33.

34,

borrowings will depend primarily on the cash generated by our business. Increasing the level of our
indebtedness also has important consequences to us such as:

increasing our vulnerability to general adverse economic, industry and competitive conditions;
limiting our flexibility in planning for, or reacting to, changes in our business and the industry;
limiting our ability to borrow additional funds; and

increasing our interest expenditure.

We cannot assure you that we will generate sufficient cash to service existing or proposed borrowings or
fund other liquidity needs, which could have an adverse effect on our business, results of operation, cash
flows and financial condition.

Our financing agreements entail interest at variable rates and any increases in interest rates may
adversely affect our business, results of operations, cash flows and financial condition.

We are susceptible to changes in interest rates and the risks arising therefrom. Certain of our financing
agreements provide for interest at variable rates with a provision for the periodic resetting of interest
rates. Further, under certain of our financing agreements, the lenders are entitled to change the applicable
rate of interest, which is a combination of a base rate that depends upon the policies of the RBI and a
contractually agreed spread. Certain of our lenders may also become entitled to change the applicable
rate of interest in the event of an adverse change in our Company’s credit risk rating. See “Financial
Indebtedness” on page 315 for a description of interest payable under our financing agreements. Further,
in recent years, the Government of India has taken measures to control inflation, which have included
tightening the monetary policy by raising interest rates. As such, any increase in interest rates may have
an adverse effect on our business, results of operations, cash flows and financial condition.

Our inability to meet our obligations, including financial and other covenants under our debt
financing arrangements, could adversely affect our business, results of operations, cash flows and
financial condition.

Our financing agreements contain certain restrictive covenants that limit our ability to undertake certain
types of transactions, any of which could adversely affect our business, results of operations, cash flows
and financial condition. We are required to obtain approval from our lenders for, among other things:

¢ — effecting any change in our capital structure including by way of fresh issuance of Equity Shares;

¢ amendments to the memorandum and articles of association of the Company or our Subsidiaries, as
applicable;

¢ undertaking guarantee obligations on behalf of any third party;

¢ formulating any scheme of amalgamation or reconstruction;

e change in the constitution of the Company or our Subsidiaries, as applicable, including
shareholding pattern, ownership, controlling interest and control;

e change in the management of the Company or our Subsidiaries, as applicable, including changes in
the composition of the board of directors and the key managerial personnel of the Company or our
Subsidiaries, as applicable;

«investment by way of share capital or extending loans or advances or placing deposits with any

other entity (excluding our group companies and associate companies);

declaration of dividend except out of profits relating to the financial year;

carrying out any change of business;

making any pre-payment of principal amounts due under the facilities;

undertaking any buyback of Equity Shares; and

selling any of our Company’s assets or investments which may have a material adverse effect.

Under these agreements, certain of the lenders also have the right to, inter-alia, appoint nominee
directors and observers to our Board of Directors, including upon an event of default. Further, any
downgrading of the credit rating of our Company by a credit rating agency, any reduction in profits
beyond a certain percentage and any qualified opinion from the statutory auditors of our Company may
qualify as an event of default under the relevant financing agreements. As security for certain loans and
credit facilities, certain of our lenders have created a charge on our assets and default of our loan
agreements can potentially lead to our lenders disposing of our assets. For example, a number of our
ATMs have been provided as security for certain loans and credit facilities. Certain financing agreements
also provide the banks and financial institutions with the right to convert any outstanding amounts into
Equity Shares of our Company at a price to be determined in accordance with applicable laws in the case

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