including rising
consumer inflation, availability of financing to our clients, changing governmental policies and a
slowdown in economic growth may have an adverse effect on our clients’ revenues, savings and
could in turn negatively affect their demand for our products. For instance, demonetization of 500
and 1,000 currency notes was announced in November 2016. The immediate impact of the
announcement led to people depositing their cash in banks and the Indian economy was drained out
of liquid cash for a brief period. In addition, any slowdown or perceived slowdown in the Indian
economy, or in specific sectors of the Indian economy, could adversely affect our business, results
of operations and financial condition and the price of the Equity Shares.

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50.

51.

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

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

Further, as a listed company, we will need to maintain and improve the effectiveness of our
disclosure controls and procedures and internal control over financial reporting, including keeping
adequate records of daily transactions to support the existence of effective disclosure controls and
procedures and internal control over financial reporting. In order to maintain and improve the
effectiveness of our disclosure controls and procedures and internal control over financial reporting,
significant resources and management attention will be required.

As a result, our management’s attention may be diverted from business concerns, which may
adversely affect our business, prospects, financial condition and results of operations. Further, we
may need to hire additional legal and accounting staff with appropriate listed company experience
and technical accounting knowledge but cannot assure that we will be able to do so in a timely and
efficient manner.

Any downgrading of India’s debt rating by an international rating agency could adversely affect
our business.

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

The trading volume and market price of the Equity Shares may be volatile following the Issue.

The market price of the Equity Shares may fluctuate as a result of, among other things, the following

factors, some of which are beyond our control:

* quarterly variations in our results of operations;

+ results of operations that vary from the expectations of securities analysts and investors;

+ results of operations that vary from those of our competitors;

* changes in expectations as to our future financial performance, including financial estimates by
research analysts and investors;

* achange in research analysts’ recommendations;

* announcements by us or our competitors of significant acquisitions, strategic alliances, joint
operations or capital commitments;

* announcements by third parties/ governmental entities of significant claims/ proceedings against
us;

* new laws and governmental regulations applicable to our industry;

* additions or departures of key management personnel;

* changes in exchange rates;

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* changes in the price of oil or gas;

* — fluctuations in stock market prices and volume; and

* general economic and stock market conditions.

Changes in relation to any of the factors listed above could adversely affect the price of the Equity
Shares.

RISK RELATING TO THE EQUITY SHARES

52.

53.

54.

Any future issuance of Equity Shares, or convertible securities or other equity linked securities
by us and any sale of Equity Shares by our Promoters or significant shareholders may dilute your
shareholding and adversely affect the trading price of the Equity Shares.

Any future issuance of the Equity Shares, convertible securities or securities linked to the Equity
Shares by us may dilute your shareholding in our Company, adversely affect the trading price of the
Equity Shares and our ability to raise capital through an issue of our securities. In addition, any
perception by investors that such issuances or sales may occur, including complying with the
minimum public shareholding norms applicable to listed companies in India, may significantly affect
the trading price of the Equity Shares. There can be no assurance that we will not issue further Equity
Shares or that the shareholders will not dispose of, pledge or otherwise encumber the Equity Shares.
The disposal of Equity Shares by any of our significant shareholders, or the perception that such
sales may occur, may significantly affect the trading price of the Equity Shares.

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

Once listed, we would be subject to circuit breaker imposed by Stock Exchange on which the
Company is listed, which does not allow transactions beyond specified increases or decreases in the
price of the Equity Shares. This circuit breaker operates independently of the index-based market-
wide circuit breakers generally imposed by SEBI on different Stock Exchanges. The percentage limit
on circuit breakers is set by the Stock Exchange based on the historical volatility in the price and
trading volume of the Equity Shares. The Stock Exchange do not inform us of the percentage limit
of the circuit breaker in effect from time to time and may change it without our knowledge. This
circuit breaker limits the upward and download movements in the price of the Equity Shares. As a
result of this circuit breaker, no assurance may be given regarding your ability to sell your Equity
Shares or the price at which you may be able to sell your Equity Shares at any particular time.

The Issue price of our Equity Shares may not be indicative of the market price of our Equity
Shares after the Issue and the market price of our Equity Shares may decline below the issue
price and you may not be able to sell your Equity Shares at or above the Issue Price

The Issue Price of our Equity Shares will be determined by Book Built method. This price is be
based on numerous factors (For further information, please refer chapter titled “Basis for Issue
Price” beginning on page 92 of this Prospectus) and may not be indicative of the market price of our

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Equity Shares after the Issue. The market price of our Equity Shares could be subject to significant
fluctuations after the Issue and may decline below the Issue Price. We cannot assure you that you
will be able to sell your Equity Shares at or above the Issue Price. Among the factors that could
affect our share price include without limitation. The following:

* Quarterly variations in the rate of growth of our financial indicators, such as earnings per share,
net income and revenues;

* Changes in revenue or earnings estimates or publication of research reports by analysts;

+ Speculation in the press or investment community;

* General market conditions; and

+ Domestic and international economic, legal and regulatory factors unrelated to our performance.

You may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.

Under current Indian tax laws and regulations, capital gains arising from the sale of equity shares in
an Indian company are generally taxable in India. Any gain realized on the sale of listed equity shares
on a stock exchange held for more than 12 months will not be subject to capital gains tax in India,
up to an amount of Rs. | lakh, if Securities Transaction Tax (“STT”) has been paid on the transaction.
STT will be levied on and collected by a domestic stock exchange on which the equity shares are
sold. Any gain realized on the sale of equity shares held for more than 12 months to an Indian
resident, which are sold other than on a recognized stock exchange and on which no STT has been
paid, will be subject to long term capital gains tax in India. Further, any gain realized on the sale of
listed equity shares held for a period of 12 months or less will be subject to short term capital gains
tax in India. Capital gains arising from the sale of the Equity Shares will be exempt from taxation in
India in cases where the exemption from taxation in India is provided under a treaty between India
and the country of which the seller is resident. Generally, Indian tax treaties do not limit India’s
ability to impose tax on capital gains. As a result, residents of other countries may be liable for tax
in India as well as in their own jurisdiction on a gain upon the sale of the Equity Shares. In addition,
changes in the terms of tax treaties or in their interpretation, as a result of renegotiations or otherwise,
may affect the tax treatment of capital gains arising from a sale of Equity Shares.

Under Indian law, foreign investors are subject to investment restrictions that limit our ability to
attract foreign investors, which may adversely affect the trading price of the Equity Shares.

Under foreign exchange regulations currently in force in India, transfer of shares between non-
residents and residents are freely permitted (subject to certain restrictions), if they comply with the
pricing guidelines and reporting requirements specified by the RBI. If the transfer of shares, which
are sought to be transferred, is not in compliance with such pricing guidelines or reporting
requirements or falls under any of the exceptions specified by the RBI, then the prior approval of
RBI will be required. Additionally, shareholders who seek to convert Rupee proceeds from a sale of
shares in India into foreign currency and repatriate that foreign currency from India require a no-
objection or a tax clearance certificate from the Indian income tax authorities. We cannot assure
investors that any required approval from the RBI or any other governmental agency can be obtained
on any particular terms or at all. For further details, please refer to chapter titled "Restrictions on
Foreign Ownership of Indian Securities" beginning on page 306 of this Prospectus.

54,
56.

57.

58.

59.

W%

Our ability to pay dividends in the future will depend on our earnings, financial condition,
working capital requirements, capital expenditures and restrictive covenants of our financing
arrangements.

Our ability to pay dividends in the future will depend on a number of factors, including but not
limited to the earnings, working capital requirements, contractual obligations, applicable legal
restrictions and overall financial condition of our Company. We may decide to retain all of our
Company’s earnings to finance the development and expansion of our Company’s business and
therefore, our Company may not declare dividends on the Equity Shares. Any future determination
as to the declaration and payment of dividend will be at the discretion of our Board and will depend
on factors that our Board deems relevant, including among others, our future earnings, financial
condition, cash requirements, business prospects and any other financing arrangements. For details
of dividends paid by our Company in the past, please refer to chapter titled "Dividend Policy"
beginning on page 178 of this Prospectus.

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

Indian legal principles related to corporate procedures, directors’ fiduciary duties and liabilities, and
shareholders’ rights may differ from those that would apply to a company in another jurisdiction.
Shareholders’ rights including in relation to class actions, under Indian law may not be as extensive
as shareholders’ rights under the laws of other countries or jurisdictions. Investors may have more
difficulty in asserting their rights as shareholder in an Indian company than as shareholder of a
corporation in another jurisdiction.

Fluctuation in the exchange rate between the Indian Rupee and foreign currencies may have an
adverse effect on the value of the Equity Shares, independent of our operating results.

On listing, the Equity Shares will be quoted in Indian Rupees on the Stock Exchanges. Any dividends
in respect of the Equity Shares will also be paid in Indian Rupees and subsequently converted into
the relevant foreign currency for repatriation, if required. Any adverse movement in currency
exchange rates during the time that it takes to undertake such conversion may reduce the net dividend
to foreign investors. In addition, any adverse movement in currency exchange rates during a delay
in repatriating outside India the proceeds from a sale of Equity Shares, for example, because of a
delay in regulatory approvals that may be required for the sale of Equity Shares may reduce the
proceeds received by equity shareholders. For example, the exchange rate between the Rupee and
the U.S. dollar has fluctuated substantially in recent years and may continue to fluctuate substantially
in the future, which may have an adverse effect on the trading price of the Equity Shares and returns
on the Equity Shares, independent of our operating results.

The price of our Equity Shares may be volatile or an active trading market for our Equity Shares
may not develop.

Prior to this Issue, there has been no public market for our Equity Shares. The trading price of our
Equity Shares may fluctuate after this Issue due to a variety of factors, including our results of
operations and the performance of our business, competitive conditions, general economic, political
and social factors, the performance of the Indian and global economy and significant developments

55
in India’s fiscal regime, volatility in the Indian and global securities market, performance of our
competitors, the Indian capital markets, changes in the estimates of our performance or
recommendations by financial analysts and announcements by us or others regarding contracts,
acquisitions, strategic partnerships, joint ventures, or capital commitments. In addition, if the stock
markets experience a loss of investor confidence, the trading price of our Equity Shares could decline
for reasons unrelated to our business, financial condition or operating results. The trading price of
our Equity Shares might also decline in reaction to events that affect other companies in our industry
even if these events do not directly affect us. Each of these factors, among others, could materially
affect the price of our Equity Shares. There can be no assurance that an active trading market for our
Equity Shares will develop or be sustained after this Issue or that the price at which our Equity Shares
are initially offered will correspond to the prices at which they will trade in the market subsequent
to this Issue.

56
W%

SECTION II: INTRODUCTION

THE ISSUE

The following table summarizes the Issue details:

 

Issue of Equity Shares* 51,00,000* Equity Shares of Rs. 10/- each fully

paid-up of our Company for cash at a price of Rs.
120/- per Equity Share aggregating up to Rs.
6,120.00 Lakhs

 

The Issue consists of:

 

 

 

(a) QIB Portion Upto 51,000* Equity Shares of Rs. 10/- each

(b) Non- Institutional portion Not less than 32,64,000* Equity Shares of Rs. 10/-
each

(c) Retail portion Not less than 17,85,000* Equity Shares of Rs. 10/-
each

 

Pre-Issue and post-Issue Equity Shares

 

Equity Shares outstanding prior to the Issue 1,46,25,000 Equity Shares of Rs. 10/- each

 

Equity Shares outstanding after the Issue 1,97,25,000* Equity Shares of Rs. 10/- each

 

 

Utilization of Net Proceeds Please refer to the chapter titled ‘Objects of the

Issue’ beginning on page 85 of this Prospectus.

 

 

 

*Subject to finalization of the basis of allotment.

Note:

1)

@

©

2)

This Issue is being made in terms of Regulation 6(1) of Chapter II of the SEBI ICDR Regulations
through the Book Build method and hence, as per Regulation 32(1) of SEBI ICDR Regulations,
the allocation has been made as follows:

Not less than 35% to Retail Individual Investors;
Not less than 64% to Non-Institutional Investors; and
Upto 1% to Qualified Institutional Buyers.

The unsubscribed portion in either of the categories specified in (a) or (b) above may be allocated
to the applicants in the other category.

The present Issue of upto 51,00,000 Equity Shares in terms of this Prospectus has been authorized
pursuant to a resolution of our Board of Directors dated December 10, 2019 and by a special
resolution passed under Section 62(1)(c) of the Companies Act, 2013 at the extra-ordinary general
meeting of the members of our Company held on December 23, 2019.

57
W%

3) Subject to valid bids being received at or above the Issue Price, under-subscription, if any, in any
category, except in the QIB portion, would be allowed to be met with spill-over from any other
categories or a combination of categories at the discretion of our Company, in consultation with
the BRLM and the Designated Stock Exchange subject to applicable laws.

For further details, please refer to chapter titled “Issue Structure” beginning on page 281 of this
Prospectus.

58
SUMMARY OF FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annexure I: Restated Statement of Assets and Liabilities (All amounts in = Lakhs)
Note Asat As at As at
Particulars Ne March 31, March 31, March 31,
2020 2019 2018
Assets
Non-current Assets
(a)Property, Plant and Equipment 3 932.38 1,139.98 1,225.91
(b)Investment Property 3 234.06 238.73 238.87
(b)Financial Assets
(i)Investments A(i) 1.62 1.36 43.14
(ii)Loans and Advances 5 268.97 254.97 194.38
(c)Deferred Tax Assets (Net) 6 35.93, (11.53) (26.06)
(d)Other Non-current Assets - - -
Total Non-current Assets 1,472.96 1,623.50 1,676.23
Current Assets
(a)Inventories 7 2,468.25 1,981.37 265.13
(b)Financial Assets
(i)Investments A(ii) 576.13 - -
(ii)Trade Receivables 8 1,634.88 1,623.19 2,244.03
(iii)Cash and Cash Equivalents 9 377.82 SE36 S77'59
(iv)Bank Balances other than above (iii) 10 1,124.54 1,086.43 874.18
(v)Other Financial Assets i 2,378.43 1,533.89 639.54
(c)Current Tax Assets (Net) - - -
(d)Other Current Assets 12 52.62 557.64 346.21
Total Current Assets 8,612.65 6,833.89 5,046.68
Total Assets 10,085.61 8,457.39 6,722.91
Equity and Liabilities
Equity
(a)Equity Share Capital 13 1,462.50 450.00 450.00
(b)Other Equity 14 5,533.08 4,581.23 2,792.94
Total Equity 6,995.58 5,031.23 3,242.94
Liabilities
Non-current Liabilities
(a)Financial Liabilities
(Long-term borrowings 15 15.23 112.69 355.68
(b)Provisions 16 64.56 24.14 14.15
(c)Deferred Tax Liabilities (Net) 6 - - -
Total Non-current Liabilities 79.78 136.84 369.83
Current liabilities
(a)Financial Liabilities
(i)Short-term borrowings 17 113.21 560.58 724.69
(ii)Trade payables - total dues of:
: small and micro enterprises
: others than small and micro enterprises 18 1,393.46 1,211.88 1,338.22
(iii)Other financial liabilities 19 150.49 355.19 327.44
(b)Other current liabilities 20 1,077.46 861.36 716.10
(©)Provisions 21 0.75 0.68 0.32
(d)Current Tax Liability (Net) 22 274.89 299.63 3.37
Total Current Liabilities 3,010.25 3,289.33, 3,110.14
Total Liabilities 10,085.61 8,457.39 6,722.91
Corporate Information AL
Summary of significant accounting policies 2

 

 

 

 

59

 
Annexure II : Restated Statement of Profit & Loss (All amounts in = Lakhs) (Except EPS)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year For the For the year
Particulars Note ended year ended ended
No 31 March, 31 March, 31 March,
2020 2019 2018
Revenue
Revenue from operations 23 16,123.83 13,948.41 8,707.77
Other income 24 155.19 106.28 152.79
Total Revenue 16,279.02 14,054.68 8,860.56
Expenses
Raw Material Consumed 25 3,713.49 4,142.29 1,943.31
Construction expenses 26 6,503.20 5,389.63 3,952.57
Changes in inventories of work-in-progress 27 (477.60) (1,712.85) (245.12)
Employee benefits 28 2,904.28 2,662.60 1,622.86
Finance costs 29 136.40 168.49 84.62
Depreciation 3 309.37 298.71 93.15
Other expenses 30 513.29 575.84 316.67
Total expenses 13,602.45 11,524.71 7,768.06
Profit before tax 2,676.57 2,529.97 1,092.50
Tax expense:
Current tax 732.22 758.62 328.00
Earlier years - - -
Deferred tax (43.58) (14.16) 48.28
Tax expense 688.64 744.46 376.28
Profit for the year 1,987.93 1,785.51 716.22
Other comprehensive income
Items that will not be reclassified to profit or loss
Re-measurement gains/(losses) on Investments 3.56 1.96
Re-measurement gains/(losses) on defined benefit (15.41)
plans (0.41) -
Tax on Defined benefit item included in OCI 3.88 0.12 .
Tax on Re-measurement of Investment item
included in OCI (0.49) (0.31)
Total Other comprehensive income for the year, net of (11.53) 2.78 1.66
tax
Total comprehensive income for the year comprising 1,976.40 1,788.29 717.88
Profit/(Loss)
Earnings per equity share
(1) Basic 13.59 12.21 4.90
(2) Diluted 13.59 12.21 4.90
Corporate Information 1
Summary of significant accounting policies 2

 

 

 

 

 

The accompanying Restated Statement of Significant Accounting Policies and notes to Restated Financial
Information are an integral part of this.

60

 
Annexure III: Restated Statement of Cash Flows

(All amounts in % Lakhs)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year onthe year For the year
' ended ended
Particulars 31 March, ended 31 March,
7 31 March, 2019
2020 2018
A. Cash Flow from Operating Activities:
Profit before tax for the year 2,676.57 2,529.97 1,092.50
Adjustments for:
Depreciation 309.37 298.71 93.15
Finance Charges 60.46 86.27 18.58
Loss on Sale of Assets/written off - 7.63 -
Dividend received (1.82) (8.97) (5.92)
Profit on sale of Fixed Assets - - (0.28)
Operating Profit before working capital changes 3,044.58 2,913.61 1,198.03
Adjustments for:
(Increase)/Decrease in Inventory (486.88) (1,716.25) (246.62)
(Increase)/Decrease in Trade receivables (11.68) 620.84 122.87
(Increase)/Decrease Long Term Loans and advances (14.00) (60.59) (11.98)
(Increase) / Decrease in Current Financial assets (844.54) (894.35) 136.99
Increase in Other Current assets 505.02 (211.43) (294.69)
(Decrease) / Increase in Trade payables 237.28 (52.09) (572.03)
(Decrease) / Increase in Provision for employee benefits 25.07 9.95 14.47
(Decrease) / Increase in Current Financial liabilities 1.29 26.81 (50.62)
(Decrease) / Increase in Other liabilities 216.09 145.27 471.80
Cash Generated from Operations 2,672.23 781.78 768.23
Taxes Paid (Net) (756.96) (463.11) (366.68)
Net Cash (used) / from Operating Activities (A) 1,915.27 318.67 401.55
B. Cash Flow from Investing Activities:
Purchase of Fixed Assets including Capital Advances and (152.81)

Capital Creditors (312.52) (1,031.23)
Proceeds from sale of Fixed Assets - 18.00 26.16
Investment in Fixed Deposits with Banks (576.39) 45.35 312.20
Dividend received 1.82 8.97 5.92

Net Cash from / (used) Investing Activities (B) (727.38) (240.20) (686.95)

C. Cash Flow from Financing Activities:

Interest Paid (60.46) (86.27) (18.58)
Receipt / (Repayment) of Vehicle Loans (net) (303.47) (242.04) 652.46
IPO Expenses (12.04)

Net Cash from / (used) Financing Activities (C) (375.97) (328.31) 633.88.

Net Increase/(Decrease) in cash and cash equivalents

(A+B+C) 811.93 (249.86) 348.47

Cash and Cash equivalents at begining of the year 577.22 827.07 478.60

Cash and Cash equivalents at end of the year 1,389.14 577.22 827.07

 

Note:

1. The Cash Flow Statement has been prepared under the Indirect method as set out in Ind AS-7 on Cash Flow Statement.

2. Previous year's figures are reclassified/regrouped to confirm and make them comparable with those of the current year.
The accompanying Restated Statement of Significant Accounting Policies and notes to Restated Financial Information are an

integral part of this.

61

 
0

Our Company was incorporated under the provisions of the Companies Act, 1956 as “Likhitha
Constructions Private Limited” on August 06, 1998, as a private limited company vide Certificate of
Incorporation issued by RoC, Hyderabad, Andhra Pradesh. Our Company’s name was subsequently
changed to “Likhitha Infrastructure Private Limited” pursuant to the Fresh Certificate of Incorporation
consequent upon change of name dated March 30, 2011 issued by RoC, Hyderabad, Andhra Pradesh. Our
Company has been converted into a public limited company and the name of our Company has been
changed to “Likhitha Infrastructure Limited” pursuant to the shareholders’ resolution passed at the Extra-
Ordinary General Meeting of our Company held on January 11, 2019 and a Fresh Certificate of
Incorporation dated February 12, 2019 issued by the RoC, Hyderabad, Telangana. The Corporate
Identification Number of our Company is U45200TG1998PLC029911.

GENERAL INFORMATION

For details of changes in Registered Offices of our Company, please refer to the section titled "History
and Certain Corporate Matters" beginning on page 145 of this Prospectus.

Flat No. 701, Plot No.8-3-940 and 8-3-940/A to E, Tirumala Shah
Residency, Yellareddy Guda, Ameerpet, Hyderabad-500073,
Telangana, India.

Telephone: 040-2375 2657

Website: www. likhitha.co.in

Email id: cs@likhitha.in

August 06, 1998

029911

U45200TG1998PLC029911

Registered Office

 

 

 

Date of Incorporation
Company Registration No.
Company Identification
No.

 

 

 

Company Category

Company limited by shares

 

Company Sub Category

Indian non-government company

 

Address of Registrar of
Companies

2™ Floor, Corporate Bhawan, GSI Post, Tattiannaram Nagole,
Bandlaguda, Hyderabad - 500 068, Telangana, India.

Phone: 040-29805427/29803827/29801927

Fax: 040-29803727

Email Id: roc.hyderabad@mca.gov.in

 

 

 

Designated Stock

Exchange

BSE Limited

 

Issue Programme

Bid/ Issue Opened on: September 29, 2020
Bid/ Issue Closed on: October 07, 2020

 

Company Secretary &
Compliance Officer

Mr. Santhosh Kumar Gunemoni

Likhitha Infrastructure Limited

Flat No. 701, Plot No.8-3-940 and 8-3-940/A to E, Tirumala Shah
Residency, Yellareddy Guda, Ameerpet, Hyderabad-500073,
Telangana, India.

Telephone: 040-23752657

Website: www. likhitha.co.in

Email id: cs@likhitha.in

 

 

 

Chief Financial Officer

 

 

Mr. Sambasiva Rao Ketineni

Likhitha Infrastructure Limited

Flat No. 701, Plot No.8-3-940 and 8-3-94 Tirumala Shah
Residency, Yellareddy Guda, Ameerpet, Hyderabad-500073,
Telangana, India.

Telephone: 040-2375 2657

Email id: sambasiva@likhitha.inmailto:

 

 

 

 

62
Board of Directors

W%

Our Company’s Board comprises of the following Directors:

 

 

 

 

 

 

 

 

 

Name, Nature of Director: ind DIN v3 Residential Address

Mr. Sivasankara Parameshwara Kurup 67 Kottinatu. Sankara Bhavanam,

Pillai years Erezha south, Chettikulangara

Chairman, Non-Executive and Independent PO, Mavelikkara, Alappuzha,

Director Kerala-690106, India

DIN: 08401552

Mr. Srinivasa Rao Gaddipati 56 8-3-940, Flat No. 405, Tirumala

Managing Director years Apartment, —- Yellareddayguda,

DIN: 01710775 Ameerpet, Hyderabad-500073,
Telangana, India.

Ms. Likhitha Gaddipati 25 HNO.8-3-940, Flat No.405,

Non-Executive Director years Tirumala Apartment, Yellareddy

DIN: 07341087 Guda, Ameerpet, Hyderabad-
500073, Telangana, India.

Mrs. Sri Lakshmi Gaddipati 52 8-3-940, Flat No. 405, Tirumala

Non-Executive Director years Apartment, —- Yellareddayguda,

DIN: 02250598 Ameerpet, Hyderabad-500073,
Telangana, India.

Mr. Kutumba Rao Gaddipati 54 2287, Rosemount LN, San

Non-Executive Director years Roman, CA 94582, California

DIN: 02333387 94582 US.

Mr. Jnanindra Kumar Dhar 71years L-3/8 DLF Phase-II Gurgaon

Non-Executive and Independent Director 122002 Haryana, India

DIN: 06861830

Mr. Talpa Sai Venkata Sesha Munupalle 70 Flat No. 104, a-block, Siddam

Non-Executive and Independent Director years Setty Tower, Jawahar Nagar,

DIN: 08388354 Near RTC X roads, Hyderabad-
500020, Telangana, India.

 

 

 

 

For further details of the Board of Directors, please refer to the section titled "Our Management"

beginning on page 150 of this Prospectus.

DETAILS OF KEY INTERMEDIARIES PERTAINING TO THIS ISSUE AND OUR COMPANY

DSUs OEE

Registrar to the Issue

 

Unistone Capital Private Limited

12, Flr No. 2, Shashank CHS Ltd., Manmala
Tank Road, Near Starcity Cinema, Mahim,
Mumbai- 400016. Maharashtra, India
Telephone: +91 9322997964

Email: mb@unistonecapital.com

Investor grievance email:
compliance@unistonecapital.com

Contact Person: Mr. Brijesh Parekh

Website: Error! Hyperlink reference not
valid. www.unistonecapital.com

SEBI Registration number: INM000012449
CIN: U65999MH2019PTC330850

Bigshare Services Private Limited

1st Floor, Bharat Tin Works Building,

Opp. Vasant Oasis, Makwana Road,

Marol, Andheri (East), Mumbai 400059, India.
Telephone: 022 6263 8200

Facsimile: 022 6263 8280

Email: ipo@bigshareonline.com

Investor grievance email:
investor@bigshareonline.com

Contact Person: Mr. Ashish Bhope
Website: www.bigshareonline.com

SEBI Registration Number: INR000001385
CIN: U99999MH1994PTC076534

 

63
Re oe oS

 

M/s Alliance Law

Address: 801, 8th Floor, Raheja Centre,
Free Press Journal Marg, Nariman Point,
Mumbai- 400 021.

Telephone: +91 22-2204 0822/23/24
E-mail: info@alliancelaw.in

Sponsor Bank

ICICI Bank Limited

Address: Capital Market Division, 1* Floor,
122, Mistry Bhavan, Dinshaw Vachha Road,
Backbay Reclamation, Churchgate,
Mumbai-400020

Telephone: 022-66818911/23/24

Fax: 022-22611138

E-mail: kmr.saurabh@icicibank.com
Website: www.icicibank.com

Contact Person: Mr. Saurabh Kumar

SEBI Cert Registration No: INBI00000004
CIN No.: L65190GJ1994PLC021012

Rikhav Securities Limited

Address: B, Matruchhaya, 4th floor, S.N.
Road, Mulund (W), Mumbai- 400080
Telephone: 022-25935353

Fax: 022-25935300

E-mail: info@rikhav.net

Website: www.rikhav.net

Contact Person: Mr. Hitesh Lakhani

SEBI Cert Registration No: INZ000157737
CIN No.: U99999MH1995PLC086635

 

Statutory & Peer Re
NSVR & Associates LLP
Address: Flat no. 202, Nestcon Gayatri, Plot no.
28, near South Indian Bank, Panchavati Co-
operative Society, Road no. 10, Banjara Hills,
Hyderabad-500034, Telangana, India.
Telephone: 040-23319833
E-mail: info@nsvr.in
Contact Person: Suresh Gannamani
Firm Registration No.:008801S/S200060
Peer Review Number: 012306

Public Issue Bank/ Banker to the Issue/
Refund Banker

ICICI Bank Limited
Address: Capital Market Division, 1* Floor,
122, Mistry Bhavan, Dinshaw Vachha Road,
Backbay Reclamation, Churchgate,
Mumbai-400020
Telephone: 022-66818911/23/24
Fax: 022-22611138
E-mail: kmr.saurabh@icicibank.com
Website: www.icicibank.com
Contact Person: Mr. Saurabh Kumar
SEBI Cert Registration No: INBI00000004
CIN No.: L65190GJ1994PLC021012

Syndicate Member PSEC UOC ELL

ICICI Bank Limited

Address: Ground Floor, South Towers, Bandra-
Kurla Complex, Bandra (east), Mumbai-
400051, Maharashtra

Telephone: 9963025771/9884249340

Fax: NA

E-mail: kumar.ravi@icicibank.com/
vijaya.manthena@icicibank.com

Website: www. icicibank.com

Contact Person: Ravi Bonal/Vijay Manthena
SEBI Cert Registration No: INBI00000004
CIN No.: L65190GJ1994PLC021012

 

 

 
W%

Except as mentioned below, there have been no changes in the auditors in last three Financial Years
preceding the date of this Prospectus.

Changes in auditors during last three Financial Years

lars of pre’

Eg

CAN ETM BHA Clg

sDritcen a
Date

 

Reason

 

 

 

 

 

Siva Krishna & Narayan K. S. Rao & Co. Resigned on Casual
Chartered Accountant Chartered Accountant January 25,| Vacancy
102, Abhiteja estate, 10-2- | Flat No.601A, Golden Garden | 2019 due to
289/12/32, 334/2RT, P.S | Apartment, Irrum  Manzil resignation
Nagar, Mastab Tank, | Colony, Hyderabad-500082, of auditor
Hyderabad-500057, Telangana, India.
Telangana, India. Tel: 040-2337 3399
Tel: 040-65525144. Email: Apoauel oa
Email : | ksraoandcompany@gmail.com rans uary 13
sivakoganti2008@gmail.co | Contact Person: Pradhasaradhi ,

2019
m Rao P
Contact Person: CA K. | Membership No.: 224777
Siva Rama Prasad Firm Registration
Membership No.: 205616 No.:003109S
Firm Registration No.: | Peer Review Number: 39254
03883S
Peer Review Number: NA
K. S. Rao & Co. NSVR & Associates LLP Resigned on Casual
Chartered Accountant Chartered Accountant August 12,| Vacancy
Flat No.601A, Golden | Flat no. 202, Nestcon Gayatri, | 2019 due to
Garden Apartment, Irrum | Plot no. 28, near South Indian resignation
Manzil Colony, Hyderabad- | Bank, Panchavati Co-operative of auditor
500082, Telangana, India. Society, Road no. 10, Banjara
Tel: 040-2337 3399 Hills, Hyderabad-500034, ‘Appomtedon
Email: Telangana, India. an 31
ksraoandcompany@gmail.co | Tel: 040-23319833 ata .
m Email: info@nsvr.in
Contact Person: | Contact Person: Suresh
Pradhasaradhi Rao P Gannamani
Membership No.: 224777 Firm Registration
Firm Registration | No.:008801S/S200060
No.:003109S Peer Review Number:
Peer Review Number: | 012306
39254

 

 

 

 

 

Investor grievances

Investors may contact the Company Secretary and Compliance Officer and/or the Registrar to the Issue
in case of any pre-Issue or post- Issue related problems, such as non-receipt of Allotment Advice, credit
of Allotted Equity Shares in the respective beneficiary account, or Refund Orders.

All grievances relating to the Issue may be addressed to the Registrar to the Issue, giving full details such
as name, address of the Bidder, number of Equity Shares applied for, the Bid amount paid on submission
of the Bid cum Application Form and the bank branch or collection center where the application was
submitted.

65
0

All grievances in relation to the application through ASBA process may be addressed to the Registrar to
the Issue, with a copy to the relevant Designated Intermediary with whom the ASBA Form was
submitted, giving details such as the full name of the sole or First Applicant, ASBA Form number,
Applicants’ DP ID, Client ID, PAN, number of Equity Shares applied for, date of submission of ASBA
Form, address of Bidder, the name and address of the relevant Designated Intermediary, where the ASBA
Form was submitted by the Bidder, ASBA Account number in which the amount equivalent to the Bid
Amount was blocked. Further, the Bidder shall enclose the Acknowledgment Slip from the Designated
Intermediaries in addition to the documents or information mentioned hereinabove.

All grievances relating to the UPI mechanism may be addressed to the Registrar to the Issue with a copy
to the relevant Sponsor Bank or the member of the Syndicate if the Bid was submitted to a member of
the Syndicate at any of the Specified Locations, or the Registered Broker if the Bid was submitted to a
Registered Broker at any of the Brokers Centres, as the case may be, quoting the full name of the sole or
first Bidder, Bid cum Application Form number, address of the Bidder, Bidder’s DP ID, Client ID, PAN,
number of Equity Shares applied for, date of Bid-cum-Application Form, name and address of the
member of the Syndicate or the Designated Branch or the Registered Broker or address of the RTA or
address of the DP, as the case may be, where the Bid was submitted, and the UPI ID of the UPI ID Linked
Bank Account in which the amount equivalent to the Bid Amount was blocked.

All grievances relating to Bids submitted through the Registered Broker and/or a Stock Broker may be
addressed to the Stock Exchanges with a copy to the Registrar to the Issue.

Filing of Draft Red Herring Prospectus/ Red Herring Prospectus/ Prospectus with Board and the
Registrar of Companies

A copy of the Draft Red Herring Prospectus has been filed with SEBI at the Securities and Exchange
Board of India, SEBI Southern Regional, Office, 7th Floor, 756-L, Anna Salai, Chennai - 600002, Tamil
Nadu.

A copy of the Red Herring Prospectus, along with the material contracts and documents required to be
filed under Section 32 of the Companies Act, 2013 has been delivered for filing to the RoC and a copy
of the Prospectus to be filed under Section 26 of the Companies Act, 2013 will be filed to the Registrar
of Companies, Hyderabad at 2™ Floor, Corporate Bhawan, GSI Post, Tattiannaram Nagole, Bandlaguda,
Hyderabad - 500 068.

Statement of inter se allocation of Responsibilities for the Issue

Since Unistone Capital Private Limited is the sole Book Running Lead Manager to this Issue, all the
responsibilities relating to the co-ordination and other activities in relation to the issue shall be performed
by it and hence, a statement of inter se allocation of responsibilities is not applicable.

Designated Intermediaries
Self-Certified Syndicate Banks (SCSBs)

The list of banks that have been notified by SEBI to act as the SCSBs under the SEBI (Bankers to an
Issue) Regulations, 1994 for the (i) ASBA process is provided on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/Other Action.do?doRecognisedFpi=yes&intmId=34 or
https://www.sebi.gov.in/sebiweb/other/Other Action.do?doRecognisedFpi=yes&intmId=35. as
applicable, or such websites as updated from time to time, and (ii) in relation to ASBA (through UPI
Mechanism), a _ list of which is available on the website of SEBI_ at
https://sebi. gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=40 and updated from

66
W%

time to time. For details of the list of branches of the SCSBs named by the respective SCSBs to receive
the ASBA Forms from the Designated Intermediaries and as updated from time to time, please refer to
the above-mentioned link.

Registered Broker

Bidders can submit ASBA Forms in the Issue using the stock-broker network of the stock exchanges,
ie. through the Registered Brokers at the Broker Centre. The list of the Registered Brokers, including
details such as postal address, telephone number and e-mail address, is provided on the websites of
BSE and NSE at www.bseindia.com/Markets/PublicIssues/brokercentres_new.aspx? and
https://www.nseindia.com/products/content/equities/ipos/ipo_mem_terminal.htm

respectively, as updated from time to time.

 

 

Registrar to the Issue and Share Transfer Agents

The list of the RTAs eligible to accept application forms at the Designated RTA Locations, including
details such as address, telephone number and e-mail address, are provided on the website of BSE and
NSE at __http://www.bseindia.com/Static/Markets/PublicIssues/RtaDp.aspx?expandable=6 and
https://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm respectively, as
updated from time to time.

 

 

Syndicate SCSB Branches

In relation to Bids (other than Bids by Anchor Investor) submitted to a member of the Syndicate, the
list of branches of the SCSBs at the Specified Locations named by the respective SCSBs to receive
deposits of Bid cum Application Forms from the members of the Syndicate is available on the website
of the SEBI
(http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35) and
updated from time to time. For more information on such branches collecting Bid cum Application
Forms from the members of Syndicate at Specified Locations, see the website of the SEBI
(http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35) .

 

 

Self Certified Syndicate Banks eligible as Sponsor Banks for UPI

The list of Self Certified Syndicate Banks eligible as sponsor banks for UPI Mechanism, including
details such as name and contact details, are provided on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmld=41 , or such
other websites as updated from time to time.

 

Collecting Depository Participants

The list of the CDPs eligible to accept ASBA Forms at the Designated CDP Locations, including details
such as name and contact details, are provided on the websites of BSE and NSE at
http://www.bseindia.com/Static/Markets/PublicIssues/RtaDp.aspx?expandable=6 and
www.nseindia.com/products/content/equities/ipos/asba_procedures.htm , respectively, or such other
websites as updated from time to time.

 

 

The list of branches of the SCSBs named by the respective SCSBs to receive deposits of the application
forms from the Designated Intermediaries will be available on the website of the SEBI
(www.sebi.gov.in) and updated from time to time.

67
0

Experts

Our Company has received written consent dated January 09, 2020 from our Statutory and the Peer
Review Auditor namely, M/s. NSVR & Associates LLP, Chartered Accountants, to include their name
as required under Section 26(1)(a)(v) of the Companies Act, 2013 in this Prospectus and as an "Expert"
as defined under Section 2(38) of the Companies Act, 2013, in respect of the reports of the Statutory
Auditors on the Restated Financial Statements dated August 1, 2020, and the Statement of Tax Benefits
dated August 1, 2020 included in this Prospectus and such consent has not been withdrawn as on the
date of this Prospectus. The term ‘expert’ and consent thereof, does not represent an expert or consent
within the meaning under the U.S. Securities Act.

Brokers to the Issue

All members of the recognized stock exchanges would be eligible to act as Brokers to the Issue.
Credit Rating

As the Issue is of Equity Shares, credit rating is not required.

Trustees

As the Issue is of Equity Shares, the appointment of trustees is not required.

Debenture Trustees

As the Issue is of Equity Shares, the appointment of Debenture trustees is not required.

IPO Grading

No credit agency registered with SEBI has been appointed in respect of obtaining grading of the Issue.
Monitoring Agency

As per regulation 41(1) of the SEBI ICDR Regulations, since the size of the present Issue is less than
Rs. 10,000 Lakhs, our Company is not required to appoint a monitoring agency for the purposes of this

Issue.

In terms of the SEBI LODR Regulations, the Audit Committee of our Company would be monitoring
the utilization of the proceeds of the Issue.

Appraising Entity

None of the purposes for which the Net Proceeds are proposed to be utilized have been financially
appraised by any banks or financial institution.

BOOK BUILDING PROCESS

The book building, in the context of the Issue, refers to the process of collection of Bids on the basis of
the Red Herring Prospectus within the Price Band, which was decided by our Company, in consultation
with the BRLM, and advertised in Business Standard editions of the English national newspaper and
Business Standard editions of the Hindi national newspaper and Telegu edition- Nava Telangana of the
Telugu newspaper, (Telugu being the regional language of Telangana where our Registered Office is
located), each with wide circulation, at least two Working Days prior to the Bid / Issue Opening Date.

68
W%

The Issue Price is finalized after the Bid / Issue Closing Date. The principal parties involved in the Book
Building Process are:

All Bidders participated in the Issue only through the ASBA process except that pursuant to the UPI
Circulars, Retail Individual Bidders also participated in the Issue through UPI mechanism in the ASBA
process. Pursuant to the issue of the Corrigendum read with the Addendum, all Bidders were given an
option to withdraw their bids until the Bid/ Issue Closing Date.

Each Bidder by submitting a Bid in Issue, was deemed to have acknowledged the above restrictions and
the terms of the Issue.

Our Company will comply with the SEBI ICDR Regulations and any other directions issued by SEBI
in relation to this Issue. In this regard, our Company have appointed the BRLMs to manage this Issue
and procure Bids for this Issue. The Book Building Process is in accordance with guidelines, rules and
regulations prescribed by SEBI and are subject to change from time to time. Bidders are advised to
make their own judgement about an investment through this process prior to submitting a Bid.

The process of Book Building is in accordance with the guidelines, rules and regulations prescribed by
SEBI under the SEBI ICDR Regulations and the Bidding Processes are subject to change from time to
time. Investors are advised to make their own judgment about investment through this process prior to
submitting a Bid in this Issue.

Bidders should note that this Issue is also subject to obtaining (i) final approval of the RoC after the
Prospectus is filed with the RoC; and (ii) final listing and trading approvals from the Stock Exchanges,
which our Company shall apply for after Allotment.

For further details, please refer to the chapters titled “Issue Structure” and “Issue Procedure” beginning
on pages 281 and 281, respectively of this Prospectus.

Illustration of Book Building Process and the Price Discovery Process

For an illustration of the Book Building Process and the price discovery process, please refer to the
chapter titled “Issue Procedure” on page 281 of this Prospectus.

Withdrawal of the Issue

Our Company, in consultation with the Book Running Lead Manager, reserves the right not to proceed
with the Issue at any time before the Issue Opening Date without assigning any reason therefor.

If our Company withdraws the Issue any time after the Issue Opening Date but before the allotment of
Equity Shares, a public notice within two (2) Working Days of the Issue Closing Date, providing
reasons for not proceeding with the Issue shall be issued by our Company. The notice of withdrawal
will be issued in the same newspapers where the pre-Issue advertisements have appeared and the Stock
Exchanges will also be informed promptly.

The BRLM, through the Registrar to the Issue, will instruct the SCSBs to unblock the ASBA Accounts
within one (1) Working Day from the day of receipt of such instruction. If our Company withdraws the
Issue after the Issue Closing Date and subsequently decides to proceed with an Issue of the Equity
Shares, our Company will file a fresh Draft Offer Document with the stock exchanges where the Equity
Shares may be proposed to be listed. Notwithstanding the foregoing, the Issue is subject to obtaining (i)
the final listing and trading approvals of the Stock Exchanges with respect to the Equity Shares issued
through the Prospectus, which our Company will apply for only after Allotment; and (ii) the final RoC
approval of the Prospectus.

69
0

Underwriting

Our Company has entered into the Underwriting Agreement with the Underwriter for the Equity Shares.
Pursuant to the terms of the Underwriting Agreement, the obligations of Underwriter is subject to
certain conditions specified therein.

The Underwriting Agreement is dated October 08, 2020. The Underwriter has indicated their intention
to underwrite the following number of Equity Shares:

Name, address, telephone, fax, BtitelCostcacl mv ytig % of the
EMU RNE RNa men ane co Poa underwritten total Issue

Equity Shares (Rs. In Bra
ry Lakhs) underwritten

underwritten

51,00,000*

      

Unistone Capital Private Limited 6,120.00
12, Flr No. 2, Shashank CHS Ltd.,

Manmala Tank Road, Near Starcity

Cinema, Mahim, Mumbai- 400016.

Maharashtra, India

Telephone: +91 9322997964

Email: mb@unistonecapital.com

Investor grievance email:

compliance@unistonecapital.com

 

*Subject to finalisation of basis of allotment

The above-mentioned underwriting commitments are indicative and will be finalised after
determination and finalisation of the Basis of Allotment and the actual allocation shall be subject to the
provisions of the SEBI ICDR Regulations.

In the opinion of the Board of Directors, the resources of the above-mentioned Underwriter are
sufficient to enable them to discharge their respective underwriting obligations in full. The
abovementioned Underwriter is registered with SEBI under Section 12(1) of the SEBI Act or registered
as brokers with the Stock Exchange(s). Our Board of Directors/ IPO Committee, at its meeting held on
October 08, 2020 has accepted and entered into the Underwriting Agreement on behalf of our Company.

Notwithstanding the above table, the Underwriter shall be responsible for ensuring payment with
respect to Equity Shares allocated to investors procured by them. In the event of any default in payment,
the Underwriter, in addition to other obligations defined in the Underwriting Agreement, will also be
required to procure subscribers or subscribe to Equity Shares to the extent of the defaulted amount in
accordance with and subject to the terms of the Underwriting Agreement.

70
W%

Our Equity Share capital before the Issue and after giving effect to the Issue, as at the date of this
Prospectus, is set forth below:

CAPITAL STRUCTURE

(Rs. in Lakhs except the share data)
Aggregate Aggregate

 

 

 

 

 

 

 

 

 

 

 

 

Particulars Nominal Value at
AEN Issue Price

I. Authorized share capital"?

2,00,00,000 Equity Shares of Rs. 10 each 2,000.00 _
IL. Issued, subscribed and paid-up share capital

prior to the Issue”

1,46,25,000 Equity Shares of Rs. 10 each 1,462.50 _
IIL. Present Issue in terms of the Prospectus”

51,00,000* Equity Shares of Rs. 10 each at a price 510.00 6,120.00

of Rs. 120/- per Equity Share
Iv. Issued, subscribed and paid-up share capital

after the Issue

1,97,25,000* Equity Shares of Rs. 10 each 1,972.50
Vv. Securities premium account

Before the Issue NIL

After the Issue 5,610

 

 

 

 

 

*Subject to finalization of the basis of allotment

© For details of the changes in the authorized share capital of our Company, please refer to chapter
titled "History and Certain Corporate Matters" beginning on page 145 of this Prospectus.

© As on the date of this Prospectus, there are no partly paid-up Equity Shares of our Company and
there is no share application money pending for allotment.

© The present Issue has been authorized pursuant to a resolution of our Board of Directors dated

December 10, 2019 and by special resolution passed under Section 62(1) (c) of the Companies Act,
2013 at the Extra Ordinary General Meeting of the members held on December 23, 2019.

71
0

1. Notes on Capital Structure
The following table sets forth the history of the equity share capital history of our Company

Nature
elas get i

AVENTIS Price  Conside p Cumulative
Tag 5 Cumulative
DEC 1 io Pet) MET g RY rT

Equity (Cash/ allotment NUDE (ery yiel

RYE a Other [Pteuityy Sistas (Rs.)
(Rs.) furry
Cash)

Equity

yA Crentang pai

      

 

 

 

 

 

 

Upon Cash Subscriptio 6,000
Incorporati n to the
on MoA “)
March 07, 44,400 10 10 Cash Rights 45,000 4,50,000
2001 issue
March 31, 3,55,000 10 10 Cash Rights issue 4,00,000 40,00,000
2010
March 29, 6,00,000 10 10 Cash Rights issue 10,00,000 1,00,00,000
2012 ®
February 35,00,000 10 NA Other than | Bonus 45,00,000 4,50,00,000
12, 2018 cash issue#

(35:1)
December 1,01,25,000 10 NA Other than | Bonus 1,46,25,000 |14,62,50,000
23, 2019 cash issue#

(2.25:1)™
Total 1,46,25,000

 

 

 

 

 

 

 

 

 

 

# Bonus issue of 35,00,000 Equity Shares in ratio of (3.5:1) and of 1,01,25,000 Equity Shares in ratio
of (2.25:1) have been made out of capitalization of reserve & surplus of the Company.

A. Initial subscribers to the MoA subscribed 600 Equity Shares of face value of Rs. 10/- each as
per the details given below:

 

 

 

 

 

 

 

Res Name of allottees Number of equity shares
di Srinivasa Rao Gaddipati 100
2: Sri Lakshmi Gaddipati 100
3 Kutumba Rao Gaddipati 100
4. Subba Rao Gaddipati 100
5. T.V.V. Anantha Lakshmi 100
6. Ravi Sri Hari Rao 100

Total 600

 

 

 

 

B. Rights issue of 44,400 Equity Shares of face value of Rs. 10/- each at a price of Rs. 10/- each as
per the details given below:

 

 

 

Res Name of allottees Number of Equity Shares
1. Srinivasa Rao Gaddipati 39,600
2: Sri Lakshmi Gaddipati 4,800

Total 44,400

 

 

 

 
W%

C. Rights issue of 3,55,000 Equity Shares of face value of Rs. 10/- each at a price of Rs. 10/- each

as per the details given below:

 

 

 

Res Name of allottees Number of Equity Shares
Ty Srinivasa Rao Gaddipati 3,35,000
2. Sri Lakshmi Gaddipati 20,000

Total 3,55,000

 

 

 

 

D. Rights issue of 6,00,000 Equity Shares of face value of Rs. 10/- each at a price of Rs. 10/- each

as per the details given below:

 

Pas Name of allottees Number of Equity Shares
1. Srinivasa Rao Gaddipati 6,00,000
Total 6,00,000

 

 

 

 

E. Bonus issue of 35,00,000 Equity Shares of face value of Rs. 10/- each in the ratio of 3.5 Equity
Shares for every 1 Equity Share held as per the details given below:

 

 

 

 

= No. Name of allottees Number of Equity Shares
Srinivasa Rao Gaddipati 34,12,500

2. Sri Lakshmi Gaddipati 87,500
Total 35,00,000

 

 

 

F. F. Bonus issue of 1,01,25,000 Equity Shares of face value of Rs. 10/- each in the ratio of 2.25
Equity Shares for every 1 Equity Share held as per the details given below:

 

 

 

 

 

 

 

 

Res Name of allottees Number of Equity Shares
d Srinivasa Rao Gaddipati 98,66,250
2. Sri Lakshmi Gaddipati 2,53,125
3. Likhitha Gaddipati 1,125
4. Nandu Babu Gaddipati 1,125
5: Nagaraju Ravulapati 1,125
6. Chandra Sekhar Mallisetty 1,125
Ts Karri Kalyan Manikanta 1,125

Total 1,01,25,000

 

 

 

 

2. As on the date of this Prospectus, our Company does not have any preference share capital.

73
4. Shareholding Pattern of our Company

The table below presents the current shareholding pattern of our Company as on the date of this Prospectus.

(Face value of Equity Shares of Rs.10 each)

LINE
pazijpiuauiap ul pjay sasys 4Ginba Jo saqunyy

Poe sasys (@) Play Sasvys p10) Jo % psy
at daquinyy (D) ‘on
ITS OU EST ALOR EZ

ul 7) Be Ya

a) PCr LINE (D) ‘on

(ose 68 ZEN
(Leese 2
POMEL N Ts Mee) MTL (TSU Co)
CEC |) CLL A LT Ce DO Ey

(OUTPUT OL TD COLL Rae UEC ed

POT ATTY LO me LEC) 08 ML CO

(0 +4+V¥) Jo % D sp jonoy

yopa ul pjay
C717 Ps ma TLL
at daquinyy

v¥ypba -/0T'SY
inby -ssvjD

es]
>
=
2
S
=
_
i}
9
2

jo sasmys

(co+a+v)
Jo % D sy (S61 ‘ANOS 42d sv payvjnopp9)

saupys Jo ‘ou ]p}0) Jo % D sp Bulpjoyaipys

Pay Saapys ‘sou [DIO J,

sjdiazay A1oysodag Burdj4sapun sa.svys Jo ‘on

Pjay saapys 4Ginba dn-piod Ap.ivg Jo ‘ony

POE eT Le ON

sdapjoy aapys Jo “sony

BEY OI ENT oe eed UB)

 

 

XIV

1,46,18,500

6,500

 

XI

 

XII

 

XI=VII+X

1,46,18,500

6,500

 

x

 

Ix

99.96

0.04

 

1,46,18,500

6,500

 

1,46,18,500

6,500

 

Vill

99.96

0.04

 

Vil
IV+V+VI1

1,46,18,500

6,500

 

VI

 

Vv

 

IV

1,46,18,500

6,500

 

Til

3

4

 

I

Promoters

&

Promoter
Group
Public

 

 

(A)

 

(B)

 

 

75
0

3. Details of Equity Shares issued for consideration other than cash:

Other than as set out below, our Company has made no other issues of Equity Shares for consideration
other than cash as on the date of this Prospectus:

 

 

 

Br Tas Issue Benefits
Value ars Eee at ey PC
TT Tag Name
Rn 5 og sag Clg Nature
Equity z é a
PN Ginitong Equity Equity Company of
SE lao) a i Allottee
Share Share allotment
(59) (Rs.)
February 35,00,000 10 NA Bonus Please
12, 2018 issue of refer to
3.5:1 for table E
every 1 above
Equity
Share
Capitalizati held
December 1,01,25,000 10 NA ms Eraet ton Bonus Please
23, 2019 issue of refer to
2.25 for table F
every 1 above
Equity
Share
held

 

 

 

 

 

 

 

 

 

1. No Equity Shares have been allotted pursuant to any scheme of arrangement approved under Section
391-394 of the Companies Act, 1956 or section 230-234 of the Companies Act, 2013.

2. Our Company has not issued any shares pursuant to employee stock option scheme.
3. Issue of Equity Shares at a price lower than issue price in the last one (1) year

Except as disclosed below, our Company has not made issue of specified securities at a price lower
than the Issue Price during the preceding one (1) year before the date of filing of this Prospectus:

Nya Issue

Rey Value sacs

PETC a jo a IEC MN Eas Name of

Equity

yu Cyentang cranes

Equity Equity aiuto Allottee
Share SES

(Rs.) (Rs.)

     

December 1,01,25,000 Bonus issue of Please refer to
23, 2019 2.25:1 for every table F above
Equity Share
held

 

74
UTNE
PAT ECAC) Re COL OTL COM LIN

POT saswys (@) Play Sasvys p10) Jo % psy
a BETTIE (D) ‘on
YY LY (@ play saapys 10103 Jo %

rx eis & eA

daquinny (CORON

(ose 68 DELON
(qou1db9 aupys paynyip
fo abpjuassad p sp) saniunzas ajqniaauod jo
uolssaauod jjnf Burunssp % v sp ‘bulpjoya.vys

(SupsinM Bulpnjoul) saniingzas ajqnsaAuod
POTTY 6 Tt eg Le LS ON

(0 +4+V¥) Jo % D sp jooy

PRY PLP dy
jo R111) fe)
ey CL
siybiqg 6unop
at daquinyy

g
=
=
BY
&
S
—
i}
5
2

vyaba -/0T'SY
jo sawys Ainbyq -ssvjD

(Zo++V)
Jo % D sy (£561 ‘AADS Aad sp paypjno]p9)

saupys Jo ‘ou ]p}0) Jo % Dv sv Burpjoyasvys

Pay saapys ‘sou [DIO J,

sydiazay A1oysodaq Burdjsapun saapys Jo on,
Play saspys 4inba dn-piod Ap. Jo ‘ony

Pjay saapys 4inba dn pind AjjnJ Jo ‘ony

apjoy aapys Jo “sony

BE) ) OI Cee eid ue)

 

 

XIV

 

XII

 

XII

 

XI=VII+X

 

x

 

Ix

 

 

 

Vill

 

Vil
IV+V+VI

 

VI

 

Vv

 

IV

 

Til

 

I

Non-

Promoter-
Non-

Public

underlying
DRs

by

held

Emp.

 

 

©

 

(C1) | Shares

 

(C2) | Shares

 

 

76
UTNE
PAT ECAC) Re COL OTL COM LIN

POT saswys (@) Play Sasvys p10) Jo % psy
it daquinyy (ORONG

ITS ON eT ALOE EZ
Cr co eras sv

a) daquinyy (D) ‘on

(one: EAE
(Lees ee 2 Ho
POUT ENT]: MEME) RYT RAE (EEC UC Oee Co
UEC |) LL a LT Ce EL Ey

(CTEM 20 PL ee ee CUD
POTTY 6 Tt eg Le LS ON

(0 +4+V¥) Jo % D sp jooy

PRY PLP dy
at R111) fe)
yopa ul pjay
ESTs ma TLIO,
at daquinyy

P<)
=)
=
2
E
<
i}
5
2

Nee
fo samys Aimbq -sspjD

(co+a+v)
Jo % D sy (£561 ‘NDS ad sp payvjnz]p2)

saupys Jo ‘ou ]p}0} Jo % D sp Bulpjoyaspys

Pay saapys ‘sou [DIO J,

sydiazay A10j1sodag Burdjsapun saspys Jo ‘oN,

Play saspys 4inba dn-piod Ap. Jo ‘ony

POE Le tT ON

Sdapjoy aapys Jo “sony

BE) ) OI Cee eid ue)

 

 

XIV

1,46,25,000

 

XI

 

XII

 

XI=VII+X

100.00

 

x

 

Ix

100.00

 

1,46,25,000

 

1,46,25,000

 

Vill

100.00

 

Vil
IV+V+VI

1,46,25,000

 

VI

 

Vv

 

IV

1,46,25,000

 

Til

7

 

I

Total

 

 

 

 

**All Pre-IPO equity shares of our Company will be locked-in from the date of listing.

*As on date of this Prospectus, one (1) Equity Share holds one (1) vote.

AWe have only one class of Equity Share of face value of Rs. 10/- each.

Our Company will file the shareholding pattern of our Company, in the form prescribed under Regulation 31 of the SEBI LODR Regulations, one day prior
to the listing of the Equity shares. The Shareholding pattern will be uploaded on the website of BSE and NSE before commencement of trading of such

Equity Shares

77
0

5. The list of the shareholders of the Company holding 1% or more of the paid-up share capital
aggregating to 80% or more of the paid-up share capital of the Company:

a. ___ As on the date of the Prospectus:

 

 

 

 

Name of the Shareholder Tag % of the then
BOK a meed ea) existing paid up
capital
Ts Srinivasa Rao Gaddipati 1,42,51,250 97.44
2. Sri Lakshmi Gaddipati 3,65,625 2.50
Total 1,46,16,875 99.94

 

 

 

 

 

 
  
 

Ten (10) days prior to the date of the Prospectus:

Name of the Shareholder Toad % of the then
Equity Shares existing paid
up capital

   
      

 

 

 

 

Srinivasa Rao Gaddipati 1,42,51,250 97.44
Sri Lakshmi Gaddipati 3,65,625 2.50
Total 1,46,16,875 99.94

 

 

 

 

 

c One (1) year prior to the date of the Prospectus:

 

 

 

 

 

 

Name of the Shareholder Tag % of the then
Equity Shares Ceci nrem ere
up capital
al Srinivasa Rao Gaddipati 43,85,000 97.44
2. Sri Lakshmi Gaddipati 1,12,500 2.50
Total 44,97,500 100.00

 

 

 

d. Two (2) year prior to the date of the Prospectus:
Name of the Shareholder Toa a % of the then

 

 

 

 

 

 

Equity Shares Cea em rere
up capital
alts Srinivasa Rao Gaddipati 43,87,500 97.50
2; Sri Lakshmi Gaddipati 1,12,500 2.50
Total 45,00,000 100.00

 

 

 

6. Other than as disclosed in this chapter, our Company has not made any public issue or rights issue
of any kind or class of securities since its incorporation.

7. Our Company does not have any proposal or intention to alter the equity capital structure by way
of split/ consolidation of the denomination of the Equity Shares, or the issue of securities on a
preferential basis or issue of bonus or rights or further public issue of securities or qualified
institutions placement within a period of six (6) months from the date of opening of the Issue.
However, if business needs of our Company so require, our Company may alter the capital
structure by way of split / consolidation of the denomination of the Equity Shares / issue of Equity
Shares on a preferential basis or issue of bonus or rights or public or preferential issue of Equity
Shares or any other securities during the period of six (6) months from the date of opening of the
Issue or from the date the application moneys are refunded on account of failure of the Issue, after
seeking and obtaining all the approvals which may be required.

78
8. Capital build-up of Promoters’ shareholding, Promoters’ contribution and Lock-in:
i. Build-up of Promoters’ shareholdings.

As on the date of this Prospectus, our Promoters, Mr. Srinivasa Rao Gaddipati and Ms. Likhitha Gaddipati
collectively hold 1,42,52,875 Equity Shares, which constitutes 97.46% of the pre-Issue issued, subscribed
and paid-up Equity share capital of our Company. None of the Equity Shares held by our Promoters is
subject to any pledge.

1. Srinivasa Rao Gaddipati
ring Troms STC Ero Eng ays % of post
PN enon Equity Acqu a BBeticeaet iy ad Peta
avrte ts Re ie ert) ferrets Feet ete

PATE nf ration Coen a Sina

ett ont (Cash/ Bred ferme
Prltaeertel Dates Other ferns)

up* Pig ent 1
Sieve Cash)
(Rs.

ed

       
  

 

 

 

 

 

 

 

 

 

August Subscriber to MOA
06, 1998
March 300 10 10 Cash Transfer of shares 0.00 0.00%
28, 2000 from Mr. Kutumba
Rao Gaddipati, Mr.
Subba Rao
Gaddipati and Mrs.
T.V.V. Anantha
Lakshmi
March 39,600 10 10 Cash Rights Issue 0.27 0.20%
07, 2001
March 3,35,000 10 10 Cash Rights Issue 2.29 1.70%
31, 2010
March 6,00,000 10 10 Cash Rights Issue 4.10 3.04%
29, 2012
February 34,12,500 10 NA Other Bonus Issue (3.5:1) 23.33, 17.30%
12, 2018 than
Cash
Septemb (500) 10 10 Other Transfer (Gift) to 0.00 0.00%
er 06, than Likhitha Gaddipati
2018 Cash
Decemb (2,000) 10 75 Transfer 500 Equity (0.01) (0.01%)
er 01, Shares each to Mr.
2018 Nandu Babu
Gaddipati, Mr.
Nagaraju
Ravulapati, Mr.
Chandra Sekhar
Mallisetty and Mr.
Karri Kalyan
Manikanta
Decemb 98,66,250 10 NA Other Bonus Issue 67.46 50.02%
er 23, than (2.25:1)
2019 Cash
Total 1,42,51,250 97.44 72.25%

 

 

 

 

 

 

 

 

 

 

79
2. Likhitha Gaddipati

 

 

 

pec a SIC ET INET % of La
PN Centon PNT Considerat BBeticraat) ad nit
Biel ame / Sale Price cn ny PS PS
arian Yi per Share (Cash/ rein rein
Pret elk ie Cole teaiey share share
paid up* ; Cash) oa oa
September 500 10 NA Other Transfer 0.00% 0.00%
06, 2018 than Cash (Gift) from

Srinivasa

Rao

Gaddipati
December 1,125 10 NA Other Bonus 0.01% 0.01%
23, 2019 than Cash Issue

(2.25:1)

Total 1,625 0.01% 0.01%

 

 

 

 

 

 

 

 

 

 

* All the Equity Shares held by our Promoters were fully paid up as on the respective dates of acquisition of
such Equity Shares.

** Cost of acquisition excludes Stamp Duty

Our Promoters have confirmed to our Company and the Book Running Lead Manager that the Equity Shares
held by our Promoters have been financed from their personal funds and no loans or financial assistance from
any bank or financial institution has been availed of by them for such purpose.

As on the date of this Prospectus, our Promoters do not hold any preference shares in our Company.

ii, Details of Lock—in of Equity Share capital:

a) Promoters’ Contribution locked-in for three years

Pursuant to Regulation 14 and 16 of the SEBI ICDR Regulations, an aggregate of at least 20% of the Post-Issue
Equity Share Capital of our Company held by our Promoters shall be considered as Promoters’ Contribution
("Promoters’ Contribution") and shall be locked-in for a period of three (3) years from the date of Allotment.
The lock-in of the Promoters’ Contribution would be created as per applicable law and procedure and details of
the same shall also be provided to the Stock Exchanges before listing of the Equity Shares.

All Equity Shares held by our Promoters, which are considered for the purposes of the Promoters’ Contribution,
are eligible for Promoters’ Contribution, pursuant to Regulation 15 of the SEBI ICDR Regulations.

Our Promoters have consented to the inclusion of such number of the Equity Shares held by them, in aggregate,
as may constitute 20% of the post-Issue Capital of our Company as Promoters’ Contribution and have agreed
not to sell or transfer or pledge or otherwise dispose of in any manner, the Promoters’ Contribution, for a period
of three years from the date of allotment in the Issue.

The below Equity Shares proposed to form part of Promoters’ Contribution subject to lock-in shall not be
disposed of/ sold/ transferred by our Promoters during the period starting from the date of filing this Prospectus

with the Stock Exchanges until the date of commencement of the lock-in period.

Accordingly, Equity Shares aggregating to 20% of the post-Issue capital of our Company, held by our Promoters
shall be locked-in for a period of three (3) years from the date of Allotment in the Issue as follows:

80
 

Name of OTC) ma

 

 

Baud which the the
Equity ag % of
SHienan r Pacers) Nature of mee Lis
Aaa A a Share PITTS
shares n Price Per transactio =
Allotted/ i capita share
aa tar Share ny ‘| cata
Tart eel gsgy H
a
Acquired
Srinivasa Decembe 39,45,00
Rao 123; 0 Issue
Gaddipat 2019
i
Total 39,45,00 20.00
0

 

 

 

 

 

 

 

 

 

*All the Equity Shares held by our Promoters were fully paid up as on the respective dates of acquisition of

su

ich Equity Shares.

** Cost of acquisition excludes Stamp Duty

The Promoters’ Contribution have been brought into the extent of not less than the specified minimum lot and
from the persons defined as ‘promoters’ under the SEBI ICDR Regulations.

The Equity Shares that are being locked are eligible for computation of Promoters’ Contribution under
Regulation 15 of the SEBI ICDR Regulations. In this respect, we confirm the following:

i)

that the minimum Promoters’ Contribution does not consist of Equity Shares acquired during the preceding
three years, if they are acquired for consideration other than cash and revaluation of assets or capitalization
of intangible assets is involved in such transaction;

that the minimum Promoters’ Contribution does not consist of Equity Shares acquired during the preceding
three years, resulting from a bonus issue by utilization of revaluation reserves or unrealized profits of the
Company or from bonus issue against Equity Shares which are ineligible for minimum promoters’
contribution;

iii) that the minimum Promoters’ Contribution does not consist of Equity Shares acquired during the one (1)

year immediately preceding the date of the Red Herring Prospectus at a price lower than the price at which
the Equity Shares are being Issued to the public in the Issue;

iv) No equity shares have been issued to our Promoters upon conversion of a partnership firm during the

preceding one year at a price less than the Issue price.

that the Equity Shares held by our Promoters which are offered for minimum Promoters’ Contribution are
not subject to any pledge or any other form of encumbrance whatsoever; and all the Equity Shares of our
Company held by the Promoters are dematerialized and shall be held in dematerialized form prior to the
filing of the Prospectus.

vi) The Equity Shares offered for Promoters’ Contribution do not consist of Equity Shares for which specific

written consent has not been obtained from the Promoters for inclusion of its subscription in the Promoters’
Contribution subject to lock-in.

81
a)

9.

Details of Equity Shares Locked-in for one (1) year

In terms of Regulation 16(1)(b) and 17 of the SEBI ICDR Regulations, Promoters’ holding in excess of
minimum Promoters’ Contribution , which will be locked-in for three (3) years and the entire pre-issue
capital held by the persons other than Promoters, all the pre-Issue Equity Share capital shall be subject
to lock-in for a period of one (1) year from the date of Allotment.

The shares which are in dematerialized form shall be locked-in by the respective depositories. The details
of lock-in of the Equity Shares shall also be provided to the Designated Stock Exchange before the listing
of the Equity Shares.

Other requirements in respect of lock-in

In terms of Regulation 21 of the SEBI ICDR Regulations, locked-in Equity Shares for one (1) year held
by our Promoters may be pledged only with scheduled commercial banks or public financial institutions
or a systematically important non-banking finance company or a housing finance company as collateral
security for loans granted by such banks or public financial institutions, provided that such pledge of the
Equity Shares is one of the terms of the sanction of the loan. Equity Shares locked-in as Promoters’
Contribution for 3 years under Regulation 16(a) of the SEBI ICDR Regulations may be pledged only if
in addition to fulfilling the aforementioned requirements, such loans have been granted to the Issuer
Company or its subsidiary(ies) by such banks or financial institutions for the purpose of financing one or
more of the objects of the Issue.

Provided that such lock-in shall continue pursuant to the invocation of the pledge and such transferee
shall not be eligible to transfer the specified securities till the lock-in period stipulated in the SEBI ICDR
Regulations has expired.

In terms of Regulation 22 of the SEBI ICDR Regulations, the Equity Shares held by Promoters and
locked-in as per Regulation 16 may be transferred to another Promoter or any person of the Promoter
group or a new Promoter and the Equity Shares held by persons other than the Promoters and locked-in
in terms of Regulation 17, may be transferred to any other person holding Equity Shares which are
locked-in along with the Equity Shares proposed to be transferred, subject to the continuation of the lock-
in in the hands of transferees for the remaining period and compliance with the SEBI Takeover
Regulations and such transferee shall not be eligible to transfer them until the lock-in period stipulated
in the SEBI ICDR Regulations has expired.

We further confirm that our Promoters Contribution of 20% of the post-Issue Equity Share capital does
not include any contribution from Alternative Investment Fund, Foreign Venture Capital Investors,
Scheduled Commercial Banks, Public Financial Institutions or Insurance Companies registered with
Insurance Regulatory and Development Authority of India.

As on the date of this Prospectus, our Company has seven (7) shareholders.

10. The average cost of acquisition of or subscription of shares by our Promoters is set forth in the table
below:

Sa ro)
Oy ro (Rs. Per share)

1.

 

Name of the Promoters No. of Shi

 

Porte Awe

Srinivasa Rao Gaddipati 1,42,51,250 0.68

 

 

2.

 

 

 

 

Likhitha Gaddipati 1,625 Nil*

 

*Since shares received as gift and bonus shares issued on said gift shares

82
11. Details of the pre and post-Issue shareholding of our Promoters and Promoter group is as below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Issue Post-Issue

Particulars ato of ies ‘i a Tog i en as
F A : a

Equity Shares otra Equity Shares potrnrs
Promoters
Srinivasa Rao 1,42,51,250 97.44 1,42,51,250 72.25
Gaddipati
Likhitha Gaddipati 1,625 0.01 1,625 0.01
Sub-Total (A) 1,42,52,875 97.46 1,42,52,875 72.26
Promoter Group
Sri Lakshmi Gaddipati 3,65,625 2.50 3,65,625 1.85
Sub-Total (B) 3,65,625 2.50 3,65,625 1.85
Total (A+B) 1,46,18,500 99.96 1,46,18,500 74.11

 

 

 

 

 

 

 

12. None of our Promoters, members of our Promoter group or our directors or their immediate relatives have
sold or purchased, or financed the sale or purchase of, Equity Shares by any other person during the six (6)
months immediately preceding the date of this Prospectus.

13. There are no financing arrangements whereby the Promoters, members of our Promoter Group, the directors
of our Company and their relatives have financed the purchase by any other person of securities of the Issuer
during the period of 6 (six) months immediately preceding the date of filing the Prospectus.

14. Our Company, our directors, our Promoters and the BRLM have not entered into any buy-back and/or
standby and/or similar arrangements for the purchase of Equity Shares of our Company, offered through
this draft offer document, from any person.

15. Since the entire issue price per share is being called up on application, all the successful applicants will be
allotted fully paid-up shares.

16. The BRLM and their associates do not hold any Equity Shares in our Company as on the date of filing of
this Prospectus. The BRLM and their respective affiliates may engage in the transactions with and perform
services for our Company in the ordinary course of business or may, in the future, engage in investment
banking transactions with our Company, for which they may receive customary compensation.

17. We have not granted any options or issued any shares under any scheme of employee stock option or
employees stock purchase in the preceding three (3) years and we do not intend to allot any Equity Shares
to our Employees under ESOS/ESOP scheme from proposed Issue.

18. As on the date of filing of this Prospectus, there are no outstanding warrants, options or rights to convert
debentures, loans or other instruments, financial instruments or any other rights which would entitle
Promoters or any shareholders or any other person any option to acquire our Equity Shares after this Initial
Public Offer.

19. An applicant cannot make an application more than the number of Equity Shares being issued through this
Issue, subject to the maximum limit of investment prescribed under relevant laws applicable to each
category of investors.

20. There will be no further issue of Equity Shares whether by way of issue of bonus shares, preferential

allotment, rights issue or in any other manner during the period commencing from submission of this
Prospectus until the Equity Shares to be issued pursuant to the Issue have been listed.

83
23.

24.

25.

26.

27.

28.

29.

30.

31.

32.

33.

34.

35.

. In case of over-subscription in all categories the allocation in the Issue shall be as per the requirements of

Regulation 49 of SEBI ICDR Regulations.

. None of our Equity Shares have been issued out of revaluation reserve created out of revaluation of assets.

An over-subscription to the extent of 1% of the Issue can be retained for the purpose of rounding off to the
nearest integer during finalizing the allotment, subject to minimum allotment, which is the minimum
application size in this Issue. Consequently, the actual allotment may go up by a maximum of 1% of the
Issue, as a result of which, the post-issue paid up capital after the Issue would also increase by the excess
amount of allotment so made. In such an event, the Equity Shares held by the Promoters and subject to 3
years lock- in shall be suitably increased; so as to ensure that 20% of the post Issue paid-up capital is locked
in.

Undersubscription, if any, in any of the categories, would be allowed to be met with spill-over from any of
the other categories or a combination of categories at the discretion of our Company in consultation with
the BRLM and the Designated Stock Exchange i.e. BSE. Such inter-se spill over, if any, would be affected
in accordance with applicable laws, rules, regulations and guidelines.

The unsubscribed portion in any reserved category, if any, may be added to any other reserved category.

There are no Equity Shares against which depositories receipts have been issued.

At any given point of time there shall be only one denomination of the Equity Shares, unless otherwise
permitted by law.

As per RBI regulations, OCBs are not allowed to participate in this Issue.
Our Company has not raised any bridge loans against the proceeds of the Issue.

Our Company shall comply with such disclosure and accounting norms as may be specified by stock
exchange, SEBI and other regulatory authorities from time to time.

Our Promoters and Promoter Group will not participate in this Issue.

This Issue is being made through Book Building method.

The BRLM, our Company, our Directors, our Promoters, our Promoter Group and/or any person connected
with the Issue shall not offer any incentive, whether direct or indirect, in the nature of discount, commission,
and allowance, or otherwise, whether in cash, kind, services or otherwise, to any Applicant, for making an
Application.

There are no safety net arrangements for this public Issue.

We shall ensure that transactions in Equity Shares by the Promoters and members of the Promoter Group,

if any, between the date of registering the Prospectus with the RoC and the Issue Closing Date will be
reported to the Stock Exchanges within 24 hours of such transactions being completed.

84
OBJECTS OF THE ISSUE

Our Company proposes to utilize the proceeds from the issue towards funding the following objects and
achieve the benefits of listing on BSE Limited and the National Stock Exchange of India Limited.

The Objects of the Issue is to raise resources to:

1. meet the Working Capital Requirements;

2. meet General Corporate Purposes; and

3. meet Issue Expenses.

The main objects set out in our Memorandum of Association enable us to undertake our existing activities
and the activities for which funds are being raised by us through the Issue for which working capital
requirements from the Net Proceeds were utilized.

Utilization of Proceeds of IPO

The details of utilization of Proceeds are as per the table set forth below:

 

 

 

 

 

 

 

 

1 Working Capital Requirements 4,700.00
2 General Corporate Purposes 600.00
3 Issue Expenses 820.00
Total Proceeds from the Issue 6,120.00
*Subject to finalization of basis of allotment

Note:
(1) The amount utilized for general corporate purposes shall not exceed 25% of the Issue Proceeds from the
Issue.

Means of Finance

    

 

 

Particulars Tig

(Rs. In Lakhs)*
Proceeds from the Issue 6,120.00
Less: Issue Expenses 820.00
Net Proceeds from the Issue 5,300.00

 

 

 

 

*Subject to finalization of basis of allotment

We confirm that there is no requirement for us to make firm arrangements of finance through verifiable means
towards atleast 75% of the stated means of finance, excluding the amount to be raised from the proposed
Issue. The fund requirement and deployment are based on internal management estimates and have not been
appraised by any bank or financial institution. These are based on current conditions of the business and
industry and are subject to change in light of changes in external circumstances or costs, other financial
conditions, business or strategy, as discussed further below. Any change in such factors may require the
Company to reschedule/ revise the planned expenditure by increasing/ decreasing the allocation for a
particular purpose from the planned expenditure.

Our management, in response to the competitive and dynamic nature of the industry, will have the discretion
to revise its business plan from time to time, and consequently, our funding requirement and deployment of
funds may also change. In accordance with the policies of our Board, our management will have flexibility in
utilizing the proceeds earmarked for general corporate purposes.

85
DETAILS OF THE OBECTS OF THE ISSUE:
Net Proceeds of IPO
a) Working Capital Requirements:

We fund our working capital requirements in the ordinary course of our business through working capital
facilities/ loans from banks and various financial institutions, overdraft against fixed deposit receipts and
from our internal accruals.

The details of our Company’s working capital requirement for Fiscal 2018-19 (audited), Fiscal 2019-20
(based on utilization) and Fiscal 2020-21 (estimated) and Fiscal 2021-22 (projected) are as follows:
(Rs. in Lakhs)
2018-19 2019-20 2020-21 2021-22

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pe tC) PN Plc BTEC Projected
Current Assets
Margin Money and Cash Balances 1,137.80 2,078.48 2,862.37 2,987.01
Trade Receivables 1,623.19 1,634.88 4,501.81 6,752.72
Work-in Process and Inventories 1,981.37 2,468.25 4,858.06 7,276.58
Other Current Assets 2,091.53, 2,431.05 4172.17 4,694.58
Total (A) 6,833.89 8,612.65 16,394.41 21,710.89
Current Liabilities
Trade Payables 1,211.88 1,393.46 535.14 739.63
Other Current Liabilities 1,216.56 1,227.95 707.00 886.31
Statutory Liabilities & Provisions 300.31 275.64 249.49 748.39
Total (B) 2,728.75 2,897.05 1,491.63 2,374.33
Net Working Capital (A)-(B) 4,105.14 5,715.60 14,902.79 19,336.55
Sources of Working Capital
Fund Based Borrowings 560.58 113.21 900.00 900.00
IPO Proceeds - - 4,700.00 4,700.00
Internal Accruals/ Other Borrowings 3,544.56 5,602.40 9,302.79 13,736.55

 

 

 

 

 

 

 

We are required to provide to the extent of 5% of the project tender amount as performance bank guarantee and
5% of project tender amount as retention money/ security deposit till the project is completed. Thereafter, the
combined 10% of the project tender amount is to be continued till the period of 15 months from the date of
completion of the respective project as per the defect liability period clause. To obtain Bank Guarantee, the
Company deposits approximately 20% of the guarantee amount as Margin Money to the Banks.

Based on the contracted projects in hand and expected schedule of completion of projects, the Company will
require approximately over Rs. 13,000 Lakh non-fund based limits upto Financial Year 2021-22 to provide
various performance bank guarantees as well as bank guarantees under defect liability.

As on July 31, 2020, the Company has tied-up with banks for working capital credit facilities to the extent of
Rs. 7,900 Lakhs of which Rs. 7,000 Lakhs is non-fund based and Rs. 900 Lakhs is fund based limits and the
total utilized working capital requirement is Rs. 5,987.46 Lakhs out of which non-fund based is Rs. 58,11.96
Lakhs and fund based is Rs. 175.50 Lakhs.

86
As a policy, the Company intends to continue to utilize maximum of non-fund based limits from banks and
minimum fund based limits as it would reduce interest costs and facilitate better utilization of internal resources.

Gross and Net working capital requirement for the year 2020-21 is estimated to be Rs. 16,394.41 Lakhs and Rs.
14,902.79 Lakhs respectively. The incremental working capital requirement to the extent of Rs. 4,700.00 Lakhs
will be met through the Net Proceeds of the Issue.

The incremental working capital requirements are based on historical Company data and estimation of the future
requirements based on the orders to be executed in Financial Year 2019-20, Financial Year 2020-21 and
Financial Year 2021-22 considering the growth in activities of our Company and in line with norms generally
accepted by banker(s).

Assumption for future working capital requirements:
(No. of Days)
Holding level Holding level Holding level be

   

 

 

 

 

Particulars EBV Etcait as on March ECE WV ETcait CE Cle
31, 2019 31, 2020 31, 2021 ae
(Audited) (Audited) (Estimated) (Projected)
Current Assets
Inventories
Work-in-progress and 52.62 55.87 76:40 7629

Stores & Spares

 

Trade Receivables 36.53 31.36 60.00 60.00
(on Gross Revenue)

Current Liabilities

Trade Payables & Other 55.06 55.93
Current Liabilities

 

 

16.97 15.17

 

 

 

 

 

 

 

Justification for “Holding Period” levels:

The justifications for the holding levels mentioned in the table above are provided below:

Cease)

Work-in-Progress and stores and spares: Holding level of inventories was 52.62 days
in Financial Year 2018-19 and 55.87 days during the Financial Year 2019-20. On the
basis of estimation and projection, the holding period is assumed to be 76.40 and 76.29
days in Financial Years 2020-21 and 2021-22 respectively, taking into consideration the
size of orders in hand, existing systems, projected activity schedule and various factors
involved in the execution of projects and processing bills thereto such as site-inspection,
confirmation, approval to raise running account bills and processing of the bills

Inventories

 

Receivables realization period was 36.53 days in Financial Year 2018-19 and decreased
to 31.36 days in Financial Year 2019-20. Taking into consideration the time period for
processing the bills by our Oil and Gas distributor customers particularly in relation to
big orders, the realization period for debtors has been expected to increase to 60 days for
Trade the Financial Years 2020-21 and 2021-22.

Receivables
Earlier the size/ quantum of the projects on which the Company was working, were
comparatively smaller in size. In big projects the bills will be released only after the
completion and certification of the third party QC teams.

 

 

 

 

87
EC Cee tty

 

The credit period in Financial Year 2018-19 was 55.06 days and 55.93 days during
Financial Year 2019-20. It is estimated to decrease to 16.97 days for Financial Year
2020-21 and projected to further decrease to 15.17 days for Financial Year 2021-22

Trade based on the financial estimation and projections prepared by the management. This is

Payables because the quantum of materials used by the Company in its project execution are
minimal and do not exceed around 10% of the project cost. For cash purchases of
inventory/ spares/ other raw materials the Company get discounts ranging from 5% to
10% thus it is preferred.

 

The above estimates are based on the generally accepted norms of our bankers. The Board at its meeting held
on September 08, 2020, approved the plan of utilization of Issue Proceeds as stated hereinabove. This amount
is based on our management’s current estimates of the amounts to be utilized towards the respective objects.
However, the actual deployment of funds will depend on a number of factors affecting our results of operation,
financial condition and access to capital. Further, in the event that there is a surplus under any head, such
amount shall be utilized towards general corporate purpose.

b) General Corporate Purposes

Our Company intends to deploy the balance Net Proceeds aggregating to Rs. 600.00 Lakhs for General
Corporate Purposes as decided by our board, we have flexibility in applying the remaining proceeds after
meeting issue expenses for general corporate purpose including but not restricted to, meeting operating
expenses, strengthening of our business development and marketing capabilities, meeting exigencies which
the Company in the ordinary course of business may not foresee or any other purpose as approved by our
board of Directors, subject to compliance with the necessary provisions of the Companies Act.

Issue Expenses

The total expenses of the Issue are estimated to be approximately Rs. 820.00 lakhs. The expenses of this Issue
include, among others, underwriting and management fees, printing and distribution expenses, legal fees,
advertisement expenses and listing fees. The estimated Issue expenses are as follows:
Donec nd Percentage
Total Oi
PCC am be oii Pees PST
PESTS 77a
beanie

   

 

 

Fees of the BRLM and commissions (including
underwriting commission, brokerage and selling
commissions) 605.00 73.78% 9.89%
Commission/processing fee for SCSBs, Sponsor
Bank and Bankers to the Offer. Brokerage and
selling commission and bidding charges for
Members of the Syndicate, Registered Brokers,
and CDPs9®) 30.00 3.66% 0.49%
PR Firm fees, Advertising and marketing
expenses, printing and stationery, distribution,

postage, etc. 39.04 4.76% 0.64%
Listing fees, Stock Exchange fees, Depository and
other regulatory expenses 50.08 6.11% 0.82%

Fees to Registrar to the Issue, Legal Advisors,
Auditors, Other Advisors etc and other issue
expenditure. 95.88 11.69% 1.57%
Total estimated Issue expenses 820.00 100.00% 13.40%

 

88
© The above estimated Issue expenses are excluding applicable taxes, where applicable. Issue expenses are
estimates and are subject to change.

© Selling commission payable to the SCSBs on the portion for Retail Individual Investors and Non-
Institutional Investors which are directly procured by the SCSBs, would be as follows:

 

Portion for Retail Individual Investors* 0.35% of the Amount Allotted (plus applicable taxes)
Portion for Non-Institutional Investors* 0.20% of the Amount Allotted (plus applicable taxes)
*Amount Allotted is the product of the number of Equity Shares Allotted and the Issue Price.

 

 

 

 

 

© No processing fees shall be payable by our Company to the SCSBs on the applications directly procured
by them. Processing fees payable to the SCSBs on the portion for Retail Individual Investors and Non-
Institutional Investors which are procured by the members of the Syndicate/ sub-Syndicate/ Registered
Broker/ RTAs/ CDPs and submitted to SCSB for blocking, would be as follows:

 

Portion for Retail Individual Investors* Rs. 10 per valid application (plus applicable taxes)
Portion for Non-Institutional Investors* Rs. 10 per valid application (plus applicable taxes)

 

 

® Processing fees for applications made by Retail Individual Bidders using the UPI Mechanism would be
as under:
Members of the Syndicate / RTAs / CDPs Rs. 30 per valid application (plus applicable taxes)
Sponsor Bank Rs. 8 per valid application (plus applicable taxes)

The Sponsor Bank shall be responsible for making
payments to the third parties such as remitter bank,
NPCI and such other parties as required in connection
with the performance of its duties under applicable
SEBI circulars, agreements and other Applicable
Laws

 

 

 

 

 

 

© Selling commission on the portion for Retail Individual Bidders, Non-Institutional Bidders which are
procured by members of the Syndicate (including their sub-Syndicate Members), Registered Brokers, RTAs
and CDPs would be as follows:

 

Portion for Retail Individual Investors* 0.35% of the Amount Allotted* (plus applicable taxes)
Portion for Non-Institutional Investors* 0.20% of the Amount Allotted* (plus applicable taxes)
* Amount Allotted is the product of the number of Equity Shares Allotted and the Issue Price.

 

 

 

 

 

Bidding Charges payable to members of the Syndicate (including their sub-Syndicate Members), RTAs and
CDPs on valid ASBA forms (except applications made by Retail Individual Bidders using the UPI
Mechanism) procured by them and submitted to SCSB for blocking, would be as follows: Rs. 10 plus
applicable taxes, per valid application bid by the Syndicate (including their sub-Syndicate Members), RTAs
and CDPs.

Bidding charges payable to the Registered Brokers, RTAs/CDPs on the portion for RIBs and Non Institutional
Bidders which are directly procured by the Registered Broker or RTAs or CDPs and submitted to SCSB for
rocessing, would be as follows:
Portion for Retail Individual Investors* Rs.10 per valid application (plus applicable taxes)
Portion for Non-Institutional Investors* Rs.10 per valid application (plus applicable taxes)
* Based on valid applications

 

 

 

 

 

 

The selling commission and bidding charges payable to Registered Brokers the RTAs and CDPs will be
determined on the basis of the bidding terminal id as captured in the Bid Book of BSE or NSE.

89
All such commissions and processing fees set out above shall be paid as per the timelines in terms of the
Syndicate Agreement and Escrow and Sponsor Bank Agreement.

Schedule of Implementation & Deployment of Funds

Our Company proposes to deploy the issue proceeds immediately on completion of the Issue and the same is
expected to be completed by Financial Year 2020-21.

Details of Funds already deployed till date and sources of funds deployed

The funds amounting to Rs. 19.84 Lakhs has been deployed up to July 31, 2020 towards issue expenses
pursuant to the Objects of the Issue from internal accruals, as certified by the Auditor of our Company, M/s.
NVSR & Associates LLP, Chartered Accountants vide certificate dated August 19, 2020.

Appraisal

The fund requirements and deployment is based on internal management estimates and has not been appraised
by any bank or financial institution

Bridge Financing Facilities

Company has not raised any bridge loans from any bank or financial institution as on the date of this
Prospectus, which are proposed to be repaid from the Net Proceeds. However, depending on business
exigencies, our Company may consider raising bridge financing for the Net Proceeds for Object of the Issue.

Interim Use of Funds

Pending utilization of the Issue Proceeds for the Objects of the Issue described above, our Company shall
deposit the funds only in Scheduled Commercial Banks included in the Second Schedule of Reserve Bank of
India Act, 1934.

In accordance with Section 27 of the Companies Act, 2013, our Company confirms that, pending utilization
of the proceeds of the Issue as described above, it shall not use the funds from the Issue Proceeds to buy, trade
or otherwise deal in equity shares of any other listed company.

Monitoring of Utilization of Funds

Since the Issue size does not exceed 210,000 Lakhs, the appointment of a monitoring agency as per Regulation
41 of the SEBI ICDR Regulations is not required.

As required under the SEBI Listing Regulations, the Audit Committee appointed by our Board will monitor
the utilization of the Issue proceeds. We will disclose the utilization of the proceeds of the Issue, including
interim use, under a separate head in our quarterly/half yearly financial disclosures and annual audited
financial statements until the Issue Proceeds remain unutilized, to the extent required under the applicable law
and regulation. We will indicate investments, if any, of unutilized proceeds of the Issue in our Balance Sheet
for the relevant Financial Years subsequent to listing of our Equity Shares on the Stock Exchanges.

Pursuant to SEBI LODR Regulations, our Company shall on a quarterly basis disclose to the Audit Committee
the uses and applications of the proceeds of the Issue.

On an annual basis, our Company shall prepare a statement of funds utilized for purposes other than those
stated in the Prospectus and place it before the Audit Committee and make such other disclosures as may be

90
required only until such time that all the proceeds of the Issue have been utilized in full. The statement shall
be certified by the Statutory Auditors of our Company.

Further, in accordance with Regulation 32(1) of the Listing Regulations, our Company shall furnish to the
Stock Exchanges on a quarterly basis, a statement indicating (i) deviations, if any, in the actual utilization of
the Net Proceeds of the Issue from the Objects of the Issue as stated above; and (ii) details of category wise
variations in the actual utilization of the proceeds of the Issue from the Objects of the Issue as stated above.
This information will also be published in newspapers simultaneously with the interim or annual financial
results and explanation for such variation (if any) will be included in our Directors’ report, after placing the
same before the Audit Committee.

No part of the Proceeds from the Issue will be paid by our Company as consideration to our Promoters,
Promoter Group, our Directors, Group Companies or Key Managerial Personnel, except in the normal course
of business.

Variation in objects

In accordance with Section 13(8) and Section 27 of the Companies Act, 2013 and applicable rules, our
Company shall not vary the objects of the Issue without our Company being authorized to do so by the
Shareholders by way of a special resolution through postal ballot. In addition, the notice issued to the
Shareholders in relation to the passing of such special resolution (the “Postal Ballot Notice”) shall specify the
prescribed details as required under the Companies Act and applicable rules. The Postal Ballot Notice shall
simultaneously be published in the newspapers, one in English, and one in Telegu, the vernacular language of
the jurisdiction where the Registered Office is situated. Our Promoters or controlling Shareholders will be
required to provide an exit opportunity to such Shareholders who do not agree to the proposal to vary the
objects, at such price, and in such manner, as may be prescribed by SEBI, in this regard.

Basic terms of the issue

The Equity shares being offered are subject to the provision of the Companies Act, 2013, our Memorandum
and Articles of Association, the terms of this offer document and other terms and conditions as may be
incorporated in the Allotment advice and other documents/ certificates that may be executed in respect of the
issue. The Equity shares shall also be subjected to laws as applicable, guidelines, notifications and regulations
relating to the issue of capital and listing and trading of securities issued from time to time by SEBI,
Government of India, RBI, ROC and /or other authorities as in force on the date of issue and to the extent
applicable.

91
BASIS FOR ISSUE PRICE

The Issue price has been determined by our Company in consultation with the BRLM on the basis of market
demand for the Equity Shares through the Book Building Process and on the basis of the following qualitative
and quantitative factors described below. The face value of the Equity Shares is Rs. 10/- each and the Issue
Price is 12 times the face value of the Equity Shares.

Investors should read the following basis with the sections titled “Risk Factors” and “Financial Information”
and the chapter titled “Our Business” beginning on page nos. 31, 179 and 114 respectively, of this Prospectus
to get a more informed view before making any investment decisions. The trading price of the Equity Shares
of our Company could decline due to these risk factors and you may lose all or part of your investments.

Qualitative Factors

Some of the qualitative factors, which form the basis for computing the price, are:
Experienced Promoter and proficient management team.
Established track record in executing Pipeline Infrastructure projects and O&M Services
Long standing relationship with our customers

Strong financial performance
Low debt equity ratio

For further details, refer to heading “Our Competitive Strengths” under section titled “Our Business”
beginning on page 114 of this Prospectus.

Quantitative Factors

The information presented below relating to the Company is based on the restated financial statements of the
Company for the Financial Years 2020, 2019 and 2018. For details, see “Restated Financial Statements” on
page 179.

Some of the quantitative factors, which form the basis or computing the price, are as follows:

1. Basic and Diluted Earnings per Share (EPS):

a. Before providing effect of Bonus Issue

 

 

 

 

 

 

 

 

 

 

Year Ended Basic & Diluted EPS (Rs. ) Weight
March 31, 2020 13.59 3
March 31, 2019 39.68 2
March 31, 2018 15.92 1.
Weighted Average 22.68 -
Notes:
1. Ratios have been calculated as below

Restated Profit attributable to Equity Shareholders

Earnings Per Share (EPS) (Rs.) Number of Equity Shares outstanding as on the date of respective

year end*

 

Restated Profit attributable to Equity Shareholders

 

Diluted Earnings Per Share (EPS)

(Rs.) Number of Diluted Potential Equity Shares as on the date of

respective year end

 

 

 

 

*the increase in the capital by way of bonus issue is not considered

2. Earnings Per Share calculation are in accordance with Ind AS-33 "Earnings Per Share".

3. The face value per equity share is Rs.10.

92
y 4

3. Return on Net worth (RoONW)

Return on Net Worth (RoNW) as per restated financial statements.

 

 

 

 

Particulars Amount (in Rs. )
March 31, 2020 33.06% 3
March 31, 2019 43.16% 2
March 31, 2018 24.83% 1
Weighted Average 35.06%

 

 

 

 

 

Note: Return on Networth has been calculated as per the following formula:

RONW = Net profit / loss after tax, as restated

 

Networth (Average of beginning and end of the year)

Weighted average RoNW is the aggregate of year-wise weighted RoNW divided by the aggregate of weights
i.e., [(RONW x Weight) for each year] / (total of weights)

4. Net Asset Value (NAV)

Particulars Amount (in Rs. )

 

 

 

Net Asset Value per Equity Share as of March 31, 2020 47.83
Net Asset Value per Equity Share after the Issue 66.49
Issue Price per equity share 120.00

 

 

 

Net Asset Value per Equity Share has been calculated as net worth divided by number of equity shares at the
end of the year. Total no of shares taken to calculate the NAV is after taking into consideration Bonus Issue

Note: Net Asset Value has been calculated as per the following formula:

NAV = _ Networth excluding preference share capital and revaluation reserve

 

Outstanding number of Equity shares outstanding during the year / period

Issue Price per Equity Share will be determined on conclusion of the Book Building Process.

5. Comparison with industry peers

As on the date of this Prospectus, there are no listed companies in India which are engaged in the same line of
business as our Company, hence comparison with industry peers are not applicable.

6. The Issue Price of the Equity Shares

The Issue Price of Likhitha Infrastructure Limited is Rs. 120/- per Equity Share has been determined by the
Company in consultation with the Book Running Lead Manager and is justified based on the above accounting
ratios. Likhitha Infrastructure Limited is a Book Built issue and price band for the same was published before
opening of the issue in English and Hindi National newspapers and one regional newspaper with wide
circulation. The revised price band, as notified through the Corrigendum was also published in English and
Hindi National newspapers and one regional newspaper with wide circulation.

For further details, see section titled “Risk Factors” beginning on page 31 and the financials of the Company
including profitability and return ratios, as set out in the section titled “Financial Statements” beginning on
page 179 of this Prospectus for a more informed view.
 

b. After providing effect of Bonus Issue
Bara neCet

March 31, 2020
March 31, 2019
March 31, 2018
Weighted Average

Weight

 

 

Bl] w

 

 

 

 

 

 

 

Notes:

1. Ratios have been calculated as below

 

Restated Profit attributable to Equity Shareholders

 

Basic Earnings Per Share (EPS) (Rs.) Weighted Average Number of Equity Shares

outstanding during the year*
Restated Profit attributable to Equity Shareholders

 

 

Diluted Earnings Per Share (EPS) (Rs.) Weighted Average Number of Diluted Potential

Equity Shares outstanding during the year*
*as the increase in the capital by way of bonus weightage is considered

 

 

 

 

2. Earnings per share calculations are in accordance with Ind AS 33 “Earnings per Share”

3. On 23/12/2019 the company has issued 1,01,25,000 bonus shares to the existing equity shareholders in the
ratio of 2.25:1. In case of a bonus issue the ordinary shares are issued to existing shareholders for no
additional consideration. Therefore, the number of ordinary shares outstanding is increased without an
increase in resources.

The number of equity shares outstanding before the bonus issue are adjusted for the proportionate change
in the number of ordinary shares outstanding as if the event had occurred at the beginning of the earliest
period presented. Accordingly, in the statement of accounting ratios with bonus effect the number of equity
shares increased to 1,46,25,000 from existing outstanding equity shares of 45,00,000 in order to take the
bonus issue effect into consideration.

4. The face value per equity share is Rs.10.

2. Price to Earnings (P/E) ratio in relation to Issue Price of Rs. 120 per Equity Share of face value
Rs. 710 each fully paid up

Particulars P/E at the Issue Price
(no. of

 

P/E ratio based on Basic & Diluted EPS for FY 2019-20
P/E ratio based on Weighted Average Basic & Diluted EPS for 3 years 10.27
Note: EPS taken to calculate the P/E is after taking into consideration Bonus Issue

 

 

 

 

Industry Peer Group P/E ratio:

We believe that there are no listed peers engaged exclusively in the segment which we operate. Accordingly,
it is not possible to provide an industry comparison in relation to our Company.

93
STATEMENT OF TAX BENEFITS

To, Date: 01" Aug 2020
The Board of Directors

LIKHITHA INFRASTRUCTURE LIMITED

Flat No.701, Plot No 8-3-940 And 8-3-94,

Tirumala Shah Residency, Yellareddy Guda,

Ameerpet, Hyderabad-500073, Telangana, India

Dear Sir(s):

Sub: Proposed initial public offering of equity shares of Rs. 10/- each (“the Issue”) of Likhitha
Infrastructure Limited (“the Company”)

We report that the enclosed statement in Annexure A, states the possible direct tax benefits available to the
Company and to its shareholders under the Income-tax Act, 1961 presently in force in India. Several of these
benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the
relevant provisions of the statute. Hence, the ability of the Company or its shareholders to derive the stated
tax benefits is dependent upon their fulfilling such conditions, which based on business imperatives the
Company faces in the future, the Company may or may not choose to fulfill.

The benefits discussed in the enclosed annexure are not exhaustive. This statement is only intended to provide
general information to the investors and is neither designed nor intended to be a substitute for professional
tax advice. In view of the individual nature of the tax consequences and the changing tax laws, each investor
is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of
their participation in the Public issue. Neither are we suggesting nor advising the investor to invest money
based on this statement.

We do not express any opinion or provide any assurance as to whether:
i) the Company or its shareholders will continue to obtain these benefits in future; or
ii) the conditions prescribed for availing the benefits have been/would be met with.

The contents of the enclosed statement are based on information, explanations and representations obtained
from the Company and on the basis of our understanding of the business activities and operations of the
Company.

We also consent to the references to us as “Experts” under section 26 of the Companies Act to the extent of
the certification provided hereunder and included in the Draft Red Herring Prospectus, Red Herring
Prospectus and Prospectus of the Company or in any other documents in connection with the Public issue.

We hereby give consent to include this statement of tax benefits in the Draft Red Herring Prospectus, Red
Herring Prospectus and Prospectus and in any other material used in connection with the Public issue.

Yours sincerely,

For NSVR & Associates LLP

Chartered Accountants

ICAI Firm Registration No.: 008801S/S200060

Sd/-

Suresh Gannamani

Partner

Membership No: 226870

UDIN: 20226870AAAADN1884 Place: Hyderabad
Enclosed: as above

95
V4

Annexure — A

ANNEXURE TO THE STATEMENT OF TAX BENEFITS AVAILABLE TO THE COMPANY AND
ITS SHAREHOLDERS UNDER THE APPLICABLE TAX LAWS IN INDIA

ANNEXURE TO THE STATEMENT OF TAX BENEFITS

The information provided below sets out the possible special tax benefits available to the Company and the
Equity Shareholders under the Income Tax Act 1961 presently in force in India. It is not exhaustive or
comprehensive and is not intended to be a substitute for professional advice Investors are advised to consult
their own tax consultant with respect to the tax implications of an investment in the Equity Shares particularly
in view of the fact that certain recently enacted legislation may not have a direct legal precedent or may have
a different interpretation on the benefits, which an investor can avail.

YOU SHOULD CONSULT YOUR OWN TAX ADVISORS CONCERNING THE INDIAN TAX
IMPLICATIONS AND CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF
EQUITY SHARES IN YOUR PARTICULAR SITUATION.

A SPECIAL TAX BENEFITS TO THE COMPANY

1) Direct Tax

NIL

2) Indirect Tax

NIL

B. SPECIAL TAX BENEFITS TO THE SHAREHOLDER
NIL
Note:

1. All the above statements are as per the current tax laws and will be available only to the sole / first name
holder where the shares are held by joint holders.

2. The above statement covers only certain relevant direct tax law benefits and does not cover any indirect
tax law benefits or benefit under any other law.

3. This statement is only intended to provide general information to the investors and is neither designed nor
intended to be a substitute for professional tax advice. In view of the individual nature of the tax
consequences, the changing tax laws, each investor is advised to consult his or her own tax consultant with
respect to the specific tax implications arising out of their participation in the Issue

4. We have not commented on the taxation aspect under any law for the time being in force, as applicable, of

any country other than India. Each investor is advised to consult its own tax consultant for taxation in any
country other than India.

96
SECTION IV —- ABOUT THE COMPANY

OUR INDUSTRY

The information in this section includes extracts from publicly available information, data and statistics and
has been derived from various government publications and industry sources. Neither we nor any other
person connected with the Issue have verified this information. The data may have been re-classified by us
for the purposes of presentation. Industry sources and publications generally state that the information
contained therein has been obtained from sources generally believed to be reliable, but that their accuracy,
completeness and underlying assumptions are not guaranteed and their reliability cannot be assured and,
accordingly, investment decisions should not be based on such information. You should read the entire
Prospectus, including the information contained in the sections titled “Risk Factors” and “Financial
Statements” and related notes beginning on page 31 and 179 Prospectus.

We are an oil & gas infrastructure service provider in India, focused on laying pipeline networks along with
construction of associated facilities; and providing Operations & Maintenance Services to the CGD
Companies. Our business broadly falls under the scope of the oil and gas industry and more minutely, pipeline
infrastructure and servicing.

Indian Economy:

India has emerged as the fastest growing major economy in the world and is expected to be one of the top
three economic powers of the world over the next 10-15 years, backed by its strong democracy and
partnerships. India's gross domestic product (GDP) (at constant 2011-12 prices) was estimated to be Rs
145.65 lakh crore (US$ 2.06 trillion) for 2019-20, growing 4.2 per cent over the previous year.

India retained its position as the third largest start-up base in the world with over 8,900-9,300 start-ups as
1,300 new start-ups got incorporated in 2019 according to a report by NASSCOM. India also witnessed the
addition of 7 unicorns in 2019 (till August 2019), taking the total tally to 24.

India's labour force is expected to touch 160-170 million by 2020 based on the rate of population growth,
increased labour force participation and higher education enrolment among other factors according to a study
by ASSOCHAM and Thought Arbitrage Research Institute.

India's foreign exchange reserves reached Rs 37.31 lakh crore (US$ 493.48 billion) in the week up to May
29, 2020 according to the data from RBI. With an improvement in the economic scenario, there have been
investments across various sectors of the economy. The mergers and acquisition (M&A) activity in India
stood at US$ 28 billion in 2019, while private equity (PE) deals reached US$ 48 billion.

The first Union Budget of the third decade of 21st century was presented by Minister for Finance & Corporate
Affairs, Ms Nirmala Sitharaman in the Parliament on February 1, 2020. The budget aimed at energising the
Indian economy through a combination of short-term, medium-term, and long-term measures.

Total expenditure for 2020-21 is budgeted at Rs 37.14 lakh crore (US$ 531.53 billion), an increase of 13 per
cent from 2019-20 (revised budget estimates). Numerous foreign companies are setting up their facilities in
India on account of various Government initiatives like Make in India and Digital India. Mr Narendra Modi,
Prime Minister of India, launched Make in India initiative with an aim to boost country’s manufacturing
sector and increase purchasing power of an average Indian consumer, which would further drive demand and
spur development, thus benefiting investors. The Government of India, under its Make in India initiative, is
trying to boost the contribution made by the manufacturing sector with an aims to take it to 25 per cent of the
GDP from the current 17 per cent. Besides, the Government has also come up with Digital India initiative,

97
which focuses on three core components: creation of digital infrastructure, delivering services digitally and
to increase the digital literacy.

India's GDP is expected to reach USS 5 trillion by FY25 and achieve upper-middle income status on the back
of digitization, globalization, favorable demographics, and reforms. India is also focusing on renewable
sources to generate energy. It is planning to achieve 40 per cent of its energy from non-fossil sources by
2030, which is currently 30 per cent, and have plans to increase its renewable energy capacity from to 175
gigawatt (GW) by 2022.

India is expected to be the third largest consumer economy as its consumption may triple to US$ 4 trillion by
2025, owing to shift in consumer behavior and expenditure pattern, according to a Boston Consulting Group
(BCG) report. It is estimated to surpass USA to become the second largest economy in terms of purchasing
power parity (PPP) by 2040 as per a report by PricewaterhouseCoopers.

(Source: https://www.ibef.org/economy/indian-economy-overview)

 

Global Oil and Gas Industry Scenario:

Global energy consumption in 2018 increased at nearly twice the average rate of growth since 2010, primarily
driven by a robust global economy and higher heating and cooling needs in some parts of the world. Higher
electricity demand was responsible for over half of the growth in energy needs. Demand for all fuels
increased, led by natural gas, even as solar and wind posted double digit growth.

Though world is making progress along a lower carbon emission path, oil and gas would continue to be
leading energy sources for the decades ahead, according to the International Energy Agency (IEA) being
plentiful, accessible, cost-effective and —especially in the case of natural gas — cleaner-burning. Oil demand
provided a relatively stable backdrop, continuing to grow robustly, increasing 1.4 Mb/d last year. In an
absolute sense, the growth in demand was dominated by the developing world, with China (0.7 Mb/d) and
India (0.3 Mb/d) accounting for almost two thirds of the global increase. But relative to the past 10 years or
so, the big outlier was the US, where oil demand grew by 0.5 Mb/d in 2018, its largest increase for well over
10 years, boosted by increased demand for ethane as new production capacity came on stream.

The increased importance of petrochemicals in driving oil demand growth was also evident in the global
product breakdown, with products most closely related to petrochemicals (ethane, LPG and naphtha)
accounting for around half of the overall growth in demand last year. Against this backdrop of steady demand
growth, on supply side global production grew by a whopping 2.2 Mb/d, more than double its historical
average. The vast majority of this growth was driven by US production, which grew by 2.2 Mb/d — the largest
ever annual increase by a single country. Since 2012 and the onset of the tight oil revolution, US production
(including NGLs) has increased by over 7 Mb/d — broadly equivalent to Saudi Arabia's crude oil exports —
an astonishing increase which has transformed both the structure of the US economy and global oil market
dynamics. Largely as a consequence, US net oil imports shrunk to less than 3 Mb/d last year, compared with
over 12 Mb/d in 2005.

For natural gas, 2018 was a good year with both global consumption and production increasing by over 5%,
one of the strongest growth rates in either gas demand or output for over 30 years. The main actor here was

the US, accounting for almost 40% of global demand growth and over 45% of the increase in production.

(Source: Petroleum and Natural Gas Regulatory Board, Annual Report 2019)

98
Indian Oil and Gas Industry:

The oil and gas sector is among the eight core industries in India and plays a major role in influencing decision
making for all the other important sections of the economy.

India’s economic growth is closely related to energy demand; therefore, the need for oil and gas is projected
to grow more, thereby making the sector quite conducive for investment.

The Government of India has adopted several policies to fulfil the increasing demand. The government has
allowed 100 per cent Foreign Direct Investment (FDI) in many segments of the sector, including natural gas,
petroleum products, and refineries, among others. Today, it attracts both domestic and foreign investment,
as attested by the presence of Reliance Industries Ltd (RIL) and Cairn India.

According to the data released by Department for Promotion of Industry and Internal Trade Policy (DPIIT),
the petroleum and natural gas sector attracted FDI worth US$ 7.82 billion between April 2000 and March
2020.

Gas pipeline infrastructure in the country stood at 16,981 km at the beginning of April 2020. Government of
India is planning to invest Rs 70,000 crore (US$ 9.97 billion) to expand the gas pipeline network across the
country.

Energy demand of India is anticipated to grow faster than energy demand of all major economies, on the back
of continuous robust economic growth.

India’s energy demand is expected to double to 1,516 Mtoe by 2035 from 753.7 Mtoe in 2017. Moreover,
the country’s share in global primary energy consumption is projected to increase by two-fold by 2035.

Crude oil consumption is expected to grow at a CAGR of 3.60 per cent to 500 million tonnes by 2040 from
221.76 million tonnes in 2017.

Natural Gas consumption is forecasted to increase at a CAGR of 4.31 per cent to 143.08 million tonnes by
2040 from 54.20 million tonnes in 2017.

(Source: https://www.ibef.org/industry/oil-gas-india.aspx)
Natural Gas Infrastructure in India:

The Indian economy presently is believed to have established itself on a healthy growth path and this would
increase going forward the energy consumption in the country. This increase in consumption is expected to
be supplemented by an alteration in the primary energy mix of India because of the substitution of oil by
natural gas. The share of natural gas in the energy mix of India is expected to increase to 20% in 2025 as
compared to 11% in 2010. However, given that all the plans for expansion in natural gas supply in the country
with the help of additional RLNG terminals, nationwide transmission pipeline network and transnational
pipelines are expected to materialize by 2025, it is envisaged that the share of natural gas in the primary
energy mix would reach 20% until 2030 if not more.

In recent years the demand for natural gas in India has increased significantly due to its higher availability,
development of transmission and distribution infrastructure, the savings from the usage of natural gas in place
of alternate fuels, the environment friendly characteristics of natural gas as a fuel and the overall favourable
economics of supplying gas at reasonable prices to end consumers. Power and Fertilizer sector remain the
two biggest contributors to natural gas demand in India and continue to account for more than 55% of gas
consumption. In future, the natural gas demand is all set to grow significantly at a CAGR of 6.8% from

99
242.6 MMSCMD (Million Metric Standard Cubic Meter Per Day) in 2012-13 to 746 MMSCMD in 2029-
30.

This demand represents the Realistic Demand for natural gas in India. Gas based power generation is
expected to contribute the highest, in the range of 36% to 47%, to this demand in the projected period (2012-
13 to 2029-30). The contribution to the overall demand from the CGD sector is set to increase from 6% to
11% during the projected period.

The supply of natural gas is likely to increase in future with the help of increase in domestic gas production
and imported LNG. However, the expected increase in domestic production at present is significantly lower
than earlier projections due to a steady reduction in gas output from the KG D6 field. The capacity of RLNG
terminals in India is expected to increase from 17.3 MMTPA in 2012-13 to 83 MMTPA in 2029-30 assuming
all the existing and planned terminals in India would materialize. Natural gas availability through non-
conventional sources like Shale Gas and Gas Hydrates has not been considered in gas supply projections in
the absence of clarity on key variables like data as most of India remains unexplored/underexplored,
regulatory policy and lack of domestic infrastructure. The total supply of natural gas is expected to grow at
a CAGR of 7.2% from 2012 to 2030 reaching 400 MMSCMD by 2021-22 and 474 MMSCMD by 2029-30.

India, currently, has a network of about 13,000 km of natural gas transmission pipelines with a design
capacity of around 337 MMSCMD. This pipeline network is expected to expand to around 28,000 Kms with
a total design capacity of around 721 MMSCMD in next 5-6 years, putting in place most of the national gas
grid that would connect all major demand and supply centre in India. This would ensure wider availability
across all regions and also potentially help to achieve uniform economic and social progress.

The design capacity of pipeline network in India is expected to reach 815 MMSCMD in 2029-30. However,
considering the addition of capacity directly linked to the existing/planned sources of natural gas in the
country, the gas grid capacity in India (pipeline emanating from source) is expected to reach 582 MMSCMD
in 2029-30 from the present 274 MMSCMD. This capacity is expected to take care of the natural gas supply
scenario in the projected period. In addition to the trunk lines regional gas pipelines, similar to the intra-state
network of Gujarat, are recommended for highly industrialized states. It is expected that going forward the
Southern and Northern part of India would catch-up with the Western part in terms of pipeline infrastructure
while Eastern and North Eastern part of the country would lag behind and would require policy boost for
industrial development to attract more investments.

Today, the natural gas sector is at the threshold of rapid growth in India supported by ever increasing demand
for natural gas in the country, increased exploration efforts under NELP, commissioning of the LNG import
terminals in the West Coast, projected upcoming LNG terminals and the Government’s initiatives in the
direction of development of a nation wide natural gas pipeline grid.

Certain regulatory reforms remain critical to the development and efficient usage of natural gas infrastructure
In India. A fair and transparent access to the pipeline infrastructure is a key for movement of gas volumes.
Currently the regulations provide for open access and have mandated accounting separation between
transportation and marketing activities. To further develop the market the regulator should unbundle (legal
unbundling) the marketing and transportation activities in next 2-3 years’ time. This would prevent
restrictions imposed by pipeline companies through non-price measures on competition. Post legal
unbundling the timing of ownership separation can be determined by the regulator based on factors like
transparency adopted by transportation companies in dealing with their trading affiliates, number of shippers
in the business and the choice exercised by consumers.

Based on the plans for expansion in natural gas supply in the country with the help of additional RLNG

terminals, nationwide transmission pipeline network and transnational pipelines expected to materialize in
next 5 to 10 years, it is envisaged that the share of natural gas in the primary energy mix would reach 20%

100
till 2030. However, to achieve a 20% share of natural gas in the primary energy it is required to attract and
sustain investments in the gas infrastructure including the Cross-Country Pipelines.

(Source: https://www.pngrb.gov.in/Hindi-Website/pdf/vision-NGPV-2030-06092013.pdf)

 

There are presently three major pipeline entities engaged in natural gas transportation across India namely
GAIL, RGTIL/RGPL and GSPL. GAIL is operating about 11411 km of trunk pipelines in India comprising
70% of the pan-India pipeline network. This includes HVJ, DVPL, DUPL/DPPL, Dadri-Bawana-Nangal and
Dabhol-Bengaluru trunk pipelines to evacuate domestic gas as well as imported RLNG. In addition, GAIL
also operates regional gas pipeline networks in Maharashtra, K.G.Basin, Cauvery Basin and Gujarat. RGTIL
and RGPL are operating 1784 km of pipelines (about 11% of pan India network), namely the East-West
Pipeline (EWPL) to evacuate gas from KG-D6 field in Andhra Pradesh and the Shadol-Phulpur Pipeline
respectively. GSPL is mainly focused in the state of Gujarat consisting of about 2692 km gas pipelines (about
16% of total).

The spread of pipeline network of different transporters is as under:

   

 

 

 

 

 

aa BBC yaog ee iesen Boca Gr elas

1 GAIL 11411 69.9%

2 RGTIL/ RGPL 1784 10.9%

3 GSPL 2692 16.5%

4 AGCL/DNPL 297 1.8%

5 IOCL 140 0.9%
Total 16324 100.0%

 

 

 

 

 

 

The natural gas is primarily sourced from KG-D6, Mumbai offshore, Cambay Basin, Ravva Offshore, KG
Basin, Cauvery basin and through import of LNG.

(Source: https://www.ppac.gov.in/WriteReadData/userfiles/file/NG_pipeline.pdf )

Present Demand Scenario-Natural Gas

Natural Gas demand has increased significantly in recent years due to the increase in the availability of gas,
development of transmission and distribution infrastructure, the savings from the usage of natural gas in place
of alternate fuels and the overall favourable economics of supplying gas at reasonable prices to end
consumers. It has become easier for the power, fertilizer and CGD sectors, as well as industrial and
commercial establishments, to switch over to natural gas for their energy requirements. In the near future,
power and fertilizer sectors are expected to remain the anchor segments for natural gas demand in India.
Going forward though, with the additional supply of gas, significant demand for natural gas is also expected
to come from the industrial (usage both in process and power generation - cogeneration) and CGD segments.

Demand Projections

Natural gas demand from the power sector is expected to be driven, not only by the shortage of domestic coal
supply and the rising cost of its substitute i.e. imported coal but also by increased domestic gas supply and
power sector reforms. The process of addressing environmental concerns is expected to drive the demand of
natural gas from the industrial users as well as Compressed Natural Gas (CNG) users in the CGD segment.
Factors like availability of domestic gas, import of LNG and development of requisite infrastructure are also
expected to push the growth of natural gas demand from the CGD user segment. The key demand drivers for
key user segments have been summarized below:
e Environmental concerns

101
Subsidy burden

Enabling policy framework
Supply of domestic gas
Availability of affordable RLNG
Requisite infrastructure

GDP / Household income

eee eee

City Gas Distribution (CGD) sector in India has seen rapid growth in recent years due to relatively high
affordability and has the capacity to absorb prices of gas higher than power and fertilizer sectors. Usage of
natural gas has proved to be economical vis-a-vis competing fuels for most of the user segments within the
CGD space. Natural gas demand for CGD sector is expected to rise steadily due to the addition of gas
networks in new cities, price advantage of CNG and increased use of PNG in domestic, industrial and
commercial sectors. Environmental concerns will further push the use of natural gas especially in the
automotive and industrial segment (coal replacement).

For projecting the natural gas demand for this user segment a base demand of 13.6 MMSCMD has been
considered in 2010-11 which takes into account the gas consumption by all the existing CGD entities in India.
The cumulative sales volumes for three major CGD players IGL, MGL and GGCL grew at around 8%-9%
from 2007 to 2011. However, this rate of growth is expected to slow down as the existing businesses become
mature on higher base effect. Therefore, the natural gas demand from the existing CGD entities has been
assumed to grow at a rate 20%-30% lower than their growth rate in the past five years till the end of 13th
five-year plan.

Additional CGD network has been assumed to be set up in ten Geographical Areas (GA) every year from
2016-17 till the end of the 13th five year plan, considering that out of more than 240 GA’s that are planned
to have a CGD network, the most feasible 60 GA’s would have a CGD network by 2021- 22. The feasibility
of a GA has been broadly assessed based on its population (more than 0.2 million) and its proximity to an
existing or a planned transmission pipeline. Natural gas demand of 0.3 MMSCMD has been assumed for
each of the 60 GAs in the first year of operation based on the experience of the existing CGD networks. This
demand has been assumed to grow at an annual rate of 5% considering that the new CGD networks would
have significantly lower demand to capture (due to high cost RLNG to be used by CGD’s) when compared
to the already established CGD.

Post 13th five year plan it has been assumed that the total demand for the CGD sector i.e. the demand
considering the CGD networks that exist today as well as those that would be setup till the end of 13th five
year plan, assumed to grow at a rate of 8% annually. The total demand from CGD sector is expected to grow
from 15.3 MMSCMD in 2012-13 to 85.6 MMSCMD in 2029-30 at a CAGR of 10.7%.

Consolidated demand:

The consolidated realistic demand for natural gas from 2012-13 to 2029-30 has been provided in below table.

IMMSCMD 2017-18 2018-19 2019-20 20: x ye. 7 > 2028-29 2029-30

 

[Power 173.88 | 188.88 | 203.88 | 218.88 | 233.88 | 248.88 | 263.88) 278.88 293.88 | 308.88}323.88 [338.88 | 353.88

 

[Fertilizer 103.45 | 105.65 | 105.65 | 105.65 | 107.85 | 110.05 | 110.05) 110.05 110.05 | 110.05/110.05 | 110.05 | 110.05

 

(City Gas 26.62] 31.16} 35.94] 40.96] 46.25 | 49.96 53.95) 58.27 62.93 | 67.96 73.40 79.27 85.61

 

Industrial 28.00) 32.00} 35.00) 37.00} 37.00} 39.62} 42.42) 45.42 48.63 52.06 55.75 59.69 63.91

 

[Petchem/
[Refineries/ 68.10] 71.34] 74.73] 78.28] 81.99} 85.89] 89.97) 94.24 98.72 | 103.41) 108.32 |113.46 | 118.85
Internal
(Cons.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

102
 

 

 

 

 

 

 

 

 

 

 

[Sponge 9.00 9.00} 10.00) 10.00 10.82) 11.26 11.72 12.19) 12.68 13.19 13.73
|lron/Steel
[Total 409.05 | 438.02 | 465.19 | 490.76 | 516.97 | 544.79 | 571.09} 598.11)625.92 | 654.55}684.07 [714.54 | 746.03
Realistic
Demand

 

 

 

 

 

 

 

The total realistic natural gas demand is likely to grow from 242.66 MMSCMD in 2012-13 to 746 MMSCMD in 2029-

30 (CAGR of 6.83%) over the projection period. The trajectory of growth in demand has been depicted in Figure:

Consolidated demand growth trajectory

 

wl

10

4

m2
3 Jang 8

i
o

2
on

2
5

32616

378.0 | |

465.19

B80

51697

490.7

TAS

cas 0
059
sim 580
sun | | |

1468

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-

 

The share of natural gas demand for CGD sector in the total gas demand is expected to increase significantly
over the projection period from 6% in 2012-13 to about 11% in 2029-30.

Natural gas demand in India is expected to register a healthy growth in the years to come. However, the
growth in demand could be much more rapid than expected if the constraints linked to availability of natural
gas and infrastructure used for its transport are addressed in future.

Regional distribution of demand

Natural gas market in India could be divided into six regions based on geographic location. These areas have
been shown in below Figure.

103
Figure Regional markets in India

   
  
  
 

North Easterm

Northern saa

Market

a

ary

Eastern
Markets

Western
Market

Souther

Market

The constituent states of these regional markets have been provided in the table below.

Regional Markets — Constituent States

 

 

 

 

 

 

AV Eve Classy Constituent states

North Uttar Pradesh, Uttaranchal, J&K, Haryana, Punjab, Delhi, Himachal Pradesh,
Rajasthan

East West Bengal, Bihar, Jharkhand, Orissa

West Maharashtra, Gujarat, Goa

North East Assam, Arunachal Pradesh, Manipur, Meghalaya, Nagaland, Tripura, Mizoram,
Sikkim

South Tamil Nadu, Kerala, Karnataka, Andhra Pradesh

Central Madhya Pradesh, Chhattisgarh

 

 

 

 

The share of each region in the total demand from 2012-13 to 2029-30 has been worked out based on
proportion of the state wise demand as projected in the ICF report “Technical Assistance for the India
National Gas Grid Study” submitted to PPAC in July 2011. The estimated region wise demand projections
have been given below.

Regional Demand Distribution

 

 

 

 

 

 

 

MMSCMD 2012-13 2016-17

North 62.98 88.40 144.66 188.74 215.11
East 10.35 21.66 31.03 53.24 60.68
West 102.80 165.13 191.78 | 207.50 236.50
North East 5.13 5.29 10.47 20.67 23.56
South 48.20 81.28 116.71 151.89 173.11
Central 13.21 16.29 22.33 32.52 37.07
Total 242.66 | 378.06 516.97 | 654.55 746.0

 

 

 

 

 

 

 

 

104
Currently the natural gas demand far exceeds domestic supply in India and the situation is likely to prevail
in future as well. Given that there are very few new domestic sources available, additional demand is likely
to be catered through RLNG in future or through transnational pipelines in absence of any large domestic
discoveries.

Natural Gas Infrastructure

India has a relatively under-developed gas pipeline infrastructure when compared to some developed
countries. However, it is growing rapidly in tune with increasing demand and growing natural gas supplies.
India, currently, has a network of 16,900 km of natural gas transmission pipelines. This network is expected
to expand to 35,000 kms of pipelines in next 2-3 years taking the country close to the formation of a National
Gas Grid connecting all major demand and supply centers in India. This will ensure wider and uniform
availability of gas across all regions for economic and social progress.

Present state of Infrastructure

GAIL India (“GAIL”) owns the largest network of the natural gas transmission infrastructure present in the
country. The company currently owns and operates 9,000km (approx.) of high-pressure natural gas pipelines
with a transmission capacity of more than 160mmscmd. At around 3,750 km in length, GAIL’s Hazira-
Vijaipur-Jagdishpur (HVJ) pipeline is the longest natural gas pipeline network in the country operating at
100% capacity. With no free capacity, this network has been unable to meet the increase in domestic natural
gas supplies stemming from the commencement of production at the KG D6 field and the increase in India’s
overall RLNG capacity. To overcome this problem, GAIL has done expansion and upgradation of its
network. The rest of the country’s natural gas trunk pipelines network is owned by Gujarat State Petronet
Limited (GSPL) and Reliance Gas Transportation Infrastructure Limited (RGTIL) with a small network
owned by Gujarat Gas Company Limited (GGCL) and Assam Gas Company Limited (AGCL). Although the
gas pipeline coverage has increased, it is still inadequate to channelize the gas supply to demand centers in
the country. The present state of natural gas transmission infrastructure in the country has been summarized
in the table below.

Natural Gas Transmission Infrastructure in India

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name of Pipeline Name of Entit Length (Kms) BOYS ra Or rea
(MMSCMD)

HVJ+GREP+DVPL GAIL 4222 53.0
DVPL-GREP Upgradation GAIL 1280 54.0
Dahej-Uran-Panvel-Dabhol GAIL 815 19.9
Agartala P/L network GAIL 61 2.3
Mumbai regional P/L network GAIL 129 7.0
Assam regional P/L network GAIL 8 2.5
KG Basin regional P/L network GAIL 878 16.0
Gujarat regional P/L network GAIL 760 3.9
Cauvery regional P/L network GAIL 271 3.9
EWPL RGTIL 1460 80.0
Gujarat Gas Grid network (HP & LP) GSPL 1950 43
Hazira- Ankleshwar GGCL 73 5.0
Assam network AGCL 105 6.0
Dadri-Panipat IOCL 132 9.5
Dadri — Bawana- Nangal GAIL 886 BL.
Total 13030 337

 

 

 

 

 

 

105
Source: https://www.pngrb.gov.in/Hindi-Website/pdf/vision-NGP V-2030-06092013.pdf

 

Infrastructure Projection:

The buildup of natural gas infrastructure in India from 2012-13 to 2029-30 is projected based on the plan
document of the government. Gas infrastructure projects linked to the pipelines authorized in 2007 by the
central government and those authorized later through bidding route by PNGRB (that are slated for
completion in the next few years as well as the pipelines planned for future), have been considered in terms
of the length and design capacities of the corresponding pipelines in this document. Other possible
infrastructure additions as per the National Gas Grid (NGG) have also been considered for projecting natural
gas infrastructure in India till 2030. Gaps identified post factoring all these planned pipelines have then been
considered for completing the gas grid.

Pipeline Infrastructure — Development Plans

To address the regional imbalance of pipeline networks present in the country, MoPNG in the year 2007
authorized to lay around 8400 kms of pipelines as per table below.

 

 

 

 

 

 

 

 

 

 

PETC Mey ote econ) Design Capacity
(MMSCMD) perl

Dadri - Bawana — Nangal 886 31 Commissioned
Chainsa - Jhajjar — Hissar 455 35 2013 (partly

commissioned)
Jagdishpur — Haldia 1860 32 2016
Dabhol - Bangalore 1414 16 2013
Kochi-kootanad-Bangalore- 1104 16 2013
Mangalore
Kakinada-Vasudevpur-Haldia # 928 26.7 TBD
Kakinada — Chennai # 577 26.7 TBD
Chennai - Bangalore —Mangalore # 538 13.3 TBD
Chennai — Tuticorin # 585 13.3 TBD
Total( A +B) 8347 210 TBD

 

 

 

 

 

 

# The authorization to these pipelines is cancelled by MoPNG / * assumed in 2017

By the end of the 13th five year plan, India is expected to have a natural gas pipeline network of around
31,432 kms with a design capacity of 782 MMSCMD with a nation wide gas grid and more uniform
pipeline network coverage in place.

At the end of the of the projection period in 2030, the design capacity of the natural gas pipeline network in
India is expected to touch 815 MMSCMD.

A summary of the natural gas pipeline infrastructure expected to be in place in the country at the end of the
projection period has been summarized in Table.

Banya

Existing before 2012

Expected addition in the 12th plan

Expected addition in the 13th Plan

Incremental Capacity addition in MBBVPL/ MBPL/ Surat
Paradip pipelines beyond 13th plan till 2030

 

 

 

 

 

 

 

 

 

106
Barra tit

Dbysrt merle Cal ay
(MMSCMD)

 

Total (A +B)

32727 815

Natural gas transmission pipeline network at the end of the 13th five year plan has been depicted in the Indian

map in Figure.

Gas transmission network in India at the end of 13th five year plan

Existing LNG terminale yar Planned LNG terminals.

 

Existing Pipelines (at the end of 2013) ——,
A: HVJ- Hazira Viaipur Jagaishpur PL (GAIL)

GERP - Part of HVJ PL (GAIL)

DUPLIDPPL - Dahej - Uran — Dabhol PL (GAIL)

EW PL - East West PL (RGTIL)

‘VKPL - Viaipur Kota PL (GAIL)

Regional Networks

DBNL- Dadri Nangs! PL (GAIL)

o7moomn

 

New Pipelines in 12 five year plan
H = Chainsa — Jhaijar— Hisar (GAIL)

1: DBPL - Dabhol Bangalore PL (GAIL)
J: KKMBPL — Kochi Bangalore Mangalore Pi (GAIL)

K : CBMPL — Chennai Bangalore Mangalore PL (RGTIL)

L: CTPL ~Chennai Tuticom PL (RGTIL)

M. MaBPL ~ Maliverum Bhilwara PL (GSPC)

MBPL / BSPL - Mahesana Bhatinda Srinagar PL (GSPC)
JHPL — Jagdishpur Haldia PL_(GAIL)

KHPL — Kakinada Haldia PL (RGTIL)

KCPL - Kakinada Chennai PL (RGTIL)

Surat - Paradip (GAIL)

Shahdol - Phulpur

T: Ennore - Nagapattinum

onovoz

New Pipelines in 13" five year plan
\V : Guwahati - Barauni

X : Kochi Tuticorin

Regional network

Considering the nationwide gas grid proposed by ICF in its report submitted to PPAC and the CBM blocks
that are likely to start production in near future, natural gas infrastructure in addition to the infrastructure
plans outlined above is shown in the below Figure on the Indian map.

107
Pipeline capacity compared to demand & Supply of gas

500

300
200

100

 

oP DPD DP Dd Pw A &
PP og iP oP yi oP oo? os!
SLM KKM LK HM HK SK

   

je Demandsupply Balance ——rotal supply © ——Total Demand — -—==Design Capacity

This suggests that further addition in pipeline infrastructure, in addition to the current plans, would be
required post 13th five year plan to meet the rising demand for natural gas in the country. Regional markets
with the biggest gap between the demand and planned addition in capacity need to be targeted for further
expansion of pipeline infrastructure so that the infrastructure keeps pace with the ever rising demand. The
expected share of each regional market in the total demand and planned pipeline capacity has been provided
in Table.

Regional Infrastructure in 2030

 

 

 

 

 

 

 

Evora Mone eo) r ial gas demand
bs) (as % of total)
North Uttar Pradesh, Uttaranchal,

J&K, Haryana, Punjab, Delhi,

Himachal Pradesh, Rajasthan _| 206.9 (25%) 215.1 (29%)

West Bengal, Bihar,
East Jharkhand, Orissa 70.8 (9%) 60.7 (8%)
West Maharashtra, Gujarat, Goa 229.9 (28%) 236.5 (32%)
North East Assam, Arunachal Pradesh,

Manipur, Meghalaya,

Nagaland, Tripura, Mizoram, | 22.8 (3%) 23.6 (3%)

Sikkim
South Tamil Nadu, Kerala,

Karnataka, Andhra Pradesh 210.5 (26%) 173.1 (23%
Central Madhya Pradesh, Chhattisgarh | 74.4 (9%) 37.1 (5%)
Total All 815 (100%) 746 (100%)

 

 

 

 

 

 

As can be seen above, the share of planned pipeline capacity for all regions is likely to meet the share of
demand for these markets till 2030. However, since the difference is not substantial and pipelines do require
additional capacities, more pipelines could be planned to cover these regional markets based on actual
progress in the buildup of demand. It should also be noted that the share of natural gas demand and pipeline
infrastructure in the eastern and north-eastern markets is significantly lower than that for the other regions.
There is a need to commit more resources towards stimulating demand in these regions so that greater balance

109
Regional Networks

Scope for further development

‘

Exsting LNG terminala x Planned LNG terminals

   

Existing Pipelines (at the end of 2013) ——

HV4J- Hazira Vjaipur Jagcishpur PL (GAIL)
GERP - Part of HVJ PL (GAIL)

DUPLIDPPL - Dahej ~ Uran — Dabhol PL (GAIL)
E.W PL - East West PL (RGTIL)

VKPL - Viaipur Kota PL (GAIL)

Regional Networks

G : DBNL- Dadri Nangal PL (GAIL)

mmoom>

New Pipelines in 12 five year plan
H: Chainsa ~ Jhajjar Hisar (GAIL)

1: DBPL - Dabhol Bangalore PL (GAIL)

J: KKMBPL ~ Kochi Bangalore Mangalore Pi (GAIL)

K: CBMPL — Chennai 8: Mangalore PL (RGTIL)

L: CTPL ~ Chennai Tuticom PL (RGTIL)

IM: MaBPL — Maliverum Bhilwara PL (GSPC)

N-MBPL / BSPL ~ Mahesana Bhatnda Srinagar PL (GSPC)
(©: JHPL —Jagdishpur Haldia PL (GAIL)

P : KHPL — Kakinada Haldia PL (RGTIL)

Q: KCPL - Kakinada Chennai PL (RGTIL)
R
s

 

Surat —Paradip (GAIL)
Shahdol - Phulpur
T: Ennore - Nagapattinum

(New Pipelines in 13® five year plan

‘dattionat Regional Networks (around CBM Dicks) = (+S

India is expected to have circa 32,727 kms of natural gas pipeline with a design capacity of 815 MMSCMD
in place by 2030. However, the addition of ‘capacity at source’ i.e. the capacity that actually connects supply
points to the markets is likely to increase to 582 MMSCMD only. This capacity indicates the potential of the
gas transport pipeline infrastructure to meet the demand in the country. The expected demand, supply and
pipeline capacity at source for the projection period has been provided in the Table.

Table: Demand-Supply-Capacity from 2019-20 to 2029-30

MMSC MD

 

2019

PAYA AIP

21

22

2027- 2028-
pti) 29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total demand 465 | 490 516 | 545 598 626 654 684 714 746
Total supply 389 | 394 400 | 431 437 | 442 448 454 461 467 471
Total Design

Capacity of 726 | 726 782 | 782 782 | 782 782 782 782 782 815
pipelines

Capacity at

source of 519 | 519 555 | 555 555 | 561 561 561 561 561 582
Pipelines

 

While the capacity at source in India is likely to be higher than the gas supply for all the projection years, it
is likely to fall behind the total demand starting from 2023-24 till the end of the projection period in 2030 as
shown in figure below.

108

 
is achieved in terms of the availability of natural gas. The increase in natural gas demand in the eastern and
north-eastern regions resulting from additional initiatives and resources would need to be coupled with
addition of more natural gas pipeline infrastructure here to support the development of the natural gas markets
in these regions.

Capacity building (resources) to help development of natural gas infrastructure

Considering the exponential growth of gas transmission pipelines and CGD networks that India is expected
to see in near future, availability of skilled/semi-skilled work force is going to prove critical to the
materialization of the gas infrastructure development plans. Although technological developments have led
to reduction in manpower requirements for development of natural gas infrastructure over time, they have
not been able to totally offset the latter. At the same time, existing institutions have not been able to provide
the industry with a stable supply of skilled/semi-skilled man power as a result of which the gap between the
demand and supply of trained manpower has been increasing annually in recent years. Going forward, this
shortfall in trained manpower may lead to delays in projects and cost overrun thereby posing serious threat
to gas infrastructure development projects. Therefore, it is essential that policy initiatives be taken to set up
additional training institutes that can address the shortfall of skilled and semi-skilled workmen. The initiative
can also be taken by private/ public sector oil & gas companies as part of their Corporate Social
Responsibility (CSR) programmes.

Long Term gas tie ups:

The increasing usage of natural gas would not only be cleaner for the environment but it would also lead to
greater diversification of the energy/fuel basket of India thereby strengthening the country’s energy security.
But in order to increase the consumption of natural gas in the country on a sustained basis, long term reliable
supply arrangements/tie ups would be needed in addition to augmenting domestic energy resource base. This
can be either through transnational pipeline or import of LNG.

Hence to ensure long term energy security of India, Govt. of India and its agencies should work with its
political / diplomatic channels to provide necessary support to the importers of gas on tying up long term
resources in foreign country which can either flow through LNG route or through pipelines based on the
geographical proximity with the country

This is important since the issue assumes geopolitical overtones. Also all large consumers of gas like China
are working at the highest level in the government to ensure such suppliers for long term.

Natural Gas in India:

Share of Natural Gas in India’s energy basket is 6.2% as against 23.4% globally. In India, in the state of
Gujarat itself, it is 25%. The country aims to achieve share of Natural Gas in our energy basket from 6.2%
to 15%.In India, a very large number of households still depend upon wood, crop wastes, dung cakes for
kitchen fuel. These increase household pollution, severely impacting the health of women and children in
particular Natural Gas (as CNG) is cheaper by 54% and 41% as compared to petrol and diesel respectively.
PNG is safer than LPG. PNG being lighter than air, dissipates immediately in the air in case of leak. The
flow of PNG can be easily controlled by various safety checks/valves installed in the system. As PNG is
supplied through pipe, it is an uninterrupted supply round-the-clock. There is no need to store cylinders in
the kitchen and thus it is space economical. Existing LPG appliances with minor modification can be used
for PNG.

In the Union Budget 2019-20, Government of India, while presenting the budget proposed to make available
a blueprint for developing gas grids, water grids, i-ways, and regional airports. The recommendations of the

110
High-Level Empowered Committee (HLEC) on retirement of old and inefficient plants, and addressing low
utilisation of Gas plant capacity due to paucity of Natural Gas, will also be taken up for implementation.

Policy Enablers to Promote Gas Usage in India

> Regulatory interventions
o CNG in public transport in certain cities

o Ban on Pet coke and Furnace Oil - Delhi, Haryana, Uttar Pradesh and Rajasthan
Domestic gas allocation for PNG (Domestic) and CNG (Transport)
CGD granted “Public Utility” status
State Governments commitment for facilitation of CGD networks
Government’s drive to connect 10 million households to PNG by 2020

VVVV

% Area of India
az

% Population of India

Geographical Area (GAs)

Snapshot of City Gas Distribution Authorizations in India

‘OF AREA, POPULATION OF NDIA

  

 

228

NO.OF GEOGRAPHICAL AREAS (is)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CGD Geographical Areas (GAs) | % Population of India| % Area of India
Authorizations Standalone | Cumulative | Standalone | Cumulative| Standalone | Cumulative
Pre-PNGRB 30 30 9.28 9.28 2.95 2.95
Round 1 (Oct '08) 6 36 0.33 9.61 0.03 2.98
Round 2 (Feb '09) 3 39 0.23 9.84 0.03 3.01
Round 3 (Jul '10) 6 45 0.77 10.61 1.21 4.22
Round 4 (Sept '13) 9 54 227) 12.88 129 5.51
Round 5 (Jan '15) 8 62 2.04 14.92 1.82 7.33
Round 6 (Oct '15) 1 79. 2.07 16.99 2.02 O35.
Round 7 (Jun '16) ili 80 0.36 17.35; 0.46 9.81
Round 8 (Nov '16) 6 86 0.94 18.29 0.57 10.38
Sec. 42 (Mar '18) 6 92: 1.57 19.86 0.61 10.99
Round 9 (Apr '18) 86 178 26.38 46.24 23.82 34.81
Round 10 (Nov 50 228 24,23 70.47 17.92 52.73
18)
Present status of CGD Infrastructure in India

June, 2019
Domestic PNG Connections _ 55,96,155
Commercial PNG Connections — 28,417

111

 
Industrial PNG Connections
Total PNG Connections

CNG Stations

Steel Pipeline Infrastructure
(Inch-km)

MDPE Pipeline Infrastructure
(Inch-km)

Gas Infrastructure Map of India

   

9,024
56,33,596
1758
50,216

1,16,158

Legend
——— Existing Gas Pipeline
— Authorised Gas Pipeline
Planned Gas Pipeline .
HEB Existing Gas upto Eight Round °
IEBI s Coveres Uncer Ninn Roun
GAs Covered Under Tenth Round

Par isrit Covered Under Ninth Roun,»
[HB Par District Covered Under Tanth Round *

ke Existing LNG Terminals

4 Up-coming LNG Terminals

 

 

 

(Source: http://pngrb.gov.in/pdf/cgd/bid10/brochure.pd|

Pipelines: Refined Products and LPG Pipeline Network

With 8,748 km of refined products pipeline in India, Indian Oil Corporation (IOC) leads the segment with
51.25 per cent of the total length of product pipeline network as on March 01, 2020. Top three companies
IOCL, HPCL and BPCL contribute more than 80 per cent of the total length of product pipeline network in
the country. As on March 01, 2020, Gas Authority of India Ltd. (GAIL) has largest share (71.61 per cent or

11,411 km) of the country’s natural gas pipeline network (16,324 km).

112
eer Pere eae e nate ec mee me Ult)

aan 46.1
as cy

58.5 cd

FyI7

FY18(P) FY19
Light Distillates Middle Distilates "Heavy Ends

 

(Source: https://www.ibef.org/download/Oil-and-Gas-June-2020.pdf )

Expansion:

H-Energy is planning to invest Rs 3,500 crore (US$ 540.62 million) to build Liquified Natural Gas (LNG)
terminals and lay down a 60 km pipeline.

As per Union Budget 2019-20, Indian Scheme ‘Kayakave Kailasa’, The Ministry of Petroleum & Natural
Gas has enabled SC/ST entrepreneurs in providing Bulk LPG Transportation. State run energy firms Bharat
Petroleum, Hindustan Petroleum and Indian Oil Corp plan to spend US$ 20 billion on refinery expansions
to add units, by 2022

Indian Oil Corp plans to make an investment of US$22.91 billion, including US$ 7.64 billion for expanding
its existing brownfield refineries, in the next 5 to 7 years. Moreover, the company plans to lay the nation's
longest LPG pipeline of 1987 km, from Gujarat coast to Gorakhpur in eastern Uttar Pradesh, to cater to
growing demand for cooking gas in the country.

India targets US$ 100 billion worth investments in gas infrastructure by 2022, including an addition of
another 228 cities to city gas distribution (CGD) network. This would include setting up of RLNG terminals,
pipeline projects, completion of the gas grid and setting up of CGD network in more cities.

As of January 2019, H-Energy is going to invest Rs 3,700 crore (US$ 512 million) for construction of an
LNG project in West Bengal.

As of March 2019, Brookfield is going to acquire Reliance Gas Transportation Infrastructure, now known
as East West Pipeline (EWPL) for Rs 13,000 crore (US$ 1.80 billion).

Opportunities:
Midstream segment:

Downstream segment:

Expansion in the transmission network of gas pipelines

LNG imports have increased significantly; this provides an opportunity to boost production capacity
In light of mounting LNG production, huge opportunity lies for LNG terminal operation, engineering,
procurement and construction services

 

India is already a refining hub with 21 refineries and expansions planned for tapping foreign investment
in export-oriented infrastructure, including product pipelines and export terminals

Development of City Gas Distribution (CGD) networks, which are similar to Delhi and Mumbai’s CGDs.
Expansion of the country’s petroleum product distribution network.

(Source: https://www.ibef.org/download/Oil-and-Gas-October-2019.pdf)

113
OUR BUSINESS

Some of the information contained in the following discussion, including information with respect to our
business plans and strategies, contain forward looking statements that involve risks and uncertainties. You
should read the chapter titled “Forward Looking Statements” beginning on page 24 of this Prospectus, for a
discussion of the risks and uncertainties related to those statements and also the chapter “Risk Factors”
beginning on page 31 of this Prospectus for a discussion of certain factors that may affect our business,
financial condition or results of operations. Our actual results may differ materially from those expressed in
or implied by these forward-looking statements. Our Fiscal Year ends on March 31* of each year, so all
references to a particular Fiscal are to the twelve-month period ended March 31* of that year.

The financial information used in this section, unless otherwise stated, is derived from our Financial
Information. The following information is qualified in its entirety by and should be read together with, the
more detailed financial and other information included in this Prospectus, including the information
contained in the chapters titled “Risk Factors” and “Financial Statements” beginning on pages 31 and 179
respectively of this Prospectus.

Overview:

We are an Oil & Gas pipeline infrastructure service provider in India, focused on laying pipeline networks
along with construction of associated facilities; and providing Operations & Maintenance services to the City
Gas Distribution (“CGD”) Companies in India. Our Company was founded by our Promoter, Mr. Srinivasa
Rao Gaddipati, in the year 1998 and has been engaged in the same line of business for over two decades. Over
the years, we have diversified the gamut of services being provided by our Company from Cross-Country
Pipeline Projects (CCP); City Gas Distribution (CGD) Projects to providing Operation & Maintenance (O&M)
Services to CGD Companies. Our client base comprises of established players in the Oil and Gas Industry,
both in public and private sector.

We have presence (including past operation) in more than 16 states and 2 Union Territories in India. Our
Company has successfully laid over 600 Kms. of Oil and Gas pipelines including steel and Medium-Density
Polyethylene (“MDPE”) network in past 5 fiscals. Additionally, our Company has laid approximately 800 kms
of Oil and Gas pipelines for on-going projects. Further, we have increased the scale of our operations by
adopting a strategy of expansion across regions and have strategically expanded to geographies where there is
a demand for providing pipeline infrastructure and O&M services. We believe that the growth and development
of our Company during the past years have been the result of our client centric approach and core competence
in the field of pipeline infrastructure. Our main focus and vision is to sustain profitable growth by executing
projects in time to the satisfaction of our clients. We are proud to have executed 10.75” OD x 69 Kms
Petroleum Product Pipeline for the first ever Trans-National Cross-Country Pipeline of South-East Asia
connecting India to Nepal, in the Year 2019, for supply of petroleum products.

Our Company has grown significantly during the past, under the leadership and guidance of our Promoter, Mr.
Srinivasa Rao Gaddipati, who is having vast technical experience of over three decades in the oil and gas
pipeline infrastructure business and is the guiding force behind the successful execution of our business
strategies over the years. His industry knowledge and understanding, track record and relationship in the
industry has been instrumental in the growth of our business and also gives us the competitive advantage to
expand our geographical and client presence in existing as well as target markets, while exploring new avenues
for growth in future. His foresightedness and vision have helped us to identify opportunities and capitalize on
the same. We have and expect to continue to benefit from his strong industry expertise and relationship with
clients.

114
Our other Promoter, Ms. Likhitha Gaddipati has been recently associated with our Company and has taken
charge as the Non-Executive Director of our Company. Her impressive academic background in the field of
information technology and management from an esteemed university in the United States and past work
experience with a Big4 consulting firm, are expected to benefit our Company in upgrading our IT systems and
in bringing further efficiency in our operations.

Our Total Income, as per the Restated Financial Statements was Rs. 8,860.56 Lakhs, Rs. 14,054.68 Lakhs and
Rs. 16,279.02 Lakhs for the Fiscals 2018, 2019 and 2020 respectively. Our PAT as per the Restated Financial
Statements was, Rs. 716.22 Lakhs, Rs. 1,785.51 Lakhs and Rs. 1,987.93 Lakhs for the Fiscals 2018, 2019 and
2020 respectively.

Our order book, as of any particular date, consists of the unexecuted portions of our outstanding orders, that
is, the total contract value of the existing contracts secured by us, as reduced by the value of work executed
and billed until the date of such order book (“Order Book’). Our total Order Book as of July 31, 2020 was
approximately Rs. 66,258.97 Lakhs. The following table sets out forth operation-wise summary of our Order
Book as of July 31, 2020:

 

 

Toad ing order % of total outst:
S Lakhs) yates
Pipeline infrastructure projects 61,585.54 92.95%
O&M Services 3 4,673.43 7.05%

 

 

 

 

 

 

Our Business:

Our business operations can be broadly classified under the following heads:

Pipeline Infrastructure Ope mn & Maintenance

Projects (O&M) Services

 

Over the past two decades, we have established a track record of successfully executing majority of our projects
in a timely manner and have developed and enhanced competencies in the areas in which we operate. Details
of operation wise break-up of revenue for the fiscals ended on March 31, 2018, 2019 and 2020is as follows:

 

 

92.62% ;
100.00% BS G0 78.75%
80.00%
60.00%
40.00% +a ai 21.25%
20.00% way ea 4
.00%
0.00%
FY 2017-18 FY 2018-19 FY 2019-20

™ Pipeline Infrastructure Projects | "O&M Services

115
PIPELINE INFRASTRUCTURE:

Our pipeline infrastructure business comprises of undertaking projects for laying of pipelines in Cross-
Country Pipeline projects as well as for setting up City Gas Distribution network and construction of
associated facilities.

Cross-Country Pipeline Projects and associated facilities:

Our Cross-Country Pipeline projects entail laying of oil and gas pipelines over long distances across the
country. It includes oil and gas pipeline laying along with construction of associated facilities which
comprises of providing fabrication, erection, installation, testing and commissioning of the underground
pipelines including associated mechanical, civil, structural, electrical, instrumentation and optical fibre
works. Advanced measures such as Global Positioning System (GPS) aided surveys, 3 LPE joint coating for
pipelines, development of Flux-cored Arc Welding (FCAW) Semi-Automatic Welding Technique and
advanced NDT techniques are adopted depending on the requirements of the project.

As on April 1, 2019, there were three major pipeline entities engaged in natural gas transportation across
India namely GAIL, RGTIL/RGPL and GSPL, where GAIL was operating about 11,411 Kms of trunk
pipelines in India comprising 70% of the pan-India pipeline network.’ Natural gas is primarily sourced from
KG-D6, Mumbai offshore, Cambay Basin, Ravva Offshore, KG Basin, Cauvery basin and through import of
LNG.

The other associated services with CCP Projects include:

1. Civil work:
/
We undertake civil works at our sites for the execution of our projects as per the requirements of the project.
Our work includes earth work such as area cleaning, grading, excavation, filling, RCC supports and
foundations for above ground piping, pump sheds, warehouses, control rooms buildings and equipment
installation, etc. carried out as per scope and specifications of the project. This also includes structural
works for various equipment, piping and other structures.

2. Mechanical and Piping works:

Up on receipt of piping material at site, pre-fabrication of piping is done, above ground pipes are
fabricated and erected on the foundations. Equipment and valves are installed. Prior to erection of the
above ground pipes, these pipes are properly leveled and sand blasted and applied with one coat of primer
as per standards and specifications. After erection, alignment fitment on the foundations, welding and
NDT and hydro testing are carried out. Final painting, of the above ground piping, fittings and valves are
carried out. Cold insulation works are carried out by an approved agency.

Underground pipes are laid after excavation which is carried out to the required depth and width. Joint
coating is done and again the joint coated area is tested by the holiday detector. Pipes are lowered. Hydro

testing and backfilling operation are carried out and the necessary valves, fittings, scrapper launcher and
receiver are installed.

' Source: https://www.ppac.gov.in/WriteReadData/userfiles/file/NG_pipeline.pdf

116
3. Electrical, instrumentation and optical fibre works:

We also carry out electrical, instrumentation & optical fibre works at our sites which include various types
of field pressure instruments and temperature instruments, panels and cathodic protection works as per
contractual requirement. All instruments are supplied and installed at the sites provided by client. Cabling,
earthing, termination, testing and commissioning works are carried out as per contractual requirements.

   

Pipeline laid for a Cross-Country Project
City Gas Distribution along with PNG Network & CNG Stations:

CGD projects entail transportation or distribution of natural gas to consumers in domestic, commercial or
industrial and transport sectors through a network of pipelines. In other words, CGD projects cater to the
following segments viz. domestic household use; commercial use such as manufacturing industry, power
generation, hotels, hospitals, restaurant and offices; and transport sector use in vehicles. Petroleum & Natural
Gas Regulatory Board (PNGRB) rolls out bidding rounds for setting up City Gas Distribution (CGD)
networks in cities and districts across the country to cover areas which could receive supply through the
pipeline network. Post the 10 CGD Bidding Round, the Government has notified 228 regions as Geographic
Areas (GAs) comprising of 402 districts covering 52.73% and 70.47% of India’s area and population
respectively.

The primary network of steel pipelines provides the core backbone connecting CGS to various PRS / DRS
where the pressure levels range between 26 bar(g) to 19 bar(g). Secondary network system consisting of
MDPE pipelines generally operates at pressure level between 4 bar(g) to 1 bar(g). MDPE pipeline network
is generally planned for cluster of industrial, commercial or domestic units at low pressure.

The following stations are involved in CGD networks:
- City Gate Station (CGS)
- Pressure Reduction Station (PRS)
- District Regulating Station (DRS)

CGS for the network is generally located at tap off point of the main transmission line or otherwise connected
by a spur-line to the main transmission line. The gas transported at City Gate Station is at a high pressure,
the primary reduction from 49 Bar (g) to 26 Bar (g) is carried out at CGS. Further, additional PRS for the
network is installed /located in industries to further reduce the pressure, as per requirement of the concerned
industry / establishment. DRS for the network is located at strategic locations which are sometimes also

117
known as Field Regulating Stations to meet various demand centres for domestic/ industrial segment. The
three interfaces can be described as follows:

- The City Gate- interface between high pressure and medium pressure

- The Pressure Reducing Station- interface between medium pressure and low pressure

- The Service Connection- interface between network and end-user pressure.

As compared to CCP projects which are conventionally linear in nature, CGD networks involve complex
structure of different routes of varying lengths and sizes and catering to different end users.

Our Company’s scope of work in CGD projects includes laying of High Pressure Gas Steel Pipelines and
Medium Density Polyethylene (MDPE) Pipelines for industrial / commercial, Compressed Natural Gas
(“CNG”) network and Piped Natural Gas (“PNG”) network, Construction of CNG Stations including civil,
mechanical, electrical & instrumentation works, connectivity to household, commercial and industrial
segments through High Pressure Gas Steel Pipelines, MDPE pipelines, Galvanized Iron pipes, copper tubing,
etc. as per the project requirements.

   

~ Gas Distribution Network
OPERATION & MAINTENANCE SERVICES:

Our Company also provides Operations & Maintenance Services to CGD Companies. Our Operation and
Maintenance (O&M) Services business includes management services for CGD networks, other repairs,
modernization, scheduled shutdowns, as well as overhauling and maintenance of existing pipelines.
Operation & Maintenance activities involves deploying manpower and tools required for replacement of
existing pipelines, emergency repair and maintenance, shifting and compressor hook up of pipelines with
associated facilities. Based on the past track record, majority of the O&M contracts get extended, from time
to time.

We have commenced O&M Services business in the year 2014 and have generated revenues of Rs. 642.67
Lakhs, Rs. 1978.94 Lakhs and Rs. 3426.43 Lakhs for the fiscal 2018, 2019 and 2020respectively,
representing 7.38%, 14.40% and 21.25% respectively of our total revenue from operations during such
periods. We are presently providing comprehensive O&M services in various regions in Delhi-NCR and
Bengaluru.

Our Business Process:
Contracts are primarily awarded through “Competitive Bidding” Tender method based on combination of

factors amongst which technical qualifications, proposed project team, schedule, past performance on similar
projects, the bid amount are the major determining factors. The process requires each bidder to pre-qualify

118
for the activities by meeting criteria that includes technical capabilities and financial strength. Given below

is our project execution process:

¥

Preparation of Technical & Financial Supporting

Documents for Tender

 

ibmission as per Tender

Certification & Notarization of Supporting Documents
by concern authority

Submission
of
contractual

Documents

 

 

Submission of
Insurance
policies for
‘Manpower,
‘Machinery,
Equipments &
Complete
Project Value

+

Preparation of BOQ for Sending budgetary RFQ to
approved Vendors

Feasibility Study, Cost Estimation, Filling SOR on
receipt of Budgetary Quotations from vendors

Submission of Tender in time
Receipt of Work Order from Customer

EXECUTION STAGE

Pre-Construction Stage

    

Micro
Budgeting,
Residual
Engineering,
Project
scheduling for
in time
completion of
Project

  
       
   
   
   
     

 

 

Establishment
of Site offices,
Store & Yard

‘Mobilization of
‘Manpower,
Machineries &
Equipments

 

 

 

 

 

 

Procurement
of
Consumables
& Project
supply
Materials

Receipt of
Free Issue
Materials
trom
customers

 

 

Transportatio
n of Materials,

Site

Preparation,
Trenching

 

|

 

a

Stringing,
‘Welding. NDT.
Joint Coating,
Holiday testing
& lowering,
back filing,
crossing

Tie- ins, CP
system,
Hydrostatic
testing

 

Installation
markers &
Sign-boards,
Restoration of
ROU

 

Terminal
works, Pre-
‘Commissioning
and
‘Commission ing

 

 

Compketion of Project
‘Material reconciliation, closure of the project &
receipt of final payment

 

119
PRE-EXECUTION STAGE:
Our Company procures work orders primarily through open bidding process of the oil and gas companies.

Our tendering team keeps track of the tenders floated and identifies the projects suitable for our Company on
the basis of project timelines, technical and financial parameters, estimation, scale of projects, etc. Post
identification of target projects, our Company refers the pre-qualification requirements of tender bidding and
ensures the fulfillment of the same. Pre-qualification requirements include financial position, location of
bidder, status of completed projects, track record, etc.

After satisfying the pre-qualification requirements, our team undertakes basic feasibility study on the basis
of the estimated cost involved in projects and other resources required. On the basis of cost estimation, we
identify the ideal bidding quotation for the tenders. After estimation of cost, our team completes the details
and documents as per the forms and formats provided in tender documents. Our Company also refers the
specification, drawings and bills of quantities of the projects. We generally send our Project Survey Team to
identify the various aspects of the project at the given location in the tender and carry out basic feasibility
survey / study so that estimation can be carried out based on actual site conditions/parameters. Any techno-
commercial query(s) in the identified Tender is communicated to Client in or before the pre-bid meeting and
client clarifies our queries before submission of our final bids.

After completion of all the above activities, our team submits the tender bid, as per the prescribed mode
provided, with in prescribed timeline. The client typically evaluates the technical bid or Pre-qualification
application first, so as to ensure that further bids of only technically qualified bidders should be considered
for further processing or financial evaluation. Thereafter, project is awarded to the bidder who offers the
lowest bid along with meeting with the stipulated techno-commercial criteria.

PROJECT EXECUTION STAGE:

After the award and acceptance of contract, our Company identifies and mobilizes the required Project
Execution Team, to look after the execution aspects of the project in the following manner:

A. Pre-Construction Stage

Extensive documentation and procedures for various different activities are prepared and submitted for
approval to the client for effective execution, control and monitoring of the project. These documents &
procedures includes but not limited to the following:

. Detailed Route Survey

. Design and Detailed Engineering

. Mobilization Plan

. Sub-Contracting Plan

. Site Organization Plan

. Quality Assurance and Quality Control Procedures

. Reviewing proposed work schedule in detail

. In-depth review of the procedures required to be put in place in respect of the site activities
. Health, Safety and Environmental (HSE) Plan

. Preparation of material take over required for the project, as per scope of supply.
. Micro scheduling of construction activities.

. Approval of vendors for materials to be supplied.

120
Detailed Engineering

Our survey team carries out detailed survey of the project site and based on the detailed survey, the project
is designed and detailed engineering is done for the entire activities for execution of work. Thereafter,
required documents are submitted to the client for approval and once the approval is received, procurement
and construction activities commence.

Mobilization

Suitable location is identified and finalized for establishment of site office, stores, materials / equipment
storage yard. Simultaneously following actions are taken:
e Obtaining necessary labor license(s)
e Mobilization of manpower, machineries and equipment in phased manner required adequately to
execute the work
e Arranging insurance policies as per the terms and conditions of the work order.
e Establishment of storage yard & camp facilities.

Procurement of Materials & Equipment

Orders are placed with the approved vendors for the materials required to be procured by us along with
technical specifications. Before commencement of manufacturing/fabrication, vendor submits technical
documents for client approval. Procurement Team / Project Coordinator coordinates with the concerned
agencies / vendors to ensure completion of manufacturing /fabrication, as per schedule. To ensure quality of
materials / equipment, we depute specialized Third-Party Inspection (TPI) Agencies to review / witness the
process of manufacturing as per the approved Quality Assurance Plan.

B. Construction Stage

This stage includes project planning meetings on a regular basis to iron out the details and allocate areas of
responsibility to the concerned personnel and to ensure that critical activities are monitored and on-going and
continuous quality assurance and quality control program are in place.

Once the execution program is approved, the project execution team commences the implementation of the
project which includes the following activities:

1. Transportation of materials procured by us and receipt of Free Issue Materials:

The materials procured by us after technical clearance from the client as per approved vendor’s list for
installation / execution are transported by the manufacturer / vendor either to Project site directly or stocked
at our stores for future transportation to the site. We also receive Free Issue Materials from Client’s site store
or issuing point and transports the same to the erection site or at site stores through suitable means and unload
the same. Utmost safety precautions and necessary insurance policies are taken care while loading / unloading
during transportation / shifting.

Third party inspection for our supply materials is done either at manufacturer’s / supplier’s place or at project
site before transportation and installation, subject to the suitability.

121
2. Site preparation:

The entire pipeline route is established with reference to the route maps and alignment sheets of tender
document. Pipeline survey is carried out by qualified and experienced surveyor with the help of survey
equipment. Thereafter center line of pipeline is demarcated and necessary equipment such as dozers / graders
etc. are mobilized for site preparation.

3. Trenching:

Excavation of the pipe trench is achieved by utilizing excavators to the required depth and width. In case,
hard rock is encountered, the same is excavated with blasting/ chiseling or by deploying rock breakers as per
the site conditions and requirements. In certain locations, manual excavation is carried out as per the site

requirements and dewatering is done as and when required by suitable dewatering pumps.
at ERT) =

 

4. Stringing:

Line pipes are stringed along the ROU. Wherever there is restricted ROU, then pipes are directly lowered in the
trench.

5. Welding:

Welder’s qualification and welding procedures tests are conducted at site before commencement of actual
welding of Line Pipes and reports thereof are submitted for concurrence of Client. After approval of these
procedures, welders and associated personnel are deployed at site for production work. All welders employed
are tested / qualified to carry out the procedure so that quality is maintained for the entire pipeline. Welding
is carried out by a main front-end crew supplemented by a mini crew who weld up tie-in of sections / crossings
by deploying qualified welders and welding equipment.

122
6. NDT:

A specialized approved NDT Sub-Contractor is deployed to carry out NDT activities. Welding repairs, if
any, found are attended to and rectified and NDT operations are carried out to ensure the quality of Welding
/ Re-welding.

7. Joint coating:

All the weld joints are blast cleaned and joint coating operations are carried out in accordance with the
specifications and approved procedures.

8. Holiday testing and lowering:

The complete section of pipeline is checked by holiday detector before lowering. The line is lowered by suitable
equipment’s using lowering cradles, lifting belts, etc. so that the outer surface of the pipe is not damaged and
requisite care is taken to lower the stretch without any damage to pipes and trench. GPS Coordinates are
recorded for each weld joint along with lowered pipeline so that this pipeline may be tracked in future, in case
of maintenance or emergencies.

9. Crossings:

Crossing of pipelines through all types of road/ravine/river or any other utilities are executed as per approved
procedure and technical specifications.

10. Cased and uncased crossings:

Cased and uncased crossings are executed as per approved procedure and technical specifications. Insertion
of casing by augur boring / HDD is executed by separate augur boring / HDD equipment. Prior approval is
taken from the Client for deployment of augur boring / HDD Agency. Prior to crossing, entire pipeline section
is pretested as per specifications.

11. Backfilling:

Backfilling and clean-up operations follow up simultaneously with lowering. Crowning is done after
backfilling the trench.

 

123
12. Tie ins:

Tie-in joints are fitted and welded and NDT joint coating activities etc. are carried out as per specifications
and standards.

13. Cathodic Protection System:

Design, Engineering, Erection, Testing and Commissioning of CP System is carried out. Cathodic protection
work is sub-contracted by us to third party with prior approval from the clients. During construction stage
Temporary Cathodic Protection is done and before Commissioning of Pipeline, Permanent Cathodic
Protection is installed to protect the line from corrosion. CP system ensures integrity of the complete Pipeline.

14. Hydrostatic testing:

All pipelines are hydro tested in accordance with the specification and approved procedure by deploying
necessary instruments, tools and tackles and the pipeline are hydrostatically tested using available tested
water. It is ensured that water is suitable for testing; else suitable chemicals are added to make the water fit
for testing.

15. Supply and installation of markers and sign boards:

Line markers are fabricated, casted and installed along the line as per specification so that the complete
pipeline can be tracked by O&M Team through these markers. Similarly sign boards are fabricated, painted
and installed as per specifications.

16. Restoration of ROU:

After backfilling, ROU restoration is carried out as per the requirements & no objection certificate from land-
owners are submitted to the client, as per the contract demands.

17. Pre-commissioning & commissioning:

Activities such as dewatering and drying activities are carried out after satisfactory hydro testing of pipeline.
Electronic-Geometry Pigging / Intelligent pigging along with magnetic cleaning are carried out through a
specialized agency with prior approval from the client. Commissioning is carried out as per the scope,
specifications and approved procedure.

18. Terminal works:

a. Civil and structural works:

Earth work such as area cleaning, grading, excavation, filling etc., are carried out and RCC supports and
foundations for above ground piping, sheds, control rooms buildings, boundary walls and equipment
installation are constructed. Valve chambers and culverts, structural cross over, over the existing pipe rack
near valve chamber. gravel filling, RCC roads, RCC pavement, RCC sump and storm water drain and other
miscellaneous works are carried out as per scope and specifications.

124
b. Mechanical and Piping works:

Up on receipt of piping material at site, pre-fabrication of piping are done, above ground pipes are fabricated
and erected on the foundations. Equipment and valves are installed. Prior to erection of the above ground
pipes, these pipes are properly leveled and sand blasted and applied with one coat of primer as per standards
and specifications. After erection, alignment fitment on the foundations, welding and NDT and hydro testing
are carried out. Final painting, of the above ground piping, fittings and valves are carried out. Cold insulation
works are carried out by an approved agency.

Underground pipes are laid after excavation; excavation is carried out to the required depth and width. Joint
coating is done and again the joint coated area is tested by the holiday detector. Pipes are lowered. Hydro
testing and backfilling operation are carried out. Necessary valves, fittings, scrapper launcher and receiver are
installed.

All other miscellaneous works as specified in the contract are carried out to the satisfaction of the client and
the entire systems are tested and commissioned.

c. Electrical, Instrumentation and cable works:

Various types of field pressure instruments and temperature instruments, panels, transformers, flow meters
etc. as per contractual requirement are supplied, installed and calibrated. Earthling system for all necessary
equipment, panels and for all circuit connections shall be installed as per technical specifications.

OFCs (Optical Fibre Cables) are blown in the laid HDPE duct, along with pipeline, with necessary termination
connections.

All activities are carried out strictly as per specifications of contract documents, standards, and approved
procedures and as per the instruction of engineer in charge at site.

Required man power and machinery resources as per qualification criteria are deployed adequately to complete
the job as per contractual completion period and work is executed in a planned manner and every precaution
is taken to complete the work within the contractual completion schedule, with complete quality consciousness
and adequate safety measures.

POST-EXECUTION STAGE:

After completion of the work, our Company is required to provide for defect liability period as per the terms of
the work contract. Upon completion of the project and processing of final bill, defect liability period commences
as per the work order. Work completion certificate is issued by the client at the time of final bill and closure of
the project. After completion of the defect liability period CPBG (Contract Performance BG) or retention
money/ security deposit, if any, is released by the client.

125
 

Our Strengths:
1. We have a strong presence in India and significant experience:

We are one of the well-established oil & gas pipeline infrastructure companies in India with diversified
operations spread across various Geographical regions such as Karnataka, Delhi-NCR, West Bengal,
Gujarat, Goa, Andhra Pradesh, Kerala, Tamil Nadu, Telangana, Madhya Pradesh, Jharkhand, Bihar,
Chandigarh, Haryana, and Uttar Pradesh. Our experience and operations in these regions has enabled us to
establish contacts with local clients and suppliers. We believe that we enjoy an established track record for
successful completion of the projects undertaken by us. Our Geographical diversity enables us to achieve
operating efficiencies, focus on our Projects and Regions where we can be competitive and obtain adequate
margins with the appropriate level of contractual and geo-political risk.

Having over 20 years of experience in oil and gas pipeline infrastructure, we believe that we are one of the
few oil and gas pipeline infrastructure companies, having good track record of timely delivery of supply
chain in all the business areas.

Currently, our Company is working on multiple projects simultaneously which range from Cross-Country
pipelines projects to City Gas Distribution projects and providing O&M services, each of which poses its
own degree of complexity spread across the country. We are proud to have executed 10.75” OD x 69 Kms
Petroleum Product Pipeline for the first ever Trans-National Cross-Country Pipeline of South-East
Asia connecting India to Nepal for supply of petroleum products. Some of our other notable projects
include:

e 12” x 125 Kms Pipeline Laying Works for Dobhi- Durgapur- Haldia Pipeline Section along with
Spur-lines under Jagdishpur-Haldia-Durgapur-Bokaro Pipeline Project

e 12” x 40 Kms Laying & Construction of Pipeline along with associated work for Bantumilli &
Ullampura Pipeline Project

e 24” x 95 Kms laying works for Barauni-Guwahati Pipeline Project

2. Efficient Business Model

Our growth is largely attributable to our efficient business model which involves careful identification and
assessment of the project with emphasis on cost optimization which is a result of executing our projects
with careful planning and strategy. Generally, as per terms of the contract awarded, our client provides us
with the sizable portion of the raw materials (gas meters, regulators, fuse & machines, generator sets, pipes
and fittings, etc.) required for execution of the projects and a relatively smaller portion of the raw materials
is required to be procured by our Company resulting into low cost of operations and consequently, enables

126
us to have better profit margins. Further, the scope for disputes and litigation with our client on account of
installation of materials not being compliant with the technical specifications is reduced.

. Strong financial performance

We strive to maintain a strong financial position with emphasis on having a strong balance sheet and
increased profitability. Between fiscal 2015 and 2020, our income from operations increased at a CAGR of
38.96% from Rs. 3,111.92 Lakhs in fiscal 2015 to Rs. 16,123.83 Lakhs in fiscal 2020, while our profit after
taxation, as restated, increased at a CAGR of 58.56 % from Rs. 198.34 Lakhs in fiscal 2015 to Rs. 1,987.93
Lakhs in fiscal 2020.

In fiscal 2018, 2019 and 2020, we have also had strong cash flows from operations. Our net cash flow from
operations was Rs. 401.55 Lakhs, Rs. 318.67 Lakhs and Rs. 1,915.27 Lakhs, respectively, reflecting our
strong financial operations. Our RONW (Average of beginning and end of year) for equity shareholders in
fiscal 2018, 2019 and 2020 was 24.83%, 43.16% and 33.06%, respectively. While our ROCE (Average of
beginning and end of year) was 48.78%, 73.55% and 58.53%, respectively. As of March 31, 2019, our long-
term debt equity ratio was 0.03:1 while it was 0.01:1 on March 31, 2020. Our debtor holding period was
79.71, 36.53 and 31.36 days in the fiscal 2018, 2019 and 2020 respectively.

Our strong balance sheet, high ROCE, positive operating cash flows, shorter debtor holding period, enable
us to fund our strategic initiatives, pursue opportunities for growth and better manage unanticipated cash
flow variations. Our financial strength provides us a valuable competitive advantage in terms of access to
bank guarantees and letters of credit, which are factors critical to our business.

. Scalability of operations

Initially, in City Gas Distribution market, around 30 cities were notified by PNGRB as CGD Geographical
Areas (GAs) for laying CGD network in such areas by the authorized entities. As per the recent Government
policies, PNGRB has increased the number of Geographical Areas (GAs) to 228 comprising of 402 districts
spread over 27 States and Union Territories, covering 70% of Indian population and 53% of its area. The
recent Government initiatives have provided lucrative opportunities for work execution company such as
ours, who is already having a good presence in City Gas Distribution Projects along with construction of
CNG Stations.

. Strong Project execution capabilities

We believe that our large equipment base, technically qualified and experienced employee pool,
comparatively lower cost center of operations and strong project management systems and capabilities
enable us to execute large as well as complex projects. As of July 31, 2020, we have been engaged on more
than 31 on-going projects across India. We have a significant equipment base including Pipe layers (Side-
boom), Excavators, Horizontal Directional Drilling (HDD) Machines, etc. which enables us to quickly and
effectively mobilise project works. Our strong project execution capabilities have enabled us to complete
various large and complex projects within the stipulated delivery timelines. We believe that our large
equipment asset base, enabling rapid mobilization of high-quality equipment, our technical expertise and
project execution capabilities are significant competitive advantages that enable us to prequalify for,
effectively evaluate and bid for, and procure contracts for projects.

127
6. Long term relationship with clients and repeat business

We enjoy a good reputation in our field and have received repeat orders from several of our prominent
Clients, despite the increase in competition. Our Clients include major Oil and Gas Companies, spread across
the country and we have been associated with some of them on long term basis. We believe that we constantly
try to address our clients’ requirements which help us to maintain a long-term working relationship with our
Clients and improve our retention strategy. We believe that our existing relationship with our Clients
represents a competitive advantage in gaining new Clients and increasing our business. The experience
gained from execution of existing projects enables us to better understand our Client’s requirements, evaluate
the scope of work and risks involved in future projects that we may bid for.

7. Highly experienced Management Team

Our Company is managed by a team of professionals led by our Promoter. We believe that the leadership
and vision of our Promoter, Mr. Srinivasa Rao Gaddipati, has been instrumental in driving our growth and
implementing our business strategies. Our management team has the requisite experience to manage the
current scale of business as well as the expansion plans for the future. The team comprises of personnel
having technical, operational and business development experience. We believe that we have achieved a
measure of success in attracting an experienced senior management team with operational and technical
capabilities, management skills, business development experience and financial management skills. In
addition, our board includes a strong combination of management as well as independent members that bring
significant business experience to our Company. For further details, please see “Our Management” on page
150 of this Prospectus.

8. Diverse fleet of sophisticated equipment

Our Company owns and maintains a diverse range of equipment such as Pipe Layers (Side-boom),
Excavators, Horizontal Directional Drilling Machines, Compressors, Generator sets, Welding Machines,
etc. which allows us to meet majority of the requirements for our on-going projects. Our equipment base
is properly managed, maintained and operated. Majority of the works in the pipeline infrastructure business
are carried out through trenchless technology. We have a substantial fleet of horizontal directional drilling
machines, which makes us more cost effective as compared to our competitors, who hire machines on
rental basis, which in turn increases their cost of execution.

Our Business Strategies:

The key elements of our business strategy are as follows:
1. Continue to expand our operations

Our objective is to expand and enhance our presence in regions where we have previously developed a strong
base of operations by our established contracts with local clients and suppliers, and familiarity with local
working conditions. Increase in demand for natural gas in India in the recent period is expected to result in
vast opportunities for the pipeline infrastructure business. In addition, favorable government policies may
act as a catalyst for boosting the further growth of this industry.

We intend to strengthen our presence all over the country and play a bigger role in CGD system as the

Government is focusing to substantially increase the CGD network and also to become a prominent player
in O&M operations of CGD network.

128
In pursuing our strategies, we seek to identify markets where we believe we can provide cost and operational
advantages to our clients and distinguish ourselves from other competitors. In order to expand our operations,
we also seek to identify acquisition targets and/or joint venture partners whose resources, capabilities and
strategies are complementary to and are likely to enhance our business operations in such regions. As on the
date of this Prospectus, we have entered into a Joint Venture Agreement with M/s. PT Citra Panji
Manunggal, a Company incorporated under the laws of Indonesia, for one of our project.

Further growth in our O&M services offerings

We believe that the significant increase in pipeline projects in India and the aging of existing pipeline
projects should result in a significant increase in demand for our O&M Services business, which include
AMC services, repairs and modernisation, scheduled shutdowns and overhauling of existing pipelines
projects. Revenue from our O&M Services business was Rs.642.67 Lakhs, Rs. 1978.94 Lakhs and Rs.
3426.43 Lakhs in fiscal 2018, 2019 and 2020, representing 7.38%, 14.40% and 21.25%, respectively, of
our total revenue from operations in these periods. We have experienced a significant growth in our O&M
Services business in recent years which grew at a CAGR of 297.51% between fiscal 2017 and fiscal 2020.
Presently, O&M Services offer relatively better margins as compared to pipeline infrastructure projects
and taking into consideration the present phase of CGD business, the business of O&M Services is expected
to further increase. Further, the level of competition for O&M contracts is relatively lower than that in case
of Pipeline Infrastructure Projects due to technical requirements.

Retaining Skilled Manpower

We strive for effectiveness and high level of productivity in our actions and work performance. We are
determined to grow as individuals in the working environment as well as improving personal well-being.
We strive to enhance the pipeline infrastructure industry by providing all possible solutions and expertise
to projects. We have assembled an experienced management team with expertise in areas that are important
to our business. We believe the successful implementation of our business and growth strategies depends
on our ability to hire and cultivate experienced, motivated and well-trained members of our management
and employee teams. We intend to continue to recruit, retain and train qualified personnel.

Optimum Utilization of Resources

Our Company constantly endeavors to improve our business operations to optimize the utilization of
resources. We have invested significant resources and intend to further invest in our activities to develop
customized systems and processes to ensure effective management control. We regularly analyze our
existing policies to be carried out for operations of our Company which enable us to identify the areas of
bottlenecks and correct the same. This helps us in improving efficiency and putting resources to optimal
use.

Continue to develop Client relationship and expand our Client base

We plan to grow our business primarily by increasing the number of clients and retaining the existing client
base, as we believe that increased client relationships will add stability to our Business. We intend to retain
existing relationships and also focus on bringing new Clients into our portfolio. Our Company believes
that our business is a by-product of relationship maintained with our clients and try to maintain long-term
relationship with our clients. Long-term relations are built on trust and continuous meeting with the
requirements of the clients.

129
6. Focus on Performance and Project Execution

We believe that we have developed a reputation for undertaking challenging projects and completing
projects within the stipulated deadlines. We intend to continue to focus on performance and execution of
projects in order to maximize client satisfaction and margins. For better performance we focus on advanced
technologies, designs and project management tools to increase productivity and maximize asset
utilization. Through our comparatively lower cost center of operations in India, we continue to optimize
operating and overhead costs to maximize our operating margins.

To facilitate efficient decision making, we intend to continue to strengthen the information and
communication infrastructure for our operations in order to deliver satisfactorily on commitments to our
clients.

7. Continue to focus on safety and environment standards

We intend to continue to focus on health, safety and environment management and quality management
standards as we believe that these elements of performance measurement have become important
competition differentiators and key criteria for prequalification of contractors by potential clients.

Our objective is to adhere complete safety standards and specifications in the pipeline infrastructure
industry with a positive attitude and approach by adopting environmental friendly and latest technologies
and to protect the health and safety of personal involved in our Company while minimizing damage caused
to environment by controlling the hazards and impacts associated with our operations.

130
Geographic Regions:

The following table depicts our geographical presence in various regions of the country:

Tl Geographical Presence

 

 

 

   
   

 

 

 

 

 

 

 

 

 

Himachal Pradesh Cajarst
‘Uttarakhand ‘Madhya Prades
Haryana ‘Karnataka
Deli Kerala
Punjzb ‘Tamil Nadu.
‘Chandigarh Wes Bengal
Bikar Uttar Prades
Telengana ‘Andhra Pradesh
Tharkhand Odisha

 

Marketing Strategy:

Our Company has a strong client profile which includes some of the major Oil and Gas Companies.
Generally, the work allocated by the Companies is based on the quality of past work done and timelines.
Therefore, marketing strategy of our Company is substantially dependent on the past credentials and track
record, which include timely completion of work, quality of services and presentation of documents. We
believe that our track record of successful completion of contracts gives us an edge in technical bids. Most
of the clients refer tender notice directly to us, as we are registered in their databases.

In case of open tenders, we are required to participate through press tenders or through Online system in
response to enquiries placed on specific web sites of our clients. In order to ensure that we can effectively
bid for these contracts, we have a dedicated team which keeps track of these tender notification or
advertisement and prepares the tender document.

We target the best possible combination of Project vis-a-vis Geographical area, accessibility, Technical
requirement, Estimates, etc. by carrying out Pre-Tender studies / Surveys.

131
Health and safety:

We continue to ensure compliance with applicable health and safety regulations and other requirements in
our operations. The safety of our personnel, our clients and end-consumers is our primary concern. We strive
for full compliance with local, state and federal occupational health and safety requirements. We operate
under a comprehensive safety program with a goal of zero accidents.

We have also adopted good industry practices, including deployment of advanced technology at our project
sites, and regularly monitoring and undertaking close supervision of the project sites to promote and ensure
a safe working environment. Our project execution activities are also subject to the Right of way permission
from the governmental, state and municipal laws. Thus, we are also subject to follow the regulation
requirements as specified by these authorities. We have complied and will continue to comply, with all
applicable environmental and associated laws, rules and regulations.

Quality assurance and quality control:

We believe that process Quality Assurance and Quality Control are essential for Client satisfaction and for
sustainable and profitable growth of our Company. Our Company has been awarded with ISO 9001:2015
Certificate for complying with the quality and operational standards. The execution of the Projects is done in
adherence to the requirements of the Client and we establish and monitor the implementation of Project
Quality and work method statements at the Project sites. To ensure Project Quality, we focus on product
requirements; the processes to be followed for quality assurance and the records to be created, the inspection
& testing plan for meeting the acceptance criteria.

We are committed to provide the best quality services in the field of laying pipeline & associated works to
our Clients, as per their requirements abiding all regulations and to the best of their satisfaction.

Corporate Social Responsibility:

We have adopted a Corporate Social Responsibility (“CSR”) policy in compliance with the requirements of
the Companies Act, 2013 and the Companies (Corporate Social Responsibility) Rules, 2014 notified by the
Central Government. We have also re-constituted the Corporate Social Responsibility Committee for the
purpose of the said compliance.

Competition:

We operate in a very competitive environment. Our competition depends on whether the project is for laying
pipelines with other associated facilities or for providing O&M Services. It also depends on the size, nature
and complexity of the project and the Geographical region in which the project is to be implemented. We
compete with other players in this field on the basis of service quality, technical capability, pricing,
performance record and experience, health and safety observance and availability of qualified personnel and
Client convenience. For further information, with respect to the Industry in which we operate please see
“Industry Overview” beginning on page 97 of this Prospectus.

132
Stage-wise implementation:

   

Details of stage-wise implementation of projects by our Company as on July 31, 2020 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

aS ee ets RET
eof
i Aa CeCe)
ren) Cutan) pani Pay
tation CONS Sd a)
basedon P&T ectual LT
Aya aera TEC me was A Gnnenl
raised Boe MR Ctcoattd
: (uncertifi :
(excluding ny ied)
ECR
“en Z
Spann Kv) Gao)
(%) 0(%)
Laying of 3LPE Carbon Steel pipeline for
1 BECL CGD Project at Rohtak ini 30 70
Pipeline Laying Works for Dobhi
Durgapur - Haldia Pipeline Section
2 Sous Alongwith Superlines Under JHDBPL page a8 te
Project, Part-C
Laying & Construction of Pipeline Along
3 GAIL | with Associated Work for ONGC 52.74 83 17
Bantumilli & Ullampura Pipeline Project
Laying = Works For BARAUNI-
4 GAIL GUWAHATI Pipeline Project. . 1 99
Laying of Underground Steel Network for
2 SS Bengaluru CGD Project SLY 22 é
Laying of Underground MDPE Network
6 GGL for Bengaluru CGD Project 76.20 ve 8
Composite Works of CNG Coco Stations
and CNG Stations in OMC ROS for City
z Seu Gas Distribution Project at Bengaluru 318 8 52
PartA, Part B, Part C
Hiring of Contract Services for O&M of
8 GGL City Gas Distribution Network for GAIL 25.25 32 68
GAS Bengalore for 3 years
Laying of 3LPE Carbon Steel pipeline for
7 HPCL CGD Project at Sonipat 34.82 BY 44
Rate Contract for Laying of 3-layer PE
10 IGL coated Carbon steel Pipeline in 96.93 98 2
Georgraphical area of Rewari
Rate Contract for Laying of 8",6" & 4"
steel pipeline & piping work for online
u ICL connection of New OMC RO's across 44.96 59 al
NVCT of Delhi

 

 

133
bodes

 

 

 

 

 

 

 

 

 

 

aoa ‘
eof ty eee)
implemen Leama ge of
tation atin work to
basedon P& oe Lit
S.no| Client A Cia etree eC me Mia a nee
raised cued (uncertif
(attire Cy ied)
on) Er a
- EY.)
ee) 0(%)
Management & Services of PNG Control
Room for operation, maintenance, repair
and monitoring of CGD _ network
consisting of underground PE main
2 igh pipelines, service pipeline and GI/ CU SBet 62 a8
installations for Segment 1 (NCT of Delhi
Part - 1) and Segment - 2 (NCT of Delhi
Part - 2).
Emergency Repair and Shifting of
13 IGL 4"/8"/12" Steel pipeline NCT of Delhi and 7.52 21 79
NCR for Two years
Laying of Carbon Steel Pipeline in
14 IGL KARNAL GA 60.39 77 23
Laying of Steel Pipelines for R.O.
15 IGL CONNECTIVITY & LOOP LINES IN 86.35 91 9
NCT OF DELHI & NCR
Laying of Carbon Steel Pipeline in
16 IGL Muzaffarnagar, Meerut & Shamli GA for - 5 95
Segment-7:
Rate Contract for Laying of MDPE
17 IGL Network and GI/Cu installation in NCT of 84.26 93 7
Delhi, UP, Haryana & Rajasthan GA
IOAGP Laying & Construction of 8"&4" NB U/G
18 L steel pipeline laying network & associated 97.69 98 2
works at Ernakulum GA
Laying of 10" Pipeline & associated works
19 IOCL from mothihari to amlekhganj (MAPL 82.91 95 5
Project)
20 IOCL Laying of 3LPE Carbon Steel pipeline in 17.93 37 63
Coimbatore GA
a1 IOCL Laying of 3LPE Carbon Steel pipeline in 14.96 33 67
Salem GA

 

 

 

 

 

 

 

 

134
bodes

 

 

 

 

 

 

 

aS eects
eof wk a eee)
phn) Conta) Maan ge of
tation Ee work to
basedon P& oe Lit
S.no| Client A Cia etree eC me Mia a nee
raised Co (uncertif
(attire Concert ied)
on) Er (%)
(%) EIRP) i‘
f 0(%)
Rate Contract for Laying of Underground
ERW/Seamless Steel Pipeline —_ for
2 ONGC Connecting OIL/GAS/EffluenyWater 30.76 a2 58
injection wells in various fields of
Rajahmundry Assest for a period of 3
‘Years
SMS City Gas Distribution Project for
23 TGPL SANGAREDDY GA. 53.90 69 31
SMS City Gas Distribution Project for
24 TGPL SANGAREDDY GA - 0 100
Laying Cross Country product pipeline
from Paradip pump station to IOCL
PHBPL pump station via Somnathpur
25 locL terminal under PSHPL Project, Group-A- 0.76 R a8
Paradip to Kansana Bansa River Crossing-
Approx. Ch. 123 KM
Laying 18Inch OD, Cross Country LPG
pipeline from PHDPL Haldia Pump
Station to Durgapur Delivery Station under
26 IOCL Paradip-Haldia- Durgapur LPG Pipeline 4.63 17 83
Aug Project, Group-C- Duttapur SV
Station-Ch.181 km to Durgapur Station
Ch. 282 km
Laying & Construction of 8” & 4” NB U/G
27 IOAGP| Steel Pipeline Network & Associated . 0 100
L Works for Malappuram GA of IOAGPL-
Group A
Laying & Construction of 8” & 4” NB U/G
28 IOAGP] Steel Pipeline Network & Associated . 0 100
L Works for Malappuram GA of IOAGPL-
Group B

 

 

 

 

 

 

 

135

 
bodes

aS eects ‘
a0

eof
implemen
tation
based on

Ao a sea dE
Pry Cou oy ren

tation as :
I work to
Pisa (aate) be

S.no| Client A Cia etree eC me Mia a

Coal

oat 4
ifi (uncertif
(uncertifi Ft)

Er a
EIR) 0)
0(%)

raised
(attire
tax)
(%)

 

Laying & Construction of 8” & 4” NB U/G
29 IOAGP| Steel Pipeline Network & Associated 0 100
L Works for Malappuram GA of IOAGPL- .

Group C

 

Laying & Construction of 8” & 4” NB U/G
IOAGP| Steel Pipeline Network & Associated

 

 

 

 

2 |p Works for Kozhikode GA of IOAGPL- : 0 100
Group A

31 IOCL Laying of 3LPE Carbon Steel pipeline in . 0 100
Vizag GA

 

 

 

 

 

Properties:

Our Company has its Registered Office at Flat No.701, Plot No 8-3-940 and 8-3-940/A to E, Tirumala Shah
Residency, Yellareddy Guda, Ameerpet, Hyderabad, Telangana-500073, which has been taken on rental
basis from our director, Mr. Kutumba Rao Gaddipati. Save and except our Registered Office, we do not have
any property which is material to the Company as on the date of this Prospectus.

Plant and Machinery:

We maintain our machinery and equipment keeping in mind the efficiency, safety and environment factors.
We have made all endeavors in procuring the line equipment and machineries that can effectively cater to
our project specific requirements. Some of the material machines and equipment procured by us includes
HDD Machine, Cable route locator, Excavators, Hydra, Site Booms/ Pipelayers, Bending Machines, Augur
boring Equipment, Pressurizing Pumps, Digitrack depth measuring device, Electrofusion unit, etc.

136
Intellectual Properties:
We have filed an application for registering the following trademark:

MWeiConttare Nature of License / STs Class PN eet MTEL
Approval PAN at as (Oi CN
abe
mark

Certificate of Trade 4108651 Objected

Registration of Trade Mark
Mark under _ section Registry,
23(2), Rule 56 (1) of Chennai
Trade Marks Act, 1999

 

 

Human resources:

Details of the manpower employed by our Company as on July 31, 2020 is as follows:

 

 

 

 

 

 

 

 

 

 

Classification No. of employees

1. Accounts & Finance and Secretarial 18
2. HR & Administration 14
3. Civil engineers and surveyors 10
4. Mechanical 790
5. Projects 28
6. Quality check 15
fe Safety and storage 22
8. Others 11

Total 908

 

 

 

In addition to the above, we also engage contract labour as per requirements of the project.
Utilities and Infrastructures:

A. Infrastructure

Our Registered Office situated at Hyderabad is well equipped with computer systems, internet connectivity,
other communication equipment and security, etc. which are required for our business operations.

2, Power

We have arrangements for regular power supply at our office premises. We meet our power requirements at
registered office by purchasing electricity from Telangana State Southern Power Distribution Company
Limited (TSSPDCL). In addition to the above, our Company has installed electrical power generators at the
project sites for meeting the power requirements.

3. Water

The water required for execution process is relatively low. Water is procured from external water supply
agencies operating in the local area where our project facilities are situated.

137

 
Insurance:

Our operations are subject to risks inherent in our operations, such as risk of equipment failure, work
accidents, fire, earthquake, flood and other force majeure events, acts of terrorism and explosion including
hazards that may cause injury or loss of life, severe damage to or destruction of properties, equipment and
environmental damage. We may also be subjected to claims resulting from defects arising from pipelines laid
by us within the warranty / defect liability period(s) extended by us.

To overcome these uncertainties, we take insurances for all our projects as per the requirements of the project
after the same is awarded to us.

Our insurance policies include storage cum erection policy, workman compensation policy, marine cargo
policy, marine cum erection policy, vehicle insurance policy, public liability policy and contractors all risk
insurance policy.

Collaborations/ Consortiums:

We have set up a partnership deed in the name of ‘CPM-Likhitha Consortium’ with PT Citra Panji
Manunggal, a company incorporated under the laws of Indonesia, for execution and completion of Laying &
Construction of Steel Gas Pipeline and Terminals along with associated facilities for Barauni Guwahati
Pipeline Project.

138
KEY INDUSTRY REGULATIONS AND POLICIES

The following description is a summary of the relevant regulations and policies as prescribed by the
Government of India and other regulatory bodies that are applicable to the Company. The information detailed
in this chapter has been obtained from various legislations, including rules and regulations promulgated by
the regulatory bodies that are available in the public domain. The regulations and policies set out below may
not be exhaustive and are only intended to provide general information to the investors and are neither
designed nor intended to be a substitute for professional advice. The Company may be required to obtain
licenses and approvals depending upon the prevailing laws and regulations as applicable. For details of such
approvals, please see chapter on “Government and Other Approvals” on page 258 of this Prospectus.

A. INDUSTRY RELATED REGULATIONS

Petroleum and Natural Gas Regulatory Board Act, 2006 (“PNGRB Act”) and the rules & regulations
framed thereunder

The PNGRB Act provides for the establishment of Petroleum and Natural Gas Regulatory Board to
protect the interests of consumers and entities engaged in specified activities relating to petroleum,
petroleum products and natural gas and to promote competitive markets and for matters connected
therewith or incidental thereto. The Petroleum and Natural Gas Regulatory Board (PNGRB) has been
constituted under PNGRB Act which lays down by regulations, the technical standards and specifications
including safety standards in activities relating to petroleum, petroleum products and natural gas,
including the construction and operation of pipeline and infrastructure projects related to downstream
petroleum and natural gas sector. PNGRB also performs various other functions as may be entrusted to
it by the Central Government to carry out the provisions of PNGRB Act.

B. LABOUR RELATED REGULATIONS
Industrial Disputes Act, 1947 (“ID Act”) and the rules framed thereunder

The ID Act provides the machinery and procedure for the investigation and settlement of industrial
disputes. It also provides certain safeguards to workers and aims to improve the service conditions of
industrial labour. When a dispute exists or is apprehended, the appropriate government is empowered to
refer the dispute to an authority mentioned under the ID Act in order to prevent the occurrence or
continuance of the dispute. Reference may be made to a labour court, tribunal or arbitrator to prevent a
strike or lock-out while a proceeding is pending. Wide powers have been given to the labour courts and
tribunals under the ID Act while adjudicating a dispute to grant appropriate relief such as modification of
contract of employment or to reinstate workmen with ancillary relief.

Employees Provident Fund and Miscellaneous Provisions Act, 1952 (“EPF Act”) and the rules framed
thereunder

Under the EPF Act, compulsory provident fund, family pension fund and deposit linked insurance are
payable to employees in factories and other establishments. The legislation provides that an establishment
employing more than 20 (twenty) persons, either directly or indirectly, in any capacity whatsoever, is
either required to constitute its own provident fund or subscribe to the statutory employee’s provident
fund. The employer of such establishment is required to make a monthly contribution to the provident
fund equivalent to the amount of the employee’s contribution to the provident fund. There is also a

139
requirement to maintain prescribed records and registers and filing of forms with the concerned
authorities. The EPF Act also prescribes penalties for avoiding payments required to be made under the
abovementioned schemes. The employee shall also be required to make the equal contribution to the fund.
The Central Government under Section 5 of the EPF Act (as mentioned above) frames Employees
Provident Scheme, 1952.

The Employees’ State Insurance Act, 1948 (“ESI Act”) and the rules framed thereunder

The ESI Act provides for certain benefits to employees in case of sickness, maternity and employment
injury. All employees in establishments covered by the ESI Act are required to be insured, with an
obligation imposed on the employer to make certain contributions in relation thereto. It shall apply to all
factories (including factories belonging to the Government) other than seasonal factories. Employers of
factories and establishments covered under the ESI Act are required to pay contributions to the Employees
State Insurance Corporation, in respect of each employee at the rate prescribed by the Central
Government. Companies which are controlled by the Government are exempt from this requirement if
employees receive benefits similar or superior to the benefits prescribed under the ESI Act. In addition,
the employer is also required to register itself under the ESI Act and maintain prescribed records and
registers.

Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act,
1996 (“Construction Workers Act”) and the rules framed thereunder

The Construction Workers Act provides for regulation of employment and conditions of service of
building and other construction workers including safety, health and welfare measures in every
establishment which employs or employed during the preceding year, 10 or more workers. Every
establishment to which the Construction Workers Act applies must be registered within a period of 60
days from the commencement of work.

Further, every employer must give notice of commencement of building or other construction work 30
days in advance. Comprehensive health and safety measures for construction workers have been
provided through the Building and Other Construction Workers (Regulation of Service and Conditions
of Service) Central Rules, 1998.

This Construction Workers Act provides for constitution of safety committees in every establishment
employing 500 or more workers with equal representation from workers and employers in addition to
appointment of safety officers qualified in the field. Any violation of the provisions for safety measures
is punishable with imprisonment for three months or a fine of a maximum of Rs. 2,000 or both.
Continuing contraventions attract an additional fine of Rs. 100 per day. It also provides for penalties for
failure to give notice of commencement of building or other construction work and obstruction of
inspection, enquiry, etc.

Buildings and Other Construction Workers’ Welfare Cess Act, 1996 (“BOCW Cess Act”) and the
rules framed thereunder

The BOCW Cess Act provides for the levy and collection of a cess on the cost of construction incurred
by employers with a view to augmenting the resources of the Building and Other Construction Workers'
Welfare Boards constituted under the BOCW Cess Act. A prescribed quantum of the construction cost
incurred by the employer is required to be deposited by the employer as welfare cess under the BOCW.
Cess Act.

140
Minimum Wages Act, 1948 (“MWA”) and the rules framed thereunder

The Minimum Wages Act, 1948 came into force with an objective to provide for the fixation of a
minimum wage payable by the employer to the employee. Every employer is mandated to pay the
minimum wages to all employees engaged to do any work skilled, unskilled, and manual or clerical
(including out-workers) in any employment listed in the schedule to the MWA, in respect of which
minimum rates of wages have been fixed or revised under the MWA. Construction of buildings, roads,
and runways are scheduled employments. It prescribes penalties for non-compliance by employers for
payment of the wages thus fixed.

The Employees Compensation Act, 1923 (“EC Act”) and the rules framed thereunder

EC Act provides for payment of compensation to injured employees or workmen by certain classes of
employers for personal injuries caused due to an accident arising out of and during the course of
employment. Under the EC Act, the amount of compensation to be paid depends on the nature and
severity of the injury. There are separate methods of calculation or estimation of compensation for injury
sustained by the employee. The employer is required to submit to the Commissioner for Employees’
Compensation a report regarding any fatal or serious bodily injury suffered by an employee within seven
days of receiving a notice.

The Contract Labour (Regulation and Abolition) Act, 1970 (the “CRLAA”) and the rules framed
thereunder

The CRLAA regulates the employment of contract labour in establishments in which twenty or more
workmen are employed or were employed on any day of the preceding 12 months as contract labour. It
governs their conditions and terms of service and provides for abolition of contract labour in certain
circumstances.

The CLRAA requires every contractor to whom the CLRAA applies to obtain a license and not to
undertake or execute any work through contract labour, except under and in accordance with such license.
Further, the CLRAA imposes certain obligations on the contractor in relation to establishment of
canteens, restrooms, drinking water, washing facilities, first aid, other facilities and payment of wages to
ensure the health and welfare of the contract labourers. However, in the event the contractor fails to
provide these amenities, the principal employer is under an obligation to provide these facilities within a
prescribed time period. Penalties, including both fines and imprisonment, may be levied for contravention
of the provisions of the CLRAA.

The Workmen Compensation Act, 1923 (“WCA”) and the rules framed thereunder

The WCA has been enacted with the objective to provide for the payment of compensation to workmen
by employers for injuries by accident arising out of and in the course of employment, and for occupational
diseases resulting in death or disablement. The WCA makes every employer liable to pay compensation
in accordance with the WCA if a personal injury/ disablement/ loss of life is caused to a workman
(including those employed through a contractor) by accident arising out of and in the course of his
employment. In case the employer fails to pay compensation due under the WCA within one month from
the date it falls due, the commissioner appointed under the WCA may direct the employer to pay the
compensation amount along with interest and may also impose a penalty.

141
Payment of Gratuity Act, 1972 and the rules framed thereunder

The Payment of Gratuity Act, 1972 provides for payment of gratuity to employees employed in factories,
shops and other establishments who have put in a continuous service of 5 (five) years, in the event of
their superannuation, retirement, resignation, death or disablement due to accidents or diseases. The rule
of ‘five years continuous service’ is however relaxed in case of death or disablement of an employee.
Gratuity is calculated at the rate of 15 (fifteen) days’ wages for every completed year of service with the
employer.

The Equal Remuneration Act, 1976 and Equal Remuneration Rules, 1976

The Constitution of India provides for equal pay for equal work for both men and women. To give effect
to this provision, the Equal Remuneration Act, 1976 was implemented. The Act provides for payment of
equal wages for equal work of equal nature to male or female workers and for not making discrimination
against female employees in the matters of transfers, training and promotion etc.

The Payment of Bonus Act, 1965 (“POB Act”)

The POB Act provides for payment of minimum bonus to factory employees and every other
establishment in which twenty or more persons are employed and requires maintenance of certain books
and registers and filing of monthly returns showing computation of allocable surplus, set on and set off
of allocable surplus and bonus due.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
(“SHWW Act”)

SHWW Act provides for the protection of women at workplace and prevention of sexual harassment at
workplace. The SHWW Act also provides for a redressal mechanism to manage complaints in this regard.
Sexual harassment includes one or more of the following acts or behavior namely, verbal or non-verbal
physical contact and advances or a demand or request for sexual favors or making sexually coloured
remarks, showing pornography or any other unwelcome physical, verbal or nonverbal conduct of sexual
nature. The SHWW Act makes it mandatory for every employer of a workplace to constitute an Internal
Complaints Committee which shall always be presided upon by a woman. It also provides for the manner
and time period within which a complaint shall be made to the Internal Complaints Committee i.e. a
written complaint is to be made within a period of 3 (three) months from the date of the last incident. If
the establishment has less than 10 (ten) employees, then the complaints from employees of such
establishments as also complaints made against the employer himself shall be received by the Local
Complaints Committee.

TAX RELATED LEGISLATIONS

Income Tax Act, 1961 and the rules framed thereunder

Income Tax Act, 1961 is applicable to every Domestic / Foreign Company whose income is taxable under
the provisions of this Act or Rules made under it depending upon its residential status and type of income

involved. It provides for levy, administration, collection and recovery of Income Tax. Under Section
139(1) every Company is required to file its Income Tax Return for every Previous Year by 30th

142
September of the Assessment Year. Other compliances like those relating to Tax Deduction at Source,
Fringe Benefit Tax, Advance Tax, Minimum Alternative Tax and like are also required to be complied
by every Company.

The Central Goods and Service Tax Act, 2017 (GST) and the rules framed thereunder

Goods and Services Tax (GST) is a comprehensive indirect tax on manufacture, sale and consumption of
goods and services throughout India to replace taxes levied by the central and state governments. It was
introduced as the Constitution (One Hundred and First Amendment) Act 2016, following the passage of
Constitution 101st Amendment Bill. GST-registered businesses are allowed to claim tax credit to the
value of GST they paid on purchase of goods or services as part of their normal commercial activity.
Administrative responsibility rests with a single authority to levy tax on goods and services.

Integrated Goods and Services Tax Act, 2017

Integrated Goods and Services Tax Act, 2017 (“IGST Act”) is a central law enacted to levy tax on the
supply of any goods and/ or services in the course of inter-State trade or commerce. IGST is levied and
collected by Centre on interstate supplies. The IGST Act sets out the rules for determination of the place
of supply of goods. Where the supply involves movement of goods, the place of supply shall be the
location of goods at the time at which the movement of goods terminates for delivery to the recipient.
The IGST Act also provides for determination of place of supply of service where both supplier and
recipient are located in India or where supplier or recipient is located outside India. The provisions
relating to assessment, audit, valuation, time of supply, invoice, accounts, records, adjudication, appeal
etc. given under the CGST Act are applicable to IGST Act. Further, the Company is also governed by
various State Goods and Service Tax statutes for levy and collection of tax on intra-State supply of goods
and services or both, as applicable

Professional Tax and the rules framed thereunder

The professional tax slabs in India are applicable to those citizens of India who are either involved in any
profession or trade. The State Government of each State is empowered with the responsibility of
structuring as well as formulating the respective professional tax criteria and is also required to collect
funds through professional tax. The professional taxes are charged on the incomes of individuals, profits
of business or gains in vocations. The professional tax is charged as per the List II of the Constitution.
The professional taxes are classified under various tax slabs in India. The tax payable under the State
Acts by any person earning a salary or wage shall be deducted by his employer from the salary or wages
payable to such person before such salary or wages is paid to him, and such employer shall, irrespective
of whether such deduction has been made or not when the salary and wage is paid to such persons, be
liable to pay tax on behalf of such person and employer has to obtain the registration from the assessing
authority in the prescribed manner. Every person liable to pay tax under these Acts (other than a person
earning salary or wages, in respect of whom the tax is payable by the employer), shall obtain a certificate
of enrolment from the assessing authority.

STATE RELATED LEGISLATIONS

Telangana Shops and Establishments Act, 1988 and the rules framed thereunder

The Establishments are required to be registered under the provisions of local shops and establishments
legislation applicable in the relevant states. The objective of the act, irrespective of the state, is to regulate

the working and employment conditions of worker employed in shops and establishments including

143
HISTORY AND CERTAIN CORPORATE MATTERS
History and background

Our Company was originally incorporated as “Likhitha Constructions Private Limited” on August 06, 1998,
as a private limited company under the provisions of the Companies Act, 1956 pursuant to Certificate of
Incorporation issued by Registrar of Companies, Hyderabad, Andhra Pradesh. Our Company’s name was
subsequently changed from “Likhitha Constructions Private Limited” to “Likhitha Infrastructure Private
Limited” pursuant to the Fresh Certificate of Incorporation Consequent upon Change of Name dated March
30, 2011 issued by Registrar of Companies, Hyderabad, Andhra Pradesh to reflect the business activities of
the Company more accurately. Our Company was converted into a public limited company pursuant to
shareholders resolution passed at the Extra-Ordinary General Meeting of our Company held on January 11,
2019 and the name of our Company was changed to “Likhitha Infrastructure Limited” and a Fresh Certificate
of Incorporation dated February 12, 2019 was issued by the Registrar of Companies, Hyderabad, Telangana.
The Corporate Identification Number of our Company is U45200TG1998PLC029911.

Corporate profile of our Company

For information on our Company’s business profile, activities, services and managerial competence, please
refer to the chapters titled “Our Management”, “Our Business” and “Industry Overview” beginning on pages
150, 114 and 97, respectively of this Prospectus.

Changes in the Registered Office of our Company since incorporation

Currently, the registered office of our Company is situated at Flat No. 701, Plot No. 8-3-940 and 8-3-940/A.
to E, Tirumala Shah Residency, Yellareddy Guda, Ameerpet, Hyderabad-500073, Telangana.

Except as disclosed below, there have been no other changes in the registered office of our Company since
the date of incorporation:

 

BS et CEC

 

ema ent

Incorporation Flat No. 202, Sree Apartments, Srinivasa Nagar West, -
Ameerpet Hyderabad-500 038, Andhra Pradesh, India.

 

August 14, 2012 Flat No.701, Plot No 8-3-940 and 8-3-940/A to E, Tirumala | Administrative
Shah Residency, Yellareddy Guda, Ameerpet, Hyderabad- Convenience
500 073, Telangana, India.

 

 

 

 

Key events and milestones

 

 

 

 

 

 

 

 

 

 

1998 Incorporated as “Likhitha Constructions Private Limited”

2006 Our first City Gas Distribution pipeline project

2011 Change in name from “Likhitha Constructions Private Limited” to “Likhitha
Infrastructure Private Limited”

2013 Our first Cross Country Pipeline project with associated facilities

2014 Our first Operations & Maintenance Services project

2015 Our First Cross Country Pipeline project ranging 50 Kms single stretch

2017 First Operations & Maintenance Services project above Rs. 5000 Lakhs in
value

2017 Our first Cross Country Pipeline project above Rs. 5000 Lakhs in value and
stretching beyond 125 Kms

2017 Our annual revenues from operations crossing Rs. 10,000 Lakhs for the first
time in fiscal 2016-17

 

 

 

145
commercial establishments. The Act provides for fixation of working hours, rest interval, overtime,
holidays, leave, termination of service, maintenance of shops and establishments and other rights and
obligations of the employers and employees. The Telangana Shops and Establishments Act,1988 governs
the Company's shops and establishment in Telangana.

INTELLECTUAL PROPERTY LAWS
The Trademarks Act, 1999 (“Trademarks Act”)

Under the Trademarks Act, a trademark is a mark capable of being represented graphically and which is
capable of distinguishing the goods or services of one person from those of others used in relation to
goods and services to indicate a connection in the course of trade between the goods and some person
having the right as proprietor to use the mark. A ‘mark’ may consist of a device, brand, heading, label,
ticket, name signature, word, letter, numeral, shape of goods, packaging or combination of colors or any
combination thereof. Section 18 of the Trademarks Act requires that any person claiming to be the
proprietor of a trade mark used or proposed to be used by him, must apply for registration in writing to
the registrar of trademarks. The trademark, once applied for and which is accepted by the Registrar of
Trademarks (“the Registrar”), is to be advertised in the trademarks journal by the Registrar. Oppositions,
if any, are invited and, after satisfactory adjudications of the same, a certificate of registration is issued
by the Registrar. The right to use the mark can be exercised either by the registered proprietor or a
registered user. The present term of registration of a trademark is 10 (ten) years, which may be renewed
for similar periods on payment of a prescribed renewal fee.

OTHER REGULATIONS

Apart from the aforementioned enactments which is inclusive in nature and not exhaustive -general
laws such as the Transfer of Property Act, 1882, Registration Act, 1908, Indian Contract Act 1872,
Specific Relief Act 1963, Negotiable Instrument Act 1881, Information Technology Act, 2000, etc. are
also applicable to our Company.

Regulations regarding foreign investment

Foreign investment in Indian securities is governed by the provisions of the Foreign Exchange
Management Act, 1999 (“FEMA”) read with the applicable FEMA Rules. FEMA replaced the
erstwhile Foreign Exchange Regulation Act, 1973. Foreign investment is permitted (except in the
prohibited sectors) in Indian companies, either through the automatic route or the government approval
route, depending upon the sector in which foreign investment is sought to be made.

144
 

Key Events / Milestone / Achievements

 

 

 

2018 Our first Cross Country Pipeline project above Rs. 10000 Lakhs in value

2019 Conversion of our Company from private limited company to public limited
company.

2019 Completed project of laying of 10" x 69 Kms pipeline & associated works
from Mothihari, Bihar, India to Amlekhganj, Nepal

 

 

 

Awards, accreditation & recognitions:

 
   

rutile}
International Certificate of IsO November November

 

 

 

 

1.
Certification compliance 9001:2015 23, 2018 13, 2021
Services Private
Limited
2 Engineers India Certificate of - - -
Limited achievements
Be All India Outstanding - December -
Achievers achievement 02, 2017
Foundation award for
construction &
design
4, Nepal Oil Certificate of - September -
Corporation appreciation 20, 2019
Limited

 

 

 

 

 

 

Main objects of our Company

The main objects of our Company as set forth in the Memorandum of Association of our Company are as
follows:

To carry on the business of Civil, Mechanical, Electrical, Electronic Engineers, Agricultural Engineers,
Construction Engineers and Engineers in all branches of work whatsoever known to engineering, to
undertake and execute construction works, projects, erectors, mechanics, founders, welders, fabricators,
manufacturers of machinery and appliances or accessories thereof and to deal in all kinds of machinery
instruments, implements, connected with the above business.

To carry on the business of consulting engineers on all matters and problems of industries or business
connecting to Civil, Mechanical, Electrical, Electronic or any other branch of engineering relating to
setting up, organization management, expansion and to enter into any arrangement by way of a turnkey
project involving supply of technical, civil, financial, administrative, plant and merchandise,
information, knowledge and experience and as such, undertake for and on behalf of a client to set up
any plant or project in or outside India.

To carry on and to construct or undertake or execute pipeline projects, pipeline networking with or
without galvanized iron connections and pipeline project engineering in all branches of work
whatsoever known to pipeline projects including but not limited to cross country pipeline projects
within India or abroad.

To carry on the business of designing, laying and construction of plant and terminal piping’s,
Compressed Natural Gas (CNG) stations and other civil constructions, along with all associated
electrical, instrumentation, telecom, fire and gas detection system and other related works.

146

 
5. To carry on and to take up the business of builders, contractors, sub-contractors, Engineers, manpower
consultants, structural and electrical, architects, surveyors, designers, sanitary, plumber, electrician and
improve work, develop, erect, control, manage, alter, repair, pull down, restore including roads, bridges,
dams, canals, warehouse, power generations and electrical works, water works, drainage and sewerage
works and buildings.

6. To carry on and to take up all or any of the business of proprietors of lands, flats, resorts, cottages,
dwelling houses, shops offices, industrial estates, commercial complexes and for these purpose to
purchase, take on lease or otherwise acquire and hold any lands or buildings of any tenure or
descriptions wherever suitable or rights or interests there in or there with to prepare building rates and
to construct, reconstruct, pull down, alter, improve, decorate and maintain flats, resorts, cottages,
dwelling houses, rest houses, shops, offices, buildings, industrial estates, workshops, works and
conveniences to lay out roads, pleasure gardens, health club, and recreation grounds or otherwise
improve or develop the land or any part thereof for any period whether belonging to the Company or
not and on such conditions as the Company shall think fit.

Changes in Memorandum of Association:

Except as stated below, there has been no change in the Memorandum of Association of our Company, in the
last ten years:

PEC Effective Date

Pai evemu meteors Shareholders i

 

Meeting Pavilions
1. Alteration of the Capital Clause:
Increase in Authorized share capital of our Company
from Rs. 20,00,000 comprising of 2,00,000 Equity
Shares of Rs.10 each to Rs.50,00,000 comprising of 5,00
000 Equity Shares of Rs.10 each

March 31, 2010 March 31, 2010

 

2° Alteration of the Capital Clause:
Increase in Authorized share capital of our Company

from Rs.50,00,000 comprising of 5,00,000 Equity Shares

 

of Rs.10 each to Rs.5,00,00,000 comprising of 50,00,000 Decemper 20, Decemper 20,
Equity Shares of Rs.10 each
3. Alteration of the Name Clause
Change in name from ‘Likhitha Construction Private
December 20,

Limited’ to ‘Likhitha Infrastructure Private Limited’ March 30, 2011

2010

 

4. Alteration of the Main Objects Clause:
Clause III(B) of the MOA was amended to add new sub-

clause (19) December 30, December 30,

2016 2016

 

5. Alteration of the Name Clause:
Conversion from Private Limited Company into Public

Limited Company January 11, 2019 February 12,

2019

 

 

 

 

6. Alteration of the Registered Office Clause

 

 

 

147
DEY Effective Date

Particulars of Amendment Shareholders i

 

Meeting PAN
Change in state of Registered office from Andhra
Pradesh to Telangana pursuant to the Andhra Pradesh | January 11, 2019
Reorganization Act, 2014 January 11,
2019

 

7. Alteration of the Objects Clause:

Amendments to Clauses III(A) & (B) and deletion of
Clause (C) of the MOA

 

8. Alteration of the Capital Clause:
Increase in Authorized share capital of our Company

from Rs.5,00,00,000 comprising of 50,00,000 Equity February 13, February 13,
Shares of Rs.10 each to Rs.20,00,00,000 comprising of 2019 2019
2,00,00,000 Equity Shares of Rs.10 each

 

 

 

 

 

 

Details regarding acquisition of business/undertakings, mergers, amalgamation, revaluation of assets
etc.

 

There are no mergers, amalgamation, revaluation of assets etc. with respect to our Company in the last 10
(ten) years.

Defaults or rescheduling of borrowing with financial institutions/banks

 

There have been no defaults or rescheduling of borrowings with any financial institutions/banks as on the
date of the Prospectus.

Number of shareholders of our Company

Our Company has 7 (Seven) shareholders as on the date of filing of this Prospectus.
Shareholders Agreement

Our Company has not entered into any shareholders agreements as on the date of this Prospectus.

Other Agreements

Our Company has not entered into any other agreements, other than the agreements entered into by it in ordinary
course of its business, as on the date of this Prospectus.

Strategic and financial partnerships

Our Company does not have any strategic or financial partners.

Details of holding company

As on the date of this Prospectus, our Company does not have any holding company.

148
Details of subsidiary or associate company

As on the date of this Prospectus, our Company does not have any subsidiary or associate company.

Time and cost overruns in setting-up projects

The industry in which our Company operates is prone to time and cost over-runs. There have been instances
of time over-run in the execution of our projects. There have however been no instances of cost overrun in
the execution of our projects. For further details with respect to time and cost over-run in execution of our
projects please refer to “Risk Factors” on page 31 of this Prospectus.

Launch of key products or services, entry or exit in new geographies

For details of launch of key products or services, entry in new geographies or exit from existing markets,
please refer to the chapter “Our Business” on page 114 of this Prospectus.

Lock-out or strikes

There have been no lock-outs or strikes in our Company since inception.

  

Changes in the activities of our Company during the last five years

There has been no change in the business activities of our Company during the last five years from the date

of this Prospectus which may have had a material effect on the profits and loss account of our Company,
including discontinuance of lines of business, loss of agencies or markets and similar factors.

Changes in the management

For details of change in Management, please see chapter titled “Our Management” on page no. 150 of the
Prospectus.

Changes in accounting policies in last three (3) years
There have been no changes in accounting policies of our Company in last three years.

Guarantees provided by our Promoters

Save and except as disclosed in this Prospectus, our Promoters have not given any guarantees to third parties
that are outstanding as on the date of filing of this Prospectus.

149
OUR MANAGEMENT
Our Company currently has seven directors on its Board, including three independent directors and two women
directors. For details on the strength of our Board, as permitted and required under the Articles of Association,
see “Main Provisions of Articles of Association” on page 307 of this Prospectus.

Our Board

The following table sets forth details regarding our Board of Directors as on the date of filing of this Prospectus:

ion, Period of

 

rth and DIN

Mr. Sivasankara Parameshwara Kurup Pillai 67 Public Limited

(Companies:
Designation: Chairman and Non-executive Independent
director = Nil
Address: Kottinatu Sankara Bhavanam, Erezha South, Private Limited
\Chettikulangara PO, Mavelikkara, Alappuzha, Kerala-690106, Companies:
India.

=" Nil

(Occupation: Professional
Foreign Companies:
[Date of Appointment: March 28, 2019

 

=" Nil
Period of Directorship: Director since March 28, 2019
ationality: Indian
[Date of expiration of the current term of office: Five years
‘ith effect from March 28, 2019
[Date of Birth: October 06, 1952
IDIN: 08401552
Mr. Srinivasa Rao Gaddipati 56 Public Limited
(Companies:
Designation: Managing Director
=" Nil
(Address: 8-3-940, Flat No. 405, Tirumala Apartment,
[Yellareddy Guda, Ameerpet, Hyderabad-500073, Telangana, [Private Limited
India. \Companies:
(Occupation: Business =" Veriedge Technologies

Private Limited
[Date of Original Appointment: August 06, 1998
[Not for Profit Companies:
[Date of Re-appointment: February 12, 2019
=" GSR Ujwala Foundation
Period of Directorship: Director since August 06, 1998
(Foreign Companies:

 

 

 

 

tionality: Indian

 

150
Occupation, Period of

Term, Date of Birth and DIN

 

 

 

* Nil
[Date of expiration of the current term of office: Three years
ith effect from February 12, 2019
[Date of Birth: January 01, 1964
DIN: 01710775
IMs. Likhitha Gaddipati 25 Public Limited
(Companies:
Designation: Non-executive director
=" Nil
(Address: HNO.8-3-940, Flat No.405, Tirumala Apartment,
[Yellareddy Guda, Ameerpet, Hyderabad-500073, Telangana, Private Limited
India. Companies:
(Occupation: Professional = Nil
[Date of Original Appointment: January 08, 2018 Foreign Companies:
[Date of Re-designation: December 23, 2019 = Nil
Period of Directorship: Director since January 08, 2018
ationality: Indian
[Date of expiration of the current term of office: Liable to retire
by rotation.
[Date of Birth: November 17, 1994
DIN: 07341087
Mrs. Sri Lakshmi Gaddipati 52 Public Limited
(Companies:
Designation: Non-executive director
= Nil

(Address: 8-3-940, Flat No. 405, Tirumala Apartment,
[Yellareddy Guda, Ameerpet, Hyderabad-500073, Telangana,
India.

(Occupation: Business

[Date of Original Appointment: August 06, 1998

[Date of Re-designation: March 27, 2019

Period of Directorship: Director since August 06, 1998

tionality: Indian

[Date of expiration of the current term of office: Liable to retire
by rotation.

 

 

Private Limited
Companies:

="  Veriedge Technologies
Private Limited

Foreign Companies:

=" Nil

 

 

151

 
Occupation, Period of

Term, Date of Birth and DIN

 

[Date of Birth: August 01, 1968

DIN: 02250598

 

 

(Address: Flat No. 104, A-block, Siddam Setty Tower, Jawahar
agar, Near RTC X Roads, Hyderabad-500020, Telangana,
India.

(Occupation: Professional

[Date of Appointment: March 28, 2019

Period of Directorship: Director since March 28, 2019

ationality: Indian

[Date of expiration of the current term of office: Five years
‘ith effect from March 28, 2019

[Date of Birth: June 10, 1950

IDIN: 08388354

 

 

Mr. Kutumba Rao Gaddipati 54 Public Limited
(Companies:
Designation: Non-executive director
=" Nil
(Address: 2287, Rosemount LN, San Ramon, CA 94582,
\California, US. [Private Limited
\Companies:
(Occupation: Professional
= Nil
[Date of Appointment: August 16, 1998
(Foreign Companies:
Period of Directorship: Director since August 16, 1998
! Nil
tionality: United States of America
[Date of expiration of the current term of office: Liable to retire
by rotation
[Date of Birth: July 01, 1966
IDIN: 02333387
Mr. Talpa Sai Venkata Sesha Munupalle 70 Public Limited
(Companies:
Designation: Non-executive and Independent director
=" Nil

Private Limited
Companies:

=" Nil
Foreign Companies:

= Nil

 

 

152

 
ion, Period of

 

irth and DIN
Mr. Jnanindra Kumar Dhar 71 Public Limited
(Companies:
Designation: Non-executive and Independent director
=" Nil
(Address: L-3/8 DLF Phase-II Gurgaon- 122002, Haryana,
India Private Limited
\Companies:
(Occupation: Professional
=" Nil

[Date of Appointment: June 01, 2019
(Foreign Companies:
Period of Directorship: Director since June 01, 2019
=" Nil
tionality: Indian

[Date of expiration of the current term of office: Five years
ith effect from June 01, 2019

[Date of Birth: July 15, 1949

 

 

 

 

[DIN: 06861830

 

Brief profiles of our Directors

Mr. Sivasankara Parameshwara Kurup Pillai is the Chairman and Independent Director of our Company.
He has been associated with our Company since March 28, 2019. He has done AMIE Mech from Human
Resource Development Institute (HRDI) in the year 1972 and has a professional qualification in American
Society for Non-destructive Testing (ASNT) Level 3 (Re-validation pending). He has worked with Newton
Engineering and Construction Co. Private Ltd. under different capacities, last one being as its Deputy General
Manager. He has the experience of executing many projects in different parts of India and involving
construction of 1000 Kms of carbon steel pipeline of various diameter, 3500 Kms of MDPE pipeline along
with pumping stations, terminal stations, etc., at Gujarat, Andhra Pradesh, Uttar Pradesh, Delhi and Madhya
Pradesh. He had also served as a Vice-President with Chemie-Tech Projects Ltd. and had handled activities
relating to design & construction of fuel oil refinery plant at Bahrain. Since 2006, he is providing consultancy
services in construction of pipeline systems and related field.

Mr. Srinivasa Rao Gaddipati, is the Managing Director of our Company and has been associated with our
Company since inception. He is having vast technical experience of over three decades in the Oil & Gas
infrastructure business and is the guiding force behind the successful execution of our business strategies over
the years. Our Company has grown during the past under his leadership and guidance. In the year 1998, he
founded our Company to facilitate further growth and development of the business. He has exposure in all
business verticals and is engaged in supervision & conduct of business of the Company, along with a team of
senior management personnel, who assist him in carrying out his activities, subject to the overall supervision
& control of the Board of Directors.

Ms. Likhitha Gaddipati is the Non- executive Director of our Company and has been associated with our
Company since January 08, 2018. She has done her B. Tech in Computer Science and Engineering from SRM
University, Tamil Nadu (Now known as Sri Ramaswamy Memorial Institute of Science and Technology) and
her masters in information technology and management, specialization: data management from Illinois

153
Mr. Kutumba Rao Gaddipati and Mrs. Sri Lakshmi
Gaddipati

   

Name Relationship
Mr. Kutumba Rao Gaddipati is the brother in law
of Mrs. Sri Lakshmi Gaddipati

 

 

Mr.
Gaddipati

Kutumba Rao Gaddipati and Ms. Likhitha | Mr. Kutumba Rao Gaddipati is the paternal

uncle of Ms. Likhitha Gaddipati

 

 

 

Remuneration details of our Directors

Remuneration details of our Executive Directors

1.

Mr. Srinivasa Rao Gaddipati is the Promoter and Managing Director of our Company and was re-appointed
as the Managing Director pursuant to the shareholders resolution dated February 13, 2019 for a period of
three years commencing from February 12, 2019 till February 11, 2022. His terms of appointment have
been laid down under the agreement dated February 13, 2019 entered into between him and our Company.
The terms of his remuneration have been revised with effect from April 01, 2019 and the same have been
approved by the shareholders at their meeting held on September 10, 2019. The significant terms of his
remuneration are set out below:

Particulars Remuneration (Rs.)

Salary Rs.720.00 Lakhs p.a.*
Benefits in kind Chauffeur driven car, driver, mobile and telephone at
residence to carry out his responsibilities.

 

 

Re-appointed as a Managing Director

February 12, 2019

 

Remuneration paid for F.Y. 2018-19

Rs. 520.00 Lakhs p.a.

 

Remuneration paid for F.Y. 2019-20

Rs. 360.00 Lakhs p.a.

 

Remuneration paid or payable by
subsidiary or associate companies

 

 

Not applicable as the Company does not have any
subsidiary or associate companies

 

 

*He is also eligible for provident fund, leave encashment, gratuity as per the policy of the Company
which has not be considered as part of the remuneration.

2. Mrs. Sri Lakshmi Gaddipati is the Non-executive Director of our Company. She was re-designated as
Non-executive pursuant to Board resolution dated March 27, 2019 prior to which she was acting as an

Executive Director of our Company and was paid the following remuneration in the last two Financial

years:

Particulars Remuneration (Rs.)

Remuneration paid for F.Y. 2018-19

Rs. 200.00 Lakhs p.a.

 

Remuneration paid for F.Y. 2019-20

Nil

 

Remuneration paid or payable by
subsidiary or associate companies

 

 

Not applicable as the Company does not have any
subsidiary or associate companies

 

3. Ms. Likhitha Gaddipati is a Non-executive Director of our Company. She was re-designated from
executive to non-executive pursuant to Board resolution dated December 23, 2019 prior to which she
was acting as an Executive Director of our Company and was paid the following remuneration in the

last two Financial years:

Particulars Remuneration (Rs.)

155

 
Institute of Technology, Chicago, Illinois, USA. She had worked with PriceWaterhouse Coopers, Chicago,
Illinois, USA as associate- advisory consultant for the period August 2018 to June 2019.

Mrs. Sri Lakshmi Gaddipati is the Non- executive Director of our Company and has been associated with
our Company since inception. She has significant experience in the overall administration of our Company.
She has played a crucial role and provided necessary support in the growth of our Company.

Mr. Kutumba Rao Gaddipati is the Non- Executive Director of our Company and has been associated with
our Company since August 16, 1998. Mr. Kutumba has done his Masters’ of Science in Electronics & Control
from the Birla Institute of Technologies and Science, Pilani, Rajasthan. He is having vast experience in the
field of engineering management and has worked with Indian Space Research Organization, Bangalore,
(ISRO) as Scientist/Engineer; with Sun Electronics Technologies Limited, Bangalore as Manager R&D-IC
Design; with Wipro Technologies, Bangalore as Specialist-IC/ System Design; with Audio Video Millenium,
Inc., Santa Clara, California, USA as Director-IC Design Engineering; and with Broadcom Limited, Santa
Clara, California, USA as Senior Manager R&D-IC Design in the past. Currently, he is associated with
Marvell Semiconductor, Santa Clara California, USA as Director- IC Design Engineering. His vast knowledge
and experience in information technology helps him contribute his concepts & skills in developing our IT
infrastructure for easy operations & management at both site and office.

Mr. Talpa Sai Venkata Sesha Munupalle is the Non-Executive and Independent Director of our Company.
He is associated with our Company since March 28, 2019. He has done his graduation from Faculty of
Commerce, Andhra University and is an associate member of Institute of Chartered Accountants of India
(ICAI). He had worked with HMT Bearings Ltd. and retired as its Joint General Manager Finance in the year
2008. He presently holds Certificate of Practice as Chartered Accountant and has been practicing since August
2008. He is the proprietor of M/s. M V S T Sai & Co., Chartered Accountants.

Mr. Jnanindra Kumar Dhar is the Non-Executive and Independent Director of our Company. He is
associated with our Company since June 01, 2019. He has done his B.Sc. in Electrical Engineering in the year
1972 from the National Institute of Technology, Calicut and has also done Advanced Control System
certification course from the IIT, Delhi in the year 1976. He is having vast experience in the field of business
management, engineering management, operations management, country management, project engineering etc.
Prior to being appointed as our Company’s director, he was associated with the Indian operations of Wood
Group PSN India Private Limited, of Scotland based Wood Group, from October 2009 till December 2016 as
Country Manager and Director.

Family Relationships between the Directors

None of the directors are related to each other in terms of the definition of relative’ under Section 2 (77) of
the Companies Act, except as set out below:

Name Relationship
Mrs. Sri Lakshmi Gaddipati and Mr. Srinivasa Rao | Mrs. Sri Lakshmi Gaddipati is the wife of Mr.
Gaddipati Srinivasa Rao Gaddipati.

 

Mr. Kutumba Rao Gaddipati and Mr. Srinivasa Rao | Mr. Kutumba Rao Gaddipati is the brother of
Gaddipati. Mr. Srinivasa Rao Gaddipati.

 

Mrs. Sri Lakshmi Gaddipati, Mr. Srinivasa Rao | Ms. Likhitha Gaddipati is the daughter of Mrs.
Gaddipati and Ms. Likhitha Gaddipati Sri Lakshmi Gaddipati and Mr. Srinivasa Rao
Gaddipati

 

 

 

 

154
 

 

 

 

 

Remuneration paid for F.Y. 2018-19 NIL

Remuneration paid for F.Y. 2019-20 NIL

Remuneration paid or payable by Not applicable as the Company does not have any
subsidiary or associate companies subsidiary or associate companies

 

 

Remuneration details of our non-executive directors and independent directors

Pursuant to the resolution of our Board dated March 28, 2019, our non-executive directors and independent
directors are entitled to receive sitting fees of Rs. 10,000/- for attending each meeting of our Board or a
Committee, as may be decided by the Board. Our Company has not paid any sitting fees to our non-executive
directors and independent directors in the Financial Year 2018-19.

The details of remuneration paid to our Non-Executive Directors and Independent Directors, other than Mrs.
Sri Lakshmi Gaddipati, during Financial Year 2019-20 are as follows:

 

 

 

 

Name of the Director Sitting Fees (Rs.)
Mr. Sivasankara Parameshwara Kurup Pillai Rs. 1,90,000

Mr. Talpa Sai Venkata Sesha Munupalle Rs. 20,000

Mr. Jnanindra Kumar Dhar Rs. 30,000

 

 

 

 

Payment or benefits to Directors, KMPs or officers of our Company

Except as stated under “Remuneration details of our executive directors” and “Remuneration details of our
non-executive directors and independent directors” and except as disclosed below, no amount or benefit has
been paid or given in the last two (2) years preceding the date of this Prospectus to any Directors of our
Company:

a) Our director, Ms. Likhitha Gaddipati has been paid Rs. 19.00 Lakhs in the FY FY 2018-19 for
rendering professional services to the Company; and
b) Rent payable to our directors as follows:

 

 

 

 

Name of the Director Amount Payable (in Financial Year Purpose
Rs.)

Mr. Srinivas — Rao | 25.92 Lakhs 2018-19 for letting out premises

Gaddipati to be used by the
Company

Mr. Kutumba Rao | 0.71 Lakhs 2019-20 for letting out premises

Gaddipati to be used by the
Company as its
registered office

 

 

 

 

 

For further details, please refer to “Annexure VI, Note 31(G) — Related Party Transaction” under the chapter
“Financial Information” on page 179 of this Prospectus.

Bonus or profit-sharing plan for the directors and Key Managerial Personnel (“KMP”)

Our Company does not have a bonus or profit-sharing plan for our directors and KMPs.

156
Shareholding of our directors

As per our Articles of Association, our Directors are not required to hold any qualification shares. Except as
mentioned below, none of the directors hold equity shares in our Company as on the date of this Prospectus:

 

 

 

 

Particulars Pre-Issue Post-Issue
Number of bocce img bo geo
Bieta) (CA oii Shares (%) holding
Mr. Srinivasa Rao 1,42,51,250 97.44 1,42,51,250 72.25
Gaddipati
Mrs. Sri Lakshmi 3,65,625 2.50 3,65,625 1.85
Gaddipati
Ms. Likhitha Gaddipati 1,625 0.01 1,625 0.01
Total 1,46,18,500 99.96 1,46,18,500 74.11

 

 

 

 

 

 

 

Service contracts with directors

There are no service contracts entered into with any of our directors which provide for any benefit upon
termination of employment.

Arrangements with major shareholders, customers, suppliers or others

There are no arrangements or understanding between major shareholders, customers, suppliers or others
pursuant to which any of the directors were selected as a director or a member of a senior management as on
the date of this Prospectus.

Appointment of relatives of our directors to any office or place of profit

Other than as disclosed in this Prospectus, none of the relatives of our directors currently hold any office or
place of profit in our Company.

Interest of our directors
Our directors are interested in our Company in the following manner:
(a) Our directors namely, Mr. Srinivasa Rao Gaddipati, Ms. Likhitha Gaddipati, Mrs. Sri Lakshmi
Gaddipati and Mr. Kutumbha Rao Gaddipati, being members of the promoter and promoter group of

our Company, may be deemed to be interested in the promotion of our Company.

(b

Our directors may be deemed as interested in our Company to the extent of the equity shares held by
them or any equity shares that may be subscribed by or allotted to them from time to time. For further
details, please refer to "Our Management — Shareholding of our directors " and “Capital Structure"
beginning on pages 150 and 71 respectively of this Prospectus. Our director may also be deemed to be
interested to the extent of any dividend, if any, payable and other distributions in respect of the equity
shares held by them.

(c) Our non-executive directors and independent directors may be deemed to be interested in our Company
to the extent of fees payable to them for attending meetings of our Board or committees thereof and

reimbursement of expenses payable pursuant to our Articles of Association.

(d) Our executive director may be deemed to be interested in our Company to the extent of remuneration
payable to him and reimbursement of expenses payable pursuant to our Articles of Association.

157
(e) Mr. Srinivasa Rao Gaddipati, Promoter and Managing Director, and Mr. Kutumba Rao Gaddipati and
Mrs. Sri Lakshmi Gaddipati have extended personal guarantees to secure the facilities availed by our
Company and may deemed to be interested to that extent;

(f) All the directors may be deemed to be interested in the contracts, agreements/arrangements entered into
or to be entered into by our Company with any company in which they hold directorships or
shareholdings as declared in their respective declarations;

(g) Our directors, Mr. Srinivasa Rao Gaddipati and Mr. Kutumba Rao Gaddipati shall be deemed to be
interested up to the extent of the rent received by them in respect of the premises given on rent/ lease/
license to our Company;

(h) Our director, Ms. Likhitha Gaddipati, shall be deemed to be interested to the extent of professional fees/
charges paid to her by our Company.

No sum has been paid or agreed to be paid to our Directors or to firms or companies in which they may be
members, in cash or shares or otherwise by any person either to induce him/ her to become, or to qualify him/
her as, a Director, or otherwise for services rendered by him/ her or by such firm or company, in connection
with the promotion or formation of our Company.

Except as disclosed above, our directors have no interest in any property acquired or proposed to be acquired
of our Company or by our Company or in the promotion or formation of the Company.

None of our Directors have availed any loan from our Company. None of the beneficiaries of loans, advances
and sundry debtors are related to the Directors of our Company.

Director’s association with the securities market
We confirm that none of our directors are associated with the securities market.
Confirmations

None of the abovementioned Directors are debarred from accessing the capital market by the SEBI nor are they
promoter or director of any other company which is debarred from accessing the capital market by SEBI.

None of the abovementioned Directors are on the RBI list of Wilful Defaulters as on the date of filing of this
Prospectus.

None of the abovementioned Directors have been declared a Fugitive Economic Offender under section 12 of
the Fugitive Economic Offender Act, 2018.

Our Directors are not and were not, during the five years preceding the date of this Prospectus, been on the
board of any listed company whose shares have been or were suspended from being traded on the BSE or NSE

during their term of directorship in such company.

None of our Directors were or are directors on the board of listed companies which have been or were delisted
from any stock exchange(s) during their term of directorship in such company.

Changes in our Board during the last three years

The changes in our Board during the three years immediately preceding the date of this Prospectus are as
follows:

158
governance including constitution of the Board and committees thereof. The corporate governance framework
is based on an effective independent Board, separation of the board’s supervisory role from the executive
management team and constitution of the Board committees, each as required under law.

Our Board of Directors is constituted in compliance with the Companies Act, 2013 and the SEBI LODR
Regulations. The Board functions either as a full board or through various committees constituted to oversee
specific functions. Our executive management provides our Board detailed reports on its performance
periodically.

Currently, our Board has seven (7) directors. In compliance with the requirements of the Companies Act &
Regulation 17 of the SEBI LODR Regulations, we have one (1) executive director as the Managing Director of
our Company, three (3) independent directors, one of whom is also the Chairman of our Company and three (3)
non- executive directors on our Board. Two of our directors are women directors on our Board.

Committee of the Board in accordance with the SEBI LODR Regulations and other applicable laws:

In terms of the SEBI LODR Regulations and the provisions of the Companies Act, 2013 or other applicable
laws, our Company has constituted the following Board-level committees:

(i) Audit Committee;

(ii) Nomination and Remuneration Committee;
(iii) Stakeholders’ Relationship Committee;

(iv) Corporate Social Responsibility Committee.

Audit Committee

The Audit Committee currently consists of:

 

 

 

 

Name Position in the committee SDSL
Mr. Talpa Sai Venkata Sesha Chairman Non-executive & Independent
Munupalle director
Mr. Sivasankara Member Non-executive & Independent
Parameshwara Kurup Pillai director
Mr. Srinivasa Rao Gaddipati Member Managing Director

 

 

 

 

 

Our Audit Committee was constituted by a resolution of our Board dated June 01, 2019 in compliance with the
Companies Act, 2013 and SEBI LODR Regulations. The role of the Audit Committee shall be in accordance
with section 177 of the Companies Act, 2013 and as per Regulation 18 and Part C of Schedule II of SEBI
LODR Regulations. The terms of reference of the Audit Committee include the following:

@ oversee our Company’s financial reporting process and the disclosure of its financial information to
ensure that the financial statement is correct, sufficient and credible;
(ii) recommendation for appointment, remuneration and terms of appointment of auditors of our Company;

(iii) approve payment to statutory auditors for any other services rendered by them;
(iv) review with the management, the annual financial statements and auditor's report thereon before
submission to the Board for approval, with particular reference to:
(a) matters required to be included in the Director’s Responsibility Statement to be included in the
board of directors’ report in terms of clause (c) of sub-Section 3 of Section 134 of the
Companies Act, 2013;
(b) changes, if any, in accounting policies and practices and reasons for the same;
( major accounting entries involving estimates based on the exercise of judgment by the
management of our Company;

160
   

 

 

 

 

 

 

 

 

 

 

Name of Director Date of change ATE
Ms. Likhitha Gaddipati January 08, 2018 Appointment as Additional Non-
Executive Director

Ms. Likhitha Gaddipati September 29, 2018 Regularization as Non-executive
Director

Mr. Srinivasa Rao Gaddipati February 12, 2019 Reappointment as Managing
Director

Mrs. Sri Lakshmi Rao Gaddipati March 27, 2019 Re-designation as Non-executive
Director

Mr. Venkata Ramamohana Rao March 28, 2019 Appointment as Independent

Thottempudi Director

Mr.Sivasankara Parameshwara March 28, 2019 Appointment as Independent

Kurup Pillai Director

Mr. Talpa Sai Venkata Sesha March 28, 2019 Appointment as Independent

Munupalle Director

Mr. Venkata Ramamohana Rao March 31, 2019 Resignation as Independent Director

Thottempudi

Mr. Jnanindra Kumar Dhar June 01, 2019 Appointed as Independent Director

Ms. Likhitha Gaddipati September 10, 2019 Re-designation as Whole-time
Director

Ms. Likhitha Gaddipati December 23, 2019 Re-designation as Non-executive
Director

 

 

 

 

 

Borrowing Powers

The Articles, subject to the provisions of the Companies Act, 2013, authorize the Board to raise, borrow or
secure the payment of any sum or sums of money for the purposes of our Company. The shareholders have,
pursuant to a resolution passed at the extra ordinary general meeting held on February 13, 2019 authorized
the Board to borrow, enhance and grant facility for the general, working capital and such other corporate
purposes, from time to time as the board may think fit, any sum or sums of money which together with the
monies already borrowed by the Company (apart from temporary loans obtained from the Company’s Bankers
in the ordinary course of business) may exceed the aggregate of the paid-up share capital of the Company and
its free reserves that is to say reserves not set apart for any specific purpose, provided that the total amount of
money so borrowed shall not at any time exceed the limit of Rs.20000.00 Lakhs on such terms and conditions
as the Board may deem fit.

Further the Board has been authorized to mortgage/charge/hypothecate all or any of the immoveable or
moveable properties of the Company including under hire purchase scheme both present and future and/or
whole or substantially the whole of the undertaking or undertakings of the Company on such terms and
conditions as the Board may deem fit, for securing any loans and/or advances already obtained or that may be
obtained from bank(s), financial institution(s), others, entities or any combination thereof from time to time
and at any time and in one or more tranches. However, the total underlying charge created/to be created shall
not exceed Rs.20000.00 Lakhs at any time.

Corporate Governance

The provisions of Listing Agreement to be entered into with the Stock Exchange(s) and the applicable
regulations of SEBI LODR Regulations with respect to corporate governance will be applicable to us
immediately upon the listing of our Equity Shares with the Stock Exchanges. We believe we are in compliance
with the requirements of the applicable regulations, including the Listing Agreement with Stock Exchange(s),
the SEBI LODR Regulations, the SEBI ICDR Regulations and the Companies Act in respect of corporate

159
(v)

(vii)

(viii)

(ix)

(x)

(xi)
(xii)
(xiii)
(xiv)
(xv)
(xvi)
(xvii)
(xviii)
(xix)
(xx)
(xxi)
(xxii)

(xxiii)

(xxiv)

(xxv)

(d) significant adjustments made in the financial statements arising out of audit findings;
(e) compliance with listing and other legal requirements relating to financial statements;
() disclosure of any related party transactions; and

(g) modified opinion(s) in the draft audit report.

review, with the management, the quarterly and any other partial year- period financial statements
before submission to the board of directors for their approval;

review, with the management, the statement of uses / application of funds raised through an issue
(public issue, rights issue, preferential issue, etc.), the statement of funds utilised for purposes other
than those stated in the offer document / prospectus / notice and the report submitted by the monitoring
agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate
recommendations to our board of directors to take up steps in this matter;

review and monitor the auditor’s independence and performance, and effectiveness of audit process;
subject to and conditional upon approval of our Board, approval of related party transactions or
subsequent modifications thereto. Such approval can be in the form of omnibus approval of related
party transactions, subject to conditions not inconsistent with the conditions specified in Regulation
23(2) and Regulation 23(3) of the SEBI LODR Regulations;

subject to review by our Board, review on quarterly basis, of related party transactions entered into by
our Company pursuant to each omnibus approval given pursuant to (viii) above;

Explanation: The term “related party transactions” shall have the same meaning as provided in Clause
2(zc) of the SEBI LODR Regulations and/or the applicable Accounting Standards and/or the
Companies Act, 2013.

scrutinize inter-corporate loans and investments;

valuation of undertakings or assets of our Company, wherever it is necessary;

evaluate internal financial controls and risk management systems;

review, with the management, performance of statutory and internal auditors, adequacy of the internal
checks and control systems;

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

discuss with internal auditors of any significant findings and follow up there on;

review the findings of any internal investigations by the internal auditors into matters where there is
suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting
the matter to the Board;

discuss with statutory auditors before the audit commences, about the nature and scope of audit as well
as post-audit discussion to ascertain any area of concern;

to look into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of non-payment of declared dividends) and creditors;

to review the functioning of the whistle blower mechanism;

oversee the procedures and processes established to attend to issues relating to the maintenance of
books of account, administration procedures, transactions and other matters having a bearing on the
financial position of our Company, whether raised by the auditors or by any other person;

act as a compliance committee to discuss the level of compliance in our Company and any associated
risks and to monitor and report to the Board on any significant compliance breaches;

approve the appointment of the Chief Financial Officer of our Company (i.e., the whole-time Finance
Director or any other person heading the finance function or discharging that function) after assessing
the qualifications, experience and background, etc. of the candidate;

oversee the vigil mechanism established by our Company and the chairman of audit committee shall
directly hear grievances of victimization of employees and directors, who use vigil mechanism to report
genuine concerns; and

carry out any other function as is mentioned in the terms of reference of the Audit Committee and any
other terms of reference as may be decided by the board of directors of our Company or

161
specified/provided under the Companies Act, 2013 or by the SEBI LODR Regulations or by any other
regulatory authority.

The Audit Committee shall mandatorily review the following information:

@
(i)

(iii)

(iv)
(v)

(vi)

management discussion and analysis of financial condition and results of operations;

statement of significant related party transactions (as defined by the Audit Committee), submitted by
the management of our Company;

management letters / letters of internal control weaknesses issued by the statutory auditors of our
Company;

internal audit reports relating to internal control weaknesses;

the appointment, removal and terms of remuneration of the chief internal auditor shall be subject to
review by the Audit Committee; and

statement of deviations in terms of the SEBI LODR Regulations:

. quarterly statement of deviation(s) including report of monitoring agency, if applicable,
submitted to stock exchange(s); and
“ annual statement of funds utilized for purposes other than those stated in the offer

document/prospectus/notice.

The powers of the Audit Committee are as mentioned below:

& oN eS

to investigate any activity within its terms of reference;

to seek information from any employee of our Company;

to obtain outside legal or other professional advice; and

to secure attendance of outsiders with relevant expertise, if it considers necessary.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee currently consists of:

 

 

 

Name PSO MUCH SOT
Mr. Jnanindra Kumar Dhar Chairman Non-executive & Independent
Director
Mr. Sivasankara Member Non-executive & Independent
Parameshwara Kurup Pillai Director
Mr. Talpa Sai Venkata Sesha Member Non-executive & Independent
Munupalle Director

 

 

 

 

The Nomination and Remuneration Committee was constituted by a resolution of our Board dated June 01,
2019, in compliance with Section 178 of the Companies Act, 2013 and as per Regulation 19 and Part D of
Schedule II of SEBI LODR Regulations.

The role of the Nomination and Remuneration shall be in accordance with Section 178 of the Companies Act
2013 and as per Regulation 19 and Part D of Schedule II of SEBI LODR Regulations The terms of reference
of the Nomination and Remuneration Committee include the following:

@

(ii)

formulating and recommending to the Board for its approval and also to review from time to time, a
nomination and remuneration policy or processes, as may be required pursuant to the provisions of the
Companies Act;

formulation of the criteria for determining qualifications, positive attributes and independence of a
director and recommend to the Board a policy relating to, the remuneration of the Directors, key
managerial personnel and other employees;

162
(iii) identifying persons who are qualified to become directors and persons who may be appointed in senior
management position in accordance with the criteria laid down, and recommend to the Board their
appointment and removal;

(iv) formulation of criteria for evaluation of performance of independent directors and the Board;

(v) recommending to the Board, qualifications, appointment, remuneration and removal of Directors, key
management personnel and persons in senior management positions in accordance with the nomination
and remuneration policy;

(vi) devising a policy on diversity of the Board;

(vii) carrying out performance evaluation of every Director in accordance with the nomination and
remuneration policy;

(viii) considering grant of stock options to eligible Directors, formulating detailed terms and conditions of
employee stock option schemes and administering and exercising superintendence over employee stock
option schemes;

(ix) engaging the services of any consultant/professional or other agency for the purpose of recommending
compensation structure/policy;

(x) | determining whether to extend or continue the term of appointment of the independent director, on the
basis of the report of performance evaluation of independent directors; and

(xi) performing such other activities as may be delegated by the Board or specified or provided under the
Companies Act, 2013 or the SEBI LODR Regulations, and the rules and regulations made thereunder
or other applicable law, including any amendments thereto as may be made from time to time.

Stakeholders’ Relationship Committee

The Stakeholders’ Relationship Committee currently comprises:

 

 

 

Name POST UMU CRTC Designation
Mr. Sivasankara Chairman Non-executive & Independent
Parameshwara Kurup Pillai Director
Ms. SriLakshmi Gaddipati Member Non- executive Director
Mr. Srinivasa Rao Gaddipati Member Managing Director

 

 

 

 

 

Our Stakeholders’ Relationship Committee was constituted by a resolution of our Board dated June 01, 2019,
in compliance with Section 178 of the Companies Act, 2013, and the SEBI LODR Regulation.

The Stakeholders Relationship Committee shall oversee all the matters pertaining to investors of our
Company. The scope and function of the Stakeholders Relationship Committee and its terms of reference shall
include the following:

(ji) Consider and resolve the grievances of security holders of the Company including Investors’
Complaints;
(ii) Allotment, transfer of shares including transmission, splitting of shares, changing joint holding into

single holding and vice versa, issue of duplicate shares in lien of those torn, destroyed, lost or defaced
or where the cages in the reverse for recording transfers have been fully utilized;

(iii) Redressing of shareholders and investor complaints such as non-receipt of declared dividend, annual
report, transfer of Equity Shares and issue of duplicate/split/consolidated share certificates;

(iv) Monitoring transfers, transmissions, dematerialization, re-materialization, splitting and consolidation
of Equity Shares and other securities issued by our Company, including review of cases for refusal of
transfer / transmission of shares and debentures;

(v) Reference to statutory and regulatory authorities regarding investor grievances;

(vi) To otherwise ensure proper and timely attendance and redressal of investor queries and grievances; and

(vii) To do all such acts, things or deeds as may be necessary or incidental to the exercise of the above
powers.

163
Corporate Social Responsibility Committee (“CSR Committee”)

The CSR Committee currently comprises of:

 

 

Name PSC MUCH CS BOTS
Mr. Srinivasa Rao Gaddipati Chairman Managing Director
Mrs. Sri Lakshmi Gaddipati Member Non-executive Director
Mr. Sivasankara Parameswara Member Non-executive & Independent
Kurup Pillai Director

 

 

 

 

 

The CSR Committee was constituted by a resolution of our Board dated February 09, 2017 and re-constituted
by a resolution of our Board dated June 01, 2019, in compliance with Section 135 of the Companies Act, 2013.

The CSR committee shall oversee proper execution of CSR activities of the Company for the sustainable
development of the society. The scope and function of the Corporate Social Responsibility Committee and its
terms of reference shall include the following:

@ specify the corporate social responsibility projects and programs to be undertaken during the year
(specifying modalities of execution in the areas/sectors chosen and implementation schedules for the
same);

(ii) formulate and recommend to the board, a corporate social responsibility policy indicating the activities

to be undertaken by our Company as specified in Schedule VII of the Companies Act, 2013, as may be
amended from time to time;

(iii) approve the corporate social responsibility policy of our Company;

(iv) recommend the amount of expenditure to be incurred on the corporate social responsibility activities;

(v) monitor the corporate social responsibility policy and corporate social responsibility activities from
time to time;

(vi) secure appropriate disclosures relating to corporate social responsibility as per the applicable provisions
of the Companies Act, 2013;

(vii) appraise the Board of corporate social responsibility activities;

(viii) specify reasons for failure (if any) for not spending the corporate social responsibility amount in the
Director’s Report; and

(ix) ensure that the expenses incurred on corporate social responsibility activities shall not be charged to
the policyholders’ account.

Other committees

In addition to the above committees, our Company has also constituted an IPO Committee comprising of the
following members:

 

 

Name POSURE BOTS Le it
Mr. Srinivasa Rao Gaddipati Chairman Managing Director
Mr. Talpa Sai Venkata Sesha Member Non-executive & Independent
Munupalle Director
Mr. Sivasankara Member Non-executive & Independent
Parameswara Kurup Pillai Director

 

 

 

 

 

Our IPO Committee was constituted by a resolution of our Board dated December 10, 2019. The terms of
reference of the IPO Committee of our Company include the following:

164
b)

3)

a)

1)
8)

h)

8)

1)

n)

Approving amendments to the Memorandum of Association and the Articles of Association of the
Company;

Approving all actions required to dematerialize the Equity Shares, including seeking the admission of
the Equity Shares into the Central Depository Services (India) Limited (the "CDSL") and the National
Securities Depository Limited (the "NSDL");

Deciding all other terms and conditions of the IPO and/or the number of Equity Shares to be offered,
including any Reservation and any rounding off in the event of any oversubscription as permitted under
Applicable Laws;

Appointing and instructing various other intermediaries, advisors for the Issue such as, inter-alia, lead
managers, syndicate members, the legal advisors, the bankers to the Issue, registrar to the Issue, banker
to the Company, underwriter, advertising agencies and all such persons or agencies as may be involved
in or concerned with the Issue and whose appointment is required in relation to the Issue, including any
successors or replacements thereof, deciding on the fees, commission, brokerage and the like and other
terms and conditions of appointment and/ or ratification of appointment of such intermediaries and
advisors and executing all documents and contracts for the Public Issue;

Finalizing and arranging for the submission of the Offer Document and the preliminary and final wrap
and any amendments, supplements, notices or corrigenda thereto, to appropriate government and
regulatory authorities, institutions or bodies;

Issuing advertisements as it may deem fit and proper in accordance with Applicable Laws;

Approving a code of conduct as may be considered necessary by the Board or the IPO Committee or as
required under Applicable Laws for the Board, officers of the Company and other employees of the
Company;

Approving suitable policies, including on insider trading, whistle blower/vigil mechanism and other
corporate governance requirement that may be considered necessary by the Board or the IPO Committee
or as may be required under Applicable Laws in connection with the Offering;

Seeking the listing of the Equity Shares on the stock exchanges, submitting listing applications to the
stock exchanges and taking all such actions as may be necessary in connection with obtaining such
listing, including, without limitation, entering into the listing agreements with the stock exchanges;
Seeking, if required, the consent of the Company's lenders with whom the Company has entered into
various commercial and other agreements, all concerned government and regulatory authorities in India
or outside India, and any other consents that may be required in connection with the IPO;

Submitting undertaking/ certificates or providing clarifications to SEBI and stock exchanges;
Determining the price at which the Equity Shares are offered to investors in the IPO in accordance with
Applicable Laws, in consultation with the lead managers and/or any other advisors, and determining the
discount, if any, proposed to be offered to eligible categories of investors;

Determining the price band and minimum lot size for the purpose of bidding, any revision to the price
band and the final Issue price after bid closure;

Determining the bid opening and closing dates;

Finalizing the basis of allocation of Equity Shares to retail investors/non institutional investors/qualified
institutional buyers and any other investor in consultation with the lead managers, the stock exchanges
and/or any other entity;

Opening bank accounts for the purposes of collecting the application money and depositing the refund
amount, through the channels as may be prescribed by the Authorities for the time being in force;

To issue receipts/allotment letters/confirmations of allotment notes either in physical or electronic mode
representing the underlying equity shares in the capital of the Company with such features and attributes
as may be required and to provide for the tradability and free transferability thereof as per market
practices and regulations, including listing on one or more stock exchange(s), with power to authorise
one or more officers of the Company to sign all or any of the aforesaid documents;

Dispatching the refund orders, including electronic credit through the channels as may be prescribed by
the Authorities for the time being in force;

approving statement of taxation, Profitability estimate/forecast with assumptions and other financial
ratios and information required to be disclosed in the Offer Document, accepting the tax benefit

165
9

»
s)

certificate and other statements to be furnished by the auditors and approving their inclusion in the Offer
Document;

to execute and deliver any agreements and arrangements as well as amendments or supplements thereto
that the IPO Committee considers necessary, desirable or expedient, in connection with the Issue,
including, without limitation, engagement letters, memoranda of understanding, the listing agreements
with the stock exchanges, the registrar's agreement, the depositories’ agreements, the Issue agreement
with the lead manager (and other entities as appropriate), the underwriting agreement, the syndicate
agreement, confirmation of allocation notes and any undertakings and declarations, and to make
payments to or remunerate by way of fees, commission, brokerage or the like or reimburse expenses
incurred in connection with the Issue, the lead manager, syndicate members, bankers to the Issue,
registrar to the Issue, bankers of the Company, underwriter, escrow agents, accountants, auditors, legal
counsel, depositories, and all such persons or agencies as may be involved in or concerned with the Issue
including any successors or replacements thereof; and any such agreements or documents so executed
and delivered and acts, deeds, matters and things done by the IPO Committee shall be conclusive
evidence of the authority of the Company in so doing;

Giving necessary undertakings to the statutory authorities/appropriate authorities, wherever required, in
respect of the Public Issue;

Approving and confirming the allotment of the Equity Shares pursuant to the Public Issue;

Updating the Register of Members and filing the Return of Allotment in respect of the Equity Shares
allotted pursuant to the Public Issue with the concerned Registrar of Companies;

to take any and all action in connection with the Issue including, without limitation, making applications,
seeking clarifications and obtaining approvals (or entering into any arrangement or agreement in respect
thereof), applications to, and clarifications or approvals from the GOI, the RBI, the SEBI, the ROC, and
the stock exchanges and that any such action already taken or to be taken be and is hereby ratified,
confirmed and/or approved as the act and deed of the Company;

to execute and deliver any and all documents, papers or instruments and to do or cause to be done any
and all acts, deeds, matters or things as it may deem necessary, desirable or expedient in order to carry
out the purposes and intent of the foregoing powers or the Issue, and any documents so executed and
delivered or acts, deeds, matters and things done or caused to be done by the IPO Committee shall be
conclusive evidence of the authority of the Company in so doing and any such document so executed
and delivered or acts, deeds, matters and things done or caused to be done prior to the date hereof are
hereby ratified, confirmed and approved as the act and deed of the IPO Committee and the Company.

166
Management Organization Structure

Board of Directors

1
Inanindra Kumar Dhar Talpa Sai Venkata Sivasankara Srinivasa Rao ri Lakshmi Gaddipati Lukhitha Gaddpati ames
Sine Ricmceae | fb recteres nw Sena a Stash Gai pith a oe

tnaependee feemeee ill Independent (Non Excite SS (Non Executive
Director) recto) (ManagingDiretn) Bieter) Ovecte)

Sambasiva Rao
Ketinenh

(chief Financial
Officer)

 

 
   
   

SSudhanshu Shekhar Santhosh Kumar ‘Gudice Mahesh
Sn (eR Manager &
min)

(Chef Executive

cer) (Company Secretary)

 

 

 

Mutha Srinivasa |
‘Sudhakar

Pragip Kumar Singh

(Resident
Construction
Manager)

(Senior Projet
‘Manager)

  

Key Management Personnel

Mr. Srinivasa Rao Gaddipati, our Managing Director, Mr. Sudhanshu Shekhar, our Chief Executive Officer,
Mr. Sambasiva Rao Ketineni, our Chief Financial Officer, and Mr. Santhosh Kumar Gunemoni, our Company
Secretary & Compliance Officer are the Key Managerial Personnel of our Company as defined under Section
2(51) of the Companies Act, 2013.

All the Key Management Personnel are permanent employees of our Company.
Brief profiles of our Key Management Personnel

For a brief profile of Mr. Srinivasa Rao Gaddipati, please see “Our Management - Brief Profiles of our
Directors” on page 150 of this Prospectus.

The details of our other Key Management Personnel as of the date of this Prospectus are set forth below:

Mr. Sambasiva Rao Ketineni, aged 60 years, is the Chief Financial Officer of our Company. He has been
associated with our Company since June 2020 and has been appointed as the Chief Financial Officer of the
Company w.e.f. June 25, 2020. He has done his graduation in commerce from Andhra University and a
member of the Institute of Chartered Accountants of India (ICAI) and is an associate member of the Institute
of Company Secretaries of India (ICSI). He has overall experience of over 30 years in the fields of Project
Financing including Finance Modelling, Debt syndication, Capital Budgeting, Working Capital Management,
Public Issue, Amalgamations and Mergers, Accounting and Auditing, Taxation (Direct and Indirect Taxes),
etc., In his multiple years of experience, he has worked in various positions, as General Manager (Finance),
Senior Vice President (Finance) and Company Secretary in private companies. His responsibilities and a wide
range of experience allow him to bring a broad view of strategic planning and problem-solving.

Mr. Sudhanshu Shekhar, aged 39 years, is the Chief Executive Officer of our Company. He has been
associated with our Company since February 2018 and has been appointed as the Chief Executive Officer of
the Company w.e.f. June 01, 2019. He has done his graduation in mechanical engineering from Bapurao
Deshmukh College of Engineering, Nagpur University, Maharashtra. He has an overall experience of nearly
16 years in the field of project management, contract management, control planning and co-ordination for

167
various oil and gas pipeline projects, water pipeline projects, tank farm projects, plants and city gas distribution
projects. He has worked as Assistant Engineer with Gammon India Limited; as Executive Engineer (Corporate
Projects) with Mahanagar Gas Limited; as Senior Planning Engineer (Projects) and Senior Manager with Punj
Lloyd Limited; as Project Control Manager and as Manager (Projects & Planning) with Wood Group Kenny
India Private Limited; as Senior Manager (Projects) with Apollo International Limited; and as Planning
Interface Engineer with MPH Global, Iran. Prior to joining our Company, he worked as contractor (consultant)
for natural gas & water pipeline projects and city gas distribution projects. He has received salary of Rs.10.19
Lakhs from our Company for the Financial Year 2019-20 in the capacity of Project Coordinator and Chief
Executive Officer.

Mr. Santhosh Kumar Gunemoni, aged 23 years, is the Company Secretary & Compliance Officer of our
Company. He has been appointed as the Company Secretary & Compliance Officer of the Company w.e.f.
December 10, 2019. He has done his bachelor’s in commerce from Osmania University, Hyderabad and is an
associate member of the Institute of Company Secretaries of India (ICSI). He has received salary of Rs.1.60
Lakhs from our Company for the Financial Year 2019-20 in the Company Secretary.

Profile of our Senior Management Team

The strength of our core team defines our growth and capability. We are proud to have a strong leadership team
of senior management persons who add value to our Company and business operations. A brief profile of such
personnel is as under:

1. Mr. Pranab Kumar Chakraborty, aged 51 years, is the Vice-President of our Company. He holds a
Bachelor’s degree in Engineering (Mechanical) from National Institute of Engineering, Maharashtra and
a MBA degree from National Institute of Management. He has over 30 years of experience in the field
of pipeline engineering. He joined our Company in April 2016. Prior to joining our Company, he has
worked with Carin India Limited as a Senior Inspection Engineer.

2. Mr. Sarfaraz Alam, aged 40 years, is a Project Manager of our Company. He holds a diploma in
mechanical engineering. He is having experience of around 18 years in the field of oil and gas
infrastructure. He joined our Company in December 2017. Prior to joining our Company, he worked with
Nandini Impex Private Limited as a Project Manager.

3. Mr. Om Prakash Singh, aged 59 years, is a Project Manager of our Company. He has done his diploma
in Mechanical Engineering with specialization in refrigeration and air conditioning from Handia
Polytechnic, Board of Technical Education, Uttar Pradesh and Bachelor’s in Mechanical Engineering
from Asian Institute of Management and Engineering, Delhi in the year 2002. Ha has also completed
ASNT (“American Society of Non-destructive Testing”) Level-II training in radiography testing,
ultrasonic testing, magnetic particle testing and dye penetrant testing. He has an overall experience of
more than 36 years in the field of oil & gas infrastructure. He has joined our Company in October 2018.
Prior to joining our Company, he has also worked with Tractebel Engineering Private Limited.

4. Mr. Mutha Srinivasa Sudhakar, aged 41 years, is a Senior Project Manager of our Company. He holds
a diploma in Mechanical Engineering from the State Board of Technical Education & Training A.P.
Hyderabad. He has also completed ASNT (“American Society of Non-destructive Testing”) Level-II
training in magnetic particle testing, penetrant testing, radiography testing and ultrasonic testing. He has
an overall experience of 22 years in the field of oil & gas infrastructure. He has joined our Company in
November 2018. Prior to joining our Company, he has worked with VCS Quality Services (I) Private
Limited.

168
5. Mr. Binay Kumar Dubey, aged 39 years, is QA/QC Manager of our Company. He has done his diploma
in Mechanical Engineering from the State Board of Technical Education, Bihar and Bachelor’s in
Mechanical Engineering from the National Institute of Engineering, Maharashtra and. Ha has also
completed ASNT (“American Society of Non-destructive Testing”) Level-II training in radiography
testing and ultrasonic testing. He has joined our Company in September 2015. Prior to joining our
Company, he has worked with Mott Mack Donald Private Limited.

6. Mr. Pradip Kumar Singh, aged 43 years, is Resident Construction Manager of our Company. He holds
a diploma in mechanical engineering and Health and Safety Executive. He is having experience of around
21 years in the field of oil and gas cross country pipeline projects. He joined our Company in September

2019. Prior to joining our Company, he worked with Punj Lloyd Limited as a Construction
Superintendent.

Relationship among Key Management Personnel and among Key Management Personnel and directors

Other than as described below, our Key Management Personnel are neither related to each other nor related to
any of the directors:

Our Managing Director, Mr. Srinivasa Rao Gaddipati and Ms. Likhitha Gaddipati are related to each other and
to Mrs. Sri. Lakshmi Gaddipati and Mr. Kutumba Rao Gaddipati. For further details see “Our Management-
Family Relationship between the Directors” on page 150of this Prospectus.

Bonus or profit-sharing plan for the Key Management Personnel

There is no bonus or profit-sharing plan for the Key Management Personnel of our Company.

Shareholding of Key Management Personnel

Except Mr. Srinivasa Rao Gaddipatti who holds 1,42,51,250 equity shares of our Company, none of our Key
Management Personnel hold any equity shares as on the date of this Prospectus.

Service Contracts with Key Management Personnel

None of our Key Management Personnel have entered into any service contracts with our Company, pursuant
to which they are entitled to benefits upon termination of employment. However, the Company has entered
into an agreement with Mr. Srinivasa Rao Gaddipati for his appointment as Managing Director of the Company
and to fix his remuneration as decided by the Board of Directors of the Company.

Interest of Key Management Personnel

Our Key Managerial Personnel, other than Mr. Srinivasa Rao Gaddipati, are only interested to the extent of
remuneration paid to them. For the interest of Mr. Srinivasa Rao Gaddipati, please refer to “Interest of our

directors” of this chapter.

No loans have been availed by the Key Management Personnel from our Company as on date of this filing of
this Prospectus.

Except Mr. Srinivasa Rao Gaddipati, Promoter of our Company, none of our other KMPs have any interest in
the promotion of our Company other than in ordinary course of business.

169
Contingent and deferred compensation payable to Key Management Personnel

There is no contingent or deferred compensation payable to our Key Management Personnel.

Changes in Key Management Personnel during the last three years

Changes in our Key Management Personnel during the three years immediately preceding the date of this

Prospectus are set forth below.

Name
Mr. Sambasiva Rao Ketineni

DECK merits
June 25, 2020

Reasons for Change
Appointed as Chief Financial Officer

 

Mr. Sekhar Narasimha
Narahari

June 25, 2020

Resigned as Chief Financial Officer

 

Mr. Srinivasa Rao Gaddipati

February 12, 2019

Re-appointed as Managing Director

 

Mr. Sekhar Narasimha
Narahari

June 01, 2019

Appointed as Chief Financial Officer

 

Mr. Sudhanshu Shekhar

June 01, 2019

Appointed as Chief Executive Officer

 

Ms. Likhitha Gaddipati

September 10, 2019

Re-designated as Whole-time Director

 

Ms. Likhitha Gaddipati

December 23, 2019

Re-designated as Non-Executive Director

 

 

Mr. Santhosh Kumar
Gunemoni

 

December 10, 2019

 

Appointed as Company Secretary &
Compliance Officer

 

 

170
OUR PROMOTER AND PROMOTER GROUP
Our Promoters
Promoters of our Company are Mr. Srinivasa Rao Gaddipati and Ms. Likhitha Gaddipati. As on the date of this

Prospectus, our Promoters hold 1,42,52,875 equity shares, which constitutes 97.46% of the pre-Issue issued
and paid-up equity share capital of our Company.

 

Mr. Srinivasa Rao Gaddipati aged 56 years, is the Promoter and
Managing Director of our Company. For a complete profile of Mr.
Srinivasa Rao Gaddipati i.e. date of birth, residential address, educational
qualification, professional experience, positions held in the past and other
directorships, special achievements, please refer to chapter titled "Our
Management" beginning on page 150 of this Prospectus.

Driving License Number: Not applied
PAN: AEEPG6166M
Aadhar No.: 6843 1899 8739

 

 

 

Ms. Likhitha Gaddipati, aged 25 years, is the Promoter and Non-
executive Director of our Company. For a complete profile of Ms.
Likhitha Gaddipati i.e. date of birth, residential address, educational
qualification, professional experience, positions held in the past and other
directorships, special achievements, please refer to section titled "Our
Management" beginning on page 150 of this Prospectus.

Driving License Number: AP00920130010876
PAN No.: BOBPG7003R
Aadhar No.: 7816 9264 3889

 

 

 

 

 

Our Company confirms that the details of the PAN, Bank Account Number(s) and Passport Number of our
Promoters shall be submitted to the Stock Exchange(s) at the time of filing the Prospectus.

Our Promoters, Mr. Srinivasa Rao Gaddipati and Ms. Likhitha Gaddipati are also involved in other ventures
and business activities in different capacities as listed below:

Mr. Srinivasa Rao Gaddipati

 

S.No. Name of entity Nature of CIN of the Entity ADEN a
interest/position PVH
eee
1 Veriedge Shareholder and | U72900AP2014PTC092137 January 03, 2014
. Technologies Director

Private Limited

 

2 GSR Ujwala | Shareholder and | U80301AP2015NPL097244 August 25, 2015
Foundation Director

 

 

 

 

 

 

 

171
Ms. Likhitha Gaddipati

S.No. Name of entity Nature of CIN of the Entity Date i
interest/position PAN TLCS

ery

    

GSR Ujwala | Shareholder U80301AP2015NPL097244 August 25, 2015
Foundation

 

Our Promoter Mr. Srinivasa Rao Gaddipati is the original promoter of our Company. Ms. Likhitha Gaddipati
joined our Company in the year 2018 as a Non-Executive Director. For further details, please refer chapter
titled “Capital Structure” on page 71 of this Prospectus.

Interests of our Promoters
Our Promoters are interested in our Company in the following manner:

(a) Our Promoters are interested in our Company to the extent of the promotion of our Company and to the
extent of their respective equity shareholding in our Company and any dividend distribution that may
be made by our Company with respect to their equity shares in the future. For details pertaining to our
Promoters’ shareholding, please refer to chapter titled "Capital Structure" beginning on page 71 of this
Prospectus.

Our Promoters are also interested to the extent that they are Directors of our Company. Mr. Srinivasa
Rao Gaddipati is interested to the extent of any remuneration and reimbursement of expenses payable
to him by virtue of being Managing Director of our Company. For further information, please refer to
chapter titled "Our Management" beginning on page 150 of this Prospectus.

(b

(c) Our Promoter, Ms. Likhitha Gaddipati, is also interested to the extent of professional charges paid or
payable to her by the Company for the professional services rendered by her to the Company. For further
details, please refer to “Annexure VI, Note 31(G) — Related Party Transaction” under the chapter
“Financial Information” beginning on page 179 of this Prospectus.

(d) Our Promoter, Mr. Srinivasa Rao Gaddipati, is also shareholder and director of our Group Company
and may be deemed to be interested to the extent of the payments made by our Company, if any, to the
Group Company. For the payments that are made by our Company to our Group Company, please refer
to ““Annexure VI, Note 31(G) — Related Party Transaction” under the chapter “Financial
Information” beginning on page 179 of this Prospectus.

(e) Our Promoter, Mr. Srinivasa Rao Gaddipati shall be deemed to be interested up to the extent of the rent
received by him in respect of the premises given on rent/ lease/ license to our Company.

Except as stated under “Annexure VI, Note 31(G) — Related Party Transaction” under the chapter “Financial
Information” beginning on page 179 of this Prospectus, our Company has not entered into any contract,
agreements or arrangements during the preceding two (2) years from the date of this Prospectus or proposes
to enter into any such contract in which our Promoters are directly or indirectly interested and no payments
have been made to them in respect of the contracts, agreements or arrangements which are proposed to be
made with them.

Except as stated otherwise in this Prospectus, our Promoters or Group Company do not have any interest in
any property acquired by our Company in the preceding three (3) years of the date of this Prospectus or

172
proposed to be acquired by it or in any transaction in acquisition of land or any construction of building or
supply of machinery.

Our Promoters are not related to any sundry debtors of our Company except as disclosed in Restated Financial
Statements.

Except as disclosed in this Prospectus, our Promoters are not interested as a member of a firm or company,
and no sum has been paid or agreed to be paid to our Promoters or to such firm or company in cash or shares
or otherwise by any person for services rendered by him or by such firm or company in connection with the
promotion or formation of our Company.

Common Pursuits

Our Promoters do not have any interest in any venture that is involved in the same line of activity or business
as that of our Company.

Promoter Group of our Company

(a) Individual Promoter Group of our Promoter

Relationship with

 

 

 

 

 

 

 

 

 

 

 

 

Pee}
Father Late Subba Rao Gaddipati Mr. Srinivasa Rao Gaddipati
Mother Mrs. Kasturi Gaddipati Mrs. Srilakshmi Gaddipati
Brother Mr. Kutumba Rao Gaddipati -
Sister Mrs. Akkineni Lakshmi* Ms. Lohitha Gaddipati
Spouse Mrs. Srilakshmi Gaddipati Mr. Chandra Dheeraj Ram
Daughter Ms. Likhitha Gaddipati -

Ms. Lohitha Gaddipati
Son - 7
Spouse’s mother Mrs. Gundapaneni Pushpa Latha* Mrs. Chandra Usha Rani
Spouse’s father Mr. Subba Rao Gundapaneni* Mr. Ravi Sankar Chandra
Spouse’s Brother - -
Spouse’s sister Mrs. E. Usha Rani* Ms. Gayathri Chandra
Spouse’s sister Mrs. K. Anuradha* :

 

 

 

 

 

* Mrs. Akkineni Lakshmi, Mrs. Gundapaneni Pushpa Latha, Mr. Subba Rao Gundapaneni, Mrs. E. Usha Rani
and Mrs. K. Anuradha have been disclosed as part of our Promoter Group on the basis of them being an
immediate relative of our Promoter. Such persons however do not maintain any relationship, arrangement,
dealing with our Company, neither have they entered into any financial transactions with us nor have any
interest in the business activities of our Company. Therefore, we have not taken their consent to be shown as
part of the Promoter Group of our Company. Further, our Company has vide its letter dated February 07,
2020 made an application under Regulation 300 of SEBI ICDR Regulations to SEBI for seeking relaxation
from the strict enforcement of Regulation 2(1)(pp) of SEBI ICDR Regulations by treating the aforesaid persons
not as a part of the promoter group of our Company for the purpose of the Issue and for all future
circumstances in relation to the listing of our Company’s shares. On July 17, 2020, our Company has received
the necessary exemption/ relaxation from SEBI in relation to the aforesaid application.

173
(b) Entities forming a part of Promoter Group

As on the date of filling of this Prospectus, the following entities form part of our Promoter Group:

 

 

 

 

 

SNe Name of Entities ] LAW
1y Veriedge Technologies Private Limited AAECV7939C
2 GSR Ujwala Foundation AAGCG0957K
Bi M/s CPM Likhitha Consortium AAOFC2233M
4. M/s Chowdary Brothers AAOFC1160F
5 M/s R. K. Cements AAGFR6592Q

 

 

 

 

 

Other than as disclosed above, our Company has no other companies or entities that form part of our Promoter
Group.

Shareholding of the Promoter Group in our Company

For details of shareholding of members of our promoter group as on the date of this Prospectus see chapter
titled “Capital Structure” on page 71 of this Prospectus.

Confirmations

The Company hereby confirms that:

“» Our Promoters are not declared as Wilful Defaulters.

Our Promoters and members of the Promoter Group have not been prohibited from accessing the capital
markets under any order or direction passed by SEBI or any other regulatory or governmental authority.

Our Promoters have not been declared as fugitive economic offender under section 12 of the Fugitive
Economic Offender Act, 2018.

Our Promoters are not promoter, directors or person in control of any other company which is prohibited
from accessing the capital markets under any order or direction passed by SEBI or any other regulatory or
governmental authority.

Related Party Transactions

For details of related party transactions entered into by our Promoters, Promoter Group and our Company
during the last financial year, the nature of transactions and the cumulative value of transactions, please refer
to “Annexure VI, Note 31(G) — Related Party Transaction” under the chapter “Financial Information”
beginning on page 179 of this Prospectus.

Payment or benefits to the Promoters

Except as stated otherwise under “Annexure VI, Note 31(G) — Related Party Transaction” under the chapter
“Financial Information” beginning on page 179 of this Prospectus about the related party transactions entered
into during the last three (3) Financial Years as per IND AS 24 and in "Interest of our Promoters" in this
Chapter, there has been no payment or benefit to our Promoters or Promoter Group during the two (2) years
prior to the filing of this Prospectus nor is there any intention to pay or give any benefit to our Promoters or
Promoter Group as on the date of this Prospectus.

174
Disassociation by the Promoters from entities in last three (3) years

None of our Promoters have disassociated themselves from any companies, firms or other entities during the
last three (3) years preceding the date of this Prospectus.

Change in the management and control of our Company

There has been no change in management and control of our Company during the last five years immediately
preceding the date of filing of this Prospectus.

Material Guarantees

There are no material guarantees given to third parties by the Promoters with respect to specified securities of
the Issuer.

Outstanding Litigation

For details of legal and regulatory proceedings involving our Promoters, please refer chapter titled
“Outstanding Litigation and Material Developments” beginning on page 251 of this Prospectus.

175
OUR GROUP COMPANIES

In accordance with the SEBI ICDR Regulations, for the purpose of identification of Group Companies, our
Company has considered companies with which there were related party transactions, during the period for
which financial information is disclosed in the Prospectus, as covered under the applicable Indian Accounting
Standards i.e., IND-AS 24 with whom our Company has had related party transactions during the financial
years ended March 31, 2018, March 31, 2019 and March 31, 2020 and also other companies as considered
material by the Board as per the materiality policy adopted by the Board pursuant to its resolution dated
December 10, 2019 (the “Materiality Policy on Group Companies”) for the purpose of disclosure in the Offer
Document in connection with the Issue.

In terms of the Materiality Policy on Group Companies apart from the companies with which there have been
related party transactions during the period for which financial information has been disclosed under this
Prospectus, a company is considered to be a material Group Company as under:

(i) company in which the investment in the form of equity or voting power or debt or debt instruments by
our Company exceeds 25% of the net worth of our Company for the last audited financial year; and

(ii) where our Company has entered into one or more transactions with such company in the last audited
financial statements for the preceding financial year, cumulatively exceeding 5% of the total revenues

of our Company for the last audited financial year.

As per the restated financial statements of the preceding three financial years , the following is our Group
Company:

1. Veriedge Technologies Private Limited

Corporate information

Veriedge Technologies Private Limited is a private company incorporated on January 03, 2014 with the
Registrar of Companies, Hyderabad, Telangana. The Corporate Identification Number is
U72900TG2014PTC092137

Nature of business

Veriedge Technologies Private Limited is in engaged in the business of providing software services.

Audited Financial Information
(Rs. in Lakh, except per share data)

   
   

 

 

 

 

 

 

Particulars For the fiscal ended March 31

0 PA) 2018
Equity capital 5.00 5.00 5.00
Reserves (excluding revaluation reserves) and (17.22) (7.19) (6.00)
Surplus
Revenue from operations - 2.25 15.93
Profit / (loss) after tax (10.03) (1.18) (0.41)
Basic EPS (in Rs.) 0 0 0
Diluted EPS (in Rs.) 0 0 0
Net asset value per share (in Rs.) (24.43) (4.37) (2.01)

 

 

 

 

 

 

There are no significant notes of the auditors in relation to the aforementioned financial statements.

176
Outstanding litigation involving the Group Companies

There are no pending litigations involving the Group Company which may have a material impact on our
Company. For details of litigation involving our Company, kindly refer to chapter ‘Outstanding Litigation and
Material Developments’ on page 251of this Prospectus.

Significant adverse factors relating to Group Companies:

(i) Our Group Company is not a sick company within the meaning of the erstwhile Sick Industrial Companies
(Special Provisions) Act, 1995 nor is under winding up/insolvency proceedings.

(ii) Our Group Company has been running in losses for the last three Financial Years. For further details please
refer “Our Group Companies- Audited Financial Information” beginning on page 176 of this Prospectus.

Our Group Company has not become defunct under the Companies Act and no application has been made to
the Registrar of Companies, Hyderabad for striking off its name during the five years preceding the date of
filing of this Prospectus.

Common pursuits of Group Companies

Our Company has no common pursuits with our Group Company. However, our Group Company may have
business interests in the Company. For further details, please refer “Annexure VI, Note 31(G) — Related Party
Transaction” under the chapter “Financial Information” on page 179 of this Prospectus.

Public or rights issue in the preceding three years

Our Group Company has not made any public/rights issue in the preceding three years.

177
DIVIDEND POLICY

Under the Companies Act, our Company can pay dividends upon a recommendation by our Board of
Directors and approval by a majority of the shareholders at the Annual General Meeting. The shareholders
of our Company have the right to decrease but not to increase the amount of dividend recommended by
the Board of Directors. The dividends may be paid out of profits of our Company in the year in which the
dividend is declared or out of the undistributed profits or reserves of previous fiscal years or out of both.
The Articles of Association of our Company also gives the discretion to our Board of Directors to declare
and pay interim dividends.

The declaration and payment of dividend will be recommended by our Board of Directors and approved
by the shareholders of our Company at their discretion and will depend on a number of factors, including
the results of operations, earnings, capital requirements and surplus, general financial conditions,
contractual restrictions, applicable Indian legal restrictions and other factors considered relevant by our
Board of Directors.

Our Company has not declared any dividends in the last three fiscals and the period between last audited
period and the date of filing of this Prospectus.

For further details, please refer to chapter titled ‘Financial Information’ beginning on page 179 of this
Prospectus.

178
SECTION V — FINANCIAL INFORMATION
RESTATED FINANCIAL STATEMENTS
Independent Auditor’s Examination Report on Restated Financial Statements

To,

The Board of Directors

M/s Likhitha Infrastructure limited

701, Tirumalashah Residency, Yellareddy Guda,
Ameerpet, Hyderabad-73

Dear Sirs,

1. We have examined the attached Restated Financial Statements of M/s Likhitha Infrastructure Limited
(the “Company” or the “Issuer”) as comprising restated statement of assets and liabilities, the restated
statement of profit and loss, restated statement of changes in equity and the restated statement of cash flows,
for the fiscals 2020, 2019 and 2018 and the summary statement of significant accounting policies read
together with the annexures and notes thereto and other restated financial information (collectively, the
“Restated Financial Statements”), as approved by the Board of Directors of the Company at their meeting
held on 1* August, 2020 for the purpose of inclusion in the Draft Red Herring Prospectus (“DRHP”)/Red
Herring Prospectus(“RHP”)/Prospectus (collectively referred to as “Offer Documents”) in connection
with its proposed Initial Public Offering of the Company The Restated Ind AS Financial Information has
been approved by the Board of Directors of the Company and is prepared in terms of the requirements of:

(a) Section 26 of Part I of Chapter III of the Companies Act, 2013 (the “Act") read with Rules 4 to 6 of
Companies (Prospectus and Allotment of Securities) Rules, 2014 (“the Rules”); and

(b) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018, as amended ("ICDR Regulations");

(c) The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of
Chartered Accountants of India (“ICAI”), as amended from time to time (the “Guidance Note”).

Managements’ Responsibility for the Restated Standalone Summary Statements:

2. The Company’s Board of Directors is responsible for the preparation of the Restated Financial Statements
for the purpose of inclusion in the Offer Documents to be filed with Securities and Exchange Board of
India, relevant stock exchanges and the Registrar of Companies, Telangana in connection with the
proposed IPO. The Restated Financial Statements have been prepared on the basis of preparation stated
in Para 4 below. The Board of Directors of the Company are responsible for designing, implementing
and maintaining adequate internal control relevant to the preparation and presentation of the Restated
Financial Statements. The Board of Directors are also responsible for identifying and ensuring that the
Company comply with the Act, ICDR Regulations and the Guidance Note.

179
Auditor’s Responsibility:

3. We have examined such Restated Financial Statements taking into consideration:

a.

b.

d.

The terms of reference and terms of our engagement agreed upon with you in accordance with our
engagement letter 14" October 2019. in connection with the proposed IPO of the Company;

The Guidance Note also requires that we comply with the ethical requirements of the Code of Ethics
issued by the ICAI;

Concepts of test checks and materiality to obtain reasonable assurance based on verification of
evidence supporting the Restated Financial Statements; and

The requirements of Section 26 of the Act and the ICDR Regulations.

Our work was performed solely to assist you in meeting your responsibilities in relation to your compliance
with the Act, the ICDR Regulations and the Guidance Note in connection with the IPO.

4. These Restated Financial Statements have been compiled by the management from

a)

Audited Ind AS financial statements of the company as at and for the year ended March 31, 2020
and March 31 2019 prepared in accordance with the Indian Accounting Standards (referred to as
“Ind AS”) as prescribed under Section 133 of the Act read with Companies (Indian Accounting
Standards) Rules 2015, as amended, and other accounting principles generally accepted in India,
which have been approved by the Board of Directors at their meeting held on 1* August 2020. The
comparative information for the year ended March 31, 2018 included in such financial statements
have been prepared by making Ind AS adjustments to the audited financial statements of the
Company as at and for the year ended March 31, 2018, prepared in accordance with the accounting
standards notified under the section 133 of the Act (“Indian GAAP”) which was approved by the
Board of directors at their meeting held on 1* August 2020.

5. We have audited the financial information of the Company for the years ended March 31, 2020 and March
31, 2019 prepared by the Company in accordance with the Ind AS for the limited purpose of complying
with the requirement of getting its financial statements audited by an audit firm holding a valid peer review
certificate issued by the “Peer Review Board” of the ICAI as required by ICDR Regulations in relation to
proposed IPO. We have issued our report dated 1 August,2020 and 17" September 2019 on these financial
information to the Board of Directors who have approved these in their meeting held on 1 August,2020
and 17" September 2019.

6. For the purpose of our examination, we have relied on:

a) Auditors’ reports issued by us dated 1 August 2020 and 17" September 2019 on the financial
statements of the Company as at 2020 and as at for the year ended March 19 as referred in
Paragraph 4 above; and

b) Auditors’ Report issued by the Previous Auditor M/s Siva Krishna & Narayana Chartered

Accountants having FRN:003883S dated 4"September, 2018 and on the financial statements of
the company as at and for the years ended March 31 2018 as referred in Paragraph 4 above.

180
10. This report should not in any way be construed as a reissuance or re-dating of any of the previous audit
reports issued by us or the Previous Auditors, nor should this report be construed as a new opinion on any
of the financial statements referred to herein.

11. We have no responsibility to update our report for events and circumstances occurring after the date of the
report.

12. Our report is intended solely for use of the Board of Directors for inclusion in the DRHP/RHP/Prospectus
to be filed with Securities and Exchange Board of India, BSE Limited, National Stock Exchange of India
Limited and Registrar of Companies, Telangana in connection with the proposed IPO. Our report should
not be used, referred to, or distributed for any other purpose except with our prior consent in writing.
Accordingly, we do not accept or assume any liability or any duty of care for any other purpose or to any
other person to whom this report is shown or into whose hands it may come without our prior consent in
writing.

For NSVR & Associates LLP
Chartered Accountants

FRN: S200060/008801S

Sd/-

Suresh Gannamani

Partner

Membership No: 226870

UDIN: 20226870AAAADO3586,
Place: Hyderabad

Date: 01/08/2020

182
The audited financial statements for the year ended March 31, 2018 and the Independent Auditors' Reports
thereon issued by the Previous Auditor have been furnished to us by the Company. Upon specific request
by the Company, we have examined and reported on the restated financial information for the year ended
March 31, 2018. The adjustments in so far as it relates to the amounts, disclosures, material errors,
regrouping, reclassification, etc., included in respect of the year ended March 31, 2018 is restricted to and
based solely on the audited financial statements and auditor's reports issued by the Previous Auditor M/s
Siva Krishna & Narayana Chartered Accountants having FRN:003883S for such year and accordingly
reliance has been placed on the restated statement of assets and liabilities and the restated statements of
profit and loss (including other comprehensive income), statements of changes in equity and cash flow
statements, the Summary Statement of Significant Accounting Policies, and other explanatory information
and (collectively, the “2018 Restated Financial Information”) examined by them for the said year. We have
not performed any additional procedures other than those stated herein and do not accept any responsibility
of whatsoever nature in this regard. The management also confirms that the restated financial information
for the Years ended 31 March 2018

iE Have been prepared after incorporating adjustments for the changes in accounting policies,
material errors and regrouping/reclassifications retrospectively in the financial year ended
March 31,2018 to reflect the same accounting treatment as per the accounting policies and
grouping/classifications followed as at and for the year ended March 31, 2020.
ii. Do not contain any exceptional items that need to be disclosed separately in the respective
financial years/period and do not contain any qualification requiring adjustments.
iii. Have been prepared in accordance with the Act, ICDR Regulations and the Guidance Note.

Based on our examination and according to the information and explanations given to us and also as per
the reliance placed on the examination report submitted by the Previous Auditors and other auditors for
the respective periods/years, we report that the Restated Financial Information:

a. have been prepared after incorporating adjustments for the changes in accounting policies, material
errors and regrouping/reclassifications retrospectively in the financial years ended March 31, 2019and
2018to reflect the same accounting treatment as per the accounting policies and
grouping/classifications followed as at and for year ended March, 2020

b. Do not contain any exceptional items that need to be disclosed separately in the respective financial
years/period and do not contain any qualification requiring adjustments. and

c. Have been prepared in accordance with the Act, ICDR Regulations and the Guidance Note.

The Restated Financial Information do not reflect the effects of events that occurred subsequent to the
Respective dates of the reports on the special purpose interim Ind AS financial statements and audited
Financial statements mentioned in paragraph 4 above.

We have also examined the following Restated Financial Statements set out in annexure prepared by
management and approved by the Board of Directors of the Company as under:
a. Significant Accounting policies as appearing in Annexure V
b. Other significant notes as restated as appearing in Note No 3 to 31(O) of annexure VI.
c. Statement of Reconciliation of Equity between Ind AS and Previous GAAP as enclosed in the
Annexure VII.
. Statement of Capitalisation as restated as appearing in Annexure VIII.
. Statement of Accounting Ratios as restated as appearing in Annexure XI.
Restated Summary Statement of Tax Shelter as appearing in Annexure X.
. Statement of Material Adjustments to Financial Statements as appearing in Annexure XI.

mmpea

181
Likhitha Infrastructure Limited

Annexure I: Restated Statement of Assets and Liabilities

(All amounts in = Lakhs)

 

 

 

 

 

 

 

 

 

 

 

Particulars Note As at As at As at
No March 31, 2020 March 31, 2019 March 31, 2018
Assets
Non-current Assets
(a)Property, Plant and 3 932.38 1,139.98 1,225.91
Equipment
(b)Investment Property 3 234.06 238.73 238.87
(b)Financial Assets
(i)Investments Ai) 1.62 1.36 43.14
(ii)Loans and Advances 5 268.97 254.97 194.38
(c)Deferred Tax Assets (Net) 6 35.93 (11.53) (26.06)
(d)Other Non-current Assets - - -
Total Non-current Assets 1,472.96 1,623.50 1,676.23
Current Assets
(a)Inventories 7 2,468.25 1,981.37 265.13
(b)Financial Assets
(Investments Gi) 576.13 - -
(ii) Trade Receivables 8 1,634.88 1,623.19 2,244.03
(iii)Cash and Cash 9 377.82 51.36 677.59
Equivalents
(iv)Bank Balances other 10 1,124.54 1,086.43 874.18
than above (iii)
(v)Other Financial Assets i 2,378.43 1,533.89 639.54
(c)Current Tax Assets (Net) - - -
(d)Other Current Assets 12 52.62 557.64. 346.21
Total Current Assets 8,612.65 6,833.89 5,046.68
Total Assets 10,085.61 8,457.39 6,722.91
Equity and Liabilities
Equity
(a)Equity Share Capital 13 1,462.50 450.00 450.00
(b)Other Equity 14 5,533.08 4,581.23 2,792.94
Total Equity 6,995.58 5,031.23 3,242.94
Liabilities
Non-current Liabilities
(a)Financial Liabilities
(Long-term borrowings 15 15.23 112.69 355.68
(b)Provisions 16 64.56 24.14 14.15
(c)Deferred Tax Liabilities 6 - - -
(Net)
Total Non-current Liabilities 79.78 136.84 369.83

 

 

 

 

 

183

 
 

 

 

 

 

Current liabilities
(a)Financial Liabilities
(Short-term borrowings 17 113.21 560.58 724.69
(ii)Trade payables - total
dues of:
: small and micro enterprises
: others than small and micro 18 1,393.46 1,211.88 1,338.22
enterprises
(iii)Other financial liabilities 19 150.49 355.19 327.44
(b)Other current liabilities 20 1,077.46 861.36 716.10
(©)Provisions 21 0.75 0.68 0.32
(d)Current Tax Liability 22 274.89 299.63 3.37
(Net)
Total Current Liabilities 3,010.25 3,289.33 3,110.14
Total Liabilities 10,085.61 8,457.39 6,722.91
Corporate Information 1
Summary of significant accounting 2
policies

 

 

 

 

 

The accompanying Restated Statement of Significant Accounting Policies and notes to Restated Financial

Information are an integral part of this.

As per our report of even date
For NSVR & ASSOCIATES LLP

FRN:008801S/S200060

Suresh Gannamani

Partner

Member Ship No:226870
UDIN:20226870AAAADO3586

Place: Hyderabad
Date:01/08/2020

For and on behalf of Board of Directors

(G Srinivasa Rao) (G Sri Lakshmi)
Managing Director Director
DIN:01710775 DIN:02250598
Sambasiva Rao K (Santhosh Kumar G)
Chief Financial Office Company Secretary

Sudhanshu Shekhar
Chief Executive Officer

184

 
Earnings per equity share

(1) Basic 13.59
(2) Diluted 13.59
Corporate Information 1
Summary of significant accounting 2
policies

12.21 4,90
12.21 4.90

 

The accompanying Restated Statement of Significant Accounting Policies and notes to Restated Financial Information

are an integral part of this.

As per our report of even date

For NSVR & ASSOCIATES LLP
FRN:008801S/S200060

Suresh Gannamani (G Srinivasa Rao)
Partner Managing Director
Member Ship No:226870 DIN:01710775
UDIN:20226870AAAADO3586

Place: Hyderabad Sambasiva Rao K
Date:01/08/2020 Chief Financial Officer

186

For and on behalf of Board of
Directors

(G Sri Lakshmi)
Director
DIN:02250598

(Santhosh Kumar G)
Company
Secretary

Sudhanshu Shekhar
Chief Executive Officer
Annexure II : Restated Statement of Profit & Loss

(All amounts in = Lakhs) (Except EPS)

 

 

 

 

 

 

 

 

 

 

 

 

 

Not For the year
Particulars e For the year ended ended For the year ended
No 31 March, 2020 31 March, 31 March, 2018
2019
Revenue
Revenue from operations 23 16,123.83 13,948.41 8,707.77
Other income 24 155.19 106.28 152.79
Total Revenue 16,279.02 14,054.68 8,860.56
Expenses
Raw Material Consumed 25 3,713.49 4,142.29 1,943.31
Construction expenses 26 6,503.20 5,389.63 3,952.57
Changes in inventories of work-in- 27 (477.60) (1,712.85) (245.12)
progress
Employee benefits 28 2,904.28 2,662.60 1,622.86
Finance costs 29 136.40 168.49 84.62
Depreciation 3 309.37 298.71 93.15
Other expenses 30 513.29 575.84 316.67
Total expenses 13,602.45 11,524.71 7,768.06
Profit before tax 2,676.57 2,529.97 1,092.50
Tax expense:
Current tax 732.22 758.62 328.00
Earlier years - - -
Deferred tax (43.58) (14.16) 48.28
Tax expense 688.64 744.46 376.28
Profit for the year 1,987.93 1,785.51 716.22
Other comprehensive income
Items that will not be reclassified to
profit or loss
Re-measurement gains/(losses) on 3.56 1.96
Investments
Re-measurement gains/(losses) on (15.41)
defined benefit plans (0.41) -
Tax on Defined benefit item included 3.88
in OCI 0.12 -
Tax on Re-measurement of
Investment item included in OCI (0.49) (0.31)
Total Other comprehensive income for (11.53) 2.78 1.66
the year, net of tax
Total comprehensive income for the 1,976.40 1,788.29 717.88
year comprising Profit/(Loss)

 

 

 

 

 

185

 
Net Increase/(Decrease) in cash and cash

equivalents (A+B+C) 811.93 (249.86) 348.47
Cash and Cash equivalents at begining of the 577.22

year 827.07 478.60
Cash and Cash equivalents at end of the year 1,389.14 577.22 827.07

 

Reconciliation of Cash and Cash equivalents

 

 

 

 

 

 

For the year For the year
Particulars a ‘ended 31 ended 31
March, 2019 March, 2018
Cash on hand 0.99 12.59 10.13
Cash Equivalents
Balances with banks in
- Current accounts 376.83 38.77 387.46
- Deposit accounts - 279.75
- Margin money deposits 1,124.54 1,086.43 874.43
Short Term Borrowings form banks (113.21) (560.58) (724.69)
1,389.14 577.22 827.07

 

Note:

1. The Cash Flow Statement has been prepared under the Indirect method as set out in Ind AS-7 on Cash Flow
Statement.

2. Previous year's figures are reclassified/regrouped to confirm and make them comparable with those of the current
year.

The accompanying Restated Statement of Significant Accounting Policies and notes to Restated Financial Information
are an integral part of this.

Cash and bank balances comprise of cash balance in hand, in current accounts with banks, demand deposit, short-term
deposits and Margin Money deposits. For this purpose, "short-term" means investments having maturity of three
months or less from the date of investment. Bank overdrafts that are repayable on demand and form an integral part of
our cash management are included as a component of cash and cash equivalents for the purpose of the statement of
cash flows.

As per our report of even date For and on behalf of Board of Directors

For NSVR & ASSOCIATES LLP

FRN:008801S/S200060

Suresh Gannamani (G Srinivasa Rao) (G Sri Lakshmi)
Partner Managing Director Director
Member Ship No:226870 DIN:01710775 DIN:02250598
UDIN:20226870AAAADO3586

Place: Hyderabad Sambasiva Rao K (Santhosh Kumar G)
Date:01/08/2020 Chief Financial Officer Company Secretary

Sudhanshu Shekhar
Chief Executive Officer

188
Annexure III : Restated Statement of Cash Flows

(All amounts in = Lakhs)

 

For the year

For the year

 

 

 

 

 

 

 

 

 

 

 

Daniailars For the year ended ended ended
31 March, 2020 31 March, 31 March,
2019 2018
A. Cash Flow from Operating Activities:
Profit before tax for the year 2,676.57 2,529.97 1,092.50
Adjustments for:
Depreciation 309.37 298.71 93.15
Finance Charges 60.46 86.27 18.58
Loss on Sale of Assets/written off - 7.63 os
Dividend received (1.82) (8.97) (5.92)
Profit on sale of Fixed Assets « - (0.28)
Operating Profit before working capital

changes 3,044.58 2,913.61 1,198.03
Adjustments for:

(Increase)/Decrease in Inventory (486.88) (1,716.25) (246.62)
(Increase)/Decrease in Trade receivables (11.68) 620.84 122.87
(Increase)/Decrease Long Term Loans and (14.00)

advances (60.59) (11.98)

(Increase) / Decrease in Current Financial (844.54)
assets (894.35) 136.99
Increase in Other Current assets 505.02 (211.43) (294.69)
(Decrease) / Increase in Trade payables 237.28 (52.09) (572.03)
(Decrease) / Increase in Provision for 25.07
employee benefits 9.95 14.47
(Decrease) / Increase in Current Financial 1.29
liabilities 26.81 (50.62)
(Decrease) / Increase in Other liabilities 216.09 145.27 471.80
Cash Generated from Operations 2,672.23 781.78 768.23
Taxes Paid (Net) (756.96) (463.11) (366.68)
Net Cash (used) / from Operating Activities (A) 1,915.27 318.67 401.55
B. Cash Flow from Investing Activities:
Purchase of Fixed Assets including Capital (152.81)

Advances and Capital Creditors (312.52) (1,031.23)
Proceeds from sale of Fixed Assets : 18.00 26.16
Investment in Fixed Deposits with Banks (576.39) 45.35 312.20
Dividend received 1.82 8.97 5.92

Net Cash from / (used) Investing Activities (B) (727.38) (240.20) (686.95)

C. Cash Flow from Financing Activities:
Interest Paid (60.46) (86.27) (18.58)
Receipt / (Repayment) of Vehicle Loans (net) (303.47) (242.04) 652.46

IPO Expenses (12.04)
Net Cash from / (used) Financing Activities (C) (375.97) (328.31) 633.88

 

187

 
Annexure IV : Restated Statement of changes in equity
a) Equity Share Capital

(All amounts in = Lakhs)

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars Number of Shares Amount
Authorised:
Equity Shares of INR 10 each.
(as at 31 March 2018 -5000000 equity shares of Rs 10 Each) 50.00 500.00
(as at 31 March 2019 -20000000 equity shares of Rs 10 Each) 200.00 2,000.00
(as at 31 March 2020 -20000000 equity shares of Rs 10 Each) 200.00 2,000.00
Issued, subscribed and paid up:
Equity Shares of INR 10 each fully paid up
(as at 31 March 2018 -4500000 equity shares of Rs 10 Each) 45.00 450.00
(as at 31 March 2019 -4500000 equity shares of Rs 10 Each) 45.00 450.00
(as at 31 March 2020 -14625000 equity shares of Rs 10 Each) 146.25 1,462.50
b) Other Equity
Reserves and surplus Other
Particulars General Retained Comprehensive Total
Reserve Earnings Income
Balance as at March 31, 17.56 2,407.50 - 2,425.06
2017
Add: Profit during the year - 716.22 - 716.22
Less: Utilized for issue of - (350.00) -
Bonus Shares (820200)
Less: Re-measurement - - 1.66
gains/(losses) on account of 1.66
OCI
Balance as at March 31, 17.56 2,773.72. 1.66 2,792.94
2018
Add: Profit during the year - 1,785.51 - 1,785.51
Less: Re-measurement - - 2.78
gains/(losses) on account of 2.78
OCI
Balance as at March 31, 17.56 4,559.23 4.44 4,581.23
2019
Add: Profit during the year - 1,987.93 -
ended 31.03.2020 1,987.93
Re-measurement - (11.53)
gains/(losses) (1.53)
Less: Utilized for issue of (1,012.50) - (1,012.50)
bonus shares
Less: Expenses on IPO (12.04) - (12.04)
Balance as at March 31, 17.56 5,522.62 (7.10) 5,533.08
2020

 

 

 

 

 

 

189

 
Likhitha Infrastructure Limited
Annexure V: Basis of Preparation and Significant Accounting Policies

1) General Information:

Likhitha Infrastructure Limited (the company) domiciled and Incorporated in India in the state of Telangana,
India in accordance with the provisions of the Companies Act, 1956. The Company is engaged in the business of
laying gas supply pipe lines and irrigation canals, building bridges over the canals and related maintenance works.
The principal accounting policies applied in the preparation of the financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.

2) Basis of preparation and significant accounting policies:
2.1 Basis of preparation and presentation of Financial Statements:

The Restated financial statements of Assets and Liabilities as at 31 March 2020, 31 March 2019 and 2018 and
Restated Statement of Profit and Loss, Restated Statement of Cash Flows and the Restated Statement of Changes
in Equity for the years ended 31 March 2020, 31 March 2019 and 2018 (together referred to as “Restated Ind AS
Financial Information”) have been compiled by the Company from the Audited Financial Statements to which
further adjustments are made to comply in all material aspects with the requirements of the Securities and
Exchange Board of India (Issue of Disclosure and Capital Requirements) Regulations, 2009, as amended (the
“ICDR Regulations”). Accordingly, these Restated Ind AS Financial Information have been prepared after
incorporating adjustments for the material amounts in the respective financial years to which they relate as
explained later. There were no exceptional items that needed to be disclosed separately for the respective years
under consideration.

The restated Ind AS financial statements have been prepared and presented in accordance with the Indian
Accounting Standards (“Ind AS”) notified under Section 133 of the Companies Act, 2013 (“the Act”) read with
Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards)
(Amendment) Rules, 2016 and other relevant provisions of the Act.

This Restated Ind AS Financial Information has been prepared for inclusion in the Offer Document to be filed by
the Company with the Securities and Exchange Board of India (‘SEBI’) in connection with proposed Initial
Public Offering of its equity shares, in accordance with the requirements of:

a) Section 26 of Part I of Chapter III of the Act read with Rules 4 to 6 of Companies (Prospectus and Allotment of
Securities) Rules, 2014; and

b) Relevant provisions of the ICDR Regulations issued by the Securities and Exchange Board of India (‘SEBI’)
on 26 August 2009, as amended from time to time in pursuance of the Securities and Exchange Board of India Act,
1992.

2.2 Basis of Measurement:

These Restated financial statements have been prepared on the historical cost convention and on an accrual basis,
except for the following material items in the balance sheet:

* Certain financial assets and liabilities are measured either at fair value or at amortized cost depending on the
classification;

+ Employee defined benefit assets / (liability) are measured at fair value of plan assets, less present value of
defined benefit obligations.

+ Long-term borrowings are measured at amortized cost using the effective interest rate method.

Allassets and liabilities are classified into current and non-current based on the operating cycle of less than twelve
months or based on the criteria of realisation/settlement within twelve months period from the balance sheet date.

190
2.3 Use of estimates and judgments:

The preparation of Restated Ind AS Financial Information in conformity with Ind AS and IND AS requires
management to make judgments, estimates and assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the restated
statement of assets and liabilities date and reported amounts of revenues and expenses for the reporting period.
Accounting estimates could change from period to period. Actual results could differ from those estimates.
Appropriate changes in estimates are made as management becomes aware of changes in circumstances
surrounding the estimates. Changes in estimates are reflected in the financial information in the period in which
changes are made and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgments in applying accounting
policies that have the most significant effect on the amounts recognized in the Restated Ind AS Financial
Information is included in the following notes:

Useful lives of property, plant and equipment and intangible assets;
Impairment of non-financial and financial assets;

Financial instruments;

Employee benefits;

Provisions, contingencies; and

Income taxes.

2.4 Summary of Significant Accounting Policies:

The Restated Ind AS Financial Information have been prepared using the accounting policies and measurement
basis summarized below.

A. Functional and presentation currency:

These financial statements are presented in Indian rupee (INR or 2), which is also the functional currency of the
Company. All financial information presented in Indian rupees has been rounded to the nearest lakhs.

B. Current and noncurrent classification:

All the assets and liabilities have been classified as current or noncurrent as per the Company’s normal operating
cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1, Presentation of
financial statements.

Assets: An asset is classified as current when it satisfies any of the following criteria:

e Itis expected to be realized in, or is intended for sale or consumption in, the Company’s normal operating cycle;
e It is held primarily for the purpose of being traded;

e It is expected to be realized within twelve months after the reporting date; or

e It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting date.

Liabilities: A liability is classified as current when it satisfies any of the following criteria:

e It is expected to be settled in the Company’s normal operating cycle;

e It is held primarily for the purpose of being traded;

e It is due to be settled within twelve months after the reporting date; or

¢ The Company does not have an unconditional right to defer settlement of the liability for at least twelve months
after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by
the issue of equity instruments do not affect its classification.

191
Current assets/ liabilities include the current portion of noncurrent assets/ liabilities respectively. All other assets/
liabilities are classified as noncurrent. Deferred tax assets and liabilities are always disclosed as non-current.

C. Foreign Currency Transaction:

Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at
the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting
period are translated into the functional currency at the exchange rate at that date. Nonmonetary items denominated
in foreign currencies which are carried at historical cost are reported using the exchange rate at the date of the
transaction; and non-monetary items which are carried at fair value or any other similar valuation denominated in
a foreign currency are reported using the exchange rates at the date when the fair value was measured.

Exchange differences arising on monetary items on settlement, or restatement as at reporting date, at rates different
from those at which they were initially recorded, are recognized in the statement of profit and loss in the year in
which they arise.

D. Fair Valuation:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company
takes into account the characteristics of the asset or liability at the measurement date. The fair value measurement
is based on the presumption that the transaction to sell the financial asset or settle the financial liability takes place
either:

e Inthe principal market, or
e Inthe absence of a principal market, in the most advantageous market

The principal or the most advantageous market must be accessible by the Company. A fair value measurement of
a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the
asset in its highest and best use. Fair value measurement and / or disclosure purposes in the Restated Ind AS
Financial Information is determined on such a basis, except for measurements that have some similarities to fair
value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.

The Company- uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of
unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the Restated Ind AS Financial Information
are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:

e Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

e Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly.

e Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.

At each reporting date, the Management analyses the movements in the values of assets and liabilities which are
required to be remeasured or re-assessed as per the Company’s accounting policies.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis

of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained
above.

192
E. Prior Period Error:

Prior period errors are omissions from, and misstatements in, the entity’s financial statements for one or more prior
periods arising from a failure to use, or misuse of, reliable information that:

a. Was available when financial statements for those periods were approved for issue; and

b. Could reasonably be expected to have been obtained and taken into account in the preparation and presentation
of those financial statements. Such errors include the effects of mathematical mistakes, mistakes in applying
accounting policies, oversights or misinterpretations of facts, and fraud

Retrospective restatement is correcting the recognition, measurement and disclosure of amounts of elements of
financial statements as if a prior period error had never occurred.

The material prior period errors are corrected retrospectively in the first set of financial statements approved for
issue after their discovery by:

(a) Restating the comparative amounts for the prior period(s) presented in which the error occurred; or
(b) If the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities
and equity for the earliest prior period presented except in the following circumstance:

A prior period error shall be corrected by retrospective restatement except to the extent that it is impracticable to
determine either the period-specific effects or the cumulative effect of the error.

When it is impracticable to determine the period-specific effects of an error on comparative information for one or
more prior periods presented, the entity shall restate the opening balances of assets, liabilities and equity for the
earliest period for which retrospective restatement is practicable (which may be the current period). When it is
impracticable to determine the cumulative effect, at the beginning of the current period, of an error on all prior
periods, the entity shall restate the comparative information to correct the error prospectively from the earliest date
practicable.

F. Revenue Recognition:

Revenue is recognized when the company satisfies a performance obligation by transferring a promised good or
service to its customers. The company considers the terms of the contract and its customary business practices to
determine the transaction price. Performance obligations are satisfied at the point of time when the customer obtains
controls of the asset.

Revenue is measured based on transaction price, which is the fair value of the consideration received or receivable,

stated net of discounts, returns and Goods and Service tax. Transaction price is recognised based on the price
specified in the contract, net of the estimated sales incentives / discounts. Accumulated experience is used to
estimate and provide for the discounts/ right of return, using the expected value method.

 

Other Operating Income:

Other Operating income consists of commissions, ancillary and allied service income. Revenue from other
operating services is recognized when the company satisfies a performance obligation by transferring promised
services to its customers.

Other Income

Other Income is recognized only when it is reasonably certain that the ultimate collection will be made.

193
Interest Income

Finance income consists of (a) interest income on funds invested in Banks and (b) Dividend earned on investment
in Mutual Funds.

(a) For all debt instruments measured at amortised cost, interest income is recorded using the effective interest rate
(EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life
of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial
asset or to the amortised cost of a financial liability. When calculating the effective interest rate, the company
estimates the expected cash flows by considering all the contractual terms of the financial instruments but does not
consider the expected credit losses.

Interest Income mainly comprises of interest on Margin money deposit with banks relating to bank guarantee.
Interest income should be recorded using the effective interest rate (EIR). However, the amount of margin money
deposits relating to bank guarantee are purely current in nature, hence effective interest rate has not been applied.
Interest is recognized using the time-proportion method, based on rates implicit in the transactions.

Dividend Income

Dividend income is recognized when the Company’s right to receive dividend is established. Dividend income on
Mutual Funds is recognized when the right to receive dividend from such funds is established.

G. Property Plant & Equipment:
Recognition and measurement:

Property, Plant and Equipment are stated at cost of acquisition or construction less accumulated depreciation and
impairment loss, if any. Cost includes expenditures that are directly attributable to the acquisition of the asset i.e.,
freight, duties and taxes applicable and other expenses related to acquisition and installation. The cost of self-
constructed assets includes the cost of materials and other costs directly attributable to bringing the asset to a
working condition for its intended use. Borrowing costs that are directly attributable to the construction or
production of a qualifying asset are capitalised as part of the cost of that asset.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.

Gains and losses upon disposal of an item of property, plant and equipment are determined by comparing the
proceeds from disposal with the carrying amount of property, plant and equipment and are recognized net within
in the statement of profit and loss.

The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the
item if it is probable that the future economic benefits embodied within the part will flow to the Company and its
cost can be measured reliably. The costs of repairs and maintenance are recognized in the statement of profit and
loss as incurred.

Items of property, plant and equipment acquired through exchange of non-monetary assets are measured at fair
value, unless the exchange transaction lacks commercial substance or the fair value of either the asset received or
asset given up is not reliably measurable, in which case the asset exchanged is recorded at the carrying amount of
the asset given up.

Depreciation:

Depreciation on items of PPE is provided on written down value basis, computed on the basis of useful lives as
mentioned in Schedule II to the Companies Act, 2013. Assets acquired under finance leases are depreciated over

194
the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain
ownership by the end of the lease term. Freehold land and land under perpetual lease are not depreciated.

Depreciation on additions / disposals is provided on a pro-rata basis i.e. from / up to the date on which asset is
ready for use / disposed-off.

The residual values, useful lives and method of depreciation are reviewed at each financial year end and adjusted
prospectively, if appropriate.

The estimated useful lives are as follows:

 

 

 

 

 

 

 

 

 

Type of Asset Estimated useful life
Plant & Machinery 25)

Plant & Machinery (IML) 2D)

Plant & Machinery (Vinegar) 2D)

Electrical Installations 25

Furniture & Fixtures 10

Office Equipment

Computers

Vehicles 8

 

 

 

 

Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date is
disclosed as capital advances under other noncurrent assets. The cost of property, plant and equipment not ready
to use before such date are disclosed under capital work-in-progress. Assets not ready for use are not depreciated.
H. Investment Property:

Investment property is property (land or a building—or part of a building—or both) held to earn rentals or for
capital appreciation or both, rather than for:

(a) Use in the production or supply of goods or services or for administrative purposes; or
(b) Sale in the ordinary course of business.

Recognition and measurement:

An investment property shall be recognised as an asset when and only when:

(a) It is probable that the future economic benefits that are associated with the investment property will flow
to the entity; and

(b) The cost of the investment property can be measured reliably.

An investment property shall be measured initially at its cost. Transaction costs shall be included in the initial
measurement. The company adopted cost model prescribed in IND AS 16 for accounting its investment property.

Cost Model:

After recognition as an asset, an item of investment property shall be carried at its cost less any accumulated
depreciation and any accumulated impairment losses.

Depreciation:

Depreciation on items of Investment Property is provided on written down value basis, computed on the basis of
useful lives mentioned in Schedule II to the Companies Act, 2013.

195
Depreciation on additions / disposals is provided on a pro-rata basis i.e. from / up to the date on which asset is
ready for use / disposed-off.

The residual values, useful lives and method of depreciation are reviewed at each financial year end and adjusted
prospectively, if appropriate.

The estimated useful lives are as follows:

 

 

 

Type of Asset Estimated useful life
Buildings 30
Land NA

 

 

 

 

I. Intangible Assets:

Intangible assets are initially measured at cost. Subsequently, such intangible assets are measured at cost less
accumulated amortization and accumulated impairment losses, if any. Subsequent expenditure is capitalized only
when it increases the future economic benefits embodied in the specific asset to which it relates. All other
expenditure, including expenditure on internally generated goodwill and brands, is recognized in statement of
profit or loss as incurred.

J. Inventories:

Inventories consist of raw materials, stores and spares and work-in-progress. Cost includes expenditures incurred
in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their
existing location and condition. In the case of work-in-progress, cost includes an appropriate share of overheads
based on normal operating capacity

The method of valuing the inventories is as follows:

e Raw-materials, Stores, Packing materials, Spare parts are valued at cost.
Finished goods are valued at cost / Net realizable value, whichever is less.
Stock in process is valued at cost or Net realizable value, whichever is less.
Waste is valued at net realizable value.

Cost of inventories is ascertained on FIFO basis.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and selling expenses. The net realisable value of work-in-progress is determined with reference to
the selling prices of related finished products.

K. Financial Instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.

Financial assets:

Initial recognition and measurement:
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair

value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation
or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the
Company commits to purchase or sell the asset.

196
Subsequent measurement

Debt instrument at Amortised Cost
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding are measured at Amortized Cost.

Investment in equity instruments:
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for

trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS103
applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable
election to present in other comprehensive income subsequent changes in the fair value. The Company makes
such election on an instrument by-instrument basis. The classification is made on initial recognition and is
irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to
the statement of profit and loss, even on sale of investment. However, the Company may transfer the cumulative
gain or loss within equity.

Equity instruments i.e., investments in equity shares within the FVTPL category are measured at fair value with
all changes recognized in the statement of profit and loss.

 

Derecognition:

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognized (i.e., removed from the Company’s balance sheet) when:

e The rights to receive cash flows from the asset have expired, or

e The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and
either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has
neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the
asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-
through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When
it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control
of the asset, the Company continues to recognize the transferred asset to the extent of the Company’s continuing
involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Impairment of trade receivables:

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and
recognition of impairment loss on the trade receivables or any contractual right to receive cash or another financial
asset that result from transactions that are within the scope of Ind AS 115. Expected credit loss model takes into
consideration the present value of all the cash shortfalls over the expected life of a financial instrument. In simple
terms, it is weighted average of credit losses with the respective risks of default occurring as weights. The credit
loss is the difference between all contractual cash flows that are due to an entity as per the contract and all the
contractual cash flows that the entity expects to receive, discounted to the effective interest rate. The Standard
presumes that entities would suffer credit loss even if the entity expects to be paid in full but later than when
contractually due. In other words, it simply focuses on DELAYS in collection of receivables.

For the purpose of identifying the days of delay, the Company took into consideration the weighted average
number of delays taking into consideration the date of billing, the credit period and the collection days.

197
Financial liabilities:

Initial recognition and measurement:

 

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as
appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings
and payables, net of directly attributable transaction costs.

The Company’s financial liabilities include trade and other payables, loans and borrowings including bank
overdrafts, financial guarantee contracts.

Subsequent Measurement:

The measurement of financial liabilities depends on their classification, as described below:

Loans and borrowings:

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using
the EIR method. Gains and losses are recognized in the statement of profit and loss when the liabilities are
derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and
loss.

L. Impairment of Non-Financial Assets:

The carrying amounts of the Company’s non-financial assets, other than inventories and deferred tax assets are
reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication
exists, then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite
lives or that are not yet available for use, an impairment test is performed each year at March 31.

The recoverable amount of an asset or cash-generating unit (as defined below) is the greater of its value in use
and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset or the cash-generating unit. For the purpose of impairment testing, assets
are grouped together into the smallest group of assets that generates cash inflows from continuing use that are
largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”).

An impairment loss is recognized in the statement of profit and loss if the estimated recoverable amount of an
asset or its cash-generating unit is lower than its carrying amount. Impairment losses recognized in respect of
cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and
then to reduce the carrying amount of the other assets in the unit on a pro-rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized
in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the estimates used to determine the
recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation or amortization, if no
impairment loss had been recognized.

198
M.Cash & Cash Equivalents:

Cash and bank balances comprise of cash balance in hand, in current accounts with banks, demand deposit, short-
term deposits and Margin Money deposits. For this purpose, “short-term” means investments having maturity of
three months or less from the date of investment. Bank overdrafts that are repayable on demand and form an
integral part of our cash management are included as a component of cash and cash equivalents for the purpose
of the statement of cash flows. The Margin money deposits shall be disclosed as restricted cash balances.

N. Employee Benefits:

Short term employee benefits:

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the
amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the obligation can be estimated reliably.

Defined Contribution Plan:

The Company’s contributions to defined contribution plans are charged to the statement of profit and loss as and
when the services are received from the employees.

Defined Benefit Plans:

The liability in respect of defined benefit plans and other post-employment benefits is calculated using the
projected unit credit method consistent with the advice of qualified actuaries.The present value of the defined
benefit obligation is determined by discounting the estimated future cash outflows using interest rates based on
prevailing market yields of Indian Government Bonds and that have terms to maturity approximating to the terms
of the related defined benefit obligation. The current service cost of the defined benefit plan, recognized in the
statement of profit and loss in employee benefit expense, reflects the increase in the defined benefit obligation
resulting from employee service in the current year, benefit changes, curtailments and settlements. Past service
costs are recognized immediately in income. The net interest cost is calculated by applying the discount rate to
the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee
benefit expense in the statement of profit and loss. Actuarial gains and losses arising from experience adjustments
and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the
period in which they arise.

Termination benefits:

Termination benefits are recognized as an expense when the Company is demonstrably committed, without
realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal
retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy.
Termination benefits for voluntary redundancies are recognized as an expense if the Company has made an offer
encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances
can be estimated reliably.

  

Other long-term employee benefi

The Company’s net obligation in respect of other long term employee benefits is the amount of future benefit
that employees have earned in return for their service in the current and previous periods. That benefit is
discounted to determine its present value. Re-measurements are recognized in the statement of profit and loss in
the period in which they arise.

O. Borrowing Costs:

199
The Company presents basic and diluted earnings per share (“EPS”) data for its equity shares. Basic EPS is
calculated by dividing the profit or loss attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year. Diluted EPS is determined by adjusting the profit or loss attributable to
equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive
potential equity shares.

Ina capitalisation or bonus issue or a share split, the number of ordinary shares outstanding is increased without
an increase in resources. The number of ordinary shares outstanding before the event is adjusted for the
proportionate change in the number of ordinary shares outstanding as if the event had occurred at the beginning of
the earliest period presented.

S. Segment Reporting:
In the opinion of the management, the company operates in only one segment i.e. laying of oil and gas pipe lines

and development of allied infrastructure. Accordingly, disclosure of segment information as prescribed in the
Indian accounting standard 108 “Operating segments” is not applicable.

201
Borrowing costs consist of interest, ancillary and other costs that the Company incurs in connection with the
borrowing of funds and interest relating to other financial liabilities. Borrowing costs also include exchange
differences to the extent regarded as an adjustment to the borrowing costs. Borrowing costs directly attributable to
the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready
for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in
the period in which they occur.

P. Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. If the effect of the time value of money is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and
the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time
is recognized as a finance cost.

Contingent liabilities:

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may,
but probably will not, require an outflow of resources. Where there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

 

Contingent assets:

Contingent assets are not recognized in the financial statements. However, contingent assets are assessed
continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income
are recognized in the period in which the change occurs.

Q. Tax Expenses:
Tax expense consists of current and deferred tax.
Income Tax:

Income tax expense is recognized in the statement of profit and loss except to the extent that it relates to items
recognized directly in equity, in which case it is recognized in equity. Current tax is the expected tax payable on
the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.

Deferred Tax:

Deferred tax is recognized using the balance sheet method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences
when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different
tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities
will be realized simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available
against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and
are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

R. Earnings Per Share:

200
 

Annexure VI : Notes to the Restated Financial Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(All amounts in = Lakhs)

Note:3 Property, Plant and Equipment
Furnitu 7
Particular Blant and reand | Vehicles Office Computers Total
Equipment | ,.. equipment
Fixtures
Gross Block
As at 31 March, 2017 88.91 2.22 33.48 0.14 3.00 127.76
Additions during the year 1,119.50 - 36.93 - 4.76} 1,161.19
Deductions during the year 31.94 1.46 - - 33.40
As at 31 March, 2018 1,176.46 2.22 68.96 0.14 7.76 | 1,255.54
Additions during the year 88.99 - 118.40 15.00 9.61 232.00
Deductions during the year 42.25 - - - 42.25
As at 31 March, 2019 1,223.20 2.22] 187.36 15.14 17.37) 1,445.29
Additions during the year 55.87 1.51 27.43 3,21 9.09 97.11
Deductions during the year - - - - - -
As at 31 March, 2020 1,279.07 3.73 | 214.79 18.35 26.45 | 1,542.40
Accumulated Depreciation
Up to 31 March, 2017 (55.71) 0.59 3.64 0.08 1.74 (49.66)
For the year 70.27 0.43 14.85 0.01 1.24 86.81
On deductions 7.05 0.46 - - Fal
Up to 31 March, 2018 7.51 1.03 18.03 0.09 2.98 29.64
For the year 254.48 0.30 32.53 1.30 3.68 292.30
On deductions 16.62 - - - 16.62
Up to 31 March, 2019 245.36 1.33 50.56 1.39 6.66 305.31
For the year 230.49 0.45 54.23 13.17 6.37 304.70
On deductions - - - - - -
Up to 31 March, 2020 475.85 1.78 | 104.79 14.56 13.04 610.01
Net Block
As at 31 March, 2018 1,168.96 1.19 50.93 0.05 4.78| 1,225.91
As at 31 March, 2019 977.84 0.89] 136.80 13.75 10.71} 1,139.98
As at 31 March, 2020 803.23 1.95] 110.00 3.79 13.42 932.38
On transition to Ind AS, the Company has elected to continue with the net carrying value of all of its

 

 

property, plant and equipment (PPE) recognised as at April 1, 2017 measured as per the previous
GAAP and use that net carrying value as the deemed cost of the PPE. While preparing restated financial
information for the year ended March 31, 2017, the Company has opted the same accounting policy
choice as adopted on transition date and accordingly the net carrying value of its PPE as at March 31,
2016 has been considered as deemed cost of PPE as at April 1, 2016.

202

 
Note:3 Investment Property

(All amounts in = Lakhs)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particular Land Buildings
Closing balance at 31 March 2017 180.19 72.06
Addition during the year - -
Disposal/Adjustment during the year - -
Closing balance at 31 March 2018 180.19 72.06
Addition during the year - 6.27
Disposal/Adjustment during the year -
Closing balance at 31 March 2019 180.19 78.33
Addition during the year - -
Disposal/Adjustment during the year - -
Closing balance at 31 March 2020 180.19 78.33
Amortization and Impairment
Closing balance at 31 March 2017 - 7.03
Amortization during the year - 6.35
Disposal/Adjustment during the year - -
Closing balance at 31 March 2018 - 13.38
Amortization during the year - 6.42
Disposal/Adjustment during the year - -
Closing balance at 31 March 2019 - 19.80
Amortization during the year 4.67
Disposal/Adjustment during the year
Closing balance at 31 March 2020 - 24.47
Net Carrying Value
At 31 March 2018 180.19 58.68
At 31 March 2019 180.19 58.53
At 31 March 2020 180.19 53.86

 

 

 

203

 
Note No.5 Loans and Advances

 

 

 

 

 

 

 

 

 

 

 

 

As at As at wn a
Particulars March 31, March 31
’
2020 31, 2019 2018
Security and other Deposits 268.97 254.97 | 194.38
Total 268.97 254.97 | 194.38
Note No.6 Deferred Tax Asset (Net)
As at As at Fis =
Particulars March 31, March 3 1 c
>
2020 31, 2019 2018
Deferred Tax Liabilities (Net) 35.93 (11.53)
(26.06)
Total 35.93 (11.53) (26.06)
Note No.7 Inventories
As at As at a s a
Particulars March 31, March at ©
’
2020 31, 2019 2018
Work-in-progress(at cost) 2,435.56 | 1,957.96 | 245.12
Stores and Spares(at cost) 32.69 23.41 20.01
Total 2,468.25 | 1,981.37 | 265.13

 

Components of work in progress consists of the cost of ma

cost and other overheads as follows.

terials, cost of manpower and service

 

 

 

 

 

 

 

 

 

 

 

 

 

As at As at ne i
Particulars March 31, March 31
’
2020 31, 2019 2018
Closing work-in-progress
cost of materials 608.89 489.49 61.28
cost of manpower and service cost and 1,096.00 881.08 | 110.30
other overheads 730.67 587.39 73.54
Total 2,435.56 | 1,957.96 |_ 245.12
Note No.4(ii) Current Investments
Agat As at As at
Particulars March March
March 31, 2020 | 312019 | 31, 2018
Fixed Deposits with Banks 576.13 - -
Total 576.13 - -

 

 

205

 
 

Annexure VI : Notes to the Restated Financial Information

Note No.4(i) Investments

(All amounts in Lakhs)

 

 

 

 

 

 

As at As at As at
Particulars March March March 31,
31, 2020 | 31, 2019 2018
Investment carried at fair value through profit or loss
Non-trade, Quoted
Investments in Equity Shares
Nil (2018 500) equity shares of Rs 2/- each in Axis Bank _ 2.46
Limited .
Nil (2018 2,000) equity shares of Rs 10/- each in Coal
India Limited - 5.49
Nil (2018 300) equity shares of Rs 2/- each in Divis _ 3.29
Laboratories Limited "
Nil (2018 50) equity shares of Rs 5/- each in
Dr Reddy's Laboratories Limited . 1.05
Nil (2018 800) equity shares of Rs 2/- each in Hindustan _ 2.46
Zinc Limited .
Nil (2018 1,500) equity shares of Rs 2/- each in Karur
Vysya Bank . 1.53
Nil (2018 300) equity shares of Rs 2/- each in Larsen & _ 3.89
Toubro Limited =
Nil (2018 1,340) equity shares of Rs 10/- each in Laurus _ 6.84
Labs Limited ‘
Nil (2018 15,100) equity shares of Rs 2/- each in Mold- _ 772
Tek Technologies Limited .
Nil (2018 800) equity shares of Rs 10/- each in Reliance
Industries Limited . 716
Total - 41.89
- Deposit accounts 1.62 1.36 1.25
Aggregate amount of quoted investments
- Fair value - 41.89
- Cost - 39.92

Aggregate provision for diminution in value of
investments

 

 

 

 

204

 
 

Note No.8 Trade Receivables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at As at As at
Particulars March 31, March 31, March 31,
2020 2019 2018
Unsecured, Considered Good
Outstanding for a period exceeding six months 252.92 59.84 -
from due date
Others 1,381.95 1,563.35 2,244.03
Total 1,634.88 1,623.19 2,244.03
Note No.9 Cash and Cash Equivalents
As at As at As at
Particulars March 31, March 31, March 31,
2020 2019 2018
Cash on hand 0.99 12.59 10.13
Balances with banks in
- Current accounts 376.83 38.77 387.46
- Deposit accounts (less than 3 months maturity) - 279.75
- Margin money deposits (less than 3 months - 0.25
maturity)
Total 377.82 51.36 677.59
Note No.10 Bank Balances other than above
As at As at As at
Particulars March 31, March 31, March 31,
2020 2019 2018
Balances with banks (Restricted Use)
- Margin money deposits 1,124.54 1,086.43 874.18
Total 1,124.54 1,086.43 874.18
Note No.11 Other Financial Assets
As at As at As at
Particulars March 31, March 31, March 31,
2020 2019 2018
Retention Money Receivable 2,358.23 1,472.07 577.38
Other Receivables 19.80 61.42 16.72
Interest accrued 0.40 = 45.09
Rent Receivable - 0.40 0.35
Total 2,378.43 1,533.89 639.54

 

 

 

 

206

 
Note No.12 Other Current Assets

 

 

Particulars

As at
March 31, 2020

As at
March 31, 2019

As at
March 31, 2018

 

Prepaid expenses

Advance for Expenses
Deposits paid under protest
Balances with Govt Authorities
Due from Staff

23.65
14.60
10.75

3.61

21.57
292.15
10.75
231.37
1.80

25.32
45.69
10.75
264.45

 

 

Total

52.62

 

557.64

 

 

346.21

 

Note No. 13 Share Capital

(All amounts in = Lakhs)

 

Particulars

As at
31 March, 2020

As at
31 March, 2019

As at
31 March, 2018

 

Amount
Numbe
rof
shares

Numbe

shares

Amount

rof

Amoun

Numbe t
rof

shares

 

Authorized:

Equity Shares of INR 10
each.

(as at 31 March 2018 -
5000000 equity shares of Rs
10 Each)

(as at 31 March 2019 -
20000000 equity shares of Rs
10 Each)

(as at 31 March 2020 -
20000000 equity shares of Rs
10 Each)

Issued, subscribed and paid
up:
Equity Shares of INR 10 each
fully paid up
(as at 31 March 2018 -
4500000 equity shares of Rs
10 Each)
(as at 31 March 2019 -
4500000 equity shares of Rs
10 Each)
(as at 31 March 2020 -
14625000 equity shares of Rs
10 Each)

Total

 

200.00 | 2,000.00

200.00 | 2,000.00

50.00
500.00

 

 

146.25 | 1462.50

45.00 450.00

45.00 | 450.00

 

146.25 | 1,462.50

45.00 450.00

45.00
450.00

 

 

 

 

 

 

 

 

 

207

 
 

i. Details of share holders holding more than 5% of total number of shares

 

 

 

Name of the Share Holder As at As at As at
31 March, 2020 31 March, 2019 31 March, 2018
% % %
Numbe Numbe Numbe
rof rof rof
Shares Shares Shares
Sri G.Srinivasa Rao 142.51 | 97.45% 43.85 | 97.44% 43.88 | 97.50%

 

 

 

 

ii. Reconciliation of Number of Shares Outstanding:

 

 

 

 

 

Name of the Share Holder As at As at As at
31 March, 2020 31 March, 2019 31 March, 2018
Amount Amount Amoun
Numbe Numbe Numbe t
rof rof rof
shares shares shares
Balance at the beginning of 45.00 45.00 450.00 10.00
the year 450.00 100.00
Add: Issue of bonus shares 101.25 | 1,012.50 - - 35.00 | 350.00
Balance at the end of the 146.25 | 1462.50 45.00 450.00 45.00 | 450.00
year

 

 

 

 

 

 

 

iii. Rights, Restrictions and Preference attached to equity Shares including declaration of
dividend
The company has only one class of equity shares having a face value of INR 10 per share with
one vote per each equity share. The company declares and pays dividends in Indian rupees. The
dividend proposed by the Board of Directors is subject to the approval of the shareholders in the
ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the company, after distribution of all
preferential creditors. The distribution will be in proportion to the number of equity shares held
by the shareholders.

 

iv. Details of the Bonus shares issued for the last 5 years immediately preceding the
current period

During the financial year 2017-18 the Company has allotted 35,00,000 of INR 10 fully paid-up
equity shares as bonus shares to the existing equity share holders of the Company in the ratio of
3.5:1.

During the financial year 2019-20 the Company has allotted 1,01,25000 of INR 10 fully paid-up
equity shares as bonus shares to the existing equity share holders of the Company in the ratio of
3.25:1

208

 
Note No. 14 Reserves and Surplus

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(All amounts in = Lakhs)
Surplus in Other
. General Statement | Compre
Particulars Reserve of Profit inenatve Total
and Loss Income
Balance as at 31 March 2017 17.56 2,407.50 - 2,425.06
Add: Profit for the year - 716.22 - 716.22
Less: Utilized for issue of Bonus Shares a (350.00) = (350.00)
Other Comprehensive Income 7 - 1.66 1.66
Balance as at 31 March 2018 17.56 2,773.72 1.66 2,792.94
Add: Profit for the year - 1,785.51 - 1,785.51
Other Comprehensive Income - - 2.78 2.78
Balance as at 31 March 2019 17.56 4,559.23 4.44 4,581.23
Add: Profit during the year ended - 1,987.93 - 1,987.93
31.03.2020
Re-measurement gains/(losses) - - (11.53) (11.53)
Less: Utilized for issue of bonus shares - (1,012.50) - (1,012.50)
Less: Expenses on IPO - (12.04) - (12.04)
Balance as at 31 March 2020 17.56 5,522.62 (7.10) 5,533.08
Annexure VI : Notes to the Restated Financial Information
Note No.15 Long-term borrowings (All amounts in Z Lakhs)
As at As at As at
Particulars March 31, March 31, March 31,
2020 2019 2018
Long term maturities of finance lease obligations 15.23 112.69 355.68
Total 15.23 112.69 355.68
Note No.16 Provisions (All amounts in Z Lakhs)
As at As at As at
Particulars March 31, March 31, March 31,
2020 2019 2018
Provision for employee retirement benefits
: Gratuity 45.38 16.73 11.13
: Compensated Absences 19.17 7.42 3.02
Total 64.56 24.14 14.15

 

 

 

 

 

209

 

 

 
 

Note No.17 Short-term borrowings

(Amount rs in Lakhs)

 

 

 

 

As at As at As at
Particulars March 31, March 31, | March 31,
2020 2019 2018
Secured Loan repayable on demand from
Banks: 113.21 560.58 724.69
Total 113.21 560.58 724.69

 

 

 

Secured Loan repayable on demand from Yes Bank Limited is Secured by (i) Exclusive charge by
Exclusive charge by way of
relatives of the directors and
the directors. Secured Loan
repayable on demand from ICICI Bank Ltd is Secured by First pari-passu charge on fixed assets
and entire current assets of the company, both present and future and exclusive collateral security
of vacant site and property of Sri G Srinivasa Rao - Director (i) vacant site at Chinamushidiwada
admeasuring 2186.2 sq. yds. covered by Sy No 71/13 & 71/19 (ii) property at Chinamudhishwada
admeasuring 2081.2 sq. yds. covered by Sy No 71/12 and part of 71/19 and admeasuring 1524.6
sq. yds. 556.60 sq. yds.covered by Sy No 71/17A & 18A and (iii) vacant site admeasuring 278.3
covered by Sy No 71/5D and personal guarantees of the Directors.

way of hypothecation on current assets, both present and future, (ii)
equitable mortgage of designated personal properties of Directors and
(iii) unconditional and irrecoverable personal guarantee of relatives o:

Note No.18 Trade payables

 

(Amount rs in

 

 

 

 

 

 

 

 

 

 

 

 

Lakhs)
As at As at As at
Particulars March 31, March 31, | March 31,
2020 2019 2018
Dues to: Small and Micro Enterprises * - -
: Other than Small and Micro Enterprises 1,393.46 1,156.18 1,208.27
Capital Creditors 55.70 129.95
Total 1,393.46 1,211.88 1,338.22
Note No.19 Other financial liabilities
As at As at As at
Particulars March 31, March 31, | March 31,
2020 2019 2018
Current maturities of finance lease obligations 106.07 312.07 311,12
Liabilities for expenses 43.82 42.53 15.72
Deposits payable 0.60 0.60 0.60
Total 150.49 355.19 327.44

 

 

 

 

210

 

 

 
Note No.20 Other current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at As at As at
Particulars March 31, March 31, | March 31,
2020 2019 2018
Statutory dues payable 292.72 297.41 318.27
Due to Staff 302.64 205.10 114.32
Remuneration and Commission Payable to directors 482.09 358.85 231.25
Advance from Customers - - 52.25
Total 1,077.46 861.36 716.10
Note No.21 Provisions
As at As at As at
Particulars March 31, March 31, | March 31,
2020 2019 2018
Provision for Employee Benefits
: Gratuity 0.75 0.68 0.32
: Compensated Absences - - -
Total 0.75 0.68 0.32
Note No.22 Current Tax Liability (Net)
As at As at As at
Particulars March 31, March 31, | March 31,
2020 2019 2018
Current Tax Liability (Net) 274.89 299.63 3.37
Total 274.89 299.63 3.37
Annexure VI : Notes to the Restated Financial Information
(All amounts in = Lakhs)
Note No.23 Revenue from Operations
As at As at As at
Particulars March 31, | March 31, | March
2020 2019 31, 2018
Revenue from Operations 16,123.83 | 13,743.41] 8,707.77
Other Operating Income - 205.00 -
Total 16,123.83 | 13,948.41 | 8,707.77
Classification of revenue from operations
As at As at As at
Particulars March 31, | March 31, | March
2020 2019 31, 2018
Revenue from Works Contract 12,697.40 | 11,764.47 | 8,065.10
% on Total Revenue 78.75% 85.60% 92.62%
O & Mand HDPE Pipeline (Annual Maintenance) 3,426.43 1,978.94 642.67
% on Total Revenue 21.25% 14.40% 7.38%
Total 16,123.83 | 13,743.41 | 8,707.77

 

 

 

 

211

 

 
 

Note No.24 Other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at As at As at
Particulars March 31, | March 31, | March
2020 2019 31, 2018
Recurring other income
Related to business activity
Interest Income 93.41 92.86 132.62
Gain on Foreign Exchange fluctuation & 0.20
Not related to business activity
Rent earned 4.80 4.45 4.20
Dividend from Chits 1.82 8.69 5.28
Dividend Income on shares 0.28 0.65
Non-recurring other income
Not related to business activity
Profit on sale of assets = 0.28
Insurance Claim 10.41 = as
Related to business activity
Sales Tax Refund 44.75 - 2.10
Value Added Tax Credit a 7.46
Total 155.19 106.28 152.79
Note No.25 Raw Material Consumed
As at As at As at
Particulars March 31, | March 31, | March 31,
2020 2019 2018
Opening Stock of raw material 23.41 20.01 18.50
Add: Purchases during the year 3,722.77 4,145.69 1,944.81
Less: Closing stock of raw material (32.69) (23.41) (20.01)
Total 3,713.49 4,142.29 1,943.31
Note No.26 Construction expenses
As at As at As at
Particulars March 31, | March 31, | March
2020 2019 31, 2018
Sub Contract Expenses 5,207.65 4,368.10} 3,331.95
Hire Charges 552.12 469.50 292.46
Labour Charges 441.39 - 1.13
Power and Fuel 158.67 318.03 67.15
Rates and Taxes 12.31 103.64 120.80
Repairs to: Plant and Machinery 9.90 13.92 8.90
Other expenses 121.16 116.43 130.19
Total 6,503.20 5,389.63 | 3,952.57

 

212

 

 

 
Note No.27 Changes in inventories of work-in-progress

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at As at As at
Particulars March 31, | March 31, | March
2020 2019 31, 2018
Opening work-in-progress 1,957.96 245.12 -
Closing work-in-progress 2,435.56 1,957.96 245.12
Total (477.60) | (1,712.85) | (245.12)
Components of work in progress consists of the cost of materials, cost of manpower and service
cost and other overheads as follows.
As at As at As at
Particulars March 31, | March 31, | March
2020 2019 31, 2018
Opening work-in-progress
cost of materials 489.49 61.28 -
cost of manpower and service cost and 881.08 110.30 -
other overheads 587.39 73.54 -
Total 1,957.96 245.12 -
Closing work-in-progress
cost of materials 608.89 489.49 61.28
cost of manpower and service cost and 1,096.00 881.08 110.30
other overheads 730.67 587.39 73.54
Total 2,435.56 1,957.96 245.12
Note No.28 Employee benefits
As at As at As at
Particulars March 31, | March 31, | March
2020 2019 31, 2018
Salaries and Wages 2,202.18 1,707.06 812.29
Directors Remuneration 360.00 720.00 720.00
Contribution to provident fund and other funds 134.07 78.08 37.98
Gratuity 14.00 5.19 11.13
ESI 67.13 62.74 13.87
Leave Encashment 11.07 4.76 3.34
Staff welfare expenses 115.83 84.77 24.25
Total 2,904.28 2,662.60 | 1,622.86

 

213

 

 

 
 

Note No.29 Finance costs

 

 

 

 

 

 

 

 

 

 

 

As at As at As at
Particulars March 31, March 31, March 31,
2020 2019 2018
Hire Purchase Charges 20.06 38.30 9.05
Interest on Working Capital Loans 36.15 26.85 6.57
Interest Others 4.26 21.12 2.96
Other borrowing costs 75.94 82.22 66.04
Total 136.40 168.49 84.62
Note No.30 Other expenses
As at As at As at
Particulars March 31, March 31, March 31,
2020 2019 2018
Rent 173.15 159.08 91.96
Repairs to other assets n 7.80 6.25
Insurance 48.61 49.84 42.67
Rates and taxes, excluding, taxes on income 0.23 0.38 3.79
Advertisement and Business Promotion expenses 44.11 34.59 15.69
Legal and Professional Charges 45.08 37.28 23.74
Auditors Remuneration 3.00 3.00 0.75
Donation - 26.00 7
Corporate Social Responsibility Expenses 33.00 20.00 26.30
Communication Expenses 1.70 3.62 3.39
Travelling and Conveyance expenses 39.39 57.08 24.88
Loss on Chits 7.70 - 9.50
Bad Debts Written Off = - -
Assets Written Off = - -
Loss on Sale of Assets = 7.63 =
Bank Charges 43.88 22.70 8.01
General expenses 69.92 146.84 59.75
Direcotrs sitting fee 3.53 - -
Total 513.29 575.84 316.67

 

214

 

 
Note No.31 Other Information to Restated Financial Statements:
A. Corporate Social Responsibility:

 

 

 

 

 

 

 

 

 

As at As at As at
Particulars 31 March, 31 March, 31 March,
2020 2019 2018
Amount required to be spent 32.42 19.17 13:77:
Amount brought forward from the previous
years - - -
Amount Spent - 20.00 26.30
Amount to be spent 32.42 - -

 

 

B. Income Tax Expenses:

(a) Income tax expense recognised in the statement of profit and loss:

 

 

 

 

 

Particulars As at As at As at
31 March, 2020 31 March, 2019 31 March, 2018
Current Tax 732.22 758.62 328.00
Taxes of Earlier Years : : -
Deffered Tax (43.58) (14.16) 48.28
Total Tax Expenses 688.64 744.46 376.28

 

 

 

 

(b) Income tax expense recognised in other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at As at As at
Particulars 31 March, 31 March, 31 March,
2020 2019 2018

Tax on Defined benefit item included in OCI (15.41) 0.12 -
Tax on Re-measurement of Investment item

included in OCI 3.88 (0.49) (0.31)
Total (11.53) (0.38) (0.31)

(c) Reconciliation of tax expense and the accounting profit multiplied by statutory tax rate:
As at As at As at
Particulars 31 March, 31 March, 31 March,
2020 2019 2018

Profit before tax 2,676.57 2,529.97 1,092.50
Enacted tax rate 25.17% 29.12% 33.06%
Expected tax expense 673.69 736.73 361.21
Impact on account of permanent

differences 10.01 21.82 9.71
Impact on account of timing differences 48.56 3.86 (45.39)
Others - (3.79) -
Income tax expense for the year/period 732.22 758.62 325.53
Effective income tax rate 27.36% 29.99% 29.80%

 

 

 

 

 

215
(d) Reconciliation of Deffered Tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars 2019-20 2018-19 2017-18
WDYV as per Income Tax 950.79 1,029.72 1,112.22
WDV as per books 932.38 1,139.98 1,225.91
Time Difference (18.41) 110.26 113.69
Tax Rate (%) 25.17 29.12 33.06
DTL/ (DTA) (4.63) 32.11 37.59
Disallowances 78.98 70.66 35.80
Leave encashment under Sec 43B 19.17 8.10 3.34
Provision for Bonus 46.13 45.83 20.25
Provision for Gratuity 59.04 16.73 11.13
Others : - 1.07
Re-measurement gains/(losses) on Investments : - (1.96)
Tax Rate (%) 25.17 29.12 33.06
DTL / (DTA) on disallowances (31.29) (20.58) (11.53)
Net (DTA)/DTL (35.93) 11.53 26.06
B/S presentation
Opening 11.53 26.06 (22.53)
Add: DTL / (DTA) (47.46) (14.53) 48.59
Closing (35.93) 11.53 26.06
P&L presentation
DTL / (DTA) (Including OCI) (15.07) (14.53) 48.59
Deferred Tax Reconciliation
Closing Deferred Tax as per Restatements (35.93) 11°53: 26.06
Less: Closing Deferred Tax per Financial Statements (35.93) 41.92 45.16
Difference : (30.39) (19.10)
C. Earnings Per Share:
Pardeulars For the year ended March 31,
2020 2019 2018
I. Net Profit as per P&L Account available for Equity
Shareholders 1,987.93 1,785.51 716.22
A. Number of shares For Basic Earnings Per Share of ~ 10 each 146.25 146.25 146.25
B. Number of shares For Diluted Earnings Per Share of ~10 each: 146.25 146.25 146.25
-Basic EPS 13.59 12.21 4.90
“Diluted EPS 13.59 12.21 4.90

 

 

 

 

 

Basic Earnings per share (EPS) amounts are calculated by dividing the profit for the year attributable to equity
holders of the Company by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average

number of equity shares outstanding during the year plus the weighted average number of equity shares that would
be issued on conversion of all the dilutive potential equity shares into equity shares.

216
Ww

During the financial year 2017-18 the Company has allotted 35, 00,000 of INR 10 fully paid-up equity shares as
bonus shares to the existing equity share holders of the Company in the ratio of 3.5:1.

During the financial year 2019-20 the Company has allotted 1,01,25000 of INR 10 fully paid-up equity shares as
bonus shares to the existing equity share holders of the Company in the ratio of 3.25:1.

In a Capitalisation or bonus issue or a share split, the number of ordinary shares outstanding is increased without
an increase in resources. The number of ordinary shares outstanding before the event is adjusted for the
proportionate change in the number of ordinary shares outstanding as if the event had occurred at the beginning
of the earliest period presented.

D. Commitments And Contingent Liabilities To The Extent Not Provided:

a) Commitments:
Estimated amount of contract remaining to be executed on capital account and not provided for
(31.03.2020: Rs Nil) (31.03.2019: Rs Nil) and (31.03.2018: Rs Nil).

b) Contingent liabilities to the extent not provided for:

I. Guarantees Issued By the Bank:

 

 

 

 

Guarantees issued by Banks

Yes Bank Limited 3,913.12 3,381.54 2,420.90
Axis Bank Limited - 1,566.12 602.00
ICICI Bank Limited 2,090.55 - -

 

 

 

 

 

As on 31.03.2020 total Bank Guarantee given by ICICI Bank Limited consits of Rs 1,424.27 Lakhs counter
bank guarantee given to Axis Bank Limited.

II. Disputed Demands:

   

Demand under Rule 17 (1) (e) of the APVAT Rules,
2005 Financial Year 2008-2009 [Rs. 307,190/- was
paid under protest] 6.14 6.14 6.14
Demand under Rule 17 (1) (e) of the APVAT Rules,
2005 Financial Year 2009-2010 [Rs. 767,828/- was

 

 

 

paid under protest] 15.36 15.36 15.36
Order u/s. 143 (3) Income tax Act, 1961 Assessment
Year 2013-14 - - 66.29
Order u/s. 143 (3) Income tax Act, 1961 AY 2017-
18 176.02 - =

 

 

 

 

 

 

E. Segment Reporting:
In the opinion of the management, the company operates in only one segment i.e. laying of gas and oil pipe lines
and development of allied infrastructure. Accordingly, disclosure of segment information as prescribed in the
Indian accounting standard 108 “Operating segments” is not applicable.

217
F. Employee Benefits:

(a) Defined Contribution Plans:

The Company has recognised following amounts as Expense in the Statement of Profit and Loss:

 

For the year

For the year ended

For the year ended 31

 

 

 

 

 

 

Particulars ended 31 March, 31 March, 2019 March, 2018
2020
Provident Fund 134.07 78.08 37.98
Employee State
Insurance 67.13 62.74 13.87

 

 

(b) Defined Benefit Plans:

(i) Compensated Absences: (Included as part of Salaries, Wages and Bonus)

"The Company's liability towards un-funded compensated absences is determined by independent actuarial
valuation using the projected unit credit method which considers each period of service as giving rise to an
additional unit of benefit entitlement and measures each unit separately to build up the final obligation.

Compensated benefits is payable to all the eligible employees of the Company on any type of separation from the
Company on the balance of unutilised leaves as per the Company Rules. Benefits would be paid at the time of
separation based on last drawn basic salary.

 

 

 

 

For the year For the year For the year
Particulars ended ended ended
31 March, 2020 31 March, 2019 31 March, 2018
Expenses recognised in
Statement of Profit and Loss 11.07 4.76 3.34

 

 

 

 

(ii). Gratuity:

The Company has a funded defined benefit gratuity plan. Every employee who has completed five years or more
of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service as
per the provisions of the Payment of Gratuity Act, 1972 (as amended).

The plan exposes the Company to actuarial risks such as interest rate risk, investment risk, longevity risk and
inflation risk.

The following table set out the funded status of the gratuity and the amounts recognized in the Company’s restated
financial information:

Change in benefit obligation:

 

 

 

 

 

 

 

 

As at
Particulars para 2020 merce 2019 March;

2018
Opening balance of benefit obligations 16.73 113 :
Current service cost 13.12 4.31 11.13
Interest cost 87 0.88 :
Actuarial (Gain) /loss 15.41 0.41 -
Benefits paid - - -
Closing balance of benefit obligations 46.13 16.73 11.13

 

 

 

 

 

218
Expenses recognised in the statement of profit and loss for the year:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at As at As at
Particulars 31 March, 31 March, 31 March,
2020 2019 2018
Current service cost 13.12 4.31 11.13
Past service cost : : :
Interest cost 0.87 0.88 :
Total expenses included in employee
benefits expense 13.99 5.19 11.13
Recognised in other comprehensive income:
As at As at As at
Particulars 31 31 at
March, March, March,
2020 2019 2018
Changes in financial assumptions 15.41 0.41 -
Experience variance (i.e. Actual experience Vs. assumptions) - - -
Actuarial (Gain) / Loss on plan assets - : :
Recognised in other comprehensive income 15.41 0.41 :
Demographic Assumptions:
As at As at As at
31 March, 31 March, 31 March,
Particulars 2020 2019 2018
Indian Assured Lives Mortality (2006-08) Ult 100% 100% 100%
Attrition Rate:
Age at valuation date / valuation date
18-30 5% 5% 5%
31-40 3% 3% 3%
41 & above 1% 1% 1%

 

 

 

 

 

Table of sample mortality rates from Indian Assured Lives Mortality (2006-08) Ult:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Age Male Female
20 0.089% 0.089%
25 0.098% 0.098%
30 0.106% 0.106%
25 0.128% 0.128%
40 0.180% 0.180%
45 0.287% 0.287%
50 0.495% 0.495%
55 0.789% 0.789%
60. 1.153% 1.153%
65 1.701% 1.701%
70 2.586% 2.586%

 

219

 
G. Related party transactions have been disclosed in accordance with Ind AS 24 'Related Party
Disclosures’:

(a)Names of the related parties and description of the relationship:

 

 

 

 

 

 

 

 

 

Name of related parties Nature of relationship
G.Srinivasa Rao Managing Director
G. Sri Lakshmi Director
Sambasiva Rao Ketineni Chief Financial Officer
Santhosh Kumar Gunemoni Company Secretary
Sudhanshu Sekhar Chief Executive Officer
G Kutumba Rao Director
G. Likhitha Director
Veriedge Technologies Pvt The entity and the reporting entity are under the control of the same
Ltd person.

 

 

(b)Related Party transactions details:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars As at As at As at

31 March, 2020 31 March, 2019 31 March, 2018
Remuneration and Commission
G. Srinivasa Rao 360.00 520.00 480.00
G. Sri Lakshmi 0.00 200.00 240.00
Narasimha Sekhar Narahari (Ex CFO) 6.41 - -
Santhosh Kumar Gunemoni 1.60 : -
Sudhanshu Sekhar 10.19
Rent
G Kutumba Rao (including Hire
Charges) 1.80 1.80 5.15:
G. Srinivasa Rao 24.00
Web Designing charges
Veriedge Technologies Pvt Ltd - - 15.93
Professional Charges
G. Likhitha - 19.00 18.00
Particulars As at 31 As at 31 As at 31

March, 2020 March, 2019 March, 2018

Remuneration and Commission Payable
G. Srinivasa Rao 361.73 216.56 149.00
G. Sri Lakshmi 120.36 142.29 82.26
Rent Payable
G Kutumba Rao 0.71 - -
G. Srinivasa Rao B 25.92 -
Professional Charges Payable
G. Likhitha 9.93 24.03 7.20

 

 

 

 

220
H. Fair Values:

Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial
instruments, other than those with carrying amounts that are reasonable approximations of fair values as of

31 March, 2020.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars FVTPL Amortized Cost Total Carrying
Value

Assets

Investments 577.75, : 577.75
Loans and Advances 268.97 - 268.97
Trade Receivables 1,634.88 - 1,634.88
Cash and Cash Equivalents 377.82 - 377.82
Other Bank Balances 1,124.54 - 1,124.54
Other Financial Assets 2,378.43 - 2,378.43
Total 6,362.39 - 6,362.39
Liabilities

Long-term borrowings - 121.29 121.29
Short-term borrowings - 113.21 113.21
Trade payables 1,393.46 - 1,393.46
Other financial liabilities 44.42 - 44.42
Total 1,437.88 234.50 1,672.38

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial
instruments, other than those with carrying amounts that are reasonable approximations of fair values as of 31
March, 2019.
Particulars FVTPL Amortized Cost Total Carrying
Value
Assets
Investments 1.36 : 1.36
Loans and Advances 254.97 - 254.97
Trade Receivables 1,623.19 - 1,623.19
Cash and Cash
Equivalents 51.36 - 51.36
Other Bank Balances 1,086.43 - 1,086.43
Other Financial Assets 1,533.89 - 1,533.89
Total 4,551.20 - 4,551.20
Liabilities
Long-term borrowings - 424.76 424.76
Short-term borrowings : 560.58 560.58
Trade payables 1,211.88 - 1,211.88
Other financial liabilities 43.13 - 43.13
Total 1,255.01 985.34 2,240.35

 

221

 

 
-

Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial
instruments, other than those with carrying amounts that are reasonable approximations of fair values as of 31
March, 2018.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars FVTPL Amortized Cost Total Carrying Value

Assets

Investments 43.14 : 43.14
Loans and Advances 194.38 - 194.38
Trade Receivables 2,244.03 - 2,244.03
Cash and Cash Equivalents 677.59 - 677.59
Other Bank Balances 874.18 - 874.18
Other Financial Assets 639.54 - 639.54
Total 4,672.86 - 4,672.86
Liabilities

Long-term borrowings - 666.80 666.80
Short-term borrowings - 724.69 724.69
Trade payables 1,338.22 - 1,338.22
Other financial liabilities 16.32 - 16.32
Total 1,354.54 1,391.50 2,746.03

 

 

i) The management assessed that fair value of trade receivables, trade payables and other liabilities approximate
their carrying amounts largely due to the short-term maturities of these instruments.

ii) The fair value of the financial assets and liabilities is included at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The method
and assumption used to estimate the fair values is Long-term fixed-rate and variable-rate receivables/advances
given are evaluated by the company based on parameters such as Interest rates, risk factors and individual
creditworthiness of the customer based on this evaluation, allowances are taken into account for the expected
credit losses of the receivables.

Fair value hierarchy:

Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 — Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

All financial assets and liabilities have been fair valued using Level 3 hierarchy except cash and bank balance
which is fair valued using Level 1.

J.Financial Risk Management:
The Company’s principal financial liabilities comprise trade and other payables. The main purpose of these

financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include trade
and other receivables, and cash and cash equivalents those are derived directly from its operations.

222
The Company’s activities expose it to a variety of financial risks, including credit risk, liquidity risk and Market
tisk. The Company’s risk management assessment and policies and processes are established to identify and
analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and
compliance with the same. Risk assessment and management policies and processes are reviewed regularly to
reflect changes in market conditions and the Company’s activities. The Board of Directors, risk Management
committee and the Audit Committee is responsible for overseeing the Company’s risk assessment and
management policies and processes.

(a) Market Risk:-

 

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price
risk. Financial instruments affected by market risk are deposits with Banks.

The analysis excludes the impact of movements in market variables on: the carrying values of gratuity and other
post-retirement obligations; provisions; and the non-financial assets and liabilities.

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks.
This is based on the financial assets and financial liabilities held as at March 31, 2020, March 31, 2019 and March
31, 2018.

(i) Interest Rate Risk:-

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The company believes that the working capital available is sufficient to meet
its current requirements. The company's exposure to interest rate risk arises primarily from deposits with Banks.
(ii) Foreign Currency Risk:-

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates
relates primarily to the Company’s operating activities i.e. Cost of material which is denominated in a foreign
currency though the same is payable in INR.

As the Company doesn't have significant transactions in foreign currency hence there is no impact on the financial
statements because of foreign currency risk except as stated above.

Total value of all imported raw materials, spare parts and components consumed during the financial year and the
total value of all indigenous raw materials, spare parts and Components consumed and the percentage of each to
the total consumption:

 

 

 

 

 

 

 

 

 

As on 31 March, 2020 As on 31 March, 2019 As on 31 March, 2018
Particulars

% Amount % Amount % Amount
Indigenous 99.55, 3,706.03 89.73 3,720.01 97.57 1,896.02
Imported 0.45 16.74 10.27 425.68 2.43 47.29
Total 100 3,722.77 100 4,145.69 100 1,943.31

 

 

 

 

 

(b) Credit Risk:-

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily
trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign
exchange transactions and other financial instruments.

223
In the opinion of the Management of the Company the loss due to credit risk has no significant impact on financial
statements as majority of company’s customers are Government companies. From past experience of realizing
financial assets company does not foresee any Expected credit loss (ECL) on trade receivables

(c) Liquidity Risk:-

The Company monitors its risk of shortage of funds using a liquidity planning tool.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use
of bank overdrafts, trade and other payables. Liquidity risk is that the Company might be unable to meet its
obligations. The Company’s approach to managing liability is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions. The company
believes that the available working capital is sufficient to meet its current requirements.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual
undiscounted payments.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As at On Less than 1 1to5
March 31, 2020 demand Year years Oubers Total
Long-term borrowings - 106.07 15.23 121.29
Short-term borrowings 113.21 - - - 113.21
Trade payables 1,393.46 - - - 1,393.46
Other financial liabilities : 44.42 - # 44.42
As at On Less than 1 1to5
March 31, 2019 demand Year years Others Total
Long-term borrowings - 312.07 112.69 424.76
Short-term borrowings 560.58 - - 560.58
Trade payables 1,211.88 = - - 1,211.88
Other financial - 43.13
liabilities - 43.13 -
As at On Less than 1 1to5
March 31, 2018 demand Year years Onhers Moral

Long-term borrowings - 311.12 355.68 666.80
Short-term borrowings 724.69 - = 7 724.69
Trade payables 1,338.22 - - “ 1,338.22
Other financial - 16.32
liabilities - 16.32 -

 

 

 

 

 

 

 

 

K. Capital Management:

For the purpose of the Company’s capital management, capital includes issued capital and all other equity
including reserves attributable to the equity shareholders of the Company. The primary objective of the
Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an
optimal capital structure so as to maximize shareholder value.

As at March 31, 2020, the Company has only one class of equity shares and has no debt except finance lease
obligations and short-term borrowings. Consequent to such capital structure, there are no externally imposed

224
capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its
capital for distribution as dividend or re-investment into business based on its long term financial plans.

L.

 

 

 

 

 

 

 

 

 

Particulars 31.03.2020 31.03.2019 31.03.2018
Total Debt 3,090.03 3,426.17 3,479.97
Total Equity 6,995.58 5,031.23 3,242.94
Debt Equity Ratio 0.44:1 0.68:1 1.07:1

 

There are no dues to Micro, small and medium enterprises as at March 31, 2020, March 31, 2019 and

March 31, 2018. The identification of Micro, small and medium enterprises as defined under the provisions
of "Micro, Small and Medium Enterprises Act, 2006" is based on management's knowledge of their status.

M.

N.

Balance in personal accounts are subject to confirmation and reconciliation.

In the opinion of the Board of Directors of the company, the current assets, loans and advances are
expected to be realized in the ordinary course of business approximately the value at which they are stated
in accounts.

. Figures of the previous years have been regrouped/rearranged to confirm those of the current year.

First-time Adoption of Ind AS:

The financial statements, for the year ended 31st March 2019, are the first set of financial statements the
Company has prepared in accordance with Indian Accounting Standards (Ind AS).For periods up to and
including the year ended 31st March 2018, the Company prepared its financial statements in accordance
with accounting standards notified under section 133 of the Companies Act 2013, read together with
paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

The Company has prepared financial statements which comply with Ind AS applicable for periods
ending on 31 st Match 2020 and on 31st March 2019, together with the comparative period data as at
and for the year ended 31st March 2018, as described in the summary of significant accounting policies.
In preparing these financial statements, the Company’s opening balance sheet was prepared as at Ist
April 2017, i.e., the Company’s date of transition to Ind AS. This note explains the principal adjustments.
made by the Company in restating its Indian GAAP financial statements, including the balance sheet as
at 1st April 2017 and the financial statements as at and for the year ended 31st March 2018.

Exemptions Applied:
Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain
requirements under Ind AS. The Company has applied the following exemptions:

The Company adopted not to measure any item of property, plant and equipment at its fair value at the
Transition Date. The Company has elected to continue with the net carrying value of all its property,
plant and equipment recognized as of April 1, 2017 (transition date) as per the previous GAAP and use
that carrying value as its deemed cost.Similarly the net carrying amount of the investment property as
per the previous GAAP is considered as deemed cost for IND AS purposes.

225
Estimates:

The estimates at 1st April 2017 and at 31 st March 2020 are consistent with those made for the same
dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting
policies) apart from the following items where application of Indian GAAP did not require estimation:

+ FVTPL — Quoted equity shares
+ Impairment of financial assets based on expected credit loss model (“ECL model”)

The estimates used by the Company to present these amounts in accordance with Ind AS reflect
conditions at 1st April 2017, the date of transition to Ind AS and as of 31st March 2020.

Reconciliation of Equity between Ind AS and Previous GAAP:

 

 

 

 

 

 

Particulars As at 31st March, 2018
Equity under erstwhile Indian GAAP 3,221.87
Impact on account of Investments measured at fair value 1.96
Fair Value of defined benefit obligation
Impact on account of Deferred Tax 19.10
Equity under Ind AS (Restated) 3,242.93

 

 

Effect of Ind AS adoption on the statement of profit and loss:

 

 

 

 

 

 

 

 

Particulars For the Year ended
31 March 2018
(A) Net profit for the period under erstwhile Indian GAAP 719.33
Impact on account of Investments measured at fair value 1.96
(B) Total adjustments 1.96
(C)Add/(less): Tax Impact (3.41)
Restated Profit/(Loss) (A+B+C) 717.88

 

Financial assets:

Under Indian GAAP, the Company accounted for long term investments in quoted equity shares as investment
measured at cost less provision for diminution other than temporary diminution in the value of investments,
if any. Under Ind AS, the Company has designated such investments as FVTPL investments. Ind AS requires
FVTPL investments to be measured at fair value. At the date of transition to Ind AS, difference between the
instruments fair value and Indian GAAP carrying amount has been recognized as a separate component of
equity, in the retained earnings.

Deferred tax:

Indian GAAP requires deferred tax accounting using the statement of profit and loss approach, which focuses
on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to
account for deferred taxes using the balance sheet approach, which focuses on temporary differences between
the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12
approach has resulted in recognition of deferred tax on new temporary differences which was not required
under Indian GAAP.

226

 
Annexure VII : Notes to the Restated Financial Information

(All amounts in = Lakhs)
Reconciliation of Equity between Ind AS and Previous GAAP

 

 

 

 

 

 

 

 

Particulars As at 31st March, 2018
Equity under erstwhile Indian GAAP 3,221.87
Impact on account of Investments measured at fair value 1.96
Fair Value of defined benefit obligation fe
Impact on account of Deferred Tax 19.10
Equity under Ind AS (Restated) 3,242.93

 

Effect of Ind AS adoption on the statement of profit and loss

 

 

 

 

 

 

 

 

 

. For the Year ended
Particulars 31 March 2018
(A) Net profit for the period under erstwhile Indian GAAP 719.33
Impact on account of Investments measured at fair value 1.96
(B) Total adjustments 1.96
(C)Add/(less): Tax Impact (3.41)
Restated Profit/(Loss) (A+B+C) 717.88

 

Impact of Ind AS adoption on the statement of cash flows for the year ended 31 March 2018

All the adjustments on account of Ind AS are non - cash in nature and hence, there is no material impact on
the cash flows in the cash flow statement.

A 1 Impact on account of deferred taxes

The impact of transition adjustments together with Ind AS mandate of using balance sheet approach
(against profit and loss approach in the previous GAAP) for computation of deferred tax has resulted
increase in equity by Rs. (3.41) Lakhs on date of transition, and adjustments were carried out in
statement of profit and loss for the subsequent periods.

A 2 The company has recognised Impact of actuarial gains / losses on defined benefit obligations and
hence it has effected other comprehensive income (OCI).

A3 Under Ind AS, all items of income and expense recognised in period should be included in profit or
loss for the period, unless a standard requires or permits otherwise. Item of income and expense that are
not recognised in profit or loss but are shown in Statement of profit and loss as "Other comprehensive
income" includes Remeasurement of defined benefit plans. The concept of other comprehensive income
did not exist under previous GAAP.

227
 

For the year |For the year |For the year

 

 

 

 

 

 

 

Particulars ended March | ended March | ended March
31, 2020 31, 2019 31, 2018

Net Asset Value Per Share (Rs) - based 47.83 111.81 72.07

on actual no. of equity shares

Nominal Value per Equity share (Rs.) 10.00 10.00 10.00

 

Annexure IX : Notes to the Restated Financial Information

(All amounts in % Lakhs) (Except EPS, Return on Net worth Net Assets Value Per Share and Nominal
Value per Share)

Statement of Accounting Ratios (With Bonus Effect) (Note)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year For the year For the year ended
Particulars ended March ended March March 31, 2018
31, 2020 31, 2019

Restated PAT as per P & L Account 1,987.93 1,785.51 716.22
Number of Equity Shares outstanding at the
end of the year 146.25 146.25 146.25
Equivalent Weighted Avg number of Equity
Shares at the end of the year 146.25 146.25 146.25
Share Capital 1,462.50 450.00 450.00
Reserves & Surplus 5,533.08 4,581.23 2,792.94
Misc. Expenses not w/off - -
Closing Net Worth 6,995.58 5,031.23 3,242.94
Opening Net Worth 5,031.23 3,242.94 2,525.06
Basic & Diluted EPS (Rs.) 13.59 12.21 4.90
Return on Net Worth (%) 33.06% 43.16% 24.83%
Net Asset Value Per Share (Rs) - based on

. 47.83 34.40 22.17
actual no. of equity shares
Nominal Value per Equity share (Rs.) 10.00 10.00 10.00
Change in Basic & Diluted EPS due to Bonus
Issue - (27.47) (11.02)
Change In Net Asset Value Per Share due to
Bonus Issue - (77.40) (49.89)
Note:

In a Capitalisation or bonus issue or a share split, the number of ordinary shares outstanding is increased
without an increase in resources. The number of ordinary shares outstanding before the event is adjusted for
the proportionate change in the number of ordinary shares outstanding as if the event had occurred at the
beginning of the earliest period presented. Since only bonus share have been allotted, no weighted average
calculation has been made.

On 23/12/2019 the company has issued 1,01,25,000 bonus shares to the existing equity shareholders in the
ratio of 2.25:1. In case of a bonus issue the ordinary shares are issued to existing shareholders for no additional
consideration. Therefore, the number of ordinary shares outstanding is increased without an increase in

229

 
Annexure VIII : Notes to the Restated Financial Information

Restated Summary Capitalisation Statement

(All amounts in = Lakhs)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

equity

 

 

 

Particulars Pre-issue as at 31 | Pre-issue as at 31 As adjusted for
March, 2020 March, 2019 issue*
Borrowings
Short term borrowings A 113.21 560.58 113.21
Long term borrowings (finance B 121.29 424.76 121.29
lease obligations)
Total borrowings (A+B) Cc 234.50 985.34 234.50
Equity
Equity share capital 1,462.50 450.00 1,972.50
Reserves and Surplus
Retained earnings 5,515.52 4,559.23 5,515.52
Capital Reserve 17.56 17.56 17.56
Securities Premium - - 5,610.00
Total equity D 6,995.58 5,026.79 13,115.58
Long term borrowings/ Equity | B/D 1.73% 8.45% 0.92%
Total borrowings/ Total | (C/D) 3.35% 19.60% 1.79%

 

These terms shall carry the meaning as per Schedule III of the Companies Act, 2013.

* As adjusted for Issue column reflects changes in Total Equity only on account of the proceeds from the Issue of 26,120.00
Lakhs, out of which 510.00 Lakhs has been adjusted towards Equity Share capital and 75,610.00 Lakhs has been adjusted
towards Securities Premium in Reserve and Surplus. Further, the Reserve and Surplus amount has not been adjusted for

share issue expenses on account of the Issue.

Annexure IX : Notes to the Restated Financial Information

(All amounts in = Lakhs) (Except EPS, Return on Net worth Net Assets Value Per Share and Nominal

Value per Share)

Statement of Accounting Ratios (Without Bonus Effect)

 

For the year

For the year

For the year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars ended March | ended March | ended March
31, 2020 31, 2019 31, 2018

Restated PAT as per P & L Account 1,987.93 1,785.51 716.22
Number of Equity Shares outstanding at

Ser doe — 8 146.25 45.00 45.00
Equivalent Weighted Avg number of

Equity Shares at the end of the year 146.25 45.00 45.00
Share Capital 1,462.50 450.00 450.00
Reserves & Surplus 5,533.08 4,581.23 2,792.94
Misc. Expenses not w/off - - -
Closing Net Worth 6,995.58 5,031.23 3,242.94
Opening Net Worth 5,031.23 3,242.94 2,525.06
Basic & Diluted EPS (Rs.) 13.59 39.68 15.92
Return on Net Worth (%) 33.06% 43.16% 24.83%

 

228

 

 
resources. The number of equity shares outstanding before the bonus issue are adjusted for the proportionate
change in the number of ordinary shares outstanding as if the event had occurred at the beginning of the earliest
period presented. Accordingly in the statement of accounting ratios with bonus effect the number of equity
shares increased to 1,46,25,000 from existing outstanding equity shares of 45,00,000 in order to take the bonus
issue effect into consideration.

Notes to Accounting Ratios:
a) Formulas used for calculating above ratios are as under:

(i) Basic Earnings Per Share (Rs.) = Restated PAT attributable to Equity Shareholders/ Weighted Average
Number of Equity Shares outstanding during the period ended 31.03.2020

(ii) Diluted Earnings Per Share (Rs.) = Restated PAT attributable to Equity Shareholders/ Weighted Average
Number of Diluted Potential Equity Shares outstanding during the period ended 31.03.2020

(c)Return on Net Worth (%) = Net profit / loss after tax, as restated / Net worth (Average of year beginning
and year ending)

Note:- (i) Weighted Average Number of equity shares is the number of equity shares outstanding at the
beginning of the year adjusted by the number of equity shares issued during the year multiplied by the time
weighting factor. The time weighting factor is the number of days for which the specific shares are outstanding
as a proportion to total number of days during the year.

In a Capitalisation or bonus issue or a share split, the number of ordinary shares outstanding is increased
without an increase in resources. The number of ordinary shares outstanding before the event is adjusted for
the proportionate change in the number of ordinary shares outstanding as if the event had occurred at the
beginning of the earliest period presented. Since only bonus share have been allotted, no weighted average
calculation has been made.

Note:- (ii) Earnings Per Share calculation are in accordance with Ind AS-33 "Earnings Per Share"

Note:- (iii) Net Worth = Equity Share Capital + Reserve and Surplus (including Net profit in the Statement of
Profit & Loss)

Note:- (v) The figures disclosed above are based on the Restated Financial Statements of the Company

230
Annexure X : Notes to the Restated Financial Information
Restated Summary Statement of Tax Shelter

(All amounts in = Lakhs)

 

For the year

For the year

For the year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ee Particulars ended ended ended
31 March, 2020 31 March, 2019 31 March, 2018
A | Restated Profit / (Loss) before taxes of the 2,676.57 2,529.97 1,092.50
Company
B | Statutory Tax rate (%) 25.17% 29.12% 33.06%
C | Tax at Statutory rate (A x B) 673.69 736.73 361.21
D | Adjustments for permanent differences :
Corporate Social Responsibility Expenses 33.00 20.00 26.30
Donation 26.00 -
Penalties 6.76 8.27 0.41
Interest on Income tax delay payment 20.66 2.06
Disallowance u/s 14A - 0.60
E | Adjustments for timing differences :
Depreciation 138.43, (4.05) (172.15)
Assets written off - -
(Profit) / Loss on sale of assets 7.63 (0.28)
Disallowance u/s 40a(ia) - - 0.46
Disallowance u/s 43B 11.07 4.76 24.20
Provision for Gratuity 13.99 pelo 11.13
Dividend (0.28) (0.65)
Provision for Bonus 29.29 - -
192.78 13.24 (137.28)
F | Net adjustments (D + E) 232.54 88.17 (107.91)
G | Tax expense / (saving) thereon at 58.53 25.68 (35.68)
statutory rates (F x B)
H | Current tax expense / (credits) (C + G) 732.22 762.40 325.53
I_| Tax saving on deduction u/s 80G at 3.79 -
statutory rates
J | Current tax expense (H - I) 732.22 758.62 325.53
Calculation of MAT
K_ | Book Profits 2,676.57 2,529.97 1,092.50
Add: Adjustments for provisions (net) - -
Less : Exempt Income
L | Taxable income (Book profits) as per 2,676.57 2,529.97 1,092.50
MAT
M | MAT rate (%) 0.00% 21.55% 20.39%
N | Tax liability as per MAT (L x M) - 545.00 223.00
O | Current tax being higher of J or N 732.22 758.62 325.53
Less: Minimum alternate tax credit - -
entitlement
Income tax of earlier years - -
Deferred tax (income) / charge (43.58) (14.16) 48.28
P_| Total tax expenses 688.64 744.46 373.81

 

231

 
Annexure XI : Notes to the Restated Financial Information (All amounts in = Lakhs)
Statement of Material Adjustments to Financial Statements Adjustment Impacting Profit & Loss A/c

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5 For the year ended March 31,
S.No Particulars 2020 | 2019 | 2018
Profit/(Loss) after tax (as per Audited Financial
I Statements) 2,006.79 | 1,777.30 720.98
Restatement Adjustments:
Restatement/ adjustment of Prior Preliminary Expenses - : -
Restatement adjustments in respect of deferred Tax (Note) (30.39) 10.99 (3.10)
I Total Adjustments (30.39) 10.99 (3.10)
I Restated profit/(loss) after tax (I+II) 1,976.40 | _ 1,788.29 717.88

 

Note:

Deferred Tax in restatements adjustments arises on account of permanent difference in the investment property
as per the books of accounts and tax books. In the earlier audited financial statements the difference between
the WDV of investment property as per Companies Act and WDV as per tax books is considered as timing
difference and provided deferred Tax thereon. However in the restated financial information ,the same was
considered as permanent difference and the deferred tax was not provided on this permanent difference

 

 

 

Particul. As at As at As at
articuliars March 31, 2020 March 31, 2019 March 31, 2018

Equity under erstwhile

Indian GAAP/Ind AS S88558 SAOO.BS 3,221.87

 

Changes due to
Investments measured at - -
fair value 1.96
Fair Value of defined
benefit obligation -
Deferred Tax Impact - 30.39 19.10

 

 

 

 

 

 

 

 

Equity under Ind AS 6,995.58 5,031.22 3,242.93
(Restated)

 

232
OTHER FINANCIAL INFORMATION

The accounting ratios required under Clause 11 of Part A of Schedule VI of the SEBI ICDR Regulations are
given below:

 

 

 

 

 

 

 

Particulars As at and for As at and for As at and for
the year the year the year
ended March ended March ended March
31, 2020 31, 2019 31, 2018
Basic & Diluted earnings per share (in 2%)
(Before providing for Bonus Effect) 13.59 39.68 15.92
Basic & Diluted earnings per share (in %)
(After providing for Bonus Effect) 13ib2 a 420
Return on net worth (%) 33.06% 43.16% 24.83%
Net asset value per share (in %) (Before
providing for Bonus Effect) 4083 Addi) Ler
Net asset value per share (in %) (After
providing for Bonus Effect) an8S 34.40 22.17
EBITDA (in = Lakhs) 3,122.34 2,997.18 1,270.27

 

 

 

 

 

 

Notes: The ratios have been computed as under:

1. Basic and diluted EPS: Restated profit for the year attributable to equity shareholders of the Company
divided by total weighted average number of equity shares outstanding at the end of the year. Basic and
diluted EPS are computed in accordance with Ind AS 33 - Earnings per share.

2. Return on networth %: Restated profit for the year attributable to equity shareholders of the Company divided
by average networth as attributable to equity shareholders of the Company (at the beginning and end of the
year).

3. Net worth = net worth means the aggregate value of equity share capital and other equity created out of the
profits, securities premium account and debit or credit balance of profit and loss account, after deducting the
aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written
off, derived from the Restated Financial Information, but does not include reserves created out of revaluation
of assets, writeback of depreciation and amalgamation.

4. Net assets value per share (in 2): Net asset value per share is calculated by dividing net worth by number of
equity shares outstanding at the end of the year.

5. EBITDA = EBITDA stands for earnings before interest, taxes, depreciation and amortisation which has been
arrived at by adding finance expense, depreciation expense, exceptional items and total tax expense to the
restated profit for the year.

6. Accounting and other ratios are derived from the Restated Financial Information.

Non-GAAP financial measures

This section includes certain Non-GAAP financial measures relating to our financial performance (together,
“Non-GAAP financial measures” and each a “Non-GAAP financial measure”), as presented below. These
Non-GAAP financial measures are not required by or presented in accordance with Indian GAAP.

Reconciliation of non-GAAP measures

Reconciliation for the following non-GAAP financial measures included in this Prospectus, EBITDA, net
debt/ (net cash), return on net worth, return on capital employed, net asset value per share and debt equity
ratio are given below:

233
Reconciliation of EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(@ in lakhs)
Particulars As at and for the As at and for the As at and for the
year ended year ended year ended
March 31, 2020 March 31, 2019 March 31, 2018
Restated profit for the year (I) 1,987.93 1,785.51 716.22
Total tax expense (II) 688.64 744.46 376.28
Exceptional items (III) : : :
Depreciation expense (IV) 309.37 298.71 93.15
Finance expense (V) 136.40 168.49 84.62
EBITDA (I+II+III+IV+V) 3,122.34 2,997.18 1,270.27
Reconciliation of Net debt/ (net cash)
(2 in Lakhs)
As at and for | As at and for the | As at and for
Particulars the year ended | year ended | the year ended
March 31, 2020 | March 31, 2019 | March 31, 2018
Non-current borrowings (I) 15.23 112.69 355.68
a maturities of non-current borrowings 106.07 312.07 311.12
Total borrowings III = (I+II) 121.29 424.76 666.80
Cash and cash equivalents (IV) 377.82 51.36 677.59
Bank balances other than cash and cash 1,124.54 1,086.43 874.18
equivalents (V)
Net Cash (VI) (1,381.06) (713.04) (884.96)
Net Debt / (Net Cash) (VI=III/VI) (0.09) (0.60) (0.75)
Reconciliation of return on net worth
(@ in lakhs)
Particulars As at and for As at and for As at and for the
the year the year year ended
ended March ended March March 31, 2018
31, 2020 31, 2019
Equity share capital (I) 1,462.50 450.00 450.00
Other equity (11) 5,533.08 4,581.23 2,792.94
Closing Networth (III)=(1+I1) 6,995.58 5,031.23 3,242.94
Opening Networth (IV) 5,031.23 3,242.94 2,525.06
Restated profit for the year (V) 1,987.93 1,785.51 716.22
Return on net worth 33.06% 43.16% 24.83%
(V/ Average of (III+IV))
Reconciliation of net asset value per share
(@ in lakhs, except share data)
Particulars As at and for As at and for As at and for the
the year the year year ended
ended March ended March March 31, 2018
31, 2020 31, 2019
Equity share capital (I) 1,462.50 450.00 450.00
Other equity (11) 5,533.08 4,581.23 2,792.94
Net worth (II1)=(I+ID) 6,995.58 5,031.23 3,242.94

 

 

Before providing for Bonus Effect:

 

 

 

 

 

 

234

 
CAPITALISATION STATEMENT

The following table sets forth our Company’s capitalisation as at March 31, 2020, derived from Restated
Financial Information, and as adjusted for the Issue. This table should be read in conjunction with the sections
titled “Management ’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk
Factors” on pages 237 and31, respectively.

(@ in lakhs)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-issue Pre-issue
. as at 31 as at 31 As
Particulars March, March, ae
2020 2019
Borrowings
Short term borrowings A 113.21 560.58 113.21
Long term borrowings (finance lease B 121.29 424.76 121.29
obligations)
Total borrowings (A+B) G 234.50 985.34 234.50
Equity
Equity share capital 1,462.50 450.00 1,972.50
Reserves and Surplus
Retained earnings 5,515.52 4,559.23 5,515.52
Capital Reserve 17.56 17.56 17.56
Securities Premium - - 5,610.00
Total equity D 6,995.58 5,026.79 13,115.58
Long term borrowings/ Equity B/D 1.73% 8.45% 0.92%
Total borrowings / Total equity c/D 3.35% 19.60% 1.79%

 

 

 

 

 

 

 

 

These terms shall carry the meaning as per Schedule III of the Companies Act, 2013.

* As adjusted for Issue column reflects changes in Total Equity only on account of the proceeds from the Issue
of 26,120.00 Lakhs, out of which 7510.00 Lakhs has been adjusted towards Equity Share capital and 25,610
Lakhs has been adjusted towards Securities Premium in Reserves & Surplus. Further, the Retained Earnings
amount has not been adjusted for share issue expenses on account of the Issue.

236
 

 

 

 

 

 

Particulars As at and for As at and for As at and for the
the year the year year ended
ended March ended March March 31, 2018
31, 2020 31, 2019

ow Average Number of equity shares 146.25 45.00 45.00

Net asset value per share (V= (I+ID/IV) 47.83 111.81 72.07

After providing for Bonus Effect:

Weighted Average Number of equity shares 146.25 146.25

(Iv) 146.25

Net asset value per share (V= (I+ID/IV) 47.83 34.40 22.17

 

 

 

 

 

 

Reconciliation of debt equity ratio
(@ in Lakhs, exceptt share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars As at and for As at and for As at and for
the year the year the year
ended March ended March ended March
31, 2020 31, 2019 31, 2018

Non-current borrowings (I) 15.23 112.69 355.68

Current — maturities of — non-current 106.07 312.07 311.12

borrowings (II)

Total borrowings III = (I+II) 121.29 424.76 666.80

Equity share capital (IV) 1,462.50 450.00 450.00

Other equity (V) 5,533.08 4,581.23 2,792.94

Equity (VID=(IV+V) 6,995.58 5,031.23 3,242.94

Debt equity ratio (VII=III/VI) 0.02 0.08 0.21

 

In accordance with the SEBI ICDR Regulations the audited financial statements of the Company for the
financial year ended March 31, 2020, March 31, 2019 and March 31, 2018 (collectively, the “Audited
Financial Statements”) are available on our website at www.likhitha.co.in.

Our Company is providing a link to this website solely to comply with the requirements specified in the SEBI
ICDR Regulations. The Audited Financial Statements do not constitute, (i) a part of this Prospectus; or (ii) a
prospectus, a statement in lieu of a prospectus, an offering circular, an offering memorandum, an
advertisement, an offer or a solicitation of any offer or an offer document or recommendation or solicitation
to purchase or sell any securities under the Companies Act, the SEBI ICDR Regulations, or any other
applicable law in India or elsewhere. The Audited Financial Statements should not be considered as part of
information that any investor should consider subscribing for or purchase any securities of our Company and
should not be relied upon or used as a basis for any investment decision.

None of our Company or any of its advisors, nor BRLMs, nor any of their respective employees, directors,
affiliates, agents or representatives accept any liability whatsoever for any loss, direct or indirect, arising
from any information presented or contained in the Audited Financial Statements, or the opinions expressed
therein.

RELATED PARTY TRANSACTIONS
For details of related party transactions of our Company, as per the requirements under Ind AS 24 ‘Related
Party Disclosures’ for the Financial Years ended March 31, 2018 and March 31, 2019 and March 31, 2020 ,

please see “Annexure VI, Note 31(G) — Related Party Transaction” under the chapter “Financial
Information” on page 179 of this Prospectus.

235
y 4

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

You should read the following discussion of our financial condition and results of operations together with
our Restated Financial Statements which have been included in this Prospectus. The following discussion and
analysis of our financial condition and results of operations is based on our Restated Financial Statements for
the years ended March 31, 2020, 2019 and 2018 including the related notes and reports, included in this
Prospectus prepared in accordance with requirements of the Companies Act and restated in accordance with
the SEBI Regulations, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other
countries. Our Financial Statements, as restated have been derived from our audited financial statements for
the respective years. Accordingly, the degree to which our Restated Financial Statements will provide
meaningful information to a prospective investor in countries other than India is entirely dependent on the
reader’s level of familiarity with Indian GAAP, Companies Act, SEBI Regulations and other relevant
accounting practices in India.

This discussion contains forward-looking statements and reflects our current views with respect to future
events and financial performance. Actual results may differ materially from those anticipated in these
forward-looking statements as a result of certain factors such as those described under “Risk Factors” and
“Forward Looking Statements” beginning on pages 31 and 24 respectively, and elsewhere in this Prospectus.

Our Financial Year ends on March 31 of each year. Accordingly, all references to a particular Financial Year
are to the 12 months ended March 31 of that year.

OVERVIEW

We are an Oil & Gas pipeline infrastructure service provider in India, focused on laying pipeline networks
along with construction of associated facilities; and providing Operations & Maintenance services to the City
Gas Distribution (“CGD”) Companies in India. Our Company was founded by our Promoter, Mr. Srinivasa
Rao Gaddipati, in the year 1998 and has been engaged in the same line of business for over two decades. Over
the years, we have diversified the gamut of services being provided by our Company from Cross-Country
Pipeline Projects (CCP); City Gas Distribution (CGD) Projects to providing Operation & Maintenance (O&M)
Services to CGD Companies. Our client base comprises of established players in the Oil and Gas Industry,
both in public and private sector.

 

SIGNIFICA\

 

DEVELOPMENTS SUBSEQUENT T

In the opinion of the Board of Directors of our Company, since the date of the last financial statements disclosed
in this Prospectus, there have not arisen any circumstance that materially or adversely affect or are likely to
affect the profitability of our Company or the value of its assets or its ability to pay its material liabilities within
the next twelve months except as follows:

1. The Board of Directors have, pursuant to Section 62(1)(c) of the Companies Act 2013, by a resolution
passed at its meeting held on December 10, 2019, authorized the Issue, subject to the approval of the
shareholders and such other authorities as may be necessary.

2. The shareholders of the Company have, pursuant to Section 62(1)(c) of the Companies Act 2013, by a

special resolution passed in the Extra-Ordinary General Meeting held on December 23, 2019 authorized the
Issue.

237
 

|FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled “Risk
Factors” beginning on page 31 of this Prospectus. Our results of operations and financial conditions are affected
by numerous factors including the following:

General Economic and Business conditions;

Competition from existing and new entrants;

Changes in laws and regulations applicable to our Industry;

Company’s inability to successfully implement its growth and expansion plans;
Changes in tax structure applicable to our Industry.

The economic environment, regulatory intervention and impact of COVID-19 outbreak

SIGNIFICANT ACCOUNTING POLICIES

For Significant accounting policies please refer Significant Accounting Policies, under Chapter titled “Financial
Information” beginning on page 179 of the Prospectus.

OVERVIEW OF REVENUE AND EXPENSES

Revenue and Expenses

PU PWN

Our revenue and expenses are reported in the following manner:

Total Revenue

Our Total Revenue comprises of revenue from operations and other income.

e Revenue from operations:

Our principal component of revenue from operations is from Pipeline infrastructure and Operations &
Maintenance, for oil & gas industry.

¢ Other Income:

Our other income includes Interest Income, Rent earned, Dividend from Chits & Shares, Profit on sale of assets,
Insurance Claim, Sales tax refund, and Value Added Tax Credit etc.

Expenses

Our expenses comprise of direct expenditure i.e Raw Material consumed, Construction expenses, Changes in
inventories of work in progress, Employee Benefit Expenses, Finance Cost, Depreciation Expenses and Other
Expenses.

Direct Expenditure

Our direct expenditure includes Raw Material consumed, Construction expenses, Changes in inventories of
work in progress. Major expense is Construction Expenses after that raw-materials.

238
Employee benefit expenses:
Our employee benefit expenses which includes Salaries and Wages, Directors Remuneration, Contribution to
provident fund and other funds, gratuity, ESI, leave encashment, staff welfare expenses.

Finance costs:
Our finance costs include hire purchase charges, interest on working capital loans & other borrowing costs.

Depreciation and amortisation expenses:
Our depreciation expenses majorly comprise of depreciation on Equipment, Vehicles and other fixed assets.

Other expenses:

Our other expenses mainly include rent, repairs to other assets, insurance, rates & taxes excluding taxes on
income, advertisement & business promotion expenses, legal and professional charges, auditors remuneration,
donation, CSR expenses, travelling & conveyance expenses, loss on chits, loss on sale of assets, bank charges
and general expenses etc.

Our Results of Operations

The following table sets forth select financial data from our restated financial statement of profit and loss for
the financial years ended March 31, 2020, 2019 and 2018 the components of which are also expressed as a
percentage of total revenue for such periods:

(Rs. In Lakhs)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars For the Year Ended M.

By e717] 31.03.2019
INCOME
Revenue from Operations 16,123.83 1,3948.41 8,707.77
As a % of Total Revenue 99.05% 99.24% 98.28%
Other Income 155.19 106.28 152.79
As a % of Total Revenue 0.95% 0.76% 1.72%
Total Revenue (A) 16,279.02 14,054.68 8,860.56
EXPENDITURE
Raw Material Consumed 3,713.49 4,142.29 1,943.31
As a % of Total Revenue 22.81% 29.47% 21.93%
Construction expenses 6,503.20 5,389.63 3,952.57
As a % of Total Revenue 39.95% 38.35% 44.61%
Changes in Inventories of finished goods, -477.60 -1,712.85 -245.12
WIP and Stock in Trade
As a % of Total Revenue -2.93% -12.19% -2.77%
Employee benefit Expenses 2,904.28 2,662.60 1,622.86
As a % of Total Revenue 17.84% 18.94% 18.32%
Finance costs 136.40 168.49 84.62
As a % of Total Revenue 0.84% 1.20% 0.96%
Depreciation expense 309.37 298.71 93.15
As a % of Total Revenue 1.90% 2.13% 1.05%
Other Expenses 513.29 575.84 316.67
As a % of Total Revenue 3.15% 4.10% 3.57%
Total Expenses (B) 13,602.45 11,524.71 7,768.06

 

 

 

 

 

239
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Particulars For the Year Ended M.

R334) 741) | 31.03.2019
As a % of Total Revenue 83.56% 82.00% 87.67%
Profit before exceptional extraordinary items 2,676.57 2,529.97 1,092.50
and tax
As a % of Total Revenue 16.44% 18.00% 12.33%
Exceptional items 0.00 0 0
Profit before extraordinary items and tax 2,676.57 2,529.97 1,092.50
As a % of Total Revenue 16.44% 18.00% 12.33%
Extraordinary items 0.00 0 0
Profit before tax 2,676.57 2,529.97 1,092.50
PBT Margin 16.44 18.00 12.33
Tax expense :
(i) Current tax 732.22 758.62 328.00
(ii) Deferred tax -43.58 -14.16 48.28
Total Tax Expense 688.64 744.46 376.28
Profit for the year/ period 1,987.93 1,785.51 716.22
PAT Margin % 12.21% 12.70% 8.08%

 

 

 

 

 

 

FINANCIAL YEAR 2019-20 COMPARED WITH FINANCIAL

Total Revenue

Our total revenue increased by 15.83% to Rs. 16,279.02 lakhs for the financial year 2019-20 from Rs. 14,054.68
lakhs for the financial year 2018-19 due to the factors described below:

Revenue from operations

Our revenue from operations increased by 15.60% to Rs. 16,123.83 lakhs for the financial year 2019-20 from
Rs. 13,948.41 lakhs for the financial year 2018-19. The increase was mainly due to significant growth in the
demand for pipeline works as well as O&M works.

Other income
Our other income increased by 46.02% to Rs. 155.19 lakhs for the financial year 2019-20 from Rs. 106.28 lakhs
for the financial year 2018-19.

Total Expenses

Our total expenses increased by 18.03% to Rs. 1,3602.45 lakhs for the financial year 2019-20 from Rs.
11,524.71 lakhs for the financial year 2018-19, due to the factors described below:

Direct Expenditure:

Our Direct expenditure increased by 24.56% to Rs. 9,739.09 lakhs for the financial year 2019-20 from Rs.
7,819.07 lakhs for the financial year 2018-19. The increase was mainly due to increase in raw material
consumed by Rs. 806.45 lakhs and Construction expenses by Rs.1,113.57 lakhs

Employee benefits expenses.

Our employee benefit expenses increased by 9.08% to Rs. 2,904.28 lakhs for the financial year 2019-20 from Rs.
2,662.60 lakhs for the financial year 2018-19. The increase was mainly due to increase in the number of
employees/ workers and also increase in salaries and wages by Rs. 495.12 lakhs, Contribution to provident fund

240
and other funds by Rs. 65.00 lakhs, ESI by Rs. 4.39 lakhs, leave encashment by Rs. 6.31 lakhs, staff welfare
expenses by Rs. 31.06 lakhs. During the financial year 2019-20, Directors’ remuneration decreased by Rs. 360.00
Lakhs when compared to the financial year 2018-19.

Finance costs

Our finance costs decreased by 19.04% to Rs. 136.40 lakhs for the financial year 2019-20 from Rs. 168.49 lakhs
for the financial year 2018-19. The decrease was mainly due to better monitoring and controlled usage of working
capital credit facilities.

Depreciation expense

Our depreciation and amortization expense increased by 3.56% to Rs. 309.37 lakhs for the financial year 2019-
20 from Rs. 298.72 lakhs for the financial year 2018-19 due to additions to plant and equipment, vehicles, office
equipment, computers and buildings.

Other expenses

Our other expenses decreased by 10.86% to Rs. 513.29 lakhs for the financial year 2019-20 from Rs. 575.84
lakhs for the financial year 2018-19. When compared to financial year 2018-19, there was an increase in Rent
expenses by Rs. 14.07 lakhs, advertisement and Business promotion by Rs. 9.52 lakhs and legal and professional
charges by Rs. 7.80 lakhs. Donation amounting to Rs. -NIL- was made during the year. During the year there was
decrease in travelling & conveyance expenses by Rs. 17.69 lakhs and General expense by Rs. 76.92 lakhs. All this,
combined with other cost savings to the extent of Rs. 9.04 lakhs resulted in decrease in the total ‘Other expenses’.

Profit before tax

Our profit before tax increased by 5.79% to Rs. 2676.57 lakhs for the financial year 2019-20 from Rs. 2,529.97
lakhs for the financial year 2018-19. The increase was primarily due to increase in revenue from operations
offset in part by increase in expenditure.

Tax expenses

Our tax benefit for the financial year 2019-20 amounted to Rs. 43.58 lakhs as against benefit of Rs. 14.16 lakhs
for the financial year 2018-19 on account of deferred tax asset. Also, Current tax decreased by 3.48% to Rs.
732.22 lakhs for the financial year 2019-20 from Rs. 758.62 lakhs for the financial year 2018-19.

Profit after tax
Due to reasons mentioned above, our profit after tax increased by 11.33% to Rs. 1987.93 lakhs for the financial
year 2019-20 from Rs. 1785.51 lakhs for the financial year 2018-19.

FINANCIAL YEAI 18-19 COMPARED

 

Total Revenue

Our total revenue increased by 58.62% to Rs. 14054.68 lakhs for the financial year 2018-19 from Rs. 8860.56
lakhs for the financial year 2017-18 due to the factors described below:

Revenue from operations

Our revenue from operations increased by 60.18% to Rs. 13948.41 lakhs for the financial year 2018-19 from
Rs. 8707.77 lakhs for the financial year 2017-18. The increase was mainly due to significant growth in the
demand for pipeline works as well as O&M works.

Other income

Our other income decreased by 30.44% to Rs. 106.28 lakhs for the financial year 2018-19 from Rs.152.79 lakhs
income for the financial year 2017-18 mainly due to decrease in Interest Income.

241
Total Expenses

Our total expenses increased by 48.36% to Rs. 11524.71 lakhs for the financial year 2018-19 from Rs. 7768.06
lakhs for the financial year 2017-18, due to the factors described below:

Direct Expenditure:

Our Direct expenditure increased by 38.37% to Rs. 7819.07 lakhs for the financial year 2018-19 from Rs.
5650.76 lakhs for the financial year 2017-18. The increase was mainly due to increase in raw material consumed
expenses by Rs. 2198.98 lakhs, Construction expenses by Rs.1437.06 lakhs, Change in inventories of work-in-
progress by Rs. 1467.73 lakhs.

Employee benefits expenses.

Our employee benefit expenses increased by 64.07% to Rs. 2662.60 lakhs for the financial year 2018-19 from
Rs. 1622.86 lakhs for the financial year 2017-18. The increase was mainly due to increase in the number of
employees/ workers and also increase in salaries and wages by Rs. 894.77 lakhs, directors’ remuneration,
Contribution to provident fund and other funds by Rs. 40.10 lakhs, ESI by Rs. 48.87 lakhs, leave encashment by
Rs.1.42 lakhs, staff welfare expenses by Rs.60.52 lakhs.

Finance costs
Our finance costs increased by 99.12% to Rs. 168.49 lakhs for the financial year 2018-19 from Rs. 84.62 lakhs
for the financial year 2017-18. The increase was mainly due to increase in Hire Purchase charges by Rs. 29.25
lakhs, Interest on working capital by Rs. 20.28 lakhs, interest on others by Rs. 18.16 lakhs, other borrowing cost by
Rs.16.18 lakhs.

Depreciation expense

Our depreciation and amortization expense increased by 220.67% to Rs. 298.71 lakhs for the financial year
2018-19 from Rs. 93.15 lakhs for the financial year 2017-18 due to additions to plant and equipment, vehicles,
office equipment, computers and buildings.

Other expenses

Our other expenses increased by 81.84% to Rs. 575.84 lakhs for the financial year 2018-19 from Rs. 316.67
lakhs for the financial year 2018-17. Our expenses increased mainly on account of increase in Rent expenses by
Rs. 67.12 lakhs, advertisement and Business promotion by Rs. 18.90 lakhs, legal and professional charges by Rs.
13.54 lakhs, Donation of Rs. 26 lakhs, travelling & conveyance expenses by Rs. 32.20 lakhs and General expense
by Rs.94.69 lakhs.

Profit before tax

Our profit before tax increased by 131.58% to Rs. 2529.97 lakhs for the financial year 2018-19 from Rs.
1092.50 lakhs for the financial year 2017-18. The increase was primarily due to increase in revenue from operations
offset in part by increase in expenditure.

Tax expenses

Our tax benefit for the financial year 2018-19 amounted to Rs. (14.16) lakhs as against benefit of Rs. 48.28 lakhs
for the financial year 2017-18 on account of deferred tax asset. Also, Current tax was increased by 131.29% to
Rs.758.62 lakhs for the financial year 2018-19 from Rs. 328 lakhs for the financial year 2017-18.

Profit after tax
Due to reasons mentioned above, our profit after tax increased by 149.30% to Rs. 1785.510 lakhs for the
financial year 2018-19 from Rs. 716.22 lakhs for the financial year 2017-18.

242
Cash Flow

The table below summaries our cash flows from our Restated Financial Information for the financial years 2020,
2019 and 2018:

(Rs.. In lakhs)

 

 

 

 

 

 

 

Particulars For the year ended March 31,
2019 2018
Net cash (used in)/ generated from operating activities 1,915.27 318.67 401.55
Net cash (used in)/ generated from investing activities (727.38) (240.20) (686.95)
Net cash (used in)/ generated from financing activities (375.97) (328.31) 633.88
Net increase/ (decrease) in cash and cash equivalents 811.93 (249.86) 348.47
Cash and Cash Equivalents at the beginning of the period 577.22 827.07 478.60
Cash and Cash Equivalents at the end of the period 1,389.14 577.22 827.07

 

 

 

 

 

 

Other Key Ratios

The table below summaries key ratios in our Restated Financial Statements for the financial years ended March
31, 2020, 2019 and 2018:

For the year ended March 31,

 

 

 

TermeC@ul eres} Bye) 2019

[Fixed Asset Turnover Ratio 13.82 10.12 5.94
[Debt Equity Ratio 03:1 68:1 11.07:1
|Current Ratio 2.86:1 2.08:1 1.62:1

 

 

 

 

 

 

Fixed Asset Turnover Ratio:
This is defined as revenue from operations divided by total fixed assets excluding capital work in progress and
intangible assets, based on Restated Financial Statements.

Debt Equity Ratio: This is defined as total debt divided by total share-holder funds. Total debt is the sum of long-
term borrowings, short-term borrowings and current maturities of long term debt, based on Restated Financial
Statements.

Current Ratio: This is defined as current assets divided by current liabilities, based on Restated Financial
Statements.

Financial Indebtedness

Our Company avails credit facilities in the ordinary course of our business. Pursuant to our Articles of
Association, subject to applicable laws, our Board is authorised to borrow sums of money for the purpose of
our Company, with or without security, upon such terms and conditions as the Board may think fit which,
together with the monies borrowed by the Company (apart from the temporary loans obtained or to be obtained
by the Company’s banker in the ordinary course of business) shall not exceed upto Rs.200 Crores exceeding
the aggregate of paid-up share capital and free reserves of our Company.

As on March 31, 2020, we have outstanding borrowings of Rs. 234.50 lakhs and bank guarantees of Rs.

6,003.66 lakhs. Set forth below is a brief summary of our aggregate outstanding borrowings as on March 31,
2020.

243
(Rs. In Lakhs)

 

 

 

 

 

 

 

 

 

 

Chingorsyclinmencties Sanctioned Psa tita ly) CTA eee
" ie 31.03.2020
ICICI - LAHYD00037682430 84.00 42.25
Srei Equipment Finance Limited-150572 420.00 46.56
Srei Equipment Finance Limited-150664 210.00 23.28
Tata Hexa Car Loan- LAHYD0003564480 10.00 0.61
ICICI Bank-L VHYD00040245830 6.00 4.30
ICICI Bank-L VHYD00040245858 6.00 4.30
Yes Bank Limited 500.00 113.21
ICICI Bank Limited 400.00 -
Total 1,636.00 234.51
Outstanding Bank Guarantees 7.000.00 6,003.66

 

 

 

 

 

Related Party Transactions

Related party transactions with certain of our promoters, directors and their entities and relatives primarily
relates to remuneration, loans & advances given and taken and Issue of Equity Shares. For further details of such
related parties under AS-18 (IND AS 24), refer “Annexure VI, Note 31(G) — Related Party Transaction” under
the chapter “Financial Information” beginning on page179 of this Prospectus.

Contingent Liabilities

As on March 31, 2020, our Company have contingent liabilities amounting to Rs. 6201.18 lakhs which includes
bank guarantees of Rs. 6003.66 lakhs and claims against value added tax Rs. 197.52 lakhs.

Off-Balance Sheet Items
We do not have any other off-balance sheet arrangements, derivative instruments or other relationships with any
entity that have been established for the purposes of facilitating off-balance sheet arrangements.

 

QUAL! E DISCLOSURE ABOUT MARKET RISK
Financial Market Risks

Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk. We are
exposed to interest rate risk, inflation and credit risk in the normal course of our business.

Interest Rate Risk
Our financial results are subject to changes in interest rates, which may affect our debt service obligations and
our access to funds.

Effect of Inflation

We are affected by inflation as it has an impact on the investing and leading to demotivated clients and lessor
projects etc. In line with changing inflation rates, we rework our margins so as to absorb the inflationary impact.

244
Credit Risk

We are exposed to credit risk on monies owed to us by our clients for services rendered. If our clients do not
pay us promptly, or at all, we may have to make provisions for or write-off such amounts.

Reservations, Qualifications and Adverse Remarks

Except as disclosed in chapter titled “Financial Information” beginning on page 179 of this Prospectus, there
have been no reservations, qualifications and adverse remarks.

Details of Default, if any, Including Therein the Amount Involved, Duration of Default and Present Status, in
Repayment of Statutory Dues or Repayment of Debentures or Repayment of Deposits or Repayment of Loans
from any Bank or Financial Institution

Except as disclosed in chapter titled “Financial Information” beginning on page 179 of this Prospectus, there
have been no defaults in payment of statutory dues or repayment of debentures and interest thereon or repayment
of deposits and interest thereon or repayment of loans from any bank or financial institution and interest thereon
by the Company.

Material Frauds

There are no material frauds, as reported by our statutory auditor, committed against our Company, in the last
five Fiscals.

Unusual or Infrequent Events or Transactions

During the periods under review there have been no transactions or events, which in our best judgment, would
be considered unusual or infrequent.

Significant Economic Changes that Materially Affected or are Likely to Affect Income from Continuing
Operations

Indian rules and regulations as well as the overall growth of the Indian economy have a significant bearing on
our operations. Major changes in these factors can significantly impact income from continuing operations.

There are no significant economic changes that materially affected our Company’s operations or are likely to
affect income from continuing operations except as described in chapter titled “Risk Factors” beginning on
page 31 of this Prospectus.

Known Trends or Uncertainties that have had or are expected to have a Material Adverse Impact on
Revenue or Income from Continuing Operations

Other than as described in the section titled “Risk Factors” beginning on page 31 of this Prospectus and in this
chapter, to our knowledge there are no known trends or uncertainties that are expected to have a material
adverse impact on revenues or income of our Company from continuing operations.

Future Changes in Relationship between Costs and Revenues, in Case of Events Such as Future Increase in
Labour or Material Costs or Prices that will Cause a Material Change are known other than as described in
chapter titled “Risk Factors” beginning on page 31 of this Prospectus and in this section, to our knowledge
there are no known factors that might affect the future relationship between cost and revenue.

245
Extent to which Material Increases in Net Sales or Revenue are due to Increased Sales Volume,
Introduction of New Products or Services or Increased Sales Prices

Construction, material and man power expenses may increase proportionate to the increase in turnover being
the direct expenses other expenses and depreciation may not increase proportionately to the increase in the
sales volume more of fixed expenditure nature.

Total turnover of each major industry segment in which we operate

Total turnover of the Company relates to single business segment i.e. gas & pipe line infrastructure and other
related activities.

Competitive Conditions

We operate in an industry which is highly competitive and fragmented and we compete with a range of organized
and unorganized players, both on the national and regional level. Further, while we have an expanding portfolio
of services requiring us to allocate resources across these verticals, our competitors may have the advantage of
focusing on one or fewer product verticals. Further, we compete against a few listed companies also, which may
have greater access to financial, technical and marketing resources and expertise available to them than us in
the products and services that compete against them. Additionally, we face competition from other established
national players as well as global players with a presence in India

Further, industry consolidation may affect competition by creating larger, more homogeneous and potentially
stronger competitors in the markets in which we compete. Our competitors may further affect our business by
entering into exclusive arrangements with our existing or potential clients. For details, please refer to the chapter
titled “Risk Factors” beginning on page 31 of this Prospectus.

Increase in income

Based on the continuous successful completion of the projects over a period of several years the Company has
been able to get higher-qualification to participate big amount tenders as well as big size pipe-line works. Due
to higher qualification the Company is able to bid for big size projects thereby the Company has been able
achieve better turnover year on year except in the FY 2018 as there was delay in the processing and awarding
tenders due to problems faced in GST implementation.

Status of any Publicly Announced New Products or Business Segments
Except as disclosed in the Prospectus, we have not announced and do not expect to announce in the near future

any new products or business segments which may have a material impact on our business prospects, results of
operations or financial condition.

Seasonality of Business

Considering the trend of business of the Company for fast several years, the execution of the works will be
higher in the second half of the financial year in comparison to first half year caused due to various factors
such as rainy season and delay in the approval of budgets of the customers in the first half.

Significant dependence on a single or few suppliers or customers
Majority of the orders come from gas & oil companies which are majorly oil and gas distribution companies
Recently, various private companies won number of geographical areas for City Gas Distribution (CGD). This

may slightly reduce the dependence on the oil and gas distribution companies. At present to major extent the
business of the Company depends on the oil & gas distribution companies.

246
FINANCIAL INDEBTEDNESS

Set forth below, is a brief summary of our Company’s borrowings as on July 31, 2020 together with a brief
description of certain significant terms / material covenants of the relevant financing arrangements.

 

Secured Borrowings

 

Outstanding Bank Guarantee

5811.96

 

Total

 

 

5987.46

 

 

Details of Secured Loans and Bank Guarantee

 

(Rs. in Lakhs)

 

 

 

 

de vy v v e ‘ 1 O
Ne yi g % rt
020
10.35% (0.50
%)
Fund Fund (“Margin”)
based- based- over and
500.00 175.50 above the
bank’s one
year
Yes Bank Working January Performance See Repayable
Limited | P| 99, a019 BG— 0.90% | Note1 | on demand
facility p.a. plus
Non-fund | Non fund applicable
based- based- Financial
4,500.00 3,584.44 BG- 1.00%
p.a. plus
applicable
taxes
re Fund L-MCLR- 6M
based- NIL | + 2.25%
. 400.00
ICICI Working | Novem
Bank capital ber 29, BG-0.90% pa See de
Limited* facility | 2019 Non-fund | Non-fund and Counter Note 2 months
based- based- BG- sublimit
2500.00 2227.52 of BG- 0.25%
p.a.

 

 

 

 

 

 

 

 

*The above limits of ICICI Bank are inclusive of the outstanding sums due under the Axis Bank BG facilities
which have since been taken over by ICICI Bank Limited. The Company is in the process of completing
formalities for releasing its charge by Axis Bank and thereafter, for making necessary filings with RoC.

247

 
Note 1 for facilities taken from Yes Bank Limited

Brief description of certain significant terms / material covenants of the relevant financing arrangements are
as follows:

 

 

 

 

 

 

 

 

   

 

(Rs. in Lakhs)
Facility Type Amount
Working capital facility
Fund based 500.00
Non-fund based 4500.00
Total 5,000.00
a) Security
Nature of Secur'
1. Pari pasu charge by way of hypothecation on current assets and movable fixed assets, both
present and future of the Company.
2. Exclusive charge by way of equitable mortgage of properties owned by Mr. Srinivasa Rao
Gaddipati, Mr. Kutumba Rao Gaddipati, Mrs. Sri Lakshmi Gaddipati and the Company.

 

 

 

 

b) Guarantees

Personal Guarantees of Mr. Srinivasa Rao Gaddipati, Mrs. Sri Lakshmi Gaddipati and Mr. Kutumba Rao
Gaddipati

a) Guarantees
Personal Guarantees of Mr. Srinivasa Rao Gaddipati and Mrs. Sri Lakshmi Gaddipati.
Note 2 for facilities taken from ICICI Bank Limited

Brief description of certain significant terms / material covenants of the relevant financing arrangements are
as follows:

 

 

 

 

(Rs. in Lakhs)
IFT a wats yUi iis
Working capital facility*
Fund based* 400.00
Non-fund based* 2500.00
Total 2900.00

 

 

 

 

*Including the credit facilities taken over from the Axis Bank

248
b) Security

Nature of Secur'

   

 

he Primary: First pari-passu charge on the entire encumbered movable fixed assets and entire
current assets of the Company, both present and future.
2. Collateral: Equitable mortgage of properties owned by Mr. Srinivasa Rao Gaddipati.

 

 

 

 

c) Guarantees
Personal Guarantees of Mr. Srinivasa Rao Gaddipati and Mrs. Sri Lakshmi Gaddipati.
RESTRICTIVE / NEGATIVE COVENANTS

The abovementioned loans from banks and financial institutions includes various restrictive covenants in
relation to certain actions to be undertaken by our Company and for some of which prior written approval of
the bank or financial institution is required. The major restrictive covenants are mentioned below. (some of
these may be common across all, while some may be specific to a particular bank or financial institution).

The Company is not allowed, without the prior written consent of the bank/financial institution, as applicable:

1. To enter into any merger/ amalgamation etc or do a buyback;
2. To wind up/liquidate its affairs;
3. To change the general nature of its business or undertake any expansion or invest in any other entity;

4. To permit any change in its ownership/ control/ management (including by pledge of promoter/sponsor
shareholding in the borrower to any third party)

5. To change remuneration of its directors in any manner other than as mandated by legal or regulatory
provisions;

6. To effect any change in its accounting method or policies;
7. To make any amendments to its constitutional documents;

8. To avail any loan; and/or stand as surety or guarantor for any third-party liability or obligation; and/or
provide any loan or advance to any third party; encumber its assets;

9. To enter into any arrangement whereby its business/ operations are managed or controlled, directly or
indirectly, by any other person;

10. To effect any major change in its capital structure, major shareholders or promoters;
This is an indictive list and there may be additional terms that may amount to an event of default under the

various borrowing arrangements entered into by us.

249
Details of Auto Loans

In addition to the above-mentioned loans, our Company has taken auto loans from ICICI Bank Limited to
finance the purchase of vehicles in the ordinary course of its business which is repayable in accordance with
the terms of respective auto loan agreement.

Details of Unsecured Loans

Our Company does not have any unsecured loan as on July 31, 2020.

250
SECTION VI- LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS
Except as stated in this section, there are no:

A. (i) criminal proceedings; (ii) actions by statutory or regulatory authorities; (iii) claims relating to direct
and indirect taxes; or (iv) Material Litigation (as defined below) involving our Company, its Subsidiary,
Directors or Promoters; (v) outstanding dues to MSMEs and other creditors (vi) Material Dues (as defined
below) to creditors;

In relation to (iv) above, our Board, at its meeting held on December 10, 2019 has determined Material
Litigation as:

a. the aggregate amount involved in such individual litigation exceeds 5% of the consolidated profit
after tax of the Company, as per the last audited financial statements; or where the decision in one
litigation is likely to affect the decision in similar litigations, even though the amount involved in such
single litigation individually may not exceed the abovementioned thresholds, if similar litigations put
together collectively exceed 5% of the consolidated profit after tax of the Company;

b. any such litigation wherein the monetary liability is not quantifiable but which is expected to be
material from the perspective of the Company’s business, operations, prospects or reputation.

Except as stated in this section, there are no outstanding litigation involving our Group Companies, the
outcome of which would have a material impact on our Company

In relation to (vi) above, our Board, at its meeting held on December 10, 2019 has determined ‘Material
Dues' as:

Outstanding dues to creditors in excess of 10% of the outstanding trade payables as per the last audited
financial statements

Details of Material Dues to creditors as required under the SEBI ICDR Regulations have been disclosed on
our website at www.likhitha.co.in.

It is clarified that for the purposes of the above, pre-litigation notices received by our Company, Subsidiaries,
Directors or Promoter shall, unless otherwise decided by the Board, not be considered as litigation until
such time that our Company or any of its Subsidiaries, Directors or Promoters, as the case may be, is
impleaded as a defendant in litigation before any judicial forum.

Except as disclosed herein, our Company, its Directors and Promoters are not Wilful Defaulters and there
have been no violations of securities laws in the past or pending against them.

251
>

LITIGATION INVOLVING OUR COMPANY

1. Litigation against our Company
1.1. Civil
NIL

1.2. Criminal
NIL
1.3, Taxation

1.3.1. Direct Tax Proceedings

 

 

 

 

 

 

 

rN
i A demand was raised on January 22, 2010 2008-09 0.77
under Section 143 (1) of the IT Act
2. Notice dated January 23, 2015 under Section 2014-15 -
139(9) of the IT Act has been received.
3. A demand was raised on December 28, 2019 2017-18 176.02
under Section 143(3) of the IT Act*
4, Assessment proceedings under Section 2018-19 -
143(3) of the IT Act
‘Bs Notice dated May 28, 2019 under Section 2018-19 -
139(9) of the IT Act has been received.
6. Notice dated April 30, 2020 under Section 2019-20 3.15
143(1)(a) of the IT Act has been received
against which our Company has filed an
appeal before the Commission of Income
Tax (Appeals) which is pending
Total 179.94

 

 

 

 

 

 

*In addition to the aforesaid demand, the AO has pursuant to the assessment order passed, directed
that penalty proceedings u/s. 274 read with section 271(1)(c) of the IT Act be initiated against our
Company for concealing/ furnishing inaccurate particulars of income for the relevant assessment
year.

1.3.2. Indirect Tax Proceedings

 

i. VAT Proceedings
Particulars Financial Status
eC
1. By a revision order (RR. No. 21/2014-15) 2008-09 The matter is
dated February 4, 2016 passed by the Deputy currently pending
Commissioner, Punjagutta Division, before the

Hyderabad, the exemption allowed by CTO

 

252
NCH

 

a) wars

on payments made to sub-contractors for
execution of pure labour work was
withdrawn and consequently, tax of Rs. 6.14
Lakhs was levied and confirmed against our
Company. Aggrieved by the aforesaid
revision order, our Company has filed an
appeal in April 2016 before the TVATAT,
Hyderabad.

Separately, our Company had filed a stay
petition for stay on collection of disputed tax
before the Additional Commissioner (CT)
and Joint Commissioner (CT)-I (l/c),
Commercial Tax Department, Hyderabad.
By an order (J.C. Order No. 89/2016) dated
June 25, 2016, our Company’s petition was
allowed and stay was granted on collection of
50% of the disputed tax amount of Rs 3.07
Lakhs out of the total disputed tax of Rs. 6.14
Lakhs on the condition that our Company
shall pay 50% of the disputed tax amount of
Rs. 3.07 Lakhs on or before July 23, 2016,
with a direction that credit will be given for
the amounts already paid by our Company
and such the stay will be in force until
disposal of the appeal by the TVATAT,
Hyderabad.

Our Company has made the aforesaid
payment of Rs. 3.07 Lakhs before July 23,
2016.

 

Status

TVATAT,
Hyderabad.

 

 

 

By a revision order (RR. No. 22/2014-15)
dated February 4, 2016 passed by the Deputy
Commissioner, Punjagutta Division,
Hyderabad, exemption allowed by CTO on
payments made to sub-contractors for
execution of pure labour work was
withdrawn and consequently levied and
confirmed tax of Rs. 15.36 Lakhs. Aggrieved
by the abovementioned revision order, our
Company has filed an appeal in April 2016
before the TVATAT, Hyderabad.

Separately, our Company had filed a stay
petition for stay of collection of disputed tax
before the Additional Commissioner (CT)
and Joint Commissioner (CT)-I (l/c),
Hyderabad. By an order (J.C. Order No.
88/2016) dated June 25, 2016, our
Company’s petition has been allowed and

 

2009-10
&2010-11

 

The matter

is

currently pending

before
TVATAT,
Hyderabad.

the

 

253

 
 

Particulars Financial

eC

stayed has been granted on collection of 50%
of the disputed tax amount of Rs 7.68 Lakhs
out of the total disputed tax of Rs. 15.36
Lakhs on the condition that our Company
shall pay 50% of the disputed tax amount of
Rs.7.68 Lakhs on or before July 23, 2016,
with a direction that credit will be given for
the amounts already paid and such stay will
be in force until disposal of the appeal filed
before the TVATAT, Hyderabad.

Our Company has made the aforesaid
payment of Rs.7.68 Lakhs before July 23,

Status

 

2016.
2s Litigation by our Company
21. Civil
NIL

2.2. Criminal

NIL
2.3. Taxation
2.3.1. Direct Tax Proceedings

NIL
2.3.2. Indirect Tax Proceedings

NIL
B. LITIGATION INVOLVING THE DIRECTORS (Other than Promoters)
ty Litigation against our Directors
11. Civil

NIL
1.2. Criminal

NIL
1.3. Taxation

254
 

 

 

 

 

 

 

2.3.1 Direct Tax Proceedings
i. Mrs. Sri Lakshmi Gaddipati
yo Particulars Amount (Rs.
Ce in Lakhs)
1, A demand was raised on June 30, 2015 under 2014-15, 0.49
Section 143(1)(a) of the IT Act
Total 0.49
2.3.2 Indirect Tax Proceedings
NIL
Qe Litigation by our Directors
21. Civil
NIL
2.2. Criminal
NIL
2.3. Taxation
2.3.1. Direct Tax Proceedings
NIL
2.3.2. Indirect Tax Proceedings
NIL
Cc. LITIGATION INVOLVING OUR PROMOTERS
1. Litigation against Promoters
11. Civil
NIL
1.2. Criminal
NIL

255

 
1.3. Taxation

1.3.1. Direct Tax Proceedings

ii. Mr. Srinivasa Rao Gaddipati

 

 

 

 

 

ha Pos Amount (Rs.
Ce B{o-19 in Lakhs)
1. A demand was raised on August 19, 2014 2013-14 1.307
under Section 143 (1)(a) of the IT Act
2. A demand was raised on June 30, 2015 under 2014-15 0.670
Section 143(1)(a) of the IT Act
3: A demand was raised on August 6, 2019 under 2017-18 1.955
Section 154 of the IT Act
Total 3.932

 

 

 

 

 

1.3.2. Indirect Tax Proceedings

NIL
2s Litigation by Promoters
1.1. Civil

NIL

1.2. Criminal
NIL
1.3. Taxation
1.3.1. Direct Tax Proceedings

NIL

1.3.2. Indirect Tax Proceedings

NIL

NOTICES FROM STATUTORY AND REGULATORY AUTHORITIES

In addition to the above, we also receive notices from various statutory authorities during the course of our
business primarily related to alleged non-compliance with certain labour legislations. There has been no
development in the matters subsequent to receipt of the said notices.

256
Our Company does not have any outstanding defaults in relation to statutory dues consisting of service tax,
value added tax, professional tax, employee state insurance, provident fund and tax deducted, dues payable
to holders of any debentures (including interest) or dues in respect of deposits (including interest) or any
defaults in repayment of loans from any bank or financial institution (including interest).

DISCIPLINARY ACTION AGAINST OUR PROMOTERS IN THE LAST FIVE FINANCIAL
YEARS

There are no disciplinary actions pending or taken by SEBI or the stock exchange(s) against the Promoters
during the last five years immediately preceding the year of the issue of the Prospectus.

OUTSTANDING DUES TO CREDITORS
As per the Materiality Policy, our Board has approved the following:
Complete details about outstanding dues to creditors (excluding banks and other financial institutions from

whom Company has availed the financing facilities) if the amount due to any one of them exceeds 10% of
the total outstanding trade payables of the Company as per the last audited financial statements.

As of March 31, 2020, our Company, in its ordinary course of business, has an aggregate amount of Rs.
1393.45 Lakhs, which is due towards sundry and other creditors. Consolidated information on material dues
to creditors and outstanding dues to MSMEs and other creditors, giving details of number of creditors and
aggregate amount for such dues is as under:

 

 

 

 

 

 

 

Material Dues to Creditors 1 145.03
Outstanding dues to MSMEs - -
Outstanding dues to other creditors 422 1248.42

 

The details pertaining to material dues to creditors as per the Restated Financial Statements for the most recent
financial year is available on the website of our Company. It is clarified that such details available on our
Company’s website do not form a part of this Prospectus. Anyone placing reliance on any source of
information including our Company’s website would be doing so at their own risk.

DISCLOSURES PERTAINING TO WILFUL DEFAULTERS

Neither our Company, our Promoters nor our Directors are or have been classified as a wilful defaulter by a
bank or financial institution or a consortium thereof in accordance with the guidelines on wilful defaulters
issued by RBI.

MATERIAL DEVELOPMENTS

Except as disclosed in the chapter titled “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” beginning on page 233 of this Prospectus, in the opinion of our Board, there have not
arisen, since March 31, 2020, any circumstances that materially or adversely affect or are likely to affect our
profitability or the value of our consolidated assets or our ability to pay material liabilities within the next 12
months.

257
GOVERNMENT AND OTHER APPROVALS

Our Company is in receipt of the necessary consents, licenses, registrations, permissions and approvals from
the Government of India and various governmental agencies required to undertake this Issue and carrying
on our present business activities. Our Company undertakes to obtain all material approvals and licenses
and permissions required to operate our present business activities. Unless otherwise stated, these approvals
and licenses are valid as on the date of this Prospectus and in case of licenses and approvals which have
expired; we have either made application for renewal or are in the process of making an application for
renewal. In order to operate our business, we require various approvals and/or licenses under various laws,
rules and regulations.

The main objects clause of the Memorandum of Association and objects incidental to the main objects enable
our Company to undertake its existing business activities.

In view of the approvals listed below, the Company can undertake this Issue and its current business activities
and no further major approvals from any governmental or regulatory authority except proposed activities of
Company or any other entity are required to undertake the Issue or continue its business activities.

Following statement sets out the details of licenses, permissions and approvals obtained by the Company
under various central and state legislations for carrying out its business activities.

Ii COMPANY RELATED APPROVALS

 

 

 

PN ey Alay stirs atrial NCH DEC
Granted Authority Reference No:/ License aA

aC Date of

nel

1; Certificate of Registrar of 029911 August -
Incorporation in Companies, 06, 1998
the name of Andhra
“Likhitha Pradesh
Construction
Private Limited”

2: Fresh Certificate Registrar of U45200TG1998PTC029911 March -
of Incorporation Companies, 30, 2011
consequent upon Andhra
change of name Pradesh
to “Likhitha
Infrastructure
Private Limited”

3. Fresh Certificate Registrar of U45200TG1998PTC029911 February -
of Incorporation Companies, 12, 2019
consequent Hyderabad
upon change of
name to Likhitha
Infrastructure
Limited on
conversion to
public limited
company

 

 

 

 

 

 

 

 

258
 

 

 

 

 

 

 

 

 

 

 

 

 

Nature of License / stints Registration/ License Date (Oi
PAV a el Authority CO Pre ehies
aL
AV Uae

Certificate of Government 24AAACL6032G1ZX July 1, 2017 N.A.
Registration for of
Goods and Service India
Tax (Gujarat)
Certificate of Government O6AAACL6032G1ZV September N.A.
Registration for of 21, 2017
Goods and Service India
Tax (Haryana)
Certificate of Government 20AAACL6032G1Z5 December 1, N.A.
Registration for of 2017
Goods and Service India
Tax (Jharkhand)
Certificate of Government 32AAACL6032G1ZO September N.A.
Registration for of 21, 2017
Goods and Service India
Tax (Kerala)
Certificate of Government 29AAACL6032G1ZN September N.A.
Registration for of 20, 2017
Goods and Service India
Tax (Karnataka)
Certificate of Government 23AAACL6032G1ZZ September N.A.
Registration for of 23, 2017
Goods and Service India
Tax (Madhya
Pradesh)
Certificate of Government O9AAACL6032G1ZP September N.A.
Registration for of 26, 2017
Goods and Service India
Tax (Uttar Pradesh)
Certificate of Government 19AAACL6032G1ZO December N.A.
Registration for of 19, 2017
Goods and Service India
Tax (West Bengal)
Certificate of Government 33AAACL6032G1ZY August 16, N.A.
Registration for of 2019
Goods and Service India
Tax (Tamil Nadu)
Certificate of Government 21AAACL6032G1Z3 January 9, N.A.
Registration for of 2020
Goods and Service India
Tax (Odisha)
Importer-Exporter Foreign Trade 0915009846 June 21, N.A.
Code (IEC) Development 2019

Officer,

Ministry of

Commerce
Certificate of Profession 36864282220 November 6, N.A.
Registration under Tax 2019

 

 

 

 

 

260

 
Il.

APPROVALS FOR THE ISSUE
The Board of Directors has, pursuant to a resolution passed at its meeting held on December 10, 2019
authorized the Issue subject to the approval of the shareholders of the Company under Section 62(1)(c)

of the Companies Act, 2013 and approvals by such other authorities as may be necessary.

The shareholders of the Company have, pursuant to a resolution dated December 23, 2019 passed in
the EGM under Section 62(1)(c) of the Companies Act, 2013 authorized the Issue.

The Company has obtained in-principle listing approval from the NSE dated February 19, 2020.

The Company has obtained in-principle listing approval from BSE dated January 23, 2020.

The Company has entered into an agreement dated February 27, 2019 with the Central Depository
Services (India) Limited (“CDSL") and the Registrar and Transfer Agent for the dematerialization of

its shares.

Similarly, the Company has also entered into an agreement dated March 20, 2019 with the National
Securities Depository Limited ("NSDL") and the Registrar and Transfer Agent, for the

dematerialization of its shares.

7. The Company's International Securities Identification Number ("ISIN") is INE060901019

 

 

 

 

 

 

Til. TAX RELATED APPROVALS
Nature of License / sents Registration/ License BETS Oi AATCC)
rN ary Authority CO Fae Viatity ry)
Bo
Vy ele
Permanent Income Tax AAACL6032G April 12, N.A.
Account Number Department, 2019
(PAN) Gol
Tax Deduction Income Tax HYDL00937G - N.A.
Account Number Department,
(TAN) Gol
Certificate of Government 36AAACL6032G2ZR September N.A.
Registration for of 24, 2017
Goods and Service India
Tax (Telangana)
Certificate of Government 37AAACL6032G1ZQ July 27; N.A.
Registration for of 2017
Goods and Service India
Tax (Andhra
Pradesh)
Certificate of Government 10AAACL6032G1Z6 January 6, N.A.
Registration for of 2018
Goods and Service India
Tax (Bihar)
Certificate of Government 07AAACL6032G1ZT September N.A.
Registration for of 18, 2017
Goods and Service India
Tax (New Delhi)

 

 

 

 

 

 

 

259
Nature of License / stints Registration/ License Date (Oi
PAV a el Authority CO Pre ehies

aL
AV Uae

 

the Telangana Tax Officer,
on Profession Srinagar
Trade, Calling and Colony
Employment Act, Circle,

 

1987 Hyderabad

Certificate of Profession 36864282220 May 9, 2019 N.A.
Enrolment under the Tax

Telangana Tax on Officer,

Profession Trade, Srinagar

Calling and Colony

Employment Act, Circle,

1987 Hyderabad

 

Iv. BUSINESS RELATED APPROVALS/ LICENSES/ CERTIFICATES

 

 

Nature (Oi SC wAU aA PTH DEI of AATCC)
Bi teaitys / Ba Paes rc)
AV ae (cai

ay) Dale
Registration Labour SEA/HYD/ACL/A2 February 26, December
Certificate of Department, /0132882/2019 2019 31, 2020
Establishments Government of
under Telangana Telangana
Shops and
Establishment
Act, 1988
Certificate on International RQ91/7990 November November
Quality Certification 23, 2019 13, 2021
Management Services _ Private
System (dso. Limited
9001: 2015)

 

 

 

 

 

 

 

Vv. LABOUR RELATED APPROVALS

 

 

Nature Peis Registration/ Date a AVANT)
Bi teaitys PN et a sca Paths i
AV acl bai

Approval
Employees’ Regional Office, 52000212110001009 October 7,
State Insurance Employees’ State 2010 N.A.
Registration Insurance
Certificate Corporation
Employees’ Sub-Regional 50520212110011009 August 14, N.A.
State Insurance Office, 2016
Registration Employees’ State
Certificate (for Insurance
Karnataka) Corporation

 

 

 

 

 

 

 

261
Elias atid aie Date of Valid up

 

 

peas Pay at ay pei eN (on Pre ehies to
PAV ae biog
AV Uae

Employees’ Sub-Regional 20520212110011009 August 1, N.A.
State Insurance Office, 2019
Registration Employees’ State
Certificate (for Insurance
Delhi) Corporation
Employee’s Office of the APKKP0042049000 August 23, N.A.
Provident Fund Regional 2019
Registration Provident fund

commissioner,

Andhra Pradesh,

 

For carrying out our present business activities which include providing oil and gas pipeline infrastructure
services with construction of associated facilities and providing operations & maintenance services, we are
required to obtain consents, licenses, registrations, permissions and approvals which may include registration
of contract labour employed at our project sites, registration under Building and Other Construction Workers
(Regulation of Employment and Condition of Service) Act, 1996, professional tax, etc. as applicable.

We obtain these licenses based on the requirements under the particular project being undertaken by us. These
approvals may vary based on factors such as the legal requirement in the state in which the project is being
undertaken, the size of the projects undertaken and the type of the project.

VI. Approvals obtained in relation to Intellectual property rights

Trademark

Our Company has applied for registration of the following trademark as on the date of this Prospectus:

 

 

We Contta se Cele Ci PV) ILE TY pricy i RY ETA)
Bence NCH PV ieee
Ty 37 4108651 March 06, 2019 Objected
VII. Approvals applied for but not yet received / Renewals made in the usual course of business (other

than those indicated under IV and V):
NIL
VIII. Material licenses / approvals for which our Company is yet to apply for
Certificate of Registration and Certificate of Enrolment under the following enactments:
a. The Andhra Pradesh Tax on Professions, Trades, Callings and Employments Act, 1987
b. Bihar Tax on Professions, Trades, Callings and Employments Taxation Act, 2011

c. The Jharkhand Tax on Professions, Trades, Callings and Employments Act, 2011

262
Kerala Municipality Act, 1994

The Karnataka Tax on Profession, Trades, Callings and Employment Act, 1976

The West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979
Tamil Nadu Tax on Professions, Trades, Callings and Employments Act, 1992

Orissa State Tax on Profession, Trades, Callings and Employments Act, 2000

263
OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Issue

The Issue in terms of the Red Herring Prospectus has been authorized pursuant to the resolution passed by the
Board of Directors dated December 10, 2019 and by the shareholders pursuant to the special resolution passed
in Extra-Ordinary General Meeting dated December 23, 2019 under Section 62(1)(c) of the Companies Act,
2013.

Our Company has obtained in-principle approval from BSE and NSE for the listing of the Equity Shares
pursuant to letters dated January 23, 2020 and February 19, 2020, respectively.

Prohibition by SEBI or any other regulatory authorities

We confirm that our Company, our Promoters, members of the Promoter group, directors and the persons in
control of our Company are not prohibited from accessing the capital market or debarred from buying, selling
or dealing in securities, under any order or direction passed by SEBI or any other securities market regulator in
any other jurisdiction or any other authority/ court as on the date of this Prospectus.

None of our directors are associated with the securities market and there has been no action taken by the SEBI
against our directors in the five years preceding the date of this Prospectus.

Further, none of our Promoters or directors have been declared as fugitive economic offender under Fugitive
Economic Offenders Act, 2018.

Compliance with the Companies (Significant Beneficial Ownership) Rules, 2018

Our Company, our Promoters and the members of the Promoter group are in compliance with the Companies
(Significant Beneficial Ownership) Rules, 2018, to the extent in force and applicable, as on the date of this
Prospectus.

Prohibition by RBI

Neither our Company, nor our Promoters or our directors have been identified as a wilful defaulter by the RBI
or other governmental authority.

Eligibility for the Issue

Our Company confirms that it is not ineligible to make the Issue in terms of Regulations 5 of SEBI ICDR
Regulations 2018.

Our Company is an “unlisted issuer” in terms of the SEBI ICDR Regulations 2018; and this Issue is an “Initial
Public Issue” in terms of the SEBI ICDR Regulations 2018.

Our Company is eligible for the Issue in accordance with Regulation 6(1) of the SEBI ICDR Regulations as
described below the eligibility criteria calculated in accordance with the Restated Financial Information,
prepared in accordance with the Companies Act and restated in accordance with the SEBI ICDR Regulations:

¢ Our Company has had net tangible assets of at least Rs.300 Lakhs in each of the preceding three full years
(of 12 months each), of which more than 50% was held in monetary assets. However, the excess monetary
assets in Fiscal 2018, 2019 and 2020 were utilized towards the business of the Company. The excess
monetary assets in Fiscal 2018, 2019 and 2020 are part of current assets of the Company being the trade
debtors, retention money with clients, margin money for bank guarantees and other trade related advances;

264
e Our Company has an average operating profit of Rs. 1,500 Lakhs, during the preceding three full years (of
12 months each), with operating profit in each of these preceding three years;

e¢ Our Company has a net worth of at least Rs. 100 Lakhs in each of the preceding three full years (of 12
months each); and

e Our Company has not changed its name within the last one year.

e¢ Our Company’s net tangible assets, monetary assets, monetary assets as a percentage of the net tangible
assets, operating profit and net worth derived from the Restated Financial Information included in this
Prospectus for the preceding three financial years ended March 31, 2020, March 31, 2019 and March 31,
2018 are set forth below:

(@ in Lakhs, unless otherwise stated)

sxoyments

 
   

2020

 

 

 

 

 

 

 

 

 

 

Net tangible assets’ 10085.61 8468.92 6748.97
Monetary assets” 6360.75 4549.84 4629.72
Monetary assets restated as a percentage 63.07% 53.72% 68.60%
of the net tangible assets
Pre-tax operating profit/(loss) * 2669.94 2516.55 1082.38
Net worth* 6995.58 5031.23 3242.94
Notes:
Net Tangible assets are total tangible assets including the investment property as shown in the restated
financials;

Monetary assets are money held and to be received in fixed or determinable amount of money and includes
Cash, cash equivalents, trade receivables, current investment, other financial assets and loans and adavnces
in financial assets under non current assets. Monetary assets in excess of 50% of the net tangible assets
were utilised towards the business of our Company

e 3. Pre tax operating profit/(loss) does not include dividend from chit fund, shares and rental income as
same are not related to operations of the company; and

e 4. Net worh = Equity share capital+Other Equity.

We confirm that:

Our Company is in compliance with conditions specified in Regulation 7(1) of the SEBI ICDR Regulations to
the extent applicable and will ensure compliance with the conditions specified in Regulation 7(2) of the SEBI
ICDR Regulations, to the extent applicable.

The fund requirements set out for the Object of the Issue are proposed to be met entirely from the Net Proceeds,
internal accruals and through existing as well as proposed debt financing. In view of above, we confirm that
with respect to the Objects, there is no requirement for us to make firm arrangements of finance through
verifiable means towards 75% of the stated means of finance, excluding the amount proposed to be raised
through the Issue.

In accordance with Regulation 49(1) of the SEBI ICDR Regulations, we shall ensure that the total number of
proposed allottee in the Issue shall not be less than thousand (1000), otherwise, the entire application money
will be unblocked/ refunded forthwith.

The Company shall Allot Equity Shares pursuant to the Issue within six days from the Bid / Issue Closing Date
or within such timeline as prescribed by SEBI, failing which, it shall pay interest at the rate of 15% (fifteen
percent) per annum if the allotment letters or refund orders/ unblocking instructions have not been despatched
to the applicants or if, in a case where the refund or portion thereof is made in electronic manner, the refund
instructions have not been given to the clearing system in the disclosed manner within six days from the date
of the closure of the Issue.

265
Our Company has facilitated trading in demat securities and has entered into the following agreements for
establishing connectivity
e Tripartite agreement dated February 27, 2019 amongst our Company, CDSL and the Registrar to the
Issue; and
e Tripartite agreement dated March 20, 2019 between our Company, NDSL and the Registrar to the Issue

DISCLAIMER CLAUSE OF SEBI

“IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE PROSPECTUS TO THE
SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) SHOULD NOT IN ANY WAY BE
DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI.
SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF
ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR
FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE
OFFER DOCUMENT. THE BOOK RUNNING LEAD MANAGER, UNISTONE CAPITAL PRIVATE
LIMITED, HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE PROSPECTUS ARE
GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE SEBI ICDR REGULATIONS.
THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION
FOR MAKING INVESTMENT IN THE PROPOSED ISSUE.

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE COMPANY IS PRIMARILY
RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL
RELEVANT INFORMATION IN THE PROSPECTUS, THE BOOK RUNNING LEAD MANAGER,
UNISTONE CAPITAL PRIVATE LIMITED IS EXPECTED TO EXERCISE DUE DILIGENCE TO
ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS
BEHALF AND TOWARDS THIS PURPOSE, THE BOOK RUNNING LEAD MANAGER, UNISTONE
CAPITAL PRIVATE LIMITED HAS FURNISHED TO SEBI A *DUE DILIGENCE CERTIFICATE
DATED SEPTEMBER 08, 2020 INTHE FORMAT PRESCRIBED UNDER SCHEDULE V(A) OF THE
SEBI ICDR REGULATIONS.

THE FILING OF THIS PROSPECTUS DOES NOT, HOWEVER, ABSOLVE OUR COMPANY
FROM ANY LIABILITIES UNDER THE COMPANIES ACT, 2013 OR FROM THE REQUIREMENT
OF OBTAINING SUCH STATUTORY AND / OR OTHER CLEARANCES AS MAY BE REQUIRED
FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI FURTHER RESERVES THE RIGHT TO
TAKE UP AT ANY POINT OF TIME, WITH THE BRLM ANY IRREGULARITIES OR LAPSES IN
THE PROSPECTUS.”

*Unistone Capital Private Limited (“Unistone”) has received SEBI approval via email dated August 28, 2020
for the transfer of Merchant Banking License alongwith ongoing mandates (including that of the Issuer) and
Merchant Banking business from CKP Financial Private Limited to Unistone. Thus, Unistone issued fresh Due
diligence Certificate.

Disclaimer from our Company and the Book Running Lead Manager

Our Company and the Book Running Lead Manager accept no responsibility for statements made otherwise
than those contained in the Prospectus or in any advertisements or any other material issued by or at our
Company’s instance and anyone placing reliance on any other source of information would be doing so at his
or her own risk.

 

The BRLMs accept no responsibility, save to the limited extent as provided in the Issue Agreement and the
Underwriting Agreement.

266
All information shall be made available by our Company and the BRLMs to the public and investors at large
and no selective or additional information would be available for a section of the investors in any manner
whatsoever, including at road show presentations, in research or sales reports, at Bidding Centres or elsewhere.
None among our Company or any member of the Syndicate is liable for any failure in (i) uploading the Bids
due to faults in any software or hardware system or otherwise; and (ii) the blocking of Bid Amount in the ASBA.
Account on receipt of instructions from the Sponsor Bank on account of any errors, omissions or non-
compliance by various parties involved in, or any other fault, malfunctioning or breakdown in, or otherwise, in
the UPI Mechanism.

Investors who Bid in the Offer will be required to confirm and will be deemed to have represented to our
Company, the Underwriter and their respective directors, officers, agents, affiliates, and representatives that
they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire the Equity
Shares and will not issue, sell, pledge, or transfer the Equity Shares to any person who is not eligible under any
applicable laws, rules, regulations, guidelines and approvals to acquire the Equity Shares. Our Company, the
Underwriter and their respective directors, officers, agents, affiliates, and representatives accept no
responsibility or liability for advising any investor on whether such investor is eligible to acquire the Equity
Shares.

The BRLMs and their respective associates and affiliates may engage in transactions with, and perform services
for, our Company, the Promoters and their respective directors and officers, group companies, affiliates or
associates or third parties in the ordinary course of business and have engaged, or may in the future engage, in
commercial banking and investment banking transactions with our Company, the Promoters and their respective
directors and officers, group companies, affiliates or associates or third parties, for which they have received,
and may in the future receive, compensation.

Disclaimer in Respect of Jurisdiction

This Issue is being made in India to persons resident in India including Indian nationals resident in India who
are majors, HUFs, companies, other corporate bodies and societies registered under applicable laws in India
and authorized to invest in shares, Indian mutual funds registered with SEBI, Indian financial institutions,
commercial banks, regional rural banks, cooperative banks (subject to RBI permission), or trusts under
applicable trust law and who are authorized under their constitution to hold and invest in equity shares, public
financial institutions as specified in Section 2(72) of the Companies Act, 2013, VCFs, state industrial
development corporations, insurance companies registered with the Insurance Regulatory and Development
Authority, provident funds (subject to applicable law) with a minimum corpus of Rs. 2,500.00 Lakhs and
pension funds with a minimum corpus of Rs. 2,500.00 Lakhs, and permitted non-residents including FIIs,
Eligible NRIs, AIFs, multilateral and bilateral development financial institutions, FVCIs and eligible foreign
investors, insurance funds set up and managed by army, navy or air force of the Union of India and insurance
funds set up and managed by the Department of Posts, India provided that they are eligible under all applicable
laws and regulations to hold the Equity Shares. The Prospectus does not, however, constitute an offer to sell or
an invitation to subscribe for Equity Shares offered hereby in any jurisdiction other than India to any person to
whom it is unlawful to make an Issue or invitation in such jurisdiction. Any person into whose possession the
Prospectus comes is required to inform himself or herself about, and to observe, any such restrictions. Any
dispute arising out of this Issue will be subject to jurisdiction of the competent court(s) in Hyderabad.

No action has been, or will be, taken to permit a public offering in any jurisdiction where action would be
required for that purpose except that this Prospectus has been filed with SEBI for its observations. Accordingly,
the Equity Shares represented hereby may not be issued or sold, directly or indirectly, and the Prospectus may
not be distributed in any jurisdiction, except in accordance with the legal requirements applicable in such
jurisdiction. Neither the delivery of the Prospectus nor any offer hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of our Company since the date hereof or that
the information contained herein is correct as of any time subsequent to this date.

267
Disclaimer Clause of BSE

BSE Limited (“the Exchange”) has given vide its letter dated January 23, 2020 permission to this Company to
use the Exchange’s name in this offer document as one of the stock exchanges on which this company’s
securities are proposed to be listed. The Exchange has scrutinized this offer document for its limited internal
purpose of deciding on the matter of granting the aforesaid permission to this Company. The Exchange does
not in any manner:-

a) warrant, certify or endorse the correctness or completeness of any of the contents of this offer document;
or

b) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or

c) take any responsibility for the financial or other soundness of this Company, its promoters, its
management or any scheme or project of this Company;

and it should not for any reason be deemed or construed that this offer document has been cleared or approved
by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company
may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the
Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in
connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated
herein or for any other reason whatsoever.

Disclaimer Clause of NSE

As required, a copy of this Offer Document has been submitted to National Stock Exchange of India Limited
(hereinafter referred to as ‘NSE”). NSE has given vide its letter Ref. No. NSE/LIST/749 dated February 19,
2020 permission to the Issuer to use the Exchange’s name in this Offer Document as one of the stock exchanges
on which this Issuer’s securities are proposed to be listed. NSE has scrutinized this Draft Offer Document for
its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Issuer. It is to
be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or
construed that the Offer Document has been cleared or approved by NSE; nor does it in any manner warrant,
certify or endorse the correctness or completeness of any of the contents of this Offer Document; nor does it
warrant that this Issuer’s securities will be listed or will continue to be listed on the Exchange; nor does it take
any responsibility for the financial or other soundness of this Issuer, its promoters, its management or any
scheme or project of this Issuer.

Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to
independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever
by reason of any loss which may be suffered by such person consequent to or in connection with such
subscription /acquisition whether by reason of anything stated or omitted to be stated herein or any other reason
whatsoever.

Disclaimer Clause under Rule 144A of the U.S. Securities Act

The Equity Shares have not been, and will not be, registered under the Securities Act, or any state securities
laws in the United States and unless so registered may not be Issued or sold within the United States, except
pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities
Act. Accordingly, the Equity Shares will be issued and sold outside the United States in compliance with
Regulation S of the Securities Act and the applicable laws of the jurisdiction where those issues and sales occur.
The Equity Shares have not been, and will not be, registered, listed or otherwise qualified in any other
jurisdiction outside India and may not be issued or sold, and Bids may not be made by persons in any such
jurisdiction, except in compliance with the applicable laws of such jurisdiction.

Further, applicants are advised to ensure that any application from them does not exceed the investment limit
or maximum number of Equity Shares that can be held by them under applicable laws. Each applicant where

268
required must agree that such Applicant will not sell or transfer any Equity Shares or any economic interest
therein, including any off-shore derivative instruments, such as participatory notes, issued against the Equity
Shares or any similar security, other than pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and in compliance with applicable laws and legislations in each
jurisdiction, including India.

Listing

The Equity Shares of our Company are proposed to be listed on BSE and NSE. Applications have been made
to BSE and NSE for permission to deal in and for an official quotation of the Equity Shares being issued in the
issue. BSE will be the Designated Stock Exchange, with which the Basis of Allotment will be finalized for the
Issue.

Consents

Consents in writing of (a) Our directors, Our Promoters, Our Company Secretary & Compliance Officer, Chief
Financial Officer, Chief Executive Officer, Statutory & Peer Review Auditor; Banker to the Company and (b)
Book Running Lead Manager, Syndicate Member, Registrar to the Issue, Public Issue Bank/ Banker(s) to the
Issue and Refund Banker, Sponsor Banker to the Issue, Legal Advisor to the Issue, Underwriter(s) to the Issue
to act in their respective capacities has been obtained/ will be obtained prior to filing of Prospectus with the
RoC and shall be filed along with a copy of the Prospectus with the RoC, as required under Sections 32 of the
Companies Act and such consents shall not be withdrawn up to the time of delivery of the Prospectus for filing
with the ROC.

In accordance with the Companies Act and the SEBI ICDR Regulations, M/s. NSVR & Associates, LLP,
Chartered Accountants, Statutory & Peer Review Auditors of the Company have agreed to provide their written
consent to the inclusion of their respective reports on “Statement of Tax Benefits” relating to the possible tax
benefits and restated financial statements as included in the Prospectus in the form and context in which they
appear therein and such consent and reports will not be withdrawn up to the time of delivery of the Prospectus.

Experts Opinion

Except for the reports in the chapter “Financial Statements” and “Statement of Tax Benefits” on page 179and
page 95 of the Prospectus from the Statutory & Peer Review Auditor, our Company has not obtained any expert
opinions. For the sake of clarity, the term “expert” shall not be construed to mean an “expert”" as defined under
the U.S. Securities Act 1933.

Particulars regarding public or rights issues during the last five (5) years

Except as stated in the chapter titled “Capital Structure” beginning on page 71 of this Prospectus, we have not
made any public or rights issue during the five (5) years preceding the date of the Prospectus and are an
“Unlisted Issuer” in terms of SEBI ICDR Regulations and this issue is an “Initial Public Offering” in terms of
SEBI ICDR Regulations.

Commission and brokerage on previous issues

Except as disclosed in “Capital Structure” on page 71, our Company has not made any capital issues during
the three years preceding the date of this Prospectus.

Since this is the Initial Public Offering of the Equity Shares, no sum has been paid or has been payable as

commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any of our
Equity Shares in the last five (5) years.

269
Capital issue during the previous three years by the Company and other listed Group-Companies /
subsidiaries/ associates of our Company

As on the date of this Prospectus, none of our Group Companies, have their securities listed on any stock
exchange in India or overseas. Further, presently our Company does not have any subsidiary or associate
companies.

Performance vis-a-vis objects — Public/rights issue of our Company

Except as stated under chapter titled "Capital Structure" beginning on page 71 of the Prospectus, our Company
has not undertaken any previous rights issue. Further, this issue is an “Initial Public Offering” in terms of SEBI
ICDR Regulations and our Company has not undertaken any public or rights issue in the five years preceding
the date of this Prospectus.

Performance vis-a-vis objects - Last one Public Issue/Rights Issue of Subsidiaries/Listed Promoters

Our Company has no subsidiaries or listed promoters and therefore disclosure under this clause is not
applicable.

270
Price Information and track record of past issues handled by the Book Running Lead Manager

Price information of past public issues (during current financial year and two financial years preceding the current financial year) handled by Unistone Capital
Private Limited pursuant to transfer of Merchant Banking business from CKP Financial Services Private Limited:
Issue Name Issue Size Issue price Listing date Opening +/-% change +/-% change change in
(in Lakhs) price on in closing in closing _— closing
Nyetiremee tc price,[+/-% [+/-% price,[+/-%

change Sa ent Teh t

Cosh ashi Cosby
benchmark]- benchmark]- benchmark]-
30th calendar 90th calendar 180th calendar
EVE from days from days hig
ety yeti eth

        

 

 

 

 

 

 

 

 

 

Kapston Facilities 2119.68 April 3.26%, [4.84%] 3.91%, [5.64%] 1.09% [8.69%]
Management 04,2018
Limited

2: Supreme 1777.68 27 September 27,1 -4.59%, -19.27%, -11.93%,
Engineering Limited 06, 2018 [-10.58%] [6.54%] [-4.76%]

 

 

 

For details regarding the track record of the BRLMs, as specified in Circular reference CIR/MIRSD/1/2012 dated January 10, 2012 issued by SEBI, please
see the website www.unistonecapital.com

Notes:

(a) Source: www.nseindia.com for the price information

(b) — Wherever 30th/90th/180th calendar day from the listing day is a holiday, the closing data of the next trading day has been considered.

(c) The Nifty 50 index is considered as the benchmark index.

Summary statement of price information of past public issues handled by Unistone Capital Private Limited
Total Total Funds Cy we lmeectliteglg Nos. of IPOs trading at Om ieee eee Nos. of IPOs trading at
no.of Raised (Rs. _ discount- 30"" calendar premium- 30" calendar discount- 180" calendar — premium- 180" calendar
IPOs In Lakh) days from listing days from listing CEB iw cites days from listing

Iosy at) et)
eraa (aan) Over 5 Over Between ne

   

Financial
ary

25-50% Le EU sect a See en y c a
FY 2017-18 | 2 3897.36 : 5 z : : 1 : - 1 - - 1
FY 2018-19 | __- : : - : 7 = -

FY 2019-20" | - : s : 7 7 - :

*The information is as on the date of the document. The information for each of the financial years is based on issues listed during such financial year.

271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
W%

Stock Market Data of the Equity Shares

Our Company is an “Unlisted Issuer’ and the issue is “Initial Public Offering” in terms of the SEBI
ICDR regulations, hence there is no stock market data available for the Equity Shares of our Company.

Mechanism for Redressal of Investor Grievances

The Registrar Agreement provides for retention of records with the Registrar to the Issue for a period
of at least 3 years from the Issue Closing Date, to enable the investors to approach the Registrar to the
Issue for redressal of their grievances.

All grievances relating to the Bidding process may be addressed to the Registrar to the Issue with a
copy to the Designated Intermediary to whom Bid cum Application Form was submitted, giving full
details such as name of the sole or first Bidder, address of the applicant, UPI ID (if applicable), Bidder
DP ID, Client ID, PAN, date of submission of Bid cum Application Form, application number, number
of Equity Shares applied for, amount paid on application, Depository Participant and the bank branch
or collection centre where the application was submitted.

Further, the Bidder shall also enclose a copy of the Acknowledgment Slip duly received from the
concerned Designated Intermediary in addition to the information mentioned hereinabove.

The Registrar to the Issue shall obtain the required information from the SCSBs for addressing any
clarifications or grievances of ASBA Bidders. Our Company, the BRLMs and the Registrar to the Issue
accept no responsibility for errors, omissions, commission or any acts of SCSBs including any defaults
in complying with their obligations under applicable SEBI ICDR Regulations.

Anchor Investors, if any, are required to address all grievances in relation to the Offer to the BRLMs.

In terms of SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2018/22, dated February 15, 2018, any
ASBA Bidder whose Bid has not been considered for Allotment, due to failure on the part of any SCSB,
shall have the option to seek redressal of the same by the concerned SCSB within three months of the
date of listing of the Equity Shares. SCSBs are required to resolve these complaints within 15 days,
failing which the concerned SCSB would have to pay interest at the rate of 15% per annum for any
delay beyond this period of 15 days.

Our Company has not received investor complaints in relation to the Equity Shares for the three years
prior to the filing of the Prospectus, hence no investor complaints in relation to our Company is pending
as on the date of filing of the Prospectus.

Further, as on date of this Prospectus, we have no Group Companies/ Subsidiary Company or associates
which is listed on any stock exchange. Hence, disclosure regarding mechanism for redressal of investor
grievances for our subsidiary companies and group companies is not applicable.

Disposal of Investor Grievances by our Company
Our Company estimates that the average time required by our Company or the Registrar to the Issue
for the redressal of routine investor grievances shall be fifteen (15) Working Days from the date of

receipt of the complaint. In case of complaints that are not routine or where external agencies are
involved, our Company will seek to redress these complaints as expeditiously as possible.

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Our Company has appointed Mr. Santhosh Kumar Gunemoni, as the Company Secretary &
Compliance Officer to redress complaints, if any, of the investors participating in the Issue. Contact
details for our Company Secretary and Compliance Officer are as follows:

Mr. Santhosh Kumar Gunemoni

Likhitha Infrastructure Limited

Flat No. 701, Plot No.8-3-940 and 8-3-940/A to E,
Tirumala Shah Residency, Yellareddy Guda,
Ameerpet, Hyderabad-500073, Telangana, India.
Telephone: 040- 2375 2657

Website: www. likhitha.co.in

Email id:

cs@likhitha.in

 

Investors can contact the Compliance Officer or the Registrar to the Issue in case of any pre-Issue or
post-Issue related problems such as non-receipt of letters of Allotment, non-credit of allotted Equity
Shares in the respective beneficiary account, non-receipt of refund intimations and non-receipt of funds
by electronic mode.

Pursuant to the press release no. PR. No. 85/2011 dated June 8, 2011, SEBI has launched a centralized
web-based complaints redress system “SCORES”. This enables the investors to lodge and follow up
their complaints and track the status of redressal of such complaints from anywhere. For more details,
investors are requested to visit the website www.scores.gov.in

The Company shall obtain authentication on the SCORES and comply with the SEBI circular no.
CIR/OIAE/1/2014 dated December 18, 2014 in relation to redressal of investor grievances through
SCORES. Our Company has also constituted a Stakeholders’ Relationship Committee to review and
redress the shareholders and investor grievances such as transfer of Equity Shares, non-recovery of
balance payments, declared dividends, approve subdivision, consolidation, transfer and issue of
duplicate shares. For further details, please refer to the chapter titled “Our Management” beginning on
page 150 of this Prospectus.

Status of Investor Complaints

Our Company is an “Unlisted Issuer” and the issue is an “Initial Public Offering” in terms of the SEBI
ICDR regulations, hence this disclosure is not applicable to our Company.

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SECTION VII - ISSUE RELATED INFORMATION
TERMS OF THE ISSUE

The Equity Shares being issued are subject to the provisions of the Companies Act 2013, SEBI ICDR
Regulations, SCRA, SCRR, SEBI LODR Regulations, our Memorandum and Articles of Association,
the terms of the Red Herring Prospectus, the Prospectus, the Abridged Prospectus, any
addendum/corrigendum thereto, the Bid cum Application Form, the Revision Form, the Confirmation
of Allocation Note/ Allotment Advice and other terms and conditions as may be incorporated in the
Allotment Advices and other documents/certificates that may be executed in respect of this Issue. The
Equity Shares shall also be subject to laws as applicable, guidelines, rules, notifications and
regulations relating to the Issue of capital and listing and trading of securities issued from time to time
by SEBI, the Government of India, the Stock Exchanges, the RBI, ROC and/or other authorities, as in
force on the date of the Issue and to the extent applicable or such other conditions as may be prescribed
by the SEBI, the RBI, the Government of India, the Stock Exchange, the ROC and any other authorities
while granting their approval for the Issue.

Please note that in terms of SEBI Circular CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015
(“SEBI 2015 Circular”) and SEBI ICDR Regulations, all the investors applying to this Issue shall use
only Application Supported by Blocked Amount (ASBA) facility for making application providing
details of their bank account which will be blocked by the SCSBs for the same. Further, pursuant to
UPI Circulars, Retail Individual Investors applying in public issue may use either Application
Supported by Blocked Amount (ASBA) facility or can use UPI as a payment mechanism for making
application.

Further vide the SEBI 2015 Circular, the Registrar to the Issue and Depository Participants have also
been authorised to collect the Application forms in addition to the SCSBs, Syndicate Members and
Registered Brokers of Stock Exchanges. Investors may visit the official website of the concerned stock
exchange for any information on operationalization of this facility of form collection by Registrar to
the Issue and DPs as and when the same is made available.

Authority for the Issue

The present Issue of 51,00,000 Equity Shares has been authorized by a resolution of the Board of
Directors of our Company at their meeting held on December 10, 2019 and was approved by the
Shareholders of the Company by passing Special Resolution at the Extra Ordinary General Meeting
held on December 23, 2019.

Ranking of Equity Shares

The Equity Shares being issued shall be subject to the provisions of the Companies Act, 2013 and our
Memorandum and Articles of Association, SEBI ICDR Regulations, SEBI Listing Regulations, SCRA
read with SCRR and shall rank pari-passu in all respects with the existing Equity Shares including in
respect of the rights to receive dividends and other corporate benefits, if any, declared by us after the
date of Allotment. For further details, please refer to the chapter titled “Main Provisions of the Articles
of Association” beginning on page 307 of this Prospectus.

Mode of Payment of Dividend
Our Company will pay dividend, if declared, to our Shareholders as per the provisions of Companies
Act, the Articles of Association, the provisions of the SEBI LODR Regulations and any other rules,

regulations or guidelines as may be issued by the Government of India in connection thereto. The
recommendation and declaration of dividend will be by the Board of Directors and the Shareholders at

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their discretion and will depend on a number of factors, including but not limited to earnings, capital
requirements and overall financial condition of our Company. For further details, please refer to the
chapter titled “Dividend Policy” and “Main Provisions of the Articles of Association” beginning on
178 and 305 of this Prospectus.

Face Value, Issue Price and Price Band

The Equity Shares having a Face Value of Rs.10/- each and the Issue Price at the lower end of Price
Band is Rs. 116/- per Equity Share and at the higher end of the Price Band is Rs. 120/- per Equity
Share.

The Price Band and the minimum Bid Lot size for the Issue was decided by our Company in
consultation with the BRLM and advertised in all editions of the English national newspaper Business
Standard, all editions of the Hindi national newspaper Business Standard, and Telugu edition of the
Telugu newspaper Nava Telangana (Telugu being the regional language of Hyderabad, where the
Registered Office of the Company is situated) each with wide circulation, at least two (2) Working
Days prior to the Bid/Issue Opening Date and was made available to the Stock Exchange for the
purpose of uploading the same on its website. The Price Band, along with the relevant financial ratios
calculated at the Floor Price and at the Cap Price, was prefilled in the Bid cum Application Forms
available on the website of the Stock Exchange. The Issue Price was determined by our Company, in
consultation with the BRLM, after the Bid/Issue Closing Date.

At any given point of time there shall be only one denomination of the Equity Shares of our Company,
subject to applicable laws.

Compliance with SEBI ICDR Regulations

Our Company shall comply with all requirements of the SEBI ICDR Regulations. Our Company shall
comply with all disclosure and accounting norms as specified by SEBI from time to time.

Rights of the Equity Shareholders

Subject to applicable laws, rules, regulations and guidelines and the Articles of Association, the equity

shareholders shall have the following rights:

1. Right to receive dividend, if declared;

2. Right to receive annual reports & notices to members;

3. Right to attend general meetings and exercise voting rights, unless prohibited by law;

4. Right to vote on a poll either in person or by proxy, in accordance with the provisions of the

Companies Act;

. Right to receive offer for rights shares and be allotted bonus shares, if announced;

6. Right to receive surplus on liquidation, subject to any statutory and preferential claim being
satisfied;

7. Right of free transferability of the Equity Shares; subject to applicable laws including any RBI Rules
and Regulations; and

8. Such other rights, as may be available to a shareholder of a listed public limited company under the
Companies Act, terms of the SEBI LODR Regulations and the Memorandum and Articles of
Association of our Company.

wu

For a detailed description of the main provisions of the Articles of Association of our Company relating
to voting rights, dividend, forfeiture and lien, transfer, transmission and/or consolidation/splitting,
please refer to chapter titled “Main Provisions of Articles of Association” beginning on page 307 of
this Prospectus.

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Allotment only in Dematerialised Form

Pursuant to Section 29 of the Companies Act and the SEBI ICDR Regulations, the Equity Shares shall
be Allotted only in dematerialised form. As per the SEBI ICDR Regulations, the trading of the Equity
Shares shall only be in dematerialised form. Applicants will not have the option of Allotment of the
Equity Shares in physical form.

In this context, two agreements have been signed amongst our Company, the respective Depositories

and the Registrar to the Issue:

e Tripartite agreement dated February 27, 2019 amongst our Company, CDSL and the Registrar to
the Issue; and

e Tripartite agreement dated March 20, 2019 between our Company, NDSL and the Registrar to the
Issue.

Market Lot and Trading Lot

Since trading of the Equity Shares is in dematerialised form, the tradable lot is one Equity Share.
Allocation and allotment of Equity Shares through this offer document will be only in electronic form
in multiples of 125 Equity Share subject to a minimum allotment of 125 Equity Shares to the successful
applicants.

For the method of Basis of Allotment, see ‘‘/ssue Procedure” beginning on page 281 of this Prospectus.
Minimum Number of Allottees

Further in accordance with Regulation 49(1) of the SEBI ICDR Regulations, the minimum number of
allottees in this Issue shall be 1000 shareholders. In case the number of prospective allottees is less
than 1000, no allotment will be made pursuant to this Issue and the amounts in the ASBA Account
blocked by the SCSBs or the Sponsor Bank, as the case may be, shall be unblocked forthwith.

Joint Holders

Where two or more persons are registered as the holders of any Equity Shares, they will be deemed to
hold such Equity Shares as joint holders with benefits of survivorship.

Nomination Facility to Bidder

In accordance with Section 72 of the Companies Act, 2013, read with Companies (Share Capital and
Debentures) Rules, 2014, the sole or first applicant, along with other joint applicant, may nominate any
one person in whom, in the event of the death of sole Applicant or in case of joint applicant, death of
all the applicants, as the case may be, the Equity Shares allotted, if any, shall vest. A person, being a
nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall be entitled
to the same advantages to which he or she would be entitled if he or she were the registered holder of
the Equity Share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint,
in the prescribed manner, any person to become entitled to Equity Share(s) in the event of his or her
death during the minority. A nomination shall stand rescinded upon a sale of equity share(s) by the
person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh
nomination can be made only on the prescribed form available on request at the Registered Office of
our Company or to the Registrar and Transfer Agents of our Company.

Any Person who becomes a nominee by virtue of Section 72 of the Companies Act, 2013 shall upon
the production of such evidence as may be required by the Board, elect either:

. to register himself or herself as the holder of the Equity Shares; or

° to make such transfer of the Equity Shares, as the deceased holder could have made

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Further, the Board may at any time give notice requiring any nominee to choose either to be registered
himself or herself or to transfer the Equity Shares, and if the notice is not complied with within a period
of ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other moneys
payable in respect of the Equity Shares, until the requirements of the notice have been complied with.

Since the allotment of Equity Shares in this Issue will be made only in dematerialized form, there is no
need to make a separate nomination with our Company. Nominations registered with the respective
depository participant of the applicant would prevail. If the investors require changing the nomination,
they are requested to inform their respective depository participant.

WITHDRAWAL OF THE OFFER

Our Company, in consultation with the Book Running Lead Manager, reserves the right not to proceed
with the Issue after the Bid/Issue Opening Date but before the Allotment. In such an event, our Company
would issue a public notice in the newspapers in which the pre-Issue advertisements were published,
within two days of the Bid/Issue Closing Date or such other time as may be prescribed by SEBI,
providing reasons for not proceeding with the Issue. The Book Running Lead Manager through the
Registrar to the Issue, shall notify the SCSBs and the Sponsor Bank, in case of RIBs using the UPI
Mechanism, to unblock the bank accounts of the ASBA Bidders (other than Anchor Investors) shall
notify the Escrow Collection Bank to release the Bid Amounts to the Anchor Investors, if any, within
one Working Day from the date of receipt of such notification. Our Company shall also inform the same
to the Stock Exchanges on which Equity Shares are proposed to be listed.

Notwithstanding the foregoing, the Issue is also subject to obtaining the final listing and trading
approvals of the Stock Exchanges, which our Company shall apply for after Allotment and within such
time period as prescribed under Applicable Law.

If our Company, in consultation with the Book Running Lead Manager, withdraw the Issue after the
Bid/Issue Closing Date and thereafter determines that it will proceed with a public offering of the Equity
Shares, our Company shall file a fresh Prospectus with SEBI and the Stock Exchanges.

ISSUE PROGRAMME

LEA Zotg Indicative Date

 

 

 

 

 

|Bid/Issue Opening Date September 29, 2020
[Bid/Issue Closing Date (October 07, 2020*
Finalization of Basis of Allotment with the Designated Stock Exchange (October 12, 2020
(Unblocking of funds from ASBA Account (October 13, 2020
(Credit of Equity Shares to DEMAT Account of Allottee (October 14, 2020
(Commencement of trading of Equity Shares on the Stock Exchange (October 15, 2020

 

 

 

 

* The Issue was scheduled to close on October 01, 2020. Pursuant to revision in the price band in accordance
with SEBI ICDR Regulations, the Bid/ Issue Period was extended by three (3) working days.

The above timetable, other than the Bid/Issue Opening and Closing Date, is indicative and does not
constitute any obligation on our Company and the BRLM. Whilst our Company shall ensure that all
steps for the completion of the necessary formalities for the listing and the commencement of trading
of the Equity Shares on the Stock Exchange are taken within 6 Working Days of the Bid/Issue Closing
Date, the timetable may change due to various factors, such as extension of the Bid/Issue Period by
our Company, revision of the Price Band or any delays in receiving the final listing and trading

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approval from the Stock Exchange. The Commencement of trading of the Equity Shares will be
entirely at the discretion of the Stock Exchange and in accordance with the applicable laws.

The BRLM will be required to submit reports of compliance with timelines and activities prescribed by
SEBI in connection with the allotment and listing procedure within six Working Days from the
Bid/Issue Closing Date, identifying non-adherence to timelines and processes and an analysis of entities
responsible for the delay and the reasons associated with it.

Submission of Bids (other than Bids from Anchor Investors):

 

Bid/Offer Period (except the Bid/Offer Closing Date)

 

Submission and Revision in Bids | Only between 10.00 a.m. and 5.00 p.m. (Indian Standard Time (“IST”)

 

Bid/Offer Closing Date

 

 

 

Submission and Revision in Bids | Only between 10.00 a.m. and 3.00 p.m. IST

 

 

On the Bid/Issue Closing Date, the Bids shall be uploaded until:

(a) 4.00 p.m. IST in case of Bids by QIB and Non-Institutional Bidders; and

(b) 5.00 p.m. IST or such extended time as permitted by the Stock Exchanges, in case of Bids by Retail
Individual Bidders.

On Bid/Issue Closing Date, extension of time will be granted by Stock Exchanges only for uploading
Bids received by RIBs after taking into account the total number of Bids received and as reported by
the Book Running Lead Manager to the Stock Exchanges.

It is clarified that Bids not uploaded on the electronic bidding system or in respect of which the
full Bid Amount is not blocked by SCSBs or not blocked under the UPI Mechanism in the
relevant ASBA Account, as the case may be, would be rejected.

Due to limitation of time available for uploading the Bids on the Bid/Issue Closing Date, the Bidders
are advised to submit their Bids one day prior to the Bid/Issue Closing Date. All times mentioned in
this Prospectus are Indian Standard Times. Bidders are cautioned that in the event a large number of
Bids are received on the Bid/Issue Closing Date, as is typically experienced in public issue, some Bids
may not get uploaded due to lack of sufficient time. Such Bids that cannot be uploaded will not be
considered for allocation under the Issue. Neither our Company nor the Book Running Book Running
Lead Manager is liable for any failure in uploading the Bids due to faults in any software/hardware
system or blocking of application amount by SCSBs on receipt of instructions from the Sponsor Bank
due to any errors, omissions, or otherwise non-compliance by various parties involved in, or any other
fault, malfunctioning or breakdown in the UPI Mechanism. Bids will only be accepted on Working
Days. Investors may please note that as per letter no. List/smd/sm/2006 dated July 3, 2006 and letter
no. NSE/IPO/25101- 6 dated July 6, 2006 issued by BSE and NSE respectively, Bids and any revision
in Bids will be accepted only during Monday to Friday and shall not be accepted on Saturdays and
public holidays as declared by the Stock Exchanges.

In case of any discrepancy in the data entered in the electronic book vis-a-vis the data contained in the
physical Bid cum Application Form, for a particular Bidder, the details as per the Bid file received
from the Stock Exchanges shall be taken as the final data for the purpose of Allotment.

Our Company in consultation with the BRLM, reserves the right to revise the Price Band during the
Bid/ Issue Period, provided that the Cap Price shall be less than or equal to 120% of the Floor Price
and the Floor Price shall not be less than the face value of the Equity Shares. The revision in Price
Band shall not exceed 20% on the either side i.e. the floor price can move up or down to the extent of
20% of the Floor Price and the Cap Price will be revised accordingly.

On account of revision in the Price Band, the Bid/Issue Period was extended by three (3) Working

Days thereby extending the Bid/Issue Closing date was from October 01, 2020 to October 07,
2020.. The revision in the Price Band and extension of the Bid/Issue Period was notified to the

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Stock Exchanges and the change was also indicated on the website of the BRLM and at the
terminals of the Syndicate Member and by intimation to Self-Certified Banks (“SCSBs”),
the Sponsor Bank, and other Designated Intermediaries, as applicable. Further , such
revision in the Price Band and the revised Bid/Issue Period, was published and advertised
in all editions of English national daily newspaper, Business Standard, all editions of Hindi
national daily newspaper, Business Standard and Telugu edition of the Telugu daily newspaper
Nava Telangana (Telugu being the regional language of Hyderabad, where our Registered Office
is located), each with wide circulation.

In case of any discrepancy in the data entered in the electronic book vis-a-vis the data contained in the
Bid cum Application Form, for a particular Bidder, the Registrar to the Issue shall ask for rectified
data.

Minimum Subscription

In accordance with Regulation 45 of SEBI ICDR Regulations, the minimum subscription to be received
in the Issue shall be at least ninety per cent of the Issue.

As per section 39 of the Companies Act, 2013 if the “stated minimum amount” has not been subscribed
and the sum payable on application is not received within a period of 30 days from the date of Issue of
Prospectus or such other period as may be specified by SEBI, the application money has to be returned
within such period as may be prescribed.

If our Company does not receive the subscription of ninety per cent of this Issue through this Offer
Document or withdrawal of the applications or after technical rejections, including devolvement of
Underwriter within 60 (sixty) days from the date of closure of this Issue, if any or if the listing or
trading permission is not obtained from the Stock Exchanges for the securities so offered under this
Prospectus, our Company shall forthwith refund or unblock the entire subscription amount received. If
there is a delay beyond fifteen (15) days after our Company becomes liable to pay the amount, our
Company and every director of our Company who are officers in default, shall pay interest at the rate
of fifteen per cent (15%) per annum.

Undersubscription, if any, in any category except the QIB portion, would be met with spill-over from
the other categories at the discretion of our Company, in consultation with the Book Running Lead
Manager and the Designated Stock Exchange.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other
jurisdiction outside India and may not be offered or sold, and applications may not be made by persons
in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction.

Arrangements for disposal of odd lots

Since the Equity Shares will be traded in dematerialised form only, and the market lot for our Equity
Shares will be one Equity Share, no arrangements for disposal of odd lots are required.

New Financial Instruments
Our Company is not issuing any new financial instruments through this Issue.

Application by eligible AIFs, NRIs, FPIs/FIIs or VCFs registered with SEBI

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It is to be understood that there is no reservation for eligible AIFs, NRIs, FPIs/FIIs or VCF registered
with SEBI. Such eligible AIFs, NRIs, FPIs/FIIs or VCF registered with SEBI will be treated on the
same basis with other categories for the purpose of Allocation.

As per the extant policy of the Government of India, OCBs cannot participate in this Issue.

Reserve Bank of India vide notification no. S.O. 3732(E) dated October 17, 2019 issued the Foreign
Exchange Management (Non-debt Instruments) Rules, 2019. The current provisions of the FEMA
Rules, provides a general permission for the NRIs and FPIs registered with SEBI to invest in shares of
Indian Companies by way of subscription in an IPO.

The Allotment of the Equity Shares to Non-Residents shall be subject to the conditions, if any, as may
be prescribed by the Government of India / RBI while granting such approvals.

Restrictions on transfer and transmission of Equity Shares

Except for lock-in of the Pre- issue Equity Shares and Promoters’ minimum contribution in the Issue
as detailed in the chapter titled “Capital Structure” beginning on page 71 of this Prospectus, and except
as provided in the Articles of Association of our Company, there are no restrictions on transfers or
transmission of Equity Shares and on their consolidation/ splitting. For further details please refer sub-
heading "Main Provisions of the Articles of Association" on page 307 of this Prospectus.

The above information is given for the benefit of the Applicants. The Applicants are advised to make
their own enquiries about the limits applicable to them. Our Company and the BRLM do not accept
any responsibility for the completeness and accuracy of the information stated hereinabove. Our
Company and the BRLM are not liable to inform the investors of any amendments or modifications or
changes in applicable laws or regulations, which may occur after the date of this Prospectus.
Applicants are advised to make their independent investigations and ensure that the number of Equity
Shares applied for do not exceed the applicable limits under laws or regulations.

Jurisdiction

Exclusive jurisdiction for the purpose of this Issue is with the competent courts/ authorities in
Hyderabad, India.

The Equity Shares have not been and will not be registered under the U.S. Securities Act or any
state securities laws in the United States and may not be offered or sold within the United States
to, or for the account or benefit of “U.S. persons” (as defined in Regulation S), except pursuant
to an exemption from or in a transaction not subject to, registration requirements of the U.S.
Securities Act and applicable U.S. state Securities laws. Accordingly, the Equity Shares are only
being offered or sold outside the United States in compliance with Regulation S under the
Securities Act and the applicable laws of the jurisdictions where those offers and sales occur.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any
other jurisdiction outside India and may not be offered or sold, and applications may not be
made by persons in any such jurisdiction, except in compliance with the applicable laws of such
jurisdiction.

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This Issue is being made in terms of Regulation 6(1) of Chapter II of the SEBI ICDR Regulations, as
amended from time to time. For further details regarding the salient features and terms of such this
Issue, please refer to chapters titled, “Terms of the Issue” and “Issue Procedure”, beginning on pages
274 and 281, respectively, of this Prospectus.

ISSUE STRUCTURE

The Issue Structure is as follows:

Initial Public Offer of 51,00,000* Equity Shares of face value of Rs.10 each (“the Issue”) fully paid up
for cash at a price of Rs. 120/- each (including a premium of Rs. 110/- each) aggregating to Rs. 6,120.00
by our Company. The Issue will constitute 25.86%* of the post issue paid up equity share capital of
our Company. The Issue is being made through the Book Building Process.

*subject to finalization of the basis of allotment

 

 

 

 

 

 

Particulars of the CHAT asain Non-Institutional Ie
Issue Bidders HITE
gC
Number of Equity | Upto 51,000* Equity Shares Not less than | Not less than
Shares available 32,64,000* Equity | 17,85,000*
for allocation/ Shares Equity Shares
allotment*
Percentage of | Upto 1% of the Issue being | Not less than 64% | Not less than 35%
Issue Size | available for allocation to QIB | of the Issue shall be | of the Issue shall
available for | Bidders available for | be available for
allocation/ allocation allocation
allotment
Basis of | Proportionate Proportionate Proportionate
Allotment/ subject to
Allocation if minimum lot as
respective explained in the
category is chapter titled
oversubscribed* “Tssue
Procedure”
beginning on
page 281 of this
Prospectus.
Mode of Bid cum | ASBA only (excluding the UPI ASBA only | ASBA Process or
Application Mechanism)” (excluding the UPI | through UPI
Mechanism) Mechanism
Minimum Bid | Such number of Equity Shares in | Such number of | 125 Equity
Size multiples of 125 Equity Shares | Equity Shares in | Shares in
such that the Application Value | multiples of 125 | multiples of 125
exceeds Rs.2.00 Lakhs Equity Shares such | Equity Shares
that the Application
Value exceeds
Rs.2.00 Lakhs
Maximum — Bid | Such number of Equity Shares in | Such number of | Such number of
Size multiples of 125 Equity Shares | Equity Shares in | Equity Shares in
not exceeding the size of the | multiples of 125 | multiples of 125

 

 

 

 

 

 

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Qualified Institutional Buyers Na PEAT oe aCe

Bar atCan cen at

 

 

 

 

 

 

 

 

 

Issue Bidders a
Issue to public subject to limits as | Equity Shares not | Equity Shares
applicable to the Bidder. exceeding the size | such that the bid
of the Issue to | amount does not
public subject to | exceed  Rs.2.00
limits as applicable | Lakhs.
to the Bidder.
Mode of Compulsorily in dematerialized form.
Allotment
Bid Lot 125 Equity Shares and in multiples of 125 Equity Shares thereafter
Allotment Lot A minimum of 125 Equity Shares and in multiples of one Equity Shares
thereafter
Trading Lot One Equity Share
Who can apply® | Public financial institutions as | Resident Indian | Resident Indian
specified in Section 2(72) of the | Individuals, individuals,
Companies Act 2013, scheduled | Eligible NRIs, | HUFs (in the
commercial banks, multilateral HUFs (in the | name of Karta)
and bilateral development financial | name of Karta), | and Eligible
institutions, mutual funds registered | companies, NRIs applying
with SEBI, FPIs other than | corporate bodies, | for Equity Shares
individuals, corporate bodies and | scientific such that the Bid
family offices, VCFs, AIFs, FVCIs, | institutions, amount does not
state industrial © development | societies, family | exceed Rs. 2.00
corporation, insurance company | offices and trusts | Lakhs in value.
registered with IRDAI, provident | for Equity Shares
fund with minimum corpus of Rs. | such that the Bid
2500 Lakhs, pension fund with | Amount exceeds
minimum corpus of Rs. 2500 | Rs. 2.00 Lakhs in
Lakhs, National Investment Fund | value.
set up by the Government,
insurance funds set up and managed
by army, navy or air force of the
Union of India, insurance funds set
up and managed by the Department
of Posts, India and Systemically
Important NBFCs
Terms of | In case of Anchor Investors, if any: Full Bid amount shall be payable by
Payment the Anchor Investors at the time of submission of their Bids
Incase of all other Bidders: Full Bid amount shall be blocked by the SCSBs
in the bank account of the ASBA Bidder, or by the Sponsor Bank through the
UPI Mechanism, that is specified in the ASBA Format the time of submission
of the ASBA Form

 

 

 

 

 

*Subject to finalization of basis of allotment

(1) Subject to valid Bids having been received at or above the Issue Price. This is an Issue in terms of
Rule 19(2)(b) of the SCRR and Regulation 6(1) of the SEBI ICDR Regulations.

(2) Anchor Investors, if any, are not permitted to use the ASBA process.

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(3) In case of joint Bids, the Bid cum Application Form should contain only the name of the first Bidder
whose name should also appear as the first holder of the beneficiary account held in joint names. The
signature of only such first Bidder would be required in the Bid cum Application Form and such first
Bidder would be deemed to have signed on behalf of the joint holders

Bidders will be required to confirm and will be deemed to have represented to our Company, the
Underwriter, their respective directors, officers, agents, affiliates and representatives that they are
eligible under applicable law, rules, regulations, guidelines and approvals to acquire the Equity Shares.

Subject to valid Bids being received at or above the Issue Price, undersubscription, if any, in any
category except the QIB Portion, would be met with spill-over from the other categories or a
combination of categories at the discretion of our Company, in consultation with the Book Running
Lead Managers and the Designated Stock Exchange.

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All Bidders should read the “General Information Document for Investing in Public Issues”

ISSUE PROCEDURE

prepared and issued in accordance’ with the circular bearing number
SEBI/HO/CFD/DIL 1/CIR/P/2020/37 dated march 17, 2020 and the UPI Circulars (collectively, the
“General Information Document”), which highlights the key rules, processes and procedures
applicable to public issues in general in accordance with the provisions of the Companies Act, the
SCRA, the SCRR and the SEBI ICDR Regulations. The General Information Document has been
updated to reflect the enactments and regulations, to the extent applicable to a public issue. The
General Information Document is available on the websites of the Stock Exchanges and the Book
Running Lead Manager before opening of the Issue. Please refer to the relevant provisions of the
General Information Document which are applicable to the Issue especially in relation to the process
for Bids by RIBs through the UPI Mechanism. The investors should note that the details and process
provided in the General Information Document should be read along with this section.

Additionally, all Bidders may refer to the General Information Document for information in relation
to (i) category of investors eligible to participate in the Issue; (ii) maximum and minimum Bid size;
(iii) who can bid; (iv) bids at different price levels; (v) Issuance of Confirmation of Allotment
(“CAN”) and allotment in the Issue; (vi) designated date; (vii) submission of Bid cum Application
Form; (viii) other instructions (limited to joint bids in cases of individuals, multiple bids and
instances when an application would be rejected on technical grounds); (ix) disposal of applications;
(x) payment instructions for Bidders applying through the ASBA process and Retail Individual
Bidders applying through the UPI mechanism under the ASBA process; (xi) general instructions
(limited to instructions for completing the Bid cum Application Form); (xii) Price discovery and
allocation; (xiii) terms of payment; (xiv)method of allotment; (xv) modes of making refund; and (xvi)
payment of interest in case of delay in dispatch of allotment letters/refund orders etc.

Pursuant to the UPI Circulars, the UPI Mechanism has been proposed as an alternate payment
mechanism and accordingly, a reduction in timelines for listing has been proposed in a phased
manner. From January 1, 2019, the UPI Mechanism for RIIs applying through Designated
Intermediaries (other than SCSBs) was made effective along with the then existing process and
existing timeline of T+6 days (“UPI Phase I”). UPI Phase I continued until June 30, 2019.
Thereafter, with effect from July 1, 2019, for applications by RIIs through Designated
Intermediaries, the then existing process of physical movement of forms from Designated
Intermediaries to SCSBs for blocking of funds has been discontinued and RIIs submitting their
Application Forms through Designated Intermediaries (other than SCSBs) shall use only the UPI
Mechanism with the existing timeline of T+6 days until the expiry of three months or floating of five
main board public issues, whichever is later (“UPI Phase II”). Subsequently, by way of its circular
no. SEBI/HO/CFD/DCR2/CIR/P/2019/133 dated November 8, 2019, SEBI extended the timeline for
applicability of UPI Phase II till March 31, 2020, which has, pursuant to circular no.
SEBI/HO/CFD/DIL2/CIR/P/2 dated March 30, 2020, been extended until further notice.
Subsequently, the final reduced timeline of T+3 will be made effective using the UPI Mechanism for
applications by RIs (“UPI Phase III”), as may be prescribed by SEBI. Accordingly, the procedure
set forth below is in accordance with UPI Phase II.

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Our Company, the Book Running Lead Manager and the members of the Syndicate do not accept
any responsibility for the completeness and accuracy of the information stated in this section, and
are not liable for any amendment, modification or change in the applicable law which may occur
after the date of this Prospectus. Bidders are advised to make their independent investigations and
ensure that their Bids are submitted in accordance with applicable laws and do not exceed the
investment limits or maximum number of the Equity Shares that can be held by them under applicable
law or as specified in this Prospectus, the Prospectus and the Prospectus.

Further, our Company and the members of the Syndicate do not accept any responsibility for any
adverse occurrences consequent to the implementation of the UPI Mechanism for application in the
Issue.

Book Building Procedure

The Issue is being made through the Book Building Process in accordance with Regulation 6(1) of
the SEBI ICDR Regulations, wherein up to 1% of the Issue shall be allocated on a proportionate
basis to QIBs. Further, not less than 64% of the Issue shall be available for allocation to Non-
Institutional Bidders and not less than 35% of the Issue shall be available for allocation to RIIs in
accordance with SEBI ICDR Regulations, subject to valid Bids being received at or above the Issue
Price.

Subject to valid Bids being received at or above the Issue Price, under-subscription, if any, in any
category except in the QIB Portion, would be allowed to be met with spill-over from any other
category or combination of categories, at the discretion of our Company in consultation with the
Book Running Lead Manager and the Designated Stock Exchange and subject to applicable laws.

The Equity Shares, on Allotment, shall be traded only in the dematerialised segment of the Stock
Exchanges.

Bidders should note that the Equity Shares will be Allotted to all successful Bidders only in
dematerialised form. The Bid cum Application Forms, which do not have the details of the Bidders’
depository account, including DP ID, Client ID, UPI ID (in case of RIBs using the UPI Mechanism)
and PAN, shall be treated as incomplete and will be rejected. Bidders will not have the option of
being allotted Equity Shares in physical form.

Phased implementation of UPI for Bids by RIBs as per the UPI Circulars

SEBI has issued UPI Circulars in relation to streamlining the process of public issue of equity shares
and convertibles by introducing an alternate payment mechanism using UPI. Pursuant to the UPI
Circulars, UPI has been introduced in a phased manner as a payment mechanism (in addition to
mechanism of blocking funds in the account maintained with SCSBs under the ASBA) for
applications by RIBs through intermediaries with the objective to reduce the time duration from
public issue closure to listing from six Working Days to up to three Working Days. Considering the
time required for making necessary changes to the systems and to ensure complete and smooth
transition to the UPI payment mechanism, the UPI Circulars have introduced and implemented the
UPI payment mechanism in three phases in the following manner:

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a) Phase I: This phase was applicable from January 1, 2019 until March 31, 2019 or floating
of five main board public issues, whichever is later. Subsequently, the timeline for
implementation of Phase I was extended until June 30, 2019. Under this phase, a RIB also
had the option to submit the ASBA Form with any of the intermediary and use his / her UPI
ID for the purpose of blocking of funds. The time duration from public issue closure to
listing would continue to be six Working Days.

b) Phase II: This phase has become applicable from July 1, 2019 and will continue until
further notice. Under this phase, submission of the physical ASBA Form by a RIB through
intermediaries to SCSBs for blocking of funds has been discontinued and replaced by the
UPI payment mechanism. However, the time duration from public issue closure to listing
continued to be six Working Days during this phase. Bids in the Issue may be made under
Phase II or Phase III.

c) Phase III: The commencement period of Phase III is yet to be notified. In this phase, the
time duration from public issue closure to listing would be reduced to be three Working
Days.

All SCSBs offering facility of making application in public issues shall also provide facility to make
application using UPI. The issuers are to appoint one of the SCSBs as a sponsor bank to act as a
conduit between the Stock Exchanges and NPCI in order to facilitate collection of requests and / or
payment instructions of the RIBs using the UPI mechanism.

For further details, refer to the General Information Document available on the websites of the Stock
Exchanges and the Book Running Lead Manager.

Bid cum Application Form

Copies of the Bid cum Application Form (other than for Anchor Investors) and the abridged
prospectus will be available with the Designated Intermediaries at the relevant Bidding Centres and
at our Registered Office. An electronic copy of the Bid cum Application Form was made available
for download on the websites of NSE (www.nseindia.com) and BSE (www.bseindia.com) at least
one day prior to the Bid / Issue Opening Date.

All Bidders (other than Anchor Investors) shall mandatorily participate in the Issue only through the
ASBA process. ASBA Bidders must provide either (i) the bank account details and authorisation to
block funds in their respective ASBA Form, or (ii) the UPI ID (in case of RIBs), as applicable, in the
relevant space provided in the ASBA Form. The ASBA Forms that do not contain such details will
be rejected. Applications made by the RIBs using third party bank account or using third party linked
bank account UPI ID are liable for rejection. Anchor Investors are not permitted to participate in the
Issue through the ASBA process.

ASBA Bidders shall ensure that the Bids are made on ASBA Forms bearing the stamp of the

Designated Intermediary, submitted at the Bidding Centres only (except in case of electronic ASBA
Forms) and the ASBA Forms not bearing such specified stamp are liable to be rejected. RIBs using

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UPI Mechanism, shall submit their ASBA Forms with Syndicate Members, Registered Brokers, RTA.
or Depository Participants. ASBA Bidders are also required to ensure that the ASBA Account has
sufficient credit balance as an amount equivalent to the full Bid Amount which can be blocked by
the SCSB.

For Anchor Investor, the Anchor Investor Application Form will be available at the offices of the
Book Running Lead Manager. The prescribed colour of the Bid cum Application Form for the
various categories is as follows:

Category Colour of Bid cum
Application Form*
Resident Indians, including QIBs, Non-institutional Investors and Retail White
Individual Investors, each resident in India and Eligible NRIs applying
on a non-repatriation basis

 

Non-Residents including Eligible NRIs, their sub-accounts (other than | Blue
sub-accounts which are foreign corporates or foreign individuals under
the QIB Portion), FPIs or FVCIs registered multilateral and bilateral
development financial institutions applying on a repatriation basis

 

Anchor Investors** White

 

 

 

 

* Excluding electronic Bid cum Application Form

** Bid cum Application Forms for Anchor Investors will be made available at the office of the Book
Running Lead Managers.

Electronic Bid cum Application forms will also be available for download on the website of NSE
(www. nseindia.com) and BSE (www.bseindia.com).

The Designated Intermediaries (other than SCSBs) shall submit/deliver the Bid cum Application
Form to the respective SCSB, where the Bidder has a bank account and shall not submit it to any
non-SCSB bank or any Escrow Bank. Further, SCSBs shall upload the relevant Bid details (including
UPI ID in case of ASBA Forms under the UPI Mechanism) in the electronic bidding system of the
Stock Exchanges. Stock Exchanges shall validate the electronic bids with the records of the CDP for
DP ID/Client ID and PAN, on a real time basis and bring inconsistencies to the notice of the relevant
Designated Intermediaries, for rectification and re-submission within the time specified by Stock
Exchanges. Stock Exchanges shall allow modification of either DP ID/Client ID or PAN ID, bank
code and location code in the Bid details already uploaded.

For RIBs using UPI mechanism, the Stock Exchanges shall share the bid details (including UPI ID)
with Sponsor Bank on a continuous basis to enable the Sponsor Bank to initiate UPI Mandate Request
to RIBs for blocking of funds. The Sponsor Bank shall initiate request for blocking of funds through
NPCI to RIBs, who shall accept the UPI Mandate Request for blocking of funds on their respective
mobile applications associated with UPI ID linked bank account. The NPCI shall maintain an audit
trail for every bid entered in the Stock Exchanges bidding platform, and the liability to compensate
RIBs (using the UPI Mechanism) in case of failed transactions shall be with the concerned entity
(i.e. the Sponsor Bank, NPCI or the Bankers to the Issue) at whose end the lifecycle of the transaction

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has come to a halt. The NPCI shall share the audit trail of all disputed transactions/ investor
complaints to the Sponsor Banks and the Bankers to the Issue. The BRLMs shall also be required to
obtain the audit trail from the Sponsor Banks and the Bankers to the Issue for analysing the same
and fixing liability.

Participation by Promoters, Promoter Group, the Book Running Lead Manager, the Syndicate
Members and persons related to Promoters/Promoter Group/the Book Running Lead
Manager

The Book Running Lead Manager and the Syndicate Members shall not be allowed to purchase
Equity Shares in this Issue in any manner, except towards fulfilling their underwriting obligations.
However, the associates and affiliates of the Book Running Lead Manager and the Syndicate
Members may Bid for Equity Shares in the Issue, either in the QIB Portion or in the Non- Institutional
Portion as may be applicable to such Bidders, where the allocation is on a proportionate basis, and
such subscription may be on their own account or on behalf of their clients. All categories of
investors, including associates or affiliates of the Book Running Lead Manager and Syndicate
Members, shall be treated equally for the purpose of allocation to be made on a proportionate basis.

Except as stated below, neither the Book Running Lead Manager nor any associate of the Book
Running Lead Manager can apply in the Issue under the Anchor Investor Portion:

ji mutual funds sponsored by entities which are associate of the Book Running Lead Manager;
(ii) insurance companies promoted by entities which are associate of the Book Running Lead
Manager;

(iii) AIFs sponsored by the entities which are associate of the Book Running Lead Manager; or

(iv) FPIs (other than individuals, corporate bodies and family offices) sponsored by the entities
which are associate of the Book Running Lead Manager.

Further, the Promoters and members of the Promoter Group shall not participate by applying for
Equity Shares in the Issue. Further, persons related to the Promoters and Promoter Group shall not
apply in the Issue under the Anchor Investor Portion. A qualified institutional buyer who has any of
the following rights in relation to the Company shall be deemed to be a person related to the
Promoters or Promoter Group of our Company:

(i) rights under a shareholders’ agreement or voting agreement entered into with the Promoters
or Promoter Group of our Company;
(ii) veto rights; or
(iii) right to appoint any nominee director on our Board.
Further, an Anchor Investor shall be deemed to be an “associate of the BRLM” if:
@ either of them controls, directly or indirectly through its subsidiary or holding company,

not less than 15% of the voting rights in the other; or

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(ii) either of them, directly or indirectly, by itself or in combination with other persons,
exercises control over the other; or

(iii) there is a common director, excluding nominee director, amongst the Anchor Investors and
the Book Running Lead Manager.

There shall be a lock-in of 30 days on the shares allotted to the anchor investors from the date of
allotment.

Bids by Mutual Funds

With respect to Bids by Mutual Funds, a certified copy of their SEBI registration certificate must be
lodged along with the Bid cum Application Form. Failing this, our Company, in consultation with
the Book Running Lead Manager, reserve the right to reject any Bid without assigning any reason
thereof, subject to applicable law.

Bids made by asset management companies or custodians of Mutual Funds shall specifically state
names of the concerned schemes for which such Bids are made.

In case of a Mutual Fund, a separate Bid can be made in respect of each scheme of the Mutual Fund
registered with SEBI and such Bids in respect of more than one scheme of the Mutual Fund will not
be treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which
such Bid has been made.

No Mutual Fund scheme shall invest more than 10% of its NAV in equity shares or equity-related
instruments of any single company, provided that the limit of 10% shall not be applicable for
investments in case of index funds or sector or industry specific schemes. No Mutual Fund under all
its schemes should own more than 10% of any company’s paid-up share capital carrying voting
rights.

Bids by Eligible NRIs

Eligible NRIs Bidding on non-repatriation basis are advised to use the Bid cum Application Form
for residents (white in colour). Eligible NRIs Bidding on a repatriation basis are advised to use the
Bid cum Application Form meant for Non-Residents (blue in colour).

Eligible NRIs may obtain copies of Bid cum Application Form from the office of BRLM and
Designated Intermediaries. Eligible NRI Bidders Bidding on a repatriation basis by using the Non-
Resident Forms should authorize their SCSB (if they are Bidding directly through the SCSB) or
confirm or accept the UPI Mandate Request (in case of RIBs Bidding through the UPI Mechanism)
to block their Non-Resident External (“NRE”) accounts, or Foreign Currency Non-Resident
(“FCNR”) Accounts, and eligible NRI Bidders Bidding on a non-repatriation basis by using Resident
Forms should authorize their respective SCSBs (if they are Bidding directly through SCSB) or
confirm or accept the UPI Mandate Request (in case of RIBs Bidding through the UPI Mechanism)
to block their Non-Resident Ordinary (“NRO”) accounts for the full Bid Amount, at the time of the
submission of the Bid cum Application Form. Participation of Eligible NRIs in the Issue shall be
subject to the FEMA.

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NRIs will be permitted to apply in the Issue through Channel I or Channel II (as specified in the UPI
Circular). Further, subject to applicable law, NRIs may use Channel IV (as specified in the UPI
Circular) to apply in the Issue, provided the UPI facility is enabled for their NRE/ NRO accounts.

For details of restrictions on investment by NRIs, see “Restrictions on Foreign Ownership of Indian
Securities” beginning on page 306 of this Prospectus.

Participation of Eligible NRIs in the Issue shall be subject to the FEMA.
Bids by HUFs

Bids by Hindu Undivided Families or HUFs should be made, in the individual name of the Karta.
The Bidder/applicant should specify that the Bid is being made in the name of the HUF in the Bid
cum Application Form/Application Form as follows: “Name of sole or first Bidder/applicant: XYZ
Hindu Undivided Family applying through XYZ, where XYZ is the name of the Karta”.
Bids/Applications by HUFs may be considered at par with Bids/Applications from individuals.

Bids by FPIs

In terms of the SEBI FPI Regulations, the issue of Equity Shares to a single FPI or an investor group
(which means the same set of ultimate beneficial owner(s) investing through multiple entities) must
be below 10% of our post-Issue Equity Share capital on a fully diluted basis.

Further, in terms of the FEMA Rules, the total holding by each FPI shall be less than 10% of the total
paid-up Equity Share capital of our Company and the total holdings of all FPIs put together shall not
exceed 24% of the paid-up Equity Share capital of our Company. The said limit of 10% and 24%
will be called the individual and aggregate limit, respectively. Bids by FPIs submitted under the
multiple investment managers structure with the same PAN but with different beneficiary account
numbers, Client ID and DP ID may not be treated as multiple Bids.

In terms of the relevant FEMA Rules, in case the total holding of an FPI increases beyond 10% of
the total paid-up Equity Share capital of our Company, on a fully diluted basis or 10% or more of
the paid-up value of any series of debentures or preference shares or share warrants issued that may
be issued by our Company, the total investment made by the FPI will be re-classified as FDI subject
to the conditions as specified by SEBI and the RBI in this regard and our Company and the investor
will be required to comply with applicable reporting requirements.

With effect from the April 1, 2020, the aggregate limit shall be the sectoral caps applicable to the
Indian company as prescribed in the FEMA Rules with respect to its paid-up equity capital on a fully
diluted basis. The aggregate limit as provided above may be decreased by the Indian company
concerned to a lower threshold limit of 24% or 49% or 74% as deemed fit, with the approval of its
board of directors and its shareholders through a resolution and a special resolution, respectively
before March 31, 2020. The Indian company which has decreased its aggregate limit to 24% or 49%
or 74%, may increase such aggregate limit to 49% or 74% or the sectoral cap or statutory ceiling
respectively as deemed fit, with the approval of its board of directors and its shareholders through a

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resolution and a special resolution, respectively. However, once the aggregate limit has been
increased to a higher threshold, the Indian company cannot reduce the same to a lower threshold.

FPIs are permitted to participate in the Issue subject to compliance with conditions and restrictions
which may be specified by the Government from time to time.

FPIs who wish to participate in the Issue are advised to use the Bid cum Application Form for non-
residents. Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and
approvals in terms of Regulation 21 of the SEBI FPI Regulations, an FPI may issue or otherwise deal
in offshore derivative instruments (as defined under the SEBI FPI Regulations as any instrument, by
whatever name called, which is issued overseas by a FPI against securities held by it that are listed
or proposed to be listed on any recognised stock exchange in India, as its underlying) directly or
indirectly, only if (i) such offshore derivative instruments are issued only by persons registered as
Category I FPIs; (ii) such offshore derivative instruments are issued only to persons eligible for
registration as Category I FPIs; (iii) such offshore derivative instruments are issued after compliance
with ‘know your client’ norms, and; and (iv) compliance with other conditions as may be prescribed
by SEBI.

An FPI issuing offshore derivative instruments is also required to ensure that any transfer of offshore
derivative instruments issued by or on its behalf, is carried out subject to inter alia the following
conditions:

(a) such offshore derivative instruments are transferred only to persons in accordance with
Regulation 22(1) of the SEBI FPI Regulations; and

(b) prior consent of the FPI is obtained for such transfer, except when the persons to whom the
offshore derivative instruments are to be transferred to are pre-approved by the FPI.

Further, Bids received from FPIs bearing the same PAN shall be treated as multiple Bids and are
liable to be rejected, except for Bids from FPIs that utilize the multiple investment manager structure
in accordance with the Operational Guidelines for Foreign Portfolio Investors and Designated
Depository Participants which were issued in November 2019 to facilitate implementation of SEBI
FPI Regulations (such structure “MIM Structure”) provided such Bids have been made with
different beneficiary account numbers, Client IDs and DP IDs. Accordingly, it should be noted that
multiple Bids received from FPIs, who do not utilize the MIM Structure, and bear the same PAN,
are liable to be rejected. In order to ensure valid Bids, FPIs making multiple Bids using the same
PAN, and with different beneficiary account numbers, Client IDs and DP IDs, are required to provide
a confirmation along with each of their Bid cum Application Forms that the relevant FPIs making
multiple Bids utilize the MIM Structure and indicate the names of their respective investment
managers in such confirmation. In the absence of such confirmation from the relevant FPIs, such
multiple Bids shall be rejected.

Participation of FPIs in the Issue shall be subject to the FEMA Rules.

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Bids under Power of Attorney

In case of Bids made pursuant to a power of attorney by limited companies, corporate bodies,
registered societies, eligible FPIs, AIFs, Mutual Funds, NBFC-SI, insurance companies, insurance
funds set up by the army, navy or air force of India, insurance funds set up by the Department of
Posts, India or the National Investment Fund and provident funds with a minimum corpus of Rs.
2500 Lakhs and pension funds with a minimum corpus of Rs. 2500 Lakhs (in each case, subject to
applicable law and in accordance with their respective constitutional documents), a certified copy of
the power of attorney or the relevant resolution or authority, as the case may be, along with a certified
copy of the memorandum of association and articles of association and/or bye laws, as applicable
must be lodged along with the Bid cum Application Form. Failing this, our Company reserves the
right to accept or reject any Bid in whole or in part, in either case, without assigning any reasons
thereof.

Our Company, in consultation with the Book Running Lead Manager, in their absolute discretion,
reserve the right to relax the above condition of simultaneous lodging of the power of attorney along
with the Bid cum Application Form.

Bids by SEBI registered VCFs, AIFs and FVCIs

The SEBI FVCI Regulations, inter alia, prescribe the investment restrictions on VCFs and FVCIs
registered with SEBI. Further, the SEBI AIF Regulations prescribe, amongst others, the investment
restrictions on AIFs. Accordingly, the holding in any company by any individual VCF or FVCI
registered with SEBI should not exceed 25% of the investible funds of the VCF or FVCI. Further,
VCFs and FVCIs can invest only up to 33.33% of the investible funds in various prescribed
instruments, including in public offerings.

Category I AIFs and Category II AIFs cannot invest more than 25% of the investible funds in one
investee company. A category III AIF cannot invest more than 10% of the investible funds in one
investee company. A VCF registered as a Category I AIF, as defined in the SEBI AIF Regulations,
cannot invest more than one-third of its investible funds by way of subscription to an initial public
offering of a venture capital undertaking. Pursuant to the repeal of the SEBI VCF Regulations, the
VCEFs which have not re-registered as an AIF under the SEBI AIF Regulations shall continue to be
regulated by the SEBI VCF Regulations until the existing fund or scheme managed by the fund is
wound up and such fund shall not launch any new scheme after the notification of the SEBI AIF
Regulations. Our Company and the Book Running Lead Manager will not be responsible for loss, if
any, incurred by the Bidder on account of conversion of foreign currency.

Participation of VCFs, AIFs or FVCIs in the Issue shall be subject to the FEMA Rules.
All non-resident investors should note that refunds (in case of Anchor Investors), dividends

and other distributions, if any, will be payable in Indian Rupees only and net of bank charges
and commission.

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In case of Bids made by limited liability partnerships registered under the Limited Liability
Partnership Act, 2008, a certified copy of certificate of registration issued under the Limited Liability
Partnership Act, 2008, must be attached to the Bid cum Application Form. Failing this, our Company,
in consultation with the Book Running Lead Manager, reserves the right to reject any Bid without
assigning any reason thereof.

Bids by Limited Liability Partnerships

Bids by Banking Companies

In case of Bids made by banking companies registered with the RBI, certified copies of (i) the
certificate of registration issued by the RBI, and (ii) the approval of such banking company’s
investment committee are required to be attached to the Bid cum Application Form. Failing this, our
Company, in consultation with the Book Running Lead Manager, reserves the right to reject any Bid
without assigning any reason thereof, subject to applicable law.

The investment limit for banking companies in non-financial services companies as per the Banking
Regulation Act, 1949, as amended, (the “Banking Regulation Act”), and the Master Directions -
Reserve Bank of India (Financial Services provided by Banks) Directions, 2016, as amended, is 10%
of the paid-up share capital of the investee company, not being its subsidiary engaged in non-
financial services, or 10% of the bank’s own paid-up share capital and reserves, whichever is lower.
Further, the aggregate investment by a banking company in subsidiaries and other entities engaged
in financial services company cannot exceed 20% of the investee company’s paid up share capital
and reserves. However, a banking company would be permitted to invest in excess of 10% but not
exceeding 30% of the paid-up share capital of such investee company if (i) the investee company is
engaged in non-financial activities permitted for banks in terms of Section 6(1) of the Banking
Regulation Act, or (ii) the additional acquisition is through restructuring of debt or to protect the
bank’s interest on loans/investments made to a company.

Bids by SCSBs

SCSBs participating in the Issue are required to comply with the terms of the circulars bearing
numbers CIR/CFD/DIL/12/2012 and CIR/CFD/DIL/1/2013 dated September 13, 2012 and January
2, 2013, respectively, issued by SEBI. Such SCSBs are required to ensure that for making
applications on their own account using ASBA, they should have a separate account in their own
name with any other SEBI registered SCSBs. Further, such account shall be used solely for the
purpose of making application in public issues and clear demarcated funds should be available in
such account for such applications.

Bids by Insurance Companies
In case of Bids made by insurance companies registered with the IRDAI, a certified copy of
certificate of registration issued by IRDAI must be attached to the Bid cum Application Form. Failing

this, our Company, in consultation with the Book Running Lead Manager, reserves the right to reject
any Bid without assigning any reason thereof, subject to applicable law.

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The exposure norms for insurers are prescribed under the Insurance Regulatory and Development
Authority of India (Investment) Regulations, 2016, as amended (“IRDAI Investment
Regulations”), based on investments in the equity shares of a company, the entire group of the
investee company and the industry sector in which the investee company operates. Insurance
companies participating in the Issue are advised to refer to the IRDAI Investment Regulations for
specific investment limits applicable to them and shall comply with all applicable regulations,
guidelines and circulars issued by IRDAI from time to time.

Bids by Provident Funds/Pension Funds

In case of Bids made by provident funds/pension funds with minimum corpus of Rs. 2500 Lakhs,
subject to applicable law, a certified copy of a certificate from a chartered accountant certifying the
corpus of the provident fund/pension fund must be attached to the Bid cum Application Form. Failing
this, our Company, in consultation with the Book Running Lead Manager, reserve the right to reject
any Bid, without assigning any reason thereof.

Bids by Systemically Important Non-Banking Financial Companies

In case of Bids made by Systemically Important Non-Banking Financial Companies registered with
RBI, certified copies of: (i) the certificate of registration issued by RBI, (ii) certified copy of its last
audited financial statements on a standalone basis, (iii) a net worth certificate from its statutory
auditor, and (iv) such other approval as may be required by the Systemically Important Non-Banking
Financial Companies, are required to be attached to the Bid cum Application Form. Failing this, our
Company, in consultation with the Book Running Lead Manager, reserves the right to reject any Bid
without assigning any reason thereof, subject to applicable law. Systemically Important NBFCs
participating in the Issue shall comply with all applicable regulations, guidelines and circulars issued
by RBI from time to time.

The investment limit for Systemically Important NBFCs shall be as prescribed by RBI from time to
time.

The information set out above is given for the benefit of the Bidders. Our Company and the
Book Running Lead Manager are not liable for any amendments or modification or changes
to applicable laws or regulations, which may occur after the date of this Prospectus. Bidders
are advised to make their independent investigations and ensure that any single Bid from them
does not exceed the applicable investment limits or maximum number of the Equity Shares
that can be held by them under applicable law or regulations, or as will be specified in the
Prospectus and the Prospectus.

Issue of securities in dematerialized form:

The Equity Shares shall be issued only in dematerialized form in compliance with the Companies
Act, 2013. Furnishing the details of depository account is mandatory and applications without
depository account shall be treated as incomplete and rejected. Investors will not have the option of
getting the allotment of securities in physical form. However, they may get the specified securities

re-materialised subsequent to allotment.

The Equity Shares, on allotment, shall be traded on Stock Exchanges in demat mode only

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General Instructions

Please note that as per ICDR Regulations, QIBs and Non-Institutional Bidders are not permitted to
withdraw their Bid(s) or lower the size of their Bid(s) (in terms of quantity of Equity Shares or the
Bid Amount) at any stage. RIBs can revise their Bid(s) during the Bid/Issue Period and withdraw or
lower the size of their Bid(s) until Bid/Issue Closing Date. Pursuant to the issue of the Corrigendum
read with the Addendum, all Bidders (QIBs, Non-Institutional Bidders and Retail Individual Bidders)
were given an option to withdraw their applications before the Bid/ Issue Closing date. This
withdrawal option could be exercised by either: through the Stock Exchange Software/ Mechanism
or Manually by approaching the Registrar to the Issue. .

Do’s:

1. Check if you are eligible to apply as per the terms of the Prospectus and under applicable
law, rules, regulations, guidelines and approvals;

2. Ensure that you have Bid within the Price Band;

3 Read all the instructions carefully and complete the Bid cum Application Form in the
prescribed form;

4. Ensure that you (other than the Anchor Investors) have mentioned the correct details of
ASBA Account (for all Bidders other than Retail Individual Investors Bidding using the
UPI Mechanism) and PAN in the Bid cum Application Form and such ASBA Account
belongs to you and no one else. Further, Retail Individual Investors using the UPI
Mechanism must also mention their UPI ID and shall use only his/her own bank account
which is linked to his/her UPI ID;

5. Ensure that your Bid cum Application Form bearing the stamp of a Designated Intermediary
is submitted to the Designated Intermediary at the relevant Bidding Centre (except in case
of electronic Bids) within the prescribed time. Bidders (other than Anchor Investors) shall
submit the Bid cum Application Form in the manner set out in the General Information
Document;

6. If you are RIB and using UPI mechanism, ensure that the name of the bank with which your
ASBA Account is maintained appears in the list of SCSBs displayed on the SEBI website
which are live on UPI. In case such bank with which such ASBA Account is maintained is
not live on UPI, RIB may submit the ASBA Form with SCSB physically, or using the
facility of linked online trading, demat and bank account. Further, ensure that the name of
the mobile application and the UPI handle being used for making such application is also
appearing on the SEBI website;

7 Ensure that you have funds equal to the Bid Amount in the ASBA Account maintained with
the SCSB before submitting the ASBA Form to the relevant Designated Intermediaries;

8. Ensure that the signature of the first Bidder in case of joint Bids, is included in the Bid cum

Application Forms. If the first Bidder is not the ASBA Account holder (or the UPI linked
bank account holder, as the case may be), ensure that the Bid cum Application Form is also

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10.

11.

12

13.

14.

15.

16.

signed by the ASBA Account holder (or the UPI linked bank account holder, as the case
may be). Bidders (except Retail Individual Investors Bidding using the UPI Mechanism)
should ensure that they have an account with an SCSB and have mentioned the correct bank
account number of that SCSB in the Bid cum Application Form. Retail Individual Investors
Bidding using the UPI Mechanism should ensure that they have mentioned the correct UPI
linked bank account number and their correct UPI ID in the Bid cum Application Form;

Ensure that the names given in the Bid cum Application Form is/are exactly the same as
the names in which the beneficiary account is held with the Depository Participant. In case
of joint Bids, the Bid cum Application Form should contain the name of only the first
Bidder whose name should also appear as the first holder of the beneficiary account held in
joint names;

Ensure that you request for and receive a stamped acknowledgement in the form of a
counterfoil or acknowledgment specifying the application number as a proof of having
accepted the Bid cum Application Form for all your Bid options from the concerned
Designated Intermediary;

Ensure that you submit the revised Bids to the same Designated Intermediary, through
whom the original Bid was placed and obtain a revised acknowledgment;

Except for Bids (i) on behalf of the Central or State Governments and the officials appointed
by the courts, who, in terms of the circular no. MRD/DoP/Cir-20/2008 dated June 30, 2008
issued by SEBI, may be exempt from specifying their PAN for transacting in the securities
market, (ii) Bids by persons resident in the state of Sikkim, who, in terms of the circular
dated July 20, 2006 issued by SEBI, may be exempted from specifying their PAN for
transacting in the securities market, and (iii) persons/entities exempt from holding a PAN
under applicable law, all Bidders should mention their PAN allotted under the IT Act. The
exemption for the Central or the State Government and officials appointed by the courts
and for investors residing in the State of Sikkim is subject to (a) the Demographic Details
received from the respective depositories confirming the exemption granted to the
beneficial owner by a suitable description in the PAN field and the beneficiary account
remaining in “active status”; and (b) in the case of residents of Sikkim, the address as per
the Demographic Details evidencing the same. All other applications in which PAN is not
mentioned will be rejected;

Ensure that thumb impressions and signatures other than in the languages specified in the
Eighth Schedule to the Constitution of India are attested by a Magistrate or a Notary Public
or a Special Executive Magistrate under official seal;

Ensure that the category and the investor status is indicated in the Bid cum Application
Form to ensure proper upload of your Bid in the electronic Bidding system of the Stock
Exchanges;

Ensure that in case of Bids under power of attorney or by limited companies, corporates,
trust, etc., relevant documents including a copy of the power of attorney, if applicable, are
submitted;

Ensure that Bids submitted by any person outside India is in compliance with applicable
foreign and Indian laws;

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17.

18.

19.

20.

21.

22.

23.

24,

25.

26.

W%

Since the Allotment will be in dematerialised form only, ensure that the depository account
is active, the correct DP ID, Client ID, UPI ID (for RIBs bidding through UPI mechanism)
and the PAN are mentioned in their Bid cum Application Form and that the name of the
Bidder, the DP ID, Client ID, UPI ID (for RIBs bidding through UPI mechanism) and the
PAN entered into the online IPO system of the Stock Exchanges by the relevant Designated
Intermediary, as applicable, matches with the name, DP ID, Client ID, UPI ID (for RIBs
bidding through UPI mechanism) and PAN available in the Depository database;

In case of QIBs and NIIs, ensure that while Bidding through a Designated Intermediary,
the ASBA Form is submitted to a Designated Intermediary in a Bidding Centre and that the
SCSB where the ASBA Account, as specified in the ASBA Form, is maintained has named
at least one branch at that location for the Designated Intermediary to deposit ASBA Forms
(a list of such branches is available on the website of SEBI at http://www.sebi.gov.in);

Ensure that you have correctly signed the authorisation / undertaking box in the Bid cum
Application Form, or have otherwise provided an authorisation to the SCSB or the Sponsor
Bank, as applicable, via the electronic mode, for blocking funds in the ASBA Account
equivalent to the Bid Amount mentioned in the Bid cum Application Form at the time of
submission of the Bid.;

Ensure that the Demographic Details are updated, true and correct in all respects;

The ASBA Bidders shall use only their own bank account or only their own bank account
linked UPI ID for the purposes of making Application in the Issue, which is UPI 2.0
certified by NPCI;

Bidders (except RIBs Bidding through the UPI Mechanism) should instruct their respective
banks to release the funds blocked in the ASBA account under the ASBA process. In case
of RIBs, once the Sponsor Bank issues the Mandate Request, the RIBs would be required
to proceed to authorize the blocking of funds by confirming or accepting the UPI Mandate
Request to authorize the blocking of funds equivalent to application amount and subsequent
debit of funds in case of Allotment, in a timely manner;

Bidding through UPI Mechanism shall ensure that details of the Bid are reviewed and
verified by opening the attachment in the UPI Mandate Request and then proceed to
authorize the UPI Mandate Request using his/her UPI PIN. Upon the authorization of the
mandate using his/her UPI PIN, a RIB Bidding through UPI Mechanism shall be deemed
to have verified the attachment containing the application details of the RIB Bidding
through UPI Mechanism in the UPI Mandate Request and have agreed to block the entire
Bid Amount and authorized the Sponsor Bank issue a request to block the Bid Amount
specified in the Bid cum Application Form in his/her ASBA Account;

Bids by Eligible NRIs, HUFs and FPIs other than individuals, corporate bodies and family
offices, for a Bid Amount of less than = 200,000 would be considered under the Retail
Category for the purposes of allocation and Bids for a Bid Amount exceeding = 200,000
would be considered under the Non-Institutional Category for allocation in the Issue.

Ensure that Anchor Investors submit their Bid cum Application Forms only to the BRLMs.
Ensure that the Bid cum Application Forms are delivered by the Bidders within the time

prescribed as per the Bid cum Application Form and the Prospectus. Application made
using incorrect UPI handle or using a bank account of an SCSB or SCSBs which is not

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27.

28.

29.

Don’ts:

10.

11.

12.

mentioned in the Annexure ‘A’ to the SEBI circular no.
SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26, 2019, is liable to be rejected.

RIBs bidding using the UPI Mechanism should mention valid UPI ID of only the Bidder
(in case of single account) and of the first Bidder (in case of joint account) in the Bid cum
Application Form; and

RIBs using the UPI Mechanism who have revised their Bids subsequent to making the
initial Bid should also approve the revised UPI Mandate Request generated by the Sponsor
Bank to authorize blocking of funds equivalent to the revised Bid Amount and subsequent
debit of funds in case of Allotment in a timely manner.

Bids by Eligible NRIs for a Bid Amount of less than Rs. 2 Lakhs would be considered under
the Retail Category for the purposes of allocation and Bids for a Bid Amount exceeding Rs.

2 Lakhs would be considered under the Non-Institutional Category for allocation in the
Issue.

Do not Bid for lower than the minimum Bid Lot;

Do not submit a Bid using UPI ID, if you are not a RIB;

Do not Bid for a Bid Amount exceeding Rs. 2.00 Lakhs (for Bids by RIBs);

Do not Bid on another Bid cum Application Form and the Anchor Investor Application
Form, as the case may be, after you have submitted a Bid to any of the Designated
Intermediary;

Do not Bid/ revise the Bid amount to less than the floor price or higher than the cap price;

Do not pay the Bid Amount in cheques, demand drafts or by cash, money order, postal
order or by stock invest;

Do not send Bid cum Application Forms by post; instead submit the same to the Designated
Intermediary only;

Do not Bid at Cut-off Price (for Bids by QIBs and Non-Institutional Bidders);

Do not instruct your respective banks to release the funds blocked in the ASBA Account
under the ASBA process;

Do not submit the Bid for an amount more than funds available in your ASBA account;

Do not submit Bids on plain paper or on incomplete or illegible Bid cum Application Forms
or on Bid cum Application Forms in a colour prescribed for another category of Bidder;

Do not submit a Bid in case you are not eligible to acquire Equity Shares under applicable
law or your relevant constitutional documents or otherwise;

298
13.

14.

15.

16.

Az,

18.

19.

20.

24.

22.

23.

24,

25.

26.

27.

28.

W%

Do not Bid if you are not competent to contract under the Indian Contract Act, 1872 (other
than minors having valid depository accounts as per Demographic Details provided by the
depository);

Do not fill up the Bid cum Application Form such that the Equity Shares Bid for exceeds
the Issue size and / or investment limit or maximum number of the Equity Shares that can
be held under the applicable laws or regulations or maximum amount permissible under the
applicable regulations or under the terms of the Prospectus;

Do not Bid for Equity Shares more than specified by respective Stock Exchanges for each
category;

In case of ASBA Bidders (other than RIBs using UPI mechanism), do not submit more than
one Bid cum Application Form per ASBA Account;

If you are RIB and are using UPI mechanism, do not submit more than one Bid cum
Application Form for each UPI ID;

Do not make the Bid cum Application Form using third party bank account or using third
party linked bank account UPI ID;

Anchor Investors should not bid through the ASBA process;

Do not submit the Bid cum Application Form to any non-SCSB bank or our Company;

Do not Bid on another Bid cum Application Form and the Anchor Investor Application
Form, as the case may be, after you have submitted a Bid to any of the Designated
Intermediaries;

Do not submit the GIR number instead of the PAN;

Anchor Investors should submit Anchor Investor Application Form only to the Book
Running Lead Managers;

Do not Bid on a Bid cum Application Form that does not have the stamp of a Designated
Intermediary;

If you are a QIB, do not submit your Bid after 3 p.m. on the QIB Bid / Issue Closing Date;

Do not submit Bids to a Designated Intermediary at a location other than at the relevant
Bidding Centres. If you are RIB and are using UPI mechanism, do not submit the ASBA
Form directly with SCSBs;

Do not submit incorrect details of the DP ID, Client ID, PAN and UPI ID details if you are
a RIB Bidding through the UPI Mechanism. Further, do not provide details for a beneficiary
account which is suspended or for which details cannot be verified to the Registrar to the
Issue;

Do not submit the Bid without ensuring that funds equivalent to the entire Bid Amount are
available for blocking in the relevant ASBA account;

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29. Do not link the UPI ID with a bank account maintained with a bank that is not UPI 2.0
certified by the NPCI in case of Bids submitted by RIBs using the UPI Mechanism; and
30. RIBs Bidding through the UPI Mechanism using the incorrect UPI handle or using a bank
account of an SCSB or a banks which is not mentioned in the list provided in the SEBI
website is liable to be rejected.

Bid cum Application Form is liable to be rejected if the above instructions, as applicable, are
not complied with.

Grounds for Technical Rejection

In addition to the grounds for rejection of Bids on technical grounds as provided in the GID, Bidders
are requested to note that Bids maybe rejected on the following additional technical grounds:

‘Li, Bids submitted without instruction to the SCSBs to block the entire Bid Amount;

2, Bids which do not contain details of the Bid Amount and the bank account details in the
ASBA Form;

3 Bids submitted on a plain paper;

4. Bids submitted by RIBs using the UPI Mechanism through an SCSBs and/or using a mobile

application or UPI handle, not listed on the website of SEBI;
5. Bids under the UPI Mechanism submitted by RIBs using third party bank accounts or using
a third party linked bank account UPI ID (subject to availability of information regarding

third party account from Sponsor Bank);

6. ASBA Form submitted to a Designated Intermediary does not bear the stamp of the
Designated Intermediary;

Ts Bids submitted without the signature of the First Bidder or sole Bidder;

8. The ASBA Form not being signed by the account holders, if the account holder is different
from the Bidder;

9. ASBA Form by the RIBs by using third party bank accounts or using third party linked
bank account UPI IDs;

10. Bids by persons for whom PAN details have not been verified and whose beneficiary
accounts are “suspended for credit” in terms of SEBI circular CIR/MRD/DP/ 22 /2010
dated July 29, 2010;

tt, GIR number furnished instead of PAN;

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12. Bids by RIBs with Bid Amount of a value of more than Rs.2.00 Lakhs (net of Retail
Discount);

13. Bids by persons who are not eligible to acquire Equity Shares in terms of all applicable
laws, rules, regulations, guidelines and approvals;

14. Bids accompanied by stock invest, money order, postal order or cash; and

15. Bids uploaded by QIBs after 4.00 pm on the QIB Bid/ Issue Closing Date and by Non-
Institutional Bidders uploaded after 4.00 p.m. on the Bid/ Issue Closing Date, and Bids by
RIBs uploaded after 5.00 p.m. on the Bid/ Issue Closing Date, unless extended by the Stock
Exchanges.

Further, in case of any pre-issue or post issue related issues regarding share certificates/demat
credit/refund orders/unblocking etc., investors shall reach out the Company Secretary and
Compliance Officer. For details of the Company Secretary and Compliance Officer, see “General
Information” beginning on page 62 of this Prospectus.

For details of grounds for technical rejections of a Bid cum Application Form, please see the General
Information Document.

Names of entities responsible for finalizing the basis of allotment in a fair and proper manner

The authorized employees of the Stock Exchanges, along with the Book Running Lead Manager and
the Registrar, shall ensure that the Basis of Allotment is finalized in a fair and proper manner in
accordance with the procedure specified in SEBI ICDR Regulations.

Method of allotment as may be prescribed by SEBI from time to time

Our Company will not make any allotment in excess of the Equity Shares offered through the Issue
through the Offer Document except in case of oversubscription for the purpose of rounding off to
make allotment, in consultation with the Designated Stock Exchange. Further, upon
oversubscription, an allotment of not more than 1% of the Net Issue to public may be made for the
purpose of making allotment in minimum lots.

The allotment of Equity Shares to applicants other than to the RIBs and Anchor Investors shall be on
a proportionate basis within the respective investor categories and the number of securities allotted
shall be rounded off to the nearest integer, subject to minimum allotment being equal to the minimum
application size as determined and disclosed.

The allotment of Equity Shares to each RIB shall not be less than the minimum bid lot, subject to the

availability of shares in RIB category, and the remaining available shares, if any, shall be allotted on
a proportionate basis.

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Payment into Anchor Investor Escrow Account

Our Company, in consultation with the Book Running Lead Manager will decide the list of Anchor
Investors to whom the CAN will be sent, pursuant to which, the details of the Equity Shares allocated
to them in their respective names will be notified to such Anchor Investors. Anchor Investors are not
permitted to Bid through the ASBA process. Instead, the payment instruments for payment into the
Anchor Investor Escrow Account should be drawn in favour of:

(a) In case of resident Anchor Investors: “Escrow Account — Likhitha Infrastructure Limited
IPO — Anchor Investor - R”
(b) In case of Non-Resident Anchor Investors: “Escrow Account — Likhitha Infrastructure

Limited IPO — Anchor Investor - R”

Anchor Investors should note that the escrow mechanism is not prescribed by SEBI and has been
established as an arrangement between our Company, the Syndicate, the Escrow Collection Bank
and the Registrar to the Issue to facilitate collections of Bid amounts from Anchor Investors.

Pre-Issue Advertisement

Subject to Section 30 of the Companies Act, our Company had, after filing the Red Herring
Prospectus with the RoC, published a pre-Issue advertisement, in the form prescribed under the SEBI
ICDR Regulations, in all editions of English national daily newspaper, Business Standard, all
editions of Hindi national daily newspaper, Business Standard and Telugu edition of the Telugu daily
newspaper Nava Telangana (Telugu being the regional language of Hyderabad, where our Registered
Office is located).

In the pre-Issue advertisement, we have stated the Bid/Issue Opening Date and the Bid/Issue Closing
Date. This advertisement, subject to the provisions of Section 30 of the Companies Act, was in the
format prescribed in Part A of Schedule X of the SEBI ICDR Regulations.

Allotment Advertisement

Our Company, the BRLM and the Registrar shall publish an allotment advertisement before
commencement of trading, disclosing the date of commencement of trading in all editions of English
national daily newspaper, Business Standard, all editions of Hindi national daily newspaper,
Business Standard and Telugu edition of the Telugu daily newspaper Nava Telangana (Telugu being
the regional language of Hyderabad, where our Registered Office is located).

The information set out above is given for the benefit of the Bidders/applicants. Our Company
and the Book Running Lead Manager are not liable for any amendments or modification or
changes in applicable laws or regulations, which may occur after the date of this Prospectus.
Bidders/applicants are advised to make their independent investigations and ensure that the

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number of Equity Shares Bid for do not exceed the prescribed limits under applicable laws or
regulations.

Signing of the Underwriting Agreement and Filing with the ROC
(a) Our Company and the Underwriter have entered into an Underwriting Agreement.

(b) After signing the Underwriting Agreement, an updated Prospectus will be filed with the
ROC in accordance with applicable law, which would then be termed as the Prospectus.
The Prospectus will contain details of the Issue Price, the Anchor Investor Issue Price (if
applicable), the Issue size, and underwriting arrangements and will be complete in all
material respects.

Impersonation

Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section
38 of the Companies Act, which is reproduced below:

“Any person who:

makes or abets making of an application in a fictitious name to a company for acquiring, or
subscribing for, its securities; or

makes or abets making of multiple applications to a company in different names or in different
combinations of his name or surname for acquiring or subscribing for its securities; or

otherwise induces directly or indirectly a company to allot, or register any transfer of, securities
to him, or to any other person in a fictitious name,

shall be liable for action under Section 447.”

The liability prescribed under Section 447 of the Companies Act, for fraud involving an amount of
at least Rs. 10 Lakhs or 1% of the turnover of the Company, whichever is lower, includes
imprisonment for a term which shall not be less than six months extending up to 10 years and fine
of an amount not less than the amount involved in the fraud, extending up to three times such amount.
Undertakings by our Company

Our Company undertakes the following:

e the complaints received in respect of the Issue shall be attended to by our Company expeditiously
and satisfactorily;

¢ all steps for completion of the necessary formalities for listing and commencement of trading at
all the Stock Exchanges where the Equity Shares are proposed to be listed are taken within six

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Working Days of the Bid/Issue Closing Date or within such other time period prescribed by
SEBI will be taken;

e the funds required for making refunds/unblocking (to the extent applicable) as per the mode(s)
disclosed shall be made available to the Registrar to the Issue by our Company;

e if Allotment is not made within six Working Days from the Bid/Issue Closing Date or such other
prescribed timelines under applicable laws, the entire subscription amount received will be
refunded/unblocked within the time prescribed under applicable laws. If there is a delay beyond
such prescribed time, our Company shall pay interest prescribed under the Companies Act, the
SEBI ICDR Regulations and other applicable laws for the delayed period;

e where refunds (to the extent applicable) are made through electronic transfer of funds, a suitable
communication shall be sent to the applicant within time prescribed under applicable laws,
giving details of the bank where refunds shall be credited along with amount and expected date
of electronic credit of refund;

¢ the Promoter’s contribution, if any, shall be brought in advance before the Bid/Issue Opening
Date and the balance, if any, shall be brought in on a pro rata basis before calls are made on the
Allottees, in accordance with the applicable provisions of the SEBI ICDR Regulations;

e that if our Company does not proceed with the Issue after the Bid/Issue Closing Date but prior
to Allotment, the reason thereof shall be given as a public notice within two days of the Bid/Issue
Closing Date. The public notice shall be issued in the same newspapers where the pre-Issue
advertisements were published. The Stock Exchanges shall be informed promptly;

e that if the Issue is withdrawn after the Bid/Issue Closing Date, our Company shall be required to
file a fresh Offer Document with SEBI, in the event a decision is taken to proceed with the Issue
subsequently;

e that our Company shall not have recourse to the Net Proceeds until the final approval for listing
and trading of the Equity Shares from all the Stock Exchanges where listing is sought has been
received

e No further issue of the Equity Shares shall be made till the Equity Shares offered through the
Prospectus are listed or until the Bid monies are refunded/unblocked in the relevant ASBA

Accounts on account of non-listing, under- subscription, etc.; and

¢ adequate arrangements shall be made to collect all Bid cum Application Forms from Bidders and
to consider them similar to non-ASBA applications while finalizing the basis of allotment.

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Utilization of Issue Proceeds

The board of directors of the Company declare that:

¢ all monies received out of the Issue shall be credited/transferred to a separate bank account other
than the bank account referred to in sub-section (3) of Section 40 of the Companies Act;

e details of all monies utilized out of the Issue shall be disclosed, and continue to be disclosed till
the time any part of the Net Proceeds remains unutilized, under an appropriate separate head in
the balance sheet of our Company indicating the purpose for which such monies have been
utilized; and

e details of all unutilized monies out of the Issue, if any shall be disclosed under an appropriate
separate head in the balance sheet of our Company indicating the form in which such unutilized
monies have been invested.

305
W%

RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES

Foreign investment in Indian securities is governed by the provisions of the FEMA Rules. Foreign
investment is permitted (except in the prohibited sectors) in Indian companies, either through the
automatic route or the approval route, depending upon the sector in which foreign investment is sought
to be made. The DIPP makes policy announcements on FDI through press notes and press releases. In
case of any conflict, the FEMA Rules prevail. The regulatory framework, over a period of time, thus,
consists of acts, regulations, press notes, press releases, and clarifications among other amendments.
The consolidated FDI policy circular of 2017, dated August 28, 2017 issued by the DIPP (“FDI
Circular”) consolidates the policy framework which was in force as on August 28, 2017 and reflects
the FDI Policy as on August 28, 2017. Further, the FDI Circular consolidates and subsumes all the
press notes, press releases, and clarifications on FDI issued by DIPP. As per the FDI Circular the cap
for foreign investment in petroleum and natural gas industry, is 100% under the automatic route.
However, downstream investments by a resident entity which is ‘foreign-owned and controlled’ within
the meaning of the FDI Circular are treated as foreign investment for the purposes of the FDI Circular.

The transfer of shares between an Indian resident and a non-resident does not require the prior approval
of the RBI or any other relevant authority, provided that (i) the activities of the investee company are
under the automatic route under the FDI Circular and the transfer does not attract the provisions of the
SEBI Takeover Regulations; (ii) the non-resident shareholding is within the sectoral limits under the
FDI Circular; and (iii) the pricing is in accordance with the guidelines prescribed by the SEBI and RBI.

As per the existing policy of the Government of India, OCBs cannot participate in this Issue.

The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, or
any state securities laws in the United States, and, unless so registered, may not be offered or sold
within the United States, except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable state securities laws in the United States.
Accordingly, the Equity Shares are being offered only outside the United States in offshore transactions
in compliance with Regulation S under the Securities Act and the applicable laws of the jurisdiction
where those offers and sales occur.

Investors are advised to confirm their eligibility under the relevant laws before investing and / or
subsequent purchase or sale transaction in the Equity Shares of our Company. Investors cannot offer,
sell, pledge or transfer the Equity Shares of our Company to any person who is not eligible under
applicable laws, rules, regulations, guidelines. Our Company, the Underwriter and their respective
directors, officers, agents, affiliates and representatives, as applicable, accept no responsibility or
liability for advising any investor on whether such investor is eligible to acquire Equity Shares of our
Company.

The above information is given for the benefit of the Applicants. Our Company and the Book Running
Lead Manager are not liable for any amendments or modification or changes in applicable laws or
regulations, which may occur after the date of this Prospectus. Applicants are advised to make their
independent investigations and ensure that the Applications are not in violation of laws or regulations
applicable to them and do not exceed the applicable limits under the laws and regulations.

306
Nai ta(s
Cy

Sub
Vai tals
CoN

Sub Heading

TABLE ‘F’ EXCLUDED

W%

SECTION VIII — MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

Heading

 

 

qd)

The regulations contained in the Table marked ‘F’
in Schedule I to the Companies Act, 2013 shall not
apply to the Company, except in so far as the same
are repeated, contained or expressly made
applicable in these Articles or by the said Act.

TABLE
EXCLUDED

-

 

2)

The regulations for the management of the
Company and for the observance by the members
thereto and their representatives, shall, subject to
any exercise of the statutory powers of the Company
with reference to the deletion or alteration of or
addition to its regulations by resolution as
prescribed or permitted by the Companies Act,
2013, be such as are contained in these Articles.

Company
governed
Articles

to
by

 

Interpretation

 

 

 

@

 

In these Articles:

(a) “Act” means the Companies Act, 2013 or any
statutory modification or re-enactment thereof
for the time being in force and the term shall be
deemed to refer to the applicable section thereof
which is relatable to the relevant Article in
which the said term appears in these Articles and
any previous company law, so far as may be
applicable.

(b) “Articles” means these articles of association of
the Company or as altered from time to time.

(c) “Board of Directors” or “Board”, means the
collective body of the directors of the Company.

(d) “Company” means “Likhitha Infrastructure
Limited”

(e) “Rules” means the applicable rules for the time
being in force as prescribed under relevant
sections of the Act.

(f) “seal” means the common seal of the Company.

 

“Act”

“Articles”

“Board
Directors”
“Board”

“Company”

“Rules”

“Seal”

of
or

 

 

307
 

 

 

 

 

 

 

 

 

 

 

within two months after allotment or within one
month from the date of receipt by the Company of
the application for the registration of transfer or

 

Article Sub Sub Heading Heading
Cy yates
Coy
(2) Words importing the singular number shall include | Number and
the plural number and words importing the | Gender
masculine gender shall, where the context admits,
include the feminine and neuter gender.

(3) Unless the context otherwise requires, words or | Expressions in the
expressions contained in these Articles shall bear the | Articles to bear
same meaning as in the Act or the Rules, as the case | the same meaning
may be as in the Act

Share capital and variation of rights
3 A. Subject to the provisions of the Act and these | Shares under

Articles, the shares in the capital of the Company | control of
shall be under the control of the Board who may
3 : Board
issue, allot or otherwise dispose of the same or
any of them to such persons, in such proportion
and on such terms and conditions and either at a
premium or at par and at such time as they may
from time to time think fit.

B. The option or right to call of shares shall not be
given to any person or persons without the
sanction of the Company in General Meeting.

4 Subject to the provisions of the Act and these | Directors may
Articles, the Board may issue and allot shares in the | allot shares
capital of the Company on payment or part payment | otherwise than for
for any property or assets of any kind whatsoever | cash
sold or transferred, goods or machinery supplied or
for services rendered to the Company in the conduct
of its business and any shares which may be so
allotted may be issued as fully paid-up or partly paid-
up otherwise than for cash, and if so issued, shall be
deemed to be fully paid-up or partly paid-up shares,
as the case may be.

5 The Company may issue the following kinds of | Kinds of Share
shares in accordance with these Articles, the Act, the | Capital
Rules and other applicable laws:

(a) Equity share capital:

(i) with voting rights; and / or

(ii) with differential rights as to dividend, voting or
otherwise in accordance with the Rules; and

(b) Preference share capital

6 () Every person whose name is entered as a member in | Issue of
the register of members shall be entitled to receive | certificate

 

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yatta
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yates
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Sub Heading

transmission or within such other period as the
conditions of issue shall provide -

(a) one certificate for all his shares without payment
of any charges; or

(b) several certificates, each for one or more of his
shares, upon payment of such charges as may be
fixed by the Board for each certificate after the first.

Heading

 

 

 

(2) Every certificate shall be under the seal and shall | Certificate to bear
specify the shares to which it relates and the amount | Seal
paid-up thereon

(3) In respect of any share or shares held jointly by | One certificate for

several persons, the Company shall not be bound to
issue more than one certificate, and delivery of a
certificate for a share to one of several joint holders
shall be sufficient delivery to all such holders.

shares held jointly

 

A person subscribing to shares offered by the
Company shall have the option either to receive
certificates for such shares or hold the shares in a
dematerialised state with a depository. Where a
person opts to hold any share with the depository, the
Company shall intimate such depository the details
of allotment of the share to enable the depository to
enter in its records the name of such person as the
beneficial owner of that share.

Option to receive
share certificate
or hold shares
with depository

 

If any share certificate be worn out, defaced,
mutilated

or torn or if there be no further space on the back for
endorsement of transfer, then upon production and
Surrender thereof to the Company, a new certificate
may be issued in lieu thereof, and if any certificate is
lost or destroyed then upon proof thereof to the
satisfaction of the Company and on execution of
such indemnity as the Board deems adequate, a new
certificate in lieu thereof shall be given. Every
certificate under this Article shall be issued on
payment of fees for each certificate as may be fixed
by the Board.

Issue of new
certificate in
place of one
defaced, lost

or destroyed

 

 

 

 

The provisions of the foregoing Articles relating to
issue of certificates shall mutatis mutandis apply to
issue of certificates for any other securities including
debentures (except where the Act otherwise
requires) of the Company.

 

Provisions as to

issue of
certificates to
apply mutatis
mutandis to

debentures, etc.

 

309

 
yatta
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10

Sub
yates
Coy

@

Sub Heading

The Company may exercise the powers of paying
commissions conferred by the Act, to any person in
connection with the subscription to its securities,
provided that the rate per cent or the amount of the
commission paid or agreed to be paid shall be
disclosed in the manner required by the Act and the
Rules.

Heading

 

Power to pay
commission in
connection with
securities issued

 

2)

The rate or amount of the commission shall not
exceed the rate or amount prescribed in the Rules.

Rate of
commission in
accordance with
Rules

 

(3)

The commission may be satisfied by the payment of
cash or the allotment of fully or partly paid shares or
partly in the one way and partly in the other.

Mode of payment
of commission

 

11

qd)

If at any time the share capital is divided into
different classes of shares, the rights attached to any
class (unless otherwise provided by the terms of
issue of the shares of that class) may, subject to the
provisions of the Act, and whether or not the
Company is being wound up, be varied with the
consent in writing, of such number of the holders of
the issued shares of that class, or with the sanction of
a resolution passed at a separate meeting of the
holders of the shares of that class, as prescribed by
the Act.

Variation of
members’ rights

 

2)

To every such separate meeting, the provisions of
these Articles relating to general meetings shall
mutatis mutandis apply.

Provisions as to
General meetings
to apply mutatis

mutandis to each
meeting

 

12

The rights conferred upon the holders of the shares
of any class issued with preferred or other rights
shall not, unless otherwise expressly provided by the
terms of issue of the shares of that class, be deemed
to be varied by the creation or issue of further shares
ranking pari passu therewith.

Issue of further
shares not to
affect rights of
existing members

 

13

Subject to the provisions of the Act, the Board shall
have thepower to issue or re-issue preference shares
of one or more classes which are liable to be
redeemed, or converted to equity shares, on such
terms and conditions and in such manner as
determined by the Board in accordance with the Act.

Power to issue
redeemable
preference shares

 

 

14

 

qa)

 

The Board or the Company, as the case may be, may,
in accordance with the Act and the Rules, issue
further shares

 

Further issue of
share capital

 

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Sub Heading

to -

(a) persons who, at the date of offer, are holders of
equity shares of the Company; such offer shall be
deemed to include a right exercisable by the person
concerned to renounce the shares offered to him or
any of them in favour of any other person; or

(b) employees under any scheme of employees’
stock
option; or

(c) any persons, whether or not those persons include
the persons referred to in clause (a) or clause (b)
above.

Heading

 

 

Q)

A further issue of shares may be made in any manner
whatsoever as the Board may determine including by
way of preferential offer or private placement,
subject to and in accordance with the Act and the
Rules.

Mode of further
issue of shares

 

Lien

 

15

@

The Company shall have a first and paramount lien -

(a) on every share (not being a fully paid share), for
all monies (whether presently payable or not) called,
or payable at a fixed time, in respect of that share;
and(b) on all shares (not being fully paid shares)
standing registered in the name of a member, for all
monies presently payable by him or his estate to the
Company: Provided that the Board may at any time
declare any share to be wholly or in part exempt from
the provisions of this clause.

Company’s — lien
on Shares

 

(2)

The Company’s lien, if any, on a share shall extend
to all

dividends or interest, as the case may be, payable and
bonuses declared from time to time in respect of such
shares for any money owing to the Company.

Lien to extend to
dividends, etc.

 

(3)

Unless otherwise agreed by the Board, the
registration of a transfer of shares shall operate as a
waiver of the Company’s lien.

Waiver of lien in
case of
registration

 

 

16

 

 

The Company may sell, in such manner as the Board
thinks fit, any shares on which the Company has a
lien:

Provided that no sale shall be made—

(a) unless a sum in respect of which the lien exists is
presently payable; or

 

As to enforcing
lien by sale

 

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Sub Heading

(b) until the expiration of fourteen days after a notice
in writing stating and demanding payment of such
part

of the amount in respect of which the lien exists as
is presently payable, has been given to the registered
holder for the time being of the share or to the person

entitled thereto by reason of his death or insolvency
or otherwise.

Heading

 

 

 

 

 

 

 

 

 

17 (D To give effect to any such sale, the Board may | Validity of sale
authorise some person to transfer the shares sold to
the purchaser thereof.

(2) The purchaser shall be registered as the holder of the | Purchaser to be
shares comprised in any such transfer. registered holder

(3) The receipt of the Company for the consideration (if | Validity of
any) given for the share on the sale thereof shall | Company’s
(subject, if necessary, to execution of an instrument | receipt
of transfer or a transfer by relevant system, as the
case may be) constitute a good title to the share and
the purchaser shall be registered as the holder of the
share.

(4) The purchaser shall not be bound to see to the | Purchaser not
application of the purchase money, nor shall his title | affected
to the shares be affected by any irregularity or
invalidity in the proceedings with reference to the
sale.

18 (a) The proceeds of the sale shall be received by the | Application of
Company and applied in payment of such part of the | proceeds of sale
amount in respect of which the lien exists as is
presently payable.

(2) The residue, if any, shall, subject to a like lien for | Payment of
sums not presently payable as existed upon the | residual money
shares before the sale, be paid to the person entitled
to the shares at the date of the sale

19 In exercising its lien, the Company shall be entitled | Outsider’s lien

 

 

to treat the registered holder of any share as the
absolute owner thereof and accordingly shall not
(except as ordered by a court of competent
jurisdiction or unless required by any statute) be
bound to recognise any equitable or other claim to,
or interest in, such share on the part of any other
person, whether a creditor of the registered holder or
otherwise. The Company’s lien shall prevail
notwithstanding that it has received notice of any
such claim.

 

not to affect
Company’s lien

 

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yatta
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20

Sub
yates
Coy

Sub Heading

The provisions of these Articles relating to lien shall
mutatis mutandis apply to any other securities
including debentures of the Company.

Heading

 

Provisions as to
lien to apply
mutatis mutandis

to debentures, etc.

 

Calls on shares

 

21

qd)

The Board may, from time to time, make calls upon
the members in respect of any monies unpaid on
their shares (whether on account of the nominal
value of the shares or by way of premium) and not
by the conditions of allotment thereof made payable
at fixed times.

Board may make
calls

 

(2)

Each member shall, subject to receiving at least
fourteen days’ notice specifying the time or times
and place of payment, pay to the Company, at the
time or times and place so specified, the amount
called on his shares.

Notice of call

 

(3)

The Board may, from time to time, at its discretion,
extend the time fixed for the payment of any call in
respect of one or more members as the Board may
deem appropriate in any circumstances.

Board may extend
time for payment

 

(4)

A call may be revoked or postponed at the discretion
of the Board.

Revocation or
postponement of
call

 

22

A call shall be deemed to have been made at the time
when the resolution of the Board authorising the call
was passed and may be required to be paid by
instalments.

Call to take effect
from date of
resolution

 

23

The joint holders of a share shall be jointly and
severally liable to pay all calls in respect thereof.

Liability of joint
holders of shares

 

24

@

If a sum called in respect of a share is not paid before
or on the day appointed for payment thereof (the
“due date”), the person from whom the sum is due
shall pay interest thereon from the due date to the
time of actual payment at such rate as may be fixed
by the Board.

When interest on
call or instalment
payable

 

2)

The Board shall be at liberty to waive payment of
any such interest wholly or in part

Board may waive
Interest

 

 

25

 

qd)

 

Any sum which by the terms of issue of a share
becomes payable on allotment or at any fixed date,
whether on account of the nominal value of the share
or by way of premium, shall, for the purposes of
these Articles, be deemed to be a call duly made and

 

Sums deemed to
be calls

 

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yatta
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Sub Heading

payable on the date on which by the terms of issue
such sum becomes payable.

Heading

 

 

2)

In case of non-payment of such sum, all the relevant
provisions of these Articles as to payment of interest
and expenses, forfeiture or otherwise shall apply as
if such sum had become payable by virtue of a call
duly made and notified.

Effect of non-
payment of sums

 

26

The Board -

(a) may, if it thinks fit, receive from any member
willing to advance the same, all or any part of
the monies uncalled and unpaid upon any
shares held by him; and

(b) upon all or any of the monies so advanced,
may (until the same would, but for such
advance, become presently payable) pay
interest at such rate as may be fixed by the
Board. Nothing contained in this clause shall
confer on the member (a) any right to
participate in profits or dividends or (b) any
voting rights in respect of the moneys so paid
by him until the same would, but for such
payment, become presently payable by him.

Payment in
anticipation of
calls may carry

interest

 

27

If by the conditions of allotment of any shares, the
whole or part of the amount of issue price thereof
shall be payable by instalments, then every such
instalment shall, when due, be paid to the Company
by the person who, for the time being and from time
to time, is or shall be the registered holder of the
share or the legal representative of a deceased
registered holder.

Instalments on
shares to be duly
paid

 

28

All calls shall be made on a uniform basis on all
shares falling under the same class.

Explanation: Shares of the same nominal value on
which different amounts have been paid-up shall not
be deemed to fall under the same class.

Calls on shares of
same class to be
on uniform basis

 

 

29

 

 

Neither a judgment nor a decree in favour of the
Company for calls or other moneys due in respect of
any shares nor any part payment or satisfaction
thereof nor the receipt by the Company of a portion
of any money which shall from time to time be due
from any member in respect of any shares either by
way of principal or interest nor any indulgence
granted by the Company in respect of payment of
any such money shall preclude the forfeiture of such
shares as herein provided.

 

Partial payment
not to preclude
forfeiture

 

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Sub Heading

Heading

 

 

 

 

 

 

 

 

30 The provisions of these Articles relating to calls shall | Provisions as to
mutatis mutandis apply to any other securities | calls to apply
including Debentures of the Company. mutatis mutandis

to debentures, etc.

31 (D The instrument of transfer of any share in the | Instrument of
Company shall be duly executed by or on behalf of | transfer to be
both the transferor and transferee. executed by

transferor and
transferee
(2) The transferor shall be deemed to remain a holder of
the share until the name of the transferee is entered
in the register of members in respect thereof.

32 The Board may, subject to the right of appeal | Board may refuse
conferred by the Act decline to register - to register transfer
(a) the transfer of a share, not being a fully paid
share, to a person of whom they do not approve; or
(b) any transfer of shares on which the Company has
a lien.

33 In case of shares held in physical form, the Board | Board may
may decline to recognise any instrument of transfer | decline to
unless - recognise
(a) the instrument of transfer is duly executed and is instrument of
in the form as prescribed in the Rules made under the | _ transfer
Act;

(b) the instrument of transfer is accompanied by the
certificate of the shares to which it relates, and such
other evidence as the Board may reasonably require
to show the right of the transferor to make the
transfer; and

(c) the instrument of transfer is in respect of only one
class of shares.

34 On giving of previous notice of at least seven days | Transfer of shares
or such lesser period in accordance with the Act and | when suspended
Rules made thereunder, the registration of transfers
may be suspended at such times and for such periods
as the Board may from time to time determine:

Provided that such registration shall not be
suspended for more than thirty days at any one time
or for more than forty five days in the aggregate in
any year.
35 The provisions of these Articles relating to transfer | Provisions as to

 

 

of shares shall mutatis mutandis apply to any other
securities including debentures of the Company.

 

transfer of shares
to apply mutatis

 

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Sub Heading

Heading

 

mutandis to
debentures, etc.

 

Transmission of shares

 

36

QQ)

On the death of a member, the survivor or survivors
where the member was a joint holder, and his
nominee or nominees or legal representatives where
he was a sole holder, shall be the only persons
recognised by the Company as having any title to his
interest in the shares.

Title to shares on
death of a
member

 

2)

Nothing in clause (1) shall release the estate of a
deceased joint holder from any liability in respect of
any share which had been jointly held by him with
other persons.

Estate of
deceased member
liable

 

37

@

Any person becoming entitled to a share in
consequence of the death or insolvency of a member
may, upon such evidence being produced as may
from time to time properly be required by the Board
and subject as herein after provided, elect, either -

(a) to be registered himself as holder of the share; or

(b) to make such transfer of the share as the deceased
or insolvent member could have made.

Transmission
Clause

 

2)

The Board shall, in either case, have the same right
to decline or suspend registration as it would have
had, if the deceased or insolvent member had
transferred the share before his death or insolvency.

Board’s right
unaffected

 

(3)

The Company shall be fully indemnified by such
person from all liability, if any, by actions taken by
the Board to give effect to such registration or
transfer.

Indemnity to the
Company

 

38

a

If the person so becoming entitled shall elect to be
registered as holder of the share himself, he shall
deliver or send to the Company a notice in writing
signed by him stating that he so elects.

Right to election
of holder of share

 

2)

If the person aforesaid shall elect to transfer the
share, he shall testify his election by executing a
transfer of the share.

Manner of
testifying election

 

 

 

3)

 

All the limitations, restrictions and provisions of
these regulations relating to the right to transfer and
the registration of transfers of shares shall be
applicable to any such notice or transfer as aforesaid
as if the death or insolvency of the member had not
occurred and the notice or transfer were a transfer
signed by that member.

 

Limitations
applicable to

Notice

 

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yatta
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39

Sub
yates
Coy

Sub Heading

A person becoming entitled to a share by reason of
the death or insolvency of the holder shall be entitled
to the same dividends and other advantages to which
he would be entitled if he were the registered holder
of the share, except that he shall not, before being
registered as a member in respect of the share, be
entitled in respect of it to exercise any right
conferred by membership in relation to meetings of
the Company:

Provided that the Board may, at any time, give notice
requiring any such person to elect either to be
registered himself or to transfer the share, and if the
notice is not complied with within ninety days, the
Board may thereafter withhold payment of all
dividends, bonuses or other monies payable in
respect of the share, until the requirements of the
notice have been complied with.

Heading

 

Claimant to be
entitled to same
advantage

 

40

The provisions of these Articles relating to
transmission by operation of law shall mutatis
mutandis apply to any other Securities including
debentures of the Company.

Provisions as to
transmission to
apply mutatis
mutandis to
debentures, etc.

 

Forfeiture of Shares

 

41

If a member fails to pay any call, or instalment of a
call or any money due in respect of any share, on the
day appointed for payment thereof, the Board may,
at any time thereafter during such time as any part of
the call or instalment remains unpaid or a judgement
or decree in respect thereof remains unsatisfied in
whole or in part, serve a notice on him requiring
payment of so much of the call or instalment or other
money as is unpaid, together with any interest which
may have accrued and all expenses that may have
been incurred by the Company by reason of non-
payment.

If call or
instalment not

paid notice must
be given

 

 

42

 

 

The notice aforesaid shall:

(a) name a further day (not being earlier than the
expiry of fourteen days from the date of service of
the notice) on or before which the payment required
by the notice is to be made; and

(b) state that, in the event of non-payment on or
before the day so named, the shares in respect of
which the call was made shall be liable to be
forfeited.

 

Form of notice

 

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43

Sub
yates
Coy

Sub Heading

If the requirements of any such notice as aforesaid
are not complied with, any share in respect of which
the notice has been given may, at any time thereafter,
before the payment required by the notice has been
made, be forfeited by a resolution of the Board to
that effect.

Heading

 

In default of
payment of shares
to be forfeited

 

Neither the receipt by the Company for a portion of
any money which may from time to time be due from
any member in respect of his shares, nor any
indulgence that may be granted by the Company in
respect of payment of any such money, shall
preclude the Company from thereafter proceeding to
enforce a forfeiture in respect of such shares as
herein provided. Such forfeiture shall include all
dividends declared or any other moneys payable in
respect of the forfeited shares and not actually paid
before the forfeiture.

Receipt of part
amount or grant
of indulgence not
to affect forfeiture

 

45

When any share shall have been so forfeited, notice
of the forfeiture shall be given to the defaulting
member and an entry of the forfeiture with the date
thereof, shall forthwith be made in the register of
members but no forfeiture shall be invalidated by
any omission or neglect or any failure to give such
notice or make such entry as aforesaid.

Entry of forfeiture
in register of
members

 

46

The forfeiture of a share shall involve extinction at
the time of forfeiture, of all interest in and all claims
and demands against the Company, in respect of the
share and all other rights incidental to the share.

Effect of
forfeiture

 

47

@

1) A forfeited share shall be deemed to be the
property of the Company and may be sold or re-
allotted or otherwise disposed of either to the person
who was before such forfeiture the holder thereof or
entitled thereto or to any other person on such terms
and in such manner as the Board thinks fit. Forfeited
shares may be sold, etc.

Forfeited shares
may be sold, etc.

 

2)

At any time before a sale, re-allotment or disposal as
aforesaid, the Board may cancel the forfeiture on
such terms as it thinks fit.

Cancellation of
Forfeiture

 

 

48

 

qa)

 

A person whose shares have been forfeited shall
cease to be a member in respect of the forfeited
shares, but shall, notwithstanding the forfeiture,
remain liable to pay, and shall pay, to the Company
all monies which, at the date of forfeiture, were
presently payable by him to the Company in respect
of the shares.

 

Members still
liable to pay
money owing at
the time of
forfeiture

 

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All such monies payable shall be paid together with
interest thereon at such rate as the Board may
determine, from the time of forfeiture until payment
or realisation. The Board may, if it thinks fit, but
without being under any obligation to do so, enforce
the payment of the whole or any portion of the
monies due, without any allowance for the value of
the shares at the time of forfeiture or waive payment
in whole or in part.

Heading

 

Member still
liable to pay
money owing at
time of

forfeiture and
interest

 

(@)

The liability of such person shall cease if and when
the Company shall have received payment in full of
all such monies in respect of the shares.

Ceaser of liability

 

49

@

A duly verified declaration in writing that the
declarant is a director, the manager or the secretary
of the Company, and that a share in the Company has
been duly forfeited on a date stated in the
declaration, shall be conclusive evidence of the facts
therein stated as against all persons claiming to be
entitled to the share;

Certificate of
Forfeiture

 

2)

The Company may receive the consideration, if any,
given for the share on any sale, re-allotment or
disposal thereof and may execute a transfer of the
share in favour of the person to whom the share is
sold or disposed of;

Title of purchaser
and transferee of
forfeited shares

 

(3)

The transferee shall thereupon be registered as the
holder of the share; and

Transferee to be
registered as
holder

 

(4)

The transferee shall not be bound to see to the
application the purchase money, if any, nor shall his
title to the share be affected by any irregularity or
invalidity in the proceedings in reference to the
forfeiture, sale, re-allotment or disposal of the share.

Transferee not
effected

 

50

Upon any sale after forfeiture or for enforcing a lien
in exercise of the powers hereinabove given, the
Board may, if necessary, appoint some person to
execute an instrument for transfer of the shares sold
and cause the purchaser’s name to be entered in the
register of members in respect of the shares sold and
after his name has been entered in the register of
members in respect of such shares the validity of the
sale shall not be impeached by any person.

Validity of sales

 

 

51

 

 

Upon any sale, re-allotment or other disposal under
the provisions of the preceding Articles, the
certificate(s), if any, originally issued in respect of
the relative shares shall (unless the same shall on
demand by the Company has been previously

 

Cancellation of
share certificate
in respect of
forfeited shares

 

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surrendered to it by the defaulting member) stand
cancelled and become null and void and be of no
effect, and the Board shall be entitled to issue a
duplicate certificate(s) in respect of the said shares
to the person(s) entitled thereto.

Heading

 

 

 

 

 

 

 

 

52 The Board may, subject to the provisions of the Act, | Surrender of
accept a surrender of any share from or by any | share certificates
member desirous of surrendering them on such terms
as they think fit.

53 The provisions of these Articles as to forfeiture shall | Sums deemed to
apply in the case of non-payment of any sum which, | be calls
by the terms of issue of a share, becomes payable at
a fixed time, whether on account of the nominal
value of the share or by way of premium, as if the
same had been payable by virtue of a call duly made
and notified

54 A. The provisions of these Articles relating to | Provisions as to

forfeiture of shares shall mutatis mutandis apply | forfeiture of
to any other securities including debentures of the | shares to apply
Company. mutatis mutandis
to debentures, etc.
B. No unclaimed Dividend shall be forfeited by the
Board unless the claim thereto becomes barred by
law and the Company shall comply with the
provision of Sections 124 and 125 of the Act in
respect of all unclaimed or unpaid dividends.
Alteration of capital
55: Subject to the provisions of the Act, the Company | Power to alter

 

 

may, by ordinary resolution -

(a) increase the share capital by such sum, to be
divided into shares of such amount as it thinks
expedient;

(b) consolidate and divide all or any of its share
capital into shares of larger amount than its existing
shares: Provided that any consolidation and division
which results in changes in the voting percentage of
members shall require applicable approvals under
the Act;

(c) convert all or any of its fully paid-up shares into
stock, and reconvert that stock into fully paid-up
shares of any denomination;

(d) sub-divide its existing shares or any of them into
shares of smaller amount than is fixed by the
memorandum;

 

share capital

 

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(e) cancel any shares which, at the date of the passing
of the resolution, have not been taken or agreed to be
taken by any person.

Heading

 

 

56

(a

Where shares are converted into stock: the holders of
stock may transfer the same or any part thereof in the
same manner as, and subject to the same Articles
under which, the shares from which the stock arose
might before the conversion have been transferred,
or as near thereto as circumstances admit:

Provided that the Board may, from time to time, fix
the minimum amount of stock transferable, so,
however, that such minimum shall not exceed the
nominal amount of the shares from which the stock
arose;

Shares may be

converted
stock

into

 

(>)

the holders of stock shall, according to the amount of
stock held by them, have the same rights, privileges
and advantages as regards dividends, voting at
meetings of the Company, and other matters, as if
they held the shares from which the stock arose; but
no such privilege or advantage (except participation
in the dividends and profits of the Company and in
the assets on winding up) shall be conferred by an
amount of stock which would not, if existing in
shares, have conferred that privilege or advantage;

Right
stockholders

of

 

such of these Articles of the Company as are
applicable to paid-up shares shall apply to stock and
the words “share” and “shareholder”/“member”
shall include

“stock” and “stock-holder” respectively.

 

57

The Company may, by resolution as prescribed by
the Act, reduce in any manner and in accordance
with the provisions

of the Act and the Rules, —

(a) its share capital; and/or

(b) any capital redemption reserve account; and/or
(c) any securities premium account; and/or

(d) any other reserve in the nature of share capital.

Reduction
capital

of

 

Joint Holders

 

 

58

 

 

Where two or more persons are registered as joint
holders (not more than three) of any share, they shall
be deemed (so far as the Company is concerned) to
hold the same as joint tenants with benefits of

 

Joint-holders

 

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survivorship, subject to the following and other
provisions contained in these Articles:

Heading

 

 

(a)

The joint-holders of any share shall be liable
severally as well as jointly for and in respect of all
calls or instalments and other payments which ought
to be made in respect of such share.

Liability of Joint
holders

 

(b)

On the death of any one or more of such joint-
holders, the survivor or survivors shall be the only
person or persons recognized by the Company as
having any title to the share but the Directors may
require such evidence of death as they may deem fit,
and nothing herein contained shall be taken to
release the estate of a deceased joint-holder from any
liability on shares

held by him jointly with any other person.

Death of one or
more joint-
holders

 

Any one of such joint holders may give effectual
receipts of any dividends, interests or other moneys
payable in respect of such share.

Receipt of one
sufficient

 

@

Only the person whose name stands first in the
register of members as one of the joint-holders of
any share shall be entitled to the delivery of
certificate, if any, relating to such share or to receive
notice (which term shall be deemed to include all
relevant documents) and any notice served on or sent
to such person shall be deemed service on all the
joint-holders.

Delivery of
certificate and
giving of notice to
first named holder

 

(e)

(i) Any one of two or more joint-holders may vote at
any meeting either personally or by attorney or by
proxy in respect of such shares as if he were solely
entitled thereto and if more than one of such joint
holders be present at any meeting personally or by
proxy or by attorney then that one of such persons so
present whose name stands first or higher (as the
case may be) on the register in respect of such shares
shall alone be entitled to vote in respect thereof.

ii) Several executors or administrators of a deceased
member in whose (deceased member) sole name any
share stands, shall for the purpose of this clause be
deemed joint-holders.

Vote of joint
holders

Executors or
administrators as
joint holders

 

®

The provisions of these Articles relating to joint
holders of shares shall mutatis mutandis apply to any
other securities including debentures of the
Company registered in joint names.

Provisions as to
joint holders as to
shares to apply
mutatis mutandis
to debentures, etc.

 

 

 

 

Capitalisation of profits

 

 

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qd)

Sub Heading

The Company by ordinary resolution in general
meeting may, upon the recommendation of the
Board, resolve —

(a) that it is desirable to capitalise any part of the
amount for the time being standing to the credit of
any of the Company’s reserve accounts, or to the
credit of the profit and loss account, or otherwise
available for distribution; and

(b) that such sum be accordingly set free for
distribution in the manner specified in clause (2)
below amongst the members who would have been
entitled thereto, if distributed by way of dividend and
in the same proportions.

Heading

 

Capitalisation

 

Q)

The sum aforesaid shall not be paid in cash but shall
be applied, subject to the provision contained in
clause (3) below, either in or towards :

(A) paying up any amounts for the time being unpaid
on any shares held by such members respectively;

(B) paying up in full, unissued shares or other
securities of the Company to be allotted and
distributed, credited as fully paid-up, to and amongst
such members in the proportions aforesaid;

(C) partly in the way specified in sub-clause (A) and
partly in that specified in sub-clause (B).

Sum how applied

 

(@)

A securities premium account and a capital
redemption reserve account or any other permissible
reserve account may, for the purposes of this Article,
be applied in the paying up of unissued shares to be
issued to members of the Company as fully paid
bonus shares;

 

(4)

The Board shall give effect to the resolution passed
by the Company in pursuance of this Article.

 

60

@

Whenever such a resolution as aforesaid shall have
been passed, the Board shall -

(a) make all appropriations and applications of the
amounts resolved to be capitalised thereby, and all
allotments and issues of fully paid shares or other
securities, if any; and

(b) generally do all acts and things required to give
effect thereto

Powers of the
Board for
capitalisation

 

 

 

Q)

 

The Board shall have power—

(a) to make such provisions, by the issue of fractional
certificates/coupons or by payment in cash or

 

Board’s power to

issue _ fractional
certificate/coupon

 

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Heading

 

 

 

 

 

 

 

 

 

 

 

otherwise as it thinks fit, for the case of shares or | etc.
other securities becoming distributable in fractions;
and
(b) to authorise any person to enter, on behalf of all
the members entitled thereto, into an agreement with
the Company providing for the allotment to them
respectively,
credited as fully paid-up, of any further shares or
other securities to which they may be entitled upon
such capitalisation, or as the case may require, for
the payment by the Company on their behalf, by the
application thereto of their respective proportions of
profits resolved to be capitalised, of the amount or
any part of the amounts remaining unpaid on their
existing shares.
(3) Any agreement made under such authority shall be | Agreement
effective and binding on such members binding on
members
Buy Back of Shares
61 Notwithstanding anything contained in these | Buy Back of
Articles but subject to all applicable provisions of | Shares
the Act or any other law for the time being in force,
the Company may purchase its own shares or other
specified securities.
General meetings
62 All general meetings other than annual general | Extraordinary
meeting shall be called extraordinary general | general meeting
meeting.
63 The Board may, whenever it thinks fit, call an | Powers of Board
extraordinary general meeting. to
call extraordinary
general meeting
Proceedings at general meetings
64 (DY No business shall be transacted at any general | Presence of
meeting unless a quorum of members is present at | Quorum
the time when the meeting proceeds to business.
(2) No business shall be discussed or transacted at any | Business confined

 

 

general meeting except election of Chairperson
whilst the chair is vacant.

 

to election of
Chairperson
whilst

chair vacant

 

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Heading

 

 

 

 

 

 

 

 

 

(3) The quorum for a general meeting shall be as | Quorum for
provided in the Act. general meeting

65 The Chairperson of the Company shall preside as | Chairperson of
Chairperson at every general meeting of the | the meetings
Company.

66 If there is no such Chairperson, or if he is not present | Directors to elect
within fifteen minutes after the time appointed for | a Chairperson
holding the meeting, or is unwilling to act as
chairperson of the meeting, the directors present
shall elect one of their members to be Chairperson of
the meeting.

67 If at any meeting no director is willing to act as | Members to elect
Chairperson or if no director is present within fifteen | a Chairperson
minutes after the time appointed for holding the
meeting, the members present shall, by poll or
electronically, choose one of their members to be
Chairperson of the meeting.

68 On any business at any general meeting, in case of | Casting vote of
an equality of votes, whether on a show of hands or s

% : Chairperson at
electronically or on a poll, the Chairperson shall anetal
have a second or casting vote. po
meeting

69 (DY The Company shall cause minutes of the | Minutes of
proceedings of every general meeting of any class of | proceedings of
members or creditors and every resolution passed by | meetings and
postal ballot to be prepared and signed in such | resolutions
manner as may be prescribed by the Rules and kept | passed
by making within thirty days of the conclusion of by postal ballot
every such meeting concerned or passing of
resolution by postal ballot entries thereof in books
kept for that purpose with their pages consecutively
numbered.

(2) There shall not be included in the minutes any matter | Certain matters
which, in the opinion of the Chairperson of the | not to be included
meeting - in Minutes
(a) is, or could reasonably be regarded, as
defamatory of any person; or
(b) is irrelevant or immaterial to the proceedings; or
(c) is detrimental to the interests of the Company.

(3) The Chairperson shall exercise an absolute | Discretion of
discretion in regard to the inclusion or non-inclusion | Chairperson in
of any matter in the minutes on the grounds specified | relation to
in the aforesaid clause. Minutes

 

 

 

 

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Heading

 

 

 

 

 

 

 

 

 

(4) The minutes of the meeting kept in accordance with | Minutes to be
the provisions of the Act shall be evidence of the | evidence
proceedings recorded therein.

70 (DY The books containing the minutes of the proceedings | Inspection of
of any general meeting of the Company or a | minute books of
resolution passed by postal ballot shall: general meeting
(a) be kept at the registered office of the Company;
and
(b) be open to inspection of any member without
charge, during 11.00 a.m. to 1.00 p.m. on all working
days other than Saturdays.

70 (2) Any member shall be entitled to be furnished, within | Members = may
the time prescribed by the Act, after he has made a | obtain copy of
request in writing in that behalf to the Company and | minutes
on payment of such fees as may be fixed by the
Board, with a copy of any minutes referred to in
clause (1) above: Provided that a member who has
made a request for provision of a soft copy of the
minutes of any previous general meeting held during
the period immediately preceding three financial
years, shall be entitled to be furnished with the same
free of cost.

71 The Board, and also any person(s) authorised by it, | Powers to arrange
may take any action before the commencement of z

" 5 security at
any general meeting, or any meeting of a class of meetings
members in the Company, which they may think fit
to ensure the security of the meeting, the safety of
people attending the meeting, and the future orderly
conduct of the meeting. Any decision made in good
faith under this Article shall be final, and rights to
attend and participate in the meeting concerned shall
be subject to such decision.

Adjournment of meeting

72 () The Chairperson may, suo moto, adjourn the | Chairperson may
meeting from time to time and from place to place. adjourn the

meeting

(2) No business shall be transacted at any adjourned | Business at
meeting other than the business left unfinished at the | adjourned
meeting from which the adjournment took place. meeting

(3) When a meeting is adjourned for thirty days or more, | Notice of
notice of the adjourned meeting shall be given as in | adjourned
the case of an original meeting. meeting

 

 

 

 

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Heading

 

 

 

 

 

 

 

 

 

 

(4) Save as aforesaid, and save as provided in the Act, it | Notice of
shall not be necessary to give any notice of an | adjourned
adjournment or of the business to be transacted at an | meeting
adjourned meeting. #

not required
Voting rights

73: Subject to any rights or restrictions for the time being | Entitlement to
attached to any class or classes of shares vote
(a) on a show of hands, every member present in | on show of hands
person shall have one vote; and and on poll
(b) on a poll, the voting rights of members shall be
in proportion to his share in the paid-up equity share
capital of the company.

74 A member may exercise his vote at a meeting by | Voting through
electronic means in accordance with the Act and | electronic means
shall vote only once.

75: (D Inthe case of joint holders, the vote of the senior who | Vote of joint
tenders a vote, whether in person or by proxy, shall | holders
be accepted to the exclusion of the votes of the other
joint holders.

(2) For this purpose, seniority shall be determined by the | Seniority of
order in which the names stand in the register of | names
members.

76 A member of unsound mind, or in respect of whom | How members
an order has been made by any court having | non compos
jurisdiction in lunacy, may vote, whether on a show | mentis and
of hands or on a poll, by his committee or other legal E

5 5 . minor may vote
guardian, and any such committee or guardian may,
ona poll, vote by proxy. If any member be a minor,
the vote in respect of his share or shares shall be by
his guardian or any one of his guardians.

77 Subject to the provisions of the Act and other | Votes in respect
provisions of these Articles, any person entitled | of
under the Transmission Clause to any shares may

ae : shares of
vote at any general meeting in respect thereof as if d d
; : lecease or
he was the registered holder of such shares, provided panennate
that at least 48 (forty eight) hours before the time of
holding the meeting or adjourned meeting, as the | members, etc.
case may be, at which he proposes to vote, he shall
duly satisfy the Board of his right to such shares
unless the Board shall have previously admitted his
right to vote at such meeting in respect thereof.
78 Any business other than that upon which a poll has | Business may

 

 

been demanded may be proceeded with, pending the
taking of the poll.

 

Proceed pending
poll

 

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Heading

 

 

 

 

 

 

 

 

79 No member shall be entitled to vote at any general | Restriction on
meeting unless all calls or other sums presently | voting rights
payable by him in respect of shares in the Company
have been paid or in regard to which the Company
has exercised any right of lien.

80 A member is not prohibited from exercising his | Restriction on
voting on the ground that he has not held his share or | exercise of voting
other interest in the Company for any specified | rights in other
period preceding the date on which the vote is taken, | cases to be void
or on any other ground not being a ground set out in
the preceding Article.

81 Any member whose name is entered in the register | Equal rights of
of members of the Company shall enjoy the same | members
rights and be subject to the same liabilities as all
other members of the same class.

Proxy

82 (DY Any member entitled to attend and vote at a general | Member may vote
meeting may do so either personally or through his | in person or other
constituted attorney or through another person as a | wise
proxy on his behalf, for that meeting.

(2) The instrument appointing a proxy and the power-of | Proxies when to
attorney or other authority, if any, under which it is | be
signed or a notarised copy of that power or authority, Deposited
shall be deposited at the registered office of the
Company not less than 48 hours before the time for
holding the meeting or adjourned meeting at which
the person named in the instrument proposes to vote,
and in default the instrument of proxy shall not be
treated as valid.

83 An instrument appointing a proxy shall be in the | Form of proxy
form as prescribed in the Rules.

84 A vote given in accordance with the terms of an | Proxy to be valid

instrument of proxy shall be valid, notwithstanding
the previous death or insanity of the principal or the
revocation of the proxy or of the authority under
which the proxy was executed, or the transfer of the
shares in respect of which the proxy is given:

notwithstanding
death of the
principal

 

Provided that no intimation in writing of such death,
insanity, revocation or transfer shall have been
received by the Company at its office before the
commencement of the meeting or adjourned meeting
at which the proxy is used.

 

 

 

 

Board of Directors

 

 

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85 Unless otherwise determined by the Company in | Board of
general meeting, the number of directors shall not be | Directors
less than 3 (three) and shall not be more than 14
(fourteen).

86 () The Board shall have the power to determine the | Directors not
directors whose period of office is or is not liable to | liable to retire by
determination by retirement of directors by rotation. | rotation

(2) The same individual may, at the same time, be | Same __ individual
appointed as the Chairperson of the Company as | may be
well as the Managing Director or Chief Executive | Chairperson
Officer of the Company. and Managing

Director/ Chief
Executive Officer

87 (69) The remuneration of the directors shall, in so far as | Remuneration of
it consists of a monthly payment, be deemed to Diveetors
accrue from day-to-day.

(2) The remuneration payable to the directors, including | Remuneration to
any managing or whole-time director or manager, if | require members’
any, shall be determined in accordance with and | consent
subject to the provisions of the Act by an ordinary
resolution passed by the Company in general
meeting.

(3) In addition to the remuneration payable to them in | Travelling and
pursuance of the Act, the directors may be paid all | other expenses
travelling, hotel and other expenses properly
incurred by them—.

(a) in attending and returning from meetings of the
Board of Directors or any committee thereof or
general meetings of the Company; or

(b) in connection with the business of the Company.

88 All cheques, promissory notes, drafts, hundis, bills | Execution of
of exchange and other negotiable instruments, and | negotiable
all receipts for monies paid to the Company, shall be | Instruments
signed, drawn, accepted, endorsed, or otherwise
executed, as the case may be, by such person and in
such manner as the Board shall from time to time by
resolution determine.

89 (69) Subject to the provisions of the Act, the Board shall | Appointment of

 

 

have power at any time, and from time to time, to
appoint a person as an additional director, provided
the number of the directors and additional directors
together shall not at any time exceed the maximum
strength fixed for the Board by the Articles.

 

additional
directors

 

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Sub Heading

Such person shall hold office only up to the date of
the next annual general meeting of the Company but
shall be eligible for appointment by the Company as
a director at that meeting subject to the provisions of

the Act.

Heading

     
  

Duration of office
of additional

 

director

 

 

 

 

 

 

 

 

90 (D The Board may appoint an alternate director to act | Appointment of
for a director (hereinafter in this Article called “the alaraatearectar
Original Director”) during his absence for a period
of not less than three months from India. No person
shall be appointed as an alternate director for an
independent director unless he is qualified to be
appointed as an independent director under the
provisions of the Act.

(2) An alternate director shall not hold office for a period | Duration of office
longer than that permissible to the Original Director | of alternate
in whose place he has been appointed and shall | director
vacate the office if and when the Original Director
returns to India.

(3) If the term of office of the Original Director is | Re-appointment
determined before he returns to India the automatic Provisi

A a . i rovisions
reappointment of retiring directors in default of applicable to
another appointment shall apply to the Original PP
Director and not to the alternate director. Original Director

91 (DY If the office of any director appointed by the | Appointment of
Company in general meeting is vacated before his | director to fill a
term of office expires in the normal course, the casual vacancy
resulting casual vacancy may, be filled by the Board
of Directors at a meeting of the Board.

(2) The director so appointed shall hold office only up | Duration of office
to the date up to which the director in whose place | of Director
he is appointed would have held office if it had not | appointed to fill
been vacated. casual vacancy
Powers of Board

92 The management of the business of the Company | General powers

 

 

shall be vested in the Board and the Board may
exercise all such powers, and do all such acts and
things, as the Company is by the memorandum of
association or otherwise authorized to exercise and
do, and, not hereby or by the statute or otherwise
directed or required to be exercised or done by the
Company in general meeting but subject
nevertheless to the provisions of the Act and other
laws and of the memorandum of association and
these Articles and to any regulations, not being
inconsistent with the memorandum of association
and these Articles or the Act, from time to time made

 

of the Company
vested in Board

 

 

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Sub Heading

by the Company in general meeting provided that no
such regulation shall invalidate any prior act of the
Board which would have been valid if such
regulation had not been made

Heading

 

 

Proceedings of the Board

 

 

 

 

 

 

 

 

 

 

93 (D The Board of Directors may meet for the conduct of | When meeting to
business, adjourn and otherwise regulate its | be convened
meetings, as it thinks fit.

(2) The Chairperson or any one Director with the | Who may
previous consent of the Chairperson may, or the | summon Board
company secretary on the direction of the | meeting
Chairperson shall, at any time, summon a meeting of
the Board

(3) The quorum for a Board meeting shall be as provided | Quorum for
in the Act. Board meetings

(4) The participation of directors in a meeting of the | Participation at
Board may be either in person or through video | Board meetings
conferencing or audio visual means or
teleconferencing, as may be prescribed by the Rules
or permitted under law.

94 () Save as otherwise expressly provided in the Act, | Questions at
questions arising at any meeting of the Board shall | Board meeting
be decided by a majority of votes. how decided

(2) In case of an equality of votes, the Chairperson of the | Casting vote of
Board, if any, shall have a second or casting vote. Chairperson at

Board meeting

95 The continuing directors may act notwithstanding | Directors not to
any vacancy in the Board; but, if and so long as their | act when number
number is reduced below the quorum fixed by the | falls below
Act for a meeting of the Board, the continuing | minimum
directors or director may act for the purpose of
increasing the number of directors to that fixed for
the quorum, or of summoning a general meeting of
the Company, but for no other purpose.

96 qd) The Chairperson of the Company shall be the | Who to preside at
Chairperson at meetings of the Board. In his | meetings of the
absence, the Board may elect a Chairperson of its | Board
meetings and determine the period for which he is to
hold office.

(2) If no such Chairperson is elected, or if at any meeting | Directors to elect

 

 

the Chairperson is not present within fifteen minutes
after the time appointed for holding the meeting, the

 

a

Chairperson

 

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Sub Heading

directors present may choose one of their number to
be Chairperson of the meeting.

Heading

 

 

 

 

 

 

 

 

 

 

 

97 (D The Board may, subject to the provisions of the Act, | Delegation of
delegate any of its powers to Committees consisting | Powers
of such member or members of its body as it thinks
fit.

(2) Any Committee so formed shall, in the exercise of | Committee to
the powers so delegated, confirm to any regulations | confirm to Board
that may be imposed on it by the Board. regulations

(3) The participation of directors in a meeting of the | Participation at
Committee may be either in person or through video | Committee
conferencing or audio visual means or | Meetings
teleconferencing, as may be prescribed by the Rules
or permitted under law.

98 (D A Committee may elect a Chairperson of its | Chairperson of
meetings unless the Board, while constituting a Committee
Committee, has appointed a Chairperson of such
Committee.

(2) If no such Chairperson is elected, or if at any meeting | Who to preside at
the Chairperson is not present within fifteen minutes | meetings of
after the time appointed for holding the meeting, the | Committee
members present may choose one of their members
to be Chairperson of the meeting.

99 (DY A Committee may meet and adjourn as it thinks fit. Committee to
meet

(2) Questions arising at any meeting of a Committee | Questions at
shall be determined by a majority of votes of the | Committee
members present. meeting how

decided

(3) In case of an equality of votes, the Chairperson of the | Casting vote of
Committee shall have a second or casting vote. 5

Chairperson at
Committee
meeting

100 All acts done in any meeting of the Board or of a | Acts of Board or

 

 

Committee thereof or by any person acting as a
director, shall, notwithstanding that it may be
afterwards discovered that there was some defect in
the appointment of any one or more of such directors
or of any person acting as aforesaid, or that they or
any of them were disqualified or that his or their
appointment had terminated, be as valid as if every
such director or such person had been duly appointed
and was qualified to be a director.

 

Committee valid
notwithstanding

defect of
appointment

 

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Save as otherwise expressly provided in the Act, a
resolution in writing, signed, whether manually or by
secure electronic mode, by a majority of the
members of the Board or of a Committee thereof, for
the time being entitled to receive notice of a meeting
of the Board or Committee, shall be valid and
effective as if it had been passed at a meeting of the
Board or Committee, duly convened and held.

Heading

 

Passing of
resolution by
circulation

 

Chief Executive Officer, Manager, Company
Secretary and Chief Financial Officer

 

102

(a)

Subject to the provisions of the Act,—

A chief executive officer, manager, company
secretary and chief financial officer may be
appointed by the Board for such term, at such
remuneration and upon such conditions as it may
think fit; and any chief executive officer, manager,
company secretary and chief financial officer so
appointed may be removed by means of a resolution
of the Board; the Board may appoint one or more
chief executive officers for its multiple businesses.

Chief Executive
Officer, etc.

 

io)

A director may be appointed as chief executive
officer, manager, company secretary or chief
financial officer.

Director may be
chief executive
officer, etc.

 

Registers

 

103

The Company shall keep and maintain at its
registered office all statutory registers namely,
register of charges, register of members, register of
debenture holders, register of any other security
holders, the register and index of beneficial owners
and annual return, register of loans, guarantees,
security and acquisitions, register of investments not
held in its own name and register of contracts and
arrangements for such duration as the Board may,
unless otherwise prescribed, decide, and in such
manner and containing such particulars as prescribed
by the Act and the Rules. The registers and copies of
annual return shall be open for inspection during
11.00 a.m. to 1.00 p.m. on all working days, other
than Saturdays, at the registered office of the
Company by the persons entitled thereto on
payment, where required, of such fees as may be
fixed by the Board but not exceeding the limits
prescribed by the Rules.

Statutory registers

 

 

104

 

(a)

 

The Company may exercise the powers conferred on
it by the Act with regard to the keeping of a foreign
register; and\ the Board may (subject to the

 

Foreign register

 

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Sub Heading

provisions of the Act) make and vary such
regulations as it may think fit respecting the keeping
of any such register.

Heading

 

 

(b)

The foreign register shall be open for inspection and
may be closed, and extracts may be taken there from
and copies thereof may be required, in the same
manner, mutatis mutandis, as is applicable to the
register of members.

 

The Seal

 

105

a)

The Board shall provide for the safe custody of the
seal.

The = seal, its
custody and use

 

The seal of the Company shall not be affixed to any
instrument except by the authority of a resolution of
the Board or of a Committee of the Board authorised
by it in that behalf, and except in the presence of at
least one director or the manager, if any, or of the
secretary or such other person as the Board may
appoint for the purpose; and such director or
manager or the secretary or other person aforesaid
shall sign every instrument to which the seal of the
Company is so affixed in their presence.

Affixation of seal

 

Dividends and Reserve

 

106

The Company in general meeting may declare
dividends, but no dividend shall exceed the amount
recommended by the Board but the Company in
general meeting may declare a lesser dividend.

Company in
general meeting
may declare
dividends

 

107

Subject to the provisions of the Act, the Board may
from time to time pay to the members such interim
dividends of such amount on such class of shares and
at such times as it may think fit.

Interim dividends

 

 

108

 

qd)

 

The Board may, before recommending any dividend,
set aside out of the profits of the Company such sums
as it thinks fit as a reserve or reserves which shall, at
the discretion of the Board, be applied for any
purpose to which the profits of the Company may be
properly applied, including provision for meeting
contingencies or for equalising dividends; and
pending such application, may, at the like discretion,
either be employed in the business of the Company
or be invested in such investments (other than shares
of the Company) as the Board may, from time to
time, think fit.

 

Dividends only to
be paid out of
profits

 

334

 
 

 

 

 

 

 

 

 

 

Article Sub Sub Heading Heading
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(2) The Board may also carry forward any profits which | Carry forward of
it may consider necessary not to divide, without | profits
setting them aside as a reserve.

109 (DY with special rights as to dividends, all dividends shall | Division of
be declared and paid according to the amounts paid | profits
or credited as paid on the shares in respect whereof
the dividend is paid, but if and so long as nothing is
paid upon any of the shares in the Company,
dividends may be declared and paid according to the
amounts of the shares.

(2) No amount paid or credited as paid on a share in | Payments in
advance of calls shall be treated for the purposes of | advance
this Article as paid on the share.
(3) All dividends shall be apportioned and paid | Dividends to be
proportionately to the amounts paid or credited as | apportioned
paid on the shares during any portion or portions of
the period in respect of which the dividend is paid;
but if any share is issued on terms providing that it
shall rank for dividend as from a particular date such
share shall rank for dividend accordingly.
110 (D The Board may deduct from any dividend payable to | No member to
any member all sums of money, if any, presently | Receive dividend
payable by him to the Company on account of calls whilseindebred
or otherwise in relation to the shares of the ihe Company and
Company. . Ps P y é
Company’s right
to reimbursement
there from
(2) The Board may retain dividends payable upon shares | Retention of

in respect of which any person is, under the | dividends

Transmission Clause hereinbefore contained,

entitled to become a member, until such person shall

become a member in respect of such shares.

111 (D Any dividend, interest or other monies payable in | Dividend how
cash in respect of shares may be paid by electronic | remitted
mode or by cheque or warrant sent through the post
directed to the registered address of the holder or, in
the case of jointholders, to the registered address of
that one of the joint holders who is first named on
the register of members, or to such person and to
such address as the holder or joint holders may in
writing direct.

(2) Every such cheque or warrant shall be made payable | Instrument of
to the order of the person to whom it is sent. payment

 

 

 

 

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@)

Sub Heading

Payment in any way whatsoever shall be made at the
risk of the person entitled to the money paid or to be
paid. The Company will not be responsible for a
payment which is lost or delayed. The Company will
be deemed to having made a payment and received
a good discharge for it if a payment using any of the
foregoing permissible means is made

Heading

Discharge
Company

 

to

 

112

Any one of two or more joint holders of a share may
give effective receipts for any dividends, bonuses or
other monies payable in respect of such share.

Receipt of one
holder sufficient

 

113

No dividend shall bear interest against the Company.

No _ interest
dividends

on

 

114

The waiver in whole or in part of any dividend on
any share by any document (whether or not under
seal) shall be effective only if such document is
signed by the member (or the person entitled to the
share in consequence of the death or bankruptcy of
the holder) and delivered to the Company and if or
to the extent that the same is accepted as such or
acted upon by the Board.

Waiver
dividends

of

 

Accounts

 

115

@

The books of account and books and papers of the
Company, or any of them, shall be open to the
inspection of directors in accordance with the
applicable provisions of the Act and the Rules.

Inspection
Directors

by

 

Q)

No member (not being a director) shall have any
right of inspecting any books of account or books
and papers or document of the Company except as
conferred by law or authorised by the Board.

Restriction
inspection
members

on
by

 

Winding up

 

116

Subject to the applicable provisions of the Act and
the Rules made there under -

Winding up of

Company

 

@)

If the Company shall be wound up, the liquidator
may, with the sanction of a special resolution of the
Company and any other sanction required by the
Act, divide amongst the members, in specie or kind,
the whole or any part of the assets of the Company,
whether they shall consist of property of the same
kind or not.

 

 

 

6)

 

For the purpose aforesaid, the liquidator may set
such value as he deems fair upon any property to be
divided as aforesaid and may determine how such
division shall be carried out as between the members
or different classes of members.

 

 

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©

Sub Heading

The liquidator may, with the like sanction, vest the
whole or any part of such assets in trustees upon such
trusts for the benefit of the contributories if he
considers necessary, but so that no member shall be
compelled to accept any shares or other securities
whereon there is any liability.

Heading

 

 

Indemnity and Insurance

 

117

(a)

Subject to the provisions of the Act, every director,
managing director, whole-time director, manager,
company secretary and other officer of the Company
shall be indemnified by the Company out of the
funds of the Company, to pay all costs, losses and
expenses (including travelling expense) which such
director, manager, company secretary and officer
may incur or become liable for by reason of any
contract entered into or act or deed done by him in
his capacity as such director, manager, company
secretary or officer or in any way in the discharge of
his duties in such capacity including expenses.

 

()

Subject as aforesaid, every director, managing
director, manager, company secretary or other
officer of the Company shall be indemnified against
any liability incurred by him in defending any
proceedings, whether civil or criminal in which
judgement is given in his favour or in which he is
acquitted or discharged or in connection with any
application under applicable provisions of the Act in
which relief is given to him by the Court.

 

©

The Company may take and maintain any insurance
as the Board may think fit on behalf of its present
and/or former directors and key managerial
personnel for indemnifying all or any of them
against any liability for any acts in relation to the
Company for which they may be liable but have
acted honestly and reasonably.

 

General Power

 

 

118

 

 

Wherever in the Act, it has been provided that the
Company shall have any right, privilege or authority
or that the Company could carry out any transaction
only if the Company is so authorized by its articles,
then and in that case this Article authorizes and
empowers the Company to have such rights,
privileges or authorities and to carry out such
transactions as have been permitted by the Act,
without there being any specific Article in that
behalf herein provided.

 

General power

 

337

 
0

SECTION IX - OTHER INFORMATION
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts, not being contracts entered into in the ordinary course of business carried on
by our Company or contracts entered into more than two (2) years before the date of filing of this
Prospectus, which are or may be deemed material have been entered or are to be entered into by our
Company. These contracts, copies of which will be attached to the copy of the Prospectus, will be
delivered to the RoC for registration and also the documents for inspection referred to hereunder, may
be inspected at the Registered Office of our Company located at Likhitha Infrastructure Limited, Flat
No. 701, Plot No.8-3-940 and 8-3-940/A to E, Tirumala Shah Residency, Yellareddy Guda, Ameerpet,
Hyderabad-500073, Telangana, India., from date of filing the Red Herring Prospectus with RoC to
Issue Closing Date on Working Days from 10.00 a.m. to 5.00 p.m.

Any of the contracts or documents mentioned in this Prospectus may be amended or modified at any
time if so required in the interest of our Company or if required by the other parties, without reference
to the shareholders, subject to compliance of the provisions contained in the Companies Act and other
applicable laws.

Material Contracts:

1) Issue Agreement dated January 09, 2020 between our Company and the BRLM.

2) Registrar Agreement dated January 06, 2020 between our Company and the Registrar to the
Issue.

3) Underwriting Agreement dated October 08, 2020 between our Company the BRLM and
Underwriter(s).

4) _ Tripartite agreement among the NSDL, our Company and Registrar to the Issue dated March 20,
2019

5) _ Tripartite agreement among the CDSL, our Company and Registrar to the Issue dated February
27, 2019

6) — Escrowand Sponsor Bank Agreement dated September 08, 2020 amongst our Company, BRLM,
Escrow Bank/ Banker to the Issue, Sponsor Bank and the Registrar to the Issue.

7) Syndicate Agreement dated September 08, 2020 between our Company, the BRLM and
Syndicate Member.

Material Documents

1) Certified true copy of the Memorandum and Articles of Association of our Company as amended
from time to time;

2) Certificate of incorporation dated August 06, 1998 and fresh certificate of incorporation
consequent to name change dated March 30, 2011 and conversion into public limited company
dated February 12, 2019;

3) Board resolution and special resolution passed pursuant to Section 62 (1)(c) of the Companies
Act, 2013 by the Board and shareholders of our Company approving the Issue, at their meetings
held on December 10, 2019 and December 23, 2019 respectively;

4) Copies of annual reports of our Company for the preceding three Fiscals;

5) | Agreement dated February 13, 2019 for the reappointment of Mr. Srinivasa Rao Gaddipati as
the Managing Director of the Company;

6) — Resolution of the Board of Directors of our Company dated September 17, 2020 approving the
Red Herring Prospectus and the resolution of the IPO committee of Directors dated September
17, 2020 approving the Red Herring Prospectus.

338
7)

8)

9)

10)
11)
12)
13)

W%

Consent dated January 09, 2020, from the statutory & peer review auditor, M/s NSVR &
Associates, LLP, Chartered Accountants, to include their name as an “expert” as defined under
section 2(38) of the Companies Act, 2013 to the extent and in their capacity as the Statutory
Auditors and in respect of the: (i) Restated Financial Statements and their examination report
dated August 01, 2020 on the Restated Financial Statements; and (ii) the statement of tax benefits
dated August 01, 2020 included in this Prospectus and such consent has not been withdrawn as
on the date of this Prospectus

Consents of Promoters, Directors, Company Secretary & Compliance Officer, Chief Financial
Officer, Chief Executive Officer, Banker to the Company, Legal Advisor to the Issue, Book
Running Lead Manager, Registrar to the Issue, and Bankers to the issue/Public Issue
Bank/Refund Banker and Sponsor Banker to include their names in the Prospectus and to act in
their respective capacities.

Copy of In-principle Approval from the NSE vide letter dated February 19, 2020 and from BSE
vide letter dated January 23, 2020 to use their names in this Offer Document for listing of Equity
Shares on the National Stock Exchange of India Limited and BSE Limited.

Due Diligence Certificate dated September 08, 2020 from the Book Running Lead Manager.
SEBI’s Observation Letter no. SRO/Issues/SG//1/2020 dated July 17, 2020.

Corrigendum dated October 1, 2020 and Addendum dated October 6, 2020.

Resolutions of the Board of Directors of our Company and the IPO Committee dated October
08, 2020 and October 08, 2020 respectively approving this Prospectus.

Any of the contracts or documents mentioned in this Prospectus may be amended or modified at

any time if so required in the interest of our Company or if required by the other parties subject
to compliance of the provisions contained in the Companies Act and other relevant statutes.

339
0

We hereby certify and declare that all relevant provisions under the Companies Act and the rules,
regulations or guidelines issued by the Government or the regulations, rules or guidelines issued by
SEBI established under Section 3 of the SEBI Act, as the case may be, have been complied with and
no statement made in this Prospectus is contrary to the provisions of the Companies Act, the SCRA,
the SCRR, the SEBI Act or the rules or regulations made thereunder or guidelines issued, as the case
may be. We further certify that all disclosures made in this Prospectus are true and correct.

DECLARATION

SIGNED BY THE DIRECTORS OF THE COMPANY

 

 

Name & Designation Signature
Sivasankara Parameshwara Kurup Pillai Sd/-
Chairman and Non-executive Independent

director

 

Srinivasa Rao Gaddipati

 

 

Sd/-
Managing Director
Sri Lakshmi Gaddipati Sd/-
Non-Executive Director
Talpa Sai Venkata Sesha Munupalle Sd/-

Non-Executive and Independent Director

 

 

 

 

SIGNED BY THE KEY MANAGERIAL PERSONNEL OF THE COMPANY

 

Name & Designation Signature
Santhosh Kumar Gunemoni Sd/-
Company Secretary & Compliance Officer

 

 

 

 

 

Place: Hyderabad
Date: October 08, 2020

 

 

 

 

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I hereby certify and declare that all relevant provisions under the Companies Act and the rules,
regulations or guidelines issued by the Government or the regulations, rules or guidelines issued by
SEBI established under Section 3 of the SEBI Act, as the case may be, have been complied with and
no statement made in this Prospectus is contrary to the provisions of the Companies Act, the SCRA,
the SCRR, the SEBI Act or the rules or regulations made thereunder or guidelines issued, as the case
may be. I further certify that all disclosures made in this Prospectus are true and correct.

DECLARATION

SIGNED BY THE DIRECTOR OF THE COMPANY

 

Name & Designation Signature
Sudhanshu Shekhar Sd/-
Chief Executive Officer

 

 

 

 

 

 

Date: October 08, 2020

 

 

341
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DECLARATION

I hereby certify and declare that all relevant provisions under the Companies Act and the rules,
regulations or guidelines issued by the Government or the regulations, rules or guidelines issued by
SEBI established under Section 3 of the SEBI Act, as the case may be, have been complied with and
no statement made in this Prospectus is contrary to the provisions of the Companies Act, the SCRA,
the SCRR, the SEBI Act or the rules or regulations made thereunder or guidelines issued, as the case
may be. I further certify that all disclosures made in this Prospectus are true and correct.

SIGNED BY THE DIRECTOR OF THE COMPANY

 

Name & Designation

Signature

 

Jnanindra Kumar Dhar
Non-Executive and Independent Director

 

Sd/-

 

 

Date: October 08, 2020

 

 

 

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W%

I hereby certify and declare that all relevant provisions under the Companies Act and the rules,
regulations or guidelines issued by the Government or the regulations, rules or guidelines issued by
SEBI established under Section 3 of the SEBI Act, as the case may be, have been complied with and
no statement made in this Prospectus is contrary to the provisions of the Companies Act, the SCRA,
the SCRR, the SEBI Act or the rules or regulations made thereunder or guidelines issued, as the case
may be. I further certify that all disclosures made in this Prospectus are true and correct.

DECLARATION

SIGNED BY THE DIRECTOR OF THE COMPANY

 

Name & Designation Signature
Likhitha Gaddipati Sd/-
Non-Executive Director

 

 

 

 

 

 

Date: October 08, 2020

 

 

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0

DECLARATION

I hereby certify and declare that all relevant provisions under the Companies Act and the rules,
regulations or guidelines issued by the Government or the regulations, rules or guidelines issued by
SEBI established under Section 3 of the SEBI Act, as the case may be, have been complied with and
no statement made in this Prospectus is contrary to the provisions of the Companies Act, the SCRA,
the SCRR, the SEBI Act or the rules or regulations made thereunder or guidelines issued, as the case
may be. I further certify that all disclosures made in this Prospectus are true and correct.

SIGNED BY THE DIRECTOR OF THE COMPANY

 

 

Name & Designation Signature
Kutumba Rao Gaddipati Sd/-

Non-Executive Director

 

 

 

 

 

Date: October 08, 2020

 

 

344
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DECLARATION

I hereby certify and declare that all relevant provisions under the Companies Act and the rules,
regulations or guidelines issued by the Government or the regulations, rules or guidelines issued by
SEBI established under Section 3 of the SEBI Act, as the case may be, have been complied with and
no statement made in this Prospectus is contrary to the provisions of the Companies Act, the SCRA,
the SCRR, the SEBI Act or the rules or regulations made thereunder or guidelines issued, as the case
may be. I further certify that all disclosures made in this Prospectus are true and correct.

SIGNED BY THE KEY MANAGERIAL PERSONNEL OF THE COMPANY

 

 

Name & Designation Signature
Sambasiva Rao Ketineni Sd/-
Chief Financial Officer

 

 

 

 

 

Date: October 08, 2020

 

 

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