NOVUS GREEN ENERGY SYSTEMS LIMITED
Transcript of NOVUS GREEN ENERGY SYSTEMS LIMITED
DRAFT RED HERRING PROSPECTUSDated: December 31, 2018
Please read section 32 of the Companies Act, 2013Book Built Issue
NOVUS GREEN ENERGY SYSTEMS LIMITEDOur Company was incorporated as ‘Novus Green Energy Systems Private Limited’, a private limited company under the Companies Act, 1956, pursuant to a certificate of incorporation dated July 17, 2009 issued by the Registrar of Companies, Andhra Pradesh & Telangana (“RoC”). Thereafter, our Company was converted into a public limited company pursuant to a special resolution passed in the Extra Ordinary General Meeting of the Shareholders held on July 19, 2018 and consequently, the name of our Company was changed to ‘Novus Green Energy Systems Limited’, pursuant to a fresh certificate of incorporation issued by the RoC on August 02, 2018 bearing registration no. 064410. The corporate identity number of our Company is U40300TG2009PLC064410. For further details, see “History and Certain Corporate Matters” on page 156.
Registered Office: #100, Siddhi, 1st & 2nd Floor, P&T Colony, Trimulgherry Secunderabad Telangana-500015CIN: U40300TG2009PLC064410, Tel: 040-027743245; Fax: +(91)-040-40045515
Company Secretary and Compliance Officer: Mr. Sannapaneni SudheerWebsite: www.novusgreen.in, E-Mail: [email protected]
PROMOTERS OF THE COMPANY : MR. ANSHUMAN YENIGALLA AND MR. VENKATA RAVINDRA YENIGALLATHE ISSUE
INITIAL PUBLIC ISSUE OF UPTO 26,00,000 EQUITY SHARES OF FACE VALUE OF RS.10 EACH OF NOVUS GREEN ENERGY SYSTEMS LIMITED (THE “COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF RS. [●] PER EQUITY SHARE INCLUDING A SHARE PREMIUM OF RS. [●] PER EQUITY SHARE (THE “ISSUE PRICE”) AGGREGATING TO RS. [●] (“THE ISSUE”), OF WHICH [●] EQUITY SHARES OF FACE VALUE OF RS. [●] EACH FOR CASH AT A PRICE OF RS. [●] PER EQUITY SHARE INCLUDING A SHARE PREMIUM OF [●] PER EQUITY SHARE AGGREGATING TO RS. [●] WILL BE RESERVED FOR SUBSCRIPTION BY MARKET MAKER TO THE ISSUE (THE “MARKET MAKER RESERVATION PORTION”). THE ISSUE LESS THE MARKET MAKER RESERVATION PORTION i.e. NET ISSUE OF [●] EQUITY SHARES OF FACE VALUE OF 10 EACH AT A PRICE OF RS. [●] PER EQUITY SHARE AGGREGATING TO RS. [●] IS HEREIN AFTER REFERRED TO AS THE “NET ISSUE”. THE ISSUE AND THE NET ISSUE WILL CONSTITUTE [●] % AND [●] % RESPECTIVELY OF THE POST ISSUE PAID UP EQUITY SHARE CAPITAL OF OUR COMPANY.THE PRICE BAND AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS (“BRLMS”) AND WILL BE ADVERTISED IN ALL INDIA EDITIONS (WIDELY CIRCULATED)OF ENGLISH NATIONAL DAILY NEWSPAPER[●],ALL INDIA EDITIONS OF (WIDELY CIRCULATED)HINDI NATIONAL DAILY NEWSPAPER) [●] AND [●] EDITIONS OF THE REGIONAL NEWSPAPER (WIDELY CIRCULATED), WHERE OUR REGISTERED OFFICE IS LOCATED) AT LEAST TWO WORKING DAYS PRIOR TO THE BID/ISSUE OPENING DATE WITH THE RELEVANT FINANCIAL RATIOS CALCULATED AT THE FLOOR PRICE AND THE CAP PRICE AND SHALL BE MADE AVAILABLE TO THE NATIONAL STOCK EXCHANGE OF INDIA LIMITED (“NSE”, OR THE “STOCK EXCHANGE”) FOR THE PURPOSES OF UPLOADING ON IT’S WEBSITES.THIS ISSUE IS BEING IN TERMS OF CHAPTER IX OF THE SEBI (ICDR) REGULATIONS, 2018 AS AMENDED FROM TIME TO TIME. For further details, see “Terms of the Issue” beginning on page 280 of this Draft Red Herring Prospectus.All the investors applying in a public issue shall use only Application Supported by Blocked Amount (ASBA) facility for making payment providing details about the bank account which will be blocked by the Self Certified Syndicate Banks (“SCSBs”) as per the SEBI circular CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015. For further details, please refer to section titled “Issue Procedure” beginning on page 289 of this Draft Red Herring Prospectus. In case of delay, if any in refund, our Company shall pay interest on the application money at the rate of 15% per annum for the period of delay.
THE FACE VALUE OF THE EQUITY SHARES IS ` 10 EACH AND THE ISSUE PRICE IS [●] TIMES OF THE FACE VALUEIn case of a revision in the Price Band, the Bid/Offer Period will be extended for at least three additional Working Days after such revision of the Price Band subject to the Bid/Offer Period not exceeding a total of 10 Working Days. Any revision in the Price Band and the revised Bid/Offer Period, if applicable, will be widely disseminated by notification to the Stock Exchanges, by issuing a press release, and also by indicating the change on the websites of the BRLMs, and at the terminals of the members of the Syndicate.In terms of Rule 19(2)(b)(i) of the Securities Contracts (Regulation) Rules, 1957, as amended (the “SCRRs”), Issue is being made for at least 25% of the post-Issue paid-up Equity Share capital of our Company. The Issue is being made in accordance with Chapter IX of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended from time to time (“SEBI (ICDR”) Regulations), wherein not more than 50.00% of the Net Issue shall be available for allocation on a proportionate basis to QIBs, provided that our Company, in consultation with the BRLM may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis. One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. In the event of under-subscription in the Anchor Investor Portion, the remaining Equity Shares shall be added to the QIB Portion. 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion (excluding Anchor Investor Portion) shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than 15.00% of the Issue will be available for allocation on a proportionate basis to Non-Institutional Investors and not less than 35.00% of the Issue will be available for allocation to Retail Individual Investors, in accordance with the SEBI (ICDR) Regulations, subject to valid Bids being received at or above the Issue Price. All investors (except Anchor Investors) shall participate in this Issue mandatorily through the Applications Supported by Blocked Amount (“ASBA”) process by providing details of their respective bank accounts which will be blocked by SCSBs. For details, refer “Issue Procedure” on page 289.
RISKS IN RELATION TO THE FIRST ISSUEThis being the first Public Issue of our Company, there has been no formal market for the securities of our Company. The face value of the shares is Rs.10.00 per Equity Shares and the Issue price is [●] times of the face value. The Issue Price (as determined by our Company in consultation with the Book Running Lead Manager) as stated in the chapter titled on “Basis for Issue Price” beginning on page 86 of the Draft Red Herring Prospectus should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active or sustained trading in the equity shares of our Company or regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISKSInvestments 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 offering. For taking an investment decision, investors must rely on their own examination of our Company and the Issue including the risks involved. The Equity Shares offered in the Issue have neither been recommended nor approved by Securities and Exchange Board of India nor does Securities and Exchange Board of India guarantee the accuracy or adequacy of this Draft Red Herring Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” beginning on page 22 of this Draft Red Herring Prospectus.
ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to our Company and the Issue, which is material in the context of the Issue, that the information contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.
LISTINGThe Equity Shares offered through the Draft Red Herring Prospectus are proposed to be listed on SME Platform of NSE Emerge (“NSE SME”). In terms of the Chapter IX of the SEBI (ICDR) Regulations, 2018, as amended from time to time, our Company has received an observation letter dated [●] from NSE for using its name in this offer document for listing our shares on the SME Platform of NSE Emerge. For the purpose of this Issue, the designated Stock Exchange will be the NSE Emerge (“NSE”).
BOOK RUNNING LEAD MANAGER REGISTRAR TO THE ISSUECAPITALSQUARE ADVISORS PRIVATE LIMITED208, 2nd Floor, AARPEE Center, MIDC Road No 11, CTS 70, Andheri (E), Mumbai 400093 Maharashtra. IndiaTel: +91-22-66849999Fax: +91-22-66849998Website: www.capitalsquare.comEmail / Investor Grievance Id: [email protected] Person: Mr. Tanmoy Banerjee/Mr. Saket JainSEBI Registration No: INM000012219
BIG SHARE SERVICE PRIVATE LIMITEDAddress: 1st Floor, Bharti Tin Work Building, Opp Vasant Oasis, Makwana Road, Marol, Andheri (E) Mumbai: 400059Tel No: +91 020-62638200; Fax No: +91 022-62638299Website: www.bigshareonline.comEmail Id: [email protected] Grievance Id: [email protected] Person: Mr. Srinivas DornalaSEBI REGN NO: INR000001385
ISSUE PROGRAMMEISSUE OPENS ON: [●] ISSUE CLOSES ON: [●]
* Our Company in consultation with the BRLMs, may consider participation by the Anchor Investors, in accordance with the SEBI ICDR Regulations. The Anchor Investor Bidding Date shall be one Working Day prior to the Bid/Offer Opening Date.** Our Company in consultation with the BRLMs, may decide to close the Bid/Offer Period for QIBs one Working Day prior to the Bid/Offer Closing Date, in accordance with the SEBI ICDR Regulations.
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TABLE OF CONTENTS
SECTION I GENERAL ..................................................................................................................................... 2
DEFINATION AND ABBREVIATIONS................................................................................................ 2 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ........................................ 14 FORWARD LOOKING STATEMENT ................................................................................................. 16 SUMMARY OF OFFER DOCUMENT ................................................................................................. 17
SECTION II – RISK FACTORS ..................................................................................................................... 22
RISK FACTORS .................................................................................................................................... 22
SECTION III INTRODUCTION ..................................................................................................................... 44
THE ISSUE ............................................................................................................................................. 44 SUMMERY OF FINANCIAL INFORMATION ................................................................................... 46 GENERAL INFORMATION ................................................................................................................. 52 CAPITAL STRUCTURE ....................................................................................................................... 62 OBJECT OF THE ISSUE ....................................................................................................................... 77 BASIS FOR THE ISSUE PRICE ........................................................................................................... 83 STATEMENT OF TAX BENEFITS ...................................................................................................... 85
SECTION IV – ABOUT THE COMAPNY .................................................................................................... 87
OUR INDUSTRY ................................................................................................................................... 87 OUR BUSINESS .................................................................................................................................. 115 KEY INDUSTRY REGULATIONS AND POLICIES ........................................................................ 143 OUR HISTORY AND CERTAIN OTHER CORPORATE MATTERS ............................................. 152 SHAREHOLDERS’ AGREEMENTS AND OTHER AGREEMENT ................................................ 156 OUR MANAGEMENT ........................................................................................................................ 157 OUR PROMOTER AND PROMOTER GROUP ................................................................................ 171 DIVIDEND POLICY............................................................................................................................ 176
SECTION V FINANCIAL INFORMATION ............................................................................................... 177
FINANCIAL STATEMENTS AS RESTATED................................................................................... 177 OTHER FINANCIAL INFORMATION .............................................................................................. 232 CAPITALISATION STATEMENT ..................................................................................................... 233 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ....................... 234 AND RESULTS OF OPERATION ...................................................................................................... 234 FINANCIAL INDEBTEDNESS .......................................................................................................... 248
SECTION VI LEGAL AND OTHER INFORMATION .............................................................................. 251
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS .......................................... 251 GOVERNMENT AND OTHER APPROVALS .................................................................................. 255 OUR GROUP ENTITIES ..................................................................................................................... 260 OTHER REGULATORY AND STATUTORY DISCLOSURE ......................................................... 261
SECTION VII ISSUE INFORMATION ....................................................................................................... 275
TEMS OF THE ISSUE ......................................................................................................................... 275 ISSUE STRUCTURE ........................................................................................................................... 281 ISSUE PROCEDURE ........................................................................................................................... 284 RESTRICTION ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ...................................... 329
SECTION VIII MAIN PROVISION OF ARTICLES OF ASSOCIATION ................................................. 330
SECTION IX OTHER INFORMATION ...................................................................................................... 349
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ............................................. 349 DECLARATION .................................................................................................................................. 350
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SECTION I GENERAL
DEFINATION AND ABBREVIATIONS
Unless the context otherwise indicates or implies, the following terms shall have the meanings provided below in this
Draft Red Herring Prospectus, and references to any statute, regulation, rule, guidelines, circular, notification or
clarification or policies will include any amendments or re-enactments thereto, from time to time.
Notwithstanding the foregoing, terms in “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 Other Material Developments” and “Part B” of “Issue Procedure”, Will have the
meaning ascribed to such terms in these respective sections.
In case of any inconsistency between the definitions given below and the definitions contained in the Conventional or
General Information Document (as defined below), the definitions given below shall prevail. The words and
expressions used but not defined in this Draft Red Herring Prospectus will have the same meaning as assigned to such
terms under the Companies Act 1956 (as superseded and substituted by notified provisions of the Companies Act,
2013), the SEBI Act, the SEBI ICDR Regulations, the SCRA, the Depositories Act and the rules and regulations made
thereunder.
CONVENTIONAL OR GENERAL TERMS
Terms Description
“NGESL”, “Our
Company”, “the Company”
or “the Issuer”
Novus Green Energy Systems Limited, a public limited company incorporated in
India under the Companies Act 1956 with its registered and corporate office located
at The registered office of our Company is situated at #100, Siddhi, 1st & 2nd Floor,
P&T Colony, Trimulgherry Secunderabad Telangana-500015. The Registered
Office of our Company has not changed since its incorporation.
“We”, “the”, “our” or “us” Unless the context otherwise indicates or implies, refers to our Company together
with its Subsidiaries
UPI Unified Payments Interface
ISSUE RELATED TERMS
Terms Description
AoA / Articles of
Association /Articles
The Articles of Association of our Company, as amended
Audit Committee The Audit Committee of our Board
Auditors/Joint Auditors The Statutory Auditors of our Company, being M/s. NSVR and Associates LLP,
Chartered Accountants.
Banker to our Company
HDFC Bank Limited, Union Bank of India and State Bank of India, as disclosed in
the section titled “General Information” beginning on page 52 of this Draft Red
Herring Prospectus.
Board/ Board of Directors The Board of Directors of our Company, or a duly constituted committee thereof
CIN Corporate Identification Number.
Chief Financial Officer/
CFO
The Chief Financial Officer of our Company being Mr. Srikrishna Saibabu
Nandiraju
Companies Act/Act Companies Act, 1956 and/ or the Companies Act, 2013, as amended from time to
time.
Corporate Office The corporate office of our Company located at the same address as our Registered
Office
CSR Committee The Corporate Social Responsibility committee of our Board
Director(s) Director(s) of Novus Green Energy Systems Limited unless otherwise specified
Depositories Act The Depositories Act, 1996, as amended from time to time
ED Executive Director
Equity Shares The Equity Shares of our Company of face value of ₹ 10 each
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Equity Shareholders Persons/ Entities holding Equity Shares of Our Company.
Equity Listing Agreement/
Listing Agreement
Unless the context specifies otherwise, this means the Equity Listing Agreement to
be signed between our company and the SME Platform of NSE EMERGE.
Our Group Entities Companies which are covered under the applicable accounting standards and such
other companies as considered material by our Board, as identified in “Our Group
Entities” on page 260.
Indian GAAP Generally Accepted Accounting Principles in India
KMP/ Key Management
Personnel
Key Management Personnel of our Company in terms of Regulation 2(1)(b)(b) of
the SEBI ICDR Regulations 2018 and Section 2(51) of the Companies Act, 2013
and as described in “Our Management - Key Management Personnel” on page 157
of this Draft Red Herring Prospectus.
Materiality Policy The policy adopted by our Board in its meeting dated December 14, 2018 for
determining (i) Our Group Entities; (ii) outstanding material litigation involving our
Company, Subsidiaries, Directors, Promoters and Our Group Entities; and (iii)
outstanding dues to creditors in respect of our Company, in terms of the SEBI ICDR
Regulations for the purposes of disclosure in the offer documents. For further details,
see “Our Group Entities” and “Outstanding Litigation and Material
Developments” on pages 260 and 251 respectively
MoA/Memorandum
of Association
The Memorandum of Association of our Company, as amended
NCDs Non-Convertible Debentures
Nomination and
Remuneration Committee
The Nomination and Remuneration committee of our Board
Peer Review Auditor Peer Review Auditor of Our Company being M/s. NSVR and Associates LLP,
Chartered Accountants.
Promoters The Promoters of our Company, namely Mr. Anshuman Yenigalla and Mr. Venkata
Ravindra Yenigalla For details, see “Our Promoters and Promoter Group”
beginning on page 171 of this Draft Red Herring Prospectus
Promoter Group Persons and entities constituting the Promoter group of our Company, pursuant to
Regulation 2(pp) of the SEBI ICDR Regulations and as disclosed in “Our Promoters
and Promoter Group” on page 171 of this Draft Red Herring Prospectus
Registered Office The registered office of our Company located at Suite 1, 2nd Floor, Siddhi 100, P&T
Colony, Tirumalagherry Secunderabad Telangana 500015 India.
Registrar of
Companies/RoC
Registrar of Companies, Hyderabad, Telangana. For further details, see “General
Information” on page 52 of this Draft Red Herring Prospectus
Restated Financial
Statements
Restated Standalone Financial Statements, collectively
Restated Standalone
Financial Statements
The restated standalone financial statements of our Company which comprises the
restated standalone balance sheet, the restated standalone profit and loss and the
restated standalone cash flow statement as at and for the years ended 30 September
2018, March 31, 2018, March 31, 2017 and March 31, 2016 together with the
annexures and the notes thereto, which have been prepared in accordance with
Section 133 of the Companies Act, 2013.
Shareholders The Holders of the Equity Shares of our Company from time to time
Stakeholders Relationship
Committee
The Stakeholders Relationship Committee of our Board
Subsidiaries The Subsidiaries of our Company as disclosed in “Our History and Certain Other
Corporate Matters – Our Subsidiaries” from page 152 of this Draft Red Herring
Prospectus.
Specified Security Specified Security means Equity Shares.
ISSUER RELATED TERMS
Term Description
Acknowledgement Slip The slip or document issued by the Designated Intermediary to a Bidder as proof of
registration of the Bid.
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Term Description
Allot/ Allotment/ Allotted of
Equity Shares
Unless the context otherwise requires, allotment of the Equity Shares pursuant to the
transfer of the respective portion of the Issued Shares by Company pursuant to the
Issue of the Equity Shares to the successful Bidders.
Allocation/ Allotment of
Equity Shares The transfer of the Equity Shares pursuant to the Issue to the successful Bidders.
Allotment Advice
Note or advice or intimation of Allotment sent to the Applicants who have been
allotted Equity Shares after the Basis of Allotment has been approved by the
Designated Stock Exchanges.
Allottee (s) A successful bidder (s) to whom the Equity Shares are being/ have been issued
/allotted.
Anchor Escrow Account
Account opened with Escrow Collection Bank for the Issue and in whose favour the
Anchor Investors will transfer money through direct credit or NEFT or RTGS in
respect of the Bid Amount when submitting a Bid
Anchor Investor
A Qualified Institutional Buyer, applying under the Anchor Investor Portion in
accordance with the requirements specified in the SEBI ICDR Regulations and the
Red Herring Prospectus
Anchor Investor Allocation
Price
The price at which Equity Shares will be allocated to Anchor Investors according to
the terms of the Draft Red Herring Prospectus, which will be decided by our Company
in consultation with the BRLM during the Anchor Investor Bid/Offer Period
Anchor Investor
Application Form
The form used by an Anchor Investor to make a Bid in the Anchor Investor Portion
and which will be considered as an application for allotment in terms of the Draft Red
Herring Prospectus, Red Herring Prospectus and Prospectus.
Anchor Investor Bidding
Date
The date one Working Day prior to the Bid/Issue Opening Date on which Bids by
Anchor Investors shall be submitted and allocation to the Anchor Investors shall be
completed.
Anchor Investor Issue Price
The final price at which the Equity Shares will be Allotted to Anchor Investors in
terms of the Draft Red Herring Prospectus, Red Herring Prospectus and the
Prospectus, which will be a price equal to or higher than the Issue Price but not higher
than the Cap Price. The Anchor Investor Issue Price will be decided by our Company,
in consultation with the BRLMs.
Anchor Investor Portion
Up to 60% of the QIB Category, which may be allocated by our Company, in
consultation with the BRLMs, to Anchor Investors, on a discretionary basis, in
accordance with SEBI ICDR Regulations. One-third of the Anchor Investor Portion
is reserved for domestic Mutual Funds, subject to valid Bids being received from
domestic Mutual Funds at or above the price at which allocation is made to Anchor
Investors
Application Supported by
Blocked Amount / ASBA
An application, whether physical or electronic, used by all Bidders to make an
application authorizing a SCSB to block the application amount in the ASBA Account
maintained with the SCSB.
ASBA Account Account maintained by ASBA bidders/ Investors with a SCSB which will be blocked
by such SCSB to the extent of the Application Amount of the ASBA Bidder/ Investor.
ASBA Bid A Bid made by an ASBA Bidder.
ASBA Bidder(s)
Any Bidder in the Issue who intends to submit a Bid.
ASBA Form
An application form, whether physical or electronic, used by ASBA Bidders which
will be considered as the application for Allotment in terms of the Draft Red Herring
Prospectus, Red Herring Prospectus and the Prospectus
Basis of Allotment
The basis on which the Equity Shares will be Allotted as described in the section titled
“Issue Procedure” - Basis of Allotment beginning on page 284 of this Draft Red
Herring Prospectus.
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Term Description
Bid(s)
An indication to make an Issue during the Bid/ Issue Period by a Bidder pursuant to
submission of the Bid cum Application Form to subscribe for or purchase our Equity
Shares of our Company at a price within the Price Band, including all revisions and
modifications thereto, to the extent permissible under SEBI ICDR Regulations. The
term “Bidding” shall be construed accordingly
Bid Amount The highest value of the optional Bids as indicated in the Bid-cum-Application Form
and payable by the Bidder upon submission of the Bid in this Issue.
Bid Cum Application Form
The form in terms of which the Bidder shall make a Bid and which shall be considered
as the application for the Allotment pursuant to the terms of the Draft Red Herring
Prospectus, Red Herring Prospectus and the Prospectus.
Bid Lot [●] Equity Shares
Bid/Issue Closing Date
The date on which the Designated Intermediaries shall not accept Bids for the Issue,
which shall be published by our Company in all editions of [●] (a widely circulated
English national newspaper) and all editions of [●] (a widely circulated Hindi national
newspaper, and the [●] edition of [●] (a widely circulated regional language in the
place where our Registered office is located).
In case of any revisions, the extended Bid/Offer Closing Date shall also be notified
on the websites and terminals of the Syndicate Members, as required under the SEBI
ICDR Regulations. Our Company in consultation with the BRLMs, consider closing
the Bid/Offer Period for the QIB Category one Working Day prior to the Bid/Offer
Closing Date in accordance with the SEBI ICDR Regulations.
Bid/ Issue Opening Date
The date on which the Designated Intermediaries shall start accepting Bids for the
Issue, which shall be published by our Company in all edition of [●] (a widely
circulated English national newspaper) and all editions of [●] (a widely circulated
Hindi national newspaper and the [●] edition of [●] (a widely circulated regional
language in the place where our Registered is located)
Bid/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.
Bidding Centers
Centers at which the Designated Intermediaries shall accept the Bid cum Application
Forms, i.e., Designated SCSB Branch for SCSBs, Specified Locations for Syndicate,
Broker Centres for Registered Brokers, Designated RTA Locations for RTAs and
Designated CDP Locations for CDPs
Book Building Process/
Book Building Method
The book building route as provided under Schedule XIII of the SEBI (ICDR)
Regulations, 2018, in terms of which this Issue is being made.
Broker Centres
Broker centres notified by the Stock Exchanges, where the Bidders can submit the
Application Forms to a Registered Broker.
The details of such broker centres, along with the names and contact details of the
Registered Brokers, are available on the website of the NSE on the following link:-
www.nseemerge.com
BRLM / Book Running
Lead Manager
Book Running Lead Manager to the Issue, in this case being Capital Square Advisors
Pvt. Ltd.
Business Day Monday to Friday (except public holidays)
CAN or Confirmation of
Allocation Note
The note or advice or intimation sent to each successful Applicant indicating the
Equity Shares which will be Allotted, after approval of Basis of Allotment by the
Designated Stock Exchange.
Cap Price The higher end of the Price Band, in this case being [●] per Equity Share above which
the Issue Price will not be finalized and above which no Bids will be accepted
Client ID Client Identification Number maintained with one of the Depositories in relation to
demat account
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Term Description
Collecting Depository
Participant or CDP
A depository participant as defined under the Depositories Act, 1996, registered with
SEBI and who is eligible to procure Applications at the Designated CDP Locations
in terms of circular no. CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015
issued by SEBI.
Controlling Branches of
SCSBs
Such branches of the SCSBs which co-ordinate Applications under this Issue made
by the Bidders with the Book Running Lead Manager, the Registrar to the Issue and
the Stock Exchanges, a list of which is provided on
http://www.sebi.gov.in/sebiweb/home/detail/32931/yes/List-of-Self-Certified-
Syndicate-Banks-SCSBsfor- Syndicate-ASBA.
Cut-off Price
Offer Price, finalised by our Company in consultation with the BRLMs, which shall
be any price within the Price Band Only Retail Individual Bidders are entitled to Bid
at the Cut-off Price. QIBs and Non- Institutional Bidders are not entitled to Bid at the
Cut-off Price
Demographic Details The demographic details of the Bidders such as their Address, PAN, Occupation and
Bank Account details.
Designated Intermediaries
/Collecting Agent
Syndicate Members, Sub-Syndicate/Agents, SCSBs, Registered Brokers, Brokers,
the CDPs and RTAs, who are authorized to collect Application Forms from the
Bidders, in relation to the Issue
Depository/ Depositories A depository registered with SEBI under the SEBI (Depositories and 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 SCSB Branches
Such branches of the SCSBs which shall collect the ASBA Application Form from
the ASBA Applicant and a list of which is available on the website of SEBI at
http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes
Syndicate-ASBA or at such other website as may be prescribed by SEBI from time
to time.
Designated CDP Locations
Such locations of the CDPs where Applicant can submit the Application Forms to
Collecting Depository Participants.
The details of such Designated CDP Locations, along with names and contact details
of the Collecting Depository Participants eligible to accept Application Forms are
available on the websites of the Stock Exchange i.e. www.bseindia.com and
www.nseemerge.com
Designated RTA Locations
Such locations of the RTAs where Applicant can submit the Application Forms to
RTAs.
The details of such Designated CDP Locations, along with names and contact details
of the Collecting Depository Participants eligible to accept Application Forms are
available on the websites of the Stock Exchange i.e. www.nseemerge.com
Designated Date
The date on which funds are transferred from the Escrow Account and the amounts
blocked by the SCSBs are transferred from the ASBA Accounts, as the case may be,
to the Public Offer Account or the Refund Account, as appropriate, in terms of the
Red Herring Prospectus and the Prospectus, following which the Board may Allot
Equity Shares to successful Bidders in the Offer.
Draft Red Herring
Prospectus “ DRHP”
This draft red herring prospectus dated December 31,2018 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 Offer including any
addenda or corrigenda thereto
Designated Market Maker [●]
Designated Stock Exchange SME Platform of NSE EMERGE.
Eligible NRI(s) NRI(s) from such jurisdiction outside India where it is not unlawful to make an Issue
or invitation under the Issue and in relation to whom this Draft Red Herring
7
Term Description
Prospectus constitutes an invitation to subscribe for the Equity Shares Issued herein
on the basis of the terms thereof.
Escrow Account
Account opened with the Escrow Collection Bank(s) and in whose favour the Anchor
Investors will transfer money through direct credit/NEFT/RTGS in respect of the Bid
Amount when submitting a Bid
Escrow Agreement
Agreement dated [●], entered into among our Company, the Registrar to the Issue,
the BRLMs, Escrow Collection Bank(s), Public Issue Bank and Refund Bank, among
others, for collection of the Bid Amounts from Anchor Investors and transfer of funds
from the Public Issue Account and where applicable remitting refunds, if any, to the
Anchor Investors, on the terms and conditions thereof
Escrow Collection Bank(s)
The bank(s) which is/are clearing members and are registered with the SEBI as an
escrow bank, with whom the Anchor Escrow Accounts in relation to the Issue for
Bids by Anchor Investors will be opened, in this case being [●].
First Bidder
Bidder whose name shall be mentioned in the Bid cum Application Form or the
Revision Form and in case of joint Bids, whose name shall also appear as the first
holder of the beneficiary account held in joint names
Floor Price
The lower end of the Price Band, and any revisions thereof, at or above which the
issue Price and the Anchor Investor Issue Price will be finalized and below which no
Bids will be accepted and which shall not be less than the face value of the Equity
Shares
FII / Foreign Institutional
Investors
Foreign Institutional Investor (as defined under SEBI (Foreign Institutional Investors)
Regulations, 1995, as amended) registered with SEBI under applicable laws in India.
General Information
Document
The General Information Document for investing in public issues prepared and issued
in accordance with the Circular (CIR/CFD/DIL/12/2013) dated October 23, 2013,
notified by SEBI read with SEBI Circular dated November 10, 2015 and bearing
Reference No. CIR/CFD/POLICYCELL/11/2015 which shall be applicable for all
public issues opening on or after January 01, 2016, all the investors can apply through
ASBA process.
ICDS Income Computation and Disclosures Standards
Issue Agreement The agreement dated December 27, 2018 entered into among our Company and the
BRLMs, pursuant to which certain arrangements are agreed to in relation to the Issue
Issue Price
The final price within the Price Band at which Offered Shares will be Allotted to
successful Bidders in terms of this Draft Red Herring Prospectus, Red Herring
Prospectus and Prospectus.
Issue Proceeds
The proceeds of the Issue as stipulated by the Company. For further information about
use of the Issue Proceeds please refer to section titled “Objects of the Issue”
beginning on page 77 of this Draft Red Herring Prospectus.
Market Maker Member Brokers of NSE who are specifically registered as Market Makers with the
NSE EMERGE Platform. In our case, [●] are the Market Maker to the Issue.
Market Making Agreement The Market Making Agreement dated [●] between our Company, [●].
Market Maker Reservation
Portion
The reserved portion of upto [●] Equity Shares of ₹10.00 each at an Issue Price of ₹
[●] each to be subscribed by Market Maker.
Mutual Fund(s) Mutual fund (s) registered with SEBI pursuant to the SEBI (Mutual Funds)
Regulations, 1996, as amended.
Minimum Promoters’
Contribution
Aggregate of [] of the fully diluted post-Issue Equity Share capital of our Company
held by our Promoters which shall be provided towards minimum promoters’
contribution and locked-in for a period of three years from the date of Allotment
Monitoring Agency N.A
Net Issue The Issue (excluding the Market Maker Reservation Portion) of up to [] equity shares
of face value ₹10.00 each of Novus Green Energy Systems Limited for cash at a price
8
Term Description
of [●] per Equity Share (the “Issue Price”), including a share premium of ₹ [●] per
equity share aggregating up to ₹ [●] Lakh.
Net Proceeds The Issue Proceeds, less the Issue related expenses, received by the Company.
Net QIB Portion The QIB Category less the number of Equity Shares Allotted to Anchor Investors
NSE EMERGE The SME platform of NSE EMERGE, approved by SEBI as an SME Exchange for
listing of equity shares issued under Chapter IX of the SEBI ICDR Regulations
Non Institutional Investors
or NIIs
All 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 an amount of more than ₹ 2 Lakh (but not
including NRIs other than Eligible NRIs)
Overseas Corporate Body /
OCB
Overseas Corporate Body means and includes an entity defined in clause (xi) of
Regulation 2 of the Foreign Exchange Management (Withdrawal of General
Permission to Overseas Corporate Bodies (OCB’s) Regulations 2003 and which was
in existence on the date of the commencement of these Regulations and immediately
prior to such commencement was eligible to undertake transactions pursuant to the
general permission granted under the Regulations. 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 irrespective of the number of specified securities applied for.
Payment through electronic
means Payment through NECS, NEFT, or Direct Credit, as applicable.
Prospectus
The Prospectus to be filed with the RoC after the Pricing Date in accordance with
Section 26 of the Companies Act, 2013, and the SEBI ICDR Regulations containing,
inter alia, the Issue Price that is determined at the end of the Book Building Process,
the size of the Issue and certain other information, including any addenda or
corrigenda thereto
Price Band
Price band of the Floor Price of ₹ [●] and a Cap Price of ₹ [●], including any
revisions thereof. The Price Band and the minimum Bid Lot size for the Issue will be
decided by our Company, in consultation with the BRLMs, and advertised in [●]
editions of [●], a widely circulated English national daily newspaper and [●]
editions of [●] (a widely circulated Hindi national daily newspaper, Hindi also being
the regional language in the place where our Registered Office is located) at least two
Working Days prior to the Bid/Issue Opening Date, with the relevant financial ratios
calculated at the Floor Price and at the Cap Price and shall be made available to the
Stock Exchanges for the purpose of uploading on their websites
Pricing Date The date on which our Company, in consultation with the BRLMs, shall finalize the
Issue Price
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.
Public Issue Account
The Bank Account opened with the Banker(s) to this Issue [●] under Section 40 of
the Companies Act, 2013 to receive monies from the SCSBs from the bank accounts
of the ASBA Bidders on the Designated Date.
Pre-IPO Placement
Placement of Equity Shares to certain investors post filing of this Draft Red Herring
Prospectus with SEBI but prior to filing of the Red Herring Prospectus with the RoC,
subject to such terms and conditions as disclosed in this Draft Red Herring
Prospectus.
9
Term Description
Qualified Institutional
Buyers or QIBs
A qualified institutional buyer as defined under Regulation 2(1)(ss) of the SEBI ICDR
Regulations.
Red Herring Prospectus or
RHP
The Red Herring Prospectus to be issued in accordance with Section 32 of the
Companies Act 2013 and the SEBI ICDR Regulations, which will not have complete
particulars of the price at which the Equity Shares shall be Allotted and which shall
be registered with the RoC at least three days before the Bid/ Issue Opening Date and
will become the Prospectus after filing with the RoC after the Pricing Date, including
any addenda or corrigendum thereto.
Refund Account(s) Account(s) opened with the Refund Bank from which refunds, if any, of the whole or
part of the Bid Amount shall be made to Anchor Investors
Refund Bank(s) The Escrow Collection Bank with whom the Refund Account(s) will be opened, in
this case being [●]
Registered Brokers Stock brokers registered with the stock exchanges having nationwide terminals, other
than the Members of the Syndicate.
Retail Discount
A discount of up to ₹ [●] on the Issue Price available to Retail Individual Investors
by our Company, in consultation with the Book Running Lead Managers, at the time
of making a Bid. The Price Band, Retail Discount, if any, and minimum Bid lot
decided by our Company in consultation with the BRLMs, and advertised in [●]
editions of [●], a widely circulated English national daily newspaper and [●]
editions of [●] (a widely circulated Hindi national daily newspaper, Hindi also being
the regional language in the place where our Registered Office is located) , at least
five Working Days prior to the Bid/Issue Opening Date and shall be made available
to the Stock Exchanges for the purpose of uploading on their website.
Registrar and Share Transfer
Agents or RTAs
Registrar and share transfer agents registered with SEBI and eligible to procure
Applications at the Designated RTA Locations in terms of circular no.
CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by SEBI
Registrar / Registrar to this
Issue /RTI Registrar to the Issue being Big Share Services Private Limited.
Registrar Agreement
The agreement dated December 26, 2018 entered into between our Company and the
Registrar to the Issue in relation to the responsibilities and obligations of the Registrar
pertaining to the Issue.
Revision Form
The form used by the Bidders to modify the quantity of Equity Shares or the Bid
Amount in any of their Bid cum Application Forms or any previous Revision Form(s),
as applicable. QIBs bidding in the QIB Portion and NIIs bidding in the Non-
Institutional Portion 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.
Reserved Category/
Categories Categories of persons eligible for making application under reservation portion.
Retail Individual
Investors/RIIs
Individual Bidders or minors applying through their natural guardians, (including
HUFs in the name of Karta and Eligible NRIs) who have applied for an amount less
than or equal to ₹ 2 Lakh in this Issue.
SEBI ICDR Regulations or
SEBI (ICDR) Regulations
Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018 as amended from time to time
Self-Certified Syndicate
Bank(s) or SCSB(s)
Banks registered with SEBI, Issuing services in relation to ASBA, a list of which is
available on the website of SEBI at
http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes
Syndicate-ASBA.
Specified Locations The Bidding centres where the Syndicate accepted ASBA Forms from Bidders.
SME Exchange The SME Platform of the NSE i.e. NSE EMERGE.
10
Term Description
SME Platform
The SME Platform of NSE i.e. NSE EMERGE for listing equity shares Issued under
Chapter IX of the SEBI ICDR Regulation which was approved by SEBI as an SME
Exchange.
Syndicate Agreement
The agreement to be entered into among the members of the Syndicate, our Company
in relation to the collection of Bids in the Issue (other than Bids directly submitted to
the SCSBs under the ASBA process or to Registered Brokers at the Broker Centres)
Syndicate Members
Intermediaries registered with SEBI and permitted to carry out activities as an
underwriter, in this case being [●]
Syndicate or members of the
Syndicate
Collectively, the BRLM and the Syndicate Members
Underwriters Capital Square Advisors Private Limited and [●]
Underwriting Agreement The agreement between our Company and the Underwriters, to be entered into on or
after the Pricing Date.
Working Days
All days, other than second and fourth Saturday of a month, Sunday or a public
holiday, on which commercial banks in Mumbai are open for business; provided
however, with reference to (a) announcement of Price Band; and (b) Bid/ Issue
Period, “Working Day” shall mean all days, excluding all Saturdays, Sundays and
public holidays, on which commercial banks in Mumbai are open for business; (c)
the time period between the Bid/ Issue Closing Date and the listing of the Equity
Shares on the Stock Exchanges, “Working Day” shall mean all trading days of Stock
Exchanges, excluding Sundays and bank holidays, as per the SEBI Circular
SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January 21, 2016
WTD Whole Time Director
INDUSTRY RELATED TERMS
AJAY Atal Jyoti Yojna
ASSOCHAM The Associated Chambers of Commerce and Industry of India
AT & C Aggregate Technical & Commercial
CCEA Cabinet Committee on Economic Affairs
CEA Central Electricity Authority
CEIG Chief Electrical Inspector to Government
CERC Central Electricity Regulatory Commission
CSO Central Statistics Organisation
DISCOMS Distribution Companies
EESL Energy Efficiency Services Limited
EPC Engineering, Procurement and Construction
FiTs Feed in Tariffs
GBI Generation Based Incentives
GDP Gross Domestic Product
GIIN Global Impact Investing Network's
GUVNL Gujarat Urja Vikas Nigam Limited
GW Gigawatt
IIP Index of Industrial Production
IMF International Monetary Fund
ILO International Labour Organisation
IREDA Indian Renewable Energy Development Agency
ISTS Inter State Transmission Systems
JNNSM Jawaharlal Nehru National Solar Mission
11
MW Megawatt
MNRE Ministry of New and Renewable Energy
MPLADS Member of Parliament Local Area Development Scheme
NAPCC National Action Plan on Climate Change
NASSCOM The National Association of Software and Services Companies
NBMMP National Biogas and Manure Management Programme
NSM National Solar Mission
NTP National Tariff Policy
NUHF National Urban Housing Fund
NVVN NTPC Vidhut Vyapar Nigam Limited
OFB Ordnance Factory Boards
PMC Project Management Consultancy
REC Renewable Energy Certificate
RGO Renewable Generation Obligation
RPO Renewable Purchase Obligation
RPSSGP Rooftop PV and Small Solar Power Generation Programme
SECI Solar Energy Corporation of India
SERCs State Electricity Regulatory Commissions
ULBs Urban Local Bodies
WTO World trade Organization
SPV Solar PhotoVolatic
Technical / Industry Related Terms
Term Description
AC Alternating Current
AD Accelerated Depreciation
Air Act Air Prevention and Control of Pollution Act, 1981
CEA Central Electricity Authority
DC Direct current
DP Depository Participant
DP ID Depository Participant’s Identity number.
Electricity Act Electricity Act, 2003
EPC Engineering, Procurement and Construction
EPF Employees’ Provident Fund and Miscellaneous Provisions Act, 1952
IMF International Monetary Fund
IREA International Renewable Agency
MD Managing Director
MNRE Ministry of New and Renewable Energy
MW Mega Watts-
NSM National Solar Mission
SECI Solar Energy Corporation of India Limited
UDAY Ujwal Discom Assurance Yojana
FPIs A foreign portfolio investor who has been registered pursuant to the SEBI FPI
Regulations
FVCI
Foreign Venture Capital Investors (as defined under the Securities and Exchange
Board of India (Foreign Venture Capital Investors) Regulations, 2000) registered
with SEBI
GAAR General Anti-Avoidance Rules
GDP Gross Domestic Product
GoI Government of India
GST Goods and Service Tax
HUF(s) Hindu Undivided Family(ies)
IAS Rules The Companies (Indian Accounting Standards) Rules, 2015
ICAI Institute of Chartered Accountants of India
12
IFRS International Financial Reporting Standards
IFSC Indian Financial System Code
Income Tax Act Income Tax Act, 1961
Ind AS
The Indian Accounting Standards referred to in the Companies (Indian Accounting
Standard) Rules, 2015
INR or Rupee or ₹ or Rs. Indian Rupee, the official currency of the Republic of India
MCA Ministry of Corporate Affairs, GoI
Notified Sections
The sections of the Companies Act, 2013 that have been notified by the MCA and
are currently in Effect
NSE National Stock Exchange of India Limited
P/E Ratio Price/Earnings Ratio
Payment of Bonus Act Payment of Bonus Act, 1965
Payment of Gratuity Act Payment of Gratuity Act, 1972
SEBI Securities and Exchange Board of India constituted under the SEBI Act
SEBI Act Securities and Exchange Board of India Act, 1992
SEBI FPI Regulations Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations,
2014
SEBI FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investors)
Regulations, 2000
SEBI ICDR Regulations
Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018
Takeover Regulations
Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011
Trademarks Act Trademarks Act, 1999
U.S. GAAP Generally Accepted Accounting Principles in the United State of America
USD/ US Dollar United States Dollar, the official currency of the United States of America
USA/ U.S./
US United States of America, its territories and possessions, any state of the United
States of America and the District of Columbia
VAT Value Added Tax
Wilful Defaulter(s) Wilful Defaulter as defined under Regulation 2(1)(lll) of the SEBI ICDR Regulations
ABBREVIATIONS
Term Description
AIF Alternative Investment Funds
Category III FPIs
FPIs registered as category III FPIs under the SEBI FPI Regulations, which shall
include all other FPIs not eligible under category I and II foreign portfolio investors,
such as endowments, charitable societies, charitable trusts, foundations, corporate
bodies, trusts, individuals and family office
Consolidated FDI Policy
The consolidated FDI Policy, effective from 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
CRISIL CRISIL Limited
Depositories Act The Depositories Act, 1996
EBITDA Earnings Before Interest, Tax, Depreciation and Amortization
ED Executive Director
EPS Earnings per share
ESI Act Employees’ State Insurance Act, 1948
Euro Euro, the official single currency of the participating member states of the European
Economic and Monetary Union of the Treaty establishing the European Community
Factories Act Factories Act, 1948
FCNR Account Foreign Currency Non Resident (Bank) account established in accordance with the
FEMA
FDI Foreign direct investment
Financial Year/Fiscal
The period of 12 months commencing on April 1 of the immediately preceding
calendar year and ending on March 31 of that particular calendar year
13
FPIs A foreign portfolio investor who has been registered pursuant to the SEBI FPI
Regulations
FVCI
Foreign Venture Capital Investors (as defined under the Securities and Exchange
Board of India (Foreign Venture Capital Investors) Regulations, 2000) registered
with SEBI
GAAR General Anti-Avoidance Rules
GDP Gross Domestic Product
GoI Government of India
GST Goods and Service Tax
HUF(s) Hindu Undivided Family(ies)
IAS Rules The Companies (Indian Accounting Standards) Rules, 2015
ICAI Institute of Chartered Accountants of India
IFRS International Financial Reporting Standards
IFSC Indian Financial System Code
Income Tax Act Income Tax Act, 1961
Ind AS
The Indian Accounting Standards referred to in the Companies (Indian Accounting
Standard) Rules, 2015
INR or Rupee or ₹ or Rs. Indian Rupee, the official currency of the Republic of India
MCA Ministry of Corporate Affairs, GoI
Notified Sections
The sections of the Companies Act, 2013 that have been notified by the MCA and
are currently in Effect
NSE National Stock Exchange of India Limited
P/E Ratio Price/Earnings Ratio
Payment of Bonus Act Payment of Bonus Act, 1965
Payment of Gratuity Act Payment of Gratuity Act, 1972
SEBI Securities and Exchange Board of India constituted under the SEBI Act
SEBI Act Securities and Exchange Board of India Act, 1992
SEBI FPI Regulations Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations,
2014
SEBI FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investors)
Regulations, 2000
SEBI ICDR Regulations
Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018
Takeover Regulations
Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011
Trademarks Act Trademarks Act, 1999
U.S. GAAP Generally Accepted Accounting Principles in the United State of America
USD/ US Dollar United States Dollar, the official currency of the United States of America
USA/ U.S./
US United States of America, its territories and possessions, any state of the United
States of America and the District of Columbia
VAT Value Added Tax
Wilful Defaulter(s) Wilful Defaulter as defined under Regulation 2(1)(lll) of the SEBI ICDR Regulations
14
PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA
In this Draft Red Herring Prospectus, the terms “we”, “us”, “our”, the “Company”, “our Company”, “Novus Green
Energy Systems Limited” and “NGESL”, unless the context otherwise indicates or implies, refers to Novus Green
Energy Systems Limited.
Certain Conventions
All references in this Draft Red Herring Prospectus to “India” are to the Republic of India. All references in this Draft
Red Herring Prospectus to the “U.S.”, “USA” or “United States” are to the United States of America.
Financial Data
Unless stated otherwise, the financial data in this Draft Red Herring Prospectus is derived from our audited financial
statements for the financial years ended March 31, 2016, 2017, 2018 and for stub period September 30, 2018 prepared
in accordance with Indian GAAP, the Companies Act and restated in accordance with the SEBI (ICDR) Regulations
and the Indian GAAP which are included in this Draft Red Herring Prospectus, and set out in “Financial Statements
as Restated” on page 177 of this Draft Red Herring Prospectus.
Our Company’s financial year commences on April 1 of the immediately preceding calendar year and ends on March
31 of that particular calendar year, so all references to a particular financial year are to the 12 month period
commencing on April 1 of the immediately preceding calendar year and ending on March 31 of that particular calendar
year.
There are significant differences between the Indian GAAP, the International Financial Reporting Standards (the
“IFRS”) and the Generally Accepted Accounting Principles in the United States of America (the “U.S. GAAP”).
Accordingly, the degree to which the financial statements included in this Draft Red Herring Prospectus will provide
meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting practices.
Any reliance by persons not familiar with Indian accounting practices, the Indian GAAP, the Companies Act and the
SEBI (ICDR) Regulations on the financial disclosures presented in this Draft Red Herring Prospectus should
accordingly be limited. We have not attempted to quantify the impact of the IFRS or the U.S. GAAP on the financial
data included in this Draft Red Herring Prospectus, nor do we provide a reconciliation of our financial statements to
those under the U.S. GAAP or the IFRS and we urge you to consult your own advisors regarding such differences and
their impact on our financial data.
Certain figures contained in this Draft Red Herring Prospectus, including financial information, have been subject to
rounding adjustments. All decimals have been rounded off to two decimal points, except for figures in percentage. In
certain instances, (i) the sum or percentage change of such numbers may not conform exactly to the total figure given;
and (ii) the sum of the numbers in a column or row in certain tables may not conform exactly to the total figure given
for that column or row. However, where any figures that may have been sourced from third-party industry sources are
rounded off to other than two decimal points in their respective sources, such figures appear in this Draft Red Herring
Prospectus as rounded-off to such number of decimal points as provided in such respective sources.
Currency and units of presentation
In this Draft Red Herring Prospectus, unless the context otherwise requires, all references to (a) ‘Rupees’ or ‘’ or ‘Rs.’
or ‘INR’ are to Indian rupees, the official currency of the Republic of India; (b) ‘US Dollars’ or ‘US$’ or ‘USD’ or
‘$’ are to United States Dollars, the official currency of the United States of America. All references to the word
‘Lakh’ or ‘Lac’ or ‘Lacs’, means ‘One hundred thousand’ and the word ‘Million’ means ‘Ten lakhs’ and the word
‘Crore’ means ‘Ten Million’ and the word ‘Billion’ means ‘One Thousand Million’.
Any percentage amounts, as set forth in “Risk Factors”, “Our Business”, “Management's Discussion and Analysis of
Financial Conditions and Results of Operations” and elsewhere in this Draft Red Herring Prospectus, unless otherwise
indicated, have been calculated based on our restated financial statement prepared in accordance with Indian GAAP.
15
Industry and Market Data
Unless stated otherwise, industry and market data used throughout this Draft Red Herring Prospectus has been
obtained or derived from internal Company reports and industry and government publications, publicly available
information and sources. Industry publications generally state that the information contained in those publications has
been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and
their reliability cannot be assured. Although, our Company believes that industry data used in this Draft Red Herring
Prospectus is reliable, it has not been independently verified.
Further, the extent to which the industry and market data presented in this Draft Red Herring Prospectus is meaningful
depends on the reader's familiarity with and understanding of, the methodologies used in compiling such data. There
are no standard data gathering methodologies in the industry in which we conduct our business, and methodologies
and assumptions may vary widely among different industry sources.
16
FORWARD LOOKING STATEMENT
This Draft Red Herring Prospectus contains certain “forward-looking statements”. These forward-looking statements
generally can be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”, “estimate”, “intend”,
“objective”, “plan”, “project”, “will”, “will continue”, “will pursue” or other words or phrases of similar import.
Similarly, statements that describe our strategies, objectives, plans, prospects or goals are also forward-looking
statements. All forward-looking statements are subject to risks, uncertainties and assumptions about us that could
cause actual results to differ materially from those contemplated by the relevant forward-looking statement.
Actual results may differ materially from those suggested by the forward-looking statements due to risks or
uncertainties associated with the expectations with respect to, but not limited to, regulatory changes pertaining to the
industries in India in which we operate and our ability to respond to them or 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 our business activities or investments, the monetary and fiscal policies
of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other
rates or prices, the performance of the financial markets in India and globally, 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 expectations include, but are not limited to, the following:
Risks and uncertainties when developing solar and EPC projects;
Implementing our growth strategy requires significant capital expenditure and will depend on our ability to maintain
our access to multiple funding sources on acceptable terms;
Our customers may not be able to fulfil their contractual obligations as a result of their poor financial health or for
other reasons;
Our business is dependent on the regulatory and policy environment affecting the renewable energy sector in India;
Restrictions on solar equipment imports may increase our business costs.
For further discussion of factors that could cause the actual results to differ from the expectations, see “Risk Factors”,
“Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
beginning on pages 22 , 115 and 234 , respectively. By their nature, certain market risk disclosures are only estimates
and could be materially different from what actually occurs in the future. As a result, actual gains or losses could
materially differ from those that have been estimated.
Forward-looking statements reflect the current views as of the date of this Draft Red Herring 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 our Company believes 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. None of our Directors, the Book
Running Lead Manager, or any of their respective affiliates have any obligation to update or otherwise revise any
statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even
if the underlying assumptions do not come to fruition. Our Company and the Directors will ensure that investors in
India are informed of material developments until the time of the grant of listing and trading permission by the Stock
Exchange.
17
SUMMARY OF OFFER DOCUMENT
(A) Primary business of the Issuer and the industry in which it operates
Summary of Primary Business of the Company
Novus Green is promoted by Mr. Anshuman Yenigalla and Mr. Venkata Ravindra Yenigalla and each of our
promoters are well experienced in execution/implementation of solar power systems and solar water pumpimg
systems. In solar pumping system, we have installed more than 6000 numbers of pumps installed up to November
30, 2018 with wide range of systems of DC Solar Pump and AC Solar Pump. In addition to the above Novus
Green also started providing consultancy services for acquiring projects and tender bidding after identifying
competent client on tender-to-tender basis.
We are also engaged in the installation of integrated Solar Power Projects/ Systems as an EPC contractor and
installed 15MWp up to November 30, 2018. We are being one of the prime player in the setting-up captive
integrated solar power systems has set-up unique project for 4MWp.
In the year 2009-10, our company has Installed First Solar System of 2kwp followed by first 100kwp captive
solar power plant in 2012. In the year of 2013, we have set up India’s first biggest captive 1.1 MWp solar power
plant in Raipur, which was inaugurated by Mr. Farooq Abdullah, Hon’ble Union Minister for New and
Renewable Energy and Mr. Raman Singh, Hon’ble Chief minister of Chhattisgarh.
Novus Green is a System Integrator of Solar PV Water Pumping System. We have ISO and IEC certifications
and Valid Test Report as per MNRE specifications and empanelled under NABARD programme for
implementing solar water pumping systems. Novus Green has got certifications of ISO 9001:2015 and ISO
14001:2015 for EPC for Solar Power Plants and Solar Water Pumping Systems
Summary of Industry of the company
We are the part of the Renewable Energy Industry of India. Recently Government of India (GOI) has taken some
key initiatives. Under the Off-Grid and Decentralized Solar PV Programme for 2017-18, Ministry is providing
Central Financial Assistance (CFA) to implementing agencies for deployment of SPV home lighting systems,
Solar street lights, Solar pumps, power packs and other solar applications to meet out the electricity and lighting
needs of the individual in the rural areas. State Nodal Agencies (SNAs) are the primary implementing agency
through which CFA of 30% was being provided. NABARD was one of the implementing agencies for pumps
and lighting systems through which CFA of 40% of the benchmark cost was being provided.
More than 96,000 pumps have been sanctioned during 2017-18 under Off-grid solar pumps. During the year, the
solar systems having total capacity of 104.41 MWp which includes solar study lamps, solar home lights, solar
street lights, solar pumps, Mini/micro grids and power plants installed at various states.
(B) Names of the promoters
Promoters of the company are –
1 Mr. Anshuman Yenigalla
2 Mr. Venkata Ravindra Yenigalla
(C) Size of the issue
Issue Size Up to 26,00,000 Equity Share of [•] each
18
1. The issue has been authorized by the Board of Directors of our Company pursuant to a resolution passed
at its meeting held on December 14, 2018.
2. Our shareholders have authorized the Issue by a special resolution adopted under Section 62(1)(c) of the
Companies Act 2013, passed at the extraordinary general meeting of our Company held on December 14,
2018.
(D) Objects of the issue
The Net Proceeds are proposed to be used in accordance with the details provided in the following table:
1 Gross Proceeds [●]
2 (Less) Issue related expenses to be borne by the Company@ [●]
3 Net Proceeds@ [●] @To be finalised upon determination of the Issue Price.
(E) Aggregate pre-issue shareholding of the promoter and promoter group, as a percentage of the paid-up
share capital of the issuer;
Category Pre-Issue
No of Shares held % of Share holding
Promoter (A) 55,62,020 79.14%
Promoter Group (B) 10,03,830 14.28%
Total (A) + (B) 65,65,850 93.42%
(F) Following details as per the Restated Standalone Financial Statements for past 3 years and stub period in
tabular format:
(₹ in Lakhs)
Particular
As at
September
30, 2018
March 31,
2018 2017 2016
a Share capital 281.13 281.13 130.05 130.05
b Net Worth 1,929.70 1,573.83 776.84 611.03
c Revenue (Total Income) 5,654.91 10,625.85 6,329.65 4,137.62
d Profit after tax 355.86 729.69 165.81 97.89
e Earnings per share
Basic & Diluted (Pre Bonus) 12.66 28.05 6.38 4.45
Basic & Diluted (Post Bonus) 5.06 10.70 2.43 1.52
f Net Asset Value per equity share 68.64 55.98 59.74 46.99
g Total borrowings 1,967.93 1,646.99 660.17 660.70
(G) Qualifications of the Auditors
The Restated Financial Statements do not contain any qualification requiring adjustments by the Auditors.
(H) Summary table of outstanding litigations and a cross-reference to the section titled ‘Outstanding
Litigations and Material Developments’.
Sr. No.
Nature of Case
No. of Outstanding cases
Amount in dispute/demanded to the
extent quantifiable (₹ in Lakhs )
I Litigations filed against our Company
Civil 1 11.78
II Litigations filed by our Company
Civil 1 N.A
For further details of the outstanding litigation proceedings, see “Outstanding Litigation and Material
Developments” beginning on page 22 of this Draft Red Herring Prospectus.
19
(I) Risk Factors
Please see “Risk Factors” beginning on page 22 of this Draft Red Herring Prospectus.
(J) Summary table of contingent liabilities and a cross-reference to contingent liabilities of the issuer as
disclosed in Restated Standalone Financial Statements.
As of September 30, 2018, our capital and other commitments (contingent liabilities) not provided for in our
Restated Standalone Financial Statements are as follows-
(₹ in Lakhs)
Particulars
As at
September
30, 2018
For the year ended March 31,
2018 2017 2016
Bank Guarantee 1,944.60 2,266.22 1,193.46 1,163.65
Letter of credit 238.06 249.98 214.45 -
Against pending litigations 11.78 11.78 11.78 11.78
Demand under APVAT Act for which appeal is pending
with Appellate Deputy commissioner, Tirupathi
- - 27.95 -
Claims against the company not acknowledged as debt in
respect of commercial tax
32.33 32.33 19.15 -
Total 2,226.77 2,560.31 1,466.79 1,175.43
For details, see “Financial Statements” on page 177 of this Draft Red Herring Prospectus.
(K) Summary of related party transactions.
As of September 30, 2018, our related party transactions in our Restated Standalone Financial Statements are as
follows-
1. Managerial Remuneration
(₹ in Lakhs)
Particulars
As at
September
30, 2018
As at March 31,
2018 2017 2016
Whole time Directors Remuneration
Salaries & allowances 114.00 144.00 96.00 78.00
Other fees - - -
Sitting fees - - -
Non-Whole Time Directors Remuneration
Sitting fees - - -
Total 114.00 144.00 96.00 78.00
2. Directors/KMP's
For six months ended For the year ended March 31,
September 30, 2018 2018 2017 2016
Anshuman Yenigalla Anshuman Yenigalla Anshuman Yenigalla Anshuman Yenigalla
Venkata Yenigalla Ravindra Venkata Yenigalla
Ravindra
Venkata Yenigalla
Ravindra
Venkata Yenigalla
Ravindra
- Ramchand Kolli Ramchand Kolli Ramchand Kolli
Pariplavi Mokkapati - - -
Sannapaneni Sudheer - - -
20
3. Relatives of Directors / KMP's
Relatives of Directors Description of Relationship
Purna Chandra Rao Yenigalla Father of Venkata Ravindra Yenigalla
Yenigalla Jhancy Mother of Venkata Ravindra Yenigalla
Rajya Lakshmi Spouse of Venkata Ravindra Yenigalla
Pallavi Yenigalla Daughter of Venkata Ravindra Yenigalla
Satvika Yenigalla Daughter of Venkata Ravindra Yenigalla
Lakshmi Yarram Sister of Venkata Ravindra Yenigalla
Sarat Yenigalla Father of Anshuman Yenigalla
Vardhaman Yenigalla Brother of Anshuman Yenigalla
Chidambara Rao Father of Pariplavi Mokkapati
Bharathi Devi Mother of Pariplavi Mokkapati
Ravi Mokkapati Brother of Pariplavi Mokkapati
4. Enterprises over which Directors or relatives of directors having Significant Influence (EDS)
For six months ended For the year ended March 31,
September 30, 2018 2018 2017 2016
- Attis Green Energy
Solutions Private
Limited
Allatus Techno Legal
Solutions Private
Limited
Allatus Techno Legal
Solutions Private Limited
- Fortis Infra Projects
Private Limited
Fortis Infra Projects
Private Limited
Fortis Infra Projects
Private Limited
- Novus Green Power
Private Limited
Novus Green Power
Private Limited
Novus Green Power
Private Limited
- Zentech Enable
Private Limited
Zentech Enable Private
Limited
Zentech Enable Private
Limited
Attis Green Energy
Solutions Private
Limited
Attis Green Energy
Solutions Private
Limited
Attis Green Energy
Solutions Private
Limited
Attis Green Energy
Solutions Private Limited
5. Transactions with Related Parties:
Directors/KMP's:
(₹ in Lakhs)
Nature of Transaction/ Name of
the Related Party
As at
September
30, 2018
For the year ended March 31,
2018 2017 2016
Expenses
Remuneration 114.00 144.00 96.00 78.00
Loans from Directors/KMP's
Opening balance 14.82 187.85 59.70 166.03
Additions/(Repayment) 5.83 (173.03) 128.15 (106.33)
Outstanding 20.65 14.82 187.85 59.70
Relatives of Directors/KMP's:
Nature of Transaction/ Name of the Related
Party
As at
September
30, 2018
For the year ended March 31,
2018 2017 2016
Loans taken from Relatives of Directors/
KMP's
Opening balance 81.46 18.47 68.23 123.88
Additions/(Repayment) (81.46) 62.99 (49.76) (55.65)
Outstanding - 81.46 18.47 68.23
21
For details of the related party transactions and as reported in the Restated Financial Statements, see
“Financial Information” beginning on page 177 of this Draft Red Herring Prospectus
(L) Financing arrangements
There have been no financing arrangements whereby our Promoters, members of the Promoter Group, our
Directors and their relatives have financed the purchase by any other person of securities of our Company during
a period of six months immediately preceding the date of this Draft Red Herring Prospectus.
(M) Weighted average price at which specified security was acquired by each of the promoters in the last one
year.
During the period of 12 months preceding the date of this DRHP, 44,14212 Equity Shares of Rs 10 each was
allotted to promoters as bonus issue and 70,808 equity shares of Rs 10 each was allotted to promoter as right
issue at a price of Rs 32 each. The weighted average price of the Equity Shares is ₹ 12.80.
(N) Average cost of acquisition of shares for promoters.
Name of Promoters
Number of Equity Shares held on the
date of this Draft Red Herring
Prospectus
Average Price per
Equity Share (in ₹)
Anshuman Yenigalla 45,27,020 4.50
Venkata Ravindra Yenigalla 10,35,000 2.00
(O) Details of pre-Issue Placement
Our Company does not contemplate any issuance or placement of Equity Shares from the date of this Draft
Red Herring Prospectus till the listing of the Equity Shares.
(P) Issue of Equity Shares for consideration other than cash in the last one year
Except Bonus Issue, Our Company has not issued any Equity Shares for consideration other than cash in the
one year preceding the date of this Draft Red Herring Prospectus.
(Q) Split / Consolidation of Equity Shares in the last one year
Our Company has not undertaken a split or consolidation of the Equity Shares in the one year preceding the
date of this Draft Red Herring Prospectus.
22
SECTION II – RISK FACTORS
RISK FACTORS
Investment in our Equity Shares involves a high degree of risk and Bidders should not invest any funds in the issue
unless Bidders can afford to take the risk of losing all or a part of your investment. The risks and uncertainties
described below together with the other information contained in this Draft Red Herring Prospectus should be
carefully considered before making an investment decision in our Equity Shares. The risks described below are not
the only ones relevant to the country or the industry in which we operate or our Company or our Equity Shares.
Additional risks and uncertainties, not presently known to us or that we currently deem immaterial may arise and may
become material in the future and may also impair our business operations and financial condition. Further, some
events may have a material impact from a qualitative perspective rather than a quantitative perspective and may be
material collectively rather than individually. To have a complete understanding of our Company, you should read
this section in conjunction with the sections entitled “Our Business” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” on pages 115 and 234 respectively, as well as the other financial
and statistical information contained in this Draft Red Herring Prospectus. If any of the risks described below, or
other risks that are not currently known or are now deemed immaterial, actually occur, our business, prospects,
financial condition and results of operations could suffer materially, the trading price of our Equity Shares could
decline, and you may lose all or part of your investment.
Prior to making an investment decision, Bidders should carefully consider all of the information contained in this
Draft Red Herring Prospectus (including “Financial Statement” on page 177 and must rely on their own examination
of our Company and the terms of the issue including the merits and the risks involved. You should also consult your
tax, financial and legal advisors about the consequences particular to you arising out to you of an investment in this
issue. Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial
or other implication of any of the risks mentioned herein. We have described the risks and uncertainties that our
management believe are material but the risks set out in this Draft Red Herring Prospectus may not be exhaustive
and additional risks and uncertainties not presently known to us, or which we currently deem to be immaterial, may
arise or may become material in the future. In making an investment decision, Bidders must rely on their own
examination of us and the terms of the issue including the merits and the risks involved. This Draft Red Herring
Prospectus also contains forward-looking statements that involve risk and uncertainties. Our actual results could
differ materially from those anticipated in these forward looking statements as a result of certain factors, including
the considerations described below in the section entitled “Forward-Looking Statements” on page 16 and elsewhere
in the Draft Red Herring Prospectus. Unless otherwise stated, the financial information used in this section is derived
from our Restated Financial Statements
1. Based on our Order Book as on November 30, 2018, our business comprising solar plants project and
solar plants are awarded by various Government or Government-funded agencies. Any adverse change in
government policies or focus, or delay in payment may lead to our contracts being foreclosed, terminated,
restructured or renegotiated.
Our business is significantly dependent on procuring contracts awarded by Government agencies. We are
engaged in EPC contracts of setting-up of Solar Photovoltaic Water pumps, which include supplying,
installing, and commissioning of the pump system. Any adverse developments concerning our Government
clients or projects, including as a result of any change in the policies adopted by the Government regarding
award of its projects or our existing relationship with the Government may adversely affect our business.
Any adverse change in Government policies that results in a reduction in capital investment/subsidy in the
solar sector may affect our business adversely. If there is any change in the Government or in budgetary
allocations for industry development or a downturn in available work in the EPC projects resulting from any
change in Governmental policies, practices or priorities that results in slowdown or complete stoppage of
solar EPC projects, our business, financial performance, results of operations and prospects may be adversely
23
affected. This business is highly dependent upon subsidy by Government and is entirely dependent upon
budgetary allocation under the scheme, which is not under our control.
2. We must deposit a bank guarantee towards Security cum performance Guarantee fees.
In our business, we are required to deposit a bank guarantee towards Security cum performance Guarantee
fees. A certain portion of the deposit shall be released after the completion of five years as per Comprehensive
Maintenance Contract (CMC). If we are unable to provide the services as per the requisite terms and
conditions, the said deposit may be forfeited. In case of non-adherence of quality, we can be penalized
suitably by the authority, besides, other measures of suspension, de-registration and blacklisting will be
invoked. We are not the manufacturers of the components used (PV module panel, water pump, ----, etc.)
We procure it from the vendors but we would be responsible for any fault/defect in the material as per the
terms of the contract. Though, we ask for back to back guarantee/warranty from the suppliers, still we are
not sure whether the suppliers will fulfil their commitment in the timely manner. Any of the above events
may adversely affect our business, results of operations and financial condition
3. Goods and Service Tax and Other Government Intervention may adversely affect our business.
GST has been implemented on July 1, 2017. The implementation of GST has led to increases in tax rates on
components used in solar power projects. As a result of such increases, our costs have also increased. As we
have a broad presence in India, the effects of such increase on our projects might vary from state to state.
Due to increase of the tax rate, our cash flows and results of operations have been decreased in the first half
of financial year 2017-18. Further, any future increases or amendments to the GST may affect our overall
tax efficiency and we may be liable to pay additional taxes.
Few of the Government initiatives may also have positive effects simultaneously on the solar power industry,
for instance, governmental boost for “Make in India” is aimed at improving the competitiveness of Indian
domestic manufacturers of solar power cells, panels and modules. However, we cannot guarantee that its
negative impact on the whole solar industry can be offset completely.
4. We face significant competition, including from both traditional and renewable energy companies, and
any failure to respond to market changes in the solar energy industry may adversely affect our business,
financial condition and results of operations.
We face significant competition in the industry in which we operate. Our primary competitors are local and
international developers and operators of Solar pumps and EPC Project. Sometimes, we also compete with
traditional energy companies such as utilities generating power from conventional fossil fuels.
Our competitors may have advantages over us in terms of greater operational, financial or technical
management, or other resources and may be able to achieve better economies of scale and lower cost of
capital. Our market position depends on our financing, development and operation capabilities, reputation
and track record. Any increase in competition during the bidding process or reduction in our competitive
capabilities could have an adverse impact on our market share and on the margins we generate from our solar
power projects.
Our competitors may also ally or form affiliates with other competitors to our detriment. As our competitors
grow in scale, they may establish in-house EPC and O&M capabilities, which could offset any advantage we
currently have over many of them. New competitors that are not currently in the market may emerge as the
solar industry grows and evolves. There can be no assurance that our current or potential competitors will
not win bids for solar power projects or offer services comparable or superior to those that we offer at the
same or lower prices or adapt to market demand more quickly than we do. Increased competition may result
in price reductions, reduced profit margins and loss of market share.
24
As we also compete with utilities generating power from conventional fossil fuels, a reduction in the price of
coal or diesel could make the development of solar energy less economically attractive and we could be at a
competitive disadvantage.
5. There are certain outstanding litigation against our Company.
Our Company is involved in certain legal proceedings at different levels of adjudication before various courts,
tribunals and appellate authorities.
A summary of the proceedings involving our Company is provided below:
Sr. No.
Nature of Case
No. of Outstanding
cases
Amount in dispute/demanded to
the extent quantifiable (₹ in Lakhs
)
I Litigations filed against our Company
Civil 1 11.78
II Litigations filed by our Company
Civil 1 N.A
6. Our industry is highly dependent upon the Government tenders and budgetary support.
Further, our business is highly dependent upon the Government tenders and budgetary support and usually,
most of the tenders are floated after getting budgetary approvals of the respective Government bodies and
most of the work is done in the second half of the financial year. Hence, our activities are not evenly spread
throughout the year and skewed more towards the last quarter of the financial year.
As a result, our revenues and profits may vary during different financial periods, and certain periods are not
indicative of our financial position for the year. Such fluctuations may adversely affect our revenues, cash
flows, results of operations and financial conditions.
7. Implementing our growth strategy requires significant working capital expenditure and will depend to a
significant extent on our ability to obtain the necessary funding on acceptable terms.
We require significant working capital for the installation and implementation of projects/contracted orders.
Due to the requirement of large amount of working capital, we need to arrange finance from Banks, financial
institution etc. In addition, rising of interest rates may adversely affect our ability to secure financing on
favourable terms and our cost of capital could, as a result, may increase significantly.
Our ability to obtain external financing is subject to a number of uncertainties, including:
the general condition of global equity and debt capital markets;
regulatory and government support in the form of tax credit incentives, and other incentives;
the continued confidence of banks and other financial institutions in us and the solar power industry;
economic, political and other conditions in India;
our ability to comply with any financial covenants under our debt financing.
Any additional equity financing by our Company may be dilutive to our shareholders and any debt financing
may contain restrictive covenants that limit our flexibility going forward. Failure to manage discretionary
spending and raise additional capital or debt financing as required may adversely affect our ability to
achieve our intended business objectives.
8. Our Business is dependent on a few customers and the loss of, or a significant reduction of contracts by
such customers could adversely affect our business.
25
Revenues from any particular client may vary significantly from reporting period to reporting period
depending on the nature of ongoing projects and the implementation schedule and stage of completion of
such projects.
Accordingly, our top clients may vary significantly. In Fiscals 2016, 2017 and 2018, our Company’s revenue
from our top ten clients in such periods represented 94.02%, 89.58% and 92.06% of total income,
respectively. Larger contracts from few customers may represent a larger part of our portfolio, increasing the
potential volatility of our results and exposure to individual contract risks. Such concentration of our business
on a few clients may have an adverse effect on our results of operations and result in a significant reduction
in the award of contracts which could also adversely affect our business if we do not achieve our expected
margins or suffer losses on one or more of these large contracts, from such clients.
9. We are dependent on the availability of components/ material from the suppliers for execution of EPC
contracts. Any lack of availability of or upward fluctuations in the price of such material may have a
material adverse effect on our business, cash flows, results of operations and financial condition.
Fluctuation is foreign exchange rate may have an adverse effect on the landed cost for the imported
component required in execution of EPC contracts awarded to us. Price of PV modules and other components
are linked to global market. The exchange rate between the Rupee and the foreign currencies
(USD/Euro/GBP, etc.) has fluctuated substantially in recent years and may continue to fluctuate substantially
in the future, which may have adverse impact on the profitability of our company.
10. Delay in our new project could affect our business.
As part of back-ward integration plans now, our Company is proposing to establish a project to manufacture
solar photo voltaic modules. Total cost of the project is estimated at 28.94 Crore which will be financed partly
by way of term loans and internal accruals. Union Bank of India has sanctioned the Term Loan of 20.15
crore. If we are unable to execute the project on time, our profitability and cash flow may be affected.
However, this delay will not hamper our present operation as our company is already sourcing PV Modules
from other sources and will continue to do so till the start of the production.
11. We are yet to obtain consent from some of our lenders for the Issuer
Our Company has taken vehicle loan and working capital loan from lenders. Our Company sought to obtain
the relevant consent from the respective lenders in advance of the date of this Draft Red Herring Prospectus.
However, as on date of this Draft Red Herring Prospectus, we are yet to receive consent from certain lenders.
Our Company proposes to obtain such consents prior to filing the Red Herring Prospectus with the RoC.
Undertaking the issue, without such consents constitutes a default under the relevant financing documents
and will entitle the respective lenders to declare a default against our Company and enforce remedies under
the terms of the financing documents, that include, among others, acceleration in repayment of the amounts
outstanding under the financing documents, enforcement of any security interest created under the financing
documents, and taking possession of the assets given as security in respect of the financing documents. A
default by our Company under the terms of any financing document may also trigger a cross-default under
some of the other financing documents of our Company, or any other agreements or instruments of our
Company containing a cross-default provision, which may individually or in aggregate, have an adverse
effect on our operations, financial position and credit rating. If the lenders of a material amount of the
outstanding loans declare an event of default simultaneously, our Company may be unable to pay its debts
when they fall due. For further details of our Company’s borrowings, see “Financial Indebtedness” on page
177.
12. The Government of India has levied safeguard duty.
26
The government of India (GOI) has levied safeguard duty of 25 percent on solar cells imports from China
and Malaysia to promote domestic industry as well as curtail dumping by those countries. The Ministry of
Finance (Department of Revenue) levied the duty based on the final recommendations proposed by the
Directorate General of Trade Remedies (DGTR) vide Notification dated 30th day July 2018. The safeguard
duty of 25 percent on solar modules and cells will be in force from July 30, 2018. This duty to some extent
may impact the project cost as the solar cells are one of the main ingredient in the panels and most of the
panel manufacturers dependent on the import of the said cells. And this may affect our business, results of
operations and financial condition. If the rate of safeguard duty will be increased in future, then our business
and operation may be adversely affected.
13. Our company has more than one hundred well trained technicians in our well established operational
areas. In case of our expansion in to new states, unavailability or shortage of such a pool of sub-
contractors or changes in regulations may have an adverse impact on our cash flows and results of
operations.
We have more than one hundred well trained technicians, subcontractors in our well established operational
areas to execute our EPC projects and Solar Pumps. We may not be able to secure the required number of
sub-contractors required for the timely execution of our projects for a variety of reasons including possibility
of disputes with sub-contractors. In addition, as we expand geographically, we will be required to use sub-
contractors, technicians with whom we are not familiar, which may increase the risk of cost and failures to
meet scheduled completion dates. If our sub-contractors do not complete their obligations in a timely and
satisfactory manner, or if we are unable to set off payments made towards statutory requirements against
dues to our sub-contractors and in case of non-availability, our costs could increase and our reputation,
business, cash flows and results of operations could be adversely affected.
14. Our order book may not be representative of our future results.
Our order book may not represent of our future result we may also encounter problems in executing the
projects, presently awarded to us or executing them 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, site clearance, 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 beyond our control or
the control of our clients, we cannot predict with certainty when, or to what extent projects forming part of
our order book will be executed. 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 receive 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, all payments due to us on a project. 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.
15. We are required to obtain certain approvals, licenses, registrations and certifications for operating our
business, and the failure to obtain, maintain or renew them could adversely affect our business, results of
operations and financial condition.
We are required to maintain various approvals, licenses, registrations and certifications for operating our
business. The approvals we require are subject to numerous conditions and we cannot assure you that such
approvals would not be suspended or revoked in the event of non-compliance or alleged non-compliance
with any terms or conditions thereof, or pursuant to any regulatory action. If we fail to comply with the
applicable regulations or if the regulations governing our business are amended, or if there is any adverse
interpretation of applicable regulations by any judicial, regulatory or administrative authority, we may incur
27
increased costs, be subject to penalties, have our approvals and permits revoked or suffer a disruption in our
operations, any of which could adversely affect our business and results of operations. If we fail to obtain or
renew such approvals, licenses, registrations and certifications, in a timely manner or at all, our business,
results of operations and financial condition could be adversely affected. For further details of key regulations
applicable to our business and our operations, see “Key Regulations and Policies in India” beginning on
page 143.
16. We have experienced negative cash flows for few years.
The details of cash flows of our Company are as follows:
(₹ in Lakhs)
Particular
As on
September 30,
2018
For the year ended on March 31,
2018 2017 2016
Net Cash generated from Operating activities -68.29 -513.54 202.77 384.72
Net Cash generated from Investing activities -132.33 -192.96 -23.81 -12.78
Net Cash generated from Financing activities 157.39 852.81 -135.89 79.83
Cash flow of a Company is a key indicator to show the extent of cash generated from operations to meet
capital expenditure, pay dividends, repay loans and to make new investments without raising finance from
external resources. Any operating losses or negative cash flows could adversely affect our results of
operations and financial conditions. If we are not able to generate sufficient cash flows, it may adversely
affect our business and financial operations.
17. Our employee expense is a significant component of our operating costs. An increase in employee expense
could reduce our profitability.
Our operations are highly dependent on skilled and semi-skilled labour. Over the years, our employee
expense has been a significant component of our operating costs. In Fiscals 2018, 2017, 2016 and for stub
period September 2018, our employee expense was ₹ 624.49 lakhs, ₹ 449.98 Lakhs, ₹ 270 Lakhs and ₹
441.35 Lakhs respectively, constituting 5.89%, 7.13% ,6.54% and 7.83%, respectively, of our revenue from
operations for such periods. Due to economic growth in the past and the increase in competition for skilled
and semi-skilled employees in India, wages in India, in recent years, have been increasing. Further, our plans
to expand in order to increase growth will also result in expansion of our work force and may therefore
necessitate increased levels of employee compensation. In addition, we may also need to increase our
compensation levels to remain competitive in attracting and retaining the quality and number of skilled and
semi-skilled employees that our business requires. Finally, our employees’ salaries are linked to minimum
wage laws in India, and any increase in the minimum wage in any state in which we operate could increase
our operating costs. In addition, a shortage in the labour pool or general inflationary pressures will also
increase our labour costs. A significant long-term increase in our employee benefit expense could reduce our
profitability, which could, among other things, affect our growth, business and financial results.
18. We may not be able to accurately estimate the speed and manner in which the evolving solar power market
develops.
The solar power market is at a relatively early stage of development in India and trends in the solar energy
industry are based only on limited data and may not be reliable. Many factors may affect the demand for
solar energy in India, including:
the cost and availability of credit, loans and other forms of financing for solar power projects;
the availability of land
fluctuations in economic and market conditions that affect the viability of conventional and non-
solar renewable energy sources
28
the cost-effectiveness, performance and reliability of solar projects compared to conventional
and other non-solar energy sources
the availability of and changes in government incentives to support the development of the
industry;
public perceptions of the direct and indirect benefits of adopting renewable energy technology;
changes in the power procurement policies implemented by state electricity board, among
others; and
the ability of the GoI to meet its announced solar targets.
If market demand for solar projects fails to develop sufficiently, our business, financial
condition, results of operations and prospects could be adversely affected.
19. Our Promoters have provided personal guarantees for a significant portion of our borrowings and
collaterals to secure certain of our loans.
All our Promoters, have extended personal guarantees in favour of Union Bank of India in relation to the
borrowing facilities availed by our Company. In the event any such guarantees are revoked, our lenders may
require us to furnish alternate guarantees, demand repayment of the amounts outstanding under the respective
facilities or even terminate such facilities. There can be no assurance that our Company will be able to arrange
any alternative guarantees in a timely manner or at all. If our lenders exercise their rights under the relevant
debt financing agreements for want of such additional guarantees, our operations and use of assets may be
significantly hampered, and our ability to avail further borrowings may be curtailed. Further, if we are
required to repay the amounts outstanding under the aforesaid borrowing facilities, our business, results of
operations and profitability may be adversely impacted. For further details, see “Financial Indebtedness”
on pages 248 of this DRHP.
20. Our future success depends significantly on the continued service of our management team and other key
personnel.
We depend on our experienced top level and second level management team, and the loss of one or more key
executives could have a negative impact on our business. The industry experience, expertise and contributions
of our management team, key personnel and our Promoters, Anshuman Yenigalla and Venkata Ravindra
Yenigalla, are essential to our continuing success, and we may not be able to continue to train, attract and
retain high quality personnel, including executive officers, project development personnel, project
management personnel and other key qualified personnel who have the necessary and required experience
and expertise when executing our growth strategy. We may be unable to replace key members of our
management team and key employees in the event we lose their services as there is intense competition for
qualified personnel in the solar power industry. Management team could prove disruptive to our operations,
require substantial resources and management attention and ultimately may prove unsuccessful. We have
other second level management team like Mr. Pramod Reddy and Mr. Praveen Kumar and the loss of any
one of them could have a negative impact on our business.
21. If we are unable to maintain an effective system of internal controls and compliances our business and
reputation could be adversely affected.
While we manage regulatory compliance by monitoring and evaluating our internal controls to ensure that
we are in compliance with all relevant statutory and regulatory requirements, there can be no assurance that
deficiencies in our internal controls and compliances will not arise, or that we will be able to implement, and
continue to maintain, adequate measures to rectify or mitigate any such deficiencies in our internal controls,
in a timely manner or at all. For example, there have been various instances of condonation of delay in relation
to filing of statutory forms and certain compounding including in relation to payment of stamp duty upon
issuance of securities by us from time to time. As we continue to grow, there can be no assurance that there
will be no other instances of such inadvertent non-compliances with statutory requirements, which may
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subject us to regulatory action, including monetary penalties, which may adversely affect our business and
reputation.
22. Restrictions on solar equipment imports may increase our business costs.
A substantial part of our equipment, mainly solar module panels, is imported from China and certain other
countries. Any restrictions, either from the central or state/provincial governments of India or China, or from
any other authorised bilateral or multilateral organisations, on such imports may adversely affect our
business, results of operations and prospects. Further, there is a possibility that, as in certain countries,
additional duties may be imposed in India on the equipment we import. For example, in January 2018, the
United States imposed higher duties, starting at 30.00% and declining to 15.00% over the next four years, on
imported solar module panels and cells. In addition, there has been media speculation that the Indian
government is considering imposing import tariffs (including anti-dumping duties and safeguard duties) on
solar module panels to protect Indian manufacturers.
We cannot assure that there will not be any new action by the relevant authorities imposing anti-dumping or
other import duties or similar tariffs. Any such imposition will result in an increase in our input costs for our
solar business, and, if the consequent increased costs cannot be passed on to off takers, our margins will
correspondingly decrease.
23. If we are not able to implement our growth strategies or manage our growth, our business and financial
condition could be adversely affected.
We have a strategy to grow our portfolio substantially. Such a growth strategy will place significant demands
on our management as well as our financial, accounting and operating systems. We cannot assure you that
we will be able to execute this strategy within the estimated budget, or as anticipated by us. Our failure to
execute our growth strategy may result in our inability to increase or even maintain our prior rates of growth.
As we expand our operations, we may be unable to manage our business efficiently, which could result in
delays, increased costs and affect the quality of our projects, and may adversely affect our reputation. Such
expansion also increases the challenges involved in preserving a uniform culture, our set of values and work
environment across our business operations, developing and improving our internal administrative
infrastructure, particularly our financial, operational, communications, internal control and other internal
systems, recruiting, training and retaining management, technical and marketing personnel, and adhering to
certain health, safety, and environmental standards. Our failure to manage our growth could have an adverse
effect on our business and financial condition.
24. Our business is mainly concentrated in southern Central and northern region of India and any adverse
development in these regions may adversely affect our business, results of operations and financial
condition.
Our business is mainly concentrated in the Southern, Central and northern States of India. We started our
operation in Hyderabad, Telangana State in 2009 and has gradually expanded in other states including
Chhattisgarh, Uttar Pradesh, Haryana, Chandigarh, Rajasthan, Punjab, Madhya Pradesh and Andhra Pradesh.
Since we mainly concentrate in southern and northern region, our business and results of operations are
dependent on the economic growth in these region and budgetary support from respective Governments.
The level of economic activity is influenced by a number of factors, including political and regulatory policy,
funding received from the central and state governments and climatic conditions such as monsoon and
drought. Any slowdown in the Indian economy may adversely affect our business and results of operations.
30
In addition, any significant social, political or economic disruption, or natural calamities or civil disruptions
in this region, or changes in the policies of the state or local governments of this region or the Government
of India, could disrupt our business operations. It may require us to incur significant expenditure and change
our business strategies. The occurrence of, or our inability to effectively respond to any such event, could
have an adverse effect on our business, results of operations and financial condition.
25. Our Company has unsecured loans that may be recalled by the lenders at any time and our Company may
not have adequate funds to make timely payments or at all.
Our Company has availed unsecured loans which may be recalled by their lenders at any time. As of
September 30, 2018, such loans availed by our Company amounted to ₹ 226.66 Lakhs. Such loans may not
be repayable in accordance with any agreed repayment schedule and may be recalled by the relevant lenders
at any time. In the event that any lender seeks a repayment of any such unsecured loan, our Company would
need to find alternative sources of financing, which may not be available on commercially reasonable terms,
or at all. As a result, any such demand may materially and adversely affect our business, cash flows, financial
condition and results of operations.
26. The land and premises for our Corporate Office and Branch Offices are taken on lease by us including.
If we or our business partners are unable to renew existing leases or relocate operations on commercially
reasonable terms, there may be an adverse effect on our business, financial condition, result of operations
and cash flows.
Our Branch Offices and Corporate Offices on which we operate, are not currently owned by us. Upon
expiration of the relevant agreement for each such premise, we will be required to negotiate the terms and
conditions on which the lease agreement may be renewed. Further, some of our lease deeds for our properties
may not be registered and some of our lease deeds may not be adequately stamped and consequently, may
not be accepted as evidence in a court of law and we may be required to pay penalties for inadequate stamp
duty. 1In the event that these existing leases are terminated or they are not renewed on commercially
acceptable terms or at all, we may suffer a disruption in our operations. If alternative premises are not
available at the same or similar costs, size or locations, our business, financial condition and results of
operations may be adversely affected.
27. The Promoter Group of our Company does not include certain individuals and entities in which such
individuals may have any direct or indirect interest as of the date of filing of this Draft Red Herring
Prospectus, as a result of which certain individual persons will be excluded from the Promoter Group and
certain entities will be excluded from the Promoter Group and Group Companies.
The Promoter Group of our Company as disclosed in “Our Promoters and Promoter Group” beginning on
page 171, does not include names of certain of the immediate relatives of our individual Promoters and
entities in which they may have any direct or indirect interest as of the date of this Draft Red Herring
Prospectus. Further, the Group Companies of our Company as disclosed in “Our Group Companies”
beginning on page 260, does not include the names of certain of the disassociated entities. For further details
in respect of such disassociation, see “Our Promoters and Promoter Group – Promoter Group” beginning
on page 171. Our Company is not in a position to obtain necessary information and confirmations as required
from the “Promoter Group” and “Group Companies”, from such immediate relatives and the disassociated
entities for inclusion in this Draft Red Herring Prospectus, in light of the disassociation of our Company from
the immediate relatives.
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28. We have filed in-appropriate Return of allotment in E-form 2 for bonus issue filed with Registrar of
Companies
Our Company has filed e-form 2 with Registrar of Companies, Hyderabad for allotment of shares dated July
13, 2011. Our Company has filed incorrect E-form 2. Though till date we have not been issued any notices
from any Authority including ROC we cannot assure that we will not be subject to any penalties for the said
erroneous filings in the future. Such erroneous filings may in future render us liable to statutory penalties
which may have adverse effect on the reputation and result of operations of our Company.
29. There are certain delays relating to forms filed with the Registrar of Companies in terms of Companies
Act, 1956/2013. Any penalty or action taken by any regulatory authorizes in future for such delays could
impact the financial position of our Company to that extent.
There were certain delays in respect of the forms filed with ROC in terms of Companies Act, 1956/2013.
Any penalty or action taken by regulatory authority in future for delay could impact the financial position of
our Company to that extent.
30. There are certain delays relating to filling of Service Tax Returns. The concerned authorities may take
action and levy penalty in future for such delays.
There are certain delays relating to filling of Service Tax Returns. The concerned authorities may take action
and levy penalty in future for such delays.
31. We have issued Equity Shares at prices that may be lower than the Offer Price in the last 12 months.
We have issued Equity Shares in the last 12 months at a price that may be lower than the Offer Price, as set
out in the table below:
Date of Allotment No of Equity
Share
Issue Price Reason Name of the Allottees
March 20, 2018 13,00,462 N.A Bonus Issue Anshuman Yenigalla
Yenigalla Venkata Ravindra
Mayur Mehta
Ambari Cloud INC
Pariplavi Mokkapati
Yenigalla Jhancy
March 31, 2018 2,10,350 32 Right Issue Pariplavi Mokkapati
Yenigalla Jhancy
Anshuman Yenigalla
November 29, 2018 42,16,911 NA Bonus Issue Anshuman Yenigalla
Yenigalla Venkata Ravindra
Pariplavi Mokkapati
Yenigalla Jhancy
B. Pramod Reddy
K Shrinivasa Chary
Lakshmi Y
Neelimia Devi Bandi
Praveen Penchala
32. One Director and Promoter do not have any documents in relation to past experience and educational
qualification. Reliance has been placed on declarations and affidavits furnished by our Director and
Promoter for details of his past experience and qualifications included in this Draft Red Herring
Prospectus.
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Our Director and Promoter Mr. Venkata Ravindra Yenigalla has been unable to trace copies of certain
documents pertaining to his educational qualifications and past qualifications. Accordingly, reliance has been
placed on declarations, undertakings and affidavits furnished by him to disclose details of his educational
qualifications and past experience in this Draft Red Herring Prospectus and we have not been able to
independently verify these details. We cannot assure you that such disclosure is true and accurate and that it
does not have any inadvertent errors or omissions.
33. We do not own one of our trademark legally as on date of Draft Red Herring Prospectus. We may be
unable to adequately protect our intellectual property. Furthermore, we may be subject to claims alleging
breach of third party intellectual property rights.
We do not own one of our trademark as on the date of Draft Red Herring Prospectus. However, we have
applied for the registration of the same. As such, we do not enjoy the statutory protections accorded to a
registered trademark as on date. There can be no assurance that we will be able to register the trademark and
the logo in future or that, third parties will not infringe our intellectual property, causing damage to our
business prospects, reputation and goodwill. Further, we cannot assure you that any application for
registration of our trademark in future by our Company will be granted by the relevant authorities in a timely
manner or at all. Our efforts to protect our intellectual property may not be adequate and may lead to erosion
of our business value and our operations could be adversely affected. We may need to litigate in order to
determine the validity of such claims and the scope of the proprietary rights of others. Any such litigation
could be time consuming and costly and the outcome cannot be guaranteed. We may not be able to detect
any unauthorized use or take appropriate and timely steps to enforce or protect our intellectual property. For
further details please refer to chapter titled “Government and Other Approvals” beginning on page 255 of
the Draft Red Herring Prospectus.
External Risk Factors
34. Political, economic or other factors that are beyond our control may have an adverse effect on our business
and results of operations.
We are dependent on domestic, regional and global economic and market conditions. Our performance,
growth and market price of our Equity Shares are and will be dependent to a large extent on the health of the
economy in which we operate. There have been periods of slowdown in the economic growth of India.
Demand for our services may be adversely affected by an economic downturn in domestic, regional and
global economies. Economic growth in the countries in which we operate is affected by various factors,
including political instability, terrorism or military conflict, global economic uncertainty and liquidity crisis
and volatility in exchange currency rates. Consequently, any future slowdown in the Indian economy could
harm our business, results of operations, financial condition and cash flows. Further, a change in the
government or a change in the macro-economic policies may adversely affect economic conditions prevalent
in the areas in which we operate in general and our business in particular. High rates of inflation in India may
increase our costs without proportionately increasing our revenues thereby decreasing our operating margins
which may adversely affect our business, financial conditions and results of operations.
In June 2016, a majority of voters in the United Kingdom elected to withdraw from the European Union in a
national referendum. On March 29, 2017, the British Prime Minister delivered a notice to the European
Council pursuant to Article 50 of the Treaty of the European Union to initiate the formal process of
withdrawal from the European Union. The Article 50 notice dated March 29, 2017, started a two-year period
for the United Kingdom to negotiate the terms of its exit from the European Union, although this period can
be extended with the unanimous agreement of the European Council. The United Kingdom and the European
Union are currently engaged in negotiations to structure their post-Brexit relationship, but significant
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uncertainty remains about the future relationship between the United Kingdom and the European Union.
Further, starting from early 2018, U.S. President Donald J. Trump announced the imposition of tariffs on
goods from certain countries, such as China, entering the United States and recently both China and the U.S.
have each imposed additional tariffs. The United States may also in the future impose tariffs on the
importation of other products that may affect the global economy. Although we do not currently export any
such products to the United States, it is not yet clear what impact these tariffs may have or what actions other
governments, including the Chinese government, may take in retaliation. These developments have had and
may continue to have a material adverse effect on global economic conditions and the stability of global and
Indian financial markets and may significantly reduce global and Indian market liquidity and restrict the
ability of key market participants to operate in certain financial markets.
For instance, in the second half of 2018, there has been significant volatility in the Indian stock markets due
to the financial issues surrounding Infrastructure Leasing & Financial Services Limited as well as liquidity
issues amongst financial institutions due to various factors.
35. Various trade restrictions and sanctions may materially and adversely affect our business, financial
condition and results of operations.
We are engaged in the business of solar energy. Our business may be affected by trade restrictions
implemented by countries or territories in which our customers are located. Further, we are subject to risks
relating to changes in trade policies, tariff regulations, or other trade restrictions which can adversely impact
trade volume between countries and within the country. At an international level, there may be trade
restrictions imposed on sanctioned countries by other countries and international organizations, which may
affect our business. In addition, international trade, political issues and conflicts may cause delays and
interruptions to cross-border transportation and result in limitations on our geographical coverage. If we are
unable to perform our services to and from countries with trade restrictions in a timely manner or at all, it
may lead to a decrease in our operating margins which may adversely affect our business, financial conditions
and results of operations.
36. Our ability to raise capital outside India may be constrained by Indian law, which may adversely affect
our financial condition, results of operations and prospects.
Under India's policy on external commercial borrowing (“ECB”), as notified by the RBI and currently in
force (“ECB Policy”), ECB by an eligible borrower under the manufacturing sector is permitted under the
automatic route up to US$ 750 million in a year, with a minimum average maturity of one year for ECB up
to US$ 50 million for companies in the manufacturing sector, three years for ECB up to US$ 50 million and
five years for ECB beyond US$ 50 million, for permissible end-uses. End uses for ECB which are not
permitted include investment in capital market, equity investment in India, working capital, general corporate
purposes, repayment of existing Indian Rupee denominated borrowings, investment in real estate or purchase
of land (except when used for affordable housing as defined in the Harmonised Master List of Infrastructure
Sub-sectors notified by Government of India, construction and development of SEZ and industrial
parks/integrated townships) and on-lending or investment for acquisition of a company or part thereof (other
than an overseas subsidiary or joint venture, subject to existing laws and regulations governing overseas
direct investment by Indian companies). Further, the ECB Policy limits the all-in-cost with a spread over 450
basis points per annum over the London Interbank Offered Rate for six months or applicable benchmark for
the respective currency. ECB not complying with these requirements is permitted with prior approval of the
RBI, in accordance with the ECB Policy. In addition, there are certain routine procedural and disclosure
requirements in relation to any such ECB.
These limitations on ECB may constrain our ability to raise cost effective funding for implementing asset
purchases, refinancing existing indebtedness, or financing acquisitions and other strategic transactions in the
future, which may adversely affect our business, financial condition, results of operations and prospects.
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37. Financial instability in other countries may cause increased volatility in the Indian financial markets. In
the event that the current difficult conditions in the global credit markets continue or if there are any
significant financial disruptions, such conditions may materially and adversely affect our business, future
financial performance and the trading price of the Equity Shares.
The Indian market and the Indian economy are influenced by economic and market conditions in other
countries, particularly emerging market countries in Asia. Financial turmoil in Europe and elsewhere in the
world in recent years has affected the Indian economy. Although economic conditions are different in each
country, investors’ reactions to developments in one country can have adverse effects on the securities of
companies in other countries, including India. Recently, the currencies of a few Asian countries including
India suffered depreciation against the U.S. Dollar owing to amongst other reasons, the announcement by the
U.S. government reducing its quantitative easing measures.
A loss of investor confidence in the financial systems of other emerging markets may cause increased
volatility in Indian financial markets and, indirectly, in the Indian economy in general. Any worldwide
financial instability could also have a negative impact on the Indian economy. Financial disruptions could
occur again and may harm our business, future financial performance and the prices of the Equity Shares.
The global credit and equity markets have experienced substantial dislocations, liquidity disruptions and
market corrections. The dislocation of the sub-prime mortgage loan market in the United States since
September 2008, and the more recent European sovereign debt crisis, has led to increased liquidity and credit
concerns and volatility in the global credit and financial markets. These and other related events have had a
significant adverse effect on the global credit and financial markets as a whole, including reduced liquidity,
greater volatility, widening of credit spreads and a lack of price transparency in the global credit and financial
markets. Recent concerns relating to the U.S. Federal Reserve’s decision to raise interest rates in the United
States have led to increased volatility, particularly in the stock and currency markets in emerging economies.
In response to such developments, legislators and financial regulators in the United States and other
jurisdictions, including India, implemented a number of policy measures designed to add stability to the
financial markets.
However, the overall impact of these and other legislative and regulatory efforts on the global financial
markets is uncertain, and they may not have the intended stabilizing effects, and therefore, if such liquidity
and credit concerns, financial volatility or disruptions occur again, our business, our future financial
performance and the prices of the Equity Shares may be adversely affected. Further, in the event that the
current difficult conditions in the global credit markets continue or if there are any significant financial
disruption, our lenders may implement new credit policies, adopt new pre-qualification criteria or procedures,
raise interest rates or add restrictive covenants in loan agreements, some or all of which may significantly
increase our financing costs. Such conditions may material and adversely affect our business, future financial
performance and the trading price of the Equity Shares.
38. The occurrence of natural or man-made disasters may adversely affect our business, results of operations
and financial condition.
Given the nature of our operations and the mobility required in meeting customer demands, the occurrence
of natural disasters, including hurricanes, floods, tsunamis, earthquakes, tornadoes, fires, explosions,
pandemic disease and manmade disasters, including acts of terrorism and military actions, may adversely
affect our financial condition or results of operations. We are particularly susceptible to accidents, system
failures, adverse geological, ecological or weather conditions, natural disasters, demographic and population
changes and other unforeseen events and circumstances across India. While we are covered by our insurance
policies for such contingencies, any disruptions, damage or destruction of our facilities may temporarily
affect our ability to meet our clients’ demand and the loss of any one of our key clients or a significant
35
reduction in demand from clients located in these locations may adversely affect our business, results of
operations and financial condition.
39. Terrorist attacks, communal disturbances, civil terrorist attacks and other acts of violence or war involving
may adversely affect the financial markets and our business.
Terrorist attacks and other acts of violence or war may negatively affect the markets on which our Equity
Shares trade and also adversely affect the worldwide financial markets. These acts may also result in a loss
of business confidence, and adversely affect our business. Some of the locations we operate in have witnessed
civil unrest including communal disturbances in recent years and it is possible that future civil unrest as well
as other adverse social, economic and political events may have a negative impact on us. Such incidents may
also create a greater perception that investment in Indian companies involves a higher degree of risk and may
have an adverse impact on our business and the price of our Equity Shares. Further, we cannot predict the
effects on our business of heightened security measures, threatened terrorist attacks, efforts to combat
terrorism, military action against a foreign state or other similar events. It is possible that one or more of these
events could be directed at Indian or foreign ports, borders, railroads or highways. Heightened security
measures or other events are likely to slow the movement of freight, within or across Indian States and may
adversely affect our business and results of operations. Any of these events could also negatively affect the
economy and consumer confidence, which could cause a downturn in the transportation industry. In addition,
any deterioration in the relations between India and its neighbouring countries may result in investor concern
about stability in the region, which may materially and adversely affect the price of our Equity Shares.
40. It may not be possible for investors outside India to enforce any judgment obtained outside India against
our Company or our management or any of our associates or affiliates in India, except by way of a suit in
India.
Our Company is incorporated under the laws of India. Our Company’s assets are primarily located in India
and all of our Directors and Key Managerial Personnel are residents of India. As a result, it may not be
possible for investors to effect service of process upon our Company or such persons in jurisdictions outside
India, or to enforce against them judgments obtained in courts outside India. Recognition and enforcement
of foreign judgements are provided for under Section 13 of the Civil Procedure Code (“CPC”) on a statutory
basis. Section 13 of the CPC provides that foreign judgements shall be conclusive regarding any matter
directly adjudicated upon, except (i) where the judgement has not been pronounced by a court of competent
jurisdiction; (ii) the judgement has not been given on the merits of the case; (iii) where it appears on the face
of the proceedings that the judgement is founded on an incorrect view of international law or a refusal to
recognise the law of India in cases to which such law is applicable; (iv) where the proceedings in which the
judgement was obtained were opposed to natural justice; (v) where the judgement has been obtained by fraud;
or (vi) where the judgement sustains a claim founded on a breach of any law then in force in India. Under the
CPC, a court in India shall, upon the production of any document purporting to be a certified copy of a foreign
judgement, presume that the judgement was pronounced by a court of competent jurisdiction, unless the
contrary appears on record. However, under the CPC, such presumption may be displaced by proving that
the court did not have jurisdiction. India has reciprocal recognition and enforcement of judgments in civil
and commercial matters with only a limited number of jurisdictions, including the United Kingdom,
Singapore and Hong Kong. In order to be enforceable, a judgment from a jurisdiction with reciprocity must
meet certain requirements of the Indian Code of Civil Procedure, 1908 (the “Civil Code”). The Civil Code
only permits the enforcement and execution of monetary decrees in the reciprocating jurisdiction, not being
in the nature of any amounts payable in respect of taxes, other charges, fines or penalties. Judgments or
decrees from jurisdictions which do not have reciprocal recognition with India cannot be enforced by
proceedings in execution in India. Therefore, a final judgment for the payment of money rendered by any
court in a non-reciprocating territory for civil liability, whether or not predicated solely upon the general laws
of the non-reciprocating territory, would not be enforceable in India. Even if an investor obtained a judgment
in such a jurisdiction against us, our officers or directors, it may be required to institute a new proceeding in
36
India and obtain a decree from an Indian court. However, the party in whose favor such final judgment is
rendered may bring a fresh suit in a competent court in India based on a final judgment that has been obtained
in a non-reciprocating territory within three years of obtaining such final judgment.
The United States and India do not currently have a treaty providing for reciprocal recognition and
enforcement of judgements, other than arbitration awards, in civil and commercial matters. Therefore, a final
judgement for the payment of money rendered by any federal or state court in the United States on civil
liability, whether or not predicated solely on the federal securities laws of the United States, would not be
enforceable in India. However, the party in whose favour such final judgement is rendered may bring a new
suit in a competent court in India based on a final judgement that has been obtained in the United States. The
suit must be brought in India within three years from the date of the judgement in the same manner as any
other suit filed to enforce a civil liability in India. It is unlikely that a court in India would award damages on
the same basis as a foreign court if an action was brought in India. Furthermore, it is unlikely that an Indian
court would enforce a foreign judgement if that court were of the view that the amount of damages awarded
was excessive or inconsistent with public policy or Indian practice. It is uncertain as to whether an Indian
court would enforce foreign judgements that would contravene or violate Indian law. However, a party
seeking to enforce a foreign judgement in India is required to obtain approval from the RBI under FEMA to
execute such a judgement or to repatriate any amount recovered.
41. If there is any change in tax laws or regulations, or their interpretation, such changes may significantly
affect our financial statements for the current and future years, which may have a material adverse effect
on our financial position, business and results of operations.
Having our business operations in multiple jurisdictions, we are subject to varying central and state tax
regimes. The applicable categories of taxes and tax rates also vary significantly from jurisdiction to
jurisdiction, which may be amended from time to time. The final determination of our tax liabilities involves
the interpretation of local tax laws and related regulations in each country as well as the significant use of
estimates and assumptions regarding the scope of future operations and results achieved and the timing and
nature of income earned and expenditure incurred. Our business and financial performance may be adversely
affected by unfavorable changes in or interpretations of existing, or the promulgation of new laws, rules and
regulations applicable to us and our business or the regulator enforcing them in any one of those countries
may adversely affect our results of operations. For instance, as of July 1, 2017, GST in India replaced taxes
levied by central and state governments with a unified tax regime in respect of the supply of goods and
services for all of India, which we believe will result in fundamental changes to India’s third-party logistics
industry. To the extent that we are entitled to certain tax benefits in India which are available for a limited
period of time, our profitability will be affected if such benefits will no longer be available, or are reduced or
withdrawn prematurely or if we are subject to any dispute with the tax authorities in relation to these benefits
or in the event we are unable to comply with the conditions required to be complied with in order to avail
ourselves of each of these benefits. See “Statement of Special Tax Benefits” beginning on page 85 for details
in relation to possible tax benefits available to our Company. In the event that any adverse development in
the law or the manner of its implementation affects our ability to benefit from these tax incentives, our
business, results of operations, financial condition and prospects may be adversely affected. Changes in the
operating environment, including changes in tax law, could impact the determination of our tax liabilities for
any given tax year. Taxes and other levies imposed by the Government of India that affect our industry
include income tax, goods and services tax and other taxes, duties or surcharges introduced from time to time.
The tax scheme in India is extensive and subject to change from time to time and any adverse changes in any
of the taxes levied by the Government of India may adversely affect our competitive position and
profitability. We cannot assure you that the Government of India may not implement new regulations and
policies which will require us to obtain approvals and licenses from the Government of India and other
regulatory bodies or impose onerous requirements and conditions on our operations. Any such changes and
the related uncertainties with respect to the applicability, interpretation and implementation of any
amendment to, or change to governing laws, regulation or policy in the countries in which we operate may
37
materially and adversely affect our business, results of operations and financial condition. In addition, we
may have to incur expenditure to comply with the requirements of any new regulations, which may also
materially harm our results of operations. We are also subject to these risks in all our overseas operations
depending on each specific country. Any unfavourable changes to the laws and regulations applicable to us
could also subject us to additional liabilities. As a result, any such changes or interpretations may adversely
affect our business, financial condition and financial performance. Further, changes in capital gains tax or
tax on capital market transactions or sale of shares may affect investor returns.
42. Our business and the price of the Equity Shares may be adversely affected by the implementation of GAAR.
The Government of India has also proposed provisions relating to GAAR which came into effect from April
1, 2017.The GAAR provisions intend to catch arrangements declared as “impermissible avoidance
arrangements”, which is any arrangement the main purpose or one of the main purposes of which is to obtain
a tax benefit and which satisfy atleast one of the following tests:
(i) creates rights, or obligations, which are not ordinarily created between persons dealing at arm’s length;
(ii) results in misuse, or abuse, of the provisions of the tax laws;
(iii) lacks commercial substance or is deemed to lack commercial substance, in whole or in part; or
(iv) is entered into, or carried out, by means, or in a manner, which are not ordinarily employed for bona fide
purposes.
The onus to prove that the transaction is not an “impermissible avoidance agreement” is on the assessee, i.e.,
an arrangement shall be presumed, unless it is proved to the contrary by the assessee, to have been entered
into, or carried out, for the main purpose of obtaining a tax benefit, if the main purpose of a step in, or a part
of, the arrangement is to obtain a tax benefit, notwithstanding the fact that the main purpose of the whole
arrangement is not to obtain a tax benefit. If GAAR provisions are invoked, then the tax authorities will have
wide powers, including denial of tax benefit or a benefit under a tax treaty which may have an adverse tax
impact on us.
43. Public companies in India, including our Company, are required to compute income tax under the ICDS.
The transition to ICDS in India is very recent and we may be negatively affected by such transition.
The Ministry of Finance had issued a notification dated March 31, 2015 notifying ICDS which creates a new
framework for the computation of taxable income. However, the Central Board of Direct Taxes (“CBDT”),
Ministry of Finance of India, according to its press release dated July 6, 2016, had deferred the applicability
of the ICDS with fiscal 2017 being the first assessment year. ICDS deviates in several respects from concepts
that are followed under general accounting standards, including Indian GAAP and IND AS. It is often seen
that ICDS based calculations of taxable income can differ from Indian GAAP or IND AS-based concepts and
they can have the effect of requiring taxable income to be recognized earlier, increasing overall levels of
taxation or both. There can be no assurance that the adoption of ICDS will not adversely affect our business,
results of operation and financial conditions.
44. Any further downgrading of our debt ratings or of India’s sovereign debt rating may adversely affect our
business.
Any downgrading of our credit ratings may increase interest rates on our outstanding debt, increase interest
rates for refinancing our outstanding debt, which would increase our financing costs, and materially and
adversely affect our ability to raise new capital on a competitive basis, which may adversely affect our
profitability and future growth. In addition, any adverse revisions to India’s credit ratings for domestic and
international debt by international rating agencies may adversely affect our ability to raise additional
financing and the interest rates and other commercial terms at which such financing is available. This may
38
materially and adversely affect our capital expenditure plans, business and future financial performance and
our ability to fund our growth in future.
45. The ability of Indian companies to raise foreign capital may be constrained by Indian law.
As an Indian company, we are subject to exchange controls that regulate borrowing in foreign currencies,
including those specified under FEMA. Such regulatory restrictions limit our financing sources for our
projects under development and hence could constrain our ability to obtain financing on competitive terms
and refinance existing indebtedness. In addition, we cannot assure you that the required approvals will be
granted to us without onerous conditions, or at all. Limitations on foreign debt may adversely affect our
business growth, results of operations and financial condition.
46. QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in terms of
quantity of Equity Shares or the Bid Amount) at any stage after submitting a Bid.
Pursuant to the SEBI ICDR Regulations, QIBs and Non-Institutional Investors are not permitted to withdraw
or lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after submitting a
Bid. Retail Individual Investors can revise their Bids during the Bid/Issue Period and withdraw their Bids
until Bid/Issue Closing Date. While our Company is required to complete Allotment pursuant to the Issue
within six Working Days from the Bid/Issue Closing Date, events affecting the Bidders’ decision to invest in
the Equity Shares, including material adverse changes in international or national monetary policy, financial,
political or economic conditions, our business, results of operation or financial condition may arise between
the date of submission of the Bid and Allotment. Our Company may complete the Allotment of the Equity
Shares even if such events occur, and such events limit the Bidders’ ability to sell the Equity Shares Allotted
pursuant to the Issue or cause the trading price of the Equity Shares to decline on listing.
47. Inflation in India could have an adverse effect on our profitability and if significant, on our financial
condition.
In the recent past, India has experienced fluctuating wholesale price inflation as compared to historical levels
due to the global economic downturn. The annual rate of inflation was at 5.77% (provisional) for the month
of June 2018 (over June 2017) as compared to 4.43% (provisional) for the previous month and 0.90% during
the corresponding month of 2017. (Source: Index Numbers of Wholesale Price in India, Review for the month
of June 2018, published on July 16, 2018 by Government of India, Ministry of Commerce and Industry).
Continued high rates of inflation may increase our expenses related to salaries or wages payable to our
employees, prices of raw materials or any other expenses that we incur. We cannot assure you that we will
be able to pass on any additional expenses to our patients or that our revenue will increase proportionately
corresponding to such inflation. Accordingly, high rates of inflation in India could have an adverse effect on
our profitability and, if significant, on our financial condition.
48. Fluctuation in the exchange rate between the Indian Rupee and foreign currencies
Fluctuation is foreign exchange rate may have an adverse effect on the landed cost for the imported
component required in execution of EPC contracts awarded to us. Price of PV modules and other components
are linked to global market. The exchange rate between the Rupee and the foreign currencies
(USD/Euro/GBP, etc.) has fluctuated substantially in recent years and may continue to fluctuate substantially
in the future, which may have adverse impact on the profitability of our company.
Risks Relating to the Equity Shares and the Issue
49. The Equity Shares have never been publicly traded, and, after the Issue, the Equity Shares may
experience ice and volume fluctuations, and an active trading market for the Equity Shares may not
39
develop. Further, the price of the Equity Shares may be volatile, and you may be unable to resell the Equity
Shares at or above the Issue Price, or at all.
Prior to the Issue, there has been no public market for the Equity Shares, and an active trading market on the
Stock Exchanges may not develop or be sustained after the Issue. The Issue Price of the Equity Shares is
proposed to be determined through a book-building process and may not be indicative of the market price of
the Equity Shares at the time of commencement of trading of the Equity Shares or at any time thereafter.
Further, the trading prices of publicly traded securities may be highly volatile. The market price of the Equity
Shares may be subject to significant fluctuations in response to, among other factors:
a) Volatility in the Indian and global securities markets;
b) Increases and decreases in our customer base or announcements of new services, strategic alliances or
agreements by us or by our competitors;
c) speculation in the press or investment community about, or actual changes in, our business, strategic
position, market share, organizational structure, operations, financial condition, financial reporting and
results, prospects, or executive team;
d) changes in estimates of our performance by financial or securities analysts that elect to research and
report on the Equity Shares or guidance provided by us, and variations between actual and estimated
financial results;
e) New laws and government regulations applicable to the industry we operate in;
f) Additions or departures of key management personnel;
g) Announcements by third parties of significant claims or proceedings against us
h) significant developments in India's economic liberalization and deregulation policies or significant
developments in India’s fiscal regulations or adoption or modification of regulations, policies, procedures
or programs applicable to our businesses; or
i) Adverse media reports on us or the sector we operate in.
General or industry-specific market conditions or stock market performance or domestic or international
macroeconomic and geopolitical factors unrelated to our performance may also affect the price of our Equity
Shares. If the stock markets experience a loss of investor confidence, the trading price of our Equity Shares
may decline for reasons unrelated to our business, financial condition or operating results. Each of these
factors, among others, may adversely affect the trading price of our Equity Shares.
50. 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. Under the Companies Act, prior to issuance of any new equity shares, a public limited company
incorporated under Indian law must offer its equity shareholders pre-emptive rights to subscribe to a
proportionate number of equity shares to maintain existing ownership, unless such pre-emptive rights are
waived by a special resolution by a three-fourths majority of the equity shareholders voting on such
resolution. However, if you are a foreign investor and the law of the foreign jurisdiction that you are in does
not permit the exercise of such pre-emptive rights without our filing an offering document or registration
statement with the applicable authority in such foreign jurisdiction, you will be unable to exercise such pre-
emptive rights, unless we make such a filing. If we elect not to file an offering document or a registration
statement, the new securities may be issued to a custodian, who may sell the securities for your benefit. The
value the custodian receives on the sale of such securities and the related transaction costs cannot be
predicted. In addition, to the extent that the investors are unable to exercise pre-emptive rights granted in
respect of the Equity Shares held by them, their proportional interest in our Company may be reduced.
51. Investors may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.
40
Under current Indian tax laws and regulations, capital gains arising from the sale of shares in an Indian
company are generally taxable in India. However, any gain realized on the sale of listed equity shares on or
before March 31, 2018 on a stock exchange held for more than 12 months will not be subject to long term
capital gains tax in India if Securities Transaction Tax (“STT”) is paid on the sale transaction and
additionally, as stipulated by the Finance Act, 2017, STT had been paid at the time of acquisition of such
equity shares on or after October 1, 2004, except in the case of such acquisitions of equity shares which are
not subject to STT, as notified by the Central Government under notification no. 43/2017/F. No.
370142/09/2017-TPL on June 5, 2017. However, the Finance Act, 2018, has now levied taxes on such long
term capital gains exceeding ₹100,000 arising from sale of Equity Shares on or after April 1, 2018, while
continuing to exempt the unrealized capital gains earned up to January 31, 2018 on such Equity Shares.
Accordingly, you may be subject to payment of long term capital gains tax in India, in addition to payment
of STT, on the sale of any Equity Shares held for more than 12 months. STT will be levied on and collected
by a domestic stock exchange on which the Equity Shares are sold.
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.
52. Foreign investors are subject to foreign investment restrictions under Indian law that limit our ability to
attract foreign investors, which may adversely affect the trading price of the Equity Shares.
Foreign ownership of Indian securities is subject to Government regulation. In accordance with foreign
exchange regulations currently in effect in India, under certain circumstances the RBI must approve the sale
of the Equity Shares from a non-resident of India to a resident of India or vice-versa if the sale does not meet
certain requirements specified by the RBI. Additionally, any person who seeks to convert the Rupee proceeds
from any such sale into foreign currency and repatriate that foreign currency from India is required to obtain
a no-objection or a tax clearance certificate from the Indian income tax authorities. As provided in the foreign
exchange controls currently in effect in India, the RBI has provided that the price at which the Equity Shares
are transferred be calculated in accordance with internationally accepted pricing methodology for the
valuation of shares at an arm’s length basis, and a higher (or lower, as applicable) price per share may not be
permitted. We cannot assure investors that any required approval from the RBI or any other government
agency can be obtained on terms favorable to a non-resident investor in a timely manner or at all. Because of
possible delays in obtaining requisite approvals, investors in the Equity Shares may be prevented from
realizing gains during periods of price increase or limiting losses during periods of price decline.
53. Any future issuance of Equity Shares may dilute your shareholding and sales of our Equity Shares by our
Promoter or other major shareholders may 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, including through exercise of employee stock options may dilute your shareholding in our Company, may
lead to the dilution of investors’ shareholdings in our Company. Any future equity issuances by us or sales
of our Equity Shares by our Promoters or other significant shareholders may adversely affect the trading price
of the Equity Shares, which may lead to other adverse consequences for us including difficulty in raising debt
or equity financing. In addition, any perception by investors that such issuances or sales might occur may
also affect the trading price of our Equity Shares. We cannot assure you that we will not offer Equity Shares
or that our shareholders will not dispose of, pledge or encumber their Equity Shares in the future.
41
54. We may not receive final listing and trading approvals from the Stock Exchange and you will not be able
to sell immediately on an Indian Stock Exchange any of the Equity Shares you are allotted in the Issue.
Under the SEBI ICDR Regulations, we are permitted to list the Equity Shares within six working days of the
Bid/Issue Closing Date. Consequently, the Equity Shares you purchase in the Issue may not be credited to
your dematerialized electronic account with Depository Participants until approximately six working days
after the Bid/Issue Closing Date. You can start trading in the Equity Shares only after they have been credited
to your dematerialized electronic account and final listing and trading approvals are received from the Stock
Exchanges. In accordance with Indian law and practice, final listing and trading approval of our Equity Shares
will not be applied for, or granted until after those Equity Shares have been offered and allotted. Approval
will require all other relevant documents authorizing the issuing of Equity Shares to be submitted. There
could be a failure or delay in listing our Equity Shares on the stock Exchange. There can be no assurance that
final listing and trading approvals will be obtained from the Stock Exchange on time or at all. Any failure or
delay in obtaining the approval would restrict your ability to dispose of the Equity Shares.
Further, there can be no assurance that the Equity Shares allocated to you will be credited to your
dematerialized electronic account, or that trading in the Equity Shares will commence within the specified
time periods. In addition, pursuant to India regulations, certain actions are required to be completed before
the Equity Shares can be listed and trading may commence. Investors’ book entry or dematerialized electronic
accounts with Depository Participants in India are expected to be credited only after the date on which the
Issue and allotment is approved by our Board of Directors. There can be no assurance that the Equity Shares
allocated to prospective Investors will be credited to their dematerialized electronic accounts, or that trading
will commence on time after allotment has been approved by our Board of Directors, or at all.
55. Our Equity Shares are quoted in Indian Rupees in India, and therefore investors may be subject to
potential losses arising out of exchange rate risk on the Indian Rupee and risks associated with the
conversion of Indian Rupee proceeds into foreign currency.
On listing, our Equity Shares will be quoted in Indian Rupees on the Stock Exchange. Any dividends in
respect of our 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 our
Equity Shares and returns on our Equity Shares, independent of our operating results.
56. We have not paid any dividends in the last three fiscal years and the three months ended September 30,
2018 and have not adopted a policy in relation to payment of dividends. Our ability to pay dividends in the
future will depend on a number of factors, including, our profit after tax for the fiscal year, our future
expansion plans and capital requirements, our financial condition and our cash flows and applicable
taxes.
We have not paid any dividends in the last three fiscal years and the three months ended September 30, 2018
and have not adopted a policy in relation to the payment of dividends. For details, see “Dividend Policy” on
page 176. Our ability to pay dividends in the future will depend on a number of factors, including our profit
after tax for the fiscal year, our future expansion plans and capital requirements, our financial condition, our
cash flows and applicable taxes, including dividend distribution tax payable by our Company. Any future
determination as to the declaration and payment of dividends will be at the discretion of our Board and
42
subsequent approval of shareholders and will depend on factors that our Board and shareholders deem
relevant. We may decide to retain all of our earnings to finance the development and expansion of our
business and, therefore, may not declare dividends on our Equity Shares. We cannot assure you that we will
be able to pay dividends at any point and in the future.
57. Statistical and industry data in this Draft Red Herring Prospectus may be inaccurate, incomplete or
unreliable.
We have not independently verified data obtained from industry publications and other sources referred to in
this Draft Red Herring Prospectus. This Draft Red Herring Prospectus includes information that is derived
from the website of IBEF and other relevant sources. Neither we, nor any of the BRLMs, nor any other person
connected with the Offer has verified the information in the website of IBEF and other sources. These
information does not guarantee the accuracy, adequacy or completeness of the information and disclaims
responsibility for any errors or omissions in the Information or for the results obtained from the use of the
Information. There are no standard data gathering methodologies in the industry in which we conduct our
business, and methodologies and assumptions vary widely among different industry sources. Further, such
assumptions may change based on various factors. We cannot assure you that information from website of
IBEF are correct or will not change and, accordingly, our position in the market may differ from that
presented in this Draft Red Herring Prospectus. Further, the IBEF Report is not a recommendation to invest
or disinvest in our Company. Prospective investors are advised not to unduly rely on the information of IBEF
or extracts thereof as included in this Draft Red Herring Prospectus, when making their investment decisions.
Prominent Notes
1. This is a Public Issue upto 26,00,000 Equity Shares of ₹ 10 each at a price of ₹ [●] per Equity Share
aggregating ₹ [●] Lakhs.
2. For information on changes in our Company’s registered office please refer to the chapter titled “Our History
and Corporate Matters” beginning on page 152 of the Draft Red Herring Prospectus.
3. Our Net Worth as per Standalone Restated Financial Statement as at September 30,2018, March 31, 2018,
March 31, 2017 and March 31, 2016 was ₹ 1929.69 Lakhs, ₹ 1573.83 Lakhs, ₹ 776.83 Lakhs and ₹ 611.02
Lakhs respectively.
4. The Net Asset Value per Equity Share as at September 30, 2018, March 31, 2018, March 31, 2017 and March
31, 2016 was 68.64, ₹55.98, ₹ 59.74 and ₹ 46.99 respectively.
5. Investors may contact the Book Running Lead Manager for any complaint pertaining to the Issue. All
grievances relating to ASBA may be addressed to the Registrar to the Issue, with a copy to the relevant SCSBs,
giving full details such as name, address of the Applicant, number of Equity Shares for which the applied,
Application Amounts blocked, ASBA Account number and the Designated Branch of the SCSBs where the
ASBA Form has been submitted by the ASBA Applicant.
6. The average cost of acquisition per Equity Share by our Promoter is set forth in the table below:
Name of the Promoters No. of Equity Shares held Average cost of
Acquisition (in )
Mr. Anshuman Yenigalla 45,27,020 4.50
Mr. Venkata Ravindra Yenigalla 10,35,000 2.00
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For further details relating to the allotment of Equity Shares to our Promoter, please refer to the chapter titled
“Capital Structure” beginning on page 62 of the Draft Red Herring Prospectus.
7. There has been no financing arrangement whereby 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
Draft Red Herring Prospectus.
8. The details of transaction by our Company are disclosed under Related Party Transactions in “Financial
Statements” of our Company beginning on page 177 of this Draft Red Herring Prospectus.
44
SECTION III INTRODUCTION
THE ISSUE
The Following Table summarize details of the issue
Issue * Up to 26,00,000 Equity Shares, of ₹ 10 each fully paid-up of our
Company for cash at a price of ₹ [●] per Equity Share aggregating
to ₹ [●] Lakhs.
Of which
Market Maker Reservation Portion: [●] Equity Shares of ₹ 10 each fully paid-up of our Company for
cash at a price of ₹ [●] per Equity Share aggregating to₹ [●] Lakhs.
Net Issue [●] Equity Shares of ₹ 10 each fully paid-up of our Company for
cash at a price of ₹ [●] per Equity Share aggregating to ₹ [●] Lakhs.
Of which
A) QIB Portion Up to [●] Equity Shares available for allocation of ₹ 10 each fully
paid-up of our Company for cash at a price of ₹ [●] per Equity
Share aggregating to ₹ [●] Lakhs.
of which:
(i) Anchor Investor Portion Up to [•] Equity Shares
(ii) Balance available for allocation to
QIBs other than Anchor Investors
(assuming Anchor Investor Portion is
fully subscribed)
[•] Equity Shares
of which:
(a) Available for allocation to Mutual
Funds only (5% of the QIB
Portion excluding Anchor
Investor Portion)
[•] Equity Shares
(b) Balance for all QIBs including
Mutual Funds
[•] Equity Shares
B) Non-Institutional Portion Not less than [●] Equity Shares of ₹ 10 each fully paid-up of our
Company for cash at a price of ₹ [●] per Equity Share aggregating
to ₹ [●] Lakhs will be available for allocation to investors above ₹
2.00 Lakhs.
C) Retail Portion Not less than [●] Equity Shares of ₹ 10 each fully paid-up of our
Company for cash at a price of ₹ [●] per Equity Share aggregating
to ₹ [●] Lakhs will be available for allocation to Investors up to ₹
2.00 Lakhs.
Pre and post Issue Equity Shares
Equity Shares outstanding prior to the
Issue
₹ 702.82 Lakh divided into 70,28,185 Equity Shares of ₹ 10 each
Equity Shares outstanding after the
Issue*
[•] Equity Shares
Utilisation of Net Proceeds See “Objects of the Issue” beginning on page 77 for information
about the use of the proceeds from the Fresh Issue. * To be updated upon finalization of the Issue Price.
Note:
Number of shares may need to be adjusted for lot size upon determination of issue price and finalisation of basis of
allotment.
1. The issue has been authorized by the Board of Directors of our Company pursuant to a resolution passed at
its meeting held on December 14, 2018.
2. Our shareholders have authorized the Issue by a special resolution adopted under Section 62(1)(c) of the
Companies Act 2013, passed at the extraordinary general meeting of our Company held on December 14,
2018.
45
3. The Issue is being made in terms of Chapter IX of the SEBI (ICDR) Regulations 2018. For further details,
please refer to section titled “Financial Information”, please see page no 177 of this Draft Red Herring
Prospectus.
4. Our Company may, in consultation with the BRLMs, allocate up to 60% of the QIB Portion to Anchor
Investors on a discretionary basis. The QIB Portion will accordingly be reduced for the Equity Shares
allocated to Anchor Investors. One-third of the Anchor Investor Portion shall be reserved for domestic
Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor
Investor Allocation Price. In the event of under-subscription in the Anchor Investor Portion, the remaining
Equity Shares shall be added to the QIB Portion. 5% of the QIB Portion (excluding Anchor Investor Portion)
shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the
QIB Portion (excluding Anchor Investor Portion) shall be available for allocation on a proportionate basis
to all QIB Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids being
received at or above the Issue Price. In the event the aggregate demand from Mutual Funds is less than as
specified above, the balance Equity Shares available for Allotment in the Mutual Fund Portion will be added
to the QIB Portion and allocated proportionately to the QIB Bidders (other than Anchor Investors) in
proportion to their Bids. For details, see “Issue Procedure” beginning on page 284 of this Draft Red Herring
Prospectus.
5. Subject to valid Bids being received at or above the Issue Price, under-subscription, if any, in any category
except 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, the BRLMs and the Designated Stock Exchange. In the event
of under-subscription in the issue, Equity Shares shall be allocated in the manner specified in the section
“Terms of the Issue “beginning on page 275 of this Draft Red Herring Prospectus.
6. In the event of oversubscription, Allotment shall be made on a proportionate basis, subject to valid bids
received at or above the Issue Price, in consultation with NSE and in accordance with SEBI (ICDR)
Regulations. 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 BRLM and the
Designated Stock Exchange.
Allocation to all categories, except the Anchor Investor Portion and the Retail Portion, if any, shall be made on a
proportionate basis, subject to valid Bids received at or above the issue Price. The allocation to each Retail Individual
Bidder shall not be less than the minimum Bid Lot, subject to availability of Equity Shares in Retail Portion, and the
remaining available Equity Shares, if any, shall be Allocated on a proportionate basis. For further details, see “Issue
Procedure” beginning on page 284. For details of the terms of the Issue, see “Terms of the Issue” beginning on page
275 of this Draft Red Herring Prospectus.
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SUMMERY OF FINANCIAL INFORMATION
ANNEXURE I
STATEMENT OF CONSOLIDATED RESTATED ASSETS AND LIABILITIES
( ₹ in Lakhs)
Sr.
No. Particulars Annexure
As at March 31,
2017 2016
EQUITY AND LIABILITIES
1) Shareholders’ Funds
a. Share Capital VII 130.05 130.05
b. Reserves & Surplus VIII 646.79 480.79
2) Non-Current Liabilities
a. Long Term Borrowings IX 256.14 160.37
b. Long Term Provisions X 43.88 26.01
3) Current Liabilities
a. Short Term Borrowings XI 404.03 500.33
b. Trade Payables XII 1,535.17 766.12
d. Other Current Liabilities XIII 50.44 97.25
c. Short Term Provisions XIV 15.84 9.34
TOTAL 3,082.35 2,170.26
ASSETS
1) Non-Current Assets
a. Fixed Assets XV
(i)Tangible Assets 113.93 96.46
(ii)Intangible Assets - -
(iii) Capital work-in-progress
(iv) Intangible Assets Under Development
Net Block 113.93 96.46
b. Non-current Investments XVI 1.00 0.81
c. Deferred Tax Asset XVII 13.01 5.67
d. Long Term Loans & Advances XVIII 174.49 21.61
2) Current Assets
a. Inventories XIX 167.88 175.32
b. Trade Receivables XX 1,689.73 1,221.67
c. Cash and Cash Equivalents XXI 535.78 492.71
d. Short Term Loans & Advances XXII 381.76 151.11
e. Other Current Assets XXIII 4.75 4.90
TOTAL 3,082.35 2,170.26
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ANNEXURE II
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AS RESTATED
(₹ in Lakhs)
Sr.
No. Particulars Annexure
As at March 31,
2017 2016
A INCOME
Revenue from Operations XXIV 6,309.71 4,133.75
Other Income XXV 19.94 3.87
Total Income (A) 6,329.65 4,137.62
B EXPENDITURE
Cost of materials consumed XXVI 4,851.61 2,956.73
Changes in inventories XXVII -49.47 322.81
Employee benefit expenses XXVIII 449.98 270.17
Finance costs XXIX 154.62 114.44
Depreciation and amortization expense XV 24.96 25.13
Other Expenses XXX 646.43 309.84
Total Expenses (B) 6,078.15 3,999.17
C Profit Before Exceptional and Extraordinary items
and tax
251.30 138.50
Exceptional items - -
Profit Before Extraordinary items 251.50 138.44
Extraordinary items - -
Profit Before tax 251.50 138.44
Tax expense :
(i) Current tax 92.84 54.01
(ii) Prior Period Taxes - -
(ii) Deferred tax -7.34 -13.40
E Total Tax Expense (E) 85.50 40.61
F Net Profit / (Loss) after tax from continuing
operations 165.81 97.89
Share of (loss) /profit from Associate 0.19 -0.05
Balance carried to Balance Sheet 166.00 97.84
48
ANNEXURE III
RESTATED STATEMENT OF CONSOLIDATED CASH FLOW ( ₹ in Lakhs)
Particulars As at March 31,
2017 2016
Cash flow from operating activities:
Net Profit before tax as per Profit And Loss account 251.50 138.44
Adjusted for:
Depreciation & Amortization 24.96 25.13
Interest & Financial Charges 154.62 114.44
Provision for Gratuity 6.56 4.37
Provision for Maintenance 15.33 11.28
Interest income 18.63 3.77
Receipt of Prior Period Income - 9.53
Share of Loss/ (Profit) from Associate Company -0.19 0.05
Operating Profit Before Working Capital Changes 434.16 299.48
Adjusted for (Increase)/ Decrease in:
Trade Receivables -468.06 -425.20
Inventories 7.43 509.25
Short Term Loans and Advances -230.65 -34.00
Other Current Assets 0.15 -4.90
Long Term Loans and Advances -152.89 60.28
Adjusted for Increase/ (Decrease) in:
Trade Payables 769.05 -25.77
Other Current Liabilities -66.07 56.39
Cash Generated From Operations 293.13 435.51
Direct Tax Paid -90.36 -50.79
Net Cash Flow from/(used in) Operating Activities: (A) 202.77 384.72
Cash Flow From Investing Activities:
Purchase of Fixed Assets -42.44 -16.55
Interest income 18.63 3.77
Net Cash Flow from/(used in) Investing Activities: (B) -23.81 -12.78
Cash Flow from Financing Activities:
Proceeds from issue of share capital Inc of Premium - 75.23
Increase / (Decrease) in Long Term Borrowing 115.04 -85.51
Increase / (Decrease) in Short Term Borrowing -96.30 204.55
Interest & Financial Charges -154.62 -114.44
Net Cash Flow from/(used in) Financing Activities ( C) -135.89 79.83
Net Increase/(Decrease) in Cash & Cash Equivalents (A+B+C) 43.07 451.76
Cash & Cash Equivalents As At Beginning of the Year 492.71 40.94
Cash & Cash Equivalents As At End of the Year 535.78 492.71
49
ANNEXURE I
STATEMENT OF RESTATED ASSETS AND LIABILITIES (₹ in Lakhs)
Sr.
No. Particulars
Annex
ure
As at
September,
2018
As at March 31,
2018 2017 2016
EQUITY AND LIABILITIES
1) Shareholders’ Funds
a. Share Capital VII 281.13 281.13 130.05 130.05
b. Reserves & Surplus VIII 1,648.57 1,292.70 646.79 480.98
2) Non-Current Liabilities
a. Long Term Borrowings IX 315.06 288.46 256.14 160.37
b. Long Term Provisions X 83.38 73.26 43.88 26.01
3) Current Liabilities
a. Short Term Borrowings XI 1,652.87 1,358.53 404.03 500.33
b. Trade Payables XII 2,958.93 3,749.48 1,535.17 766.12
d. Other Current Liabilities XIII 98.96 108.38 50.44 97.25
c. Short Term Provisions XIV 243.72 189.83 15.84 9.34
T O T A L 7,282.60 7,341.76 3,082.34 2,170.44
ASSETS
1) Non-Current Assets
a. Fixed Assets XV
(i) Tangible Assets 231.63 201.91 113.93 96.46
(ii) Intangible Assets 7.65 4.96 - -
(iii) Capital work-in-progress 76.10 - - -
(iv) Intangible Assets Under Development 0.32 - - -
Net Block 315.69 206.87 113.93 96.46
b. Non-current Investments XVI - 1.00 1.00
c. Deferred Tax Asset XVII 31.85 24.43 13.01 5.67
d. Long Term Loans & Advances XVIII 358.50 360.52 174.49 21.61
2) Current Assets
a. Current investments XIX 99.09 91.50 - -
b. Inventories XX 1,162.88 336.25 167.88 175.32
c. Trade Receivables XXI 3,612.09 5,036.66 1,689.73 1,221.67
d. Cash and Cash Equivalents XXII 638.86 682.09 535.78 492.71
e. Short Term Loans & Advances XXIII 1,007.89 565.17 381.76 151.11
f. Other Current Assets XXIV 55.75 38.27 4.75 4.90
T O T A L 7,282.60 7,341.76 3,082.34 2,170.44
50
ANNEXURE II
STATEMENT OF PROFIT AND LOSS AS RESTATED (₹ in Lakhs)
Sr.
No. Particulars Annexure
As at
September,
2018
As at March 31,
2018 2017 2016
A INCOME
Revenue from Operations XXV 5,636.34 10,596.54 6,309.71 4,133.75
Other Income XXVI 18.56 29.31 19.94 3.87
Total Income (A) 5,654.91 10,625.85 6,329.65 4,137.62
B EXPENDITURE
Cost of materials consumed XXVII 4,346.87 7,741.44 4,851.61 2,956.73
Changes in inventories of Work-In-Progress XXVIII -393.35 -17.56 -49.47 322.81
Employee benefit expenses XXIX 441.35 624.49 449.98 270.17
Finance costs XXX 151.82 207.40 154.62 114.44
Depreciation and amortization expense XV 34.37 38.68 24.96 25.13
Other Expenses XXXI 559.76 1,023.45 646.63 309.84
Total Expenses (B) 5,140.81 9,617.90 6,078.34 3,999.12
C Profit Before Exceptional and
Extraordinary items and tax 514.10 1,007.95 251.30 138.50
Exceptional items - - - -
Profit Before Extraordinary items 514.10 1,007.95 251.30 138.50
Extraordinary items - - - -
Profit Before tax 514.10 1,007.95 251.30 138.50
Tax expense :
(i) Current tax 165.65 285.85 92.84 54.01
(ii) Prior Period Taxes - 3.84 - -
(ii) Deferred tax -7.42 -11.42 -7.34 -13.40
E Total Tax Expense (E) 158.24 278.27 85.50 40.61
F Net Profit / (Loss) after tax 355.86 729.69 165.81 97.89
51
ANNEXURE III
STATEMENT OF CASH FLOW AS RESTATED (₹ in Lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Cash flow from operating activities:
Net Profit before tax as per Profit And Loss account 514.10 1,007.95 251.30 138.50
Adjusted for:
Depreciation & Amortization 34.37 38.68 24.96 25.13
Interest & Financial Charges 151.82 207.40 154.62 114.44
Provision for Gratuity 2.30 11.77 6.56 4.37
Provision for Maintenance 10.04 24.41 15.33 11.28
Interest income 18.27 28.94 18.63 3.77
Receipt of Prior Period Income - - - 9.53
Profit on sale of Assets 0.18 0.22 - -
Provision for Bad Debts 41.37
Operating Profit Before Working Capital Changes 735.54 1,261.05 434.16 299.48
Adjusted for (Increase)/ Decrease in:
Trade Receivables 1,383.20 -3,346.93 -468.06 -425.20
Inventories -826.63 -168.37 7.43 509.25
Short Term Loans and Advances -442.72 -183.41 -230.65 -34.00
Other Current Assets -17.48 -33.51 0.15 -4.90
Long Term Loans and Advances 2.02 -186.03 -152.89 60.28
Adjusted for Increase/ (Decrease) in:
Trade Payables -790.56 2,214.31 769.05 -25.77
Other Current Liabilities 2.32 48.02 -66.07 56.39
Cash Generated From Operations 45.70 -394.88 293.13 435.51
Direct Tax Paid -113.99 -118.66 -90.36 -50.79
Net Cash Flow from/(used in) Operating Activities: (A) -68.29 -513.54 202.77 384.72
Cash Flow From Investing Activities:
Purchase of Fixed Assets -143.66 -132.12 -42.44 -16.55
Purchase of Investments -7.59 -91.50 -
Sale of Fixed Assets 0.65 0.73 - -
Interest income 18.27 28.94 18.63 3.77
Sale of Non-Current Investments - 1.00 - -
Net Cash Flow from/(used in) Investing Activities: (B) -132.33 -192.96 -23.81 -12.78
Cash Flow from Financing Activities:
Proceeds from issue of share capital Inc of Premium - - - 75.23
Increase / (Decrease) in Long Term Borrowing 14.87 105.71 115.04 -85.51
Increase / (Decrease) in Short Term Borrowing 294.34 954.49 -96.30 204.55
Interest & Financial Charges -151.82 -207.40 -154.62 -114.44
Net Cash Flow from/(used in) Financing Activities ( C) 157.39 852.81 -135.89 79.83
Net Increase/(Decrease) in Cash & Cash Equivalents (A+B+C) -43.23 146.31 43.07 451.76
Cash & Cash Equivalents As At Beginning of the Year 682.09 535.78 492.71 40.94
Cash & Cash Equivalents As At End of the Year 638.86 682.09 535.78 492.71
52
GENERAL INFORMATION
Our Company was incorporated as “Novus Green Energy Systems Private Limited” at Secunderabad, Andhra Pradesh
as a Private company limited by Shares under the provisions of the Companies Act, 1956 vide Certificate of
Incorporation dated July 17, 2009 bearing Corporate Identification Number U40300AP2009PTC064410 issued by
Assistant Registrar of Companies, Andhra Pradesh & Telangana. Consequent upon the conversion of our Company
to public limited company and as approved by the shareholders of our company pursuant to a special resolution dated
July 19, 2018, the name of our Company was changed to “Novus Green Energy Systems Limited” and fresh certificate
of incorporation dated August 02, 2018 was issued by the Registrar of Companies, Andhra Pradesh & Telangana. The
Corporate Identification Number of our Company is U40300TG2009PLC064410.
For details of changes in name and registered offices of our Company, please refer to the section titled "History and
Certain Corporate matters" beginning on page 152 of this Draft Red Herring Prospectus.
Our Company and Issue Related Information
Registered Office Novus Green Energy Systems Limited
#100, Siddhi, 1st & 2nd Floor, P&T Colony,
Trimulgherry Secunderabad Telangana-500015
Tel:040-027743245
Fax: +(91)- 040-40045515
Email: [email protected]
Website: www.novusgreen.in
Date of Incorporation July 17, 2009
Registration Number 064410
Corporate Identification Number U40300TG2009PLC064410
Company Category Company Limited by Shares
Company Sub Category Indian Non-Government Company
Address of the Registrar of Companies Registrar of Companies, Andhra Pradesh & Telangana,
2nd Floor, Corporate Bhavan,
GSI Post, Tattiannaram Nagole, Bandlaguda
Hyderabad - 500 068
Designated Stock Exchange NSE EMERGE,
Exchange Plaza, C-1, Block G, Bandra Kurla Complex,
Bandra (E), Mumbai-400051, Maharashtra, India
Issue Programme Issue Opens on: [●]
Issue Closes on: [●]
Company Secretary and Compliance Officer Mr. Sannapaneni Sudheer
Novus Green Energy Systems Limited
#100, Siddhi, 1st & 2nd Floor, P&T Colony,
Trimulgherry Secunderabad Telangana-500015.
Telephone: +(91)- 040-027743245
Fax: +(91)-040-40045515
CIN: U40300TG2009PLC064410
Website: www.novusgreen.in
Email id: [email protected]
Chief Financial Officer Mr. Srikrishna Saibabu Nandiraju
Novus Green Energy Systems Limited
#100, Siddhi, 1st & 2nd Floor, P&T Colony,
Trimulgherry Secunderabad Telangana-500015.
Telephone: +(91)- 040-027743245
Fax: +(91)-040-40045515
CIN: U40300TG2009PLC064410
Website: www.novusgreen.in
Email id: [email protected]
53
Board of Directors
Our Company’s Board comprises of the following Directors:
Name, Nature of Directorship and DIN Age Residential Address
Mr. Anshuman Yenigalla
Managing Director
DIN: 02258999
34 years Plot No: 100, Opp RTO Office, P & T Colony
Trimulgherry, Secunderabad, Hyderabad, Telangana
India: 500015.
Mr. Venkata Ravindra Yenigalla
Whole Time Director
DIN: 02259077
54 years H-No: 5-9-48/94, Raghav Kalyan Estate, J J Nagar,
Post, Secunderabad, Telangana India: 500087
Mrs. Pariplavi Mokkapati
Non- Executive Director
DIN: 08178598
60 years Plot No: 100, Opp RTO Office, P & T Colony
Trimulgherry, Secunderabad, Hyderabad, Telangana
India: 500015.
Mrs. Nagulavari Vanitha
Independent Director
DIN: 7271674
30 years House No. 1-8-104, Opposite A.R.I Gate, Rajendra
Nagar, Hyderabad, Telangana India:500030
Mr. Srinivasa Rao Muttineni
Independent Director
DIN: 00592616
63 years Flat No 201; Block No 8 Hill ridge springs, (Beside
ISB Campus) Gachhibowli, Hyderabad Telangana
India:500 034
For further details of the Board of Directors, please refer to the section titled "Our Management" beginning on page 161
of the Draft Red Herring Prospectus.
Investors may contact our Company Secretary and Compliance Officer and/ or the Registrar to the Issue and/ or
the Book Running Lead Manager, in case of any pre-issue or post-issue related problems, such as non-receipt of
letters of allotment, credit of allotted Equity Shares in the respective beneficiary account or refund orders, etc.
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 Centre where the application was submitted.
All grievances relating to the ASBA process may be addressed to the Registrar to the Issue with a copy to the relevant
SCSB 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 Centers, as the
case maybe , 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 ASBA Account number 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 Exchange with a copy to the Registrar.
54
Details of Key Intermediaries pertaining to this Issue and Our Company:
Book Running Lead Manager to the Issue
Capital Square Advisors Private Limited
208, 2nd Floor, AARPEE Centre, MIDC Road No:11,
Andheri (E), Mumbai – 400093, Maharashtra, India
Tel. No.: 022-66849999
Fax No :022-66849998
Email: [email protected]
Website: www.capitalsquare.com
SEBI Registration No.: INM000012219
Contact Person: Mr. Tanmoy Banerjee/Mr. Saket Jain
Legal Advisor to the Issue
V.V.Vinod Kumar
Plot No. 14, Navanirman Nagar,
Road No. 71, Jubilee Hills
Hyderabad, 500096, Telangana
Telephone: 04023552577
Contact Person: V V Vinod Kumar
Email: [email protected]
Website: N.A.
Contact Person: Mr. V.V.Vinod Kumar
Registrar to the Issue
Big Share Services Private Limited
1st Floor, Bharat Tin Works Building, Opp. Vasant Oasis,
Makwana Road, Marol, Andheri East, Mumbai, Maharashtra
400059
Tel:020-62638200; Fax:022-62638299:
Email: [email protected]:
Investor Grievance E-mail: [email protected]:
Contact Person: Mr. Srinivas Dornala
Website: www.bigshareonline.com
SEBI Registration No: INR000001385
CIN: U99999MH1994PTC076534
Banker to the Company
Union Bank of India [●]
Tel: [●]
Facsimile[●]
Email: [●]
Website: [●]
Contact Person: [●]
Banker to the Company
HDFC Bank Limited
[●]
Tel: [●]
Facsimile[●]
Email: [●]
Website: [●]
Contact Person: [●]
Banker to the Company
State Bank of India
[●]
Tel: [●]
Facsimile[●]
Email: [●]
Website: [●]
Contact Person: [●]
Statutory and Peer Review Auditors to the Company
M/s. NSVR and Associates LLP
(Formerly known as Nekkanti Srinivasu & Co.)
Chartered Accountants
Flat No 202, Nestcon Gayatri, Plot No 28,
Panchavati Cooperative Society,
Road No 10, Banjara hills,
Hyderabad Telangana-500 034, India.
Telephone: +91 40 23319833
E-mail: [email protected]
Website: www.nsvr.in
Contact Person: Mr. V. Gangadhara Rao N
Firm Registration: 008801S/S200060
Membership Number: 219486
Peer Review Certificate No: 009126
Bankers to the Issue/Public Issue Bank/Refund Banker
[●]
^ To be appointed before the issue opening date.
M/s NSVR and Associates LLP is a peer review auditor of our Company in compliance with section 11 of part A of Schedule
VI of SEBI (ICDR)2018 and hold a valid peer review certificate No. 009126 dated June 30,2016 issued by the “Peer Review
Board” of the ICAI.
55
Statement of inter se allocation of Responsibilities for the Issue
Capital Square Advisors Private Limited is the sole Book Running Lead Manager to the Issue and all the
responsibilities relating to co-ordination and other activities in relation to the Issue shall be performed by them and
hence a statement of inter-se allocation of responsibilities is not required.
Self-Certified Syndicate Banks (SCSBs)
The lists of banks that have been notified by SEBI to act as SCSB for the Applications Supported by Blocked Amount
(ASBA) Process are provided on http://www.sebi.gov.in/sebiweb/home/detail/32931/yes/List-of-Self-Certified-
Syndicate-Banks-SCSBsfor- Syndicate-ASBA. For details on Designated Branches of SCSBs collecting the ASBA
Bid Form, please refer to the above-mentioned SEBI link.
Broker Centres/ Designated CDP Locations/ Designated RTA Locations
In accordance with SEBI Circular No. CIR/CFD/14/2012 dated October 4, 2012 and
CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015, Applicants can submit Application Forms with the
Registered Brokers at the Broker Centres, CDPs at the Designated CDP Locations or the RTAs at the Designated RTA
Locations, respective lists of which, including details such as address and telephone number, are available at the
websites of the Stock Exchange at www.nseemerge.com . The list of branches of the SCSBs at the Broker Centres,
named by the respective SCSBs to receive deposits of the Application Forms from the Registered Brokers will be
available on the website of the SEBI (www.sebi.gov.in) and updated from time to time.
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
Since the Issue is being made in terms of Chapter IX of the SEBI (ICDR) Regulations 2018 there is no requirement
of appointing an IPO Grading agency.
Monitoring Agency
As per regulation 262(1) of the SEBI ICDR Regulations 2018, the requirement of Monitoring Agency is not mandatory
if the Issue size excluding the size of offer for sale by selling shareholders, is below ₹ 10,000 Lakhs. Since the Issue
size is only of ₹ [●] Lakh, our Company has not appointed any monitoring agency for this Issue. However, as per
Section 177 of the Companies Act, 2013, the Audit Committee of our Company, would be monitoring the utilization
of the proceeds of the Issue.
Appraising Entity
None of the objects of the issue for which the Net Proceeds will be utilised have been appraised by any agency.
56
Expert Opinion
Except as stated below, our Company has not obtained any expert opinions:
Our Company has received written consent dated December 17, 2018, from the Statutory Auditors namely, M/s.
NSVR and Associates LLP, Chartered Accountants, to include their name as required under Section 26(1)(a)(v) of the
Companies Act, 2013 in this Draft Red Herring 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
December 17, 2018, and the statement of tax benefits dated December 17, 2018, included in this Draft Red Herring
Prospectus and such consent has not been withdrawn as on the date of this Draft Red Herring Prospectus. However,
the term “Expert” shall not be construed to mean an “expert” as defined under the Securities Act.
BOOK BUILDING PROCESS
The book building, in the context of the Offer, refers to the process of collection of Bids on the basis of the Red
Herring Prospectus within the Price Band, which will be decided by our Company and the Selling Shareholder, in
consultation with the BRLM, and advertised in [●] editions of the English national newspaper, [●] editions of the
Hindi national newspaper, and [●] editions of the Marathi newspaper (Marathi being the regional language of Mumbai
where our Registered and Corporate Office is located), each with wide circulation, at least five working days prior to
the Bid / Issue Opening Date. The Issue Price is finalized after the Bid / Issue Closing Date. The principal parties
involved in the Book Building Process are:
Our Company;
the BRLM;
The Syndicate Member(s) who are intermediaries registered with SEBI/ registered as brokers with NSE and
eligible to act as Underwriters. The Syndicate Member will be appointed by the Book Running Book Running
Lead Manager the SCSBs;
the Registered Brokers
the Registrar to the Issue
the Escrow Collection Bank(s);
the Collecting Depository Participants.
The SEBI ICDR Regulations have permitted the Issue of securities to the public through the Book Building Process,
wherein not more than 50% of the Issue shall be available for allocation on a proportionate basis to QIBs, of which
5% shall be reserved for Mutual Funds. Further, not less than 15% of the Issue shall be available for allocation on a
proportionate basis to Non Institutional Bidders and not less than 35% of the Issue shall be available for allocation on
a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price.
Under subscription, if any, in any category, would be allowed to be met with spill-over from any other category or
combination of categories at the discretion of our Company, in consultation with the BRLM and the Designated Stock
Exchange. Our Company will comply with the SEBI ICDR Regulations 2018 for this Issue. In this regard, our
Company has appointed the Book Running Lead Manager to procure subscriptions to the Issue.
In accordance with the SEBI Regulations, QIBs and Non-Institutional Bidders are not allowed to withdraw or lower
the size of their Bids (in terms of the quantity of the Equity Shares or the Bid Amount) at any stage. Retail Individual
Bidders can revise or withdraw their Bids prior to the Bid/issue Closing Date.
We will comply with the SEBI ICDR Regulations 2018 and any other ancillary directions issued by SEBI for this
Issue. In this regard, we have appointed Capital Square Advisors Private Limited as the Book Running Book Running
Lead Manager, respectively to manage the Issue and procure subscriptions to the Issue.
The process of Book Building under the SEBI ICDR Regulations is subject to change from time to time and the
investors are advised to make their own judgment about investment through this process prior to making a Bid
or application in the Issue.
57
Illustration of Book Building and Price Discovery Process: (Investors should note that this example is solely for
illustrative purposes and is not specific to the Issue)
Bidders can bid at any price within the price band. For instance, assume a price band of ₹20 to ₹24 per equity share,
issue size of [●] equity shares and receipt of five bids from bidders, details of which are shown in the table below. A
graphical representation of the consolidated demand and price would be made available at the bidding centers during
the bidding period. The illustrative book below shows the demand for the equity shares of the issuer company at
various prices and is collated from bids received from various investors.
Bid Quantity Bid Amount() Cumulative Quantity Subscription
500 24 500 16.67%
1,000 23 1,500 50.00%
1,500 22 3,000 100.00%
2,000 21 5,000 166.67%
2,500 20 7,500 250.00%
The price discovery is a function of demand at various prices. The highest price at which the issuer is able to issue the
desired number of shares is the price at which the book cuts off, i.e., ₹ 22.00 in the above example. The issuer, in
consultation with the Book Running Book Running Lead Manager will finalize the issue price at or below such cut-
off price, i.e., at or below ₹ 22.00. All bids at or above this issue price and cut-off bids are valid bids and are considered
for allocation in the respective categories.
Steps to be taken by the Bidders for Bidding:
1) Check eligibility for making a Bid (see section titled “Issue Procedure” on page 284 of this Draft Red Herring
Prospectus);
2) Ensure that you have a demat account and the demat account details are correctly mentioned in the Bid cum
Application Form;
3) Ensure correctness of your PAN, DP ID and Client ID mentioned in the Bid cum Application Form. Based on
these parameters, the Registrar to the Issue will obtain the Demographic Details of the Bidders from the
Depositories.
4) Except for Bids on behalf of the Central or State Government officials, residents of Sikkim and the officials
appointed by the courts, who may be exempt from specifying their PAN for transacting in the securities market,
for Bids of all values ensure that you have mentioned your PAN allotted under the Income Tax Act in the Bid
cum Application Form. The exemption for Central or State Governments and officials appointed by the courts
and for investors residing in Sikkim is subject to the Depositary Participant‘s verification of the veracity of
such claims of the investors by collecting sufficient documentary evidence in support of their claims;
5) Ensure that the Bid cum Application Form is duly completed as per instructions given in the Draft Red Herring
Prospectus and in the Bid cum Application Form;
BID / ISSUE PROGRAMME
An indicative timetable in respect of the Issue is set out below:
Event Indicative Date
Bid / Issue Opening Date []
Bid / Issue Closing Date []
Finalization of Basis of Allotment with the Designated Stock Exchange []
Unblocking of Funds []
Credit of Equity Shares to demat accounts of Allottees []
Commencement of trading of the Equity Shares on the Stock Exchange []
58
Bids and any revision in Bids shall be accepted only between 10.00 a.m. and 5.00 p.m. (Indian Standard Time)
during the Bidding Period as mentioned above at the bidding centers mentioned in the Bid cum Application Form or,
in case of Bids submitted through ASBA, the Designated Branches of the SCSBs and the Syndicate ASBA Bidding
Locations, On the Bid/Issue Closing Date, Bids (excluding ASBA Bidders) shall be uploaded until (i) 5.00 p.m.
in case of Bids by QIB Bidders and Non-Institutional Bidders; and (ii) until 5.00 p.m. or until such time as permitted
by the NSE in case of Bids by Retail Individual Bidders. It is clarified that Bids not uploaded in the book, would be
rejected. Bids by ASBA Bidders shall be uploaded by the SCSB in the electronic system to be provided by the NSE.
In case of discrepancy of data between the Stock Exchange and the Designated Branches of the SCSBs, the decision
of the Registrar to the Issue, in consultation with the BRLM, our Company and the Designated Stock Exchange, based
on the physical / electronic records, as the case may be, of the Bid cum Application Forms shall be final and binding
on all concerned. Further, the Registrar to the Issue may ask for rectified data from the SCSB.
Due to limitation of time available for uploading the Bids on the Bid/ Issue Closing Date, the Bidders are advised to
submit their Bids one day prior to the Bid Closing Date and, in any case, no later than 1.00 p.m. (Indian Standard
Time) on the Bid Closing Date. Bidders are cautioned that in the event a large number of Bids are received on the Bid
Closing Date, which may lead to some Bids not being uploaded due to lack of sufficient time to upload, such Bids
that cannot be uploaded will not be considered for allocation in the Issue. If such Bids are not uploaded, our Company,
the BRLM and the Syndicate Members shall not be responsible. Bids will be accepted only on working days, i.e.
Monday to Friday (excluding any public holiday).
On the Bid/ Issue Closing Date, extension of time will be granted by the Stock Exchange only for uploading the Bids
received from Retail Individual Bidders, after taking into account the total number of Bids received up to the closure
of timings for acceptance of Bid cum Application Forms as stated herein and reported by the BRLM to the Stock
Exchange within half an hour of such closure.
Our Company, in consultation with the BRLM, reserves the right to revise the Price Band during the Bidding Period
in accordance with the SEBI ICDR Regulations 2018. The Cap Price shall be less than or equal to 120% of the Floor
Price. Subject to compliance with the immediately preceding sentence, the Floor Price can be revised up or down to a
maximum of 20% of the Floor Price as originally disclosed at least two working days prior to the Bid /Issue Opening
Date and the Cap Price will be revised accordingly.
In case of revision in the Price Band, the Bidding Period will be extended for three additional Working Days
after revision of the Price Band subject to the Bidding Period not exceeding 10 Working Days. Any revision in
the Price Band and the revised Bidding Period, if applicable, will be widely disseminated by notification to the
Stock Exchange, by issuing a press release, and also by indicating the change on the website of the BRLM and
at the terminals of the members of the Syndicate.
Underwriting
Our Company and Book Running Lead Manager to the Issue hereby confirm that the Issue is 100% Underwritten by
the Underwriter [●]. The underwriting agreement is dated [●] pursuant to the terms of the underwriting agreement;
obligations of the underwriter are subject to certain conditions specified therein. The underwriter has indicated their
intention to underwrite following number of specified securities being offered through this Issue.
Name, Address, Telephone, Facsimile, and
Email of the Underwriters
Indicated number of
Equity Shares to be
Underwritten
Amount
Underwritten
% of the total
Offer size
Underwritten
Capital Square Advisors Private Limited [●]
[●]
[●]
59
Name, Address, Telephone, Facsimile, and
Email of the Underwriters
Indicated number of
Equity Shares to be
Underwritten
Amount
Underwritten
% of the total
Offer size
Underwritten
208, 2nd Floor, AARPEE Centre, MIDC Road
No:11, Andheri (E), Mumbai – 400093,
Maharashtra, India
Tel. No.: 022-6684999
Fax No :022-66849998
Email: [email protected]
Website:www.capitalsquare.com
SEBI Registration No: INM000012219
[●]
[●] [●] [●]
[●] [●] [●]
In the opinion of the Board of Directors of our Company, the resources of the above mentioned Underwriter are
sufficient to enable them to discharge their respective obligations in full.
Details of Market Making Arrangement for the Offer
Our Company has entered into Market Making Agreement dated [●] with the following Market Maker to fulfill the
obligations of Market Making for this Issue:
Name [●] [●]
Address [●] [●]
Telephone [●] [●]
E-mail [●] [●]
Contact Person [●] [●]
SEBI Registration No. [●] [●]
The Market Maker shall fulfill the applicable obligations and conditions as specified in the SEBI (ICDR) Regulations
2018 and the circulars offered by the NSE and SEBI regarding this matter from time to time.
Following is a summary of the key details pertaining to the Market Making Arrangement:
The Market Maker(s) (individually or jointly) shall be required to provide a 2-way quote for 75% of the time in a day.
The same shall be monitored by the stock exchange. Further, the Market Maker(s) shall inform the exchange in
advance for each and every black out period when the quotes are not being issued by the Market Maker(s).
The price band shall be 20% and the market maker spread (difference between the sell and the buy quote) shall be
within 10% or as intimated by Exchange from time to time and the same shall be updated in the Draft Red Herring
Prospectus.
The prices quoted by Market Maker shall be in compliance with the Market Maker Spread Requirements and other
particulars as specified or as per the requirements of NSE Emerge Platform and SEBI from time to time.
The minimum depth of the quote shall be ₹1,00,000. However, the investors with holdings of value less than ₹1,00,000
shall be allowed to Issue their holding to the Market Maker(s) (individually or jointly) in that scrip provided that he
sells his entire holding in that scrip in one lot along with a declaration to the effect to the selling broker.
The Market Maker shall not sell in lots less than the minimum contract size allowed for trading on the EMERGE
Platform (in this case currently the minimum trading lot size is [●] equity shares; however, the same may be changed
by the EMERGE Platform of NSE from time to time).
60
The Market Maker shall be required to provide a 2-way quote for 75% of the time in a day. The same shall be
monitored by the Stock Exchange. The spread (difference between the sell and the buy quote) shall not be more than
10% or as specified by the Stock Exchange. Further, the Market Maker (s) shall inform the exchange in advance for
each and every black out period when the quotes are not being offered by the Market Maker (s).
After a period of three (3) months from the market making period, the Market Maker would be exempted to provide
quote if the Shares of Market Maker in our Company reaches to 25% of Issue Size. Any Equity Shares allotted to
Market Maker under this Issue over and above 25% of Issue Size would not be taken in to consideration of computing
the threshold of 25% of Issue Size. As soon as the Shares of Market Maker in our Company reduces to 24% of Issue
Size, the Market Maker will resume providing two (2) way quotes.
There shall be no exemption/threshold on downside. However, in the event the Market Maker exhausts his inventory
through market making process, NSE may intimate the same to SEBI after due verification.
Execution of the order at the quoted price and quantity must be guaranteed by the Market Maker(s), for the quotes
given by him.
There would not be more than five (5) Market Makers for a script at any point of time and the Market Makers may
compete with other Market Makers for better quotes to the investors.
On the first day of the listing, there will be pre the equity market hours. The circuits will apply from the first day of
the listing on the discovered price during the pre-open call auction.
There will be special circumstances under which the Market Maker may be allowed to withdraw temporarily/fully
from the market – for instance due to system problems, any other problems. All controllable reasons require prior
approval from the Exchange, while force-majeure will be applicable for non-controllable reasons. The decision of the
Exchange for deciding controllable and non-controllable reasons would be final.
The Market Maker(s) shall have the right to terminate said arrangement by giving a three (3) months’ notice or on
mutually acceptable terms to the Book Running Lead Manager, who shall then be responsible to appoint a replacement
Market Maker(s). In case of termination of the above mentioned Market Making agreement prior to the completion of
the compulsory Market Making period, it shall be the responsibility of the Book Running Lead Manager to arrange
for another Market Maker in replacement during the term of the notice period being served by the Market Maker but
prior to the date of releasing the existing Market Maker from its duties in order to ensure compliance with the
requirements of regulation 261(1) of the SEBI (ICDR) Regulations 2018. Further our Company and the Book Running
Lead Manager reserve the right to appoint other Market Makers either as a replacement of the current Market Maker
or as an additional Market Maker subject to the total number of Designated Market Makers does not exceed five (5)
or as specified by the relevant laws and regulations applicable at that particulars point of time. The Market Making
Agreement is available for inspection at our registered office from 11.00 a.m. to 5.00 p.m. on Working Days.
Risk containment measures and monitoring for Market Makers:
NSE SME Exchange will have all margins, which are applicable on the NSE main board viz., Mark-to-Market, Value-
At-Risk (VAR) Margin, Extreme Loss Margin, Special Margins and Base Minimum Capital etc. NSE can impose any
other margins as deemed necessary from time-to-time.
Price Band and Spreads:
SEBI Circular bearing reference no: CIR/MRD/DP/ 02/2012 dated January 20, 2012, has laid down that for issue size
up to ₹250 Crores, the applicable price bands for the first day shall be:
In case equilibrium price is discovered in the Call Auction, the price band in the normal trading session shall be 5%
of the equilibrium price.
In case equilibrium price is not discovered in the Call Auction, the price band in the normal trading session shall be
5% of the issue price.
61
Additionally, the trading shall take place in TFT segment for first 10 days from commencement of trading. The
following spread will be applicable on the NSE SME Exchange/ Platform.
Market Price Slab (In ₹) Proposed spread (in % to sale price)
Up to 50 9
50 to 75 8
75 to 100 6
Above 100 5
Punitive Action in case of default by Market Makers:
NSE SME Exchange will monitor the obligations on a real time basis and punitive action will be initiated for any
exceptions and/or non-compliances. Penalties / fines may be imposed by the Exchange on the Market Maker, in case
he is not able to provide the desired liquidity in a particular security as per the specified guidelines. These penalties /
fines will be set by the Exchange from time to time. The Exchange will impose a penalty on the Market Maker in case
he is not present in the market (Issuing two way quotes) for at least 75% of the time. The nature of the penalty will be
monetary as well as suspension in market making activities / trading membership. The Department of Surveillance
and Supervision of the Exchange would decide and publish the penalties / fines / suspension for any type of
misconduct/ manipulation/ other irregularities by the Market Maker from time to time.
Pursuant to SEBI Circular number CIR/MRD/DSA/31/2012 dated November 27, 2012, limits on the upper side for
market makers during market making process has been made applicable, based on the issue size and as follows:
Issue Size
Buy quote exemption threshold
(including mandatory initial
inventory of 5% of the Issue size)
Re-Entry threshold for buy quote
(including mandatory initial
inventory of 5% of the Issue size)
Upto₹20 Crore 25% 24%
₹20 Crore to ₹50 Crore 20% 19%
₹50 Crore to ₹80 Crore 15% 14%
Above ₹80 Crore 12% 11%
All the above mentioned conditions and systems regarding the Market Making Arrangement are subject to change
based on changes or additional regulations and guidelines from SEBI and Stock Exchange from time to time.
62
CAPITAL STRUCTURE
Our share capital structure before the Issue and after giving effect to the Issue, as at the date of this Draft Red Herring
Prospectus, is set forth below:
(₹ in Lakhs, except share data)
No. Particulars Aggregate Nominal
Value
Aggregate Value
at Issue Price (1)
A. Authorized Share Capital*
1,05,00,000 Equity Shares of face value of ₹10/- each 1050.00
B. Issued, Subscribed & Paid-up Share Capital prior to the
Issue
70,28,185 Equity Shares of face value of ₹10/- each 702.82
C. Present Issue in terms of this Draft Red Herring
Prospectus
Issue of Up to 26,00,000 Equity Shares of face value of ₹ 10/-
each for cash at a price of ₹[●] per Equity Share
[●] [●]
Which comprises of:
Reservation for Market Maker portion
[●] Equity Shares of face value of ₹ [●] each at a premium of
₹ [●] per Equity Share reserved as Market Maker Portion
[●] [●]
Net Issue to the Public
[●] Equity Shares of face value of ₹ [●] each at a premium of
₹ [●]/- per Equity Share
[●] [●]
Of which:
[●] Equity Shares of face value of ₹ [●] each at a premium of
₹ [●]/- per Equity Share will be available for allocation for
allotment to Retail Individual Investors of up to ₹ [●] lakh
[●] [●]
[●] Equity Shares of face value of [●]/- each at a premium of
₹[●]/- per Equity Share will be available for allocation for
allotment to Other Investors of above ₹ [●] Lakh
[●] [●]
D. Paid up Equity capital after the Issue
[●] Equity Shares of face value of ₹ [●] each [●] -
E. Securities Premium Account
Before the Issue 90.42
After the Issue [●]
(1) To be finalized upon determination of the issue price.
(2) This Issue has been authorized by the Board of Directors pursuant to a board resolution dated December 14, 2018
and by the shareholders of our Company pursuant to a special resolution dated December 14, 2018 passed at the
EGM of the Company under Section 62 (1)(c) of the Companies Act, 2013.
*For details of the change in authorized capital of our Company, see “History and Certain Corporate Matters-
Amendments to our Memorandum of Association” on Page 152 of this Draft Red Herring Prospectus.
Class of Shares
Our Company has only one class of share capital i.e. Equity Shares of ₹ 10.00 each only. All Equity Shares issued are
fully paid up. Our Company does not have any outstanding convertible instruments as on the date of the Draft Red
Herring Prospectus.
Notes to Capital Structure
1. Details of changes in Authorized Share Capital of our Company since incorporation
63
Sr.
No.
Date of
Shareholders
approval
EOGM/
AGM/
Postal
Ballot
Authorized
Capital
(₹ )
Particulars of Change
1. On Incorporation - 250,000/- -
2. 09.07.2011 EOGM 5,000,000/- The authorized share capital of the Company increased
from ₹ 2,50,000/- divided into 25,000 equity shares of
₹10/- each to ₹ 5,000,000/- divided into 500,000 equity
shares of ₹ 10/- each.
3. 21.10.2013 EOGM 10,000,000/- The authorized share capital of the Company increased
from ₹ 50,00,000/- divided into 500,000 equity shares
of ₹ 10/- each to ₹ 10,000,000/- divided into 1,000,000
equity shares of ₹ 10/- each.
4. 15.06.2015 EOGM 15,000,000/- The authorized share capital of the Company increased
from ₹ 10,000,000/- divided into 10,00,000 equity
shares of ₹ 10/- each to 15,000,000/- divided into
1,500,000 equity shares of ₹ 10/- each.
5. 15.03.2018 EOGM 35,000,000/- The authorized share capital of the Company increased
from ₹ 15,000,000/- divided into 1,500,000 equity
shares of ₹ 10/- each to ₹ 35,000,000/- divided into
3,500,000 equity shares of ₹ 10/- each.
6. 19.11.2018 EOGM 105,000,000/- The authorized share capital of the Company increased
from ₹ 35,000,000/- divided into 3,500,000 equity
shares of ₹ 10/- each to ₹ 10,50,00,000/- divided into
1,05,00,000 equity shares of ₹ 10/- each.
2. Equity Share Capital history of our Company
The following is the history of the Share Capital of our Company:
64
Date of
Allotment
Number
of Equity
Shares
Face
Value
per
Equity
Share
(₹)
Issue
Price
per
Equity
Share
(₹)
Nature of
Consideration
(Cash/ Other
than Cash)
Nature of
Allotment
Cumulative
Number of
Equity
Shares
Cumulative
Share
Capital (₹)
Cumulative
Share
Premium
(₹)
July 17,
2009
10,000 10 10 Cash Subscription
to MOA
10,000 100,000 0
October
05, 2009
15,000 10 10 Cash Further
allotment
25000 250,000 0
July 13,
2011
435,000 10 10 Cash Further
allotment
460,000 4,600,000 0
November
30, 2013
540,000 10 20 Cash Further
allotment
1,000,000 10,000,000 5,400,000
August
03, 2015
150,462 10 50 Cash Further
allotment
1,150,462 11,504,620 11,418,480
March 28,
2016
150,000 10 50 Cash Further
allotment
1,300,462 13,004,620 17,418,480
March 20,
2018
13,00,462 10 NA Other than
Cash
Bonus Issue 2,600,924 26,009,240 4,413,860
March 31,
2018
2,10,350 10 32 Cash Right Issue 2,811,274 28,112,740 9,041,560
November
29, 2018
42,16,911 10 NA Other than
Cash
Bonus Issue 70,28,185 702,81,850 --
Notes:
1) Initial Subscribers to the MOA subscribed to 10,000 (Ten Thousand only) Equity Shares of face value of ₹
10/- each as per the details given below:
S. No. Name of the Subscriber to MOA No of Shares Allotted
1. Anshuman Yenigalla 7,500
2. Venkata Ravindra Yenigalla 2,500
Total 10,000
2) Further Allotment of 15,000 Equity Shares of face value of ₹10/- each fully paid as per the details given below:
Sr. No. Name of Allottees No of Shares Allotted
1. Anshuman Yenigalla 11,250
2. Venkata Ravindra Yenigalla 3,750
Total 15,000
65
3) Further Allotment of 435,000 Equity Shares of face value of ₹10/- each fully paid as per the details given
below:
4) Further Allotment of 540,000 Equity Shares of face value of ₹ 10/- each fully paid as per the details given
below:
Sl. No. Name of Person No of Shares Allotted
1. Anshuman Yenigalla 540,000
Total 540,000
5) Preferential Allotment of 150,462 Equity Shares of face value of ₹10/- each fully paid as per the details given
below:
Sl. No. Name of Person No of Shares Allotted
1. Ambari Cloud INC 50,512
2. Mayur Mehta 99,950
Total 150,462
6) Preferential Allotment of 150,000 Equity Shares of face value of ₹ 10/- each fully paid as per the details given
below:
Sr. No. Name of Allottees No of Shares Allotted
1. Anshuman Yenigalla 100,000
2. Pariplavi Mokkapati 50,000
Total 150,000
7) Bonus Issue of 1,300,462 Equity Shares of face value of ₹ 10/- each fully paid as per the details given below:
Sl. No. Name of Allottees No of Shares Allotted
1. Anshuman Yenigalla 870,000
2. Venkata Ravindra Yenigalla 207,000
3. Mayur Mehta 99,950
4. Ambari Cloud INC 50,512
5. Pariplavi Mokkapati 50,000
6. Yenigalla Jhancy 23,000
Total 1,300,462
8) Right Issue of 210,350 Equity Shares of face value of ₹ 10/- each fully paid as per the details given below:
Sl. No. Name of Allottees No of Shares Allotted
1. Pariplavi Mokkapati 87,042
2. Yenigalla Jhancy 52,500
3. Anshuman Yenigalla 70,808
Total 210,350
Sr. No. Name of Allottees No of Shares Allotted
1. Anshuman Yenigalla 2,11,250
2. Venkata Ravindra Yenigalla 2,00,750
3. Challa Uma Maheshwar Reddy 23,000
Total 4,35,000
66
9) Bonus Issue of 42,16,911 Equity Shares of face value of ₹ 10/- each fully paid as per the details given below:
Sl. No. Name of Allottees No of Shares Allotted
1. Anshuman Yenigalla 27,16,212
2. Venkata Ravindra Yenigalla 6,21,000
3. Pariplavi Mokkapati 4,54,563
4. Yenigalla Jhancy 1,47,735
5. B. Pramod Reddy 40,515
6. K Shrinivasa Chary 1,51,536
7. Lakshmi Y 30,000
8. Neelimia Devi Bandi 28,350
9. Praveen Penchala 27,000
Total 42,16,911
3. Issue of Equity Shares for Consideration other than cash
Except as disclosed below, our Company has not issued any equity shares for consideration other than cash:
Date of
Allotment
Names of the
Allottees
Number
of Equity
Shares
Face
Value
(in ₹ )
Issue
Price
per
Equity
Share
(in ₹)
Reasons for
Allotment
March
20,2018
Anshuman Yenigalla 870,000 10 - Bonus Issue in
ratio of 1:1 by
capitalization of
reserves pursuant
to the
shareholders
resolution dated
March 20,2018
Venkata Ravindra
Yenigalla
207,000 10 -
Mayur Mehta 99,950 10 -
Ambari Cloud INC 50,512 10 -
Parplavi Mokkapati 50,000 10 -
Yenigalla Jhancy 23,000 10 -
November
29, 2018
Anshuman Yenigalla 27,16,212 10 - Bonus Issue in
ratio of 3:2 by
capitalization of
reserves pursuant
to the
shareholders
resolution dated
November 29,
2018
Venkata Ravindra
Yenigalla
6,21,000 10 -
Parplavi Mokkapati 454563 10 -
Yenigalla Jhancy 147735 10 -
B Pramod Reddy 40515 10 -
K Srinivasa Chary 151536 10 -
Lakshmi Y 30000 10 -
Neelima Devi Bandi 28350 10 -
Praveen Penchala 27000 10 -
4. No Equity Shares have been allotted pursuant to any scheme approved under Section 391-394 of the Companies
Act, 1956 or section 230-232 of the Companies Act, 2013.
5. Our Company has not issued equity shares under one or more employee stock option schemes, particulars of
equity shares issued under the employee stock option schemes may be aggregated quarter-wise, indicating the
aggregate number of equity shares issued and the price range within which equity shares have been issued in
each quarter.
67
6. Except as disclosed below, no Equity Shares have been issued at price below Issue Price during the last one
year:
Date of
Allotment
Names of the Allottees Number of
Equity
Shares
Face
Value
(in₹ )
Issue Price per
Equity Share
(in₹)
Reasons for
Allotment
March
20,2018
Anshuman Yenigalla 870,000 10 - Bonus Issue in ratio
of 1:1 by
capitalization of
reserves pursuant to
the shareholders
resolution dated
March 20,2018
Venkata Ravindra
Yenigalla
207,000 10 -
Mayur Mehta 99,950 10 -
Ambari Cloud INC 50,512 10 -
Parplavi Mokkapati 50,000 10 -
Yenigalla Jhancy 23,000 10 -
November
29, 2018
Anshuman Yenigalla 27,16,212 10 - Bonus Issue in ratio
of 3:2 by
capitalization of
reserves pursuant to
the shareholders
resolution dated
November 29, 2018
Venkata Ravindra
Yenigalla
6,21,000 10 -
Parplavi Mokkapati 454563 10 -
Yenigalla Jhancy 147735 10 -
B Pramod Reddy 40515 10 -
K Srinivasa Chary 151536 10 -
Lakshmi Y 30000 10 -
Neelima Devi Bandi 28350 10 -
Praveen Penchala 27000 10 -
7. Build-up of our Promoters’ Shareholding, Promoters’ Contribution and Lock-in
a) Build-up of Promoters’ shareholding in our Company
As on the date of this Draft Red Herring Prospectus, Our Promoters (i) Mr. Anshuman Yenigalla holds
45,27,020 Equity Shares, which constitutes 64.41% of the issued, subscribed and paid-up Equity Share
capital of our Company and (ii) Mr. Venkata Ravindra Yenigalla holds 10,35,000 Equity Shares, which
constitutes 14.73 % of the issued, subscribed and paid-up Equity Share capital of our Company
None of the Equity Shares held by our Promoters are subject to any pledge.
Set forth below is the build-up of the equity shareholding of our Promoters, since the incorporation of our
Company.
Date of
Allotment/
Acquisition/
Sale
Number
of Equity
Shares
Face
Value
(₹)
Issue/
Acquisiti
on/ Sale
Price per
Equity
Share(₹)
Nature of
Consideration
(Cash/ Other
than Cash)
Nature of
Transaction
% of
Pre-Issue
Equity
Share
Capital
% of
Post-
Issue
Equity
Share
Capital
Source
of
Funds
Anshuman Yenigalla
17-07-2009 7,500 10 10 Cash Subscription
to MOA
0.11% [] Owned
Fund
05-10-2009 11,250 10 10 Cash Allotment 0.16% [] Owned
Fund
13-07-2011 211,250 10 10 Cash Allotment 3.01% [] Owned
Fund
30-11-2013 540,000 10 20 Cash Allotment 7.68% [] Owned
Fund
68
Date of
Allotment/
Acquisition/
Sale
Number
of Equity
Shares
Face
Value
(₹)
Issue/
Acquisiti
on/ Sale
Price per
Equity
Share(₹)
Nature of
Consideration
(Cash/ Other
than Cash)
Nature of
Transaction
% of
Pre-Issue
Equity
Share
Capital
% of
Post-
Issue
Equity
Share
Capital
Source
of
Funds
28-03-2016 100,000 10 50 Cash Allotment 1.42% [] Owned
Fund
20-03-2018 870,000 10 - Other than
Cash
Bonus Issue 12.38% [] N.A
31-03-2018 70,808 10 32 Cash Right Issue 1.01% [] Owned
Fund
29-11-2018 27,16,212 10 - Other than
Cash
Bonus Issue 38.65% [] N.A
Total 45,27,020 64.41% []
Date of
Allotment/
Acquisition/
Sale
Number
of Equity
Shares
Face
Value
(₹)
Issue/
Acquisitio
n/ Sale
Price per
Equity
Share(₹)
Nature of
Consideratio
n
(Cash/ Other
than Cash)
Nature of
Transaction
% of Pre-
Issue
Equity
Share
Capital
% of Post-
Issue
Equity
Share
Capital
Source
of
Funds
Venkata Ravindra Yenigalla
17-07-2009 2,500 10 10 Cash Subscription
to MOA
0.04% [] Owned
Fund
05-10-2009 3,750 10 10 Cash Allotment 0.05% [] Owned
Fund
13-07-2011 200,750 10 10 Cash Allotment 2.86% [] Owned
Fund
20-03-2018 207,000 10 - Other than
Cash
Bonus issue 2.95% [] -
29-11-2018 6,21,000 10 - Other than
Cash
Bonus Issue 8.84% [] -
Total 10,35,000 14.73% [] -
b) Details of Promoters’ Contribution Locked-in for Three (3) Years
Pursuant to Regulation 236 and 238 of the SEBI (ICDR) Regulations 2018, an aggregate of at least 20% of
the post-Issue Equity Share capital of our Company held by our Promoters shall be locked-in for a period of
three (3) years from the date of Allotment.
All Equity Shares held by our Promoters are eligible for Promoters’ contribution, pursuant to Regulation 237
of the SEBI (ICDR) Regulations.
All the Equity Shares of our Company held by our Promoters shall be held in dematerialized form prior to
filing of the Red Herring Prospectus with the RoC.
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
the Equity Shares proposed to form part of Promoters’ contribution subject to lock-in shall not be disposed
69
of/ sold/ transferred by our Promoters during the period starting from the date of filing this Draft Red Herring
Prospectus with the Stock Exchange 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:
Details of Promoter’s Contribution
Date of Allotment
and Made Fully
Paid-up /
Acquisition
Nature of
Consideration
(Cash/Other
than Cash)
Number of Equity
Shares Allotted/
Acquired/
Transferred
Face
Value
(₹)
Issue/
Acquisition
Price (₹)
% of
Post-
Issue
Share
Capital
Period of
Lock-in
Anshuman Yenigalla
[●] [●] [●] [●] [●] [●] [●]
[●] [●] [●] [●] [●] [●] [●]
Grand Total [●] [●]
Details of Promoter’s Contribution
Date of Allotment
and Made Fully
Paid-up /
Acquisition
Nature of
Consideration
(Cash/Other
than Cash)
Number of Equity
Shares Allotted/
Acquired/
Transferred
Face
Value
(₹)
Issue/
Acquisition
Price (₹)
% of
Post-
Issue
Share
Capital
Period of
Lock-in
Venkata Ravindra Yenigalla
[●] [●] [●] [●] [●] [●] [●]
[●] [●] [●] [●] [●] [●] [●]
Grand Total [●] [●]
The Promoters’ contribution has been brought in to 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 237 of the SEBI (ICDR) Regulations. In this respect, we confirm the following:
i) that the minimum promoter’s 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;
ii) that the minimum promoter’s 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 promoter’s contribution does not consist of Equity Shares acquired during the
one (1) year immediately preceding the date of this Draft 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) 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 in the process of being
dematerialized and shall be held in dematerialized form prior to the filing of the Red Herring
Prospectus.
70
c) Details of Equity Shares Locked-in for one (1) year
In terms of Regulation 238(b) and 239 of the SEBI (ICDR) Regulations, other than the Equity Shares issued
to the Promoters for the Minimum Promoter’s Contribution, which will be locked-in as minimum Promoters’
contribution for three (3) years, all the Pre-Issue Equity Shares 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, if any, 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.
d) Other requirements in respect of lock-in
In terms of Regulation 242 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 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 can be pledged only if in addition to fulfilling the aforementioned requirements, such loans have
been granted by such banks or financial institutions for the purpose of financing one or more of the objects
of the Issue.
In terms of Regulation 243 of the SEBI (ICDR) Regulations, the Equity Shares held by persons other than
our Promoters prior to the Issue may be transferred to any other person holding Equity Shares which are
locked-in, subject to the continuation of the lock-in in the hands of transferees for the remaining period and
compliance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011, as amended ("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.
Further, in terms of Regulation 243 of SEBI (ICDR) Regulations, the Equity Shares held by our Promoters
may be transferred to and among the Promoters Group or to new promoters or persons in control of our
Company, subject to continuation of the lock-in in the hands of the transferees for the remaining period and
compliance with the 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.
e) 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.
8. Shareholding of our Promoters & Promoter Group
The table below presents the shareholding of our Promoters and Promoter Group, who hold Equity Shares as
on the date of filing of this Draft Red Herring Prospectus:
Particulars Pre-Issue Post-Issue
Number of
Shares
Percentage
(%) holding
Number of
Shares
Percentage
(%) holding
Promoters (A)
Anshuman Yenigalla 45,27,020 64.41% 45,27,020 []
Venkata Ravindra Yenigalla 10,35,000 14.73% 10,35,000 []
Promoter Group (B)
Pariplavi Mokkapati 7,57,605 10.78% 7,57,605 []
Yenigalla Jhancy 2,46,225 3.50% 2,46,225 []
71
Particulars Pre-Issue Post-Issue
Number of
Shares
Percentage
(%) holding
Number of
Shares
Percentage
(%) holding
Total (A+B) 65,65,850 93.42% 65,65,850 []
The average cost of acquisition of or subscription to Equity Shares by our promoters is set forth in the table below:
Name of Promoters Number of Shares Cost of Acquisition (in ₹)
Anshuman Yenigalla 45,27,020 4.50
Venkata Ravindra Yenigalla 10,35,000 2.00
9. Acquisition and sale/transfer of Equity Shares by our Promoters in last one (1) year
There has been no acquisition, sale or transfer of Equity Shares by our Promoters in the last one (1) year
preceding the date of filing of this Draft Red Herring Prospectus.
10. Shareholding Pattern of our Company
The table below presents the current shareholding pattern of our Company as per Regulation 31 of the SEBI
Listing Regulations as on the date of this Draft Red Herring Prospectus:
72
Cate
gory
(I)
Category of
shareholder
(II)
Nos. of
sharehold
ers
(III)
No. of
fully paid
up equity
shares
held
(IV)
No.
of
Partl
y
paid-
up
equit
y
shar
es
held
(V)
No. of
shares
underlyi
ng
Deposito
ry
Receipts
(VI)
Total nos.
shares
held
(VII) =
(IV)+(V)+
(VI)
Shareholdi
ng as a %
of total no.
of shares
(calculated
as per
SCRR,
1957)
(VIII)
As a % of
(A+B+C2)
Number of Voting Rights held in
each class of securities
(IX)
No. of
Shares
Underlyin
g
Outstandi
ng
convertibl
e
securities
(including
Warrants
)
(X)
Shareholdi
ng , as a %
assuming
full
conversion
of
convertibl
e
securities (
as a
percentage
of
diluted
share
capital)
(XI)=
(VII)+(X)
As a % of
(A+B+C2
Numbe
r of
Locked
in
shares
(XII)
Number
of
Shares
pledged
or
otherwise
encumber
ed
(XIII)
Number of
equity
shares held
in
demateriali
zed form
(XIV)
No of Voting Rights Total
as a
% of
(A+B
+
C)
N
o.
(a)
As
a %
of
tota
l
Sha
r es
hel
d
(b)
No. As a
(a) % of
total
Share
s held
(b)
Class
eg:
X
Cla
ss
eg:
Y
Tot al
(A) Promoter &
Promoter
Group
4 6565850 N.A N.A 6565850 93.42 6565850 - 6565850 - - 93.42 - - 26,26,340
(B) Public 5 462335 N.A N.A 462335 6.58 462335 - 462335 6.58 1,84,934
(C) Non Promoter-
Non Public
- -
(C1) Shares
underlying DRs
- - - - - - - - - - - - - - -
(C2) Shares held by
Employee
Trusts
- - - - - - - - - - - - - - -
Total 9 7028185 7028185 100.00 7028185 7028185 100.00 - - 28,11,274
73
We have entered into tripartite agreement with both depositories.
In terms of SEBI circular bearing no. Cir/ISD/3/2011 dated June 17, 2011 and SEBI circular bearings no.
SEBI/Cir/ISD/05/2011 dated September 30, 2011, our Company shall ensure that the Equity Shares held by
the Promoters and Promoter Group shall be in dematerialized prior to the filing of Prospectus with the RoC.
Our Company will file the shareholding pattern of our Company, in the form prescribed under Regulation
31 of the Listing Regulation, one day prior to the listing of the Equity shares. The Shareholding pattern will
be uploaded on the website of NSE before commencement of trading of such Equity Shares.
11. Except as set out below, none of the directors of our Company are holding any Equity Shares in our Company:
Particulars Number of Equity
Shares
Percentage holding (%)
Anshuman Yenigalla 45,27,020 64.41%
Venkata Ravindra Yenigalla 10,35,000 14.73%
Pariplavi Mokkapati 7,57,605 10.78%
Total 63,19,625 89.92%
12. None of the shareholding of the Promoters & Promoter Group is subject to lock-in as on date of this Draft Red
Herring Prospectus.
13. Except K. Srinivasa Chary, none of the persons belonging to the category Public are holding more than 1% of
the total number of shares as on the date of this Draft Red Herring Prospectus.
14. None of the Key Managerial Personnel holds Equity Shares in our Company as on the date of this Draft Red
Herring Prospectus except as disclosed in Point 9 above.
15. Top Ten Shareholders of our Company
a. List of Shareholders holding 1.00% or more of the Paid-up Capital of the Company as on date of the
Draft Red Herring Prospectus :
Sl.
No.
Name of the Shareholder Number of
Equity Shares
% of paid up
capital
1. Anshuman Yenigalla 45,27,020 64.41%
2. Venkata Ravindra Yenigalla 10,35,000 14.73%
3. Pariplavi Mokkapati 7,57,605 10.78%
4. Yenigalla Jhancy 2,46,225 3.50%
5. K. Srinivasa Chary 2,52,560 3.59%
Total 68,18,410 97.02%
b. List of Shareholders holding 1.00% or more of the Paid-up Capital of the Company as on date ten
days prior to the date of the Draft Red Herring Prospectus :
Sl.
No.
Name of the Shareholder Number of
Equity Shares
% of paid up
capital
1. Anshuman Yenigalla 45,27,020 64.41%
2. Venkata Ravindra Yenigalla 10,35,000 14.73%
3. Pariplavi Mokkapati 7,57,605 10.78%
4. Yenigalla Jhancy 2,46,225 3.50%
5. K. Srinivasa Chary 2,52,560 3.59%
Total 68,18,410 97.02%
74
c. List of Shareholders holding 1.00% or more of the Paid-up Capital of the Company as on date one
year prior to the date of the Draft Red Herring Prospectus :
Sl.
No.
Name of the Shareholder Number of
Equity Shares
% of paid up
capital
1. Anshuman Yenigalla 18,10,808 64.42
2. Venkata Ravindra Yenigalla 4,14,000 14.73
3. Pariplavi Mokkapati 1,87,042 6.65
4. Yenigalla Jhancy 98,500 3.50
5. Ambari Cloud Inc 1,01,024 3.59
6. Mayur Mehta 1,99,900 7.11
Total Total 2811,274
16. Till date Company has not introduced any employee’s stock option schemes/ employees stock purchase
schemes.
17. None of our Promoters, Promoter Group, our Directors and their relatives has entered into any financing
arrangements or financed the purchase of the Equity shares of our Company by any other person during the
period of six (6) months immediately preceding the date of filing of the Draft Red Herring Prospectus.
18. We hereby confirm that there will be no further issue of capital whether by the way of issue of bonus shares,
preferential allotment, right issue or in any other manner during the period commencing from the date of the
Draft Red Herring Prospectus until the Equity Shares offered have been listed or application money unblocked
on account of failure of the Issue.
19. Our Company, our Promoters, our Directors and the Book Running Lead Manager have not entered into any
buy-back or standby arrangements for the purchase of the Equity Shares of our Company.
20. Except as stated below, none of the Promoters, Promoter Group, the Directors and their relatives have
purchased or sold any Equity Shares during the period of six (6) months immediately preceding the date of
filing of this Draft Red Herring Prospectus with the Stock Exchange:
Date Name of the
Transferee
No of Shares Consideration per
share(Amount)(Rs)
September 28, 2018 Pariplavi Mokkapati 116,000 56.00
July 01, 2018 Yenigalla Jhancy 10 30.00
21. Our Company undertakes that there shall be only one (1) denomination for the Equity Shares of our Company,
unless otherwise permitted by law. Our Company shall comply with such disclosure and accounting norms as
specified by SEBI from time to time.
22. There are no outstanding warrants, options or rights to convert debentures, loans or other instruments into
Equity Shares as on the date of this Draft Red Herring Prospectus.
23. The Equity Shares are fully paid up and there are no partly paid-up Equity Shares as on the date of filing of
this Draft Red Herring Prospectus.
24. Our Company shall comply with such disclosures and accounting norms as may be specified by SEBI and other
regulatory authorities from time to time.
25. The Equity Shares issued pursuant to this Issue shall be fully paid-up.
26. Our Company has not made any public issue of any kind or class of securities of our Company within the
immediately preceding two (2) years prior to filing this Draft Red Herring Prospectus.
75
27. As on date of this Draft Red Herring Prospectus, our Company has Nine (9) shareholders.
28. Our Company, Directors, Promoters or members of our Promoter Group shall not make any payments, direct
or indirect, discounts, commissions, allowances or otherwise under this Issue except as disclosed in this Draft
Red Herring Prospectus.
29. 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.
30. Our Company has not revalued its assets during the last five (5) financial years.
31. An over-subscription to the extent of 10% 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 10% of the Issue,
as a result of which, the Post-Issue Paid-up Capital after the Issue would also increase by the excess amount of
allotment so made. In such an event, the Equity Shares held by the Promoters and subject to three (3) years
lock-in shall be suitably increased; so as to ensure that 20% of the Post-Issue Paid-up Capital is locked in. 2
32. Under subscription, 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 Book
Running Lead Manager and Designated Stock Exchange. Such inter-se spill over, if any, would be affected in
accordance with applicable laws, rules, regulations and guidelines.
33. In case of over-subscription in all categories the allocation in the Issue shall be as per the requirements of
Regulation 268 of SEBI (ICDR) Regulations, 2018.
34. The unsubscribed portion in any reserved category (if any) may be added to any other reserved category.
35. The unsubscribed portion if any, after such inter se adjustments among the reserved categories shall be added
back to the net Issue to the public portion.
36. There are no Equity Shares against which depository receipts have been issued.
37. Other than the Equity Shares, there is no other class of securities issued by our Company.
38. We shall ensure that transactions in Equity Shares by the Promoters and members of the Promoter Group, if
any, between the date of registering this Draft Red Herring Prospectus with the RoC and the Issue Closing Date
are reported to the Stock Exchanges within twenty-four (24) hours of such transactions being completed.
39. In terms of Rule 19(2)(b)(i) of the Securities Contracts (Regulation) Rules, 1957, as amended, the Issue is
being made for at least 25% of the Post-Issue Paid-up Equity Share capital of our Company. Further, this Issue
is being made in terms of Chapter IX of the SEBI (ICDR) Regulations, 2018 as amended from time to time.
76
40. Our Promoters and members of our Promoter Group will not participate in this Issue.
41. The Book Running Lead Manager and its associates do not hold any Equity Shares in our Company as on the
date of filing this Draft Red Herring Prospectus.
77
OBJECT OF THE ISSUE
Requirement of Funds:
Our Company proposes to utilize the net proceeds towards the following objects:
I. To meet working capital requirement;
II. General corporate purpose and
III. To Meet the Issue Expenses
Our Company proposes to utilize the net proceeds from the Issue towards funding the following objects and achieve
the benefits of listing the equity shares on the SME platform of NSE Emerge. We believe that the listing of Equity
shares will enhance our brand name and provide liquidity to the existing shareholders. Listing will also provide a
public market for the Equity Shares in India.
The main objects clause as set out in the Memorandum of Association enables our Company to undertake its existing
activities and the activities for which funds are being raised by our Company through the Issue.
Utilization of Net Proceeds:
The details of the proceeds of the Issue are summarized below:
1 Gross Proceeds [●]
2 (Less) Issue related expenses to be borne by the Company@ [●]
3 Net Proceeds@ [●]
@To be finalised upon determination of the Issue Price.
Fund Requirements
The Net Proceeds are proposed to be utilised towards the following objects:
Sl.No Particulars Amount ₹ In Lakhs
1 To meet Working Capital Requirement 1,800.00
2 General Corporate Purpose@ [●]
3 To Meet the Issue Expenses@ [●]
Total Net Proceeds [●]
@To be finalised upon determination of the Issue Price.
Means of Finance: The above-mentioned fund requirement will be met from the proceeds of the Issue. We intend
to fund the shortfall, if any, from internal accruals and/ or debt. Set forth below are the means of finance for the above-
mentioned fund requirement:
Sl. No. Particulars Amount ₹ in Lakhs
1 Working Capital Requirement 1,800.00
2
General corporate purpose@ [●]
Total [●]
@To be finalised upon determination of the Issue Price.
The fund requirements for the Objects are based on internal management estimates and quotations received from
vendors and have not been appraised by any bank or financial institution.
Since the entire fund requirements are to be funded from the proceeds of the Issue. Accordingly, there is no
requirement to make firm arrangements of finance under Regulation 230(1)(e) of the SEBI (ICDR) Regulations
78
2018 through verifiable means towards at least 75% of the stated means of finance, excluding the amounts to be
raised through the proposed Issue.
The fund requirements are based on internal management estimates and have not been appraised by any bank or
financial institution or any other independent agency. These are based on current conditions and are subject to change
in the light of changes in external circumstances or costs or other financial conditions and other external factors.
Given the dynamic nature of our business, we may have to revise our funding requirements and deployment on
account of a variety of factors such as our financial condition, business and strategy and external factors such as
market conditions, competitive environment and interest or exchange rate fluctuations, which may not be within the
control of our management. This may entail rescheduling or revising the planned expenditure and funding
requirements, including the expenditure for a particular purpose at the discretion of our management. If the actual
utilisation towards any of the Objects is lower than the proposed deployment such balance will be used for general
corporate purposes to the extent that the total amount to be utilized towards general corporate purposes will not exceed
25% of the proceeds from the Issue in accordance with Regulation 230(2) of the SEBI (ICDR) Regulations 2018. In
case of a shortfall in raising requisite capital from the Net Proceeds or an increase in the total estimated costs of the
Objects of the Issue, we may explore a range of options including utilising our internal accruals and seeking additional
debt from existing and future lenders. We believe that such alternate arrangements would be available to fund any
such shortfalls. Further, in case of variations in the actual utilization of funds earmarked for the purposes set forth
above, increased fund requirements for a particular purpose may be financed by surplus funds, if any, available in
respect of the other purposes for which funds are being raised in this Issue.
For further details on the risks involved in our business plans and executing our business strategies, please see the
section titled “Risk Factors” beginning on page no. 22 of this Draft Red Herring Prospectus.
Proposed schedule of implementation and deployment of the Net Proceeds
The Net Proceeds are currently expected to be deployed in accordance with the schedule as stated below:
Sl. No. Particulars Amount ₹ in Lakhs
1 Working Capital Requirement 1,800.00
2
General corporate purpose@ [●]
Total [●]
@To be finalised upon determination of the Issue Price.
Details of the Utilization of the proceeds
1. To Meet Working Capital Requirement
Our business is working capital intensive. Our working capital requirements are being financed from banks and also
internal accruals and other sources like unsecured loans from promoters.
Net Working Capital as on March 31, 2018 is Rs.2,732.21 Lakhs (as per the restated financial statements) and is
estimated at Rs. 4,183.42 Lakhs .
The details of our Company working capital requirement are based on restated financial statement as at March 2018
and as estimated & projected for FY 2019, 2020 & 2021 respectively are as under:
Particulars 17-18 2018-19 2019-20 2020-21
Audited Estimated Projected Projected
Current Assets (Rs.in Lakhs)
Inventory
336.25
963.39
1,191.03
1,528.96
Trade receivables
5,036.66
5,200.00
6,405.50
8,149.36
Cash and cash equivalents
734.58
910.00
1,120.96
1,426.14
79
Short-term loans and advances
39.84
45.82
52.69
60.60
Other Current Assets
603.00
944.34
1,146.48
1,315.88
Gross Working Capital (1)
6,750.33
8,063.55
9,916.66 12,480.94
Current Liabilities
Trade Payables
3,737.58
3,591.14
2,977.59
3,822.40
Other Current Liabilities
96.95
92.10
87.49
83.12
Short-Term Provisions
183.59
196.89
206.73
217.07
Total Current Liabilities (2)
4,018.12
3,880.13
3,271.81 4,122.59
Working Capital (1-2)
2,732.21
4,183.42
6,644.85 8,358.34
Source of Working Capital
Fund Based Borrowings
1,358.53
2,200.00
2,200.00
2,200.00
Company's Funds
1,373.68
1,983.42
4,444.85
6,158.34
Sourced from
Reserves
1,332.92
2,383.42
2,978.94
Current Years Profits
650.50
261.43
1379.40
IPO Proceeds
-
1,800.00
1,800.00
The total working capital requirements for the Year ended March 2019 and March 2020 are expected to be Rs.4,183.42
lakhs and Rs.6,644.85 lakhs respectively. The incremental working capital requirement for the year ending March
31, 2020 will be Rs.2,461.43 lakhs, which will be met through the net proceeds of IPO to the extent of Rs.1,800.00
Lakhs and the balance portion will be met through fund-based borrowings and internal accruals.
The Company’s turnover and operations have been increasing for last 3 years by way of increase in number of
installation of pumps/ projects and by geographical expansion to various locations across country, this has led to an
increase in the Working Capital requirement of business to achieve estimated and projected turnover.
Our Company has been sanctioned working capital facilities from Banks and financial institutions amounting to
Rs.5,400 lakhs out of which Rs.2,200 lakhs is fund based i.e. CC and the balance Rs.3,200 lakhs is non-fund based .
For further details please refer chapter titled “Financial Indebtedness” beginning on page no 255.
Assumption for working capital requirements
(In No. of Days)
Particulars
Holding level as on
31 March
2017-2018
(Audited)
Holding level as on
31 March
2018-2019
(Estimated)
Holding level as on
31 March
2019-2020
(Projected)
Current Assets
Trade Receivables 174 120 120
Inventories 16 30 30
Current Liabilities
Trade Payables 176 113 75
Justification for “Holding Period” levels:
The justifications for the holding levels mentioned in the table above are provided below:
80
Assets- Current Assets
Trade Receivables
Debtor holding period is 174 days in F.Y. 2017-2018 as the majority receivables are
from government departments which generally take time to process bills. This period
is slowly coming down in the FY 2018-19 as the payment system is streamlined in
most of the states by allocating requisite budgets. Therefore, the debtors holding period
is forecast at 120 days for the FY 2018-19 & 2019-20.
Inventories
Our inventories primarily consist of submersible pumps, modules and solar
photovoltaic panels etc. The inventory holding level in F.Y. 2017-18 is @16 days. For
FY 2018-19 and 2019-20 it is estimated and projected, to increase the inventory level
at 30 days of the total consumption as the readily available inventory reduces the
execution period of projects and other project execution overheads.
Liabilities- Current Liabilities
Trade Payables
Average creditors payment period is 176 days for FY 2017-18 and the same is forecast
at 113 and 75 days in FY 2018-19 and 2019-20 respectively. The Company can
demand for the discount on the materials if the payment is made as per the terms of
invoice. Generally the credit period is allowed up to 60 days.
The working capital projections as approved by the Board by the resolution dated 14th December, 2018.
Basis of Estimation
The incremental working capital requirements are based on historical Company data and estimation of the future
requirements in FY 2019-20 considering the growth in activities of our Company and in line with norms generally
accepted by banker(s).
2. General Corporate Purpose
Our management, in accordance with the policies of our Board, will have flexibility in utilizing the proceeds
earmarked for general corporate purposes. We intend to deploy the balance Net proceeds aggregating to [●]
towards the general corporate purposes to drive our business growth. In accordance with the policies set up by
our Board, we have flexibility in applying the remaining Net Proceeds, for general corporate purpose including
but not restricted to, meeting operating expenses, development costs for projects and the 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 purposes as approved by our Board of Directors, subject to
compliance with the necessary provisions of the Companies Act.
We confirm that any issue related expenses shall not be considered as a part of General Corporate Purpose.
Further, we confirm that the amount for general corporate purposes, as mentioned in this Draft Red Herring
Prospectus, shall not exceed 25% of the amount raised by our Company through this Issue.
3. To Meet the Issue Expenses
The estimated Issue related expenses include Issue Management Fee, Underwriting and Selling Commissions,
Printing and Distribution Expenses, Legal Fee, Advertisement Expenses, Registrar’s Fees, Depository Fee and
Listing Fee. The total expenses for this Issue are estimated to be approximately ₹ [●] Lakhs which is [●] % of the
Issue Size. All the Issue related expenses shall be met out of the proceeds of the Issue and the break-up of the
same is as follows:
(₹ in Lakhs)
Activity Expenses (1) Percentage of Issue Size (1)
Fees payable to Merchant Banker, Registrar Fees,
Legal Fees & Misc. Expenditure
[●] [●]
Brokerage & Selling Commission [●] [●]
Printing and Stationery Expenses [●] [●]
Advertising and Marketing Expenses [●] [●]
Statutory Expenses [●] [●]
Total Estimated Issue Expenses [●] [●] (1) Amounts will be finalised at the time of filing the Prospectus and on determination of Issue Price and other details.
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Proposed Schedule of Implementation:
The proposed year wise break up of deployment of funds and Schedule of implementation of Net Issue Proceeds is as
under:
(₹ in Lakhs)
Sl.
No. Particulars
Amount already
Incurred
Amount to be deployed
in F.Y. 2017-18
1. To meet Working Capital Requirement [●] [●]
2. General corporate purpose [●] [●]
Total [●] [●]
Funds Deployed and Sources of Funds Deployed:
Till December 17, 2018, Our Company has deployed/incurred expense of ₹ 5.00 Lakhs towards Issue Expenses out
of internal accruals duly certified by Statutory Auditor, NSVR and Associates LLP., Chartered Accountants, vide
their certificate dated December 17, 2018 have confirmed that, the following expenses have been incurred for the
proposed object of the Issue:
(₹ in Lakhs)
Particulars Amount deployed
Issue Expenses^ 5.00
Total 5.00
^ Excluding applicable tax
Appraisal
None of the Objects have been appraised by any bank or financial institution or any other independent third party
organization and the fund requirements for the Objects are based on the internal management estimates. The funding
requirements of our Company are dependent on a number of factors which may not be in the control of our
management, including variations in interest rate structures, changes in our financial condition and current commercial
conditions and are subject to change in light of changes in external circumstances or in our financial condition,
business or strategy.
Shortfall of Funds
Any shortfall in meeting the fund requirements will be met by way of internal accruals and/or secured/unsecured
Loans.
Bridge Financing Facilities
Our Company has not raised any bridge loans from any banks or financial institution as on the date of this Draft Red
Herring Prospectus, which are proposed to be repaid from the Net Proceeds. However, depending upon business
requirements, our Company may consider raising bridge financing facilities including by way of any other short-term
instrument like non-convertible debentures, commercial papers, etc., pending receipt of the Net Proceeds.
Monitoring of Utilization of Funds
There is no requirement for a monitoring agency as the size of the Issue is less than ₹ 10,000 Lakhs. Our Board and
Audit Committee shall monitor the utilization of the Net Proceeds. Our Company will disclose the utilization of the
Net Proceeds, including interim use, under a separate head in our balance sheet along with the relevant details, for all
such amounts that have not been utilized. Our Company will also indicate investments, if any, of the unutilized Net
Proceeds in the balance sheet of our Company for the relevant Financial Years subsequent to receipt of listing and
trading approvals from the Stock Exchange.
Pursuant to the Listing Regulations, our Company shall on a half yearly basis disclose to the Audit Committee, the
uses and applications of the Net Proceeds. On an annual basis, our Company shall prepare a statement of funds utilised
82
for purposes other than those stated in this Draft Red Herring Prospectus and place it before the Audit Committee.
Such disclosure shall be made only until such time that all the Net Proceeds have been utilised in full. The statement
will be certified by the statutory auditors of our Company.
Further, in accordance with the Listing Regulations, our Company shall furnish to the Stock Exchange, a statement
indicating (i) material deviations, if any, in the utilisation of the Net Proceeds from the Objects as stated above; and
(ii) details of category wise variations in the utilisation of the Net Proceeds from the Objects as stated above. This
information will also be published in newspapers simultaneously with the interim or annual financial results after
placing the same before the Audit Committee. In the event of any deviation in the use of Net Proceeds from the
Objects, as stated above, our Company shall intimate the same to the Stock Exchange without delay.
Interim Use of Net Proceeds
The Net Proceeds of the Issue pending utilisation for the purposes stated in this section shall be deposited 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 it shall not use the Net Proceeds for buying,
trading or otherwise dealing in shares of any other listed company or for any investment in the equity markets.
Variation in Objects
In accordance with Section 13(8) and 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. In addition, the notice issued to the Shareholders in relation to the passing of such special resolution shall
specify the prescribed details as required under the Companies Act and shall be published in accordance with the
Companies Act and the rules there under. As per the current provisions of the Companies Act, our Promoters or
controlling Shareholders would 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.
Other confirmations
There is no material existing or anticipated transactions with our Promoter, our Directors, our Company‘s key
Managerial personnel and Group Companies, in relation to the utilization of the Net Proceeds. No part of the Net
Proceeds will be paid by our Company as consideration to our Promoters and Promoter Group, the Directors,
associates or Key Management Personnel, except in the normal course of business and in compliance with applicable
law.
83
BASIS FOR THE ISSUE PRICE
The price band/ offer Price will be determined by our Company in consultation with the Book Running Lead Manager,
on the basis of an assessment of market demand for the Equity Shares issued through the Book Building Process and
on the basis of quantitative and qualitative factors as described below. Investors should also refer to the sections “Risk
Factors” and “Restated Financial Information” and chapters titled “Our Business” beginning on pages 22, 177 and
115 respectively of this Draft Red Herring Prospectus, to have a more informed view before making an investment
decision. 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:
Well-established EPC player
Integrated approach to developing solar power projects by highly experienced development teams
Expertise and experience in project management:
Experience Management and Employees
Established relationship with public sector clientele and excellent pre-qualification credentials
Design and Engineering team
For further details, refer to heading “Our Competitive Strengths” under chapter titled “Our Business” on page 115
of this Draft Red Herring Prospectus.
QUANTITATIVE FACTORS
The information presented below relating to the Company is based on the Restated Standalone Financial Information
for Stub Period 30th September, 2018 and the Financial Years 2018, 2017 and 2016 prepared in accordance with AS.
Some of the quantitative factors, which form the basis or computing the price, are as follows:
1. Basic and Diluted Earnings per Share (“EPS”) as adjusted for changes in capital As per Restated
Standalone Financial Information:
Period
Restated
Basic & Diluted (₹) Weights
FY 2015-16 4.45 1
FY 2016-17 6.38 2
FY 2017-18 28.05 3
Weighted Average 16.89
30th September, 2018* 12.66
*Not Annualised
2. Price to Earnings (P/E) ratio in relation to price band of ₹ [●] per Equity Share of face value of 10
each fully paid up
Particulars
P/E at the higher
end of price band
(no of times)
P/E at the Lower
end of price band
(no of times)
P/E ratio based on Basic & Diluted EPS for FY 2017-
18 based on a standalone basis [] []
P/E ratio based on Basis & Diluted EPS for the six
months ended September 30,2017 based on a
standalone basis
[] []
84
3. Average Return on Net Worth
Period Restated
RONW (%) Weights
FY 2015-16 16.02 1
FY 2016-17 21.34 2
FY 2017-18 46.36 3
30th September, 2018* 18.71
Weighted Average 32.96
*Not Annualised
4. Minimum RoNW required for maintaining pre-issue EPS as at March 31, 2018:
To maintain pre-Issue basic & Diluted EPS a. As per restated standalone financial information:
At the Floor Price - [●]%
At the Cap Price - [●]%
5. Net Asset Value (NAV) per Equity Share of face value of ₹ 10 each *
Net Asset Value (NAV) per Equity Share per Equity
Share
Net Asset Value per Equity Share as of March 31, 2018 as per Restated
Standalone Financial Information
55.98
Net Asset Value per Equity Share as of September 30, 2018 as per Restated
Standalone Financial Information
68.69
Net Asset Value per Equity Share after issue –At Floor Price as per Restated
Standalone Financial Information []
Net Asset Value per Equity Share after issue –At Cap Price as per Restated
Standalone Financial Information []
Issue price per Equity Share# []
# Issue Price will be determined on the conclusion of the Book Building Process.
*Net asset value per share (in ₹ ) = Net worth as at the end of the period/year /Number of equity shares outstanding
at the end of the period / year
6. Comparison of accounting ratios of the issuer with the peer group
There are no comparable listed companies in India; hence a comparison with industry peers is not applicable.
For further details see section titled “Risk Factors” beginning on page 22 of this Draft Red Herring Prospectus and
the financials of the Company including profitability and return ratios, as set out in the section titled “Restated
Financial Information” beginning on page 177 of this Draft Red Herring Prospectus for a more informed view
85
STATEMENT OF TAX BENEFITS
To
The Board of Directors
M/s. Novus Green Energy Systems Limited
Plot No.100, P&T Colony,
Trimulgherry,
Secunderabad - 500015.
Dear Sirs,
Sub: Statement of possible Special tax benefit (‘the Statement’) available to M/s. Novus Green Energy Systems
Limited and its shareholders prepared in accordance with the requirements under Schedule VI of the
Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 as
amended (the ‘Regulations’)
We hereby confirm that the enclosed annexure, prepared by M/s. Novus Green Energy Systems Limited (‘the
Company”) states the possible special tax benefits available to the Company and the shareholders of the Company
under the Income – tax Act, 1961 (‘Act’), the Wealth Tax Act, 1957 and the Gift Tax Act, 1958, 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 Act. Hence, the ability of the Company or its shareholders to derive the tax
benefits is dependent upon fulfilling such conditions, which based on the business imperatives, the company may or
may not choose to fulfill.
The amendments in Finance Act 2018 have been incorporated to the extent relevant in the enclosed annexure.
The benefits discussed in the enclosed Annexure cover only special tax benefits available to the Company and do not
cover any general tax benefits available to the Company. Further, these benefits are not exhaustive and the preparation
of the contents stated is the responsibility of the Company’s management. We are informed that this statement is only
intended to provide general information to the investors and hence 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.
Our views are based on the existing provisions of the Act and its interpretations, which are subject to change or
modification by subsequent legislative, regulatory, administrative or judicial decisions. Any such change, which could
also be retroactive, could have an effect on the validity of our views stated herein. We assume no obligation to update
this statement on any events subsequent to its issue, which may have a material effect on the discussions herein.
We do not express any opinion or provide any assurance as to whether:
the Company or its shareholders will continue to obtain these benefits in future; or
the conditions prescribed for availing the benefits, where applicable have been/would be met.
86
The enclosed annexure is intended solely for your information and for inclusion in the Draft Red Herring Prospectus/
Red Herring Prospectus and Prospectus or any other issue related material in connection with the proposed issue of
equity shares and is not to be used, referred to or distributed for any other purpose without our prior written consent.
for NSVR & ASSOCIATES LLP.,
Chartered Accountants,
Firm Registration No. :008801S/S200060
Peer Review Certificate No. :009126
P Venkata Ratnam
Partner
Membership No.: 230675
Place: Hyderabad
Date: 17-12-2018
Encl: Annexure
87
SECTION IV – ABOUT THE COMAPNY
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 other industry sources. Neither we nor any other person connected
with this 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 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.
GLOBAL ECONOMIC OUTLOOK
In the first half of 2018, global growth shed some of the strong momentum registered in the second half of last year,
and the expansion became less synchronized across countries. Activity moderated more than expected in some large
advanced economies from its strong pace last year, while the emerging market and developing economy group
continued to expand at broadly the same pace as in 2017. Among advanced economies, growth disappointed in the
euro area and the United Kingdom. Slower export growth after a strong surge in the final quarter of 2017 contributed
notably to the euro area slowdown. Higher energy prices helped dampen demand in energy importers, while some
countries were also affected by political uncertainty or industrial actions.
In the United Kingdom, growth moderated more than anticipated, partly because of weather-related disruptions in the
first quarter. Set against these developments, the US economy maintained robust growth, particularly in the second
quarter, with private sector activity buoyed further by sizable fiscal stimulus. Aggregate growth in the emerging
market and developing economy group stabilized in the first half of 2018. Emerging Asia continued to register strong
growth, supported by a domestic demand-led pickup in the Indian economy from a four-year-low pace of expansion
in 2017, even as activity in China moderated in the second quarter in response to regulatory tightening of the property
sector and nonbank financial intermediation. Higher oil prices lifted growth among fuel-exporting economies in sub-
Saharan Africa and the Middle East. The recovery in Latin America continued, though at a more subdued pace than
anticipated as tighter financial conditions and a drought weighed on growth in Argentina and a nationwide truckers’
strike disrupted production in Brazil.
Banking on the resurgence of global majors and the continuing policy stimulus-driven growth in China, India and
similar economies, the outlook for global GDP growth for 2018 is 3.7%. While the U.S. is expected to see a modest
growth pick-up due to stronger business and consumer confidence, both Europe and Japan are forecast to have stronger
and sustained momentum with diminished political uncertainty and growing private consumption respectively.
Exhibit 1: GDP Real Growth, Global, 2014-2021 (%)
Source: IMF
88
Global Growth Outlook
Global growth is projected at 3.7 percent in 2018 and 2019, 0.2 percentage point below the April 2018 WEO, even
though well above its level during 2012–16. Differences in the outlook across countries and regions are notable
(Table 1.1, Annex Tables 1.1.1–1.1.7, and Boxes 1.2 and 1.3 provide details of country projections). Global growth
is expected to remain steady at 3.7 percent in 2020, as the decline in advanced economy growth with the unwinding
of the US fiscal stimulus and the fading of the favorable spillovers from US demand to trading partners is offset by a
pickup in emerging market and developing economy growth. Thereafter, global growth is projected to slow to
3.6 percent by 2022–23, largely reflecting a moderation in advanced economy growth toward the potential of that
group.
Growth in advanced economies will remain well above trend at 2.4 percent in 2018, before softening to 2.1 percent
in 2019. The forecast for both years is 0.1 percentage point weaker than in the April 2018 WEO. In 2018, weaker-
than-expected outturns in the first half of the year have led to downward revisions for the euro area and the United
Kingdom. In 2019, recent trade measures are expected to weigh on economic activity, especially in the United States,
where the 2019 growth forecast was revised down by 0.2 percentage point. Growth is expected to decline to
1.8 percent in 2020 as the US fiscal stimulus begins to unwind and euro area growth moderates toward its medium-
term potential. Growth is projected to fall to 1.4 percent later on as working-age population growth continues to slow
and productivity growth remains moderate. With emerging Asia continuing to expand at a strong pace—despite a
0.3 percentage point downward revision to the 2019 growth forecast mostly driven by recently announced trade
measures—and activity in commodity exporters firming, growth in the emerging market and developing economy
group is set to remain steady at 4.7 percent in 2018–19. Over the medium term, growth is projected to rise to slightly
less than 5 percent. Beyond 2019, the aggregate growth rate for the group reflects offsetting developments as growth
moderates to a sustainable pace in China, while it improves in India (owing to structural reforms and a still-favorable
demographic dividend), commodity exporters (though to rates below the average of recent decades), and some
economies experiencing macroeconomic stress in 2018–19. In comparison with the April 2018 WEO, the growth
forecast for emerging market and developing economies was marked down for 2018 and 2019 by 0.2 percentage point
and 0.4 percentage point, respectively, and for 2020–23 by about 0.2 percentage point. For 2018–19, the main sources
of the downward revision are the negative expected impact of the trade measures implemented since the April 2018
WEO on activity in China and other economies in emerging Asia, much weaker activity in Iran following the
reimposition of US sanctions, a sharp projected slowdown in Turkey following the ongoing market turmoil, and a
more subdued outlook for large economies in Latin America (Argentina, Brazil, Mexico). Over 2020–23, the revisions
primarily reflect a downward reassessment of the still-strong growth prospects for India and a lower growth forecast
for Pakistan and Turkey, in addition to continued weaker growth in Iran.
(Source: IMF )
The pickup in global activity that started in the second half of 2016 gathered steam in the first half of 2017, reflecting
firmer domestic demand growth in advanced economies and China and improved performance in other large emerging
market economies. Growth in China and other emerging Asia remains strong, and the still-difficult conditions faced
by several commodity exporters in Latin America, the Commonwealth of Independent states, and sub- Saharan Africa
show some signs of improvement. In advanced economies, the notable 2017 growth pickup is broad based, with
stronger activity in the United States and Canada, the Euro area and Japan. Prospects for medium-term growth are
more subdued, however, as negative output gaps shrink (leaving less scope for cyclical improvement) and
demographic factors and weak productivity weigh on potential growth. The welcome cyclical pickup in global
economic activity after disappointing growth over the past few years provides an ideal window of opportunity to
undertake key reforms designed to boost potential output and ensure that its benefits are broadly shared and to build
resilience against downside risks. With countries still facing differences in cyclical conditions, varied stances of
monetary and fiscal policy remain appropriate. Completing the economic recovery and adopting strategies to ensure
fiscal sustainability remain important goals in many economies. The continued recovery in global investment
stimulated stronger manufacturing activity. World trade growth moderated in the second quarter after expanding very
rapidly in the first. Strong trade growth is a sign of strong economic growth, as trade provide a way for developing
and emerging economies to grow quickly, and strong import growth is associated with faster growth in the developed
countries. World trade growth was weaker in 2016 (1.3% in 2016 in comparison to 2.6% in 2015, WTO press release,
2017), due to falling import demand and slowing GDP growth in several major developing economies as well as in
North America. However, in 2017, trade rebounded strongly (world trade growth is 3.6 % in 2017(P), WTO Press
Release, Sep 2017) and this is attributed to a resurgence of Asian trade flows as intra-regional shipments picked up
and as import demand in North America recovered after stalling in 2016.
Among emerging market and developing economies, higher domestic demand in China and continued recovery in
key emerging market economies supported growth in the first half of 2017. In India, growth momentum slowed,
reflecting the persisting impact of its currency exchange initiative as well as uncertainty related to the mid-year
introduction of the country-wide Goods and Services Tax.
89
India’s growth projection for 2017 has been revised down to 6.7 per cent (7.2 per cent in April), reflecting still
persisting disruptions associated with the currency exchange initiative introduced in November 8, 2016 as well as the
transition costs related to the launch of the National Goods and Services Tax in July 2017.
The latter move, which promises the unification of India’s vast domestic market, is among several key structural
reforms under implementation that are expected to help push growth above 8 per cent in the medium term.
(Source: Department of Commerce | Annual Report 2017-18)
OVERVIEW OF INDIAN ECONOMY
Introduction
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.
Market size
India’s GDP is estimated to have increased 6.6 per cent in 2017-18 and is expected to grow 7.3 per cent in 2018-19.
In April-July quarter of 2018-19, the GDP grew by 8.2 per cent.
India has retained its position as the third largest startup base in the world with over 4,750 technology startups, with
about 1,400 new start-ups being founded in 2016, according to a report by NASSCOM.
India's labour force is expected to touch 160-170 million by 2020, based on 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 were US$ 400.49 billion in the week up to September 14, 2018, according to data
from the RBI.
INDIA TRADE STORY
India’s Merchandise Trade Value in US$ Billion
India's Services Trade Value in US$ Billion
90
(Source: RBI)
(Source: Department of Commerce | Annual Report 2017-18)
Recent Developments
Exports from India increased 20.7 per cent year-on-year to US$ 221.83 billion in April-August 2018.
Nikkei India Manufacturing Purchasing Managers’ Index (PMI) was at 51.7 in August 2018, showing
expansion in the sector.
Mergers and acquisitions (M&A) activity in the country has reached US$ 74.8 billion in 2018 (up to August).
Income tax collection in the country reached ₹ 10.03 lakh crore (US$ 137.75 billion) in 2017-18.
Companies in India have raised around ₹ 21,000 crore (US$ 2.88 billion) through Initial Public Offers (IPO)
in 2018 (up to August).
India's Foreign Direct Investment (FDI) equity inflows reached US$ 389.60 billion between April 2000 and
June 2018, with maximum contribution from services, computer software and hardware,
telecommunications, construction, trading and automobiles.
India's Index of Industrial Production (IIP) rose 5.4 per cent year-on-year in April-July 2018.
Retail inflation in the country was at a 10 month low of 3.69 per cent in August 2018, while wholesale
inflation was at 4.53 per cent.
Around 10.8 million jobs were created in India in 2017.
The top 100 companies in India are leading in the world in terms of disclosing their spending on corporate
social responsibility (CSR), according to a 49-country study by global consultancy giant, KPMG.
The bank recapitalisation plan by Government of India is expected to push credit growth in the country to
15 per cent, according to a report by Ambit Capital.
India has improved its ranking in the World Bank's Doing Business Report by 30 spots over its 2017 ranking
and is ranked 100 among 190 countries in 2018 edition of the report.
India's ranking in the world has improved to 126 in terms of its per capita GDP, based on purchasing power
parity (PPP) as it increased to US$ 7,170 in 2017, as per data from the International Monetary Fund (IMF).
India is expected to have 100,000 startups by 2025, which will create employment for 3.25 million people
and US$ 500 billion in value, as per Mr T V Mohan Das Pai, Chairman, Manipal Global Education.
91
The World Bank has stated that private investments in India is expected to grow by 8.8 per cent in FY 2018-
19 to overtake private consumption growth of 7.4 per cent, and thereby drive the growth in India's gross
domestic product (GDP) in FY 2018-19.
Moody’s upgraded India’s sovereign rating in November 2017 after 14 years to Baa2 with a stable economic
outlook.
Government Initiatives
The Union Budget for 2018-19 was announced by Mr Arun Jaitley, Union Minister for Finance, Government of India,
in Parliament on February 1, 2018. This year’s budget will focus on uplifting the rural economy and strengthening of
the agriculture sector, healthcare for the economically less privileged, infrastructure creation and improvement in the
quality of education of the country. As per the budget, the government is committed towards doubling the farmers’
income by 2022. A total of ₹ 14.34 lakh crore (US$ 196.94 billion) will be spent for creation of livelihood and
infrastructure in rural areas. Budgetary allocation for infrastructure is set at ₹ 5.97 lakh crore (US$ 81.99 billion) for
2018-19. All-time high allocations have been made to the rail and road sectors.India's unemployment rate is expected
to be 3.5 per cent in 2018, according to the International Labour Organisation (ILO).
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, has launched the Make in India initiative
with an aim to boost the manufacturing sector of Indian economy, to increase the purchasing power of an average
Indian consumer, which would further boost demand, and hence spur development, in addition to benefiting investors.
The Government of India, under the Make in India initiative, is trying to give boost to the contribution made by the
manufacturing sector and aims to take it up to 25 per cent of the GDP from the current 17 per cent. Besides, the
Government has also come up with Digital India initiative, which focuses on three core components: creation of
digital infrastructure, delivering services digitally and to increase the digital literacy.
Some of the recent initiatives and developments undertaken by the government are listed below:
The Union Cabinet gave its approval to the North-East Industrial Development Scheme (NEIDS) 2017 in
March 2018 with an outlay of ₹ 3,000 crores (US$ 460 million) up to March 2020.
Around 855,000 houses have been constructed up to August 21 2018, under Government of India’s housing
scheme named Pradhan Mantri Awas Yojana (Urban).
Village electrification in India was completed in April 2018.
Around 10.16 million households have been electrified up to August 09, 2018 under the Pradhan Mantri
Sahaj Bijli Har Ghar Yojana (SAUBHAGYA).
Prime Minister's Employment Generation Programme (PMEGP) will be continued with an outlay of ₹ 5,500
crore (US$ 755.36 million) for three years from 2017-18 to 2019-20, according to the Cabinet Committee
on Economic Affairs (CCEA).
In February 2018, The Union Cabinet Committee has approved setting up of National Urban Housing Fund
(NUHF) for ₹ 60,000 crore (US$ 8.24 billion) which will help in raising requisite funds in the next four
years.
The target of an Open Defecation Free (ODF) India will be achieved by October 2, 2019 as adequate funding
is available to the Swachh Bharat Mission (Gramin), according to Ms Uma Bharti, Minister of Drinking
Water and Sanitation, Government of India.
The Government of India has decided to invest ₹ 2.11 trillion (US$ 32.9 billion) to recapitalise public sector
banks over the next two years and ₹ 7 trillion (US$ 109.31billion) for construction of new roads and highways
over the next five years.
The mid-term review of India's Foreign Trade Policy (FTP) 2015-20 has been released by Ministry of
Commerce & Industry, Government of India, under which annual incentives for labour intensive MSME
sectors have been increased by 2 per cent.
92
The India-Japan Act East Forum, under which India and Japan will work on development projects in the
North-East Region of India will be a milestone for bilateral relations between the two countries, according
to Mr Kenji Hiramatsu, Ambassador of Japan to India.
The Government of India will spend around ₹1 lakh crore (US$ 13.73 billion) during FY 18-20 to build
roads in the country under Pradhan Mantri Gram Sadak Yojana (PMGSY).
The Government of India plans to facilitate partnerships between gram panchayats, private companies and
other social organisations, to push for rural development under its 'Mission Antyodaya' and has already
selected 50,000 panchayats across the country for the same.
The Government of India and the Government of Portugal have signed 11 bilateral agreements in areas of
outer space, double taxation, and nano technology, among others, which will help in strengthening the
economic ties between the two countries.
Road Ahead
India's gross domestic product (GDP) is expected to reach US$ 6 trillion by FY27 and achieve upper-middle income
status on the back of digitisation, globalisation, favourable demographics, and reforms. India's revenue receipts are
estimated to touch ₹ 28-30 trillion (US$ 385-412 billion) by 2019, owing to Government of India's measures to
strengthen infrastructure and reforms like demonetisation and Goods and Services Tax (GST). 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 also have plans to increase its renewable energy capacity from to 175 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 behaviour and expenditure pattern, according to a Boston Consulting Group (BCG) report;
and is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by
the year 2040, according to a report by PricewaterhouseCoopers.
(Source: https://www.ibef.org/economy/indian-economy-overview)
Apart from being a critical driver of economic growth, foreign direct investment (FDI) is a major source of non-debt
financial resource for the economic development of India. Foreign companies invest in India to take advantage of
relatively lower wages, special investment privileges such as tax exemptions, etc. For a country where foreign
investments are being made, it also means achieving technical know-how and generating employment.
Market size
According to Department of Industrial Policy and Promotion (DIPP), the total FDI investments in India April-June
2018 stood at US$ 12.75 billion, indicating that government's effort to improve ease of doing business and relaxation
in FDI norms is yielding results.
Data for April-June 2018 indicates that the services sector attracted the highest FDI equity inflow of US$ 2.43 billion,
followed by trading – US$ 1.63 billion, telecommunications – US$ 1.59 billion and computer software and hardware
– US$ 1.41 billion. Most recently, the total FDI equity inflows for the month of June 2018 touched US$ 2.89 billion.
During April-June 2018, India received the maximum FDI equity inflows from Singapore (US$ 6.52 billion), followed
by Mauritius (US$ 1.49 billion), Japan (US$ 0.87 billion), Netherlands (US$ 0.84 billion), and United Kingdom (US$
0.65 billion).
Investments/ developments
India emerged as the top recipient of Greenfield FDI Inflows from the Commonwealth, as per a trade review released
by The Commonwealth in 2018.
Some of the recent significant FDI announcements are as follows:
In August 2018, Bharti Airtel received approval of the Government of India for sale of 20 per cent stake in
its DTH arm to an America based private equity firm, Warburg Pincus, for around $350 million.
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In June 2018, Idea’s appeal for 100 per cent FDI was approved by Department of Telecommunication (DoT)
followed by its Indian merger with Vodafone making Vodafone Idea the largest telecom operator in India
In May 2018, Walmart acquired a 77 per cent stake in Flipkart for a consideration of US$ 16 billion.
In February 2018, Ikea announced its plans to invest up to Rs 4,000 crore (US$ 612 million) in the state of
Maharashtra to set up multi-format stores and experience centres.
In November 2017, 39 MoUs were signed for investment of Rs 4,000-5,000 crore (US$ 612-765 million) in
the state of North-East region of India.
In December 2017, the Department of Industrial Policy and Promotion (DIPP) approved FDI proposals of
Damro Furniture and Supr Infotech Solutions in retail sector, while Department of Economic Affairs,
Ministry of Finance approved two FDI proposals worth Rs 532 crore (US$ 81.4 million).
The Department of Economic Affairs, Government of India, closed three foreign direct investment (FDI)
proposals leading to a total foreign investment worth Rs 24.56 crore (US$ 3.80 million) in October 2017.
Kathmandu based conglomerate, CG Group is looking to invest Rs 1,000 crore (US$ 155.97 million) in India
by 2020 in its food and beverage business, stated Mr Varun Choudhary, Executive Director, CG Corp Global.
International Finance Corporation (IFC), the investment arm of the World Bank Group, is planning to invest
about US$ 6 billion through 2022 in several sustainable and renewable energy programmes in India.
Government Initiatives
Government of India is planning to consider 100 per cent FDI in Insurance intermediaries in India to give a boost to
the sector and attracting more funds. In January 2018, Government of India allowed foreign airlines to invest in Air
India up to 49 per cent with government approval. The investment cannot exceed 49 per cent directly or indirectly.
No government approval will be required for FDI up to an extent of 100 per cent in Real Estate Broking Services. In
September 2017, the Government of India asked the states to focus on strengthening single window clearance system
for fast-tracking approval processes, in order to increase Japanese investments in India.
The Ministry of Commerce and Industry, Government of India has eased the approval mechanism for foreign direct
investment (FDI) proposals by doing away with the approval of Department of Revenue and mandating clearance of
all proposals requiring approval within 10 weeks after the receipt of application. The Government of India is in talks
with stakeholders to further ease foreign direct investment (FDI) in defence under the automatic route to 51 per cent
from the current 49 per cent, in order to give a boost to the Make in India initiative and to generate employment. In
January 2018, Government of India allowed 100 per cent FDI in single brand retail through automatic route.
GLOBAL STATUS - RENEWABLE ENERGY
Renewable power generating capacity saw its largest annual increase ever in 2017, raising total capacity by almost
9% over2016, the total global RE capacity has reached 2195 GW* as on Dec2017. Overall, renewables accounted for
an estimated 70% of net additions to global power capacity in 2017, due in large part to continued improvements in
the cost-competitiveness of solar PV and wind power. Solar PV led the way, accounting for nearly 55% of newly
installed renewable power capacity in 2017. More solar PV capacity was added than the net additions of fossil fuels
and nuclear power combined. Wind (29%) and hydropower (11%) accounted for most of the remaining capacity
additions. Several countries are successfully integrating increasingly larger shares of variable renewable power into
electricity systems. Renewable-based stand-alone and off-grid single home or mini-grid systems represented about
6% of new electricity connections worldwide between 2012 and 2016.
Solar PV was the top source of new power generating capacity in 2017, due largely to strong growth in China, with
more solar PV installed globally than the net additions of fossil fuels and nuclear power combined. Global capacity
increased nearly one-third, to approximately 402 GW.
The year 2017 brought tumbling bid prices for both onshore and offshore wind power capacity in auctions around the
world. Bid prices were down due to technology innovation and scale, expectations of continued technology advances,
reduced financing costs due to lower perceived risk, and fierce competition in the industry. Electric utilities and large
oil and gas companies continued to move further into the industry. Wind power had its third strongest year ever, with
more than 52 GW added (about 4% less than in 2016) for a total of 539 GW.
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Top 10 Countries - Solar PV Capacity*
S. No. Countries Added- 2017(GW) Cumulative as on- Dec, 2017 (GW)
1 China 53.1 131.1
2 United States 10.6 51
3 Japan 7 49
4 Germany 1.7 42.4
5 Italy 0.4 19.7
6 India 9.1 18.3
7 United Kingdom 0.9 12.7
8 France 0.9 8
9 Australia 1.3 7.2
10 Spain 0.1 5.6
Total 98 402
95
National Targets for share of Renewable Energy in Final Energy by a specific year at end 2017
Source: http://www.ren21.netREN 21 Global Status Report for 2018
By year’s end, global renewable power capacity totalled around 2,195 GW – enough to supply an estimated 26.5% of
global electricity, with hydropower providing about 16.4%.By year’s end, global renewable power capacity totalled
around 2,195 GW – enough to supply an estimated 26.5% of global electricity, with hydropower providing about
16.4%.
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GLOBAL RENEWABLE POWER CAPACITY, 2007-2017
Source: http://www.ren21.netREN 21 Global Status Report for 2018
GLOBAL INVESTMENT FLOWS IN THE RENEWABLE SECTOR
Global new investment in renewable power and fuels exceeded USD 200 billion annually for the eighth year running.
The investment total of USD 279.8 billion* in 2017 was up 2% over 2016, despite further cost reductions for wind
and solar power technologies. Investment in new renewable power capacity (including all hydropower) was three
times the investment in fossil fuel generating capacity, and more than double the investment in fossil fuel and nuclear
power generation combined. Investment in renewable energy continued to focus on solar power, particularly solar
PV, which increased its lead over wind power in 2017. Asset finance of utility-scale projects, such as wind farms and
solar parks, dominated investment during the year at USD 216.1 billion. Small-scale solar PV installations (less than
1 MW) saw an investment increase of 15%, to USD 49.4 billion.
In 2017, global issuance of green bonds jumped 67% to a record USD 163.1 billion. The strong growth in green bonds
was related to a leap in the volume of asset-backed securities issued (mostly linked to residential solar PV systems in
the United States), to growth in green bond issuance by sovereign governments. IREDA has successfully raised $ 300
million through a 5 year rupee-denominated green bond.
OVERVIEW OF INDIAN RENEWABLE ENERGY INDUSTRY
India accounts for approximately 4 per cent of the total global electricity generation and contributes 4.43 per cent to
the global renewable generation capacity.
The International Energy Agency’s World Energy Outlook projects a growth of renewable energy supply to 4,550
GW in 2040 on a global basis.
A hydro power revival policy is underway which amongst others is likely to include the classification of all hydro
power projects as renewable energy
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Source: www.ibef.org
*up to 31.12.2017
Source: MNRE Annual Report 2017-18
RENEWABLE ENERGY REGULATORY FRAMEWORK
The development of grid interactive renewable power took off with the coming into force of the Electricity Act 2003
(EA 2003), which, among other things, provides for regulatory interventions for promotion of renewable energy (RE)
sources through a) determination of tariff; b) specifying renewable purchase obligation (RPO); c) facilitating grid
connectivity; and d) promotion of development of market.
The National Tariff Policy (NTP) 2006 requires the State Electricity Regulatory Commissions (SERCs) to fix a
minimum percentage of Renewable Purchase Obligation (RPO) from such sources taking into account availability of
such resources in the region and its impact on retail tariffs and procurement by distribution companies at preferential
tariffs determined by the SERCs. NTP has further elaborated on the role of regulatory commission; mechanism for
promoting renewable energy and timeframe for implementation, etc. The policy was amended in January 2011 to
prescribe solar-specific RPO be increased from a minimum of 0.25 per cent in 2012 to 3 per cent by 2022. Further,
the National Action Plan on Climate Change (NAPCC) suggests increasing the share of renewable energy in the total
energy mix at-least up to 15 percent by 2020.
In view of the aforesaid provisions, regulatory framework for renewable power is evolving and all major States,
Central Electricity Regulatory Commission (CERC), Central Electricity Authority (CEA) etc are declaring, revising,
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and modifying renewable power regulatory framework such as RE policy, RPOs, Feed in Tariffs (FiTs), Renewable
Energy Certificate (REC) mechanism, grid connectivity and forecasting provisions etc. on a regular basis.
Ministry of New & Renewable Energy has initiated an exercise to track the evolving renewable power regulatory
framework and develop a repository of information in a consolidated manner. This exercise is expected to help
understand the dynamic nature of the renewable energy regulations and related issues and also create a platform to
share information on pertinent issues.
Renewable Energy Sources
RENEWABLE ENERGY GROWTH DRIVERS
Some of the significant developments in the recent years are mentioned below:
National Solar Mission (NSM) was launched in January 2010. was the first mission to be operationalized
under the National Action Plan on Climate Change (NAPCC).
The initial target of the NSM was installing 20 GW grid-connected solar power plants by the year 2022 was
enhanced to 100 GW to be achieved by the same target year.
In the year 2015, the Government of India announced a target for 175 GW cumulative renewable power
installed capacity by the year 2022. A capacity of 62.84 GW has been set up by December.
During 2017-18, a total 5602.65 MW capacity has been added till 31.12.2017 is as follows:
Achievement in grid connected renewable power
Achievement (MW)
(April - December, 2017)
Cumulative
Achievements (MW)
(as on 31.12.2017)
Wind Power 568.71 32848.46
Solar Power - Ground Mounted 4492.05 16070.07
Solar Power - Roof Top 271.49 982.30
Small Hydro Power 38.30 4418.15
Bio Power (Biomass & Gasification
and Bagasse Cogeneration)
232.10 8413.80
Waste to Power 0.00 114.08
Total 5602.65 62846.86
Renewable Energy
Sources (RES)
Small Hydro Power
(Project<25MW)Wind Power
Bio Power
Solar power
Biomass Power
Urban & industrail Waste Power
Other forms of renewable
energy
Solar power
hydro Energy
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100 GW total power generation capacity added in last 4 FYs, out of which more than 37.3 GW were through
RE Sources. RE installed capacity has already reached over 71 GW as on June, 2018, which is more than
20% of the overall installed power generation capacity of India. India is aiming for 500 GW with 350 GW
Solar, 140 GW Wind and 10 GW biomass power) of RE Power by 2030, based on renewable energy
technologies.
The Government has set the trajectory of bidding 60 GW capacity of solar energy and 20 GW capacity of
Wind energy till 31.03.2020. Projects worth each 30 GW Solar Power and 10 GW Wind Power capacity
would be bid out each in the year 2018-19 & 2019-20.
Bidding Trajectory (GW) during FYs 2018-19 & 2019-20
Technology FY 2018-19 FY 2019-20
Solar Power 34 30
Wind Power 10 10
Manufacturing linked Solar 10 10
Solar - Wind Hybrid 4 3
Off Shore 1 1
Others ( Floating Solar,
Biomass, Small Hydro)
2 2
Total 61 56
The Government of India is coming up with new Scheme ‘Kisan Urja Suraksha evam Utthaan Mahabhiyan
(KUSUM)’ with more focus on rural areas, farmers interest & solarization of existing grid connected
agriculture pumps etc.,
100 per cent of village electrification achieved under Deen Dayal Upadhyaya Gram Jyoti Yojana
(DDUGKY)
Now, in terms of wind power installed capacity, India is globally placed at 4th position after China, USA
and Germany.
Solar tariff has declined to lowest level of 2.44 /kWh.
About 9 times higher Solar Plant installed between 2014-17( 1.1 Lakh) against 1991-2014 (11,600)
(Source: MNRE Annual Report 2017-18, IREDA Annual Report 2017-18)
Largest ever Wind Power capacity addition of 5502.39 MW in 2016-17 exceeding target by 38%. During
2017-18, a total 467.11 MW capacity has been added till 30.11.2017, making cumulative achievement
32746.87 MW. Now, in terms of wind power installed capacity India is globally placed at 4th position after
China, USA and Germany.
Biggest ever Solar Power capacity addition of 5525.98 MW in 2017-18. During 2017-18, a total 4323.1
MW (including 207.92 MW Solar Roof Top) capacity has been added till 30.11.2017, making cumulative
achievement 16611.73 MW (including 863.92 MW Solar Roof Top).
So far,1.42 lakh Solar Pump have been installed in the Country as on 30.11.2017 including 1.31 lakh
during last three and half year.
Solar projects of capacity 23656 MW have been tendered and LoI for 19,340 MW issued.
A capacity addition of 0.59 GW has been added under Grid Connected Renewable Power since last three
and half years from Small Hydro Power plants.
Biomass power includes installations from biomass combustion, biomass gasification and bagasse co-
generation making a cumulative achievement to 8181.70 MW.
Family Type Biogas Plants mainly for rural and semi-urban households are set up under the National Biogas
and Manure Management Programme (NBMMP). During 2017-18, against a target of 1.1 lakh biogas
plants, 0.15 lakh biogas plants installations has been achieved making a cumulative achievement to 49.8
lakh biogas plants as on 30.11.2017.
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Programme/ Scheme wise Physical Progress in year 2017-18 (January- November 2017)
Sector FY- 2017-18
Achievement (Jan-November
2017)
Cumulative Achievement
as on 30.11.2017
I. GRID-INTERACTIVE POWER (CAPACITIES IN MWp)
Wind Power 4046.44 32746.87
Solar Power 7599.31 16611.73
Small Hydro Power 64.80 4399.35
Bio Power (Biomass & Gasification and
Bagasse Cogeneration)#
60.95 8181.70
Waste to Power 16.00 114.08
Total 11787.50 62053.73
II. OFF-GRID/ CAPTIVE POWER (CAPACITIES IN MWEQ)
Waste to Energy 12.11 175.45
Biomass(non-bagasse) Cogeneration 9.50 661.41
Biomass Gasifiers 0.92 163.37
Aero-Generators/Hybrid systems 0.32 3.29
SPV Systems 146.02 551.56
Total 168.87 1555.08
III. OTHER RENEWABLE ENERGY SYSTEMS
Family Biogas Plants (in Lakhs) 0.15 49.80
Water mills/micro hydel (Nos.) 0.00 2690/72
#Progress of Bio power has been revised to installed capacity
from exportable power capacity.
(Source: Make in India, http://pib.nic.in, https://mnre.gov.in)
Amendments in Tariff Policy to promote Renewable Energy
Enhancement in Solar Renewable Power Obligation (RPO) to 8% by March 2022.
Introduction of Renewable Generation Obligation (RGO) for New coal/lignite based thermal plants after
specified date.
Ensuring affordable renewable power through bundling of renewable power.
No inter-state transmission charges and losses to be levied for solar and wind power.
Notification of the long term growth trajectory of RPO for solar and non-solar energy for next 3 years from
2016-17, 2017-18 and 2018-19;
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Development of Solar Parks and Ultra Mega Solar Power Projects;
Development of power transmission network through Green Energy Corridor project;
Making roof top solar as a part of housing loan provided by banks;
Repowering of Wind Power Projects for optimal utilization of wind resources;
Offshore wind energy policy for development of offshore wind energy in the Indian Exclusive Economic Zone;
Supporting research and development on various aspects of renewable energy including with industry
participation;
Financial incentives for off-grid and decentralized renewable energy systems and devices for meeting energy
needs for cooking, lighting and productive purposes
(Source: Make in India)
POLICY MEASURES FOR PROMOTION OF NEW & RENEWABLE ENERGY
The Government of India has undertaken a number of policy measures for increasing share of renewable energy in
India’s energy mix. These, inter-alia, include:
a) Provision of Renewable Purchase Obligation (RPO) under the National Tariff Policy;
b) Notification of the long term growth trajectory of RPO for solar and non-solar energy for next 3 years from 2016-
17, 2017-18 and 2018-19;
c) Development of Solar Parks and Ultra Mega Solar Power Projects;
d) Development of power transmission network through Green Energy Corridor project;
e) Making roof top solar as a part of housing loan provided by banks;
f) Waiver of Inter-State Transmission Charges and losses;
g) Repowering of Wind Power Projects for optimal utilization of wind resources;
h) Offshore wind energy policy for development of offshore wind energy in the Indian Exclusive Economic Zone;
i) Supporting research and development on various aspects of renewable energy including with industry
participation;
j) Financial incentives for off-grid and decentralized renewable energy systems and devices for meeting energy
needs for cooking, lighting and productive purposes; and
k) Permitting 100 percent Foreign Direct Investment in sector through automatic route.
The Government of India has set up a target of installing 175 GW capacity through renewables by 2022. As on
28.02.2018, a total capacity of 65 GW had been installed in the country.
(Source: http://pib.nic.in/PressReleaseIframePage.aspx?PRID=1524602)
FDI POLICY
Foreign Direct Investment (FDI) up to 100% is permitted under the automatic route for renewable energy generation
and distribution projects subject to provisions of The Electricity Act, 2003.
OVERVIEW OF INDIAN SOLAR MARKET
Evolution of solar power in India
In the renewable energy segment in India, wind energy accounted for the largest share at 56.0% as of March 2017,
while solar power contributed 22.0%. However, growth in the solar power sector over the last five years has been
robust. Capacity additions of 12.3 GW were witnessed in the solar power segment over Fiscal 2012 through Fiscal
2017, registering a CAGR of 67.0%, although starting from a low base. Growth in the solar sector has significantly
outpaced that of other renewable energy sources (wind and other renewables) in India, which grew at a 14.0% CAGR
over the same period.
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Growth of Solar Sector
The growth factors for solar energy in India are detailed below:
Strong government initiatives
The GoI has taken significant action in connection with climate change. The GoI has provided a framework, the
National Action Plan on Climate Change (“NAPCC”), in 2008, where it proposed an eight-pronged strategy – the
NSM, energy efficiency, sustainable habitat, water planning, the Himalayan ecosystem, afforestation, sustainable
agriculture and strategic knowledge on climate change. The GoI has prioritized solar power in particular as reflected
below:
Introduction of the NSM
The GoI launched the NSM, in Fiscal 2010, under which it has undertaken several initiatives to promote low cost
solar power in the country.
Some of the key initiatives taken under the NSM scheme are as follow:
a. The GoI appointed NVVN, the trading arm of NTPC, to bid competitively for solar power and bundle it with
cheaper thermal power to sell it to distribution companies. The objective was to reduce the average power
purchase cost of solar power.
b. The GoI is incentivizing the central public sector undertakings (“CPSUs”) to install solar power under the VGF
mechanism. Under Batch V of NSM, it has already allocated approximately 1 GW. Further, the GoI has
mandated large public sector institutions to substitute part of their power consumption with solar power.
103
c. The GoI has also incorporated SECI for the purpose of promoting solar projects in India. It conducts the
bidding procedure and also undertakes the distribution of funds allocated from the centre to developers .SECI
also buys solar power from the developers and sells it to bulk consumers under tripartite agreements.
Introduction of JNNSM
Some of the key initiatives taken under the JNNSM include the appointment of NVVM to buy competitively bid solar
power and bundle it with cheaper thermal power to sell it to DISCOMs so as to reduce the average power purchase
cost of solar power. Under the JNNSM, NTPC has committed to add 10GW of solar power by fiscal 2022. The GoI
is also incentivising central public sector undertakings to install solar power under the viability gap funding
mechanism and has mandated large public sector institutions to substitute part of their power consumption with solar
power. In addition, for the purpose of promoting solar projects in India, the GoI has incorporated SECI to conduct the
bidding procedure and undertake the distribution of funds allocated by the GoI to developers.
Operational support for the execution of solar projects
The GoI has given significant support to the solar power sector for execution of projects through the setting up of
solar parks. Under a policy released in September 2014, the GoI has planned to prepare land banks for 20,000 MW
of solar projects spread across 25 states in India. The GoI has also approved capacity augmentation of solar parks to
40 GW in March 2017 to support execution of solar projects and sanctioned ₹81 billion for a newly envisaged 20 GW
of solar projects. In addition, various states including Andhra Pradesh, Telangana, Rajasthan, Karnataka, Madhya
Pradesh and Punjab, have implemented initiatives to address prevailing land acquisition issues.
Central and state level incentives
Several fiscal and regulatory incentives have been provided by the government to developers to facilitate growth in
the solar power sector, including accelerated depreciation benefit; generation based incentives; availability of viability
gap funding; tax holiday under Section 80 IA of the Income Tax Act; regulatory incentives such as must run status of
renewable energy and deemed generation for projects. Particularly under state solar policies, incentives such as
concessional wheeling and banking charges, concessional transmission charges and transmission losses, cross subsidy
surcharges and reactive charges also have been made available.
KUSUM SCHEME (Kisan Urja Suraksha evam Utthaan Mahaabhiyan) Solar Agriculture Pumps Loan
Subsidy Yojana
The start of 2018 saw the announcement of several unique schemes, aimed at the betterment of farmers. One of these
programs was the Kisan Urja Suraksha Utthaan Mahaabhiyan or the KUSUM scheme. Under this arrangement, the
central government desires to assist as many farmers as possible to install new and improved solar pumps on their
farms. The farmers need not pay a hefty fee for this benefit as it comes with government subsidy.
Launch details of the scheme
Date of Launch 1st February (Union Budget 2018)
First Announcement Made By Mr. Arun Jaitley On 1st February
Second Announcement Made By Power Ministry On 2nd February
Starting Year 2018 – 2019
Supervised By Indian Power Ministry that is headed by R.K. Singh
Construction of plants on infertile lands only – The government has also announced that it will take initiative to
Construct plants, which will generate solar power. As per the draft, these plants will only be erected on infertile areas,
capable of generating a total of 28,250 MW power.
Distribution of solar powered pumps – One of the primary aims of this program is to provide interested farmers
with solar pumps. The government states that 17.5 lakh solar powered pumps will be provided to agricultural labors.
Power production on small scale – Apart from the solar power plants, government will work towards the installation
of new solar pumps in farms, which have diesel pumps. The capacity of these pumps will be 720 MW.
Power generation from tube-wells – The government will also work toward the installation of unique tube-wells.
Each of these pumps will be able to generate power of 8250 MW.
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Overview Solar Pumps Industry
Under the Off-Grid and Decentralized Solar PV Programme for 2017-18, Ministry is providing Central Financial
Assistance (CFA) to implementing agencies for deployment of SPV home lighting systems, Solar street lights, Solar
pumps, power packs and other solar applications to meet out the electricity and lighting needs of the individual in the
rural areas. State Nodal Agencies (SNAs) are the primary implementing agency through which CFA of 30% was
being provided. NABARD was one of the implementing agencies for pumps and lighting systems through which CFA
of 40% of the benchmark cost was being provided.
More than 96,000 pumps have been sanctioned during 2017-18 under Off-grid solar pumps. Overall, about 2.4 lakh
pumps have been sanctioned and 1.47 lakh solar pumps installed under the programme till 31.12.2017. A total of 182
MWp capacity solar PV offgrid systems / power plants have been installed till 31st December 2017
During the year, the solar systems having total capacity of 104.41 MWp which includes solar study lamps, solar home
lights, solar street lights, solar pumps, Mini/micro grids and power plants installed at various states:
150 kwp of SPV power plants has been installed at various hospitals and primary health centre in Arunachal
Pradesh
2000 numbers of solar plants for drinking water installed in Odisha
SPV power plants of capacity 500 kWp has been installed in Chhattisgarh
9 Mini grids having capacity of 210.4 kWP has been installed in nine villages of Gumla districts in Jharkhand
12,890 number of solar pumps has been installed in Chhattisgarh
SPV power plants of capacity 134 kWP have been installed in Rajasthan.
SPV power plant of capacity 25 kWp and 700 number of Solar street lights have been installed in Manipur.
Solar street lights installed during last five years including current year (31.12.2017) (page 30)
18800
62968
49985
76471
13867
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
2013-14 2014-15 2015-16 2016-17 2017-18
Nu
mb
ers
Years
Solar Street Lights
105
Solar pumps installed during last five years including current year
State wise pumps sanctioned during the year 2017-18:
Sl. No State Number of solar pumps
sanctioned
1 Andaman and Nicobar 20
2 Andhra Pradesh 15000
3 Bihar 3300
4 Chhattisgarh 15000
5 Gujarat 5000
6 Jharkhand 2000
7 Karnataka 1500
8 Madya Pradesh 14000
9 Maharashtra (For Drinking Water) 1000
10 Maharashtra(For Irrigation) 7000
11 Odisha 1500
12 Punjab 2556
13 Rajasthan 7500
14 Tamil Nadu 1000
15 Uttar Pradesh 20000
(Source: National Solar Mission annual report 2017-18)
3437
46 4855
6164
7074
0
10
20
30
40
50
60
70
80
01-Apr 01-May 01-Jun 01-Jul 01-Aug 01-Sep 01-Oct 01-Nov 01-Dec
Nu
mb
ers
Years
Solar Pumps
106
Solar home lighting systems installed during last five years including current year (31.12.2017)
The Government of India has taken several initiatives during the last two years such as introduction of the concept of
solar parks, organizing RE-Invest 2015—a global investors’ meet, launching of a massive grid-connected rooftop
solar programme, earmarking of 38,000 crores for a Green Energy Corridor, eight-fold increase in clean environment
cess from 50 per tonne to 400 per tonne, solar pump scheme with a target of installing 100,000 solar pumps and
programme to train 50,000 people for solar installations under the Surya Mitra scheme, no inter-state transmission
charges and losses to be levied for solar and wind power, compulsory procurement of 100 per cent power from waste
to energy plants, and Renewable Generation Obligations on new thermal and lignite plants, etc.
As on December 31, 2017, the total solar power capacity installed is 17052.37 MW. Based upon availability of land
and solar radiation, the potential of solar power in the country has been assessed to be around 750 GWp. State-wise
details of estimated solar energy potential in the country and the cumulative installed capacity are given as follows:
State-wise estimated Solar Energy Potential in the Country
Sr. No. State/UT Solar Potential (GWp)#
1. Andhra Pradesh 38.44
2. Arunachal Pradesh 8.65
3. Assam 13.76
4. Bihar 11.20
5. Chhattisgarh 18.27
6. Delhi 2.05
7. Goa 0.88
8. Gujarat 35.77
9. Haryana 4.56
10. Himachal Pradesh 33.84
11. Jammu & Kashmir 111.05
12. Jharkhand 18. 18
13. Karnataka 24.70
14. Kerala 6.11
15. Madhya Pradesh 61.66
16. Maharashtra 64.32
17. Manipur 10.63
18. Meghalaya 5.86
19. Mizoram 9.09
20. Nagaland 7.29
21. Odisha 25.78
3437
46 48
5561
6470
74
0
10
20
30
40
50
60
70
80
01-Apr 01-May 01-Jun 01-Jul 01-Aug 01-Sep 01-Oct 01-Nov 01-Dec
Nu
mb
ers
Years
Solar Home Lighting System
107
22. Punjab 2.81
23. Rajasthan 142.31
24. Sikkim 4.94
25. Tamil Nadu 17.67
26. Telangana 20.41
27. Tripura 2.08
28. Uttar Pradesh 22.83
29. Uttarakhand 16.80
30. West Bengal 6.26
31. UTs 0.79
Total 748.98
(Source: MNRE Annual Report 2017-18 )
# Assessed by National Institute of Solar Energy
Commissioning Status of Grid Connected Solar Projects
Sr. No. State/UT Total cumulative
capacity (MW) as
on 31-03-2017
Capacity
commissioned in
2017-18 (MW)
Total cumulative
capacity (MW) as
on 31-12-2017
1. Andaman & Nicobar 6.56 6.05 12.61
2. Andhra Pradesh 1867.23 297.99 2165.21
3. Arunachal Pradesh 0.27 4.12 4.39
4. Assam 11.78 0.00 11.78
5. Bihar 108.52 33.00 141.52
6. Chandigarh 17.32 1.57 18.89
7. Chhattisgarh 128.86 50.52 179.38
8. Dadar & Nagar 2.97 0.00 2.97
9. Daman & Diu 10.46 0.00 10.46
10. Delhi 40.27 17.75 58.02
11. Goa 0.71 0.00 0.71
12. Gujarat 1249.37 95.32 1344.69
13. Haryana 81.40 122.45 203.85
14. Himachal Pradesh 0.73 0.75 1.48
15. Jammu & Kashmir 1.36 1.00 2.36
16. Jharkhand 23.27 0.00 23.27
17. Karnataka 1027.84 773.01 1800.85
18. Kerala 74.20 14.00 88.20
19. Lakshadweep 0.75 0.00 0.75
20. Madhya Pradesh 857.04 353.07 1210.11
21. Maharashtra 452.37 310.71 763.08
22. Manipur 0.03 1.30 1.33
23. Meghalaya 0.01 0.05 0.06
24. Mizoram 0.10 0.10 0.20
25. Nagaland 0.50 0.00 0.50
26. Odisha 79.42 0.09 79.51
27. Puducherry 0.08 0.03 0.11
28. Punjab 793.95 111.69 905.64
29. Rajasthan 1812.93 497.53 2310.46
30. Sikkim 0.00 0.01 0.01
31. Tamil Nadu 1691.83 127.59 1819.42
32. Telangana 1286.98 1703.09 2990.07
33. Tripura 5.09 0.00 5.09
34. Uttar Pradesh 336.73 213.65 550.38
35. Uttarakhand 233.49 13.40 246.89
36. West Bengal 26.14 13.70 39.84
37. Other/MoR/PSU 58.31 0.00 58.31
Total 12288.83 4763.54 17052.37
(Source: MNRE Annual Report 2017-18 )
108
The growth of the solar sector in India commenced with the commissioning of 15 MW of solar PV pilot projects
between 2008 and 2009. Solar capacity additions have grown at an increasing rate since the introduction of the NTPC
Vidhut Vyapar Nigam Limited (NVVN) scheme under India’s Jawaharlal Nehru National Solar Mission (JNNSM)
(which allowed bundling of solar power with cheaper thermal power).
Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects:-
Some of the key initiatives taken under the above scheme are as follow
a. The scheme for development of Solar Parks and Ultra Mega Solar Power Projects was rolled out by Ministry
of New & Renewable Energy in December, 2014. The Scheme has been conceived on the lines of the
“Charanka Solar Park” in Gujarat which is a first-of-its-kind large scale Solar Park in India with contiguous
developed land and transmission connectivity.
b. It was planned to set up at least 25 Solar Parks and Ultra Mega Solar Power Projects targeting over 20,000
MW of solar power installed capacity within a span of 5 years starting from 2014-15.( revised in 2017 with
the approval of Cabinet to setup at least 50 solar parks with aggregate capacity of 40,000 MW).
c. The capacity of the Solar Parks is normally 500 MW and above. However, smaller parks considered in
Himalayan Region & other hilly States where contiguous land may be difficult to acquire in view of difficult
terrain and in States where there is acute shortage of non-agricultural land.
d. The implementing agency is sanctioned a grant of upto 25 Lakh/Park for preparing Detailed Project Report
(DPR) of the Solar Park.
e. Thereafter, application is sent by the implementing agency to Solar Energy Corporation of India (SECI) for
the grant of up to 20 lakh/MW or 30% of the project cost including Grid-connectivity cost, whichever is
lower. The approved grant is released by SECI as per milestones prescribed in the scheme.
f. In-principle approval has been accorded to 35 Solar Parks of aggregate capacity of 20,514 MW planned to
be set up in 21 States/UTs.
Some of the key initiatives taken under the above scheme are as follow
a. A capacity of 300 MW is to be set up in various Establishments of Ministry of Defence i.e. Establishments
of Army, Navy, Air Force, Ordnance Factory Board, Defence Laboratories and Defence PSUs etc. Para
Military Forces also to be covered under this scheme.
b. Minimum size of the project to be 1 MW.
c. The projects under this Scheme are to mandatorily use solar cells & modules which are made in India.
d. Project Implementation Schedule is 5 years period i.e. from 2014-19.
e. The following two modes may be used for tendering
Developer Mode: This is mode under which the project is given to developer, who makes the investment,
own the project and supplies power to Defence Establishments.
EPC Mode: This is applicable when project is built through EPC contractor and investment is made by
the Defence establishment/Para Military Forces.
f. The solar project developers are provided VGF based on the bid. The bidders are selected on the basis of
bids for minimum VGF requirement for the project with commitment to supply solar power at 5.50/KWh
for 25 years. However, the upper limits of the VGF are as follows:
Category-I: 2.5 Cr./MW for project capacity upto 5 MW or 30% of the project cost whichever is lower;
Category-II: 2 Cr./MW for project capacity greater than 5 MW upto 25 MW or 30% of the project cost
whichever is lower; and
Category-III: 1.5 Cr./MW for project capacity greater than 25 MW or 30% of the project cost whichever
is lower.
3000 MW Grid connected solar PV power projects under nsm phase-ii, batch-II, Tranche-I – ‘state specific
bundling scheme’
Under this Scheme, which is part of Tranche-I of Batch-II of Phase-II of National Solar Mission, 3 GWcapacity of
solar PV power plants are being set up based on the mechanism of bundling of solar power (3 GW) with unallocated
thermal power (1500 MW) in the ratio of 2:1 (in MW terms), for which the required 1500 MW unallocated thermal
power has been made available bythe Ministry of Power.
109
State-wise allocations of 3000 MW State Specific Bundling Scheme under NSM Phase-II, Batch-II
Sl.
No.
State/ UT Capacity
allotted in open
category (MW)
Capacity allotted
in
Domestic
Content
Requirement
(DCR)category
(MW)
In Solar
Parks
Outside
Solar
Parks
Total
Capacity
Allotted
(MW)
1. Andhra Pradesh 1100 150 1250 0 1250
2. Karnataka 500 100 600 0 600
3. Rajasthan 550 100 420 230 650
4. Telangana 350 50 0 400 400
5. Uttar Pradesh 100 00 0 100 100
Total 2600 400 2270 730 3000
Break-up of 2050 MW Project Commissioned as on 30.11.2017
State Solar PV Projects Allotted (MW) Solar PV Projects Commissioned
(MW)
Andhra Pradesh 1250 1000
Rajasthan 650 650
Uttar Pradesh 100 100
Karnataka 600 0
Telangana 400 300
Total 3000 2050
GENERATION BASED INCENTIVES (GBI) PROGRAMME FOR SMALL PV SOLAR POWER PLANTS
Rooftop PV and Small Solar Power Generation Programme (RPSSGP)
a. After successful demonstration of MW projects in Demo Scheme, Ministry launched a Generation Based
Incentives (GBI) programme on 16th June 2010 to give a thrust to rooftop PV and other small solar power
plants connected to grid under Phase I NSM. Implementing Agency is IREDA.
b. 100 MW Solar capacity was allocated and 91.8 MW of 72 projects in 12 States was commissioned. GBI is
applicable for 25 years from the commissioning date and payable to the distribution utility
c. Ministry provides fixed GBI from 8.69 to 12.24 /Kwh to the State utilities at a rate equal to the difference
of the CERC tariff for 2010-11 ( 17.91 per kWh) and a base rate of 5.50 per kWh.
d. Annual budget requirement by Ministry under RPSSGP scheme is approx. 180.00 crore for 91.8 MW.
Status of Funds received, Claims processed and Released under Solar GBI Schemes
Schemes Receipt of Funds
from MNRE
Claims Processed and
Pending for Release
Amount Released
Amount Date Amount Date Amount
Demo Solar GBI 187.26 15-10-2018 18.49 15-10-2018 187.58
RPSSGP (Solar GBI) 852.42 15-10-2018 19.59 15-10-2018 771.18
(Source: www. http://ireda.in)
GRID CONNECTED ROOFTOP AND SMALL POWER PLANTS PROGRAMME
a. The Ministry is implementing “Grid Connected Rooftop and Small Solar Power Plants Programme” which is
providing subsidy upto 30% of benchmark cost for the general category states and upto 70 % of benchmark
cost for special category states, i.e. North Eastern States including Sikkim, Uttarakhand, Himachal Pradesh,
Jammu & Kashmir and Lakshadweep, Andaman & Nicobar Islands for installation of grid connected rooftop
solar power plants in building of residential, institutional and social sector. For Government sector
achievement linked incentives upto 25% of the benchmark cost in general category States/UTs and 60 % of
the benchmark cost for special category States/UTs are being provided. About 4200 MW is being targeted
under this scheme (2100 MW with subsidy and 2100 MW without subsidy) by year 2019-20.
110
b. So far, 1810 MWp solar rooftop systems have been sanctioned/ approved under the scheme. Aggregate 982.30
MWp have been reported as installed in the country. Solar rooftop projects are being implemented by State
Nodal Agencies (SNA’s), Solar Energy Corporation of India (SECI), Public Sector Undertakings (PSUs) and
other Multi Government Agencies (MGAs), Private Developers etc..
c. Solar Energy Corporation of India has tendered 500 MWp for Social, Institutional and Residential Sector and
500 MWp tender for Government Sector including PSUs.
d. An online platform namely SPIN has been developed for submission of online proposal, project completion
reports, data management, communications etc. SPIN stands for Solar Photovoltaic Installations is an e-
governance of initiative of the Ministry. It is an online system designed to monitor almost all activities involved
in Solar Rooftop programme. It contains a useful tool for calculating the rooftop area or estimate for installation
of rooftop for a lay man and provision for entering his request for installing the SPV system. SPIN is also
inbuilt with the utilities like email and SMS for communicating to various stake holders. The SPIN is designed
and developed by National Informatics Centre (NIC).
ATAL JYOTI YOJANA
Under the Atal Jyoti Yojna (AJAY) programme Solar Street Lights are to be installed in rural, semi-urban and urban
areas which don’t enjoy adequate coverage of power grid in the states of Uttar Pradesh, Assam, Bihar, Jharkhand and
Odisha.
The total cost of the scheme is Rs 499.30 crore. MNRE is providing provide 75% of the cost of street lights and
remaining 25% comes through from Member of Parliament Local Area Development Scheme (MPLADS) funds,
Panchayat funds or Municipalities and other Urban Local Bodies (ULBs)Funds.
As on 31st December 2017, the implementing agency (EESL) has received sanctions letters from DMs from 74
constituencies which includes 1,05,217 nos. quantity to be installed in all 5 states out of which 47 are from Uttar
Pradesh, 11 are from Bihar, 5 are from Odisha, 7 are from Jharkhand and 4 are from Assam.
Physical Progress (as on 31.12.2017)
Total nos. of lights installed is 68,628
Current rate of installation by EESL is 1000 lights/day.
Work is in progress in all 5 States.
Out of 74 sanctions received from District Authorities, work is in progress in 71 locations.
Work at 13 nos. of constituencies is completed.
State-wise Division of total Sanction Letters received
States Sanctioned Letter No Progress as on 31.12.2017
Uttar Pradesh 67417 47414
Bihar 14638 10828
Assam 6165 2317
Jharkhand 9267 3946
Odisha 7730 4123
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Installation of 60kWp Floating Pond Top Solar Power Plant at Hon’ble Governor
House in Bihar
(Source: MNRE Annual Report 2017-18 )
Other Initiative
Under National Solar Mission, the target for setting up solar capacity increased from
20 GW to 100 GW by 2021-22. Target of 10,000 MW, set for 2017-18 which will take the cumulative
capacity over 20GW till 31st March 2018.
As on date, 23656 MW has been tendered out, of which LOI issued for
19340 MW.
Capacity of the scheme for “Development of Solar Parks and Ultra Mega Solar Power Projects” has been
enhanced from 20,000 MW to 40, 000 MW. 35 solar parks of aggregate capacity 20,514 MW have been
approved in 21 States.
Kurnool Solar Park in Andhra Pradesh with 1000 MW capacity has already been commissioned and is
operational. With commissioning of 1000 MW capacity at single location, Kurnool Solar Park has emerged
as the World’s Largest Solar Park.
650 MW capacity commissioned in Bhadla Phase-II Solar Park in Rajasthan.
250 MW capacity commissioned in Phase –I of Neemuch Mandsaur Solar Park (500 MW) in Madhya
Pradesh.
3 new solar parks have been approved in this year at Rajasthan (1000 MW), Gujarat (500 MW) and Mizoram
(23 MW) after issue of Guidelines for Enhancement of capacity from 20, 000 MW to 40, 000 MW under
Solar Park Scheme.
Solar tariff has declined to lowest level of Rs 2.44 /kWh. The chronology of down ward trend in Solar
tariff during recent times is as given below:
Sl
No.
Period Capacity Lowest
Tariff
(/KWh)
Scheme State
1 February-2017 750 MW 3.30 State Scheme Madhya
Pradesh (REWA
Solar park)
2 May-2017 250 MW 2.62 VGF Scheme Rajasthan
(Bhadla IV Solar park)
3437
46 48
5561
6470
74
0
10
20
30
40
50
60
70
80
01-Apr 01-May 01-Jun 01-Jul 01-Aug 01-Sep 01-Oct 01-Nov 01-Dec
Atal Jyoti Yojana- Monthly Progress of
Sanction Letters
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3 May-2017 500 MW 2.44 VGF Scheme Rajasthan
(Bhadla III Solar park)
4 Aug-17 500 MW 2.65 State Scheme Gujarat
(Non-Solar Park)
As on 30.11.2017 over 41.80 lakh Solar Lighting Systems, 1.42 lakh Solar Pumps, and power packs of
181.52 MWeq have been installed in the country. Major achievements of 18.47 lakh Solar Lighting Systems,
1.31 lakh. Solar Pumps, Power Packs of 96.39 MWeq have been reported during last three and half years
Several schemes namely (i) Defence scheme (ii) Central Public Sector Undertakings (CPSUs) scheme (iii)
Bundling scheme (iv) Canal Bank/ Canal Top scheme (v) VGF Scheme (vi) Solar Park scheme (vii) Solar
rooftops, have been initiated/launched by the Ministry under National Solar Mission which are under
implementation.
· Under Defence scheme against a target of 300 MW, 357.50 MW has been sanctioned; under Central Public
Sector Undertakings (CPSUs) scheme against a target of 1000 MW, entire capacity sanctioned; under 3000
MW Bundling scheme, Tranch-I: 3000 MW has been tendered; under 100 MW Canal Bank/ Canal Top
scheme, all capacity sanctioned; under 2000 MW & 5000 MW VGF Scheme; and under 20,000 MW Solar
Park scheme, 35 Solar parks have been approved in 21 States with aggregate capacity of 20,514 MW.
Solar Rooftop
Ministry is implementing Grid Connected Rooftop and Small Solar Power Plants Programme which provides for
installation of 2100 MW capacity through CFA/ incentive in the residential, social, Government/PSU and Institutional
sectors.
Under the programme, central financial assistance upto 30% of bench mark is being provided for such projects in
Residential, Institutional and Social sectors in General Category States and upto 70% of the benchmark cost in Special
Category States. For Government sector, achievement linked incentives are being provided. Subsidy/CFA is not
applicable for commercial and industrial establishments in private sector.
So far sanctions for 1767 MWp capacity solar rooftop projects has been issued and around 863.92 MWp
capacity has been installed.
All the 36 State / UT ERCs have now notified net/gross metering regulations and/or tariff orders for rooftop
solar projects
Concessional loans of around 1375 million US dollars from World Bank (WB), Asian Development Bank
(ADB) and New Development Bank (NDB) have been made available to State Bank of India (SBI), Punjab
National Bank (PNB) and Canara Bank for solar rooftop projects.
Suryamitra programme has been launched for creation of a qualified technical workforce and over 11
thousand persons have been trained under the programme.
An online platform for expediting project, approval, report submission, and monitoring of RTS projects has
been created.
Initiated geo-tagging of RTS projects, in co-ordination with ISRO, for traceability and transparency.
Launched mobile app ARUN (Atal Rooftop Solar User Navigator) for ease of access of beneficiaries for
request submission and awareness.
MNRE has allocated Ministry wise expert PSUs for implementation of RTS projects in various
Ministries/Departments.
Published best practices guide and compendium of policies, regulations, technical standards and financing
norms for solar power projects.
(Source: http://pib.nic.in/PressReleaseIframePage.aspx?PRID=1514215)
113
Upto 31.12.2017
Recent Scenario and Government Initiatives
FDI Inflows
According to data released by the Department of Industrial Policy and Promotion (DIPP), FDI inflows in the Indian
non-conventional energy sector between April 2000 and June 2018 stood at US$ 6.84 billion. More than US$ 42
billion has been invested in India’s renewable energy sector since 2014.
100 per cent FDI is allowed under automatic route for projects of renewable power generation and
distribution subject to provisions of The Electricity Act, 2003.
New investments in clean energy in the country reached US$11 billion in 2017. In the first half of 2018,
investments in clean energy in India reached US$ 7.4 billion.
The non-conventional energy sector has received a total FDI equity inflow of US$ 6.84 billion during April
2000 to June 2018.
Inter-state distribution of wind power was started in August 2018.
In the first half of 2018, investments in clean energy increased 22 per cent year-on-year.
In the first half of 2018, India installed 1 MW of solar capacity every hour.
With 28 deals, clean energy made up 27 per cent of US$ 4.4 billion merger and acquisition (M&A) deals
which took place in India’s power sector in 2017.
In March 2018, ReNew Power finalised a deal estimated at US$ 1.55 billion to acquire Ostro Energy and
make it the largest renewable energy company in India.
World’s largest solar park named ‘Shakti Sthala’ was launched in Karnataka in March 2018 with an
investment of Rs 16,500 crore (US$ 2.55 billion).
Solar sector in India received investments of over US$ 10 billion in CY 2017.
Private Equity (PE) investments in India's wind and solar power have increased by 47 per cent in 2017
(January 1 to September 25) to US$ 920 million, across nine deals, as compared to US$ 630 million
coming from 10 deals during the corresponding period in 2016**.
114
Government initiatives
Some initiatives by the Government of India to boost the Indian renewable energy sector are as follows:
A new Hydropower policy for 2018-28 has been drafted for the growth of hydro projects in the country.
The Government of India has announced plans to implement a US$ 238 million National Mission on
advanced ultra-supercritical technologies for cleaner coal utilisation.
The Ministry of New and Renewable Energy (MNRE) has decided to provide custom and excise duty
benefits to the solar rooftop sector, which in turn will lower the cost of setting up as well as generate power,
thus boosting growth.
Around 4.96 million household size biogas plants were installed in the country under the National Biogas
and Manure Management Programme (NBMMP) by 2016-17 end.
The Indian Railways is taking increased efforts through sustained energy efficient measures and maximum
use of clean fuel to cut down emission level by 33 per cent by 2030.
Road Ahead
The Government of India is committed to increased use of clean energy sources and is already undertaking
various large-scale sustainable power projects and promoting green energy heavily. In addition, renewable
energy has the potential to create many employment opportunities at all levels, especially in rural areas. The
Ministry of New and Renewable Energy (MNRE) has set an ambitious target to set up renewable energy
capacities to the tune of 175 GW by 2022 of which about 100 GW is planned for solar, 60 for wind and other
for hydro, bio among other. India will need investments of around US$ 125 billion to reach this target. As of
June 2018, Government of India is aiming to achieve 225 GW of renewable energy capacity by 2022, much
ahead of its target of 175 GW as per the Paris Agreement
115
OUR BUSINESS
Overview
We were founded in 2009 at Secunderabad, Telangana as a Private company limited by Shares under the provisions
of the Companies Act, 1956. For further details, see “History and Certain Corporate Matters” beginning on page
152.We are promoted by Mr. Anshuman Yenigalla and Mr. Venkata Ravindra Yenigalla and each of our promoters
are having good industrial exposure. We are primarily engaged in EPC contracts of setting-up of power plants and
water pumping systems, as an EPC contractor installed 15MWp solar power plants up to November 30, 2018 and also
installed more than 6000 numbers of water pumping systems with wide range of systems of DC Solar Pumps and AC
Solar Pumps across India. Recently, we have also started to provide project consultancy services for acquiring solar
power projects and tender bidding after identifying competent client on tender-to-tender basis.
In the year 2009-10, our company installed first solar system of 2kwp followed by other 4 systems of 32Kwp and first
100kwp captive solar power plant in 2012. In the year of 2013, we have set up India’s first biggest captive 1.1 MWp
solar power plant in Raipur, which was inaugurated by Mr. Farooq Abdullah, Hon’ble Union Minister for New and
Renewable Energy and Mr. Raman Singh, Hon’ble Chief minister of Chhattisgarh.
We are one of the prime player in setting-up of captive integrated solar power systems and have set-up 2MW solar
rooftop project for IIT Delhi.
In the year 2014, we have ventured in to solar water pumping system business vertical and installed more than 200nos
of water pumping systems apart from the solar power projects of 4MWp cumulative capacity in 158 locations.
We are presently operating in various states of India like Telengana State, Andhra Pradesh, Tamil Nadu, Karnataka,
Chhattisgarh, Odisha, Madhya Pradesh(MP), Jharkhand, Bihar, Uttar Pradesh(UP), Haryana and Rajasthan.
We are system integrator of Solar power plants and Water Pumping Systems. We are also an ISO 9001:2015 and ISO
14001:2015 certified company with MNRE SP1B rating and empanelled with NABARD programme for
implementing solar water pumping systems.
We have been ranked at 8th Position among the EPC contractors in installation of solar rooftops across the country
according to the report published by leading external publishing agency – Bridge to India for the year 2016.
Growth of Our Portfolio
The chart below illustrates the growth of our portfolio from inception to the date of this Draft Red Herring Prospectus:
116
For a description of our activities, competition, management, etc., also see “Industry Overview” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 87 and 234
respectively.
Our EPC projects
We have started as an EPC contractor in quest for next generation technologies to support a healthy and stress free
life and serving in the field of supply, installation and commissioning of water pump system and SPV power plants.
We have categorized our EPC service in four main elements:
Project Planning: Scope, Schedule & Resources.
Project Development : Site Survey, Systems Design
Project Implementation : Design, Build, Test & Training
Project Operation & Maintenance: 24 * 7 Support
117
118
Process Flow Chart
The process flow of the EPC for Solar Water Pumps as well as integrated Solar Power Projects/ Systems is:
Business Development Department
Designing Department
Purchase Department
Installation and Commissioning Department
Billing Department
Service Department
Solar Pumps
Process for operating Solar water pump:
Solar water pump or a solar photovoltaic water pumping system is a system powered by solar energy. It is just like
the traditional electric pump with the only exception that it uses solar energy instead of non-renewable energy for its
operation.
It consists of one or more solar panels, also known as solar photovoltaic modules, a motor pump set, electronic controls
or a controller device to operate the pump, the required hardware.
When sunlight falls on the solar panels with the photovoltaic electric effect it produces direct current (DC) which will
have connected to the motor pump directly or through VFD produces water output.
Following Diagram gives a clear view on the process for operating Solar water pump
119
Typical Economics of Solar water pumping systems
Cost of Pump (5 HP AC Submersible) : Rs. 3,25,000/-
(MNRE Benchmark Price 2018-19)
It is usually funded through following source:
MNRE Subsidy: ₹ 65,000/-
DISCOM Share: ₹ 1,20,000/-
Cost to Farmer: ₹. 1,40,000/-
PV Array Capacity: 4.8 kWp
Energy Generated per year: 6,480 kWh.
Water Pumped: 67,200 ltr/day
Payback Period: 3.Year and 1 Month
Following are few benefits of Solar Water Pump
• During day-time automatic operation Switch on and Off in the morning and evening.
• Free and renewable source of energy.
• Saving in electricity Bills.
• Durable and reliable.
• Minimal maintenance required.
• Handy and easy to operate.
• Can replace conventional pumps where there is electric grid.
• Pollution free and environmental friendly
• Long operational life
120
Scope of Work
Solar water pump tenders are issued by Government and other nodal agencies, and our typical scope of work in such
contracts are as follows:
a) Conducting of site survey including bore well size, water level output requirements.
b) Designing of the pumping systems as per the survey requirements and mobilisation of materials.
c) Transportation of all materials to the site and keeping the same in safe own custody.
d) Installation of the structure, PV modules, motor pump with appropriate electrical connections and also required
protection systems like earthing and lighting arrestor.
e) After initial operation and testing of the pump for about a week handing over the same to the customer and
should be maintained for 5 years under CMC terms.
Performance Guarantee
We need to provide following performance guarantees and warranties:
a) The solar panel generation shall be warrant for twenty-five years with rated performance as per MNRE
recommended technical specification and remaining materials for 5 years.
b) Performance guarantees for the rated delivery / discharge of water as per standard test condition and the test reports
generated from authorized test centers (TUV/CITRAC/UL/NISE)
Penalty and termination of contact:
The system shall be supplied, installed and commissioned within the scheduled time as mentions in the supply /
installation order. If the supplier fails to adhere to the schedule, the agency shall levy the prescribed penalties and
liquidated damages. They may also consider termination of the contact and forfeit the security deposit.
Details of Proposed Project for Manufacturing PV Module
As part of back-ward integration plans now, our Company is going to establish to manufacture solar photo voltaic
modules. Total cost of the project is estimated at Rs. 28.94 Crore which will be financed partly by way of term loans
and internal accruals.
Brief Details of the project:
a. Location: Nandi Gama Village, Ranga Reddy (District
b. Land details: Survey No: 920,921, Nandi Gama Village, Nandi Gama Mondal, Ranga Reddy (District),
Telangana-521185, Project cost: ₹28.94 Crores
c. Means of finance: Internal accruals: ₹ 8.79 crore
Term loan: ₹ 20.15 crore (sanctioned by Union Bank of India)
Our Scale and Size
The performance graph of the revenue of our company since last 3 years and for September 30, 2018 will be given
in the below table:
Year
2015-16 2016-17 2017-18
September
30,2018
Revenue (₹ In Lakhs) 4,133.75 6,309.71 10,596.54 5,636.34
Growth Rate (%) - 52.64 67.94 -
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Our Major Landmark Projects
Following are the land mark projects of our company since inception:
During the Financial year 2012-13, we have installed 1.1MWp SPV Plant in Raipur Chhattisgarh and
completed the said project a month before the given period of completion. The said project was inaugurated
by Mr. Farooq Abdullah, Hon’ble Union Minister for New and Renewable Energy and Mr. Raman Singh,
Hon’ble Chief minister of Chhattisgarh.
In the year 2014, we have installed 1 MWp system on rooftops of Indian Institute of Technology (IIT) New
Delhi and the same was completed in the due course of time.
In the year 2015, Our Company executed one of the first kind of roof top project on Salarjung Museum,
Hyderabad of capacity 500KWp, by standing India’s first museum with solar power plant.
During the period of 2016-17 we have executed over 1000 solar water pumping systems across the country
and also executed another major project of 500KWp Solar Plant for Mulkanoor Co-operative Society from
the state of Telangana.
Supplied and installed 1007nos of Solar water pumping systems for Karnataka Government during the FYs
2015-16 & 2016-17.
Supplied and installed 1500 nos of Solar Water Pumping systems for Chhattisgarh Government during the
FYs 2016-17 & 2017-18.
Supplied and installed 300nos of Solar drinking water systems for RWS&S, Odisha during the FYs 2016-17
& 2017-18.
In the financial year 2017-18, our Company has bagged the order for over 1500 number of solar pumps in
the Madhya Pradesh and added with major and land mark project of 2MWp Solar Plants installation from
the Vignan Group of Institutions. Before the end of the financial year, with the completion of the major
projects , we have achieved the gross turnover of Rs. 107 crores with 2561 number of solar water pumps and
3456KWp capacity of Power Plants Installed.
Our Strengths
We believe the following competitive strengths have contributed and will continue to contribute to our success:
Well-established EPC player
We provide turnkey EPC solar energy solutions from concept to commissioning for solar PV and also operation and
maintenance services as and when required for the project. With our in-house engineering and design teams, we strive
to leverage our technical experience and industry know-how to develop the most cost-effective and energy efficient
PV solar plants in the industry. We provide complete end-to-end solutions including complete Engineering,
Procurement and Construction (EPC) services for our customers seeking to build solar power plants and solar water
pumping systems in India. We assist customers seeking to use solar power right from the planning stage through the
entire operational life of the project.
Integrated approach to developing solar power projects by highly experienced development teams
We have dedicated and experienced teams at multiple locations committed to provide and ensure flexible, integrated,
dependable, cost effective and responsible solutions to the customer resulting in total customer satisfaction.
Our experienced O & M team ensure the following at all installation sites
Maximized performance
Minimized faults
Immediate trouble shooting within 24 hours
Fast and Efficient response time
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In-House, On-Site warranty and repairs
As per MNRE guidelines every solar installation (Power plant or Pumps) should be provided with 5 years operational
and maintenance. 5years back to back O&M support from all the material suppliers which will ensure the support to
end customers. We have ERP database system functionally designed for service support, for monitoring and logging
of all maintenance data.
Expertise and experience in project management:
With our Expertise and experienced project managers and their team oversee all activities ranging logistical, technical,
and procurement. Preparation of appropriate documentation with the required-on site approvals ensure compliance
with regulators. Our extensive proficiency gathered with experience in various regions of India has boosted our
operational capabilities. Our competent and experienced project management team ensures our projects have very
low gestation periods and are installed at record setting time-periods without any compromise in quality. We also
ensure seamless completion of commissioning formalities including all government registrations and approvals.
Experience Management and Employees:
Our Company and core management is having vast experience of more than Nine (9) years in executing project from
small to large scale in the fields of supplying, installing and commissioning of solar water pumping systems and SPV
power plants. Our team also possesses the requisite qualifications and experience in the industry. We are responsible
for the growth in our business operations. Our Company led by our Promoter and management who has helped us in
achieving strong revenue and profit growth over the past several years.
Established relationship with public sector clientele and excellent pre-qualification credentials:
Our company with the completion of number of projects has gained experience in the field. We accomplished this by
demonstrating genuine commitment towards the company/individual we work for and ensure the solar project
implementation exceeds their expectation. We thus built trust of various Government and Private bodies and
established relationship with them.
Design and Engineering team
We believe that our projects are performing according to their design specifications. Our Company has an in-house
engineering and design team, which reduces our dependence on outsourcing engineering and design work to third
party consultants.
Along with the experienced core management, our Company has in existence a separate and exclusive team for
design, engineering and execution of projects which are mainly focused and involved in the project
management, design, strategy, and supply chain design and engineering team are as follows
Design Department:
Head – Design: Mr. Rajeswara Rao
Mr. Ashok(Mechanical)
Engineering Team
Head – Engineering: Mr. Pavan Kulkarni (Head)
Mr. Keshav Kumar Jha
Ms. Veera Raghava
Mr. Manoj Kumar
Large Order Book and repeat orders
Since our Company’s incorporation in 2009 we have undertaken projects for Solar Power Plants and Solar Pumps In
our industry, an order book is considered an indicator of future performance since it represents a portion of anticipated
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future revenue. Our Order Book as on a particular date consists of estimated revenue from unexecuted or uncompleted
portions of our ongoing projects, i.e., the total contract value of such ongoing projects as reduced by the value of
construction work billed until such date. We have a robust 60% increase in revenue for the year ended march, 2018,
compared to a robust Increase in revenue of 68% for the financial year 2016-173. This was led by execution progress
on its ongoing projects and monetization from realty projects. We also reported 280% increase in the net profits
despite its interest cost triple against the corresponding period of the previous year.
We believe that our quality of work and timely execution has allowed us to enhance our relationships with existing
clients and to secure projects from new clients. For example, we have secured repeat orders from some of our clients
namely NREDCAP, APEPDCL, APSPDCL, CREDA, UPNEDA, MPUVNL, OREDA, Rajasthan Horticulture
Development Society, since the date of our first contract with each of them.
Strong Track record of completed projects across various states in India
We are well established in EPC Projects, Solar Pumps with a track record of 9 years of experience and expertise in
execution of various EPC projects in various states of India. Our experience and established track record of executing
projects allows us to meet the necessary pre-qualification requirements and helps us identify and mitigate certain
development and operational risks.
Strong Track record of consistent financial performance and growth:
We have grown rapidly since its inception in terms of several parameters such as amount of revenue it is generating,
operations from various locations and the number of employees who are working for it. Further the company has
improved its clientele by rendering different kinds of services in the process of supplying, installing and
commissioning of SPV power plants and solar water pumping systems.
The performance graph of the revenue of our company since last 3 years and for September 30, 2018 will be given in
the below table:
Year
2015-16 2016-17 2017-18
September
30,2018
Revenue (₹ In Lakhs) 4,133.75 6,309.71 10,596.54 5,636.34
Growth Rate (%) - 52.64 67.94 -
Quality management:
We have adequate quality control procedures which ensure the ability of our projects to deliver highest generation
levels and minimize future maintenance problems. We have developed our operational capabilities in Supplying,
Installing and commissioning of SPV power plants and solar water pumping systems. Further our company always
strives to keep at best by being customer centric and keep in mind customer needs and expectations. Our Company
always adapts new and better technology and methods to implement the projects and ensure that the quality is not
compromised at any stage.
Optimal Utilization of Resources
As the demand is ahead of the supply there is a direct need for efficient and effective utilization of resources. Hence
an attempt is made to reduce the utilization of electricity from non-renewable energy by optimally utilizing the Solar
Energy. As the Solar Energy is one of the substitutes for fossil fuel, a breakthrough is achieved by adopting an
alternative technique which is generation electricity by renewable energy and the company constantly endeavours to
improve our process, skill up-gradation of our employees, modernization of infrastructure and methods of processing.
We regularly analyse our existing process and to identify the areas of bottlenecks and correct the same. This helps us
in improving our services so as to reap the optimum satisfaction of our clients.
Favourable credit rating and access to diversified sources of funds
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We believe that our favourable credit ratings enable us to access various cost competitive funding options. Our
credit ratings as of November 30, 2018 are as follows:
BB+ Positive by ICRA
Relationship with Client
We focus on providing the clients with the desired and standard quality of work. By providing the desired quality and
standards of work we aim to achieve highest level of customer satisfaction. The team is built with excellent managerial
support, technical support.
We provide a toll-free customer support line accessible for us 24 *7. We build systems by carefully looking at various
parameters and for any issues related to Site, module operation or degradation, AC DC cabling, MPP tracking,
transformer, invertor replacement and other operational issues by sending our operational team on site to mitigate the
issues effectively and to the customer satisfaction.
Time Management
We adhere to time management and follow proper protocols for installation on site. This is followed by rigorous
quality control systems and implementation is followed as per the regulatory guidelines specified. By analysing our
past completed projects, there are the situations where the company has completed a month before the given
completion period in the first land mark project of installing 1.1MWp SPV power plant at Raipur, Chhattisgarh such
other major projects at record time of completion.
Our Company with quick project completion without compromising on quality helped us to increase and improve the
client relationship and financial performance of the company respectively.
Efficient business model
Our growth is largely attributable to our efficient business model which involves careful identification of our projects
and cost optimisation, which is a result of executing our projects with careful planning and strategy. Primarily our
company was engaged in EPC contracts of setting-up of Solar Photovoltaic Water pumps, which include supplying,
installing, and commissioning of the pump system across India in solar pumping system. We have installed more than
6000 numbers of pumps till 30th November 2018 with wide range of products of DC Solar Pump and AC Solar Pump.
In other vertical we carry the installation of integrated Solar Power Projects/ Systems as an EPC contractor and
installed 15MWp till 30th November 2018. We also started providing consultancy services for acquiring projects and
tender bidding after identifying competent client on tender-to-tender basis. This model has facilitated us in maximising
our efficiency and increasing our profit margins. Projects. Our Company follows a strategic approach during the pre-
bidding stage, which involves undertaking technical surveys and feasibility studies and analysing the technical and
design parameters and the cost involved in undertaking the project. We believe that our strategic approach during the
pre-bidding stage enables us to bid at competitive prices and helps us to successfully win projects. Once we win a bid,
our focus is to provide highly quality of service during the execution stage of the project. Although our company
started its business with one model, it eventually started serving to the clients through the following various
verticals/business activities
a. Grid Interactive Solar PV Power Plants
b. Off-Grid Solar PV Power Plants
c. Solar Water Pumping Systems
d. Manufacturing of VFDs & Control Panels
e. BOOT Model Solar Power Plants
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Focused geographic expansion based on scientific project selection.
Initially, we carried out our operations in the state of Andhra Pradesh and thereafter expanded to the state of
Chhattisgarh in the year 2010 by executing 1.1 MWp SPV Plant.
Thereafter, our Company expanded its operations to various states across the country and erected Solar Power Plants
and Solar Water Pumping Systems.
We are selective when we expand into a new location and typically consider geographies where we can deliver high-
quality services without experiencing significant delays and interruptions. We have expanded our operations into
states with less competition, high GDP, stable political conditions, favourable geographic and climatic conditions.
We strive to cluster our projects geographically to improve efficiency and profitability. By leveraging the manpower,
equipment and materials which are set-up at nearby work sites, we save transportation costs and investment in new
equipment, thus achieving economies of scale.
As of date the Company’s operations spread across 11 major states.
We have a Registered office (HO) located in Hyderabad, Telangana State with branch offices at following places;
Vijayawada, Andhra Pradesh
Bangalore, Karnataka
Raipur, Chhattisgarh
Chandigarh, Haryana & Punjab
Delhi
Bhubaneshwar, Odisha
Jaipur, Rajasthan
Lucknow, Uttara Pradesh
Bhopal, Madya Pradesh
Government Initiatives
As a boost to this industry during the Budget 2018-19 Announcement, a Scheme named as “KUSUM” was announced.
The Full Form of KUSUM is Kisan Urja Suraksha Evam Utthan Mahabhiyan. The main objective of this Scheme is
to make Solar Pumps to ensure less consumption of electricity. This is a great initiative. This Scheme will not only
benefit our Farmers but the whole country not in the farming perspective but also for electricity saving. Under this
Scheme, 3 Crore Solar Pumps (Tube well) will be installed by 2022. The aim of the Scheme to introduce Solar Pumps
for Irrigation Purposes. Total Amount to be spent for Kusum Yojana – 1.40 Lakh Crore. Under this Scheme, the
farmer will have to bear only 10% of the cost and the remaining 90% of the cost will be borne by the government.
Under this arrangement, the central government desires to assist as many farmers as possible to install new and
improved solar pumps on their farms. The farmers need not pay a hefty fee for this benefit as it comes with government
subsidy. The main aim of this scheme is to provide the farmers with advanced technology to generate power. The
solar pumps will not only assist to irrigate the farmers, but will also allow each farmer to generate safe energy. Due
to the presence of the energy power grid, the agricultural labours will be able to sell the extra power directly to the
government. It will provide them with extra income as well. So, this scheme will bring double benefits.
The government is executing two national level programs to promote installation of solar roof tops. The Jawaharlal
Nehru National Solar Mission was launched in 2010 and had set an ambitious target of 20 GW solar by 2022. This
target was further revised in 2015 to 100 GW solar by 2022. Another web-based initiative, namely Solar Guidelines,
has been adopted under Indo German Energy Programme (IGEP) to encourage rapid development of the solar sector
in India by disseminating policy and technology related information. Moreover, State Bank of India has also signed
an agreement with the World Bank for debt financing of ₹ 4200 crores towards grid-connected solar projects in India.
The government is making efforts to achieve its targets and enable widespread adoption of solar
We are registered with MNRE Channel Partner to get direct subsidy for Solar Water Pump System in all over India.
The Ministry of New and Renewable Energy (MNRE), which provides 30 per cent subsidy to most solar powered
items such as solar lamps and solar heating systems, has further extended its subsidy scheme to solar-powered
refrigeration units with a view to boost the use of solar-powered cold storages.
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Recent Trends in Solar Energy
Solar energy is playing a pivotal role in compensating the electrical energy as there is short fall in this energy due to
more demand and decline trends of conventional source of energies exhaustion of fuels like coal, petroleum, natural
gases and constant of environmental and climatic changes to cope up this photovoltaic installation is being done in an
electrical system to compensate and enhance the energy. Following are the few recent Trends which are versatile and
more useful for the masses.
Emergence of distributed generation – This is the best way to narrow down the gap between supply and demand.
The trend towards distributed generation has been noticed in the past years and has played a key role in electrifying
villages and helping meet the latent demands in the system. Distributed generation also helps in overcoming the
shortfalls in the transmission, mitigating the apprehensions of the solar energy suppliers to some extent.
Off Grid Solar Application – The Government of India has also incorporated off-grid renewable energy policy to
boost the use of renewable energy through stand-alone systems in remote areas. The policy aims to increase the use
of green energy and curb the growing issue of waste disposal. It expects the use of more solar products, bio gas and
fertilizer plants in housing societies, private offices, and establishments.
Using unproductive land – There is an insufficient amount of land in many states of India to generate solar energy
so as to meet the country’s current target of land-based energy. To tackle this issue, the ministry is allowing the state
governments to allocate unproductive land for solar energy projects resulting in low costs and minimal use of private
lands.
Newer Methods which will enhance the use of Solar Energies– Day by day new trends and innovations are being
developed throughout the world in R&D centers, automobile sectors and domestic use in institutions, hostels to reduce
the energy wastage and to generate the power by solar devices
Safeguard duties: The government of India (GOI) has levied safeguard duty of 25 percent on solar cells imports
from China and Malaysia to promote domestic industry as well as curtail dumping by those countries. The Ministry
of Finance (Department of Revenue) levied the duty based on the final recommendations proposed by the Directorate
General of Trade Remedies (DGTR) vide Notification dated 30th day July 2018.
The safeguard duty of 25 percent on solar modules and cells will be in force from July 30, 2018. This duty to some
extent may impact the project cost as the solar cells are one of the main ingredient in the panels and most of the panel
manufacturers dependent on the import of the said cells.
However, the impact may not be substantial as in the overall cost of the project or panels the cost of the solar cells
may not of more than 5 to 6%. Hence, the cost of the panels may go-up to the extent of 2% which would be passed
on to the customer as the contract agreements generally carry an off-set clause in relation to the variation in materials
prices.
Further, the Company has a policy of having booking of materials particularly panels for the projects immediately on
successful bidding to mitigate the problem of price fluctuation
OUR STRATEGIES
Strengthen market position
We intend to continue to strengthen our market position in our core solar energy businesses by taking advantage of
industry and regulatory trends driving growth in the Indian renewable energy industry. Our Company with wide
range of locations from where operations of the company is being done have an indirect effect of various policy
measures such as Jawaharlal Nehru National Solar Mission (JNNSM) Feed-in-Tariff, Accelerated Depreciation (AD),
Generation Based Incentives (GBI), Renewable Purchase Obligations (RPO) and Renewable Energy Certificates
(RECs). The Ministry of New and Renewable Energy (MNRE), which provides 30 per cent subsidy to most solar
powered items such as solar lamps and solar heating systems, has further extended its subsidy scheme to solar-
powered refrigeration units with a view to boost the use of solar-powered cold storages.
We intend to continue to maintain our diversified growth and portfolio in EPC projects, targeting geographic
adjacency of our projects to increase our economies of scale. We intend to use our scale to continue to negotiate for
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better procurement and O&M terms from our vendors and more competitive financing and refinancing terms from
our lenders. We will aim to continue to maintain a sound capital structure and prudent leverage as our business grows
and to invest our operating cash flows appropriately to support our growth plans.
We will also look at growth opportunities in the distributed solar market where overall capacity as well as average
capacity per site has grown significantly. We believe that our capabilities in distributed EPC projects will enable us
to capture a greater share of this fast growing market in the future.
Recently we have identified Home Lighting System to diversify our business. We have submitted tender vide Tender
Reference No TN-2018-19/05 dated November 28, 2018 to Rajasthan Renewable Energy Corporation Limited for
design, supply, installation, commissioning and 5 years comprehensive maintenance of solar home lighting system
under “SAUBHAGYA SCHEME”
Technological Up gradation
The solar power industry is constantly evolving to improve generation efficiency, reduce plant downtime and module
degradation and to enhance the useful lives of projects. We have been experimenting with our value engineering
approach to make our projects more economically viable to improve efficiency, plant availability and output and, as
a result, profitability. We introduced optimal DC:AC ratios at our projects, utilize customized software for forecasting
and use bifacial modules to optimize power generation at some of our projects.
Selectively expand our geographical footprint
Our Company started its operations in Hyderabad, Telangana State in 2009 and has gradually expanded in other
states including Chhattisgarh, Uttar Pradesh, Haryana, Chandigarh, Rajasthan, Punjab, Madhya Pradesh and
Andrapradesh Pradesh. We plan to continue our strategy of diversifying and expanding our presence in different states
for the growth of our business. We are selective when we expand in a new location and typically look to geographies
where we can deliver high-quality services without experiencing significant delays and interruptions on account of
adverse climatic conditions or regulatory delays. We believe that our strategy of selective expansion helps us in
mitigating diversification related risks. Through further diversification of our operations geographically, we hope to
hedge against risks in specific areas or projects and protect us from fluctuations resulting from business concentration
in limited geographical areas.
Continue focusing on enhancing execution efficiency.
We intend to continue enhancing our operational efficiencies to better absorb our fixed costs, reduce our other
operating costs and strengthen our competitive position through the following initiatives:
We will continue our practices of scientific selection of projects and calibrated growth by avoiding projects that may
over-leverage our balance sheets or may require significant investments in equipment or manpower. We will continue
to expand into states with less competition, high GDP, stable political conditions, favourable geographic and climatic
conditions. We will continue to focus on geographically clustering our projects to further improve our business and
financial performance. Our future growth will depend on how successfully we undertake our projects in other states
and cluster our existing and new projects to achieve optimal efficiency and profitability.
We intend to strengthen our diagnostics and performance monitoring capabilities across our solar energy projects. In
addition, we intend to invest in advanced technologies.
Continue to invest in and improve our integrated business model
The growth of our portfolio of assets is critical to us. In order to seamlessly grow our operations and our portfolio of
assets, we intend to invest extensively on our business units, through having established procedures in place for every
stage in the project development cycle, including using standardized parameters for determining the auctions that we
will submit bids for, using standardized processes for evaluating land, interacting with the relevant local or
government authorities to obtain the relevant approvals for a project, designing and developing a project site,
procuring our components in a timely manner and constructing the project. We believe that having established
procedures in place should help reduce the costs of developing a project and improve the timelines within which the
project will be commissioned.
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Leverage core competencies
In-house integration has been an integral part of our growth over the years and we seek to focus on further enhancing
our in-house competencies by expanding into various functional aspects of our projects thereby eliminating
dependence on third parties. Depending on the nature of projects that we may bid for and win in future, we may also
develop design and engineering capabilities in-house.
We believe that further developing specialized in-house capabilities would reduce dependence on third parties,
thereby avoiding risks and minimizing costs associated with outsourcing. Further, as part of our diversification
strategy into other activities such as Home Lighting System, we plan to set up in-house facilities to assist us in timely
execution of these projects while maintaining quality, similar to that of our current in-house integrated model in the
EPC projects.
Details of Order Book
The region wise Order Book of our company as on November 30, 2018 is set out below:
Present position of Order Book
SOLAR POWER PLANTS
S.
No
Client State Capacity(KWp) /
No of Pumps
Total contract value
(₹ in Lakhs)
Booked till
Sept 30th
Unbooked Order
(₹ in Lakhs)
1 TSPA TS 320 144.14 - 144.14
2 CREDA CG 100 46.707 - 46.71
3 CREDA CG 50 23.3535 - 23.35
4 CREDA CG 50 23.3535 - 23.35
5 80 kwp solar power plant at
AP Police head Quarters
AP 80 38.4 - 38.40
6 District Court, Kadapa (Court
Complexes- 651kWP)
AP 651 315.13 - 315.13
7 OREDA OD 60 53.175 39.88125 13.29
8 Haryana Irrigation Research
Management
HA 40 26.72 - 26.72
9 HAREDA HA 50 33.40 - 33.40
States No of Contracts Capacity (in
KWp)
Total contract
value (₹ in lakhs)
Percentage of Order
Value
Andhra Pradesh
15 11055 7566.57
35.18%
Telangana 1.95%
Tamilnadu 2.5%
Chhattisgarh
17 6947 6228.33
8.24%
Odisha 7.11%
Madhya Pradesh(MP) 16.57%
Jharkhand 0.7%
Bihar
5 7309.33 5882.23
9.72%
Uttar Pradesh(UP) 5.25%
1.83%
Haryana 10.95%
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10 Indore Smart City Corporation
1.5 MWp
MP 1500 594.60 - 594.60
11 Court Complexes, Andhra
Pradesh
AP 651 294.33 - 294.33
12 Visakhapatnam Indistrial
Water Supply Corporation
AP 1000 628.25 - 628.25
13 AAI, Vijayawada AP 1000 540.41 - 540.41
14 Smart City Viskhapatnam 1
MWp
AP 1000 616.45 - 616.45
15 Smart City Viskhapatnam 1.5
MWp
AP 1500 877.70 - 877.70
16 TSNPDCL TG 296 171.68 35.27 136.41
17 SAAP AP 2000 1040 - 1,040.00
18 AAI, Trichy TN 1000 476.64 - 476.64
19 BAREDA Solar Power Plants BR 3593.33 1,855.20 - 1,855.20
TOTAL 7724.49
SOLAR PUMPS
S.
No
Client State Capacity(KWp)
/No of Pumps
Total contract
value (₹ in Lakhs)
Booked till
Sept 30th
Unbooked Order(₹
in Lakhs)
1 APEPDCL Pumps AP 182 1,150.58 1,121.76 28.82
2 APSPDCL Pumps AP 334 1,069.99 1,069.99 0.00
3 CREDA SSY – II CG 67 219.72 219.72 0.00
4 CREDA Dual Pumps CG 3 10.85103 10.85 0.00
5 Rajastan Horticulture
Development Society
RJ 634 2090.4471 550.89 1,539.56
6 CREDA CG 83 358.23 275.85 82.38
7 CREDA Dual Pumps CG 16 57.87216 - 57.87
8 CREDA Pumps SSY-III CG 311 446.4 37.22 409.18
9 OREDA OD 102 389.94 307.32 82.62
10 MPUVNL 3 HP DC Solar
water pumping systems
MP 338 1,078.22 398.15 680.07
11 MPUVNL 5 HP AC Solar
water pumping systems
MP 400 1,489.95 655.58 834.37
12 UPNEDA Pumps UP 233 1,002.44 427.19 575.25
13 OREDA - 5 HP 18 No's OD 18 69.34 - 69.34
14 OREDA - 3 HP 14 No's OD 14 41.93 - 41.93
15 OREDA OD 108 356.90 - 356.90
16 OREDA OD 90 297.41 - 297.41
17 OREDA OD 13 42.96 - 42.96
18 CREDA CG 109 395.13 - 395.13
19 HAREDA Pumps 2 HP DC HA 270 289.50 - 289.50
20 Jharkhand Pumps JH 192 134.42 - 134.42
Geographical Expansion
We started our business operations in Hyderabad, Telangana State in 2009 and have gradually expanded to Raipur,
Delhi, Bangalore, Lucknow, Jaipur, Haryana, Punjab Odisha, Chandigarh, Madhya Pradesh and Andhra Pradesh.
While the majority of our contracts are being executed in Chhattisgarh and Andhra Pradesh, the orders we received
from both region have accounted for 33 % and 40 % of our Order Book respectively as of November 30, 2018.
1. Hyderabad, Telangana State – 2009
2. Raipur, Chhattisgarh- 2010
3. Delhi - 2012
4. Vijayawada, Andhra Pradesh - 2014
5. Bangalore, Karnataka - 2015
6. Luknow, Uttar Pradesh - 2016
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7. Bhubaneswar, Odisha - 2016
8. Jaipur, Rajasthan - 2016
9. Chandigarh, Haryana & Punjab - 2017
10. Bhopal, Madhya Pradesh - 2017
Region Wise Power Plants and Pumps Installed FY
2017-18
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Statistics of installations
Solar Power Plants
Solar Water Pumps
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Key performance indicators
Our operating performance depends on our projects operating consistently at optimal levels. A solar project’s
Performance generally depends on the following parameters:
Our Operations
We are committed to providing high quality services in every domain of our operations. We strive to achieve this by
ensuring that we have a motivated work force and following acceptable quality standards in operations, management
and client relationships, which we believe leads to value creation for all stakeholders.
The objectives of our operations include (a) optimization of time, cost and investment, (b) compliance with statutory,
contractual and procedural requirements, and (c) client satisfaction.
We are focused on building a motivated team of people by way of training, incentives and recognitions. The learning
and development programmes cover leadership and personal productivity topics that are aimed to enable the
individual goals to be aligned with the organisational goals. The key business processes of the Company are as
follows:
Business development and marketing
Our Company has a very decentralised business development model. The operations of our company are divided into
three jurisdictions – North India, Central India & South India and each of these areas is led by a Regional Head. The
Regional Head is assisted by a Business Development Manager and overlooks the business development activities in
their respective areas.
The primary source of business generation happens through various tenders that are floated by diverse number of state
government and public enterprises. We have a dedicated 4 member Tendering Team in their Head Office in
Hyderabad. They regularly scout for tenders being floated across India. Our Company has access to various Tender
Advertisement portals and is registered with the E-Procurement sites of more than 12 states across India. This helps
us to get a wider reach in bidding for various tenders.
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In addition to these, all business generated from private sector comes through the personal visits of the Business
Development Managers to the organisations. The corresponding manager prepares a weekly visit chart to identify
prospective clients and visits and follows up with them on a regular basis. Since the company is already established
in this domain since almost last ten years, enquiries also come in as a result of the good will of the company and word
of mouth references.
Environment, Health and Safety management
We are committed to provide health and safety at workplace with the aim to prevent workplace accidents, injuries and
diseases, and outlines consequences for breaches of those standards across our organization and further we continually
review our facilities and equipment for safety.
Our Company continues frequency of interaction between technological, human and organizational safeguarding
personnel so that adequate measures and procedures will be taken place as and when required along with existing
compliance codes, standards, regulations and best practices for environmental, health and safety processes.
Corporate Social Responsibility
We demonstrate our commitment towards our communities by committing our resources and energies to social
Development. In furtherance of the same, we have undertaken various activities in the areas of for the benefit of
employees and their families and environmental sustainability balances by optimum utilization of renewable energy
resources till the financial year 2017-18.
In the current financial year we have crossed the limits which are specified in the provisions of provisions of section
135 of the Companies Act, 2013 i.e. net profit of more than ₹ 5 crore as per the latest audited financial statements and
requirement of constitution of committee and framing of CSR policy for spending minimum 2% of Average net profits
of the company is necessary. To comply with provisions of the Act we have constituted the CSR committee with the
three (3) members and composition of CSR committee is as follows:4
Mr. Anshuman Yenigalla : Chairman
Mr. Venkata Ravindra Yenigalla : Member
Mr. B Pramod Reddy : Member
Award and recognition
We have achieved following awards and recognition
1. Awarded winner of Solar Roof Series Excellence awards in the category Best Rooftop Solar EPC/System
installer -Commercial Project (150-500kw) presented at solar roofs Punjab-Haryana- Chandigarh Edition,
16th November 2018
2. Winner of Solar Roof Jaipur 2018, Solar Roof Series Excellence awards in the category Best Rooftop Solar
EPC Company for the Year - Captive Projects, for its outstanding achievements in the state of Rajasthan
2018
Key Challenges
Following are the few challenges which the Novus Green has been confronted with while executing the project and
smooth functioning of operations of the company
Complexity of subsidy structure & involvement of too many agencies like MNRE, IREDA, SNA, electricity
board and electricity regulatory commission makes the development of solar PV projects difficult.
The lack of closer industry-government cooperation for the technology to achieve scale.
The need for a better financing infrastructure, models and arrangements to spur the PV industry and consumption
of PV products.
Training and development of human resources to drive industry growth and PV adoption
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Customers
We provide standard quality of services to our customers. By providing the desired quality and standards of work we
aim to achieve highest level of customer satisfaction. We provide a toll-free customer support line accessible for us
24 *7. We build systems by carefully looking at various parameters and for any issues related to Site, module operation
or degradation, AC DC cabling, MPP tracking, transformer, invertor replacement and other operational issues by
sending our operational team on site to mitigate the issues effectively and to the customer satisfaction. . In Fiscals
2016, 2017,2018 and for September 2018, our Company’s revenue from our top ten clients in such periods
represented 94.02%, 89.58%, 92.06% and 96.51% of total income, respectively.
Equipment
Our Company, since its inception operates as an EPC contractor and serving in the field of supply, installation and
commissioning of water pump system and SPV power plants and with this service motive objective the company does
not maintaining any major equipment for its day to day business.
Performance Evaluation Reports
We have received several appreciations and performance evaluation reports as under:
Sr.
No.
Date Name of the Client In relation
1. 25-Apr-2018 Chhattisgarh State Renewable
Energy Development Agency
(CREDA)
On successful completion of design, supply,
installation & commissioned of 1304 Nos, SPV
pumps under Saur Sujla Scheme.
2. 23-Mar-2018 Indian Institute of Technology
(IIT), Delhi
On successful completion of procurement with
installation, testing and commissioning of 1 MWp
solar PV generation station at IIT, Delhi.
3. 18-Jan-2018 New & Renewable Energy
Development Corp Ltd
On successful installation & commissioning of
1250 kWp on Solar power packs at various
premises in Guntur.
4. 08-Jan-2018 Odisha Renewable Energy
Development Agency
(OREDA)
On successful completion of supplied, installed
and commissioned of 147 nos of projects of solar
energy based Dual pump 1HP Submersible
Brushless DC motor pump sets with 900wp PV
array mini water supply scheme in under National
Rural Drinking Water Programme.
5. 12-june-2017 Karnataka Renewable Energy
Development Limited (KREDL
On successful installation and commissioned of
192 nos of AC solar water pumping systems of 5
HP capacity for irrigation purpose in different
taluks of Karnataka
6. 18-Jan-2017 New & Renewable Energy
Development Corp Ltd
On successful completion of supplied and
installed of 502 nos of 5 HP solar PV pump sets
with RMS facility for Agriculture purpose in the
state of Andhra Pradesh.
7. 15-jan-2017 Karnataka Renewable Energy
Development Limited (KREDL)
On successful installation and commissioned of
103 nos of AC solar water pumping systems of 5
HP capacity for irrigation purpose in different
taluks of Karnataka.
8. 15-Dec-2016 GAIL (India) Limited On successful completion of supply, installation
& commissioning of 200 kWp, Solar Roof Top
solar power at G. Konduru, Andhra Pradesh.
9. 22-Oct-2016 New & Renewable Energy
Development Corp Ltd
On successful installation and commissioning of
100 kW grid connected solar PV power plant at
135
DR.YSR Horticulture college, research and
training institute, Anantharajupet, Kadapa.
10. 23-Sep-2016 Mulkanoor Cooperative Rural
Bank and Marketing Society
Ltd., Mulkanoor, Karimnagar
On successful completion of 500 kWp solar
photovoltaic power plant under grid interactive
solar applications of JNNSM, MNRE, GOI.
11. 06-sep-2016 Karnataka Renewable Energy
Development Limited
(KREDL)
On successful installation and commissioned of
59 nos of AC solar water pumping systems of 5
HP capacity for irrigation purpose in different
taluks of Karnataka.
12. 12-Jul-2016 Karnataka Renewable Energy
Development Limited
(KREDL)
On successful installation and commissioned of
59 nos of AC solar water pumping systems of 5
HP capacity for irrigation purpose in different
taluks of Karnataka.
13. 2016-17 New & Renewable Energy
Development Corp Ltd
On successful installation of 200 kWp solar
photovoltaic power plant under Grid Interactive
solar applications of JNNSM, MNRE, GOI.
14. 21-Sep-2015 Telangana New & Renewable
Energy Development Corp Ltd
On successful installation & commissioning of
500 kWp Grid connected SPV system at Salar
Jung Museum.
15. 19-Mar-2015 Indian Institute of Technology
(IIT), Delhi
On successful completion of S/I/T/C of 1 MWp
solar PV generation station complete with PV
modules, inverter, charge controller & other
accessories at roof top of IIT Delhi.
16. 08-Aug-2013 Chhattisgarh State Renewable
Energy Development Agency
(CREDA)
On successful completion of contract of (COMC)
1 MW (100*10 No’s) solar Photovoltaic power
plant at Naya Mantralaya Capital Complex, New
Raipur, Chhattisgarh.
Suppliers
Our Company is maintaining the consistent and healthy relationship with all its suppliers and most of the suppliers
are repetitive to the Company since its early stages due their quality control, consistency, responsiveness and service,
financial stability and other ethical practices. In Fiscals 2016, 2017,2018 and for September 2018, Our Company’s
top ten suppliers in such periods represented 73.61%, 72.48%, 74.02% and 66.24% of total income, respectively.
Employees
As of November 30th, 2018, we are operating with more than 200 employees from different locations across India.
With an increase in our operation capacities or execution of any expansion projects in future, we expect increase in
such number of employees and labors. We consider our relations with our employees to be satisfactory. We have not
experienced any labor disruptions in the past and do not have any unionized employees. In case of disputes or other
problems with our work force such as strikes, work stoppages or increased wage demands, our business, financial
conditions and results of operations may be materially and adversely affected.
Following are departments and the number of employees worked for it:
Sl. No Name of the department Number of employees
1 Management 12
2 Finance 13
3 Administration 20
4 Business Development 6
5 Purchase 7
6 Design 5
7 Engineering & Technicians 82
8 Human Resource 3
9 Information technology 2
136
10 Logistics 5
11 Project Management 2
12 Service 33
13 Quality and Control 6
14 Stores 6
Total 202
Renewable Energy Certificates (RECs)
The list of certificates and empanelment’s from regulatory authorities
S.No Name of the certification Certificate No Issued date
1. Electrical License A 2.2110-8243 16.05.2013
2. Ministry of New and Renewable Energy
Grid connected Rooftop division MNRE/CP/GCRT/A/522 21.08.2017
3. Labour Department Renewal of
Registration Certificate SER/HYD/ACL/A2/15430/2016 03.04.2018
4. Certificate of Registration of Novus
Green green-ISO 9001: 2015 58710/A/0001/UK/En 21.05.2013
5.
Certificate of Registration of Novus
Green green-ISO 14001: 2015 58710/B/0001/UK/En 25.08.2013
6. NSIC Certification NSIC/GP/NTA/2015/39916 14.11.2017
7. CREDA SI registration Certificate 4145/CREDA/RE-II/SI/2018 22.05.2018
8. Final Empanelment Letter DH/Solar/EOI/2017-18/444-593 17.04.2018
9. NREDCAP Registration
NREDCAP/OSD/42-156/RT-
SPV-500KWp/2018-19 27.06.2018
10. OREDA List of Empaneled Vendor 1798/OREDA 23-04-2016
11. TSREDCO Registration Certificate TSREDCO-ES045/2018/5298 11.07.2018
Competition
We believe our primary competitors are other domestic and international solar power. We compete for project awards
based on, among other things, pricing, technical and engineering expertise, financing capabilities, past experience and
track record.
The list of major competitors in the solar water pumping systems and solar power plants to our Company
Sl. No List of Competitors
1 Tata Power Solar Systems Limited
2 Jain Irrigation Systems Limited.
3 Shakti Pumps India Limited
4 Aditi Solar Private Limited
5 Premier Solar Systems Private Limited
6 Span Pumps Private Limited
7 Swelect Energy Systems Limited
8 Vikram Solar Limited
9 ReNew Power Limited
10 Larsen & Toubro Limited
Insurance
We maintain a number of insurance policies to cover the different risks related to our projects in accordance with the industry
practice. Such insurance policies include stock insurance, vehicle insurance plan and life insurance policy for employees,
insurance coverage for fire, special perils, and burglary.
137
Insurance details Financial Year 2018-19
HO
Sr
No.
Description of Property Policy No. Name of the
Company
Period Asset
Covered
Insurance
Amount (₹)
Premiu
m (₹)
1 5HP CRI submersible & solar powered
pumpsets in 69 No at various places in
Karnataka Tumkur
431500/11/2
019/107
The Oriental
Insurance
Company
Ltd
28/05/2018
to
27/05/2019
Stock in
Karnataka
20700000 21183
2 Equipments related to salar power
plants,water pumps streetlights projects
at kanha saiya, transport nagar ring road
bhopal , dist.bhopal , state MP
9600004618
0100000093
The New
India
Assurance
Co Ltd
12/06/2018
to
11/06/2019
Stock 20000000 2360
3 Equipments related to salar power
plants,water pumps streetlights projects at
Auto Garage ,plot no.62/A, beside NRI
cancer hospital,Auto nagar mangalagiri
9600004618
0100000092
The New
India
Assurance
Co Ltd
12/06/2018
to
11/06/2019
Stock 30000000 3540
4 Equipments related to salar power
plants,water pumps streetlights projects
at patrapali,bypass chhak,near new bus
stand , po-sundargarh,state odisha
9600004618
0100000094
The New
India
Assurance
Co Ltd
12/06/2018
to
11/06/2019
Stock 10000000 1180
5 Equipments related to salar power
plants,water pumps streetlights projects at
Plot no.394,vardhman
nagar,badarwas,jaipur,rajasthan
9600004618
0100000080
The New
India
Assurance
Co Ltd
28/05/2018
to
27/05/2019
Stock 20000000 3540
6 Equipments related to salar power
plants,water pumps streetlights projects at
vardhman
nagar,badarwas,jaipur,rajasthan
9600001118
0100000187
The New
India
Assurance
Co Ltd
28/05/2018
to
27/05/2019
Stock 20000000 21034
7 Equipments related to salar power
plants,water pumps streetlights projects at
Patrapali,bypass chhak,near new bus
stand , po-sundargarh,odisha
9600001118
0100000202
The New
India
Assurance
Co Ltd
12/06/2018
to
11/06/2019
Stock 10000000 11109
8 Equipments related to salar power
plants,water pumps streetlights projects at
Auto Garage ,plot no.62/A, beside NRI
acancer hospital,Auto nagar mangalagiri
9600001118
0100000200
The New
India
Assurance
Co Ltd
12/06/2018
to
11/06/2019
Stock 30000000 33319
9 Equipments related to salar power
plants,water pumps streetlights projects at
kanha saiya, Transport Nagar Ring Road
Bhopal , Dist.Bhopal ,MP
9600001118
0100000201
The New
India
Assurance
Co Ltd
12/06/2018
to
11/06/2019
Stock 20000000 22213
10 AP 10 BA 5677 M1087451 IFFCO -
TOKIO
General
Insurance
12/05/2018
to
11/05/2019
Vehicle 506200 33326
12 company health insurance 4016/121381
545/02/000
ICICI
Lombord
28/09/2018
to
27/09/2019
Group
Insurance
21700000 940847
13 TS 10 UA 5614 431500/31/2
019/2862
The Oriental
Insurance
Company
Ltd
26/07/2018
to
25/07/2019
Vehicle 425000 12065
14 FLAT NO 3,2nd floor ,mch no 6-3-
680/8/2/203,siri residency somajiguda,
hyderabad
431890/11/2
019/11
The New
India
Assurance
Co Ltd
20/10/2018
to
19/10/2019
Residential
Flat
7000000 4585
15 AP 10 BE 5677 431500/31/2
019/856
The Oriental
Insurance
Company
Ltd
11/05/2018
to
10/05/2019
Vehicle 523385 16685
138
16 Flat no 204,2 ND floor,sthapati
complex,sy no
12,124,125&142,kompally,qutbullapur
mandal,medchat
431890/11/2
019/12
The Oriental
Insurance
Company
Ltd
20/10/2018
to
19/10/2019
Residential
Flat
6700000 4389
17 7 NO pumps Andhra Pradesh East
Godavari
431500/11/2
018/583
The Oriental
Insurance
Company
Ltd
29/03/2018
to
28/03/2019
Stock 1960000 1995
18 42 no of solar powered CRI submersible
pumpsets at various places in Andhra
Pradesh Nellore
431500/11/2
018/580
The Oriental
Insurance
Company
Ltd
29/03/2018
to
28/03/2019
Stock 11760000 11969
19 76 no of solar powered CRI submersible
pumpsets at various places as per
attached annexure in Andhra Pradesh,
Prakasam District
431500/11/2
018/581
The Oriental
Insurance
Company
Ltd
29/03/2018
to
28/03/2019
Stock 21280000 21658
20 5HP CRI submersible&solar powered
pumpsets in 71 No at various places in
Andhra Pradesh Nellore
431500/11/2
018/582
The Oriental
Insurance
Company
Ltd
29/03/2018
to
28/03/2019
Stock 19880000 20233
21 5HP CRI submersible&solar powered
pumpsets in 31 No at various places in
Andhra Pradesh
6129001118
0100000870
The Oriental
Insurance
Company
Ltd
31/07/2018
to
30/07/2019
Stock 8680000 8835
22 5HP CRI submersible&solar powered
pumpsets in 13 No at various places in
Andhra Pradesh
6129001118
0100000871
The Oriental
Insurance
Company
Ltd
31/07/2018
to
30/07/2019
Stock 3640000 3705
23 5HP CRI submersible&solar powered
pumpsets in 53 No at various places in
Andhra Pradesh East Godavari
431500/11/2
019/40
The Oriental
Insurance
Company
Ltd
19/04/2018
to
18/04/2019
Stock 14840000 15104
24 5HP CRI submersible&solar powered
pumpsets in 57 No at various places in
Andhra Pradesh Vishakapatnam
431500/11/2
019/42
The Oriental
Insurance
Company
Ltd
19/04/2018
to
18/04/2019
Stock 15960000 16244
25 5HP CRI submersible&solar powered
pumpsets in 9 No at various places in
andhra pradesh east godavari
431500/11/2
019/41
The Oriental
Insurance
Company
Ltd
19/04/2018
to
18/04/2019
Stock 2520000 2566
26 5HP CRI submersible&solar powered
pumpsets in 81 No at various places in
andhra pradesh nellore
431500/11/2
019/39
The Oriental
Insurance
Company
Ltd
19/04/2018
to
18/04/2019
Stock 22680000 23084
27 5HP CRI submersible&solar powered
pumpsets in 22 No at various places in
andhra pradesh SRIKAKULAM
431500/11/2
019/211
The Oriental
Insurance
Company
Ltd
12/07/2018
to
11/07/2019
Stock 6160000 6269
28 5HP CRI submersible&solar powered
pumpsets in 115 No at various places in
andhra pradesh KARNOOL
431500/11/2
019/212
The Oriental
Insurance
Company
Ltd
12/07/2018
to
11/07/2019
Stock 32200000 32773
29 5HP CRI submersible&solar powered
pumpsets in 95 No at various places in
andhra pradesh nellore
431500/11/2
018/489
The Oriental
Insurance
Company
Ltd
16/02/2018
to
15/02/2019
Stock 26600000 27073
30 5HP CRI submersible&solar powered
pumpsets in 41 No at various places in
andhra pradesh east godavari
431500/11/2
018/535
The Oriental
Insurance
Company
Ltd
12/03/2018
to
11/03/2019
Stock 11480000 11684
139
31 5HP CRI submersible&solar powered
pumpsets in 123 No at various places in
andhra pradesh east godavari
431500/11/2
018/537
The Oriental
Insurance
Company
Ltd
12/03/2018
to
11/03/2019
Stock 34440000 35051
32 42 no of solar powered CRI submersible
pumpsets at various places as per
attached annexure in andhra pradesh
nellore
431500/11/2
018/580
The Oriental
Insurance
Company
Ltd
29/03/2018
to
28/03/2019
Stock 11760000 11969
33 5HP CRI submersible&solar powered
pumpsets in 71 No at various places in
andhra pradesh nellore
431500/11/2
018/582
The Oriental
Insurance
Company
Ltd
29/03/2018
to
28/03/2019
Stock 19880000 20233
34 76 no of solar powered CRI submersible
pumpsets at various places as per
attached annexure in andhra pradesh
prakasam District
431500/11/2
018/581
The Oriental
Insurance
Company
Ltd
29/03/2018
to
28/03/2019
Stock 21280000 21658
35 5HP CRI submersible&solar powered
pumpsets in 34 No at various places in
andhra pradesh east godavari
431500/11/2
018/536
The Oriental
Insurance
Company
Ltd
12/03/2018
to
11/03/2019
Stock 9520000 9689
36 7 NO pumps andhra pradesh east
godavari
431500/11/2
018/583
The Oriental
Insurance
Company
Ltd
29/03/2018
to
28/03/2019
Stock 1960000 1995
37 5HP CRI submersible&solar powered
pumpsets in 9 No at various places in
nellore
431500/11/2
019/72
The Oriental
Insurance
Company
Ltd
18/05/2018
to
17/05/2019
Stock 15400000 61554
38 5HP CRI submersible&solar powered
pumpsets in 70 No at various places in
andhra pradesh visahkapatnam
431500/11/2
019/43
The Oriental
Insurance
Company
Ltd
19/04/2018
to
18/04/2019
Stock 19600000 19947
39 311 Pumps at Various places in
Vishakapatnam & West Godavari
12048534 IFFCO -
TOKIO
General
Insurance
Co Ltd
3/10/2018
to
2/10/2019
Stock 93300000 81792
40 217 Pumps at Various places in Guntur 12048576 IFFCO -
TOKIO
General
Insurance
Co Ltd
3/10/2018
to
2/10/2019
Stock 65100000 57071
DELHI
Sr.No Property Covered Policy No. Insurance
Company
Policy
Tenure
Assets
covered in
policy
Insured
Amount
(₹)
Premium (in ₹)
1 Maruti CIAZ-ZETA
1.3 hybrid
2311201783260401000 HDFC ERGO
General
Insurance
Company LTD
06/05/2018
to
05/05/2019
Vehicle 850000 21649
2 13 solar water pump
set at Jaipur,
Rajasthan
1419814718P107011789 United India
Insurance
Company LTD
29/08/2018
to
28/08/2023
Stock 4737202 30100
3 4 solar water pump
set at jaipur,
rajasthan
1419814718P107011838 United India
Insurance
Company LTD
29/08/2018
to
28/08/2023
Stock 1773639 10750
4 13 solar water pump
set at Jaipur,
Rajasthan
1419814718P107011739 United India
Insurance
Company LTD
29/08/2018
to
28/08/2023
Stock 4673982 30100
140
5 14 solar water pump
set at Jaipur,
Rajasthan
1419814718P107011653 United India
Insurance
Company LTD
29/08/2018
to
28/08/2023
Stock 4673982 30100
6 16 solar water pump
set at Jaipur,
Rajasthan
1419814718P107587545 United India
Insurance
Company LTD
07/09/2018
to
06/09/2019
Stock 3994464 35475
7 17 solar water pump
set at Jaipur,
Rajasthan
1419814718P107587191 United India
Insurance
Company LTD
07/09/2018
to
06/09/2019
Stock 4798365 35475
RAIPUR
Sr.No Property
Covered
Policy No. Insurance
Company
Policy
Tenure
Assets
covered in
policy
Insured
Amount
(₹ )
Premium (in ₹)
1 BAJAJ CT-100 2312202332065900000 HDFC ERGO
General
Insurance
Company LTD
26/07/2018
to
25/07/2019
Vehicle 27318 1265
2 Water Pumps
installed in CG
state Raipur
,Chattisgarh
2701002618P104768196 United India
Insurance
Company LTD
04/07/2018
to
03/07/2019
Fire &
Burglary
Policy
7440150 17559
3 Water Pumps
installed in CG
state Raipur
,Chattisgarh
2701002618P102660067 United India
Insurance
Company LTD
17/05/2018
to
16/05/2019
Fire &
Burglary
Policy
48996400 115631
4 Water Pumps
installed in CG
state Raipur
,Chattisgarh
2701002618P107068314 United India
Insurance
Company LTD
29/08/2018
to
28/08/2019
Fire &
Burglary
Policy
299150 706
5 Water Pumps
installed in CG
state Raipur
,Chattisgarh
2701002618P102908647 United India
Insurance
Company LTD
17/05/2018
to
16/05/2019
Fire &
Burglary
Policy
10103750 23833
6 Water Pumps
installed in CG
state Raipur
,Chattisgarh
2701002618P102659987 United India
Insurance
Company LTD
17/05/2018
to
16/05/2019
Fire &
Burglary
Policy
48406025 114238
7 Maruthi S-Cross
ZETA
78159363 IFFCO TOKIO
general insurance
23/06/2018
to
22/06/2019
Vehicle 797011 21000
8 Water Pumps
installed in CG
state Raipur
,Chattisgarh
2701002618P102659933 United India
Insurance
Company LTD
17/05/2018
to
16/05/2019
Fire &
Burglary
Policy
47893275 113042
Intellectual Property
We have applied for the trade mark under the provisions of Trade Mark Act, 1999 along with such other necessary
approval if any applicable and details of the same will be as follows
1. Application Number : 3922008
2. Nature of Application : Multiclass
3. Authority : Registry, Hyderabad
Immovable Properties
Except as stated below, we do not have any immovable property.
141
Description of the Property:
Address 6-3-680/8/2/203 Plot No:3, 2nd, SIRI Residency, Somajiguda, Hyderabad, Telangana-
500082.
Date of Execution of Agreement January 22,2014
Consideration 35,25,000/-
Purpose Guest house for the management and employees
Rent Agreements
S.
No
Location of the property Area Licensor / Lessor Rent /
License Fees
(In₹)
Lease /
License
period
Purpose
1. 706, Savera Apt, Sector-13,
Rohini, Delhi 110085
Not
specified
Komal Preet Kaur 20,000/- 15-09-2017 to
14-09-2019
Office Use
2. A-206, 2nd Floor, North Ex Mall,
Sector-9, Rohini, Delhi 110085.
Not
specified
Wood Land India
Furnitures Pvt Ltd
10,000/- 15-09-2017 to
14-09-2019
Office use
3. Plot No: 253, Sector A, Zone B,
Mancheswar Industrial Estate,
Bhubaneshwar 751010.
1500 sq ft Balla Manmadha
Rao
14,300 02-11-2018 to
31-10-2019
Office use
4. Plot No 251, Sanamumdali,
Mundali Colony, Baranga,
Cuttack 754006.
3500 sq ft Kaminiparva Dash 13,200 02-11-2018 to
31-10-2019
Office use
5. Plot; 62A, Survey No49,
Autonagar, Mangalagiri,
Guntur, Andhra Pradesh.
458.42 sq
yards
Bandalamudi
Madhav rao
29,000/- 01-03-2018 to
22-02-2020
Godown
6. Flat No;511, 5th Floor,
Whitefeild Apt, Sai bharti,
Mangalagiri, AP 522503
Not
specified
Gazi Mohammad
Habibulla
12,000/- 01-04-2018 to
28-02-2019
Office
7. Plot no 394, Vardhaman nagar,
Badarwas, Sangener, Jaipur,
Rajasthan
287.42 Sq
ft
Ramesh chand
Jain
35,000/- 01-05-2018 to
31-04-2019
Office use
8. Plot 394, Vardhaman Nagar,
Badarwas, Ajmer Road, Jaipur.
347.77 sq
ft
Ramesh chand
Jain
35,000/- 01-05-2018 to
31-03-2019
Resident
Purpose
9. Bad Patrapali, Sundargarh,
770001
Not
Specified
Amruta Kumar
Patel
15,500/- 11-05-2018 to
30-04-2019
Lease Rent
Commercial
Purpose
10. Kharasa nio 366/1
267Kanhasaiya Kokta,Transport
nagar, Bhopal, MP
Not
Specified
Bhanupratap
Singh
28,000/- 01-06-2018 to
30-05-2019
Godown
Purpose
11. Khasara no 738/12-22, District;
Mova, Raipur, Chattisgarh.
900 sq ft Mina Tanwani 13,200/- 01-06-2018 to
30-04-2019
Godown
Purpose
12. Khasara no 738/12-22, District;
Mova, Raipur, Chattisgarh
900 sq ft Meena Tanwani 13,200/- 01-06-2018 to
30-04-2019
Godown
Purpose
13. Plot No: 11, 2nd Floor, Ravi
Cooperative Housing Society,
Trimulgherry, Secunderabad,
Telangana, 500015
Not
Specified
Shri K. Ravindra 20,000/- 01-06-2018 to
30-04-2019
Office use
14. Niljigarh, Sukinda, Jaipur 2000 sq ft Shri raj Kishore 2500/- 10-06-2018 to
09-06-2019
Commercial
Purpose
15. Flat no A -2, 117, Nirupam royal
palm, Hoshangabad road,
Jatkhedi, Dist Bhopal, MP
Not
Specified
Arun Kumar
Pandey
11,000/- 01-07-2018 to
31-05-2019
Office Use
16. Shabri Nagar, ward 12, Sukma,
Chhatisgarh
Not
Specified
Rambalak sharma 5,000/- 01-07-2018 to
30-06-2019
Office Use
17. Plot 61A, NRI cancer Hospital,
Autonagar, Mangalagiri,
Guntur, AP 522503
2100 sq ft Boyidapu Venkat 15,000/- 01-08-2018 to
31-09-2020
Resident
Purpose
142
18. Gram Nagar, Panchyat nigari
ward no 02, Chamtari,.
Chhatisgarh
Not
Specified
Santosh Kumar 3,000/- 01-09-2018 to
31-07-2019
Resident
Purpose
19. Door 71, Pipe Lione Road,
Subhash nagar, Telangana,
500055
1000 sq ft Satyanarayan 24,000/- 13-09-2018 to
12-07-2019
Godown
Purpose
20. Maa Danteshwari nagar,
Aavrabhata Dantewad,
Chhatisgarh
Not
Specified
Sunita Panda 10,000/- 01-09-2018 to
31-03-2019
Office Use
21. Ward no 02, nagar Panchayat,
Jagpur, Kavanda Mod, Dis-
Janjgir, Champa -
Not
Specified
Surendra Kumar
Chandra
4,200/- 28-09-2018 to
28-08-2019
Office Use
22. Entire Ground Floor A Part of
Property No C-53, Situated at
Prashant Vihar, Delhi- 110085
Not
Specified
Smt Anshu garg 12,500/- 01-06-2018 to
30-04-2019
Office Use
23. Panchkula, 1st Floor, Industrial
Area, Phase I
360 Sq Ft Uday Kumar 11,000/- 11-05-2018 to
10-05-2019
Office Use
24. Khasra No 2261, Shivkumar
Road , Uttar Pradesh, Rampura
Village
Not
Specified
Reema Saluja 20,000/- 01-12-2018 to
30-10-2019
Office Use
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KEY INDUSTRY REGULATIONS AND POLICIES
The following description is a summary of certain sector specific laws and regulations in India, which are applicable
to the Company and its subsidiaries. The information detailed in this chapter, is based on the current provisions of
Indian laws which are subject to amendments, changes and modifications. The information detailed in this chapter
has been obtained from sources available in the public domain. The regulations 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
substitute for professional legal advice.
Industry specific legislations
National Renewable Energy Bill, 2015
MNRE released the draft National Renewable Energy Bill, 2015 on July 14, 2015.The draft bill provides for a
framework to facilitate and promote the use of renewable energy. It aims to address issues that are not adequately
covered under the Electricity Act or its amendments with respect to renewable energy such as the principles of grid
planning and operation and the concept of national targets and its compliance by utilities. It proposes provisions for
facilitating generation of renewable energy through sound institutional structure, supportive eco-system, viable
economic and financial framework and promotion of renewable energy applications including distributed and grid
connected renewable electricity.
Among other things, the bill proposes to empower the GoI and State Governments to establish national renewable
energy funds and state green funds respectively, in order to meet the expenses of implementing the national renewable
energy policy and national renewable energy plan. Further, unlike the Electricity Act, no license is required for supply
of electricity, if generated from renewable energy sources under the provisions of the bill.
National Solar Mission
The GoI launched the NSM, in Fiscal 2010, under which it has undertaken several initiatives to promote low cost
solar power in the country.
Some of the key initiatives taken under the NSM scheme are as follow:
a. The GoI appointed NVVN, the trading arm of NTPC, to bid competitively for solar power and bundle it with
cheaper thermal power to sell it to distribution companies. The objective was to reduce the average power
purchase cost of solar power.
b. The GoI is incentivizing the central public sector undertakings (“CPSUs”) to install solar power under the VGF
mechanism. Under Batch V of NSM, it has already allocated approximately 1 GW. Further, the GoI has
mandated large public sector institutions to substitute part of their power consumption with solar power.
c. The GoI has also incorporated SECI for the purpose of promoting solar projects in India. It conducts the
bidding procedure and also undertakes the distribution of funds allocated from the centre to developers’ .SECI
also buys solar power from the developers and sells it to bulk consumers under tripartite agreements.
Electricity Act, 2003 read with Indian Electricity Rules, 1956 and Regulations made thereunder
The Electricity Act, 2003 read with the Electricity Rules, 1956 consolidates the laws relating to generation,
transmission, distribution, trading and use of electricity and generally for taking measures conducive to development
of electricity industry, promoting competition therein, protecting interest of consumers and supply of electricity to all
areas, rationalization of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and
environmentally benign policies, constitution of Central Electricity Authority, Regulatory Commissions and
establishment of Appellate Tribunal and for matters connected therewith or incidental thereto. As per the Electricity
Act, "electrical plant" means any plant, equipment, apparatus or appliance or any part thereof used for, or connected
with, the generation, transmission, distribution or supply of electricity. However, it does not include the following:
a) an electric line; or
(b) a meter used for ascertaining the quantity of electricity supplied to any premises; or
(c) an electrical equipment, apparatus or appliance under the control of a consumer.
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The Electricity Act envisages the establishment of Central Electricity Authority (the “Authority”) for the purposes of
inter-alia advising the Central Government on the matters relating to the national electricity policy, formulating short-
term and perspective plans for development of the electricity system and co-ordinating the activities of the planning
agencies for the optimal utilisation of resources to serve the interests of the national economy and to provide reliable
and affordable electricity for all consumers. Further, the Electricity Act bars the member of the Authority to have any
share or interest, whether in his own name or otherwise, in any company or other body corporate or an association of
persons (whether incorporated or not), or a firm engaged in the business of generation, transmission, distribution and
trading of electricity or fuel for the generation thereof or in the manufacture of electrical equipment.
Central Electricity Authority (Technical Standards for Construction of Electrical Plants and Electric Lines)
Regulations, 2010, as amended (“Technical Standards Regulations”)
The Technical Standards Regulations lays down the technical standards and designs for construction of electric plants
and lines. The Technical Standards Regulations also provides the general requirement for various parts or components
or assemblies of equipment and systems which shall have proven materials with well-established physical and
chemical properties appropriate to the service as intended. Further, it lays down the requirement that all equipment
and systems installed shall comply with the provisions of statutes, regulations and safety codes, as applicable and also
the design, construction and testing of all equipment, facilities, components and systems shall be in accordance with
latest version of relevant standards and codes issued by Bureau of Indian Standards (BIS) and/or reputed international
standards. The Technical Standards Regulations provides for the requirement that all materials, components and
equipment shall be tested at all stages of procurement, manufacturing, erection, commissioning as per comprehensive
quality assurance programme to be agreed mutually, between the Owner and the equipment supplier.
The Electricity (Amendment) Bill, 2014 was introduced to amend certain provisions of the Electricity Act. Among
others, the amendment empowers the GoI to establish and review a national renewable energy policy, tariff policy
and electricity policy. Further, the GoI may in consultation with the state governments, notify policies and adopt
measures for promotion of the national renewable energy fund, development of the renewable energy industry and
for effective implementation and enforcement of related measures.
Renewable Purchase Obligations
The Electricity Act promotes the development of renewable sources of energy by requiring the relevant electricity
regulatory commission to ensure grid connectivity and the sale of electricity generated from renewable sources. In
addition, it requires the relevant electricity regulatory commission to specify, for the purchase of electricity from
renewable sources, a percentage of the total consumption of electricity within the area of a distribution licensee, which
are known as renewable purchase obligations (“RPOs”). Pursuant to this mandate, most of the relevant electricity
regulatory commission have specified solar and non-solar RPOs in their respective states. In terms of the RPO
regulations, RPOs are required to be met by obligated entities (that is, distribution licensees, captive power plants and
open access consumers) by purchasing renewable energy, either by entering into PPAs with renewable energy power
producers or by purchasing renewable energy certificates.
The RPO regulations require the obligated entities to purchase power from renewable energy power producers such
as our company. In the event of default by an obligated entity in any fiscal, the relevant electricity commission may
direct the obligated entity to deposit an amount determined by the relevant electricity regulatory commission into a
fund to be utilized for, among others, the purchase of renewable energy certificates. Additionally, pursuant to the
Electricity Act, a defaulting obligated entity may also be liable to pay penalty as determined by the relevant electricity
regulatory commission. In May 2015, the Supreme Court of India upheld a regulation that made it compulsory for
captive power plants and open access consumers to purchase electricity to fulfill their RPOs. This landmark judgment
is expected to increase the demand for renewable energy by captive players and also improve the marketability of
renewable energy certificates in India.
Jawaharlal Nehru National Solar Mission
The Jawaharlal Nehru National Solar Mission (“JNNSM”) was approved by the GoI on November 19, 2009 and
launched on January 11, 2010.Under the JNNSM, NTPC has committed to add 10GW of solar power by fiscal 2022.
The GoI is also incentivising central public sector undertakings to install solar power under the viability gap funding
mechanism and has mandated large public sector institutions to substitute part of their power consumption with solar
power. In addition, for the purpose of promoting solar projects in India, the GoI has incorporated SECI to conduct the
bidding procedure and undertake the distribution of funds allocated by the GoI to developers.
Operational support for the execution of solar projects
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The GoI has given significant support to the solar power sector for execution of projects through the setting up of
solar parks. Under a policy released in September 2014, the GoI has planned to prepare land banks for 20,000 MW
of solar projects spread across 25 states in India. The GoI has also approved capacity augmentation of solar parks to
40 GW in March 2017 to support execution of solar projects and sanctioned ₹81 billion for a newly envisaged 20 GW
of solar projects. In addition, various states including Andhra Pradesh, Telangana, Rajasthan, Karnataka, Madhya
Pradesh and Punjab, have implemented initiatives to address prevailing land acquisition issues.
Central and state level incentives
Several fiscal and regulatory incentives have been provided by the government to developers to facilitate growth in
the solar power sector, including accelerated depreciation benefit; generation based incentives;availability of viability
gap funding; tax holiday under Section 80 IA of the Income Tax Act; regulatory incentives such as must run status of
renewable energy and deemed generation for projects. Particularly under state solar policies, incentives such as
concessional wheeling and banking charges, concessional transmission charges and transmission losses, cross subsidy
surcharges and reactive charges also have been made available.
GENERATION BASED INCENTIVES (GBI) PROGRAMME FOR SMALL PV SOLAR POWER PLANTS
Rooftop PV and Small Solar Power Generation Programme (RPSSGP)
a. After successful demonstration of MW projects in Demo Scheme, Ministry launched a Generation Based
Incentives (GBI) programme on 16th June 2010 to give a thrust to rooftop PV and other small solar power
plants connected to grid under Phase I NSM. Implementing Agency is IREDA.
b. 100 MW Solar capacity was allocated and 91.8 MW of 72 projects in 12 States was commissioned. GBI is
applicable for 25 years from the commissioning date and payable to the distribution utility
c. Ministry provides fixed GBI from 8.69 to 12.24 /Kwh to the State utilities at a rate equal to the difference of
the CERC tariff for 2010-11 ( 17.91 per kWh) and a base rate of 5.50 per kWh.
d. Annual budget requirement by Ministry under RPSSGP scheme is approx. ₹ 180.00 crore for 91.8 MW.
Renewable Energy Certificate Mechanism
The Central Electricity Regulatory Commission (Terms and Conditions for recognition and issuance of Renewable
Energy Certificate for Renewable Energy Generation) Regulations, 2010, were enacted to develop the market in
electricity from non-conventional energy sources by issuance of transferable and saleable credit certificates (“REC
Mechanism”). The REC Mechanism provides a market based instrument which can be traded freely and provides
means for fulfilment of RPOs by the distribution utilities/consumers. Under the REC Regulations, there are two
categories of certificates, i.e. solar certificates issued to eligible entities for generation of electricity based on solar as
renewable energy source and non-solar certificates issued to eligible entities for generation of electricity based on
renewable energy sources other than solar. The REC Regulations determine the quantum of such certificates to be
issued to the eligible entities and the method of dealing in the certificates. The National Load Despatch Centre is the
central agency which oversees the REC Mechanism, including, inter alia, registration of eligible entities, issuance of
certificates, maintaining and settling accounts in respect of certificates, acting as repository of transactions in
certificates and such related functions of the REC Mechanism as may be assigned by the CERC. There are certain
conditions which are now imposed on electricity generating company, distribution licensee and captive generation
plant to be eligible to apply for REC.
The Ministry of New and Renewable Energy
The MNRE is the nodal ministry of the Government of India at the national level for all matters relating to
nonconventional sources of energy and renewable energy. The mandate of MNRE includes research, development,
commercialisation and deployment of renewable energy systems/devices for various applications in rural, urban,
industrial and commercial sector.
National Institute of Solar Energy (“NISE”)
NISE is an autonomous research and development institution under the MNRE, Government of India, established to
facilitate the research and development, testing, certification and skill development activities in the field of solar
energy. NISE also supports the MNRE in the implementation of NSM.
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STATE LAWS
Various states in India have from time to time, announced administrative policies and regulations in relation to solar
power projects and related matters. These state-specific policies and regulations have material effects on our business.
Karnataka
The Karnataka Renewable Energy Development Limited is the agency responsible for promoting and developing
renewable energy in the state of Karnataka. The government of Karnataka has formulated Karnataka policy, which as
amended, will remain in effect until 2021 or until modified by another policy. The Karnataka policy aims to harness
a minimum of 6,000 MW of solar power by 2021 in multiple phases. Generation of solar power under the Karnataka
policy is attractive to project developers because the policy provides incentives such as tax concessions under the
Karnataka industrial policy and central excise duty and customs duty exemptions. Solar power projects under the
Karnataka policy are further exempt from obtaining consent from the Karnataka Pollution Control Board as required
under the pollution control laws.
Telangana
Telangana New and Renewable Energy Development Corporation Limited is the agency responsible for promotion
and development of renewable energy in Telangana. The government of Telangana has formulated the Telangana
policy from June 1, 2015 and effective for a period of five years. All solar projects that are commissioned during the
operative period shall be eligible for the incentives declared under the policy, for a period of ten years from the date
of commissioning; unless the period is specifically mentioned.
The Telangana policy provides for a single window clearance to facilitate and expedite approvals required for setting
up of solar power projects. The Telangana policy also provides that the land acquired for grid-connected solar power
projects for sale to distribution companies/ captive use/ third party sale shall be deemed to be converted to non-
agricultural land status on payment of applicable conversion charges to the solar policy cell and no further conversion
procedures need to be followed by the developers in respect of such land. Further, solar power projects using photo
voltaic or solar thermal technology would be given clearances under the pollution control laws within a week by the
Telangana State Pollution Control Board.
Madhya Pradesh
The New and Renewable Energy Department is the agency responsible for promotion and development of renewable
energy in Madhya Pradesh. The government of Madhya Pradesh accorded approval to the MP policy on July 10, 2012.
The MP policy provides incentives such as exemption from payment of electricity duty and cess for a period of 10
years from the date of commissioning of the project and all industrial incentives available to industrial units under the
schemes administered by the industrial department will be available to the solar power producers. Solar power projects
are further exempted from payment of VAT and entry tax on the equipment purchased for installation of solar power
plants.
Laws relating to employment
The Factories Act, 1948 (“Factories Act”) and The Gujarat Factories Rules, 1963
The Factories Act defines a factory to cover any premises which employs 10 or more workers and in which
manufacturing process is carried on with the aid of power and any premises where there are at least 20 workers, even
while there may not be an electrically aided manufacturing process being carried on. State Governments have the
authority to formulate rules in respect of matters such as prior submission of plans and their approval for the
establishment of factories and registration and licensing of factories. The Factories Act provides that the person who
has ultimate control over the affairs of the factory and in the case of a company, any one of the directors, must ensure
the health, safety and welfare of all workers. There is a prohibition on employing children below the age of fourteen
years in a factory. The occupier is required to submit a written notice to the chief inspector of factories containing all
the details of the factory, the owner, manager and himself, nature of activities and such other prescribed information
prior to occupying or using any premises as a factory. The occupier is required to ensure, as far as it is reasonably
practicable, the health, safety and welfare of all workers while they are at work in the factory.
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In addition to the Factories Act, the employment of workers, depending on the nature of activity, is regulated by a
wide variety of generally applicable labour laws. The following is an indicative list of labour laws applicable to the
business and operations of Indian companies engaged in manufacturing activities:
• Industrial Employment (Standing Orders) Act, 1946;
• Contract Labour (Regulation and Abolition) Act, 1970;
• Employees’ State Insurance (General) Regulations, 1950 read with Employees’ State Insurance Act, 1948;
• Industrial Employment (Standing Orders) Act, 1946
• Employees’ Compensation Act, 1923;
• Industrial Disputes Act, 1947 and Industrial Dispute (Central) Rules, 1957;
• Maternity Benefit Act, 1961;
• Minimum Wages Act, 1948;
• Payment of Bonus Act, 1965;
• Child Labour Prohibition and Regulation Act, 1986;
• The Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013;
• Payment of Gratuity Act, 1972; and
• Payment of Wages Act, 1936.
Intellectual Property Laws
The Trademarks Act, 1999 (“Trademarks Act”)
The Trademarks Act provides for the process for making an application and obtaining registration of trademarks in
India. The purpose of the Trademarks Act is to grant exclusive rights to marks such as a brand, label, heading and to
obtain relief in case of infringement for commercial purposes as a trade description. The Trademarks Act prohibits
registration of deceptively similar trademarks and provides for penalties for infringement, falsifying and falsely
applying trademarks.
The Trademarks Act is supplemented by the Trademarks Rules, 2002. Rule 38 of the Trademarks Rules, 2002 deals
with expedited examination. An applicant, after receiving an application number from the Registrar of Trademarks
(an acknowledgment of receipt of application) can file Form TM 63 along with a fee and a reasoned request for an
expedited examination of his application. If the Registrar of Trademarks declines the request, the fee is refunded.
The Copyright Act, 1957 (“Copyright Act”)
The Copyright Act governs copyright protection in India. Registration under the Copyright Act acts as a prima facie
evidence of the particulars entered therein and helps expedite infringement proceedings and reduce delay caused due
to evidentiary considerations.
Environmental Laws
The Environment Protection Act, 1986 (“Environment Act”)
The Environment Act has been enacted for the protection and improvement of the environment. The Environment
Act empowers the GoI to take measures to protect and improve the environment such as by laying down standards
for emission or discharge of pollutants, providing for restrictions regarding areas where industries may operate and
so on. The GoI may make rules for regulating environmental pollution.
Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016 (the “Hazardous Waste
Rules”)
The Hazardous Waste Rules are to be read with the Environment Act. The term “hazardous waste” has been defined
in the Hazardous Waste Rules and any person who has, control over the affairs of the factory or the premises or any
person in possession of the hazardous waste has been defined as an “occupier”. Furthermore, in terms of the
Hazardous Waste Rules, the occupier has been, inter alia, made responsible for safe and environmentally sound
handling of hazardous wastes generated in his establishment and shall require license/authorisation for generation,
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processing, treatment, package, storage, transportation, use, collection, destruction, conversion, offering for sale,
transfer or the like of the hazardous waste from the State Pollution Control Board.
Water (Prevention and Control of Pollution) Act, 1974 and Air (Prevention and Control of Pollution) Act, 1981
The basic purpose of these statutes is to control, abate and prevent pollution. In order to achieve these objectives,
Pollution Control Boards (“PCBs”), which are vested with diverse powers to deal with water and air pollution, have
been set up in each State. The PCBs are responsible for setting the standards for maintenance of clean air and water,
directing the installation of pollution control devices in industries and undertaking inspection to ensure that industries
are functioning in compliance with the standards prescribed. These authorities also have the power to carry out search,
seizure and investigation if the authorities are aware of or suspect pollution that is not in accordance with such
regulations. All industries and factories are required to obtain consent orders from the PCBs, which are indicative of
the fact that the factory or industry in question is functioning in compliance with the pollution control norms. These
consent orders are required to be renewed annually.
TAX RELATED LEGISLATIONS
Income-Tax Act, 1961 (the “IT Act”) and Rules made thereunder
IT Act is applicable to every Company, whether domestic or foreign whose income is taxable under the provisions of
the IT Act or Rules made thereunder depending upon its Residential Status and Type of Income involved. The IT Act
provides for the taxation of persons resident in India on global income and persons not resident in India on income
received, accruing or arising in India or deemed to have been received, accrued or arising in India. Every Company
assessable to income tax under the IT Act is required to comply with the provisions thereof, including those relating
to Tax Deduction at Source, Advance Tax, Minimum Alternative Tax and like. Every such Company is also required
to file its returns by September 30 of each assessment year.
Central Goods and Services Tax Act, 2017 (the “GST Act”)
The GST Act levies indirect tax throughout India to replace many taxes levied by the Central and State Governments.
The GST Act was applicable from July 1, 2017 and combine the Central Excise Duty, Commercial Tax, Value Added
Tax (VAT), Food Tax, Central Sales Tax (CST), Introit, Octroi, Entertainment Tax, Entry Tax, Purchase Tax, Luxury
Tax, Advertisement Tax, Service Tax, Customs Duty, Surcharges. GST will be levied on all transactions such as sale,
transfer, purchase, barter, lease, or import of goods and/or services. India will adopt a dual GST model, meaning that
taxation is administered by both the Union and State Governments. Transactions made within a single state will be
levied with Central GST (CGST)by the Central Government and State GST(SGST) by the government of that state.
For inter-state transactions and imported goods or services, an Integrated GST (IGST) is levied by the Central
Government. GST is a consumption-based tax; therefore, taxes are paid to the state where the goods or services are
consumed and not the state in which they were produced.
Customs Act, 1962 (the “Customs Act”)
The Customs Act governs among other things, the import and export of goods, determination of rate of duty, tariff
valuation, the manner of payment to authorities, and loading and unloading of goods. The Customs Act also provides
for levy of penalty and/or confiscation of prohibited or dutiable goods. The duties imposed on the import and export
of goods are subject to rates specified under the Customs Tariff Act. Further, pursuant to the Customs Act, the
Department of Customs appoints ports or airports as customs ports or customs airports and places as Inland Container
Depots (ICDs).
IMPORTANT GENERAL LAWS
Foreign Exchange Management Act, 1999 (“FEMA”) and Regulations framed thereunder.
Foreign investment in India is governed primarily by the provisions of the FEMA which relates to regulation primarily
by the RBI and the rules, regulations and notifications there under, and the policy prescribed by the Department of
Industrial Policy and Promotion, Ministry of Commerce & Industry, Government of India. As laid down by the FEMA
Regulations no prior consents and approvals are required from the Reserve Bank of India, for Foreign Direct
Investment under the ‘automatic route’ within the specified sectoral caps. In respect of all industries not specified as
FDI under the automatic route, and in respect of investment in excess of the specified sectoral limits under the
automatic route, approval may be required from the FIPB and/or the RBI. The RBI, in exercise of its power under the
FEMA, has notified the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside
149
India) Regulations, 2000 ("FEMA Regulations") to prohibit, restrict or regulate, transfer by or issue security to a
person resident outside India and Foreign Exchange Management (Export of Goods and Services) Regulations, 2000
for regulation on exports of goods and services.
Companies Act, 2013 and Rules and Regulations made thereunder
The Companies Act, 2013, has been introduced to replace the existing Companies Act, 1956 in a phased manner. The
Ministry of Corporate Affairs, has also issued rules complementary to the Companies Act, 2013 establishing the
procedure to be followed by companies in order to comply with the substantive provisions of the Companies Act,
2013. Further, the Ministry of Corporate Affairs has notified Companies Amendment Act, 2017 amending various
sections of the Companies Act, 2013 which came into force on February 9, 2018.
Micro, Small and Medium Enterprises Development Act, 2006 (the “MSMED Act”)
The MSMED Act seeks to facilitate the development of micro, small and medium enterprises. The MSMED Act
provides that where an enterprise is engaged in the manufacturing and production of goods pertaining to any industry
specified in the first schedule to the Industries (Development and Regulation) Act, 1951, the classification of an
enterprise will be as follows:
a. where the investment in plant and machinery does not exceed twenty-five lakh rupees shall be regarded as a micro
enterprise;
b. where the investment in plant and machinery is more than twenty-five lakh rupees but does not exceed five crore
rupees shall be regarded as a small enterprise.
c. where the investment in plant and machinery is more than five crore rupees but does not exceed ten crore rupees
shall be regarded as a medium enterprise.
d. The MSMED Act provides for the memorandum of micro, small and medium enterprises to be submitted by the
relevant enterprises to the prescribed authority.
The MSMED Act also provides for the establishment of the Micro and Small Enterprises Facilitation Council
(‘Council’). The Council has jurisdiction to act as an arbitrator or conciliator in a dispute between the supplier located
within its jurisdiction and a buyer located anywhere in India.
Competition Act, 2002
The Competition Act, 2002 prohibits anti-competitive agreements, abuse of dominant positions by enterprises and
regulates “combinations” in India. The Competition Act also established the Competition Commission of India (the
“CCI”) as the authority mandated to implement the Competition Act, 2002. The provisions of the Competition Act
relating to combinations were notified on March 4, 2011 and came into effect on June 1, 2011. Combinations which
are likely to cause an appreciable adverse effect on competition in a relevant market in India are void under the
Competition Act.
Negotiable Instruments Act, 1881(“NI Act”)
The NI Act provides effective legal provision to restrain people from issuing cheques without having sufficient funds
in their account or any stringent provision to punish them in the event of such cheque not being honoured by their
bankers and returned unpaid.
Consumer Protection Act, 1986 (“COPRA”)
COPRA aims at providing better protection to the interests of consumers and for that purpose makes provisions for
the establishment of authorities for the settlement of consumer disputes. The COPRA provides a mechanism for the
consumer to file a complaint against a trader or service provider in cases of unfair trade practices, restrictive trade
practices, defects in goods, deficiency in services, price charged being unlawful and goods being hazardous to life
and safety when used or being offered for sale to the public.
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Indian Contract Act, 1872 (“Contract Act”)
The Contract Act codifies the way in which a contract may be entered into, executed, implementation of the provisions
of a contract and effects of breach of a contract. A person is free to contract on any terms he chooses. The Contract
Act consists of limiting factors subject to which contract may be entered into, executed and the breach enforced. It
provides a framework of rules and regulations that govern formation and performance of contract. The contracting
parties themselves decide the rights and duties of parties and terms of agreement.
Arbitration and Conciliation Act, 1996, as amended (the “Arbitration Act”)
The Arbitration Act was enacted to consolidate and amend the law relating to domestic arbitration, international
commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation
and for matters connected therewith or incidental thereto. The main objectives of the Arbitration Act inter-alias to
make provision for an arbitral procedure which is fair, efficient and capable of meeting the needs of the specific
arbitration, to provide that the arbitral tribunal gives reasons for its arbitral award, to ensure that the arbitral tribunal
remains within the limits of its jurisdiction, to minimize the supervisory role of courts in the arbitral process, to permit
an arbitral tribunal to use mediation, conciliation or other procedures during the arbitral proceedings to encourage
settlement of disputes etc.
PROPERTY RELATED LAWS AND INTELLECTUAL PROPERTY
Our Company is required to comply with central and state laws in respect of property. Central Laws that may be
applicable to our Company's operations include the Land Acquisition Act, 1894, the Transfer of Property Act, 1882,
Registration Act, 1908, Indian Stamp Act, 1899, and Indian Easements Act, 1882.
Design Act, 2000 (Designs Act)
The Designs Act, 2000 The objective of Designs Act it to promote and protect the design element of industrial
production. It is also intended to promote innovative activity in the field of industries. The Controller General of
Patents, Designs and Trade Marks appointed under the Trademarks Act shall be the Controller of Designs for the
purposes of the Designs Act. When a design is registered, the proprietor of the design has copyright in the design
during ten years from the date of registration.
The Trade Marks Act, 1999 (“TM Act”)
The “TM Act” provides for the application and registration of trade marks in India. The purpose of the Trade Marks
Act is to grant exclusive rights to marks such as a brand, label and heading and to obtain relief in case of infringement
for commercial purposes as a trade description. The registration of a trade mark is valid for a period of 10 years and
can be renewed in accordance with the specified procedure.
Application for trade mark registry has to be made to Controller-General of Patents, Designs and TM Act who is the
Registrar of Trade marks for the purposes of the TM Act. The TM Act prohibits any registration of deceptively similar
trademarks or chemical compound among others. It also provides for penalties for infringement, falsifying and falsely
applying trademarks.
Taxation Laws
The following is an indicative list of tax related laws that are applicable to our Company:
Central:
Income Tax Act, 1961
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. U/s 139(1) every Company is required to file its Income tax return for every Previous Year by 30th
September of the Assessment Year. Other compliances like those relating to Tax Deduction at Source, Fringe Benefit
Tax, Advance Tax, and Minimum Alternative Tax and like are also required to be complied by every Company.
The Central Goods and Service Tax Act, 2017
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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.
State:
A. Gujarat Goods and Service Tax Act, 2017;
B. Gujarat Panchayats, Municipalities, Municipal Corporations and State Tax on Professions, Traders, Callings
and Employment Act, 1976; and
C. Gujarat Stamp Act, 1958.
General Laws
Companies Act;
Indian Registration Act, 1908;
The Indian Contract Act, 1872;
The Specific Relief Act, 1963;
Competition Act, 2002; and
Sale of Goods Act, 1930.
Industrial and Labour Laws
The employment of workers, depending on the nature of activity, is regulated by a wide variety of generally applicable
labour laws. The following is an indicative list of labour laws which may be applicable to the Company due to the
nature of the business activities:
i. Contract Labour (Regulation and Abolition) Act, 1970;
ii. Employees’ Provident Funds and Miscellaneous Provisions Act, 1952;
iii. The Factories Act, 1948
iv. The Employees State Insurance Act, 1948;
v. Minimum Wages Act, 1948;
vi. Payment of Bonus Act, 1965;
vii. Payment of Gratuity Act, 1972;
viii. Payment of Wages Act, 1936;
ix. Maternity Benefit Act, 1961;
x. Industrial Disputes Act, 1947; and
xi. Employees' Compensation Act, 1923.
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OUR HISTORY AND CERTAIN OTHER CORPORATE MATTERS
1. HISTORY AND BACKGROUND
a. History and background
Our Company was incorporated as “Novus Green Energy Systems Private Limited” at Secunderabad, Telangana as a
Private company limited by Shares under the provisions of the Companies Act, 1956 vide Certificate of Incorporation
dated July 17, 2009 bearing Corporate Identification Number U40300AP2009PTC064410 issued by Registrar of
Companies, Andhra Pradesh & Telangana. Consequent upon the conversion of our Company to public limited
company and as approved by the shareholders of our company pursuant to a special resolution dated July 19, 2018,
the name of our Company was changed to “Novus Green Energy Systems Limited” and fresh certificate of
incorporation dated August 02, 2018 was issued by the Registrar of Companies, Andhra Pradesh & Telangana. The
Corporate Identification Number of our Company is U40300TG2009PLC064410.
For a description of our activities, operational solar power projects, under construction solar power projects, and
committed solar power projects, equipment suppliers, competition, management, etc., see “Business”, “Industry
Overview” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
beginning on page 115, 87 and 234 respectively.
Changes in registered office of our Company since incorporation
The registered office of our Company is situated at #100, Siddhi, 1st & 2nd Floor, P&T Colony, Trimulgherry
Secunderabad Telangana-500015. The Registered Office of our Company has not changed since its incorporation.
b. Major events and milestones of our company
The following table sets forth the key events and milestones in the history of our Company, since incorporation:
Year Key Milestones
2009 Incorporation
2009 Empanelment as Channel Partner for Rooftop and Small Solar Power Plant Programme of
Ministry of New and Renewable Energy (MNRE).
2009 Installed 1st Solar System of 2KWp and completed 4 systems (32 Kwp) till March 2010.
2011 Entered Chhattisgarh Market and installed 8 system (30 Kwp) till March 2011.
2012 Installed 1st 100 Kwp captive Solar Power plant. Completed installation of 85 systems of 406
Kwp till March 2012.
2013 Execution of 1.1 MWp SPV plant in Raipur, Chhattisgarh.
Completion of installations of 110 systems of 2646 Kwp till March 2013.
2014 Execution of first one MWp SPV plant in IIT Delhi.
Completed installations of 153 systems of 4136 KWp Installed capacity with till
March 2014.
2015 & 2016 Execution of 500 KWp SPV plan in Salarjung Museum, Hyderabad.
Over 8000 KWp installed capacity with 1000+ systems till August 2015.
Order book of 8112 KWp for 2015- 16.
2017 Over 3000 solar water pumping systems across the country and also executed another
major project of 500KWp Solar Plant for Mulkanoor Co-operative Society from the
state of Telangana
153
Year Key Milestones
2018 Over 500 number of solar pumps in the Madhya Pradesh and added with major and
land mark project of 2MWp Solar Plants installation from the Vignan Group of
Institutions
Time and Cost Overrun in setting-up of projects including the proposed project
Our Company has not experienced any time or cost overrun in relation to setting up of projects.
Key awards, accreditations or recognition
We have achieved following awards and recognition
1. Awarded winner of Solar Roof Series Excellence awards in the category Best Rooftop Solar EPC/System
installer -Commercial Project (150-500kw) presented at solar roofs Punjab-Haryana- Chandigarh Edition,
16th November 2018
2. Winner of Solar Roof Jaipur 2018, Solar Roof Series Excellence awards in the category Best Rooftop Solar
EPC Company for the Year - Captive Projects, for its outstanding achievements in the state of Rajasthan
2018
Defaults or rescheduling of borrowings with financial institutions/ banks, conversion of loans into equity along
with reasons thereof
There have been no defaults or rescheduling of borrowings with financial institutions/banks in respect of our current
borrowings.
c. Details regarding material acquisitions or divestments of business/undertakings, mergers, amalgamation, any
revaluation of assets etc., if any, in the last ten years.
There has been no material acquisitions or divestments of business/undertakings, mergers, amalgamation, any
revaluation of assets etc., if any, in the last ten years prior to the date of filing of this Draft Red Herring Prospectus.
2. MAIN OBJECTS AS SET OUT IN THE MEMORANDUM OF ASSOCIATION OF THE ISSUER AND
DATES ON WHICH THE MEMORANDUM OF ASSOCIATION OF THE ISSUER HAS BEEN AMENDED.
Main Objects under the Memorandum of Association
The main objects as set forth in the Memorandum of Association of our Company are as follows:
“To carry on the business of manufacture, develop process, buy, sell, exchange alter, improve, import, or export or
otherwise deal in all kinds of electrical or energy producing devices, solar energy products, photo voltaic cells,
gadgets and components, for industrial, business and household applications and development, deployment support
and supply energy related Information Technology Software service and software services.
To carry on the business of electrical engineers, and contractors, manufactures, suppliers, of and dealers in electrical
and other appliances, cables, dry cells, accumulators, and to generate, accumulate, distribute and supply, electricity
for which electrical energy can be employed and to manufacture and deal in all apparatus and things required for or
capable of being used in connection with the generation, distribution, supply, accumulation and employment of
electricity.
To carry on the business as importers, exporters, assemblers, manufacturers and dealers in electric transformers, all
sizes and description, voltage stabilizers, and voltage regulators, which are generally used in the above business or
are capable of being so used”.
154
Amendments to our Memorandum of association
Date of Resolution/
Change
Particulars of change
July 9, 2011
The authorized shares capital of ₹ 2,50,000 divided into 25,000 equity shares of ₹10
each was increased to ₹ 50,00,000 divided into 5,00,000 equity shares of ₹ 10 each.
Oct 21, 2013
The authorized shares capital of ₹ 50,00,000 divided into 5,00,000 equity shares of
₹ 10 each was increased to ₹ 1,00,00,000 divided into 1,00,000 equity shares of ₹
10 each.
July 15, 2015
The authorized shares capital of ₹ 1,00,00,000 divided into 1,00,000 equity shares
of ₹ 10 each was increased to ₹ 1,50,00,000 divided into 1,50,000 equity shares of
₹ 10 each.
Mar 15, 2018
The authorized shares capital of ₹ 1,50,00,000 divided into 1,50,000 equity shares
of ₹ 10 each was increased to ₹ 3,50,00,000 divided into 35,00,000 equity shares of
₹ 10 each.
July 19, 2018
Amendment of Clause III of Memorandum of Association (MOA) by merging the
objects stated in clause III(1)(C) in III(1)(B) to make the MOA in line of the
provisions of Companies Act, 2013.
August 02, 2018
Change of name of the Company from Novus Green Energy Systems Private Limited
to Novus Green Energy Systems Limited consequent upon conversion from Private
Company to Public Company.
November 19, 2018
The authorized shares capital of ₹ 3,50,00,000 divided into 35,00,000 equity shares
of ₹ 10 each. was increased to ₹ 10,50,00,000 divided into 1,05,00,000 equity shares
of ₹ 10 each.
3. DETAILS OF SUBSIDIARIES AND HOLDING COMPANIES
Our Company does not have any Subsidiary and nor it has any Holding Company/ies.
Other Details Regarding our Company
For information on our activities, services, growth, technology, marketing strategy, capacity built-up, our standing
with reference to our prominent competitors and customers, please refer to sections titled “Our Business”, “Our
Industry” and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations”
beginning on pages 115 , 87 and234 respectively of this Draft Red Herring Prospectus. For details of our management
and managerial competence and for details of shareholding of our Promoters, please refer to sections titled “Our
Management” and “Capital Structure” beginning on pages 157 and 62 respectively of this Draft Red Herring
Prospectus.
Raising of capital in form of equity or debt
Except as set out in the section titled “Capital Structure” beginning on page 62 of this Draft Red Herring Prospectus,
our Company has not raised capital in the form of Equity Shares. Further, our Company has not undertaken any public
offering of debt instruments since its incorporation.
Details regarding the changes in the activities of the Issuer during the last five years which may have had a
material effect on the profits/loss, including discontinuance of lines of business, loss of agencies or markets and
similar factors.
There has been no change in the activities of our Company during the period of 5 (five) years prior to the date of
filing of this Draft Red Herring Prospectus which may have had a material effect on the profits or loss of our Company
or affected our business including discontinuance of lines of business, loss of agencies or markets and similar factors.
Injunction or restraining order
Our Company is not operating under any injunction or restraining order.
155
Shareholders of our Company
As on the date of this Draft Red Herring Prospectus, our Company has Nine (9) shareholders. For further details in
relation to the current shareholding pattern, please refer to section titled “Capital Structure” beginning on page 62 of
this Draft Red Herring Prospectus.
Strikes or Labour Unrest
There have been no lock-outs or strikes in our Company since incorporation.
Shareholders Agreements
Our Company has not entered into any shareholder’s agreement as on the date of this Draft Red Herring Prospectus.
Material Agreements
Our Company has not entered into any material agreement, other than the agreements entered by it in ordinary course
of its business.
Strategic Partners
Our Company does not have any strategic partners as on the date of this Draft Red Herring Prospectus.
Financial Partners
Our Company does not have any financial partners as on the date of this Draft Red Herring Prospectus.
156
SHAREHOLDERS’ AGREEMENTS AND OTHER AGREEMENT
Our Company has not entered into any shareholder’s agreement as on the date of this Draft Red Herring Prospectus
157
OUR MANAGEMENT
Board of Directors
Under the Articles of Association, our Company is authorized to have a minimum of three directors and a maximum
of up to 14 Directors. As on the date of this Draft Red Herring Prospectus, our Company has Five Directors.
The following table sets forth details regarding our Board as on the date of this Draft Red Herring Prospectus:
Sl.
No.
Name, Designation, Address, Occupation,
Nationality, Term & DIN
Age
(in years)
Other Directorships as on the
date of this Draft Red Herring
Prospectus
1. Name: Mr. Anshuman Yenigalla
DIN: 02258999
Date of Appointment: Reappointed as Managing
Director with effect from 01/07/2018
Occupation: Business
Designation: Chairman and Managing Director
Address: Plot No 100, P & T Colony,
Trimulgherry, Secunderabad Hyderabad 500015
Telengana, India
Nationality: Indian
Term: 3 years with effect from July 01, 2018 Liable
to retire by rotation
34 Private Companies
Nil
Public Companies
Nil
2. Name: Mr. Venkata Ravindra Yenigalla
DIN: 02259077
Date of Appointment: Reappointed as Whole Time
Director with effect from 01/07/2018
Occupation: Business
Designation: Whole time Director
Address: 5-9-48/94, Raghava Kalyan Estates J.J
Nagar, Secunderabad Hyderabad 500087
Telengana, India
Nationality: Indian
Term: 3 years with effect from July 01, 2018 Liable
to retire by rotation
55 Private Companies
Nil
Public Company
Nil
3. Name: Mrs. Pariplavi Mokkapati
60 Private Company
158
Sl.
No.
Name, Designation, Address, Occupation,
Nationality, Term & DIN
Age
(in years)
Other Directorships as on the
date of this Draft Red Herring
Prospectus
DIN: 08178598
Date of Appointment: 12/07/2018
Occupation: Doctor and Teacher
Designation: Non-Executive Director
Address: Plot No 100, P & T Colony,
Trimulgherry, Secunderabad Hyderabad 500015
Telengana, India
Nationality: Indian
Term: Liable to be retire by rotation
Nil
Public Company
Nil
4. Name: Mrs. Nagulavari Vanitha
DIN: 7271674
Date of Appointment: 13/12/2018
Occupation: Practising Company Secretary
Designation: Independent Director
Address: 1-8-104, Opposite A R I Gate,
Rajendranagar, K.v. Rangareddy, Telangana –
500030, India.
Nationality: Indian
Term: 5 Years with effect from 13/12/2018
30 Private Companies
Medipure Life Sciences India
Private Limited
Public Companies
Sai Silks (Kalamandir)
Limited
Kapston Facilities
Management Limited
5. Name: Mr. Srinivasa Rao Muttineni
DIN: 00592616
Date of Appointment: 13/12/2018
Occupation: Profession
Designation: Independent Director
Address: Flat No.-201, Block No-8, Hill Ridge
Springs,Gachibowli, Serlingampally, Rangareddy
Hyderabad, Telangana
India, 500032
Nationality: Indian
55 Private Companies
Nil
Public Company
Nil
159
Sl.
No.
Name, Designation, Address, Occupation,
Nationality, Term & DIN
Age
(in years)
Other Directorships as on the
date of this Draft Red Herring
Prospectus
Term: 5 Years with effect from 13/12/2018
For further details on their qualification, experience etc., please see their respective biographies under the heading
‘Brief Biographies’ below.
Brief Biographies of the Directors
Mr. Anshuman Yenigalla, aged about 34 years, is the Chairman and Managing Director of our Company. He is the
core promoter of our company. He holds a bachelor’s degree in Mechanical Engineering in Production field from
Osmania University. Further he also holds the degree of Post-Graduate Diploma in Intellectual Property Rights
(PGDIPL) from IIT Kharagpur. He had received Certificate of Achievement for Six Sigma Core Green Belt, A Merit
Certificate in All India Level mathematics & Science Test and A National Cadet Corps (NCC) ‘A’ Certificates. He
has more than nine (9) years of experience in the solar industry, particularly in setting up solar water pumps and solar
captive power generation units. He has been on our Board since July 17,2009
Mr. Venkata Ravindra Yenigalla, aged about 55 years, is the Whole-time Director of our Company. He holds
bachelor’s degree in Engineering in the field of Industrial Engineering and Management sciences from Kakatiya
University, Warangal, India. He has an extensive experience of 34 years in various industrial and manufacturing
organization in making turbo generators vibration analysis, boilers, reactors and telecom equipment manufacturing.
He has also experience market analysis, vendor development, pre –sales and after sales coordination and entire cycle
of product development. Further he is expert in six sigma and lean management/ manufacturing processes. He was a
member of Management Committee to implement strategic restructuring of business implementation of self-
certification procedures and also handled large teams engaged in production of telecom products signage. He has been
on our Board since July 17,2009 being one of the promoter.
Mrs. Pariplavi Mokkapati, aged about 61 years, is the Non-Executive Director of our Company. She holds the
degree in MBBS in the field of sciences from Osmania University, Hyderabad. Further she is also having additional
qualifications in medical sciences such as MS (in Anatomy), MD and PhD (in Genetics). She is also the faculty of
Modern Science of NTR University of Health Science, Andhra Pradesh. She got the Certificate of Appreciation for
the success of the All –India Essay Writing Event 2010, which was organized by Shri Ram Chandra Mission in
collaboration with the United Nations Information Centre for India and Bhutan (UNIC) in commemoration of UN
International Year of Youth (August 2010-11). She has over 25 years of teaching experience in the Medical and Allied
Healthcare fields at the undergraduate, postgraduate and doctoral levels. She also has extensive research experience
in these fields. She has held various positions of repute and responsibility in the academic and scientific areas and has
been pioneering various student related academic and extracurricular activities in the above fields. She has also
worked as External Faculty to various institutions like BITS Pilani- Hyderabad campus and the National Industrial
Security Academy. She is a Life Member of various National and International professional bodies and is an invited
speaker and honoured/chief guest at various events of national and international repute. She has also worked for many
national government services and agencies like the Medical Council of India, Union Public Service Commission,
National Board of Examinations, Indian Council of Medical Research etc. For her skill, dedication and achievements
she was awarded the Best Medical Teacher in the State award. She is the recipient of many other awards/titles and
felicitations including “Distinguished Alumni of Osmania Medical College” “Vaidya Shiromani “, etc. She has been
on our Board since July 12,2018.
Mrs. Nagulavari Vanitha aged about 30 years is the Independent director of our company. She is Commerce
Graduate and an Associate Member of Institute of Company Secretaries of India. She is having experience of over 8
years in the area of legal secretarial, capital market and other corporate affairs. She is also acting as an Independent
Director of Kapston Facilities Management Limited, Sai Silks (Kalamandir) Limited and a director of Medipure Life
Sciences (India) Private Limited.
Mr. Srinivasa Rao Muttineni aged about 55 years is one of the Independent Director of our company. He holds the
degree of B.E. –Civil Engineering from Andhra University. He is having 34 years of experience in the Infrastructure
projects and worked with reputed construction and consultancy (Project Management) Organizations. He is also
160
having Good experience and exposure to various sectors of Infra like Highways, Industrial (Power, Cement,
Fertilizers), Water supply, Hydel projects, Buildings and execution of Complex Projects.
Confirmations
None of our Directors is, or was a director of any listed company during the last five years preceding the date of this
Draft Red Herring Prospectus, whose shares have been, or were suspended from being traded on any of the stock
exchanges during the term of their directorship in such company. None of our Directors is, or was a director of any
listed company which has been, or was delisted from any stock exchange during the term of their directorship in such
company.
Common directorships of the Directors in companies whose shares are/were suspended from trading on the
Stock Exchange(s) and/ or the Stock Exchange(s) for a period beginning from five (5) years prior to the date
of this Draft Red Herring Prospectus
None of the Directors are/ were directors of any company whose shares were suspended from trading by Stock
Exchange(s) or under any order or directions issued by the stock exchange(s)/ SEBI/ other regulatory authority in the
last five (5) years.
Common directorships of the Directors in listed companies that have been/were delisted from stock exchanges
in India
None of the Directors are/ were directors of any entity whose shares were delisted from any Stock Exchange(s).
Further, none of the directors are/ were directors of any entity which has been debarred from accessing the capital
markets under any order or directions issued by the Stock Exchange(s), SEBI or any other Regulatory Authority.
Family Relationships between the Directors
Except as stated below, none of directors are related to each other as per section 2(77) of the Companies Act, 2013:
Director Other Director Relation
Mrs. Pariplavi Mokkapati Mr. Anshuman Yenigalla Mother
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 member of a senior management as on the date of this Draft
Red Herring Prospectus.
Service Contracts
Our Company has not executed any service contracts with its directors providing for benefits upon termination of
their employment.
Borrowing Powers of the Board
The Articles, subject to the provisions of Section 180(1)(c) of the Act 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
special resolution passed at the Extra-ordinary General Meeting held on November 29, 2018, in accordance with
Section 180(1)(c) of the Act authorized the Board to borrow monies from time to time, such sums of money even
though the money so borrowed together with money already borrowed exceeds the aggregate of the paid-up capital
and free reserves of the Company provided, however, that the total borrowing (apart from the temporary loans taken
from the company’s bankers) shall not exceed ₹ 500 Crores.
161
Remuneration to Managing/ Whole-time Directors
The remuneration payable to our Managing/ Whole-timeDirectors will be governed as per the terms of their
appointment and shall be subject to the provisions of Section 2 (54), 2(94), 196, 197, 198 and 203 and any other
applicable provisions of the Act read with Schedule V to the Act and the rules made there under (including any
statutory modification(s) or re-enactment thereof or any of the provisions of the Companies Act, 2013, for the time
being in force)
The details of remuneration paid and perquisites given to Managing Directors for services rendered by them to the
Company during the FY 2017-18:
Particulars Mr. Anshuman Yenigalla Mr. Venkata Ravindra Yenigalla
Gross Salary ₹ 12.00 Lakh p.m ₹ 6.00 Lakh p.m
Designation Managing Director Whole Time Director
Term 3 years 3 years
Perquisites N.A N.A
Remuneration paid for FY 2017-18 ₹ 96 Lakh p.a ₹ 48 Lakh p.a
Bonus or profit sharing plan for the Directors
None of our Directors are entitled to any bonus or profit sharing plans of our Company.
Shareholding of Directors in our Company
The details of the shareholding of our Directors as on the date of this Draft Red Herring Prospectus are as follows.
Sl.
No.
Name of the Shareholder No. of Equity
Shares
Percentage of
Pre-Issue
Capital (%)
Percentage of Post-
Issue Capital (%)
1. Mr. Anshuman Yenigalla 45,27,020 64.41% [●]
2. Mr. Venkata Ravindra Yenigalla 10,35,000 14.73% [●]
3. Mrs. Pariplavi Mokkapati 7,57,605 10.78% [●]
Total 63,19,625 89.92% [●]
Payment or benefit to Non-Executive Directors of our Company
Apart from the remuneration of our Managing/ Whole-time Directors as provided under the heading ‘Remuneration
to Managing/ Whole-time Directors’ above, our Non-Executive Directors & Independent Directors are entitled to be
paid a sitting fee up to the limits prescribed by the Act and the Rules made there under and actual travel, boarding
and lodging expenses for attending the Board or Committee meetings. They may also be paid commissions and any
other amounts as may be decided by the Company in accordance with the provisions of the Articles, the Act and any
other applicable Indian laws and regulations.
Interests of our Directors
Our Directors may be deemed to be interested to the extent of fees payable to them for attending meetings of the
Board or a committee thereof as well as to the extent of remuneration paid to them or services rendered as a Director
of our Company and reimbursement of expenses payable to them. For further details, please refer to sub-sections
‘Remuneration to Managing/ Whole-time Directors’ & ‘Payment or benefit to Non-Executive Directors of our
Company’ above.
162
Our Directors and Promoters, have extended personal guarantees in favour of Union Bank of India in relation to the
borrowing facilities availed by our Company. In the event any such guarantees are revoked, our lenders may require
us to furnish alternate guarantees, demand repayment of the amounts outstanding under the respective facilities or
even terminate such facilities.
None of our Directors have any interest in any property acquired by our Company within two (2) years of the date of
this Draft Red Herring Prospectus or proposed to be acquired by it or in any transaction in acquisition of land or any
construction of building.
For further details of Our Group Entities please refer to SECTION GROUP COMPANY at page 260 of this Draft
Red Herring prospectus.
Further, except as disclosed under sub-section ‘Shareholding of Directors in our Company’ above, none of our
Directors hold any Equity Shares or any other form of securities in our Company. Our Directors may also be interested
to the extent of Equity Shares, if any, held by them or held by the entities in which they are associated as promoters,
directors, partners, proprietors or trustees or held by their relatives or that may be subscribed by or allotted to the
companies, firms, ventures, trusts in which they are interested as promoters, directors, partners, proprietors, members
or trustees, pursuant to the Issue.
Our Directors Mr. Anshuman Yenigalla and Mr. Venkata Ravindra Yenigalla have interest in the promotion of our
company or business of our Company.
Our Directors may also be deemed to be interested to the extent of any dividend payable to them and other
distributions in respect of the said Equity Shares.
Except as disclosed in this Draft Red Herring Prospectus, no sum has been paid or agreed to be paid to any of our
Directors or to any firm or company in which Director is a partner or member, in cash or shares or otherwise by any
person either to induce such Director to become, or to qualify as, a director, or otherwise for services rendered by
such Director or by such firm or company in connection with the promotion or formation of our Company.
Changes in our Company’s Board of Directors during the last three (3) years
Name Date of Event Nature of Event
Mr. Ramchand koli 01/07/2018 Resignation as a Director
Mr. Venkata Ravindra Yenigalla 01/07/2018 Appointment as a Whole Time Director
Mr. Anshuman Yenigalla 01/07/2018 Reappointment as Managing Director
Mrs. Pariplavi Mokkapati 12/07/2018 Appointment as a Director
Mrs. Vanitha Nagulavari 13/12/2018 Appointment as an Independent Director
Mr. Srinivas Rao Muttineni 13/12/2018 Appointment as an Independent Director
Management Organizational Structure
The following chart depicts our Management Organization Structure:
163
COMPLIANCE WITH CORPORATE GOVERNANCE
In additions to the applicable provisions of the Companies Act, 2013 with respect to the Corporate Governance,
provisions of the SEBI Listing Regulations will be applicable to our company immediately up on the listing of Equity
Shares on the Stock Exchange.
As on date of this Draft Red Herring Prospectus, as our Company is coming with an issue in terms of Chapter IX of
the SEBI (ICDR) Regulations, 2018, the requirement specified in regulations 17, 18, 19, 20, 21, 22, 23, 24, 25, 26,
27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C, D and E of Schedule V of SEBI (Listing
Obligations and Disclosures Requirement) Regulations, 2015 is not applicable to our Company, although we require
to comply with requirement of the Companies Act, 2013 wherever applicable. In spite of certain regulations and
schedules of SEBI (Listing Obligations and Disclosures Requirement) Regulations, 2015 is not applicable to our
Company, our Company endeavours to comply with the good Corporate Governance and accordingly certain
exempted regulations have been compiled by our Company.
Our Company has complied with the corporate governance requirement, particularly in relation to appointment o
independent directors including woman director on our Board, constitution of an Audit Committee, Stakeholders
Relationship Committee and Nomination and Remuneration Committee. Our Board functions either on its own or
through committees constituted thereof, to oversee specific operational areas.
Our Company has constituted the following committees:
Board Of Directors
Chairman Managing Director
Vice President
CFO GM
South - Head Central - Head North - Head
CS HR
164
1. Audit Committee
Our Company has formed the Audit Committee vide resolution passed in the meeting of Board of Directors held
on December 13, 2018 as per the applicable provisions of the Section 177 of the Act read with the Companies
(Meetings of Board and its Powers) Rules, 2014 (as amended) and also to comply with Regulation 18 of SEBI
Listing Regulations (applicable upon listing of Company’s Equity Shares). The constituted Audit Committee
comprises following members.
Name of the Director Status in Committee Nature of Directorship
Vanitha Nagulavari Chairman Independent Director
Srinivasa Rao Muttineni Member Independent Director
Pariplavi Mokkapati Member Non-Executive Women Director
The Company Secretary of our Company shall act as a Secretary of the Audit Committee. The Chairman of the
Audit Committee shall attend the Annual General Meeting of our Company to furnish clarifications to the
shareholders in any matter relating to financial statements. The scope and function of the Audit Committee and
its terms of reference shall include the following:
A. Tenure: The Audit Committee shall continue to be in function as a Committee of the Board until otherwise
resolved by the Board, to carry out the functions of the Audit Committee as approved by the Board.
B. Meetings of the Committee: The Committee shall meet at least four (4) times in a year and not more than
one hundred twenty (120) days shall elapse between any two meetings. The quorum for the meeting shall be
either two members or one third of the members of the Committee, whichever is higher but there shall be
presence of minimum two Independent Directors at each meeting.
C. Role and Powers: The Role of Audit Committee together with its powers as Part C of Schedule II of SEBI
Listing Regulations and Act shall be as under:
(a) the recommendation for appointment, remuneration and terms of appointment of auditors of the
Company;
(b) review and monitor the auditor’s independence and performance, and effectiveness of audit process;
(c) examination and reviewing of the financial statement and the auditors’ report thereon before submission
to the board for approval, with particular reference to:
i. matters required to be included in the Directors’ Responsibility Statement to be included in the
Board’s report in terms of Section 134(3)(c) of the Act;
ii. changes, if any, in accounting policies and practices and reasons for the same;
iii. major accounting entries involving estimates based on the exercise of judgment by management
iv. significant adjustments made in the financial statements arising out of audit findings
v. compliance with listing and other legal requirements relating to financial statements
vi. disclosure of any related party transactions
vii. Qualifications in the draft audit report
(d) examination and reviewing, with the management, the quarterly financial statements before submission
to the board for approval
(e) approval or any subsequent modification of transactions of the Company with related parties
(f) scrutiny of inter-corporate loans and investments
(g) valuation of undertakings or assets of the Company, wherever it is necessary;
165
(h) evaluation of internal financial controls and risk management systems;
(i) monitoring the end use of funds raised through public offers and related matters;
(j) oversight of the Company’s financial reporting process and the disclosure of its financial information
to ensure that the financial statement is correct, sufficient and credible;
(k) reviewing, with the management, performance of statutory and internal auditors, adequacy of the
internal control systems;
(l) reviewing the adequacy of internal audit function, if any, including the structure of the internal audit
department, staffing and seniority of the official heading the department, reporting structure coverage
and frequency of internal audit;
(m) discussion with internal auditors of any significant findings and follow up thereon;
(n) reviewing the findings of any internal investigations by the internal auditors into matters where there
is suspected fraud or irregularity or a failure of internal control systems of a material nature and
reporting the matter to the board;
(o) discussion with statutory auditors before the audit commences, about the nature and scope of audit as
well as post-audit discussion to ascertain any area of concern;
(p) 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;
(q) approval of appointment of CFO (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;
(r) reviewing the Management discussion and analysis of financial condition and results of operations;
(s) reviewing the Management letters / letters of internal control weaknesses issued by the statutory
auditors;
(t) reviewing the Internal audit reports relating to internal control weaknesses;
(u) reviewing the appointment, removal and terms of remuneration of the Chief internal auditor shall be
subject to review by the Audit Committee;
(v) reviewing the functioning of the Whistle Blower mechanism;
(w) reviewing/ redressal of complaint/s under the Sexual Harassment of Women at Workplace (Prohibition,
Prevention & Redressal) Act, 2013;
(x) establishment of a vigil mechanism for directors and employees to report genuine concerns about
unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or ethics
policy in such manner as may be prescribed, which shall also provide for adequate safeguards against
victimization of persons who use such mechanism and make provision for direct access to the
chairperson of the Audit Committee in appropriate or exceptional cases:
(y) such other functions / activities as may be assigned / delegated from time to time by the Board of
Directors of the Company and/or pursuant to the provisions of the Act read with the Companies
(Meetings of Board and its Powers) Rules, 2014 (as amended) and SEBI Listing Regulations.”
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2. Stakeholders Relationship Committee
Our Company has formed the Stakeholders Relationship Committee as per Section 178 and other applicable
provisions of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 (as amended)
and also to comply with Regulation 20 of SEBI Listing Regulations (applicable upon listing of Company’s equity
shares) vide board resolution dated December 13, 2018. The constituted Stakeholders Relationship Committee
comprises the following members:
Name of the Director Status in Committee Nature of Directorship
Vanitha Nagulavari Chairman Independent Director
Srinivasa Rao Muttineni Member Independent Director
Pariplavi Mokkapati Member Non-Executive Women Director
The Company Secretary of our Company shall act as a Secretary to the Stakeholders Relationship Committee.
The scope and function of the Stakeholders Relationship Committee and its terms of reference shall include the
following:
A. Tenure: The Stakeholders Relationship Committee shall continue to be in function as a committee of the
Board until otherwise resolved by the Board, to carry out the functions of the Stakeholders Relationship
Committee as approved by the Board.
B. Terms of Reference: The Stakeholders Relationship Committee shall oversee all matters pertaining to
investors of our Company. The terms of reference of the Stakeholders Relationship Committee include the
following:
Considering and resolving the grievance of security holders of the Company including complaints
related to transfer of shares, non-receipt of annual report and non-receipt of declared dividends;
Such other functions / activities as may be assigned / delegated from time to time by the Board of
Directors of the Company and/or pursuant to the provisions of the Act read with SEBI Listing
Regulations.
3. Nomination and Remuneration Committee
Our Company has formed the Nomination and Remuneration Committee as per Section 178 and other applicable
provisions of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 (as amended)
and also to comply with Regulation 19 of SEBI Listing Regulations (applicable upon listing of Company’s Equity
Shares) vide board resolution dated December 13, 2018. The Nomination and Remuneration Committee
comprises the following members:
Name of the Director Status in Committee Nature of Directorship
Vanitha Nagulavari Chairman Independent Director
Srinivasa Rao Muttineni Member Independent Director
Pariplavi Mokkapati Member Non-Executive Women Director
The Company Secretary of our Company shall act as a Secretary to the Nomination and Remuneration
Committee. The scope and function of the Committee and its terms of reference shall include the following:
A. Tenure: The Nomination and Remuneration Committee shall continue to be in function as a committee of
the Board until otherwise resolved by the Board.
B. Meetings: The committee shall meet as and when the need arises for review of Managerial Remuneration.
The quorum for the meeting shall be one third of the total strength of the committee or two members,
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whichever is higher. The Chairperson of the nomination and remuneration committee may be present at the
annual general meeting, to answer the shareholders' queries; however, it shall be up to the chairperson to
decide who shall answer the queries.
C. Terms of Reference:
(a) Formulation of the criteria for determining qualifications, positive attributes and independence of a
director and recommend to the Board a policy, relating to the remuneration of the directors, key
managerial personnel and other employees;
(b) Formulation of criteria for evaluation of Independent Directors and the Board;
(c) Devising a policy on Board diversity;
(d) Identifying persons who are qualified to become directors and who may be appointed in senior
management in accordance with the criteria laid down, and recommend to the Board of Directors their
appointment and removal and shall carry out evaluation of every director’s performance;
(e) Determining, reviewing and recommending to the Board, the remuneration of the Company’s
Managing/ Joint Managing / Deputy Managing / Whole time / Executive Director(s), including all
elements of remuneration package;
(f) To ensure that the relationship of remuneration to perform is clear and meets appropriate performance
benchmarks.
(g) Formulating, implementing, supervising and administering the terms and conditions of the Employee
Stock Option Scheme, Employee Stock Purchase Scheme, whether present or prospective, pursuant to
the applicable statutory/regulatory guidelines;
(h) Carrying out any other functions as authorized by the Board from time to time or as enforced by
statutory/ regulatory authorities.
4. Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee of our Board consists of three members. The members of the
Corporate Social Responsibility Committee are:
Name of the Director Status in Committee Nature of Directorship/other
Mr. Anshuman Yenigalla Chairman Managing Director
Mr. Venkata Ravindra Yenigalla Member Whole Time Director
Mr. B. Pramod Reddy Member Vice President
The Corporate Social Responsibility Committee was constituted by our Board at their meeting held on August
25, 2018. The scope and functions of the Corporate Social Responsibility Committee are in accordance with
Section 135 of the Companies Act, 2013. The terms of reference of the Corporate Social Responsibility
Committee of our Company include:
1. Formulation of a corporate social responsibility policy to the Board, indicating the activities to be undertaken
by the Company. The activities should be within the list of permitted activities specified in the Companies
Act, 2013 and the rules thereunder;
2. Recommending the amount of expenditure to be incurred, amount to be at least 2% of the average net profit
of the Company in the previous three years;
3. Instituting a transparent monitoring mechanism for implementation of the corporate social responsibility
projects or programs or activities undertaken by the Company; and
4. Monitoring the corporate social responsibility policy from time to time.
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The quorum for any meeting of the Corporate Social Responsibility Committee shall be two members.
POLICY ON DISCLOSURES AND INTERNAL PROCEDURE FOR PREVENTION OF INSIDER
TRADING:
The provisions of the Regulation 9(1) of SEBI (Prohibition of Insider Trading) Regulations, as amended, will be
applicable to our Company immediately upon the listing of Equity Shares. We shall comply with the requirements of
the SEBI (Prohibition of Insider Trading) Regulations, as amended on listing of Equity Shares. Further, Board of
Directors at their meeting held on December 14, 2018 has approved and adopted the policy on insider trading in view
of the proposed public issue.
The Company Secretary and Compliance Officer of our Company will be responsible for setting forth policies,
procedures, monitoring and adherence to the rules for the preservation of price sensitive information and the
implementation of the Code of Conduct under the overall supervision of the Board.
Policies:
In accordance with the applicable provisions of the Listing Regulations and other applicable law, we have formulated
policies, including the following copies of which are available on our website:
Insider Trading Policy
Whistle blower policy
Code of conduct of directors and employees
Code of practices and procedures for fair disclosure of unpublished price sensitive information
Archival policy for disclosure to stock exchanges
Policy for determination of materiality of event/information
Risk management policy
Sexual Harassment Policy
Profiles of our Key Managerial Personnel
The details of the Key Managerial Personnel as on the date of this Draft Red Herring Prospectus are set out below.
Except for certain statutory benefits, there are no other benefits accruing to the Key Managerial Personnel.
Mr. Anshuman Yenigalla, aged about 34 years, is the Chairman and Managing Director of our Company. He holds
a bachelor’s degree in Mechanical Engineering in Production field from Osmania University. Further he also holds
the degree of Post-Graduate Diploma in Intellectual Property Rights (PGDIPL) from IIT Kharagpur. He had received
Certificate of Achievement for Six Sigma Core Green Belt, A Merit Certificate in All India Level mathematics &
Science Test and A National Cadet Corps (NCC) ‘A’ Certificates. He has more than nine (9) years of experience in
the solar industry, particularly in setting up solar water pumps and solar captive power generation units. He has been
on our Board since July 17,2009
Mr. Venkata Ravindra Yenigalla, aged about 55 years, is the Whole-time Director of our Company. He holds
bachelor’s degree in Engineering in the field of Industrial Engineering and Management sciences from Kakatiya
University, Warangal, India. He has an extensive experience of 34 years in various industrial and manufacturing
organization in making turbo generators vibration analysis, boilers, reactors and telecom equipment manufacturing.
He has also experience market analysis, vendor development, pre –sales and after sales coordination and entire cycle
of product development. Further he is expert in six sigma and lean management/ manufacturing processes. He was a
member of Management Committee to implement strategic restructuring of business implementation of self-
certification procedures and also handled large teams engaged in production of telecom products signage. He has been
on our Board since July 17,2009 being one of the promoter.
Mr. Sannapaneni Sudheer, aged about 25 years, is the Company Secretary & Compliance Officer of our company.
He has experience in the secretarial matters. He has been appointed as Company Secretary & Compliance Officer
169
with effect from July 07, 2018.
Mr. Srikrishna Saibabu Nandiraju, aged about 61 years, is the CFO of our Company. He is Commerce Graduate
from Osmania University in 1977 from Badruka College of Commerce & Arts at Kachiguda, Telangana. He was
worked as Accounts officer and as Financial Controller in other companies in the years 1978 to 1989 and He has
around 28 years of Experience in Sri Krishna Pharmaceuticals Limited alone in finance and accounts and left the
organisation with the designation of Deputy General Manager(DGM)- in finance and accounts. Further he is well
versed in the areas of Finalization of accounts, arrangement of Finance/ Funds (both term loan & working capital
loans) from the various Financial Institutions / PSU Banks & Private Banks. He has been appointed as Chief Financial
Officer with effect from December 13, 2018.
Status of Key Management Personnel in our Company
All our key managerial personnel are permanent employees of our Company. The term of office of our key managerial
personnel is until the attainment of 65 years of age.
Shareholding of Key Management Personnel in our Company
The details of the shareholding of our Key Managerial Personnel as on the date of this Draft Red Herring Prospectus
are as follows:
Sl.
No.
Name of the Shareholder No. of Equity
Shares
Percentage of
Pre-Issue
Capital (%)
Percentage of
Post-Issue
Capital (%)
1. Mr. Anshuman Yenigalla 45,27,020 64.41% [●]
2. Mr. Venkata Ravindra Yenigalla 10,35,000 14.73% [●]
Total 55,62,020 79.14% [●]
Bonus or profit sharing plan of the Key Managerial Personnel
Our Company does not have a performance linked bonus or a profit sharing plans for the Key Management Personnel.
However, our Company may pay incentive to its employees including the Key Managerial Personnel based on their
performances per the Company’s policies.
Interests of Key Management Personnel
The Key Management Personnel do not have any interest in our Company other than to the extent of the remuneration
or benefits to which they are entitled to as per their terms of appointment and reimbursement of expenses incurred by
them during the ordinary course of business. Our Key Management Personnel may also be interested to the extent of
Equity Shares, if any, held by them or held by the entities in which they are associated as promoters, directors,
partners, proprietors or trustees or held by their relatives or that may be subscribed by or allotted to the companies,
firms, ventures, trusts in which they are interested as promoters, directors, partners, proprietors, members or trustees,
pursuant to the Issue.
Payment of Benefits to Officers of Our Company (non-salary related)
Except as disclosed in this Draft Red Herring Prospectus and any statutory payments made by our Company to its
officers, our Company has not paid any sum, any non-salary related amount or benefit to any of its officers or to its
employees including amounts towards superannuation, ex-gratia/ rewards.
Except statutory benefits upon termination of employment in our Company or superannuation, no officer of our
Company is entitled to any benefit upon termination of such officer’s employment in our Company or superannuation.
Contributions are made by our Company towards provident fund, gratuity fund and employee state insurance.
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Except as stated under section titled ‘Financial Information’ beginning on page 177 of this Draft Red Herring
Prospectus, none of the beneficiaries of loans and advances or sundry debtors are related to our Company, our
Directors or our Promoters.
Relationship amongst the Key Managerial Personnel of our Company
Expect Mr. Anshuman Yenigalla who is the son of Mrs. Pariplavi Mokkapati, none of the Key Managerial Personnel
are related to each other.
Arrangement and Understanding with Major Shareholders/Customers/ Suppliers
None of the above Key Managerial Personnel have been selected pursuant to any arrangement/ understanding with
major shareholders/customers/suppliers.
Details of Service Contracts of the Key Managerial Personnel
Except for the terms set forth in the appointment letters, the Key Managerial Personnel have not entered into any
other contractual arrangements with our Company for provision of benefits or payments of any amount upon
termination of employment.
Employee Stock Option or Employee Stock Purchase
Our Company has not granted any options or allotted any Equity Shares under the ESOP Scheme as on the date of
this Draft Red Herring Prospectus.
Loans availed by Directors / Key Managerial Personnel of our Company
None of the Directors or Key Managerial Personnel have availed loan from our Company which is outstanding as on
the date of this Draft Red Herring Prospectus.
Changes in Our Company’s Key Managerial Personnel during the last three (3) years
Name Date of Event Nature of Event
Mr. Venkata Ravindra Yenigalla July 01, 2018 Appointment as a Whole Time Director
Mr. Anshuman Yenifalla July 01, 2018 Reappointment as Managing Director
Mr. Sannapaneni Sudheer July 06, 2018 Appointment as Company Secretary
Mr. Srikrishna Saibabu Nandiraju December 13, 2018 Appointment as CFO
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OUR PROMOTER AND PROMOTER GROUP
Our Promoters
Our Promoters are Mr. Anshuman Yenigalla and Mr. Venkata Ravindra Yenigalla. As on date of this Draft Red
Herring Prospectus, our Promoters hold an aggregate of 55,62,020 Equity Shares, aggregating to 79.14% of the pre-
offered issued, subscribed and paid-up Equity Share capital of our Company. For further details, see “Capital
Structure” on page 62.
Details of Individual Promoters of our Company
Mr. Anshuman Yenigalla, aged about 34 years, is the Chairman and
Managing Director of our Company. He holds a bachelor’s degree in
Mechanical Engineering in Production field from Osmania University.
Further he also holds the degree of Post-Graduate Diploma in Intellectual
Property Rights (PGDIPL) from IIT Kharagpur. He had received
Certificate of Achievement for Six Sigma Core Green Belt, A Merit
Certificate in All India Level mathematics & Science Test and A National
Cadet Corps (NCC) ‘A’ Certificates. He has more than nine (9) years of
experience in the solar industry, particularly in setting up solar water
pumps and solar captive power generation units. He has been on our Board
since July 17,2009
For further details, please refer to section titled ‘Our Management’
beginning on page 157 of this Draft Red Herring Prospectus.
Permanent Account Number: AJZPA0068L
Aadhar No.: 9323 1678 8426
Voter’s identification card No.: GBZ7564370
Passport No.: G1158293
Driving License No.: DLEAP01015962003
Name of Bank: Union Bank of India
Bank Account Number: 327302010094685
Position/posts held in the past: Managing Director
Directorship held: As mentioned under titled ‘Our Management’
Other Ventures: Nil
172
Mr. Venkata Ravindra Yenigalla, aged about 55 years, is the Whole-
time Director of our Company. He holds bachelor’s degree in Engineering
in the field of Industrial Engineering and Management sciences from
Kakatiya University, Warangal, India. He has an extensive experience of
34 years in various industrial and manufacturing organization in making
turbo generators vibration analysis, boilers, reactors and telecom
equipment manufacturing. He has also experience market analysis, vendor
development, pre –sales and after sales coordination and entire cycle of
product development. Further he is expert in six sigma and lean
management/ manufacturing processes. He was a member of Management
Committee to implement strategic restructuring of business
implementation of self-certification procedures and also handled large
teams engaged in production of telecom products signage. He has been on
our Board since July 17,2009 being one of the promoter. For further
details, please refer to section titled ‘Our Management’ beginning on
page 157 of this Draft Red Herring Prospectus.
Permanent Account Number: AAVPY0964E
Aadhar No.: 3497 3036 8342
Voter’s identification card No.: N.A
Passport No.: J1226622
Driving License No.: 786791987OD
Name of Bank: Canara Bank
Bank Account Number: 2620101001444
Position/posts held in the past: Whole Time Director
Directorship held: As mentioned under titled ‘Our Management’
Other Ventures: Nil
We confirm that the Permanent Account Number, Bank Account Number and Passport Number of our Promoters
have been submitted to the Stock Exchange at the time of filing of this Draft Red Herring Prospectus.
Further, our Promoters have confirmed that they have not been identified as willful defaulters by any bank or financial
institution or consortium thereof, in accordance with the guidelines on willful defaulters issued by the RBI.
Our Promoters have not been debarred or restricted from accessing the capital markets for any reason, by SEBI or
any other authorities. Our Promoters are not, nor has been a promoter, director or person in control of any company
which is debarred or restricted from accessing the capital markets for any reason, by SEBI or any other authorities.
Change in management and control of the Company
Mr. Anshuman Yenigalla and Mr. Venkata Ravindra Yenigalla has been in the management or control of our
Company since inception. There has been no change in the control or management of our Company since its
Incorporation.
173
Interests of our Promoters
Interest in the promotion of the Company
As of the date of this Draft Red Herring Prospectus, our Promoters hold an aggregate of 55,62,020 Equity Shares,
aggregating to 79.14% of the pre-Issue issued, subscribed and paid-up Equity Share capital of our Company.
Our Promoters are interested in our Company only to the extent of their respective Equity shareholding in our
Company and any dividend distribution that may be made by our Company in the future. For details pertaining to our
Promoters’ shareholding, please refer to section titled ‘Capital Structure’ beginning on page 62 of this Draft Red
Herring Prospectus.
Interest in property, land, construction of building, supply of machinery
Our Promoter does not have any interest in any property acquired by our Company within three years preceding the
date of filing this Draft Red Herring Prospectus or any property proposed to be acquired by our Company or in any
transaction with respect to the acquisition of land, construction of building or supply of machinery or any other
contract, agreement or arrangement entered into by our Company and no payments have been made or are proposed
to be made in respect of these contracts, agreements or arrangements except as stated in “Financial Statements” on
page 177 of this Draft Red Herring Prospectus.
Interest as Guarantor
All our Promoters, have extended personal guarantees in favour of Union Bank of India in relation to the borrowing
facilities availed by our Company. In the event any such guarantees are revoked, our lenders may require us to furnish
alternate guarantees, demand repayment of the amounts outstanding under the respective facilities or even terminate
such facilities.
Interest as a director
Mr. Anshuman Yenigalla is the Managing Director of the Company and may also be deemed to be interested of their
appointment and reimbursement of expenses payable to them. For further details, please refer to section titled ‘Our
Management’ beginning on page 157 of this Draft Red Herring Prospectus.
Our Promoter is not interested as a member of a firm or company, and no sum has been paid or agreed to be paid to
him or to such firm or company in cash or shares or otherwise by any person either to induce him to become, or to
qualify him as a Director or for services rendered by our Promoter or by such firm or company in connection with the
promotion or formation of our Company.
Payment of Amounts or Benefits to our Promoters or Promoter Group during the last two years
Except as stated in ‘Financial Statement’ on page 177 of this Draft Red Herring Prospectus, no amount or benefit has
been paid by our Company to our Promoters or the members of our Promoter Group since the incorporation of the
Company
Our Promoter Group
In addition to our Promoters named herein above, the following natural persons are part of our Promoter Group (as
they are immediate relatives of our promoter) in terms of Regulation 2(1)(pp) (ii) of SEBI ICDR Regulations 2018:
Name of our Promoter Name of the Relatives Relationship with the Relative
Mr. Anshuman Yenigalla Dr. Sarat Yenigalla Father
Pariplavi Mokkapati Mother
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Name of our Promoter Name of the Relatives Relationship with the Relative
Dr.Vardhaman Yenigalla Brother
NA Sister
NA Daughter
NA Son
NA Spouse
NA Spouse's Father
NA Spouse's Mother
NA Spouse's Brother
NA Spouse’s Sister
Mr. Venkata Ravindra
Yenigalla
Late. Purnachander Rao Father
Mrs. Jhancy Yenigalla Mother
Dr. Sarat Yenigalla Brother
Mrs. Lakshmi Yarram Sister
Miss Pallavi & Miss Satvika Daughter
NA Son
Mrs. Rajya Lakshmi Spouse
Mr. Mulpuru Satyanarayana Spouse's Father
Mrs. Jhancy Lakshmi Spouse's Mother
Mr. Srinivas and Mr. Sunil Kumar Spouse's Brother
Mrs. Gadde Madhuri Devi Spouse’s Sister
Our Promoter Group as defined under Regulation 2(1)(pp)(iii) of the SEBI (ICDR) Regulations, 2018 includes
following entities:
Nature of Relationship Entity
Any Body corporate in which 20 (twenty) percent or
more of the Equity Share capital is held by the promoter
or an immediate relative of the promoter or a firm or
HUF in which the promoter or any one or more of his
immediate relative is a member.
Nil
Any Body corporate in which a body corporate as
provided above holds 20 (twenty) percent or more of the
Equity Share capital
Nil
Any HUF or firm in which the aggregate shareholding
of the promoter and his immediate relatives is equal to
or more than 20 (twenty) percent of the total
Nil
Companies with which the Promoters has disassociated in the last three years.
Except as stated below, none of our Promoters have disassociated themselves from any of the companies, firms or
entities during the last three years preceding the date of this Draft Red Herring Prospectus.
Allatus Techno Legal Solutions Private Limited (strike off)
Name of Promoter Name of the
Entity
Reasons for
disassociation
Date of disassociation
Mr. Venkata Ravindra Yenigalla
Fortis Infra
Projects Private
Ltd
Sale of stake October 06,2017
Mr. Anshuman Yenigalla and
Mr. Venkata Ravindra Yenigalla
Novus Green
Power Private
Limited
Sale of stake April 28,2017
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Experience of Promoters in the line of business
Our Promoter is well experienced in the Company’s line of business. The Company shall also endeavor to ensure that
relevant professional help is sought as and when required in the future.
Litigation details pertaining to our Promoters
For details on litigations and disputes pending against the Promoters and defaults made by our Promoters, please refer
to section titled ‘Outstanding Litigations and Material Developments’ beginning on page 251 of this Draft Red
Herring Prospectus.
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DIVIDEND POLICY
Under the companies Act, 2013, an Indian company pays dividends upon a recommendation of its Board of Directors
and approved by majority of the shareholders. Under the Companies Act, 2013 dividends may be paid out of profits
of a company in the year in which the dividend is declared or out of the undistributed profits or reserves of the previous
years or out of both.
Our Company does not have a formal dividend policy. Any dividend to be declared shall be recommended by the
Board of Directors depending upon the financial condition, results of operations, capital requirements and surplus,
contractual obligations and restrictions the terms of the credit facilities and other financing arrangements of our
company at the time a dividend is considered, and other relevant factors and approved by the Equity Shareholders at
their discretion. Our company has not paid any dividend for the last three years and till September 30, 2018.
Dividends are payable within 30 days of approval by the Equity Shareholders at the annual general meeting of our
company and incase of interim dividend within 30 days of declaration by the Board of Directos. When dividend are
declared, all the Equity Shareholders whose name appear in the register of members of our company as on the “record
date” are entitled to be paid the dividend declared by our company. Any Equity shareholders who ceases to be an
Equity Shareholder prior to the recorded date, or who becomes an Equity Shareholder after the record date, will not
be entitled to the dividend declared by our company.
177
SECTION V FINANCIAL INFORMATION
FINANCIAL STATEMENTS AS RESTATED
Sl. No. Details Page No.
1. Restated Consolidated Financial Information 181-204
2. Restated Standalone Financial Information 205-232
178
REPORT OF THE INDEPENDENT AUDITORS ON CONSOLIDATED FINANCIAL STATEMENTS
To,
The Board of Directors,
Novus Green Energy Systems Limited,
Trimulgherry- Secunderabad.
1. We have examined the attached Restated Consolidated Financial Information of M/s. NOVUS GREEN
ENERGY SYSTEMS LIMITED (the “Company”), which comprises of the Restated Summary Statement
of Assets and Liabilities as at March 31, 2017 and 2016 the Restated Summary Statement of Profit and Loss
and the Restated Summary Statement of Cash Flows for each of the years ended March 31, 2017 and 2016
respectively, and the Summary of Significant Accounting Policies (collectively, the “Restated Financial
Information”) as approved by the Board of Directors of the Company at their meeting for the purpose of
inclusion in the offer document prepared by the Company in connection with its proposed Initial Public Offer
of equity shares (herein after referred to as the “Issue”), prepared in terms of the requirements of :
i. Section 26 of Part I of Chapter III of the Companies Act, 2013 (“the Act”) read with Rule 4 to 6 of
Companies (Prospectus and Allotment of Securities) Rules, 2014 (“the Rules);
ii. the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
(Amendment) Regulations, 2018 as amended from time to time in pursuance of provisions of
Securities and Exchange Board of India Act, 1992 (“ICDR Regulations”)
2. The preparation of the Restated Financial Information is the responsibility of the Management of the
Company for the purpose set out in paragraph 12 below. The management’s responsibility includes
designing, implementing and maintaining adequate internal control relevant to the preparation and
presentation of the Restated Financial Information. The Management is also responsible for identifying and
ensuring that the Company complies with the Act, the Rules and ICDR Regulations.
Our responsibility is to examine the Restated Financial Information and confirm whether such Restated
Financial Information comply with the requirements of the Act, the Rules and ICDR Regulations.
3. We have examined such Restated consolidated Financial Statements taking into consideration
i. The terms of reference and terms of our engagement agreed upon with you in accordance with our
engagement letter dated October 09,2018 in connection with the proposed IPO of the Company
and
ii. The Guidance Note (Revised) on Reports in Company Prospectuses issued by the Institute of
Chartered Accountants of India.
4. These Restated Financial Information have been compiled by the Management from the consolidated audited
Financial Statements of the Company as at and for the year ended March 31, 2017 and 2016 which have
been approved by Board of Directors at their meetings held on June 05, 2017 and August, 26, 2016
respectively.
Audit for the financial years ended 2017 and 2016 was conducted by previous auditors, M/s. M M Reddy &
Co., Chartered Accountants., and accordingly reliance has been placed on the financial information examined
by them. The financial report included for these years, i.e., 2017 and 2016 are based solely on the report
submitted by M/s. M M Reddy & Co., and Chartered Accountants have also confirmed that the restated
consolidated financial information:
a) have been made after incorporating adjustments for the changes in accounting policies
retrospectively in respective financial years to reflect the same accounting treatment as per
changed accounting policy for all the reporting periods;
179
b) have been made after incorporating adjustments for the material amounts in the respective
financial years to which they relate; and
c) do not contain any extra-ordinary items that need to be disclosed separately [other than those
presented in the Restated Consolidated Financial Information] and do not contain any
qualification requiring adjustments.
In terms of Schedule VIII, Clause IX (9) of the SEBI (ICDR) Regulations, 2018 and other provisions relating
to accounts of M/s Novus Green Energy Systems Limited, we NSVR & ASSOCIATES LLP (formerly
known as Nekkanti Srinivasu & Co), Chartered Accountants, have been subjected to the peer review process
of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer
Review Board of the ICAI).
5. In accordance with the requirements of 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, the ICDR Regulations and the
Guidance Note, we report that:
a. The Restated Statement of Assets and Liabilities of the Company as at March 31, 2017 and 2016
examined by us, as set out in Annexure I to this examination report are after making adjustments and
regrouping as in our opinion were appropriate and more fully described in the Statement of Significant
Accounting Policies in Annexure IV and the Notes to Accounts in Annexure V.
b. The Restated Statement of Profit and Loss of the Company for the years ended on March 31, 2017 and
2016 examined by us, as set out in Annexure II to this examination report are after making adjustments
and regrouping as in our opinion were appropriate and more fully described in the Statement of
Significant Accounting Policies in Annexure IV and the Statement of Adjustments to the consolidated
Audited Financial Statements in Annexure VI.
c. The Restated Statement of Cash flow statement of the Company for the years ended on March 31, 2017
and 2016 examined by us, as set out in Annexure III to this examination report are after making
adjustments and regrouping as in our opinion were appropriate and more fully described in the
Statement of Significant Accounting Policies in Annexure IV and the Statement of Adjustments to the
consolidated Audited Financial Statements in Annexure VI.
d. The Restated consolidated Financial Statements have been made after incorporating adjustments for :
i) The changes, if any, in accounting policies retrospectively in respective financial years to reflect the
same accounting treatment as per the changed accounting policy for all the reporting period / years.
ii) Prior Period and other material amounts in the respective financial years to, which they relate,
Which are stated in the Statement of Material Adjustments as set out in Annexure VI
e. Such Financial statements do not require any corrective adjustments on account of:
i) Other remarks/comments in the Companies (Auditor's Report) Order, 2016 ("the Order"), as
amended, issued by the Central Government of India in terms of sub - section (11) of section 143
of the Companies Act, 2013, on consolidated Financial Statements of the Company for the years
ended on March 31, 2017 and 2016.
ii) Extra-ordinary / Exceptional items that need to be disclosed separately in the accounts requiring
adjustments.
6. At the request of the company, we have also examined the following financial information ("Other Financial
Information") proposed to be included in the offer document prepared by the management and approved by
the board of directors of the company and annexed to this report:
180
1 Schedule of Share Capital Annexure – VII
2 Schedule of Reserves & Surplus Annexure – VIII
3 Details of Long Term Borrowings of the Company Annexure – IX
4 Statement of Long term Provisions Annexure – X
5 Details of Short Term Borrowings of the Company Annexure – XI
6 Statement of Trade Payables Annexure – XII
7 Statement of Other Current Liabilities Annexure – XIII
8 Statement of Short Term Provisions Annexure – XIV
9 Statement of Fixed Assets Annexure – XV
10 Statement of Non-Current Investments Annexure – XVI
11 Statement of Deferred Tax Asset Annexure – XVII
12 Statement of Long term Loans & Advances Annexure – XVIII
13 Schedule of Inventories Annexure – XIX
14 Statement of Trade Receivables Annexure – XX
15 Statement of Cash and Cash Equivalents Annexure – XXI
16 Statement of Short Term Loans and Advances Annexure – XXII
17 Statement of Other Current Assets Annexure – XXIII
18 Schedule of Revenue from Operations Annexure – XXIV
19 Schedule of Other Income Annexure – XXV
20 Schedule of cost of materials consumed Annexure – XXVI
21 Schedule of Changes in Inventories Annexure – XXVII
22 Schedule of Employee Benefit Expenses Annexure – XXVIII
23 Schedule of Finance Cost Annexure – XXIX
24 Schedule of Other Expenses Annexure – XXX
25 Schedule of Related Party Transactions Annexure – XXXI
26 Schedule of Contingent Liability Annexure – XXXII
27 Summary of Accounting Ratios Annexure – XXXIV
7. According to the information and explanation given to us for financial year ended 2017 and 2016 also as per
the reliance placed on the reports submitted by the previous auditor, M/s. M M Reddy & Co., Chartered
Accountants , in our opinion the Restated Consolidated Financial Statements and the other Financial
Information set forth in Annexure VII to XXXV read with the Significant Accounting Policies and Notes to
the Restated consolidated Financial Statements have been prepared in accordance with section 26 read with
applicable provisions within Rule 4 to 6 of Companies (Prospectus and Allotment of Securities) Rules, 2014
of Companies Act, 2013 and the SEBI Regulations and the Guidance Note on the Reports in Company
Prospectus (Revised) issued by the Institute of Chartered Accountants of India (ICAI).
Consequently the Financial Information has been prepared after making such regroupings and adjustments,
in our opinion, considered appropriate to comply with the same. As a result of these regrouping and
adjustments, the amount reported in the Financial Information may not necessarily be the same as those
appearing in the respective Consolidated Audited Financial Statements for the relevant years.
8. This report should not in any way construed as a reissuance or redrafting of any of the audit report issued
nor should this report be construed as new opinion on any of the financial statement referred to therein.
181
9. We have no responsibility to update our report for events and circumstances occurring after the date of the
report.
10. This report is intended solely for your information and for inclusion in the Offer document in connection
with the Company's proposed IPO of Equity Shares and is not to be used, referred to or distributed for any
other purpose without our prior written consent.
FOR NSVR & ASSOCIATES LLP,
Chartered Accountants
(Firm Registration No.: 008801S/S200060)
P. Venkat Ratnam
Partner Membership number: 230675
Place: Hyderabad
Date: December 17, 2018
182
ANNEXURE I
STATEMENT OF CONSOLIDATED RESTATED ASSETS AND LIABILITIES (₹ in Lakhs)
Sr.
No. Particulars Annexure
As at March 31,
2017 2016
EQUITY AND LIABILITIES
1) Shareholders’ Funds
a. Share Capital VII 130.05 130.05
b. Reserves & Surplus VIII 646.79 480.79
2) Non-Current Liabilities
a. Long Term Borrowings IX 256.14 160.37
c. Long Term Provisions XI 43.88 26.01
3) Current Liabilities
a. Short Term Borrowings XII 404.03 500.33
b. Trade Payables XIII 1,535.17 766.12
d. Other Current Liabilities XV 50.44 97.25
c. Short Term Provisions XIV 15.84 9.34
T O T A L 3,082.35 2,170.26
ASSETS
1) Non-Current Assets
a. Fixed Assets XVI
(i)Tangible Assets 113.93 96.46
(ii)Intangible Assets - -
(iii) Capital work-in-progress
(iv) Intangible Assets Under Development
Net Block 113.93 96.46
b. Non-current Investments XVII 1.00 0.81
c. Deferred Tax Asset XVIII 13.01 5.67
d. Long Term Loans & Advances XIX 174.49 21.61
2) Current Assets
a. Inventories XX 167.88 175.32
b. Trade Receivables XXI 1,689.73 1,221.67
c. Cash and Cash Equivalents XXII 535.78 492.71
d. Short Term Loans & Advances XXIII 381.76 151.11
e. Other Current Assets XXIV 4.75 4.90
T O T A L 3,082.35 2,170.26
As per our report of even date attached
For and on behalf of the Board of Directors
M/s. NSVR and Associates LLP
(Formerly known as Nekkanti Srinivasu & Co.)
Chartered Accountants
Firm Registration: 008801S/S200060
P. Venkat Ratnam
Partner Membership number: 230675
Novus Green Energy Systems Limited
Mr. Anshuman Yenigalla
Managing Director
DIN: 02258999
Mr. Venkata Yenigalla Ravindra
Whole Time Director
DIN: 02259077
Mr. Srikrishna Saibabu Nandiraju
Chief Financial Officer
Mr. Sannapaneni Sudheer
Company Secretary & Compliance
Officer
Place:
Date:
183
ANNEXURE II
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AS RESTATED (₹ in lakhs)
Sr.
No. Particulars Annexure
As at March 31,
2017 2016
A INCOME
Revenue from Operations XXIV 6,309.71 4,133.75
Other Income XXV 19.94 3.87
Total Income (A) 6,329.65 4,137.62
B EXPENDITURE
Cost of materials consumed XXVI 4,851.61 2,956.73
Changes in inventories XXVII -49.47 322.81
Employee benefit expenses XXVIII 449.98 270.17
Finance costs XXIX 154.62 114.44
Depreciation and amortization expense XXX 24.96 25.13
Other Expenses XVI 646.43 309.84
Total Expenses (B) 6,078.15 3,999.17
C Profit Before Exceptional and Extraordinary items
and tax
251.30 138.50
Exceptional items - -
Profit Before Extraordinary items 251.50 138.44
Extraordinary items - -
Profit Before tax 251.50 138.44
Tax expense :
(i) Current tax 92.84 54.01
(ii) Prior Period Taxes - -
(ii) Deferred tax -7.34 -13.40
E Total Tax Expense (E) 85.50 40.61
F Net Profit / (Loss) after tax from continuing operations 165.81 97.89
Share of (loss) /profit from Associate 0.19 -0.05
Balance carried to Balance Sheet 166.00 97.84
As per our report of even date attached
For and on behalf of the Board of Directors
M/s. NSVR and Associates LLP
(Formerly known as Nekkanti Srinivasu & Co.)
Chartered Accountants
Firm Registration: 008801S/S200060
P. Venkat Ratnam
Partner Membership number: 230675
Novus Green Energy Systems Limited
Mr. Anshuman Yenigalla
Managing Director
DIN: 02258999
Mr. Venkata Yenigalla Ravindra
Whole Time Director
DIN: 02259077
Mr. Srikrishna Saibabu Nandiraju
Chief Financial Officer
Mr. Sannapaneni Sudheer
Company Secretary & Compliance
Officer Place:
Date:
184
ANNEXURE III
RESTATED STATEMENT OF CONSOLIDATED CASH FLOW ( ₹ in lakhs)
Particulars As at March 31,
2017 2016
Cash flow from operating activities:
Net Profit before tax as per Profit And Loss account 251.50 138.44
Adjusted for:
Depreciation & Amortization 24.96 25.13
Interest & Financial Charges 154.62 114.44
Provision for Gratuity 6.56 4.37
Provision for Maintenance 15.33 11.28
Interest income 18.63 3.77
Receipt of Prior Period Income - 9.53
Share of Loss/ (Profit) from Associate Company -0.19 0.05
Operating Profit Before Working Capital Changes 434.16 299.48
Adjusted for (Increase)/ Decrease in:
Trade Receivables -468.06 -425.20
Inventories 7.43 509.25
Short Term Loans and Advances -230.65 -34.00
Other Current Assets 0.15 -4.90
Long Term Loans and Advances -152.89 60.28
Adjusted for Increase/ (Decrease) in:
Trade Payables 769.05 -25.77
Other Current Liabilities -66.07 56.39
Cash Generated From Operations 293.13 435.51
Direct Tax Paid -90.36 -50.79
Net Cash Flow from/(used in) Operating Activities: (A) 202.77 384.72
Cash Flow From Investing Activities:
Purchase of Fixed Assets -42.44 -16.55
Interest income 18.63 3.77
Net Cash Flow from/(used in) Investing Activities: (B) -23.81 -12.78
Cash Flow from Financing Activities:
Proceeds from issue of share capital Inc of Premium - 75.23
Increase / (Decrease) in Long Term Borrowing 115.04 -85.51
Increase / (Decrease) in Short Term Borrowing -96.30 204.55
Interest & Financial Charges -154.62 -114.44
Net Cash Flow from/(used in) Financing Activities ( C) -135.89 79.83
Net Increase/(Decrease) in Cash & Cash Equivalents (A+B+C) 43.07 451.76
Cash & Cash Equivalents As At Beginning of the Year 492.71 40.94
Cash & Cash Equivalents As At End of the Year 535.78 492.71
As per our report of even date attached
For and on behalf of the Board of Directors
M/s. NSVR and Associates LLP
(Formerly known as Nekkanti Srinivasu & Co.)
Chartered Accountants
Firm Registration: 008801S/S200060
P. Venkat Ratnam
Partner Membership number: 230675
Novus Green Energy Systems Limited
Mr. Anshuman Yenigalla
Managing Director
DIN: 02258999
Mr. Venkata Yenigalla Ravindra
Whole Time Director
DIN: 02259077
Mr. Srikrishna Saibabu Nandiraju
Chief Financial Officer
Mr. Sannapaneni Sudheer
Company Secretary & Compliance
Officer Place:
Date:
185
ANNEXURE- IV
SIGNIFICANT ACCOUNTING POLICIES
A. Disclosure of Accounting Policies:
(a) Basis of Preparation of Consolidated Financial Statements:
The Restated Summary consolidated Financial Statements of the Company for each of the years ended 31 March 2017
and 31 March 2016, have been prepared using the historical audited general purpose consolidated financial statements
of the Company for the years ended 31st March, 2017 and 2016 respectively which were prepared under generally
accepted accounting principles in India (Indian GAAP) and originally approved by the Board of Directors of the
Company at that relevant time.
The Company has prepared the consolidated financial statements to comply in all material respects with the
accounting standards specified under section 133 of the Companies Act, 2013, read with rule 7 of the Companies
(Accounts) Rules, 2014, Companies (Accounting Standards) Amendment Rules, 2016 and other accounting principles
generally accepted in India and the Guidance Note (Revised) on Reports in Company Prospectuses issued by the
Institute of Chartered Accountants of India. The consolidated financial statements have been prepared under the
historical cost convention and on an accrual basis. The accounting policies have been consistently applied by the
Company and are consistent with those adopted in the preparation of consolidated financial statements for the
financial years ended 31st March, 2017 and 2016.
These consolidated financial statements have been prepared using presentation and disclosure requirements of the
Schedule III of Companies Act 2013.
Details of associate company considered in consolidated accounts:
Name of the Associate Shareholding as on Extent of Holding
Fortis Infra Projects Private Limited 31-03-2016 50%
Fortis Infra Projects Private Limited 31-03-2017 50%
With effect from M/s. Fortis Infra Projects Private Limited (the company) has ceased to be a Associate.
Basis of consolidated accounts:
The consolidated accounts related to M/s. Novus Green Energy Systems Limited, Secunderabad (Holding Company)
and M/s. Fortis Infra Projects Private Limited Hyderabad (Associate Company), have been prepared in accordance
with equity method as per AS - 23 "Accounting for Investments in Associates" issued by the Institute of Chartered
Accountants of India.
Equity method
The equity method is a method of accounting whereby the investment is initially recorded at cost, identifying any
goodwill/capital reserve arising at the time of acquisition. The carrying amount of the investment is adjusted thereafter
for the post acquisition change in the investor’s share of net assets of the investee. The consolidated statement of
profit and loss reflects the investor’s share of the results of operations of the investee
(b) Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities at the date of the consolidated financial statements and the result of operations
during the reporting period. Although these estimates are based upon management’s best knowledge of current events
and actions, actual results could differ from these estimates.
B. Valuation of Inventories:
Inventories are valued in accordance with the requirements of accounting standard (AS-2) on Valuation of Inventories.
Inventory consists of Solar panels, water pumps, batteries etc., which are valued at lower of cost and net realisable
value after providing for obsolescence and other losses, where considered necessary. Cost comprises of the purchase
price including duties and taxes, freight inwards and other expenditure directly attributable to the acquisition.
186
C. Cash Flow Statement:
Cash Flow statement is reported using the indirect method, where by profit before tax is adjusted for the effects of
transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and
item of income or expenses associated with investing or financing cash flow. The cash flow from operating, investing
and financing activities of company is segregated based on the available information.
D. Contingencies and Events Occurring After Balance Sheet Date:
All contingencies and events occurring after the balance sheet date which have a material effect on the financial
position of the company are considered for preparing the consolidated financial statements.
E. Revenue Recognition:
Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer,
recovery of the consideration is reasonably certain, the associated costs and possible return of goods can be estimated
reliably.
Revenue from Supply, Erection and Commissioning of Solar Power Equipment is recognised when the equipment is
installed and the same is approved by the appropriate authority.
Revenue presented is net of VAT, Service Tax and GST, to the extent applicable
Interest income is recognised on a time proportion basis taking into account the amount outstanding the rate
applicable.
F. Property, Plant &Equipment’s:
Property, Plant & Equipment is stated at cost of acquisition and installation, less accumulated depreciation and
impairment losses, if any.
The cost of Property, Plant & Equipment comprises:
a) Its purchase price, including import duties and non–refundable purchase taxes, after deducting trade discounts
and rebates.
b) Any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable
of operating in the manner intended by management.
Method of Depreciation:
Depreciation on Property, plant and equipment is provided based on useful life of the asset prescribed under the
Schedule II of the Companies act, 2013. Depreciation is provided on Written down value method during these years.
G. Foreign Currency Transaction:
Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Monetary
foreign currency assets and liabilities if any, are translated into rupees at the exchange rate prevailing at the balance
sheet date. All exchange differences are dealt with in Profit & Loss Account.
H. Investments:
Non-current investments are carried at cost less any other-than-temporary diminution in value, determined separately
for each individual investment. The reduction in the carrying amount is reversed when there is a rise in the value of
the investment or if the reasons for the reduction no longer exist. Any reduction in the carrying amount and any
reversal in such reductions are charged or credited to the statement of profit and loss.
I. Employee Benefits Expense:
i) Short-Term Employee Benefits
The undiscounted amount of short-term employee benefits such as salary, bonus etc., expected to be paid in exchange
for the services rendered by employees are recognised as expense during the period when the employees render the
services.
187
ii) Post-employment benefits
Defined Contribution Plan
A defined contribution plan is a post-employment benefit plan under which the Company pays specified
contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund.
The Contributions as specified under the law are paid to respective Regional Provident Fund Commissioner. The
Company’s contribution is recognized as an expense in the Statement of Profit and Loss during the period in which
the employee renders the related service.
Defined Benefit Plan
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees.
The plan provides for a lump sum payment to vested Employees at retirement, death while in employment or on
termination of employment of an amount equivalent to 15 days salary payable for each completed year of service.
Vesting occurs upon completion of five years of service.
Gratuity is recognized on the basis of actuarial valuation carried out using projected unit credit method.The
liability for Gratuity is accrued and provided for as determined by an independent actuarial valuation as per the
requirements of Accounting Standard - 15 on “Employee Benefits”.
J. Borrowing Cost :
Borrowing costs are interest and other costs incurred by an enterprise in connection with the borrowing of funds.
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as
part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready
for its intended use.
The borrowing cost other than those capitalised as above have been debited to the Statement of Profit and Loss of the
current year.
K. Segment Reporting:
Segment reporting is not applicable. As the company operates in single segment therefore, Segment reporting was not
made as per AS-17.
L. Earnings per Share and Diluted Earnings per Share:
Basic earnings/ (loss) per share are calculated by dividing the net profit/ (loss) for the period/ year attributable to
equity shareholders by the weighted average number of equity shares outstanding during the period/ year. The
weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue and
share split.
For the purpose of calculating diluted earnings/(loss) per share, the net profit/(loss) for the period/year attributable to
equity shareholders and the weighted average number of shares outstanding during the period/ year are adjusted for
the effects of all dilutive potential equity shares except where the results will be anti-dilutive. The dilutive potential
equity shares are deemed converted as of the beginning of the period, unless they have been issued at a later date.
In case of Bonus issue, equity shares are issued to existing shareholders for no additional consideration i.e., number
of equity shares outstanding is increased without an increase in resources. The number of equity shares outstanding
before the event is adjusted for the proportionate change in the number of equity shares outstanding as if the event
had occurred at the beginning of the earliest period reported.
M. Taxes on Income:
Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the
year. Current and deferred tax are recognised in statement of profit and loss.
Current Tax:
Current tax expenses are accounted in the same period to which the revenue and expenses relate. Provision for current
income tax is made for the tax liability payable on taxable income after considering tax allowances, deductions and
exemptions determined in accordance with the applicable tax rates and the prevailing tax laws.
188
Minimum Alternate Tax credit is recognized as an asset only when and to the extent there is convincing evidence that
the company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet
date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing
evidence to the effect that the Company will pay normal income tax during the specified period.
Deferred tax:
Deferred tax is recognized on timing differences; being the difference between taxable incomes and accounting
income that originate in one period and are capable of reversal in one or more subsequent periods. The deferred tax
is accounted for using the tax rates and laws that have been substantively enacted as of the balance sheet date.
N. Intangible assets:
Intangible assets are recorded at the consideration paid for acquisition including any duties and other taxes (other than
those subsequently recoverable by the enterprise from the taxing authorities), and any directly attributable expenditure
in making the asset ready for its intended use.
Intangible assets are amortized on a Written down value basis over the best estimate of their useful lives, commencing
from the date the asset is available to the Company for its use.
The Management’s estimates of the useful life of Software is 5 years
O. Impairment of Assets:
The Company assesses at each reporting date as to whether there is any indication that an asset (tangible and
intangible) may be impaired. An asset is treated as impaired, when the carrying cost of the asset exceeds its
recoverable amount. Recoverable amount is higher of an asset’s or cash generating unit’s net selling price and its
value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing
use of an asset and from its disposal at the end of its useful life.
An impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired. The
impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of
recoverable amount.
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 obligation that is
reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle
the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent
liability. A disclosure for a contingent liability is also 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.
189
ANNEXURE - V
NOTES TO ACCOUNTS
1. Earnings Per Share: (₹ in Lakhs)
Particulars
For the year ended
March 31,
2017 2016
I. Net Profit as per Profit & Loss Account available for Equity Shareholders 166.00 97.84
II Weighted Average Number of Equity Shares for Earnings Per Share Computation
A. For Basic Earnings Per Share of 10 each 26.01 22.02
B. For Diluted Earnings Per Share of 10 each 26.01 22.02
Earnings Per Share (Weighted Average)
-Basic 6.38 4.44
-Diluted 6.38 4.44
(1) Post-Bonus Issue*
II Weighted Average Number of Equity Shares for Earnings Per Share Computation
A. For Basic Earnings Per Share of ₹ 10 each 68.18 64.19
B. For Diluted Earnings Per Share of ₹10 each: 68.18 64.19
Earnings Per Share (Weighted Average)
- Basic 2.43 1.52
- Diluted 2.43 1.52
*The Company has made Bonus Issue on November 29, 2018. The Company has Issued Bonus shares in the ratio of
3:2 (i.e. three equity shares of ₹10 each for every two fully paid up equity shares of ₹10 each) to shareholders. The
EPS (Post Bonus Issue) is also calculated by considering total number of shares after the bonus issue
2. Deferred Tax :
Deferred Tax liability on account of timing difference between taxable income and accounting income for the year is
accounted for by applying the tax rates and laws enacted or substantially enacted as of the balance sheet date. Deferred
Tax Assets are recognized only to the extent of virtual certainty of its realization or adjustment against deferred tax
liability. The company has accounted for Income Tax in compliance with the accounting standards relating Accounting
for Taxes on Income(AS-22) issued by the Institute of Chartered Accountants of India.
(₹ in Lakhs)
Particulars For the year ended March 31,
2017 2016
Opening Deferred Tax (Liability)/ Asset 5.67 -7.73
WDV as per Companies Act 1956 113.93 96.46
WDV as per Income Tax Rules 1962 109.24 84.17
Temporary timing difference on Assets (4.69) (12.28)
Timing Difference on Provision for Gratuity 19.71 13.15
Timing Difference on Provision for Maintenance 32.20 16.87
Timing differences 47.22 17.73
Closing Deferred Tax (Liability)/ Asset 13.01 5.67
3. Remuneration to Statutory Auditors: (₹ in Lakhs)
4. Foreign Exchange Earnings & Expenditure: (₹ in Lakhs)
Particulars For the year ended March 31,
2017 2016
Statutory Audit Fees 5.00 5.75
For Other Matters - -
Total 5.00 5.75
190
Particulars For the year ended March 31,
2017 2016
Earnings in Foreign Exchange - -
Expenditure in Foreign Exchange - -
Total - -
191
5. Disclosures as per "AS - 15 Employee benefits" in respect of defined benefit plan
Changes in Present Value of Defined Benefit obligation are as follows:
(₹ in Lakhs)
Particulars For the year ended March 31,
2017 2016
Present Value of Defined benefit obligation at the beginning of the period 13.15 8.78
Interest Cost 1.02 0.68
Current Service cost 4.51 3.05
Past Service cost 0 0
Benefits paid 0 0
Actuarial (gains)/losses 1.03 0.64
Present Value of Defined benefit obligation at the end of the period 19.71 13.15
Amount Recognized in the Balance Sheet
(₹ in Lakhs)
Particulars For the year ended March 31,
2017 2016
Present Value of funded obligation 19.71 13.15
Amount Recognized in the Profit & Loss Account
( ₹in Lakhs)
Particulars For the year ended March 31,
2017 2016
Interest cost 1.02 0.68
Current service cost 4.51 3.05
Past service cost 0 0
Actuarial (Gain)/Loss (0) (0)
Amount included in Employee Benefit Expenses 1.03 0.64
6.56 4.37
Summary of Actuarial assumptions
Particulars For the year ended March 31,
2017 2016
Discount rate 7.75 % p.a 7.75 % p.a
Salary growth rate 5.00 % p.a 5.00 % p.a
Mortality IALM 2006-08 Ultimate IALM 2006-08 Ultimate
Withdrawal rate
5% p.a (18 to 30 Years) 5% p.a (18 to 30 Years)
3.00% p.a.(30 to 44 Years) 3.00% p.a.(30 to 44 Years)
2.00% p.a. (44 to 60 Years) 2.00% p.a. (44 to 60 Years)
6. Details of dues to micro, small and medium enterprises as defined under the MSMED Act, 2006:
To the extent of information available, the company has no overdue amounts outstanding to any micro, medium and
small scale enterprises.
7. The management has confirmed that adequate provisions have been made for all the known and determined
liabilities and the same is not in excess of the amounts reasonably required.
8. Previous year figures have been re-grouped and reclassified wherever necessary to confirm to the current year
classification.
192
Notes on Material adjustments and regroupings to Restated Summary Statements ANNEXURE VI
(₹ in Lakhs)
Particulars As at March 31,
2017 2016
Profit/(Loss) after tax (as per Audited Financial Statements) 180.98 111.11
Restatement Adjustments:
Prior Period Revenue Restated ( Ref Note A) - -9.53
Expenses
Provision for Diminution ( Ref Note B) - -
Provision for Gratuity ( Ref Note C) -6.56 -4.37
Provision for Maintenance ( Ref Note D) -15.33 -11.28
Depreciation Adjustment ( Ref Note E) 2.78 2.80
Items to be considered as Fixed assets charged to Revenue ( Ref Note F) - -
Deferred Tax restated ( Ref Note G) 4.14 9.10
Prior Period Tax ( Ref Note H)
Total Adjustments -14.97 -13.27
Restated profit/(loss) after tax (I+II) 166.00 97.84
The above statement should be read with the notes to restated summary statement of assets and liabilities, profits and
losses and cash flows
A) Revenue pertaining to earlier period is restated and corresponding adjustments was made to opening
Reserves as on 01.04.2015
B) As per AS 13, Current Investments are carried in financial statements at lower of cost and fair value. During
the restatement of Accounts, the Company has restated the investments at market value which is lower than
cost
C) In the financial statements for the year ended March 31, 2018, March 31, 2017, March 31, 2016, the company
has not provided provision for Gratuity. For the purpose of restated summary of financial statements,
Provision for Gratuity was made according to the Actuarial Valuation report as per AS 15 for the respective
financial years.
D) During the restatement of Accounts, the Company has reversed Depreciation which was provided excess at
earlier periods
E) During the process of restatement of Accounts, Company has capitalized the expenses which was attributed
to the Intangible assets and consequently there is change in calculation of depreciation and assets
F) Deferred tax has been computed on adjustments made as detailed above and has been adjusted in the restated
profit and loss for the years ended, March 31,2018, March 31, 2017, March 31, 2016. The tax rate applicable
to the respective years has been used to calculate the deferred tax impact on adjustments made to the
respective years.
G) The Company received demand notice on 19/05/2017 from the Income Tax Department for Rupees 3,
83,880/- for the Financial Year 2013-14, The liability for the same was recognised in the Restated Financial
Statements
193
RESTATED STATEMENT OF SHARE CAPITAL ANNEXURE VII
(₹ in Lakhs)
Particulars As at March 31,
2017 2016
SHARE CAPITAL
Authorized:
Equity Shares of 10/- each
Number of Shares 15.00 15.00
Amount (` in lakhs) 150.00 150.00
Issued, Subscribed & Fully paid up
Equity Shares of 10/- each
Number of Shares 13.00 13.00
Amount (₹ in lakhs) 130.05 130.05
Reconciliation of number of shares outstanding at the end of year
Particulars As at March 31,
2017 2016
Equity Shares
Equity shares at the beginning of the year of 10/- each 13.00 10.00
Add: Equity shares issued - 3.00
Add: Bonus shares issued - -
Less: Reduction in share capital - -
Equity Shares at the end of the year 13.00 13.00
Particulars As at March 31,
2017 2016
Y.Anshuman
Number of Shares held 8.70 8.70
% of Share Holding 66.90% 66.90%
Y. V. Ravindra
Number of Shares held 2.07 2.07
% of Share Holding 15.92% 15.92%
Y. Jhancy
Number of Shares held 0.23 0.23
% of Share Holding 1.77% 1.77%
Mayur Mehta
Number of Shares held 1.00 1.00
% of Share Holding 7.69% 7.69%
Ambari Cloud, INC
Number of Shares held 0.51 0.51
% of Share Holding 3.88% 3.88%
Dr. Pari Plavi
Number of Shares held 0.50 0.50
% of Share Holding 3.84% 3.84%
Note:
A) The company has only one class of equity shares having a par value of 10/- per Share. Each holder of equity
share is entitled for one vote per share. In the event of liquidation, the equity shareholders are eligible to
receive the remaining assets of the Company after distribution of all preferential amounts in proportion to
their shareholdings.
B) During the year 2017-18, pursuant to the shareholders' approvals under Section 63 and other applicable
provisions of the Act, the Company has issued bonus shares in the ratio of 1:1 (i.e. one bonus equity share
of 10 each for every five fully paid up equity shares of 10 each), to the shareholders on record date of March
20, 2018, by capitalizing existing reserves to the extent of ₹ 130.05 lakhs
194
Annexure-VIII
RESTATED STATEMENT OF RESERVES AND SURPLUS (₹ in Lakhs)
Particulars As at March 31,
2017 2016
Security Premium
Opening Balance 54.00 54.00
Add / (Less): Changes during the year
Add: Premium on share capital 120.18 120.18
Less: Issue of Bonus Shares During The period - -
Total (a) 174.18 174.18
Profit & Loss A/c
(i) Opening Balance 306.60 216.79
Add / (Less): Changes during the year - -
Add: Excess Depreciation - 0.84
Add Prior period Income Recognised in FY 2015-16 - 9.53
Add: Profit for the year 166.00 97.84
Less: Provision for Gratuity for Previous Years - 8.78
Less: Provision for Maintenance for Previous Years - 5.58
Less: Provision for Prior Period Taxes 3.26
Less: Adj of deferred tax - 0.76
Total (b) 472.61 306.60
Total Reserves (a+b) 646.79 480.79
ANNEXURE - IX
RESTATED STATEMENT OF LONG TERM BORROWINGS (₹ in Lakhs)
Particulars As at March 31,
2017 2016
(i) Secured Loans
(a) Term Loans
From Banks 3.16 4.31
From Others - -
(ii) Unsecured Loans
(a) From Banks 18.66 -
(b) From Others 28.01 28.13
(c) Loans from Related Parties 206.32 127.93
Total 256.14 160.37
ANNEXURE - X
RESTATED STATEMENT OF LONG TERM PROVISIONS (₹ in Lakhs)
Particulars As at March 31,
2017 2016
Provision for Gratuity 19.06 12.74
Provision for Maintenance 24.82 13.27
Total 43.88 26.01
195
ANNEXURE - XI
RESTATED STATEMENT OF SHORT TERM BORROWINGS (₹ in Lakhs)
Particulars As at March 31,
2017 2016
Loans Repayable on Demand
From Banks 404.03 500.33
From Other Parties - -
Loans & Advances from Related Parties - -
Total 404.03 500.33
ANNEXURE - XII
RESTATED STATEMENT OF TRADE PAYABLES (₹ in Lakhs)
Particulars As at March 31,
2017 2016
Dues to Micro, Small and Medium Enterprises
Dues to Others 1,535.17 766.12
Total 1,535.17 766.12
ANNEXURE - XIII
RESTATED STATEMENT OF OTHER CURRENT LIABILITIES (₹ in Lakhs)
Particulars As at March 31,
2017 2016
Current maturities of long-term debt 28.68 9.41
Advances from customers - 54.80
Other liabilities 21.77 33.03
Total 50.44 97.25
ANNEXURE - XIV
RESTATED STATEMENT OF SHORT TERM PROVISIONS (₹ in Lakhs)
Particulars As at March 31,
2017 2016
Provision for Income tax 7.81 5.33
Provision for Gratuity 0.65 0.41
Provision for Maintenance 7.38 3.60
Total 15.84 9.34
ANNEXURE - XV
DETAILS OF FIXED ASSETS AS RESTATED: (₹ in Lakhs)
Particulars As at March 31,
2017 2016
Building
Opening Balance 35.25 35.25
Addition during the year - -
Reduction during the year - -
Closing Balance( Gross value) 35.25 35.25
196
Depreciation During the year 1.44 1.51
Accumulated Depreciation 3.43 1.92
Closing Balance 30.38 31.82
Tools & Testing Equipment’s
Opening Balance 5.82 0.63
Addition during the year 15.60 5.18
Reduction during the year - -
Closing Balance( Gross value) 21.41 5.82
Depreciation During the year 1.99 0.42
Accumulated Depreciation 0.66 0.24
Closing Balance 18.76 5.15
Furniture & Fixtures - -
Opening Balance 3.59 2.54
Addition during the year 9.03 1.05
Reduction during the year - -
Closing Balance( Gross value) 12.62 3.59
Depreciation During the year 2.19 0.40
Accumulated Depreciation 1.53 1.14
Closing Balance 8.90 2.06
Vehicles
Opening Balance 79.66 79.66
Addition during the year 6.07 -
Reduction during the year - -
Closing Balance( Gross value) 85.73 79.66
Depreciation During the year 9.82 12.35
Accumulated Depreciation 49.83 37.48
Closing Balance 26.08 29.83
Particulars As at March 31,
2017 2016
Opening Balance 18.76 15.17
Addition during the year 5.34 3.59
Reduction during the year - -
Closing Balance( Gross value) 24.10 18.76
Depreciation During the year 3.76 4.23
Accumulated Depreciation 14.00 9.77
Closing Balance 6.34 4.76
Office Equipment’s
Opening Balance 15.72 12.44
Addition during the year 3.44 3.28
Reduction during the year - -
Closing Balance( Gross value) 19.16 15.72
Depreciation During the year 2.28 2.76
Accumulated Depreciation 11.03 8.27
Closing Balance 5.85 4.69
Two Wheelers Hero Honda
Opening Balance 3.87 0.99
Addition during the year - 2.88
197
Reduction during the year - -
Closing Balance( Gross value) 3.87 3.87
Depreciation During the year 0.66 0.42
Accumulated Depreciation 1.09 0.67
Closing Balance 2.12 2.77
Mobile Phone
Opening Balance 4.98 4.40
Addition during the year 2.97 0.58
Reduction during the year - -
Closing Balance( Gross value) 7.94 4.98
Depreciation During the year 0.83 0.58
Accumulated Depreciation 1.74 1.17
Closing Balance 5.37 3.24
Particulars As at March 31,
2017 2016
Opening Balance 21.84 21.84
Addition during the year - -
Reduction during the year - -
Closing Balance( Gross value) 21.84 21.84
Depreciation During the year 2.01 2.45
Accumulated Depreciation 9.69 7.24
Closing Balance 10.14 12.15
Additions during the Year 42.44 16.55
Gross Block 231.93 189.49
Depreciation for the Year 24.96 25.13
Total Accumulated Depreciation 93.03 67.90
Net Block 113.93 96.46
ANNEXURE - XVI
RESTATED STATEMENT OF NON-CURRENT INVESTMENTS (₹ in Lakhs)
Particulars As at March 31,
2017 2016
Unquoted Investments (Measured at cost)
Fortis Infra Projects Private Limited (Fully Paid up) (Face Value Rs 10/- per Share) 1.00 0.81
Total 1.00 0.81
ANNEXURE - XVII
RESTATED STATEMENT OF DEFERRED TAX ASSET ( ₹ in Lakhs)
Particulars As at March 31,
2017 2016
Opening Balance 5.67 -7.74
Add/Less: Changes during the year 7.34 13.40
Total 13.01 5.67
ANNEXURE - XVIII
RESTATED STATEMENT OF LONG TERM LOANS AND ADVANCES (₹ in Lakhs)
Particulars As at March 31,
2017 2016
198
Unsecured-Considered good
EMD, Security& Other Deposits 174.49 21.61
Total 174.49 21.61
ANNEXURE - XIX
RESTATED STATEMENT OF INVENTORIES (₹ in Lakhs)
Particulars As at March 31,
2017 2016
Raw materials 104.92 161.82
Work-in-progress 62.97 13.50
Total 167.88 175.32
ANNEXURE - XX
RESTATED STATEMENT OF TRADE RECEIVABLES (₹ in
Lakhs)
Particulars As at March 31,
2017 2016
Trade Receivables
O/s less than six months
Secured, considered good
Unsecured, considered good 1,662.92 1,185.31
O/s more than six months
Secured, considered good
Unsecured, considered good 26.81 36.36
Total 1,689.73 1,221.67
ANNEXURE - XXI
RESTATED STATEMENT OF CASH & CASH EQUIVALENTS (₹ in Lakhs)
Particulars As at March 31,
2017 2016
Cash and Cash Equivalents
Cash in hand 9.70 18.41
Balances with Banks 100.32 160.91
Cash with Restricted use in Deposit& Other Accounts 425.76 313.39
Total 535.78 492.71
ANNEXURE - XXII
RESTATED STATEMENT OF SHORT TERM LOANS AND ADVANCES (₹ in Lakhs)
Particulars As at March 31,
2017 2016
Balances with Revenue Authorities - -
Advances to suppliers 176.54 101.28
EMD, Security, Rental & Other Deposits 205.21 49.83
Total 381.76 151.11
ANNEXURE XXIII
RESTATED STATEMENT OF OTHER CURRENT ASSETS (₹ in
Lakhs)
199
Particulars As at March 31,
2017 2016
Employee Advances 4.75 4.90
Others - -
Total 4.75 4.90
ANNEXURE XXIV
RESTATED STATEMENT OF REVENUE FROM OPERATIONS (₹ in
Lakhs)
Particulars As at March 31,
2017 2016
Revenue From Contracts 6,305.89 4,127.81
Other operating revenue 3.82 5.94
Total 6,309.71 4,133.75
ANNEXURE XXV
RESTATED STATEMENT OF OTHER INCOME (₹ in
Lakhs)
Particulars As at March 31,
2017 2016
Interest Received on FD 18.63 3.77
Other non-operating income 1.31 0.10
Total 19.94 3.87
ANNEXURE XXVI
RESTATED STATEMENT OF COST OF MATERIALS CONSUMED (₹ in
Lakhs)
Particulars As at March 31,
2017 2016
Opening Raw materials 161.82 348.26
Add : Purchases made during the year 4,794.71 2,770.28
Less : Closing Raw materials 104.92 161.82
Cost of Materials Consumed 4,851.61 2,956.73
ANNEXURE
XXVII
RESTATED STATEMENT OF CHANGES IN INVENTORIES (₹ in
Lakhs)
Particulars As at March 31,
2017 2016
Opening stock of inventories
Work- in- progress 13.50 336.31
Total 13.50 336.31
Closing stock of inventories
Work- in- progress 62.97 13.50
Total 62.97 13.50
200
Increase / (Decrease) In Stocks -49.47 322.81
ANNEXURE XXVIII
RESTATED STATEMENT OF EMPLOYEE BENEFITS EXPENSES (₹ in Lakhs)
Particulars As at March 31,
2017 2016
Salaries, wages and bonus 406.43 258.37
Contribution to provident and other funds 23.95 8.67
Staff welfare expense 19.60 3.13
Total 449.98 270.17
ANNEXURE XXIX
RESTATED STATEMENT OF FINANCE COST (₹ in
Lakhs)
Particulars As at March 31,
2017 2016
Interest expense-Banks 91.18 50.13
Interest expense-Others 10.07 1.21
Other borrowing costs and charges 53.38 63.10
Total 154.62 114.44
ANNEXURE XXX
RESTATED STATEMENT OF DETAILS OTHER EXPENSES (₹ in
Lakhs)
Particulars As at March 31,
2017 2016
Power, Fuel& Water 7.79 12.46
Work contract expenses 337.28 79.92
Rent 21.45 15.14
Insurance 11.12 12.40
Auditor's Remuneration 5.00 5.75
Rates and Taxes 8.80 6.58
Freight& Postage Charges 35.21 24.96
Travelling& Conveyance 49.89 55.10
Legal& Professional charges 16.29 10.03
Printing and Stationary 3.59 2.82
Repairs and Maintenance 49.50 21.74
Telephone& Internet Charges 20.01 9.61
Legal, Inspection, Registration & Renewals Charges 4.11 8.59
Commission &brokerage - -
Tender fees 7.94 1.83
Selling& Distribution Expenses 41.66 24.76
Provision for Maintenance 15.33 11.28
General(Misc.) Expenses 11.64 6.90
Total 646.63 309.84
201
ANNEXURE - XXXI
STATEMENT OF RELATED PARTY TRANSACTION:
1. Managerial Remuneration:
(₹ in Lakhs)
Particulars For the year ended March 31,
2017 2016
Whole time Directors Remuneration
Salaries & allowances 96.00 78.00
Other fees - -
Sitting fees - -
Non Whole time Directors Remuneration
Sitting fees - -
Total 96.00 78.00
2. Directors/KMP's
For the year ended March 31
2017 2016
Anshuman Yenigalla Anshuman Yenigalla
Venkata Yenigalla Ravindra Venkata Yenigalla Ravindra
Ramchand Kolli Ramchand Kolli
3. Relatives of Directors / KMP's
Relatives of Directors Description of Relationship
Purna Chandra Rao Yenigalla Father of Venkata Ravindra Yenigalla
Jhansi Yenigalla Mother of Venkata Ravindra Yenigalla
Rajya Lakshmi Spouse of Venkata Ravindra Yenigalla
Pallavi Yenigalla Daughter of Venkata Ravindra Yenigalla
Satvika Yenigalla Daughter of Venkata Ravindra Yenigalla
Lakshmi Yarram Sister of Venkata Ravindra Yenigalla
Sarat Yenigalla Father of Anshuman Yenigalla
Vardhaman Yenigalla Brother of Anshuman Yenigalla
Chidambara Rao Father of Pariplavi Mokkapati
Bharathi Devi Mother of Pariplavi Mokkapati
Ravi Mokkapati Brother of Pariplavi Mokkapati
4. Enterprises over which Directors or relatives of directors having Significant Influence (EDS)
For the year ended March 31,
2017 2016
Allatus Techno Legal Solutions Private Limited Allatus Techno Legal Solutions Private Limited
Novus Green Power Private Limited Novus Green Power Private Limited
Zentech Enable Private Limited Zentech Enable Private Limited
Attis Green Energy Solutions Private Limited Attis Green Energy Solutions Private Limited
5. Transactions with Related Parties:
Directors/KMP: (₹ in Lakhs)
Nature of Transaction/ Name of the Related Party For the year ended March 31,
2017 2016
Expenses
Remuneration 96.00 78.00
Finance
Opening balance 59.70 166.03
Transaction during the year 128.15 -106.33
Outstanding 187.85 59.70
202
Relatives of Directors/KMP's:
(₹ in Lakhs)
Nature of Transaction/ Name of the Related Party For the year ended March 31,
2017 2016
Expenses
Remuneration - -
Finance
Opening balance 68.23 123.88
Transaction during the year -49.76 -55.65
Outstanding 18.47 68.23
ANNEXURE – XXXII
STATEMENT OF CONTINGENT LIABILITIES
( ₹ in Lakhs)
Particulars For the year ended March 31,
2017 2016
Bank Guarantee 1,193.46 1,163.65
Letter of credit 214.45 -
Against pending litigations 11.78 11.78
Demand under APVAT Act for which appeal is pending with Appellate
Deputy commissioner, Tirupathi 27.95 -
Claims against the company not acknowledged as debt in respect of
commercial tax 19.15 -
Total 1,466.79 1,175.43
203
REPORT OF THE INDEPENDENT AUDITORS ON STANDALONE FINANCIAL STATEMENTS
To,
The Board of Directors,
Novus Green Energy Systems Limited,
Trimulgherry- Secunderabad.
1. We have examined the attached Restated Standalone Financial Information of M/s. NOVUS GREEN
ENERGY SYSTEMS LIMITED (the “Company”), which comprises of the Restated Summary Statement
of Assets and Liabilities as at September 30, 2018 and at March 31, 2018, 2017,and 2016, the Restated
Summary Statement of Profit and Loss and the Restated Summary Statement of Cash Flows for the six
months ended September 30, 2018 and for each of the years ended March 31, 2018, 2017 and 2016
respectively, and the Summary of Significant Accounting Policies (collectively, the “Restated Financial
Information”) as approved by the Board of Directors of the Company at their meeting, for the purpose of
inclusion in the offer document prepared by the Company in connection with its proposed Initial Public Offer
of equity shares (herein after referred to as the “Issue”), prepared in terms of the requirements of :
i. Section 26 of Part I of Chapter III of the Companies Act, 2013 (“the Act”) read with Rule 4 to 6 of
Companies (Prospectus and Allotment of Securities) Rules, 2014 (“the Rules);
ii. the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
(Amendment)Regulations, 2018 as amended from time to time in pursuance of provisions of
Securities and Exchange Board of India Act, 1992 (“ICDR Regulations”)
2. The preparation of the Restated Financial Information is the responsibility of the Management of the
Company for the purpose set out in paragraph 12 below. The management’s responsibility includes
designing, implementing and maintaining adequate internal control relevant to the preparation and
presentation of the Restated Financial Information. The Management is also responsible for identifying and
ensuring that the Company complies with the Act, the Rules and ICDR Regulations.
Our responsibility is to examine the Restated Financial Information and confirm whether such Restated
Financial Information comply with the requirements of the Act, the Rules and ICDR Regulations.
3. We have examined such Restated Standalone Financial Statements taking into consideration
i. The terms of reference and terms of our engagement agreed upon with you in accordance with our
engagement letter dated October 09, 2018 in connection with the proposed IPO of the Company
and
ii. The Guidance Note (Revised) on Reports in Company Prospectuses issued by the Institute of
Chartered Accountants of India.
4. These Restated Financial Information have been compiled by the Management from the audited Standalone
Financial Statements of the Company as at and for the six months ended September 30, 2018 and as at and
for the year ended March 31, 2018, 2017 and 2016 which have been approved by Board of Directors at their
meetings held on November 29, 2018, August 25, 2018, June 5, 2017 and August, 30, 2016 respectively.
Audit for the financial years ended 2018, 2017 and 2016 was conducted by previous auditors,M/s. M M
Reddy & Co., Chartered Accountants., and accordingly reliance has been placed on the financial information
examined by them for the financial year ended 2018, 2017 and 2016. The financial report included for these
years, i.e., 2018, 2017 and 2016 are based solely on the report submitted by M/s. M M Reddy & Co.,
Chartered Accountants have also confirmed that the restated standalone financial information:
a) have been made after incorporating adjustments for the changes in accounting policies
retrospectively in respective financial years to reflect the same accounting treatment as per changed
accounting policy for all the reporting periods;
204
b) have been made after incorporating adjustments for the material amounts in the respective financial
years to which they relate; and
c) do not contain any extra-ordinary items that need to be disclosed separately [other than those
presented in the Restated Standalone Financial Information] and do not contain any qualification
requiring adjustments.
In terms of Schedule VIII, Clause IX (9) of the SEBI (ICDR) Regulations, 2018 and other provisions relating
to accounts of M/s Novus Green Energy Systems Limited, we NSVR & ASSOCIATES LLP (formerly
known as Nekkanti Srinivasu& Co), Chartered Accountants, have been subjected to the peer review process
of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer
Review Board of the ICAI).
5. In accordance with the requirements of 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, the ICDR Regulations and the
Guidance Note, we report that:
a. The Restated Statement of Assets and Liabilities of the Company as at, September 30, 2018 and as at
March 31, 2018, 2017 and 2016 examined by us, as set out in ANNEXURE I to this examination report
are after making adjustments and regrouping as in our opinion were appropriate and more fully described
in the Statement of Significant Accounting Policies in ANNEXURE IV and the Notes to Accounts in
ANNEXURE V.
b. The Restated Statement of Profit and Loss of the Company for the Six months ended September 30, 2018
and for the years ended on March 31, 2018, 2017 and 2016 examined by us, as set out in ANNEXURE
II to this examination report are after making adjustments and regrouping as in our opinion were
appropriate and more fully described in the Statement of Significant Accounting Policies in
ANNEXURE IV and the Statement of Adjustments to the Standalone Audited Financial Statements in
ANNEXURE VI.
c. The Restated Statement of Cash flow statement of the Company for the Six months ended September 30,
2018 and for the years ended on March 31, 2018, 2017 and 2016 examined by us, as set out in
ANNEXURE III to this examination report are after making adjustments and regrouping as in our
opinion were appropriate and more fully described in the Statement of Significant Accounting Policies
in ANNEXURE IV and the Statement of Adjustments to the Standalone Audited Financial Statements
in ANNEXURE VI.
d. The Restated Standalone Financial Statements have been made after incorporating adjustments for :
i) The changes, if any, in accounting policies retrospectively in respective financial years to reflect the
same accounting treatment as per the changed accounting policy for all the reporting period / years.
ii) Prior Period and other material amounts in the respective financial years to, which they relate,
Which are stated in the Statement of Material Adjustments as set out in ANNEXURE VI
e. Such Financial statements do not require any corrective adjustments on account of:
i) Other remarks/comments in the Companies (Auditor's Report) Order, 2016 ("the Order"), as
amended, issued by the Central Government of India in terms of sub - section (11) of section 143
of the Companies Act, 2013, on Standalone Financial Statements of the Company as at for the Six
months ended September 30, 2018 and for the years ended on March 31, 2018, 2017, 2016.
ii) Extra-ordinary / Exceptional items that need to be disclosed separately in the accounts requiring
adjustments.
6. At the request of the company, we have also examined the following financial information ("Other Financial
Information") proposed to be included in the offer document prepared by the management and approved by
the board of directors of the company and annexed to this report:
205
1 Schedule of Share Capital ANNEXURE – VII
2 Schedule of Reserves & Surplus ANNEXURE – VIII
3 Details of Long Term Borrowings of the Company ANNEXURE – IX
4 Statement of Long term Provisions ANNEXURE – X
5 Details of Short Term Borrowings of the Company ANNEXURE – XI
6 Statement of Trade Payables ANNEXURE – XII
7 Statement of Other Current Liabilities ANNEXURE – XIII
8 Statement of Short Term Provisions ANNEXURE – XIV
9 Statement of Fixed Assets ANNEXURE – XV
10 Statement of Non-Current Investments ANNEXURE – XVI
11 Statement of Deferred Tax ANNEXURE – XVII
12 Statement of Long term Loans & Advances ANNEXURE – XVIII
13 Statement of Current Investments ANNEXURE –XIX
14 Schedule of Inventories ANNEXURE – XX
15 Statement of Trade Receivables ANNEXURE – XXI
16 Statement of Cash and Cash Equivalents ANNEXURE – XXII
17 Statement of Short Term Loans and Advances ANNEXURE – XXIII
18 Statement of Other Current Assets ANNEXURE – XXIV
19 Schedule of Revenue from Operations ANNEXURE – XXV
20 Schedule of Other Income ANNEXURE – XXVI
21 Schedule of cost of materials consumed ANNEXURE – XXVII
22 Schedule of Changes in Inventories ANNEXURE – XXVIII
23 Schedule of Employee Benefit Expenses ANNEXURE – XXIX
24 Schedule of Finance Cost ANNEXURE – XXX
25 Schedule of Other Expenses ANNEXURE – XXXI
26 Statement of Related Party Transactions ANNEXURE – XXXII
27 Statement of Contingent Liability ANNEXURE – XXXIII
28 Capitalization Statement ANNEXURE – XXXIV
29 Summary of Accounting Ratios ANNEXURE – XXXV
30 Statement of Tax Shelter ANNEXURE – XXXVI
7. According to the information and explanation given to us for financial year ended 2018, 2017 and 2016 also
as per the reliance placed on the reports submitted by the previous auditor, M/s. M M Reddy & Co., Chartered
Accountants , in our opinion the Restated Standalone Financial Statements and the other Financial
Information set forth in ANNEXURE VII to XXXVI read with the Significant Accounting Policies and Notes
to the Restated Standalone Financial Statements have been prepared in accordance with section 26 read with
applicable provisions within Rule 4 to 6 of Companies(Prospectus and Allotment of Securities) Rules, 2014
of Companies Act, 2013 and the SEBI Regulations and the Guidance Note on the Reports in Company
Prospectus (Revised) issued by the Institute of Chartered Accountants of India (ICAI).
Consequently the Financial Information has been prepared after making such regroupings and adjustments,
in our opinion, considered appropriate to comply with the same. As a result of these regrouping and
adjustments, the amount reported in the Financial Information may not necessarily be the same as those
appearing in the respective Standalone Audited Financial Statements for the relevant years.
206
8. We have not audited or reviewed any Standalone financial statements of the Company as of any date or for
any period subsequent to September 30, 2018. Accordingly, we express no opinion on the financial position,
results of operations or cash flows of the Company as of any date or for any period subsequent to September
30, 2018.
9. This report should not in any way construed as a reissuance or redrafting of any of the audit report issued
nor should this report be construed as new opinion on any of the financial statement referred to therein.
10. We have no responsibility to update our report for events and circumstances occurring after the date of the
report.
11. This report is intended solely for your information and for inclusion in the Offer document in connection
with the Company's proposed IPO of Equity Shares and is not to be used, referred to or distributed for any
other purpose without our prior written consent.
FOR NSVR & ASSOCIATES LLP,
Chartered Accountants
(Firm Registration N0. 008801S/S200060)
P. Venkat Ratnam
Partner Membership number: 230675
Place: Hyderabad
Date: December 17, 2018
207
As per our report of even date attached
For and on behalf of the Board of Directors
M/s. NSVR and Associates LLP
(Formerly known as Nekkanti Srinivasu & Co.)
Chartered Accountants
Firm Registration: 008801S/S200060
P. Venkat Ratnam
Partner Membership number: 230675
Novus Green Energy Systems Limited
Mr. Anshuman Yenigalla
Managing Director
DIN: 02258999
Mr. Venkata Yenigalla Ravindra
Whole Time Director
DIN: 02259077
Mr. Srikrishna Saibabu Nandiraju
Chief Financial Officer
Mr. Sannapaneni Sudheer
Company Secretary & Compliance
Officer
Place: Hyderabad
Date: December 17, 2018
ANNEXURE I
STATEMENT OF RESTATED ASSETS AND LIABILITIES (₹ in lakhs)
Sr.
No. Particulars
Annex
ure
As at
September,
2018
As at March 31,
2018 2017 2016
EQUITY AND LIABILITIES
1) Shareholders’ Funds
a. Share Capital VII 281.13 281.13 130.05 130.05
b. Reserves & Surplus VIII 1,648.57 1,292.70 646.79 480.98
2) Non-Current Liabilities
a. Long Term Borrowings IX 315.06 288.46 256.14 160.37
b. Long Term Provisions X 83.38 73.26 43.88 26.01
3) Current Liabilities
a. Short Term Borrowings XI 1,652.87 1,358.53 404.03 500.33
b. Trade Payables XII 2,958.93 3,749.48 1,535.17 766.12
d. Other Current Liabilities XIII 98.96 108.38 50.44 97.25
c. Short Term Provisions XIV 243.72 189.83 15.84 9.34
T O T A L 7,282.60 7,341.76 3,082.34 2,170.44
ASSETS
1) Non-Current Assets
a. Fixed Assets XV
(i) Tangible Assets 231.63 201.91 113.93 96.46
(ii) Intangible Assets 7.65 4.96 - -
(iii) Capital work-in-progress 76.10 - - -
(iv) Intangible Assets Under Development 0.32 - - -
Net Block 315.69 206.87 113.93 96.46
b. Non-current Investments XVI - 1.00 1.00
c. Deferred Tax Asset XVII 31.85 24.43 13.01 5.67
d. Long Term Loans & Advances XVIII 358.50 360.52 174.49 21.61
2) Current Assets
a. Current investments XIX 99.09 91.50 - -
b. Inventories XX 1,162.88 336.25 167.88 175.32
c. Trade Receivables XXI 3,612.09 5,036.66 1,689.73 1,221.67
d. Cash and Cash Equivalents XXII 638.86 682.09 535.78 492.71
e. Short Term Loans & Advances XXIII 1,007.89 565.17 381.76 151.11
f. Other Current Assets XXIV 55.75 38.27 4.75 4.90
T O T A L 7,282.60 7,341.76 3,082.34 2,170.44
208
ANNEXURE II
STATEMENT OF PROFIT AND LOSS AS RESTATED (₹ in lakhs)
Sr.
No. Particulars Annexure
As at
September,
2018
As at March 31,
2018 2017 2016
A INCOME
Revenue from Operations XXV 5,636.34 10,596.54 6,309.71 4,133.75
Other Income XXVI 18.56 29.31 19.94 3.87
Total Income (A) 5,654.91 10,625.85 6,329.65 4,137.62
B EXPENDITURE
Cost of materials consumed XXVII 4,346.87 7,741.44 4,851.61 2,956.73
Changes in inventories of Work-In-Progress XXVIII -393.35 -17.56 -49.47 322.81
Employee benefit expenses XXIX 441.35 624.49 449.98 270.17
Finance costs XXX 151.82 207.40 154.62 114.44
Depreciation and amortization expense XV 34.37 38.68 24.96 25.13
Other Expenses XXXI 559.76 1,023.45 646.63 309.84
Total Expenses (B) 5,140.81 9,617.90 6,078.34 3,999.12
C Profit Before Exceptional and
Extraordinary items and tax 514.10 1,007.95 251.30 138.50
Exceptional items - - - -
Profit Before Extraordinary items 514.10 1,007.95 251.30 138.50
Extraordinary items - - - -
Profit Before tax 514.10 1,007.95 251.30 138.50
Tax expense :
(i) Current tax 165.65 285.85 92.84 54.01
(ii) Prior Period Taxes - 3.84 - -
(ii) Deferred tax -7.42 -11.42 -7.34 -13.40
E Total Tax Expense (E) 158.24 278.27 85.50 40.61
F Net Profit / (Loss) after tax 355.86 729.69 165.81 97.89
As per our report of even date attached
For and on behalf of the Board of Directors
M/s. NSVR and Associates LLP
(Formerly known as Nekkanti Srinivasu & Co.)
Chartered Accountants
Firm Registration: 008801S/S200060
P. Venkat Ratnam
Partner Membership number: 230675
Novus Green Energy Systems Limited
Mr. Anshuman Yenigalla
Managing Director
DIN: 02258999
Mr. Venkata Yenigalla Ravindra
Whole Time Director
DIN: 02259077
Mr. Srikrishna Saibabu Nandiraju
Chief Financial Officer
Mr. Sannapaneni Sudheer
Company Secretary & Compliance
Officer
Place: Hyderabad
Date: December 17, 2018
209
ANNEXURE III
STATEMENT OF CASH FLOW AS RESTATED (₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Cash flow from operating activities:
Net Profit before tax as per Profit And Loss account 514.10 1,007.95 251.30 138.50
Adjusted for:
Depreciation & Amortization 34.37 38.68 24.96 25.13
Interest & Financial Charges 151.82 207.40 154.62 114.44
Provision for Gratuity 2.30 11.77 6.56 4.37
Provision for Maintenance 10.04 24.41 15.33 11.28
Interest income 18.27 28.94 18.63 3.77
Receipt of Prior Period Income - - - 9.53
Profit on sale of Assets 0.18 0.22 - -
Provision for Bad Debts 41.37
Operating Profit Before Working Capital Changes 735.54 1,261.05 434.16 299.48
Adjusted for (Increase)/ Decrease in:
Trade Receivables 1,383.20 -3,346.93 -468.06 -425.20
Inventories -826.63 -168.37 7.43 509.25
Short Term Loans and Advances -442.72 -183.41 -230.65 -34.00
Other Current Assets -17.48 -33.51 0.15 -4.90
Long Term Loans and Advances 2.02 -186.03 -152.89 60.28
Adjusted for Increase/ (Decrease) in:
Trade Payables -790.56 2,214.31 769.05 -25.77
Other Current Liabilities 2.32 48.02 -66.07 56.39
Cash Generated From Operations 45.70 -394.88 293.13 435.51
Direct Tax Paid -113.99 -118.66 -90.36 -50.79
Net Cash Flow from/(used in) Operating Activities: (A) -68.29 -513.54 202.77 384.72
Cash Flow From Investing Activities:
Purchase of Fixed Assets -143.66 -132.12 -42.44 -16.55
Purchase of Investments -7.59 -91.50 -
Sale of Fixed Assets 0.65 0.73 - -
Interest income 18.27 28.94 18.63 3.77
Sale of Non-Current Investments - 1.00 - -
Net Cash Flow from/(used in) Investing Activities: (B) -132.33 -192.96 -23.81 -12.78
Cash Flow from Financing Activities:
Proceeds from issue of share capital Inc of Premium - - - 75.23
Increase / (Decrease) in Long Term Borrowing 14.87 105.71 115.04 -85.51
Increase / (Decrease) in Short Term Borrowing 294.34 954.49 -96.30 204.55
Interest & Financial Charges -151.82 -207.40 -154.62 -114.44
Net Cash Flow from/(used in) Financing Activities ( C) 157.39 852.81 -135.89 79.83
Net Increase/(Decrease) in Cash & Cash Equivalents (A+B+C) -43.23 146.31 43.07 451.76
Cash & Cash Equivalents As At Beginning of the Year 682.09 535.78 492.71 40.94
Cash & Cash Equivalents As At End of the Year 638.86 682.09 535.78 492.71
As per our report of even date attached For and on behalf of the Board of Directors
M/s. NSVR and Associates LLP
(Formerly known as Nekkanti Srinivasu & Co.)
Chartered Accountants
Firm Registration: 008801S/S200060
P. Venkat Ratnam
Partner Membership number: 230675
Novus Green Energy Systems Limited
Mr. Anshuman Yenigalla
Managing Director
DIN: 02258999
Mr. Venkata Yenigalla Ravindra
Whole Time Director
DIN: 02259077
Mr. Srikrishna Saibabu Nandiraju
Chief Financial Officer
Mr. Sannapaneni Sudheer
Company Secretary & Compliance
Officer
Place: Hyderabad
Date: December 17, 2018
210
ANNEXURE- IV
SIGNIFICANT ACCOUNTING POLICIES
(A) Disclosure of Accounting Policies :
a) Basis of Preparation of Standalone Financial Statements:
The Restated Summary Standalone Financial Statements of the Company for the Six months ended 30th September
2018 and for each of the years ended 31 March 2018, 31 March 2017, 31 March 2016, have been prepared using the
historical audited general purpose Standalone financial statements of the Company as at September 30, 2018 and
years ended 31st March, 2018, 2017 and 2016 respectively which were prepared under generally accepted accounting
principles in India (Indian GAAP) and originally approved by the Board of Directors of the Company at that relevant
time.
The Company has prepared the Standalone financial statements to comply in all material respects with the accounting
standards specified under section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts)
Rules, 2014, Companies (Accounting Standards) Amendment Rules, 2016 and other accounting principles generally
accepted in India and the Guidance Note (Revised) on Reports in Company Prospectuses issued by the Institute of
Chartered Accountants of India. The Standalone financial statements have been prepared under the historical cost
convention and on an accrual basis. The accounting policies have been consistently applied by the Company and are
consistent with those adopted in the preparation of financial statement for the Six months ended 30 September 2018
and for the financial years ended 31st March, 2018, 2017 and 2016.
These Standalone financial statements have been prepared using presentation and disclosure requirements of the
Schedule III of Companies Act 2013.
b) Use of Estimates
The preparation of Standalone financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities at the date of the standalone financial statements and the result of operations during
the reporting period. Although these estimates are based upon management’s best knowledge of current events and
actions, actual results could differ from these estimates.
(B) Valuation of Inventories:
Inventories are valued in accordance with the requirements of accounting standard (AS-2) on Valuation of Inventories.
Inventory consists of Solar panels, water pumps, batteries etc., which are valued at lower of cost and net realisable
value after providing for obsolescence and other losses, where considered necessary. Cost comprises of the purchase
price including duties and taxes, freight inwards and other expenditure directly attributable to the acquisition.
(C) Cash Flow Statement:
Cash Flow statement is reported using the indirect method, where by profit before tax is adjusted for the effects of
transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and
item of income or expenses associated with investing or financing cash flow. The cash flow from operating, investing
and financing activities of company is segregated based on the available information.
(D) Contingencies and Events Occurring After Balance Sheet Date:
All contingencies and events occurring after the balance sheet date which have a material effect on the financial
position of the company are considered for preparing the Standalone financial statements.
(E) Revenue Recognition:
Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer,
recovery of the consideration is reasonably certain, the associated costs and possible return of goods can be estimated
reliably.
211
Revenue from Supply, Erection and Commissioning of Solar Power Equipment is recognised when the equipment is
installed and the same is approved by the appropriate authority.
Revenue presented is net of VAT, Service Tax and GST, to the extent applicable
Interest income is recognised on a time proportion basis taking into account the amount outstanding the rate
applicable.
(F) Property, Plant &Equipment’s:
Property, Plant & Equipment is stated at cost of acquisition and installation, less accumulated depreciation and
impairment losses, if any.
The cost of Property, Plant & Equipment comprises:
a) Its purchase price, including import duties and non–refundable purchase taxes, after deducting trade
discounts and rebates.
b) Any costs directly attributable to bringing the asset to the location and condition necessary for it to be
capable of operating in the manner intended by management.
Method of Depreciation:
Depreciation on Property, plant and equipment is provided based on useful life of the asset prescribed under the
Schedule II of the Companies Act, 2013. Depreciation is provided on Written down value method during these years.
(G) Foreign Currency Transaction:
Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Monetary
foreign currency assets and liabilities if any, are translated into rupees at the exchange rate prevailing at the balance
sheet date. All exchange differences are dealt with in Profit & Loss Account.
(H) Investments:
Non-current investments are carried at cost less any other-than-temporary diminution in value, determined separately
for each individual investment. The reduction in the carrying amount is reversed when there is a rise in the value of
the investment or if the reasons for the reduction no longer exist. Any reduction in the carrying amount and any
reversal in such reductions are charged or credited to the statement of profit and loss.
Investments, which are readily realizable and intended to be held for not more than one year from the date on which
such investments are made, are classified as current investments. Current investments are stated at lower of cost and
fair market value in the financial statements. Any Profit or loss on disposal of investments and changes in carrying
amount of such investments is disclosed in Profit & Loss account.
(I) Employee Benefits Expense:
i. Short-Term Employee Benefits
The undiscounted amount of short-term employee benefits such as salary, bonus etc., expected to be paid in exchange
for the services rendered by employees are recognised as expense during the period when the employees render the
services.
ii. Post-employment benefits
Defined Contribution Plan
A defined contribution plan is a post-employment benefit plan under which the Company pays specified
contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund.
The Contributions as specified under the law are paid to respective Regional Provident Fund Commissioner. The
Company’s contribution is recognized as an expense in the Statement of Profit and Loss during the period in
which the employee renders the related service.
212
Defined Benefit Plan
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees.
The plan provides for a lump sum payment to vested Employees at retirement, death while in employment or on
termination of employment of an amount equivalent to 15 days’ salary payable for each completed year of
service. Vesting occurs upon completion of five years of service.
Gratuity is recognized on the basis of actuarial valuation carried out using projected unit credit method. The
liability for Gratuity is accrued and provided for as determined by an independent actuarial valuation as per the
requirements of Accounting Standard - 15 on “Employee Benefits”.
(J) Borrowing Cost:
Borrowing costs are interest and other costs incurred by an enterprise in connection with the borrowing of funds.
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as
part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready
for its intended use.
The borrowing cost other than those capitalised as above have been debited to the Statement of Profit and Loss of the
current year.
(K) Segment Reporting:
Segment reporting is not applicable. As the company operates in single segment therefore, Segment reporting was not
made as per AS-17.
(L) Earnings per Share and Diluted Earnings per Share:
Basic earnings/ (loss) per share are calculated by dividing the net profit/ (loss) for the period/ year attributable to
equity shareholders by the weighted average number of equity shares outstanding during the period/ year. The
weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue and
share split.
For the purpose of calculating diluted earnings/(loss) per share, the net profit/(loss) for the period/year attributable to
equity shareholders and the weighted average number of shares outstanding during the period/ year are adjusted for
the effects of all dilutive potential equity shares except where the results will be anti-dilutive. The dilutive potential
equity shares are deemed converted as of the beginning of the period, unless they have been issued at a later date.
In case of Bonus issue, equity shares are issued to existing shareholders for no additional consideration i.e., number
of equity shares outstanding is increased without an increase in resources. The number of equity shares outstanding
before the event is adjusted for the proportionate change in the number of equity shares outstanding as if the event
had occurred at the beginning of the earliest period reported.
(M) Taxes on Income:
Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the
year. Current and deferred tax are recognised in statement of profit and loss.
Current Tax:
Current tax expenses are accounted in the same period to which the revenue and expenses relate. Provision for current
income tax is made for the tax liability payable on taxable income after considering tax allowances, deductions and
exemptions determined in accordance with the applicable tax rates and the prevailing tax laws.
Minimum Alternate Tax credit is recognized as an asset only when and to the extent there is convincing evidence that
the company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet
date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing
evidence to the effect that the Company will pay normal income tax during the specified period.
Deferred tax:
213
Deferred tax is recognized on timing differences; being the difference between taxable incomes and accounting
income that originate in one period and are capable of reversal in one or more subsequent periods. The deferred tax
is accounted for using the tax rates and laws that have been substantively enacted as of the balance sheet date.
(N) Intangible Assets:
Intangible assets are recorded at the consideration paid for acquisition including any duties and other taxes (other than
those subsequently recoverable by the enterprise from the taxing authorities), and any directly attributable expenditure
in making the asset ready for its intended use.
Intangible assets are amortized on a Written down value basis over the best estimate of their useful lives, commencing
from the date the asset is available to the Company for its use.
The Management’s estimates of the useful life of Software is 3 years
(O) Impairment of Assets:
The Company assesses at each reporting date as to whether there is any indication that an asset (tangible and
intangible) may be impaired. An asset is treated as impaired, when the carrying cost of the asset exceeds its recoverable
amount. Recoverable amount is higher of an asset’s or cash generating unit’s net selling price and its value in use.
Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset
and from its disposal at the end of its useful life.
An impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired. The
impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of
recoverable amount.
(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 obligation that is
reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle
the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent
liability. A disclosure for a contingent liability is also 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.
214
ANNEXURE - V
NOTES TO ACCOUNTS
1. Earnings Per Share: (₹ in lakhs)
Particulars As at Sep 30
2018
For the year ended March 31,
2018 2017 2016
I. Net Profit as per Profit & Loss Account available
for Equity Shareholders 355.86 729.69 165.81 97.89
II Weighted Average Number of Equity Shares for
Earnings Per Share Computation
A. For Basic Earnings Per Share of 10 each 28.11 26.01 26.01 22.02
B. For Diluted Earnings Per Share of 10 each: 28.11 26.01 26.01 22.02
Earnings Per Share (Weighted Average)
- Basic 12.66 28.05 6.38 4.45
- Diluted 12.66 28.05 6.38 4.45
(1) Post-Bonus Issue*
II Weighted Average Number of Equity Shares for
Earnings Per Share Computation
A. For Basic Earnings Per Share of ₹ 10 each 70.28 68.18 68.18 64.19
B. For Diluted Earnings Per Share of ₹10 each: 70.28 68.18 68.18 64.19
Earnings Per Share (Weighted Average)
- Basic 5.06 10.70 2.43 1.52
- Diluted 5.06 10.70 2.43 1.52
*The Company has made Bonus Issue on November 29, 2018. The Company has Issued Bonus shares in the ratio of
3:2 (i.e. three equity shares of ₹ 10 each for every two fully paid up equity shares of ₹ 10 each) to shareholders. The
EPS (Post Bonus Issue) is also calculated by considering total number of shares after the bonus issue
2. Deferred Tax:
Deferred Tax liability on account of timing difference between taxable income and accounting income for the year is
accounted for by applying the tax rates and laws enacted or substantially enacted as of the balance sheet date. Deferred
Tax Assets are recognized only to the extent of virtual certainty of its realization or adjustment against deferred tax
liability. The company has accounted for Income Tax in compliance with the accounting standards relating Accounting
for Taxes on Income(AS-22) issued by the Institute of Chartered Accountants of India.
(₹ in lakhs)
Particulars As at Sep 30 For the year ended March 31,
2018 2018 2017 2016
Opening Deferred Tax (Liability)/ Asset 24.43 13.01 5.67 -7.73
WDV as per Companies Act 1956 239.28 206.86 113.93 96.46
WDV as per Income Tax Rules 1962 248.20 202.67 109.24 84.17
Temporary timing difference on Assets 8.93 (4.19) (4.69) (12.28)
Timing Difference on Provision for Gratuity 33.78 31.48 19.71 13.15
Timing Difference on Provision for Maintenance 66.64 56.61 32.20 16.87
Timing differences 109.36 83.89 47.22 17.73
Closing Deferred Tax (Liability)/ Asset 31.84 24.43 13.01 5.67
3. Remuneration to Statutory Auditors: ( ₹ in lakhs)
Particulars As at Sep 30
2018
For the year ended March 31,
2018 2017 2016
Statutory Audit Fees 2.00 4.00 5.00 5.75
For Other Matters 1.00 1.00 - -
Total 3.00 5.00 5.00 5.75
215
4. Foreign Exchange Earnings & Expenditure: (₹ in lakhs)
5. Disclosures as per "AS - 15 Employee benefits" in respect of defined benefit plan
Changes in Present Value of Defined Benefit obligation are as follows:
(₹ in lakhs)
Particulars For Sep 30
2018
For the year ended March 31,
2018 2017 2016
Present Value of Defined benefit obligation at the
beginning of the period
31.48 19.70 13.15 8.78
Interest Cost 1.30 1.53 1.02 0.68
Current Service cost 3.26 5.83 4.51 3.05
Past Service cost 0 8.23 0 0
Benefits paid 0 0 0 0
Actuarial (gains)/losses (2.26) (3.82) 1.03 0.64
Present Value of Defined benefit obligation at the end
of the period
33.79 31.48 19.71 13.15
Amount Recognized in the Balance Sheet (₹ in lakhs)
Particulars For Sep 30
2018 For the year ended March 31,
2018 2017 2016
Present Value of funded obligation 33.79 31.48 19.71 13.15
Amount Recognized in the Profit & Loss Account (₹ in lakhs)
Particulars For Sep 30
2018
For the year ended March 31,
2018 2017 2016
Interest cost 1.30 1.53 1.02 0.68
Current service cost 3.26 5.83 4.51 3.05
Past service cost 0 8.23 0 0
Expected return on plan asset (0) (0) (0) (0)
Actuarial (Gain)/Loss (2.26) (3.82) 1.03 0.64
Amount included in Employee Benefit Expenses 2.30 11.77 6.56 4.37
Summary of Actuarial assumptions
Particulars For Sep 30 2018 For the year ended March 31,
2018 2017 2016
Discount rate 8.25% p.a 7.75 % p.a 7.75 % p.a 7.75 % p.a
Salary growth rate 5.00% p.a 5.00 % p.a 5.00 % p.a 5.00 % p.a
Mortality IALM 2006-08
Ultimate
IALM 2006-08
Ultimate
IALM 2006-08
Ultimate
IALM 2006-08
Ultimate
Withdrawal rate
5% p.a
(18 to 30 Years)
5% p.a
(18 to 30 Years)
5% p.a
(18 to 30 Years)
5% p.a
(18 to 30 Years)
3.00% p.a.
(30 to 44 Years)
3.00% p.a.
(30 to 44 Years)
3.00% p.a.
(30 to 44 Years)
3.00% p.a.
(30 to 44 Years)
2.00% p.a.
(44 to 60 Years)
2.00% p.a.
(44 to 60 Years)
2.00% p.a.
(44 to 60 Years)
2.00% p.a.
(44 to 60 Years)
6. Details of dues to micro, small and medium enterprises as defined under the MSMED Act, 2006:
Particulars As at Sep 30
2018
For the year ended March 31,
2018 2017 2016
Earnings in Foreign Exchange - -
Expenditure in Foreign Exchange 3.40 1.71 - -
Total 3.40 1.71 - -
216
To the extent of information available, the company has no overdue amounts outstanding to any micro, medium and small
scale enterprises.
7. The management has confirmed that adequate provisions have been made for all the known and determined
liabilities and the same is not in excess of the amounts reasonably required.
8. Previous year figures have been re-grouped and reclassified wherever necessary to confirm to the current year
classification.
217
ANNEXURE VI
Notes on Material adjustments and regroupings to Restated Summary Statements (₹ in lakhs)
Particulars As at September As at March 31,
2018 2018 2017 2016
Profit/(Loss) after tax (as per Audited Financial
Statements) 350.81 698.46 180.78 111.16
Restatement Adjustments:
Prior Period Revenue Restated ( Ref Note A) -9.53
Expenses
Provision for Diminution ( Ref Note B) 0.39 -0.39 - -
Provision for Gratuity ( Ref Note C) - 19.71 -6.56 -4.37
Provision for Maintenance ( Ref Note D) 26.61 5.59 -15.33 -11.28
Depreciation Adjustment ( Ref Note E) -12.67 6.25 2.78 2.80
Items to be considered as Fixed assets charged to
Revenue ( Ref Note F) -4.07 4.07
Deferred Tax restated ( Ref Note G) -12.30 -0.18 4.14 9.10
Prior Period Tax ( Ref Note H) 7.10 -3.84
Total Adjustments 5.05 31.22 -14.97 -13.27
Restated profit/(loss) after tax (I+II) 355.86 729.69 165.81 97.89
The above statement should be read with the notes to restated summary statement of assets and liabilities, profits and
losses and cash flows
A) Revenue pertaining to earlier period is restated and corresponding adjustments was made to opening
Reserves as on 01.04.2015
B) As per AS 13, Current Investments are carried in financial statements at lower of cost and fair value. During
the restatement of Accounts, the Company has restated the investments at market value which is lower than
cost
C) In the financial statements for the year ended March 31, 2018, March 31, 2017, March 31, 2016, the company
has not provided provision for Gratuity. For the purpose of restated summary of financial statements,
Provision for Gratuity was made according to the Actuarial Valuation report as per AS 15 for the respective
financial years.
D) In the financial statements for the year ended March 31, 2018, March 31, 2017, March 31, 2016, the company
has not provided provision for Maintenance. For the purpose of restated summary of financial statements,
Provision for Maintenance was made according to the Estimates of Management for the respective financial
years.
E) During the restatement of Accounts, the Company has reversed Depreciation which was provided excess at
earlier periods
F) During the process of restatement of Accounts, Company has capitalized the expenses which was attributed
to the Intangible assets and consequently there is change in calculation of depreciation and assets
G) Deferred tax has been computed on adjustments made as detailed above and has been adjusted in the restated
profit and loss for the years ended, March 31,2018, March 31, 2017, March 31, 2016. The tax rate applicable
to the respective years has been used to calculate the deferred tax impact on adjustments made to the
respective years.
H) The Company received demand notice on 19/05/2017 from the Income Tax Department for Rupees
3,83,880/- for the Financial Year 2013-14, The liability for the same was recognised in the Restated Financial
Statements
218
ANNEXURE VII
RESTATED STATEMENT OF SHARE CAPITAL (₹ in lakhs)
Particulars As at September,
2018
As at March 31,
2018 2017 2016
SHARE CAPITAL
Authorized:
Equity Shares of 10/- each
Number of Shares 35.00 35.00 15.00 15.00
Amount (₹ in lakhs) 350.00 350.00 150.00 150.00
Issued, Subscribed & Fully paid up
Equity Shares of 10/- each
Number of Shares 28.11 28.11 13.00 13.00
Amount (₹ in lakhs) 281.13 281.13 130.05 130.05
Reconciliation of number of shares outstanding at the end of year
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Equity Shares
Equity shares at the beginning of the year
of 10/- each 28.11 13.00 13.00 10.00
Add: Equity shares issued - 2.10 - 3.00
Add: Bonus shares issued - 13.00 - -
Less: Reduction in share capital - - - -
Equity Shares at the end of the year 28.11 28.11 13.00 13.00
Details of Shareholders holding more than 5% of Shares in the company
Particulars As at September,
2018
As at March 31,
2018 2017 2016
Y.Anshuman
Number of Shares held 18,10,808 18,10,808 8,70,000 8,70,000
% of Share Holding 64.41% 64.41% 66.90% 66.90%
Y. V. Ravindra
Number of Shares held 4,14,000 4,14,000 2,07,000 2,07,000
% of Share Holding 14.73% 14.73% 15.92% 15.92%
Mayur Mehta
Number of Shares held - 1,99,900 99,950 99,950
% of Share Holding - 7.11% 7.69% 7.69%
Dr. Pariplavi
Number of Shares held 3,03,042 1,87,042 50,000 50,000
% of Share Holding 10.78% 6.65% 3.84% 3.84%
219
Note:
1) The company has only one class of equity shares having a par value of 10/- per Share. Each holder of equity
share is entitled for one vote per share. In the event of liquidation, the equity shareholders are eligible to
receive the remaining assets of the Company after distribution of all preferential amounts in proportion to
their shareholdings.
2) During the year 2017-18, pursuant to the shareholders' approvals under Section 63 and other applicable
provisions of the Act, the Company has issued bonus shares in the ratio of 1:1 (i.e. one bonus equity share
of 10 each for every five fully paid up equity shares of 10 each), to the shareholders on record date of March
20, 2018, by capitalizing existing reserves to the extent of Rupees ₹ 130.05 lakhs
Annexure-VIII
RESTATED STATEMENT OF RESERVES AND SURPLUS (₹ in lakhs)
Particulars As at September,
2018
As at March 31,
2018 2017 2016
Security Premium
Opening Balance 90.42 174.18 174.18 54.00
Add / (Less): Changes during the year
Add: Premium on share capital - 46.28 - 120.18
Less: Issue of Bonus Shares During The period - 130.05 - -
Total (a) 90.42 90.42 174.18 174.18
Profit & Loss A/c
(i) Opening Balance 1,202.29 472.60 306.79 216.93
Add / (Less): Changes during the year
Add: Excess Depreciation 0.84
Add Prior period Income Recognised in FY 2015-16 9.53
Add: Profit for the year 355.86 729.69 165.81 97.89
Less: Provision for Gratuity for Previous Years 8.78
Less: Provision for Maintenance for Previous Years 5.58
Less: Provision for Prior Period Taxes 3.26
Less: Adj of deferred tax 0.76
Total (b) 1,558.15 1,202.29 472.60 306.79
Total Reserves (a+b) 1,648.57 1,292.70 646.79 480.98
ANNEXURE - IX
RESTATED STATEMENT OF LONG TERM BORROWINGS (₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
(i) Secured Loans
(a) Term Loans
From Banks 88.41 71.18 3.16 4.31
From Others
(ii) Unsecured Loans
(a) From Banks - - 18.66 -
(b) From Others 206.01 121.01 28.01 28.13
(c) Loans from Related Parties 20.65 96.27 206.32 127.93
Total 315.06 288.46 256.14 160.37
220
Details of Vehicle Loans from Banks are as follows:
Name of the
Lender
Date of
Sanction
Amount
Sanctioned
Amount O/s as
at Sep 30 2018
Repayment
Schedule Details of Security
HDFC Bank 27-06-2017 8.95 7.21
Repayable in 60
Monthly instalments
of 18,690/-.
Hypothecation of
Vehicle Purchased
Through Loan
HDFC Bank 03-05-2018 14.63 13.43
Repayable in 60
Monthly instalments
of 30,017/-.
Hypothecation of
Vehicle Purchased
Through Loan
HDFC Bank 03-05-2018 16.00 14.69
Repayable in 60
Monthly instalments
of 32,827/-.
Hypothecation of
Vehicle Purchased
Through Loan
HDFC Bank 19-12-2017 20.14 17.62
Repayable in 60
Monthly instalments
of 41,079/-.
Hypothecation of
Vehicle Purchased
Through Loan
HDFC Bank 06-06-2017 4.50 1.19
Repayable in 35
Monthly instalments
of 15,740/-.
Hypothecation of
Vehicle Purchased
Through Loan
HDFC Bank 09.05.2017 9.06 6.38
Repayable in 60
Monthly instalments
of 22,405/-.
Hypothecation of
Vehicle Purchased
Through Loan
YES Bank 23-03-2018 21.48 19.64
Repayable in 60
Monthly instalments
of 43,915/-.
Hypothecation of
Vehicle Purchased
Through Loan
HDFC Bank 25-06-2018 5.00 4.76
Repayable in 36
Monthly instalments
of 16,077/-.
Hypothecation of
Vehicle Purchased
Through Loan
YES Bank 18-09-2018 23.70 23.70
Repayable in 60
Monthly instalments
of 47,311/-.
Hypothecation of
Vehicle Purchased
Through Loan
Details of Unsecured Loans from Banks
Name of the
Lender
Date of
Sanction
Amount
Sanctioned
Amount O/s
as at Sep 30
2018
Repayment
Schedule Details of Security
Standard
Chartered Bank 01-01-2017 50.00 2.81
Repayable in 24
Monthly
instalments of
2,42,671 NA
ANNEXURE - X
RESTATED STATEMENT OF LONG TERM PROVISIONS ( ₹ in lakhs)
Particulars As at September,
2018
As at March 31,
2018 2017 2016
Provision for Gratuity 32.16 30.39 19.06 12.74
Provision for Maintenance 51.21 42.87 24.82 13.27
Total 83.38 73.26 43.88 26.01
ANNEXURE - XI
RESTATED STATEMENT OF SHORT TERM BORROWINGS (₹ in lakhs)
Particulars As at September,
2018
As at March 31,
2018 2017 2016
221
Loans Repayable on Demand
From Banks 1,377.39 1,171.35 404.03 500.33
From Other Parties 275.47 187.18 - -
Loans & Advances from Related Parties - - - -
Total 1,652.87 1,358.53 404.03 500.33
Details of Short Term Borrowings
Name of the
Lender
Date of
Sanction
Amount
Sanctioned
Amount O/s
as at Sep
30,2018
Repayment Schedule Details of Security
Union Bank Of
India 07.10.2017 1,400.00 1,377.39 On Demand
Exclusive Charge on
Stocks, Work in Progress,
Book Debts & Other
Current Assets of the
Company.
National Small
Industries
Corporation 03.03.2018 300.00 275.47
Taken under raw
material assistance
scheme need to be
repaid within 90 days
of date of payment to
creditors by NSIC Bank Guarantee
ANNEXURE - XII
RESTATED STATEMENT OF TRADE PAYABLES (₹ in lakhs))
Particulars As at September,
2018
As at March 31,
2018 2017 2016
Dues to Micro, Small and Medium Enterprises
Dues to Others 2,958.93 3,749.48 1,535.17 766.12
Total 2,958.93 3,749.48 1,535.17 766.12
ANNEXURE - XIII
RESTATED STATEMENT OF OTHER CURRENT LIABILITIES (₹ in lakhs)
Particulars As at September,
2018
As at March 31,
2018 2017 2016
Current maturities of long-term debt 23.02 34.76 28.68 9.41
Advances from customers - - - 54.80
Other liabilities 75.94 73.62 21.77 33.03
Total 98.96 108.38 50.44 97.25
ANNEXURE - XIV
RESTATED STATEMENT OF SHORT TERM PROVISIONS (₹ in lakhs)
Particulars As at September,
2018
As at March 31,
2018 2017 2016
Provision for Income tax 226.66 175.00 7.81 5.33
Provision for Gratuity 1.62 1.09 0.65 0.41
Provision for Maintenance 15.43 13.74 7.38 3.60
Total 243.72 189.83 15.84 9.34
ANNEXURE - XV
222
DETAILS OF FIXED ASSETS AS RESTATED: (₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Building
Opening Balance 35.25 35.25 35.25 35.25
Addition during the year - - - -
Reduction during the year - - - -
Closing Balance( Gross value) 35.25 35.25 35.25 35.25
Depreciation During the year 0.69 1.37 1.44 1.51
Accumulated Depreciation 6.24 4.87 3.43 1.92
Closing Balance 28.32 29.01 30.38 31.82
Tools & Testing Equipment’s
Opening Balance 21.69 21.41 5.82 0.63
Addition during the year - 0.27 15.60 5.18
Reduction during the year - - - -
Closing Balance( Gross value) 21.69 21.69 21.41 5.82
Depreciation During the year 1.40 3.20 1.99 0.42
Accumulated Depreciation 5.85 2.65 0.66 0.24
Closing Balance 14.44 15.84 18.76 5.15
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Furniture & Fixtures
Opening Balance 16.36 12.62 3.59 2.54
Addition during the year 0.61 3.74 9.03 1.05
Reduction during the year - - - -
Closing Balance( Gross value) 16.97 16.36 12.62 3.59
Depreciation During the year 1.23 2.87 2.19 0.40
Accumulated Depreciation 6.59 3.72 1.53 1.14
Closing Balance 9.15 9.77 8.90 2.06
Vehicles
Opening Balance 181.60 85.73 79.66 79.66
Addition during the year 33.64 95.87 6.07 -
Reduction during the year 4.82 - - -
Closing Balance( Gross value) 210.42 181.60 85.73 79.66
Depreciation During the year 16.61 15.54 9.82 12.35
Accumulated Depreciation 70.83 59.65 49.83 37.48
Closing Balance 122.99 106.42 26.08 29.83
Computers & Peripherals
Opening Balance 39.01 24.10 18.76 15.17
Addition during the year 0.64 16.05 5.34 3.59
Reduction during the year - 1.14 - -
Closing Balance( Gross value) 39.65 39.01 24.10 18.76
Depreciation During the year 4.11 7.37 3.76 4.23
223
Accumulated Depreciation 24.51 17.14 14.00 9.77
Closing Balance 11.04 14.50 6.34 4.76
Office Equipment
Opening Balance 22.62 19.16 15.72 12.44
Addition during the year 24.92 3.45 3.44 3.28
Reduction during the year - - - -
Closing Balance( Gross value) 47.53 22.62 19.16 15.72
Depreciation During the year 4.73 3.35 2.28 2.76
Accumulated Depreciation 16.66 13.31 11.03 8.27
Closing Balance 26.14 5.96 5.85 4.69
224
ANNEXURE - XVI
RESTATED STATEMENT OF NON-CURRENT INVESTMENTS (₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Unquoted Investments (Measured at cost)
Fortis Infra Projects Private Limited (Fully Paid up) (Face Value 10/-
per Share) - - 1.00 1.00
Particulars As at September,
2018
As at March 31,
2018 2017 2016
Two Wheelers Hero Honda
Opening Balance 4.94 3.87 3.87 0.99
Addition during the year - 1.07 - 2.88
Reduction during the year - - - -
Closing Balance( Gross value) 4.94 4.94 3.87 3.87
Depreciation During the year 0.31 0.56 0.66 0.42
Accumulated Depreciation 2.31 1.75 1.09 0.67
Closing Balance 2.31 2.62 2.12 2.77
Mobile Phone
Opening Balance 13.06 7.94 4.98 4.40
Addition during the year 1.33 5.11 2.97 0.58
Reduction during the year - - - -
Closing Balance( Gross value) 14.39 13.06 7.94 4.98
Depreciation During the year 1.19 1.20 0.83 0.58
Accumulated Depreciation 3.77 2.57 1.74 1.17
Closing Balance 9.43 9.29 5.37 3.24
Solar Photovoltoic Power System
Opening Balance 21.84 21.84 21.84 21.84
Addition during the year - - - -
Reduction during the year - - - -
Closing Balance( Gross value) 21.84 21.84 21.84 21.84
Depreciation During the year 0.68 1.64 2.01 2.45
Accumulated Depreciation 13.34 11.70 9.69 7.24
Closing Balance 7.81 8.50 10.14 12.15
Software
Opening Balance 6.55 - - -
Addition during the year 6.10 6.55 - -
Reduction during the year - - - -
Closing Balance( Gross value) 12.65 6.55 - -
Depreciation During the year 3.41 1.59 - -
Accumulated Depreciation 1.59 - - -
Closing Balance 7.65 4.96 - -
Additions during the Year 67.24 132.12 42.44 16.55
Gross Block 425.33 362.91 231.93 189.49
Depreciation for the Year 34.37 38.68 24.96 25.13
Total Accumulated Depreciation 151.68 117.36 93.03 67.90
Net Block 239.28 206.87 113.93 96.46
Tangible Assets 231.63 201.91 113.93 96.46
Intangible Assets 7.65 4.96 - -
225
Total - - 1.00 1.00
ANNEXURE - XVII
RESTATED STATEMENT OF DEFERRED TAX ASSET (₹ in lakhs)
Particulars As at September,
2018
As at March 31,
2018 2017 2016
Opening Balance 24.43 13.01 5.67 -7.74
Add/Less: Changes during the year 7.42 11.42 7.34 13.40
Total 31.85 24.43 13.01 5.67
ANNEXURE - XVIII
RESTATED STATEMENT OF LONG TERM LOANS AND ADVANCES (₹ in lakhs)
Particulars As at September,
2018
As at March 31,
2018 2017 2016
Unsecured-Considered good
EMD, Security& Other Deposits 358.50 360.52 174.49 21.61
Total 358.50 360.52 174.49 21.61
ANNEXURE - XIX
RESTATED STATEMENT OF CURRENT INVESTEMENTS (₹ in lakhs)
Particulars As at September,
2018
As at March 31,
2018 2017 2016
a) Investments in Equity Instruments
b) Investments in Mutual Funds 99.09 91.50 - -
Total 99.09 91.50 - -
ANNEXURE - XX
RESTATED STATEMENT OF INVENTORIES (₹ in lakhs)
Particulars As at September,
2018
As at March 31,
2018 2017 2016
Raw materials 689.00 255.73 104.92 161.82
Work-in-progress 473.88 80.53 62.97 13.50
Total 1,162.88 336.25 167.88 175.32
ANNEXURE - XXI
RESTATED STATEMENT OF TRADE RECEIVABLES (₹ in lakhs)
Particulars As at September,
2018
As at March 31,
2018 2017 2016
Trade Receivables
O/s less than six months
Secured, considered good
Unsecured, considered good 3,391.60 4,729.55 1,662.92 1,185.31
O/s more than six months
Secured, considered good
Unsecured, considered good 261.85 307.10 26.81 36.36
226
Less: Provision for Bad debts -41.37 - - -
T O T A L 3,612.09 5,036.66 1,689.73 1,221.67
ANNEXURE - XXII
RESTATED STATEMENT OF CASH & CASH EQUIVALENTS (₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Cash and Cash Equivalents
Cash in hand 1.66 0.21 9.70 18.41
Balances with Banks 38.90 63.58 100.32 160.91
Cash with Restricted use in Deposit& Other Accounts 598.30 618.30 425.76 313.39
Total 638.86 682.09 535.78 492.71
ANNEXURE XXIII
RESTATED STATEMENT OF SHORT TERM LOANS AND ADVANCES (₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Balances with Revenue Authorities 178.47 132.64 - -
Advances to suppliers 38.45 10.59 176.54 101.28
EMD, Security, Rental & Other Deposits 790.97 421.94 205.21 49.83
Total 1,007.89 565.17 381.76 151.11
ANNEXURE XXIV
RESTATED STATEMENT OF OTHER CURRENT ASSETS (₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Employee Advances 23.81 13.86 4.75 4.90
Others 31.94 24.40 - -
Total 55.75 38.27 4.75 4.90
ANNEXURE XXV
RESTATED STATEMENT OF REVENUE FROM OPERATIONS (₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Revenue From Contracts 5,636.27 10,593.10 6,305.89 4,127.81
Other operating revenue 0.08 3.45 3.82 5.94
Total 5,636.34 10,596.54 6,309.71 4,133.75
227
ANNEXURE XXVI
RESTATED STATEMENT OF OTHER INCOME (₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Interest Received on FD 18.27 28.94 18.63 3.77
Other non-operating income 0.30 0.37 1.31 0.10
Total 18.56 29.31 19.94 3.87
ANNEXURE XXVII
RESTATED STATEMENT OF COST OF MATERIALS CONSUMED (₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Opening Raw materials 255.73 104.92 161.82 348.26
Add : Purchases made during the year 4,780.14 7,892.25 4,794.71 2,770.28
Less : Closing Raw materials 689.00 255.73 104.92 161.82
Cost of Materials Consumed 4,346.87 7,741.44 4,851.61 2,956.73
ANNEXURE XXVIII
RESTATED STATEMENT OF CHANGES IN INVENTORIES (₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Opening stock of inventories
Work- in- progress 80.53 62.97 13.50 336.31
Total 80.53 62.97 13.50 336.31
Closing stock of inventories
Work- in- progress 473.88 80.53 62.97 13.50
Total 473.88 80.53 62.97 13.50
Increase / (Decrease) In Stocks -393.35 -17.56 -49.47 322.81
ANNEXURE XXIX
RESTATED STATEMENT OF EMPLOYEE BENEFITS EXPENSES (₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Salaries, wages and bonus 386.22 524.02 406.43 258.37
Contribution to provident and other funds 23.38 34.01 23.95 8.67
Staff welfare expense 31.74 66.45 19.60 3.13
Total 441.35 624.49 449.98 270.17
228
ANNEXURE XXX
RESTATED STATEMENT OF FINANCE COST (₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Interest expense-Banks 93.29 134.53 91.18 50.13
Interest expense-Others 1.13 0.54 10.07 1.21
Other borrowing costs and charges 57.40 72.32 53.38 63.10
Total 151.82 207.40 154.62 114.44
ANNEXURE
XXXI
RESTATED STATEMENT OF DETAILS OTHER EXPENSES (₹ in lakhs)
Particulars
As at
Septem
ber,
2018
As at March 31,
2018 2017 2016
Power, Fuel& Water 16.11 16.58 7.79 12.46
Work contract expenses 270.49 612.67 337.28 79.92
Rent 20.05 26.06 21.45 15.14
Insurance 14.62 16.01 11.12 12.40
Auditor's Remuneration 3.00 5.00 5.00 5.75
Rates and Taxes - 2.11 8.80 6.58
Freight& Postage Charges 20.92 35.77 35.21 24.96
Travelling& Conveyance 46.89 74.19 49.89 55.10
Legal& Professional charges 9.43 58.64 16.29 10.03
Printing and Stationary 4.39 26.49 3.59 2.82
Repairs and Maintenance 26.56 34.67 49.50 21.74
Telephone& Internet Charges 8.48 23.81 20.01 9.61
Legal, Inspection, Registration & Renewals Charges 8.60 8.86 4.11 8.59
Commission &brokerage 0.16 13.52 - -
Tender fees 27.88 10.57 7.94 1.83
Selling& Distribution Expenses 17.20 23.09 41.66 24.76
Provision for Maintenance 10.04 24.41 15.33 11.28
General(Misc.) Expenses 13.60 11.01 11.64 6.90
Provision for Bad Debts 41.37 - - -
Total 559.76 1,023.45 646.63 309.84
ANNEXURE - XXXII
STATEMENT OF RELATED PARTY TRANSACTION:
1. Managerial Remuneration
(₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Whole time Directors Remuneration
Salaries & allowances 114.00 144.00 96.00 78.00
Other fees - - -
Sitting fees - - -
Non Whole time Directors Remuneration
Sitting fees - - -
Total 114.00 144.00 96.00 78.00
2. Directors/KMP's
229
For six months ended For the year ended March 31,
September 30, 2018 2018 2017 2016
Anshuman Yenigalla Anshuman Yenigalla Anshuman Yenigalla Anshuman Yenigalla
Venkata Yenigalla
Ravindra
Venkata Yenigalla
Ravindra
Venkata Yenigalla
Ravindra
Venkata Yenigalla Ravindra
- Ramchand Kolli Ramchand Kolli Ramchand Kolli
Pariplavi Mokkapati - - -
Sannapaneni Sudheer - - -
3. Relatives of Directors / KMP's
Relatives of Directors Description of Relationship
Purna Chandra Rao Yenigalla Father of Venkata Ravindra Yenigalla
Jhansi Yenigalla Mother of Venkata Ravindra Yenigalla
Rajya Lakshmi Spouse of Venkata Ravindra Yenigalla
Pallavi Yenigalla Daughter of Venkata Ravindra Yenigalla
Satvika Yenigalla Daughter of Venkata Ravindra Yenigalla
Lakshmi Yarram Sister of Venkata Ravindra Yenigalla
Sarat Yenigalla Father of Anshuman Yenigalla
Vardhaman Yenigalla Brother of Anshuman Yenigalla
Chidambara Rao Father of Pariplavi Mokkapati
Bharathi Devi Mother of Pariplavi Mokkapati
Ravi Mokkapati Brother of Pariplavi Mokkapati
4. Enterprises over which Directors or relatives of directors having Significant Influence (EDS)
For six months
ended
For the year ended March 31,
September 30,
2018
2018 2017 2016
- Attis Green Energy
Solutions Private Limited
Allatus Techno Legal
Solutions Private Limited
Allatus Techno Legal
Solutions Private Limited
- Fortis Infra Projects
Private Limited
Fortis Infra Projects
Private Limited
Fortis Infra Projects Private
Limited
- Novus Green Power
Private Limited
Novus Green Power
Private Limited
Novus Green Power Private
Limited
- Zentech Enable Private
Limited
Zentech Enable Private
Limited
Zentech Enable Private
Limited
Attis Green Energy
Solutions Private
Limited
Attis Green Energy
Solutions Private Limited
Attis Green Energy
Solutions Private Limited
Attis Green Energy Solutions
Private Limited
5. Transactions with Related Parties:
Directors/KMP's: (₹ in lakhs)
Nature of Transaction/ Name of the Related
Party
As at
September
30, 2018
For the year ended March 31,
2018 2017 2016
Expenses
Remuneration 114.00 144.00 96.00 78.00
Loans from Directors/KMP's
Opening balance 14.82 187.85 59.70 166.03
Additions/(Repayment) 5.83 (173.03) 128.15 (106.33)
Outstanding 20.65 14.82 187.85 59.70
230
Relatives of Directors/KMP's:
ANNEXURE – XXXIII
STATEMENT OF CONTINGENT LIABILITIES
Particulars
As at
September
30, 2018
For the year ended March 31,
2018 2017 2016
Bank Guarantee 1,944.60 2,266.22 1,193.46 1,163.65
Letter of credit 238.06 249.98 214.45 -
Against pending litigations 11.78 11.78 11.78 11.78
Demand under APVAT Act for which appeal is
pending with Appellate Deputy commissioner,
Tirupathi - - 27.95 -
Claims against the company not acknowledged as
debt in respect of commercial tax 32.33 32.33 19.15 -
Total 2,226.77 2,560.31 1,466.79 1,175.43
ANNEXURE XXXIV
STATEMENT OF CAPITALISATION (₹ in lakhs)
Particulars Pre Issue Post Issue
Borrowings Short term debt (A) 1,652.87 [●]
Long Term Debt (B) 338.08 [●]
Total debts (C=A+B) 1,990.95 [●]
Shareholders’ funds Equity share capital (D) 281.13 [●]
Reserve and surplus - as restated (E ) 1,648.57 [●]
Total shareholders’ funds (F=D+E) 1,929.69 [●]
Long term debt / shareholders’ funds 0.18 [●]
Total debt / shareholders’ funds 1.03 [●]
Annexure – XXXV
STATEMENT OF ACCOUNTING RATIOS AS RESTATED ( ₹ in lakhs)
Particulars
As at
September,
2018
As at March 31,
2018 2017 2016
Restated PAT as per P & L Account 355.86 729.69 165.81 97.89
Actual Number of Equity Shares outstanding at
the end of the year 28.11 28.11 13.00 13.00
Weighted Average number of Equity Shares at the
end of the year (Before Bonus Issue) 28.11 26.02 26.01 22.02
Weighted Average number of Equity Shares at the
end of the year(Post Bonus Issue)* 70.28 68.18 68.18 64.19
Nature of Transaction/ Name of the Related Party
As at
September
30, 2018
For the year ended March 31,
2018 2017 2016
Expenses
Remuneration
Loans taken from Relatives of Directors/ KMP's
Opening balance 81.46 18.47 68.23 123.88
Additions/(Repayment) (81.46) 62.99 (49.76) (55.65)
Outstanding Nil 81.46 18.47 68.23
231
Share Capital 281.13 281.13 130.05 130.05
Reserves & Surplus 1,648.57 1,292.70 646.79 480.98
Net Worth 1,929.69 1,573.83 776.83 611.02
Earnings Per Share:
Basic & Diluted (Before Bonus Issue) 12.66 28.05 6.38 4.45
Basic & Diluted (Post Bonus Issue) 5.06 10.70 2.43 1.52
Return on Net Worth (%) 18.44% 46.36% 21.34% 16.02%
Net Asset Value Per Share () - based on actual no.
of equity shares at the end of the year 68.64 55.98 59.74 46.99
Nominal Value per Equity share () 10.00 10.00 10.00 10.00
*The Company has made Bonus Issue on November 29, 2018. The Company has Issued Bonus shares in the
ratio of 3:2 (i.e. three equity shares of Rs.10 each for every two fully paid up equity shares of Rs.10 each) to
shareholders. The EPS (Post Bonus Issue) is also calculated by considering total number of shares after the bonus
issue
Statement of Tax Shelter ANNEXURE – XXXVI
(₹ in lakhs)
Particulars
As at
September
30, 2018
As at March 31,
2018 2017 2016
NORMAL TAX
Income Tax Rate (%) 29.12 28.84 31.96 33.06
Restated Income before tax as per books (A) 514.10 1,007.95 251.30 138.50
Total Incomes considered separately (B) - - - -
Restated Profit other than income considered separately
(C)=(A-B) 514.10 1,007.95 251.30 138.50
Tax Adjustment
Permanent Differences
Section 40 Disallowance - 2.68 - -
Section 37 Disallowance 41.29 6.99 - -
Total Permanent Differences (D) 41.29 9.68 - -
Timing Differences
Book Depreciation (a) 34.37 38.68 24.96 25.13
Income Tax Depreciation allowance (b) 21.26 30.71 17.37 14.02
Section 43B Disallowance ( c) 12.34 36.18 21.89 15.65
Total Timing Differences (E=a-b+c) 25.45 44.14 29.48 26.77
Income From Business or Profession (F)=(C+D+E) 580.84 1,061.77 280.79 165.26
Taxable income from other sources (G) - - - -
Taxable Income/(Loss) (F+G) 580.84 1,061.77 280.79 165.26
Unabsorbed Losses - - - -
Gross Total Income 580.84 1,061.77 280.79 165.26
Deductions under chapter VI-A 15.67 16.71 - -
Taxable Income 567.20 1,045.06 280.79 165.26
Tax on Total Income 164.58 301.40 89.74 54.64
MINIMUM ALTERNATE TAX
Minimum Alternate Tax Rate (%) 21.55 21.34 20.39 20.39
Restated Income before tax as per books (A) 514.10 1,007.95 251.30 138.50
Book Profit u/s 115JB 514.10 1,007.95 251.30 138.50
MAT on Book Profit 110.78 215.11 51.24 28.24
Tax paid as per normal or MAT Normal Normal Normal Normal
Total Tax as per Return 165.65 300.33 89.74 57.79
Difference (1.07) 1.06 (0.00) (3.15)
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OTHER FINANCIAL INFORMATION
The Standalone Financial Statements do not constitute, (i) a part of this Draft Red Herring 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 to purchase or sell any securities under the Companies Act,
2013, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2018,
or any other applicable law in India or elsewhere in the world. The Standalone Financial Statements should not be
considered as part of information that any investor should consider to subscribe for or purchase any securities of our
Company or any of its subsidiaries, or any entity in which it or its shareholders have significant influence (collectively,
the “Group”) and should not be relied upon or used as a basis for any investment decision. None of the Group or any
of its advisors, nor any 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 Standalone Financial Statements, or the opinions expressed therein.
For details of accounting ratios, see “Financial Statements – Annexure XXXV Restated Standalone Statement of
Accounting Ratio” on page no177 of this Draft Red Herring Prospectus.
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CAPITALISATION STATEMENT
STATEMENT OF CAPITALISATION
(₹ in Lakhs)
Particulars Pre Issue Post Issue
Borrowings
Short term debt (A) 1,652.87 [●]
Long Term Debt (B) 338.08 [●]
Total debts (C=A+B) 1,990.95 [●]
Shareholders’ funds
Equity share capital (D) 281.13 [●]
Reserve and surplus - as restated (E ) 1,648.57 [●]
Total shareholders’ funds (F=D+E) 1,929.69 [●]
Long term debt / shareholders’ funds 0.18 [●]
Total debt / shareholders’ funds 1.03 [●]
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MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
The following discussion and analysis of our financial condition and results of operations are based on, and should
be read in conjunction with the Restated Financial Statements, the notes and significant accounting policies thereto
and the reports thereon in “Financial Statements” beginning on page 177 which have been prepared in accordance
with Accounting Standard, the Companies Act and the SEBI ICDR Regulations.
Our financial statements, as included in this Draft Red Herring Prospectus, for the six months ended September 30,
2018, were prepared in accordance with Accounting Standard and restated in accordance with the requirements of
SEBI ICDR Regulations, and for the financial years ended March 31, 2018, 2017 and 2016 were prepared in
accordance with Indian GAAP. We have not attempted to quantify the impact of IFRS or U.S. GAAP on the financial
information included in this Draft Red Herring Prospectus, nor do we provide a reconciliation of our financial
statements to those under U.S. GAAP or IFRS. Accordingly, the degree to which the financial information included
in this Draft Red Herring Prospectus will provide meaningful information depends on the reader’s level of familiarity
with the Companies Act, Accounting Standard and the SEBI ICDR Regulations. Any reliance on the financial
disclosure in this Draft Red Herring Prospectus, by persons not familiar with Indian accounting practices, should
accordingly be limited
Our fiscal year ends on March 31 of each year. Accordingly, unless otherwise stated, all references to a particular
Fiscal are to the 12-month period ended March 31 of that year.
This discussion also contains certain forward-looking statements and reflects our management’s current views with
respect to future events and our financial performance. Actual results may differ materially from those anticipated in
these forward looking statements. By their nature, certain market risk disclosures are only estimates and could be
materially different from what actually occurs in the future. As a result, actual future gains or losses could materially
differ from those that have been estimated. Given these uncertainties, prospective investors should not place undue
reliance on such forward-looking statements. Factors that could cause or contribute to such differences include, but
are not limited to, those discussed in the sections titled “Risk Factors”, “Forward Looking Statements” and “Our
Business” on pages 22, 16 and 115, respectively.
Overview
We are founded in 2009 at Secunderabad, Telengana as a Private company, limited by Shares under the provisions of
the Companies Act, 1956. For further details, see “History and Certain Corporate Matters” beginning on page 152
of this Draft Red Herring Prospectus. We are primarily engaged in EPC contracts of setting-up of Solar Photovoltaic
Water pumps, which include supplying, installing, and commissioning of the pump system. We have been ranked at
8th Position among EPC contractors across the country according to the report published by leading external
publishing agency – Bridge to India.
We are promoted by Mr. Anshuman Yenigalla and Mr. Venkata Ravindra Yenigalla and each of our promoters are
well experienced in Solar Industry. In solar pumping system, we have installed more than 6000 numbers of pumps up
to 30th November 2018 with wide range of systems of DC Solar Pump and AC Solar Pump. In addition to the above
Novus Green also started providing consultancy services for acquiring projects and tender bidding after identifying
competent client on tender-to-tender basis.
We are also engaged in the installation of integrated Solar Power Projects/ Systems as an EPC contractor and installed
15MWp of solar power plants and more than 6000 solar water pumping systems up to 30th November 2018. We are
one of the prime player in the setting-up captive integrated solar power systems.
In the year 2009, our company has Installed First Solar System of 2kwp followed by first 100kwp captive solar power
plant in 2012. In the year of 2013, we have set up India’s first biggest captive 1.1 MWp solar power plant in Raipur ,
which was inaugurated by Mr. Farooq Abdullah, Hon’ble Union Minister for New and Renewable Energy and Mr.
Raman Singh, Hon’ble Chief minister of Chhattisgarh.
We have got registered with MNRE Channel Partner to get direct subsidy for Solar Water Pump System in all over
India. Novus Green is a System Integrator of Solar PV Water Pumping System. We have ISO and IEC certifications
and Valid Test Report as per MNRE specifications and empanelled under NABARD programme for implementing
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solar water pumping systems. Novus Green has got certifications of ISO 9001:2015 and ISO 14001:2015 for EPC for
Solar Power Plants and Solar Water Pumping Systems.
The chart below illustrates the growth of our portfolio from our first project to the date of this Draft Red Herring
Prospectus:
For a description of our activities, operational solar power projects, under construction solar power projects, and
committed solar power projects, equipment suppliers, competition, management, etc., see “Business”, “Industry
Overview” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
beginning on page 115, 87 and 234 respectively.
We are since its inception starts operates as an EPC contractor and serving in the field of supply, installation and
commissioning of water pump system and SPV power plants.
We have categorized our EPC service in four main elements:
Project Planning : Scope, Schedule & Resources.
Project Development : Site Survey, Systems Design
Project Implementation : Design, Build, Test & Training
Project Operation & Maintenance: 24 * 7 Support
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The process flow of each Vertical EPC, Solar Water Pump as well as integrated Solar Power Projects/ Systems is:
Business Development Department
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Designing Department
Purchase Department
Installation and Commissioning Department
Billing Department
Service Department
Process for operating Solar water pump:
Solar water pump or a solar photovoltaic water pumping system is a system powered by solar energy. It is just like
the traditional electric pump with the only exception that it uses solar energy instead of non-renewable energy for its
operation.
It consists of one or more solar panels, also known as solar photovoltaic modules, a motor pump set, electronic controls
or a controller device to operate the pump, the required hardware.
When sunlight falls on the solar panels it produces direct current (DC) which then feeds the motor to pump out the
water. However, in the case where the motor requires an alternating current (AC), the DC produced by solar panels
is converted to AC using an inverter
Following Diagram gives a clear view on the process for operating Solar water pump
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Significant factors affecting our results of operations and financial condition
We believe that the following factors significantly affect our results of operations and financial condition during the
periods under review and may continue to affect our results of operations and financial condition in the future as
well:
Price of Solar Panel in Global Market
Prices of solar PV panels have fallen considerably in the last decade, which has given boost to commercialisation of
solar technology. Due to reduced price, solar technology has becomes more competitive.
Government Policies and Initiatives
The development of renewable power sector depends in part on government policies and regulatory frameworks that
support the development of the solar energy industry. Government support for solar energy has been strong in recent
years, and the GoI has periodically reaffirmed its desire to sustain and strengthen that support. The GoI’s voluntary
commitment at the United Nations Framework Convention on Climate Change to reduce India’s carbon intensity by
20% to 25% below its 2005 level by 2020, and the introduction of the National Action Plan on Climate Change
Capacity Installed in KWp
Until 2016 2016-17 2017-18
Pumps Installed (No's)
Until 2016 2016-17 2017-18
3456
7605 2323
2561
4347
948
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(“NAPCC”), also have helped drive renewable energy demand. Along with the GoI’s initiative of increasing
renewable purchase obligation (“RPO”) targets, this has resulted in greater support for solar energy in India.
However, such policies or incentives may be modified or amended and the governmental support for solar energy
development may not continue or may be reduced. In addition, policy incentives may be available only for a limited
period, and there can be no assurance that the validity of such schemes will be extended.
Our business is significantly dependent on procuring contracts awarded by Government agencies. One of the major
business activity of the company is executing EPC contracts of setting-up of Solar Photovoltaic Water pumps, which
include supplying, installing, and commissioning of the pump system. Presently, this s the focus area of the
Government and is subsidised and hence, it is highly dependent upon Government budget and budgetary support. Any
adverse developments concerning the Government programs or adverse change in the policies adopted by the
Government, regarding award of its projects could adversely affect our business. There can be no assurance that the
GoI or the state governments will continue to place emphasis on this sector. Any adverse change in Government
policies that results in a reduction in capital investment/subsidy in the solar sector could affect our business adversely.
If there is any change in the Government or in budgetary allocations for industry development or a downturn in
available work in the EPC projects resulting from any change in Governmental policies, practices or priorities that
results in slowdown or complete stoppage of solar EPC projects, our business, financial performance, results of
operations and prospects may be adversely affected.
Well-established EPC player for setting up Solar Power Plants
We provide turnkey EPC solar energy solutions from concept to commissioning for solar PV and also operation and
maintenance services as and when required for the project. With our in-house engineering and design teams, we strive
to leverage our technical experience and industry know-how to develop the most cost-effective and energy efficient
PV solar plants in the industry. We provide complete end-to-end solutions including complete Engineering,
Procurement and Construction (EPC) services for our customers seeking to build solar power plants and solar water
pumping systems in India. We assist customers seeking to use solar power right from the planning stage through the
entire operational life of the project.
Subcontractor dependency
We have more than one hundred well trained technicians, subcontractors in our well established operational areas to
execute our EPC projects and Solar Pumps. We may not be able to secure the required number of sub-contractors
required for the timely execution of our projects for a variety of reasons including possibility of disputes with sub-
contractors. In addition, as we expand geographically, we will be required to use sub-contractors, technicians with
whom we are not familiar, which may increase the risk of cost and failures to meet scheduled completion dates. If our
sub-contractors do not complete their obligations in a timely and satisfactory manner, or if we are unable to set off
payments made towards statutory requirements against dues to our sub-contractors and in case of non-availability,
our costs could increase and our reputation, business, cash flows and results of operations could be adversely affected.
Working capital requirements and access to capital resources
Our business requires significant amounts of working capital primarily for our material purchases for project before
we receive payments from our customers. Our working capital requirements will increase in the event we undertake
a larger number of orders as we grow our business. Our working capital requirements can also vary significantly
across our business lines, with businesses such as government contracts and our EPC business typically having slower
payment from customers, and therefore higher working capital requirements. If we grow our EPC business relative to
our other business lines, we expect that our working capital ratios would be adversely affected.
Relationship with Existing Customers
We believe that our quality of work and timely execution has allowed us to strengthen our relationships with existing
clients and to secure projects from new clients. For example, we have secured repeat orders from some of our clients,
namely CREDA, OREDA, Rajasthan Horticulture Development Society, since the date of our first contract with each
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of them. If we are not able to properly execute the orders on time then our relationship with the existing customers
may get adversely affected and we may be debarred from bidding in the future and that may adversely impact our
business.
Competition
We face significant competition for the award of projects from a large number of existing and new solar players.
Further, some of our competitors are larger than us, have stronger financial resources or a more experienced
management team, or have stronger engineering capabilities in executing technically complex projects. Our
competition depends on various factors, such as the type of project, total contract value, potential margins, complexity,
location of the project and risks relating to revenue generation. While service quality, technical ability, performance
record, experience, health and safety records and the availability of skilled personnel are key factors in client decisions
among competitors, price often is the deciding factor in most tender awards. Competition from other companies may
impact our ability to successfully bid for projects at price levels which would generate desired returns for us.
Safeguard Duty
The government of India (GOI) has levied safeguard duty of 25 percent on solar cells imports from China and
Malaysia to promote domestic industry as well as curtail dumping by those countries. The Ministry of Finance
(Department of Revenue) levied the duty based on the final recommendations proposed by the Directorate General of
Trade Remedies (DGTR) vide Notification dated 30th day July 2018. The safeguard duty of 25 percent on solar
modules and cells will be in force from July 30, 2018. This duty to some extent may impact the project cost as the
solar cells are one of the main ingredient in the panels and most of the panel manufacturers dependent on the import
of the said cells. And this may affect our business, results of operations and financial condition.
Macroeconomic conditions
Our results of operations may be materially affected by conditions in the global capital markets and the economy
generally in India and elsewhere around the world. Weak economic conditions in the markets or a reduction in
consumer spending, as well as investment in capital goods could affect our profitability, including increased costs.
Furthermore, lack of availability of affordable credit in financial markets may cause our suppliers to experience
serious cash flow problems and, as a result, may delay delivery of our orders.
Results of Operations
The following table sets out selected data for the six months ended September 30, 2018 and for Fiscals 2018, 2017
and 2016, together with the percentage each line item represents of our total income for the periods presented.
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Particulars
As at
September,
2018
As on March 31st ,
% to
Total
Income
2018
% to
Total
Income
2017
% to
Total
Income
2016
% to
Total
Income
INCOME
Revenue from Operations 5,636.34 99.67% 10,596.54 99.72% 6,309.71 99.68% 4,133.75 99.91%
Other Income 18.56 0.33% 29.31 0.28% 19.94 0.32% 3.87 0.09%
Total Income (A) 5,654.91 100% 10,625.85 100% 6,329.65 100% 4,137.62 100%
EXPENDITURE
Cost of materials consumed 4,346.87 76.87% 7,741.44 72.85% 4,851.61 76.65% 2,956.73 71.46%
Changes in inventories of Work-In-Progress -393.35 -6.96% -17.56 -0.17% -49.47 -0.78% 322.81 7.80%
Employee benefit expenses 441.35 7.80% 624.49 5.88% 449.98 7.11% 270.17 6.53%
Finance costs 151.82 2.68% 207.40 1.95% 154.62 2.44% 114.44 2.77%
Depreciation and amortization expense 34.37 0.61% 38.68 0.36% 24.96 0.39% 25.13 0.61%
Other Expenses 559.76 9.90% 1,023.45 9.63% 646.63 10.22% 309.84 7.49%
Total Expenses (B) 5,140.81 90.91% 9,617.90 90.51% 6,078.34 96.03% 3,999.12 96.65%
Earnings Before Interest, Tax, Depreciation and
Amortization 700.29 12.38% 1,254.03 11.80% 430.88 6.81% 278.07 6.72%
Profit Before Exceptional & Extraordinary items and tax 514.10 9.09% 1,007.95 9.49% 251.30 3.97% 138.50 3.35%
Exceptional items - - - -
Profit Before Extraordinary items 514.10 9.09% 1,007.95 9.49% 251.30 3.97% 138.50 3.35%
Extraordinary items - - - -
Profit Before tax 514.10 9.09% 1,007.95 9.49% 251.30 3.97% 138.50 3.35%
Tax expense :
(i) Current tax 165.65 2.93% 285.85 2.69% 92.84 1.47% 54.01 1.31%
(ii) Prior Period Taxes - - 3.84 0.04% - - - -
(ii) Deferred tax -7.42 -0.13% -11.42 -0.11% -7.34 -0.12% -13.40 -0.32%
Total Tax Expense (E) 158.24 2.80% 278.27 2.62% 85.50 1.35% 40.61 0.98%
Net Profit / (Loss) after tax 355.86 6.29% 729.69 6.87% 165.81 2.62% 97.89 2.37%
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Main Components of our Profit & Loss Account-
Income Our total income comprises of revenue from operations and other income.
Revenue from Operations Our revenue from operations as a percentage of total income was 99.67%, 99.72%, 99.68% and 99.91% respectively
for the September 2018, fiscals 2018, 2017 and 2016.
Other Income Our other income comprises of Interest on FDR and Other non-operating income. Other income as percentage of total
income was 0.33%, 0.28%, 0.32% and 0.09% respectively for the September 2018, fiscals 2018, 2017 and 2016 .
Expenditure Our total expenditure primarily consists of Cost of Material Consumed, Changes in Inventories of WIP, Employee
Benefit Expenses, Finance Cost, Depreciation & Amortization Expenses and Other Expenses.
Cost of Material Consumed Cost of Material Consumed is primarily related to Opening stock and Closing Stock of Work in Progress & Finished
Goods.
Changes in Inventories Changes of Stock in trade indicate the difference between the Opening and Closing Stock of goods.
Employee Benefit Expenses Employee Benefit Expenses include expenses in relation to employees’ remuneration and benefits including salary,
wages & bonuses, Contribution to provident and other funds and staff welfare expenses etc.
Finance Cost Finance Cost majorly consists of Interest expenses and other borrowing costs and charges.
Depreciation and Amortization Expenses Depreciation and Amortization Expenses primarily consist of depreciation on the Building, Tools & Testing
Equipment, Furniture & Fixtures, Vehicles, Property, Computers & Peripherals, Office Equipment, Two Wheelers
Hero Honda, Mobile Phone, Solar Photovoltaic Power System and Software.
Other Expenses Other expenses primarily include Work contract expenses, Travelling& Conveyance, Tender fees, Selling &
Distribution Expenses, Insurance, Repairs and Maintenance, Power, Fuel & Water, Rent, Auditor's Remuneration,
Freight & Postage Charges, Legal& Professional charges, Printing and Stationary, Telephone& Internet Charges,
Commission &brokerage and General (Misc.) Expenses.
Provision for Tax The provision for current taxation is computed in accordance with relevant tax regulation. Deferred tax is
recognized on timing differences between the accounting and the taxable income for the year and quantified using the
tax rates and laws enacted or subsequently enacted as on balance sheet date. Deferred tax assets are recognized and
carried forward to the extent that there is a virtual certainly that sufficient future taxable income will be available
against which such deferred tax assets can be realized in future.
Six months ended September 30, 2018
Income Our company recorded a total revenue of ₹ 5,654.91 lakh for the six months ended September 30, 2018. The EBITDA
and PAT Margin of our company for these six months were 12.42% and 6.29%.
Revenue from Operations Our revenue from operations for the six months ended September 30, 2018 was ₹ 5,636.34 Lakh which is 99.67% of
total Income.
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Other Income
Our other income for the six months ended September 30, 2018 was ₹ 18.56 Lakhs which is 0.33% of total Income.
Expenditure
Total Expenses The total expenditure for stub period 30th September, 2018 are ₹5,140.81 Lakhs which is 90.91% of total Income.
Cost of Material Consumed Cost of Material Consumed for stub period 30th September, 2018 are ₹ 4,346.87 Lakhs which is 76.87% of total
Income.
Employee Benefit Expenses The employee benefit expense comprises of salaries, wages & bonus. Our Company has incurred ₹441.35 Lakhs as
employee benefit expenses during the 30th September, 2018 which is 7.80% of Total Income.
Finance Cost For the six months ended on 30th September, 2018 the finance Cost ₹ 151.82 Lakhs which is 2.68% of total Income.
Depreciation and Amortization Expenses Our depreciation and amortization expense amounted to ₹ 34.37 Lakhs for the six months ended September 30, 2018,
primarily in relation to plant and machinery, building, computers and other assets.
Profit/ (Loss) After Tax As a result of the foregoing, our Profit after tax for the six months ended September 30, 2018 was ₹ 355.86 Lakhs.
Financial Year 2017-18 compared with Financial Year 2016-17
Income
Our total income for Financial Year 2017-18 was ₹ 10,625.85 Lakhs, an increase in 67.87% over the total income of
₹6,329.65 Lakhs in Financial Year 2016-17. The EBITDA and PAT margin of the company in Financial Year 2017-
18 was 11.83% and 6.87% as compared to 6.83% and 2.62% in Financial Year 2016-17. The increase in EBITDA
was 191.03% in Financial Year 2017-18 over Financial Year 2016-17.
Revenue from Operations
Our revenue from operations increased from ₹6,309.71 Lakhs in Financial Year 2016-17 to ₹10,596.54 Lakhs in
Financial Year 2017-18, an increase of 67.94%. Key factors, facilitating the growth are as under:
a. Our Company executed the order for over 1500 number of solar pumps in the Madhya Pradesh
b. Completed installation of a major project of 2MWp Solar Plant for Vignan Group of Institutions.
Other Income Our other income for the Financial Year 2017-18 was ₹ 29.31 Lakhs as compared to ₹ 19.94 Lakhs recorded in
Financial Year 2016-17 representing an increase of 46.99%.
Expenditure
Total Expenses The total expenditure for the Financial Year 2017-18 and the Financial Year 2016-17 are ₹ 9,617.90 Lakhs and
₹6,078.34 Lakhs respectively which is 90.51% and 96.03% of total revenue. The expenses increased by 58.23%,
whereas revenue increased by 67.94%.
Cost of Material Consumed Cost of Material Consumed for the Financial Year 2017-18 and the Financial Year 2016-17 are ₹ 7,741.44 Lakhs and
₹4,851.61 Lakhs respectively which is 72.85% and 76.65% of the total revenue representing an increase of 59.56%
of cost of material against the increase in revenue of 67.94%.
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Change in inventories There was 64.50% increase in inventories from ₹ -49.47 Lakhs in the Financial Year 2016-17 to ₹-17.56 Lakhs in the
Financial Year 2017-18.
Employee Benefit Expenses Our employee benefit expense comprises of salaries, wages & bonus. Our Company has incurred ₹ 624.49 Lakhs as
employee benefit expenses during the Financial Year 2017-18 as compared to ₹ 449.98 Lakhs during the Financial
Year 2016-17. The increase is 38.78 % as compared to previous year. The increase is primarily due to increase in the
number of employees and increase in the compensation paid.
Finance Cost Our finance cost increased by 34.14% in the Financial Year 2017-18 as compared to Financial Year 2016-17 due to
increase in bank borrowings and other loans.
Depreciation and Amortization Expenses There was 54.97% increase in Depreciation from ₹ 38.68 Lakhs in the Financial Year 2017-18 to ₹ 24.96 Lakhs in
the Financial Year 2016-17. The increase is primarily due to additions in Fixed Assets such as Tools & Testing
Equipments, Furniture & Fixtures, Vehicles, Computers & Peripherals, Office Equipments, Two Wheelers, Mobile
Phone and Softwares.
Other Expenses Our Company has incurred₹ 1,023.45 Lakhs during the Financial Year 2017-18 on Other Expenses as compared to ₹
646.63 Lakhs during Financial Year 2016-17. The increase of 58.27% is majorly due to Work contract expenses,
Travelling & Conveyance, Repairs and Maintenance, Tender fees, General Expense etc.
Profit/ (Loss) After Tax For the year the Financial Year 2017-18 the profit stood at ₹ 729.69 Lakhs as against the profit of ₹ 165.81 Lakhs for
the Financial Year 2016-17. The increase in PAT by 340.08 % was majorly due to the factors mentioned above.
Financial Year 2016-17 compared with Financial Year 2015-16
Income Our company recorded a total income of ₹ 6,329.65 Lakhs for Financial Year 2016-17, an increase in 52.98% over
the total income of ₹ 4,137.62 Lakhs in Financial Year 2015-16. The EBITDA and PAT margin of the company in
Financial Year 2016-17 was 6.83% and 2.62% as compared to 6.73% and 2.37% in Financial Year 2015-16. The
increase in EBITDA was 54.95% in Financial Year 2016-17 against Financial Year 2015-16.
Revenue from Operations
Our revenue from operations increased by 52.64% to ₹ 6,309.71 Lakhs in Financial Year 2016-17 from₹ 4,133.75
Lakhs in Financial Year 2015-16, primarily for the reasons set forth below:
a. Geographical Expansion: Till financial year 2015-16, our business area was restricted to Andhra Pradesh
and Telengana. Thereafter, we have gradually expanded in other states, which has helped boost our revenue.
b. Executed over 1000 No’s of solar water pumping systems across the country
c. Executed 500 kWp solar plant for Mulkanoor Co-op Society in Telengana
Expenditure
Total Expenses The total expenditure for the Financial Year 2016-17 and the Financial Year 2015-16 are ₹ 6078.34 Lakhs and ₹
3,999.12 Lakhs respectively. Both revenue and expenditure increased in tandem by approx. 52.00%.
Cost of Material Consumed Cost of Material Consumed for the Financial Year 2016-17 and the Financial Year 2015-16 are ₹ 4851.61 Lakhs and
₹ 2,956.73 Lakhs respectively which is 76.65% and 71.46% of the total revenue representing an increase of 64.09%.
Employee Benefit Expenses The employee benefit expense comprises of salaries, wages & bonus. Our Company has incurred ₹ 449.98 Lakhs as
employee benefit expenses during the Financial Year 2016-17 as compared to₹ 270.17 Lakhs during the Financial
Year 2015-16. The increase is 66.55 % as compared to previous year.
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Finance Cost
Finance costs increased to ₹154.62 Lakhs for Financial Year 2016-17 compared to ₹ 114.44 Lakhs for Financial Year
2015-16 due to increased utilisation of credit facilities, availed from Banks and Others.
Depreciation and Amortization Expenses Depreciation is at the same level, as there is no significant change in fixed assets. Depreciation was₹ 25.13 Lakhs in
the Financial Year 2015-16 and ₹ 24.96 Lakhs in the Financial Year 2016-17.
Profit/ (Loss) After Tax For the year the Financial Year 2016-17 the profit stood at ₹165.81 Lakhs as against the profit of ₹ 97.89 Lakhs for
the Financial Year 2015-16.
Other Key Ratio
The Table below summaries key ratios in our Restated Financial Statements for the period ended June 30, 2018 and
Financial Years ended March 31, 2018, 2017 and 2016
Particular As on September 30,
2018
For the year ended on March 31,
2018 2017 2016
Debt Equity Ratio 1.02 1.05 0.85 1.08
Current Ratio 1.33 1.25 1.39 1.49
Debtors Turnover Ratio 2.45 3.15 4.33 4.10
Inventory Turnover Ratio 15.68 107.90 126.89 16.90
Cash Flow
As on September 30, 2018 and March 31, 2018, 2017 and 2016, we had cash and cash equivalents of ₹ 638.86 Lakhs,
₹682.09 Lakhs, ₹ 535.78 Lakhs and ₹ 492.71 Lakhs, respectively. Our primary requirements for cash are working
capital, ongoing capital expenditure and general corporate needs. Our primary sources of liquidity are cash generated
from operating activities and borrowings from banks and financial institutions.
Set forth below is a table of selected information from our Company’s statements of cash flows for the period
indicated.
(₹ in Lakhs)
Particular As on September
30, 2018
For the year ended on March 31,
2018 2017 2016
Net Cash generated from Operating activities -68.29 -513.54 202.77 384.72
Net Cash generated from Investing activities -132.33 -192.96 -23.81 -12.78
Net Cash generated from Financing activities 157.39 852.81 -135.89 79.83
Net Increased or decreased in cash & cash equivalent -43.23 146.31 43.07 451.77
cash & cash equivalent at the beginning of the period 682.09 535.78 492.71 40.94
cash & cash equivalent at the Closing of the period 638.86 682.09 535.78 492.71
Cash generated from Operating activities
Our net cash used in operating activities for the six months ending September 30, 2018 was ₹ -68.29 Lakhs.
Our net cash generated from operating activities decreased to ₹ -513.54 Lakhs in Fiscal 2018 from ₹ 202.77 Lakhs in
Fiscal 2017. Our cash flows used in operating activities for this period were negatively impacted primarily due to the
following reason:
a. Major portion of revenue came in last quarter of Fiscal 2018 and due to this reason our trade receivables also
increased by 6.00%, which affected our cash flow from operating activities.
Our net cash generated from operating activities decreased to ₹ 202.77 Lakhs in Fiscal 2017 from ₹ 384.72 Lakhs in
Fiscal 2017. Our cash flows used in operating activities for this period was negatively impacted primarily due to
changes in working capital
Cash generated from investing activities
Our net cash used in Investing activities for the six months ending September 30, 2018 was ₹ -132.33 Lakhs.
246
Net cash used in investing activities decreased to ₹ -192.96 Lakhs in Fiscal 2018 from ₹ -23.81 Lakhs in Fiscal 2017
due to purchase of additional fixed assets. Similarly our net cash from Investing activities in Fiscal 2017 was
decreased also due to the acquisition of additional fixed assets.
Cash generated from financing activities
Our net cash used in financing activities for the six months ending September 30, 2018 was ₹ 157.39 Lakh Lakhs.
Our net cash from financing activities in Fiscal 2018 was increased to ₹ 852.81 Lakhs in Fiscal 2018 from ₹ -135.89
Lakhs in Fiscal 2017 due to increase of short term borrowings. Net cash used in financing activities decreased to ₹-
135.89 Lakhs in Fiscal 2017 from₹ 79.83 Lakhs in Fiscal 2016 due to decrease of short term borrowings and increase
of interest charges.
Quantitative and Qualitative Risks
Our activities expose us to a variety of risk.
Maintenance Risk
As per MNRE guidelines every solar installation (Power plant or Pumps) should be provided with 5 years of
operational and maintenance service. We have an ERP database system functionally designed for service support, for
monitoring and for logging of all maintenance data. We shall be responsible for all the required activities for
successful operation and maintenance of the project from the date of commissioning. We must replace the defective
modules immediately. We are responsible for periodic upgrading and improvement and module any degradation may
require us to make additional capital expenditures to upgrade our facilities. The development and implementation of
such technology entails technical and business risks and significant costs. If we are careless or negligent, we may
become liable for damage and in addition, inconsistencies in the quality of maintenance services may affect the system
efficiency of such projects.
Any of the above events may adversely affect our business, results of operations and financial condition.
Performance Guarantee
In our business, we are required to deposit a bank guarantee towards Security cum performance Guarantee fees. A
certain portion of the deposit shall be released after the completion of five years as per Comprehensive Maintenance
Contract (CMC). If we are unable to provide the services as per the requisite terms and conditions, the said deposit
may be forfeited. In case of non-adherence of quality, we can be penalized suitably by the authority, besides, other
measures of suspension, de-registration and blacklisting will be invoked.
We are not the manufacturers of the components used (PV module panel, water pump, ----, etc.) We procure it from
the vendors but we would be responsible for any fault/defect in the material as per the terms of the contract. Though,
we ask for back to back guarantee/warranty from the suppliers, still we are not sure whether the suppliers will fulfil
their commitment in the timely manner.
Any of the above events may adversely affect our business, results of operations and financial condition
Geographical Concentration
Our business is mainly concentrated in the southern and northern States of India. We started our operation in
Hyderabad, Telangana State in 2009 and has gradually expanded in other states including Chhattisgarh, Uttar Pradesh,
Haryana, Chandigarh, Rajasthan, Punjab, Madhya Pradesh and Andhra Pradesh. Since we mainly concentrate in
southern and northern region, our business and results of operations are dependent on the economic growth in these
region and budgetary support from respective Governments.
The level of economic activity is influenced by a number of factors, including political and regulatory policy, funding
received from the central and state governments and climatic conditions such as monsoon and drought. Any slowdown
in the Indian economy may adversely affect our business and results of operations. In addition, any significant social,
political or economic disruption, or natural calamities or civil disruptions in this region, or changes in the policies of
the state or local governments of this region or the Government of India, could disrupt our business operations. It may
247
require us to incur significant expenditure and change our business strategies. The occurrence of, or our inability to
effectively respond to any such event, could have an adverse effect on our business, results of operations and financial
condition.
Fluctuation in the exchange rate between the Indian Rupee and foreign currencies
Fluctuation is foreign exchange rate may have an adverse effect on the landed cost for the imported component
required in execution of EPC contracts awarded to us. Price of PV modules and other components are linked to global
market. The exchange rate between the Rupee and the foreign currencies (USD/Euro/GBP, etc.) has fluctuated
substantially in recent years and may continue to fluctuate substantially in the future, which may have adverse impact
on the profitability of our company.
Inflation
In the recent past, India has experienced fluctuating wholesale price inflation as compared to historical levels due to
the global economic downturn. The annual rate of inflation was at 5.77% (provisional) for the month of June 2018
(over June 2017) as compared to 4.43% (provisional) for the previous month and 0.90% during the corresponding
month of 2017. (Source: Index Numbers of Wholesale Price in India, Review for the month of June 2018, published
on July 16, 2018 by Government of India, Ministry of Commerce and Industry). Continued high rates of inflation
may increase our expenses related to salaries or wages payable to our employees, prices of materials or any other
expenses that we incur. We cannot assure you that we will be able to pass on any additional expenses to our patients
or that our revenue will increase proportionately corresponding to such inflation. Accordingly, high rates of inflation
in India could have an adverse effect on our profitability and, if significant, on our financial condition.
Effect of Goods and Service Tax and Other Government Intervention
GST has been implemented on July 1, 2017. The implementation of GST has led to increases in tax rates on
components used in solar power projects. As a result of such increases, our costs have also increased. As we have a
broad presence in India, the effects of such increase on our projects might vary from state to state. Due to increase of
the tax rate, our cash flows and results of operations have been decreased in the first half of financial year 2017-18.
Further, any future increases or amendments to the GST may affect our overall tax efficiency and we may be liable
to pay additional taxes.
Few of the Government initiatives may also have positive effects simultaneously on the solar power industry, for
instance, governmental boost for“Make in India”is aimed at improving the competitiveness of Indian domestic
manufacturers of solar power cells, panels and modules. However, we cannot guarantee that its negative impact on
the whole solar industry can be offset completely.
248
FINANCIAL INDEBTEDNESS
Set forth below, is a brief summary of our Company’s borrowings as on September 30, 2018 together with a brief
description of certain significant terms of such financing arrangements
(₹ in Lakhs)
Nature of Borrowing Amount Sanctioned
Amount Outstanding as on
September 30, 2018
A. Fund Based Borrowings
(a) Term Loans
Secured 123.46 108.63
(b) Working Capital Facility
Secured 1,700.00 1,652.87
(c) Related Parties 20.65 20.65
B. Non- Fund Based Borrowings
Bank Guarantees 3,100.00 2,182.66
Total 4944.11 3,964.8
Details of Secured Loans
Name of
Lender
Type of
Loan Date of Sanction
Amount
Sanctioned
(₹ in Lakhs)
Amount
Outstanding
as
on September
30, 2018
(₹ in Lakhs) Interest
Repayment
Schedule Security
HDFC
Bank
Vehicle
Loan May 09, 2017 9.06 6.38 8.05%
Repayable in 60
Monthly
instalments of
₹ 22,405/-.
Hypothecation of
Vehicle
Purchased
Through Loan
HDFC
Bank
Vehicle
Loan June 27, 2017 8.95 7.21 9.26%
Repayable in 60
Monthly
instalments of
₹ 18,690/-.
Hypothecation of
Vehicle
Purchased
Through Loan
HDFC
Bank
Vehicle
Loan May 03, 2018 14.63 13.43 8.50%
Repayable in 60
Monthly
instalments of
₹ 30,017/-.
Hypothecation of
Vehicle
Purchased
Through Loan
HDFC
Bank
Vehicle
Loan May 03, 2018 16.00 14.69 8.50%
Repayable in 60
Monthly
instalments of
₹ 32,827/-.
Hypothecation of
Vehicle
Purchased
Through Loan
HDFC
Bank
Vehicle
Loan December 19, 2017 20.14 17.62 8.25%
Repayable in 60
Monthly
instalments of
₹ 41,079/-.
Hypothecation of
Vehicle
Purchased
Through Loan
HDFC
Bank
Vehicle
Loan June 06, 2017 4.50 1.19 14.03%
Repayable in 35
Monthly
instalments of
₹ 15,740/-.
Hypothecation of
Vehicle
Purchased
Through Loan
249
YES
Bank
Vehicle
Loan March 23, 2018 21.48 19.64 8.49%
Repayable in 60
Monthly
instalments of
₹ 43,915/-.
Hypothecation of
Vehicle
Purchased
Through Loan
HDFC
Bank
Vehicle
Loan June 25, 2018 5.00 4.76 8.05%
Repayable in 36
Monthly
instalments of
₹ 16,077/-.
Hypothecation of
Vehicle
Purchased
Through Loan
YES
Bank
Vehicle
Loan September 18, 2018 23.70 23.70 7.60%
Repayable in 60
Monthly
instalments of
₹ 47,311/-.
Hypothecation of
Vehicle
Purchased
Through Loan
Union
Bank Of
India
Cash
Credit October 07, 2017 1,400.00 1,377.39
1 Year
MCLR +
3.15%
i.e.,
11.35% On Demand
Exclusive Charge
on Stocks, Work
in Progress Book
Debts & Other
Current Assets of
the Company&
for Collateral
security refer
Annexure A
National
Small
Industries
Corporati
on
Cash
Credit March 03, 2018 300.00 275.47 10.25%
Taken under
raw material
assistance
scheme need to
be repaid within
90 days of date
of payment to
creditors by
NSIC
Secured by bank
Guarantee
Restrictive covenants for Cash Credit:
1) The loan/credit facilities will be utilised for the purpose for which they are sanctioned and will not be utilised
for any other purpose.
2) Company should not create any charge, Lien or encumbrance over the assets of the company or any part
thereof in favour of any Financial Institution, Bank, Company, Firm or persons except with the permission
of Bank.
3) Company should not sell or transfer any property or collateral security during the currency of the Loan.
4) Company agree that bank will have right to examine the books of accounts of company and to have the
factory site and the securities inspected from time to time by officers of the bank and/or outside
consultants/agencies.
5) Company agree that bank reserves the right to stipulate additional conditions in their absolute discretion, as
considered necessary, upon the occurrence of any event, which may have any adverse impact on the business
of the company
Annexure A for Collateral security
S.no Owner Name Asset Type Location
1
Novus Green Energy
Systems Limited Residential Flat Flat No.3, 2" Floor, Siri Residency, Hyderabad
2 Y.Anshuman Residential Flat Flat No. 204, 2" Floor,Kompally village, Quthubullapur mandal
3 Y.Anshuman open Plot Plot No.63/P, Manasa Hills, Rajendra Nagar circle
250
4 Y. Venkata Ravindra Residential Flat
Plot No.94 in Sy. No.s 157 & 158, Situated at raghava kalyan
estates, Yapral village
5 Y.Vardhaman Residential Flat
No. 304, 3" Floor, Stapathi Complex, Kompally village,
Quthubullapur mandal
6 Y.Vardhaman Residential open Plot Plot No.63/P, Manasa Hills, Rajendra Nagar circle
7 Y.Anshuman &Y.Pariplavi Residential Building Plot No.100, Sy.No.30, Tirumulgery
8 Y.Pallavi Residential open Plot Plot No.64/P, Manasa Hills, Rajendra Nagar circle
9 Y.Pariplavi Residential open Plot plot no.D/153, Salar Jang, Ghatkesar mandal
10 Y.Pariplavi Residential open Plot plot no.D/153, Salar Jang, Ghatkesar mandal
11 Y. Vardhaman Residential open Plot
Plot No.15, Thumukunta village, Shameerpet mandal, Ranga
Reddy Dist
12 Y. Anshuman Residential open Plot
Plot No.16 , Thumukunta village, Shameerpet mandal, Ranga
Reddy Dist
13 Y. Anshuman Residential open Plot Plot No.114, Shamirpet village, Ranga Reddy Dist
14 Y. Vardhaman Residential open Plot Plot No.116, Shamirpet village, Ranga Reddy Dist
15 M Pramod Kumar Residential open Plot plot No.3 , Devarampally village, Mominpet mandal
16 Y. Venkata Ravindra Residential open Plot plot no. E/S-8, Salar Jang, Ghatkesar mandal
17 K Srinivasa Chary Residential open Plot Ghanpur village
251
SECTION VI LEGAL AND OTHER INFORMATION
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS
Except as described below, there are no outstanding litigations, suits, civil or criminal prosecutions, proceedings
before any judicial, quasi- judicial, arbitral or administrative tribunals, including pending proceedings for violation
of statutory regulations or alleging criminal or economic offences or tax liabilities or any other offences (including
past cases where penalties may or may not have been awarded and irrespective of whether they are specified under
paragraph (i) of Part I of Schedule XIII of the Companies Act ) against our Company, Promoter, Group Companies
and Directors as of the date of this Prospectus that would have a material adverse effect on our business. There are
no defaults, non- payments or overdue of statutory liabilities, institutional/ bank dues and dues payable to holders of
debentures or fixed deposits and arrears of cumulative preference shares that would have a material adverse effect
on our business.
Except as disclosed below there are no i) litigation or legal actions, pending or taken, by any Ministry or department
of the Government or a statutory authority against our Promoters during the last five years; (ii) direction issued by
such Ministry or Department or statutory authority upon conclusion of such litigation or legal action; (iii) pending
proceedings initiated against our Company for economic offences; (iv) default and non-payment of statutory dues by
our Company; (v) inquiries, inspections or investigations initiated or conducted under the Companies Act, 2013 or
any previous companies law in the last five years against our Company and Subsidiaries including fines imposed or
compounding of offences done in those five years; or (vi) material frauds committed against our Company in the last
five years.
Except as stated below there are no outstanding Material Dues (as defined below) to creditors; or (ii) outstanding
dues to small scale undertakings and other creditors.
Our Board, in its meeting held on December 14,2018 determined that outstanding dues to creditors in excess of 5%
of consolidated trade payables of our Company as per last audited financial statements shall be considered as
material dues (“Material Dues”). Our Board, in its meeting held on December 14,2018 determined that litigations
involving the Company/promoters/group companies/subsidiaries other than criminal proceedings, statutory or
regulatory actions and taxation matters where a monetary amount of claim by or against the entity or person in any
such pending matter(s) as per last audited financial statements and such pending cases are material from the
perspective of the Company’s business, operations, prospects or reputation, shall be considered as material. Unless
otherwise stated to contrary, the information provided is as of date of this Draft Red Herring Prospectus.
PART 1: LITIGATION RELATING TO OUR COMPANY
A. FILED AGAINST OUR COMPANY
1. Litigation involving Criminal Laws
NIL
2. Litigation involving Civil Laws
1. A civil suit for Recovery of Amount, for the material supplied was filed by one M/s EMMVEE Photovoltaic
Power Private Limited against the Company and the same is pending before the Hon"ble XXX ADDL. City
Civil & Sessions Judge, Bangalore. The suit is for an amount of ₹ 11, 78,363/- (Rupees Eleven Lakhs
Seventy Eight Thousand Three Hundred and Sixty Three). The amount stated supra includes interest
calculated by the Plaintiff @ 18% from one month from the date of supply of material till date of institution
of suit.
2. Principal amount due is ₹ 7,84,000/- (Rupees Seven Lakh Eighty Four Thousand only) and Interest amount
is ₹ 3,94,363/- (Rupees Three Lakh Ninety Four Thousand Three Hundred and Sixty Three only)
252
3. Litigation involving actions by Statutory/ Regulatory Authorities
NIL
4. Litigation involving Tax Liabilities
(i) Direct Tax Liabilities: NIL
(ii) Indirect Taxes Liabilities: NIL
5. Other Pending Litigations
NIL
B. CASES FILED BY OUR COMPANY
1. Litigation Involving Criminal Laws
NIL
2. Litigation Involving Civil l Laws
1. Outstanding material civil litigation – NIL (The Company along with other petitioners has filed a Writ
Petition bearing W.P No. 26704 of 2018, on the file of Hon'ble High Court of Judicature of Andhra
Pradesh and Telangana, against the Government of Andhra Pradesh Rep. by its Principal Secretary,
Rural Water Supply and Sanitation Department and other Respondents, questioning the action of the
Government in allotting the tender to the Respondents therein.
3. Litigation Involving Actions by Statutory/ Regulatory Authorities
NIL
4. Litigation involving Tax Liabilities
(i) Direct Tax Liabilities: NIL
(ii) Indirect Taxes Liabilities: NIL
5. Other Pending Litigations
NIL
PART 2: LITIGATION RELATING TO OUR PROMOTERS
A. FILED AGAINST OUR PROMOTERS
1. Litigation Involving Criminal Laws
NIL
2. Litigation Involving Actions by Statutory/ Regulatory Authorities
NIL
3. Litigation involving Tax Liabilities
253
(i) Direct Tax Liabilities: NIL
(ii) Indirect Taxes Liabilities: NIL
4. Other Pending Litigations
NIL
B. CASES FILED BY OUR PROMOTERS
1. Litigation Involving Criminal Laws
NIL
2. Litigation Involving Civil Laws
Nil
3. Litigation Involving Actions by Statutory/ Regulatory Authorities
NIL
4. Litigation involving Tax Liabilities
(i) Direct Tax Liabilities: NIL
(ii) Indirect Taxes Liabilities: NIL
5. Other Pending Litigations
Mr. Y Anshuman, MD has filed a private complaint u/s 420 r/w 34 IPC against Mr.Malla Ramaiah and Mrs.
Malla Bhichama vide FIR No.174/2018 dated 24/11/2018 with Tirimulghery Police Station, Hyderabad.
PART 3: LITIGATION RELATING TO OUR DIRECTORS (OTHER THAN THE PROMOTERS OF THE
COMPANY)
A. FILED AGAINST OUR DIRECTORS
1. Litigation Involving Criminal Laws
NIL
2. Litigation Involving Actions by Statutory/ Regulatory Authorities
NIL
3. Litigation involving Tax Liabilities
(i) Direct Tax Liabilities: NIL
(ii) Indirect Taxes Liabilities: NIL
254
4. Other Pending Litigations
NIL
B. CASES FILED BY OUR DIRECTORS
1. Litigation Involving Criminal Laws
NIL
2. Litigation Involving Actions by Statutory/ Regulatory Authorities
NIL
3. Litigation involving Tax Liabilities
(i) Direct Tax Liabilities: NIL
(ii) Indirect Taxes Liabilities: NIL
4. Other Pending Litigations
Mr. Y Anshuman, MD has filed a private complaint u/s 420 r/w 34 IPC against Mr.Malla Ramaiah and Mrs.
Malla Bhichama vide FIR No.174/2018 dated 24/11/2018 with Tirimulghery Police Station, Hyderabad.
PART 4: AMOUNTS OWED TO SMALL SCALE UNDERTAKINGS AND OTHER CREDITORS
As on September 30, 2018, the Company has outstanding creditors of Nil.
PART 5: MATERIAL DEVELOPMENTS OCCURING AFTER LAST BALANCE SHEET DATE
Except as disclosed in Chapter titled “Management’s Discussion & Analysis of Financial Conditions & Results of
Operations” beginning on page 234 there have been no material developments that have occurred after the Last
Balance Sheet Date.
255
GOVERNMENT AND OTHER APPROVALS
In view of the licenses / permissions / approvals / no-objections / certifications / registrations, (collectively
“Authorizations”) listed below, our Company can undertake this Issue and our current business activities and to the
best of our knowledge, no further approvals from any government or regulatory authority or any other entity are
required to undertake this Issue or continue our business activities. Unless otherwise stated, these approvals are all
valid as of the date of this Draft Red Herring Prospectus.
It must be distinctly understood that, in granting these approvals, the GOI, the RBI or any other authority does not
take any responsibility for our financial soundness or for the correctness of any of the statements made or opinions
expressed in this behalf. For further details in connection with the regulatory and legal framework within which we
operate, please refer to the chapter titled “Key Industry Regulations and Policies” on page 143 of this Draft Red
Herring Prospectus.
APPROVALS FOR THE ISSUE
1. Our Board has, pursuant to a resolution passed at its meeting held on December 14, 2018 authorized the
Issue.
2. Our shareholders have pursuant to a resolution passed at their meeting dated December 14, 2018 under
Section 62 of the Companies Act, 2013 authorized the Issue.
INCORPORATION AND OTHER DETAILS
1. Certificate of Incorporation bearing registration number 064410 dated July 17, 2009, has been issued to our
Company, in the name of “Novus Green Energy Systems Limited” under the Companies Act, 1956 by the
Assistant Registrar of Companies, Andhra Pradesh, Hyderabad.
2. Consequent upon the conversion of our Company to public limited company and as approved by the
shareholders of our company pursuant to a special resolution dated July 19, 2018, the name of our Company
was changed to “Novus Green Energy Systems Limited” and fresh certificate of incorporation dated August
02, 2018 was issued by the Registrar of Companies, Hyderabad. The Corporate Identification Number of our
Company is U40300TG2009PLC064410.
3. The Company has entered into an agreement dated 10 September 2018 with the Central Depository Services
(India) Limited (CDSL) and the Registrar and Transfer Agent, who in this case depository for the
dematerialization of its shares.
4. Similarly, the Company has also entered into an agreement dated 16 October 2018 with the National
Securities Depository Limited (NSDL) and the Registrar and Transfer Agent, who in this case is depository
for the dematerialization of its shares.
5. The ISIN of the Company is INE01LN01017.
Taxation Related Approvals/ Licenses/ Registrations
The Company has obtained the following approvals from various tax authorities as set out below:
Sl.
No.
Description Authority Registration Number Date of Expiry/ Status
1. Permanent Account
Number (PAN)
The Income Tax
Department,
Government of India
AADCN0778J N/A
256
2. Tax Deduction Account
Number (TAN)
The Income Tax
Department,
Government of India
HYDN04133D N/A
3. Service Tax
Registration Certificate
issued for Consulting
Engineering Services,
Maintenance or repair
services, Construction
Services other than
Residential Complex
including
Commercial/Industrial
Buildings, Civil
Structure, Works
Contract Service
(Form ST -2)
(Telangana)
Central Excise
Department
AADCN0778JSD001 N/A
4. Service Tax
Registration Certificate
issued for Maintenance
or repair services,
Erection,
Commissioning and
Installation Services,
Works Contract
Service.
(From ST-2)
(Raipur)
Central Excise
Department
AADCN0778JSD002 N/A
5. VAT Registration
Certificate
(Telangana)
Government of
Telangana Commercial
Tax Department
36875288864 N/A
6. VAT Registration
Certificate
(Karnataka)
Government of
Karnataka
29071271207 N/A
7. CST Registration
Certificate Under
section 7(1) & 7(2) of
the Central Sales Tax
Act 1956.
Commercial Tax
Department
28875288864 N/A
8. CST Registration
Certificate Under
section 7(1) & 7(2) of
the Central Sales Tax
Act 1956. (Telangana)
Commercial Tax
Department
36875288864(C ) N/A
9. Professional Tax Payer
Enrollment Certificate
Commercial Tax
Department
28104673127 N/A
10. Professional Tax Payer
Registration Certificate
Commercial Tax
Department
28234666484 N/A
11. Goods & Services Tax
Provisional Enrollment
Applied to Government
of Telangana
36AADCN0778J1Z7 N/A
12. Goods & Services Tax
Provisional Enrollment
Applied to Government
of Gujarat
24AADCN0778J1ZC N/A
13. Goods & Services Tax
Provisional Enrollment
Applied to Government
of Himachal Pradesh
02AADCN0778J1ZI N/A
14. Goods & Services Tax
Provisional Enrollment
Applied to Government
of Punjab
03AADCN0778J1ZG N/A
15. Goods & Services Tax
Provisional Enrollment
Applied to Government
of Haryana
06AADCN0778J1ZA N/A
16. Goods & Services Tax
Provisional Enrollment
Applied to Government
of Delhi
07AADCN0778J1Z8 N/A
257
17. Goods & Services Tax
Provisional Enrollment
Applied to Government
of Uttar Pradesh
09AADCN0778J1Z4 N/A
18. Goods & Services Tax
Provisional Enrollment
Applied to Government
of Odisha
21AADCN0778J1ZI N/A
19. Goods & Services Tax
Provisional Enrollment
Applied to Government
of Chhattisgarh
22AADCN0778J1ZG N/A
20. Goods & Services Tax
Provisional Enrollment
Applied to Government
of Karnataka
29AADCN0778J1Z2 N/A
21. Goods & Services Tax
Provisional Enrollment
Applied to Government
of Andhra Pradesh
37AADCN0778J1Z5 N/A
22. Goods & Services Tax
Provisional Enrollment
Applied to Government
of Rajasthan
08AADCN0778J1Z6 N/A
23. Goods & Services Tax
Provisional Enrollment
Applied to Government
of Madhya Pradesh
23AADCN0778J1ZE N/A
Business Related Approval/ Licenses/ Registration
Sl. No. Description Authority Registration / License
Number/ Reference
Number/ Notice No
Date of Issue/
Application
Date of
Expiry
1. Legal Entity
Identifier
Legal Entity
Identifier India
Limited (LEIL)
335800IFHVO7FGGA7X42.
03-Dec-2018
02-Dec-
2019
2. Empanelment
as Channel
Partner for Grid
Connected
Roof Top and
Small Solar
Power Plants
Programme of
Ministry of
New and
Renewable
Energy.
Ministry of New and
Renewable Energy- Grid
Connected Roof Top Division
MNRE/CP/G
CRT/A/522
August 21,
2017
3. License for
Electrical
Installation Work to
carryout in
Telangana
Government of
Telangana
A/8243,2-1373 May 16, 2017
15-05-2019
4. Labour License
Certificate
Government of
Telangana
(Labour
Department)
SER/HYD/ACL/A2/15430/2
016
April 03, 2018
31-12-2018
5. Government
Purchase
Enlistment
Certificate
National Small
Industries
Corporation
Limited
NSIC/GP/NTA/2015/003991
6
October 14,
2017
13-10-2019
6. Store Detail
Certificate
National Small
Industries
Corporation
Limited
NSIC/GP/NTA/2015/001647
3
October 14,
2017
13-10-2019
7. Certificate of
Importer-Exporter
Code
Ministry of
Commerce &
Industry
Office of Jr.
Director
General of
Foreign Trade
0916925749 January 04,
2017
N/A
258
8. MSME Registration
Certificate
Ministry of
Micro, Small
and Medium
Enterprise
TS02D0009994 October 02,
2017
N/A
Empanelment of the
Company for Solar
Pumping Project
Directorate of
Horticulture,
Rajasthan
F ( ) DH/Solar/EOI/2017-
18/444-593
April 17, 2018
N/A
Empanelment of the
Company for
Supply, Installation,
Commissioning of
the Grid Interactive
Rooftop Solar
Power Plant
Odisha
Renewable
Energy
Development
Agency
1798/OREDA April 23, 2016
N.A
9. Empanelment of
the Company for
Supply,
Installation,
Commissioning
of 1 KWP to 500
Kwp Grid
Connected Solar
Rooftop PV
Power Plant
New and
Renewable
Energy
Development
Corporation of
Andhra Pradesh
NREDCAP/OSD/42-156/RT-
SPV1-500KWp/2018-19
June 27, 2018
June 30,
2019
10. System Integrator
for implementing
Off Gird
Decentralized Solar
Photovoltaic
Project
Chhattisgarh
State
Renewable
Energy
Development
Agency
4145/CREDA/RE-II/SI-2018
May 22, 2018
May 21,
2019
11. Registration of the
Company for Solar
Connected Activity
Telangana State
Renewable
Energy
Development
Corporation
Limited
TSREDCO-ES
045/2018/5298
July 10, 2018
July 09,
2020
ESIC and Provident Fund Related Approval/ Licenses/ Registration
Sl.
No.
Description Authority Registration / License
Number
Date of Issue/
Application
Date of
Expiry
1. Implementation of
ESIC Act, 1948 and
registration of
Employees of the
Factories and
Establishment Act
Employee
State Insurance
Corporation
59001530330001099 04-09-2012 N. A
2. Registration
Certificate under
Employee’s
Provident Fund and
Miscellaneous
Provision Act, 1952
Regional
Provident Fund
Commissioner
AP/HY/73410/Enf/C-
II/14/3861
31-08-2012 N. A
259
ISO Related Certificates:
Sl.
No.
Description Authority Certificate Number Date of
Issue
Date of
Expiry
1 ISO 14001:2015
EPC for Solar
Power Plants and
Solar Water
Pumping Systems
United Registrar of
System
Certification
58710/B/0001/UK/En 13-01-2018 24-08-2019
2. ISO 9001:2015 –
EPC for Solar
Power Plants and
Solar Water
Pumping Systems
United Registrar of
System
Certification
58710/A/0001/UK/En 05-01-2018 20-05-2019
Pending Approvals
1. Our Company has applied/ is yet to apply for the following required approvals:
We have applied for the trade mark under the provisions of Trade Mark Act, 1999 and details of the same will be as
follows
Date Of Application Application Number Nature of Application Authority
21/08/2018 3922008 Multiclass Registry, Hyderabad
260
OUR GROUP ENTITIES
In accordance with the Regulation 2(t) of SEBI ICDR Regulations, 2018 and the AS 18, for the purpose of
identification of group companies, our Company has considered companies as covered under the applicable
accounting standards (i.e. Accounting Standard 18 issued by the Institute of Chartered Accountants of India) on a
consolidated basis, or other companies as considered material by our Board.
Accordingly, in terms of the “Material Policy” adopted by our Board in its meeting dated December 14, 2018, for
the purpose of disclosure in offer documents for the Issue, a company shall be considered material and will be
disclosed as a Group Entity if such company forms part of the Promoter Group, and our Company has entered into
one or more transactions with such company in the previous audit fiscal year / period cumulatively exceeding 10% of
the total revenue of our Company for such fiscal.
.
261
OTHER REGULATORY AND STATUTORY DISCLOSURE
Authority for the Issue
The Issue in terms of this Draft Red Herring Prospectus has been authorized pursuant to the resolution passed by the
Board of Directors dated December 14, 2018, and by the shareholders pursuant to the special resolution passed in
Extra-Ordinary General Meeting dated December 14, 2018, under Section 62(1)(c) of the Companies Act, 2013.
Our Company has obtained in-principle approval from the NSE EMERGE for using its name in the Draft Red Herring
Prospectus pursuant to an approval letter dated [●], [●] NSE is the Designated Stock Exchange.
In-principle Listing Approvals
Our Company has obtained in-principle approval from National Stock Exchange of India Limited by way of its letter
dated [●] to use the name of NSE Emerge in this Issue. Document for listing of equity shares on the EMERGE
platform of the NSE. National Stock Exchange of India Limited is the Designated Stock Exchange.
Prohibition by SEBI or other governmental authorities
We confirm that our Company, our Company, our Promoters, natural person in control of Promoter, Promoter Group,
our Directors or the person(s) in control of our Company have not been prohibited from accessing the capital market
for any reason or restrained from buying, selling or dealing in securities, under any order or directions by the SEBI
or any other regulatory or government authorities.
There are no violations of securities laws committed by any of them in the past or pending against them, nor have any
companies with which any of our Company, our Promoter, Directors, persons in control of our Company or any
natural person behind the Promoter are or were associated as a promoter, director or person in control, been debarred
or prohibited from accessing the capital markets under any order or direction passed by the SEBI or any other
authority.
None of our Directors are associated with the securities market and there has been no action taken by the SEBI against
the Directors or any other entity with which our Directors are associated as promoters or director.
Further none of our Promoters or Directors has been declared as fugitive economic offender under Fugitive Economic
Offenders Act ,2018.
Prohibition by RBI
Neither our Company, nor our Promoters, our Directors, relatives (as per Companies Act, 2013) of Promoter or the
person(s) in control of our Company have been identified as a willful defaulter by the RBI or other governmental
authority and there has been no violation of any securities law committed by any of them in the past and no such
proceedings are pending against any of them except as details provided under section titled "Outstanding Litigations
and Material Developments" beginning on page 251 of the Draft Red Herring Prospectus.
Compliance with the Companies (Significant Beneficial Ownership) Rules, 2018
Our Company is in compliance with the Companies (Significant Beneficial Ownership) Rules, 2018 (“SBO Rules”),
to the extent applicable, as on the date of the Draft Red Herring Prospectus.
Under the SBO Rules certain persons who are ‘significant beneficial owners’, are required to intimate their beneficial
holdings to our Company in Form no. BEN-1. However, pursuant to the General Circular no. 8/2018 dated September
10, 2018 issued by the Ministry of Corporate Affairs, Government of India (“MCA”), filing of Form no. BEN – 1
262
under the SBO Rules has been deferred until further notification from MCA. Therefore, compliance by Promoters
and members of the Promoter Group, with the SBO Rules, to the extent applicable to each of them will be completed
only upon further notification by the MCA.
Eligibility for the Issue
Our Company is not ineligible in terms of Regulations 228 and 230(1) of SEBI ICDR Regulations 2018 for this Issue.
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 229(1) of the SEBI (ICDR) Regulations 2018
and other provisions of Chapter IX of the SEBI (ICDR) Regulations 2018, as we are an Issuer whose post issue paid
up capital will not be more than ₹ 10 Crores and we may hence, issue Equity Shares to the public and propose to list
the same on the Small and Medium Enterprise Exchange (in this case being the "SME Platform of NSE EMERGE
(NSE)").
We confirm that:
In accordance with Regulation 260 of the SEBI (ICDR) Regulations 2018, this issue is 100% underwritten and shall
not restrict to minimum subscription level. The Book Running Lead Manager (BRLM) to the Issue shall underwrite
minimum 15% of the Total Issue Size. For further details, pertaining to said underwriting please refer to section titled
"General Information – Underwriting" beginning on page 52 of the Draft Red Herring Prospectus.
In accordance with Regulation 268(1) of the SEBI (ICDR) Regulations 2018, we shall ensure that the total number of
proposed allotees in the Issue shall be greater than or equal to fifty (50), otherwise, the entire application money will
be unblocked forthwith. If such money is not repaid within eight (8) Working Days from the date our Company
becomes liable to repay it, then our Company and every officer in default shall, on and from expiry of eight (8)
Working Days, be liable to repay such application money, with an interest at the rate as prescribed under the
Companies Act, 2013.
We file Draft Red Herring Prospectus with stock exchange. In accordance with Regulation 246(5) the SEBI (ICDR)
Regulations 2018, the copy of Draft Red Herring Prospectus shall also be submitted to SEBI. However SEBI shall
not issue any observations on our Draft Red Herring Prospectus.
In accordance with Regulation 261 of the SEBI (ICDR) Regulations 2018, we hereby confirm that we shall enter into
an agreement with the Book Running Lead Manager and a Market Maker to ensure compulsory Market Making for a
minimum period of three (3) years from the date of listing of Equity Shares on the SME Platform of NSE. For further
details of the arrangement of market making please refer to section titled "General Information – Details of the
Market Making Arrangements for this Issue" beginning on page 52 of the Draft Red Herring Prospectus. The post
issue paid up capital of the Company shall not be more than ₹ 25 Crore. The post issue capital of our company shall
be [●].
We further confirm that we shall be complying with all the other requirements as laid down for such an issue under
Chapter IX of SEBI (ICDR) Regulations 2018, as amended from time to time and subsequent circulars and guidelines
issued by SEBI and the Stock Exchange.
The Issuer should be a company incorporated under the Companies Act 1956
The Net worth (excluding revaluation reserves) of our Company is positive as per the latest audited financial results
and we have a positive cash accruals (earnings before depreciation and tax) from operations for at least 2 financial
years.
Our Company has track record of more than Three years.
263
We have positive cash accruals (earnings before depreciation and tax) from operations for at least 2 financial years as
mentioned below:
( ₹ in Lakhs)
Particulars 30th September,2018 F.Y. 2017-18 F.Y. 2016-17 F.Y. 2015-16
Net Profit after Income Tax
(as restated)
(Rs. In Lakhs)
355.86 729.69 165.81 97.89
Our Company has not been referred to the Board for Industrial and Financial Reconstruction (BIFR).
There is no winding up petition against our Company that has been admitted by the Court or a liquidator has not been
appointed of competent Jurisdiction against the Company.
No material regulatory or disciplinary action by a stock exchange or regulatory authority in the past three years against
the applicant company.
There has been no change in the promoter/s of the Company in the preceding one year from date of filing application
to NSE for listing on SME segment.
The provisions of Regulations 25(4), 25(5), Regulation 25(2), Regulation 99, Regulation 4, Regulation 6(1),
Regulation 103 and sub-regulation (2) of Regulation 47 of SEBI (ICDR) Regulations, 2018 shall not apply to us in
this Issue.
Our Company shall mandatorily facilitate trading in demat securities and will enter into an agreement with both the
depositories. The Company has entered into an agreement for registration with the Central Depositary Services
Limited (CDSL) dated September 10, 2018 and National Securities Depository Limited dated October 16, 2018 for
establishing connectivity.
Our Company has a website i.e. www.novusgreen.in
We confirm that we comply with all the above requirements / conditions so as to be eligible to be listed on the SME
Platform of the NSE EMERGE.
Compliance with Part A of Schedule VI of the SEBI (ICDR) Regulations
Our Company is in compliance with the provisions specified in Part A of Schedule VI of the SEBI (ICDR) Regulations
2018. No exemption from eligibility norms has been sought under Regulation 300 of the SEBI (ICDR) Regulations
2018, with respect to the Issue.
DISCLAIMER CLAUSE OF SEBI
IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF ISSUE DOCUMENT TO THE
SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)/ STOCK EXCHANGE SHOULD NOT IN ANY
WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY
SEBI/ STOCK EXCHANGE. SEBI/ STOCK EXCHANGE 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 ISSUE DOCUMENT. THE BOOK RUNNING LEAD MANAGER,
CAPITAL SQUARE ADVISORS PRIVATE LIMITED HAS CERTIFIED THAT THE DISCLOSURES
MADE IN THE ISSUE DOCUMENT ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY
WITH THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018 IN
264
FORCE FOR THE TIME BEING. 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 ISSUER IS PRIMARILY
RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT
INFORMATION IN THE ISSUE DOCUMENT, THE BOOK RUNNING LEAD MANAGER , CAPITAL
SQUARE ADVISORS IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE ISSUER
DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS
PURPOSE, THE BOOK RUNNING LEAD MANAGER HAS FURNISHED TO SEBI A DUE DILIGENCE
CERTIFICATE DATED DECEMBER 27, 2018 WHICH READS AS FOLLOWS:
WE, THE UNDER NOTED BOOK RUNNING LEAD MANAGER TO THE ABOVE MENTIONED
FORTHCOMING ISSUE STATE AND CONFIRM AS FOLLOWS:
WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION
LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS, ETC.
AND OTHER MATERIAL IN CONNECTION WITH THE FINALISATION OF THE DRAFT RED
HERRING PROSPECTUS PERTAINING TO THE SAID ISSUE
ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE ISSUER, ITS
DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, AND INDEPENDENT VERIFICATION OF
THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE
CONTENTS OF THE DOCUMENTS AND OTHER PAPERS FURNISHED BY THE ISSUER, WE
CONFIRM THAT:
THE DRAFT RED HERRING PROSPECTUS FILED WITH THE BOARD IS IN CONFORMITY WITH
THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;
ALL MATERIAL LEGAL REQUIREMENTS RELATING TO THE ISSUE AS ALSO THE REGULATIONS
GUIDELINES, INSTRUCTIONS ETC FRAMED/ ISSUED BY THE BOARD, THE CENTRAL
GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY
COMPLIED WITH; AND
THE MATERIAL DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE TRUE,
FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS
TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN ACCORDANCE
WITH THE REQUIREMENTS OF THE COMPANIES ACT, 2013, APPLICABLE PROVISIONS OF THE
COMPANIES ACT, 1956, THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL
AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018 AND OTHER APPLICABLE LEGAL
REQUIREMENTS.
WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT
RED HERRING PROSPECTUS ARE REGISTERED WITH THE BOARD AND THAT TILL DATE SUCH
REGISTRATION IS VALID.
WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO
FULFILL THEIR UNDERWRITING COMMITMENTS- NOTED FOR COMPLIANCE
WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTER HAS BEEN OBTAINED FOR
INCLUSION OF THEIR SPECIFIED SECURITIES AS PART OF PROMOTERS’ CONTRIBUTION
SUBJECT TO LOCK-IN AND THE SPECIFIED SECURITIES PROPOSED TO FORM PART OF
PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN SHALL NOT BE DISPOSED / SOLD /
TRANSFERRED BY THE PROMOTER DURING THE PERIOD STARTING FROM THE DATE OF
265
FILING THE DRAFT RED HERRING PROSPECTUS WITH THE BOARD TILL THE DATE OF
COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT RED HERRING PROSPECTUS.
WE CERTIFY THAT REGULATION 237 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
(ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018, WHICH RELATES
TO SPECIFIED SECURITIES INELIGIBLE FOR COMPUTATION OF PROMOTERS CONTRIBUTION,
HAS BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE
WITH THE SAID REGULATION HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS.
WE UNDERTAKE THAT SUB-REGULATION (2) OF REGULATION 236 AND CLAUSE (C) AND (D) OF
SUB-REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND EXCHANGE BOARD OF
INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 200189 SHALL BE
COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT
PROMOTERS’ CONTRIBUTION SHALL BE RECEIVED AT LEAST ONE DAY BEFORE THE
OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITORS’ CERTIFICATE TO THIS EFFECT
SHALL BE DULY SUBMITTED TO THE SEBI. WE FURTHER CONFIRM THAT ARRANGEMENTS
HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE KEPT IN AN
ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO
THE ISSUER ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE. – NOT APPLICABLE
WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE FUNDS ARE
BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN OBJECTS’ LISTED IN THE
OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF THE
ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID
IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION
WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE
MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS
PER THE PROVISIONS OF SUB-SECTION (3) OF SECTION 40 OF THE COMPANIES ACT, 2013 AND
THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS
OBTAINED FROM ALL THE STOCK EXCHANGE MENTIONED IN THE DRAFT RED HERRING
PROSPECTUS. WE FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE
BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION – NOTED
FOR COMPLIANCE
WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT RED HERRING
PROSPECTUS THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN
DEMAT MODE- NOTED FOR COMPLIANCE
WE CERTIFIED THAT ALL APPLICABLE PROVISIONS OF THESE REGULATIONS WHICH RELATE
TO RECEIPT OF PROMOTERS’’ CONTRIBUTION PRIOR TO OPENING OF THE ISSUE, SHALL BE
COMPLIED WITH. ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE PROMOTERS’
CONTRIBUTION SHALL BE RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE
ISSUE AND THAT THE AUDITORS’ CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED
TO THE BOARD. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO
ENSURE THAT THE PROMOTERS’ CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT
WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO THE ISSUER ALONG
WITH THE PROCEEDS OF THE ISSUE.
WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT RED
HERRING PROSPECTUS:
AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME, THERE SHALL BE ONLY ONE
DENOMINATION FOR THE EQUITY SHARES OF THE ISSUER AND
266
AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND
ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME.
WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO ADVERTISEMENT IN
TERMS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND
DISCLOSURE REQUIREMENTS) REGULATIONS, 2018 WHILE MAKING THE ISSUE. NOTED FOR
COMPLIANCE
WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS BEEN
EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OR THE
ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS STANDS, THE RISK FACTORS,
PROMOTERS EXPERIENCE, ETC.
WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH THE
APPLICABLE PROVISIONS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF
CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018, CONTAINING DETAILS
SUCH AS THE REGULATION NUMBER, ITS TEX T, THE STATUS OF COMPLIANCE, PAGE NUMBER
[] OF THE DRAFT RED HERRING PROSPECTUS WHERE THE REGULATION HAS BEEN
COMPLIED WITH AND OUR COMMENTS, IF ANY.
WE ENCLOSE STATEMENT ON ‘PRICE INFORMATION OF PAST ISSUES HANDLED BY
MERCHANT BANKERS (WHO ARE RESPONSIBLE FOR PRICING THIS ISSUE)’, AS PER FORMAT
SPECIFIED BY THE SEBI THROUGH CIRCULAR- DETAILS ARE ENCLOSED IN ANNEXURE A-NOT
APPLICABLE AS THIS IS THE FIRST ISSUE
WE CERTIFY THAT PROFITS FROM RELATED PARTY TRANSACTIONS HAVE ARISEN FROM
LEGITIMATE BUSINESS TRANSACTIONS.
ADDITIONAL CONFIRMATIONS/ CERTIFICATION TO BE GIVEN BY BOOK RUNNING LEAD
MANAGER IN DUE DILIGENCE CERTIFICATE TO BE GIVEN ALONG WITH OFFER DOCUMENT
REGARDING SME EXCHANGE
WE CONFIRM THAT NONE OF THE INTERMEDIARIES NAMED IN THE OFFER DOCUMENT HAVE
BEEN DEBARRED FROM FUNCTIONING BY ANY REGULATORY AUTHORITY.
WE CONFIRM THAT ALL THE MATERIAL DISCLOSURES IN RESPECT OF THE ISSUER HAVE
BEEN MADE IN OFFER DOCUMENT AND CERTIFY THAT ANY MATERIAL DEVELOPMENT IN
THE ISSUER OR RELATING TO THE ISSUE UP TO THE COMMENCEMENT OF LISTING AND
TRADING OF THE SPECIFIED SECURITIES OFFERED THROUGH THIS ISSUE SHALL BE
INFORMED THROUGH PUBLIC NOTICES/ADVERTISEMENTS IN ALL THOSE NEWSPAPERS IN
WHICH PRE-ISSUE ADVERTISEMENT AND ADVERTISEMENT FOR OPENING OR CLOSURE OF
THE ISSUE HAVE BEEN GIVEN.
WE CONFIRM THAT THE ABRIDGED PROSPECTUS CONTAINS ALL THE DISCLOSURES AS
SPECIFIED IN THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND
DISCLOSURE REQUIREMENTS) REGULATIONS, 2018.- NOTED FOR COMPLIANCE
WE CONFIRM THAT AGREEMENTS HAVE BEEN ENTERED INTO WITH THE DEPOSITORIES FOR
DEMATERIALISATION OF THE SPECIFIED SECURITIES OF THE ISSUER.
WE CERTIFY THAT AS PER THE REQUIREMENTS OF FIRST PROVISION TO SUB-REGULATION
(2) OF REGULATION 236 OF SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL
AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018; THE CASH FLOW STATEMENT HAS
BEEN PREPARED AND DISCLOSED IN THE DRAFT RED HERRING PROSPECTUS. – NOT
APPLICABLE
WE CONFIRM THAT UNDERWRITING AND MARKET MAKING ARRANGEMENTS AS PER
REQUIREMENTS OF REGULATION 260 AND 261 OF THE SECURITIES AND EXCHANGE BOARD OF
267
INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018, HAVE BEEN
MADE.
Note:
The filing of the Draft Red Herring Prospectus does not, however, absolve our Company from any liabilities under
section 34, section 35, Section 36 and Section 38 (1) of 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 Book Running Lead Manager any irregularities or lapses in the Draft
Red Herring Prospectus.
All legal requirements pertaining to the Issue will be complied with at the time of registration of the Draft Red Herring
Prospectus with the Registrar of Companies, Mumbai, Maharashtra, in terms of sections 26, 32 and 33 of the
Companies Act, 2013.
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 Draft Red Herring Prospectus or, in case of the Company, 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 Book Running Lead Manager accepts no responsibility, save to the limited extent as provided in the Issue
Agreement entered between the Book Running Lead Manager and our Company on December 27,2018 and the
Underwriting Agreement dated [●] entered into between the Underwriters and our Company and the Market Making
Agreement dated [●] entered into among the Market Maker and our Company.
All information shall be made available by our Company and the Book Running Lead Manager 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 collection centers or
elsewhere.
The Book Running Lead Manager and their respective associates and affiliates may engage in transactions with, and
perform services for, our Company, our Promoter Group, or our affiliates or associates in the ordinary course of
business and have engaged, or may in future engage, in commercial banking and investment banking transactions
with our Company, our Promoter Group, Group Entities, and our affiliates or associates, for which they have received
and may in future receive compensation.
Caution
Investors who apply in the Issue will be required to confirm and will be deemed to have represented to our Company
and the Underwriters and their respective directors, officers, agents, affiliates and representatives that they are eligible
under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of our Company and
will not Issue, sell, pledge or transfer the Equity Shares of our Company to any person who is not eligible under
applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of our Company. Our Company,
the Underwriters and their respective directors, officers, agents, affiliates and representatives accept no responsibility
or liability for advising any investor on whether such investor is eligible to acquire the Equity Shares in the Issue.
Disclaimer in Respect of Jurisdiction
This Issue is being made in India to persons resident in India (including Indian nationals resident in India who are
majors, HUFs, companies, corporate bodies and societies registered under 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
268
under their constitution to hold and invest in 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 ₹ 2,500.00 Lakh and pension funds with a minimum corpus of ₹ 2,500.00 Lakh, and permitted non-residents
including FIIs, Eligible NRIs, 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 Equity Shares of our Company. The Draft Red Herring Prospectus does not, however, constitute
an Issue to sell or an invitation to subscribe for Equity Shares Issued 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 Draft Red Herring Prospectus comes is required to inform himself or herself about, and to observe, any such
restrictions.
Any dispute arising out of this Issue will be subject to jurisdiction of the competent court(s) only.
No action has been, or will be, taken to permit a public Issuing in any jurisdiction where action would be required for
that purpose. Accordingly, the Equity Shares represented hereby may not be Issued or sold, directly or indirectly, and
the Draft Red Herring Prospectus may not be distributed in any jurisdiction, except in accordance with the legal
requirements applicable in such jurisdiction. Neither the delivery of the Draft Red Herring Prospectus nor any sale
hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of our
Company from the date hereof or that the information contained herein is correct as of any time subsequent to this
date.
Disclaimer Clause of the SME Platform of NSE EMERGE
As required, a copy of this Issue Document has been submitted to SME Platform of NSE (NSE Emerge). (NSE) has
given vide its letter [●] dated [●] permission to the Issuer to use the Exchange’s name in this Issue Document on
which this Issuer’s securities are proposed to be listed. The Exchange has scrutinized draft Issue 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 Emerge should not in any way be deemed or
construed that the Issue Document has been cleared or approved by NSE Emerge; nor does it in any manner warrant,
certify or endorse the correctness or completeness of any of the contents of this Issue 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 Promoter, 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 U.S. Securities Act 1933, as amended (the
"Securities Act") or any state securities laws in the United States and may not be Issued or sold within the United
States or to, or for the account or benefit of, "U.S. persons" (as defined in Regulation S under the Securities Act),
except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities
Act. Accordingly, the Equity Shares 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.
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Further, each Applicant where required agrees that such Applicant will not sell or transfer any Equity Shares or create
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.
Filing
We file Draft Red Herring Prospectus with stock exchange. In accordance with Regulation 246(5) the SEBI (ICDR)
Regulations 2018, the soft copy of Draft Red Herring Prospectus shall also be submitted to SEBI. However SEBI
shall not issue any observations on our Draft Red Herring Prospectus.
A copy of the Prospectus shall be filed with SEBI at the Securities and Exchange Board of India, Corporation Finance
Department, SEBI Bhavan, 1st Floor, Indira Chambers, 8-2 622/5/A/1, Road No.10, Avenue4, Banjara Hills,
Hyderabad-500034, India for their record purpose only.
A copy of the Prospectus, along with the documents required to be filed under Section 32 of the Companies Act, 2013
would be delivered for registration to the Registrar of Companies, Hyderabad, 2ND Floor, Corporate Bhawan, GSI
Post, Tattiannaram Nagole, Bandlaguda, Hyderabad - 500 068, India.
Listing
The Equity Shares of our Company are proposed to be listed on SME Platform of NSE (NSE Emerge). Our Company
has obtained in-principle approval from (NSE) by way of its letter dated [●] for listing of equity shares on SME
Platform of NSE (NSE Emerge).
NSE Emerge will be the Designated Stock Exchange, with which the Basis of Allotment will be finalized for the
Issue. If the permission to deal in and for an official quotation of the Equity Shares on the SME Platform is not granted
by NSE, our Company shall forthwith repay, without interest, all moneys received from the applicants in pursuance
of the Draft Red Herring Prospectus. If such money is not repaid within eight (8) days from the date our Company
becomes liable to repay it, then our Company and every officer in default shall, on and from expiry of eight (8) days,
be liable to repay such application money, with interest at the rate as prescribed under the Companies Act, 2013.
Our Company shall ensure that all steps for the completion of the necessary formalities for listing and commencement
of trading at the SME Platform of NSE mentioned above are taken within Six (6) Working Days of the Issue Closing
Date.
Impersonation
Attention of the Applicants is specifically drawn to the provisions of sub-section (1) of Section 38 of the Companies
Act, 2013 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 to action under section 447 of the Companies, Act 2013
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Consents
Consents in writing of (a) Our Directors, Our Promoters, Our Company Secretary & Compliance Officer, Chief
Financial Officer, Our Statutory Auditor, Key Managerial Personnel, Our Peer Review Auditor, Our Banker(s) to the
Company; (b) Book Running Lead Manager, Registrar to the Issue, Banker(s) to the Issue, Legal Advisor to the Issue,
Underwriter(s) to the Issue and Market Maker to the Issue to act in their respective capacities shall be obtained as
required as required under section 26 of the Companies Act, 2013 and shall be filed along with a copy of the Draft
Red Herring Prospectus with the RoC, as required under Sections 32 of the Companies Act, 2013 and such consents
will not be withdrawn up to the time of delivery of the Prospectus for registration with the RoC.
In accordance with the Companies Act and the SEBI (ICDR) Regulations 2018, Sachin Agrawal & Associates.
Chartered Accountants, Statutory 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 Draft Red Herring 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 Draft Red Herring
Prospectus.
Experts Opinion
Except for the reports in the section “Financial Statement” and “Statement of Tax Benefits” on page 177 and 85 of
the Draft Red Herring Prospectus from the Peer Review Auditors and Statutory Auditor respectively, 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.
Expenses of the Issue
The Estimated Issue expenses are as under: -
Activity Expenses (₹ in
Lakhs)
% of Total
Estimated Issue
Expenditure
% of
Issue Size
Payment to the Book Running Lead Manager including,
Underwriting and Selling commissions, Brokerages,
payment to other intermediaries such as Legal Advisors,
Registrars, Bankers etc. and other Out of Pocket
Expenses
[●] [●] [●]
Printing and Stationery and Postage Expenses
Advertising and Marketing Expenses
Regulatory Fee and Expenses
[●]
[●]
[●]
Total [●] [●] [●]
Fees, Brokerage and Selling Commission payable to the Book Running Lead Manager
The total fees payable to the Book Running Lead Manager will be as per the (i) Issue Agreement dated December
27,2018, with the Book Running Lead Manager, Capital Square Advisors Private Limited, (ii) the Underwriting
Agreement dated [●] Underwriter Capital Square Advisors Private Limited and (iii) the Market Making Agreement
dated [●]with Market Maker [●], a copy of which is available for inspection at our Registered Office from 10.00 am
to 5.00 pm on all Working Days from the date of the Draft Red Herring Prospectus until the Issue Closing Date.
Fees Payable to the Registrar to the Issue
The fees payable to the Registrar to the Issue for processing of applications, data entry, printing of refund orders,
preparation of refund data on magnetic tape and printing of bulk mailing register will be as per the agreement between
our Company and the Registrar to the Issue dated December 26, 2018 a copy of which is available for inspection at
our Company’s Registered Office.
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The Registrar to the Issue will be reimbursed for all out-of-pocket expenses including cost of stationery, postage,
stamp duty, and communication expenses. Adequate funds will be provided to the Registrar to the Issue to enable it
to make refunds in any of the modes described in the Draft Red Herring Prospectus or send allotment advice by
registered post/speed post.
Particulars regarding Public or Rights Issues during the last five (5) years
Our Company has not made any previous public or rights issue in India or Abroad the five (5) years preceding the
date of the Draft Red Herring Prospectus.
Previous issues of Equity Shares otherwise than for cash
For detailed description please refer to section titled "Capital Structure" beginning on page 62 of the Draft Red
Herring Prospectus.
Underwriting Commission, brokerage and selling commission on Previous Issues
Since this is the Initial Public Offering of our Company’s Equity Shares, no sum has been paid or has been payable
as commission or brokerage for subscribing for or procuring or agreeing to procure subscription for any of the Equity
Shares since our incorporation.
Particulars in regard to our Company and other listed group-companies / subsidiaries/ associates under the same
management within the meaning of Section 370(1B) of the Companies Act, 1956 / Section 186 of the Companies Act,
2013 which made any capital issue during the last three years:
Neither our Company nor any other companies under the same management within the meaning of Section 370(1B)
of the Companies Act, 1956 has made/Section 186 of the Companies Act, 2013, have made any public issue or rights
issue during the last three years.
Performance vis-a-vis objects – Public/right issue of our Company and /or listed Group Companies/
subsidiaries and associates of our Company
Except as stated under section titled "Capital Structure" beginning on page 62 of the Draft Red Herring Prospectus
our Company has not undertaken any previous public or rights issue. None of the Group Companies/ Entities or
associates of our Company are listed on any stock exchange.
Performance vis-a-vis objects - Last Issue of Group/Associate Companies
All of our Group / Associate are unlisted and have not made a public issue of shares in the last ten (10) years preceding
the date of the Draft Red Herring Prospectus.
Outstanding Debentures or Bond Issues or Redeemable Preference Shares
Our Company does not have any outstanding debentures or bonds or Preference Redeemable Shares as on the date of
filing the Draft Red Herring Prospectus.
Outstanding Convertible Instruments
Our Company does not have any outstanding convertible instruments as on the date of filing the Draft Red Herring
Prospectus.
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Option to Subscribe
Equity Shares being issued through the Draft Red Herring Prospectus can be applied for in dematerialized form only.
Stock Market Data of the Equity Shares
This being a public Issue of the Equity Shares of our Company, the Equity Shares are not listed on any Stock
Exchanges.
Mechanism for Redressal of Investor Grievances
The Agreement amongst the Registrar to the Issue, our Company provides for retention of records with the Registrar
to the Issue for a period of at least three (3) year from the last date of dispatch of the letters of allotment, or demat
credit or where refunds are being made electronically, giving of unblocking instructions to the clearing system, to
enable the investors to approach the Registrar to the Issue for redressal of their grievances.
All grievances relating to the Issue may be addressed to the Registrar to the Issue, giving full details such as name,
address of the applicant, application number, number of Equity Shares applied for, amount paid on application,
Depository Participant, and the bank branch or collection center where the application was submitted.
All grievances relating to the ASBA process may be addressed to the SCSBs, giving full details such as name, address
of the applicant, number of Equity Shares applied for, amount paid on application and the relevant Designated Branch
or the collection center of the SCSBs where the Application Form was submitted by the ASBA Applicants.
The Applicant should give full details such as name of the sole/ first Applicant, Application Form number, Applicant
DP ID, Client ID, PAN, date of the Application Form, address of the Applicant, number of the Equity Shares applied
for and the name and address of the Designated Intermediary where the Application Form was submitted by the
Applicant. Further, the investor shall also enclose the Acknowledgement Slip from the Designated Intermediaries in
addition to the documents or information mentioned hereinabove.
Disposal of Investor Grievances by our Company
Our Company estimates that the average time required by our Company or the Registrar to the Issue 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.
Our Company has appointed Mr. Sannapaneni Sudheer, as the 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:
Telephone: +(91)-040-69993245
Fax: +(91)-040-40045515
Email id: [email protected]
Investors can contact the Compliance Officer or the Registrar in case of any pre-Issue or post-Issue related problems
such as non-receipt of letters of allocation, credit of allotted Equity Shares in the respective beneficiary account etc.
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 would enable 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
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Status of Investor Complaints
We confirm that we have not received any investor compliant during the three years preceding the date of the Draft
Red Herring Prospectus and hence there are no pending investor complaints as on the date of the Draft Red Herring
Prospectus.
Disposal of investor grievances by listed companies under the same management as our Company
We do not have any listed company under the same management.
Change in Auditors during the last three (3) years
There is change in Auditor during the last three (3) years.
Name Date of Event Nature of Event
M.M Reddy & Company, Chartered
Accountants
October 09, 2018 Appointment of M/s. NSVR and Associates
LLP, Chartered Accountants.
Capitalization of Reserves or Profits
Except as disclosed under section titled "Capital Structure" beginning on page 62 of the Draft Red Herring
Prospectus, our Company has not capitalized its reserves or profits at any time during the last five (5) years.
Revaluation of Assets
Our Company has not revalued its assets in five (5) years preceding the date of the Draft Red Herring Prospectus.
Tax Implications
Investors who are allotted Equity Shares in the Issue will be subject to capital gains tax on any resale of the Equity
Shares at applicable rates, depending on the duration for which the investors have held the Equity Shares prior to such
resale and whether the Equity Shares are sold on the Stock Exchanges. For details, please refer the section titled
"Statement of Tax Benefits" beginning on page 85 of this Draft Red Herring Prospectus.
Purchase of Property
Other than as disclosed under section titled "Our Business" beginning on page 115 of this Draft Red Herring
Prospectus, there is no property which has been purchased or acquired or is proposed to be purchased or acquired
which is to be paid for wholly or partly from the proceeds of the present Issue or the purchase or acquisition of which
has not been completed on the date of the Draft Red Herring Prospectus, other than property, in respect of which: -
The contract for the purchase or acquisition was entered into in the ordinary course of business, or the contract was
entered into in contemplation of the Issue, or that the Issue was contemplated in consequence of the contract; or the
amount of the purchase money is not material.
Except as stated elsewhere in the Draft Red Herring Prospectus, our Company has not purchased any property in
which the Promoter and/or Directors have any direct or indirect interest in any payment made there under.
Servicing Behaviour
Except as stated in the Draft Red Herring Prospectus, there has been no default in payment of statutory dues or of
interest or principal in respect of our borrowings or deposits.
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Payment or benefit to officers of Our Company
Except statutory benefits upon termination of their employment in our Company or superannuation, no officer of our
Company is entitled to any benefit upon termination of his employment in our Company or superannuation.
Except as disclosed under sections titled "Our Management" and "Related Party Transactions" beginning on page
157 and 177 respectively of the Draft Red Herring Prospectus, none of the beneficiaries of loans and advances and
sundry debtors are related to the Directors of our Company.
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SECTION VII ISSUE INFORMATION
TEMS OF THE ISSUE
The Equity Shares being issued are subject to the provisions of the Companies Act 2013, SEBI (ICDR) Regulations
2018, SCRR, SEBI Listing Regulations, our Memorandum and Articles of Association, the terms of this Draft Red
Herring Prospectus, the Abridged Prospectus, the Application Form, the Revision Form, the Confirmation of
Allocation Note and other terms and conditions as may be incorporated in the allotment advices and other
documents/certificates that may be executed in respect of this Issue. The Equity Shares shall also be subject to laws
as applicable, guidelines, notifications and regulations relating to the Issue of capital and listing and trading of
securities issued from time to time by SEBI, the Government of India, the Stock Exchanges, the RBI, the FIPB, RoC
and/or other authorities, as in force on the date of the Issue and to the extent applicable.
Please note that in terms of SEBI Circular CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015, all the
investors applying to this Issue shall use only Application Supported by Blocked Amount (ASBA) facility for making
payment.
Authority for the Issue
The present Issue of upto 26,00,000 Equity Shares has been authorized by a resolution of the Board of Directors of
our Company at their meeting held on December 14,2018 and was approved by the Shareholders of the Company by
passing Special Resolution at the Extra Ordinary General Meeting held on December 14,2018.
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 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 “Main Provisions of the Articles of Association” beginning on page 330 of this
Draft Red Herring Prospectus.
Mode of Payment of Dividend
The declaration and payment of dividend will be as per the provisions of Companies Act, the Articles of Association,
the provisions of the SEBI Listing Regulations and any other rules, regulations or guidelines as may be issued by the
Government of India in connection thereto and recommended by the Board of Directors and the Shareholders at 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. We shall pay dividends in cash and as per provisions of the Companies
Act. For further details, please refer to the chapter titled “Dividend Policy” beginning on 176 of this Draft Red Herring
Prospectus.
Face Value and Issue Price
The Equity Shares having a Face Value of ₹ 10.00 each are being issued in terms of this Draft Red Herring Prospectus
at the price of ₹ [●] per equity Share (including premium of ₹[●] per equity share). The Issue Price is determined by
our Company in consultation with the Book Running Lead Manager and is justified under the section titled “Basis
for Issue Price” on page 83 of this Draft Red Herring Prospectus. 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 2018
Our Company shall comply with all requirements of the SEBI ICDR Regulations 2018. Our Company shall comply
with all disclosure and accounting norms as specified by SEBI from time to time.
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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;
5. 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 Listing Regulations and the Memorandum and Articles of Association of our Company.
For a detailed description of the main provisions of the Articles of Association of our Company relating to voting
rights, dividend, forfeiture and lien, transfer, transmission and/or consolidation/splitting, please refer to Section titled
“Main Provisions of Articles of Association” beginning on page 330 of this Draft Red Herring Prospectus.
Minimum Application Value, Market Lot and Trading Lot
As per ICDR Regulations 2018 and Section 29(1) of the Companies Act, 2013 the Equity Shares to be allotted must
be in Dematerialized form i.e. not in the form of physical certificates but be fungible and be represented by the
statement issued through electronic mode. Hence, the Equity Shares being issued can be applied for in the
dematerialized form only.
The trading of the Equity Shares will happen in the minimum contract size of [●] Equity Shares and the same may be
modified by the SME Platform of NSE Emerge from time to time by giving prior notice to investors at large.
Allocation and allotment of Equity Shares through this offer document will be done in multiples of [●] Equity Share
subject to a minimum allotment of [●] Equity Shares to the successful applicants in terms of the SEBI circular No.
CIR/MRD/DSA/06/2012 dated February 21, 2012.
Further, in accordance with Regulation 267(2) of the SEBI (ICDR) Regulations 2018 the minimum application size
in terms of number of specified securities shall not be less than Rupees One Lakh per application.
Minimum Number of Allottees
The minimum number of allottees in the Issue shall be 50 shareholders. In case the number of prospective allottees is
less than 50, no allotment will be made pursuant to this Issue and the amounts in the ASBA Account 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 Investor
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 in accordance with Section 72 of the Companies Act, 2013, be entitled to the
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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.
In accordance with Section 72 of the Companies Act, 2013 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.
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.
ISSUE PROGRAMME
Event Indicative Date
ISSUE OPENING DATE [●]
ISSUE CLOSING DATE [●]
Minimum Subscription
In accordance with Regulation 260(1) of SEBI ICDR Regulations 2018, this Issue is 100% underwritten. Also, in
accordance with explanation to Regulation 260(1) of SEBI ICDR Regulations 2018, the underwriting shall not be
restricted to any minimum subscription level. This Issue is 100% underwritten and the details of the same have been
disclosed under section titled “General Information” on page 52 of this Draft Red Herring Prospectus.
As per section 39 of the new Companies Act, 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, the application
money has to be returned within such period as may be prescribed.
If as prescribed, the issuer does not receive the minimum subscription of 90% of the offer through offer document
(except in case of an offer for sales of specified securities) on the date of closure of the issue, or if the subscription
level falls below 90% after the closure of the issue on account of cheque having been returned unpaid ( in case of the
right issue) or withdrawal of the applications or after technical rejections, or if the listing or trading permission is not
obtained from for the securities so offered under the offer document, the issuer shall forthwith refund the entire
subscription amount received. If there is a delay beyond fifteen days after the issuer becomes liable to pay the amount,
the issuer and every director of the issuer who are officers in default, shall pay interest at the rate of fifteen per cent.
per annum.
Further, in accordance with Regulation 268(1) of SEBI ICDR Regulations 2018, the minimum number of allottees in
this Issue shall be fifty (50). In case the minimum number of prospective allottees is less than fifty (50), no allotment
will be made pursuant to this Issue and the amounts in the ASBA Account shall be unblocked forthwith.
Further, in accordance with Regulation 267(2) of the SEBI (ICDR) Regulations 2018, the minimum application size
in terms of number of specified securities shall not be less than Rupees One Lakh per application.
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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
The trading of the Equity Shares will happen in the minimum contract size of [●] equity shares in terms of the SEBI
circular No. CIR/MRD/DSA/06/2012 dated February 21, 2012. However, the Market Maker shall buy the entire
shareholding of a shareholder in 1 (one) lot, where value of such shareholding is less than the minimum contract size
allowed for trading on SME platform of NSE Emerge.
Application by Eligible NRIs, FPIs/FIIs or VCFs registered with SEBI
It is to be understood that there is no reservation for Eligible NRIs, FPIs/FIIs or VCF registered with SEBI. Such
Eligible 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.
NRIs, FPIs/FIIs and foreign venture capital investors registered with SEBI are permitted to purchase shares of an
Indian company in a public Issue without the prior approval of the RBI, so long as the price of the equity shares to be
issued is not less than the price at which the equity shares are issued to residents. The transfer of shares between an
Indian resident and a non-resident does not require the prior approval of the FIPB or the RBI, provided that (i) the
activities of the investee company are under the automatic route under the foreign direct investment ("FDI") Policy
and the non-resident shareholding is within the sectoral limits under the FDI policy; and (ii) the pricing is in
accordance with the guidelines prescribed by the SEBI/RBI.
The current provisions of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident
outside India) Regulations, 2000, provides a general permission for the NRIs, FPIs and foreign venture capital
investors registered with SEBI to invest in shares of Indian companies by way of subscription in an IPO. However,
such investments would be subject to other investment restrictions under the Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, RBI and/or SEBI regulations as
may be applicable to such investors.
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 shares or debentures and on their consolidation or splitting
Except for lock-in of the Pre-Issue Equity Shares and Promoter minimum contribution in the Issue as detailed in the
section titled “Capital Structure” beginning on page 62 of the Draft Red Herring Prospectus, and except as provided
in the Articles of Association of our Company, there are no restrictions on transfers of Equity Shares. There are no
restrictions on transfer and transmission of shares/ debentures and on their consolidation/ splitting except as provided
in the Articles of Association. For further details, please refer sub-heading "Main Provisions of the Articles of
Association" on page 330 of the Draft Red Herring 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 Book Running Lead Manager s do not accept
any responsibility for the completeness and accuracy of the information stated hereinabove. Our Company and the
Book Running Lead Manager are not liable to inform to inform the investors of any amendments or modifications or
changes in applicable laws or regulations, which may occur after the date of this Draft Red Herring 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.
279
Option to receive Equity Shares in Dematerialized Form
As per Section 29(1) of the Companies Act, 2013 and in accordance with SEBI ICDR Regulations 2018, every
company making public offer shall issue securities only in dematerialized form only. Hence, the Equity Shares being
offered can be applied for in the dematerialized form only. The investors have an option either to receive the security
certificate or to hold the securities with depository. However, as per SEBI's circular RMB (compendium) series
circular no. 2 (1999-2000) dated February 16, 2000, it has been decided by the SEBI that trading in securities of
companies making an initial public offer shall be in dematerialized form only. The Equity Shares on Allotment will
be traded only on the dematerialized segment of the SME Exchange. Applicants will not have an option of Allotment
of the Equity Shares in physical form. Allottees shall have the option to re-materialize the Equity Shares, if they so
desire, as per the provisions of the Companies Act, 2013 and the Depositories Act.
Migration to Main Board
In accordance with the NSE Emerge Circular dated November 26, 2012, our Company will have to be mandatorily
listed and traded on the SME Platform of the NSE for a minimum period of two years from the date of listing and
only after that it can migrate to the Main Board of the NSE as per the guidelines specified by SEBI and as per the
procedures laid down under Chapter IX of the SEBI (ICDR) Regulations 2018.
As per the provisions of the Chapter IX of the SEBI (ICDR) Regulation, 2018, our Company may migrate to the main
board of NSE from the SME Exchange on a later date subject to the following:
• If the Paid up Capital of our Company is likely to increase above ₹ 25 Crores by virtue of any further issue
of capital by way of rights, preferential issue, bonus issue etc. (which has been approved by a special
resolution through postal ballot wherein the votes cast by the shareholders other than the promoters in favour
of the proposal amount to at least two times the number of votes cast by shareholders other than promoter
shareholders against the proposal and for which our Company has obtained in-principal approval from the
main board), we shall have to apply to NSE for listing our shares on its Main Board subject to the fulfillment
of the eligibility criteria for listing of specified securities laid down by the Main Board
OR
• If the Paid-Up Capital of our Company is more than ₹ 10.00 Crore and up to ₹ 25.00 Crore, our company
may still apply for migration to the Main Board If our Company fulfils the eligibility criteria for listing laid
down by the Main Board of NSE and if the same has been approved by a special resolution through postal
ballot wherein the votes cast by the shareholders other than the promoters in favour of the proposal amount
to at least two times the number of votes cast by shareholders other than promoter shareholders against the
proposal.
Market Making
The Equity Shares offered through this Issue are proposed to be listed on the SME Platform of NSE Emerge, wherein
the Book Running Lead Manager to this Issue shall ensure compulsory Market Making through the registered Market
Makers of the SME Exchange for a minimum period of 3 (three) years from the date of listing on the SME Platform
of NSE Emerge. For further details of the agreement entered into between our Company, the Book Running Lead
Manager and the Market Maker please refer to section titled "General Information - Details of the Market Making
Arrangements for this Issue" beginning on page 52 of this Draft Red Herring Prospectus.
In accordance with the SEBI Circular No. CIR/MRD/DSA/31/2012 dated November 27, 2012, it has been decided to
make applicable limits on the upper side for the Market Makers during market making process taking into
consideration the Issue size in the following manner:
280
Issue size Buy quote exemption threshold
(including mandatory initial inventory
of 5% of Issue size)
Re-entry threshold for buy quotes
(including mandatory initial
inventory of 5% of Issue size)
Up to 20 Crore 25% 24%
20 to 50 Crore 20% 19%
50 to 80 Crore 15% 14%
Above 80 Crore 12% 11%
Further, the Market Maker shall give (2) Two way quotes till it reaches the upper limit threshold; thereafter it has the
option to give only sell quotes. Two (2) way quotes shall be resumed the moment inventory reaches the prescribed
re-entry threshold.
In view of the Market Maker obligation, there shall be no exemption/threshold on downside. However, in the event
the Market Maker exhausts its inventory through market making process on the platform of the exchange, the
concerned stock exchange may intimate the same to SEBI after due verification.
New Financial Instruments
There are no new financial instruments such as deep discounted bonds, debenture, warrants, secured premium notes,
etc. issued by our Company through this Issue.
Jurisdiction
Exclusive jurisdiction for the purpose of this Issue is with the competent courts / authorities in Mumbai, Maharashtra,
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.
281
ISSUE STRUCTURE
The Public Issue of Upto 26,00,000 Equity Shares of 10/- each for cash at a price of ₹ [●] per Equity Share (including
a share premium of ₹ [●] per Equity Share) aggregating to ₹ [●] (the “Issue”) by our Company of which upto []
Equity Shares of ₹ 10 each will be reserved for subscription by Market Makers to the Issue (“Market Maker
Reservation Portion”) the Issue less the Market Maker Reservation Portion i.e. Issue of [●] Equity Shares of ₹ 10
each is hereinafter referred to as the “Net Issue”. This Issue and the Net Issue will constitute [●] % and [●] %
respectively of the post Issue paid up Equity Share capital of the Company.
This Issue is made through the Book Building Process.
Particulars QIBs* Non-Institutional
Bidders
Retail Individual
Bidders
Market Maker
Reservation Portion
Number of
Equity Shares
available for
allocation**
Not more than [●] Equity
Shares
Not less than [●] Equity
Shares or Issue less
allocation to QIBs and
Retail Individual Bidders
Not less than [●] Equity
Shares or Issue less
allocation to QIBs and
Non- Institutional
Bidders
[●] Equity Shares
Percentage of the
Issue Size
available for
allocation
Not more than 50% of the
Net Issue shall be available
for allocation to QIBs.
However, up to 5% of the Net
QIB Portion will be available
for allocation proportionately
to Mutual Funds only.
Not less than 15% of the
Net Issue or the Net Issue
less allocation to QIB
Bidders and Retail
Individual Bidders shall
be available for
allocation.
Not less than 35% of the
Net Issue, or the Net
Issue less allocation to
QIB Bidders and Non-
Institutional Bidders
shall be available for
allocation.
[●] % of the Issue
Basis of
Allocation, if
respective
category is
oversubscribed
Proportionate,
(a) At least [●] Equity Shares
will be available for
allocation on a proportionate
basis to Mutual Funds only;
And
(b) [●] Equity Shares will be
available for allocation on a
proportionate basis to all
other QIBs including Mutual
Funds receiving allocation as
per (a) above
Proportionate Allotment to each
Retail Individual
Bidder shall not be less
than the minimum Bid
Lot, subject to
availability of Equity
Shares in the Retail
Category, and the
remaining available
Equity Shares, if any,
shall be allotted on a
proportionate basis. For
more information, see
"Issue Procedure" on
page 284.
Firm Allotment
Mode of
Application
Through ASBA Process only
Mode of
Allotment
Compulsorily in dematerialized form
Minimum
Application
Such nos. of Equity Shares in
multiples of [●] Equity
Shares at an Issue Price of ₹
[●] such that the application
value exceeds₹ 2 Lakh
[●] Equity Shares
Such nos. of Equity
Shares in multiples of
[●] Equity Shares at an
Issue Price of ₹ [●] such
that the application
value exceeds ₹ 2 Lakh
[●] Equity Shares
Maximum
Application
Such nos. of Equity Shares
in multiples of [●] Equity
Shares such that the
application size does not
exceeds the Issue, subject to
applicable limit.
Such nos. of Equity
Shares in multiples of
[●] Equity Shares such
that the application size
does not exceeds the
Issue, subject to
applicable limit.
[●] Equity Shares [●] Equity Shares
Trading Lot [●] Equity Shares [●] Equity Shares.
However, the Market
282
Makers may accept odd
lots if any in the market
as required under the
SEBI (ICDR)
Regulations, 2018.
Application Lot
Size
[●] Equity Shares Thereafter
Equity Shares and in
multiples of [●] Equity
Shares
Who can
Apply***
Public financial institutions
specified in Section 2(72) of
the Companies Act, FPIs
(other than category III
FPIs), scheduled commercial
banks, mutual funds
registered with the SEBI,
venture capital funds
registered with SEBI, FVCIs,
Alternative Investment
Funds, multilateral and
bilateral development
financial institutions, state
industrial development
corporations, insurance
companies registered with
the Insurance Regulatory and
Development Authority,
provident funds with a
minimum corpus of ₹2500
Lakhs, pension funds with a
minimum corpus of ₹ 2500
Lakhs, the National
Investment Fund set up by
the GoI, insurance funds set
up and managed by the army,
navy, or air force of the
Union of India and Insurance
funds set up and managed by
the Department of Posts,
India and Systemically
Important NBFCs.
Companies, Corporate
Bodies, Scientific
Institutions, Societies,
Trusts, Resident Indian
Individuals, HUF (in the
name of Karta), Eligible
NRIs and sub accounts of
FIIs registered with
SEBI, which are foreign
corporates or individuals
Eligible QFIs and
Category III FPIs.
Resident Indian
individuals, HUFs (in
the name of the Karta)
and Eligible NRIs
applying for Equity
Shares such that the Bid
Amount does not
exceed 2,00,000 in
value
Market Maker
Terms of
Payment
Full Bid Amount shall be blocked by the SCSBs in the bank account of the ASBA Bidder that is specified in the
ASBA Form at the time of submission of the ASBA Form.
This Issue is being made in terms of Chapter IX of the SEBI (ICDR) Regulations 2018 through the Fixed Price method
and hence, as per of Regulation 253 of SEBI (ICDR) Regulations 2018, the allocation of Net Issue to the public
category shall be made as follows:
(a) not less than thirty five per cent to retail individual investors; and
(b) not less than fifteen per cent. to non-institutional investors
(c) not more than fifty per cent. to qualified institutional buyers, five per cent. of which shall be allocated
to mutual funds:
The unsubscribed portion in either of the categories specified in (a) or (b) above may be allocated to the applicants
in the other category.
In addition to five per cent. Allocation available in terms of clause (c), mutual funds shall be eligible for allocation
under the balance available for qualified institutional buyers.
283
Withdrawal of the Issue
Our Company in consultation with the Book Running Lead Manager, reserves the right not to proceed with this Issue
at any time before the Issue Opening Date, without assigning any reason thereof.
In case, the Company wishes to withdraw the Issue after Issue Opening but before allotment, the Company will give
public notice giving reasons for withdrawal of Issue. The public notice will appear in two widely circulated national
newspapers (one each in English and Hindi) and one in regional newspaper.
The Book Running Lead Manager, through the Registrar to the Issue, will instruct the SCSBs, to unblock the ASBA
Accounts within one Working Day from the day of receipt of such instruction. The notice of withdrawal will be issued
in the same newspapers where the pre-issue advertisements have appeared and the Stock Exchange will also be
informed promptly.
If the Company withdraws the Issue after the Issue Closing Date and subsequently decides to undertake a public
offering/Issue of Equity Shares, the Company will file a fresh Draft Red Herring Prospectus with the stock exchange
where the Equity Shares may be proposed to be listed.
Notwithstanding the foregoing, this Issue is subject to obtaining (i) the final listing and trading approvals of the Stock
Exchange, which our Company will apply for only after Allotment; and (ii) the final RoC approval to the Prospectus
after it is filed with the RoC.
Issue Programme
ISSUE OPENING DATE [●]
ISSUE CLOSING DATE [●]
Applications and any revisions to the same will be accepted only between 10.00 a.m. to 5.00 p.m. (Indian Standard
Time) during the Issue Period at the Application Centers mentioned in the Application Form, or in the case of ASBA
Applicants, at the Designated Bank Branches except that on the Issue Closing Date applications will be accepted only
between 10.00 a.m. and 3.00 p.m. (Indian Standard Time).
Applications will be accepted only on Working Days, i.e., Monday to Friday (excluding any public holiday).
284
ISSUE PROCEDURE
All Bidders should review the General Information Document for Investing in Public Issues prepared and issued in
accordance with the circular (CIR/CFD/DIL/12/2013) dated October 23, 2013 notified by SEBI (“General
Information Document”) included below under section “PART B – General Information Document”, which
highlights the key rules, processes and procedures applicable to public issues in general in accordance with the
provisions of the Companies Act 2013 (to the extent notified), the Companies Act, 1956 (to the extent not repealed
by the Companies Act, 2013), the Securities Contracts (Regulation) Act, 1956, the Securities Contracts (Regulation)
Rules, 1957 and the SEBI ICDR Regulations as amended. The General Information Document has been updated to
include reference to the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014,
SEBI Listing Regulations 2015 and certain notified provisions of the Companies Act, 2013, to the extent applicable
to a public issue. The General Information Document is also available on the websites of the Stock Exchanges and
the Book Running Book Running Lead Manager. Please refer to the relevant portions of the General Information
Document which are applicable to this Issue.
Pursuant to the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Fifth
Amendment) Regulations, 2015, there have been certain changes in the issue procedure for initial public Issuing
including making ASBA Process mandatory for all investors, allowing registrar, share transfer agents, collecting
depository participants and stock brokers to accept application forms. Further, SEBI, by its circular No.
(CIR/CFD/POLICYCELL/11/2015) dated November 10, 2015, reduced the time taken for listing after the closure of
an issue to six working days. These changes are applicable for all public issues which open on or after January 1,
2016.
Phased implementation of Unified Payments Interface SEBI has issued a circular
(SEBI/HO/CFD/DIL2/CIR/P/2018/138) dated November 1, 2018 in relation to streamlining the process of
public issue of inter alia, equity shares. Pursuant to the circular, Unified Payments Interface will be introduced
in a phased manner as a payment mechanism in addition to ASBA for applications by Retail Individual Bidders
through intermediaries. Phase I of this mechanism will be applicable from January 1, 2019.
Please note that the information stated/ covered in this section may not be complete and/or accurate and as such
would be subject to modification/change.
Our Company and the Book Running Lead Manager do not accept any responsibility for the completeness and
accuracy of the information stated in this section and the General Information Document. Bidders are advised to make
their independent investigations and ensure that their Applications do not exceed the investment limits or maximum
number of Equity Shares that can be held by them under applicable law or as specified in the Draft Red Herring
Prospectus and the Prospectus.
This section applies to all the Bidders, please note that all the Bidders are required to make payment of the full
Application Amount along with the Application Form.
Our Company and the BRLM are not liable for any amendments, modifications or change in applicable laws or
regulations, which may occur after the date of this Draft Red Herring Prospectus.
PART A
• Book Building Issue Procedure
This Issue is being made in compliance with the provisions of Reg. 229 of Chapter IX of the SEBI ICDR Regulations
2018 and through the Book Building Process wherein not less than 35% of the net issue to Public shall be available
for allocation to Retail Individual Bidders and not less than 15% to the Non Institutional Bidders and the balance 50%
shall be available for allocation to QIBs. Further 5% of the Issue shall be reserved for allocation to the Market Maker.
Under-subscription, if any, in any category, would be allowed to be met with spill over from any other category or
combination of categories, at the discretion of our Company in consultation with the BRLMs and the Designated
Stock Exchange.
285
Subject to valid Bids being received at or above the issue Price, allocation to all categories in the Net Issue, shall be
made on a proportionate basis, except for retail portion where allotment to each retail bidder shall not be less than the
minimum bid lot subject to availability of Equity shares in Retail portion, and the remaining available Equity shares,
if any, shall be allotted on a proportionate basis.
The Equity Shares, on Allotment, shall be traded only in the dematerialized segment of the Stock Exchanges.
Investors should note that the Equity Shares will be Allotted to all successful Bidders only in dematerialized
form. The Bid cum Application Forms which do not have the details of the Bidders’ depository account,
including DP ID, Client ID 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.
Bid cum Application Form
Copies of the Bid cum Application Form and the abridged prospectus will be available at the offices of the BRLM,
the Designated Intermediaries at Bidding Centres, and Registered Office of our Company. An electronic copy of the
Bid cum Application Form will also be available for download on the websites of the NSE (www.nseemerge.com),
the SCSBs, the Registered Brokers, the RTAs and the CDPs at least one day prior to the Bid/Issue Opening Date.
All Bidders shall mandatorily participate in the Issue only through the ASBA process. ASBA Bidders must provide
bank account details and authorization to block funds in the relevant space provided in the Bid cum Application Form
and the Bid cum Application Forms that do not contain such details are liable to be rejected.
ASBA Bidders shall ensure that the Bids are made on Bid cum Application Forms bearing the stamp of the Designated
Intermediary, submitted at the Collection Centres only (except in case of electronic Bid cum Application Forms) and
the Bid cum Application Forms not bearing such specified stamp are liable to be rejected.
The prescribed colour of the Bid Cum Application Form for various categories is as follows:
Category Colour
Indian Public / eligible NRI's applying on a non-repatriation basis (ASBA) White
Non-Residents including eligible NRI's, FPI‘s, FIIs, FVCIs, etc. applying on a repatriation
basis (ASBA)
Blue
Pursuant to SEBI Circular No. CIR/CFD/POLICYCELL/11/2015 Dated November 10, 2015, an Investor, intending
to subscribe to this Issue, shall submit a completed application form to any of the following Intermediaries
(Collectively called “Designated Intermediaries”):
The aforesaid intermediary shall, at the time of receipt of application, give an acknowledgement to investor, by giving
the counter foil or specifying the application number to the investor, as proof of having accepted the application form,
in physical or electronic mode, respectively.
Designated Intermediaries shall submit Bid cum Application Forms to SCSBs only.
Sr. No. Designated Intermediaries
1. An SCSB, with whom the bank account to be blocked, is maintained
2. A syndicate member (or sub-syndicate member)
3. A stock broker registered with a recognized stock exchange (and whose name is mentioned on the
website of the stock exchange as eligible for this activity) (“broker”)
4. A depository participant (“DP”) (whose name is mentioned on the website of the stock exchange as
eligible for this activity)
5. A registrar to an issue and share transfer agent (“RTA”) (whose name is mentioned on the website of
the stock exchange as eligible for this activity)
286
The upload of the details in the electronic bidding system of stock exchange will be done by:
Bidders shall submit an Application Form either in physical or electronic form to the SCSB's authorizing blocking
funds that are available in the bank account specified in the Application Form used by ASBA Bidders.
Availability of Draft Red Herring Prospectus/ Red Herring Prospectus/ Prospectus and Application Forms
The bid cum Application Forms and copies of the Draft Red Herring Prospectus/ Red Herring Prospectus/ Prospectus
may be obtained from the Registered Office of our Company, Book Running Lead Manager to the Issue, Registrar to
the Issue, as mentioned in the Application Form. The application forms may also be downloaded from the website of
NSE i.e. www.nseemerge.com.
Who can Bid?
In addition to the category of Bidders as set forth under ―Part B -General Information Document for Investing in
Public Issues-Category of Investors Eligible to participate in an Issue” on page [●] of this Draft Red Herring
Prospectus, the following persons are also eligible to invest in the Equity Shares under all applicable laws, regulations
and guidelines, including:
• FPIs and sub-accounts registered with SEBI other than Category III foreign portfolio investor;
• Category III foreign portfolio investors, which are foreign corporate or foreign individuals only under the
Non-Institutional Investors category;
• Scientific and / or industrial research organizations authorized in India to invest in the Equity Shares.
• Any other persons eligible to apply in this Issue under the laws, rules, regulations, guidelines and policies
applicable to them.
MAXIMUM AND MINIMUM APPLICATION SIZE
1. For Retail Individual Bidders
The Application must be for a minimum of [●] Equity Shares and in multiples of [●] Equity Shares thereafter, so as
to ensure that the Application Price payable by the Applicant does not exceed ₹ 2,00,000. In case of revision of
Applications, the Retail Individual Bidders have to ensure that the Application Price does not exceed ₹ 2,00,000.
2. For Other than Retail Individual Bidders (Non-Institutional Bidders and QIBs):
The Application must be for a minimum of such number of Equity Shares that the Application Amount exceeds ₹
2,00,000 and in multiples of [●] Equity Shares thereafter. An Application cannot be submitted for more than the Net
Issue Size. However, the maximum Application by a QIB investor should not exceed the investment limits prescribed
for them by applicable laws. Under existing SEBI Regulations, a QIB Applicant and Non Institutional Bidder cannot
withdraw its Application after the Issue Closing Date and is required to pay 100% Bid Amount upon submission of
Bid.
For Applications submitted
by investors to SCSB:
After accepting the form, SCSB shall capture and upload the relevant details in
the electronic bidding system as specified by the stock exchange and may begin
blocking funds available in the bank account specified in the form, to the extent
of the application money specified.
For applications submitted
by investors to
intermediaries other than
SCSBs:
After accepting the application form, respective Intermediary shall capture and
upload the relevant details in the electronic bidding system of the stock exchange.
Post uploading, they shall forward a schedule as per prescribed format along with
the application forms to designated branches of the respective SCSBs for blocking
of funds within one day of closure of Issue.
287
In case of revision in Applications, the Non-Institutional Bidders, who are individuals, have to ensure that the
Application Amount is greater than₹ 2,00,000 for being considered for allocation in the Non-Institutional Portion.
Bidders are advised to ensure that any single Application from them does not exceed the investment limits or
maximum number of Equity Shares that can be held by them under applicable law or regulation or as specified
in this Draft Red Herring Prospectus.
The above information is given for the benefit of the Bidders. The Company and the BRLMs are not liable for
any amendments or modification or changes in applicable laws or regulations, which may occur after the date
of this Draft Red Herring Prospectus. Bidders are advised to make their independent investigations and ensure
that the number of Equity Shares applied for do not exceed the applicable limits under laws or regulations.
PARTICIPATION BY ASSOCIATES /AFFILIATES OF BRLM AND THE SYNDICATE MEMBERS
The BRLM and Syndicate Members, if any shall not be entitled to subscribe to this Issue in any manner except towards
fulfilling their underwriting and market making obligations. However, associates/affiliates of the BRLM and
Syndicate Members, if any may subscribe for Equity Shares in the Issue, either in the QIB Category or in the Non-
Institutional Category as may be applicable to the Bidder, where the allocation is on a proportionate basis and such
subscription may be on their own account or on behalf of their clients.
Option to Subscribe in the Issue
a) As per Section 29(1) of the Companies Act 2013, allotment of Equity Shares shall be dematerialized form
only. Investors will not have the option of getting allotment of specified securities in physical form. However,
they may get the specified securities re-materialized subsequent to allotment.
b) The Equity Shares, on allotment, shall be traded on the Stock Exchange in demat segment only.
c) A single application from any investor shall not exceed the investment limit/minimum number of Equity
Shares that can be held by him/her/it under the relevant regulations/statutory guidelines and applicable law.
Information for the Bidders
• Our Company shall file the Red Herring Prospectus with the RoC at least three days before the Bid / Issue
Opening Date.
• Our Company shall, after registering the Red Herring Prospectus with the RoC, make a pre-Issue
advertisement, in the form prescribed under the ICDR Regulations 2018, in English and Hindi national
newspapers and one regional newspaper with wide circulation. In the pre-Issue advertisement, our Company
and the Book Running Lead Manager shall advertise the Issue Opening Date, the Issue Closing Date. This
advertisement, subject to the provisions of the Companies Act, shall be in the format prescribed in Part A of
Schedule X of the ICDR Regulations 2018.
• Our Company shall announce the Price Band at least five Working Days before the Issue Opening Date in
English and Hindi national newspapers and one regional newspaper with wide circulation.
• This announcement shall contain relevant financial ratios computed for both upper and lower end of the Price
Band. Further, this announcement shall be disclosed on the websites of the Stock Exchanges where the Equity
Shares are proposed to be listed and shall also be pre-filled in the application forms available on the websites
of the stock exchanges.
• The Issue Period shall be for a minimum of three Working Days. In case the Price Band is revised, the Issue
Period shall be extended, by an additional three Working Days, subject to the total Issue Period not exceeding
ten Working Days. The revised Price Band and Issue Period will be widely disseminated by notification to
the SCSBs and Stock Exchanges, and by publishing in English and Hindi national newspapers and one
regional newspaper with wide circulation and also by indicating the change on the websites of the Book
Running Lead Manager and at the terminals of the members of the Syndicate.
• The Book Running Lead Manager shall dispatch the Red Herring Prospectus and other Issue material
including Bid cum Application Form, to the Designated Stock Exchange, members of the Syndicate, Bankers
to the Issue, investors’ associations and SCSBs in advance.
288
• Copies of the Bid cum Application Form will be available for all categories of Bidders, with the Designated
Branches, members of the Syndicate (at the Syndicate ASBA Bidding Centers) and at our Registered Office.
Electronic Bid cum Application Form will be available on the websites of the SCSBs and on the websites of
the Stock Exchanges at least one Working Day prior to the Issue Opening Date. Copies of the Bid cum
Application Form will be available for the Retail Individual Bidders with the members of the Syndicate and
at our Registered Office.
The Bidders should note that in case the PAN, the DP ID and Client ID mentioned in the Bid cum Application
Form and entered into the electronic bidding system of the Stock Exchanges by the Syndicate Member does
not match with the PAN, DP ID and Client ID available in the database of Depositories, the Bid cum
Application Form is liable to be rejected.
Application by Indian Public including eligible NRIs applying on Non-Repatriation Basis
Bid cum Application must be made only in the names of individuals, Limited Companies or Statutory Corporations
/institutions and not in the names of Minors, Foreign Nationals, Non Residents Indian (except for those applying on
non-repatriation), trusts, (unless the Trust is registered under the Societies Registration Act, 1860 or any other
applicable Trust laws and is authorized under its constitution to hold shares and debentures in a company), Hindu
Undivided Families, Partnership firms or their nominees. In case of HUFs, application shall be made by the Karta of
the HUF. An applicant in the Net Public Category cannot make an application for that number of Equity Shares
exceeding the number of Equity Shares Issued to the public. Eligible NRIs applying on a non-repatriation basis should
authorize their SCSB to block their NRE/FCNR accounts as well as NRO accounts.
Applications by eligible NRIs/ FPI’s on Repatriation Basis
Bid cum Application Forms have been made available for eligible NRIs at our registered office and at the office of
the Book Running Lead Manager to the Issue.
Eligible NRIs Bidders may please note that only such applications as are accompanied by payment in free foreign
exchange shall be considered for Allotment under the category. The Eligible NRIs who intend to get the amount
blocked in the Non Resident Ordinary (NRO) accounts shall use the form meant for Resident Indians and shall not
use the forms meant for this category.
Under FEMA, general permission is granted to companies vide notification no. FEMA/20/2000 RB dated 03/05/2000
to issue securities to NRIs subject to the terms and conditions stipulated therein. Companies are required to file the
declaration in the prescribed form to the concerned Regional Office of RBI within 30(thirty) days from the date of
issue of shares of allotment to NRIs on repatriation basis.
Allotment of Equity shares to Non-Resident Indians shall be subject to the prevailing Reserve Bank of India
Guidelines. Sale proceeds of such investments in Equity shares will be allowed to be repatriated along with the income
thereon subject to the permission of the RBI and subject to the Indian Tax Laws and regulations and any other
applicable laws.
As Per the Current Regulations, The Following Restrictions Are Applicable for Investments by FPIs.
1) A foreign portfolio investor shall invest only in the following securities, namely- (a) Securities in the primary
and secondary markets including shares, debentures and warrants of companies, listed or to be listed on a
recognized stock exchange in India; (b) Units of schemes floated by a domestic mutual funds, whether listed on
a recognized stock exchange or not; (c) Units of Schemes floated by a collective investment scheme; (d)
Derivatives traded on a recognized Stock Exchange; (e) Treasury bills and dated government securities; (f)
Commercial papers issued by an Indian Company; (g) Rupee denominated credit enhanced bonds; (h) Security
receipts issued by asset reconstruction companies; (i) Perpetual debt instruments and debt capital instruments, as
specified by the Reserve Bank of India from time to time; (j) Listed and unlisted non-convertible
debentures/bonds issued by an Indian company in the infrastructure sector, where “infrastructure” is defined in
terms of the extant External Commercial Borrowings (ECB) guidelines; (k) Non-Convertible debentures or bonds
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issued by Non – Banking Financial Companies categorized as “Infrastructure Finance Companies” (IFC) by the
Reserve Bank of India; (i) Rupee denominated bonds or units issued by infrastructure debt funds; (m) Indian
depository receipts; and (n) Such other instruments specified by the Board from time to time.
2) Where a foreign institutional investor or a sub account, prior to commencement of SEBI (Foreign Portfolio
Investors) Regulations, 2014, hold equity shares in a company whose shares are not listed on any recognized
stock exchange, and continues to hold such shares after Initial Public Issue and listing thereof, such shares shall
be subject to lock-in for the same period, if any, as is applicable to shares held by a foreign direct investor placed
in similar position, under the policy of the Government of India relating to foreign direct investment from the
time being in force.
3) In respect of investments in the secondary market, the following additional conditions shall apply:
a) A foreign portfolio investor shall transact in the securities in India only on the basis of taking and giving
delivery of securities purchased or sold;
b) Nothing contained in clause (a) shall apply to:
i) Any transactions in derivatives on a recognized stock exchange;
ii) Short selling transactions in accordance with the framework specified by the Board;
iii) Any transaction in securities pursuant to an agreement entered into with the merchant banker in the
process of market making or subscribing to unsubscribed portion of the issue in accordance with
Chapter IX of the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018;
iv) Any other transaction specified by the Board.
c) No transaction on the stock exchange shall be carried forward;
d) The transaction of business in securities by a foreign portfolio investor shall be only through stock
brokers registered by the Board; provided nothing contained in this clause shall apply to:
4) Transactions in Government securities and such other securities falling under the purview of the Reserve Bank
of India which shall be carried out in the manner specified by the Reserve Bank of India;
5) Sale of securities in response to a letter of offer sent by an acquirer in accordance with the Securities and Exchange
Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
6) Sale of securities in response to an offer made by any promoter or acquirer in accordance with the Securities and
Exchange Board of India (Delisting of Equity Shares) Regulations, 2009.
7) Sale of securities, in accordance with the Securities and Exchange Board of India (Buy Back of Securities)
Regulations, 1998;
8) divestment of securities in response to an offer by Indian Companies in accordance with Operative Guidelines of
Disinvestment of shares of Indian Companies in the overseas market through issue of American Depository
Receipts or Global Depository Receipts as notified by the Government of India and directions issued by Reserve
Bank of India from time to time;
9) Any bid for, or acquisition of, securities in response to an offer for disinvestment of shares made by the Central
Government or any State Government;
10) Any transaction in securities pursuant to an agreement entered into with merchant banker in the process of market
making portion of the Issue or subscribing to the unsubscribed portion of the Issue in accordance with Chapter
IX of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,
2018;
11) Any other transaction specified by Board.
a) A foreign portfolio investor shall hold, deliver or cause to be delivered securities only in dematerialized
form:
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12) Provided that any shares held in non-dematerialized form, before the commencement of these regulation, can be
held in non-dematerialized form, if such shares cannot be dematerialized.
13) Unless otherwise approved by the Board, securities shall be registered in the name of the foreign portfolio investor
as a beneficial owner for the purposes of the Depositories Act, 1996.
14) The purchase of Equity Shares of each company by a single foreign portfolio investor or an investor group shall
be below ten percent of the total issued capital of the company.
15) The investment by the foreign portfolio investor shall also be subject to such other conditions and restrictions as
may be specified by the Government of India from time to time.
16) In cases where the Government of India enters into agreements or treaties with other sovereign Governments and
where such agreements or treaties specifically recognize certain entities to be distinct and separate, the Board
may, during the validity of such agreements or treaties, recognize them as such, subject to conditions as may be
specified by it.
17) A foreign portfolio investor may lend or borrow securities in accordance with the framework specified by the
Board in this regard.
18) No foreign portfolio investor may issue, subscribe to or otherwise deal in offshore derivative instruments, directly
or indirectly, unless the following conditions are satisfied:
19) Such offshore derivative instruments are issued only to persons who are regulated by an appropriate foreign
regulatory authority;
20) Such offshore derivatives instruments are issued after compliance with “know your client” norms:
Provided that those unregulated broad based funds, which are classified as Category II foreign portfolio investor by
virtue of their investment manager being appropriately regulated shall not issue, subscribe or otherwise deal, in
offshore derivatives instruments directly or indirectly:
Provided further that, no Category III foreign portfolio investor shall issue, subscribe to or otherwise deal in offshore
derivatives instruments directly or indirectly.
A foreign portfolio investor shall ensure that further issue or transfer of any offshore derivative instruments issued by
or on behalf of it is made only to persons who are regulated by an appropriate foreign regulatory authority.
Foreign portfolio investors shall fully disclose to the Board any information concerning the terms of and parties to
off-shore derivative instruments such as participatory notes, equity linked notes or any other such instruments, by
whatever names they are called, entered into by it relating to any securities listed or proposed to be listed in any stock
exchange in India, as and when and in such form as the Board may specify.
Any offshore derivative instruments issued under the Securities and Exchange Board of India of India (Foreign
Institutional Investors) Regulations, 1995 before commencement of SEBI (Foreign Portfolio Investors) Regulation,
2014 shall be deemed to have been issued under the corresponding provision of SEBI (Foreign Portfolio Investors)
Regulation, 2014.
The purchase of equity shares of each company by a single foreign portfolio investor or an investor group shall be
below 10 per cent of the total issued capital of the company.
An FII or its subaccount which holds a valid certificate of registration shall, subject to the payment of conversion
fees, be eligible to continue to buy, sell or otherwise deal in securities till the expiry of its registration as a foreign
institutional investor or sub-account, or until he obtains a certificate of registration as foreign portfolio investor,
whichever is earlier.
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Qualified foreign investor may continue to buy, sell or otherwise deal in securities subject to the provision of SEBI
(Foreign Portfolio Investors) Regulation, 2014, for a period of one year from the date of commencement of aforesaid
regulations, or until it obtains a certificate of registration as foreign portfolio investor, whichever is earlier.
Application by Mutual Funds
As per the Current regulations, the following restrictions are applicable for investments by Mutual Fund:
No mutual fund scheme shall invest more than 10% of its net asset value in the Equity Shares or equity related
instruments of any single company provided that the limit of 10% shall not be applicable for investments in index
funds or sector or industry specific funds. No mutual fund under all its schemes should own more than 10% of any
company's paid up share capital carrying voting rights.
With respect to Bids by Mutual Funds, a certified copy of their SEBI registration certificate must be lodged with the
Bid Cum Application Form. Failing this, our Company reserves the right to accept or reject any Bid in whole or in
part, in either case, without assigning any reason thereof.
In 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 Bid in respect of more than one scheme of the Mutual Fund will not be treated as multiple Applications
provided that the Applications clearly indicate the scheme concerned for which the Application has been made.
The Bid made by Asset Management Companies or custodians of Mutual Funds shall specifically state the names of
the concerned schemes for which the Applications are made.
Applications by Limited Liability Partnerships
In case of Bids made by limited liability partnerships registered under the Limited Liability Partnership Act, 2008, a
certified copy of certificate of registration issued under the LLP Act, 2008 must be attached to the Bid cum Application
Form. Failing this, our Company reserves the right to reject any Bids without assigning any reason thereof.
Applications by Insurance Companies
In case of Bids made by insurance companies registered with IRDA, certified copy of certificate of registration issued
by IRDA must be attached to the Bid cum Application Form. Failing this, our Company, in consultation with the
BRLM, reserves the right to reject any application, without assigning any reason thereof.
The exposure norms for insurers, prescribed under the Insurance Regulatory and Development Authority (Investment
Scheme) (5th Amendment) Regulations, 2010, as amended (the “IRDA Investment Regulations”), are broadly set
forth below:
(a) Equity shares of a company: The lesser of 10% of the investee company’s subscribed capital (face value) or 10%
of the respective fund in case of life insurer or 10% of investment assets in case of general insurer or reinsurer;
(b) The entire group of the investee company: at least 10% of the respective fund in case of a life insurer or 10% of
investment assets in case of general insurer or reinsurer (25% in case of Unit Linked Insurance Plans); and
(c) The industry sector in which the investee company operates: 10% of the insurer‘s total investment exposure to
the industry sector (25% in case of Unit Linked Insurance Plans).
Applications under Power of Attorney
In case of Bids made pursuant to a power of attorney by limited companies, corporate bodies, registered societies,
FIIs, FPI‘s, Mutual Funds, insurance companies and provident funds with minimum corpus of ₹ 2,500 Lakh (subject
to applicable law) and pension funds with a minimum corpus of ₹ 2,500 Lakh, a certified copy of the power of
attorney or the relevant Resolution or authority, as the case may be, along with a certified copy of the memorandum
of association and articles of association and/or bye laws must be lodged with the Application Form. Failing this, our
Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason
therefore.
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With respect to the Bids by VCFs, FVCIs and FPIs, a certified copy of the power of attorney or the relevant resolution
or authority, as the case may belong with a certified copy of their SEBI registration certificate must be lodged along
with the Bid cum Application Form. Failing this, our Company reserves the right to accept or reject any Bid in whole
or in part, in either case, without assigning any reason therefore.
In the case of Bids made pursuant to a power of attorney by Mutual Funds, a certified copy of the power of attorney
or the relevant resolutions or authority, as the case may be, along with the certified copy of their SEBI registration
certificate must be submitted along with the Bid cum Application Form. Failing this, the Company reserves the right
to accept or reject any Bid cum Application in whole or in part, in either case, without assigning any reason therefore.
In the case of Bids made by insurance companies registered with the IRDA, a certified copy of certificate of
registration issued by the IRDA must be lodged along with the Bid cum Application Form. Failing this, the Company
reserves the right to accept or reject any Application in whole or in part, in either case, without assigning any reason
therefore.
In the case of Bids made by to the power of attorney by FIIs, a certified copy of the power of attorney the relevant
resolution or authority, as the case may be along with the certified copy of SEBI registration certificate must be lodged
with the Bid cum Application Form. Failing this, the Company reserves the right to accept or reject any Bid cum
Application in whole or in part, in either case, without assigning any reason thereof.
In the case of Bid cum Applications made by provident funds, subject to applicable law, with minimum corpus of ₹
2500 Lakh and pension funds with minimum corpus of ₹ 2500 Lakh, a certified copy of a certificate from a chartered
accountant certifying the corpus of the provident fund/pension fund must be lodged along with the Bid cum
Application Form. Failing this, the Company reserves the right to accept or reject any Application in whole or in part,
in either case, without assigning any reason thereof.
Application by Provident Funds/Pension Funds
In case of Bids made by provident funds with minimum corpus of ₹2,500 lakhs (subject to applicable law) and
pension funds with minimum corpus of ₹2,500 lakhs, a certified copy of certificate from a chartered accountant
certifying the corpus of the provident fund/ pension fund must be lodged along with the Bid cum Application Form.
Failing this, our Company reserves the right to accept or reject any Bid cum Application in whole or in part, in either
case, without assigning any reason thereof.
The above information is given for the benefit of the Bidder. Our Company, BRLM and Syndicate Members are not
liable for any amendments or modification or changes in applicable laws or regulations, which may occur after the
date of filing of this Draft Red Herring Prospectus. Bidders are advised to make their independent investigations and
ensure that the maximum number of Equity Shares applied for or maximum investment limits do not exceed the
applicable limits under laws or regulations or as specified in this Draft Red Herring Prospectus.
Bids by banking companies
In case of Bids made by banking companies registered with RBI, certified copies of: (i) the certificate of registration
issued by RBI, and (ii) the approval of such banking company’s investment committee are required to be attached to
the Bid cum Application Form, failing which our Company, severally and not jointly, reserve the right to reject any
Bid without assigning any reason therefore.
The investment limit for banking companies in non-financial services companies as per the Banking Regulation Act,
1949 (the “Banking Regulation Act”), and Master Circular – Para-banking Activities dated July 1, 2015 is 10% of
the paid-up share capital of the investee company or 10% of the banks’ own paid-up share capital and reserves,
whichever is less. Further, the investment in a non-financial services company by a banking company together with
its subsidiaries, associates, joint ventures, entities directly or indirectly controlled by the bank and mutual funds
managed by asset management companies controlled by the banking company cannot exceed 20% of the investee
company’s paid-up share capital. A banking company may hold up to 30% of the paid-up share capital of the investee
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company with the prior approval of the RBI provided that the investee company is engaged in non-financial activities
in which banking companies are permitted to engage under the Banking Regulation Act.
Method and Process of Bids
1) The Designated Intermediaries shall accept applications from the Bids during the Issue Period.
2) The Issue Period shall be for a minimum of three Working Days and shall not exceed 10 (ten) Working Days.
The Issue Period may be extended, if required, by an additional three Working Days, subject to the total Issue
Period not exceeding 10 (ten) Working Days.
3) During the Issue Period, Bidders who are interested in subscribing to the Equity Shares should approach the
Designated Intermediaries to register their applications.
4) The Bidder cannot apply on another Application Form after bids on one Bid Cum Application Form have been
submitted to the Designated Intermediaries. Submission of a second Bid cum Application form to either the same
or to another Designated Intermediaries will be treated as multiple bids and is liable to rejected either before
entering the application into the electronic collecting system or at any point prior to the allocation or Allotment
of Equity Shares in this Issue.
5) Designated Intermediaries accepting the bid cum application forms shall be responsible for uploading the
application along with other relevant details in application forms on the electronic bidding system of stock
exchange and submitting the form to SCSBs for blocking of funds (except in case of SCSBs, where blocking of
funds will be done by respective SCSBs only). All bids shall be stamped and thereby acknowledged by the
Designated Intermediaries at the time of receipt.
6) Upon receipt of the bid cum Application Form, submitted whether in physical or electronic mode, the Designated
Intermediaries shall verify if sufficient funds equal to the bid Amount are available in the ASBA Account, as
mentioned in the bid cum Application Form, prior to uploading such bids with the Stock Exchange.
7) If sufficient funds are not available in the ASBA Account, the Designated Intermediaries shall reject such bids
and shall not upload such bids with the Stock Exchange.
8) If sufficient funds are available in the ASBA Account, the SCSB shall block an amount equivalent to the bid
Amount mentioned in the Bid cum Application Form and will enter each application option into the electronic
collecting system as a separate application and generate a TRS for each price and demand option. The TRS shall
be furnished to the Applicant on request.
9) The bid Amount shall remain blocked in the aforesaid ASBA Account until finalization of the Basis of Allotment
and consequent transfer of the bid Amount against the Allotted Equity Shares to the Public Issue Account, or
until withdraw/ failure of the Issue or until withdrawal/ rejection of the bid cum Application Form, as the case
may be. Once the Basis of Allotment if finalized, the Registrar to the Issue shall send an appropriate request to
the Controlling Branch of the SCSB for unblocking the relevant ASBA Accounts and for transferring the amount
allocable to the successful bidders to the Public Issue Account. In case of withdrawal/ failure of the Issue, the
blocked amount shall be unblocked on receipt of such information from the Registrar to the Issue.
Terms of payment
The entire Issue price of ₹ [●] per share is payable on application. In case of allotment of lesser number of Equity
Shares than the number applied, the Registrar shall instruct the SCSBs to unblock the excess amount paid on
Application to the bidders. SCSBs will transfer the amount as per the instruction of the Registrar to the Public Issue
Account, the balance amount after transfer will be unblocked by the SCSBs.
The bidders should note that the arrangement with Bankers to the Issue or the Registrar is not prescribed by SEBI and
has been established as an arrangement between our Company, Banker to the Issue and the Registrar to the Issue to
facilitate collections from the bidders.
• Payment Mechanism
The Bidders shall specify the bank account number in their Bid cum Application Form and the SCSBs shall block an
amount equivalent to the bid Amount in the bank account specified in the Bid cum Application Form. The SCSB shall
keep the bid Amount in the relevant bank account blocked until withdrawal/ rejection of the Application or receipt of
instructions from the Registrar to unblock the bid Amount. However, Non Retail Bidders shall neither withdraw nor
lower the size of their applications at any stage. In the event of withdrawal or rejection of the Bid cum Application
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Form or for unsuccessful Bid cum Application Forms, the Registrar to the Issue shall give instructions to the SCSBs
to unblock the application money in the relevant bank account within one day of receipt of such instruction. The Bid
Amount shall remain blocked in the ASBA Account until finalization of the Basis of Allotment in the Issue and
consequent transfer of the Bid Amount to the Public Issue Account, or until withdrawal/ failure of the Issue or until
rejection of the Bid by the ASBA Bidder, as the case may be.
Please note that pursuant to SEBI circular CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 investors in
the public issue can only invest through ASBA Mode. Electronic Registration of Applications
1) The Designated Intermediaries will register the applications using the on-line facilities of the Stock
Exchange.
2) The Designated Intermediaries will undertake modification of selected fields in the application details
already uploaded before 1.00 p.m. of next Working Day from the Issue Closing Date.
3) The Designated Intermediaries shall be responsible for any acts, mistakes or errors or omissions and
commissions in relation to,
i. the Bids accepted by them,
ii. the Bids uploaded by them
iii. the Bids accepted but not uploaded by them or
iv. With respect to applications by Bidders, Bids accepted and uploaded by any Designated Intermediary
other than SCSBs, the Application form along with relevant schedules shall be sent to the SCSBs or
the Designated Branch of the relevant SCSBs for blocking of funds and they will be responsible for
blocking the necessary amounts in the ASBA Accounts. In case of Bid accepted and Uploaded by
SCSBs, the SCSBs or the Designated Branch of the relevant SCSBs will be responsible for blocking
the necessary amounts in the ASBA Accounts.
4) Neither the Book Running Lead Manager nor our Company nor the Registrar to the Issue, shall be responsible
for any acts, mistakes or errors or omission and commissions in relation to,
i. the bids accepted by any Designated Intermediaries
ii. the bids uploaded by any Designated Intermediaries or
iii. the bids accepted but not uploaded by any Designated Intermediaries
5) The Stock Exchange will offer an electronic facility for registering applications for the Issue. This facility
will available at the terminals of Designated Intermediaries and their authorized agents during the Issue
Period. The Designated Branches or agents of Designated Intermediaries can also set up facilities for off-
line electronic registration of applications subject to the condition that they will subsequently upload the off-
line data file into the online facilities on a regular basis. On the Issue Closing Date, the Designated
Intermediaries shall upload the applications till such time as may be permitted by the Stock Exchange. This
information will be available with the Book Running Book Running Lead Manager on a regular basis.
6) With respect to bids by bidders, at the time of registering such bids, the Syndicate Bankers, DPs and RTAs
shall forward a Schedule as per format given below along with the Bid cum Application Forms to Designated
Branches of the SCSBs for blocking of funds:
S. No. Details*
1. Symbol
2. Intermediary Code
3. Location Code
4. Application No.
5. Category
6. PAN
7. DP ID
8. Client ID
9. Quantity
10. Amount
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*Stock Exchanges shall uniformly prescribe character length for each of the above-mentioned fields
1. With respect to bids by bidders, at the time of registering such bids, the Designated Intermediaries shall enter
the following information pertaining to the bids into in the on-line system: •Name of the bidder; IPO Name:
• Bid cum Application Form Number;
• Investor Category;
• PAN (of First bidder, if more than one bidder);
• DP ID of the demat account of the Bidder;
• Client Identification Number of the demat account of the Bidder;
• Number of Equity Shares Applied for;
• Bank Account details;
• Locations of the Banker to the Issue or Designated Branch, as applicable, and bank code of the SCSB
branch where the ASBA Account is maintained; and
• Bank account number.
2. In case of submission of the Bid by a Bidder through the Electronic Mode, the Bidder shall complete the
above-mentioned details and mention the bank account number, except the Electronic ASBA Bid cum
Application Form number which shall be system generated.
3. The aforesaid Designated Intermediaries shall, at the time of receipt of bid, give an acknowledgment to the
investor, by giving the counter foil or specifying the application number to the investor, as a proof of having
accepted the bid cum application form in physical as well as electronic mode. The registration of the bid by
the Designated Intermediaries does not guarantee that the Equity Shares shall be allocated / allotted either
by our Company.
4. Such acknowledgment will be non-negotiable and by itself will not create any obligation of any kind.
5. In case of Non Retail Bidders and Retail Individual Bidders, bids would not be rejected except on the
technical grounds as mentioned in the Red Herring Prospectus. The Designated Intermediaries shall have no
right to reject applications, except on technical grounds.
6. The permission given by the Stock Exchanges to use their network and software of the Online IPO system
should not in any way be deemed or construed to mean that the compliance with various statutory and other
requirements by our Company and/or the Book Running Lead Manager are cleared or approved by the Stock
Exchanges; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of
the compliance with the statutory and other requirements nor does it take any responsibility for the financial
or other soundness of our company; our Promoter, our management or any scheme or project of our
Company; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of
the contents of this Prospectus, nor does it warrant that the Equity Shares will be listed or will continue to be
listed on the Stock Exchanges.
7. The Designated Intermediaries will be given time till 1.00 p.m. on the next working day after the Issue
Closing Date to verify the DP ID and Client ID uploaded in the online IPO system during the Issue Period,
after which the Registrar to the Issue will receive this data from the Stock Exchange and will validate the
electronic application details with Depository’s records. In case no corresponding record is available with
Depositories, which matches the three parameters, namely DP ID, Client ID and PAN, then such applications
are liable to be rejected.
8. The SCSBs shall be given one day after the Issue Closing Date to send confirmation of Funds blocked (Final
certificate) to the Registrar to the Issue.
9. The details uploaded in the online IPO system shall be considered as final and Allotment will be based on
such details for bids.
Allocation of Equity shares
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1. The Issue is being made through the Book Building Process where in upto [●] Equity Shares shall be reserved
for Market Maker. [●] Equity shares will be allocated on a proportionate basis to Retail Individual Bidders,
subject to valid bids being received from Retail Individual Bidders at the Issue Price. The balance of the Net
Issue will be available for allocation on proportionate basis to Non Retail Bidders.
2. Under- subscription if any, in any category, would be allowed to be met with spill-over from any other
category or combination of categories at the discretion of our Company in consultation with the Book
Running Lead Manager and the Stock Exchange.
3. Allocation to Non-Residents, including Eligible NRIs, Eligible QFIs, FIIs and FVCIs registered with SEBI,
applying on repatriation basis will be subject to applicable law, rules, regulations, guidelines and approvals.
4. In terms of SEBI Regulations, Non Retail Bidders shall not be allowed to either withdraw or lower the size
of their applications at any stage.
5. Allotment status details shall be available on the website of the Registrar to the Issue.
Signing of Underwriting Agreement and Filing of Draft Red Herring Prospectus with ROC
a. Our company, BRLM and Syndicate Members has entered into an Underwriting Agreement dated [●].
b. A copy of Red Herring Prospectus and Prospectus will be filled with the RoC in terms of Section 26 of
Companies Act, 2013.
Pre-Issue Advertisement
Subject to Section 30 of the Companies Act 2013, our Company shall, after registering the Red Herring
Prospectus with the RoC, publish a pre-Issue advertisement, in the form prescribed by the SEBI Regulations, in
(i) English National Newspaper; (ii)Hindi National Newspaper and (iii) Regional Newspaper each with wide
circulation. In the pre-Issue advertisement, we stated the Bid Opening Date and the Bid Closing Date. This
advertisement, subject to the provisions of Section 30 of the Companies Act, 2013, was in the format prescribed
in Part A of Schedule X of the SEBI Regulations 2018.
Advertisement regarding Issue Price and Prospectus
Our Company will issue a statutory advertisement after the filing of the Prospectus with the RoC. This
advertisement, in addition to the information that has to be set out in the statutory advertisement, shall indicate
the final derived Issue Price. Any material updates between the date of the Red Herring Prospectus and the date
of Prospectus will be included in such statutory advertisement.
Issuance of Allotment Advice
a. Upon approval of the Basis of Allotment by the Designated Stock Exchange.
b. The Book Running Lead Manager or the Registrar to the Issue will dispatch an Allotment Advice to their
bidders who have been allocated Equity Shares in the Issue.
c. The dispatch of Allotment Advice shall be deemed a valid, binding and irrevocable contract for the Allotment
to such Bid.
General Instructions Do's:
• Check if you are eligible to apply;
• Read all the instructions carefully and complete the applicable Bid Cum Application Form;
• Ensure that you have Bid within the Price Band;
• Ensure that the details about the Depository Participant and the beneficiary account are correct as Allotment
of Equity Shares will be in the dematerialized form only;
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• Each of the bidders should mention their Permanent Account Number (PAN) allotted under the Income Tax
Act, 1961;
• Ensure that the Demographic Details are updated, true and correct in all respects;
• Ensure that the name(s) given in the Bid cum Application Form is exactly the same as the name(s) in which
the beneficiary account is held with the Depository Participant.
• Ensure that you have funds equal to the Application Amount in the ASBA account maintained with the
SCSB before submitting the Bid cum Application Form under the ASBA process to the respective member
of the Syndicate (in the Specified Locations), the SCSBs, the Registered Broker (at the Broker Centres), the
RTA (at the Designated RTA Locations) or CDP (at the Designated CDP Locations); Instruct your
respective Banks to release the funds blocked in the ASBA Account under the ASBA process;
• Ensure that the Bid cum Application Form is signed by the account holder in case the bidder is not the
account holder. Ensure that you have mentioned the correct bank account number in the Bid cum
Application Form;
• Ensure that the Bid cum Application Forms are delivered by the bidders within the time prescribed as per
the Bid cum Application Form and the Red Herring Prospectus;
• Ensure that you have requested for and receive a TRS;
• Ensure that you request for and receive a stamped acknowledgement of the Bid cum Application Form for
all your bid options;
• All Investors submit their bids through the ASBA process only;
• Ensure that you receive an acknowledgement from the concerned Designated Intermediary, for the
submission of your Bid cum Application Form; and
• The Bid cum Application Form is liable to be rejected if the above instructions, as applicable, are not
complied with.
Don’ts:
• Do not apply for lower than the minimum bid size;
• Do not apply for a price different from the price mentioned herein or in the Bid cum Application Form;
• Do not apply on another Bid cum Application Form after you have submitted an application to the SCSBs,
Registered Brokers of Stock Exchange, RTA and DPs registered with SEBI;
• Do not pay the bid Price in cash, by money order or by postal order or by stock invest;
• Do not send Bid cum Application Forms by post, instead submit the Designated Intermediary only;
• Do not submit the Bid cum Application Forms to any non-SCSB bank or our Company
• Do not apply on a Bid cum Application Form that does not have the stamp of the relevant Designated
Intermediary;
• Do not submit the bid without ensuring that funds equivalent to the entire application Amount are blocked
in the relevant ASBA Account;
• Do not apply for a bid Amount exceeding 2,00,000 (for applications by Retail Individual Bidders);
• Do not fill up the Bid cum Application Form such that the Equity Shares applied for exceeds the Issue Size
and/or investment limit or maximum number of Equity Shares that can be held under the applicable laws or
regulations or maximum amount permissible under the applicable regulations;
• Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground;
• Do not submit incorrect details of the DP ID, beneficiary account number and PAN or provide details for a
beneficiary account which is suspended or for which details cannot be verified by the Registrar to the Issue;
• Do not submit bids on plain paper or incomplete or illegible Bid cum Application Forms in a colour
prescribed for another category of Applicant; and
• Do not make Bid cum Applications if you are not competent to contract under the Indian Contract Act,
1872, as amended.
• Do not submit more than five Bid cum Application Forms per ASBA Account;
The Bid cum Application Form is liable to be rejected if the above instructions, as applicable, are not complied with.
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Bids at Different Price Levels and Revision of Bids
a. Our Company in consultation with the BRLM, and without the prior approval of, or intimation, to the
Bidders, reserves the right to revise the Price Band during the Bid/ Issue Period, provided that the Cap Price
shall be less than or equal to 120% of the Floor Price and the Floor Price shall not be less than the face
value of the Equity Shares. The revision in Price Band shall not exceed 20% on the either side i.e. the floor
price can move up or down to the extent of 20% of the floor price disclosed. If the revised price band
decided, falls within two different price bands than the minimum application lot size shall be decided based
on the price band in which the higher price falls into.
b. Our Company in consultation with the BRLM, will finalize the Issue Price within the Price Band, without
the prior approval of, or intimation, to the Bidders.
c. The Bidders Can Bid at any price within the Price Band. The Bidder has to Bid for the desired number of
Equity Shares at a specific price. Retail Individual Bidders May Bid at the Cut-off Price. However, bidding
at Cut-off Price is prohibited for QIB and Non-Institutional Bidders and such Bids from QIB and Non-
Institutional Bidders shall be rejected.
d. Retail Individual Bidders, who Bid at Cut-off Price agree that they shall purchase the Equity Shares at any
price within the Price Band. Retail Individual Bidders shall submit the Bid cum Application Form along
with a cheque/demand draft for the Bid Amount based on the Cap Price with the Syndicate. In case of
ASBA Bidders (excluding Non-Institutional Bidders and QIB Bidders) bidding at Cut-off Price, the ASBA
Bidders shall instruct the SCSBs to block an amount based on the Cap Price.
Communications
All future communications in connection with Bids made in this Issue should be addressed to the Registrar quoting
the full name of the sole or First Bidder, Bid cum Application Form number, Bidders Depository Account Details,
number of Equity Shares applied for, date of Bid cum Application Form, name and address of the member of the
Syndicate or the SCSB / Designated Intermediary, where the Bid was submitted and bank account number in which
the amount equivalent to the Bid Amount was blocked.
Bidders can contact the Compliance Officer or the Registrar in case of any pre-Issue or post-Issue related problems
such as non-receipt of letters of Allotment, credit of allotted shares in the respective beneficiary accounts, unblocking
of funds, etc. In case of ASBA Bids submitted to the Designated Branches of the SCSBs, the Bidders can contact the
Designated Branches of the SCSBs.
Impersonation
Attention of the bidders is specifically drawn to the provisions of sub-section (1) of Section 38 of the Companies Act,
2013 which is reproduced below:
Any person who-
i. Makes or abets making of an application in a fictitious name to a company for acquiring, or subscribing for,
its securities; or
ii. 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
iii. 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 to action under section 447 of the Companies, Act 2013.
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Undertakings by Our Company
We undertake as follows:
1. That the complaints received in respect of the Issue shall be attended to by us expeditiously and satisfactorily;
2. That all steps will be taken for the completion of the necessary formalities for listing and commencement of
trading at the SME Exchange EMERGE Platform of NSE where the Equity Shares are proposed to be listed
within 6 (six) Working days of Bid/Issue Closing Date.
3. That if the Company does not proceed with the Issue, the reason thereof shall be given as a public notice to be
issued by our Company within two days of the Issue Closing Date. The public notice shall be issued in the same
newspapers where the pre-Issue advertisements were published. The stock exchange on which the Equity Shares
are proposed to be listed shall also be informed promptly;
4. That our Promoters’ contribution in full has already been brought in;
5. 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 Working Days of the Bid/Issue
Closing Date.
6. That no further issue of Equity Shares shall be made till the Equity Shares Issued through the Red Herring
Prospectus are listed or until the Application monies are unblocked on account of non-listing, under subscription
etc. and
7. That if the Company withdraws the Issue after the Issue Closing Date, our Company shall be required to file a
fresh offer document with the RoC/ SEBI, in the event our Company subsequently decides to proceed with the
Issuer;
8. Adequate arrangements shall be made to collect all Bid cum Application Forms.
9. That none of the promoters or directors of the company is willful defaulter under Regulation 228(c) of SEBI
(ICDR) Regulations, 2018.
Utilization of Issue Proceeds
Our Company declares 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, 2013.
Equity Shares in Dematerialized Form with NSDL or CDSL
To enable all shareholders of our Company to have their shareholding in electronic form, the Company had signed
the following tripartite agreements with the Depositories and the Registrar and Share Transfer Agent:
a. Agreement dated October 16,2018 between NSDL, the Company and the Registrar to the Issue;
b. Agreement dated September 10, 2018 between CDSL, the Company and the Registrar to the Issue;
The Company's equity shares bear an ISIN No. INE01LN01017
Other Instructions
Joint Applications in the case of Individuals
Applications may be made in single or joint names (not more than three). In the case of joint Applications, all
payments will be made out in favour of the Applicant whose name appears first in the Application Form or Revision
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Form. All communications will be addressed to the First Applicant and will be dispatched to his or her address as per
the Demographic Details received from the Depository.
Multiple Applications
An Applicant should submit only one Application (and not more than one). Two or more Applications will be deemed
to be multiple Applications if the sole or First Applicant is one and the same.
In this regard, the procedures which would be followed by the Registrar to the Issue to detect multiple applications
are given below:
i. All applications are electronically strung on first name, address (1st line) and applicant‘s status. Further,
these applications are electronically matched for common first name and address and if matched, these are
checked manually for age, signature and father/ husband ‘s name to determine if they are multiple
applications
ii. Applications which do not qualify as multiple applications as per above procedure are further checked for
common DP ID/ beneficiary ID. In case of applications with common DP ID/ beneficiary ID, are manually
checked to eliminate possibility of data entry error to determine if they are multiple applications.
iii. Applications which do not qualify as multiple applications as per above procedure are further checked for
common PAN. All such matched applications with common PAN are manually checked to eliminate
possibility of data capture error to determine if they are multiple applications.
In case of a mutual fund, a separate Application can be made in respect of each scheme of the mutual fund registered
with SEBI and such Applications in respect of more than one scheme of the mutual fund will not be treated as multiple
Applications provided that the Applications clearly indicate the scheme concerned for which the Application has been
made. In cases where there are more than 20 valid applications having a common address, such shares will be kept in
abeyance, post allotment and released on confirmation of ―know your client norms by the depositories. The Company
reserves the right to reject, in its absolute discretion, all or any multiple Applications in any or all categories.
After submitting an ASBA Application either in physical or electronic mode, an ASBA Applicant cannot apply (either
in physical or electronic mode) to either the same or another Designated Branch of the SCSB Submission of a second
Application in such manner will be deemed a multiple Application and would be rejected. More than one ASBA
Applicant may apply for Equity Shares using the same ASBA Account, provided that the SCSBs will not accept a
total of more than five Application Forms with respect to any single ASBA Account.
Duplicate copies of Application Forms downloaded and printed from the website of the Stock Exchange bearing the
same application number shall be treated as multiple Applications and are liable to be rejected. The Company, in
consultation with the Book Running Book Running Lead Manager reserves the right to reject, in its absolute
discretion, all or any multiple Applications in any or all categories. In this regard, the procedure which would be
followed by the Registrar to the Issue to detect multiple Applications is given below:
1. All Applications will be checked for common PAN. For Bidders other than Mutual Funds and FII subaccounts,
Applications bearing the same PAN will be treated as multiple Applications and will be rejected.
2. For Applications from Mutual Funds and FII sub-accounts, submitted under the same PAN, as well as Applications
on behalf of the Bidders for whom submission of PAN is not mandatory such as the Central or State Government,
an official liquidator or receiver appointed by a court and residents of Sikkim, the Application Forms will be
checked for common DP ID and Client ID.
Permanent Account Number or PAN
Pursuant to the circular MRD/DoP/Circ 05/2007 dated April 27, 2007, SEBI has mandated Permanent Account
Number (―PAN) to be the sole identification number for all participants transacting in the securities market,
irrespective of the amount of the transaction w.e.f. July 2, 2007. Each of the Bidders should mention his/her PAN
allotted under the IT Act. Applications without the PAN will be considered incomplete and are liable to be rejected.
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It is to be specifically noted that Bidders should not submit the GIR number instead of the PAN, as the Application is
liable to be rejected on this ground.
Our Company/ Registrar to the Issue Book Running Lead Manager can, however, accept the Application(s) in
which PAN is wrongly entered into by ASBA SCSB’s in the ASBA system, without any fault on the part of
Applicant.
PART B
GENERAL INFORMATION DOCUMENT FOR INVESTING IN PUBLIC ISSUES
This General Information Document highlights the key rules, processes and procedures applicable to public issues in
accordance with the provisions of the Companies Act, 2013 (to the extent notified and in effect), the Companies Act,
1956 (without reference to the provisions thereof that have ceased to have effect upon the notification of the
Companies Act, 2013), the Securities Contracts (Regulation) Act, 1956, the Securities Contracts (Regulation) Rules,
1957 and the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,
2018. Applicants should not construe the contents of this General Information Document as legal advice and should
consult their own legal counsel and other advisors in relation to the legal matters concerning the Issue. For taking an
investment decision, the Applicants should rely on their own examination of the Issuer and the Issue, and should
carefully read the Draft Red Herring Prospectus/ Red Herring Prospectus/ Prospectus before investing in the Issue
Section 1: Purpose of the General Information Document (GID)
This document is applicable to the public issues undertaken inter-alia through the Book Building Issues. The
purpose of the “General Information Document for Investing in Public Issues” is to provide general guidance
to potential Applicants in IPOs, on the processes and procedures governing IPOs, undertaken in accordance with
the provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018 (“SEBI ICDR Regulations, 2018”).
Applicants should note that investment in equity and equity related securities involves risk and Applicant should
not invest any funds in the Issue unless they can afford to take the risk of losing their investment. The specific
terms relating to securities and/or for subscribing to securities in an Issue and the relevant information about the
Issuer undertaking the Issue; are set out in the Prospectus filed by the Issuer with the Registrar of Companies
(“RoC”). Applicants should carefully read the entire Prospectus and the Application Form and the Abridged
Prospectus of the Issuer in which they are proposing to invest through the Issue. In case of any difference in
interpretation or conflict and/or overlap between the disclosure included in this document and the Prospectus, the
disclosures in the Prospectus shall prevail. The Prospectus of the Issuer is available on the websites of stock
exchange, on the website(s) of the BRLM to the Issue and on the website of Securities and Exchange Board of
India (“SEBI”) at www.sebi.gov.in.
For the definitions of capitalized terms and abbreviations used herein Applicants may refer to the section “Glossary
and Abbreviations”.
Section 2: Brief Introduction to IPOs on SME Exchange
2.1 Initial public Issue (IPO)
An IPO means an Issue of specified securities by an unlisted Issuer to the public for subscription and may include an
Issue for Sale of specified securities to the public by any existing holder of such securities in an unlisted Issuer.
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For undertaking an IPO, an Issuer is inter-alia required to comply with the eligibility requirements of in terms of either
Regulation 228 or Regulation 229 of the SEBI ICDR Regulations, 2018 if applicable. For details of compliance with
the eligibility requirements by the Issuer Applicants may refer to the Prospectus.
The Issuer may also undertake IPO under Chapter IX of SEBI (ICDR) regulations 2018, wherein as per,
Regulation 229(1): An issuer whose post-issue face value capital does not exceed ten crore rupees shall issue its
specified securities in accordance with provisions of this Chapter.
Regulation 229(2): An issuer whose post-issue face value capital is more than ten crore rupees and upto twenty-five
crore rupees, may also issue its specified securities in accordance with provisions of this Chapter. The present Issue
being made under Regulation 229(2) of Chapter IX of SEBI (ICDR) Regulation 2018.
2.2 Other Eligibility Requirements
In addition to the eligibility requirements specified in paragraphs 2.1 an Issuer proposing to undertake an IPO is
required to comply with various other requirements as specified in the SEBI ICDR Regulations, 2018, the Companies
Act, 1956 and the Companies Act, 2013 as may be applicable (“the Companies Act), the Securities Contracts
(Regulation) Rules, 1957 (the “SCRR”), industry-specific regulations, if any, and other applicable laws for the time
being in force.
Following are the eligibility requirements for making an SME IPO under Regulation 229 (1) of Chapter IX of SEBI
(ICDR) Regulation 2018:
a) In accordance with Regulation 260 of SEBI (ICDR) Regulation 2018, Issue has to be 100% underwritten and
shall not be restricted upto the minimum subscription level and the BRLM has to underwrite at least 15% of the
total issue size.
b) In accordance with regulation 268(1) of SEBI (ICDR) Regulation 2018, total number of proposed allottees in
the Issue shall be greater than or equal to fifty, otherwise the entire application money will be blocked forthwith.
If such money is not repaid within eight days from the date the company becomes liable to repay it, than the
Company and every officer in default shall, on and from expiry of eight days, be liable to repay such application
money, with interest as prescribed under Section 40 of the Companies Act, 2013.
c) In accordance with Regulation 246(1) the SEBI (ICDR) Regulation 2018, Company is not required to file any
Issue Document with SEBI nor has SEBI issued any observations on the Issue Document. The Book Running
Lead Manager shall submit the copy of Prospectus along with a Due Diligence Certificate including additional
confirmations as required to SEBI at the time of filing the Prospectus with Stock Exchange and the Registrar of
Companies.
d) In accordance with Regulation 261(1) of the SEBI (ICDR) Regulation 2018, the BRLM has to ensure
compulsory market making for a minimum period of three years from the date of listing of Equity Shares Issued
in the Issue.
e) The Issuer shall have a track record of three years.
f) The Net worth (excluding revaluation reserves) of the Issuer shall be positive as per the latest audited financial
results.
g) The Issuer should have positive cash accruals (earnings before depreciation and tax) from operations for at least
2 financial years.
h) The Post-issue paid up capital of the Issuer shall be less than 25 Crores.
i) The Issuer shall mandatorily facilitate trading in demat securities.
j) The Issuer should not have been referred to Board for Industrial and Financial Reconstruction.
k) No petition for winding up is admitted by a court or a liquidator has not been appointed of competent jurisdiction
against the Company.
l) No material regulatory or disciplinary action should have been taken by any stock exchange or regulatory
authority in the past three years against the Issuer.
m) The Company should have a website
Issuer shall also comply with all the other requirements as laid down for such an Issue under Chapter IX of SEBI
(ICDR) Regulations 2018 and subsequent circulars and guidelines issued by SEBI and the Stock Exchange.
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The provisions of Regulations 25(4), 25(5), Regulation 25(2), Regulation 99, Regulation 4, Regulation 6(1),
Regulation 103 and sub-regulation (2) of Regulation 47 of SEBI (ICDR) Regulations, 2018 shall not apply to us in
this Issue.
Thus the Company is eligible for the Issue in accordance with Regulation 229(2) and other provision of Chapter IX
of SEBI (ICDR) Regulations 2018 as the post –issue face value capital does not exceed ₹2500 Lakh. Company also
complies with the eligibility conditions laid by the SME Platform of NSE EMERGE for listing of our Equity Shares.
2.3 Types of Public Issues – Fixed Price Issues and Book Built Issue
In accordance with the provisions of the SEBI ICDR Regulations, 2018, an Issuer can either determine the Issue Price
through the Book Building Process (“Book Built Issue”) or undertake a Fixed Price Issue (“Fixed Price Issue”). An
Issuer may mention Floor Price or Price Band in the RHP (in case of a Book Built Issue) and a Price or Price Band in
the Daft Prospectus (in case of a fixed price Issue) and determine the price at a later date before registering the
Prospectus with the Registrar of Companies.
The cap on the Price Band should be less than or equal to 120% of the Floor Price. The Issuer shall announce the
Price or the Floor Price or the Price Band through advertisement in all newspapers in which the pre-issue
advertisement was given at least five Working Days before the Bid/Issue Opening Date, in case of an IPO and at least
one Working Day before the Bid/Issue Opening Date, in case of an FPO.
The Floor Price or the Issue price cannot be lesser than the face value of the securities.
Applicants should refer to the Prospectus or Issue advertisements to check whether the Issue is a Book Built Issue or
a Fixed Price Issue.
2.4 Issue Period
The Issue may be kept open for a minimum of three Working Days (for all category of Applicants) and not more than
ten Working Days. Applicants are advised to refer to the Application Form and Abridged Prospectus or Prospectus
for details of the Issue Period. Details of Issue Period are also available on the website of Stock Exchange.
2.5 Migration to Main Board
SME Issuer may migrate to the Main Board of Stock Exchange from the SME Exchange at a later date subject to the
following:
If the Paid up Capital of the Company is likely to increase above ₹ 25 crores by virtue of any further issue of capital
by way of rights, preferential issue, bonus issue etc. (which has been approved by a special resolution through postal
ballot wherein the votes cast by the shareholders other than the Promoters in favor of the proposal amount to at least
two times the number of votes cast by shareholders other than promoter shareholders against the proposal and for
which the company has obtained in-principal approval from the main board). The Company shall apply to Stock
Exchange for listing of its shares on its Main Board subject to the fulfillment of the eligibility criteria for listing of
specified securities laid down by the Main Board.
OR
If the Paid up Capital of the company is more than ₹10 crores but below ₹ 25 crores, the Company may still apply for
migration to the main board if the same has been approved by a special resolution through postal ballot wherein the
votes cast by the shareholders other than the Promoters in favour of the proposal amount to at least two times the
number of votes cast by shareholders other than promoter shareholders against the proposal.
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2.6 Flowchart of Timelines
A flow chart of process flow in Book Building Issues is as follows:
SECTION 3: CATEGORY OF INVESTORS ELIGIBLE TO PARTICIPATE IN AN ISSUE
Each Bidder should check whether it is eligible to apply under applicable law. Furthermore, certain categories of
Bidders/Bidders, such as NRIs, FII’s, FPIs and FVCIs may not be allowed to apply in the Issue or to hold Equity
Shares, in excess of certain limits specified under applicable law. Bidders are requested to refer to the Prospectus for
more details.
Subject to the above, an illustrative list of Bidders is as follows:
• Indian national’s resident in India who are competent to contract under the Indian Contract Act, 1872, as
amended, in single or joint names (not more than three) or in the names of minors as natural / legal guardian;
• Hindu Undivided Families or HUFs, in the individual name of the Karta. The Bidder/Bidder should specify
that the Application is being made in the name of the HUF in the Bid cum Application Form as follows:
“Name of sole or first Bidder: XYZ Hindu Undivided Family applying through XYZ, where XYZ is the name
of the Karta”. Applications by HUFs may be considered at par with those from individuals;
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• Companies, corporate bodies and societies registered under applicable law in India and authorized to invest
in equity shares under their respective constitutional and charter documents;
• Mutual Funds registered with SEBI;
• Eligible NRIs on a repatriation basis or on a non-repatriation basis subject to applicable law; NRIs other than
Eligible NRIs are not eligible to participate in this Issue.
• Indian Financial Institutions, scheduled commercial banks regional rural banks, co-operative banks (subject
to RBI regulations and the SEBI ICDR Regulations, 2018 and other laws, as applicable); •FPIs other than
Category III foreign portfolio investors, VCFs and FVCIs registered with SEBI.
• Limited liability partnerships registered in India and authorized to invest in equity shares.
• Sub- accounts of FIIs registered with SEBI, which are foreign corporate or foreign individuals only under the
Non- Institutional Bidder’s category.
• State Industrial Development Corporations.
• Trusts/societies registered under the Societies Registration Act, 1860, as amended or under any other law
relating to trusts/societies and who are authorized under their respective constitutions to hold and invest in
equity shares;
• Scientific and/ or Industrial Research Organizations authorized to invest in equity shares.
• Insurance Companies registered with IRDA;
• Provident Funds and Pension Funds with minimum corpus of ₹ 2500 Lakhs and who are authorized under
their constitution to hold and invest in equity shares;
• Eligible QFIs;
• Multilateral and Bilateral Development Financial Institutions;
• National Investment Fund set up by resolution no F.No.2/3/2005-DDII dated November 23, 2005 of
Government of India published in the Gazette of India;
• Insurance funds set up and managed by army, navy, air force of the Union of India or by Department of Posts,
India;
• Any other person eligible to apply to this Issue, under the laws, rules, regulations, guidelines, and policies
applicable to them and under Indian Laws.
Applications not to be made by:
• Minors (except under guardianship)
• Partnership firms or their nominees
• Foreign Nationals (except NRIs)
• Overseas Corporate Bodies
As per the existing regulations, OCBs are not allowed to participate in an Issue.
SECTION 4: APPLYING IN THE ISSUE
Book Building Issue: Bidders should only use the specified Bid cum Application Form either bearing the stamp of
Designated Intermediaries as available or downloaded from the websites of the Stock Exchanges. Bid cum Application
Forms are available with the registered office of the Issuer, and office of the RTA and at the office of the BRLM. For
further details regarding availability of Bid cum Application Forms, Bidders may refer to the Prospectus.
Bidders should ensure that they apply in the appropriate category. The prescribed color of the Bid cum Application
Form for various categories of Bidders is as follows:
Category Color of the
Application
Resident Indian, Eligible NRIs applying on a non -repatriation basis White
NRIs, FVCIs, FIIs, their Sub-Accounts (other than Sub-Accounts which are foreign
corporate(s) or foreign individuals bidding under the QIB), FPIs on a repatriation basis
Blue
4.1 Instructions for Filing Bid cum Application Form/ Bid cum Application Form
Bidders may note that forms not filled completely or correctly as per instructions provided in this GID, the Red
Herring Prospectus and Bid cum Application Form / Bid cum Application Form are liable to be rejected.
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Instructions to fill each field of the Bid cum Application Form can be found on the reverse side of the Bid cum
Application Form. Specific instructions for filling various fields of the Resident Bid cum Application Form and Non-
Resident Bid cum Application Form and samples are provided below.
The samples of the Bid cum Application Form for resident Bidders and the Bid cum Application Form for non-resident
Bidders are reproduced below:
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4.1.1 FIELD NUMBER 1: NAME AND CONTACT DETAILS OF THE SOLE/FIRST BIDDER
a) Bidders should ensure that the name provided in this field is exactly the same as the name in which the
Depository Account is held.
b) Mandatory Fields: Bidders should note that the name and address fields are compulsory and e-mail and/or
telephone number/mobile number fields are optional. Bidders should note that the contact details mentioned
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in the Bid cum Application Form may be used to dispatch communications (including letters notifying the
unblocking of the bank accounts of Bidders) in case the communication sent to the address available with
the Depositories are returned undelivered or are not available. The contact details provided in the Bid cum
Application Form may be used by the Issuer, The Designated Intermediaries and the Registrar to the Issue
only for correspondence(s) related to an Issue and for no other purposes.
c) Joint Bids: In the case of Joint Bids, the Bids should be made in the name of the Bidder whose name appears
first in the Depository account. The name so entered should be the same as it appears in the Depository
records. The signature of only such first Bidder would be required in the Bid cum Application Form/
Application Form and such first Bidder would be deemed to have signed on behalf of the joint holders All
communications may be addressed to such Bidder and may be dispatched to his or her address as per the
Demographic Details received from the Depositories.
d) Impersonation: Attention of the Bidders is specifically drawn to the provisions of sub-section (1) of Section
38 of the Companies Act, 2013 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 of the said
act.”
e) Nomination Facility to Bidder: Nomination facility is available in accordance with the provisions of
Section 72 of the Companies Act, 2013. In case of allotment of the Equity Shares in dematerialized form,
there is no need to make a separate nomination as the nomination registered with the Depository may prevail.
For changing nominations, the Bidders should inform their respective DP.
4.1.2 FIELD NUMBER 2: PAN NUMBER OF SOLE FIRST BIDDER
a) PAN (of the sole/ first Bidder) provided in the Bid cum Application Form should be exactly the same as the
PAN of the person(s) in whose name the relevant beneficiary account is held as per the Depositories’ records.
b) PAN is the sole identification number for participants transacting in the securities market irrespective of the
amount of transaction except for Applications on behalf of the Central or State Government, Applications
by officials appointed by the courts and Applications by Bidders residing in Sikkim (“PAN Exempted
Bidders”). Consequently, all Bidders, other than the PAN Exempted Bidders, are required to disclose their
PAN in the Bid cum Application Form, irrespective of the Application Amount. A Bid cum Application
Form without PAN, except in case of Exempted Bidders, is liable to be rejected. Applications by the Bidders
whose PAN is not available as per the Demographic Details available in their Depository records, are liable
to be rejected.
c) The exemption for the PAN Exempted Bidders is subject to (a) the Demographic Details received from the
respective Depositories confirming the exemption granted to the beneficiary owner by a suitable description
in the PAN field and the beneficiary account remaining in “active status”; and (b) in the case of residents of
Sikkim, the address as per the Demographic Details evidencing the same.
d) Bid cum Application Forms which provide the General Index Register Number instead of PAN may be
rejected.
e) Applications by Bidders whose demat accounts have been ‘suspended for credit’ are liable to be rejected
pursuant to the circular issued by SEBI on July 29, 2010, bearing number CIR/MRD/DP/22/2010. Such
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accounts are classified as “Inactive demat accounts” and demographic details are not provided by
depositories.
4.1.3 FIELD NUMBER 3: BIDDERS DEPOSITORY ACCOUNT DETAILS
a) Bidders should ensure that DP ID and the Client ID are correctly filled in the Bid cum Application Form.
The DP ID and Client ID provided in the Bid cum Application Form should match with the DP ID and Client
ID available in the Depository database, otherwise, the Bid cum Application Form is liable to be rejected.
b) Bidders should ensure that the beneficiary account provided in the Bid cum Application Form is active.
c) Bidders should note that on the basis of DP ID and Client ID as provided in the Bid cum Application Form,
the Bidder may be deemed to have authorized the Depositories to provide to the Registrar to the Issue, any
requested Demographic Details of the Bidder as available on the records of the depositories. These
Demographic Details may be used, among other things, for unblocking of ASBA Account or for other
correspondence(s) related to an Issue.
d) Bidders are, advised to update any changes to their Demographic Details as available in the records of the
Depository Participant to ensure accuracy of records. Any delay resulting from failure to update the
Demographic Details would be at the Bidders’ sole risk.
4.1.4 FIELD NUMBER 4: BID OPTIONS
a) Price or Floor Price or Price Band, minimum Bid Lot and Discount (if applicable) may be disclosed in the
DRHP by the Issuer. The Issuer is required to announce the Floor Price or Price Band, minimum Bid Lot
and Discount (if applicable) by way of an advertisement in at least one English, one Hindi and one regional
newspaper, with wide circulation, at least five Working Days before Bid/Offer Opening Date in case of an
IPO, and at least one Working Day before Bid/Offer Opening Date in case of an FPO.
b) The Bidders may Bid at or above Floor Price or within the Price Band for IPOs undertaken through the Book
Building Process. Cut-Off Price: Retail Individual Investors or Employees or Retail Individual Shareholders
Can Bid at the Cut off Price indicating their agreement to Bid for and purchase the Equity Shares at the Offer
Price as determined at the end of the Book Building Process. Bidding at the Cut-off Price is prohibited for
QIBs and NIIs and such Bids from QIBs and NIIs may be rejected.
c) Minimum Bid Value and Bid Lot: The Issuer in consultation with the BRLMs may decide the minimum
number of Equity Shares for each Bid to ensure that the minimum Bid value is within the range of
above1,00,000. The minimum Bid Lot is accordingly determined by an Issuer on basis of such minimum Bid
value.
d) Allotment: The Allotment of specified securities to each RII shall not be less than the minimum Bid Lot,
subject to availability of shares in the RII category, and the remaining available shares, if any, shall be
Allotted on a proportionate basis. For details of the Bid Lot, Bidders may to the DRHP or the advertisement
regarding the Price Band published by the Issuer.
4.1.4.1 Minimum and Maximum Bid Size
a) For Retails Individual Bidders
The Application must be for a minimum of [●] equity shares. As the application price payable by the retail
individual Bidders cannot exceed 200000 they can make Application for only minimum Application size i.e
for [●] equity shares.
b) For Other Bidders (Non-Institutional Bidders and QIBs):
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i. The Application must be for a minimum of such number of equity shares such that the Application
Amount exceeds200000 and in multiples of [●] equity shares thereafter. An application cannot be
submitted for more than the Issue Size. However, the maximum application by a QIB investor should
not exceed the investment limits prescribed for them by applicable laws. Under existing SEBI
Regulations, a QIB Bidder cannot withdraw its Application after the Issue Closing Date and is required
to pay 100% QIB Margin upon submission of Application. In case of revision of Applications, the Non-
Institutional Bidders, who are individuals, have to ensure that the Application Amount is greater than
200000 for being considered for allocation in the Non-Institutional Portion. Bidders are advised to
ensure that any single Application from them does not exceed the investment limits or maximum
number of equity shares that can be held by them under prescribed law or regulation or as specified in
this Draft Red Herring Prospectus.
ii. In case the Bid Amount reduces to 200,000 or less due to a revision of the Price Band, Bids by the
Non-Institutional Bidders who are eligible for allocation in the Retail Category would be considered
for allocation under the Retail Category.
iii. The price and quantity options submitted by the Bidder in the Bid cum Application Form may be treated
as optional bids from the Bidder and may not be cumulated. After determination of the Issue Price, the
number of Equity Shares Bid for by a Bidder at or above the Issue Price may be considered for allotment
and the rest of the Bid(s), irrespective of the Bid Amount may automatically become invalid. This is
not applicable in case of FPOs undertaken through Alternate Book Building Process.
4.1.4.2 Multiple Applications:
a) Bidder should submit only one Bid cum Application Form. Bidder shall have the option to make a maximum
of Bids at three different price levels in the Bid cum Application Form and such options are not considered as
multiple Bids. Submission of a second Bid cum Application Form to either the same or to another member of
the Syndicate, SCSB or Registered Broker and duplicate copies of Bid cum Application Forms bearing the
same application number shall be treated as multiple Bids and are liable to be rejected.
b) Bidders are requested to note the following procedures may be followed by the Registrar to the issue to detect
multiple applications:
i. All Bids may be checked for common PAN as per the records of the Depository. For Bidders other
than Mutual Funds and FPI sub-accounts, bids bearing the same PAN may be treated as multiple
applications by a Bidder and may be rejected.
ii. For applications from Mutual Funds and FPI sub-accounts, submitted under the same PAN, as well as
Applications on behalf of the PAN Exempted Bidders, the Bid cum Application Forms may be checked
for common DP ID and Client ID. In any such applications which have the same DP ID and Client ID,
these may be treated as multiple applications and may be rejected.
c) The following Bids may not be treated as multiple applications:
i. Bid by Reserved Categories in their respective reservation portion as well as that made by them in the
Net Issue portion in public category.
ii. Separate Bids by Mutual Funds in respect of more than one scheme of the Mutual Fund provided that
the Bid clearly indicates the scheme for which the application has been made.
iii. Application by Mutual Funds, and sub-accounts of FPIs (or FPIs and its sub-accounts) submitted with
the same PAN but with different beneficiary account numbers, Client IDs, and DP IDs.
4.1.5 FIELD NUMBER 5: CATEGORY OF BIDDERS
a) The categories of Bidders identified as per the SEBI ICDR Regulations, 2018 for the purpose of Application,
allocation and allotment in the Issue are RIIs, Individual Bidders other than RIIs, and other investors
(including corporate bodies or institutions, irrespective of the number of specified securities applied for).
b) An Issuer can make reservation for certain categories of Bidders as permitted under the SEBI ICDR
Regulations, 2018. For details of any reservations made in the Issue, Bidders may refer to the Prospectus.
c) The SEBI ICDR Regulations, 2018, specify the allocation or allotment that may be made to various categories
of Bidders in an Issue depending upon compliance with the eligibility conditions. For details pertaining to
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allocation and Issue specific details in relation to allocation Bidder may refer to the Draft Red Herring
Prospectus.
4.1.6 FIELD NUMBER 6: INVESTOR STATUS
a) Each Bidder should check whether it is eligible to apply under applicable law and ensure that any prospective
allotment to it in the Issue is in compliance with the investment restrictions under applicable law.
b) Certain categories of Bidders, such as NRIs, FIIs, FPIs and FVCIs may not be allowed to Apply in the Issue
or hold Equity Shares exceeding certain limits specified under applicable law. Bidders are requested to refer
to the Red Herring Prospectus for more details.
c) Bidders should check whether they are eligible to apply on non-repatriation basis or repatriation basis and
should accordingly provide the investor status. Details regarding investor status are different in the Resident
Bid cum Application Form and Non-Resident Bid cum Application Form.
d) Bidders should ensure that their investor status is updated in the Depository records.
4.1.7 FIELD 7: PAYMENT DETAILS
a) The full Bid Amount (net of any Discount, as applicable) shall be blocked in the ASBA Account based on the
authorization provided in the ASBA Form. If discount is applicable in the Issue, the RIIs should indicate the
full Bid Amount in the Bid-cum-Application Form and the funds shall be blocked for the Bid Amount net of
Discount. Only in cases where the DRHP indicates that part payment may be made, such an option can be
exercised by the Bidder. In case of Bidders specifying more than one Bid Option in the Bid-cum-Application
Form, the total Bid Amount may be calculated for the highest of three options at net price, i.e. Bid price less
Discount offered, if any.
b) Bid Amount cannot be paid in cash, through money order or through postal order or through stock invest.
c) Bidders who Bid at Cut-off Price shall DEPOSIT the Bid Amount based on the Cap Price.
d) All Bidders can participate in the Issue only through the ASBA mechanism.
e) Please note that, providing bank account details in the space provided in the Bid-cum-Application Form
is mandatory and Applications that do not contain such details are liable to be rejected.
4.1.7.1 Payment instructions for Bidders
a) Bidders may submit the Bid cum Application Form either in physical mode or online mode to any Designated
Intermediaries.
b) Bidders should specify the Bank Account number in the Bid cum Application Form. The Bid cum Application
Form submitted by an Bidder and which is accompanied by cash, demand draft, money order, postal order or
any mode of payment other than blocked amounts in the ASBA Account maintained with an SCSB, may not
be accepted.
c) Bidder should ensure that the Bid cum Application Form is also signed by the ASBA Account holder(s) if the
Bidder is not the ASBA Account holder;
d) Bidder shall note that for the purpose of blocking funds under ASBA facility clearly demarcated funds shall
be available in the account.
e) From one ASBA Account, a maximum of five Bid cum Application Forms can be submitted.
f) Bidders applying through a member of the Syndicate should ensure that the Bid cum Application Form is
submitted to a member of the Syndicate only at the Specified Locations. Bidders should also note that Bid
cum Application Forms submitted to the Syndicate at the Specified Locations may not be accepted by the
member of the Syndicate if the SCSB where the ASBA Account, as specified in the Bid cum Application
Form, is maintained has not named at least one branch at that location for the members of the Syndicate to
deposit Bid cum Application Forms (a list of such branches is available on the website of SEBI at
http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries).
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g) Bidders applying through a Registered Broker, RTA or CDP should note that Bid cum Application Forms
submitted to them may not be accepted, if the SCSB where the ASBA Account, as specified in Bid cum
Application Form, is maintained has not named at least one branch at that location for the Registered Brokers,
RTA or CDP, as the case may be, to deposit Bid cum Application Forms.
h) ASBA Bidder applying directly through the SCSBs should ensure that the Bid cum Application Form is
submitted to a Designated Branch of a SCSB where the ASBA Account is maintained.
i) Upon receipt of Bid cum Application Form, the Designated Branch of the SCSB may verify if sufficient funds
equal to the Application Amount are available in the ASBA Account, as mentioned in the Bid cum Application
Form.
j) If sufficient funds are available in the ASBA Account, the SCSB may block an amount equivalent to the
Application Amount mentioned in the Bid cum Application Form may upload the details on the Stock
Exchange Platform.
k) If sufficient funds are not available in the ASBA Account, the Designated Branch of the SCSB may not upload
such Applications on the Stock Exchange platform and such Applications are liable to be rejected.
l) Upon submission of a completed Bid cum Application Form each Bidder may be deemed to have agreed to
block the entire Bid Amount and authorized the Designated Branch of the SCSB to block the Application
Amount specified in the Bid cum Application Form in the ASBA Account maintained with the SCSBs.
m) The Bid Amount may remain blocked in the aforesaid ASBA Account until finalization of the Basis of
allotment and consequent transfer of the Bid Amount against the Allotted Equity Shares to the Public Issue
Account, or until withdrawal or failure of the Issue, or until withdrawal or rejection of the Bid cum
Application, as the case may be.
n) SCSBs bidding in the Issue must apply through an Account maintained with any other SCSB; else their
Application is liable to be rejected.
4.1.8 Unblocking of ASBA Account
a) Once the Basis of Allotment is approved by the Designated Stock Exchange, the Registrar to the Issue may
provide the following details to the controlling branches of each SCSB, along with instructions to unblock the
relevant bank accounts and for successful Bids transfer the requisite money to the Public Issue Account
designated for this purpose, within the specified timelines: (i) the number of Equity Shares to be Allotted, if
any, against each Bid, (ii) the amount to be transferred from the relevant bank account to the Public Issue
Account, for each Bid, (iii) the date by which funds referred to in (ii) above may be transferred to the Public
Issue Account, and (iv) details of rejected/ non allotment / partial allotment ASBA Application, if any, along
with reasons for rejection and details of withdrawn or unsuccessful Bid, if any, to enable the SCSBs to unblock
the respective bank accounts.
b) On the basis of instructions from the Registrar to the Issue, the SCSBs may transfer the requisite amount
against each successful Bid to the Public Issue Account and may unblock the excess amount, if any, in the
ASBA Account.
c) In the event of withdrawal or rejection of the Bid cum Application Form and for unsuccessful Bid, the
Registrar to the Issue may give instructions to the SCSB to unblock the Bid Amount in the relevant ASBA
Account within 6 Working Days of the Issue Closing Date.
4.1.8.1 Discount (if applicable)
a) The Discount is stated in absolute rupee terms.
b) RII, Employees and Retail Individual Shareholders are only eligible for discount. For Discounts Issued in the
Issue, Bidders may refer to the Red Herring Prospectus.
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c) For the Bidders entitled to the applicable Discount in the Issue the Bid Amount less Discount (if applicable)
shall be blocked.
Bidder may note that in case the net payment (post Discount) is more than two lakh Rupees, the bidding system
automatically considers such Bids for allocation under Non-Institutional Category. These Bids are neither eligible
for Discount nor fall under RII category.
4.1.8.2 Additional Payment Instructions for NRIs
The Non-Resident Indians who intend to block funds in their Non-Resident Ordinary (NRO) accounts shall use
the form meant for Resident Indians (non-repatriation basis). In the case of Bids by NRIs applying on a repatriation
basis, blocking of funds in their NRO account shall not be accepted.
4.1.9 FIELD NUMBER 8: SIGNATURES AND OTHER AUTHORISATIONS
a) Only the First Bidder is required to sign the Bid cum Application Form. Bidders should ensure that signatures
are in one of the languages specified in the Eighth Schedule to the Constitution of India.
b) If the ASBA Account is held by a person or persons other than the Bidder, then the Signature of the ASBA
Account holder(s) is also required.
c) In relation to the Applications, signature has to be correctly affixed in the authorization/undertaking box in
the Bid cum Application Form, or an authorization has to be provided to the SCSB via the electronic mode,
for blocking funds in the ASBA Account equivalent to the Application Amount mentioned in the Bid cum
Application Form.
d) Bidders must note that Bid cum Application Form without signature of Bidder and /or ASBA Account holder
is liable to be rejected.
4.1.10 ACKNOWLEDGEMENT AND FUTURE COMMUNICATION
a) Bidders should ensure that they receive the acknowledgment duly signed and stamped by the Designated
Intermediary, as applicable, for submission of the Bid cum Application Form.
b) All communications in connection with Applications made in the Issue should be addressed as under:
i. In case of queries related to Allotment, non-receipt of Allotment Advice, credit of allotted equity shares,
unblocking of funds, the Bidders should contact the Registrar to the Issue.
ii. In case of Applications submitted to the Designated Branches of the SCSBs or Registered Brokers or
Registered RTA/DP, the Bidders should contact the relevant Designated Branch of the SCSB or
Registered Brokers or Registered RTA/DP, as the case maybe.
iii. Bidder may contact the Company Secretary and Compliance Officer or BRLM in case of any other
complaints in relation to the Issue.
iv. In case of queries relating to uploading of Bids by a Syndicate Member, the Bidders should contact the
relevant Syndicate Member.
v. In case of queries relating to uploading of Bids by a Registered Broker, the Bidders should contact the
relevant Registered Broker
vi. In case of Bids submitted to the RTA, the Bidders should contact the relevant RTA
vii. In case of Bids submitted to the DP, the Bidders should contact the relevant DP.
c) The following details (as applicable) should be quoted while making any queries -
i. Full name of the sole or Bidder, Bid cum Application Form number, Bidders’ DP ID, Client ID, PAN,
number of Equity Shares applied for, amount paid on application.
ii. name and address of the Designated Intermediary, where the Application was submitted; or
iii. In case of ASBA Applications, ASBA Account number in which the amount equivalent to the Application
Amount was blocked.
For further details, Bidder may refer to the Red Herring Prospectus and the Bid cum Application Form.
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4.2 INSTRUCTIONS FOR FILING THE REVISION FORM
a) During the Issue Period, any Bidder (other than QIBs and NIIs, who can only revise their application upwards)
who has registered his or her interest in the Equity Shares at a particular number of shares is free to revise
number of shares applied using revision forms available separately.
b) RII may revise their applications till closure of the issue period or withdraw their applications until finalization
of allotment.
c) Revisions can be made in both the desired number of Equity Shares and the Bid Amount by using the Revision
Form.
d) The Bidder can make this revision any number of times during the Issue Period. However, for any revision(s)
in the Bid, the Bidders will have to use the services of the same Designated Intermediary through which such
Bidder had placed the original Bid.
A sample Revision form is reproduced below:
Other than instructions already highlighted at paragraph 4.1 above, point wise instructions regarding filling up
various fields of the Revision Form are provided below:
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Revision Form – R
4.2.1 FIELDS 1, 2 AND 3: NAME AND CONTACT DETAILS OF SOLE/FIRST BIDDER, PAN OF SOLE/FIRST
BIDDER & DEPOSITORY ACCOUNT DETAILS OF THE BIDDER
Bidders should refer to instructions contained in paragraphs 4.1.1, 4.1.2 and 4.1.3.
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4.2.2 FIELD 4 & 5: BID OPTIONS REVISION ‘FROM’ AND ‘TO’
a) Apart from mentioning the revised options in the Revision Form, the Bidder must also mention the details of
the share applied/bid for given in his or her Bid cum Application Form or earlier Revision Form. For example,
if a Bidder has Bid for three options in the Bid-cum-Application Form and such Bidder is changing only one of
the options in the Revision Form, the Bidder must still fill the details of the other two options that are not being
revised, in the Revision Form. The members of the Syndicate, the Registered Brokers and the Designated
Branches of the SCSBs may not accept incomplete or inaccurate Revision Forms.
b) In case of revision, Bid options should be provided by Bidders in the same order as provided in the Bid cum
Application Form.
c) In case of revision of Bids by RIIs, Employees and Retail Individual Shareholders, such Bidders should ensure
that the Bid Amount, should not exceed2,00,000/- due to revision and the bid may be considered, subject to the
eligibility, for allocation under the Non-Institutional Category, not being eligible for Discount (if applicable)
and such Bid may be rejected if it is at the Cut-off Price. The Cutoff Price option is given only to the RIIs,
Employees and Retail Individual Shareholders indicating their agreement to Bid for and purchase the Equity
Shares at the Offer Price as determined at the end of the Book Building Process.
d) In case the total amount (i.e., original Bid Amount plus additional payment) exceeds 200,000, the Bid will be
considered for allocation under the Non-Institutional Category in terms of the DRHP. If, however, the RII does
not either revise the Bid or make additional payment and the Offer Price is higher than the cap of the Price Band
prior to revision, the number of Equity Shares Bid for shall be adjusted downwards for the purpose of allocation,
such that no additional payment would be required from the RII and the RII is deemed to have approved such
revised Bid at Cut-off Price.
e) In case of a downward revision in the Price Band, RIIs and Bids by Employees under the Reservation Portion,
who have bid at the Cut-off Price could either revise their Bid or the excess amount paid at the time of Bidding
may be unblocked in case of Bidders.
4.2.3 FIELD 6: PAYMENT DETAILS
a) All Bidders are required to make payment of the full Bid Amount (less Discount, if applicable) along with the
Bid Revision Form. In case of Bidders specifying more than one Bid Option in the Bid cum Application Form,
the total Bid Amount may be calculated for the highest of three options at net price, i.e. Bid price less discount
offered, if any.
b) Bidder may Offer instructions to block the revised amount based on cap of the revised Price Band (adjusted for
the Discount (if applicable) in the ASBA Account, to the same Designated Intermediary through whom such
Bidder had placed the original Bid to enable the relevant SCSB to block the additional Bid Amount, if any.
c) In case the total amount (i.e., original Bid Amount less discount (if applicable) plus additional payment) exceeds
200,000, the Bid may be considered for allocation under the Non-Institutional Category in terms of the DRHP.
If, however, the Bidder does not either revise the Bid or make additional payment and the Offer Price is higher
than the cap of the Price Band prior to revision, the number of Equity Shares Bid for may be adjusted downwards
for the purpose of Allotment, such that additional amount is required blocked and the Bidder is deemed to have
approved such revised Bid at the Cut-off Price.
d) In case of a downward revision in the Price Band, RIIs, Employees and Retail Individual Shareholders, who
have bid at the Cut-off Price, could either revise their Bid or the excess amount paid at the time of Bidding may
be unblocked.
4.2.4 FIELDS 7: SIGNATURES AND ACKNOWLEDGEMENTS
Bidders may refer to instructions contained at paragraphs 4.1.8 and 4.1.9 for this purpose.
4.3 SUBMISSION OF REVISION FORM/BID CUM APPLICATION FORM
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Bidders may submit completed Bid cum Application Form / Revision Form in the following manner: -
Mode of Application Submission of Bid cum Application Form
All Investor Bids To the Designated Intermediaries
The aforesaid intermediaries shall, at the time of receipt of application, give an acknowledgement to investor, by
giving the counter foil or specifying the application number to the investor, as a proof of having accepted the Bid cum
Application Form, in physical or electronic mode respectively
SECTION 5: ISSUE PROCEDURE IN BOOK BUILDING ISSUE
Book Building, in the context of the Offer, refers to the process of collection of Bids within the Price Band or above
the Floor Price and determining the Offer Price based on the Bids received as detailed in Schedule XIII of SEBI ICDR
Regulations, 2018. The Offer Price is finalised after the Bid/Offer Closing Date. Valid Bids received at or above the
Offer Price are considered for allocation in the Offer, subject to applicable regulations and other terms and conditions.
5.1 SUBMISSION OF BIDS:
a) During the Bid/Offer Period, Bidders/Applicants may approach any of the Designated Intermediaries to
register their Bids.
b) In case of Bidders/Applicants (excluding NIIs, NIBs and QIBs) Bidding at Cut-off Price, the
Bidders/Applicants may instruct the SCSBs to block Bid Amount based on the Cap Price less discount (if
applicable).
c) For details of the timing on acceptance and upload of Bids in the Stock Exchanges Platform
Bidders/Applicants are requested to refer to the DRHP.
5.2 ELECTRONIC REGISTRATION OF BIDS
a) The Designated Intermediary may register the Bids using the on-line facilities of the Stock Exchanges. The
Designated Intermediaries can also set up facilities for off-line electronic registration of Bids, subject to the
condition that they may subsequently upload the off-line data file into the on-line facilities for Book Building
on a regular basis before the closure of the issue.
b) On the Bid/Offer Closing Date, the Designated Intermediaries may upload the Bids till such time as may be
permitted by the Stock Exchanges and as disclosed in the Red Herring Prospectus.
c) Only Bids that are uploaded on the Stock Exchanges Platform are considered for allocation/Allotment. The
Designated Intermediaries are given till 1 p.m. on the next Working Day following the Bid/Offer Closing
Date to modify select fields uploaded in the Stock Exchange Platform during the Bid/Offer Period after
which the Stock Exchange(s) send the bid information to the Registrar to the Issue for further processing.
5.3 BUILD UP OF THE BOOK
(a) Bids received from various Bidders/Applicants through the Designated Intermediaries may be electronically
uploaded on the Bidding Platform of the Stock Exchanges’ on a regular basis. The book gets built up at
various price levels. This information may be available with the BRLMs at the end of the Bid/Offer Period.
(b) Based on the aggregate demand and price for Bids registered on the Stock Exchanges Platform, a graphical
representation of consolidated demand and price as available on the websites of the Stock Exchanges may
be made available at the Bidding Centres during the Bid/ Offer Period.
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5.4 WITHDRAWAL OF BIDS
(a) RIBs can withdraw their Bids until Bid/Offer Closing Date. In case a RIB wishes to withdraw the Bid during
the Bid/Offer Period, the same can be done by submitting a request for the same to the concerned Designated
Intermediary who shall do the requisite, including unblocking of the funds by the SCSB in the ASBA
Account.
(b) The Registrar to the Issue shall give instruction to the SCSB for unblocking the ASBA Account upon or after
the finalization of basis of allotment. QIBs and NIBs can neither withdraw nor lower the size of their Bids
at any stage.
5.5 REJECTION & RESPONSIBILITY FOR UPLOAD OF BIDS
(a) The Designated Intermediaries are individually responsible for the acts, mistakes or errors or omission in
relation to:
i. the Bids accepted by the Designated Intermediary,
ii. the Bids uploaded by the Designated Intermediary, and
iii. the Bid cum application forms accepted but not uploaded by the Designated Intermediary.
(b) The BRLMs and their affiliate Syndicate Members, as the case may be, may reject Bids if all information
required is not provided and the Bid cum Application Form is incomplete in any respect.
(c) The SCSBs shall have no right to reject Bids, except in case of unavailability of adequate funds in the ASBA
account or on technical grounds.
(d) In case of QIB Bidders, only the (i) SCSBs; and (ii) BRLMs and their affiliate Syndicate Members (only in
the specified Locations) have the right to reject bids. However, such rejection shall be made at the time of
receiving the Bid and only after assigning a reason for such rejection in writing.
(e) All bids by QIBs, NIBs & RIBs Bidders can be rejected on technical grounds listed herein.
5.5.1 GROUNDS FOR TECHNICAL REJECTIONS
Bid cum Application Forms/Application Forms can be rejected on the below mentioned technical grounds either at
the time of their submission to any of the Designated Intermediaries, or at the time of finalization of the Basis of
Allotment. Bidders/ Applicants are advised to note that the Bids/Applications are liable to be rejected, which have
been detailed at various places in this GID:-
• Bid/Application by persons not competent to contract under the Indian Contract Act, 1872, as amended,
(other than minors having valid Depository Account as per Demographic Details provided by Depositories);
• Bids/Applications by OCBs;
• In case of partnership firms, Bid/Application for Equity Shares made in the name of the firm. However, a
limited liability partnership can apply in its own name;
• In case of Bids/Applications under power of attorney or by limited companies, corporate, trust, etc., relevant
documents are not being submitted along with the Bid cum application form;
• Bids/Applications by persons prohibited from buying, selling or dealing in the shares directly or indirectly
by SEBI or any other regulatory authority;
• Bids/Applications by any person outside India if not in compliance with applicable foreign and Indian laws;
• PAN not mentioned in the Bid cum Application Form/ Application Forms except for Bids/Applications by
or on behalf of the Central or State Government and officials appointed by the court and by the investors
residing in the State of Sikkim, provided such claims have been verified by the Depository Participant;
• In case no corresponding record is available with the Depositories that matches the DP ID, the Client ID and
the PAN;
• Bids/Applications for lower number of Equity Shares than the minimum specified for that category of
investors;
• Bids/Applications at a price less than the Floor Price & Bids/Applications at a price more than the Cap Price;
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• Bids/Applications at Cut-off Price by NIBs and QIBs;
• The amounts mentioned in the Bid cum Application Form/Application Forms do not tally with the amount
payable for the value of the Equity Shares Bid/Applied for;
• Bids/Applications for amounts greater than the maximum permissible amounts prescribed by the regulations;
• Submission of more than five ASBA Forms/Application Forms per ASBA Account;
• Bids/Applications for number of Equity Shares which are not in multiples Equity Shares as specified in the
RHP;
• Multiple Bids/Applications as defined in this GID and the RHP/Prospectus;
• Bids not uploaded in the Stock Exchanges bidding system.
• Inadequate funds in the bank account to block the Bid/ Application Amount specified in the ASBA Form/
• Application Form at the time of blocking such Bid/ Application Amount in the bank account;
• Where no confirmation is received from SCSB for blocking of funds;
• Bids/Applications by Bidders not submitted through ASBA process;
• Bids/Applications submitted to Designated Intermediaries at locations other than the Bidding Centers or to
the Escrow Collecting Banks (assuming that such bank is not a SCSB where the ASBA Account is
maintained), to the Issuer or the Registrar to the Issue;
• Bids/Applications by SCSBs wherein a separate account in its own name held with any other SCSB is not
mentioned as the ASBA Account in the Bid cum Application Form/Application Form.
5.6 BASIS OF ALLOCATION
a) The SEBI ICDR Regulations, 2018 specify the allocation or Allotment that may be made to various
categories of Bidders/Applicants in an Offer depending on compliance with the eligibility conditions. Certain
details pertaining to the percentage of Offer size available for allocation to each category is disclosed overleaf
of the Bid cum Application Form and in the RHP/Prospectus. For details in relation to allocation, the
Bidder/Applicant may refer to the DRHP/ RHP/ Prospectus.
b) Under-subscription in any category (except QIB Portion) is allowed to be met with spill-over from any other
category or combination of categories at the discretion of the Issuer and in consultation with the BRLMs and
the Designated Stock Exchange and in accordance with the SEBI ICDR Regulations, 2018. Unsubscribed
portion in QIB Category is not available for subscription to other categories.
c) In case of under subscription in the Offer, spill-over to the extent of such under-subscription may be
permitted from the Reserved Portion to the Offer. For allocation in the event of an under-subscription
applicable to the Issuer, Bidders/Applicants may refer to the RHP.
d) Illustration of the Book Building and Price Discovery Process Bidders should note that this example is solely
for illustrative purposes and is not specific to the Offer; it also excludes Bidding by Anchor Investors.
Bidders can bid at any price within the price band. For instance, assume a price band of 20 to 24 per share, issue size
of [●] equity shares and receipt of five bids from bidders, details of which are shown in the table below. The illustrative
book given below shows the demand for the equity shares of the issuer company at various prices and is collated from
bids received from various investors.
Bid Quantity Bid Price () Cumulative Quantity Subscription
500 24 500 16.70%
1000 23 1500 50.00%
1500 22 3000 100.00%
2000 21 5000 166.70%
2500 20 7500 250.00%
The price discovery is a function of demand at various prices. The highest price at which the issuer is able to issue
the desired number of equity shares is the price at which the book cuts off, i.e., 22.00 in the above example. The
issuer, in consultation with the Book Running Lead Manager, will finalize the issue price at or below such cut-off
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price, i.e., at or below 22.00. All bids at or above this issue price and cut-off bids are valid bids and are considered
for allocation in the respective categories.
(e) Alternate Method of Book Building
In case of FPOs, Issuers may opt for an alternate method of Book Building in which only the Floor Price is specified
for the purposes of Bidding (“Alternate Book Building Process”). The Issuer may specify the Floor Price in the RHP
or advertise the Floor Price at least one Working Day prior to the Bid/Offer Opening Date. QIBs may Bid at a price
higher than the Floor Price and the Allotment to the QIBs is made on a price priority basis. The Bidder with the
highest Bid Amount is allotted the number of Equity Shares Bid for and then the second highest Bidder is Allotted
Equity Shares and this process continues until all the Equity Shares have been allotted. RIBs, NIBs and Employees
are Allotted Equity Shares at the Floor Price and Allotment to these categories of Bidders is made proportionately. If
the number of Equity Shares Bid for at a price is more than available quantity then the Allotment may be done on a
proportionate basis. Further, the Issuer may place a cap either in terms of number of specified securities or percentage
of issued capital of the Issuer that may be Allotted to a single Bidder, decide whether a Bidder be allowed to revise
the bid upwards or downwards in terms of price and/or quantity and also decide whether a Bidder be allowed single
or multiple bids.
SECTION 6: ISSUE PROCEDURE IN FIX PRICE ISSUE
Bidders may note that there is no Bid cum Application Form in a Fixed Price Offer.
As the Offer Price is mentioned in the Fixed Price Offer therefore on filing of the Prospectus with the RoC, the
Application so submitted is considered as the application form. Applicants may only use the specified Application
Form for the purpose of making an Application in terms of the Prospectus which may be submitted through the
Designated Intermediary. Applicants may submit an Application Form either in physical form to the any of the
Designated Intermediaries or in the electronic form to the SCSB or the Designated Branches of the SCSBs authorizing
blocking of funds that are available in the bank account specified in the Application Form only (“ASBA Account”).
The Application Form is also made available on the websites of the Stock Exchanges at least one day prior to the
Bid/Offer Opening Date. In a fixed price Offer, allocation in the net offer to the public category is made as follows:
minimum fifty per cent to Retail Individual Bidders; and remaining to (i) individual investors other than Retail
Individual Bidders; and (ii) other Applicants including corporate bodies or institutions, irrespective of the number of
specified securities applied for. The unsubscribed portion in either of the categories specified above may be allocated
to the Applicants in the other category.
For details of instructions in relation to the Application Form, Bidders/ Applicants may refer to the relevant section
of the GID.
SECTION 7: ALLOTMENT PROCEDURE AND BASIS OF ALLOTMENT
7.1 Basis of Allotment
The Allotment of Equity Shares to Bidders other than Retail Individual Investors may be on proportionate basis. For
Basis of Allotment to Bidders may refer to DRHP. No Retail Individual Investor will be Allotted less than the
minimum Bid Lot subject to availability of shares in Retail Individual Investor Category and the remaining available
shares, if any will be Allotted on a proportionate basis. The Issuer is required to receive a minimum subscription of
90% of the Offer (excluding any Offer for Sale of specified securities). However, in case the Offer is in the nature of
Offer for Sale only, then minimum subscription may not be applicable.
Allotment will be made in consultation with SME PLATFORM OF NSE EMEGE (The Designated Stock Exchange).
In the event of oversubscription, the allotment will be made on a proportionate basis in marketable lots as set forth
here:
a) The total number of Shares to be allocated to each category as a whole shall be arrived at on a proportionate
basis i.e. the total number of Shares applied for in that category multiplied by the inverse of the over
subscription ratio (number of Bidders in the category x number of Shares applied for).
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b) The number of Shares to be allocated to the successful Bidders will be arrived at on a proportionate basis in
marketable lots (i.e. Total number of Shares applied for into the inverse of the over subscription ratio).
c) For applications where the proportionate allotment works out to less than [●] Equity Shares the allotment
will be made as follows:
i) Each successful Bidder shall be allotted [●] Equity Shares;
ii) The successful Bidders out of the total Bidders for that category shall be determined by the drawal of lots
in such a manner that the total number of Shares allotted in that category is equal to the number of Shares
worked out as per (2) above.
d) If the proportionate allotment to a Bidder works out to a number that is not a multiple of [●] Equity Shares,
the Bidder would be allotted Shares by rounding off to the lower nearest multiple of [●] Equity Shares subject
to a minimum allotment of [●] Equity Shares.
e) If the Shares allotted on a proportionate basis to any category is more than the Shares allotted to the Bidders
in that category, the balance available Shares for allocation shall be first adjusted against any category, where
the allotted Shares are not sufficient for proportionate allotment to the successful Bidders in that category,
the balance Shares, if any, remaining after such adjustment will be added to the category comprising of
Bidders applying for the minimum number of Shares. If as a result of the process of rounding off to the lower
nearest multiple of [●] Equity Shares, results in the actual allotment being higher than the shares Issued, the
final allotment may be higher at the sole discretion of the Board of Directors, up-to 110% of the size of the
Issue specified under the Capital Structure mentioned in this Prospectus.
f) The above proportionate allotment of shares in an Issue that is oversubscribed shall be subject to the
reservation for Retail Individual Bidders as described below:
i. As per Regulation 32(4) of the SEBI (ICDR) Regulations 2018, as the Retail Individual Investor
category is entitled to more than fifty percent on proportionate basis, the retail individual investors shall
be allocated that higher percentage.
ii. Remaining to Individual Bidders other than retail individual investors and Other investors including
corporate bodies or institutions, irrespective of the number of specified securities applied for;
iii. The unsubscribed portion in either of the categories specified in (a) or (b) above may be available for
allocation to the Bidders in the other category, if so required.
'Retail Individual Investor' means an investor who applies for shares of value of not more than 2,00,000. Investors
may note that in case of over subscription allotment shall be on proportionate basis and will be finalized in consultation
with SME Platform of NSE EMERGE.
The Executive Director / Managing Director of NSE EMERGE - the Designated Stock Exchange in addition to Book
Running Lead Manager and Registrar to the Public Issue shall be responsible to ensure that the basis of allotment is
finalized in a fair and proper manner in accordance with the SEBI (ICDR) Regulations, 2018.
As per the RBI regulations, OCBs are not permitted to participate in the Issue. There is no reservation for Non
Residents, NRIs, FPIs and foreign venture capital funds and all Non Residents, NRI, FPI and Foreign Venture Capital
Funds Bidders will be treated on the same basis with other categories for the purpose of allocation.
7.2 DESIGNATED DATE AND ALLOTMENT OF EQUITY SHARES
a) Designated Date: On the Designated Date, the SCSBs shall transfer the funds represented by allocation of Equity
Shares into the Public Issue Account with the Bankers to the Issue.
b) Issuance of Allotment Advice: Upon approval of the Basis of Allotment by the Designated Stock Exchange, the
Registrar shall upload the same on its website. On the basis of the approved Basis of Allotment, the Issuer shall
pass necessary corporate action to facilitate the Allotment and credit of Equity Shares. Bidders are advised to
instruct their Depository Participant to accept the Equity Shares that may be allotted to them pursuant to the Issue.
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c) Pursuant to confirmation of such corporate actions, the Registrar will dispatch Allotment Advice to the Bidders
who have been Allotted Equity Shares in the Issue.
d) The dispatch of Allotment Advice shall be deemed a valid, binding and irrevocable contract.
e) Issuer will ensure that: (i) the Allotment of Equity Shares; and (ii) initiate corporate action for credit of shares to
the successful Bidders Depository Account will be completed within 5Working Days of the Issue Closing Date.
The Issuer also ensures the credit of shares to the successful Bidder’s depository account is completed within 5
Working Days of the Issue Closing Date,
SECTION 8: INTEREST AND REFUNDS
8.1 COMPLETION OF FORMALITIES FOR LISTING & COMMENCEMENT OF TRADING
The Issuer may ensure that all steps for the completion of the necessary formalities for listing and commencement of
trading at all the Stock Exchanges are taken within 6 Working Days of the Issue Closing Date. The Registrar to the
Issue may give instructions for credit to Equity Shares the beneficiary account with DPs, and dispatch the Allotment
Advice within 6Working Days of the Issue Closing Date.
8.2 GROUNDS FOR UNBLOCKING OF FUNDS
8.2.1 Non Receipt of Listing Permission
An Issuer makes an application to the Stock Exchange(s) for permission to deal in/list and for an official quotation of
the Equity Shares. All the Stock Exchanges from where such permission is sought are disclosed in Prospectus. The
Designated Stock Exchange may be as disclosed in the Prospectus with which the Basis of Allotment may be finalized.
If the permissions to deal in and for an official quotation of the Equity Shares are not granted by any of the Stock
Exchange(s), the Issuer may forthwith initiate action to unblock the application amount from the Investors accounts.
If such money is not repaid within the eight days after the Issuer becomes liable to repay it, then the Issuer and every
director of the Issuer who is an officer in default may, on and from such expiry of eight days, be liable to repay the
money, with interest at such rate, as prescribed under Section 73 of Companies Act, and disclosed in the Prospectus.
8.2.2 Minimum Subscription
This Issue is not restricted to any minimum subscription level. This Issue is 100% underwritten.
As per Section 39 of 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 the Prospectus, the application
money has to be returned within such period as may be prescribed. If our company does not receive the 100%
subscription of the Issue through the Issue Document including devolvement of underwriters, if any, within sixty (60)
days from the date of closure of the issue, our company shall forthwith unblocked the entire application amount
received. If there is a delay beyond eighty days after our company becomes liable to pay the amount, our company
and every officer in default will, on and from the expiry of this period be jointly and severally liable to repay the
money, with interest or other penalty as prescribed under SEBI Regulations, the Companies Act, 2013.
The minimum number of allottees in this Issue shall be 50 shareholders. In case the minimum number of prospective
allottees is less than 50 no allotment will be made pursuant to this Issue and the amounts in the ASBA Account shall
be unblocked within 6working days of closure of the issue.
Further in accordance with Regulation 267(2) of the SEBI (ICDR) Regulations 2018, our Company shall ensure that
the minimum application size in terms of number of specified securities shall not be less than₹100000/- (Rupees One
Lakh) per application.
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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 applications may not be made by persons in any such jurisdiction,
except in compliance without the applicable laws of such jurisdiction.
8.2.3 MINIMUM NUMBER OF ALLOTTEES
The Issuer may ensure that the number of prospective allottees to whom Equity Shares may be allotted may not be
less than 50 failing which the entire application monies may be unblocked forthwith.
8.3 Mode of Unblocking of Funds
Within 6 Working Days of the Issue Closing Date, the Registrar to the Issue may give instructions to SCSBs for
unblocking the amount in ASBA Account on unsuccessful Application and also for any excess amount blocked on
Application.
8.3.1Mode of making refunds for Bidders
The Registrar to the Issue may instruct the controlling branch of the SCSB to unblock the funds in the relevant ASBA
Account for any withdrawn, rejected or unsuccessful ASBA applications or in the event of withdrawal or failure of
the Issue.
8.4 Interest in Case of Delay in Allotment
The Issuer may pay interest at the rate of 15% per annum if demat credits are not made to Bidders or instructions for
unblocking of funds in the ASBA Account are not dispatched within the 6 Working days of the Issue Closing Date.
The Issuer may pay interest at 15% per annum for any delay beyond 6 working days from the Issue Closing Date, if
Allotment is not made.
SECTION 9: GLOSSARY AND ABBREVIATIONS
Unless the context otherwise indicates or implies, certain definitions and abbreviations used in this document may
have the meaning as provided below. References to any legislation, act or regulation may be to such legislation, act
or regulation as amended from time to time.
Term Description
Allotment/ Allot/ Allotted The allotment of Equity Shares pursuant to the Issue to successful Bidders
Allottee A Bidder to whom the Equity Shares are Allotted
Allotment Advice
Note or advice or intimation of Allotment sent to the Bidders who have been allotted
Equity Shares after the Basis of Allotment has been approved by the designated Stock
Exchanges
Application
An indication to make an Issue during the Issue Period by a prospective pursuant to
submission of Bid cum Application Form or during the Anchor Investor Issue Period
by the Anchor Investors, to subscribe for or purchase the Equity Shares of the Issuer at
a price including all revisions and modifications thereto.
Bid cum Application Form The form in terms of which the Bidder should make an application for Allotment in
case of issues other than Book Built Issues, includes Fixed Price Issue
Application Supported by
Blocked Amount/
(ASBA)/ASBA
An application, whether physical or electronic, used by Bidders to make an Application
authorizing an SCSB to block the Bid Amount in the specified bank account maintained
with such SCSB
ASBA Account Account maintained with an SCSB which may be blocked by such SCSB to the extent
of the Application Amount of the ASBA Bidder
ASBA Application An Application made by an ASBA Bidder
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Bidder Prospective Bidders in the Issue who apply through ASBA
Basis of Allotment The basis on which the Equity Shares may be Allotted to successful Bidders under the
Issue
Book Running Lead
Manager / BRLM
The Book Running Lead Manager to the Issue as disclosed in the Prospectus and the
Bid cum Application Form of the Issuer.
Bid
An indication to make an Issue during the Issue Period by a prospective Bidder
pursuant to submission of Bid cum Application Form or during the Anchor Investor
Issue Period by the Anchor Investors, to subscribe for or purchase the Equity Shares of
the Issuer at a price within the Price Band, including all revisions and modifications
thereto.
Issue Closing Date
The date after which the SCSBs may not accept any application for the Issue, which
may be notified in an English national daily, a Hindi national daily and a regional
language newspaper at the place where the registered office of the Issuer is situated,
each with wide circulation. Bidders may refer to the Prospectus for the Issue Closing
Date
Issue Opening Date
The date on which the SCSBs may start accepting application for the Issue, which may
be the date notified in an English national daily, a Hindi national daily and a regional
language newspaper at the place where the registered office of the Issuer is situated,
each with wide circulation. Bidders may refer to the Prospectus for the Issue Opening
Date
Issue Period
Except in the case of Anchor Investors (if applicable), the period between the Issue
Opening Date and the Issue Closing Date inclusive of both days and during which
prospective Bidders (other than Anchor Investors) can submit their Application,
inclusive of any revisions thereof. The Issuer may consider closing the Issue Period for
QIBs one working day prior to the Issue Closing Date in accordance with the SEBI
ICDR Regulations, 2018. Bidders may refer to the Prospectus for the Issue Period
Application Amount
The value indicated in the Bid cum Application Form and payable by the Bidder upon
submission of the Application (except for Anchor Investors), less discounts (if
Applicable).
Bid cum Application Form
The form in terms of which the Bidder should make an Issue to subscribe for or
purchase the Equity Shares and which may be considered as the application for
Allotment for the purposes of the Red Herring Prospectus, whether applying through
the ASBA or otherwise.
Bidder
Any prospective investor (including an ASBA Bidder) who makes an Application
pursuant to the terms of the Prospectus and the Bid cum Application Form. In case of
issues undertaken through the book building process, all references to a Bidder should
be construed to mean a Bidder
Basis of Allotment The basis on which the Equity Shares may be Allotted to successful Bidders under the
Issue
Bid
An indication to make an Issue during the Issue Period by a prospective Bidder
pursuant to submission of Bid cum Application Form or during the Anchor Investor
Issue Period by the Anchor Investors, to subscribe for or purchase the Equity Shares of
the Issuer at a price within the Price Band, including all revisions and modifications
thereto.
Issue Closing Date
The date after which the SCSBs may not accept any application for the Issue, which
may be notified in an English national daily, a Hindi national daily and a regional
language newspaper at the place where the registered office of the Issuer is situated,
each with wide circulation. Bidders may refer to the Prospectus for the Issue Closing
Date
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Issue Opening Date
The date on which the SCSBs may start accepting application for the Issue, which may
be the date notified in an English national daily, a Hindi national daily and a regional
language newspaper at the place where the registered office of the Issuer is situated,
each with wide circulation. Bidders may refer to the Prospectus for the Issue Opening
Date
Issue Period
Except in the case of Anchor Investors (if applicable), the period between the Issue
Opening Date and the Issue Closing Date inclusive of both days and during which
prospective Bidders (other than Anchor Investors) can submit their Application,
inclusive of any revisions thereof. The Issuer may consider closing the Issue Period for
QIBs one working day prior to the Issue Closing Date in accordance with the SEBI
ICDR Regulations, 2018. Bidders may refer to the Prospectus for the Issue Period
Application Amount
The value indicated in the Bid cum Application Form and payable by the Bidder upon
submission of the Application (except for Anchor Investors), less discounts (if
applicable).
Bid cum Application Form
The form in terms of which the Bidder should make an Issue to subscribe for or
purchase the Equity Shares and which may be considered as the application for
Allotment for the purposes of the Red Herring Prospectus, whether applying through
the ASBA or otherwise.
Book Built Process/ Book
Building Process/ Book
Building Method
The book building process as provided under SEBI ICDR Regulations, 2018,
Broker Centres
Broker centres notified by the Stock Exchanges, where Bidders can submit the Bid cum
Application Form to a Registered Broker. The details of such broker centres, along
with the names and contact details of the Registered Brokers are available on the
websites of the Stock Exchanges.
Business Day Monday to Friday (except public holidays)
CAN/Confirmation
of
Allotment Note
The note or advice or intimation sent to each successful Bidder indicating the Equity
Shares which may be Allotted, after approval of Basis of Allotment by the Designated
Stock Exchange
Client ID Client Identification Number maintained with one of the Depositories in relation to
demat account
Collecting Depository
Participant or CDP
A depository participant as defined under the Depositories Act, 1996, registered with
SEBI and who is eligible to procure Applications at the Designated CDP Locations in
terms of circular no. CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015
issued by SEBI
DP Depository Participant
DP ID Depository Participant’s Identification Number
Depositories National Securities Depository Limited and Central Depository Services (India)
Limited
Demographic Details Details of the Bidders including the Bidder’s address, name of the Bidder’s
father/husband, investor status, occupation and bank account details
Designated Branches
Such branches of the SCSBs which may collect the Bid cum Application Forms used
by the ASBA Bidders applying through the ASBA and a list of which is available on
http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/RecognisedIntermediaries.
Designated CDP Locations
Such locations of the CDPs where Bidder can submit the Bid cum Application Forms
to Collecting Depository Participants.
The details of such Designated CDP Locations, along with names and contact details
of the Collecting Depository Participants eligible to accept Bid cum Application Forms
are available on the websites of the Stock Exchange i.e. www.nseemerge.com
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Designated RTA Locations
Such locations of the RTAs where Bidder can submit the Bid cum Application Forms
to RTAs.
The details of such Designated RTA Locations, along with names and contact details
of the RTAs eligible to accept Bid cum Application Forms are available on the websites
of the Stock Exchange i.e. www.nseemerge.com
Designated Date The date on or after which funds are transferred by the SCSBs to the Public Issue
Account of the Issuer.
Designated Stock Exchange The designated stock exchange as disclosed in the Red Herring Prospectus of the
Issuer
Designated Intermediaries
/Collecting Agent
Syndicate Members, Sub-Syndicate/Agents, SCSBs, Registered Brokers, Brokers, the
CDPs and RTAs, who are authorized to collect Bid cum Application Forms from the
Bidders, in relation to the Issue
Discount Discount to the Issue Price that may be provided to Bidders in accordance with the
SEBI ICDR Regulations, 2018.
Red Herring Prospectus The Red Herring Prospectus filed with SEBI in case of Book Built Issues and which
may mention a price
Employees
Employees of an Issuer as defined under SEBI ICDR Regulations, 2018 and including,
in case of a new company, persons in the permanent and full time employment of the
promoting companies excluding the promoters and immediate relatives of the
promoter. For further details Bidder may refer to the Prospectus
Equity Shares Equity shares of the Issuer
FCNR Account Foreign Currency Non-Resident Account
First Bidder The Bidder whose name appears first in the Bid cum Application Form or Revision
Form
FII(s)
Foreign Institutional Investors as defined under the SEBI (Foreign Institutional
Investors) Regulations, 1995 and registered with SEBI under applicable laws in
India
FPIs Foreign Portfolio Investors as defined under the Securities and Exchange Board of
India (Foreign Portfolio Investors) Regulations, 2014
FPO Further public Issuing
Foreign Venture Capital
Investors or FVCIs
Foreign Venture Capital Investors as defined and registered with SEBI under the SEBI
(Foreign Venture Capital Investors) Regulations, 2000
IPO Initial public Issuing
Issue Public Issue of Equity Shares of the Issuer including the Issue for Sale if applicable
Issuer/ Company The Issuer proposing the initial public Issuing/further public Issuing as applicable
Issue Price
The final price, less discount (if applicable) at which the Equity Shares may be Allotted
in terms of the Prospectus. The Issue Price may be decided by the Issuer in consultation
with the Book Running Lead Manager (s)
Maximum RII Allottees
The maximum number of RIIs who can be allotted the minimum Application Lot. This
is computed by dividing the total number of Equity Shares available for Allotment to
RIIs by the minimum Application Lot.
MICR Magnetic Ink Character Recognition - nine-digit code as appearing on a cheque leaf
Mutual Fund A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996
NECS National Electronic Clearing Service
NEFT National Electronic Fund Transfer
NRE Account Non-Resident External Account
NRI
NRIs from such jurisdictions outside India where it is not unlawful to make an Issue or
invitation under the Issue and in relation to whom the Prospectus constitutes an
invitation to subscribe to or purchase the Equity Shares
NRO Account Non-Resident Ordinary Account
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Net Issue The Issue less reservation portion
Non-Institutional Investors
or NIIs
All Bidders, including sub accounts of FIIs registered with SEBI which are foreign
corporate or foreign individuals and FPIs which are Category III foreign portfolio
investors, that are not QIBs or RIBs and who have Applied for Equity Shares for an
amount of more than 200,000 (but not including NRIs other than Eligible NRIs)
Non-Institutional Category
The portion of the Issue being such number of Equity Shares available for allocation to
NIIs on a proportionate basis and as disclosed in the Prospectus and the Bid cum
Application Form
Non-Resident A person resident outside India, as defined under FEMA and includes Eligible NRIs,
FIIs, FPIs and FVCIs
OCB/Overseas Corporate
Body
A company, partnership, society or other corporate body owned directly or indirectly
to the extent of at least 60% by NRIs including overseas trusts, in which not less than
60% of beneficial interest is irrevocably held by NRIs directly or indirectly and which
was in existence on October 3, 2003 and immediately before such date had taken
benefits under the general permission granted to OCBs under FEMA
Issue for Sale Public Issue of such number of Equity Shares as disclosed in the Prospectus through
an Issue for sale by the Selling Shareholder
Other Investors
Investors other than Retail Individual Investors in a Fixed Price Issue. These include
individual Bidders other than retail individual investors and other investors including
corporate bodies or institutions irrespective of the number of specified securities
applied for.
PAN Permanent Account Number allotted under the Income Tax Act, 1961
Pricing Date The date on which the Issuer in consultation with the Book Running Lead Manager (s),
finalize the Issue Price
Prospectus
The prospectus to be filed with the RoC in accordance with Section 32 of the
Companies Act, 2013 read with section 26 of Companies Act 2013 after the Pricing
Date, containing the Issue Price, the size of the Issue and certain other information
Public Issue Account An account opened with the Banker to the Issue to receive monies from the Escrow
Account and from the ASBA Accounts on the Designated Date
QIB Category The portion of the Issue being such number of Equity Shares to be Allotted to QIBs on
a proportionate basis
Qualified Institutional
Buyers or QIBs As defined under SEBI ICDR Regulations, 2018
RTA Registrar to the Issue and Share Transfer Agent
Registered Broker Stock Brokers registered with the Stock Exchanges having nationwide terminals, other
than the members of the Syndicate
Registrar to the Issue/RTI The Registrar to the Issue as disclosed in the Prospectus and Bid cum Application Form
Reserved Category/
Categories
Categories of persons eligible for making application/bidding under reservation portion
Reservation Portion The portion of the Issue reserved for category of eligible Bidders as provided under the
SEBI ICDR Regulations, 2018
Retail Individual Investors /
RIIs Investors who applies or bids for a value of not more than 200,000.
Retail Individual
Shareholders
Shareholders of a listed Issuer who applies or bids for a value of not more than 200,000.
Retail Category
The portion of the Issue being such number of Equity Shares available for allocation to
RIIs which shall not be less than the minimum bid lot, subject to availability in RII
category and the remaining shares to be allotted on proportionate basis.
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Revision Form
The form used by the Bidder in an issue through Book Building process to modify the
quantity of Equity Shares and/or bid price indicates therein in any of their Bid cum
Application Forms or any previous Revision Form(s)
RoC The Registrar of Companies
SEBI The Securities and Exchange Board of India constituted under the Securities and
Exchange Board of India Act, 1992
SEBI ICDR Regulations,
2018
The Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018
Self-Certified Syndicate
Bank(s) or SCSB(s)
A bank registered with SEBI, which Issues the facility of ASBA and a list of which is
available on http://www.sebi.gov.in/cms/sebi_data/attachdocs/1316087201341.html
Specified Locations Refer to definition of Broker Centers
Stock Exchanges/ SE The stock exchanges as disclosed in the Prospectus of the Issuer where the Equity
Shares Allotted pursuant to the Issue are proposed to be listed
Syndicate The Book Running Lead Manager (s) and the Syndicate Member
Syndicate Agreement The agreement to be entered into among the Issuer, and the Syndicate in relation to
collection of the Bids in this Issue (excluding Application from ASBA Bidders)
Syndicate Member(s)/SM The Syndicate Member(s) as disclosed in the Prospectus
Underwriters The Book Running Lead Manager (s)
Underwriting Agreement The agreement dated [●] entered into between the Underwriters and our company.
Working Day
Any day, other than 2nd and 4th Saturday of the month, Sundays or public holidays,
on which commercial banks in India are open for business, provided however, with
reference to announcement Issue Period, “Working Days” shall mean all days,
excluding Saturdays, Sundays and public holidays, which are working days for
commercial banks in India.
329
RESTRICTION ON FOREIGN OWNERSHIP OF INDIAN SECURITIES
Foreign investment in Indian securities is regulated through the Industrial Policy, 1991 of the Government of India
and FEMA. While the Industrial Policy, 1991 prescribes the limits and the conditions subject to which foreign
investment can be made in different sectors of the Indian economy, FEMA regulates the precise manner in which
such investment may be made. Under the Industrial Policy, unless specifically restricted, foreign investment is
freely permitted in all sectors of Indian economy up to any extent and without any prior approvals, but the foreign
investor is required to follow certain prescribed procedures for making such investment. Foreign investment is
allowed up to100% under automatic route in our Company.
India’s current Foreign Direct Investment (“FDI”) Policy issued by the Department of Industrial Policy and
Promotion, Ministry of Commerce and Industry, GOI (“DIPP”) by circular of 2015, with effect from May 12,
2015 (“Circular of 2015”), consolidates and supersedes all previous press notes, press releases and clarifications
on FDI issued by the DIPP. The Government usually updates the consolidated circular on FDI Policy once every
Year and therefore, Circular of 2015 will be valid until the DIPP issues an updated circular.
The transfer of shares by an Indian resident to a Non-Resident does not require the prior approval of the FIPB or
the RBI, provided that (i) the activities of the investee company are under the automatic route under the
Consolidated FDI Policy and transfer does not attract the provisions of the SEBI (Substantial Acquisition of Shares
and Takeovers) Regulations, 2011; (ii) the non-resident shareholding is within the sectoral limits under the
Consolidated FDI Policy; and (iii) the pricing is in accordance with the guidelines prescribed by SEBI/RBI. Further,
in terms of the Consolidated FDI Policy, prior approval of the RBI shall not be required for transfer of shares
between an Indian resident and person not resident in India if conditions specified in the Consolidated FDI Policy
have been met. The transfer of shares of an Indian company by a person resident outside India to an Indian resident,
where pricing guidelines specified by RBI under the foreign exchange regulations in India are not met, will not
require approval of the RBI, provided that (i) the original and resultant investment is in line with Consolidated FDI
policy and applicable foreign exchange regulations pertaining to inter alia sectoral caps and reporting requirements;
(ii) the pricing is in compliance with applicable regulations or guidelines issued by SEBI.
As per the existing policy of the Government of India, OCBs cannot participate in this Issue.
The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other
jurisdiction outside India and may not be offered or sold, and Applications may not be made by persons in
any such jurisdiction, except in compliance with the applicable laws of such jurisdiction, except in compliance
with the applicable laws of such jurisdiction.
The above information is given for the benefit of the Applicants. Our Company and the BRLM are not liable
for any amendments or modification or changes in applicable laws or regulations, which may occur after the
date of this Draft Red Herring Prospectus. Applicants are advised to make their independent investigations
and ensure that the Applications are not in violation of laws or regulations applicable to them.
330
SECTION VIII MAIN PROVISION OF ARTICLES OF ASSOCIATION
The following regulations comprised in these Articles of Association were adopted pursuant to members resolution
passed at the Extra Ordinary General Meeting of the Company held on 19th day of July 2018, in substitution for, and
to the entire exclusion of, the earlier regulations comprised on the extant Articles of Association of the Company.
TABLE ‘F’ EXCLUDED
1. (1) 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 ‘F’ 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 to governed by
Articles
Interpretation
2 (1) 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 “Novus Green Energy Systems 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 of Directors” or
“Board”
“Company”
“Rules”
“Seal”
Number and Gender (2) Words importing the singular number shall include the plural number
and words importing the masculine gender shall, where the context
admits, include the feminine and neuter gender.
Expressions in the Articles to
bear the same meaning as
in the Act
(3) Unless the context otherwise requires, words or
expressions contained in these Articles shall bear the
same meaning as in the Act or the Rules, as the
case may be
331
Share capital and variation of rights
Shares under control of
Board
3 Subject to the provisions of the Act and these Articles, the shares in
the capital of the Company shall be under the control of the Board
who may 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.
Directors may allot shares
otherwise than for cash
4 Subject to the provisions of the Act and these Articles, the Board may
issue and allot shares in the capital of the Company on payment or
part payment for any property or assets of any kind whatsoever 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.
Kinds of Share Capital
5 The Company may issue the following kinds of shares in accordance
with these Articles, the Act, the 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
Issue of certificate
6 (1) Every person whose name is entered as a member in the register of
members shall be entitled to receive 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
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.
(2) Every certificate shall be under the seal and shall specify the shares
to which it relates and the amount paid-up thereon
Certificate to bear
Seal
(3) In respect of any share or shares held jointly by 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.
One certificate for
shares held jointly
7 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
8 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
9 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
332
debentures, etc.
10 (1) 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.
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
Variation of
members’ rights
11 (1) If at any time the share capital is divided into different classes of shares,
the rights attached to any class (unless otherwise provided by the terms
of issue of the shares of that class) may, subject to the provisions of 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.
Provisions as to
General meetings to
apply mutatis
mutandis to each
meeting
(2) To every such separate meeting, the provisions of these Articles relating
to general meetings shall mutatis mutandis apply.
Issue of further
shares not to affect
rights of existing
members
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 paripassu
therewith.
Power to issue
redeemable
preference shares
13 Subject to the provisions of the Act, the Board shall have the power 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.
Further issue of
share capital
14 (1) The Board or the Company, as the case may be, may, in accordance
with the Act and the Rules, issue further shares
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.
Mode of further
issue of shares
(2)
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.
Lien
15 (1) 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
Company’s lien
on
Shares
333
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.
(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
(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.
As to enforcing
lien by sale
17 (1) To give effect to any such sale, the Board may authorise some person
to transfer the shares sold to the purchaser thereof.
Validity of sale
(2) The purchaser shall be registered as the holder of the shares comprised
in any such transfer.
Purchaser to be
registered holder
(3) The receipt of the Company for the consideration (if any) given for the
share on the sale thereof shall (subject, if necessary, to execution of an
instrument 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.
Validity of
Company’s
receipt
(4) The purchaser shall not be bound to see to the application of the
purchase money, nor shall his title to the shares be affected by any
irregularity or invalidity in the proceedings with reference to the sale.
Purchaser not
affected
Application of
proceeds of sale
18 (1) The proceeds of the sale shall be received by the Company and applied in
payment of such part of the amount in respect of which the lien exists as is
presently payable.
Payment of
residual money
(2) The residue, if any, shall, subject to a like lien for sums not
presently payable as existed upon the shares before the sale, be paid to the
person entitled to the shares at the date of the sale
Outsider’s lien
not to affect
Company’s lien
19 In exercising its lien, the Company shall be entitled 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.
Provisions as
to lien to apply
mutatis mutandis to
debentures, etc.
20 The provisions of these Articles relating to lien shall mutatis mutandis apply
to any other securities including debentures of the Company.
Calls on shares
Board may make
calls
21 (1) 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.
Notice of call (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.
334
Board may extend
time for payment
(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.
Revocation or
postponement of
call
(4) A call may be revoked or postponed at the discretion of the Board.
Call to take effect
from date of
resolution
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.
Liability of joint
holders of shares
23 The joint holders of a share shall be jointly and severally liable to pay all calls
in respect thereof.
24 (1) 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 (1) 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 payable on the date on which by the terms of issue such sum
becomes payable.
Sums deemed to
be calls
(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
Provisions as to
calls to apply
30 The provisions of these Articles relating to calls shall mutatis mutandis apply
to any other securities including Debentures of the Company.
335
mutatis mutandis to
debentures, etc.
Instrument of
transfer to be
executed by
transferor and
transferee
31 (1) The instrument of transfer of any share in the Company shall be duly
executed by or on behalf of both the 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.
Board may refuse
to register transfer
32 The Board may, subject to the right of appeal conferred by the Act decline to
register -
(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.
Board may decline
to recognise
instrument of
transfer
33 In case of shares held in physical form, the Board may decline to recognise
any instrument of transfer unless -
(a) the instrument of transfer is duly executed and is in the form as prescribed
in the Rules made under the 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.
Transfer of shares
when suspended
34 On giving of previous notice of at least seven days or such lesser period in
accordance with the Act and 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.
Provisions as to
transfer of shares
to apply mutatis
mutandis to
debentures, etc.
35 The provisions of these Articles relating to transfer of shares shall mutatis
mutandis apply to any other securities including debentures of the Company.
Transmission of shares
36 (1) 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 (1) 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 hereinafter
provided, elect, either -
(a) to be registered himself as holder of the share; or
(b) to make such transfer of the share as the deceased or insolvent member could
have made.
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 (1) 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
336
(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
39 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.
Claimant to be
entitled to same
advantage
Provisions as to
transmission to
apply mutatis
mutandis to
debentures, etc.
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.
Forfeiture of Shares
If call or
instalment not
paid notice must
be given
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.
Form of notice 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.
In default of
payment of shares
to be forfeited
43 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.
Receipt of part
amount or grant of
indulgence not to
affect forfeiture
44 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.
Entry of forfeiture
in register of
members
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.
337
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) 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 (1) 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
(2) 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.
Member still
liable
to pay money
owing at time of
forfeiture and
interest
(3) 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 (1) A duly verified declaration in writing that the declarant is 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
affected
Validity of sales 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.
Cancellation of
share certificate in respect
of forfeited
shares
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 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.
Surrender of share
certificates
52 The Board may, subject to the provisions of the Act, accept a surrender of
any share from or by any member desirous of surrendering them on such
terms as they think fit.
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Sums deemed to be calls 53 The provisions of these Articles as to forfeiture shall apply in the case of
non-payment of any sum which, 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
Provisions as to
forfeiture of shares to
apply mutatis
mutandis to
debentures, etc.
54 The provisions of these Articles relating to forfeiture of shares shall
mutatis mutandis apply to any other securities including debentures of the
Company.
Alteration of capital
Power to alter
share capital
55 Subject to the provisions of the Act, the Company 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;
(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.
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 into
stock
(b) 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 of
stockholders
(c) 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 of
capital
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 survivorship, subject to the following
and other provisions contained in these Articles:
Joint-holders
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(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
(c) 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
Delivery of
certificate and
giving of notice to first
named holder
(d) 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.
Vote of joint holders
Executors or
administrators as joint
holders
(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.
Provisions as to joint
holders as
to shares to apply
mutatis mutandis to
debentures, etc.
(f) 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.
Capitalisation of profits
Capitalisation 59 (1) 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.
Sum how applied (2) 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).
(3) 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;
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(4) The Board shall give effect to the resolution passed by the Company in
pursuance of this Article.
60 (1) 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
(2) The Board shall have power—
(a) to make such provisions, by the issue of fractional certificates/coupons or by
payment in cash or otherwise as it thinks fit, for the case of shares or 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.
Board’s power to
issue fractional
certificate/coupon
etc.
(3) Any agreement made under such authority shall be effective and binding on
such members
Agreement
binding
on members
Buy Back of Shares
61 Notwithstanding anything contained in these Articles but subject to all applicable
provisions of the Act or any other law for the time being in force, the Company may
purchase its own shares or other specified securities.
Buy Back of
Shares
General meetings
62 All general meetings other than annual general meeting shall be called
extraordinary general meeting.
Extraordinary
general meeting
63 The Board may, whenever it thinks fit, call an extraordinary general meeting. Powers of Board
to
call extraordinary
general meeting
Proceedings at general meetings
64 (1) No business shall be transacted at any general meeting unless a quorum of
members is present at the time when the meeting proceeds to business.
Presence of
Quorum
(2) No business shall be discussed or transacted at any general meeting except
election of Chairperson whilst the chair is vacant.
Business confined
to election of
Chairperson whilst
chair vacant
(3) The quorum for a general meeting shall be as provided in the Act. Quorum for
general meeting
Chairperson of the
meetings
65 The Chairperson of the Company shall preside as Chairperson at every
general meeting of the Company.
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Directors to elect a
Chairperson
66 If there is no such Chairperson, or if he is not present within fifteen minutes
after the time appointed for 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.
Members to elect a
Chairperson
67 If at any meeting no director is willing to act as Chairperson or if no director
is present within fifteen 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.
Casting vote of
Chairperson at
general meeting
68 On any business at any general meeting, in case of an equality of votes,
whether on a show of hands or electronically or on a poll, the Chairperson
shall have a second or casting vote.
Minutes of
proceedings of
meetings and
resolutions passed
by postal ballot
69 (1) The Company shall cause minutes of the proceedings of every general
meeting of any class of members or creditors and every resolution passed
by postal ballot to be prepared and signed in such manner as may be
prescribed by the Rules and kept by making within thirty days of the
conclusion of every such meeting concerned or passing of resolution by
postal ballot entries thereof in books kept for that purpose with their pages
consecutively numbered.
Certain matters
not to be included
in Minutes
(2) There shall not be included in the minutes any matter which, in the opinion
of the Chairperson of the meeting -
(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.
Discretion of
Chairperson in
relation to Minutes
(3) The Chairperson shall exercise an absolute discretion in regard to the
inclusion or non-inclusion of any matter in the minutes on the grounds
specified in the aforesaid clause.
Minutes to be
evidence
(4) The minutes of the meeting kept in accordance with the provisions of the
Act shall be evidence of the proceedings recorded therein.
Inspection of
minute books of
general meeting
70 (1) The books containing the minutes of the proceedings of any general meeting
of the Company or a resolution passed by postal ballot shall:
(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 the time prescribed by the
Act, after he has made a request in writing in that behalf to the Company and 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.
Members may
obtain copy of
minutes
71 The Board, and also any person(s) authorised by it, may take any action before
the commencement of any general meeting, or any meeting of a class of 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.
Powers to arrange
security at
meetings
Adjournment of meeting
72 (1) The Chairperson may, suo moto, adjourn the meeting from time to time and from
place to place.
Chairperson
may adjourn the
meeting
(2) No business shall be transacted at any adjourned meeting other than the business
left unfinished at the meeting from which the adjournment took place.
Business at
adjourned meeting
(3) When a meeting is adjourned for thirty days or more, notice of the adjourned
meeting shall be given as in the case of an original meeting.
Notice of
adjourned meeting
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(4) Save as aforesaid, and save as provided in the Act, it shall not be necessary to
give any notice of an adjournment or of the business to be transacted at an
adjourned meeting.
Notice of
adjourned meeting
not required
Voting rights
73 Subject to any rights or restrictions for the time being attached to any class or
classes of shares
(a) on a show of hands, every member present in person shall have one vote; and
(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.
Entitlement to vote
on show of hands
and on poll
74 A member may exercise his vote at a meeting by electronic means in accordance
with the Act and shall vote only once.
Voting through
electronic means
75 (1) In the case of joint holders, the vote of the senior who tenders a vote, whether in
person or by proxy, shall be accepted to the exclusion of the votes of the other
joint holders.
Vote of joint
holders
(2) For this purpose, seniority shall be determined by the order in which the names
stand in the register of members.
Seniority of names
How members non-
compos mentis and
minor may vote
76 A member of unsound mind, or in respect of whom an order has been made by
any court having jurisdiction in lunacy, may vote, whether on a show of hands
or on a poll, by his committee or other legal guardian, and any such committee
or guardian may, on a 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.
Votes in respect of
shares of deceased or
insolvent
members, etc.
77 Subject to the provisions of the Act and other provisions of these Articles, any
person entitled under the Transmission Clause to any shares may vote at any
general meeting in respect thereof as if he was the registered holder of such
shares, provided that at least 48 (forty eight) hours before the time of holding
the meeting or adjourned meeting, as the 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.
Business may
Proceed pending poll
78 Any business other than that upon which a poll has been demanded may be
proceeded with, pending the taking of the poll.
Restriction on voting
rights
79 No member shall be entitled to vote at any general meeting unless all calls or
other sums presently 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.
Restriction on exercise
of voting rights in
other cases to be void
80 A member is not prohibited from exercising his voting on the ground that he
has not held his share or other interest in the Company for any specified period
preceding the date on which the vote is taken, or on any other ground not being
a ground set out in the preceding Article.
Equal rights of
members
81 Any member whose name is entered in the register of members of the Company
shall enjoy the same rights and be subject to the same liabilities as all other
members of the same class.
Proxy
Member may
vote in person or
otherwise
82 (1) Any member entitled to attend and vote at a general meeting may do so either
personally or through his constituted attorney or through another person as a
proxy on his behalf, for that meeting.
Proxies when to be
deposited
(2) The instrument appointing a proxy and the power-of attorney or other
authority, if any, under which it is signed or a notarised copy of that power or
authority, 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.
343
Form of proxy 83 An instrument appointing a proxy shall be in the form as prescribed in the
Rules.
84 A vote given in accordance with the terms of an 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:
Proxy to be valid not
withstanding 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
85 Unless otherwise determined by the Company in general meeting, the number
of directors shall not be less than 3 (three) and shall not be more than 14
(fourteen).
Board of Directors
86 (1) The Board shall have the power to determine the directors whose period of
office is or is not liable to determination by retirement of directors by rotation.
Directors not liable
to retire by rotation
(2) The same individual may, at the same time, be appointed as the Chairperson of
the Company as well as the Managing Director or Chief Executive Officer of
the Company.
Same individual
may be Chairperson
and Managing
Director/ Chief
Executive Officer
87 (1) The remuneration of the directors shall, in so far as it consists of a monthly
payment, be deemed to accrue from day-to-day.
Remuneration of
directors
(2) The remuneration payable to the directors, including any managing or whole-
time director or manager, if any, shall be determined in accordance with and
subject to the provisions of the Act by an ordinary resolution passed by the
Company in general meeting.
Remuneration to
require members’
consent
(3) In addition to the remuneration payable to them in pursuance of the Act, the
directors may be paid all 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.
Travelling and other
expenses
88 All cheques, promissory notes, drafts, hundis, bills of exchange and other
negotiable instruments, and all receipts for monies paid to the Company, shall
be 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.
Execution of
negotiable
Instruments
89 (1) Subject to the provisions of the Act, the Board shall 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.
Appointment of
additional directors
Duration of office of
additional
director
(2) 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.
Appointment of
alternate director
90 (1) The Board may appoint an alternate director to act for a director (hereinafter
in this Article called “the Original Director”) during his absence for a period
of not less than three months from India. No person shall be appointed as an
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alternate director for an independent director unless he is qualified to be
appointed as an independent director under the provisions of the Act.
Duration of
office of alternate
director
(2) An alternate director shall not hold office for a period longer than that
permissible to the Original Director in whose place he has been appointed
and shall vacate the office if and when the Original Director returns to India.
Re-appointment
provisions
applicable to
Original Director
(3) If the term of office of the Original Director is determined before he returns
to India the automatic reappointment of retiring directors in default of
another appointment shall apply to the Original Director and not to the
alternate director.
Appointment of director
to fill a
casual vacancy
91 (1) If the office of any director appointed by the Company in general meeting
is vacated before his term of office expires in the normal course, the
resulting casual vacancy may, be filled by the Board of Directors at a
meeting of the Board.
Duration of office of
Director appointed to fill
casual vacancy
(2) The director so appointed shall hold office only up to the date up to which
the director in whose place he is appointed would have held office if it had
not been vacated.
Powers of Board
General powers
of the Company
vested in Board
92 The management of the business of the Company 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 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
Proceedings of the Board
When meeting to be
convened
93 (1) The Board of Directors may meet for the conduct of business, adjourn
and otherwise regulate its meetings, as it thinks fit.
Who may summon Board
meeting
(2) The Chairperson or any one Director with the previous consent of the
Chairperson may, or the company secretary on the direction of the
Chairperson shall, at any time, summon a meeting of the Board
Quorum for Board meetings (3) The quorum for a Board meeting shall be as provided in the Act.
Participation at
Board meetings
(4) The participation of directors in a meeting of the Board may be either in
person or through video conferencing or audio-visual means or
teleconferencing, as may be prescribed by the Rules or permitted under
law.
Questions at
Board meeting
how decided
94 (1) Save as otherwise expressly provided in the Act, questions arising at any
meeting of the Board shall be decided by a majority of votes.
Casting vote of
Chairperson at
Board meeting
(2) In case of an equality of votes, the Chairperson of the Board, if any, shall
have a second or casting vote.
Directors not to
act when number
falls below
minimum
95 The continuing directors may act notwithstanding any vacancy in the
Board; but, if and so long as their number is reduced below the quorum
fixed by the Act for a meeting of the Board, the continuing 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.
Who to preside at meetings
of the Board
96 (1) The Chairperson of the Company shall be the Chairperson at meetings of
the Board. In his absence, the Board may elect a Chairperson of its
meetings and determine the period for which he is to hold office.
Directors to elect a
Chairperson
(2) If no such Chairperson is elected, or if at any meeting the Chairperson is
not present within fifteen minutes after the time appointed for holding
345
the meeting, the directors present may choose one of their number to be
Chairperson of the meeting.
Delegation of
powers
97 (1) The Board may, subject to the provisions of the Act, delegate any of its
powers to Committees consisting of such member or members of its body
as it thinks fit.
Committee to
conform to Board
regulations
(2) Any Committee so formed shall, in the exercise of the powers so
delegated, conform to any regulations that may be imposed on it by the
Board.
Participation
at Committee
meetings
(3) The participation of directors in a meeting of the Committee may be
either in person or through video conferencing or audio-visual means or
teleconferencing, as may be prescribed by the Rules or permitted under
law.
Chairperson of
Committee
98 (1) A Committee may elect a Chairperson of its meetings unless the Board,
while constituting a Committee, has appointed a Chairperson of such
Committee.
Who to preside
at meetings of
Committee
(2) If no such Chairperson is elected, or if at any meeting the Chairperson is
not present within fifteen minutes after the time appointed for holding
the meeting, the members present may choose one of their members to
be Chairperson of the meeting.
Committee to meet 99 (1) A Committee may meet and adjourn as it thinks fit.
Questions at
Committee
meeting how
decided
(2) Questions arising at any meeting of a Committee shall be determined
by a majority of votes of the members present.
Casting vote of
Chairperson
at Committee
meeting
(3) In case of an equality of votes, the Chairperson of the Committee shall
have a second or casting vote.
Acts of Board or Committee
valid
notwithstanding
defect of
appointment
100 All acts done in any meeting of the Board or of a 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.
Passing of
resolution by
circulation
101 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.
Chief Executive Officer, Manager, Company Secretary
and Chief Financial Officer
Chief Executive
Officer, etc.
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.
Director may be
chief executive
officer, etc.
(b) A director may be appointed as chief executive officer, manager, company
secretary or chief financial officer.
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Registers
Statutory 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.
Foreign register 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 provisions of the
Act) make and vary such regulations as it may think fit respecting the keeping of
any such register.
(b) The foreign register shall be open for inspection and may be closed, and extracts
may be taken therefrom, and copies thereof may be required, in the same manner,
mutatis mutandis, as is applicable to the register of members.
The Seal
The seal, its
custody and use
105 (1) The Board shall provide for the safe custody of the seal.
Affixation of seal 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.
Dividends and Reserve
Company in
general meeting
may declare
dividends
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.
Interim 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.
Dividends only
to be paid out of
profits
108 (1) 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.
Carry forward of
profits
(2) The Board may also carry forward any profits which it may consider necessary not
to divide, without setting them aside as a reserve.
Division of profits 109 (1) with special rights as to dividends, all dividends shall be declared and paid
according to the amounts paid or credited as paid on the shares in respect whereof
the dividend is paid, but if and so long as nothing is paid upon any of the shares in
the Company, dividends may be declared and paid according to the amounts of the
shares.
Payments in
advance
(2) No amount paid or credited as paid on a share in advance of calls shall be treated
for the purposes of this Article as paid on the share.
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Dividends to be
apportioned
(3) All dividends shall be apportioned and paid proportionately to the amounts paid or
credited as paid on the shares during any portion or portions of the period in respect
of which the dividend is paid; but if any share is issued on terms providing that it
shall rank for dividend as from a particular date such share shall rank for dividend
accordingly.
No member to
Receive dividend
whilst indebted to the
Company and
Company’s right to
reimbursement
therefrom
110 (1) The Board may deduct from any dividend payable to any member all sums of
money, if any, presently payable by him to the Company on account of calls or
otherwise in relation to the shares of the Company.
Retention of
dividends
(2) The Board may retain dividends payable upon shares in respect of which any
person is, under the Transmission Clause hereinbefore contained, entitled to
become a member, until such person shall become a member in respect of such
shares.
Dividend how
remitted
111 (1) Any dividend, interest or other monies payable in cash in respect of shares may be
paid by electronic mode or by cheque or warrant sent through the post directed to
the registered address of the holder or, in the case of joint holders, to the registered
address of that one of the joint holders who is first named on the register of
members, or to such person and to such address as the holder or joint holders may
in writing direct.
Instrument of
payment
(2) Every such cheque or warrant shall be made payable to the order of the person to
whom it is sent.
Discharge to
Company
(3) 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
Receipt of one
holder sufficient
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.
No interest on
dividends
113 No dividend shall bear interest against the Company.
Waiver of dividends 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.
Accounts
Inspection by
Directors
115 (1) 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.
Restriction on
inspection by
members
(2) 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.
Winding up
Winding up of
Company
116 Subject to the applicable provisions of the Act and the Rules made thereunder -
(a) 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.
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(b) 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.
(c) 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.
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.
(b) 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.
(c) 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
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.
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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 the Draft Red Herring 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 Draft Red Herring 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 Suite 1, 2nd Floor, Siddhi #100, P&T Colony, Tirumalagherry Secunderabad, Telangana 500015,
India from date of filing the Draft Red Herring Prospectus with ROC to Issue Closing Date on working days from
10.00 a.m. to 5.00 p.m.
Material Contracts
1. Issue Agreement dated December 27, 2018 between our Company and the Book Running Lead Manager.
2. Agreement dated December 26, 2018 between our Company and the Registrar to the Issue.
3. Syndicate Agreement dated [●] entered into among the members of the Syndicate, our Company and the
Registrar to the Issue.
4. Escrow Agreement dated [●] entered into amongst our Company, the BRLMs, the Syndicate Members, Escrow
Collection Banks.
5. Underwriting Agreement dated [●] between our Company, the Book Running Lead Manager, and Underwriter.
6. Market Making Agreement dated [●] between our Company, Book Running Lead Manager and Market Maker.
7. Tripartite agreement among the NSDL, our Company and Registrar to the Issue dated October 16, 2018.
8. Tripartite agreement among the CDSL, our Company and Registrar to the Issue dated September 10, 2018.
9. Banker's to the Issue Agreement dated [●] between our Company, the Book Running Lead Manager, Escrow
Collection Bank and the Registrar to the Issue.
Material Documents
1. Certified true copy of the Memorandum and Articles of Association of our Company including certificates of
incorporation.
2. Board resolution dated 14 December 2018 and special resolution passed pursuant to Section 62(1)(C) of the
Companies Act, 2013 at the EGM by the shareholders of our Company held on 14 December 2018.
3. Statement of Tax Benefits dated December 17, 2018 issued by the peer review certified auditor, M/s. NSVR
and Associates LLP, Chartered Accountants.
4. Copy of Restated Audit report from the peer review certified auditor, M/s. NSVR and Associates LLP,
Chartered Accountants, dated December 17, 2018 included in the Draft Red Herring Prospectus.
5. Copy of Certificate from the Auditor regarding the source and deployment of funds.
6. Copies of Annual reports of the Company for the year ended March 31, 2018, 2017, 2016, and for the period
ended September 2018
7. Consents of Directors, Company Secretary & Compliance Officer, Chief Financial Officer, Statutory Auditors,
Peer Review Auditor, Legal Advisor to the Issue, Bankers to our Company, Book Running Lead Manager,
Registrar to the Issue, Underwriter and Market Maker to include their names in the Draft Red Herring
Prospectus to act in their respective capacities.
8. Due Diligence Certificate dated December 27, 2018 from the Book Running Lead Manager.
9. Copy of Approval dated [●] from the SME Platform of NSE Emerge.
Any of the contracts or documents mentioned in the Draft Red Herring Prospectus may be amended or modified at
any time if so required in the interest of our Company or if required by the other parties, with the consent of
shareholder’s subject to compliance of the provisions contained in the Companies Act and other relevant statutes.
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DECLARATION
We hereby declare that all relevant provisions of the Companies Act, 2013 and the guidelines/regulations issued by
the Government of India or the guidelines/regulations issued by the Securities and Exchange Board of India,
established under section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been
complied with and no statement made in the Draft Red Herring Prospectus is contrary to the provisions of the
Companies Act, 2013, the Securities and Exchange Board of India Act, 1992 or rules made or guidelines or regulations
issued there under, as the case may be. We further certify that all statements are true and correct.
Signed by all Directors of our company
Name and Designation Signature
Mr. Anshuman Yenigalla
Chairman and Managing Director
Mr. Venkata Ravindra Yenigalla
Whole Time Director
Mrs. Pariplavi Mokkapati
Non-Executive Director
Mrs. Nagulavari Vanitha
Independent director
Mr. Srinivasa Rao Muttineni
Independent director
Signed by Chief Financial Officer and Company Secretary and Compliance Officer Company of the Company.
Mr. Srikrishna Saibabu Nandiraju Mr. Sannapaneni Sudheer
Chief Financial Officer Company Secretary and Compliance Officer
Place: Hyderabad
Date: 31/12/2018