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LETTER OF OFFER February 26, 2010

For Equity Shareholders of our Company Only

INTELLIVATE CAPITAL VENTURES LIMITEDOur Company was incorporated as a public limited company on November 18, 1982 in the name of “K. B. Steel Limited”, under the Companies Act, 1956 and was granted certifi cate for commencement of business on March 22, 1983. The name of our Company was changed to “Intellivate Capital Ventures Limited” pursuant to a special resolution of the members of our Company and a fresh certifi cate of incorporation refl ecting the change of name was issued on December 10, 2008.

Registered Offi ce: 66/1, Hansa Villa, Opp. South Indian Gymkhana, Bhaudaji Cross Road, Matunga (CR), Mumbai - 400 019. (For details of changes in the registered offi ce of the Company, see “Our History and Corporate Structure” on page 70)

Tel: +91-22-24034235; Fax: +91-22- 24031691; Contact Person: Mr. Amit Kalra; Email: [email protected]: Mr. Vipul J. Modi, Mrs. Leena V. Modi and M/s Vipul J Modi (HUF) (For further details on promoters see “Our Promoters” on page 81)

FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF OUR COMPANY ONLY

LETTER OF OFFERISSUE OF 24,25,000 (TWENTY FOUR LAKHS TWENTY FIVE THOUSAND) EQUITY SHARES WITH A FACE VALUE OF Rs. 10/- EACH FOR CASH AT A PRICE OF Rs. 50/- PER EQUITY SHARE (INCLUDING A PREMIUM OF Rs. 40/- PER EQUITY SHARE) FOR AN AMOUNT AGGREGATING UPTO RS. 1212.50 LAKHS TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF 5 (FIVE) EQUITY SHARES FOR EVERY 1 (ONE) FULLY PAID-UP EQUITY SHARE HELD BY THE EXISTING EQUITY SHAREHOLDERS ON THE RECORD DATE, i.e. MARCH 03, 2010. THE FACE VALUE OF EQUITY SHARES IS RS. 10 EACH AND THE ISSUE PRICE IS 5 TIMES OF THE FACE VALUE OF THE EQUITY SHARES. FOR FURTHER DETAILS, PLEASE REFER TO THE CHAPTER TITLED “TERMS OF THE ISSUE” BEGINNING ON PAGE 149 OF THIS LETTER OF OFFER.

PAYMENT METHOD1

Amount Payable per Equity Share (Rs.)Face Value (Rs.) Premium (Rs.) Total (Rs.)

On Application 2.50 10.00 12.50On Allotment 2.50 10.00 12.50On one or more calls 5.00 20.00 25.00Total 10.00 40.00 50.001Please refer to risk factor no.35 in “Risk Factors” on page 10 for risks associated with the payment method. For details on the payment method see “Terms of the Issue” on page 149.

GENERAL RISKSInvestment in equity and equity-related securities involve a degree of risk and investors should not invest any funds in the 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 the Issue. For taking an investment decision, investors must rely on their own examination of the Issuer and the Issue including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (SEBI), nor does SEBI guarantee the accuracy or adequacy of this Letter of Offer. Specifi c attention of the investors is invited to the chapter titled “Risk Factors” beginning on page 10 of this Letter of Offer.

ISSUER’S ABSOLUTE RESPONSIBILITYThe Issuer, having made all reasonable inquiries, accepts responsibility for and confi rms that this Letter of Offer contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Letter of Offer 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 Letter of Offer as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING ARRANGEMENTThe existing Equity Shares of our Company are listed only on the Bombay Stock Exchange Limited (BSE). Our Company has received in-principle approval to deal in and for offi cial quotation in respect of the Equity Shares arising out of the Issue from BSE by its letter dated October 12, 2009. For purposes of the Issue, BSE is the Designated Stock Exchange.

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUEARIHANT CAPITAL MARKETS LIMITEDMerchant Banking DivisionSEBI Registration No.: INM000011070 3rd Floor, Krishna Bhavan, 67, Nehru Road, Vile Parle (East), Mumbai – 400 057Tel: +91-22-4225 4800; Fax: +91-22-4225 4880Email: [email protected]: www.arihantcapital.comContact Person: Ms. Sheela Chhatwani

PURVA SHAREGISTRY INDIA PRIVATE LIMITEDSEBI Regn No: INR0000011129, Shiv Shakti Indl Estate, J R Boricha Marg, Opp. Kasturba Hospital, Lower Parel, Mumbai - 400 011Tel : +91-22-23016761; Fax : +91-22-23012517 Email: [email protected]: http://www.purvashare.comContact Person: Mr. V. B. Shah

ISSUE PROGRAMME

ISSUE OPENS ON LAST DATE FOR RECEIPT OF REQUESTS FOR SPLIT APPLICATION FORMS ISSUE CLOSES ON

MARCH 11, 2010 MARCH 18, 2010 MARCH 25, 2010

SECTION TABLE OF CONTENTS Page No.

NO OFFER IN OTHER JURISDICTIONS 3

PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA 3

FORWARD-LOOKING STATEMENTS 4

I DEFINITIONS AND ABBREVIATIONS 5

II RISK FACTORS 10

III INTRODUCTION

SUMMARY

SUMMARY OF OUR INDUSTRY AND BUSINESS 21

THE ISSUE DETAILS IN BRIEF 23

SUMMARY OF FINANCIAL AND OPERATIONAL INFORMATION 25

GENERAL INFORMATION 28

CAPITAL STRUCTURE OF THE COMPANY 32

IV PARITCULARS OF THE ISSUE 39

V ABOUT US

OUR INDUSTRY OVERVIEW 58

OUR BUSINESS 66

KEY INDUSTRY REGULATIONS AND POLICIES 69

OUR HISTORY AND CORPORATE STRUCTURE 70

OUR MANAGEMENT 73

OUR PROMOTERS 81

DIVIDEND POLICY 91

VI FINANCIAL STATEMENTS

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA 92

FINANCIAL INFORMATION OF THE ISSUER 92

FINANCIAL INFORMATION OF GROUP COMPANIES 120

CHANGES IN ACCOUNTING POLICIES IN THE LAST THREE YEARS 127

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF THE OPERATIONS

127

VII LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS 134

GOVERNMENT APPROVALS AND LICENSING ARRANGEMENTS 136

VIII OTHER REGULATORY AND STATUTORY DISCLOSURES 138

IX OFFERING INFORMATION

TERMS OF THE ISSUE 149

ISSUE PROCEDURE 153

X DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES OF ASSOCIATION

173

XI OTHER INFORMATION 189

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

DECLARATION

INTELLIVATE CAPITAL VENTURES LIMITED __________________________________________________________________________________________

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NO OFFER IN OTHER JURISDICTIONS

The rights entitlement and Equity Shares of our Company have not been and may not be offered or sold, directly or indirectly, and this Letter of Offer may not be distributed in any jurisdiction outside India. Receipt of this Letter of Offer willnot constitute an offer in those jurisdictions in which it would be illegal to make such an offer and, in those circumstances, this Letter of Offer must be treated as sent, for information only, and should not be copied or redistributed. No person receiving a copy of this Letter of Offer in any territory other than in India may treat the same as constituting an invitation oroffer to him/her, nor should he/she in any event use the CAF.

Our Company will not accept any CAF where the address as indicated by the applicant is not an Indian address. Accordingly, persons receiving a copy of this Letter of Offer should not, in connection with the Issue of Equity Shares or the rights entitlements, distribute or send the same in any other jurisdiction where to do so would or might contravene local securities laws or regulations. If this Letter of Offer is received by any person in any such territory, or by their agent or nominee, theymust not seek to subscribe to the Equity Shares or the rights entitlements referred to in this Letter of Offer.

PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA

Unless stated otherwise, the financial information in this Letter of Offer is derived from our Company’s financial statements for the financial years ended 2009, 2008, 2007, 2006 and 2005 prepared in accordance with Indian GAAP and applicable SEBI (ICDR) Regulations, as stated in the audit report dated January 29, 2010 of our Statutory Auditors, M/s. J. B. Dudhela & Co., included in this Letter of Offer. Unless stated otherwise, throughout this Letter of Offer, all figures have been expressed in lakhs, though certain numbers are also expressed in Rs. millions and in Rs. crores. References to the singular also refers to the plural and one gender also refers to any other gender, wherever applicable, and the words “lakhs” or “lacs” means “100 thousand” and the word “million” or “mn” means “10 lakhs” and the word “crore” means “10 million” or “100 lakhs” and the word “billion” means “1,000 million” or “100 crores”. Our financial year commences on April 1 and ends on March 31 of the next year. Unless stated otherwise, reference herein to a financial year, is to the financial year ended March 31 of a particular year.

In this Letter of Offer, unless the context otherwise requires, all references to “India” are to the Republic of India, all references to the “US” or the “U.S.” or the “USA”, or the “United States” are to the United States of America, all references to “UK” or the “U.K.” are to the United Kingdom. In this Letter of Offer, any discrepancies in any table between the total and the sum of the amounts listed may be due to rounding off.

Market and industry data used in this Letter of Offer, has been obtained from various industry publications, internal Company reports, public domain and governmental sources. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable and that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although, we believe market data used in this Letter of Offer is reliable, it has not been independently verified. Similarly, internal Company reports, while believed by us to be reliable, have not been verified by any independent sources.


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FORWARD-LOOKING STATEMENTS

This Letter of Offer contains certain “forward-looking statements”. These forward looking statements can generally be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”, “estimate”, “intend”, “objective”, “plan”, “project”, “shall”, “will”, “will continue”, “will pursue” or other words or phrases of similar import. Similarly, statements that describe the objectives, plans or goals also are forward-looking statements. All forward looking statements are subject torisks, uncertainties and assumptions about the Company that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. Important factors that could cause actual results to differ materiallyfrom the expectations include, among others:

General economic and business conditions in the markets in which we operate and in the national economic conditions; Company’s ability to successfully implement the strategy, growth and expansion plans and technological changes; Changes in the value of Rupee and other currency changes; Changes in political and social conditions in India, the monetary policies of India and other countries, inflation, deflation, recession, unanticipated fluctuation in interest rates, foreign exchange rates, equity prices or other rates or price changes in the Indian and international interest rates and its impact on financial market; Allocation of funds by the Government; Changes in laws and regulations relating to the industry in which we operate; Increasing competition or other factors affecting the industry segments in which our Company operates.

For a further discussion of factors that could cause our actual results to differ, please refer to the chapter titled “Risk Factors” and chapters titled “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” beginning on pages 10, 66 and 127 respectively of this Letter of Offer. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated.

Neither our Company, nor our Directors and officers nor the Lead Manager nor 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 theoccurrence of unanticipated events, even if the underlying assumptions do not come to fruition. In accordance with SEBI /Stock Exchange requirements, our Company and the Lead Manager 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 for the Equity Shares being offered through this Issue.


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SECTION I: DEFINITIONS AND ABBREVIATIONS

In this Letter of Offer, the terms “the Issuer”, ”We”, ”us”, ”our”, “the Company”, “our Company” “Intellivate Capital” or “ICVL”, unless the context otherwise implies, refers to Intellivate Capital Ventures Limited.

CONVENTIONAL / GENERAL TERMS

Term Description ACA Associate Chartered Accountant Act/ Companies Act The Companies Act, 1956 and the rules made thereunder, as amended

from time to time Articles/AOA Articles of Association of our Company Auditors The statutory auditors of our Company M/s. J. B. Dudhela & Co. Applicant Any shareholder/investor/other person who makes an application in this

Issue in accordance with this Letter of Offer Application Money The aggregate of monies payable on application by the Applicant, being

the aggregate money payable at Rs.12.50/- per share towards the entitlement of Equity Shares

Allotment Money The aggregate of monies payable on allotment by the Applicant, being the aggregate money payable at Rs.12.50/- per share

Bankers to this Issue HDFC Bank Limited B.Com Bachelor in Commerce Board or Board of Directors The Board of Directors of our Company as constituted from time to time

including any committee thereof Call Money The monies payable by the Applicant, aggregating to Rs.25.00/- per share

towards the entitlement of Equity Shares, on one or more calls Consolidated Certificate One consolidated certificate issued by our Company for the Equity Shares

allotted under one folio, in case of multiple physical shares Collection Centre As defined in SEBI (Issue Of Capital And Disclosure Requirements)

Regulations, 2009, and mentioned in the CAF. Designated Stock Exchange Bombay Stock Exchange Limited DLOF/ Draft Letter of Offer Draft Letter of Offer dated September 30, 2009 submitted to SEBI Depositories NSDL and CDSL Depositories Act Depositories Act, 1996 as amended from time to time Equity Share Capital or Share Capital Share capital of our Company as at a specific date Equity Share(s) or Share(s) Equity Share(s) of our Company having a face value of Rs. 10/- each Equity Shareholder(s)/ Shareholder(s) The holder of Equity Share(s) FY / Financial Year Financial year ending March 31, unless otherwise specified. IFSC Indian Financial System Code Indian GAAP Generally Accepted Accounting Principles in India Investor(s) The holder(s) of Equity Shares of our Company as on the Record Date, i.e.

March 3, 2010 and Renouncees, who are eligible to apply for and receive their Rights Entitlement, subject to applicable law

Issue / Rights Issue The issue of 24,25,000 Equity Shares of Rs. 10 each for cash at a premium of Rs.40.00 per Equity Share aggregating to Rs. 1212.50 lakhs by the Company to the Equity Shareholders on rights basis in the ratio of five Equity Shares for every one Equity Share held

Issue Closing Date March 25, 2010


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Issue Opening Date March 11, 2010 Issue Price Rs. 50/- per Equity Share, being 5 (five) times the face value of each

Equity Share I.T. Act The Income Tax Act, 1961 including the rules made thereunder, as

amended from time to time Lead Manager or Lead Manager to the Issue

Arihant Capital Markets Limited

LOF/ Letter of Offer Letter of Offer dated February 26, 2010 Ltd. Limited MBA Master of Business Administration Memorandum / MOA Memorandum of Association of our Company Net Issue proceeds The proceeds of this Issue, after meeting Issue expenses PIO Persons of Indian Origin Pvt. Private Record Date The record date fixed by our Company for the purpose of this Issue, being

March 3, 2010 Refund Bankers to this Issue HDFC Bank Limited Registrar to the Issue or Registrar

Purva Sharegistry (India) Private Limited

Registered Office of our Company 66/1, Hansa Villa, Opp. South Indian Gymkhana, Bhaudaji Cross Road, Matunga (CR), Mumbai – 400 019

Renouncees The persons who have acquired Rights Entitlements from Equity Shareholders

Rights Entitlement The number of Equity Shares that a Shareholder is entitled to in a proportion to his/her existing shareholding in our Company as on Record Date.

ROC / Registrar of Companies The Registrar of Companies SCSB Self Certified Syndicate Bank SEBI Securities and Exchange Board of India constituted under SEBI Act, 1992 SEBI Act, 1992 The Securities and Exchange Board of India Act, 1992, as amended from

time to time SEBI DIP Guidelines /SEBI Guidelines

The SEBI (Disclosure and Investor Protection) Guidelines, 2000, issued by SEBI on 27th January, 2000, as amended, including instructions and clarifications issued by SEBI from time to time (now rescinded).

SEBI (ICDR) Regulations or ICDR Regulations

SEBI (Issue Of Capital And Disclosure Requirements) Regulations, 2009

Stock Exchange Bombay Stock Exchange Limited SEBI (SAST) Regulations / SAST / SEBI Takeover Code / Takeover Code

Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as amended.


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OFFERING – RELATED TERMS

Term Description Allotment Unless the context otherwise requires, issue of equity Shares pursuant to

this Issue. Allottee The successful Applicant to whom the equity Shares is being / or have

been issued. Applicant Any prospective Investor who makes an application pursuant to terms of

this Offer Document. Application Forms The Forms in terms of which the Investors shall apply for the Equity

Shares of the Company. ASBA/ Applications Supported by Blocked Amount

An application for subscribing to an issue, containing an Authorization to block the application money in a bank account.

Auditors The statutory auditors of our Company M/s. J. B. Dudhela & Co. Bankers to the Issue HDFC Bank Limited CAF Composite Application Form Equity Shareholders /

Shareholders /

Members

Equity shareholders whose names appear as Beneficial owners as per the list to be furnished by the depositories in respect of the shares held in the electronic form and on the Register of Members of the Company in respect of the shares held in physical form at the close of business hours on the Record Date i.e. March 3, 2010 and to whom this issue is being made.

Face Value Face Value of Equity Shares of the Company being Rs. 10/- each. Issue Closing date The date on which the Issue closes for Subscription i.e. March 25, 2010 Issue Opening date The date on which the Issue opens for Subscription i.e. March 11, 2010 Issue Period The period between the Issue opening date and the Issue closing date

inclusive of both the days and during which prospective applicants can submit their application forms.

Issue / Rights Issue Issue of 24,25,000 Equity Shares of Rs. 10/- each at Rs. 50/- (including share premium of Rs. 40/-) per Equity Share on a Rights basis to the existing Equity shareholders of the Company in the ratio of 5 (five) equity shares for every 1 (one) equity share held on Record Date i.e. March 3, 2010 aggregating to Rs. 12,12,50,000(Rupees Twelve Crores Twelve Lakhs Fifty Thousand only)

Letter of Offer/ LOF/ Offer Document This Letter of Offer circulated to the Equity Shareholders of the Company Lead Manager Lead Manager to the Issue, in this case being Arihant Capital Markets

Limited SAF(s) Split Application Form(s)


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COMPANY/ INDUSTRY RELATED TERMS

Anish Properties or APPL Anish Properties Private Limited Ashwa Realty or ARIPL Ashwa Realty (India) Private Limited Bombay Exim or BEPL Bombay Exim Private Limited Ex-promoters/erstwhile promoters/Old promoters

Mr. Kaushik Kansara, Mrs. Manglaben Kansara, Mrs. Hansa K Kansara, Ms. Sharda B Kansara, Ms Jaybalaben J. Dudhela and Ms. Jyotsna B Mavani

Galaxy Realty or GRPL Galaxy Realty Private Limited High Rise or HRRPL High Rise Realty Private Limited Hansa Villa Realty or HVRPL Hansa Villa Realty Private Limited Jimeet Developers or JDPL Jimeet Developers Private Limited Jinal Finvest or JFPL Jinal Fin-vest Private Limited Ltd Limited Niralee Properties or NPPL Niralee Properties Private Limited Promoters/Present Promoters/Current Promoters/New Promoters

Mr. Vipul J. Modi, Ms. Leena V. Modi and Vipul J. Modi (HUF)

Piyali Builders or PBDPL Piyali Builders & Developers Private Limited Rock Builders or RBDPL Rock Builders & Developers Private Limited Samruddhi Finstock or SFL Samruddhi Finstock Limited Samruddhi Stock Brokers or SSBL Samruddhi Stock Brokers Limited. Samruddhi Commodities or SCTL Samruddhi Commodities Trading Limited. Samruddhi Equities or SESL Samruddhi Equities and Securities Services Limited Saria Builders or SBDPL Saria Builders & Developers Private Limited VJM (HUF) Vipul J. Modi (HUF)

ABBREVIATIONS

Term Description AGM Annual General Meeting AS Accounting Standard, issued from time to time by the Institute of Chartered Accountants of

India BSE Bombay Stock Exchange Limited CAF Composite Application Form CAGR Compounded Annual Growth Rate CDSL Central Depository Services (India) Limited CIN Corporate Identity Number Demat Dematerialization of Equity Shares DIN Director’s Identification Number LOF Letter of Offer DP Depository Participant EBITDA Earning Before Interest, Tax, Depreciation and Amortisation ECS Electronic Clearing Service EGM Extraordinary General Meeting EPS Earnings Per Share


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FCNR Account Foreign Currency Non Resident Account FDI Foreign Direct Investment FEMA Foreign Exchange Management Act, 1999 FII(s) Foreign Institutional Investors registered with SEBI under applicable laws FIPB Foreign Investment Promotion Board, Ministry of Finance, Government of India GDP Gross Domestic Product GIR General Index Number GoI Government of India HUF Hindu Undivided Family IGF Investors’ Grievance Forum KMP Key Managerial Personnel MAT Minimum Alternate Tax MCX Multi Commodity Exchange of India Limited MICR Magnetic Ink Character Recognition MoU / MOU Memorandum of Understanding NAV

Net Asset Value being paid up Equity Share capital plus free reserves (excluding reserves created out of revaluation) less Miscellaneous expenses not written off and debit balance of Profit & Loss account, divided by number of issued Equity Shares.

NBFC Non Banking Financial Company NCDEX National Commodity & Derivatives Exchange of India Limited NGO Non-Governmental Organization NEFT National Electronic Funds Transfer NOC No Objection Certificate NR Non Resident NRE Account Non Resident External Account NRI Non Resident Indian NRO Account Non Resident Ordinary Account NSDL National Securities Depository Limited OCB Overseas Corporate Bodies P/E Ratio Price/Earnings Ratio PAN Permanent Account Number POA Power of Attorney RBI The Reserve Bank of India RONW Return on net worth Rs. or INR Indian Rupees RTGS Real Time Gross Settlement UAE United Arab Emirates UK United Kingdom US / USA United States of America USD or $ or US $ United States Dollar VOIP Voice over Internet Protocol


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SECTION II: RISK FACTORS An investment in Equity Shares involves a degree of risk. Prior to investing and making any investment decisions relating to our Equity Shares, investors should carefully consider all the risks described below, in addition to the other information contained in this Letter of Offer. Investors should carefully consider all the information contained in the section titled “Financial Information of the Issuer” beginning on 92 of this Letter of Offer, for the information related to the financial performance of our Company. The occurrence of any of the following events could have a material adverse effect on our business, results of operation, financial condition and prospects and cause the market price of our Equity Shares to fall significantly and you may lose all or part of your investment. These risks are not the only ones that we face. This Letter of Offer also contains forward looking statement that involves risks and uncertainties. Our business operations could also be affected by additional factors that are not presently known to us or that we currently consider to be immaterial to our operations. Unless otherwise stated in the relevant risk factors set forth below, we are not in a position to specify or quantify the financial or other implications of any of the risks mentioned herein. Materiality: The Risk Factors have been determined on the basis of their materiality. The following factors have been considered for determining the materiality:

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

INTERNAL RISK FACTORS AND RISKS RELATING TO OUR BUSINESS

1. We intend to use approximately 83 % of the proceeds of this Issue for investments in certain unlisted companies which are subject to lesser degree of public scrutiny. A substantial part of the net proceeds representing approximately 83 % of this Issue is going to be utilised for Strategic investments in companies and trading in securities. The strategic investments in companies can be by way of subscribing to the equity capital of or providing debt to certain unlisted companies. This money would be utilised as per the discretion of the management of those unlisted companies. The companies being unlisted, their activities may not be subject to the same level of public scrutiny as a listed Company.

2. Our Company, Promoter(s), directors and group companies are involved in certain litigations Our Company, Promoter(s), directors and group companies are involved in certain litigations, a summary of which is given hereunder:


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For further details, please refer ‘Legal and Other Information’ beginning on page no.134 of this Letter of Offer.

3. Certain of our Promoter Group entities have incurred losses during recent Fiscals. Certain of our Promoter Group companies have incurred losses in the last three Fiscals, as set forth in the table below: (Rs. In lacs)

Profit/(loss) after tax Name of the Company March 31, 2009 March 31, 2008 March 31, 2007

Piyali Builders And Developers Private Limited (0.06) (0.09) (0.03)

Anish Properties Private Limited 2.82 0.90 (0.03)

Ashwa Realty (India) Private Limited 0.01 0.02 (2.84)

Galaxy Realty Private Limited (0.03) (0.06) (0.01)

Saria Builders And Developers Private Limited (0.05) (0.08) (0.02)

Hansa Villa Realty Private Limited 0.51 7.07 (0.03)

4. We have accumulated losses

As per restated accounts, our Company has accumulated losses in the last five years and for period ended 31/12/2009 as follows: (Rs. in lacs)

Year Ended Period ended

31/12/2009

31/03/2009 31/03/2008 31/03/2007 31/03/2006 31/03/2005

Accumulated losses (Debit balance in Profit and Loss account)

3.83 8.51 9.19 12.00 12.74 14.05

Sr. No.

Particulars of litigations No. of Cases Amount (Rs. in Lacs)

A Company (i) Litigation filed against our Company NIL NA (ii) Litigation filed by our Company 1 7.14

B Group Companies (i) Litigation filed against group companies NIL NA (ii) Litigation filed by Group Companies

- where financial implication can be ascertained 3

42.54

- where financial implication cannot be ascertained 5 -- C Promoter(s) / Directors of our Company

(i) Litigation filed against promoters / Directors 1 Not Ascertainable

(ii) Litigation filed by promoters / Directors NIL NA


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5. Our Company has been unsuccessful in carrying out its plans in the past Our Company did its maiden issue in 1983 to meet the cost of project for setting up manufacturing facilities for SS coils. However, due to technical difficulties, the original plan was shelved. Thereafter, we established the plant of SS Rolling Sheet which was operated till 1986-87. During the year 1986-87 we diversified into plastic extrusion and installed the extrusion plant to manufacture plastic pipes and started the production in the year 1987-88. However, we were unsuccessful in this business due to intense competition and decrease in profit margin and discontinued business activities in the 2000-01.

6. The present rights issue is being made at an issue price of Rs. 50 per share which is significantly higher than the last recorded trade of Rs. 30.00 on 20th January 2010 on the BSE. Moreover, the issue price of Rs. 50 per share translates into a Price-Earning ratio of 87.72 times based on weighted average EPS and 178.57 times based on EPS on March 31, 2009, which is higher than the industry PE of 8.5 times (Finance companies-small: Capitaline Database as on 25/2/2010)

7. Our Company had discontinued business operations since 2000-2001 and was thereafter carrying only marginal activities for about eight years till 2007-2008 Our Company discontinued its business in the year 2000-01 due to intense competition and decrease in profit margin. Since then the Company has undertaken only marginal activities till the year ended March 31, 2008. During the period 2001-02 to 2006-07, our Company had not carried on any manufacturing activities. However, our Company had continued to earn some amount of commission income from various parties for referring the sales and procurement transactions, details whereof are given in page no. 66.

8. Our Company has undergone change of management control in 2007 - 2008

The present promoters, Mr. Vipul J. Modi, Ms. Leena V. Modi and Vipul J. Modi (HUF), had acquired substantial paid up equity share capital and management control of the Company pursuant to regulations 10 & 12 of SEBI (SAST) Regulations from the erstwhile promoters/promoter group comprising Mr. Kaushik Kansara, Mrs. Manglaben Kansara, Mrs. Hansa K Kansara, Ms. Sharda B Kansara, Ms Jaybalaben J. Dudhela and Ms. Jyotsna B Mavani, through Share Purchase Agreements with them and complying with the provisions of SEBI (SAST) Regulations 1997. The present promoters do not have track record of managing any other listed company and their business experience is limited to managing closely held companies in the field of stock broking, financial services and real estate.

9. Our Company is entering into a new line of business.

Our Company is entering into new lines of business, i.e., management consultancy and advisory services on corporate financial and commercial aspects and investment activities. We have only recently started these business activities. We are thus in the process of identifying potential markets and customers. At present, although our Company has employed qualified professionals and our present promoters have experience in these lines of business, we cannot give any assurance that we will be successful in its execution.

10. We have limited experience in operating financial service business and there can be no assurance that we will achieve our business objective. We have entered into the business of providing advisory services and investment /trading in securities/derivatives only during the year 2008-2009. Thus, we have limited experience in operating this business.


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We are also subject to business risks and uncertainties associated with any new business, including the risk that we will not achieve our business objective. However, one of our Current Promoters Mr. Vipul Modi is a professional with experience in the business that the Company has ventured into.

11. Our Company has not placed order for acquiring information technology systems for its operations. Our Company is proposing to raise a sum of Rs.20 lacs for acquiring information technology systems for its operations. However, we have not placed order for acquiring these systems. For details please refer to Page no. 39 under the head ‘Object of the Issue’.

12. Non-compliance with Clause 47(a) of Listing Agreement Clause 47(a) of Listing Agreement, requires us to appoint the Company Secretary to act as Compliance Officer who will also be responsible for monitoring the share transfer process and report to the Company’s Board in each meeting. Our Compliance Officer, till February 11, 2010 was Mr. Inderpreet Singh Chadha who is not a Company Secretary. In terms of SEBI circular SMD/Policy/Listing/Cir-5/2003 dated February 12, 2003, BSE could take action under sub-section 2 of section 23 of Securities Contracts (Regulation) Act, 1956.

13. SEBI has levied penal interest on the present promoters, Mr. Vipul J. Modi, Ms. Leena V. Modi and Vipul J. Modi (HUF) during the takeover from the erstwhile promoters The Open Offer to the shareholders of our Company was made by the Present Promoters at a price of Rs.28.00 (Rupees Twenty Eight) per share. However on account of delay in completing the Open Offer formalities SEBI required the present promoters to revise the offer price by adding interest at Re 0.55 per share. The open offer was thereafter made at a price of Rs. 28.55 per equity share.

14. Delayed compliance of the SEBI (Prohibition of Insider Trading) Regulations, 1992 and SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 Our New Promoters have delayed compliance with Chapter II of the SEBI (SAST) Regulations for the shares acquired in the Open Offer made by them to the shareholders of the Company in 2007. Our Company has delayed compliance with the SEBI (Prohibition of Insider Trading) Regulations, 1992 and regulation 8A of the SEBI (SAST) Regulations. Disclosure under regulation 8A as said above by our Company is not in the prescribed format as per the SEBI (SAST) Regulations. Our Company has also delayed compliances with clauses 35 and 41 of the listing agreement with the BSE. For details please refer page 38 of this letter of offer.

15. Filing under the SEBI consent order Our Company had delayed compliance with regulation 6(2) and 6(4) of the SEBI (SAST) Regulations for the year 1997 and 8(3) of the said Regulations for the period 1998 to 2002. SEBI had issued a Letter no. CFD/DCR/RC/TO/13060/04 dated July 21, 2004 giving an option to the Company to give its consent in writing for the payment of a penalty of Rs. 1,75,000/- (Rupees One Lakh Seventy Five Thousand only), under Settlement by Consent Order. The Board of Directors has vide letter dated February 26, 2010 undertaken that our Company will file under the Consent Order Scheme of SEBI in this regard before the issue opening date, i.e. March 11, 2010.


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16. Our Company does not own any fixed assets at present Our Company made a public issue in the year 1983 to meet the cost of project to set up manufacturing facilities of SS Coil. However, due to technical difficulties, the original plan was shelved and our company established the plant of SS Rolling Sheet which was operated till 1986-87. During the year 1986-87 the company diversified into plastic extrusion and installed the extrusion plant to manufacture plastic pipes and started the production in the year 1987-88. Thereafter, due to intense competition and decrease in profit margins our Company discontinued this business in the year 2000-01. With the discontinuation of the business the fixed assets were sold gradually.

17. The premises of our Company are not registered under the Bombay Shops and Establishment Act, 1948. We are not registered under the Bombay Shops and Establishment Act, 1948. Under the said Act, the non-registration is punishable with fine which is not less than one thousand rupees and which may extend to five thousand rupees.

18. Dependence on rights issue proceeds.

Our Company is dependent on the full subscription to the rights issue. Under-subscriptions to the issue may have an adverse impact on the implementation of the Company’s investment plan. In the event of under-subscription of the issue, promoters by themselves or through one or more of their group companies intend to subscribe to the issue beyond their entitlements. In such a case, the acquisition of additional shares by promoters shall be exempt from the requirement of making an open offer in terms of regulations 3(1)(b)(ii) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. The acquisition will not result in a change in the control of the management of the Company.

19. Our Company had received a show cause notice dated January 24, 2008 from the BSE for non-compliance of clause 15/16 of the listing agreement for giving only 16 days notice for book closure to the BSE for Annual General Meeting for year ended 31/03/2007. Our Company had vide letter dated January 31, 2008 responded to BSE explaining the reason for the delay in giving the book closure notice and requesting BSE to condone the delay and drop the show cause notice. Thereafter, no action has been taken against the Company by the BSE

20. We have changed our name from K B Steel Limited to Intellivate Capital Ventures Limited

Our Company was originally incorporated as “K B Steel Limited” on November 18, 1982 and obtained its Certificate for Commencement of Business on March 22, 1983 under the Companies Act 1956. Subsequently the name of the Company was changed from K B Steel Limited to Intellivate Capital Ventures Limited to reflect the nature of the business proposed to be carried out by the Company, i.e. activities relating to the financial services sector. Our Company obtained a fresh Certificate of Incorporation consequent upon change of name dated December 10, 2008. For more information on the change in the name, see the section titled “History and Corporate Structure” on page 70 of this Letter of offer.

21. We have made very marginal net profits after tax.

As per our restated financial information, we earned marginal net profits for FY 2009, FY 2008, FY 2007, FY 2006, FY 2005 of Rs. 0.69 lakhs, Rs.2.81 lakhs, Rs. 0.74 lacs, Rs. 1.31 lacs and Rs. 0.69 lacs respectively. We expect our expenditure to continue to increase in the future and if our income does not grow at a faster rate than the expected rate of increase in the expenditure, or if our operating expenditures are higher than we anticipate, we may not be profitable and we may incur losses in future.

For further details, please refer chapter titled “Financial Information of the Issuer” beginning from page 92 of this Letter of Offer.


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22. We had negative cash flow from operating activities in the past. Any negative operating cash flow in the future could have an adverse effect on our results of operations. We had negative net cash flow from operating activities amounting to Rs. 3.35 lakhs and Rs. 27.06 lakhs for the years ended 31/03/2009 and 31/03/2007 respectively as per our restated financial information. There can be no assurance that we will not experience periods of negative cash flow in the future. If the negative cash flow trend persists in future, our Company may not be able to generate sufficient amounts of cash flow to finance our Company’s working capital and capital expenditure requirements.

23. Difficult market conditions can adversely affect our business in many ways, including by reducing the volume of the transactions involving our advisory business, and these could materially reduce our revenue or income. We are a company that has recently started financial and advisory services. Our business in this area can be materially affected by conditions in the domestic and global financial markets and economic conditions in India and throughout the world. During periods of unfavourable market or economic conditions, the volume and value of advisory services may decline even as there could be an increase in the price competition among financial services companies seeking such engagements. A market downturn would likely lead to a decline in the volume of transactions that we may execute for our customers as well as a decrease in fees that we earn. Consequently, our profitability may also be adversely affected. Our ability to grow our new lines of business viz. management consultancy and advisory services on corporate financial and commercial aspects and investment activities may be limited in difficult market conditions. We are unable to quantify the impact of any such adverse market conditions on our business and/or financial condition.

24. Our funding requirements and the deployment of the proceeds of the Issue are based on management estimates and have not been independently appraised. Our funding requirements and the deployment of proceeds of the Issue as mentioned in the chapter titled ‘Objects of the Issue’ beginning on page 39 of this Letter of Offer are based on management estimates and have not been appraised by any bank or financial institution. We may have to revise our management estimates from time to time and consequently our funding requirements may also change. This may result in rescheduling of our expenditure plans and an increase or decrease in our proposed expenditure for a particular object.

25. Some of our objects for which this issue is being made, may require us to obtain further regulatory approvals such as NBFC registration from Reserve Bank of India.

One of the objects of the issue is to make strategic investments in business enterprises and to invest or trade in corporate securities. We may have to obtain registration as Non-Banking Finance Company from Reserve Bank of India if such investments of our company were to fall within the prescribed parameters. There can be no assurance that we will succeed in obtaining such registration from Reserve Bank of India. Further, our Company does not presently have any alternate plan in case we do not succeed to obtain the NBFC registration from RBI.

26. Our registered office from which we operate is not owned by us. We do not own the premises in which our registered office is situated. We share the Registered Office, with our group companies. Our Registered Office belongs to Saria Builders and Developers Private Limited, a group company.


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27. Our Company is utilizing the infrastructure facilities belonging to the group companies. Presently we do not have any infrastructure facilities of our own. We are utilizing the common facilities of the group companies. We do not have any cost sharing agreement or arrangement with these group companies.

28. We have not declared dividend on Equity Shares in the last five years and there can be no assurance that we will declare dividend in future. We have not declared dividend on Equity Shares in last five years. The amount of dividend payments in future, if any, will depend upon several factors including our future earnings, financial condition, cash flows, working capital requirements and capital expenditures. There can be no assurance that we will pay dividend in future.

29. Increased competition for skilled employees and wage increases for our employees may reduce our profit margin.

Due to sustained economic growth in India and increased competition for skilled employees in India over the last few years, wages of skilled employees are increasing at a fast rate. Accordingly, we may need to increase our levels of employee compensation rapidly to remain competitive in attracting the quality of employees that our business requires. Wage increases may reduce our profit margins and have a material and adverse effect on our results of operations.

30. Our operations rely substantially on our Key Management Team and their resignation from our Company could adversely affect the business. We have professionals who are responsible for the day-to-day operations and to drive the business growth. If one or more members of our management team are unable or unwilling to continue with our Company, we may find it difficult to replace such people and our business may be adversely affected. Competition in the financial services industry for qualified employees is intense. Our continued ability to compete effectively in our businesses depends on our ability to attract new employees and to retain and motivate our existing employees. Our inability to hire and retain such employees could adversely affect our business.

31. Fluctuations in operating results and other factors may result in decrease in Equity Share price. Stock markets have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our Equity Shares. There may be significant volatility in the market price of our Equity Shares. If our Company is unable to meet market or investor expectations in relation to our financial performance, investors could sell our Equity Shares when it becomes apparent that the expectations of the market may not be realised, resulting in a decrease in the market price of our Equity Shares. In addition to our Company’s operating results, changes in financial estimates or recommendations by analysts, governmental investigations, litigations, speculation in the press or investment community, the possible effects of a war, terrorist and other hostilities, changes in general conditions in the economy or the financial markets or other developments affecting the financial services industry, could cause the market price of Equity Shares to fluctuate substantially.

32. We have entered into and may continue to enter into related party transactions. For the year ended 31/03/2009, our Company has entered into related party transactions, as given below:


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(Rs. in lakhs) Name of Party Nature of Transaction 31.03.2009 31.03.2008

Samruddhi Stock Brokers Ltd Purchase of shares 86.24 Nil

Samruddhi Stock Brokers Ltd Sale of shares 62.05 Nil

Samruddhi Finstock Ltd Profit from derivatives trading 2.46 Nil

These transactions are in the ordinary course of business of purchase / sale of shares and trading in derivatives for which our Company has entered into broker agreements with the group companies.

33. Possible Conflict of interest within our Promoter Group may affect implementation of our business strategy.

Samruddhi Equities and Securities Services Limited, our Promoter Group company, is engaged in financial advisory services, i.e., in business similar to that of our Company.

The Promoters have confirmed that it is their intention to conduct all future business in financial advisory services through our Company only. However in case Samruddhi Equities and Securities Services Limited or any other group entity undertakes financial advisory services in future, then there will be common pursuit between such entities and us.

Risks associated with Equity Shares

34. We may issue fresh shares, which may result in dilution of investor share holding in our Company. Any future equity offerings by us, sale by significant shareholders or by way of an induction of strategic investors, may lead to a dilution of investor’s shareholding in our Company and/or affect the market price of our Equity Shares.

35. We have a small investor base and trading volumes of our equity shares on the stock exchange are low which may affect the ability of our shareholders to sell their shares on stock exchange. As on December 31, 2009, we have 125 shareholders. Also, there has been no trading in the equity shares of our company after January 20, 2010. Thus, there can be no assurance regarding the ability of shareholders to sell the equity shares on the Stock Exchange. The partly paid-up Equity Shares offered under the Issue will be traded under separate ISINs for the period as may be applicable prior to the record date for one or more calls. An active trading may not develop for the partly paid-up Equity Shares and, therefore, the trading price of the partly paid-up Equity Shares may be subject to greater volatility than our fully-paid Equity Shares. Further, Investors in this Issue will be required to pay the money due on the allotment and call(s) even if, at that time, the market price of our Equity Shares is less than the Issue Price.

36. Investors will not be able to immediately sell any of the Equity Shares allotted in the Issue on BSE.

Under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, we are permitted to allot Equity Shares within fifteen days of the closure of the Rights issue. Consequently, the Equity Shares allotted to the Investor in the Issue may not be credited to their demat account, with Depository Participants until approximately fifteen days after the issuance of the Equity Shares. Investors can start trading in the Equity Shares only after the Equity Shares have been credited to their demat account and listing and trading permissions are received from the Stock Exchange.


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Further, there can be no assurance that the trading in Equity Shares will commence within the specified time periods.

External Risk Factors.

37. A slowdown in economic growth in India and the world over could adversely impact our business The global financial crisis began in 2007 and took a turn for the worse in September 2008 with the collapse of several international financial institutions, including investment banks, mortgage lenders and insurance companies. This led to a severe choking of credit and a global crash in stock markets. The Indian economy has grown at 9.2 per cent in 2007 and 9.6 per cent in 2006. Like most of the world, however, India faced testing economic times in 2008. According to the Central Statistical Organisation, Press Note dated May 29, 2009 India’s GDP growth for 2009 is estimated at 6.7%. Any slowdown in the Indian economy or in the growth of industries to which we provide advisory services could adversely affect our business and consequently our financial performance and the price of our Equity Shares.

38. Political instability or changes in the government policies that adversely affect economic conditions in India generally could impact our financial results and prospects.

Political instability or major changes in government policies can adversely affect the economic activity in the country and such a situation can have a negative impact on our business prospects. We are also exposed to the risks consequent to being part of the Indian financial sector.

39. Terrorist attacks, civil unrest and other acts of violence or war involving India and other countries could adversely affect the financial markets and our business.

Terrorist attacks and other acts of violence or war may negatively affect the Indian markets on which the Equity Shares trade and also adversely affect the worldwide financial markets. These acts may also result in a loss of business confidence, make travel and other services more difficult and ultimately adversely affect our business. In addition, any deterioration in relations between India and its neighbouring states might result in investor concern about stability in the region, which could adversely affect the price of the Equity Shares. India has also witnessed civil disturbances in recent years and it is possible that future civil unrest as well as other adverse social, economic and political events in India could have a negative impact on us. Such incidents could also create a greater perception that investment in Indian companies involves a higher degree of risk and could have an adverse impact on our business and the price of the Equity Shares.

40. Natural calamities could have a negative impact on the Indian economy and cause our business to suffer.

India has experienced natural calamities such as earthquakes, Tsunami, floods and drought in the past few years. The extent and severity of these natural disasters determines their impact on the Indian economy. In the current year too, there have been reports of deficient rainfall in several parts of the country raising the spectre of drought in the country. Prolonged spells of below normal rainfall or other natural calamities could have a negative impact on the Indian economy, adversely affecting our business prospects. Any downgrading of India’s sovereign rating by an international rating agency could have a negative impact on our business.


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41. After this Issue, the price of the Equity Shares may be volatile, or an active trading market for the Equity Shares may not develop.

The Equity Shares of our company are not regularly traded on the Stock Exchange. In fact, the last recorded trade on BSE was on January 20, 2010. We cannot assure that an active trading market for the Equity Shares will develop or be sustained after this Issue, or that the price at which the Equity Shares are offered herein will correspond to the prices at which they will trade in the market subsequent to this Issue.

Further, the prices of the Equity Shares may fluctuate after this Issue due to a wide variety of factors, including: Volatility in the Indian and global securities markets; Our operational performance and financial results and conditions; Changes in the estimates of our performance or recommendations by financial analysts; Developments in India’s economic liberalisation and deregulation policies; Changes in India’s laws and regulations impacting our business.

42. We may be adversely affected by economic, regulatory, political and military uncertainties in India and

surrounding countries. Any instability triggered by economic, political or military events in India or surrounding countries can have a far-reaching impact on the economic condition of our country. Such a situation can have adverse impact on business and industry in India. Considering the present size of operations of our company and that we have just commenced new line of business, we may be more severely affected by such circumstances.

Prominent Notes to Risk Factors

1. The investors may contact the merchant bankers, M/s Arihant Capital Markets Limited, who have submitted the due diligence certificate to the SEBI, for any complaint pertaining to the issue.

2. The net worth of our Company as on December 31, 2009 as per the restated financial statement was Rs.189.67 lakhs.

3. For details of the group companies having business interests or other interests in the issuer please refer ‘Business interests in our Company of the group companies/associate companies’ on page 127 in the section pertaining to Financial Information of group companies

4. The average cost of acquisition of Equity Shares of our Company by our Promoters is Rs. 28 per Equity Share. 5. The book value per Equity Share as derived from our restated financial statements on as on December 31, 2009 was

Rs. 39.11 per Equity Share. 6. We enter into transactions with certain related parties, which are in the ordinary course of business of purchase / sale

of shares and trading in derivatives for which our Company has entered into broker agreements with the group companies. The cumulative value of transactions and the nature of the transactions for the year ended March 31, 2009 and period ended December 31, 2009 is as follows: (Rs. in lakhs) Name of Party Nature of Transaction 31.12.2009 31.03.2009 Samruddhi Stock Brokers Ltd Purchase of shares 4.94 86.24 Samruddhi Stock Brokers Ltd Sale of shares 0.00 62.05 Samruddhi Finstock Ltd Profit from Derivatives trading - 2.46 Samruddhi Finstock Ltd Purchase of shares 7.43 -

Samruddhi Finstock Ltd Sale of shares 17.03 -

7. Our Company was originally incorporated as “K B Steel Limited” on November 18, 1982 and obtained its Certificate for Commencement of Business on March 22, 1983 under the Companies Act 1956. Subsequently the


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name of the Company was changed from K B Steel Limited to Intellivate Capital Ventures Limited to reflect the nature of the business proposed to be carried out by the Company, i.e. activities relating to the financial services sector. Our Company obtained a fresh Certificate of Incorporation consequent upon change of name dated December 10, 2008. For more information on these changes in the name, see the section titled “History and Corporate Structure” on page 70 of this Letter of offer.

8. There have been no financing arrangements whereby the promoter group, the directors of our Company and their relatives have financed the purchase by any other person of securities of our Company during the period of six months immediately preceding the date of filing offer document with the SEBI. Others:

9. There have been no transactions in Equity Shares of our Company by our Promoters and Promoter Group and Directors of our Company in the last six months preceding the date of this Letter of Offer.

10. For details of interests of our Directors and KMP please refer to the chapter titled "Our Management" beginning on page 73 of this Letter of Offer.

11. For details of the interests of our Promoters and Promoter Group, please refer to the chapters titled "Our Promoters” beginning on page 81 respectively of this Letter of Offer.

12. Any clarification or information relating to the Issue shall be made available by the Lead Manager and our Company to the investors at large and no selective or additional information would be available for a section of investors in any manner whatsoever. Investors may contact the Lead Manager for any complaints, information or clarifications pertaining to the Issue. The Lead Manager is obliged to provide the same to Investors.

13. For further details please refer to our financial information on related party transactions in the chapter titled "Financial Information of the Issuer" beginning on page 92 of this Letter of Offer.

14. Before making an investment decision in respect of the Issue, Investors are advised to refer to the chapter titled "Basis for Issue Price" beginning on page 45 of this Letter of Offer.

15. Please refer to the paragraph titled "Basis of Allotment" beginning on page 170 of this Letter of Offer for details of the basis of allotment.

16. The Issue is of 24,25,000 (Twenty Four Lakhs Twenty Five Thousand) Equity Shares of Rs. 10 each for cash at a price of Rs. 50/- per Equity Share (including a premium of Rs. 40/- per Equity Share) aggregating upto Rs. 1212.50 lakhs on rights basis to the existing Equity Shareholders of our Company in the ratio of 5 (five) Equity Shares for every 1 (one) Equity Share held on the Record Date March 3, 2010. For details please refer to the chapter titled "Terms of Issue" beginning on page 149 of this Letter of Offer.


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SECTION III: INTRODUCTION

A. SUMMARY

1. SUMMARY OF OUR INDUSTRY AND BUSINESS

SUMMARY OF OUR INDUSTRY The Industry information presented in this section has been extracted from publicly available documents, which have not been prepared or independently verified by the Company, the Lead Manager or any of their respective affiliates or advisors or the sources referred to herein. In this Section, we have relied on and referred to information regarding the industry and competitors from market research reports, and other publicly available sources. Although we believe that this information is reliable, we have not independently ‘verified the accuracy and completeness of the information. International Scenario Financial Markets The economic slowdown of the advanced countries which started around mid-2007, as a result of sub-prime crisis in USA, led to the spread of economic crisis across the globe. Many hegemonic financial institutions like Lehman Brothers or Washington Mutual or General Motors collapsed and several became bankrupt in this crisis. The global financial markets, after experiencing one of the most severe shocks, has however, witnessed signs of stabilisation in Q2 of 2009 with rebound in activity in some of the market segments. The incipient signs of slowdown in the pace of deterioration of economic conditions in the advanced economies, better than expected corporate performance and confidence building measures by the governments and central banks helped in bolstering general confidence in the markets. The positive outcomes were reflected in a general rise in the investor risk appetite leading to significant recovery in equity prices from their lowest levels in October 2008, narrowing down of credit spreads in some market segments and a decline in the implied volatilities. A series of policy induced measures contributed to waning of market uncertainty and helped stabilise the financial markets in Q2 of 2009. These include further steps by the central banks to ease monetary conditions, the action plan of the G-20 announced in April 2009, publication of the specific rescue package plans for banks, particularly in the US and the UK, and the release of the results of US Fed’s bank stress-tests based action plan. Indian Scenario Financial markets in India have evidenced significant development since the financial sector reforms initiated in the early 1990s. The development of these markets has been done in a calibrated, sequenced manner and in step with those in other markets in the real economy. The emphasis has been on strengthening price discovery, easing restrictions on flows or transactions, lowering transaction costs, and enhancing liquidity. Benefiting from a series of policy initiatives over time, greater domestic market integration has also been witnessed. India Financial Market promotes the savings of the economy, providing an effective channel for transmitting the financial policies. It is a well-developed, competitive, efficient and integrated financial sector (see diagram below). There are large number of buyers and sellers of the financial product, the prices are fixed by the market forces of demand and supply within the Indian Financial Market. The other markets of the economy assist the functioning of the financial market in India.


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In keeping with evolving global financial developments and the ongoing Indian financial sector reforms, financial markets have, for a variety of purposes, emerged as a major channel of resource mobilisation. Overall, the gradual removal of structural bottlenecks and a shift away from the erstwhile administered interest rates have led to greater domestic market integration. This process has, however, tended to make the system more vulnerable to contagion risk. The equity, government securities, foreign exchange and money markets along with their corresponding derivatives segments have developed into reasonably deep and liquid markets and there has been significant increase in domestic market integration over the years. However, the credit derivative market is yet to take off in any significant manner. As regards corporate bonds, though the primary market has seen an increase in issuance, the secondary market has not developed commensurately. The equity market has witnessed wide-spread development in infrastructure and its functioning is comparable to advanced markets. It has seen significant increase in growth and diversity in composition in the past two decades. SUMMARY OF OUR BUSINESS Our Company was incorporated for carrying on the business of manufacturing and trading of steel pipes. In 1983, we set up manufacturing facilities of SS Coil. However, due to technical difficulties, the original plan was shelved and we established the plant of SS Rolling Sheet which was operated till 1986-87. During the year 1986-87 our Company diversified into plastic extrusion and installed the extrusion plant to manufacture plastic pipes and started the production in the year 1987-88. Thereafter, we discontinued this business in the year 2000-01 due to intense competition and decrease in profit margins. Since then our Company was not carrying on any significant operations till the takeover by the Present Promoters, Mr. Vipul J. Modi, Ms. Leena V. Modi and Vipul J. Modi (HUF). After the takeover by the Present Promoters, who are experienced in the field of corporate financial advisory services such as business restructuring, equity placements, mergers & acquisitions, syndication of bank loans, stock broking activities etc, we have commenced new line of business, which includes rendering of management consultancy and advisory services on various aspects of corporate financial and commercial matters, trading in securities and investing in corporate equity and debt instruments – both listed and unlisted. We obtained our members approval for undertaking these activities, by way of a special resolution on October 14, 2008 through Postal Ballot. Since then, we have started offering financial advisory services and have also made investments in /traded in securities of other companies.


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Business Strategy and Strengths of the Business

Our Business Strategies:

Focusing on growth in the new line of business Backed by the experience of our present promoters and their background in the field of financial services, we have started offering financial advisory services and trading in securities. We have set up an Office in Mumbai and appointed qualified and experienced personnel for looking after the operational aspects of business. We are presently focused on this line of activity for growth.

To offer diversified financial services.We intend to have a multi-disciplinary approach to financial services for which we need to build a diversified business platform within financial services arena by identifying suitable business opportunities in related areas and offer products andservices across a wider spectrum of financial services. We intend to build distinct professional skill-sets in different areas such as Transaction Advisory Services, Mergers & Amalgamation, Business Valuation, Corporate Finance and Infrastructure Financing advisory services. This could include merchant banking, insurance distribution and other financial services. We believe that this will enable us to maintain growth and profitability and limit our dependence on any particular line of financial services. Our recently launched advisory services business is in the process of consolidation and being scaled up.

Our Strength: Promoters’ background in financial services industry offers us opportunity to develop a strong business The experience, background and contacts of our present promoters will help us to develop a strong business. Besides, we have appointed qualified professionals to oversee operational aspects of business. We therefore have the capability to generate business and deliver competently.

2. THE ISSUE DETAILS IN BRIEF

Dear Shareholder(s),

Pursuant to the resolution passed under section 81(1) of the Companies Act by: i. The Members of our Company at the Annual General Meeting held on September 22, 2009 and

ii. The Board of Directors of our Company at their meeting held on September 26, 2009 iii. has been decided to make the following offer to the Equity Shareholders of our Company, with a right to renounce:

ISSUE OF 24,25,000 EQUITY SHARES OF Rs. 10/- EACH FOR CASH AT A PRICE OF Rs. 50/- PER EQUITY SHARE (INCLUDING A PREMIUM OF Rs. 40/- PER EQUITY SHARE) AGGREGATING TO Rs. 1212.50 LAKHS TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF 5 (FIVE) EQUITY SHARES FOR EVERY 1 (ONE) FULLY PAID UP EQUITY SHARE HELD BY THE EXISTING EQUITY SHAREHOLDERS ON THE RECORD DATE, i.e. MARCH 3, 2010.

THE FACE VALUE OF EQUITY SHARES IS Rs. 10 EACH AND THE ISSUE PRICE IS FIVE (5) TIMES OF THE FACE VALUE OF THE EQUITY SHARES. FOR MORE DETAILS, PLEASE REFER TO THE CHAPTER TITLED “TERMS OF THE ISSUE” BEGINNING ON PAGE 149 OF THIS LETTER OF OFFER.


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Important 1. The Issue is applicable only to those Equity Shareholders whose names appear as beneficial owners as per the list to be

furnished by the Depositories in respect of the Equity Shares held in the electronic form and in the Register of Members of our Company in respect of the Equity Shares held in physical form as on the Record Date, fixed in consultation with the Designated Stock Exchange i.e. BSE.

2. Your attention is drawn to the chapter titled “Risk Factors” beginning on page 10 of this Letter of Offer.

3. Please ensure that you have received the CAF with this Letter of Offer. In case the original CAF is not received, lost or misplaced by the shareholder, the Registrar will issue a duplicate CAF on the request of the shareholder who should furnish the registered folio number/DP ID/client ID number and his/her full name and address to the Registrar. Please note that applicants making the application in the duplicate CAF should not utilize the original CAF for any purpose including renunciation, even if it is received/ found subsequently. In case the original and the duplicate CAF’s are lodged for subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored.

4. Please read this Letter of Offer and the instructions contained herein and in the CAF carefully, before filling in the CAF. The instructions contained in the CAF are an integral part of this Letter of Offer and must be carefully followed. Applications are liable to be rejected if they are not in conformity with the terms of this Letter of Offer or the CAF.

5. All enquiries in connection with this Letter of Offer or CAF should be addressed to the Registrar to the Issue, Purva Sharegistry (India) Private Limited, quoting the registered folio number/DP ID/client ID number and the CAF Number as mentioned in the CAF.

6. The Issue will be kept open for a minimum period of fifteen (15) days. If extended, it will be kept open for a maximum period of thirty (30) days.

Issue Schedule

ISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLIT APPLICATION FORMS

ISSUE CLOSES ON

MARCH 11, 2010 MARCH 18, 2010 MARCH 25, 2010

Issue

Equity Shares proposed to be issued 24,25,000 Equity Shares Rights Entitlement 5 (Five) Equity Shares for every 1(One) fully paid up

Equity Share held by the existing Equity Shareholders of our Company on the Record Date

Record Date March 3, 2010 Issue Price per Equity Share Rs.50/- Equity Shares outstanding prior to the Issue 4,85,000 Equity Shares Equity Shares outstanding after the Rights Issue of Equity Shares

29,10,000 Equity Shares

Terms of the Issue For more information, please refer to the chapter titled “Terms of the Issue” beginning on page 149 of this Letter of Offer.


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Please refer to risk factor no. 35 in “Risk Factors” on page 17 for risks associated with the payment method. For details on the payments method see “Terms of Issue”, on page 149.

The Issue Price of our Equity Shares is Rs. 50.00 per Equity Share. The Investors are required to pay 25% of the Issue Price on application, 25% of the Issue Price on Allotment and the balance 50% of the Issue Price on one or more calls as may be decided by the Board.

While making an application, the Investor shall make a payment of Rs.12.50 per Equity Share. Out of the amount of Rs. 12.50 paid on application Rs. 2.50 would be adjusted towards the face value of the Equity Shares and Rs. 10.00 shall be adjusted towards the share premium of the Equity Shares. Similarly, out of the amount of Rs. 12.50 paid on the allotment, Rs. 2.50 would be adjusted towards the face value of the Equity Shares and Rs. 10.00 shall be adjusted towards the share premium of the Equity Shares. The adjustments with respect to Issue Price on one or more calls will be in a manner as may be determined by the Board.

The amount due on allotment is to be paid by the Investor on the receipt of allotment advice cum allotment money due notice that will be sent on allotment. The amount due on allotment, i.e. Rs. 12.50 will have to be paid by the shareholders within 30 days from the date of allotment, or such other date as may be fixed by the Board of our Company and intimated in the Allotment advice.

Notices for the payment of call money for call(s) shall be sent by our Company to the Equity Shareholders of the partly paid-up Equity Shares on the record date(s) to be fixed for the respective calls.

Equity Shares in respect of which calls have been made and the balance amount payable remains unpaid may be forfeited by the Company, at any time after the due date for payment of the balance amount due, as provided under the Articles of Association.

For further details, see “Terms of Issue” on page 149.

3. SUMMARY OF FINANCIAL AND OPERATIONAL INFORMATION

Selected financial information of Intellivate Capital Ventures Limited

The following tables set forth our selected financial information derived from our restated financial statements for the periodended December 31, 2009 and years ended March 31, 2009, 2008, 2007, 2006 and 2005. The financial statements have been prepared in accordance with Indian GAAP, the Companies Act and SEBI (ICDR) Regulations and restated as described in the Auditors Report of M/s. J. B. Dudhela & Co., dated January 29, 2010 and included in the chapter titled “Financial Information of the Issuer” beginning on page 92 of this Letter of Offer and this table should be read in conjunction with the financial statements mentioned therein and the notes thereto.

Payment Method Amount Payable per Equity Share (Rs.) Face Value (Rs.) Premium (Rs.) Total (Rs.)

On Application 2.50 10.00 12.50 On Allotment 2.50 10.00 12.50 On one or more calls 5.00 20.00 25.00 Total 10.00 40.00 50.00


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Profit and Loss Account (Rupees in lacs)

For 9 months ended

For the year ended

December March March March March March 31, 2009 31, 2009 31, 2008 31, 2007 31, 2006 31, 2005

Income Income from Operations 3.58 11.36 - - - - Income from Investments 4.66 0.93 - - - - Other Income 4.42 2.23 3.83 2.75 4.25 2.67

12.66 14.52 3.83 2.75 4.25 2.67

Expenditure Employee Cost 4.05 - - 0.08 0.08 0.20 Operation and Other expenses 2.86 13.68 1.01 1.85 2.79 1.62

6.91 13.68 1.01 1.93 2.87 1.82

Profit before depreciation and taxes 5.75 0.84 2.82 0.82 1.38 0.85

Depreciation - - 0.01 0.05 0.07 0.11

Profit before taxes 5.75 0.84 2.81 0.77 1.31 0.74

Provision for taxes - Current Income Tax (1.06) (0.15) (0.30) (0.09) (0.11) (0.06) - Fringe Benefit Tax - - - (0.02) - - - MAT Credit Entitlement - - 0.29 0.09 0.11 -

Profit before prior period items 4.69 0.69 2.80 0.75 1.31 0.68 Prior period adjustments - - 0.01 (0.01) - 0.01

Profit after Tax 4.69 0.69 2.81 0.74 1.31 0.69

Balance brought forward from previous year

(8.51) (9.19) (12.00) (12.74) (14.05) (14.74)

(3.83) (8.51) (9.19) (12.00) (12.74) (14.05) Less :- Appropriations - - - - - Balance Carried to Balance Sheet (3.83) (8.51) (9.19) (12.00) (12.74) (14.05)


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Statement of Assets and Liabilities (As Restated) (Rupees in lacs)

As at


Assets A. Fixed Assets Gross Block - - - 4.46 4.46 4.46 Less : Depreciation / Amortisation

- - - 4.20 4.15 4.09

Net Block - - - 0.26 0.31 0.37

B. Investments - - - - - -

C. Current Assets, Loans & Advances

Sundry Debtors 8.87 7.62 7.62 7.62 7.62 9.54 Cash & Bank Balance 172.26 174.62 55.74 0.63 27.37 20.44 Loans & Advances 11.02 3.55 1.55 53.43 26.13 29.62

Total Assets 192.15 185.79 64.91 61.94 61.43 59.97

Liabilities and Provisions

D. Current Liabilities and Provisions

Current Liabilities 0.88 0.25 0.10 0.22 0.50 0.45 Provisions 1.60 0.54 0.50 0.22 0.17 0.06

2.48 0.79 0.60 0.44 0.67 0.51

E. Net Worth Represented by: Shareholders' Funds: Share Capital 48.50 48.50 24.50 24.50 24.50 24.50 Reserves and Surplus 145.00 145.00 49.00 49.00 49.00 49.00

Less: Profit & Loss Debit bal (3.83) (8.51) (9.19) (12.00) (12.74) (14.04)

189.67 184.99 64.31 61.50 60.76 59.46 Total Liabilities 192.15 185.79 64.91 61.94 61.43 59.97


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B. GENERAL INFORMATION 1. Issuer Details

Name Intellivate Capital Ventures Limited

Address of the Registered Office 66/1, Hansa Villa, Opp. South Indian Gymkhana, Bhaudaji Cross Road, Matunga (CR), Mumbai - 400 019, India Tel: +91-22-24034235; Fax: +91-22- 24031691 Email: [email protected]

Corporate Identity Number L27200MH1982PLC028715

Address of the Registrar of Companies Registrar of Companies, Mumbai Everest, 5th Floor, 100, Marine Drive, Mumbai – 400 002,

Maharashtra, India.

2. Board of Directors Our Board of Directors as on the date of the filing of this Letter of Offer with SEBI is as follows:

Name of the Director Position Category Mr. Vipul Jayantilal Modi Chairman and Director Promoter Director Mrs. Leena Vipul Modi Director Promoter Director Mr. Siddharth Pravinchandra Shah Director Independent Director

For further details regarding the Board of Directors please refer to the chapter titled “Our Management” beginning on page 73 of this Letter of Offer.

3. Composition of the Board Mr. Vipul Modi is the Chairman of our Company. All the directors of our Company are non executive directors. For further details regarding the Board of Directors please refer to the chapter titled “Our Management” beginning on page 73 of this Letter of Offer.

4. Bankers to our Company Indusind Bank Limited Ground Floor, Sonawala Buliding, Fort, Mumbai - 400 001 Tel: 91-22-6636 6580 Fax: 91 22-6636 6590 Contact Person: Mr. Adil Mehta Email: [email protected]


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5. Company Secretary and Compliance Officer Mr. Amit Radhey Shyam Kalra 66/1, Hansa Villa, Opp. South Indian Gymkhana, Bhaudaji Cross Road, Matunga (CR), Mumbai - 400 019, India Tel: +91-22-24034235, Fax: +91-22-24031691 Email: [email protected]

6. ISSUE MANAGEMENT TEAM

i) Lead Manger to the Issue ARIHANT CAPITAL MARKETS LIMITED 3rd Floor, Krishna Bhavan, 67, Nehru Road, Vile Parle (East), Mumbai – 400 057 Tel: +91-22- 4225 4800; Fax: +91-22- 4225 4880 Email: [email protected]: www.arihantcapital.comContact Person: Ms. Sheela Chhatwani SEBI Registration No.: INM 000011070

(ii) Registrar to the Issue PURVA SHAREGISTRY (INDIA) PRIVATE LIMITED 9, Shiv Shakti Indl Estate, J R Boricha Marg, Opp. Kasturba Hospital, Lower Parel, Mumbai - 400 011 Tel : 91 22 23016761; Fax : 23012517 Email: [email protected]: http://www.purvashare.comContact Person: Mr. V. B. Shah SEBI Registration No.: INR000001112

(iii) Bankers to the Issue HDFC BANK LIMITED HDFC Bank Ltd, FIG - OPS Department, Lodha, I Think Techno Campus, O-3, Level, Next to Kanjurmarg Railway Station, Kanjurmarg (East), Mumbai- 400042 Tel : +91-22- 30752928 Fax : +91-22- 25799801 Email: [email protected]: www.hdfcbank.comContact Person: Mr. Deepak Rane SEBI Registration No.: INBI00000063


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(iv) Self Certified Syndicate Banks The list of banks which have been notified by SEBI to act as SCSBs for the ASBA process are provided at http://www.sebi.gov.in/pmd/scsb.pdf.

(v) Refund Bankers to the Issue HDFC BANK LIMITED HDFC Bank Ltd, FIG - OPS Department, Lodha, I Think Techno Campus, O-3, Level, Next to Kanjurmarg Railway Station, Kanjurmarg (East), Mumbai- 400042 Tel : +91-22- 30752928 Fax : +91-22- 25799801 Email: [email protected]: www.hdfcbank.comContact Person: Mr. Deepak Rane SEBI Registration No.: INBI00000063

7. Auditors to our Company J. B. Dudhela &Co. Chartered Accountants Mahavir Chambers , Off. No. 5, 2nd Floor , 1/5 Banaji Street, Fort, Mumbai - 400 001 Tel. No. : +91-22-2043 023l Fax : +91-22 2043 023l Contact Person: Mr J. B. Dudhela Email: [email protected]

8. Statement of Inter-se Allocation of Responsibility of Arihant Capital Markets Limited Arihant Capital Markets Limited is the sole Lead Manager to the Rights Issue and all the issue related activities are co-ordinated by them.

9. Credit RatingThis being an Issue of Equity Shares, no credit rating is required.

10. IPO Grading This being a Rights Issue, no grading is required.

11. Debenture Trustee This being a Rights Issue of Equity Shares, appointment of debenture trustees is not required.

12. Monitoring Agency As the size of the Issue does not exceed Rs. 50,000 lakhs, appointment of a monitoring agency is not required. Since clause 49 of the listing agreement is not applicable to us, we do not have an Audit Committee. The Board of Directors of the Company will monitor utilization of the proceeds periodically. The Board may form a committee to monitor utilization of the proceeds which committee in turn will report to the Board of Directors.


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13. Appraising Entity Not Applicable

14. Book building process Not Applicable

15. Underwriting / Standby arrangements The present Issue is not underwritten and our Company has not made any standby arrangements for the Issue.

OTHERS Listing The Equity shares of our Company are listed only on BSE.

Investors are advised to contact the Registrar to the Issue / Compliance Officer in case of any pre-issue / post-issue related problems such as non-receipt of this Letter of Offer / letter of allotment or share certificates / refund orders/ demat credit /electronic refund of funds.

Impersonation Attention of the applicants is specifically drawn to the provisions of subsection (1) of section 68A of the Act which is reproduced below:

“Any person who makes in a fictitious name, an application to a company for acquiring, or subscribing for, any shares therein, or otherwise induces a company to allot, or register any transfer of shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years”.

Minimum Subscription If our Company does not receive the minimum subscription of 90% of the Issue on the date of the closure of the Issue, the entire subscription shall be refunded to the applicants within 15 days from the date of closure of the Issue. If there is delay in the refund of subscription by more than 8 days after our Company becomes liable to pay the subscription amount (i.e. 15 days after closure of the Issue), our Company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of section 73 of the Companies Act.

In case the permission to deal in and for an official quotation of the Equity Shares is not granted by BSE, the Issuer shall forthwith repay without interest, all monies received from the applicants in pursuance of this Letter of Offer and if such money is not repaid within eight days after the day from which the Issuer is liable to repay it, the Issuer shall pay interest as prescribed under sub-section (2) and (2A) of section 73 of the Companies Act, 1956.


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C. CAPITAL STRUCTURE OF THE COMPANY

Our share capital as on the date of filing of this Letter of Offer with SEBI (before and after the Issue) is set forth below:

Aggregate Nominal value (Rs.)

Aggregate value at issue price (Rs.)

A Authorized Capital

1,50,00,000 Equity Shares of Rs. 10 each 15,00,00,000

B Issued Subscribed and Paid - up Capital before the Issue

4,85,000 fully Paid-Up Equity Shares of Rs. 10 each 48,50,000

C Present Issue being offered to the Equity Shareholders through this Letter of Offer

24,25,000 Equity Shares of Rs. 10 each for cash at a premium of Rs. 40 per share (at issue price of Rs. 50 per share) 2,42,50,000 12,12,50,000

Paid-up Equity Capital after the Issue

29,10,000 Equity Shares of Rs. 10 each (pursuant to full subscription of equity shares offered) 2,91,00,000

D Share Premium Account

Before the Issue 96,00,000

After the Issue 10,66,00,000

Notes to the Capital Structure

1. Build up of existing Equity Share Capital:

Date of Allotment

Number of Equity Shares

FaceValue (Rs.)

Issuepricepershare (Rs.)

Consider-ation (cash, bonus, consider-ation other than cash)

Reasons for Allotment / Forfeiture

Cumulati-ve Paid –up Capital (In Rs.)

Secur -itiesPremium(In Rs.)

Cumul- ative SecuritiesPremium(In Rs.)

25.11.1982 70 10/- 10/- Cash Subscribers to MOA

700 __ __

09.05.1983 2,44,930 10/- 10/- Cash Issue through Prospectus

dated March 1983

24,50,000 __ __

25.03.2009 2,40,000 (note 18

below)

10/- 50/- Cash Preferential Issue to other

investors

48,50,000 96,00,000 96,00,000


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2. As indicated above no equity shares have been issued for consideration other than cash. 3. We have not allotted any shares in terms of any scheme approved under sections 391-394 of the Companies Act, 1956. 4. Our Company does not have any revaluation reserves and our Company has not issued any Bonus Shares out of revaluation

reserves 5. Our Company does not have any Employees Stock Option Scheme and has not issued any shares under any such scheme. 6. We have not issued any shares at a price lower than the issue price during the preceding year. 7. No further issue of capital by way of issue of bonus shares, preferential allotment, public issue, rights issue which will

affect the Equity Share Capital of our Company, shall be made during the period commencing from the filing of this Letter of Offer with SEBI and the date on which the Equity Shares issued under this Letter of Offer are listed or application moneys are refunded on account of the failure of the Issue. Further, presently our Company does not intend or propose to alter our capital structure for six months from the date of opening of the Issue, by way of split or consolidation of the denomination of Equity Shares or further issue of Equity Shares (including issue of securities convertible into or exchangeable, directly or indirectly for Equity Shares) whether preferential or otherwise. 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 Equity Shares if we enter into acquisition(s) or joint venture(s) or induct strategic investors/ partners for furthering our business, wherein we may consider raising additional capital to fund such activity or use Equity Shares as currency for such transactions or issue of any other securities during the period of 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 for such alteration.

8. Capital build up of the current promoters is detailed below:

Sr. No.

Name of Promoter

Nature of Issue Date of Transfer

Consid-eration

No. of Shares

Face Value (Rs.)

Transfer Price(Rs.)

1 Mr. Vipul J. Modi

Acquired after entering into an SPA with the erstwhile promoters of the Company and making an open offer in terms of the SEBI (SAST) Regulations, 1997

03-03-2008 Cash 173,600 10/- 28/-

2 Ms. Leena V. Modi


03-03-2008 Cash 2,450 10/- 28/-

3 Vipul J. Modi (HUF)


03-03-2008 Cash 3,000 10/- 28/-


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34

9. Details of the shareholding of the Promoters and Promoter Group as on the date of filing of this Letter of Offer with SEBI is as follows:

Sr.No.

Particulars No. of Shares Percentage (%)

1 Mr. Vipul Jayantilal Modi 173,600 35.79 2 M/s. Vipul Jayantilal Modi - HUF 3,000 0.62 3 Mrs. Leena Vipul Modi 2,450 0.51

Total 179,050 36.92

10. There have been no purchases or sales in Equity Shares of our Company by our Promoters and Promoter Group entities and Directors of our Company and their immediate relatives (as defined in sub-clause ii of clause (zc) of sub regulation (1) of regulation 2) in the last six (6) months preceding the date of this Letter of Offer.

11. Our Promoters Group entities, Directors of our Company and their relatives have not financed the purchase our equity shares by any other person in the last six (6) months preceding the date of this Letter of Offer

12. The present Issue being a Rights Issue, as per extant SEBI (ICDR) Regulations, the requirements of Promoters’ contribution and lock-in are not applicable.

13. The present Issue is not underwritten. Our Company, Promoters, Directors of our Company, the Lead Manager to the Issue have not entered into any buy-back, standby or similar arrangements for any of the securities being issued through this Letter of Offer.

14. The call(s) shall be structured in such a manner that the entire call money is called within twelve months from the date of allotment in the Issue and if any applicant fails to pay the call money within the said twelve months, the equity shares on which there are calls in arrear along with the money already paid on such shares shall be forfeited in terms of the Articles of Association of the Company.

15. Details of top 10 shareholders:

a. As on March 3, 2010:

Sr. No. Particulars No. of Shares Percentage (%) 1. Vipul Jayantilal Modi 173,600 35.79 2. Nikunj M Turakhia HUF 20,000 4.12 3. Nikunj M Turakhia 20,000 4.12 4. Heena N Turakhia 20,000 4.12 5. Deep P Shah 16,500 3.40 6. Vijay Punamchand Ajmera HUF 15,000 3.09 7. Hitesh Punamchand Ajmera HUF 15,000 3.09 8. Nimesh Punamchand Ajmera HUF 15,000 3.09 9. Himanshu Punamchand Ajmera HUF 15,000 3.09 10. Alka Sanjay Shah 15,000 3.09

Sanjay Popatlal Shah HUF 15,000 3.09 Dipti Sunil Shah 15,000 3.09 Sunil Popatlal Shah HUF 15,000 3.09

Total 3,70,100 63.91


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b. 10 days prior to filing the Letter of Offer with BSE, i.e. February 22, 2010 :

Sr. No. Particulars No. of Shares Percentage (%) 1. Vipul Jayantilal Modi 173,600 35.79 2. Nikunj M Turakhia HUF 20,000 4.12 3. Nikunj M Turakhia 20,000 4.12 4. Heena N Turakhia 20,000 4.12 5. Deep P Shah 16,500 3.40 6. Vijay Punamchand Ajmera HUF 15,000 3.09 7. Hitesh Punamchand Ajmera HUF 15,000 3.09 8. Nimesh Punamchand Ajmera HUF 15,000 3.09 9. Himanshu Punamchand Ajmera HUF 15,000 3.09 10. Alka Sanjay Shah 15,000 3.09

Sanjay Popatlal Shah HUF 15,000 3.09 Dipti Sunil Shah 15,000 3.09 Sunil Popatlal Shah HUF 15,000 3.09

Total 3,70,100 63.91

c. Two years prior to the date of filing of this Letter of Offer with BSE, i.e. March 4, 2008:

Sr. No. Name No of Shares Percentage %

1 Vipul J Modi 173600 70.86

2 Nirav Gunvantray 12000 4.90

3 Sunil Solanki 4800 1.96

4 Atul Chokshi 3200 1.31

5 Vipul J Modi Huf 3000 1.22

6 Anish Kharidia 3000 1.22

7 Beena Gunvantray Kansara 3000 1.22

8 Jayshree Gunvantray Kansara 3000 1.22

9 Paras Gunvantray Kansara 3000 1.22

10 Hasmukhbhai Shah 2800 1.14

Total 2,11,400 86.29

16. The Lead Manager to the Issue and their associates do not hold any shares in our Company.

17. Our Company has made a preferential allotment of 2,40,000 equity shares of Rs.10/- each in terms of Chapter XIII of the SEBI (DIP) Guidelines (now rescinded). With respect to the preferential allotment, we confirm that the relevant provisions of SEBI (DIP) Guidelines (now rescinded) regarding preferential allotment including certification by a chartered accountant have been complied with. The certificate by the chartered accountant provides as follows: “This is certify that Intellivate Capital Ventures Limited (formerly known as K B Steel Limited) has complied with all the provisions of the SEBI (DIP) Guideline and further the Company has complied with all the legal and statutory formalities and that no statutory authority has restrained the Company from issuing 2,40,000 equity shares to the investors (other than promoters) on preferential basis.”

18. Details of the preferential allotment of 2,40,000 Equity Shares allotted on March 25, 2009:


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36

Sr.No.

Name of the shareholder Number of shares Shares as a percentage of total number of shares

1 Nikunj M Turakhia HUF 20,000 4.12 2 Nikunj M Turakhia 20,000 4.12 3 Heena N Turakhia 20,000 4.12 4 Deep P Shah 16,500 3.40 5 Vijay Punamchand Ajmera HUF 15,000 3.09 6 Hitesh Punamchand Ajmera HUF 15,000 3.09 7 Nimesh Punamchand Ajmera HUF 15,000 3.09 8 Himanshu Punamchand Ajmera HUF 15,000 3.09 9 Alka Sanjay Shah 15,000 3.09

10 Sanjay Popatlal Shah HUF 15,000 3.09 11 Dipti Sunil Shah 15,000 3.09 12 Sunil Popatlal Shah HUF 15,000 3.09 13 Chandrakant K. Shah 5000 1.03 14 Charulata C. Shah 3000 0.62 15 Nihir C. Shah 2500 0.52 16 Nihir C. Shah (HUF) 1000 0.21 17 Honey N. Shah 3000 0.62

18 Naresh K. Shah 5000 1.03 19 Ranjanben N. Shah 3000 0.62 20 Saurabh N. Shah 2500 0.52 21 Saurabh N. Shah (HUF) 1000 0.21 22 Jeny S. Shah 3000 0.62 23 Vipul K. Shah 7000 1.44 24 Rupa V. Shah 5000 1.03 25 Vipul K. Shah (HUF) 2500 0.52

Total 2,40,000 49.48 19. The aforesaid 2,40,000 equity shares are under lock in for a period of one year from the date of allotment, i.e., March 25,

2009 till March 24, 2010, as per Chapter XIII of the SEBI (DIP) Guidelines (now rescinded). The BSE permitted the listing of the said shares with effect from May 11, 2009.

20. The details of changes in the authorized share capital of our Company after the date of incorporation till the filing of this Letter of Offer have been set out below:

Date of the ShareholdersApproval

Changes

14.10.2008 Increase in the Authorised capital from Rs.25 lakhs to Rs. 1500 lakhs comprising 1,50,00,000 equity shares of Rs.10/- each

21. At any given time, there shall be only one denomination of the Equity Shares of our Company and our Company shall comply with such disclosure and accounting norms as specified by SEBI from time to time.

22. As on the date of this Letter of Offer, there are no outstanding warrants, options or rights to convert debentures, loans or other instruments convertible into Equity Shares.


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37

23. The Issue will remain open for a minimum of 15 days. However, the Board of Directors will have the right to extend the Issue period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date.

24. Our Company has not availed of “bridge loans” to be repaid from the proceeds of the Issue for incurring expenditure on the Objects of the Issue.

25. The Equity Shares of our Company are fully paid up and there are no partly paid up shares as on the date of this Letter of Offer.

26. No payment, direct or indirect in the nature of discount, commission, allowance or otherwise shall be made either by us or our Promoters to the persons who receive allotments, if any, under the Issue.

27. Our Company has not made a public offering of its Equity Shares in the immediately preceding two (2) years from the date of filing of this Letter of Offer.

28. The terms of issue have been presented under the chapter titled “Terms of the Issue” beginning on page 149 of this Letter of Offer.

29. Shareholding Pattern before and after the Issue (assuming all shareholders subscribe to their entitlements in full) is as under:

Category of Shareholder Pre- Issue holding* Post- Issue Holding Total No. of

Shares As a Percentage

of (A+B) Total No. of

Shares As a Percentage

of (A+B) (A) Shareholding of Promoter &

Promoter Group

(1) Indian (a) Individuals/HUF 179,050 36.92 10,74,300 36.92 (b) Central Govt./State Govt(s) Nil NA Nil NA (c Bodies Corporate Nil NA Nil NA (d) Financial Institutions/Banks Nil NA Nil NA (e) Any Other (Specify) Nil NA Nil NA Trusts Nil NA Nil NA Sub - Total (A) (1) 179,050 36.92 10,74,300 36.92 (2) Foreign Nil NA Nil NA Sub - Total (A) (2) Nil NA Nil NA Total Promoters holding (A) 179,050 36.92 10,74,300 36.92 (B) Public Shareholding (1) Institutions Nil NA Nil NA Sub - Total (B) (1) Nil NA Nil NA (2) Non-Institutions (a) Bodies Corporate 50 0.01 300 0.01 (b) Individuals (i) Individual Shareholders

holding nominal Share Capital upto Rs. 1 lakhs

74,350 15.33 4,46,100 15.33

(ii) Individual Shareholders holding nominal Share Capital in excess of Rs. 1 lakh

231,550 47.74 13,89,300 47.74

Sub - Total (B) (2) 3,05,950 63.08 18,35,700 63.08 Total Public Shareholding (B) 3,05,950 63.08 18,35,700 63.08

Grand Total (A) + (B) 4,85,000 100.00 29,10,000 100.00 *As per Shareholding pattern as on December 31, 2009 30. Currently, there are no equity shares held by Promoter & Promoter group that are under pledge. 31. The total number of members of our Company as on December 31, 2009 is 125. 32. Our Promoters have confirmed that they intend to subscribe to their rights entitlement, as well as the entire

undersubscribed portion from public shareholders, if any, in this rights issue, either by themselves or through one or


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38

more Promoter Group Entities. The Promoters have provided an undertaking dated February 16, 2010 to the Company that the Promoters along with the Promoter Group shall apply for additional Equity Shares in the Issue to the extent of the unsubscribed portion of the Issue, subject to applicable laws. As a result of this subscription and consequent allotment, the Promoters /Promoter Group may acquire shares over and above their entitlement in the issue which may result in their shareholding in the Company being above their current holding. This subscription and acquisition of additional equity shares by the Promoter/Promoter Group, if any, will not result in change of control of the management of the Company and shall be exempt in terms of provision to Regulation 3(1)(b)(ii) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. The Promoters undertake that, subscription by the Promoter and/or Promoter Group for the Equity Shares in the Issue and the allotment of the Equity Shares will be in continuous compliance with the minimum public shareholding requirement specified under Clause 40A of the Listing Agreement with the BSE and other applicable laws. In this context, the Promoters of our Company have provided following undertaking vide letter dated February 16, 2010: “The subscription by the Promoters and/or members of the Promoter Group for the Equity Shares in the Issue and the allotment of the Equity Shares will be in continuous compliance with the minimum public shareholding requirement specified under Clause 40A of the Listing Agreement with the BSE and the Company will take such steps as may be necessary to ensure such compliance with Clause 40A of the Listing Agreement.” In case the permission to deal in and for an official quotation of the Equity Shares is not granted by BSE, our Company shall forthwith repay without interest, all monies received from the applicants in pursuance of this Letter of Offer and if such money is not repaid within eight days after the day from which the we are liable to repay it, our Company shall pay interest as prescribed under section 73 (2) and (2A) of the Companies Act.

33. Compliances by our Company during the financial year preceding the date of this Letter of Offer: There have been delays in complying with clauses 35 and 41 of the listing agreement. Filing under clause 35 of the listing agreement for two quarters ended March 2008 and June 2008 are erroneous. Our Company has been in compliance with clause 40A during the said period. Compliances relating to clause 49 are not applicable to our Company. Our Company has complied with Regulation 8(3) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations for year ended 31-03-2009. However, the compliance with Regulation 8A of the Regulations is delayed and is not in the prescribed format. There has also been delay in complying with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 1992 for the year 2008-2009.


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SECTION IV: PARITCULARS OF THE ISSUE (A) OBJECTS OF THE ISSUE

Our Company intends to utilize the proceeds of the Issue towards the following purposes:

1. Expansion of the existing advisory business 2. Information Technology Systems 3. Strategic Investments in Companies and trading in securities 4. General Corporate Purposes 5. Issue expenses

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

(B) Brief details of the fund requirements We intend to utilize the funds raised from the Issue as follows: (Rs. in lakhs)

Sr. No. Objects Amount 1 Expansion of the existing advisory business 100.00 2 Information Technology Systems 20.00 3 Strategic Investments in Companies and trading in securities 1000.00 4 General Corporate Purposes 250.00 5. Issue Expenses 15.00

Total 1385.00

The above fund requirements and deployment are based on the estimates of our management and have not been appraised by any bank or financial institution or independent third party. These fund requirements are based on the current business plan ofour Company. We operate in a competitive and dynamic industry, and may have to revise our business plan from time to time on account of new activities that we may pursue or to formulate a response to revised market or economic circumstances. In case of any variations in the actual utilization of funds earmarked for the above activities, increased fund deployment for a particular activity may be met with by other funding sources, including surplus funds, if any, available.

(C) Funding Plan (Means of finance) (Rs. in lakhs)

Particulars Amount From own funds including internal accruals 172.50 Proceeds of Rights Issue 1212.50 Total 1385.00


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The details of the fund requirements are as follows:

i. Expansion of the existing advisory business

We intend to strengthen our product offerings in advisory services. Presently, we are offering advisory services on several financial and corporate issues. The background of our Present Promoters in the field of financial advisory services provides us with an opportunity to render advisory services touching a wide range of corporate requirements. We are presently constrained by limited manpower and infrastructure set-up. In order to attract leading enterprises to avail of our services, it is essential that we cater to their varying needs for advisory services. For this purpose, we need to have a strong team of qualified professionals with experience and knowledge covering several domains and pertaining to different industries. Our present manpower strength is sufficient to support the current levels of operations and marginal annual growth from the present levels. A sustained and significant growth in this segment covering more and different areas of advisory services would require us to reinforce our base strength by inducting quality manpower amidst us, besides supplementing and upgrading our infrastructure set up. We estimate that an investment of Rs. 100 lacs towards this object will result in expansion of our product offerings leading to creation of additional business opportunities for our company.

The expansion of our corporate advisory business would involve setting up of team to undertake Corporate Finance and Transaction Advisory services covering mergers and acquisitions, due diligence, valuation etc.

Corporate finance: The right kind of financing at the right time can be critical at many stages of the life cycle of a business.Entrepreneurs and business enterprises need funds, may be for a start-up or for financing growth, or for restructuring or re-capitalisation or debt retirement, acquisition or merger. Our team would offer advisory services on what are the best form of funds, and how it can be accessed in time.

Our Promoters have good experience in helping entrepreneurs and their management teams achieve their strategic goals by developing effective financing arrangements with a broad array of traditional and non-traditional investors and lenders. It is now proposed to augment our advisory team to comprise finance professionals who can develop financing structures, identify appropriate lenders/investors, provide introductions to financing sources, develop business financing plans, assist with presentations to lenders/investors, support financing negotiations and effect financial closures of projects. Our team would endeavour to connect our clients with best financing options to provide timely financing arrangements through term loans, working capital finance from banks, lines of credit, mortgage loans, lease and hire purchase, factoring, secured and unsecured corporate loans, equity through public offers, private placements, and venture capital funds etc.

Transaction Advisory: As globalisation of Indian economy intensifies, mergers, sales, acquisitions, divestments and other transactions are becoming frequent and important part of corporate business strategies. It would be our endeavour to help entrepreneurs and their management teams minimize the risks and maximize the value of such transactions. Acquiring or selling a business involves a series of complex activities, requiring time-bound and sometimes simultaneous action on different fronts. Our team would offer a comprehensive package of services to guide clients through these areas. For clients who are sellers, our team would focus on maximizing value and offer them value optimization consulting, business valuation services, prepare Offering Memorandums, help prepare for buyer due diligence, structure the deal, analyze offers, advise on tax planning, prepare transaction documents, oversee transaction activities, assist with the closing process, providedata room facilities and document control, ensure compliance with regulatory requirements, provide advice on wealth management and financial planning. Our services for buyers would involve preparing strategies for acquisition, identifying potential target companies, performing financial due diligence, conducting quality of earnings analyses, deal structuring and designing transaction documents, overseeing transaction activities, tax planning, identifying and valuing intangible assets and facilitating harmonious integration of businesses.

Valuation of business is another important advisory activity. Understanding the worth of a business is critical to an entrepreneur whether he is launching, growing, or selling it. It is especially vital for an entrepreneur on the sale side or buy side to clearly understand what is the worth of the business he is selling or acquiring. The use of business valuations is an integral part of corporate decision making in today’s complex business environment. There are many reasons why one needs a valuation, from regulatory purposes to taxation and succession planning.


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Our advisory team would have appropriate team that can handle business valuation assignments ranging from proprietary business to large public company transactions. It would be our endeavour to adopt a thorough, logical valuation approach that takes into account all the significant parameters of valuation to provide a clear, concise valuation report with a well-supported conclusion. Valuation may be required by entrepreneurs for a variety of reasons including equity dilution, acquisition, purchase price allocation, taxation purposes, for litigation support and dispute resolution, shareholder transactions, arriving at swap ratios for merger and acquisition, intangible asset and intellectual property valuations, shareholder agreements and joint venture agreements, court opinions and expert testimony, partnership dissolution and reorganizations etc. Our team would offer to provide clients professional services on valuation that is objective, credible and reliable.

The break-up of requirement of funds proposed to be raised through this issue for the expansion of advisory business is as given below:

The above expenses are estimated for a period of one year which is proposed to be met out of the proceeds of the issue. We expect our operations in this area of business to stabilize within this period and thereafter these expenses would be met out of revenues generated.

ii. Information Technology Systems

In order to improve the quality and pace of our service offerings and to meet the technological needs due to expansion in our business lines, we are required to upgrade our technological platforms and incur additional expenditure on our technology platforms and systems. The expenditure on technology will include acquisition of additional hardware / software / server setup, back office platform etc. According to our internal estimate we will need to infuse Rs. 20 lacs for building up necessary technology infrastructure to support our operations at envisaged levels.

Break up of cost to be incurred for information technology systems:

Number Cost per Unit (Rs. in lacs) Rs. in lacs

Computers 25 0.50 12.50 Website Design & Development Lump sum 1.00 Telephone / intercom / software / Servers / network etc. Lump sum 6.50

20.00

These are our management estimates and we have not obtained any quotations nor placed any orders for the same. Keeping in mind the fact that these are common items, easily available in the market ‘off-the-shelf’ at short notice with short deliveryperiod and that prices of these items tend to fall or new advanced features become available at same or lower prices, we propose to place orders for these items closer to implementation of our plan.

Team Members No. of persons Annual Cost to company per person ( Rs. in lacs)

Total annual cost (Rs. in lacs)

Vice President 2 15.00 30 Managers 4 6.00 24 Officers 4 2.50 10 Staff 5 1.20 6 Travelling & Other Related Expenses 30

15 100


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iii. Strategic investments in companies and trading in securities:

Break up of funds proposed to be deployed for strategic investment and trading in securities:

Strategic Investments: Our Company intends to make investments from the proceeds by way of strategic investments in certain nascent sectors like energy, healthcare and media by way of both equity and debt or a combination of both. However the form of investment has not yet been decided. Our company will identify entrepreneurs and business enterprises having a strong business or market potential and support them with financial assistance in the form of equity or convertibles or a combination of both, besides providing them with useful inputs in managing their business operations, financial issues, business expansion, marketing of products etc. The investments would be in the nature of medium to long-term and will be contingent upon the business enterprises meeting rigorous due diligence requirements besides having a professional management with transparency in governance.

Sector Focus for Strategic Investment:

- Renewable Energy - Environment - IT / ITes - Infrastructure - Education - Media - Healthcare

Out of the total funds of Rs. 750 lacs earmarked for strategic investment purposes from the proposed issue, the Company has not made any sector-wise allocation of funds. However, allocation of funds to a single sector would be based on prudential norms and generally be restricted to 25% of the corpus so as to spread the risk across sectors. Further, the investment in any single venture/proposal would not exceed Rs. 75 lakhs.

As we are undertaking corporate advisory services including corporate finance, we may selectively participate in equity or debt financing of our client companies for whom we syndicate strategic equity investment / debt finance from private or institutional lenders. However, our investments will be purely governed by our own evaluation criteria.

The ultimate deployment of funds across sectors would depend on the specific investment opportunities presented to the Company and their evaluation of the same based on evaluation criteria. In this behalf our Company will broadly pursue the following evaluation criteria:

a. Management Team: Considering the fact that the management team of the investee company will play a key role in our collective success, we would look for business enterprises with strong management teams having outstanding managers with proven track record in relevant areas of expertise, fiscal prudence, entrepreneurial drive. Transparency in operations, professional integrity and leadership and team-building skills, including a talent for communicating their ideas and for inspiring others with their vision would be other expected qualities in the management. Besides, the management should seek to maintain and enhance their stake in the business.

b. Differentiated Product or Services: We would prefer business enterprises that offer proprietary or significantly differentiated products or services, the benefits of which create long-term sustainable competitive advantage.

c. Large Market Opportunity: A large identifiable market potential exists for the investee company’s products or services.

d. Entry barriers. Ideally, the target market is characterized by defensible barriers to entry.

Investments & Trading Rs. in lacs Strategic investments 750 Investments in listed securities & Trading in listed securities 250

1000


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e. Visibility of Exit Mechanism: There is a clearly defined exit mechanism for the investment either through listing or alternative strategic sale, within a time frame of 12-36 months.

f. Venture Return Potential: We will carefully evaluate and scrutinize the return potential of every business opportunity presented to us. Portfolio companies should demonstrate significant addressable markets that provide attractive return potential.

g. Location: We would prefer to invest in business enterprises located in Maharashtra and its contiguous states like Gujarat, Goa, Madhya Pradesh, Karnataka and Andhra Pradesh.

Trading and Investment in securities: Our Company also intends to undertake investment and trading in stocks and securities. The investment and / or trading in securities will be done on the basis of in-house study of companies, industries,fundamental and technical analysis thereof and will also draw on the expertise and experience of the present promoters and group companies.

If and when it becomes applicable, our Company will apply to the RBI for obtaining NBFC registration certificate for carrying on investment and / or other financing activities.

iv. General Corporate Purposes

The application of the Issue proceeds for general corporate purposes would include but not be restricted to financing our working capital requirements, capital expenditure, deposits for renting or otherwise acquiring business premises, setting-up of new services, brand building exercises, obtaining new or enabling accreditations and licenses, strengthening of our marketing capabilities, meeting exigencies etc. which we in the ordinary course of business may incur. 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 use Rs. 250 lakhs for general corporate purposes.

v. Issue Expenses

The total expenses of the Issue are estimated to be approximately Rs. 15 lakhs. The Issue related expenses include, among others, issue management fees, registrar fees, printing and distribution expenses, auditor fees, legal charges, advertisement expenses, stamp duty, depository charges, listing fees to the stock exchanges, fees to SEBI and other miscellaneous expenses. The total expenses for the Issue are estimated not to exceed 1.25 % of the size of the Rights Issue. The following table provides a break up of estimated Issue expenses:

Sr.No.

Particulars Estimated amount(Rs. In lakhs)

As percentage of total Issue expense

As percentage of total Issue size (%)

1. Intermediary Fees 7.50 50.00% 0.62 2. Advertisement, Postage, Printing and

Stationery 5.00 33.33% 0.41

3. Others (filing fees, stamp duty, contingency etc)

2.50 16.67% 0.21

Total 15.00 100.00% 1.24

(D) Appraisal: The requirement of the funds by our Company has not been appraised and are based on the estimate of the Management


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(E) Schedule of Implementation Barring unforeseen circumstances, our Company will utilize the funds over a period of time by the end of March 31, 2011 as follows:

(Rs. In lakhs) Year end 31/03/2010 Year end 31/03/2011 Expansion of the existing advisory business 10.00 90.00 Information Technology Systems 10.00 10.00 Strategic Investments in Companies and trading in securities 100.00 900.00 General Corporate Purposes 15.00 235.00 Issue Expenses 15.00 0.00 Total 150.00 1235.00

(F) Deployment of Funds Since our Company is not raising capital for a project particulars under this para are not applicable.

Funds deployed towards objects of the issue as on 31.01.2010 Issue Expenses : Rs. 3.42 lacs

Sources of Funds Own Funds : Rs. 3.42 lacs

M/s. J. B. Dudhela & Co., Chartered Accountants have certified the details relating to issue expenses vide certificate dated February 12, 2010.

(G) Sources of Financing of Funds already deployed We have utilised our own funds to finance our deployment towards the Objects of the Issue and we have not availed of any financing arrangement / facility. Hence, no part of the proceeds of the issue are proposed to be utilised toward repayment of any such financing arrangement.

(H) Deployment of Balance Funds Please refer para relating to ‘Schedule of Implementation’ on page 44.

(I) Interim use of Issue proceeds Our management, in accordance with the policies set up by the Board, will have flexibility in deploying the proceeds received from the Issue. Depending on options available, we may also consider temporarily investing the funds in high quality interest / income bearing instruments / deposits with banks for the necessary duration and / or to temporarily deposit the funds in cash credit accounts with banks, for reducing overdraft, if any taken at a later stage, repaying other loans, if anyavailed and save interest costs. Such investments would be in accordance with investment policies approved by the Board from time to time.

(J) Basic Terms of the Issue Please refer ‘Terms of Issue’ on page 149 of this Letter of Offer.


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(K) Basis for Issue Price The Issue Price has been determined in consultation with Lead Manager to the Issue considering the following qualitative & quantitative factors. Investors should also refer to the chapter “Risk Factors” beginning on page 10of this Letter of Offer andthe financials of our Company including important profitability and return ratios, as set out in chapter titled “Financial Information of the Issuer” beginning from page 92 of this Letter of Offer to get a more informed view before making any investment decision. Please refer to the restated financial statements of our Company as stated in this Letter of Offer.

Qualitative Factors:

Factors Internal to our Company

The present Promoters of our Company have good experience in the financial services sector and have been in the field for more than fifteen years. We believe that the promoters have developed an in-depth knowledge of the sector. We had successfully made placement of equity shares on preferential basis to certain investors during March 2009 at a price of Rs. 50/- per share.

Quantitative Factors:

Information presented in this chapter is derived from our restated financial information prepared in accordance with the Companies Act 1956 and applicable SEBI (ICDR) Regulations.

a. Basic and Diluted Earning per Equity Share (EPS) of face value Rs. 10/-

Year Weights EPS (Rs.) Year ended March 31, 2007 1 0.30 Year ended March 31, 2008 2 1.15 Year ended March 31, 2009 3 0.28 Weighted Average EPS 0.57

Notes: 1. EPS has been computed on the basis of restated Profits & Losses after tax for the respective years. EPS for the nine

months period ended December 31, 2009 as per the restated accounts is Rs. 0.97 per share.

2. The denominator considered for the purpose of calculating EPS is the weighted average number of outstanding Equity Shares during the year.

3. EPS calculations have been done in accordance with Accounting Standard 20-“Earning per share” issued by the Institute of Chartered Accountants of India.

b. Price Earning Ratio (P/E) at issue price of Rs.50/-

Sr. No. Particulars P/E Ratio

1 P/E (based on EPS on March 31, 2009) 178.57 2 P/E (based on weighted average EPS) (for details please see note

below) 87.72


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Note:

Weighted average EPS Rs. 0.57

Issue Price per share Rs. 50

Price Earning ratio (P/E) Issue Price / Weighted Average EPS

i.e. 50 / 0.57

Thus P/E = 87.72

c. Industry P/E

Particulars P/E Ratio

Industry P/E 8.5

Highest 133.77 Lowest 0.64 Average 67.21 Source: Capitaline Database as on 25/02/2010; Segment- Small - Finance & Investments

P/E is based on the entire Finance and Investments sector

d. Average return on net worth

Year Weights RONW (%)

Year ended March 31, 2007 1 1.20 Year ended March 31, 2008 2 4.37 Year ended March 31, 2009 3 0.37 Weighted Average return on net worth 1.84

e. Minimum Return on increased net worth required to maintain pre-issue EPS as on March 31, 2009 - Rs. 0.28/- is 0.58%

f. Net Asset Value (NAV) per share (Rs.)

Pre issue as on March 31, 2009 38.14 Pre issue as on December 31, 2009 39.11 Post Issue 48.02 Issue Price 50.00

Note: Net Asset Value per Share = Equity Share Capital plus Reserves & Surplus less Miscellaneous Expenditure to the extent not written off /No. of Equity Shares


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g. Comparison of key ratios with the companies in the same industry group

Company EPS(RS.)*

P/E* RONW (%)#

NAV (RS.)# FACE VALUE

Brescon Corporate Advisors Ltd 14.07 6.25 17.46 97 10.00

Fortune Financial Services India Ltd 4.03 32.98 3.5 72.1 10.00 SMIFS Capital Markets Ltd 6.33 6.47 0.38 117.1 10.00 Source: Capitaline Database as on 25/02/2010; Segment- Small - Finance & Investments

* As per trailing 12 month #Full Year

Peer Group Average

The Companies in the above list have been selected on the basis that they are listed Companies engaged in providing Non-Banking Financial Services. However, their performance may not be directly comparable with that of our business as they cater to different segments of the market and therefore their business portfolio will vary.

h. Stock Market Data:

For details of Stock Market Data, please refer to page 145 of this Letter of Offer.

i. Issue Price

The Face Value is Rs. 10/- per Equity Share and the Issue Price is Rs. 50/- (fifty) per Equity Share is 5(five) times the Face Value of the Equity Share.

On the basis of the above qualitative and quantitative parameters, we are of the opinion that the Issue Price of Rs.50/- per Equity Share is justified. For further details, see the section “Risk Factors” on page 10 and the financials of the Company including important profitability and return ratios, as set out in the section “Financial Statements of the Issuer” on page 92.

Monitoring of utilization of Issue proceeds

There is no requirement for appointment of a monitoring agency in terms of clause 16 of the SEBI (ICDR) Regulations. The Board of Directors of our Company will monitor the utilization of the proceeds of the Issue. Our Company will disclose the utilization of Issue proceeds under a separate head in its financial statements along with details for FY 2009-2010 clearly specifying the purpose for which such proceeds have been utilized. Our Company, in its financial statements for FY 2009-2010, will provide details, if any, in relation to all such proceeds of the Issue that have not been utilized thereby also indicating investments, if any, of such unutilized proceeds of the Issue in our Company’s financial statements for the relevantFinancial Years commencing from FY 2010.

Furthermore, in accordance with clause 43A of the Listing Agreement we shall furnish to the Stock Exchange(s) on a quarterly basis, a statement including material deviations if any, in the utilisation of the process of the Issue from the objectsof the Issue 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 Board of Directors or committee thereof.

No part of the Issue proceeds will be paid by our Company as consideration to Promoters, Directors, KMP, Associate, Affiliates or Promoter Group entities except as stated in the Objects of the Issue or otherwise in the ordinary course of business.


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(L) Statement of Tax Benefits

CERTIFICATE FOR STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS

To,The Board of Directors Intellivate Capital Ventures Limited 66/1, Hansa Villa, Opp. South Indian Gymkhana, Bhaudaji Cross Road, Matunga (CR), Mumbai - 400 019

Dear Sirs,

We hereby report that the enclosed annexure states the possible income-tax benefits available to the Company and its shareholders under the current tax laws in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant provisions of the statute. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on business imperatives the Company faces in the future, the Company may or may not choose to fulfill.

The benefits discussed below are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual natureof the tax consequences and the changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue.

We do not express any opinion or provide any assurance as to whether:

1. The Company or its shareholders will continue to obtain these benefits in future; or the conditions prescribed for availing the benefits have been / would be met with.

2. The contents of this annexure are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company.

For J B Dudhela & CO. Chartered Accountants

J B Dudhela Proprietor Membership No. : 035354 Place: Mumbai Date: September 26, 2009


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STATEMENT OF POSSIBLE BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS

A. Benefits available to the Company under the Income-tax Act, 1961 (‘Act’)

1. Exemption in respect of dividend:

Dividends (whether interim or final) declared, distributed or paid by a domestic company for any assessment year commencing on or after April 1, 2003 are exempt in the hands of the Company, in its capacity as shareholder, as per the provisions of section 10(34) of the Act, if the same is subject to dividend distribution tax under section 115O of the Act.

2. Taxation of capital gains

Under section 10(38) of the Act, capital gain arising from the transfer of a long term capital asset, being equity shares in a company or unit of an equity oriented fund held for a period of more than 12 months is exempt from tax, provided such transaction is chargeable to securities transaction tax.

In accordance with the section 48 of the Act, capital gains arising out of sale of long-term capital assets shall be computed after indexing cost of acquisition / improvement. According to provisions of section 112(1)(b) of the Act, such gain shall be taxed at the rate of 20% (subject to surcharge and education cess as applicable). Further as per proviso to section 112(1), longterm capital gains on transfer of any securities [as defined in clause (h) of section 2 of the Securities Contracts (Regulation)Act, 1956] computed without indexation of cost of acquisition, would be taxed at concessional rate of 10% (subject to surcharge and education cess as applicable) and in that case any excess tax payable computed according to section 48 / 112 (1) (b) of the Act shall be ignored for the purpose of determining the tax payable by the assessee.

As per section 111A of the Act, short term capital gain arising from transfer of an equity shares in a company listed on a recognized stock exchange or a unit of an equity oriented fund would be taxable at 15 percent (subject to surcharge and education cess as applicable), in cases where securities transaction tax has been paid as per Chapter VII of the Finance (No.2)Act, 2004. In cases where securities transaction tax has not been paid, short term capital gains would be taxable at 30%.

As per the provisions of section 54EC of the Act and subject to the conditions specified therein, capital gains arising to the Company on transfer of a long term capital asset shall not be chargeable to tax to the extent such capital gains are invested incertain long term specified assets within six months from the date of transfer, provided that the investment in long term specified assets during any financial year does not exceed fifty lakhs rupees. However, if the Company transfers or converts such specified assets into money within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which such specified assets are transferred or converted into money.

3. Credit of Minimum Alternate Tax paid

As per the provisions of section 115JAA (1A) of the Act, tax credit shall be allowed for any Assessment Year commencing on or after April 01, 2006. Credit eligible for carry forward is the difference between MAT paid and the tax computed as per the normal provisions of the Act. The credit is available for set off only when tax becomes payable under the normal provisions and that tax credit can be utilized to set-off any tax payable under the normal provisions in excess of MAT payable for that relevant year. Such MAT credit shall not be available for set-off beyond 5 years succeeding the year in which the MAT credit initially arose. As per Finance Act 2006, MAT credit can be set-off upto 7 years succeeding the year in which the MAT credit initially arose in respect of tax paid under MAT for FY 2006-07 onwards. As per Finance Act 2009, MAT credit can be set-off upto 10 years succeeding the year in which the MAT credit initially arose in respect of tax paid under MAT for FY 2009-10 onwards.


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4. Deduction of securities transaction tax under section 36(1)(xv):

Section 36(1)(xv) provides that securities transaction tax paid during the previous year in respect of taxable securities transactions entered into in the course of business during the previous year shall be allowed as deduction provided that such income arising from such taxable securities transactions is included in the income computed under the head “profits and gains from business or profession”.

5. Carry forward of unabsorbed depreciation

As per provisions of sub section (2) of 32 of the Act, the company is entitled to carry forward and set off the unabsorbed depreciation arising due to absence / insufficiency of profits or gains chargeable for the previous year. The amount is allowedto be carried forward and set off for the succeeding previous years until the amount is exhausted without any time limit.

6. Carry forward of business loss

As per provisions of section 72 of the Act, the company is entitled to carry forward business losses for a period of 8 consecutive assessment years commencing from the assessment year when the losses were first computed and set off such losses from income chargeable under the head “Profits and gains from business or profession”.

7. Carry forward of loss under the head ‘capital gains’

As per the provisions of section 74 of the Act, the company is entitled to carry forward losses under the head capital gains fora period of 8 consecutive assessment years commencing from the assessment year when the losses were first computed. Short term capital losses can be set off against any income chargeable under the head “capital gains”; long term capital losses can be set off only against long term capital gains.

8. Special Tax Benefits

There are no special tax benefits available to the company.

9. Wealth Tax benefits As per the provisions of section 2(m) of the Wealth tax Act, 1957, the company is entitled to reduce debts owed in relation to the assets which are chargeable to wealth tax in computing the net taxable wealth.

B. Benefits available to Shareholders

I. Benefits available Resident shareholders

General Tax Benefits:

1. Dividends exempt under section 10(34)

Dividends (whether interim or final) declared, distributed or paid by the Company for any assessment year commencing on or after April 1, 2003 are exempt in the hands of shareholders as per the provisions of section 10(34) of the Act, if the same issubject to dividend distribution tax under section 115O of the Act.


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In accordance with the section 48 of the Act, capital gains arising out of sale of long-term capital assets shall be computed after indexing cost of acquisition / improvement. According to provisions of section 112(1)(b) of the Act, such gain shall be taxed at the rate of 20% (subject to education cess as applicable). Further as per proviso to section 112(1), long term capitalgains on transfer of any securities [as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956] computed without indexation of cost of acquisition, would be taxed at concessional rate of 10% (subject to education cess as applicable) and in that case any excess tax payable computed according to section 48 / 112 (1) (b) of the Act shall be ignored for the purpose of determining the tax payable by the assessee.

As per section 111A of the Act, short term capital gain arising from transfer of an equity shares in a company listed on a recognized stock exchange or a unit of an equity oriented fund would be taxable at 15 percent (subject to education cess as applicable), in cases where securities transaction tax has been paid as per Chapter VII of the Finance (No.2) Act, 2004. In cases where securities transaction tax has not been paid, short term capital gains would be added to total income and tax accordingly.

Under section 54EC of the Act, capital gain arising from transfer of long term capital assets [other than those exempt u/s 10 (38)] shall be exempt from tax, subject to the conditions and to the extent specified therein, if the capital gain are investedwithin a period of six months from the date of transfer in the bonds redeemable after three years and issued by -

(i) National Highways Authority of India (‘NHAI’) constituted under section 3 of National Highways Authority of India Act, 1988 and notified by the Central Government in the Official Gazette for the purpose of this section;

(ii) Rural Electrification Corporation Limited (‘RECL’), a company formed and registered under the Companies Act, 1956 and notified by the Central Government in the Official Gazette for the purpose of this section;

If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced. However, the amount so exempted shall be chargeable to tax subsequently, if the new bonds are transferred or converted into money within three years from the date of their acquisition. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an assessee during any financial year cannot exceed fifty lakhs rupees. Under section 54F of the Act, long-term capital gains (in cases not covered under section 10(38) of the Act) arising to an individual or Hindu Undivided Family (HUF) on transfer of shares of the company will be exempt from capital gain tax subject to certain conditions, if the net consideration from such shares are used for purchase of residential house property within a period of one year before and two years after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer.


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3. Special Tax Benefits

There are no special tax benefits available to the resident members.

II. Benefits available to Non-Resident Indian shareholders

1. Dividends exempt under section 10(34)





As per section 111A of the Act, short term capital gain arising from transfer of an equity shares in a company listed on a recognized stock exchange or a unit of an equity oriented fund would be taxable at 15 percent (subject to education cess as applicable), in cases where securities transaction tax has been paid as per Chapter VII of the Finance (No.2) Act, 2004. In cases where securities transaction tax has not been paid, short term capital gains would be added to total income and taxed accordingly.

Under section 54EC of the Act, capital gain arising from transfer of long term capital assets [other than those exempt u/s 10 (38)] shall be exempt from tax, subject to the conditions and to the extent specified therein, if the capital gain are investedwithin a period of six months from the date of transfer in the bonds redeemable after three years and issued by -


(ii) Rural Electrification Corporation Limited (‘RECL’), a company formed and registered under the Companies Act, 1956 and notified by the Central Government in the Official Gazette for the purpose of this section;

If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced. However, the amount so exempted shall be chargeable to tax subsequently, if the new bonds are transferred or converted into money within three years from the date of their acquisition. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an assessee during any financial year cannot exceed fifty lakhs rupees.


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Under section 54F of the Act, long-term capital gains (in cases not covered under section 10(38) of the Act) arising to an individual or Hindu Undivided Family (HUF) on transfer of shares of the company will be exempt from capital gain tax subject to certain conditions, if the net consideration from such shares are used for purchase of residential house property within a period of one year before and two years after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer.

Capital gains tax - Options available under the Act

(A) Where shares have been subscribed in convertible foreign exchange:

Non-resident Indians investing in the equity of Indian companies are given concession to pay tax on long term capital gains @ 10% as per conditions specified and in which case, indexation of cost of acquisition and other deductions are not available in computing tax on long term capital gains.

Under section 115-I of the Act, the non-resident Indian shareholder has an option to be governed by the provisions of Chapter XIIA of the Income Tax Act, 1961 viz. “Special Provisions Relating to Certain Incomes of Non-Residents” which are as follows:

As per the provisions of section 115D read with section 115E of the Act and subject to the conditions specified therein, long term capital gains arising on transfer of an Indian company’s shares, will be subject to tax at the rate of 10 percent (subject to education cess as applicable), without indexation benefit.

Under provisions of section 115F of the Act, long-term capital gains (in cases not covered under section 10(38) of the Act) arising to a non-resident Indian from the transfer of shares of the company subscribed to in convertible Foreign Exchange shall be exempt from Income tax, if the net consideration is reinvested in specified assets within six months of the date of transfer. If only part of the net consideration is so reinvested, the exemption shall be proportionately reduced. The amount so exempted shall be chargeable to tax subsequently, if the specified assets are transferred or converted into money within three years from the date of their acquisition.

As per the provisions of section 115G of the Act, Non-Resident Indians are not obliged to file a return of income under section 139(1) of the Act, if their only source of income is income from investments or long term capital gains or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the Act.

Under section 115H of the Act, where the Non-Resident Indian becomes assessable as a resident in India, he may furnish a declaration in writing to the Assessing Officer, along with his return of income for that year under section 139 of the Act to the effect that the provisions of the Chapter XII-A shall continue to apply to him in relation to such investment income derived from the specified assets for that year and subsequent assessment years until such assets are converted into money.

As per the provisions of section 115I of the Act, a Non-Resident Indian may elect not to be governed by the provisions of Chapter XII-A for any assessment year by furnishing his return of income for that assessment year under section 139 of the Act, declaring therein that the provisions of Chapter XII-A shall not apply to him for that assessment year and accordingly his total income for that assessment year will be computed in accordance with the other provisions of the Act.


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(B) Where the shares have been subscribed in Indian Rupees :


3. Provisions of the Act vis-à-vis provisions of the tax treaty

As per section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the relevant tax treaty to the extent they are more beneficial to the non-resident.

Special Tax Benefits

There are no special tax benefits available to the non - resident Indian members.

III. Benefits available to other Non-Residents

1. Dividends exempt under section 10(34) of the Act


2. Computation of capital gains Under section 10(38) of the Act, capital gain arising from the transfer of a long term capital asset, being equity shares in a company or unit of an equity oriented fund held for a period of more than 12 months is exempt from tax, provided such transaction is chargeable to securities transaction tax.


As per section 111A of the Act, short term capital gain arising from transfer of an equity shares in a company listed on a recognized stock exchange or a unit of an equity oriented fund would be taxable at 15 percent (subject to surcharge and education cess as applicable), in cases where securities transaction tax has been paid as per Chapter VII of the Finance (No.2)Act, 2004. In cases where securities transaction tax has not been paid, short term capital gains would be added to total incomeand taxed accordingly.


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Under section 54EC of the Act, capital gain arising from transfer of long term capital assets [other than those exempt u/s 10 (38) of the Act] shall be exempt from tax, subject to the conditions and to the extent specified therein, if the capital gain areinvested within a period of six months from the date of transfer in the bonds issued by -


(ii) Rural Electrification Corporation Limited (‘RECL’), a company formed and registered under the Companies Act, 1956 and notified by the Central Government in the Official Gazette for the purpose of this section; and

If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced. However, the amount so exempted shall be chargeable to tax subsequently, if the new bonds are transferred or converted into money within three years from the date of their acquisition. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an assessee during any financial year cannot exceed fifty lakhs rupees. Under section 54F of the Act, long-term capital gains (in cases not covered under section 10(38) of the Act) arising to an individual or Hindu Undivided Family (HUF) on transfer of shares of the company will be exempt from capital gain tax subject to certain conditions, if the net consideration from such shares are used for purchase of residential house property within a period of one year before and two years after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer.

3. Provisions of the Act vis-à-vis provisions of the treaty

As per section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the relevant tax treaty to the extent they are more beneficial to the non-resident.


There are no special tax benefits available to other non- residents. IV. Benefits available to Foreign Institutional Investors (“FIIs”)

General Benefits: By virtue of section 10(34) of the Act, income earned by way of dividend income from another domestic company referred to in section 115-O of the Act, are exempt from tax in the hands of the institutional investor.

1. Taxability of capital gains

As per the provisions of section 115AD of the Act, FIIs will be taxed on the capital gains income at the following rates:

Nature of income Rate of taxLong term capital gains 10 percent Short term capital gains 30 percent/ 15 percent under section 111A


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The above tax rates would be increased by the applicable surcharge. The benefits of indexation and foreign currency fluctuation protection as provided by section 48 of the Act are not available to FIIs.

As per section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the tax treaty to the extent they are more beneficial to the non-resident.


Under section 54EC of the Act, capital gain arising from transfer of long term capital assets [other than those exempt u/s 10 (38)] shall be exempt from tax, subject to the conditions and to the extent specified therein, if the capital gain are invested within a period of six months from the date of transfer in the bonds redeemable after three years and issued by -

i. National Highways Authority of India (‘NHAI’) constituted under section 3 of National Highways Authority of India Act, 1988 and notified by the Central Government in the Official Gazette for the purpose of this section;

ii. Rural Electrification Corporation Limited (‘RECL’), a company formed and registered under the Companies Act, 1956 and notified by the Central Government in the Official Gazette for the purpose of this section;

If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced. However, the amount so exempted shall be chargeable to tax subsequently, if the new bonds are transferred or converted into money within three years from the date of their acquisition. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an assessee during any financial year cannot exceed fifty lakhs rupees.

Dividends (whether interim or final) declared, distributed or paid by the Company for any assessment year commencing on or after April 1, 2003 are exempt in the hands of shareholders as per the provisions of section 10(34) of the Act, if the same is subject to dividend distribution tax under section 115O of the Act.


There are no special tax benefits available to the Foreign Institutional Investors.

V. Benefits available to Mutual Funds

As per the provisions of section 10(23D) of the Act, any income (including dividend from and income from sale of shares of the company) of Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 or Regulations made thereunder, Mutual Funds set up by public sector banks or public financial institutions and Mutual Funds authorized by the Reserve Bank of India, would be exempt from income tax, subject to such conditions as may be prescribed in this behalf.

VI. Benefits available to Venture Capital Companies / Funds

As per section 10(23FB) of the Act, all Venture capital companies/funds registered with Securities and Exchange Board of India, subject to the conditions specified, are eligible for exemption from income tax on all their income, including dividend from and income from sale of shares of the company.


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VII. Benefits available to the Members of the Company under Wealth Tax Act, 1957

Shares of the Company held by the shareholder will not be treated as an asset within the meaning of section 2(ea) of Wealth Tax Act, 1957 and hence in this respect, Wealth Tax Act will not be applicable.

VIII. Benefits available under the Gift Tax Act, 1958

Gift tax is not leviable in respect of any gifts made on or after October 1, 1998. Therefore, any gift of shares of the Companywill not attract gift tax.

Notes: 1. All the above benefits are as per the current tax law as amended by the Finance Act, 2009.

2. The stated benefits will be available only to the sole / first named holder in case the shares are held by joint holders.

3. In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further subject to any benefits available under the Double Taxation Avoidance Agreements, if any, between India and the country in which the non-resident has fiscal domicile.

4. In view of the individual nature of tax consequences, each investor is advised to consult his / her own tax advisor with respect to specific tax consequence of his / her participation in the scheme.


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SECTION V: ABOUT US

(A) OUR INDUSTRY OVERVIEW

The Industry information presented in this section has been extracted from publicly available documents, which have not been prepared or independently verified by the Company, the Lead Manager or any of their respective affiliates or advisors or the sources referred to herein. In this Section, we have relied on and referred to information regarding the industry and competitors from market research reports, and other publicly available sources. Although we believe that this information is reliable, we have not independently ‘verified the accuracy and completeness of the information.

International Scenario

Financial Markets

The economic slowdown of the advanced countries which started around mid-2007, as a result of sub-prime crisis in USA, led to the spread of economic crisis across the globe. Many hegemonic financial institutions like Lehman Brothers or Washington Mutual or General Motors collapsed and several became bankrupt in this crisis.

The global financial markets, after experiencing one of the most severe shocks, has however, witnessed signs of stabilisation in Q2 of 2009 with rebound in activity in some of the market segments. The incipient signs of slowdown in the pace of deterioration of economic conditions in the advanced economies, better than expected corporate performance and confidence building measures by the governments and central banks helped in bolstering general confidence in the markets. The positive outcomes were reflected in a general rise in the investor risk appetite leading to significant recovery in equity prices from their lowest levels in October 2008, narrowing down of credit spreads in some market segments and a decline in the implied volatilities (Chart 2). A series of policy induced measures contributed to waning of market uncertainty and helped stabilise the financial markets in Q2 of 2009. These include further steps by the central banks to ease monetary conditions, the action plan of the G-20 announced in April 2009, publication of the specific rescue package plans for banks, particularly in the US and the UK, and the release of the results of US Fed’s bank stress-tests based action plan.

Financial Services - PE & MA

Tough market conditions and ongoing debt funding restrictions in 2009 have seen private equity M&A activity in the first half of 2009 (US$32.9 billion in announced transactions globally) decline by 78.8% over the prior equivalent period - financial sponsors accounted for just 3.5% of announced transactions during the first half of 2009. PE returns struggled along with other asset classes, with the overall IRR (globally) for PE standing at negative 27%. Even though investors are still keenon this asset class, PE funds will take longer to raise new funds with most attention now being focused on refinancing or restructuring portfolio company bank debt and turning these investments around. Looking ahead, PE investments made over the next few years are likely to generate excellent returns, particularly those investments which incorporate operational improvement opportunities.

In the Asia Pacific region, Australia and New Zealand were the first territories to experience a downturn in PE deal activity some 15 months ago. In China, the market slowed into the fourth quarter of 2008 but is already showing early signs of recovery. In other territories, Japanese M&A has seen some uplift in the financial services space (rather than PE) whilst political instability in Thailand has affected M&A activity levels. Some liberalisation to the Malaysian regulatory environment may have a positive effect going forward as will the presence of new single purpose/focus funds (e.g. Distressed Debt funds and the Islamic Infrastructure Fund). Deal activity is being hampered by vendors still having unreasonably high price expectations (notwithstanding economic conditions and poor financial performances) and lack of funding availability. Individual lenders’ appetite of US$25 million is limiting deal opportunities to US$500 million in enterprise value and there islittle evidence that the Corporate Bond Market or Mezzanine debt will rebound in the short-term. Equally, whilst there is talk of vendor finance becoming more readily available, this is not yet evident in the market place. On the positive side, there area number of current deals which offer stapled finance packages, plus renewed interest in PIPE deals. In addition, global PE and sovereign wealth funds have taken cornerstone investments in several blue-chip corporates facing short-term liquidity rather than solvency issues.


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Short-term strategic business reviews, cash optimisation initiatives, and strategic option scenario analyses are critical to portfolio companies implementing quick wins to stabilise their performance and restore stakeholder confidence. PE funds are being increasingly proactive in sharing strategic plans with financiers to support the stabilisation initiatives being implemented at their portfolio investments. Capital market valuation pressures and lower EBITDA performance reflecting tightened consumer spending as the global financial crisis continues to impact the real economy will inevitably result in holding periods extending into the 2010 calendar year and possibly 2011 on existing portfolio investments. Some PE funds will have to make difficult decisions around the ongoing support of distressed portfolio investments, with some recent examples of failure. On the plus side, there is renewed trade buyer interest in 2006 and 2007 vintage investments, particularlyin the health sector, and a number of dual track sale/IPO processes are poised awaiting for the equity markets to re-open.

PE funding

According to International Financial Services London (IFSL) estimates, $189bn of private equity was invested globally in 2008, down 40% on the previous year (Chart 1). (Source: IFSL Research, Private Equity, August 2009)


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Chart 2: Indicators of Global Financial Market


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Developments Indian Scenario Financial markets in India have evidenced significant development since the financial sector reforms initiated in the early 1990s. The development of these markets has been done in a calibrated, sequenced manner and in step with those in other markets in the real economy. The emphasis has been on strengthening price discovery, easing restrictions on flows or transactions, lowering transaction costs, and enhancing liquidity. Benefiting from a series of policy initiatives over time, greater domestic market integration has also been witnessed.

India Financial Market promotes the savings of the economy, providing an effective channel for transmitting the financial policies. It is a well-developed, competitive, efficient and integrated financial sector (see diagram below). There are large number of buyers and sellers of the financial product, the prices are fixed by the market forces of demand and supply within the Indian Financial Market. The other markets of the economy assist the functioning of the financial market in India.

In keeping with evolving global financial developments and the ongoing Indian financial sector reforms, financial markets have, for a variety of purposes, emerged as a major channel of resource mobilisation. Overall, the gradual removal of structural bottlenecks and a shift away from the erstwhile administered interest rates have led to greater domestic market integration. This process has, however, tended to make the system more vulnerable to contagion risk.

The equity, government securities, foreign exchange and money markets along with their corresponding derivatives segments have developed into reasonably deep and liquid markets and there has been significant increase in domestic market integration over the years. However, the credit derivative market is yet to take off in any significant manner. As regards corporate bonds, though the primary market has seen an increase in issuance, the secondary market has not developed commensurately.

The equity market has witnessed wide-spread development in infrastructure and its functioning is comparable to advanced markets. It has seen significant increase in growth and diversity in composition in the past two decades.

The Financial Market in India focuses on these features:

1. Equity Market 2. Foreign Exchange Market 3. Government Securities Market 4. Money Market 5. Corporate Bond Market 6. Credit Risk Transfer Mechanism

1 Equity Market

The last two decades have seen tremendous growth in Indian equity markets. There has been significant improvement in the market and settlement infrastructure, and major strides have been taken in areas of risk management which received a major impetus after the setting up of SEBI as the market regulator. The turnover in the cash and derivatives markets, as well as market capitalisation and returns from stock markets, increased considerably until end-2007. But since early 2008 there has been considerable volatility, with a downward bias in market capitalisation and price-to-earnings ratios, largely due to global financial developments. The recent volatility has, however, not affected the smooth functioning of the stock markets and the settlement of trades. On the contrary, it has brought to the fore the resilience of the market infrastructure and its arrangements for risk management. This is also a pointer to the robust regulatory environment within which the equity market operates in India.


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2 Foreign Exchange Market

The foreign exchange market in India is one of the fastest growing across countries, as is evident from both the spot and derivatives segments. The Indian foreign exchange market volumes have shown the fastest growth between 1998 and 2007 among the countries surveyed by the Bank for International Settlements (BIS). The total annual turnover increased from USD 1.3 trillion during 1997-98 to USD 12.3 trillion during 2007-08. The daily average turnover has seen a substantial pick-up from about USD 5 billion during 1997-98 to USD 49 billion during 2007-08. The forward and swap market as a per cent of total turnover continued to hover around 50 per cent. Apart from increased turnover, the low and stable bid-ask spread of the INR/USD market is an indicator of the deep liquidity and efficiency of the market. However, since September 2008, considerable volatility has been witnessed in the market.

3 Government Securities Market

Given the important strategic intervention role that the Government is required to play in any country, the government securities market is one of the most important segments of the financial market. The market also serves as an important transmission channel for monetary policy. Without it, or with one that functions poorly, the regulatory power to intervene during times of crisis would be severely circumscribed. India has for long recognized this and attention to the development of the government securities market is always given.

In recent times, and consequent to the various steps taken to develop the government securities market, there has been tremendous growth in both the volume and liquidity in this segment. The outstanding stock of government securities increased from Rs.76,908 crore in 1991-92 to Rs.13,32,435 crore in 2007-08. The outstanding stock as a per cent of GDP increased from 11.8 per cent to 28.3 per cent during the corresponding period. Trade associations like Fixed Income Money Market Dealers Association (FIMMDA) have also played a crucial role in the development of the government securities market.

4 Money Market

The Reserve Bank traditionally regulates the money markets. The important components of the money market in India are inter-bank call (overnight) money, market repo, collateralised borrowing and lending obligation (CBLO), Commercial Paper (CP), Certificate of Deposit (CD) and term money market. Treasury bills constitute the main instrument of short-term borrowing by the Government. Historically, the call money market has constituted the core of the money market in India. However, the collateralised segments, viz., market repo and CBLO have come into prominence in recent years. The market continues to be liquid with a low and stable bid-ask spread. A better trading and settlement infrastructure coupled with the introduction of financial market reforms have led to a decline in money market volatility. In the derivatives segment, the swap market (especially overnight index swaps) has been the active segment and is used by banks as well as other entities to manage their interest rate risk more than any other instrument. The notional principal outstanding in respect of Interest Rate Swaps has increased.

5 Corporate Bond Market

The corporate bond market needs to develop as a critical segment of the financial sector. In India, however, it has failed to take off so far, largely because of lack of buying interest, poor transparency and an absence of pricing of spreads against the benchmark yield curve. An inadequate supply of paper from corporates, given the increased access to the offshore market for Indian corporates (though on the wane in recent times), large issuance of credit-risk-free government securities and low-risk subordinated debts by banks as part of their Tier II capital at attractive interest rates, and the absence of delivery versus payment (DVP) and tax deducted at source (TDS) systems for corporate bonds have also acted as impediments to the development of secondary market activities.

6 Credit Risk Transfer Mechanism

Financial markets require mechanisms that allow the smooth but transparent transfer of risk to voluntary and well-informed investors. In India the Credit Risk Transfer (CRT) mechanism needs to gain ground but the approach has to be gradual. Liquidity risks emanating from off-balance sheet items and the inter-linkages of CRT instruments with other markets need to be recognised. CRT instruments could be exchange-traded to enhance transparency and their transactions recorded and settled through a clearing corporation. Adequate disclosure norms need to be in place. The approach to the development of the securitized market should be gradual and calibrated.


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Impact of the recent recession on the Financial Market and Indian economy in general (Source: Global Recession and its Impact on Indian Financial Markets, Volume 3, Issue ¾, Year August 2009)

I. Stock Market

Due to the impact of global economic recession, Indian stock market crashed from the high of 20000 to a low of around 8000 points. Corporate performance of most of the companies remained subdued, and the impact of moderation in demand was visible in the substantial deceleration during the current fiscal year. Corporate profitability also exhibited negative growth inthe last three successive quarters of the year. Indian stock market has tumbled down mainly because of 'the substitution effect'of:

Drying up of overseas financing for Indian banks and Indian corporates; Constraints in raising funds in a bearish domestic capital market; and Decline in the internal accruals of the corporates.

Thus, the combined effect of the reversal of portfolio equity flows, the reduced availability of international capital both debtand equity and the perceived increase in the price of equity with lower equity valuations has led to the bearish influence on stock market.

II. Forex Market

In India, the current economic crisis was largely insulated by the reversal of foreign institutional investment (FII), externalcommercial borrowings (ECB) and trade credit. Its spillovers became visible in September-October 2008 with overseas investors pulling out a record USD 13.3 billion and fall in the nominal value of the rupee from Rs. 40.36 per USD in March 2008 to Rs. 51.23 per USD in March 2009, reflecting at 21.2 per cent depreciation during the fiscal 2008-09. The annual average exchange rate during 2008-09 worked out to Rs. 45.99 per US dollar compared to Rs. 40.26 per USD in 2007-08 which is the biggest annual loss for the rupee since 1991 crisis. Moreover, there is reduction in the capital account receipts in 2008-09

III. Money Market

The money market consists of credit market, debt market and government securities market.All these markets are in some or other way related to the soundness of banking system as they are regulated by the Reserve Bank of India. According to the Report submitted by the Committee for Financial Sector Assessment (CFSA), set up jointly by the Government and the RBI, our financial system is essentially sound and resilient, and that systemic stability is by and large robust and there are no significant vulnerabilities in the banking system. Yet, NPAs of banks may indeed rise due to slowdown as Reserve Bank has pointed out. But given the strength of the banks’ balance sheets, that rise is not likely to pose any systemic risks, as it mightin many advanced countries. Nevertheless, the call money rate went over 20 per cent immediately after the Lehman Brothers’ collapse and banks’ borrowing from the RBI under daily liquidity adjustment facility overshot Rs. 50,000 crore on several occasions during September-October 2008 under tight liquidity situation.

IV. Slowing GDP

In the past 5 years, the economy has grown at an average rate of 8-9 per cent. Services which contribute more than half of GDP have grown fastest along with manufacturing which has also done well. But this impressive run of GDP ended in the first quarter of 2008 and is gradually reduced. Even before the global confidence dived, the economy was slowing. According to the revised estimates released by the CSO (May 29, 2009) for the overall growth of GDP at factor cost at constant prices in 2008-09 was 6.7 per cent as against the 7 per cent projection in the midyearreview of the Economy presented in the Parliament on December 23, 2008. The growth of GDP at factor cost (at constant 1999-2000 prices) at 6.7 per cent in 2008-09 nevertheless represents a deceleration from high growth of 9 per cent and 9.7 per cent in 2007-08 and 2006-07 respectively. (Table 1) The RBI annual policy statement 2009 presented on July 28, 2009 projects GDP growth at 6 per cent in 2009-10.


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The slowdown in growth of GDP is more clearly visible from the growth rates over successive quarters of 2008- 09. In the first two quarters of 2008-09, the growth in GDP was 7.8 and 7.7 respectively which fell to 5.8 per cent in the third and fourth quarters of 2008-09. The third quarter witnessed a sharp fall in the growth of manufacturing, construction, trade, hotelsand restaurants. The last quarter was an added deterioration in manufacturing due to the deepening impact of the global crisis and a slowdown in domestic demand. (Table 2)

Table 2: Rate of growth at factor cost on 1999-2000 prices (per cent)

Hence, the slowdown in Indian economy is evident from the low GDP growth with deceleration in the industrial activity, particularly in the manufacturing and infrastructure sectors and moderation in the services sector mainly in the construction, transport and communication, trade, hotels and restaurants.

The capital account balance declined significantly to US $ 16.09 billion in 2008-09 as compared to US $ 82.68 billion during the corresponding period in 2007-08. As at end-March 2009 the foreign exchange reserves stood at US $ 252 billion.

Reflecting the impact of the measures taken by the Reserve Bank, the Indian financial markets returned to normalcy much earlier than the international financial markets. Call rates in the money market have settled back into the informal LAF corridor since November 2008, having breached the upper bound in the preceding two months. In the foreign exchange market, the Indian rupee generally depreciated against major currencies up to the end of the financial year 2008-09, before appreciating in the first quarter of 2009-10, as the capital flows resumed. In the credit market, the lending rates of scheduledcommercial banks (SCBs) began to soften at a gradual pace since November 2008. The activity in the government securities market was subdued for most of Q4 of 2008-09, however, the volume picked up in Q1 of 2009-10 and yields rose, particularly of the medium to long-term maturity. Indian equity markets, picking up global cues, staged recovery in the last week of March 2009, which continued in Q1 of 2009-10 (Table 3).


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Table 3: Domestic Financial Markets at a Glance

(Source: Reserve Bank of India, Macroeconomic and Monetary Developments First Quarter Review 2009-10)


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Financial Services - PE & MA

The global downturn has had a significant impact on M&A activity in India with a fall in both outbound and private equity deal activity being the most obvious impact. Both M&A deal volumes and values fell in the first half of the year in comparison to corresponding periods in 2007 and 2008. The total number of M&A deals in this period stood at 565 deals, down from 677 deals in the first half of 2008. Deal values fell 65% during the same period, from US$32.5 billion to US$11.5 billion. Outbound investments accounted for a mere approximately US$0.4 billion of M&A activity in the first half of 2009, spread over 47 deals, representing a fall of over 97% in terms of value compared with the first half of 2008. Indian companies focused primarily on distressed asset transactions during the period, and the prevailing economic conditions in the West provided such opportunities, owing to lower demand and volumes, eroding customer confidence, overcapacity and volatile cost base. Inbound deal volume and value fell by 35% and 80% respectively. (Source: Asia Pacific M& A Bulletin, Pricewaterhouse Coopers, Mid year 2009)

Private equity transactions also declined during the first half of 2009, with only 96 deals worth approximately US$1.9 billion reported during the period. Private equity investors continue to be cautious of investing, given the continuing high value expectations, further fuelled by the stock market rally after the announcement of the results of the general elections. Certainprivate equity firms are carrying significant mark-to-market losses on their books, and have focused on ensuring there is no further value depletion in their existing portfolio.

(B) OUR BUSINESS (1) Details of our business

Our Company was incorporated for carrying on the business of manufacturing and trading of steel pipes. In 1983, we set up manufacturing facilities of SS Coil. However, due to technical difficulties, the original plan was shelved and we established the plant of SS Rolling Sheet which was operated till 1986-87.

During the year 1986-87 our company diversified into plastic extrusion and installed the extrusion plant to manufacture plastic pipes and started the production in the year 1987-88.

Thereafter, our Company discontinued this business in the year 2000-01 due to intense competition and decrease in profit margins.


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Since then our Company was carrying on only marginal activities till the takeover by the Present Promoters, Mr. Vipul J. Modi, Ms. Leena V. Modi and Vipul J. Modi (HUF) during the year 2007-2008. During the period 2001-02 to 2006-07, our Company had not carried on any manufacturing activities. However, our Company had continued its interaction with various entities in the market. This enabled us to book sales on behalf of certain clients. During this process our Company earned some amount of commission income from various parties for referring the sales and procurement transactions. This constituted substantial part of Other Income as shown in the Financial Statements of the respective years. Also, we have deployed surplus funds in fixed deposits and by way of loans advanced to parties and earned interest income on the same, which is included in Miscellaneous Income.

Rs. in lakhs PARTICULARS 2007 2006 2005 2004 2003 2002 Interest on Fixed Deposits 0.32 - - - - - Commission income 2.39 4.25 2.51 2.64 0.30 3.44 Miscellaneous income 0.04 - 0.16 0.27 2.52 3.16 TOTAL 2.75 4.25 2.67 2.91 2.82 6.60 Commission income as a % of Total income above

86.91 100.00 94.01 90.72 10.64 52.12

After the takeover by the Current Promoters, who are experienced in the field of corporate financial advisory services such as business restructuring, equity placements, mergers & acquisitions, syndication of bank loans, stock broking activities etc, we have commenced new line of business, which includes rendering of management consultancy and advisory services on all aspects of corporate financial and commercial matters, trading in securities and investing in corporate equity and debt instruments – both listed and unlisted.

We obtained our members approval for undertaking these activities, by way of a special resolution on October 14, 2008 through Postal Ballot.

Since then, we have started offering financial advisory services and have also made investments in /traded in securities of other companies. Our office is located in Mumbai, considered as the commercial capital of India. Our clientele mostly comprise of the small and medium business segment, who prefer to outsource their financial advisory requirements from decent sized professionally run outfits. With years of experience that our directors have, we provide value by clearly understanding our clients’ goals and priorities, evaluating opportunities, identifying key challenges and issues, and providingthe support needed to deliver results.

At present, the areas of our advisory services broadly cover the following: a) Acquisition: On behalf of our clients, we identify business enterprises that can be potential candidates for takeover.

Such takeovers by our clients could be for harmonious expansion of their business, inorganic growth or for diversification into other business areas. We identify such target companies through a well-defined strategy using both informal and formal linkages in the related industry and endeavour to meet the client requirements in terms of size of the target company and the likely investment outflow.

b) Mergers: We advise clients on mergers of businesses, considering different aspects of the transaction including due diligence, taxation and stamp duty impact, relative valuation and the legal procedure involved. Our goal is to help entrepreneurs and their management teams minimize the risks and maximize the value of transactions for which they engage us.

c) Syndication of finance: The right kind of financing at the right time can be critical at many stages of the life cycle of a business. Mid-sized companies require finance for growth, for restructuring, for acquisition etc. We help entrepreneurs and their management teams achieve their strategic goals by developing effective financing arrangements through an array of lenders. We have the expertise to develop financing structures, identify prospective lenders, prepare business financing plans and assist with presentations to lenders etc.


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We are currently providing some advisory services in the areas of acquisition, merger, business valuation and syndicating corporate finance.

The advisory services that we presently render do not require us to hold any specific license or approval from any regulatory authority. There are no legal or regulatory barriers for entry by any individual or entity into this area of activity and to thatextent, we face competition. However, these advisory services constitute a form of specialized service which has significant impact on the business enterprise availing the service. Hence, professional skills, domain knowledge and expertise determine the flow of deals, in the medium and long-term. The experience and background of our present promoters helps us in attracting deals which are executed by our managers under the guidance of the directors.

We market our services directly by meeting prospective clients or their in-house advisors and offering them our specific services. References from existing clientele and other professional associates are also a major source of building future mandates.

We are presently also into investments and trading in corporate securities. We presently draw on the experience of our group companies which are into stock broking activities and trade and invest in company equities and derivative instruments

Business Strategy and Strengths of the Business

Our Business Strategies:

Focusing on growth in the new line of business Backed by the skills and experience of our present promoters and their background in financial services transactions, we have started offering financial advisory services and trading and investing in securities. We have set up an Office in Mumbai and appointed qualified personnel for looking after the operational aspects of business. We are presently focused on this line of activity for growth.

One of the objects of the present rights issue is to improve our delivery capabilities in the advisory services segment, by enhancing manpower and related infrastructure.

To offer diversified financial services.We intend to have a multi-disciplinary approach to financial services for which we need to build a diversified business platform within financial services arena by identifying suitable business opportunities in related areas and offer products andservices across a wider spectrum of financial services. We intend to build distinct professional skill-sets in different areas such as Transaction Advisory Services, Mergers & Amalgamation, Business Valuation, Corporate Finance and Infrastructure Financing advisory services. This could include merchant banking, insurance distribution and other financial services. We believe that this will enable us to maintain growth and profitability and limit our dependence on any particular line of financial services. Our recently launched advisory services business is in the process of consolidation and being scaled up.

Our Strength: Promoters’ background in financial services industry offers us opportunity to develop a strong business The experience, background and contacts of our Present Promoters will help us to develop strong business. Besides, we have appointed qualified professionals to oversee operational aspects of business. We therefore have the capability to generate business and deliver competently.

(3) Intellectual Property Rights / Property/Land

Our Company does not own any Intellectual Property Rights, Property and / or Land.


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(C) KEY INDUSTRY REGULATIONS AND POLICIES

The following description is a summary of the relevant regulations and policies as prescribed by the Government of India. The regulations set below are not exhaustive, and is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional legal advice. Our Company is engaged in the business of financial advisory services and investment and trading in shares/derivates. Set forth below are certain general legislations andregulations which govern this industry in India. However, there is no specific or key legislation and regulation governing thisindustry:

1. The Shops and Establishment Act, 1948

The Shops and Establishment Act, 1948 is a state legislation which governs establishments such as shops, offices, godowns and such other establishments. This legislation regulates the conditions of work and employment in such establishments and generally prescribes obligations in respect of registration, opening and closing hours, daily and weekly working hours, health and safety measures, and wages for overtime work.

2. The Income Tax Act, 1961

In accordance with the Income Tax Act, 1961 any income earned by way of profits by a company incorporated in India is subject to tax levied on it in accordance with the tax rate as declared as part of the annual Finance Act.

3. The Companies Act, 1956

The Companies Act, 1956 deals with issue, allotment and transfer of securities and various aspects relating to company management. It provides for standard of disclosure in public issues of capital, particularly in the fields of company management and projects, information about other listed companies under the same management, and management perception of risk factors. It also regulates underwriting, the use of premium and discounts on issues, rights and bonus issues, payment of interest and dividends, providing of annual report and other information.

4. Foreign Exchange Management Act, 1999

Foreign investment in India is governed primarily by the provisions of the Foreign Exchange Management Act ("FEMA"), and the rules, regulations and notifications there under, as issued by the RBI from time to time, and the policy prescribed by the Department of Industrial Policy and Promotion, which provides for whether or not approval of the Foreign Investment Promotion Board ("FIPB") is required for activities to be carried out by foreigners in India. 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 India) Regulations, 2000 ("FEMA Regulations") to prohibit, restrict or regulate, transfer by or issue security to a person resident outside India. As laid down by the FEMA Regulations, no prior consents and approvals are required from the RBI, for FDI 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. At present, foreign investment in our Company falls under the RBI automatic approval route for FDI/NRI investment upto 100%.

Since the Net worth of the Company is less than 200 lakhs, our Company is not required to obtain registration as an NBFC with the RBI for carrying on the investment activities. However, our Company will obtain the necessary registration when it becomes applicable.


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(D) OUR HISTORY AND CORPORATE STRUCTURE

Our History and Major Events

Our Company was originally incorporated as “K. B. Steel Limited” on November 18, 1982 as a public limited company and obtained the certificate for commencement of business on March 22, 1983 from the Registrar of Companies, Maharashtra. Subsequently, the name of our Company was changed to ‘Intellivate Capital Ventures Limited’ and fresh certificate of incorporation was obtained on December 10, 2008, to reflect the nature of the business proposed to be carried out by the Company, i.e. activities relating to the financial services sector.

Our Company was originally promoted by Mr. Kaushik B. Kansara and his associates/relatives. Our Company was incorporated to carry on the business of manufacturing and trading of steel pipes.

Our Company made a public issue of 2,44,930 equity shares of Rs.10 each for cash at par aggregating to about Rs. 24.49 Lakhs in the year 1983 to meet the cost of project to set up manufacturing facilities of SS Coil.

However, due to technical difficulties, the original plan was shelved and our company established the plant of SS Rolling Sheet which was operated till 1986-87. During the year 1986-87 the company diversified into plastic extrusion and installed the extrusion plant to manufacture plastic pipes and started the production in the year 1987-88.

Thereafter, due to intense competition and decrease in profit margins our Company discontinued this business in the year 2000-01. We sold the fixed assets and may not have complied with applicable provisions of law in this regard.

Since then our Company was carrying on only marginal activities, till the takeover by the current promoters Mr. Vipul J. Modi, Ms. Leena V. Modi and Vipul J. Modi (HUF) in 2007-2008. During the period 2001-02 to 2006-07, our Company had not carried on any manufacturing activities. However, our Company had continued its interaction with various entities in the market. This enabled us to book sales on behalf of certain clients. During this process our Company earned some amount of commission income from various parties for referring the sales and procurement transactions. This constituted substantial part of Other Income as shown in the Financial Statements of the respective years. Also, we have deployed surplus funds in fixed deposits and by way of loans advanced to parties and earned interest income on the same, which is included in Miscellaneous Income.

Rs. in lakhs PARTICULARS 2007 2006 2005 2004 2003 2002 Interest on Fixed Deposits 0.32 - - - - - Commission income 2.39 4.25 2.51 2.64 0.30 3.44 Miscellaneous income 0.04 - 0.16 0.27 2.52 3.16 TOTAL 2.75 4.25 2.67 2.91 2.82 6.60 Commission income as a % of Total income above

86.91 100.00 94.01 90.72 10.64 52.12

Mr. Vipul J. Modi, Ms. Leena V. Modi and Vipul J. Modi (HUF), acquired 1,79,050 constituting 73.08% of the then total paid up equity capital of the company from the Old Promoters/promoter group and had made an open offer for 20% of the equity capital of the company in terms of Regulations 10 & Regulation 12 of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 1997. The open offer closed in August 2007. However, no equity shares were tendered pursuant to the offer. Thus, post closure of the open offer the Promoters holding stood at 1,79,050 shares constituting about 73.08% (as on date 36.92% of the current paid up capital) of the then total paid up equity capital of the Company.


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On March 25, 2009 we allotted 2,40,000 equity shares of Rs. 10/- each at a premium of Rs. 40/- to certain other investors on a preferential basis for cash for augmenting long term resources of the Company to meeting the fund requirements for growth plans, to supplement the working capital resources and for general corporate purposes. These shares were listed on the BSE with effect from, Monday, May 11, 2009.

After the takeover, the object clause of the MOA was amended and our Company was empowered to do business inter alia, as management consultants and advisors on all aspects of corporate financial and commercial matters.

Our Company had entered into two separate Agreements, both dated 24.4.1989, for borrowing Rs. 14.50 lacs and Rs.9.00 lacs from Bank of India, Vatva Industrial Estate Branch, Ahmedabad. The filing of the necessary forms for satisfaction of charge for Rs. 9.00 lakhs with the ROC was delayed for which the Company had made an application to the CLB for compounding and the necessary compliances are now completed. We are in the process of filing the necessary form for charge pertaining to Rs.14.50 lakhs.

Main Objects of our Company

1. To carry on the business of management consultants, merchant bankers and advisors on all aspects of corporate financial and commercial matters.

2. To carry on the business of an investment company and to buy, undertake, lease, invest in, acquire, hold shares, stocks, debentures, debenture stocks, bonds, obligations and securities of any kind issued or guaranteed by any company constituted or carrying on business in India or elsewhere and debentures, debenture stock, bonds, obligations of sovereign rulers, commissioners, public body or authority, supreme, municipal, local or otherwise, firm or person whether in India or elsewhere. Also to carry on the business of investment and research advisory services.

3. To undertake and carry on the business as securities brokers, share and stock brokers, finance and investment brokers, sub-brokers, under-writers, sub-underwriters and consultants for and to purchase, acquire, hold, sell, buy, invest, trade, exchange, deal, barter, borrow, lend, guarantee, give, comfort for pledge, hypothecate, charge and deal in investment instruments and securities of all kinds and to carry on financial operations of all kinds including credit rating, money changers, OTC dealers, Stock Exchange members, bought out deals, placement of shares, hedging and to engage in the business of buying, selling, trading, stocking of art including paintings, sculptures and goods of artistic values and also to act as facilitators for buying & selling of commercial & residential properties.

4. To undertake and carry on the business of and activities as an Asset Management Company and/or to sponsor the set of a mutual fund, asset management company and trustee company.

5. To carry on the business of soliciting and procuring insurance business as a Corporate Agent of any insurance company / companies.


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Amendments to our MOA

Date of passing the resolution

Clause Amendment

September 21, 2002

Amendment to the Objects Clause – Other Objects

Insertion of clauses 104 to 106 after Clause 103 in the Other Objects

October 14, 2008 Amendment to the Capital Clause

Increase in Authorised Share Capital from Rs. 25 lakhs divided into 2,50,000 Equity Shares of Rs.10/- each to Rs. 1500 lakhs divided into 1,50,00,000 Equity Shares of Rs.10/- each

Amendment to the Name Clause

Change of Name from K. B. Steel Limited to Intellivate Capital Ventures Limited

Amendment to the Objects Clause – Main Objects

Change of the Main Objects Clause by deletion of the then existing clause 1 to clause 5 and replacing them with new clauses 1 to 5

Changes in the Registered Office

At the time of incorporation our registered office was situated at 142-F, Lalbawa Haveli, R. No. 40, Bhuleshwar, Bombay – 400 002, India. On August 4, 1986 our registered office was shifted to B/43, Mittal Tower, Nariman Point, Bombay – 400 021, India and on March 1, 1988 our registered office was shifted back to 142-F, Lalbawa Haveli, 40, Bhuleshwar, Bombay – 400 002, India. On December 14, 1993, our registered office was shifted to Mahavir Chambers, Off. No. 5, 2nd Floor, 1/5, Banaji Street, Fort, Bombay – 400 001, India. Subsequently on May 15, 2008, our registered office was shifted to 66/1, Hansa Villa, Opp. South Indian Gymkhana, Bhaudaji Cross Road, Matunga (CR), Mumbai – 400 019, India where it is presently located.

Details of Major events in the history of the issuer:

Year Description of event 1983 IPO of Rs. 24.49 lacs and listing of shares of our company on the Bombay Stock Exchange 1987 Installation of plastic extrusion plant 2001 Discontinued the business of plastic extrusion products. 2001-2007 Sale of entire fixed assets of the company 2008 Change of management control in favour of present promoters consequent to Open Offer 2008 Commencement of business of financial advisory services 2009 Allotment of 2,40,000 equity shares of Rs. 10 each at premium of Rs. 40 per share to

investors on preferential basis

Our Subsidiary and Holding Companies

Our Company currently has no subsidiary. Also no company holds 51% or more of our Company.

Business Transfer / Shareholders Agreement

Our Company has not entered into Business Transfer or Shareholders’ Agreement. Our Company is also not aware of any such Agreements to which our shareholders may be a party.


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Other Agreements

Except the agreements that may have been entered into in the ordinary course of the business carried on or intended to be carried on by our Company, our Company has not entered into any other Agreement / Contract.

Strategic Partners

The Company does not have any Strategic Partner as on the date of filing of this Letter of Offer.

Financial Partners

The Company does not have any Financial Partner as on the date of filing of this Letter of Offer.

(E) Our Management

(1) Board of Directors The Articles of Association of our Company requires that the number of directors shall be a minimum of three (3) and a maximum of twelve (12). Currently, the Board of Directors of our Company comprises three (3) directors. All the three (3) directors are non-executive and two (2) are promoter directors and one (1) is an independent director.

The following table sets forth details regarding our board of directors as on the date of this Letter of Offer:

Name, Designation, Father’s/Husband’s Name, Address, Occupation, Age, Nationality & DIN

Date of Appointment and Term Other Directorships

Mr. Vipul Jayantilal Modi s/o Mr. Jayantilal Modi

Designation: Non –executive Promoter Director

Address: 601, Amrut Dhara Heights, 591 Jame Jamshed Road, Matunga, Mumbai – 400 019

Occupation: Practicing Chartered Accountant

Age: 44 years

Nationality: Indian

DIN: 00796116

Appointed as additional director on 31/01/2008 and thereafter on 26/07/2008 as a director liable to retire by rotation

1. Samruddhi Finstock Limited 2. Samruddhi Stock Brokers Limited 3. Samruddhi Commodities Trading

Limited 4. Samruddhi Equities & Securities

Services Limited 5. Piyali Builders & Developers Private

Limited 6. Rock Builders & Developers Private

Limited 7. Anish Properties Private Limited 8. Ashwa Realty (India) Private Limited 9. Jimeet Developers Private Limited 10. High Rise Realty Private Limited 11. Bombay Exim Private Limited 12. Galaxy Realty Private Limited 13. Saria Builders & Developers Private Limited. 14. Jinal Fin-vest Private Limited 15. Niralee Properties Private Limited 16. Hansa Villa Realty Private Limited


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Mrs. Leena Vipul Modi w/o Mr. Vipul Modi

Non –executive Promoter Director

Address: 601, Amrut Dhara Heights, 591 Jame Jamshed Road, Matunga, Mumbai – 400 019

Occupation: Business

Age: 44 years

Nationality :Indian

DIN: 00796382


1. Samruddhi Finstock Limited 2. Samruddhi Stock Brokers Limited. 3. Samruddhi Commodities Trading

Limited. 4. Samruddhi Equities & Securities Services Limited 5. Piyali Builders & Developers Private

Limited 6. Rock Builders & Developers Private

Limited 7. Anish Properties Private Limited 8. Ashwa Realty (India) Private Limited 9. Jimeet Developers Private Limited

10. High Rise Realty Private Limited 11. Bombay Exim Private Limited 12. Galaxy Realty Private Limited 13. Saria Builders & Developers Private

Limited 14. Jinal Fin-vest Private Limited 15. Niralee Properties Private Limited

Mr. Siddharth Pravinchandra Shah s/o Mr. Pravinchandra Shah

Independent Non-executive Director

Address: Samkit, 23, Jainnagar, Opp. Sanjivani Hospital, New Sharda Mandir Road, Ahmedabad – 380 007. Occupation: Practicing Chartered Accountant Age: 43 years

Nationality :Indian DIN: 00389042


1. Panamax Infotech Limited 2. Innova Call Centre Private Limited 3. Teles Call Centre Private Limited 4. Broadband Telecom Private Limited

Brief Biography of our Directors

i. Mr. Vipul Modi is a graduate in commerce and a Fellow member of the Institute of Chartered Accountants of India. He has about 20 years of experience in capital markets. His experience spans in the fields of finance, taxation, legal and regulatory activities. Mr. Vipul Modi has advised leading Corporate Houses in raising funds. He has also provided advisory services in areas of Mergers/Demergers and Acquisitions, Reorganisation / Reconstruction Schemes and Strategies. Since the past 9 years he has been associated with the Investors’ Grievances Forum and he is presently the Honorary Vice President of the said Forum, a SEBI registered NGO that works in the field of investor’s protection with SEBI, Department of Corporate Affairs, Economic Offences Wing, Reserve Bank of India, Stock Exchanges, Insurance Regulatory and Development Authority and other Regulatory Bodies.


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ii. Mrs. Leena Modi is a graduate in commerce from the Mumbai University. She is a designated director in Samruddhi Stock Brokers Limited, a company engaged in the business of share trading. The company is a member of the Bombay Stock Exchange (BSE) and registered with SEBI as a stock broker.

iii. Mr. Siddharth Shah is a Chartered Accountant and a graduate in commerce. He has also done his LLB from the University of Gujarat. He has experience of about 20 years in the areas of Accounting, Auditing, Finance and Taxation. He has worked on several projects for clients across a wide range of industries. He is the proprietor of M/s Siddharth Shah and Company, Chartered Accountants and a partner in M/s. Thakkar & Company, Chartered Accountants.

Mr. Siddharth Shah is not related to the other two directors.

Service Contracts

Presently, our Company has not entered into any Service contracts with our directors that provide for any benefits upon termination of employment.

Borrowing Powers of Directors

The borrowing powers of our Company is as per our AOA which allows our Board to borrow any amount not exceeding the aggregate of the paid up equity capital of our Company and free reserves except with the consent of the members of our Company in general meeting. The members of our Company have, by their resolution dated October 14, 2008 authorised the Board to borrow an amount up to Rs.100 Crores (Rupees Hundred Crores only) over and above the paid up capital and free reserves.

Size of the Board

Our Board consists of three (3) members with two (2) promoter-non-executive directors and one (1) non-executive independent director. The Chairman of the Board is a non-executive promoter director.

Composition of Board of Directors

Name of the Director Position Category Mr. Vipul Modi Chairman Promoter & Non-Executive Director Mrs. Leena Modi Director Promoter & Non-Executive Director Mr. Siddharth P Shah Director Independent & Non-Executive Director

(2) Compensation of Directors

Non Executive Directors

All our directors, i.e., Mr. Vipul Modi, Mrs. Leena Modi and Mr. Siddharth Shah are Non Executive Directors and are not paid any remuneration, commission or sitting fees.

During the last two years our Company has not entered into contract appointing or fixing remuneration of a Director, Managing Director or Whole-time Director. Mr. Kaushik Kansara, one of the ex-promoters of the Company was appointed as a Managing Director with effect 12/04/2005 for a period of five years. However, he ceased to be director with effect from April 30, 2008 due to the change in the management and takeover by the New Promoters.


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Executive Directors

Our Company does not have any Executive Director.

(3) Shareholding of our Directors

As per the AOA of our Company, Directors of our Company are not required to hold any qualification shares. The holdings of the Directors of our Company in their personal capacity are as follows:

Name of the Director Number of Equity Shares (As on the date of this letter of offer )

Mr. Vipul Modi 1,73,600 Mrs. Leena Modi 2,450

Mr. Siddharth P Shah Nil

(4) Interest of our Directors

Interest of the Directors in promotion of our Company:

All our directors may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board or a Committee thereof as well as to the extent of other remuneration, reimbursement of expenses, if any, payable to them.

Mr. Vipul Modi and Mrs. Leena Modi are also interested to the extent of their shareholding and to the extent of Equity Shares that may be subscribed for and allotted to them, out of the present Issue in terms of this Letter of Offer and also to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares in our Company. Our Company has entered into broking agreement with the group companies (where Mr. Vipul Modi and Mrs. Leena Modi are promoters/directors) for undertaking the transactions for trading in securities and derivatives. Our directors Mr. Vipul Modi and Mrs. Leena Modi are also directors on the boards of certain Group Companies, and they may be deemed to be interested to the extent of the payments made by the Company, if any, to these Group Companies, in respect of the aforesaid transactions. The details of the transactions with the related parties by our Company with the Promoter Group entities for the year ended March 31, 2009 and period ended December 31, 2009 are as follows:

Name of Party Nature of Transaction 31.12.2009 31.03.2009

Samruddhi Stock Brokers Ltd Purchase of shares 4.94 86.24

Samruddhi Stock Brokers Ltd Sale of shares 0.00 62.05

Samruddhi Finstock Ltd Profit from Derivatives trading - 2.46

Samruddhi Finstock Ltd Purchase of shares 7.43 -


None of our directors have any interest in any property acquired by us within two years of the date of filing this offer document with SEBI or proposed to be acquired by us.


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Except as stated above our Directors/Promoters/ Group companies have no interest:

In any property acquired by us within two years of the date of filing this offer document with SEBI or proposed to be acquired by it

As a director or promoter in being a member of any firm or company or otherwise for services rendered by the director/promoter or by the firm or company, in connection with the promotion or formation of our Company

In any transaction in acquisition of land, construction of building and supply of machinery, etc

(5) Changes in our Board of Directors during the last three years

Sr. No.

Name of Director Date of appointment Date of

cessation Reason

1. Mr. Vipul J Modi January 31, 2008 -- Appointment 2. Mr. Leena V Modi January 31, 2008 -- Appointment 3. Mr. Anil Patel -- January 31, 2008 Resignation 4. Mr. Mohanlal C. Shah -- January 31, 2008 Resignation 5. Mr. Gautambhai Modi -- January 31, 2008 Resignation 6. Mr. Siddharth P Shah April 30, 2008 -- Appointment 7. Mr. Kaushik B Kansara -- April 30, 2008 Resignation

(6) Management Organisation Structure The present management structure is as follows

(7) Corporate Governance

As per Circular No. SEBI/CFD/DIL/CG/1/2004/12/10 dated October 29, 2004, issued by SEBI, the provisions relating to corporate governance under Clause 49 of the Listing Agreement are not applicable to our Company since the paid-up capital is less than Rs. 300 Lacs and net worth has been less than Rs. 2500 Lacs at all times in the history of the our Company.

Board of Directors

Research Analyst - KMP

Corporate Advisor- KMP

Officer OfficerOfficer


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We confirm that the our paid-up capital and the net worth in any quarter since we got listed on BSE have never exceeded the limits as aforesaid and as such the provisions of Clause 49 of the Listing agreement are not applicable to us.

We thus do not have Audit Committee and other committees as required under clause 49 of the listing agreement. However, our Company has formed an Investor Grievance Committee comprising Mrs. Leena Modi and Mr. Siddharth Shah, directors of the Company.

(8) Key Managerial Personnel

The Key Managerial Personnel of our Company are as follows:

Name & Designation

Age (Years)

Qualification Previous Employment

Date of Joining

Experience (Years)

Gross Salary for period ended 31, 2009 (in Rs.)

Mr. Inderpreet Singh Chadha

Corporate Advisor

25 B.Com, ACA

Samruddhi Equities & SecuritiesServices Ltd.

01-06-2009 1.5 years NA

Ms. Swati Vinod Gupta

Research Analyst

23 B.Com, Cleared final examination of Chartered Accountancy of the ICAI

- 01-06-2009 0.5 years NA

Mr. Amit Radhey Shyam Kalra Company Secretary and Compliance Officer

24 B.Com, ACS

- 12-02-2010 - NA

Brief profile of the Key Managerial Personnel

I. Mr. Inderpreet Singh Chadha

Mr. Inderpreet Singh Chadha has a Bachelor’s degree in Commerce and is a qualified Chartered Accountant and is currently pursuing the Strategic Level of the Certified Institute of Management Accountant (CIMA) from UK.

During his tenure as an article trainee, he has worked as an Audit Assistant at reputed CA firms and was involved in and has headed various Statutory Audits, Tax Audits & Internal Audit assignments of various companies.

Currently he is involved in various management consultancy assignments including conducting due diligence, structuring and restructuring arrangements, valuations, financial modeling, private equity syndication, IPOs & related capital advisory services.


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79

II. Ms. Swati Vinod Gupta

Ms. Swati Vinod Gupta has a Bachelor’s degree in Commerce from Mumbai University. She has also completed her final examination of Chartered Accountancy from the Institute of Chartered Accountants of India. Currently, she is pursuing the Chartered Financial Analyst course from CFAI (US) and has passed the Level-1 examination.

During her tenure as an article trainee, she has worked on several accounting and auditing projects for clients across a range of industries. She has handled various assignments relating to Statutory Audit, Tax Audit, Management Audit, Limited Review of various companies.

She handles research operations at ICVL.

III. Mr. Amit Radhey Shyam Kalra

Mr. Amit Kalra has a Bachelor’s degree in Commerce from Maharshi Dayanand University, Rohtak. He is also an associate member of The Institute of Company Secretaries of India. During his tenure as an apprentice he has been associated with secretarial and related compliances and Corporate Governance implementation.

Mr. Amit Kalra holds the position of Company Secretary and Compliance Officer in our Company.

There is no family relationship between any of the key managerial personnel.

Shareholding of Key Managerial Personnel in our Company

As on date of this Letter of Offer, none of our Key Management Personnel are holding any equity shares of our Company. The aforementioned Key Management Personnel are permanent employees of our Company.

Bonus or Profit Sharing Plan for our Key Managerial Employees

Our Company has no fixed bonus or profit sharing plan for its Key Managerial Employees.

Employee Stock Option Plan

Our Company currently does not have any Employee Stock Option Plan.

Changes in our Key Managerial Personnel during last three (3) years

There are no changes in the Key Managerial Personnel during last three (3) years except following:

Name & Designation Date of Appointment Date of Resignation

Mr. Kaushik Kansara Managing Director

-- 30-04-2008

Mr. Inderpreet Singh Chadha Corporate Advisor

01-06-2009 --

Ms. Swati Vinod Gupta Research Analyst

01-06-2009 --

Mr. Amit Radhey Shyam Kalra Company Secretary and Compliance Officer

12-02-2010


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Details of Loans given to Key Managerial Personnel

As on the date of filing of this Letter of Offer, there are no loans that have been given to our Directors and Key Managerial Personnel.

Interest of our Key Managerial Personnel

The Key Managerial Personnel of our Company do not have any interest in our Company other than to the extent of the remuneration or benefits to which they are entitled as per their terms of appointment and reimbursement of expenses incurred by them during the ordinary course of business.

(9) Employees

Our Company does not have any Stock Option Scheme or Stock Purchase Scheme for employees.

No amount or benefit or consideration for payment of giving of the benefit has been paid or given within the two years preceding the date of filing this offer document with SEBI and no such amount or benefit is intended to be paid or given to any Officer.


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(F) OUR PROMOTERS Promoters

Our Company was originally promoted by Mr. Kaushik B. Kansara and his relatives and associates. On June 16, 2007, Mr. Vipul Modi, Mrs. Leena Modi and M/s. Vipul J. Modi (HUF) entered into a Agreement with Mr. Kaushik B. Kansara and Mrs. Manglaben B. Kansara to acquire in aggregate 1,34,450 fully paid up equity shares of Rs.10/- each, representing 54.88% of the then voting capital of our Company, at a price of Rs. 28/- per equity share. Pursuant to this Agreement, on June 21, 2007, Mr. Vipul Modi, Mrs. Leena Modi and M/s. Vipul J. Modi (HUF) made an open offer to the shareholders of our Company for substantial acquisition of shares/voting rights accompanied with the change of control and management of the Target Company in compliance with regulations 10 & 12 and other provisions of Chapter III of the SEBI (SAST) Regulations, 1997 as amended (Open Offer).

Subsequently on August 30, 2007 Mr. Vipul Modi, Mrs. Leena Modi and M/s. Vipul J. Modi (HUF) also entered into a ‘Supplementary Agreement’ with Mrs. Hansa K Kansara, Ms. Sharda B Kansara, Ms Jaybalaben J. Dudhela and Ms. Jyotsna B. Mavani also forming part of Promoter Group to acquire in aggregate 44,600 fully paid-up equity shares of Rs.10/- each, representing 18.20% of the then voting capital of our Company also at a price of Rs. 28/- per share, payable in cash.

The Open Offer was for acquisition of 49,000 (Forty Nine Thousand) equity shares of Rs.10 (Rupees Ten) at a price of Rs. 28.00. SEBI subsequently imposed interest of Re. 0.55 and the Offer price was revised to Rs.28.55 (Rupees Twenty Eight and Paise Fifty Five) only. However, no shares were tendered in the Open Offer.

Mr. Vipul Modi and Mrs. Leena Modi were thereafter appointed as directors on the Board of our Company on 31/01/2008.

The details of our Promoter are as follows:

1. MR. VIPUL MODI Mr. Vipul Modi, aged 44 years is a Chartered Accountant. He has about 20 years of experience in capital markets.His experience spans the fields of finance, taxation, legal and regulatory activities. Mr. Vipul Modi has advised leading Corporate Houses in raising funds. He has also provided advisory services in areas of Mergers/Demergers and Acquisitions, Reorganisation / Reconstruction Schemes and Strategies. He is the Honorary Vice President (Advisor) of Investors Grievances Forum, which is registered with SEBI.

.

Permanent Account Number AABPM1417A Driving License Number MH019921520 Passport F1744405 Voter ID ZHS1655281

Mr. Vipul Modi, resides at 601, Amrut Dhara Heights, 591 Jame Jamshed Road, Matunga, Mumbai – 400 019.


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2. MRS. LEENA MODI Mrs. Leena Modi, aged 44 years, is a graduate in commerce from the Mumbai University. She is a Designated Director in Samruddhi Stock Brokers Limited, a company engaged in the business of stock broking. The company is a member of the Bombay Stock Exchange (BSE) and registered with SEBI as a stock broker.

Permanent Account Number AABPM1418R Driving License Number MH01 90/34725

Passport F1744403 Voter ID ZHS1655299

Mrs. Leena Modi, resides at 601, Amrut Dhara Heights, 591 Jame Jamshed Road, Matunga, Mumbai – 400 019.

3. VIPUL J. MODI (HUF)Vipul J. Modi (HUF) was formed on April 1, 1993 by Mr. Vipul J. Modi as Karta of the HUF. Permanent Account Number of Vipul J. Modi (HUF) is AAAHV0890H VJM (HUF) is engaged in the business of share trading and investment.

The address of the HUF is 601, Amrut Dhara Heights, 591 Jame Jamshed Road, Matunga, Mumbai – 400 019.

Other Information

There are no litigations pending by or against VJM (HUF).

No penalty of any kind has been imposed on VJM (HUF) by SEBI or any other stock exchange or RBI or any other authority in India or abroad. There are no defaults in meeting any statutory/bank/institution dues by VJM (HUF). Further, no proceedings have been initiated for economic offences against VJM (HUF).

Undertaking Permanent Account Number, Bank Account Number and Passport Number of Mr. Vipul Modi and Mrs Leena Modi and Permanent Account Number and Bank Account Number of VJM (HUF) have been submitted to BSE where the Equity Shares are proposed to be listed at the time of filing the draft Letter of Offer.

Interest of our Promoters

The aforementioned Promoters of the Company are interested to the extent of their shareholding and to the extent of Equity Shares that may be subscribed for and allotted to them, out of the present Issue in terms of this Letter of Offer and also to theextent of any dividend payable to them and other distributions in respect of the said Equity Shares in our Company. Further, our Promoters who are also the Directors of the Company may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board or a Committee thereof as well as to the extent of other remuneration, reimbursement of expenses, if any, payable to them. Further, our individual Promoters are also directors on the boards of certain Group Companies, and they may be deemed to be interested to the extent of the payments made by the Company, if any, to these Group Companies. For the payments that are made by the Company to certain Group Companies, please refer to the section entitled “Related Party Transactions” on page 105 of this Letter of Offer. Barring the broking agreement with the group companies for undertaking the transactions for trading in securities and derivatives, we have not entered into any contract, agreements or arrangements during the preceding two years from the date of this Letter of Offer in which the Promoters are directly or indirectly interested and no payments have been made to them in respect of the contracts, agreements or arrangements which are proposed to be made with them including the properties purchased by the Company other than in the normal course of business.


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Information in relation to Group Companies

Our Promoters have direct ownership control of all the Indian group entities described herein.

Promoter Group Companies and entities

The companies that form part of our Promoter Group include: a) a company in which 10% or more of the share capital is held by our Promoters or their immediate relatives; and b) a company in which a company specified above holds 10% or more, of the share capital; and c) a company promoted by our Promoters.

The companies that form part of our Promoter Group are as follows: 1. Samruddhi Finstock Limited2. Samruddhi Stock Brokers Limited.3. Samruddhi Commodities Trading Limited.4. Samruddhi Equities & Securities Services Limited5. Piyali Builders & Developers Private Limited6. Rock Builders & Developers Private Limited7. Anish Properties Private Limited8. Ashwa Realty (India) Private Limited9. Jimeet Developers Private Limited10. High Rise Realty Private Limited11. Bombay Exim Private Limited12. Galaxy Realty Private Limited13. Saria Builders & Developers Private Limited14. Jinal Fin-vest Private Limited15. Niralee Properties Private Limited16. Hansa Villa Realty Private Limited

The following Proprietary Concern also forms part of our Promoter Group:

1. M/s. Vipul Modi & Associates, Chartered Accountants


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Other particulars: 1. Name Samruddhi Finstock Limited Type of organization Closely held public company Corporate Information SFL was incorporated on March 29, 1995 as a private limited

company. Subsequently, the word ‘Private’ was deleted and name of the company was changed to the present name and fresh certificate of incorporation consequent to change of name was obtained from Registrar of Companies, Gujarat, dated April 15, 2002. The Company Identification Number of SFL is U65910GJ1995PLC025229. The Registered Office of SFL is situated at Mehta Market, Main Road, Surendranagar, Gujarat – 363 001. The Permanent Account Number of SFL is AACCS3742C.

Brief description of the business SFL is engaged in the business of share trading and Stock Broking. SFL is a member of National Stock Exchange of India Limited, Mumbai (NSE) and registered with SEBI as a Stock Broker. It is also registered with SEBI in Cash, F& O and Currency segments and as a self clearing member.

Nature and Interest of the promoters Our Promoter directors Mr. Vipul Modi and Mrs. Leena Modi are also promoter directors of this company

2. Name Samruddhi Stock Brokers Limited Type of organization Closely held public company Corporate Information SSBL was incorporated on May 10, 2004. It received its certificate

for commencement of business on June 2, 2004. The Company Identification Number of SSBL is U67120MH2004PLC146183. The Registered Office of SSBL is located at 66/1, Hansa Villa, Opp. South Indian Gymkhana, Bhaudaji Cross Road, Matunga (CR), Mumbai - 400 019. The Permanent Account Number of SSBL is AAICS2455A.

Brief description of the business SSBL in engaged in the business of Stock Broking and share trading. SSBL is a member of The Bombay Stock Exchange (BSE) and is registered with SEBI, as a Stock Broker. It is also registered with SEBI in Cash, F& O and Currency segments.



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3. Name Samruddhi Commodities Trading Limited Type of organization Closely held public company Corporate Information SCTL was incorporated on October 17, 2003. It received its

certificate for commencement of business on November 18, 2003. The Company Identification Number of SCTL is U51909MH2003PLC142749. The Registered Office of SCTL is located at 66/1, Hansa Villa, Bhaudaji Cross Road, Matunga (CR), Mumbai - 400 019. The Permanent Account Number of SCTL is AAHCS7729L.

Brief description of the business SCTL is registered with Multi Commodity Exchange of India Limited (MCX) as Trading cum Clearing Member with the Membership Code 12270. SCTL is also registered with National Commodity & Derivatives Exchange Limited, Mumbai (NCDEX) with the Membership No. NCDEX-CO-04-00183.


4. Name Samruddhi Equities and Securities Services Limited Type of organization Closely held public company Brief Corporate Information SESSL was originally incorporated in the name & style of ‘Broad-

Vision Investments Services Private Limited’ on March 7, 2001 under the Companies Act, 1956 in the State of Maharashtra. The name of the company was subsequently changed to ‘Broad-Vision Investments Services Limited’ and a fresh Certificate of Incorporation consequent on Change of Name was obtained from Registrar of Companies, Maharashtra on February 18, 2002. The name of the company was further changed to ‘Samruddhi Equities and Securities Services Limited’ for which fresh certificate from ROC dated July 06, 2005 was received. The Company Identification Number of SESSL is U67120MH2001PLC131117. The Registered Office of SESSL is located at 7, Om Krishna Kunj, M. G. Cross Road No. 3, Kandivali (West), Mumbai – 400 067. The Permanent Account Number of SESSL is AABCB6529P.

Brief description of the business SESSL is engaged in the business of corporate advisory services. Nature and Interest of the promoters Our Promoter directors Mr. Vipul Modi and Mrs. Leena Modi are

also promoter directors of this company


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5. Name Piyali Builders and Developers Private Limited Type of organization Private limited company Brief Corporate Information PBDPL was incorporated on March 7, 1994. The Company

Identification Number of PBDPL is U70101MH1994PTC076944. The Registered Office of PBDPL is situated at Chhapkhandwala House, 1st Floor, 47 Dr Simon F Road, Marine Lines, Mumbai – 400 002. The Permanent Account Number of PBDPL is AAACP3529J.

Brief description of the business PBDPL is formed for the purpose of carrying on building and development activities though it is presently not engaged in any business activity.


6. Name Rock Builders And Developers Private Limited Type of organization Private limited company Brief description of the business RBDPL is currently engaged in the business of investment and

trading in shares. Brief Corporate Information RBDPL was incorporated on May 24, 1995. The Company

Identification Number of RBDPL is U45200MH1995PTC088731. The Registered Office of RBDPL is located at Chhapkhandwala House, 1st Floor, 47 Dr Simon F Road, Marine Lines, Mumbai – 400 002. The Permanent Account Number of RBDPL is AAACR5632A.


7. Name Anish Properties Private Limited Type of organization Private limited company Brief Corporate Information APPL was incorporated on March 13, 1995. The Company

Identification Number of APPL is U70100MH1995PTC086403. The Registered Office of APPL is located at Chhapkhandwala House, 1st Floor, 47 Dr Simon F Road, Marine Lines, Mumbai – 400 002. The Permanent Account Number of APPL is AAACA6817A.

Brief description of the business APPL is currently engaged in real estate development activities. Nature and Interest of the promoters Our Promoter directors Mr. Vipul Modi and Mrs. Leena Modi are



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8. Name Ashwa Realty (India) Private Limited Type of organization Private limited company Brief Corporate Information ARPL was incorporated on February 27, 1996. The Company

Identification Number of ARPL is U70100MH1996PTC097661. The Registered Office of ARPL is located at Chhapkhandwala House, 1st Floor, 47 Dr Simon F Road, Marine Lines, Mumbai – 400 002. The Permanent Account Number of ARPL is AAACA7947F.

Brief description of the business ARPL is formed for the purpose of carrying on building and development activity


9. Name Jimeet Developers Private Limited Type of organization Private limited company Brief Corporate Information JDPL was incorporated on August 9, 1995. The Company

Identification Number of JDPL is U45200MH1995PTC091627. The Registered Office of JDPL is located at Chhapkhandwala House, 1st Floor, 47 Dr Simon F Road, Marine Lines, Mumbai – 400 002. The Permanent Account Number of JDPL is AAACJ2285K.

Brief description of the business JDPL is presently carrying on investment and related activities. Nature and Interest of the promoters Our Promoter directors Mr. Vipul Modi and Mrs. Leena Modi are


10. Name High Rise Realty Private Limited Type of organization Private limited company Brief Corporate Information HRRPL was incorporated on July 24, 1995. The Company

Identification Number of HRRPL is U45200MH1995PTC090939. The Registered Office of HRRPL is located at Chappkhanwala House, 47, Dr Simon Fernandes Road, Marine Lines, Mumbai – 400 002. The Permanent Account Number of HRRPL is AAACH2642G.

Brief description of the business HRRPL is currently in the business of investments and trading Nature and Interest of the promoters Our Promoter directors Mr. Vipul Modi and Mrs. Leena Modi are



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11. Name Bombay Exim Private Limited Type of organization Private limited company Brief Corporate Information BEPL was incorporated on September 29, 1989. The Company

Identification Number of BEPL is U51900MH1989PTC053704. The Registered Office of BEPL is located at Chhapkhanawala House, 1st Floor Dr Simon Fernandes Rd, Dhobi Talao, Mumbai - 400002. The Permanent Account Number of BEPL is AAACB1582D.

Brief description of the business BEPL is formed for the purpose of acting as traders in merchandise and other products.

Nature and Interest of the promoters Our Promoter directors Mr. Vipul Modi and Mrs. Leena Modi are also promoter directors of this company.

12. Name Galaxy Realty Private Limited Type of organization Private limited company Brief Corporate Information GRPL was incorporated on July 24, 1995. The Company

Identification Number of GRPL is U45200MH1995PTC090940. The Registered Office of GRPL is located at Chhapkhandwala House, 1st Floor, 47 Dr Simon F Road, Marine Lines, Mumbai – 400 002. The Permanent Account Number of GRPL is AAACG2196G.

Brief description of the business GRPL is formed for the purpose of carrying on building and development activities though it is currently not carrying on any business activity.


13. Name Saria Builders And Developers Private Limited Type of organization Private limited company Brief Corporate Information SBDPL was incorporated on March 16, 1995. The Company

Identification Number of SBDPL is U70100MH1995PTC086574. The Registered Office of SBDPL is located at Chhapkhandwala House, 1st Floor, 47 Dr Simon F Road, Marine Lines, Mumbai – 400 002. The Permanent Account Number of SBDPL is AABCS1250J.

Brief description of the business SBDPL is formed for the purpose of carrying on building and development activities though it is currently not carrying on any business activity.



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14. Name Jinal Fin-Vest Private Limited Type of organization Private limited company Brief Corporate Information JFPL was incorporated on June 18, 1996. The Company

Identification Number of JFPL is U65990MH1996PTC100294. The Registered Office of JFPL is located at Chhapkhandwala House, 1st Floor, 47 Dr Simon F Road, Marine Lines, Mumbai – 400 002. The Permanent Account Number of JFPL is AABCJ5582F.

Brief description of the business JFPL is currently engaged in the business of running a business centre and investment and general trading.


15. Name Niralee Properties Private Limited Type of organization Private limited company Brief Corporate Information NPPL was incorporated on April 7, 1993. The Company

Identification Number of NPPL is U45250MH1993PTC071509. The Registered Office of NPPL is located at Chhapkhandwala House, 1st Floor, 47 Dr Simon F Road, Marine Lines, Mumbai – 400 002. The Permanent Account Number of NPPL is AAACN1795J.

Brief description of the business NPPL is formed for the purpose of carrying on building and development activity and is currently earning rental income


16. Name Hansa Villa Realty Private Limited Type of organization Private limited company Brief Corporate Information HVRPL was incorporated on February 16, 1995. The Company

Identification Number of HVRPL is U70100MH1995PTC095038. The Registered Office of HVRPL is located at 66/1, Hansa Villa, Bhaudaji Cross Road, Matunga (CR), Mumbai - 400 019. The Permanent Account Number of HVRPL is AAACY0328E.

Brief description of the business HVRPL is currently engaged in the business of real estate and investing and trading in securities.

Nature and Interest of the promoters

Our Promoter director Mr. Vipul Modi is currently the promoter director of this company.

Other than those stated above, there are no other entities that are part of our Promoter Group. However, Mr. Vipul Modi holds more than 10% of the share capital of Five Elements Environment Ventures Private Limited and Organic Recycling Systems Private Limited. These Companies are not promoted by Mr. Vipul Modi nor is he a director in the aforementioned companies, and his interest in these Companies is only to the extent of his shareholding and is in the nature of strategic investment.


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Particulars of the nature and extent of the interest, if any, of every promoter, directors or group companies

1. Interest of the promoters in promotion of the issuer:

The aforementioned Promoters of the Company are interested to the extent of their shareholding and to the extent of Equity Shares that may be subscribed for and allotted to them, out of the present Issue in terms of this Letter of Offer and also to theextent of any dividend payable to them and other distributions in respect of the said Equity Shares in our Company. Further, our Promoters who are also the Directors of the Company may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board or a Committee thereof as well as to the extent of other remuneration, reimbursement of expenses, if any, payable to them. Further, our individual Promoters are also directors on the boards of certain Group Companies, and they may be deemed to be interested to the extent of the payments made by the Company, if any, to these Group Companies. For the payments that are made by the Company to certain Group Companies, please refer to the section entitled “Related Party Transactions” on page 105 of this Letter of Offer. Barring the broking agreement with the group companies for undertaking the transactions for trading in securities and derivatives, we have not entered into any contract, agreements or arrangements during the preceding two years from the date of this Letter of Offer in which the Promoters are directly or indirectly interested and no payments have been made to them in respect of the contracts, agreements or arrangements which are proposed to be made with them including the properties purchased by the Company other than in the normal course of business.

2. Interests of the Director in the Issuer:

Interest of the Directors in promotion of our Company:

All our directors may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board or a Committee thereof as well as to the extent of other remuneration, reimbursement of expenses, if any, payable to them.

Mr. Vipul Modi and Mrs. Leena Modi are also interested to the extent of their shareholding and to the extent of Equity Shares that may be subscribed for and allotted to them, out of the present Issue in terms of this Letter of Offer and also to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares in our Company. Our Company has entered into broking agreement with the group companies (where Mr. Vipul Modi and Mrs. Leena Modi are promoters/directors) for undertaking the transactions for trading in securities and derivatives. Our directors Mr. Vipul Modi and Mrs. Leena Modi are also directors on the boards of certain Group Companies, and they may be deemed to be interested to the extent of the payments made by the Company, if any, to these Group Companies, in respect of the aforesaid transactions. The details of the transactions with the related parties by our Company with the Promoter Group entities for the year ended March 31, 2009 and period ended December 31, 2009 are as follows:


Samruddhi Stock Brokers Ltd Purchase of shares 4.94 86.24

Samruddhi Stock Brokers Ltd Sale of shares 0.00 62.05

Samruddhi Finstock Ltd Profit from Derivatives trading - 2.46

Samruddhi Finstock Ltd Purchase of shares 7.43 -


None of our directors have any interest in any property acquired by us within two years of the date of filing this offer document with SEBI or proposed to be acquired by us.


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3. Interest of Group Companies in the Issuer:

Please refer to ‘Financial Information of Group Companies’, on page 120

4. Except as stated above our Directors/Promoters/ Group companies have no interest:

In any property acquired by us within two years of the date of filing this offer document with SEBI or proposed to be acquired by it

As a director or promoter in being a member of any firm or company or otherwise for services rendered by the director/promoter or by the firm or company, in connection with the promotion or formation of our Company

In any transaction in acquisition of land, construction of building and supply of machinery, etc

Payment or Benefit to the Promoter of our Company No amount or benefit or consideration for payment of giving of the benefit has been paid or given within the two years preceding the date of filing this offer document with SEBI and no such amount or benefit is intended to be paid or given to any Promoter or Promoter group.

DIVIDEND POLICY

The declaration and payment of dividends will be recommended by our Board of Directors and approved by our shareholders, at their discretion, and will depend on a number of factors, including but not limited to our earnings, capital requirements and overall financial position. We may choose to distribute dividends as and when we consider appropriate. Our Company has not paid any dividend in past five years.


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SECTION VI: FINANCIAL STATEMENTS

(A) Selected Consolidated Financial and Operating data – Not Applicable

(B) Financial Information of the issuer:

The Restated financial statements of Intellivate Capital Ventures Limited, prepared in accordance with Indian GAAP, as at and for the years ended March 31, 2009, 2008, 2007, 2006 and 2005 and as at and for the period ended December 31, 2009 are being presented in this Letter of Offer:


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AUDITORS’ REPORT

To,The Board of Directors Intellivate Capital Ventures Limited 66/1, Hansa Villa, Opp. South Indian Gymkhana, Bhaudaji Cross Road, Matunga (CR), Mumbai - 400 019

Dear Sirs,

Ref: FINANCIAL INFORMATION OF THE COMPANY

1. We have examined the financial information of Intellivate Capital Ventures Limited, as attached to this report and initialed by us for identification.

2. The said financial information has been prepared in accordance with the requirements of paragraph B(1) of Part II of Schedule II to the Companies Act, 1956 (the “Act"), the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, (the "Regulations") issued by the Securities and Exchange Board of India, ("SEBI") in pursuance to section 11 of the Securities and Exchange Board of India Act, 1992, and related amendments/clarifications; and in accordance with our engagement with company requesting us to carry out work in connection with the Offer Document being issued by the company in connection with its rights issue of Equity shares (referred to as "the issue"). The financial information has been prepared by the Company and approved by the Board of Directors of the Company.

A. Financial information as per audited financial statements

3. We have examined:

a) The attached "Summary Statement of Profits and Losses, as restated" of the Company for the financial years ended on March 31st of 2005, 2006, 2007, 2008 and 2009 and for the period ended December 31, 2009 enclosed in Annexure I; and

b) The attached "Summary Statement of Assets and liabilities, as restated" as at the said dates enclosed as Annexure II to this report, together referred to as 'Summary Statements'.

c) The Summary Statements have been extracted from the Financial Statements of the year ended on 31st March, 2005, 2006, 2007, 2008 and 2009 audited and examined by us and approved / adopted by the Board and members for the respective years. The financial statements of the Company for the period ended 31st December, 2009 have been approved by the Board of Directors of the Company and audited by us for the purpose of disclosure in the Offer Document being issued by the Company in connection with the Proposed Issue of Equity Shares on a Rights basis.

Based on our examination of these summary statements, we state that: a) The restated profits have been arrived at after making such adjustments and regrouping, which in our opinion are

appropriate in the years to which they relate, as shown in Annexure III to this report.


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b) The summary statements of the Company have been restated with retrospective effect to reflect the significant accounting policies being adopted by the company as at March 31, 2009 and December 31, 2009 as given in the Annexure IV to this report.

c) There were no qualifications or extra-ordinary items that need to be disclosed separately in the summary statements.

B. Other Financial Information

4. We have examined the following financial information relating to the Company proposed to be included in the Offer Document, as approved by the Board of Directors and annexed to this report:

a) Notes to audited Financial Statements for the year ended 31st March, 2009 (Annexure V-A) b) Notes to audited Financial Statements for the year ended 31st December, 2009 (Annexure V-B) c) Statement of Cash Flows (Annexure VI) d) Statement of Accounting Ratios (Annexure VII) e) Statement of Tax Shelter (Annexure VIII) f) Capitalization Statement (Annexure IX) g) Statement of Dividend Paid (Annexure X) h) Age-wise analysis of Debtors, As Restated (Annexure XI) i) Statement of Loans and Advances, As Restated (Annexure XII) j) Break up of Loans & Advances - As per Audited Accounts (Annexure XIII) k) Statement of details of Other Income (Annexure XIV) l) Statement of aggregate value of Quoted Investments (Annexure XV)

5. In our opinion, the financial information of the Company, attached to this report as mentioned in Paragraphs A and B above, read with respective significant accounting policies as given in Annexure IV to this report, and after making adjustments, rounding off figures in lacs and regrouping as considered appropriate, has been prepared in accordance with Part II of Schedule II of the Act and the Guidelines issued by SEBI.

6. This report should not in any way be construed as a re-issuance or re-dating of any of the previous audit reports issued by us nor should it be construed as a new opinion on any of the financial statements referred to therein.

7. This report is intended solely for your information and for inclusion in the Offer Document in connection with proposed rights issue of shares of the company and is not to be used, referred to or distributed for any other purpose without our prior written consent.

For J B Dudhela & CO. Chartered Accountants

J B Dudhela Proprietor Membership No. 035354

Place: Mumbai Date: 29/01/2010


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Statement of Profit and Losses, As Restated

Annexure I (Rupees in lacs)

For 9 months ended

For the year ended


Income Income from Operations 3.58 11.36 - - - - Income from Investments 4.66 0.93 - - - - Other Income 4.42 2.23 3.83 2.75 4.25 2.67

12.66 14.52 3.83 2.75 4.25 2.67

Expenditure Employee Cost 4.05 - - 0.08 0.08 0.20 Operation and Other expenses 2.86 13.68 1.01 1.85 2.79 1.62

6.91 13.68 1.01 1.93 2.87 1.82

Profit before depreciation and taxes 5.75 0.84 2.82 0.82 1.38 0.85

Depreciation - - 0.01 0.05 0.07 0.11

Profit before taxes 5.75 0.84 2.81 0.77 1.31 0.74

Provision for taxes - Current Income Tax (1.06) (0.15) (0.30) (0.09) (0.11) (0.06) - Fringe Benefit Tax - - - (0.02) - - - MAT Credit Entitlement - - 0.29 0.09 0.11 -

Profit before prior period items 4.69 0.69 2.80 0.75 1.31 0.68 Prior period adjustments - - 0.01 (0.01) - 0.01

Profit after Tax 4.69 0.69 2.81 0.74 1.31 0.69

Balance brought forward from previous year

(8.51) (9.19) (12.00) (12.74) (14.05) (14.74)

(3.83) (8.51) (9.19) (12.00) (12.74) (14.05) Less :- Appropriations - - - - - Balance Carried to Balance Sheet (3.83) (8.51) (9.19) (12.00) (12.74) (14.05)

Refer Annexure III - Notes on Adjustments made in Restated Financial Statements


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Statement of Assets and Liabilities, As Restated Annexure II

(Rupees in lacs) As at


Assets A. Fixed Assets Gross Block - - - 4.46 4.46 4.46 Less : Depreciation / Amortisation

- - - 4.20 4.15 4.09

Net Block - - - 0.26 0.31 0.37

B. Investments - - - - - -

C. Current Assets, Loans & Advances

Sundry Debtors 8.87 7.62 7.62 7.62 7.62 9.54 Cash & Bank Balance 172.26 174.62 55.74 0.63 27.37 20.44 Loans & Advances 11.02 3.55 1.55 53.43 26.13 29.62

Total Assets 192.15 185.79 64.91 61.94 61.43 59.97

Liabilities and Provisions

D. Current Liabilities and Provisions

Current Liabilities 0.88 0.25 0.10 0.22 0.50 0.45 Provisions 1.60 0.54 0.50 0.22 0.17 0.06

2.48 0.79 0.60 0.44 0.67 0.51

E. Net Worth Represented by: Shareholders' Funds: Share Capital 48.50 48.50 24.50 24.50 24.50 24.50 Reserves and Surplus 145.00 145.00 49.00 49.00 49.00 49.00

Less: Profit & Loss Debit bal (3.83) (8.51) (9.19) (12.00) (12.74) (14.04)

189.67 184.99 64.31 61.50 60.76 59.46 Total Liabilities 192.15 185.79 64.91 61.94 61.43 59.97

Refer Annexure III - Notes on Adjustments made in Restated Financial Statements


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Notes on Adjustments Made in Restated Financial Statements Annexure III

1. Regrouping

Financial Statements, which were elaborative, are summarized and regrouped in the restated summary statement for better investor’s perspective.

2. Tax Impact of Adjustment

There is no Major Impact on Taxes on Account of restatement of profitability and as such no such adjustment is made in the restated summary statement.

3. MAT Credit Entitlement

The Company has started recognizing MAT credit entitlement in its accounts from the financial year 2008-09 onwards in accordance with the Guidance note issued by the ICAI. Accordingly, the profits for the earlier financial years have been restated to account for MAT credit entitlement. A reconciliation of the actual and adjusted profits is given below:

(Rs. In lacs) PARTICULARS 31.12.2009 31.03.2009 31.03.2008 31.03.2007 31.03.2006 31.03.2005

Actual Profit after tax (as per audited accounts)

4.69 1.17 2.52 0.65 1.20 0.69

Adjustments for: MAT credit entitlement

- (0.48) 0.29 0.09 0.11 -

Adjusted Profit after tax 4.69 0.69 2.81 0.74 1.31 0.69


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Significant Accounting Policies Followed in the Preparation of Financial Statements for the year ended March 31, 2009 and 9 months ended December 31, 2009

Annexure IV

a) Basis of preparation of Financial statements

These financial statements have been prepared under the historical cost convention from the books of account maintained on an accrual basis which is in conformity with accounting principles generally accepted in India, relevant provisions of the Companies Act,1956 and the mandatory Accounting Standards as specified in the Companies (Accounting Standard) Rules, 2006, prescribed by the Central Government.

b) Use of estimates

The preparation of financial statements in conformity with GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as at the date of financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in the current and future periods.

c) Fixed Assets

Fixed assets are stated at historical cost of acquisition or construction less accumulated depreciation.

d) Depreciation

Depreciation is provided on written down value method at the rates and in the manner prescribed under Schedule XIV of the Companies, Act 1956.

e) Investments

Investments are classified as current or long term in accordance with Accounting Standards 13 on “Accounting for Investments”.

Long term Investments are carried at cost less provision for diminution in value considered to be other than temporary in nature, if any.

Trade investments are valued at lower cost or market value.

f) Revenue Recognition:

In appropriate circumstances, revenue (income) is recognized when it is earned and no significant uncertainty as to determination or realisation exists.

Income from Consultancy services and Commission is recognized on proportionate completion method based on agreed terms and contract.

Interest, as and when applicable on refunds from statutory authorities is recognized when such interest is determinable, based on completed proceedings. Other interest income is recognized using time proportion method, based on interest rate implicit in the transactions.

Profit on sale of investments is recognized on completion of transactions.

g) Expenses

Material known liabilities are provided for on the basis of available information / estimates.

h) Deferred Revenue Expenditure

Deferred revenue expenditure is written off entirely in the year in which it is incurred as per the provision of AS-26 on “Intangible Assets”.


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i) Taxes on Income

Income tax is accounted for in accordance with Accounting Standard 22 on Accounting for Taxes on income. Tax comprises current Tax and deferred Tax.

Provision for taxation is made in accordance with the provisions of Income Tax Act, 1961. Deferred tax assets (if any) are recognized only if there is reasonable certainty that they will be realized.

Minimum Alternate Tax (MAT) credit is recognized only when and to the extent there is convincing evidence that company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India, the said assets is created by the way of a credit to the Profit and Loss account.


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Notes to Audited Financial Statements for year ended March 31, 2009 Annexure V-A

1. Contingent liabilities not provided for Current Year Rs. Nil (Previous Year Rs. 1.75 lacs)

2. Sundry Debtors considered good in schedule 4 include Rs.7,14,060/- for which the company initiated legal action; since the award of arbitrator has been appealed by other party, no accounting effect has been given to said award in the accounts

3. Managerial remuneration under section 198 of the Companies Act, 1956 Particulars 31.03.2009 31.03.2008

Salaries Rs. Nil Rs. Nil

House Rent Allowance Rs. Nil Rs. Nil

Contribution to provident fund Rs. Nil Rs. Nil

Other Allowance Rs. Nil Rs. Nil

4. Payment to Auditors Particulars 31.03.2009 31.03.2008

Audit Fees Rs. 11,030 Rs. 5,618

For other services Rs. 8,824 Rs. Nil

5. Segment Information The Company is primarily engaged in the business of 'financial services' and therefore, segment reporting, as required under Accounting Standard - 17, is not applicable.


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6. Related party disclosures under Accounting Standard - 18

List of Related Parties where Control exists:

Samruddhi Finstock Ltd

Samruddhi Stock Brokers Ltd

Samruddhi Commodities Trading Ltd

Samruddhi Equities & Securities Services Ltd

Bombay Exim Private Limited

Jinal Finvest Private Limited

Jimeet Developers Private Limited

Ashwa Realty (India) Private Limited

Galaxy Realty Private Limited

Niralee Properties Private Limited

High Rise Realty Private Limited

Anish Properties Private Limited

Saria Builders & Developers Private Limited

Piyali Builders & developers Private Limited

Rock Builders & Developers Private Limited

Transactions with Related Parties during the year: (Amount in Rs.)


Samruddhi Stock Brokers Ltd Purchase of shares 8,623,996 Nil

Samruddhi Stock Brokers Ltd Sale of shares 6,204,948 Nil

Samruddhi Fin stock Ltd Profit from derivatives trading 245,777 Nil


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Outstanding Receivable / Payable as on: (Amount in Rs.) Name of Party 31.03.2009 31.03.2008

Samruddhi Stock Brokers Ltd Nil Nil

Samruddhi Finstock Ltd Nil Nil

7. Earnings Per Share Particulars 31.3.2009 31.3.2008 Net profit for the year as per profit and loss account considered as numerator for calculating earnings per share [Rupees]

117,595 251,183

Weighted average number of equity share [Nos.] 249,602 245,000

Nominal value per share 10 10

Earnings per share – Basic and diluted [Rupees] 0.47 1.02

8. Para 3, 4C & 4D of Part II of Schedule VI to the Companies Act, 1956 are not applicable to the company.

9. Change in Capital Structure The Company increased its authorized share capital from Rs. 25 lacs consisting of 2.50 lacs equity shares of Rs. 10/- each

to Rs. 1500 lacs consisting of 150 lacs equity shares of Rs. 10/- each vide special resolution passed on 14th October, 2008.

10. Preferential Allotment As per approval of shareholders in the Extra Ordinary General Meeting held on 20th March, 2009, the Company issued 240,000 equity shares of Rs. 10/- each at a price of Rs. 50/- on a preferential basis to persons other than promoters on 25th March, 2009 in accordance with SEBI (Disclosure and Investor Protection) Guidelines, 2000. Accordingly paid up share capital of the company stands increased to Rs. 48.50 lacs. The share issue proceeds of Rs. 120 lacs have been temporarily parked in fixed deposits.

11. Change Of Name The name of the Company was changed from "K. B. STEEL LIMITED" to "INTELLIVATE CAPITAL VENTURES LIMITED" pursuant to special resolution passed by the members on October 14, 2008 through Postal Ballot. Accordingly, the ROC has issued Fresh Certificate of Incorporation Consequent upon Change of Name dated December 10, 2008.

12. Change Of Main Objects Clause The Company has altered its Main Objects clause according to the change in the business of the company vide special resolution passed by the Members on October 14, 2008 through Postal Ballot and has obtained certificate to this effect from the Registrar of Companies, Maharashtra on December 10, 2008.

13. Change in line of business The Company had no activities relating to the previous line of business for substantial period of time prior to change of name. Therefore, the above figures pertain to the new line of business.


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103

14. Retirement Benefits No provision for Retirements Benefits has been made since there was no employee during the year.

15. Provision for Taxes The company has made provision for current tax as per the provisions of Income Tax Act 1961. Minimum Alternate Tax credit entitlement of prior periods amounting to Rs. 48,468/- is recognized during the year, as per the provisions of Minimum Alternate Tax under section 115JB of the Income Tax Act, 1961.

No provision for Fringe Benefit Tax has been made since there is no employee employed during the year.

16. Deferred Tax Assets / Liabilities Since there are no timing differences between taxable income and accounting income capable of being reversal in subsequent periods, Deferred Tax Asset / liability has not been created.

In the opinion of Management, the current Assets, Loans and Advances are approximately of the value as stated if realised in the ordinary course of business.

The figures of the previous year have been regrouped, rearranged and reclassified wherever necessary.


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104

Notes to Audited Financial Statements for 9 months ended 31st December, 2009

Annexure V-B

1. Contingent liabilities not provided for Current Period Rs. NIL (Previous Year Rs. NIL)

2. Sundry Debtors considered good in schedule 4 include Rs.7,14,060/- for which the company initiated legal action; since the award of arbitrator has been appealed by other party, no accounting effect has been given to said award in the accounts

3. Managerial remuneration under section 198 of the Companies Act, 1956 Particulars 31.12.2009 31.03.2009

Salaries Rs. Nil Rs. Nil

House Rent Allowance Rs. Nil Rs. Nil

Contribution to provident fund Rs. Nil Rs. Nil

Other Allowance Rs. Nil Rs. Nil

4. Payment to Auditors Particulars 31.12.2009 31.03.2009

Audit Fees Rs. 8,272 Rs. 11,030

For other services Rs. 6,618 Rs. 8,824

5. Segment Information The Company is primarily engaged in the business of 'financial services' and therefore, segment reporting, as required under Accounting Standard - 17, is not applicable.


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105

6. Related party disclosures under Accounting Standard - 18

List of Related Parties where Control exists:

Samruddhi Finstock Ltd

Samruddhi Stock Brokers Ltd

Samruddhi Commodities Trading Ltd

Samruddhi Equities & Securities Services Ltd

Bombay Exim Pvt Ltd

Jinal Finvest Pvt Ltd

Jimeet Developers Pvt Ltd

Ashwa Realty (India) Pvt Ltd

Galaxy Realty Pvt Ltd

Niralee Properties Pvt Ltd

High Rise Realty Pvt Ltd

Anish Properties Pvt Ltd

Saria Builders & Developers Pvt Ltd

Piyali Builders & developers Pvt Ltd

Rock Builders & Developers Pvt Ltd

Transactions with Related Parties during the year: (Amount in Rs.)


Samruddhi Stock Brokers Ltd Purchase of shares 4,94,048 8,623,996

Samruddhi Stock Brokers Ltd Sale of shares 45 6,204,948

Samruddhi Finstock Ltd Profit from Derivatives trading - 245,777

Samruddhi Finstock Ltd Purchase of shares 742,860 -

Samruddhi Finstock Ltd Sale of shares 1,703,366 -


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106

Outstanding Receivable / Payable as on: (Amount in Rs.) Name of Party 31.12.2009 31.03.2009

Samruddhi Stock Brokers Ltd Nil Nil Samruddhi Finstock Ltd Nil Nil

7. Earnings Per Share Particulars 31.12.2009 31.3.2009 Net profit for the year / period as per profit and loss account considered as numerator for calculating earnings per share [Rupees]

468,545 117,595

Weighted average number of equity share [Nos.] 485,000 249,602 Nominal value per share [Rupees] 10 10 Earnings per share – Basic and diluted [Rupees] 0.97 0.47

8. Para 3, 4C & 4D of Part II of Schedule VI to the Companies Act, 1956 are not applicable to the company.

9. Proposed Rights Issue The Board of Directors of the Company at its meeting held on September 26, 2009 has decided to make an Issue of Equity Shares on a rights basis to the existing equity shareholders in the ratio of 5 (Five) equity shares for every 1 (One) fully paid up equity share held in the Company, at a price of Rs. 50/- per equity share (Face Value Rs. 10/- & Premium : Rs. 40/- per equity share), subject to necessary sanctions, approvals and applicable provisions of law.

10. Retirement Benefits No provision for Retirements Benefits has been made since no employee is eligible for the same.

11. Provision for Taxes The company has made provision for current tax as per the provisions of Income Tax Act, 1961.

12. Deferred Tax Assets / Liabilities Since there are no timing differences between taxable income and accounting income capable of being reversal in subsequent periods, Deferred Tax Asset / liability has not been created.

13. In the opinion of Management, the current Assets, Loans and Advances are approximately of the value as stated if realised in the ordinary course of business.

14. The figures for the current period cover only nine months of the financial year; hence are not comparable to the figures of the previous year.


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107

Statement of Cash Flows, As Restated

Annexure-VI

(Rs. In Lacs)

For 9 months ended

For the year ended on

December March March March March March

31, 2009 31, 2009 31, 2008 31, 2007 31, 2006 31, 2005

1 CASH FLOW FROM OPERATING ACTIVITIES

Net Profit / (Loss) before taxes 5.75 0.84 2.80 0.77 1.30 0.74 Adjustment for:

Depreciation - - 0.01 0.05 0.07 0.11 Interest income (4.42) (2.23) (2.98) (0.32) - (0.01) (Profit) / loss on sale of fixed assets - - - - - (0.14) Operating Profit before working

capital changes 1.33 (1.39) (0.17) 0.50 1.37 0.70

Changes in Working Capital: Change in Trade & Other

Receivables (4.67) (0.81) 52.86 (27.20) 5.75 18.48

Change in Trade Payables 0.62 0.15 (0.12) (0.28) 0.05 (0.04) Cash generated from operations (2.72) (2.05) 52.57 (26.98) 7.17 19.14 Taxes paid (0.93) (1.30) (0.68) (0.01) (0.24) 0.06 Cash provided by operating

activities before prior period adjustment

(3.64) (3.35) 51.89 (26.99) 6.93 19.20

Prior period Adjustment - - (0.01) (0.07) - (0.03)

Net Cash generated / (used) by operating activities

(3.64) (3.35) 51.88 (27.06) 6.93 19.17

2 CASH FLOW FROM

INVESTING ACTIVITIES

Sale of fixed assets - - 0.25 - - 0.27

Interest Received 1.29 2.23 2.98 0.32 - 0.01


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108

Net Cash Generated / (used) in investing activities

1.29 2.23 3.23 0.32 - 0.28

3 CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of shares - 120.00 - - - -

Net Cash Generated / (used) in financing activities

- 120.00 - - - -

Net increase / (decrease) in Cash and Cash equivalents

(2.36) 118.88 55.11 (26.74) 6.93 19.45

Add: Cash and cash equivalents at the beginning of the year

174.62 55.74 0.63 27.37 20.44 0.99

Cash and cash equivalents at the end of year

172.26 174.62 55.74 0.63 27.37 20.44

Note: Figures in brackets represent the outflow of cash.


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109

Statement of Accounting Ratios

Annexure VII

(Rupees in lacs except where stated)

For 9 monthsended

For the year ended on


Earnings per share (Rupees) 0.97 0.28 1.15 0.30 0.53 0.28

Net Assets value per share (Rupees) 39.11 38.14 26.25 25.10 24.80 24.27

Return on Net Worth (%) 2.47 0.37 4.37 1.20 2.16 1.16

Net profit / (loss) attributable to equity Shareholders

4.69 0.69 2.81 0.74 1.31 0.69

Tangible Net Worth 189.67 184.99 64.31 61.5 60.76 59.46

Weighted average number of equity shares in the period (in Nos.)

4.85 2.49 2.45 2.45 2.45 2.45

Notes: 1. Brackets indicate negative figures.

2. Weighted average no. of shares has been calculated on time basis

3. Formulas for calculating Ratios:

(i) Earnings Per share (Rs.) = Net profit attributable to equity share holders ____________________________________________________________________________________________________________________________________________________________________________________________________

Weighted average number of equity shares outstanding during the year / period

(ii) Net asset value per share (Rs.) = Net worth excluding revaluation reserves at the end of the year / period ______________________________________________________________________________________________________________________________________________________________________________________________

Number of equity shares outstanding at the end of the year / period

(iii) Return on Net Worth (%) = Net profit attributable to equity shareholders ___________ __________________________________________________________________________________________________________________________________________________________________________________

Net worth excluding revaluation reserves at the end of the year / period


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110

4. Restated net profit, as appearing in the restated Statement of profits and losses (Annexure I) and net worth as appearing inthe statement of restated assets and liabilities (Annexure II), has been considered for the purpose of computing the above ratios. These ratios are computed on the basis of the restated financial information of the issuer Company.

5. Earnings per share calculations are done in accordance with Accounting Standard-20 "Earning per share" issued by the Institute of Chartered Accountants of India.

6. Calculation of ratios post issue has not been considered.


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111

Statement of Tax Shelter

Annexure VIII

(Amount in Rupees)

Particulars 31.12.2009 31.03.2009 31.03.2008 31.03.2007 31.03.2006 31.03.2005 Tax Rate (including Surcharge & Cess) 0.3090 0.3090 0.3090 0.3366 0.3366 0.3659

Net Profit/(Loss) before Tax as per Profit & Loss A/c 574,545 84,109 280,221 76,890 130,461 73,865

Tax at Notional Rate 177,534 25,990 86,588 25,881 43,913 27,027

Permanent Differences (A) - 1,095,000 - - - -Timing Differences (B) Difference in Book Depreciation & Depreciation under Income Tax Act 1961 - - 882 (199) 420 (91)

Others (Capital gains considered separately) (C) (466,458) (92,835) (484) - - -

Net adjustments (A+B+C) (466,458) 1,002,165 398 (199) 420 (91)

Tax Savings Thereon (144,136) 309,669 123 (67) 141 (33)

Taxable Income (Other than Capital Gains) 108,087 1,086,274 280,619 76,691 130,881 73,774 Brought forward loss and unabsorbed depreciation adjusted - 1,086,274 280,619 76,691 130,881 73,774 Taxable Income after set off of losses 108,087 - - - - -Tax on Income (Other than Capital Gains) 33,399 - - - - -

Tax on Capital Gains 72,068 14,345 - - - -Total Taxation 105,467 14,345 - - - - MAT tax u/s 115JB - - 28,863 8,627 10,978 5,792

Note: The statement tax shelter is based on Income Tax Returns filed by the Company with Income Tax Authorities, except for the period ended on December 31, 2009, and not based on restated profit and loss account as per Annexure –I.


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112

Statement of Capitalization

Annexure IX

(Rupees in lacs)

Particulars Pre issue as at Post issue

March 31, 2009 December 31, 2009

A) Debts

a) Short - Term Debts - - -

b) Long-Term Debt - - -

Total Debts (a+b) (A) - - -

B) Shareholders' Funds (Equity)

a) Equity Share Capital 48.50 48.50 291.00

b) Reserves and Surplus

Less: Profit & Loss Debit balance

145.00 145.00

(3.83)

1,115.00

(3.83)(8.51)

Total Share holding funds (B) 184.99 189.67 1,402.17

Long Term Debts / Equity (A/B) Not Applicable Not Applicable Not Applicable


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113

Statement of Dividend Paid

Annexure X

(Rupees in lacs)

Particulars

For 9 months ended

For the year ended

December

31, 2009

March

31, 2009

March

31, 2008

March

31, 2007

March

31, 2006

March

31, 2005

Face Value of Equity Shares

(Rs. Per Share)

Rs.10 Rs.10 Rs.10 Rs.10 Rs.10 Rs.10

Interim Dividend on Equity Shares

NIL NIL NIL NIL NIL NIL

Final Dividend on Equity Shares

NotApplicable

NIL NIL NIL NIL NIL

Total Dividend on Equity Shares

NIL NIL NIL NIL NIL NIL

Dividend Rate NIL NIL NIL NIL NIL NIL

Dividend Tax NIL NIL NIL NIL NIL NIL


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114

Age-wise analysis of Debtors, As Restated

Annexure XI

(Rupees in lacs)

Age wise Break-up

As at

December

31, 2009

March

31, 2009

March

31, 2008

March

31, 2007

March

31, 2006

March

31, 2005

Debt exceeding six months 7.62 7.62 7.62 7.62 7.62 9.31

Other Debts 1.25 - - - - 0.23

Total 8.87 7.62 7.62 7.62 7.62 9.54


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115

Statement of Loans and Advances, As Restated

Annexure XII

(Rupees in lacs)

Particulars

As at

December

31, 2009

March

31, 2009

March

31, 2008

March

31, 2007

March

31, 2006

March

31, 2005

Loans and Advances

- Promoter - - - - - -

- Directors of Company - - - - - -

- Group Companies - - - - - -

-Subsidiary Company Not Applicable

NotApplicable

NotApplicable

NotApplicable

NotApplicable

NotApplicable

- Others 11.02 3.55 1.55 53.43 26.13 29.62

Total 11.02 3.55 1.55 53.43 26.13 29.62


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116

Break up of Loans & Advances - As per Audited Accounts Annexure XIII

(Rs. In lacs)

PARTICULARS 31.12.2009 31.03.2009 31.03.2008 31.03.2007 31.03.2006 31.03.2005

Advance payment of taxes 3.16 2.24 1.05 0.37 0.37 0.13

MAT Credit Entitlement 0.48 0.48 - - - -

Amount recoverable in cash or in kind (Deposits) - 0.81 - 0.05 0.05 0.27

Accrued interest on FD 3.95 - - - - -

Advance Right Issue expenses 3.42 - - - - -

MAS Financial Services Limited - - - - - 15.18

Jay Chloro chem - - - - - 5.24

Novena Chemicals Private Limited - - - - 3.79 8.79

Nirav Industries - - - - 21.81 -

Naresh Steel Industries Private Limited - - - 52.80 - -

TOTAL * 11.02 3.54 1.05 53.23 26.02 29.62

* The difference between the amounts as stated above and the amount as given in the restated accounts is due MAT adjustment made in the restated accounts.


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117

Statement of details of Other Income (where such income exceeds 20% of Net Profit before Tax)

Annexure XIV

(Rs. In lacs) Particulars 31.12.2009 31.03.2009 31.03.2008 31.03.2007 31.03.2006 31.03.2005

Interest on I. T. Refund - 0.01 - 0.01 - 0.01

Interest on Fixed Deposits 4.42 2.22 2.98 0.32 -

Commission income - - 0.85 2.39 4.25 2.51

Miscellaneous income - - - 0.04 - 0.01

Profit on sale of assets - - - - - 0.14

Total Other Income 4.42 2.23 3.83 2.76 4.25 2.67

The above income has arisen out of normal business activities and is recurring in nature.


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118

Statement of aggregate value of Quoted Investments

Annexure XV

(Amount in Rs.)

Particulars 31.12.2009 31.03.2009 31.03.2008 31.03.2007 31.03.2006 31.03.2005

2 Fully Paid up Equity Shares of Rs. 10/- each of Sparsh BPO Services Ltd

Book Value - 283 - - - -

Market Value (Rs. 38/- per share as on 31.03.3009)

- 76 - - - -

Note on non-provision of bad debts for sundry debtors (Debt exceeding six months) as given in Annexure XI

Sundry Debtors for Rs. 7.62 lacs includes two debtors for Rs. 7.14 lacs and Rs. 0.48 lakhs.

The debtor for Rs. 7.14 lakhs is Department of Telecommunication, Marathwada area, Nanded, Maharashtra. Our Company had initiated arbitration proceedings against the said debtor. The arbitral award was in our favour. The decision of the arbitrator was thereafter challenged by the aforesaid debtor and decision of the Court is pending. Our Company has thus not provided for any doubtful debt since we expect that the decision will be in our favour and will be recovered and is hence considered good.

As regards the balance of about Rs. 0.48 lakhs, the same is recoverable from the Department of Telecommunication, Mumbai. This amount is in the nature of Earnest Money Deposit (EMD) for performance guarantee given to the department at the time of obtaining contract. However, since our Company had a dispute with Department of Telecommunication, Nanded, the Mumbai division withheld the refund of the said EMD. The said department has not paid money to us pending the outcome of the litigation as said above. Since we are positive of outcome of the above litigation in our favour, we consider the debt as good and have therefore not provided for this debtor as well.


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119

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 31ST DECEMBER, 2009

(Rs. In lacs) SR. PARTICULARS UNAUDITED AUDITED NO. QUARTER ENDED YEAR TO DATE YEAR ENDED

31.12.2009 31.12.2008 31.12.2009 31.12.2008 31.03.2009 1 Net Income from Sales / Income from Operations 1.68 0.50 3.58 0.50 12.29 2 Other Operating Income 2.39 0.42 9.08 2.27 2.23 3 Total Income (1+2) 4.07 0.92 12.66 2.77 14.52 4 Expenditure Employees Cost 2.10 - 4.05 - - Depreciation - - - - - Other Expenditure 0.83 0.33 2.86 0.69 13.68

Total 2.93 0.33 6.91 0.69 13.68 5

Profit / (loss) from Operations before Other Income, Interest and Exceptional Items 1.14 0.59 5.75 2.08 0.84

6 Other Income - - - - - 7 Interest - - - - - 8 Exceptional Items - - - - -

9Profit / (loss) from Ordinary activities before Tax (5-6-7-8) 1.14 0.59 5.75 2.08 0.84

10 Tax Expense Current Tax 0.32 0.07 1.06 0.07 0.15 MAT Credit Entitlement - - - - (0.48)

11 Net Profit / (loss) from Ordinary activities after Tax (9-10) 0.82 0.52 4.69 2.01 1.17

12 Extraordinary Items (net of tax expense) - - - - - 13 Net Profit / (loss) for the period (11-12) 0.82 0.52 4.69 2.01 1.17

14 Paid-up Equity Share Capital (Face Value Rs. 10 per share) 48.50 24.50 48.50 24.50 48.50

15 Reserves excluding Revaluation Reserves as per Balance Sheet of previous accounting year - - - - 136.49

16 Basic and Diluted Earnings Per Share (Rs.) 0.17 0.21 0.97 0.82 0.47 17 Public Shareholding Number of Shares 305,950 65,950 305,950 65,950 305,950 Percentage of Shareholding 63.08% 26.92% 63.08% 26.92% 63.08%

18 Promoters and promoter group Shareholding a) Pledged / Encumbered

- Number of shares - - - - - - Percentage of shares (as a % of the total

shareholding of promoter and promoter group) - - - - -

- Percentage of shares (as a % of the total share capital of the company) - - - - -


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120

b) Non-encumbered - Number of shares 179,050 - 179,050 - 179,050

- Percentage of shares (as a % of the total shareholding of promoter and promoter group) 100% - 100% - 100%

- Percentage of shares (as a % of the total share capital of the company) 36.92% - 36.92% - 36.92%

NOTES :

1 The above results have been approved by the Board of Directors at its meeting held on January 29, 2010 and shall be subjected to limited review by the Statutory Auditors of the Company in terms of Clause 41 of the Listing Agreement.

2 The Company had no activities relating to the previous line of business for substantial period of time prior to change of object &/or

name. Therefore, the above figures pertain to the new line of business.

3 The Company is operating in only one segment i.e. 'financial services'.

4 Previous period / quarter figures have been regrouped / rearranged, wherever necessary.

5 No investor complaints were received during the quarter under review. There were no investor complaints outstanding at the beginning and end of the quarter.

(C) FINANCIAL INFORMATION OF GROUP COMPANIES

There are 16 group companies. All these companies are unlisted. On the basis of turnover (total income as certified by the respective companies Statutory Auditors for the year ended 2008 - 2009) the following are the five largest group companies:

1. Samruddhi Finstock Limited 2. Samruddhi Stock Brokers Limited 3. Samruddhi Commodities Trading Limited 4. Samruddhi Equities And Securities Services Limited 5. Jinal Fin-vest Private Limited


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121

The details of each Indian group companies mentioned above have been described below in the same order :

1. Samruddhi Finstock Limited

Date of incorporation March 29, 1995 as a private limited company. Subsequently, the word ‘Private’ was deleted and name of the company was changed to the present name and fresh certificate of incorporation consequent to change of name was obtained from Registrar of Companies, Gujarat dated April 15, 2002.

Nature of activities SFL is engaged in the business of share trading and stock broking. SFL is a member of National Stock Exchange of India Limited, Mumbai (NSE) and registered with SEBI as a Stock Broker. It is also registered with SEBI in Cash, F&O and Currency segments and as a self clearing member.

(Rs. In lakhs) 31st March 2009 31st March 2008 31st March 2007

Equity Capital 30.00 30.00 30.00 Reserves (excluding revaluation reserve) 1 205.44 194.15 169.00

Sales (total income) 135.39 337.64 168.18 Profit after tax (transferred to P&L a/c)

11.76 24.92 36.30

Earnings per share (Rs. per share) 3.92 8.31 12.10 Net Asset Value (Rs. per share) (face value Rs.10/- per share)

78.48 74.72 66.33

1 Net of miscellaneous expenditure not written off

Note: As on March 31, 2007, SFL had Preference shares as a part of the paid-up capital, which were redeemed during the year ended March 31, 2008.

Share Price Performance

SFL is not listed on any stock exchange in India or abroad

Information regarding adverse factors

SFL is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 nor is it under winding up.

SFL has not made loss in the immediately preceding year. Barring the cases as mentioned in Section ‘Legal and Other Information’ on page 134, there are no litigations pending by or against SFL.

Save for a few instances of imposition of penalty by stock exchanges on our group companies engaged in stock broking, for certain lapses / infringement etc., no major action or penalty including suspension of trading has been imposed on SFL by SEBI or any other stock exchange or any other authority in India. There are no defaults in meeting any statutory/bank/institution dues by SFL. Further, no proceedings have been initiated for economic offences against SFL.


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122

2. Samruddhi Stock Brokers Limited

Date of incorporation May 10, 2004 Nature of activities SSBL in engaged in the business of stock broking and share trading. SSBL is

a member of The Bombay Stock Exchange (BSE) and is registered with SEBI, as a Stock Broker. It is also registered with SEBI in Cash, F& O and Currency segments.

(Rs. In lakhs)31st March 2009 31st March 2008 31st March 2007


Sales (total income) 68.24 220.81 143.60 Profit after tax (transferred to P&L a/c)

5.25 104.63 28.10

Earnings per share 2 (Rs. per share)

10.50 209.26 56.20

Net Asset Value1

(Rs. per share) 320.56 309.92 100.50

1 Net of miscellaneous expenditure not written off. Also share premium received on the issue of preference shares has not been included in Reserves above. 2 The Company has issued preference shares, however the aforesaid computation are only with reference to Equity shares, i.e. 50000 (fifty thousand) equity shares of Rs.10/- each

Note: Details of Preference Shares 2,50,000 Redeemable Preference Shares of Rs.10/- each fully paid-up.


SSBL is not listed on any stock exchange in India or abroad.


SSBL is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 nor is it under winding up.

SSBL has not made loss in the immediately preceding year. There are no litigations pending by or against SSBL.

Save for a few instances of imposition of penalty by stock exchanges on our group companies engaged in stock broking, for certain lapses / infringement etc., no major action or penalty of any kind including suspension of trading has been imposed on SSBL by SEBI or any other stock exchange or any other authority in India. There are no defaults in meeting any statutory/bank/institution dues by SSBL. Further, no proceedings have been initiated for economic offences against SSBL.


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3. Samruddhi Commodities Trading Limited

Date of incorporation October 17, 2003 Nature of activities SCTL is registered with Multi Commodity Exchange of India Limited (MCX)

as Trading cum Clearing Member with the Membership Code 12270. SCTL is also registered with National Commodity & Derivatives Exchange Limited, Mumbai (NCDEX) with the Membership No. NCDEX-CO-04-00183.



Sales 23.97 28.16 23.31 Profit after tax (transferred to P&L a/c)

1.68 0.62 1.74

Earnings per share 2 (Rs. per share)

3.36 1.25 3.48

Net Asset Value1

(Rs. per share) (face value Rs.10/-)

20.30 15.72 13.24

1 Net of miscellaneous expenditure not written off. Also share premium received on the issue of preference shares has not been included in Reserves above. 2 The Company has issued preference shares at premium, however the aforesaid computation are only with reference to Equity shares, i.e. 50000 (fifty thousand) equity shares of Rs.10/- each. Details of Preference shares issued: 50,000 Preference Shares of Rs10/- each fully paid 10,000 OCR Preference Shares of Rs.10/-each fully paid


SCTL is not listed on any stock exchange in India or abroad.


SCTL is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 nor is it under winding up. SCTL has not made loss in the immediately preceding year. There are no litigations pending by or against SCTL.

No penalty of any kind including suspension of trading has been imposed on SCTL by SEBI or any other stock exchange or any other authority in India. There are no defaults in meeting any statutory/bank/institution dues by SCTL. Further, no proceedings have been initiated for economic offences against SCTL.


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4. Samruddhi Equities and Securities Services Limited

Date of incorporation SESSL was originally incorporated in the name & style of ‘Broad-Vision Investments Services Private Limited’ on March 7, 2001 under the Companies Act, 1956 in the State of Maharashtra. The name of the company was subsequently changed to ‘Broad-Vision Investments Services Limited’ and a fresh Certificate of Incorporation consequent on Change of Name was obtained from Registrar of Companies, Maharashtra on February 18, 2002. The name of the company was further changed to ‘Samruddhi Equities and Securities Services Limited’ for which fresh certificate from ROC dated July 06, 2005 was received.

Nature of activities SESSL is engaged in the business of corporate advisory services.



Sales (Total Income) 62.72 23.23 33.69 Profit after tax 2.24 6.45 10.08 Earnings per share (Rs. per share) 4.48 12.90 20.16 Net Asset Value (Rs. per share) (face value Rs10/- per share)

53.36 48.86 35.92



SESSL is not listed on any stock exchange in India or abroad.


SESSL is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 nor is it under winding up. SESSL has not made loss in the immediately preceding year. There are no litigations pending by or against SESSL.

No penalty of any kind including suspension of trading has been imposed on SESSL by SEBI or any other stock exchange or any other authority in India. There are no defaults in meeting any statutory/bank/institution dues by SESSL. Further, no proceedings have been initiated for economic offences against SESSL.

Related Party Transactions as per the financial statements

For the details please refer chapter titled “Financial Information of the Issuer” beginning on page 92 of this raft Letter of Offer.


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Common Pursuits

Samruddhi Equities and Securities Services Limited, our Promoter Group company, is engaged in financial advisory services, i.e., in business similar to that of our Company.

The Promoters have confirmed that it is their intention to conduct all future business in financial advisory services through our Company only. However in case Samruddhi Equities and Securities Services Limited or any other group entity undertakes financial advisory services in future, then there will be common pursuit between such entities and us.

5. Jinal Fin-vest Private Limited

Date of incorporation June 18, 1996. Nature of activities JFPL is currently engaged in the business of running a business centre and

investment and general trading.


Equity Capital 0.60 0.60 0.60 Reserves (excluding revaluation reserve) 1(Rs. per share)

13.03 9.60 8.11

Net Asset Value (Rs. per share)(Face Value Rs 100/- per share)

2271.67 1700.00 1451.67


Note: JFPL has also issued 400 Redeemable Preference shares of Rs.100/- each, which forms part of the paid up capital of JFPL


JFPL is not listed on any stock exchange in India or abroad.


JFPL is not a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 nor is it under winding up. JFPL has not loss in the immediately preceding year. There are no litigations pending by or against JFPL.

No penalty of any kind including suspension of trading has been imposed on JFPL by SEBI or any other stock exchange or any other authority in India. There are no defaults in meeting any statutory/bank/institution dues by JFPL. Further, no proceedings have been initiated for economic offences against JFPL.

Related Party Transactions as per the financial statements

For the details please refer chapter titled “Financial Information of the Issuer” beginning on page 92 of this Letter of Offer.

Common Pursuits

There are no common pursuits between JFPL and our Company.

As per audited accounts for the year ended March 31, 2009, none of the group companies is a sick industrial company or is under winding up or has negative net worth. Financial data for each group entity has been derived from its financial statements prepared in accordance with Indian GAAP


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Our Promoters have confirmed that there are no group companies which are or had remained defunct and for which application was made to the Registrar of Companies for striking off the name of the company, during the five years preceding the date of filing this offer document with the Board.

Ventures from which Promoters have disassociated themselves

1. The Promoters, Mr. Vipul Modi and Mrs. Leena Modi have disassociated themselves from a company by the name Vvalue4u Wealth Creators Private Limited as follows:

Name of Promoter Appointment Resignation

Mr. Vipul Modi 13.05.08 01.01.09 Mrs. Leena Modi 13.05.08 01.01.09

Reasons for Disassociation:

The Company was co-promoted by them. However, due to personal reasons they sold their entire shareholding in the Vvalue4u Wealth Creators Private Limited to other co-promoters. 2. Mrs. Leena Modi have disassociated herself from a company by the name Freez-Air Exports Private Limited, where she

was a director and promoter as follows:

Name of Promoter Appointment ResignationMrs. Leena Modi 26.09.1994 08.10.2008

Reasons for Disassociation:

Due to personal reasons Mrs. Leena Modi sold her entire shareholding in the Company to new management.

Common Pursuits

a. Save as mentioned in page 113 with regard to Samruddhi Equities and Securities Services Limited there are no common pursuits between our Company and other group companies.

b. Except the related party transaction as given in the Auditors Report on page 105, the related party transaction amongst the group companies do not have any impact on the financial performance of our Company.

Details of sales purchase between the group companies and our Company

We have entered into transactions with certain related parties. These transactions are in ordinary course of purchase / sale ofshares and trading in derivatives for which our Company has entered into broker agreements with the group companies. The cumulative value of transactions for the year ended March 31, 2009 is as follows: (Rs. in lakhs)

Name of Party Nature of Transaction Year ended 31.03.2009

Samruddhi Stock Brokers Limited Purchase of shares 86.24

Samruddhi Stock Brokers Limited Sale of shares 62.05

Samruddhi Fin stock Limited Profit from derivatives trading 2.46


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Material items of income and expenditure for our Company for the aforesaid transaction:

Name of related party Material items of income Material items of expenditure

Samruddhi Stock Brokers Limited Profits that may arise from the activity of trading in shares

Brokerage

Samruddhi Fin stock Limited Profits that may arise from the from derivatives trading

Brokerage

Business interests in our Company of the group companies/associate companies:

As said above, Samruddhi Stock Brokers Limited and Samruddhi Finstock Limited have business interests to the extent our Company undertakes activities of purchase and/or sale of securities through these companies.

(D) Changes in accounting policies in the last three years

We confirm that there have been no changes in accounting policies except as may be stated in the part pertaining ‘Financial Information of the Issuer’ on page 92

(E) MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF THE OPERATIONS

1 OVERVIEW OF THE BUSINESS

Our Company was incorporated as “K.B. Steel Limited” on November 18, 1982 and obtained its Certificate for Commencement of Business on March 22, 1983 under the Indian Companies Act 1956. Our Company has been taken over by the Present Promoters in the year 2007-2008, after complying with the SEBI (SAST) Regulations, 1997. The name of our Company was changed to “Intellivate Capital Ventures Limited” pursuant to a special resolution of the members of our Company and a fresh certificate of incorporation reflecting the change of name was issued on December 10, 2008. (For further details see “Our History and Corporate Structure” on page 70 of this Letter of Offer).

After takeover by the New Promoters, the management has taken various steps to enter into new line of Business i.e. Financial Services Sector, with an objective of capitalizing on the experience and expertise of the New Promoters.

The steps taken for the same include: Identification of services that can be offered by the New Promoters, Increased networking to create relationships with clients, Executing few assignments of Financial Advisory services.

The above has resulted in improved performance for the financial year ended March 31, 2009.

The name of our Company was changed from “K.B. Steel Limited” to “Intellivate Capital Ventures Limited” (ICVL) vide Fresh Certificate of Incorporation Consequent upon Change of Name dated December 10, 2008, issued by Registrar of Companies, Maharashtra, Mumbai.

Our Company has altered its Memorandum of Association according to the change in the business of our Company.

Our Company will be carrying on the business of providing Advisory services in the field of Finance, Capital Market, Business Restructuring, and Strategic Management. Our Company will also make Investments as described in the “Object of the Issue” section on page 39 to this letter of offer.


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The Paid up equity capital of our Company has been increased from Rs. 24.50 Lacs to Rs. 48.50 Lacs by issue of 2,40,000 Equity shares of Rs 10/- each at Rs 50/- per share.

2 SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR

Our Company has appointed professionals in the management team to handle the increased business from financial services. During the period after March 2009, our Company has received new assignments for advisory services which are currently being executed by the new management team.

Significant development after December 31, 2009 that may affect our future results of operations

In the opinion of the Board of our Company, there have not arisen, since the date of the last financial statements included in this Letter of Offer, any circumstance that materially and adversely affect or is likely to affect our trading or profitability or the value of our assets or our ability to pay our liabilities within the next 12 months. Except as stated herein above, there is no subsequent development after the date of the Auditor’s Report which we believe is expected to have a material impact on reserves, profits, earning per share and book value of our business.

3 FACTORS THAT MAY AFFECT THE RESULTS OF THE OPERATIONS

Our company is engaged in Consultancy and Advisory Services relating to the Finance Sector. It is also planning to make Investments in other companies as described in this letter of offer. The Indian economy has been continuously growing since the last few years and it has been observed that, even the current global financial crisis has not affected India as much as itaffected the European and American economies. In our opinion, Consultancy and Advisory Services in the finance sector is a niche area wherein our Company can perform reasonably well given the background of the New Promoters. The future growth and development of the Indian economy will have its impact on the operations and the results of our Company.

a. Unusual or infrequent events and transactions

Other than as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on page 127 of this Letter of Offer, there have been no transactions or events, to our knowledge, which would be considered “unusual” or “infrequent”.

b. Significant economic / regulatory changes

Other than as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on page 127 of this Letter of Offer, to our knowledge there are no significant economic / regulatory changes that materially affect or are likely to affect the income from continuing operations.

c. Known trends and uncertainties

Other than as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on page 127 of this Letter of Offer, to our knowledge there are no trends or uncertainties that have or had or are expected to havea material adverse impact on revenues or income from continuing operations of our Company.

d. Future relationship between costs and income

Other than as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on page 127 of this Letter of Offer, to our knowledge there are no known factors which will have a material adverse impact on the operation and finances of our Company.


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e. Total turnover of each industry segment in which our Company operates

Our company has started providing Consultancy and Advisory services in the Finance Sector and the Turnover from the same is reflected in the Financial Results of the FY 2008-2009 as disclosed in this Letter of Offer. Our Company has also undertaken activities relating to investment and trading in securities and derivatives.

f. New product or business segment

Other than as described in “Our Business” section on page 66 and the “Object of the Issue “ section on page 39 of this Letter of Offer there are no new business segments or material new products planned.

g. Seasonality of business

Our business is not seasonal. However, there could be a variation in our quarterly income or profit after tax because of various factors, described in the section titled “Risk Factors” on page 10 of this Letter of Offer.

h. Dependence on single or few customers

We are not dependant on any particular customer.

i. Competitive conditions

We expect competition to intensify due to, among other things, the entry of new participants, as described above and in the section titled “Risk Factors” on page 10 of this Letter of Offer resulting in further downward pressures on our margins.

4 DISCUSSION ON THE RESULTS OF OPERATIONS

a) Summary of past financial results (Rs. In lacs)

Period

ended

31/12/2009

2009 2008 2007

Income from Operations 3.58 11.36 - -

Investment income 4.66 0.93 - -

Other Income 4.42 2.23 3.83 2.76

Expenditure 6.91 (13.68) (1.01) (1.93)

Depreciation - - (0.01) (0.05)

Net Profit / (Loss) before Tax 5.75 0.84 2.80 0.77

Provision for Tax (1.06) (0.15) (0.30) (0.10)

MAT credit entitlement - 0.48 - -

Net Profit / (Loss) after Tax 4.69 1.18 2.51 0.66

Balance brought from previous year (8.51) (9.69) (12.20) (12.85)

Balance carried to Balance sheet (3.83) (8.51) (9.69) (12.20)

There are no audit qualifications. Hence no adjustments are necessary to the above.


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b) Income on account of major product / main activities (Rs. In lacs)

Particulars Period ended

31/12/2009

2009 2008 2007

Income from Advisory services / Investment activities 8.24 12.29 - -

Sales of products - - - -

Our Company had no significant operations up to FY 2007-08. Therefore, there is no income from major product / main activity in FY 2007-08 and 2006-07. The business of advisory services and investment /trading in securities/derivatives has been started from FY 2008-09 onwards.

c) Nature / break-up of other income (Rs. In lacs)

Particulars Period ended

31/12/2009

2009 2008 2007

Interest on I. T. Refund - 0.01 - 0.01

Interest on Fixed Deposits 4.42 2.22 2.98 0.32

Commission income - - 0.85 2.39

Miscellaneous income - - - 0.04

Total Other Income 4.42 2.23 3.83 2.76

The other income as shown above is recurring in nature.

d) We state that we have a wide clientele base and that our business is not dependent upon a single customer or a few major customers. Also, no foreign customer constitutes a significant portion of our business, thus there would be no impact on our business of exchange rate fluctuations.

e) We state that we have not followed any unorthodox procedure for recording sales and revenues.

f) There are no other miscellaneous income and miscellaneous expenditure.


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5 COMPARISON OF FINANCIAL RESULTS

FISCAL 2009 COMPARED TO FISCAL 2008

Income from Operations

Operational income comprises of income from consultancy and advisory services provided by our Company, income from shares / derivatives trading and profit / loss on sale of investments. Operational Revenues were Rs. 12.29 lacs during the fiscal ended 2009 as compared to nil in the previous year. The increase in operational activity is on account of commencement of financial advisory business by using the domain knowledge of the new promoters. .

Other Income

Other Income mainly consists of interest income on fixed deposits. Total other income earned during fiscal 2009 is Rs. 2.23 lacs as compared to Rs. 3.83 lacs during the fiscal 2008.

Expenditure

These comprise of stamp duty charges, filing fees, advertising expenses and other office expenses. These have increased substantially during the year from Rs. 1 lac in 2008 to Rs. 13.68 lacs mainly on account of legal expenses incurred on change in name, MOA/AOA of our Company and issue of equity shares on preferential basis during the year.

Depreciation

No amount was charged off as depreciation during the fiscal 2009 since there were no fixed assets held by our Company during the year. Depreciation charged to profit & loss account during the year 2008 was Rs. 0.01 lacs.

Profit / (Loss) before Tax

During the fiscal 2009, our Company reported a Profit before tax of Rs 0.84 lacs compared to Rs. 2.80 lacs during the fiscal 2008. This reduction in Profit is mainly due to additional expenses incurred as discussed above in the Para “Expenditure”.

Provision for Taxation

Our Company has made a provision of Rs. 0.15 lacs for current tax during the fiscal 2009 as per the provisions of the Income Tax Act, 1961 as against Minimum Alternate Tax (MAT) provision of Rs. 0.30 lacs during the fiscal 2008. MAT credit entitlement of prior periods amounting to Rs. 0.48 lacs is recognized during the year, as per the provisions of section 115JB of the Income Tax Act, 1961. No provision for FBT was made during fiscal 2009 and 2008 since there were no employees in our Company.



There were no operational revenues in fiscal 2008 and 2007 since our Company has had no significant operations since the past few years

Other Income

Other Income comprising of interest income and commission was Rs. 3.82 lacs in 2008 compared to Rs. 2.76 lacs in 2007.


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Expenditure

Operational and administrative costs consisting of electricity charges, rental expenses, traveling and other miscellaneous expenses reduced from Rs. 1.85 lacs in 2007 to Rs. 1.01 lacs during the fiscal 2008.

Employee costs

This consists mainly of salary, wages and other allowances to employees. The employee costs were nil during the fiscal 2008 since there was no employee in our Company. During the year 2007, employee costs were Rs. 0.10 lacs.

Depreciation

Depreciation has been provided at the rates specified in Schedule XIV of the Companies Act, 1956. Depreciation during the fiscal 2008 was Rs. 0.01 lacs compared to Rs. 0.05 lacs during 2007.


During the fiscal 2008, our Company reported net profit before tax of Rs. 2.80 lacs compared to Rs. 0.77 lacs during the fiscal 2007.


Our Company has made a provision of Rs. 0.30 lacs for current tax during the fiscal 2008 as per the provisions of minimum alternate tax under Income Tax Act, 1961, as against Rs. 0.09 lacs for current tax and Rs. 0.02 lacs for FBT during the fiscal 2007. Net deferred tax assets have not been recognized in the absence of virtual certainty of taxable income in future.



There were no operational revenues in fiscal 2007 and 2006 since our Company had no significant operations since the past few years.

Other Income

Other Income comprising of interest income and commission was Rs. 2.76 lacs in 2007 compared to Rs. 4.25 lacs in 2006.

Expenditure

Operational and administrative costs consisting of electricity charges, rental expenses, traveling and other miscellaneous expenses reduced from Rs. 2.79 lacs in 2006 to Rs. 1.85 lacs during the fiscal 2007.

Employment Cost

The employee costs during both the years 2007 and 2006 were Rs. 0.10 lacs.

Depreciation

Depreciation has been provided at the rates specified in Schedule XIV of the Companies Act, 1956. Depreciation during the fiscal 2007 was Rs. 0.05 lacs as compared to Rs. 0.07 lacs during 2006.


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During the fiscal 2007 our Company reported net profit before tax of Rs. 0.77 lacs compared to Rs. 1.30 lacs during the fiscal 2006.


Our Company has made a provision of Rs. 0.09 lacs for current tax and Rs. 0.02 lacs for FBT during the fiscal 2007 against Rs. 0.11 lacs for current tax during the fiscal 2006. Net deferred tax assets have not been recognized in the absence of virtualcertainty of taxable income in future.

OPERATIONS DURING THE PERIOD APRIL 2009 TO DECEMBER 2009


Operational revenues during the period April 2009 to December 2009 were on account of income from advisory / consultancy services Rs. 3.58 lacs and profit on sale of short term investments amounting to Rs. 4.66 lacs.

Other Income

Other Income comprising of interest income on fixed deposits was Rs. 4.42 lacs during the above period.

Expenditure

Operational and administrative costs comprising of legal and professional fees, advertising & publicity, and other miscellaneous expenses were Rs. 2.87 lacs during the period.

Employment Cost

The employee costs were Rs. 4.05 lacs during the period April 2009 to December 2009.

Depreciation

There was no amount charged off as depreciation since there are no fixed assets held by our Company.


During the period our Company earned net profit before tax of Rs. 5.75 lacs.


Our Company has made a provision of Rs. 1.06 lacs for current tax during the period ended December 2009 as per the provisions of the Income Tax Act, 1961.

Change in the Accounting Policies

There have been no changes in Accounting Policies during the last three years.


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SECTION VII- LEGAL AND OTHER INFORMATION

(A) Outstanding Litigations and Material Developments

(1) Outstanding litigations involving our Company:

a. Litigations against the issuer or against any other company whose outcome could have a materially adverse effect of the position of the issuer – NIL

b. All litigations against the directors involving violation of statutory regulations or alleging criminal offence - One criminal complaint against Mr. Vipul Modi in his capacity as a Secretary of Investor Grievance Forum has been filed by Tata Sons Limited. This criminal complaint was made by Tata Sons Limited in 2003 in the Court of Additional Chief Metropolitan Magistrate, 37th Court, Esplanade at Mumbai, in respect of an advertisement said to have been issued by Investor Grievance Forum in certain newspapers, the contents of which were alleged to be defamatory against the Tata Group. The complaint was filed against IGF and others including Mr. Vipul Modi.

c. Any criminal/ civil prosecution against the directors for any litigation towards tax liabilities – Except as stated in b above NIL.

d. Pending proceedings initiated for economic offences against the issuer or its directors along with their present status – NIL

e. Adverse findings, if any, in respect of the issuer as regards compliance with the securities laws- NIL

f. The details of the past cases in which penalties were imposed by the authorities concerned on the issuer or its directors – A monetary penalty of Rs.1.75 lakhs was imposed on our Company by SEBI under the SEBI (SAST) Regulations for delayed compliance with regulation 6(2) and 6(4) of the Regulations for the year 1997 and 8(3) of the Regulations for the period 1997 to 2002 for which SEBI issued a Letter no. CFD/DCR/RC/TO/13060/04 dated July 21, 2004 giving an option to the Company to give its consent in writing for the payment of a penalty of Rs. 1,75,000/- (Rupees One Lakh Seventy Five Thousand only). Accordingly, our Company had filed the consent for payment of Rs. 1,75,000/- for the above said non-compliance of regulation 6(2) and 6(4) for the year 1997 and 8(3) for the year 1998-2002 of the Regulations, but it was not paid. The Board of Directors has vide letter dated February 26, 2010 undertaken that our Company will file under the Consent Order Scheme of SEBI in this regard before the issue opening date, i.e. March 11, 2010.

g. Outstanding litigations, defaults, etc. pertaining to matters likely to affect operations and finances of the issuer, including disputed tax liabilities, prosecution under any enactment in respect of Schedule XIII to the Companies Act, 1956 (1 of 1956) etc. – Our Company had initiated arbitration proceedings against a debtor, M/s General Manager (Telecom), Department of Telecommunication, Marathwada area, Nanded, Maharashtra, under the Arbitration and Conciliation Act, 1996. The award of the arbitrator was in the favour of our Company and was then challenged by the aforesaid debtor. As per the books of accounts of the Company, Rs.7.14 lakhs is due and outstanding from the said Department of Telecommunication, Marathwada area, Nanded, Maharashtra.

h. The name(s) of the small scale undertaking(s) or any other creditors to whom the issuer owes a sum exceeding Rs. one lakh which is outstanding more than thirty days – NIL

(2) Our Company has no subsidiaries, thus details pertaining to litigations under this head are not applicable

(3) Outstanding litigations involving the promoters and group companies:


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135

(a) All pending litigations in which the promoters are involved, defaults to the financial institutions or banks, non-payment of statutory dues and dues towards instrument holders such as debt instrument holders, fixed deposits and arrears on cumulative preference shares, by the promoters and group companies, together with the amounts involved and the present status of such litigations or defaults and the details of proceedings initiated for economic offences or civil offences (including the past cases, if found guilty), any disciplinary action taken by the SEBI or recognised stock exchanges against the promoters and group companies. The likely adverse effect of these litigations, defaults, etc. on the financial performance of the issuer shall also be mentioned - NIL

(b) The cases of pending litigations, defaults, etc. in respect of group companies with which the promoters were associated in the past but are no longer associated shall also be disclosed in case their name(s) continue to be associated with the particular litigation(s) - NIL

(c) If any of the group companies had faced/is facing any litigations/ defaults/ over dues or labour problems/ closure etc., the same shall be disclosed -

Samruddhi Finstock Limited has filed three suits under Section 138 of Negotiable Instruments Act, 1881, 30th MetroPolitan Majistrate Court, Kurla, Mumbai, which are pending as on date. Also Hansa Villa Realty Private Limited has filed five suits details of which are given hereunder:

Details of litigations – filed by Samruddhi Finstock Limited SR. NO.

PARTICULARS CASE NO. STATUS

1 Samruddhi Finstock Ltd v/s

Mr. Mahesh Bahadur Lalvani

3021451/SS/2008 Case amount: Rs.10,52,000 Parties have decided to settle the case for Rs.10 Lacs in two tranches, of which Rs.5 lacs is already encashed on May 7, 2009 and for the balance Rs.5 Lacs post dated cheque dated November 10, 2009 was issued. Thereafter, the party had sought extension in writing to repay balance Rs. 5 lacs till 30th January, 2010 and thereafter orally has sought further extension till 28/02/2010. The balance payment of Rs. 5 lacs has not yet been received


Mr. Rajesh Kalani

3012020/SS/2008 Case amount: about Rs.11 Lacs. Plea is Recorded; Affidavit of evidence has also been filed; Cross examination of Complainant is over on 23.02.2010; The next date of hearing is 5th March 2010 for adducing accused evidence. 4 post dated Cheques for Rs.11 Lacs, in settlement, from Mr. Rajesh Kalani, in December 2008, without prejudice to rights of the SFL. However the very first of such cheques was returned and a copy of the letter of settlement-cum-undertaking has been filed with the court.


Mr. Mahesh Parekh

3004652/SS/2009 Case Amount- Rs.21,02,376 Plea is Recorded; Affidavit of evidence has also been filed. Non bailable warrants was directed to be issued against Mr. Mahesh Parekh on 20-2-2010 ; Next Date for hearing – 10th March, 2010 for cross examination of Complainant.


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Details of litigations – filed by Hansa Villa Realty Private Limited

S. No Suit No. Defendant Nature of legal process 1 1042/2008 K Chandra Sekhar Nayak & Others Recovery of possession of premises 2 1043/2008 Radha Rao & Others Recovery of possession of premises 3 1044/2008 Harikishen Girdhrlal Chavan Recovery of possession of premises 4 1045/2008 Sushila D. Kini Recovery of possession of premises 5 1046/2008 Laxmi G, Bhat & other Recovery of possession of premises

(d) All the litigations against the promoter involving violation of statutory regulations or alleging criminal offence shall be furnished in the offer document. One criminal complaint against Mr. Vipul Modi in his capacity as a Secretary of Investor Grievance Forum has been filed by Tata Sons Limited. For details please refer page 134.

(e) Pending proceedings initiated for economic offences against the promoters, group companies shall be disclosed separately indicating their present status - NIL

(f) Adverse findings, if any, in respect of the persons/entities connected with the issuer/promoter/ group companies as regards compliance with the securities laws - NIL

(g) The details of the past cases in which penalties were imposed by the concerned authorities - NIL

(4) Our Company confirms that except as mentioned above there are no litigations against our Company, our Directors, Promoters and the Promoter group. We further confirm that no litigations have arisen against our Company, our Directors, Promoters and the Promoter group after the filing the Draft Letter of Offer with SEBI till the date of this Letter of Offer.

(5) Material developments since the last balance sheet date

The Directors of our Company in their opinion hereby state that there is no material development after the date of the last financial statements disclosed in the Letter of Offer which is likely to materially and adversely affect or is likely to affect the trading or profitability of the Company or the value of its assets, or its ability to pay its liabilities within the next twelvemonths

(B) GOVERNMENT APPROVALS AND LICENSING ARRANGEMENTS

(1) Investment approvals (FIPB/ RBI, etc.). As on the date of this Letter of Offer, since the net worth of the Company is less than Rs. 200 lakhs, our Company is not required to obtain registration as an NBFC with the RBI for carrying on the investment activities. However, our Company will obtain the necessary registration when it becomes applicable.

(2) All government and other approvals – Government Approvals: NIL Other General Approvals:


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Name of Registration / License Issuing Authority Registration / License no. and Date

Certificate of Incorporation Registrar of Companies, Maharashtra

28715/November 18, 1982

Certificate for Commencement of Business

Registrar of Companies, Maharashtra

28715/March 22, 1983

Certificate of Registration of Special Resolution confirming alteration of the Object Clause(s) to the current main objects


L27200MH1982PLC028715/ December 10, 2008

Fresh certificate of incorporation with change of name from K B Steel Limited to Intellivate Capital Ventures Limited


L27200MH1982PLC028715/ December 10, 2008

Permanent Account Number Commissioner of Income Tax, Mumbai, Maharashtra

AAACK4323P

Tax Deduction Account Number Income Tax Department MUMK18521G

(3) Technical approvals– Not Applicable

(4) Letter of intent or industrial license and declaration of the Central Government, Reserve Bank of India or any regulatory authority about the non-responsibility for financial soundness or correctness of the statements – Not Applicable

There is no requirement to take any prior approval from government and/or any statutory body.

On the basis of the indicative list of approvals provided above, our Company can undertake this Issue and its current business activities and no further major approvals from any Government or regulatory authority are required to undertake the Issue or continue these activities. Unless otherwise stated, these approvals are valid as on the date of this Letter of Offer.


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SECTION VIII: OTHER REGULATORY AND STATUTORY DISCLOSURES

(A) Authority for the Issue

The following approvals have been obtained or will be obtained in connection with the Issue:

1. The members of our Company have given their consent to the rights issue vide a resolution passed at the Annual General Meeting of the Company on September 22, 2009.

2. The Board of Directors has at its meeting held on September 26, 2009, authorized the Issue, pursuant to a resolution under section 81(1) of the Companies Act.

3. In-principle approval from the Bombay Stock Exchange Limited dated October 12, 2009 bearing reference no. DCS/PREF/JA/IP-RT/1073/9-10.

(B) Prohibition by SEBI

Our Company, our Promoters, our Promoter Group, our Directors, Group Companies have not been prohibited from accessing the capital markets for any reasons by SEBI or any other authorities.

(C) Association of the Group companies with the Stock Market

Our Company further confirms that except as given below none of the directors of our Company are associated with the securities market:

I. SAMRUDDHI FINSTOCK LIMITED

SFL is a member of the NSE.

Registration Number (SEBI)

Shares INB 231031239

Cash INB231031239 dated, May 21, 1998

F&O INF231031239

Currency INE231031239 dated August 27, 2008

Self Clearing Member INF231031239 dated February 28, 2008


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II. SAMRUDDHI STOCK BROKERS LIMITED

SSBL is a member of the BSE.

Registration Number (SEBI)

Shares INB011213536

Cash INB011213536 Dated October 15, 2004

F&O INF011213536 dated August 3, 2007

Currency INE261213536 dated October 6, 2008

I. SAMRUDDHI COMMODITIES TRADING LIMITED

Registration Number (Forward Markets Commission) NCDEX / TCM / CORP / 0575

MCX / TCM / CORP / 0848

We confirm that SEBI has not initiated any action against the aforesaid entities.

(D) Eligibility for the Issue

Our Company is an existing company registered under the Companies Act. Our equity shares are already listed on the BSE. We are thus eligible to offer this Issue in terms of Chapter IV of the SEBI (ICDR) Regulations.

(E) Our Company, our Promoters and group companies, relatives (as per Companies Act) of the promoters are not identified as wilful defaulters by RBI or other Government authorities.

(F) This not being a fast track issue Part B of Schedule A is not applicable.

(G) Disclaimer Clause of SEBI

AS REQUIRED, A COPY OF THIS DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THIS DRAFT LETTER OF OFFER TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED TO MEAN THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THIS DRAFT LETTER OF OFFER. THE LEAD MERCHANT BANKER, ARIHANT CAPITAL MARKETS LIMITED, HAS CERTIFIED THAT THE DISCLOSURES MADE IN THIS DRAFT LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING AN INVESTMENT IN THE PROPOSED ISSUE.


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IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE OUR COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THIS DRAFT LETTER OF OFFER, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE OUR COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE THE LEAD MERCHANT BANKER, ARIHANT CAPITAL MARKETS LIMITED, HAS FURNISHED TO SEBI, A DUE DILIGENCE CERTIFICATE DATED SEPTEMBER 30, 2009, WHICH READS AS FOLLOWS:

1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS, ETC. AND OTHER MATERIAL IN CONNECTION WITH THE FINALISATION OF THIS DRAFT LETTER OF OFFER PERTAINING TO THE SAID ISSUE.

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, IT’S 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 COMPANY, WE CONFIRM THAT:

A. THIS DRAFT LETTER OF OFFER FORWARDED TO THE BOARD IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;

B. ALL THE 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

C. THE DISCLOSURES MADE IN THIS DRAFT LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT 1956, THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AND OTHER APPLICABLE LEGAL REQUIREMENTS.

3. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THIS DRAFT LETTER OF OFFER ARE REGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATION IS VALID;

4. WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS - NOT APPLICABLE;

5. WE CERTIFY THAT WRITTEN CONSENT FROM THE PROMOTERS HAS BEEN OBTAINED FOR INCLUSION OF THEIR SPECIFIED SECURITIES PROPOSED TO FORM PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN AND THE EQUITY SHARES PROPOSED TO FORM PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN SHALL NOT BE DISPOSED OR SOLD OR TRANSFERRED BY THE PROMOTERS DURING THE PERIOD STARTING FROM THE DATE OF FILING THE DRAFT LETTER OF OFFER WITH SEBI TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT LETTER OF OFFER - NOT APPLICABLE

6. WE CERTIFY THAT REGULATION 33 OF THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, WHICH RELATES TO SPECIFIED SECURITIES


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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 THIS DRAFT LETTER OF OFFER - NOT APPLICABLE.

7. WE UNDERTAKE THAT SUB REGULATION (4) OF REGULATION 32 AND CLAUSE (c) AND (d) OF THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE RECEIVED AT LEAST ON DAY BEFORE THE OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITORS’ CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE BOARD. 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.

8. 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.

9. 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 SECTION 73(3) OF THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE LETTER OF OFFER. WE FURTHER CONFIRM THAT THE AGREEMENT TO BE ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER WILL SPECIFICALLY CONTAIN THIS CONDITION - NOTED FOR COMPLIANCE

10. WE CERTIFY THAT NO PAYMENT IN THE NATURE OF DISCOUNT, COMMISSION, ALLOWANCE OR OTHERWISE SHALL BE MADE BY THE ISSUER OR THE PROMOTERS, DIRECTLY OR INDIRECTLY, TO ANY PERSON WHO RECEIVES SECURITIES BY WAY OF FIRM ALLOTMENT IN THE ISSUE – NOT APPLICABLE.

11. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THIS DRAFT LETTER OF OFFER THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR PHYSICAL MODE.

12. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THIS DRAFT LETTER OF OFFER:

A. AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME THERE SHALL BE ONLY ONE DENOMINATION FOR THE SHARES OF OUR COMPANY AND;

B. AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME.

13. WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO ADVERTISEMENT IN TERMS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 WHILE MAKING THE ISSUE.


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14. WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OR THE ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS STANDS, THE RISK FACTORS, PROMOTERS EXPERIENCE , ETC.

15. WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS OF COMPLIANCE, PAGE NUMBER OF THE DRAFT LETTER OF OFFER WHERE THE REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.

The filing of the draft letter of offer does not, however, absolve our company from any liabilities under section 63 or section 68 of the act or from the requirement of obtaining such statutory and 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 lead manager any irregularities or lapses in the draft letter of offer. In addition to the lead manager, the issuer is also obligated to update the draft letter of offer and keep the public informed of any material changes till the date of listing and commencement of trading of the equity shares offered under the draft letter of offer.

Disclaimer Statement from Our Company and the Lead merchant banker

Our Company and Lead Manager accept no responsibility for statements made otherwise than in this Letter of Offer or in the advertisements or any other material issued by or at the instance of our Company and that anyone placing reliance on any other source of information , would be doing so at his / her / their own risk. All information shall be made available by the Lead Manager and the Issuer to the shareholders and no selective or additional information would be made available for a section of the shareholders or investors in any manner whatsoever including at presentations, research or sales reports etc.

(H) Caution

Investors who invest in the Issue will be deemed to have represented to our Company and Lead Manager 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 are relying on independent advice / evaluation as to their ability and quantum of investment in this Issue.

(I) Disclaimer with respect to jurisdiction

This Letter of Offer has been prepared under the provisions of Indian Laws and the applicable rules and regulations thereunder.

The distribution of the Letter of Offer and the issue of Equity Shares on a rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. Persons in whose possession the Letterof Offer may come are required to inform themselves about and observe such restrictions. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Mumbai, Maharashtra, India only.

No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that the Draft Letter of Offer will be filed with SEBI for observations and SEBI has given its observations. Accordingly, the Equity Shares represented thereby may not be offered or sold, directly or indirectly, and this Letter of Offermay not be distributed in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of this Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been no change in our affairs from the date hereof or that the information contained herein is correct as of any timesubsequent to this date.


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(J) Disclaimer Clause of the BSE

As required, a copy of this Letter of Offer has been submitted to BSE. BSE has given vide its letter dated October 12, 2009, permission to our Company to use its name in this Letter of Offer as the Stock Exchange on which our Company’s securities are proposed to be listed. The Exchange has scrutinized this Letter of Offer for its limited internal purpose of deciding on thematter of granting the aforesaid permission to our Company.

BSE does not in any manner: (i) warrant, certify or endorse the correctness or completeness of any of the contents of this Letter of Offer; or (ii) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or(iii) take any responsibility for the financial or other soundness of this Company, its Promoters, its management or any scheme or project of this Company; and it should not for any reason be deemed or construed that this Letter of Offer has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.

(K) Disclaimer Clause of the RBI – Not Applicable

(L) Filing

The Draft Letter of Offer has been filed with the Securities Exchange Board of India, SEBI Bhavan, Plot No. C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 for its observations. The Letter of Offer has also been filed with the BSE.

(M) Designated Stock Exchange

The Equity Shares of our Company are listed on the BSE. The Designated Stock Exchange for the purpose of the Issue will be the Bombay Stock Exchange Limited, (hereinafter referred to as “BSE”).

Our Company has made application to the BSE for permission to deal in and for an official quotation in respect of the Equity Shares being offered in terms of this Letter of Offer. Our Company has applied for in-principle approval from BSE for the securities proposed to be issued through this Letter of Offer and has received in-principle approvals from BSE by its letter dated October 12, 2009 bearing reference no. DCS/PREF/JA/IP-RT/1073/9-10 granting in principle approval for listing the securities arising from the Issue. Our Company will apply to the BSE for listing of the Equity Shares to be issued pursuant to the Issue.

If the permission to deal in and for an official quotation of the securities is not granted by the Stock Exchange mentioned above, within 15 days from the Issue Closing Date, our Company shall forthwith repay, without interest, all monies received from applicants in pursuance of this Letter of Offer. If such money is not paid within eight days after our Company becomes liable to repay it, then our Company and every Director of our Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under subsections (2) and (2A) of section 73 of the Companies Act.

(N) Consent

Consent in writing of the Auditors, Lead Manager and the Registrar to the Issue, to act in their respective capacities; and of the bankers to our Company and Directors for their names to appear as such in this Letter of Offer have been obtained and such consents have not been withdrawn up to the time of delivery of this Letter of Offer for registration with the Stock Exchange.

M/s J. B. Dudhela & Co., the Auditors of our Company have given their written consent for the inclusion of their Report in the form and content as appearing this Letter of Offer and such consents and Reports have not been withdrawn upto the time of delivery of this Letter of Offer for registration to the Stock Exchange. M/s J. B. Dudhela & Co., the Auditors of our Company have given their written consent for inclusion of statement of tax benefits in the form and content as appearing in this Letter of Offer accruing to our Company and its members.


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To the best of our knowledge there are no other consents required for making this issue, however, should the need arise, necessary consents shall be obtained by us.

(O) Expert Opinion

Save and except as stated in the chapter titled “Financial Information of the Issuer” and chapter titled “Statement of Tax Benefits” beginning on page 92 and 48 respectively of this Letter of Offer, our Company has not obtained any expert opinions in relation to this Letter of Offer.

(P) Issue expenses

The Issue related expenses inter-alia includes issue management fees, registrar fees, printing and distribution expenses, auditor fees, advertisement expenses, stamp duty, depository charges and listing fees to the stock exchanges. The following table provides a break up of estimated Issue expenses:

Sr. No. Particulars Estimated amount (Rs. in lakhs)

As percentage of total Issue expense

As percentage of total Issue size

1. Intermediary Fees 7.50 50.00% 0.62

2. Advertisement, Postage, Printing and Stationery

5.00 33.33% 0.41

3. Others (filing fees, stamp duty, contingency etc)

2.50 16.67% 0.21

Total 15.00 100.00% 1.24

Details of Fees Payable

Fees Payable to the Lead Manager

The total fees payable to the Lead Manager will be as per the Engagement Letter dated June 10, 2009 and as stated in the Memorandum of Understanding executed between our Company and Lead Manager dated September 26, 2009 copy of which is available for inspection at our Registered Office.

Fees Payable to the Registrar to the Issue

The Fees Payable to the Registrar to the Issue is set out in relevant documents, copies of which are available for inspection atthe Registered Office of our Company at 66/1, Hansa Villa, Opp. South Indian Gymkhana, Bhaudaji Cross Road, Matunga (CR), Mumbai - 400 019 from 11.00 a.m. to 3.00 p.m., from the date of filing of this Letter of Offer until the date of closure of the issue.

Fees Payable to the Bankers to the Issue The Fees Payable to the Bankers to the Issue is set out in relevant documents, copies of which are available for inspection at the Registered Office of our Company at 66/1, Hansa Villa, Opp. South Indian Gymkhana, Bhaudaji Cross Road, Matunga (CR), Mumbai - 400 019 from 11.00 a.m. to 3.00 p.m., from the date of filing of this Letter of Offer until the date of closure of the issue.


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Underwriting Commission, Brokerage and Selling Commission No underwriting commission, brokerage and selling commission will be paid for the Issue.

(Q) Details of Public / Rights Issues

Our Company has not made any public issue or rights issues of shares in the last five years.

(R) Previous issues of securities otherwise than for cash.

Our Company has not made any issues of securities for consideration other than cash

(S) Commission or brokerage on previous issues

For the preferential issue made by our Company on 25.03.2009 no commission or brokerage was paid. Except as stated, our Company has not made any issues during the last five years. As per the Prospectus of our Company dated March 17, 1983 brokerage or commission paid at the time of IPO in 1983 was 1% of the nominal value of shares.

(T) Our Company has not made any capital issue during the last three years. None of our group companies/ associates is listed.

(U) Promise vis-à-vis performance (1) Our Company:

Since our Company has not made any public/rights issues made during the period of ten years immediately preceding the date of filing this offer document with SEBI, details regarding “list of public/rights issues made during the period of ten years ”, “Promise vis-à-vis object- last three issues” and “Non achievement of objects” are not applicable.

(2) Listed Group Companies/ Associate companies: There are no listed Group Companies/ Associate companies.

(V) There are no outstanding debentures or bonds and redeemable preference shares and other instruments issued by us and outstanding as on date of this Letter of Offer.

(W) Stock Market Data for Equity Shares of our Company Company's shares are listed on BSE (Designated Stock Exchange). As the shares are traded on The Bombay Stock Exchange Limited, Mumbai the Company's stock market data have been given below.

The high and low closing prices recorded on BSE for the preceding three years and the number of shares traded on the days the high and low prices were recorded are stated below:


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Price for the last three years

High Low Year Date Price

(Rs.) Volume Date Price

(Rs.) Volume Average*

(Rs.) Volume Traded

during the year

2009 No trading in the equity shares 2008 20/06 2008 30.50 12000 1/1/2008 27.70 100 29.10 12150 2007 28/12/2007 26.40 300 19/1/2007 25.15 50 25.76 350 (Source: BSE website)

*Average calculated as mean of high and low of the closing prices.

The high and low prices and volume of Equity Shares traded on the respective dates during the last six months is as follows:

High Low Month Date Price

(Rs.) Volume Date Price

(Rs.) Volume Average*

(Rs.) Volume Traded during

themonth

January, 2010 20/01/2010 30.00 100 20/01/2010 30.00 100 30.00 100 December, 2009

No trading in the equity shares

November, 2009


October, 2009


September, 2009


August, 2009 No trading in the equity shares

(X) Investor Grievances and Redressal System

We presently have a very small shareholder base. We have made adequate arrangements for redressal of investor complaints. The share transfer and dematerialization for our Company is being handled by the Registrar and Share Transfer Agent.

Our Company has also formed an Investor Grievance Committee, comprising Mrs. Leena Modi and Mr. Siddharth Shah, directors of the Company, which would oversee the investor grievance mechanism.


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Investor Grievances arising out of this Issue

Our Company’s investor grievances arising out of the Issue will be handled by Purva Sharegistry (India) Private Limited, the Registrar to the Issue. The Registrar will have appropriate designated personnel handling our post-Issue correspondence.

The agreement between our Company and the Registrar provides that the Registrar will not hand over any application or other documents/records pertaining to the issue to our Company or to any other person until the completion of dispatchof allotment letters, refund order, share certificates, etc.

All grievances relating to the Issue may be addressed to the Registrar to the Issue giving full details such as folio number, DP-ID & Client ID, name and address, contact telephone / cellular phone numbers, email identity of the first applicant, number and type of shares applied for, Application Form serial number, amount paid on application and the name of the bank and the branch where the application was deposited, along with a photocopy of the acknowledgement slip. In case of renunciation, the same details of the Renouncee should be furnished.

Investors may contact our Company Secretary and Compliance Officer in case of any pre-Issue/ post -Issue related problems such as non-receipt of letters of allotment / share certificates / Demat credit / refund orders etc. His address is as follows:

Mr. Amit Radhey Shyam Kalra 66/1, Hansa Villa, Opp. South Indian Gymkhana, Bhaudaji Cross Road, Matunga (CR), Mumbai - 400 019, Tel: +91-22-24034235; Fax: +91-22- 24031691; Email: [email protected]

Status of Complaints

Details of Investors’ complaints during the last three years, i.e. period from September 1, 2006 to March 31, 2007, years ended March 31, 2008 and 2009 and for period thereafter till February 26, 2010:

Period Beginning Received Resolved Pending 01/09/2006 to 31/03/2007 Nil Nil Nil Nil01/04/2007 to 31/03/2008 Nil Nil Nil Nil 01/04/2008 to 31/03/2009 Nil Nil Nil Nil01/04/2009 to 26/02/2010 Nil Nil Nil Nil

The maximum time taken by the Registrar for attending to investor grievances will be one (1) month from the date of receipt.

(Y) Changes in Auditors during the last three (3) years

There has been no change in our Statutory Auditors in last three financial years.

(Z) Capitalisation of Reserves or Profits

Our Company has not capitalized any of its reserves or profits for the last five years.


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(AA) Revaluation of Assets

Our Company has not revalued its assets for the last five years.

IMPORTANT

1. This Issue is applicable to those Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the shares held in electronic form, and in the Register of Members of our Company in case of Equity Shares held in physical form at the close of business hours on the Record Date i.e. March 3, 2010.

2. Your attention is drawn to the chapter titled “Risk Factors” beginning on page 10 of this Letter of Offer.

3. Please ensure that you have received the Composite Application Form (“CAF”) with this Letter of Offer.

Please read this Letter of Offer and the instructions contained herein and in the CAF carefully before filling in the CAF. The instructions contained in the CAF are an integral part of this Letter of Offer and must be carefully followed. An application is liable to be rejected for any non-compliance of the provisions contained in this Letter of Offer or the CAF.


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SECTION IX: OFFERING INFORMATION

(A) TERMS OF THE ISSUE The Equity Shares are now being issued pursuant to the Rights Issue and the Equity Shares to be allotted are subject to the terms and conditions contained in this Letter of Offer, the enclosed CAF, the Memorandum and Articles of Association of our Company, the provisions of the Act, FEMA, regulations issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities issued by Government of India and/or other statutory authorities and bodies from time to time, terms and conditions as stipulated in the allotment advice or letter of allotment or security certificate and rules as may be applicable and introduced from time to time.

1. Ranking of equity sharesThe Equity Shares being issued shall be subject to the provisions of our Memorandum of Association and Articles of Association. The dividend payable on the partly paid-up Equity Shares, until fully paid-up, shall rank for dividend in proportion to the amount paid-up. The Equity Shares shall rank pari passu, in all respects including dividend, with our existing Equity Shares once fully paid-up. As per the Articles of Association of the Company, no member is entitled to vote either personally or by proxy at any General Meeting or Meeting of a class of shareholders either upon a show of hands or upon a poll in respect of any shares registered, in his name on which any calls or other sums presently payable by him have not been paid or in regard to which the Company has, any right of lien.

For further details, please refer to the chapter titled “Main Provisions of Articles of Association” beginning on page 173 of this Letter of Offer.

2. Mode of Payment of Dividend Dividend, if any declared by the Board and approved by our shareholders, will be paid in any of the modes permitted by the Companies Act, 1956.

3. Face value and issue price Face valueEach Equity Share shall have the face value of Rs. 10 (Rupees Ten).

Issue Price Rs. 50 (Rupees Fifty) per Equity share.

4. Payment Method Please refer to risk factor no 35 in “Risk Factors” on page 17 for risks associated with the payment method. For details on the payments method see “Terms of Issue” beginning on page 149.

The Issue Price of our Equity Shares is Rs. 50.00 per Equity Share. The Investors are required to pay 25% of the Issue Price on application, 25% of the Issue Price on Allotment and the balance 50% of the Issue Price on one or more calls as may be decided by the Board.

While making an application, the Investor shall make a payment of Rs.12.50 per Equity Share. Out of the amount of Rs. 12.50 paid on application Rs. 2.50 would be adjusted towards the face value of the Equity Shares and Rs. 10.00 shall be adjusted towards the share premium of the Equity Shares. Similarly, out of the amount of Rs. 12.50 paid on the allotment, Rs. 2.50 would be adjusted towards the face value of the Equity Shares and Rs. 10.00 shall be adjusted towards the share premium of the Equity Shares. The adjustments with respect to Issue Price on one or more calls will be in a manner as may be determined by the Board.

The amount due on allotment is to be paid by the Investor on the receipt of allotment advice cum allotment money payment notice that will be sent on allotment. The amount due on allotment, i.e. Rs. 12.50 will have to be paid by the shareholders within 30 days from the date of allotment, or such other date as may be fixed by the Board of our company and intimated in the Allotment advice.


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Notices for the payment of call money for call(s) shall be sent by our Company to the Equity Shareholders of the partly paid-up Equity Shares on the record date(s) to be fixed for the respective calls.

Equity Shares in respect of which calls have been made and the balance amount payable remains unpaid may be forfeited by the Company, at any time after the due date for payment of the balance amount due, in accordance with the Articles of Association.

The calls shall be structured in such a manner that the entire call money is called and the shares offered through the issue shall be made fully paid-up within twelve months from the date of allotment in the issue and if any investor fails to pay the call money within the said twelve months, the equity shares on which there are calls in arrears along with the money already paid on such shares will be forfeited in accordance with the Articles of Association of the Company.

Procedure for call(s)

Our Company would convene a meeting of the Board/Committee thereof to pass the required resolutions for making the Call(s) and suitable intimation would be given by our Company to the Stock Exchange. The Call(s) shall be deemed to have been made at the time when the respective resolutions authorizing such Call(s) are passed at the meeting of the Board/Committee thereof. The Call(s) may be revoked or postponed at the discretion of the Board/Committee thereof. Pursuant to Article 34 of the Articles of Association of the Company, the Investors would be given 14 days notice in writing for the payment of the call money. The Board/Committee thereof may, from time to time at its discretion, extend the time fixed for the payments of the Call(s). If the Investors fail to pay the call money, the application money/allotment/call money already paid may be forfeited.

5. Rights of Equity Shareholders

Subject to applicable laws, Equity Shareholders shall inter-alia have the following rights: 1. Right to receive dividend, if declared; 2. Right to attend general meetings and exercise voting power, unless prohibited by law; 3. Right to vote on poll, either in person or proxy; 4. Right to receive offer for right shares and be allotted bonus shares if announced; 5. Right to receive surplus on liquidation; 6. Right of free transferability of share; and 7. Such other rights as may be available to a shareholder of a listed public company under the Companies Act and

our Memorandum and Articles of Association of our Company and the terms of the listing agreement with the Stock Exchange.

For further details on the main provisions of our Company’s Articles of Association dealing with voting rights, dividend, forfeiture and lien, transfer and transmission and / or consolidation / splitting, please refer to the chapter titled“Main Provisions of Articles of Association of our Company” beginning on page 173 of this Letter of Offer.

6. Market lot

The securities of our Company are tradable only in dematerialized form. The market lot for the Equity Shares in dematerialized mode is one. In case of holding in physical form, our Company would issue to the allottees separate certificate for the Equity Shares allotted on rights basis with a split performance. Our Company would issue one certificate for the entire allotment. However, our Company would issue split certificates on written requests from the shareholders. Investors may please note that the Equity Shares of Our Company can be traded on the Stock Exchange in dematerialized form only.


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7. Nomination facility In terms of section 109A of the Act, nomination facility is available in case of Equity Shares. The applicant can nominate any person by filling the relevant details in the CAF in the space provided for this purpose.

A sole Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders being individual(s) may nominate any person(s) who, in the event of the death of the sole holder or all the joint-holders, as the case may be, shall become entitled to the Equity Shares. A person, being a nominee, becoming entitled to the Equity Shares by reason of the death of the original Equity Shareholder(s), shall be entitled to the same advantages to which he would be entitled if he were the registered holder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s) may also make a nomination to appoint, in the prescribed manner, any person to become entitled to the Equity Share(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall stand rescinded upon the sale of the Equity Share by the person nominating. A transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity Share is held by two or more persons, the nominee shall become entitled to receive the amount only on the demise of all the holders. Fresh nominations can be made only in the prescribed form available on request at the Registered Office of our Company or such other person at such addresses as may be notified by our Company. The applicant can make the nomination by filling in the relevant portion of the CAF.

Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has / have already registered the nomination with our Company, no further nomination needs to be made for Equity Shares to be allotted in this Issue under the same folio.

In case the allotment of Equity Shares is in dematerialized form, there is no need to make a separate nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective DP of the applicant would prevail. If the applicant requires change in the nomination, they are requested to inform their respective DP.

8. Minimum Subscription If our Company does not receive the minimum subscription of ninety per cent of the Issue through this letter of offer on the date of the closure of the Issue, the entire subscription shall be refunded to the applicants within 15 days from the date of closure of the Issue. If there is delay in the refund of subscription by more than 8 days after our Company becomes liable to pay the subscription amount (i.e. 15 days after closure of the Issue), our Company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of section 73 of the Companies Act. In case the permission to deal in and for an official quotation of the Equity Shares is not granted by BSE, the Issuer shall forthwith repay without interest, all monies received from the applicants in pursuance of this Letter of Offer and if such money is not repaid within eight days after the day from which the Issuer is liable to repay it, the Issuer shall pay interest as prescribed under sub-section (2) and (2A) of section 73 of the Companies Act, 1956.

Additional subscription by promoters

Our Promoters namely, Mr. Vipul J. Modi, Mrs. Leena V. Modi and Vipul J. Modi (HUF) have confirmed that they intend to subscribe to the full extent of their entitlement in the Issue. Our Promoters, either by themselves or through one or more Promoter Group Entities, have agreed to subscribe to the entire unsubscribed portion ,if any, in this rights issue.

As a result of this subscription and consequent allotment, our Promoters and Promoter Group Entities may acquire shares over and above their entitlement in the Issue, which may result in an increase of the shareholding being above the current shareholding. This subscription and acquisition of additional Equity Shares, if any, will not result in change of control of the management of our Company and shall be exempt in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code. Our Promoters and Promoter Group intend to subscribe to unsubscribed portion as per the relevant provisions of the law.


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The Promoters undertake that, subscription by the Promoter and/or Promoter Group for the Equity Shares in the Issue and the allotment of the Equity Shares will be in continuous compliance with the minimum public shareholding requirement specified under Clause 40A of the Listing Agreement with the BSE and other applicable laws.

9. Arrangement for odd lot Equity Shares

Our Company has not made any arrangements for the disposal of odd lot Equity Shares arising out of this Issue. Our Company will issue a consolidated certificate for the number of shares allotted to the Equity Shareholder.

10. Restrictions, if any, on transfer and transmission of shares and on their consolidation or splitting.

Except as stated in the Articles of Association of our Company there are no restrictions on transfer and transmission of shares. For details please refer to Section X “Description Of Equity Shares And Terms Of Articles Of Association Of Our Company” on page 173.

11. Option to receive Equity Shares in Dematerialized Form

Applicants to the Equity Shares of our Company issued through this Issue shall be allotted the securities in dematerialized (electronic) form at the option of the applicant. Our Company has signed agreements dated May 2, 2001 and March 19, 2009 with CDSL and NSDL respectively, which enables the Investors to hold and trade in securities in a dematerialized form, instead of holding the securities in the form of physical certificates.

In this Issue, the allottees who have opted for Equity Shares in dematerialized form will receive their Equity Shares in the form of an electronic credit to their beneficiary account with a depository participant. The CAF shall contain space for indicating number of shares applied for in demat and physical form or both. Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do not accurately contain this information, will be given the securities in physical form. No separate applications for securities in physical and /or dematerialized form should be made. If separate applications are made, the application for physical securities will be treated as multiple applications and is liable to be rejected.

In case of partial allotment, allotment will be done in demat option for the shares sought in demat and balance, if any, will be allotted in physical shares.

Others 12. Basis for the Issue

The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the shares held in the electronic form and on the Register of Members of our Company in respect of shares held in the physical form at the close of business hours on the Record Date, i.e. March 3, 2010 fixed in consultation with the Designated Stock Exchange, BSE.

Rights Entitlement Ratio:

As your name appears as beneficial owner in respect of the shares held in the electronic form or appears in the register of members as an equity shareholder of our Company as on the Record Date i.e. March 3, 2010, you are entitled to the number of shares in Block I of Part A of the enclosed in the CAF.


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The eligible shareholders shall be entitled to the following: 1. 5 [Five] Equity shares for every 1 [One] Equity Share held as on the Record Date 2. Rights Entitlement on Equity Shares held in the pool account of the clearing members on the Record Date shall be

considered, and such claimants are requested to: a. Approach the concerned depository through the clearing member of the Stock Exchange with requisite

details; and b. Depository in turn should furnish details of the transaction to the Registrar.

13. Joint Holders

Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the same as joint holders with benefits of survivorship subject to provisions contained in the Articles of Association of our Company.

14. Notices

All notices to the Equity Shareholder(s) required to be given by our Company shall be published in one English national daily with wide circulation, one Hindi national daily with wide circulation and one regional language daily newspaper with wide circulation and/or, will be sent by ordinary post /registered post to the registered holders of the Equity Share at the address registered with the registrar from time to time.

Terms of payment Issue price of Rs.50/- is to be paid as follows:

Amount Payable per Equity Share (Rs.)Face Value (Rs.) Premium (Rs.) Total (Rs.)

On Application 2.50 10.00 12.50 On Allotment 2.50 10.00 12.50 On one or more calls 5.00 20.00 25.00 Total 10.00 40.00 50.00

For details please refer ‘Payment Method’ on page 149.

Payment should be made in cash (not more than Rs. 20,000) or by cheque / bank demand draft / drawn in favour of “Intellivate Capital - Rights Issue” and marked “A/c Payee” on any bank (including a co-operative bank) which is situated at and is a member or a sub-member of the bankers clearing house located at the centre where the CAF is accepted. Outstation cheques /money orders / postal orders will not be accepted and CAFs accompanied by such cheque / money orders / postal orders are liable to be rejected.

Where an applicant has applied for additional shares and is allotted lesser number of shares than applied for, the excess application money shall be refunded. The monies would be refunded within 15 days from the closure of the Issue, and if there is a delay beyond 8 days from the stipulated period, our Company will pay interest on the monies in terms of sub-sections (2) and (2A) of section 73 of the Companies Act, 1956.

(B) ISSUE PROCEDURE Procedure for Application The enclosed CAF for Equity Shares should be completed in all respects in its entirety before submission to the Bankers to the Issue or their designated branches as they appear in the CAF. The forms of the CAF should not be detached under any circumstances, otherwise the application is liable to be rejected.


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The CAF would be sent to all shareholders at their registered Indian address. In case the original CAF is not received by the applicant or is misplaced by the applicant, the applicant may request the Registrar to the Issue, Purva Sharegistry (India) Private Limited for issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name and address.

Non-resident shareholders can obtain a copy of the CAF from the Registrar to the Issue, Purva Sharegistry (India) Private Limited , from their office situated at 9, Shiv Shakti Indl Estate, J R Boricha Marg, Opp. Kasturba Hospital, Lower Parel, Mumbai - 400 011 by furnishing the registered folio number, DP ID number, Client ID number and their full name and address.

Acceptance of the Issue You may accept the offer to participate in this Issue and apply for the Equity Shares offered, either in full or in part, by filling Part A of the enclosed CAFs and submit the same along with the application money payable to the Bankers to the Issue at any of the collection centres as mentioned on the reverse of the CAFs before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors of the Company in this regard. Investors at centers not covered by the branches of collecting banks can send their CAFs together with the cheque drawn at par on a local bank at Mumbai/demand draft payable at Mumbai to the Registrar to the Issue by registered post. Such applications sent to anyone other than the Registrar to the Issue are liable to be rejected. This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in part in favourof any other person or persons subject to the approval of the Board. Such renouncees can only be Indian Nationals (including minor through their natural / legal guardian) / limited companies incorporated under and governed by the Act, statutory corporations / institutions, trusts (registered under the Indian Trust Act), societies (registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such trust / society is authorized under its constitution / bye laws to hold Equity Shares in a company and cannot be a partnership firm, foreign nationals or nominees of any of them (unless approved by RBI or other relevant authorities) or to any person situated or having jurisdiction where the offering in terms of this Letter of Offer could be illegal or require compliance with securities laws of such jurisdiction or any other persons not approved by the Board.

The CAF consists of four parts: Part A : Form for accepting the Equity Shares offered and for applying for additional Equity Shares Part B : Form for renunciation Part C : Form for application for renouncees Part D : Form for request for split application forms

Option available to the Equity Shareholders The summary of options available to the Equity Shareholder is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the enclosed CAF:

Option Option Available Action Required A. Accept whole or part of your

entitlement without renouncing the balance.

Fill in and sign Part A (All joint holders must sign)

B. Accept your entitlement in full and apply for additional Equity Shares

Fill in and sign Part A including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

C. Renounce your entitlement in full to one person (Joint renouncees not exceeding three are considered as one renouncee).

Fill in and sign Part B (all joint holders must sign) indicating the number of Equity Shares renounced and hand over the entire CAF to the renouncee. The renouncees must fill in and sign Part C of the CAF (All joint renouncees must sign)

D. 1. Accept a part of your entitlement Fill in and sign Part D (all joint holders must sign) requesting for


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and renounce the balance to one or more renouncee(s)

OR

2. Renounce your entitlement to all the Equity Shares offered to you to more than one renouncee

Split Application Forms. Send the CAF to the Registrar to the Issue so as to reach them on or before the last date for receiving requests for Split Forms. Splitting will be permitted only once. On receipt of the Split Form take action as indicated below. (i) For the Equity Shares you wish to accept, if any, fill in and sign Part A of one split CAF (only for option 1). (ii) For the Equity Shares you wish to renounce, fill in and sign Part B indicating the number of Equity Shares renounced and hand over the split CAFs to the renouncees. (iii) Each of the renouncees should fill in and sign Part C for the Equity Shares accepted by them.

E. Introduce a joint holder or change the sequence of joint holders

This will be treated as a renunciation. Fill in and sign Part B and the renouncees must fill in and sign Part C.

Option A: Acceptance of the Issue in full or in part

You may accept the Issue and apply for the Equity Shares offered, either in full or in part by filling part A of the enclosed CAF. For details of submission of CAF and mode of payment please refer to the paragraph titled “Acceptance of the Issue” and “Payment Method” beginning on page 144 and 149 respectively of this Letter of Offer.

Option B: Additional Equity Shares

You are eligible to apply for additional Equity Shares over and above the number of Equity Shares you are entitled to, provided that you have applied for all the Equity Shares offered without renouncing them in whole or in part in favor of any other person(s). The application for additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board and in consultation if necessary with the Designated Stock Exchange. This allotment of additional Equity Shares will be made on an equitable basis with reference to number of Equity Shares held by you on the Record Date.

If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for additional shares in Part A of the CAF. Applications for additional Equity Shares shall be considered and allotment shall be in the manner prescribed under the paragraph titled “Basis of Allotment” beginning on page 161 of this Letter of Offer. The renouncees applying for all the Equity Shares renounced in their favor may also apply for additional Equity Shares.

Where the number of additional Equity Shares applied for exceeds the number available for allotment, the allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange.

In case of change of status of holders i.e. from Resident to Non-Resident, a new demat account shall be opened for the purpose.


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Option C & D: Renunciation

This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in part in favourof any other person or persons subject to the approval of the Board. Such renouncees can only be Indian Nationals (including minor through their natural / legal guardian) / limited companies incorporated under and governed by the Act, statutory corporations / institutions, trusts (registered under the Indian Trust Act), societies (registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such trust / society is authorized under its constitution / bye laws to hold Equity Shares in a company and cannot be a partnership firm, foreign nationals or nominees of any of them (unless approved by RBI or other relevant authorities) or to any person situated or having jurisdiction where the offering in terms of this Letter of Offer could be illegal or require compliance with securities laws of such jurisdiction or any other persons not approved by the Board.

Renunciation in favour of non residents / FIIs

Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to Resident Indian(s) is subject to the renouncer(s) / renouncee(s) obtaining the approval of the FIPB and / or necessary permission of the RBI, if and to the extent required, under the FEMA and other applicable laws and such permissions should be attached to the CAF.

Applications not accompanied by the aforesaid approval(s), wherever the same are liable to be rejected.

By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, OCBs have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to OCBs Regulations), 2003. Accordingly, the existing Equity shareholders of our Company who wish to renounce the same in favour of renouncees shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s) except with the prior permission of RBI.

Your attention is drawn to the fact that our Company shall not allot and / or register any Equity Shares in favor of: 1. More than three persons including joint holders; 2. Partnership firm(s) or their nominee(s); 3. Minors (unless application is made through a guardian) ;and 4. Any Trust or Society (unless the same is registered under the Societies Registration Act, 1860 or any other

applicable Trust laws and is authorized under its Constitutions to hold Equity Shares of a Company).

The right of renunciation is subject to the express condition that the Board / Committee of Directors shall be entitled in its absolute discretion to reject the request for allotment to renouncee(s) without assigning any reason thereof.

Part A of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. If used, this will render the application invalid. Submission of the enclosed CAF to the Bankers to the Issue at its collecting branches specified on the reverse of the CAF with the form of renunciation (Part B of the CAF) duly filled in shall be conclusive evidence for our Company of the person(s) applying for Equity Shares in Part C to receive allotment of such Equity Shares. The renouncees applying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares. Part ‘A’ must not be used by the renouncee(s) as this will render the application invalid. Renouncee(s) will also have no further right to renounce any shares in favour of any other person.


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Procedure for renunciation

To renounce all the Equity Shares offered to a shareholder in favour of one renouncee If you wish to renounce the offer indicated in Part A, in whole, please complete Part B of the CAF. In case of joint holding, all joint holders must sign Part B of the CAF. The person in whose favor renunciation has been made should complete and sign Part C of the CAF. In case of joint renouncees, all joint renouncees must sign this part of the CAF. Renouncee(s) shall not be entitled to further renounce their entitlement in favour of any other person.

To renounce in part/or renounce the whole to more than one person(s) If you wish to either accept this offer in part and renounce the balance or renounce the entire offer in favour of two or more renouncees, the CAF must be first split into requisite number of forms. For this purpose you shall have to apply to the Registrar to the Issue. Please indicate your requirement of Split Application Forms in the space provided for this purpose in Part D of the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last date ofreceiving requests for Split Application Forms. On receipt of the required number of split forms from the Registrar, the procedure as mentioned in paragraph above shall have to be followed. In case the signature of the Equity Shareholder(s), who has renounced the Equity Shares, does not agree with the specimen registered with our Company, the application is liable to be rejected.

Renouncee(s)

The person(s) in whose favour the offer is renounced should fill in and sign Part C of the Application Form and submit the entire Application Form to the Bankers to the Issue at any of the collection centres as mentioned on the CAF, on or before the Issue Closing Date along with the application money.

Option E: Change and / or introduction of additional holders

If you wish to apply for Equity Shares jointly with any other person(s), not more than three, who is /are not already a joint holder with you, it shall amount to renunciation and the procedure as stated above for renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the procedure, as stated above shall have to be followed. However, this right of renunciation is subject to the express condition that the Board shall be entitled in its absolute discretion to reject the request for allotment from the renouncee(s) without assigning any reason thereof.

Please note that: 1. Part A of the CAF must not be used by any person(s) other than those in whose favour this Issue has been made. If

used, this will render the application invalid.

2. Request for split application form should be made for a minimum of one (1) Equity Share or in multiples of one (1) Equity Share;

3. Request by the applicant for the Split Application Form should reach our Company on or before March 18, 2010.

4. Only the person to whom this Letter of Offer has been addressed to and not the renouncee(s) shall be entitled to renounce and to apply for Split Application Forms. Forms once split cannot be split again.

Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.


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Availability of duplicate CAF

In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue a duplicate CAF on the request of the applicant who should furnish the registered folio number / DP and Client ID number and his / her full name and address to the Registrar to the Issue. Please note that those who are making the application in the duplicate form should not utilize the original CAF for any purpose including renunciation, even if it is received / found subsequently. Thus in case the original and duplicate CAFs are lodged for subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored. Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of duplicate CAF in transit, if any.

Procedure for Application through the Applications Supported by Blocked Amount (“ASBA”) Process

This section is for the information of the Equity Shareholders proposing to subscribe to the Issue through the ASBA Process. The Company and the Lead Manager are not liable for any amendments or modifications or changes in applicable laws or regulations, which may occur after the date of this Letter of Offer. Equity Shareholders who are eligible to apply under the ASBA Process are advised to make their independent investigations and to ensure that the CAF is correctly filled up.

The list of banks who have been notified by SEBI to act as SCSB for the ASBA Process are provided on http://www.sebi.gov.in/pmd/scsb.pdf. For details on designated branches of SCSB collecting the CAF, please refer the above mentioned SEBI link.

Equity Shareholders who are eligible to apply under the ASBA Process

The option of applying for Equity Shares in the Issue through the ASBA Process is only available to Equity Shareholder(s) of the Company on the Record Date and who:

Is holding the Equity Shares in dematerialised form and has applied towards his/her rights entitlements or additional Securities in the Issue in dematerialised form; Has not renounced his entitlements in full or in part; Is not a Renouncee; Is applying through a bank account with one of the SCSBs.

CAF

The Registrar will despatch the CAF to all Equity Shareholders as per their entitlement on the Record Date for the Issue. Those Equity Shareholders who wish to apply through the ASBA payment mechanism will have to select for this mechanism in Part A of the CAF and provide necessary details. Equity Shareholders desiring to use the ASBA Process are required to submit their applications by selecting the ASBA Option in Part A of the CAF only. Application in electronic mode will only be available with such SCSB who provides such facility. The Equity Shareholder shall submit the CAF to the SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the application in the said bank account maintained with the same SCSB.

Acceptance of the Issue

You may accept the Issue and apply for the Equity Shares either in full or in part, by filling Part A of the respective CAFs sent by the Registrar, selecting the ASBA process option in Part A of the CAF and submit the same to the SCSB before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors of the Company in this regard.


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Mode of payment

The Equity Shareholder applying under the ASBA Process agrees to block the entire amount payable on application with the submission of the CAF, by authorizing the SCSB to block an amount, equivalent to the amount payable on application, in a bank account maintained with the SCSB. After verifying that sufficient funds are available in the bank account provided in the CAF, the SCSB shall block an amount equivalent to the amount payable on application mentioned in the CAF until it receives instructions from the Registrar. Upon receipt of intimation from the Registrar, the SCSBs shall transfer such amount as per Registrar’s instruction allocable to the Equity Shareholders applying under the ASBA Process from bank account with the SCSB mentioned by the Equity Shareholder in the CAF. This amount will be transferred in terms of the SEBI Regulations, into the separate bank account maintained by the Company as per the provisions of section 73(3) of the Companies Act, 1956. The balance amount remaining after the finalization of the basis of allotment shall be either unblocked by the SCSBs or refunded to the investors by the Registrar on the basis of the instructions issued in this regard by the Registrar to the Issue and the Lead Manager to the respective SCSB.

The Equity Shareholders applying under the ASBA Process would be required to block the entire amount payable on their application at the time of the submission of the CAF. The SCSB may reject the application at the time of acceptance of CAF if the bank account with the SCSB details of which have been provided by the Equity Shareholder in the CAF does not have sufficient funds equivalent to the amount payable on application mentioned in the CAF. Subsequent to the acceptance of the application by the SCSB, the Company would have a right to reject the application only on technical grounds.

Options available to the Equity Shareholders applying under the ASBA Process

The summary of options available to the Equity Shareholders is presented below. You may exercise any of the following options with regard to the Equity Shares, using the respective CAFs received from Registrar:

Option Available Action Required 1 Accept whole or part of your entitlement without

renouncing the balance. Fill in and sign Part A of the CAF (All joint holders must sign)

2 Accept your entitlement in full and apply for additional Equity Shares

Fill in and sign Part A of the CAF including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

The Equity Shareholder applying under the ASBA Process will need to select the ASBA option process in the CAF and provide required necessary details. However, in cases where this option is not selected, but the CAF is tendered to the SCSB with the relevant details required under the ASBA process option and SCSB blocks the requisite amount, then that CAF would be treated as if the Equity Shareholder has selected to apply through the ASBA process option.

Additional Equity Shares

You are eligible to apply for additional Equity Shares over and above the number of Equity Shares that you are entitled too, provided that (i) you have applied for all the Equity Shares (as the case may be) offered without renouncing them in whole or in part in favour of any other person(s). Applications for additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in the manner prescribed under “Basis of Allotment” on page 161 of this Letter of Offer.

If you desire to apply for additional Equity Shares please indicate your requirement in the place provided for additional Securities in Part A of the CAF.


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Renunciation under the ASBA Process

Renouncees cannot participate in the ASBA Process.

Option to receive Securities in Dematerialized Form

EQUITY SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY UNDER THE ASBA PROCESS CAN ONLY BE ALLOTTED IN DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY SHARES ARE BEING HELD ON RECORD DATE.

General instructions for Equity Shareholders applying under the ASBA Process

(a) Please read the instructions printed on the respective CAF carefully.

(b) Application should be made on the printed CAF only and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/or which are not completed in conformity with the terms of this Letter of Offer are liable to be rejected. The CAF must be filled in English.

(c) The CAF in the ASBA Process should be submitted at a Designated Branch of the SCSB and whose bank account details are provided in the CAF and not to the Bankers to the Issue/Collecting Banks (assuming that such Collecting Bank is not a SCSB), to the Company or Registrar or Lead Manager to the Issue.

(d) All applicants, and in the case of application in joint names, each of the joint applicants, should mention his/her PAN number allotted under the Income-Tax Act, 1961, irrespective of the amount of the application. CAFs without PAN will be considered incomplete and are liable to be rejected.

(e) All payments will be made by blocking the amount in the bank account maintained with the SCSB. Cash payment is not acceptable. In case payment is affected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon.

(f) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with the Company/or Depositories.

(g) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the specimen signature(s) recorded with the Company. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant.

(h) All communication in connection with application for the Securities, including any change in address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first/sole applicant Equity Shareholder, folio numbers and CAF number.

(i) Only the person or persons to whom Securities have been offered and not renouncee(s) shall be eligible to participate under the ASBA process.


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Do’s:

a. Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in.

b. Ensure that you submit your application in physical mode only. Electronic mode is only available with certain SCSBs and not all SCSBs and you should ensure that your SCSB offers such facility to you.

c. Ensure that the details about your Depository Participant and beneficiary account are correct and the beneficiary account is activated as Equity Shares will be allotted in the dematerialized form only.

d. Ensure that the CAFs are submitted at the SCSBs whose details of bank account have been provided in the CAF.

e. Ensure that you have mentioned the correct bank account number in the CAF.

f. Ensure that there are sufficient funds (equal to {number of Equity Shares as the case may be applied for} X {Application Money payable, as the case may be}) available in the bank account maintained with the SCSB mentioned in the CAF before submitting the CAF to the respective Designated Branch of the SCSB.

g. Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on application mentioned in the CAF, in the bank account maintained with the respective SCSB, of which details are provided in the CAF and have signed the same.

h. Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF in physical form.

i. Each applicant should mention their PAN allotted under the I. T. Act.

j. Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary account is held with the Depository Participant. In case the CAF is submitted in joint names, ensure that the beneficiary account is also held in same joint names and such names are in the same sequence in which they appear in the CAF.

k. Ensure that the Demographic Details are updated, true and correct, in all respects.

Don’ts:

1) Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB.

2) Do not pay the amount payable on application in cash, by money order or by postal order.

3) Do not send your physical CAFs to the Lead Manager to Issue / Registrar / Collecting Banks (assuming that such Collecting Bank is not a SCSB) / to a branch of the SCSB which is not a Designated Branch of the SCSB / Company; instead submit the same to a Designated Branch of the SCSB only.

4) Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground.

5) Do not instruct your respective banks to release the funds blocked under the ASBA Process.


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Grounds for Technical Rejection under the ASBA Process

In addition to the grounds listed under “Grounds for Technical Rejection” on page 167 of this Letter of Offer, applications under the ABSA Process are liable to be rejected on the following grounds:

a) Application for entitlements or additional shares in physical form.

b) DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records available with the Registrar.

c) Sending CAF to a Lead Manager / Registrar / Collecting Bank (assuming that such Collecting Bank is not a SCSB) / to a branch of a SCSB which is not a Designated Branch of the SCSB / Company.

d) Renouncee applying under the ASBA Process.

e) Insufficient funds are available with the SCSB for blocking the amount.

g) Funds in the bank account with the SCSB whose details are mentioned in the CAF having been frozen pursuant to regulatory orders.

g) Account holder not signing the CAF or declaration mentioned therein.

Depository account and bank details for Equity Shareholders applying under the ASBA Process

IT IS MANDATORY FOR ALL THE EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS TO RECEIVE THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF. ORDINARY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS MUST ENSURE THAT THE NAME GIVEN IN THE CAF IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE CAF IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE CAF.

Equity Shareholders applying under the ASBA Process should note that on the basis of name of these Equity Shareholders, Depository Participant’s name and identification number and beneficiary account number provided by them in the CAF, the Registrar to the Issue will obtain from the Depository demographic details of these Equity Shareholders such as address, bank account details for printing on refund orders and occupation (“Demographic Details”). Hence, Equity Shareholders applying under the ASBA Process should carefully fill in their Depository Account details in the CAF.

These Demographic Details would be used for all correspondence with such Equity Shareholders including mailing of the letters intimating unblock of bank account of the respective Equity Shareholder. The Demographic Details given by Equity Shareholders in the CAF would not be used for any other purposes by the Registrar. Hence, Equity Shareholders are advised to update their Demographic Details as provided to their Depository Participants. By signing the CAFs, the Equity Shareholders applying under the ASBA Process would be deemed to have authorised the Depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on its records.

Letters intimating allotment and unblocking (if any) would be mailed at the address of the Equity Shareholder applying under the ASBA Process as per the Demographic Details received from the Depositories. Equity Shareholders applying under the ASBA Process may note that delivery of letters intimating unblocking of bank account may get delayed if the same once sent to the address obtained from the Depositories are returned undelivered. In such an event, the address and other details given by the Equity Shareholder in the CAF would be used only to ensure dispatch of letters intimating unblocking of bank account.


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Note that any such delay shall be at the sole risk of the Equity Shareholders applying under the ASBA Process and none of the Company, the SCSBs or the Lead Managers shall be liable to compensate the Equity Shareholder applying under the ASBA Process for any losses caused to such Ordinary Shareholder due to any such delay or liable to pay any interest for such delay.

In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the Equity Shareholders (including the order of names of joint holders), the DP ID and the beneficiary account number, then such applications are liable to be rejected.

Application on Plain Paper

An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF and who is not applying under the ASBA Process may make an application to subscribe to the Issue on plain paper, along with Demand Draft, net of bank and postal charges payable at Mumbai which should be drawn in favor of the “Intellivate Capital – Rights Issue” and the Equity Shareholders should send the same by registered post directly to Registrar to the Issue.

The envelope should be superscribed “Intellivate Capital – Rights Issue” and should be postmarked in India. The application on plain paper, duly signed by the Investors including joint holders, in the same order as per specimen recorded with the Company, must reach the office of the Registrar to the Issue before the Issue Closing Date and should contain the following particulars:

Name of Issuer, being Intellivate Capital Ventures Limited; Name and address of the Equity Shareholder including joint holders; Registered Folio Number/ DP and Client ID no.; Number of Equity Shares held as on Record Date; Number of Equity Shares entitled to; Number of Equity Shares applied for; Number of additional Equity Shares applied for, if any; Total number of Equity Shares applied for; Total amount paid on application at the rate of Rs. 12.50 per Equity Share; Particulars of cheque/draft; Except for applications on behalf of the Central or State Government and the officials appointed by the courts, PAN of the Investor and for each Investor in case of joint names, irrespective of the total value of the Equity Shares applied for pursuant to the Issue; and Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of the Company.

The Shareholders making application otherwise than on application form shall not renounce their rights and shall not utilize the application form for any purpose including renunciation even if it is received subsequently.

Where any shareholder makes an application on application form as well as on plain paper, the application is liable to be rejected

Underwriting

The Issue is not underwritten.


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Allotment / Refund

The Company will issue and dispatch allotment advice/ share certificates /demat credit and/ or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any, within a period of 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day the Company becomes liable to repay it, the Company and every Director of the Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under Section 73 of the Companies Act.

Investors residing at centers where clearing houses are managed by the RBI or are available otherwise, will get refund through ECS only except where the Investors are otherwise disclosed as applicable/eligible to get refunds through direct credit and RTGS.

In case of those Investors who have opted to receive their Rights Entitlement in dematerialized form by using electronic credit under the depository system, an advice regarding the credit of the Equity Shares shall be given separately. Investors towhom refunds are made through electronic transfer of funds will be sent a letter through ordinary post intimating them about the mode of credit of refund within a period of 15 days from the Issue Closing Date.

In case of those Investors who have opted to receive their Rights Entitlement in physical form, the Company will issue the corresponding share certificates under section 113 of the Companies Act or other applicable provisions if any.

Any refund order exceeding Rs. 1,500 will be dispatched by registered post/ speed post to the sole/ first Investor’s registeredaddress. Refund orders up to the value of Rs. 1,500 would be sent under the certificate of posting. Such cheques or pay orders will be payable at par at all places where the applications were originally accepted and will be marked ‘Account Payee only’ and would be drawn in the name of the sole/ first Investor. Adequate funds would be made available to the Registrar to the Issue for this purpose.

Payment of Refund Mode of making refunds The payment of refund, if any, would be done through any of the following modes:

1. ECS – Payment of refund would be done through ECS for Investors having an account at any centre where such facility has been made available. This mode of payment of refunds would be subject to availability of complete bank account details including the MICR code as appearing on a cheque leaf, from the Depositories. The payment of refunds is mandatory for Investors having a bank account at any centre where ECS facility has been made available by the RBI or are available otherwise (subject to availability of all information for crediting the refund through ECS), except where the Investor, being eligible, opts to receive refund through National Electronic Fund Transfer (“NEFT”), direct credit or RTGS.

2. NEFT – Payment of refund shall be undertaken through NEFT wherever the Investors’ bank has been assigned the Indian Financial System Code, which can be linked to a MICR, if any, available to that particular bank branch. IFSC will be obtained from the website of RBI as on a date immediately prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the Investors have registered their nine digit MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC of that particular bank branch and the payment of refund will be made to the Investors through this method.

3. Direct Credit – Investors having bank accounts with the Bankers to the Issue shall be eligible to receive refunds through direct credit. Charges, if any, levied by the relevant bank(s) for the same would be borne by the Company.

4. RTGS – Investors having a bank account at any centre where such facility has been made available and whose refund amount exceeds Rs. 1 lakh, have the option to receive refund through RTGS. Such eligible Investors who indicate their preference to receive refund through RTGS are required to provide the IFSC code in the CAF. In the event the same is not provided, refund shall be made through ECS. Charges, if any, levied by the refund bank(s) for the same would be borne by the Company. Charges, if any, levied by the Investor’s bank receiving the credit would be borne by the Investor.


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5. For all other Investors, including those who have not updated their bank particulars with the MICR code, the refund orders will be despatched under certificate of posting for value up to Rs. 1,500 and through Speed Post/ Registered Post for refund orders of Rs. 1,500 and above. Such refunds will be made by cheques, pay orders or demand drafts drawn in favour of the sole/first Investor and payable at par.

6. Credit of refunds to Investors in any other electronic manner, permissible under the banking laws, which are in force, and is permitted by the SEBI from time to time.

Printing of Bank Particulars on Refund Orders

As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the Investor’s bank account, where available, are mandatorily required to be given for printing on the refund orders. Bank account particulars will be printed on the refund orders/refund warrants which can then be deposited only in the account specified. Our Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud.

Allotment advice / Share Certificates/ Demat Credit

Allotment advice/ share certificates/ demat credit or letters of regret will be dispatched to the registered address of the first named Investor or respective beneficiary accounts will be credited within 15 days from the Issue Closing Date. In case the Company issues allotment advice, the relevant share certificates will be dispatched within one month from the date of allotment. Allottees are requested to preserve such allotment advice (if any) to be exchanged later for share certificates.

Option to receive Equity Shares in Dematerialized Form

Investors to the Equity Shares of our Company issued through this Issue shall be allotted the securities in dematerialized (electronic) form at the option of the Investor. Our Company signed a tripartite agreement with CDSL on May 2, 2001 which enables the Investors to hold and trade in securities in a dematerialized form, instead of holding the securities in the form ofphysical certificates. Our Company has also signed a tri-partite agreement with NSDL on March 19, 2009, which enables the Investors to hold and trade in securities in a dematerialized form, instead of holding the securities in the form of physical certificates.

In this Issue, the allottees who have opted for Equity Shares in dematerialized form will receive their Equity Shares in the form of an electronic credit to their beneficiary account as given in the CAF, after verification with a depository concerned. Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Allotment advice, refund order (if any) would be sent directly to the Investor by the Registrar to the Issue but the Investor’s depository participant will provide to him the confirmation of the credit of such Equity Shares to the Investor’s depository account. CAFs, which do not accurately contain this information, will be given the Equity Shares in physical form. No separate CAFs for Equity Shares in physical and/or dematerialized form should be made. If such CAFs are made, the CAFs for physical Equity Shares will be treated as multiple CAFs and is liable to be rejected. In case of partial allotment, allotment will be donein demat option for the Equity Shares sought in demat and balance, if any, will be allotted in physical Equity Shares.

Investors may please note that the Equity Shares of our Company can be traded on the Stock Exchange only in dematerialized form.

Procedure for availing the facility for allotment of Equity Shares in this Issue in the electronic form is as under:

Open a beneficiary account with any depository participant (care should be taken that the beneficiary account should carry the name of the holder in the same manner as is exhibited in the records of the Company. In the case of joint holding, the beneficiary account should be opened carrying the names of the holders in the same order as with the Company). In case of Investors having various folios in our Company with different joint holders, the Investors will have to open separate accounts for such holdings. Those Equity Shareholders who have already opened such beneficiary account(s) need not adhere to this step.


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For Equity Shareholders already holding Equity Shares of our Company in dematerialized form as on the Record Date, the beneficial account number shall be printed on the CAF. For those who open accounts later or those who change their accounts and wish to receive their Equity Shares pursuant to this Issue by way of credit to such account, the necessary details of their beneficiary account should be filled in the space provided in the CAF. It may be noted that the allotment of Equity Shares arising out of this Issue may be made in dematerialized form even if the original Equity Shares of our Company are not dematerialized. Nonetheless, it should be ensured that the depository account is in the name(s) of the Equity Shareholders and the names are in the same order as in the records of the Company.

Responsibility for correctness of information (including Investor’s age and other details) filled in the CAF vis-à-vis such information with the Investor’s depository participant, would rest with the Investor. Investors should ensure that the names of the Investors and the order in which they appear in CAF should be the same as registered with the Investor’s depository participant.

If incomplete / incorrect beneficiary account details are given in the CAF the Investor will get Equity Shares in physical form.

The Equity Shares allotted to applicants opting for issue in dematerialized form, would be directly credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant’s depository participant will provide to him the confirmation of the credit of such Equity Shares to the applicant’s depository account. Renouncees will also have to provide the necessary details about their beneficiary account for allotment of Equity Shares in this Issue. In case these details are incomplete or incorrect, the application is liable to be rejected.

General instructions for Investors

a) Please read the instructions printed on the enclosed CAF carefully.

b) Application should be made on the printed CAF provided by our Company and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/ or which are not completed in conformity with the terms of this Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded without interest and after deduction of bank commission and other charges, if any. The CAF must be filled in English and the names of all the Investors, details of occupation, address, father’s / husband’s name must be filled in block letters.

The CAF together with cheque/demand draft should be sent to the Bankers to the Issue at any of the Collecting Centres as mentioned in the CAF or, in case of applications made on plain paper, to the Registrar to the Issue and not to our Company or Lead Manager to the Issue. Investors residing at places other than cities where the branches of the Bankers to the Issue have been authorised by our Company for collecting applications, will have to make payment by demand draft payable at Mumbai of an amount net of bank and postal charges and send their CAFs to the Registrar to the Issue by registered post. If any portion of the CAF is/are detached or separated, such application is liable to be rejected.

Applications where separate cheques/demand drafts are not attached for amounts to be paid for Equity Shares are liable to be rejected.

c) Except for applications on behalf of the Central or State Government and the officials appointed by the courts, PAN of the Investor and for each Investor in case of joint names are required to be filled in the CAF, irrespective of the total value of the Equity Shares applied for pursuant to the Issue. CAFs without PAN will be considered incomplete and are liable to be rejected.

d) Investors are advised that it is mandatory to provide information as to their savings/current account number and the name of the Bank with whom such account is held in the CAF to enable the Registrar to the Issue to print the said details in the refund orders, if any, after the names of the payees. Application not containing such details is liable to be rejected.

e) The payment against the application should not be effected in cash if the amount to be paid is Rs. 20,000 or more. In case payment is effected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon. Payment against the application if made in cash, subject to conditions as mentioned above, should be made only to the Bankers to the Issue.


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f) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with the Company.

g) In case of an application under power of attorney or by a body corporate or by a society, a certified true copy of the relevant power of attorney or relevant resolution or authority to the signatory to make the relevant investment under this Issue and to sign the application and a copy of the Memorandum and Articles of Association and / or bye laws of such body corporate or society must be lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case the above referred documents are already registered with the Company, the same need not be a furnished again. In case these papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue ClosingDate, then the application is liable to be rejected. In no case should these papers be attached to the application submitted to the Bankers to the Issue.

h) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the specimen signature(s) recorded with the Company. Further, in case of joint Investors who are Renouncees, the number of Investors should not exceed three. In case of joint Investors, reference, if any, will be made in the first Investor’s name and all communication will be addressed to the first Investor.

i) All communication in connection with application for the Equity Shares, including any change in address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first/sole Investor, folio numbers and CAF number. Please note that any intimation for change of address of Equity Shareholders, after the date of allotment, should be sent to the Registrar and Transfer Agents of the Company, in the case of Equity Shares held in physical form and to the respective depository participant, in case of Equity Shares held in dematerialized form.

j) SAFs cannot be re-split.

k) Only the person or persons to whom Equity Shares have been offered and not Renouncee(s) shall be entitled to obtain SAFs.

l) Investors must write their CAF number at the back of the cheque /demand draft.

m) Only one mode of payment per application should be used. The payment must be either in cash or by cheque / demand draft drawn on any of the banks, including a co-operative bank, which is situated at and is a member or a sub member of the Bankers Clearing House located at the centre indicated on the reverse of the CAF where the application is to be submitted.

n) A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts or post-dated cheques and postal / money orders will not be accepted and applications accompanied by such cheques / demand drafts / money orders or postal orders will be rejected. The Registrar will not accept payment against application if made in cash. (For payment against application in cash please refer point (e) above).

o) No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank/ Registrar will acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of the CAF.


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Grounds for Technical Rejections

Investors are advised to note that applications are liable to be rejected on technical grounds, including the following:

Amount paid does not tally with the amount payable for; Bank account details (for refund) are not given; Age of Renouncee(s) not given; Except for CAFs on behalf of the Central or State Government and the officials appointed by the courts, PAN not given for application of any value; In case of CAF under power of attorney or by limited companies, corporate, trust, etc., relevant documents are not submitted; If the signature of the Equity Shareholder in the CAF does not match with the one in the records of the company / registrars. If the Investors desires to have Equity Shares in electronic form, but the CAF does not have the Investor’s depository account details; CAFs are not submitted by the Investors within the time prescribed as per the CAF and this Letter of Offer; CAFs not duly signed by the sole/joint Investors; CAFs by OCBs; CAFs accompanied by Stockinvest; In case no corresponding record is available with the depositories that matches three parameters, namely, names of the Investors (including the order of names of joint holders), the Depository Participant’s identity (DP ID) and the beneficiary’s identity; CAFs by ineligible non-residents (including on account of restriction or prohibition under applicable local laws) and where a registered address in India has not been provided; CAFs where our Company believes that CAF is incomplete or acceptance of such CAF may infringe applicable legal or regulatory requirements; Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground; Applications by renouncees who are persons not competent to contract under the Indian Contract Act, 1872, including minors; Multiple CAFs; and Please read the Letter of Offer and the instructions contained therein and in the CAF carefully before filling in the CAF. The instructions contained in the CAF are each an integral part of the Letter of Offer and must be carefully followed. CAF is liable to be rejected for any non-compliance of the provisions contained in the Letter of Offer or the CAF.

Mode of payment for Resident Equity Shareholders/ Investors

All cheques / drafts accompanying the CAF should be drawn in favour of the Collecting Bank (specified on the reverse of the CAF), crossed ‘A/c Payee only’ and marked ‘Intellivate Capital - Rights Issue’;

Investors residing at places other than places where the bank collection centres have been opened by our Company for collecting applications, are requested to send their CAFs together with demand draft for the full application amount, net of bank and postal charges favouring the Bankers to the Issue, crossed ‘A/c Payee only’ and marked ‘Intellivate Capital -Rights Issue’ payable at Mumbai directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.


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Investment by NRIs Investments by NRIs are governed by the Portfolio Investment Scheme under Regulation 5(3)(i) of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000.

NRI Investors should note that applications by ineligible non-residents (including on account of restriction or prohibition under applicable local laws) and where a registered address in India has not been provided are liable to be rejected.

Mode of payment for Non-Resident Indian Equity Shareholders/ Investors As regards the application by non-resident Equity Shareholders, the following conditions shall apply: Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to Resident Indian(s) is subject to the renouncer(s) / renouncee(s) obtaining the approval of the FIPB and / or necessary permission of the RBI, if and to the extent required, under the FEMA and other applicable laws and such permissions should be attached to the CAF.

Applications not accompanied by the aforesaid approval(s), wherever the same is applicable, are liable to be rejected. Payment by non-resident Indians must be made by demand draft payable at Mumbai /cheque payable drawn on a bank account maintained at Mumbai or funds remitted from abroad in any of the following ways: As regards the application by non-resident Equity Shareholders, the following conditions shall apply:

Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to Resident Indian(s) is subject to the renouncer(s) / renouncee(s) obtaining the approval of the FIPB and / or necessary permission of the RBI, if and to the extent required, under the FEMA and other applicable laws and such permissions should be attached to the CAF.

Applications not accompanied by the aforesaid approval(s), wherever the same are liable to be rejected.

Payment by non-residents must be made by demand draft payable at Mumbai /cheque payable drawn on a bank account maintained at Mumbai or funds remitted from abroad in any of the following ways:

Application with repatriation benefits By Indian Rupee drafts purchased from abroad and payable at Mumbai or funds remitted from abroad (submitted along with Foreign Inward Remittance Certificate); or By cheque/draft on a Non-Resident External Account (NRE) or FCNR Account maintained in Mumbai; or By Rupee draft purchased by debit to NRE/FCNR Account maintained elsewhere in India and payable in Mumbai; or FIIs registered with SEBI must remit funds from special nonresident rupee deposit account. Non-resident Indian investors applying with repatriation benefits should draw cheques/drafts in favour of ‘Intellivate Capital – Rights Issue – NR’ and must be crossed ‘account payee only’ for the full application amount, net of bank and postal charges.

Application without repatriation benefits As far as non-residents holding Equity Shares on non-repatriation basis are concerned, in addition to the modes specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained in Mumbai or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Mumbai. In such cases, the allotment of Equity Shares will be on non-repatriation basis. All cheques/drafts submitted by non-residents applying on a non-repatriation basis should be drawn in favour of ‘Intellivate Capital – Rights Issue – NR’ and must be crossed ‘account payee only’ for the full application amount, net of bank and postal charges. The CAFs duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAFs before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF. Investors may note that where payment is made by drafts purchased from NRE/ FCNR/ NRO accounts as the case may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft has been issued by debiting the NRE/ FCNR/ NRO account should be enclosed with the CAF. Otherwise the application shall be considered incomplete and is liable to be rejected. New demat account shall be opened for holders who have had a change in status from resident Indian to NRI.


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Notes: In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to IT Act. In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity Shares cannot be remitted outside India. The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAFs before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF. In case of an application received from non-residents, allotment, refunds and other distribution, if any, will be made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making such allotment, remittance and subject to necessary approvals.

Basis of Allotment

The basis of allotment shall be finalized by the Board of our Company or Committee of Directors of our Company authorized in this behalf by the Board of the Company. The Board of our Company or the Committee of Directors as the case may be, will proceed to allot the equity Share in consultation with BSE in the following order of priority.

a) Full allotment to those Equity Shareholders who have applied for their rights entitlement either in full or in part and also to the renouncee(s) who has/ have applied for Equity Shares renounced in their favor, in full or in part.

b) Allotment to the Equity Shareholders who having applied for all the Equity Shares offered to them and have also applied for additional Equity Shares. The allotment of such additional Equity Shares will be made as far as possible on an equitable basis having due regard to the number of Equity Shares held by them on the Record Date, provided there is an under-subscribed portion after making full allotment in (a) above. The allotment of such Equity Shares will be made on a fair and equitable basis in consultation with the Designated Stock Exchange.

c) Allotment to the renounces, who having applied for the Equity Shares renounced in their favour have also applied for additional Equity Shares, provided there is an under-subscribed portion after making full allotment in (a) and (b) above. The allotment of such additional Equity Shares will be made on a proportionate basis at the sole discretion of the Board/ Committee of Directors but in consultation with the Designated Stock Exchange, as a part of the Issue and not as a preferential allotment.

d) Allotment to any other person as the Board may in its absolute discretion deem fit provided there is surplus available after making full allotment under (a), (b) and (c) above.

e) Our Company shall not retain any over-subscription.

Payment by Stockinvest

In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003- 04 dated November 5, 2003, the Stockinvest Scheme has been withdrawn. Hence, payment through Stockinvest would not be accepted in this Issue.

Disposal of application and application money

No acknowledgment will be issued for the application moneys received by the Company. However, the Bankers to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF.

The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, and in either case without assigning any reason thereto.


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In case an application is rejected in full, the whole of the application money received will be refunded. Wherever an application is rejected in part, the balance of application money, if any, after adjusting any money due on Equity Shares allotted, will be refunded to the Investor within a period of 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day our Company becomes liable to repay it, our Company and every Director of our Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under Section 73 of the Companies Act. For further instruction, please read the CAF carefully.

Undertakings by the Company

1. The complaints received in respect of the Issue shall be attended to by our Company expeditiously and satisfactorily.

2. All steps for completion of the necessary formalities for listing and commencement of trading at all Stock exchanges where the securities are to be listed will be taken within seven working days of finalization of basis of allotment.

3. That funds required for making refunds to unsuccessful applicants as per the modes disclosed shall be made available to the Registrar to the Issue by the Company.

4. That where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicant within 15 days of closure of the Issue, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund.

5. That no further issue of securities shall be made till the securities offered through this offer document are listed or till the application moneys are refunded on account of non-listing, under subscription, etc.;

6. Adequate arrangements shall be made to collect all ASBA applications and to consider then similar to non-ASBA applications while finalising the Basis of Allotment.

Utilisation of Issue Proceeds

The Board of Directors declares that:

i. All monies received out of this Issue shall be transferred to a separate bank account other than the bank account referred to sub-section (3) of Section 73 of the Companies Act;

ii. Details of all monies utilized out of the Issue shall be disclosed and continued to be disclosed till the time any part of the issue proceeds remains unutilised under an appropriate separate head in the balance sheet of our Company indicating the purpose for which such monies have been utilized; and

iii. Details of all unutilized monies out of the Issue, if any, shall be disclosed under an appropriate separate head in the balance sheet of our Company indicating the form in which such unutilized monies have been invested.

Important

1. Please read this Letter of Offer carefully before taking any action. The instructions contained in the accompanying Composite Application Form (CAF) are an integral part of the conditions of this Letter of Offer and must be carefully followed; otherwise the application is liable to be rejected.

2. All enquiries in connection with this Letter of Offer or accompanying CAF and requests for Split Application Forms must be addressed (quoting the Registered Folio Number/ DP and Client ID number, the CAF number and the name of the first Equity Shareholder as mentioned on the CAF and superscribed ‘Intellivate Capital Ventures Limited - Rights Issue’ on the envelope) to the Registrar to the Issue at the following address:


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Purva Sharegistry (India) Private Limited 9, Shiv Shakti Indl Estate, J R Boricha Marg, Opp. Kasturba Hospital, Lower Parel, Mumbai - 400 011

3. It is to be specifically noted that this Issue of Equity Shares is subject to the chapter titled “Risk Factors” beginning onpage 10 of this Letter of Offer

4. Our Company will not be liable for any postal delays and applications received through mail after the closure of the Issue, are liable to be rejected and returned to the applicants.

5. The Issue will not be kept open for more than 15 days unless extended, in which case it will be kept open for a maximum of 30 days.


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SECTION X: DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES OF ASSOCIATION

(A) Rights of members regarding voting, dividend, lien on shares and the process for modification of such rights and forfeiture of shares.

These are contained in the Articles of Association of our Company, for details please refer to ‘Main Provisions of the Articlesof Association’ on page 173.

(B) Main Provisions of the Articles of Association

Please note that each provision herein below is numbered as per the corresponding article number in the Articles of Association and capitalized/defined terms herein have the same meaning given to them in the Articles of Association.

Authorised Capital 3. The Authorised Share Capital of the Company will be as stated in the Memorandum of Association of the Company.

Rights, privileges and advantages as to voting or otherwise shall be as these Articles may from time to time prescribe.

Increase of capital by the Company and how carried into effect 4. The Company in General Meeting may from time to time by Ordinary Resolution increase the capital by the creation of

new shares, such increase to be of such aggregate amount and to be divided into Shares of such respective amounts as the Resolution shall prescribe. The new shares shall be issued upon such terms and conditions and with such rights and privileges annexed thereto as the Resolution creating the same shall direct, and if no direction be given, as the Directors shall determine, and in particular, such shares may be issued with preferential or a qualified right to dividends, and in the distribution of the assets of the Company, and with a right of voting at General Meeting of the Company in conformity with Section 87 and 88 of the Act. Whenever the capital of the Company has been increased under the provisions of this Articles the Directors shall comply with the provisions of Section 97 of the Act.

New Capital same as existing capital 5. Except so far as otherwise provided by the conditions of issue or by these presents, any capital raised by the creation of

new shares shall be considered as part of the existing capital, and shall be subject to the provisions herein contained, with reference to the payments of calls and installments, forfeiture, lien, surrender, transfer and transmission, voting and otherwise.

Reduction of Capital

9. The Company may (subject to the provision of Section 78 , 80, 100 to 105 inclusive ,of the Act ) from time to time by Special Resolution ,reduce its capital ,any Capital Redemption Reserve Account and Share Premium Account in any manner for the time being authorized by law. And in particular capital may be paid off on the footing that it may be called up again or otherwise. This Article is not to derogate from any power the Company would have if it were omitted.

Buy-back of securities

10. Pursuant to section 77A of the Companies Act, 1956, read with SEBI (Buy – Back of Securities) Regulation , 1998, the Company may purchase its own shares or other specified securities from out of its free reserves or out of its Securities Premium Account or out of the proceeds of an earlier issue other than fresh issue of shares made specifically for buy-back purpose by passing a Special Resolution as provided under section 192A of the Companies Act, 1956, read with Companies (Passing of the Resolution by Postal Ballot) Rule, 2001.


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Sub-division, consolidation and cancellation of shares 11. Subject to the provisions of Section 94 of the Act the Company in general meeting may, from time to time, sub divide or

consolidate its shares, or any of them, and the resolution whereby any share is sub-divided, may determine that, as between the holders of the share resulting from such sub-division one or more of such shares shall have some preference or special advantage as regards dividend, capital or otherwise over or as compared with the others or other. Subject as aforesaid the Company in general meeting may also cancel shares which have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the shares so cancelled.

Modification of rights 12. Whenever the capital, by reason of the issue of Preference Shares or otherwise, is divided into different classes of shares,

all or any rights and privileges attached to each class may subject to the provisions of Section 106 and 107 of the Act be modified, commuted, affected or abrogated, or dealt with by agreement between the Company and any person purporting to contract on behalf of that class, provided such agreement is ratified in writing by holders of at least thee-fourths in nominal value of the issued shares of the class or is confirmed by a Special Resolution passed at a separate general meeting of the holders of shares of the class.

SHARES AND CERTIFICATES Register and Index of Members

13. The Company shall cause to be kept a Register and Index of Members in accordance with Section 150 and 151 of the Act, the Company shall be entitled to keep in any state or country outside India a branch Register of Members resident in that State of country.

Shares to be numbered progressively and no share to be subdivided

14. The shares in the capital shall be numbered progressively according to their several denominations, and except in the manner hereinbefore mentioned no shares shall be sub divided. Every forfeited or surrendered shares shall continue to bear the number by which the same was originally distinguished.

FURTHER ISSUE OF SHARES

15. Subject to the provisions of the Companies Act, 1956 and the SEBI guidelines in the respect of Employee’s Stock-Option Scheme, the Company may issue shares to its employees and Directors on terms and conditions as may be sanctioned by the Share holders.

16. The Company shall have the power, subject to all applicable provisions of the Companies Act, 1956, or any re-enactment thereof empowers the Company to do so, to buy-back any of it own shares, whatever fully or partly paid up.

17. Where at the time after the expiry of two years from the formation of the Company or at any time after the expiry of one year from the allotment of shares in the Company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the Company by allotment of further shares either out of the un-issued capital or out of the increased share capital then: a. such further shares shall be offered to the persons who at the date of the offer, are holders of the equity shares of

the Company, in proportion, as near as circumstances admit, to the capital paid up on those shares at the date b. such offer shall be made by a notice specifying the number of shares offered and limiting a time not less that fifteen

days from the date of the offer, and the offer if not accepted, will be deemed to have been declined. c. The offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the shares

offered to them in favour of any other person and the notice referred to in sub-clause (b) hereof shall contain a statement of his right. PROVIDED THAT the Directors may decline, without assigning any reason to allot any shares to any person in whose favour any member may renounce the shares offered to him.


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d. After expiry of the time specified in the aforesaid notice or on receipt of earlier intimation from the person to whom such notice is given that he declines to accept the shares offered, the Board of Directors may dispose off them in such manner and to such person (s) as they may think in their sole discretion, fit.

18. Notwithstanding anything contained in sub-clause (1) hereof, the further shares aforesaid may be offered to any persons (whether or not those persons include the persons referred to in clause (a) of sub-clause (1) hereof) in any manner whatsoever. a. If a special resolution to that effect is passed by the Company in General Meeting, or b. Where no such special resolution is passed, if the votes cast (whether on a show of hands or on a poll as the case

may be) in favour of the proposal contained in the resolution moved in the general meeting (including the casting vote, if any, of the Chairman) by the members who, being entitled to do so, vote in person, or where proxies are allowed, by proxy, exceed the votes, if any, cast against the proposal by members, so entitled to voting and the Central Government is satisfied, on an application made by the Board of Directors in this behalf that the proposal is most beneficial to the Company.

19. Nothing in sub-clause (c) of (1) hereof shall be deemed: a. To extend the time within which the offer should be accepted; or b. To authorize any person to exercise the right of renunciation for a second time on the ground that the person in

whose favour the renunciation was first made has declined to take the shares comprised in the renunciation.

20. Nothing in this Article shall apply to the increase of the subscribed capital of the Company caused by the exercise of anoption attached to the debentures issued or loans raised by the Company: i. To convert such debentures or loans into shares in the Company; or

ii. To subscribe for shares in the Company (whether such option is conferred in these Articles or otherwise). PROVIDED THAT the terms of issue of such debentures or the terms of such loans include a term providing for such option and such term:

a. Either has been approved by the Central Government before the issue of the debentures or the raising of the loans or is in conformity with Rules, if any, made by the Government in this behalf; and

b. In the case of debentures or loans or other than debentures issued to or loans obtained from Government or any institution specified by the Central Government in this behalf, has also been approved by a special resolution passed by the Company in General Meeting before the issue of the debentures or raising of the loans.

Shares at the disposal of the Director 21. Subject to the provisions of Section 81 of the Act and these Articles, the shares in the capital of the Company for the

time being shall be under the control of the Directors 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 or (subject to the compliance with the provision of Section 79 of the Act) at a discount and at such time as they may from time to time think fit and with the sanction of the Company in the General Meeting to give to any person or persons the option or right to call for any shares either at par or premium during such time and for such consideration as the Directors think fit, and may issue and allot shares in the capital of the Company on payment in full or part of any property sold and transferred or for any services rendered to the Company in the conduct of its business and any shares which may so be allotted may be issued as fully paid up shares and if so issued shall be deemed to be fully paid shares. Provided that option or right to call of shares shall not be given to any person or persons without the sanction of the Company in the General Meeting.

Acceptance of shares 22. Any application signed by or on behalf of an applicant for shares in the Company, followed by an allotment of any share

therein, shall be an acceptance of shares within the meaning of these Articles and every person who thus or otherwise accepts any shares and whose name is on the Register shall for the purposes of these Articles; be a Member.


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Deposit and call etc. to be debt payable immediately 23. The money (if any) which the Board shall on the allotment of any shares being made by them require or direct to be paid

by way of deposit, call or otherwise, in respect of any shares allotted by them, shall immediately on the inscription of the name of the allottee in the Register of Members as the name of the holder of such shares, become a debt due to and recoverable by the Company from the allottee thereof and shall be paid by him accordingly.

Liability of Members 24. Every Member, or his heirs, executors or administrators shall pay to the Company the portion of the capital represented

by his share or shares which may, for the time being remain unpaid thereof, in such amounts, at such time or times, and in such manner as the Board shall from time to time in accordance with the Company’s regulations, require or fix for the payment thereof.

Limitation of time for issue of certificate 25. Every member shall be entitled, without payment, to one or more certificates in marketable lots, for all the shares of each

class, or denomination registered in his name, or if the Directors so approve (upon paying such fee as the Directors may from time to time determine) to several certificates, each for one or more of such shares and the company shall complete; and have ready for delivery such certificates within three months from the date of allotment unless the conditions of issue thereof otherwise provide, or within one month of the receipt of application of registration of transfer, transmission, subdivision, consolidation or renewal of any of its shares as the case may be. Every certificate of shares shall be under the seal of the Company and shall specify the number and distinctive numbers of shares in respect of which it is issued and amount paid up thereon and shall be in such form as the directors may prescribe or approve, provided that in respect of a share or shares held jointly by several persons, the Company shall not be borne to issue more than one certificate and delivery of a certificate of shares to one of several joint holders shall be sufficient delivery to all such holder.

Fractional Certificates 26. The Company may issue such fractional certificates as the Board may approve in respect of any of the shares of the

Company on such terms the Board thinks fit as to the period within which the fractional certificates are to be converted into share certificates.

Issue of new certificate in place of one defaced, lost or destroyed 27. If any certificate be worn out, defaced, mutilated or torn or if there be no further space on the back thereof 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 lost or destroyed then upon proof thereof to the satisfaction of the Company and on execution of such indemnity as the Company deem adequate, being given, in a new Certificate in lieu thereof shall be given to the party entitled to such lost or destroyed Certificate. Every Certificates under the Articles shall be issued without payment of fees if the Directors so decide, or on payment of such fees (not exceeding Rs.2/- for each certificate) as the Directors shall prescribe. Provided that no fee shall be charged for issue of new certificates in replacement of those which are old, defaced, or worn out or where there is no further space on the back thereof for endorsement of transfer. Provided that notwithstanding what is stated above the Directors shall comply with such Rules or Regulations or requirements of any Stock Exchange or the Rules made under the Act or the rules made under Securities Contracts (Regulation) Act, 1956 or any other Act, or rules applicable in this behalf. The provisions of this Article shall mutatis mutandis apply to debentures of the Company.

The first name of joint holders deemed sole holder 28. If any share stands in the names of two or more persons, the person first named in the Register shall as regards receipt

of dividends or bonus or service of notices and all or any other matter connected with the Company, except voting at meetings, and the transfer of the shares be deemed the sole holder thereof but the joint-holders of a share shall be severally as well as jointly liable for the payment of all installments and calls, due in respect of such share and for all incidents thereof according to the Company’s regulation.


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Company not bound to recognize on interest in shares other than that of registered holder 29. Except as ordered, by a Court of competent Jurisdiction or as by law required the Company shall not be bound to

recognize any equitable, contingent, future or partial interest in share or (except only as is by these Articles otherwise expressly provided) any rights in respect of a share other than absolute; right thereto, in accordance with these Articles, in the person from time to time registered as the holder register any share in the joint names of any two or more persons or the survivor or survivors of them.

LIENCompany to have lien on shares 44. The Company shall have a first and paramount lien upon all the shares (other than fully paid up shares) registered in the

name of each Member (whether solely or jointly with others) and upon the proceeds of sale thereof, for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares, and no equitable interest in any shares shall be created except upon the footing and upon the condition that Article 25 hereof is to have full effect. Any such lien shall extend to all dividends from time to time declared in respect of such shares. Unless otherwise agreed the registration of a transfer of shares shall operate as a waiver of the Company’s lien, if any, on such shares. The Directors may at any time declare any shares wholly or in part to be exempt from the provisions of this clause.

As to enforcing lien by sale 45. For the purpose of enforcing such lien the Board may sell the shares subject hereto in such manner as they shall think

fit, and for that purpose may cause to be issued a duplicate certificate in respect of such shares and may authorise one of their Members to execute a transfer thereof on behalf of and in the name of such Member. No sale shall be made until such period as aforesaid shall have arrived, and until notice in writing of the intention to sell shall have been served on such Member or his representatives and default shall have been made by him or them in payment, fulfillment, or discharge of such debts, liabilities or engagements for fourteen days after such notice.

Application of proceeds of sale 46. The net proceeds of any such sale shall be received by the Company and applied in or towards payment of such part of

the amount in respect of which the lien exists as is presently payable and 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 person entitled to the shares at the date of the sale.

FORFEITURE AND SURRENDER OF SHARES

If money payable on share not paid notice to be given to member47. If any Member fails to pay any call or installment of a call on or before the day appointed for the payment of the same or

any such extension thereof as aforesaid, the Board may at any time thereafter, during such time as the call or installment remains unpaid, give notice to him requiring him to pay the same together with any interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non payment.

Form of Notice 48. The notice shall name a day (not being less than fourteen days from the date of the notice) and a place or places on and

at which such call or installment and such interest thereon at such rate not exceeding 18 per cent per annum as the Directors shall determine from the day on which such call or installment ought to have been paid and expenses as aforesaid are to be paid. The notice shall also state that, in the event of the nonpayment at or before the time and at the place appointed, the shares in respect of which the calls was made or installment is payable, will be liable to be forfeited.


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In default of payment shares to be forfeited 49. If the requirements of any such notice as aforesaid shall not be complied with, every or any share in respect of which,

such notice has been given, may at any time thereafter before payment of all calls or installments, interest and expenses due in respect thereof, be forfeited by a resolution of the Board to that effect. Such forfeiture shall include all dividends declared or any other moneys payable in respect of the forfeited share and not actually paid before the date of forfeiture which shall be the date on which the resolution of the Directors is passed forfeiting, the shares.

Notice of forfeiture to a member 50. When any share, shall have been so forfeited notice of the forfeiture shall be given to the Member in whose name it

stood immediately prior to the forfeiture, and an entry of the forfeiture, with the date thereof, shall forthwith be made in the Register of Members, but no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice or to make any such entry as aforesaid.

Forfeited share to be property of the Company and may be sold, etc 51. Any share so forfeited shall be deemed to be the property of the Company, and may be sold, re-allotted, or otherwise

disposed of, either to the original holder thereof or to any other person, upon such terms and in such manner as the Board shall think fit.

Member still liable to pay money owing at time of forfeiture and interest 52. Any member whose shares have forfeited shall notwithstanding the forfeiture, be liable to pay and shall forthwith pay to

the Company, on demand all calls, installments, interest and expenses owing upon or in respect of such shares at the time of the forfeiture, together with interest thereon from time to time of the forfeiture until payment at such rate not exceeding 18 per cent per annum as the Board may determine and the Board may enforce the payment thereof, if it thinks fit.

Effect of forfeiture53. The forfeiture of a share shall involve extinction, at the time of the forfeiture, of all interest in and claims and demands

against the Company, in respect of the share and all other rights incidental to the share, except only such of those rights as by these Articles are expressly saved.

Evidence of forfeiture 54. A declaration in writing that the declarant is a Director or Secretary of the Company and that a share in the Company

has been duly forfeited in accordance with these Articles 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 shares.

Validity of sale 55. Upon any sale after forfeiture or surrender or for enforcing a lien in purported exercise of the powers hereinbefore

given, the Board may appoint some person to execute an instrument of transfer of the shares sold and cause the Purchaser’s name to be entered in the Register in respect of the shares sold, and the purchaser shall not be bound to see the regularity of the proceedings, or to be application of the purchase money, and after his name has, been entered in the Register in respect of such shares, the validity of the sale shall not be impeached by any person and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively.

Cancellation of share certificate in respect of forfeited shares 56. Upon any sale, re-allotment or other disposal under the provisions of the preceding Articles, the certificate or

certificates originally issued in respect of the relative shares shall (unless the same shall on demand by the Company have been previously surrendered to if by the defaulting Member) stand cancelled and become null and void and of no effect, and the Directors shall be entitled to issue a duplicate certificate or certificates in respect of the said shares to the person or persons entitled thereto.


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Power to annul forfeiture 57. The Board may at any time before any share so forfeited shall have been sold re-allotted or otherwise disposed off,

annul the forfeiture thereof upon such conditions as it thinks fit.

Surrender of shares 58. The Directors may, subject to the provisions of the Act, accept from any member on such terms and conditions as shall

be agreed, a surrender of his shares or stock or any part thereof.

TRANSFER AND TRANSMISSION OF SHARES Register of Transfers 59. The Company shall maintain a “Register of Transfer” and therein shall be fairly and distinctly entered particulars of

every transfer or transmission of every share held in material form.

Form of transfer 60. The instrument of transfer shall be in writing and all the provisions of Section 108 of the Companies Act, and of any

statutory modification thereof for the time being shall be duly complied with in respect of all transfer of shares and registration thereof.

Transfer form to be completed and presented to the Company 61. The Instrument of Transfer duly stamped and executed by the Transferor and the Transferee shall be delivered to the

Company in accordance with the provisions of the Act. The Instrument of Transfer shall be accompanied by such evidence as the board may require to prove the title of Transferor and his right to transfer the shares and every registered Instrument of Transfer shall remain in the custody of the Company until destroyed by the order of the Board. The Transferor shall be deemed to be the holder of such shares until the name of the Transferee shall have been entered in the Register of Members in respect thereof. Before the registration of a transfer the certificate or certificates of the shares must be delivered to the Company.

62. Subject to the provisions of Section 111 of the Act and Section 22A of the Securities Contracts (Regulation) Act, 1956, the Directors may, at their own absolute and uncontrolled discretion and by giving reasons, decline to register or acknowledge any transfer of shares whether fully paid or nor and the right of refusal, shall not be affected by the circumstances that the proposed transferee is already a member of the Company but in such cases, the Directors shall within one month from the date on which the instruments of transfer was lodged with the Company, send to the transferee and transferor notice of the refusal to register such transfer provided that registration of transfer shall not be refused on the ground of the transferor being either alone or jointly with any other person or persons indebted to the Company on any account whatsoever except when the Company has a lien on the shares. Transfer of shares/debentures in whatever lot shall not be refused.

Transfer Books and Register of Members when closed 63. The Board shall have power on giving not less than seven days previous notice by advertisement in some newspaper

circulating in the district in which the office of the Company is situated to close the Transfer Books the Register of Members or Register of Debenture holders, at such time or times and for such period or periods, not exceeding thirty days at a time and not exceeding in the aggregate forty-five days in each year.

Notice of application when to be given 64. Where, in the case of partly paid shares, an application for registration is made by the transferor, the Company shall

give notice of the application to the transferee in accordance with the provision of Section 110 of the Act.


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Death of one or more joint holders of shares 65. In the case of the death of any one or more of the person named in the Register of Members as the joint-holders of any

shares, the survivor or survivors shall be the only persons recognized by the Company as having any title to or interest in such shares, but 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.

Title of shares of deceased Member 66. The executors or administrators or holders of a Succession Certificate or the legal representatives of a deceased Member

(not being one or two or more joint-holders) shall be the only persons recognized by the Company as having any title to the shares registered in the name of such Member, and the Company shall not be bound to recognize such executors or administrators or holders of a Succession Certificate or the legal representatives shall have first obtained Probate or letters of Administration or Successions Certificate, as the case may be, from a duly constituted Court in the Union of India, provided that in any case where the Board in its absolute discretion thinks fit, the Board may dispense with production of Probate or Letters of Administration or Succession Certificate, upon such terms as to indemnity or otherwise as the Board in its absolute discretion may think necessary and register the name of any person who claims to be absolutely entitled to the shares standing in the name of a deceased member, as a Member.

67. A) As per section 109 A: i. Every holder of shares/ debentures/fixed deposits will have freedom to nominate of anytime a person to whom the

shares/ debentures/ fixed deposits shall rest in the event of his death. ii. Where the shares/debentures/deposits are held by more than one person jointly, the joint holder may together may

make such nomination. iii. Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether

testamentary or otherwise, in respect of such shares in, or debentures of, the Company, where a nomination made in the prescribed manner purports to confer on any person the right to vest the shares in or debentures of the Company, the nominee shall, on the death of the shareholder or holder of debentures of the Company or, as the case may be, on the death of the joint holders become entitled to all the rights in the shares or debentures of the Company or, as the case may be, all the joint holders, in relation to such shares in, or debentures of the Company to the exclusion of all other persons, unless the nomination is varied or cancelled in the prescribed manner.

iv. Where the nominee is a minor, it shall be lawful for the holder of the shares, or holder of debentures, to make the nomination to appoint in the prescribed manner any person to become entitled to shares in or debentures of the Company, in the event of his death, during the minority.

B) As per Section 109 B: i. Any person who becomes a nominee by virtue of the provisions of Section 109A, upon the production of such

evidence as may be required by the Board and subject as hereinafter provided, elect, either: a) to be registered himself as holder of the share or debenture as the case may be; or b) to make such transfer of the shares or debenture, as the case may be, as the deceased shareholder or debenture

holder, as the case may be, could have made. ii. The Board shall, in either case, have the same right to decline or suspend registration as it would have had, if the,

deceased shareholder or debenture holder, as the case may be, had transferred the share or debenture, as the case may be, before his death.

iii. If the person being a nominee, so becoming entitled, elects to be registered as holder of the share or debenture as the case may be, himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects and such notice shall be accompanied with the death certificate of the deceased shareholder or debenture holder, as the case may be.

iv. All the limitations, restrictions. and provisions of this Act relating to the right to transfer and the registration of transfers of shares or debentures shall be applicable to any such notice or transfer as aforesaid as if the death of the member had not occurred and the notice or transfer where a transfer signed by that shareholder or debenture holder as the case may be.


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v. A person being a nominee becoming entitled to a share/or debenture by reason of the death of the holder shall be entitled to the same dividend and other advantages to which he would be entitled if he were the registered holder of the share or debentures except that he shall not before being registered a member in respect of his shares or debentures be entitled in respect of it to exercise any right confirmed 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 shares or debentures and if the notice is not complied with within ninety days, the board may thereafter withheld payment of all dividends, bonuses or other monies payable in respect of the shares or debentures until the requirements of the notice have been complied with.

No transfer to Insolvent etc 68. No share in any circumstances be transferred to any insolvent or person of unsound mind.

No fee on transfer or transmission 69. No fees shall be charged for registration of transfer, transmission, probate, succession certificate and letters of

administration, certificate of death or marriage, power of attorney or similar other documents.

As to shares of Infant and lunatics 70. The guardian of an infant entitled to shares and the Committee of a lunatic member or of a lunatic entitled to shares may

upon producing to the Directors such evidence of their position as may be reasonably required by them be placed upon the Register in respect of the shares to which the, infant or lunatic may be entitled as the case may be.

Persons entitled may receive dividend without being registered as Member. 71. Subject to the provisions of the Act, a person entitled to a share by transmission shall, subject to the right of the Directors

to retain such dividends, or money as hereinafter provided, be entitled to receive and may give a discharge, for any dividends or other moneys payable in respect of the shares.

72. The Company shall incur no liability or responsibility whatsoever in consequence of its registering or giving effect, any transfer of shares made or purporting to be made by any apparent legal owner thereof (as shown or appearing in the Register of members) to the prejudice of persons having or claiming any equitable right, title or interest to or in the said shares, notwithstanding that the Company may have had notice of such equitable right, title or interest or notice prohibiting registration of such transfer, and may have entered such notice or referred thereto, in any book of the Company, and the Company shall not be bound or required to regard or attend or give effect to any notice which may be given to it of any equitable right, title or interest, or be under any liability whatsoever for refusing or neglecting so todo, though it may have been entered or referred to in some book of the Company, but the Company shall nevertheless be at liberty to regard and attend to any such notice and give effect thereto if the Board shall so think fit.

DEMATERIALISATION OF SHARES 73. Dematerialisation/Rematerialisation of Shares

a) Notwithstanding anything contained in these Articles, the Company shall, in accordance with the provisions of the Depositories Act, be entitled to dematerialize any or all its shares or rematerialize any or all its Shares held with a Depository and/or offer its Shares for subscription in a dematerialised form pursuant to the Depositories Act.

Register and Index of Members b) The Company shall be required to maintain a Register and Index of members in accordance with Section 150 and 151 of

the Act and the Depositories Act, with details of shares held in material and dematerialised forms, in any media (including electronic media) as may be permitted by law. The Register and Index of Beneficial Owners maintained by a Depository under Section 11 of the Depositories Act shall be deemed to be the Register and Index of Members holding shares in a dematerialised form for the purposes of the Act.


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Recognition of the rights of beneficial owners c) Save as herein otherwise provided, the Company shall be, entitled to treat the person whose name appears as the

beneficial owner of the shares in the records of the Depository as the absolute owner thereof and accordingly the Company shall not (except by an order of a court of competent jurisdiction or as required by law) be bound to recognise any benami trust or equitable, contingent or other interest in such shares on the part of any other person whether or not it shall have express or implied notice thereof.

Provided further that the Depository as the registered owner shall not have any voting rights or any other rights in respect of the shares held by the Depository and the beneficial owner shall be entitled to all such voting rights and other rights and benefits, in respect of its shares held with a Depository.

d) Notwithstanding anything provided hereinabove, in the case of transfer of Shares, where the Company has not issued any certificates and where such Shares, are being held in an electronic and fungible form, the provisions of the Depositories Act shall apply and accordingly the Depository shall be deemed to be the registered owner for the purpose of effecting transfer of ownership of Shares, on behalf of the beneficial owner, Furthermore, nothing contained in Section 108 of the Act or in these Articles shall, apply to a transfer of shares effected by a transferor and transferee, both of whom are entered as Beneficial Owners in the records of a Depository.

e) In respect of Shares, held by the Depository on behalf of a beneficial owner, the provisions of Sections 153, 153A, 153B, 187B, 187C and 372A of the Act shall not apply.

f) Nothing contained in the Act or these Articles regarding the necessity of having distinctive numbers for shares issued by the Company shall apply to shares held with a Depository.

BORROWING POWERS Power to borrow 75. Subject to the provisions of Sections 58A, 292 and 293 of the Act the Board may, from time to time at its discretion by a

resolution passed at a meeting of the Board, accept deposits from members either in advance of calls or otherwise and generally raise, or borrow or secure the payment of any sum or sums of money for the purposes of the Company. Provided, however, where the moneys to be borrowed together with the moneys already borrowed (apart from temporary loans, obtained. from the Company’s Bankers in the ordinary course of business) exceed the aggregate of the paid up Capital of the Company and its free reserves (not being reserves set apart for any specific purpose) the Board shall not borrow such moneys without the consent of the Company in General Meeting.

Payment or repayment of money borrowed 76. Subject to the provisions of Article 75 hereof, the payment or repayment of money borrowed as aforesaid may be

secured in such manner and upon such terms and conditions in all respects as the Resolution shall prescribe including by the issue of debentures or debentures-stock of the Company, charged upon all or any part of the property of the Company (both present and future), including its uncalled capital for the time being, and debentures, debentures stock and other securities may be made assignable free from any equities between the Company and the person to whom the same may be issued.

Terms of issue of debentures 77. Any debentures, debenture stock or other securities may be issued at a discount premium or otherwise and may be issued

on condition that they shall be convertible into shares of any denomination, and with any privileges and conditions as to redemption; surrender, drawing, allotment of shares and attending (but no voting) at general meetings, appointment of’ Directors and otherwise. Debentures with the right to conversion into or allotment of shares shall be issued only with the consent of the Company in general meeting accorded by a Special Resolution.


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Register of mortgages etc to be kept 78. The Board shall cause a proper Register to be kept in accordance with the provisions of Section 143 of the act of all

mortgages, debentures and charges specifically affecting the property of the Company and shall cause the requirements of Sections 118, 125 and 127 to 144 (both inclusive) of the Act in that half to be duly complied with, so far as they fail to be complied with by the Board.

Register and index of debenture holder 79. The Company shall, if at any time, issue debentures, keep a Register and Index of Debenture holders in accordance with

Section 152 of the Act. The Company shall have the power to keep in any State or country outside India a branch Register of Debenture holders resident in that State of country.

CONVERSION OF SHARES INTO STOCK AND RECONVERSION Shares may be converted into stock 80. The Company in general meeting may convert its fully paid up shares into stock; and when any shares shall have been

converted into stock the several holders of such stock may henceforth transfer their respective interest therein, or any part of such interest, in the same manner and subject to the same regulations, as and subject to which shares from which the stock arose might have- been transferred, if no such conversion had taken place, or as near thereto as circumstances will admit. The Company may at any time reconvert any stock into paid-up shares of any denomination.

Right of stock holders 81. 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 of winding up) shall be conferred by an amount of stock which would not, if existing in shares have, conferred that privilege or advantage.

Provision for shares to apply to stock 82. Such of the regulations of the Company (other than those relating to share warrants), as are applicable to paid-up shares

shall apply to stock and the words “share” and “shareholder”, in those regulations shall include “stock” and “stockholder” respectively.

VOTE OF MEMBERS Members in arrears not to vote 103. No member shall be entitled to vote either personally or by proxy at any General Meeting or Meeting of a class of

shareholders either upon a show of hands or upon a poll in respect of any shares registered, in his name on which any calls or other sums presently payable by him have not been paid or in regard to which the Company has, and has exercised, any right of lien.

Number of vote to which member entitled 104. Subject to the provisions of these Articles, and without prejudice to any special privileges or restrictions as to voting for

the time being attached to any class of shares for the time being forming part of the capital of the Company, every Member, not disqualified by the last preceding Article shall be entitled to be present and to speak and vote at such meeting and on a show of hands every Member (being an individual) present in person or by proxy or (being a body corporate) is present by a representative or proxy shall have one vote and upon a poll the voting right of every Member present in person or by proxy or by a representative shall be in proportion to his share of the paid up equity share capital of the Company. Provided however, if any Preference Shareholder be present at any meeting of the Company, save as provided in clause (b) of sub-section (2) of Section 87, he shall have right to vote only on resolutions placed before the meeting which directly affect the rights attached to his preference shares.

105. On a poll being taken at a meeting of the Company, a Member entitled to more than one vote, or his proxy, or other person entitled to vote for him, as the case may be, need not, if he votes, use all his votes or cast in the same way all the votes he uses.


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How Members non-composements and minor may vote. 106. 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 guardian may, on poll vote by proxy. If any Member be a minor the vote in respect of his shares shall be by his guardian, or anyone of his guardians, if more than one, to be selected in case of dispute by the Chairman of the meeting.

Vote of joint Members 107. If there be joint registered holders of any shares, anyone of such persons may vote at any meeting or may appoint

another person (whether a Member or not) as his proxy in respect of such shares, as if he were solely entitled thereto but the proxy so appointed shall not have any right to speak at the meeting and, if more than one of such joint-holders be present at any meeting, that one of said persons so present whose name stands higher on the register shall alone be entitled to speak and to vote in respect of such shares, but the other or others of the joint holders shall be entitled to be present at the meeting. Several executors or administrators of a deceased Member in whose name shares stand shall for the purpose of these Articles be deemed joint-holders thereof.

Voting in person or by proxy 108. Subject to the provisions of these Articles votes may be given either personally or by proxy. A Body corporate being a

Member may vote either by a proxy or a representative duly authorised in accordance with Section 187 of the Act, and such representative shall be entitled to exercise the same right and powers (including the right to vote by proxy) on behalf of the body corporate which he represents as that body could exercise if it were an individual member.

Votes in respect of shares if deceased and insolvent member 109. Any person entitled under Article 63 to transfer any share may vote at any General Meeting in respect thereof in the

same manner as if he were the registered holder of such shares, provided that forty-eight hours at least before, the time of holding the meeting or adjourned meeting, as the case may be, at which he proposes to vote he shall satisfy the Directors of his right to transfer of such shares and give such indemnity (if any) as the Directors may require or the Directors shall have previously admitted his right to vote at such meeting in respect thereof.

Appointment of proxy 110. Every Proxy, (whether a Member or not), shall be appointed in writing under the hand of the appointer or his attorney,

or if such appointer is a body corporate, under the common seal of such corporation, or be signed by an officer or any attorney duly authorized by it, and any Committee or guardian may appoint such proxy. The proxy so appointed shall not have any right to speak at the meeting.

Proxy either for specified meeting or for a period 111. A proxy may be appointed by an instrument of proxy either for the purpose of a particular meeting specified in the

instrument and any adjournment thereof or may be appointed for the purpose every meeting of the Company, or of every meeting to be held before a date specified in the instrument and every adjournment of any such meeting.

Proxy to vote on a show of hands and poll 112. A Member present by proxy shall be entitled to vote on a show of hands as well as on a poll.

Deposit of instrument of appointment 113. The instrument appointing a proxy and the power of attorney or other authority, (if any) under which it is signed or a

notarially certified copy of that power of authority, shall be deposited at the Office not later than forty-eight hours before the time for holding the meeting at which the person named in instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid. No instrument appointing a proxy shall be valid after the expiry of twelve months from the date of its execution.


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Form of proxy 114. Every instrument of proxy whether for a specified meeting or otherwise, shall, as nearly as circumstances will admit, be

in any of the forms set out in Schedule IX of the Act.

Validity of votes given by proxy not withstanding death of member 115. 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 revocation of the proxy or of any power of attorney under which such proxy was signed, or, the transfer of the share in respect of which the vote is given, provided that no intimation in writing of the death or insanity, revocation or transfer shall have been received at the Office before the commencement of the meeting shall be entitled to require such evidence as he may in his discretion, think fit of the due execution of an instrument of proxy and that the same has not been revoked.

Time for objection of votes 116. No objection shall be made to the validity of any vote except at the meeting or poll at which such vote is tendered, and

every vote whether given personally or by proxy, not disallowed at such meeting or poll shall be deemed valid for all purposes of such meeting or poll whatsoever.

Chairman of the meeting to the judge of the validity of every vote 117. The Chairman of any meeting shall be sole judge of the validity of every vote tendered at such meeting. The Chairman

present at the taking of poll shall be the sole judge of the validity of every vote tendered as such poll.

118. Minutes of General Meeting and Inspection thereof by Members 1. The Company shall cause minutes of all proceedings of every General Meeting to be kept by making within thirty

days of the conclusion of every such meeting concerned, entries thereof in books kept for that purpose with their pages consecutively numbered.

2. Each page of every such book shall be initialled or signed and the last page of the record of proceedings of each meeting in such book shall be dated and signed by the Chairman of the same meeting with in the aforesaid period of thirty days or in the event of the death or inability of that Chairman -within that period, by a Director duly authorised by the Board for the purpose.

3. In no case the minutes of proceeding of meeting shall be attached to any such book as aforesaid by pasting or otherwise.

4. The minutes of each meeting shall contain a fair and correct summary of the proceeding thereat. 5. All appointments of Officers made at any aforesaid meeting shall be included in the minutes of the meeting. 6. Nothing herein contained shall require or be deemed to require the inclusion in any such minutes of any matter

which in the opinion of the Chairman or 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. The Chairman of the meeting shall exercise an absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes on the aforesaid grounds.

7. Any such minute shall be evidence of the proceedings recorded therein. 8. The book containing the minutes of proceedings of General Meetings shall be kept at the Office of the Company and

shall be open during business hours for such periods not being less in the aggregate than two hours in such day as the Directors determine, to the inspection of any member without charge.


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DIRECTORS

Number of Directors

119. Until otherwise determined by a General Meeting of the Company and subject to the provisions of Section 252 of the Act, the number of directors (including Debenture and Alternate Directors) shall not be less than three nor more than twelve.

Qualification of Director

130. A Director need not hold any shares in the Company to qualify him for the office of a Director of the Company.

Remuneration of Directors 131. a) Subject to the provisions of the Act, a Managing Director or a Director, who is in the whole-time employment of the

Company may be paid remuneration, either by way of a monthly payment or at a specified percentage of the net profits of the Company or partly by one way and partly by the other. b) Subject to the provisions of the Act a Director, who is neither in the whole-time employment nor a Managing Director may be paid remuneration either:

i) by way of monthly, quarterly or annual payment with approval of the Central Government, or; ii) by way of commission if the Company by a special resolution has authorised such payment.

c) The fee payable to Directors (other than Managing or Wholetime Director, if any) for attending each meeting of the ‘Board or Committee thereof shall be such sum as may be prescribed by the Act or the Central Government from time to time.

DIVIDENDS Division of profits 161. The profits of the Company, subject to any special rights relating thereto created or authorized to be created by these

Articles and subject to the provisions of these Articles, shall be divisible among the Members in proportion to the amount of capital paid up or credited as paid-up on the shares held by them respectively.

The Company in General Meeting may declare a dividend. 162. The Company in General Meeting may declare dividends to be paid to the Members according to their respective rights,

but no dividends shall exceed the amount recommended by the Board.

Dividends only to be paid out of profits 163.

1) No dividend shall be declared or paid otherwise than out of profits of the financial year arrived at after providing for depreciation in accordance with the provisions of Section 205 and 205 A of the Act or out of the profits of the Company for any previous financial year or years arrived at after providing for depreciation in accordance with these provisions and remaining undistributed or out of both provided that :- a. If the Company has not provided for depreciation for any previous financial year or years it shall, before declaring

or paying a dividend for any financial year, provide for such depreciation out of the profits of the financial year or out of the profits of any other previous financial year or years.

b. If the Company has incurred any loss in any previous financial year or years the amount of the loss or an amount which is equal to the amount provided for depreciation for the year or those years whichever is less, shall be set off against the profits of the Company for the year for which the dividend is proposed to be declared or paid or against the profit of the Company for any previous financial year or years in accordance with the provisions of subsection (2) of Section 205 of the Act or against both.


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2) Notwithstanding anything contained in sub-clause (1) hereof no dividend shall be declared or paid by the Company for any financial year out of the profits of the Company for that year arrived at after providing for depreciation in accordance with the provisions of sub clause (I) hereof except after the transfer to the reserves of the Company of such percentage of its profits for that year not exceeding 10% as may be prescribed. Provided that nothing in this clause shall be deemed to prohibit the voluntary transfer by a company of a higher percentage of its profits to the reserves in accordance with such rules as may be made by the Central Government in this behalf.

3) Where owing to inadequacy or absence of profits in any year, the Company proposes to declare dividend out of the accumulated profits earned by the Company in previous years and transferred by it to the reserves, such declaration of dividend shall not be made except in accordance with such rules as may be made by the Central Government in this behalf, and where any such declaration shall not be made except with the previous approval of the Central Government.

Interim Dividend 164. Subject to the provisions of the Act, the Board may, from time to time pay to the Members such interim dividend as in

their judgment the position of the Company justifies.

Capital paid up advance at interest not to earn dividend 165. Where Capital is paid in advance of calls, such capital may carry interest but shall not in respect thereof confer a right

to dividend or to- participate in profits.

Dividends in proportion to amount paid up 166. 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 dividends as from a particular date, such share shall rank for dividend accordingly.

One of joint holders receipt effectual 167. Any one of several persons who are registered as the joint holders of any share may give effectual receipts for all

dividends or bonus and payments on account of dividends or bonus or other moneys payable in respect of such shares.

No member to receive dividend whilst indebted to the Company and Company’s right of reimbursement there out. 168. No Member shall be entitled to receive payment of any interest or dividends in respect of his share or shares, whilst

any money may be due or owing from him to the Company in respect of such share or shares otherwise howsoever, either alone or jointly with any other person or persons, and the Board may deduct from the interest or dividend payable to any Member all sums of money so due from him to the Company.

Transfer of share must be registered. 169. A transfer of shares shall not pass the right to any dividend declared thereon before the registration of the transfer.

Dividend how remitted 170. Unless otherwise directed any dividend may be paid by cheque or warrant or by a payslip or receipt having the force of

a cheque or warrant sent through post to the registered address of the Member or person entitled or in case of joint holders to that one of them first named in the Register in respect of the joint-holdings. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. The Company shall not be liable or responsible for any cheque or warrant or payslip or receipt lost in transmission, or for any dividend lost to the Member or person entitled thereto by the forged endorsement of any cheque or warrant or the forged signature on any payslip or receipt or the fraudulent recovery of the dividend by any other means.


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Unclaimed dividends 171. Where the Company has declared a dividend but which has not been paid or the dividend warrant in respect thereof has

not been posted within 42 days from the date of declaration to any shareholder entitled to the payment of the dividend, the Company shall within 7 days from the date of expiry of the said period of 42 days, open a special account in that behalf in any scheduled bank called “Unpaid Dividend of ……………… Limited” and transfer to the said account, the total amount of dividend which remains unpaid or in relation to which no dividend warrant has been posted. Any money transferred to the unpaid dividend account of the Company which remains unpaid or unclaimed shall be dealt with according to the provisions of the Companies Act, 1956 and the rules made thereunder in respect thereof.


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SECTION XI: 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 entered into more than two years before the date of this Letter of Offer) which are or may be deemed material have been entered or to be entered into by our Company. Copies of these contracts and the documents may be inspected at the Registered Office of our Company situated at 66/1, Hansa Villa, Opp. South Indian Gymkhana, Bhaudaji Cross Road, Matunga (CR), Mumbai - 400 019, from 11.00 AM to 3.00 PM on working days from the date of this Letter of Offer until the Issue Closing Date.

Material Contracts to the Issue 1. Memorandum of Understanding dated September 26, 2009 executed by our Company with Arihant Capital Markets

Limited. 2. Memorandum of Understanding dated September 26, 2009 executed by our Company with Registrar to the Issue. 3. Agreement dated February 20, 2010, executed by our Company with Bankers to the Issue.

Material Documents 1. Our Memorandum and Articles of Association as amended till date. 2. Resolutions of the Board of Directors dated September 26, 2009, in relation to the Issue and other related matters. 3. Resolution passed by the Members at the Annual General Meeting held on September 22, 2009 authorizing the

proposed rights Issue. 4. Report of the Statutory Auditors’ dated January 29, 2010 prepared as per Indian GAAP and mentioned in this Letter of

Offer and Statement of Tax Benefits from the Auditor’s dated September 26, 2009. 5. Copies of annual reports of our Company for the past five financial years. 6. Letter dated October 12, 2009, bearing reference no. CFD/PREF/JA/IP-RT/1073/9-10 from BSE granting in-principle

listing approval. 7. Consents of Auditor’s, Bankers to our Company, Bankers to the Issue, Lead Manager, Registrar to the Issue, Directors

of our Company, as referred to, in their respective capacities. 8. Tripartite Agreement between NSDL, our Company and the Registrar to the Issue dated March 19, 2009. 9. Tripartite Agreement between CDSL, our Company and the Registrar to the Issue dated May 2, 2001. 10. Offer Document of the previous Initial Public Offer made in the year 1983 by our Company in its erstwhile name K. B.

Steel Limited. 11. Offer Document dated October 19, 2007 for acquisition of substantial shares and takeover of the management of the

Company by the current promoters and 12. Due diligence certificate dated September 30, 2009 to SEBI from Arihant Capital Markets Limited. 13. Copy of SEBI Observation Letter No. CFD/DIL/ISSUES/SK/MS/191280/2010 dated January 18, 2010.

Any of the contracts or documents mentioned in this Letter of Offer may be amended or modified at any time if so required in the interest of our Company or if required by the other parties, without reference to the shareholders subject to complianceof the provisions contained in the Companies Act and other relevant statutes.


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DECLARATION

We hereby certify that no statement made in this Letter of Offer is in contravention of any of the provisions of the Companies Act, 1956 and the rules made thereunder. We further certify that all the legal requirements connected with the Issue as also the guidelines, instructions issued by the Securities and Exchange Board of India, Government and any other competent authority in this behalf have been duly complied with. We further certify that all the statements in this Letter of Offer are true and correct.

SIGNED BY THE DIRECTORS OF THE COMPANY

Mr. Vipul Modi (Chairman)

Mrs. Leena Modi

Mr Siddharth Shah (by his duly constituted attorney Mr. Vipul Modi)

Place: Mumbai Date: February 26, 2010

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