Dated June 23, 2010 Please read Section 60B of the Companies Act, 1956 100% Book Building

Issue The Draft Red Herring Prospectus shall be updated upon filing with the RoC

DRAFT RED HERRING PROSPECTUS

(The Company was originally incorporated as Skyzen Investment Advisors Private Limited on June 7, 2005 at Mumbai as a private limited company under the Companies Act, 1956. For details of changes in the name and registered office of the Company, please see the section History and Certain Corporate Matters on page 83.)

Milestone Capital Advisors Limited

Registered and Corporate Office: 602, Hallmark Business Plaza, Sant Dyaneshwar Marg, Opp. Guru Nanak Hospital, Bandra (East), Mumbai 400 051 Tel: +91 22 42357000; Fax: +91 22 42357077 Contact Person: Ravindra Gupta, Company Secretary and Compliance Officer Tel: +91 22 42357000; Fax: +91 22 42357077; Email: ipo.investor@milestonecapital.in; Website: www.milestonecapital.in

PROMOTERS OF THE COMPANY: VED PRAKASH ARYA AND MILESTONE FINCAP SERVICES PRIVATE LIMITED
PUBLIC ISSUE OF 4,285,715 EQUITY SHARES OF FACE VALUE OF Rs. 10 EACH OF MILESTONE CAPITAL ADVISORS LIMITED (THE COMPANY OR THE ISSUER) FOR CASH AT A PRICE OF Rs. [] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF Rs. [] PER EQUITY SHARE) AGGREGATING TO Rs. [] MILLION (THE ISSUE). THE ISSUE WILL CONSTITUTE 30.00% OF THE POST ISSUE PAID UP CAPITAL OF THE COMPANY.
The Company is also considering a Pre-IPO Placement of up to714,200 Equity Shares and aggregating up to Rs.400.00 million with certain investors (Pre-IPO Placement). The Company will complete the issuance of such Equity Shares, if any, prior to the filing of the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is completed, the Issue size would be reduced by the extent of such Pre-IPO Placement, subject to a minimum Issue size of 25% of the post Issue paid-up equity capital being offered to the public.

THE FACE VALUE OF EQUITY SHARES IS Rs. 10 EACH. THE PRICE BAND AND THE MINIMUM BID LOT WILL BE DECIDED BY THE COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS AND ADVERTISED AT LEAST TWO WORKING DAYS PRIOR TO THE BID/ISSUE OPENING DATE. In case of any revision in the Price Band, the Bid/Issue Period will be extended by three additional Working Days after revision of the Price Band, subject to the Bid/Issue Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bid/Issue Period, if applicable, will be widely disseminated by notification to the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE), by issuing a press release, and also by indicating the change on the websites of the Book Running Lead Managers (BRLMs) and at the terminals of the Syndicate Members. In terms of Rule 19(2) (b) (i) of the Securities Contracts Regulations Rules, 1957 (SCRR), as amended, this is an issue for more than 25% of the post-Issue capital.The Issue is being made through the 100% Book Building Process wherein at least 50% of the Issue shall be allocated on a proportionate basis to Qualified Institutional Buyers (QIB) Bidders. Provided that the Company may allocate up to 30% of the QIB Portion to Anchor Investors on a discretionary basis out of which one-third shall be reserved for domestic Mutual Funds. 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. If at least 50% of the Issue cannot be allocated to QIBs, then the entire application money shall be refunded forthwith. Potential investors may participate in this Issue through an Application Supported by Blocked Amount (ASBA) process providing details about the bank account which will be blocked by the Self Certified Syndicate Bank (SCSB) for the same. For details, see the section Issue Procedure on page 217. RISK IN RELATION TO THE FIRST ISSUE This being the first public issue of the Equity Shares of the Company, there has been no formal market for the Equity Shares of the Company. The face value of the Equity Shares is Rs.10 each. The Floor Price is [] times of the face value and the Cap Price is [] times of the face value. The Issue Price (as has been determined and justified by the Company and the BRLMs as stated in the section Basis for Issue Price on page 39) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing. IPO GRADING This Issue has been graded by [] as [], indicating [].The IPO grade is assigned on a five -point scale from 1 to 5, with IPO grade 5/5 indicating strong fundamentals and IPO grade 1/5 indicating poor fundamentals. For details, please see the section General Information on page 15. GENERAL RISKS Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Company 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 the contents of this Draft Red Herring Prospectus. Specific attention of the investors is invited to Risk Factors on page xii. ISSUERS ABSOLUTE RESPONSIBILITY The Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to the Company and the Issue, which is material in the context of the Issue, that the information contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which make this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING ARRANGEMENT The Equity Shares offered through this Draft Red Herring Prospectus are proposed to be listed on the BSE and the NSE. We have received an in-principle approval from the BSE and the NSE for the listing of the Equity Shares pursuant to letters dated [] and [], respectively. For the purposes of the Issue, the Designated Stock Exchange shall be the []. BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE

IDFC CAPITAL LIMITED

Naman Chambers, C-32 G-Block, Bandra Kurla Complex Bandra (East) Mumbai 400 051 Tel: +91 22 6622 2600 Fax: +91 22 6622 2501 Email: milestone.ipo@idfc.com Investor grievance email: complaints@ idfc.com Website: www.idfccapital.com Contact Person: Hiren Raipancholia SEBI Registration No.: INM000011336 BID/ISSUE OPENS ON

EDELWEISS CAPITAL LIMITED

14th Floor, Express Towers Nariman Point Mumbai 400 021 Tel: +91 22 4086 3535 Fax: +91 22 4086 3610 Email: milestone.ipo@edelcap.com Investor Grievance Email: customerservice.mb@edelcap.com Website: www.edelcap.com Contact Person: Sumeet Lath/Jibi Jacob SEBI Registration No.: INM0000010650 []

ICICI SECURITIES LIMITED

ICICI Centre, H.T. Parekh Marg, Churchgate, Mumbai 400 020 Tel: +91 22 2288 2460 Fax: +91 22 2282 6580 Email: milestone.ipo@icicisecurities.com Investor Grievance Email: customercare@ icicisecurities.com Website: www.icicisecurities.com Contact Person: Vishal Kanjani SEBI Registration No.: INM000011179 BID/ISSUE CLOSES ON

KARVY COMPUTERSHARE PRIVATE LIMITED

Plot No. 17-24, Vittal Rao Nagar Madhapur, Hyderabad 500 081 Tel: +91 40 2342 0815 Fax: +91 40 2343 1551 Email: milestone@karvy.com Website: http://karisma.karvy.com Contact Person: Murali Krishna SEBI Registration No.: INR000000221 []

BID/ISSUE PROGRAMME* * The Company may consider participation by Anchor Investors. The Anchor Investor Bid/ Issue Period shall be one Working Day prior to the Bid/ Issue Opening Date.

TABLE OF CONTENTS
SECTION I: GENERAL ........................................................................................................................... DEFINITIONS AND ABBREVIATIONS................................................................................................... PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA................................................ FORWARD LOOKING STATEMENTS ..................................................................................................... SECTION II: RISK FACTORS................................................................................................................ SECTION III: INTRODUCTION............................................................................................................ SUMMARY OF INDUSTRY ...................................................................................................................... SUMMARY OF BUSINESS ....................................................................................................................... SUMMARY FINANCIAL INFORMATION .............................................................................................. THE ISSUE.................................................................................................................................................. GENERAL INFORMATION ...................................................................................................................... CAPITAL STRUCTURE ............................................................................................................................. OBJECTS OF THE ISSUE .......................................................................................................................... BASIS FOR ISSUE PRICE ......................................................................................................................... STATEMENT OF TAx BENEFITS ............................................................................................................ SECTION IV: ABOUT THE COMPANY ............................................................................................... INDUSTRY OVERVIEW ............................................................................................................................ BUSINESS................................................................................................................................................... REGULATIONS AND POLICIES .............................................................................................................. HISTORY AND CERTAIN CORPORATE MATTERS .............................................................................. MANAGEMENT......................................................................................................................................... SUBSIDIARIES AND JOINT VENTURES ............................................................................................... PROMOTERS AND PROMOTER GROUP ............................................................................................... GROUP COMPANIES ................................................................................................................................ RELATED PARTY TRANSACTIONS ....................................................................................................... DIVIDEND POLICY................................................................................................................................... SECTION V: FINANCIAL INFORMATION ......................................................................................... FINANCIAL STATEMENTS ...................................................................................................................... MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION ......................................................................................................................................... SECTION VI: LEGAL AND OTHER INFORMATION ....................................................................... OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS .................................................. GOVERNMENT APPROVALS .................................................................................................................. OTHER REGULATORY AND STATUTORY DISCLOSURES ................................................................ SECTION VII: ISSUE INFORMATION ................................................................................................ TERMS OF THE ISSUE ............................................................................................................................. ISSUE STRUCTURE .................................................................................................................................. ISSUE PROCEDURE.................................................................................................................................. RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ........................................... SECTION VIII: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION ............................ SECTION Ix: OTHER INFORMATION ............................................................................................... MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION .................................................... DECLARATION.......................................................................................................................................... I
I Ix xI

xII 1 1 3 9 14 15 24 34 39 41 49 49 61 80 83 92 108 117 120 125 126 127 127 180 194 194 198 200 210 210 213 217 246 247 259 259 261

SECTION I: GENERAL DEFINITIONS AND ABBREVIATIONS Term The Issuer, the Company, our Company We, us, Our Description Unless the context otherwise requires, refers to Milestone Capital Advisors Limited, a company incorporated under the Companies Act with its registered office at 602, Hallmark Business Plaza, Sant Dyaneshwar Marg, Opp. Guru Nanak Hospital, Bandra (East), Mumbai 400 051 Unless the context otherwise requires, refers to Milestone Capital Advisors Limited, its Subsidiaries and Joint Ventures on a consolidated basis, as described herein

Company Related Terms Term Articles / Articles of Association Auditors Board/ Board of Directors Capstone Capital Director(s) Equity Shares Group Companies Description The Articles of Association of the Company The statutory auditors of the Company, i.e. G.M. Kapadia & Co., Chartered Accountants The board of directors of the Company or a duly constituted committee thereof Capstone Capital Services Private Limited The director(s) of the Company, unless otherwise specified Equity shares of the Company of face value of Rs. 10 each, unless otherwise specified Companies, firms, ventures promoted by the Promoters, irrespective of whether such entities are covered under Section 370(1B) of the Companies Act or not. For details of Group Companies of the Company, see the section Group Companies on page 120 IL&FS Milestone Realty Advisors Private Limited Jevir Leasing and Finance Limited The joint ventures of the Company, namely, IL&FS Milestone Realty, Milestone Ecofirst, Milestone Religare and Capstone Capital and the joint venture of Omega Global Mauritius Ltd., namely Milestone Religare Capital Management Ltd., as defined herein The memorandum of association of the Company

IL&FS Milestone Realty Jevir L&F Joint Ventures

Memorandum/ Memorandum of Association Milestone Ecofirst Milestone Fincap Milestone Investment Milestone Religare Milestone PMS Milestone Property Milestone Trusteeship Omega Global Promoters Promoter Group

Registered Office Subsidiaries

Milestone Ecofirst Advisory Services (India) Private Limited Milestone Fincap Services Private Limited Milestone Investment Advisory Services Private Limited Milestone Religare Investment Advisors Private Limited Milestone Portfolio Management Services Private Limited Milestone Projects and Property Management Private Limited Milestone Trusteeship Services Private Limited Omega Global Mauritius Ltd. Ved Prakash Arya and Milestone Fincap Services Private Limited Unless the context otherwise requires, refers to such persons and entities which constitute the Promoter Group of the Company in terms of Regulation 2(zb) of the SEBI Regulations and a list of which is provided in the section Promoters and Promoter Group on page 117 The registered office of the Company located at 602, Hallmark Business Plaza, Sant Dyaneshwar Marg, Opp. Guru Nanak Hospital, Bandra (East), Mumbai 400 051 The subsidiaries of the Company, namely, Milestone Property, Milestone PMS, Milestone Investment, Milestone Trusteeship, Jevir L&F and Omega Global as defined herein. It also includes the subsidiaries of Omega Global, namely, Milestone

Term

Description Capital Management LLC, IL&FS Milestone Capital Management LLC and Milestone Mercator Maritime Management Ltd.

Issue Related Terms Term Allotment/Allot/Allotted Allottee Anchor Investor Anchor Period Investor Bid/Issue Description Unless the context otherwise requires, means the issue and allotment of Equity Shares pursuant to this Issue to the successful Bidders A successful Bidder to whom the Equity Shares are Allotted A Qualified Institutional Buyer, applying under the Anchor Investor Portion, with a minimum Bid of Rs. 100 million The day, one Working Day prior to the Bid/Issue Opening Date, on which Bids by Anchor Investors shall be submitted and allocation to Anchor Investors shall be completed The final price at which Equity Shares will be issued and Allotted to Anchor Investors in terms of the Red Herring Prospectus and the Prospectus, which price may be equal to or higher than the Issue Price but not higher than the Cap Price. The Anchor Investor Issue Price will be decided by the Company, in consultation with the BRLMs Up to 30% of the QIB Portion which may be allocated by the Company to Anchor Investors on a discretionary basis. One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the price at which allocation is being done to other Anchor Investors An application, whether physical or electronic, used by Bidders to make a Bid authorising a SCSB to block the Bid Amount in their specified bank account maintained with the SCSB An account maintained by the ASBA Bidder with the SCSB, which will be blocked by such SCSB to the extent of the appropriate Bid Amount in relation to a Bid by an ASBA Bidder; Any Bidder intending to apply through the ASBA process The form, whether physical or electronic, used by an ASBA Bidder to make a Bid, which contains an authorisation to block the Bid Amount in an ASBA Account and which will be considered as the application for Allotment for the purposes of the Red Herring Prospectus and the Prospectus The form used by the ASBA Bidders to modify the quantity of Equity Shares or the Bid Amount in any of their ASBA Bid cum Application Forms or any previous ASBA Revision Form(s) The banks which are clearing members and registered with SEBI as Bankers to the Issue with whom the Escrow Account will be opened and in this case being [] The basis on which the Equity Shares will be Allotted to successful Bidders under the Issue and which is described in the section Issue Procedure Basis of Allotment on page 239 An indication to make an offer during the Bid Period by a Bidder pursuant to submission of Bid cum Application Form or ASBA Bid cum Application Form, as the case may be, or during the Anchor Investor Bid/ Issue Period by the Anchor Investors in the Anchor Investor Bid cum Application Form, to subscribe to the Equity Shares of the Company at a price within the Price Band, including all revisions and modifications thereto; The highest value of the optional Bids indicated in the Bid cum Application Form The form used by a Bidder to make a Bid and which will be considered as the application for Allotment for the purposes of the Red Herring Prospectus and the Prospectus including the ASBA Bid cum Application Form (if applicable) The date after which the Syndicate and the SCSBs will not accept any Bids for this

Anchor Investor Issue Price

Anchor Investor Portion

Application Supported by Blocked Amount/ ASBA ASBA Account

ASBA Bidder ASBA Bid cum Application Form or ASBA BCAF

ASBA Revision Form Banker(s) to the Issue/ Escrow Collection Bank(s) Basis of Allotment Bid

Bid Amount Bid cum Application Form

Bid /Issue Closing Date

ii

Term

Bid /Issue Opening Date

Bidder Bid/Issue Period

Book Building Process/Method BRLMs/Book Running Lead Managers Business Day CAN/Confirmation of Allocation Note

Cap Price Cut-off Price

Designated Branches

Designated Date

Designated Stock Exchange Draft Red Herring Prospectus

Edelweiss Eligible NRI

Escrow Account

Escrow Agreement

Description Issue, which shall be notified in an English national newspaper, a Hindi national newspaper and a Marathi newspaper, each with wide circulation The date on which the Syndicate and the SCSBs shall start accepting Bids for the Issue, which shall be the date notified in an English national newspaper, a Hindi national newspaper and a Marathi newspaper, each with wide circulation Any prospective investor who makes a Bid pursuant to the terms of the Red Herring Prospectus and the Bid cum Application Form The period between the Bid/Issue Opening Date and the Bid/Issue Closing Date inclusive of both days and during which prospective Bidders (except Anchor Investors) and the ASBA Bidders can submit their Bids The book building process as provided under Schedule XI of the SEBI Regulations, in terms of which the Issue is being made The Book Running Lead Managers to the Issue, in this case being IDFC Capital, Edelweiss and I-Sec Any day on which commercial banks in Mumbai are open for business In relation to Anchor Investors, it shall mean the note or advice or intimation including any revisions thereof sent to each successful Anchor Investors indicating the Equity Shares allocated after discovery of the Anchor Investor Price. In relation to Bidders other than Anchor Investors, it shall mean the note or advice or intimation including any revisions thereof, sent to each successful Bidder indicating the Equity Shares allocated after discovery of the Issue Price in accordance with the Book Building Process The higher end of the Price Band, above which the Issue Price will not be finalised and above which no Bids will be accepted The Issue Price, finalised by the Company, in consultation with the BRLMs. Only Retail Individual Bidders whose Bid Amount does not exceed Rs. 100,000 are entitled to Bid at the Cut-off Price. No other category of Bidders are entitled to Bid at the Cut-off Price Such branches of the SCSBs which shall collect the ASBA Bid cum Application Forms used by the ASBA Bidders and a list of which is available on the website of SEBI from time to time. The date on which funds are transferred from the Escrow Account to the Public Issue Account or the Refund Account, as appropriate, or the amount blocked by the SCSBs is transferred from the bank account of the ASBA Bidders to the Public Issue Account, as the case may be, after the Prospectus is filed with the RoC, following which the Board of Directors shall Allot Equity Shares to successful Bidders [] This Draft Red Herring Prospectus dated June 23, 2010 issued in accordance with Section 60B of the Companies Act and the SEBI Regulations, filed with SEBI and which does not contain complete particulars of the price at which the Equity Shares are offered and the size of the Issue Edelweiss Capital Limited NRIs from jurisdictions outside India where it is not unlawful to make an issue or invitation under the Issue and in relation to whom the Red Herring Prospectus constitutes an invitation to subscribe to the Equity Shares offered herein Account opened with the Escrow Collection Bank(s) and in whose favour the Bidders (excluding the ASBA Bidders) will issue cheques or drafts in respect of the Bid Amount when submitting a Bid Agreement dated [] to be entered into by the Company, the Registrar to the Issue, the BRLMs, the Syndicate Members, the Escrow Collection Bank(s) and Refund Bank(s) for collection of the Bid Amounts and where applicable, refunds of the amounts collected to the Bidders (excluding the ASBA Bidders) on the terms and conditions thereof

iii

Term Escrow Collection Banks First Bidder Floor Price I-Sec IDFC Capital Issue

Description [] The Bidder whose name appears first in the Bid cum Application Form or Revision Form or the ASBA Bid cum Application Form or ASBA Revision Form The lower end of the Price Band, at or above which the Issue Price will be finalised and below which no Bids will be accepted ICICI Securities Limited IDFC Capital Limited Public issue of 4,285,715 Equity Shares for cash at a price of Rs. [] per Equity Share aggregating to Rs. [] million. The Company is also considering a Pre-IPO Placement. The Company will complete the issuance of such Equity Shares, if any, prior to the filing of the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is completed, the Issue size would be reduced by the extent of such Pre-IPO Placement, subject to a minimum Issue size of 25% of the post Issue paid-up equity capital being offered to the public. The agreement entered into on June 23, 2010 between the Company and the BRLMs, pursuant to which certain arrangements are agreed to in relation to the Issue The final price at which the Equity Shares will be issued and Allotted in terms of the Red Herring Prospectus. The Issue Price will be decided by the Company, in consultation with the BRLMs, on the Pricing Date The proceeds of the Issue that are available to the Company A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996 5% of the QIB Portion (excluding the Anchor Investor Portion), or 75,000 Equity Shares available for allocation to Mutual Funds only, out of the QIB Portion (excluding the Anchor Investor Portion) The Issue Proceeds less the Issue expenses. For further information about use of the Issue Proceeds and the Issue expenses, please see the section Objects of the Issue on page 34 All Bidders that are not QIBs or Retail Individual Bidders and who have Bid for Equity Shares for an amount of more than Rs. 100,000 (but not including NRIs other than eligible NRIs) The portion of the Issue being not less than 642,857 Equity Shares available for allocation to Non-Institutional Bidders A person resident outside India, as defined under FEMA and includes a Non Resident Indian A Pre-IPO Placement of up to714,200 Equity Shares and aggregating up to Rs. 400.00 million with certain investors is being considered by the Company and will be completed prior to the filing of the Red Herring Prospectus with the RoC. Price Band of a minimum price of Rs. [] (Floor Price) and the maximum price of Rs. [] (Cap Price) and include revisions thereof. The Price Band and the minimum Bid lot size for the Issue will be decided by the Company, in consultation with the BRLMs, and advertised, at least two Working Days prior to the Bid/ Issue Opening Date, in [] edition of [] in the English language, [] edition of [] in the Hindi language and [] edition of [] in the Marathi language The date on which the Company, in consultation with the BRLMs, finalises the Issue Price The Prospectus to be filed with the RoC in accordance with Section 60 of the Companies Act, containing, inter alia, the Issue Price that is determined at the end of the Book Building Process, the size of the Issue and certain other information An account opened with the Bankers to the Issue to receive monies from the Escrow Account and from the SCSBs from the bank accounts of the ASBA Bidders

Issue Agreement

Issue Price

Issue Proceeds Mutual Funds Mutual Funds Portion

Net Proceeds

Non-Institutional Bidders

Non-Institutional Portion Non-Resident Pre-IPO Placement

Price Band

Pricing Date Prospectus

Public Issue Account

iv

Term Qualified Institutional Buyers or QIBs

QIB Portion Red Herring Prospectus or RHP

Refund Account(s)

Refund Bank(s) Refunds through electronic transfer of funds Registrar /Registrar to the Issue Retail Individual Bidders

Description on the Designated Date Public financial institutions as specified in Section 4A of the Companies Act, scheduled commercial banks, mutual fund registered with SEBI, FII and subaccount registered with SEBI, other than a sub-account which is a foreign corporate or foreign individual, multilateral and bilateral development financial institution, venture capital fund registered with SEBI, foreign venture capital investor registered with SEBI, state industrial development corporation, insurance company registered with IRDA, provident fund with minimum corpus of Rs. 250 million, pension fund with minimum corpus of Rs. 250 million and National Investment Fund set up by Government of India and insurance funds set up and managed by the army, navy or air force of the Union of India. The portion of the Issue being at least 2,142,858 Equity Shares to be Allotted to QIBs The Red Herring Prospectus issued in accordance with Section 60B of the Companies Act, which does not have complete particulars of the price at which the Equity Shares are offered and the size of the Issue. The Red Herring Prospectus will be filed with the RoC at least three days before the Bid/Issue Opening Date and will become a Prospectus upon filing with the RoC after the Pricing Date The account opened with the Escrow Collection Bank(s), from which refunds (excluding refunds to ASBA Bidders), if any, of the whole or part of the Bid Amount shall be made [] Refunds through NECS, Direct Credit, NEFT, RTGS or the ASBA process, as applicable Karvy Computershare Private Limited Individual Bidders (including HUFs applying through their karta and Eligible NRIs) who have not Bid for Equity Shares for an amount of more than Rs. 100,000 in any of the Bidding options in the Issue The portion of the Issue being not less than 1,500,000 Equity Shares available for allocation to Retail Individual Bidder(s) The form used by the Bidders, excluding ASBA Bidders, to modify the quantity of Equity Shares or the Bid Amount in any of their Bid cum Application Forms or any previous Revision Form(s) Securities Exchange Board of India (Foreign Institutional Investors) Regulations 1995, as amended Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended from time to time A banker to the Issue registered with SEBI, which offers the facility of ASBA and a list of which is available on the website of SEBI from time to time. BSE and the NSE BRLMs and the Syndicate Members The agreement to be entered into between the Syndicate and the Company in relation to the collection of Bids in this Issue (excluding Bids from the ASBA Bidders) [] The slip or document issued by a member of the Syndicate or the SCSB (only on request), as the case may be, to the Bidder as the proof of registration of the Bid BRLMs and the Syndicate Members The agreement among the Underwriters and the Company to be entered into on or after the Pricing Date All days other than a Sunday or a public holiday (except during the Bid/Issue Period where a working day means all days other than a Saturday, Sunday or a public holiday), on which commercial banks in Mumbai are open for business

Retail Portion Revision Form

SEBI FII Regulations SEBI Regulations Self Certified Syndicate Bank(s) or SCSB(s) Stock Exchanges Syndicate Syndicate Agreement

Syndicate Members TRS or Transaction Registration Slip Underwriters Underwriting Agreement Working Day

Industry Related Terms Term Assets under Management or AUM Carried Interest Description Assets managed under the investment advisory services or portfolio management services, as applicable, including, Committed Corpus across various schemes that are advised by the Company A share of profits in the investments made by the schemes, as per contractually agreed terms, to the advisor of the scheme based on performance over and above the threshold rate of return An aggregate of contractually agreed amounts that the fund investors have agreed to pay to the fund in terms of a contribution agreement entered into between the fund and the fund investors Investments made by an investment vehicle in companies that own ready to let real estate in India, as permitted under the applicable regulations. The main source of income generation of these investments is the rental income from the ready to let real estate. The internal rate of return on an investment is the annualized effective compounded return rate that can be earned on the capital invested

Committed Corpus

Yield Driven Real Estate Investments

IRR

Conventional and General Terms/ Abbreviations Term Act or Companies Act AGM AS/Accounting Standards AY BPLR BSE CAGR CDSL CENVAT CESTAT CIS CIN Civil Code Depositories Depositories Act DIN DIPP DP/ Depository Participant DP ID EBITDA ECB ECS EGM EPS FCNR Account FDI FEMA Description Companies Act, 1956, as amended from time to time Annual General Meeting Accounting Standards issued by the Institute of Chartered Accountants of India Assessment Year Benchmark Prime Lending Rate Bombay Stock Exchange Limited Compounded Average Growth Rate Central Depository Services (India) Limited Central Value Added Tax Central Excise and Service Tax Appellate Tribunal Collective Investment Schemes Corporate Identity Number Code of Civil Procedure, 1908, as amended from time to time NSDL and CDSL Depositories Act, 1996, as amended from time to time Director Identification Number Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India A depository participant as defined under the Depositories Act, 1996 Depository participant identity Earnings Before Interest, Tax, Depreciation and Amortisation External Commercial Borrowings Electronic Clearing Service Extraordinary General Meeting Earnings Per Share i.e., profit after tax for a Fiscal Year divided by the weighted average outstanding number of equity shares at the end of that Fiscal Year Foreign Currency Non-Resident Account established in accordance with the FEMA Foreign Direct Investment Foreign Exchange Management Act, 1999 read with the rules and regulations thereunder and amendments thereto

vi

Term FEMA Regulations FII(s) FIPB Fiscal Year/ FY/ Fiscal FVCI GDP GoI/Government HUF IFRS I.T. Act Indian GAAP Indian Partnership Act IPO IT LIBOR MAT Mn / mn MOU NA/ n.a. NAV NEFT NOC Non-Resident NRE Account NRI

NRO Account NSDL NSE OCB

p.a. P/E Ratio PAN PAT PBT PIO PLR RBI RoC RONW Rs./INR

Description FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 and amendments thereto Foreign Institutional Investors as defined under SEBI (Foreign Institutional Investor) Regulations, 1995 and registered with SEBI under applicable laws in India Foreign Investment Promotion Board Unless stated otherwise, the period of 12 months ending March 31 of that particular year Foreign Venture Capital Investor registered under the SEBI (Foreign Venture Capital Investor) Regulations, 2000 Gross Domestic Product Government of India Hindu Undivided Family International Financial Reporting Standards Income Tax Act, 1961, as amended from time to time Generally Accepted Accounting Principles in India Indian Partnership Act 1932, as amended from time to time Initial Public Offering Information Technology London Inter-Bank Offer Rate Minimum Alternate Tax Million Memorandum of Understanding Not Applicable Net Asset Value National Electronic Fund Transfer No Objection Certificate A person resident outside India, as defined under FEMA and includes a Non Resident Indian Non Resident External Account Non Resident Indian, being a person resident outside India, as defined under FEMA and the FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 Non Resident Ordinary Account National Securities Depository Limited National Stock Exchange of India Limited A company, partnership, society or other corporate body owned directly or indirectly to the extent of at least 60% by NRIs including overseas trusts, in which not less than 60% of beneficial interest is irrevocably held by NRIs directly or indirectly as defined under Foreign Exchange Management (Transfer or Issue of Foreign Security by a Person resident outside India) Regulations, 2000. OCBs are not allowed to invest in this Issue Per annum Price/Earnings Ratio Permanent Account Number allotted under the Income Tax Act, 1961 Profit after tax Profit before tax Person of Indian Origin Prime Lending Rate Reserve Bank of India Registrar of Companies, Maharashtra situated at Everest, 5 th Floor, 100, Marine Drive, Mumbai 400 002 Return on Net Worth Indian Rupees

vii

Term RTGS SCRA SCRR SEBI SEBI Act SEBI Regulations SEBI Takeover Regulations SEBI VCF Regulations SICA State Government US / USA US GAAP USD/US$/U.S.$ VCFs

Description Real Time Gross Settlement Securities Contracts (Regulation) Act, 1956, as amended from time to time Securities Contracts (Regulation) Rules, 1957, as amended from time to time Securities and Exchange Board of India constituted under the SEBI Act Securities and Exchange Board of India Act 1992, as amended from time to time SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended from time to time Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as amended from time to time Securities and Exchange Board of India (Venture Capital Fund) Regulations, 1996 as amended from time to time Sick Industries Companies (Special Provisions) Act, 1985 The government of a state of the Union of India United States of America Generally Accepted Accounting Principles in the United States of America United States Dollars Venture Capital Funds as defined in and registered with SEBI under the SEBI (Venture Capital Fund) Regulations, 1996

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PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA All references to India contained in this Draft Red Herring Prospectus are to the Republic of India and all references to the U.S. are to the United States of America. Financial Data Unless stated otherwise, the financial data in this Draft Red Herring Prospectus is derived from our restated audited standalone financial statements as of and for the past five Fiscals and restated audited consolidated financial statements as of March 31, 2010, prepared in accordance with Indian GAAP, the Companies Act and the SEBI Regulations, and included in this Draft Red Herring Prospectus. In this Draft Red Herring Prospectus, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off. Our current Fiscal Year commences on April 1 and ends on March 31 of the next year, so all references to particular Fiscal Year, unless stated otherwise, are to the 12 months period ended on March 31 of that year. All numbers in this Draft Red Herring Prospectus have been represented in million or in whole numbers, where the numbers have been too small to present in million. There are significant differences between Indian GAAP, US GAAP and IFRS. We do not provide reconciliation of our financial statements to IFRS or US GAAP financial statements. The Company has not attempted to explain those differences or quantify their impact on the financial data included herein, and we urge you to consult your own advisors regarding such differences and their impact on our financial data. Accordingly, the degree to which the Indian GAAP financial statements included in this Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with Indian accounting practices. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this Draft Red Herring Prospectus should accordingly be limited. Any percentage amounts, as set forth in the sections Risk Factors, Business, Managements Discussion and Analysis of Financial Condition and Results of Operations on pages xii, 61 and 180 respectively and elsewhere in this Draft Red Herring Prospectus, unless otherwise indicated, have been calculated on the basis of our restated audited consolidated and standalone summary financial statements prepared in accordance with Indian GAAP. Currency and Units of Presentation All references to Rupees, Re. or Rs. are to Indian Rupees, the official currency of the Republic of India. All references to US$, U.S.$, USD or US Dollars are to United States Dollars, the official currency of the United States of America. Exchange Rates This Draft Red Herring Prospectus contains conversions of certain US Dollar and other currency amounts into Indian Rupees that have been presented solely to comply with the requirements of the SEBI Regulations. These conversions should not be construed as a representation that those US Dollar or other currency amounts could have been, or can be converted into Indian Rupees, at any particular rate. The Company has, in this Draft Red Herring Prospectus, used a conversion rate of Rs. 45.14 for one US Dollar, being the RBI reference rate as of March 31, 2010 (Source: RBI Website). Definitions For definitions, please see the section Definitions and Abbreviations on page i. In the section Main Provisions of Articles of Association on page 247, defined terms have the meaning given to such terms in the Articles.

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Industry and Market Data Unless stated otherwise, industry and market data used in this Draft Red Herring Prospectus has been obtained or derived from publicly available information as well as industry publications and sources. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Accordingly, no investment decision should be made on the basis of such information. Although industry data used in this Draft Red Herring Prospectus is reliable, it has not been independently verified by the Company or the BRLMs. Similarly, internal Company reports, which we believe to be reliable, have not been verified by any independent sources. The Company has relied on an industry report by VCCEdge (the research arm of VCCircle.com). Information has been obtained by VCCEdge from sources which it considers reliable. However, VCCEdge does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. No part of the report may be published/ reproduced in any form without VCCEdges prior written approval. VCCEdge or its owner Mosaic Media Ventures Private Limited is not liable for investment decisions which may be based on the views expressed in the report. The extent to which the market and industry data used in this Draft Red Herring Prospectus is meaningful depends on the readers familiarity with and understanding of the methodologies used in compiling such data. There are no standard data gathering methodologies in the industry in which we conduct our business, and methodologies and assumptions may vary widely among different industry sources.

FORWARD LOOKING STATEMENTS All statements contained in this Draft Red Herring Prospectus that are not statements of historical fact constitute forward-looking statements. All statements regarding our expected financial condition and results of operations, business, plans and prospects are forward-looking statements. These forward-looking statements include statements with respect to our business strategy, our revenue and profitability and other matters discussed in this Draft Red Herring Prospectus regarding matters that are not historical facts. This Draft Red Herring Prospectus contains certain forward-looking statements. These forward-looking statements can be generally identified by words or phrases such as aim, anticipate, believe, expect, estimate, intend, objective, plan, possible, probable, project, will, will continue, will pursue or other words or phrases of similar import. Similarly, statements that describe our strategies, objectives, plans or goals are also forward-looking statements. All forwardlooking statements are subject to risks, uncertainties and assumptions about the Company that could cause actual results to differ materially from those contemplated by the relevant statement. Forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. These statements are based on our managements beliefs and assumptions, which in turn are based on currently available information. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate, and the forward-looking statements based on these assumptions could be incorrect. Further actual results may differ materially from those suggested by the forward looking statements due to risks or uncertainties associated with our expectations with respect to, but not limited to, regulatory changes pertaining to the industries in which we have our businesses and our ability to respond to them, our ability to successfully implement our strategy, our growth and expansion, technological changes, our exposure to market risks, general economic and political conditions which have an impact on our business activities or investments, the monetary and fiscal policies, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in domestic laws, regulations and taxes and changes in competition in our industry. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, the following: We have experienced rapid growth, which may be difficult to sustain and which may place significant demands on our administrative, operational and financial resources; The general economic and condition and financial markets across the world; We may enter into new businesses, make future strategic investments or acquisitions or enter into joint ventures, each of which may result in additional risks and uncertainties in our business; We have a limited operating history on a consolidated basis. Our operating results are limited and our future results may be difficult to predict; We depend substantially on our senior management and key management personnel, the loss of whose services would have a material adverse effect on our business, results and financial condition; Political instability, terrorism or military conflict in India or in countries in the region or globally including in Indias various neighbouring countries; and Natural disasters in India or in countries in the region or globally including in Indias neighbouring countries; For further discussion of factors that could cause our actual results to differ from our expectations, please see the sections Risk Factors, Business and Managements Discussion and Analysis of Financial Condition and Results of Operations on pages xii, 61 and 180, respectively. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual gains or losses could materially differ from those that have been estimated. The Company, the Directors, the Syndicate and their respective affiliates or associates do not have any obligation to, and do not intend to, update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with the SEBI requirements, the Company and the BRLMs will ensure that investors in India are informed of material developments until such time as the grant of listing and trading permissions by the Stock Exchanges.

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SECTION II: RISK FACTORS Unless specified or quantified in the relevant risk factors below, the Company is not in a position to quantify the financial or other implication of any of the risks described in this section. An investment in the Equity Shares involves a high degree of risk. You should consider all the information in this Draft Red Herring Prospectus, including the risks and uncertainties described below, before making an investment in our Equity Shares. The risk factors set forth below do not purport to be complete or comprehensive in terms of the risk factors that may arise in connection with our business or any decision to purchase, own or dispose of the Equity Shares. The risks and risk factors set forth below are not an exhaustive list of the risks currently facing us or that may develop in the future. If any of the following risks or any of the other risks and uncertainties discussed in this Draft Red Herring Prospectus actually occur, our business, financial condition and results of operations could suffer, the trading price of our Equity Shares could decline, and you may lose all or part of your investment. These risks and uncertainties are not the only issues that we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also have an adverse effect on our business, results of operations and financial condition. In making an investment decision, prospective investors must rely on their own examination of the Company and the terms of the Issue, including the merits and risks involved. This Draft Red Herring Prospectus also contains forward-looking statements that involve risks and uncertainties. Our results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including events described below and elsewhere in this Draft Red Herring Prospectus. This Draft Red Herring Prospectus also contains forward-looking statements that involve risks and uncertainties. Our results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including events described below and elsewhere in this Draft Red Herring Prospectus. Unless otherwise stated, the financial information of the Company used in this section is derived from its audited restated standalone and consolidated financial statements under Indian GAAP. RISKS RELATING TO OUR BUSINESS 1. There are criminal proceedings currently pending against the Promoter and Managing Director, Ved Prakash Arya. Six criminal complaints are currently outstanding against the Promoter and Managing Director, Ved Prakash Arya, which have been initiated against directors of Pantaloon Retail (India) Limited, and are outstanding against him in his capacity as such director. An adverse outcome in any or all of these criminal proceedings involving the Ved Prakash Arya could have a material adverse effect on his ability to serve the Company, as well as on our business, prospects, financial condition and results of operations. Further, an adverse outcome in any of these proceedings may affect our reputation and standing and impact our future business. We cannot assure you that any of these proceedings will be decided in favour of Ved Prakash Arya, or that no further liability would arise out of these proceedings. For further details, see the section Outstanding Litigation and Material Developments on page 194. 2. We have experienced rapid growth in our operations, which may be difficult to sustain and which may place significant demands on our administrative, operational and financial resources. Any failure to manage this growth may affect our ability to generate revenue and control our expenses. Our AUMs have grown from Rs. 11,643.80 million as of March 31, 2008 (including the AUMs of those companies which became our Subsidiaries or Joint Ventures during Fiscal Year ended March 31, 2010) to

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31,521.60 million as of March 31, 2010. For details of the acquisition of our Subsidiaries and Joint Ventures, please see section History and Certain Corporate Matters on page 83. Our rapid growth has caused, and, if it continues, will continue to cause, significant demands on our operational, legal and accounting infrastructure, and may result in increased expenses. The complexity of these demands, and the expense required to address them, is a function not simply of the amount by which our AUM have grown, but of significant differences in the investing strategies employed within funds advised by us. In addition, we are required to continuously develop our systems and infrastructure in response to the increasing sophistication of the investment advisory market and legal, accounting and regulatory developments. In addition to our investment advisory business, we also have other businesses namely portfolio management services, property management services and consultancy services in clean technology and sustainable development including water management solutions, which also place a significant burden on our existing management and our systems and infrastructure. Our future growth will depend on, among other things, our ability to maintain an operating platform and management system sufficient to address our growth and will require us to incur significant additional expenses and to commit additional senior management and operational resources. As a result, we face significant challenges: in maintaining adequate financial and business controls; in implementing new or updated information and financial systems and procedures; and in training, managing, retaining and appropriately sizing our work force and other components of our business on a timely and cost-effective basis. There can be no assurance that we will be able to manage our expanding operations effectively or that we will be able to continue to grow, and any failure to do so could materially adversely affect our ability to generate revenue and control our expenses. 3. We may enter into new businesses, make future strategic investments or acquisitions or enter into joint ventures, each of which may result in additional risks and uncertainties in our business. We intend, to the extent that market conditions warrant, to grow our business by increasing our AUMs and creating new investment products and businesses across sectors. Accordingly, we may pursue growth through strategic investments, acquisitions or joint ventures, which may include entering into new lines of business or expanding operations in existing lines of business, such as providing investment advisory services to the infrastructure fund (the Infrastructure Fund) and the small and medium enterprises fund (the SME Fund) to be set up, foraying into real estate focussed mutual funds, REITs and related business expansions, as permitted by applicable regulations. In addition, we have entered into joint ventures in the past, and expect opportunities will arise to acquire, or enter into joint ventures with, relevant industry players where investments are proposed or with other investment advisors or otherwise. To the extent we enter into joint ventures, or enter into a new line of business or make strategic investments or acquisitions, we will face numerous risks and uncertainties, including risks associated with (i) the required investment of capital and other resources, (ii) the possibility that we have insufficient expertise to engage in such activities profitably or without incurring inappropriate amounts of risk, (iii) combining or integrating operational and management systems and controls, and (iv) loss of investors in funds advised by us due to the perception that we are no longer focusing on our core investment advisory duties. Entry into certain lines of business may subject us to new laws and regulations with which we are not familiar, or from which we are currently exempt, and may lead to increased litigation and regulatory risk. If a new business generates insufficient revenues or if we are unable to efficiently manage our expanded operations, our results of operations will be materially and adversely affected. In the case of joint ventures, we are subject to additional risks and uncertainties in that we may be dependent upon, and subject to liabilities, losses or reputational damage relating to, systems, controls and personnel that are not under our control.

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4.

We have a limited operating history and our future results may be difficult to predict. Further, we may not be able to successfully manage the operations of the Subsidiaries acquired in Fiscal 2010 and Joint Ventures where we acquired a stake in Fiscal 2010. The Company was incorporated in 2005 and hence has a limited operating history. Pursuant to a rearrangement, the Company acquired stakes in Milestone PMS in October 2009 and in IL&FS Milestone, Milestone Religare, Milestone Ecofirst, Milestone Property, Milestone Investment Advisory, Milestone Trusteeship and Jevir L&F in December 2009 from Milestone Fincap, the corporate Promoter of the Company. The Company acquired Omega Global in March 2010 and subsequent to the acquisition it conducts its offshore business operations through the subsidiaries and joint venture of Omega Global. For further details see section History and Certain Corporate Matters on page 83. Pursuant to the aforesaid rearrangement, the Company has six direct subsidiaries, holds three subsidiaries through its offshore subsidiary, Omega Global and has five joint ventures including one joint venture held through Omega Global. On account of the Companys limited operating history, and the consolidation during Fiscal 2010, our future results, especially on a consolidated basis, may be difficult to predict. Further, the Company may face difficulties in managing and streamlining the operations of its Subsidiaries acquired in Fiscal 2010 and Joint Ventures where it has acquired a stake in Fiscal 2010. There can be no assurance that the Company will be able to manage the businesses of its Subsidiaries acquired in Fiscal 2010 and Joint Ventures where it has acquired a stake in Fiscal 2010 in an efficient and effective manner. The successful management of the Company and its aforesaid Subsidiaries and Joint Ventures and the achievement of synergies requires, amongst other things, coordination of business development, technology sharing and employee retention, hiring and training policies, as well as the alignment of sales and marketing operations, compliance and control procedures, and information and software systems. Any difficulties encountered in combining operations could result in higher integration costs, and require the dedication of significant management resources and time and costs which may divert the managements attention from day to day business. Additionally, the Company will continue to rely principally on the existing management team of the Subsidiaries acquired in Fiscal 2010 and Joint Ventures where it has acquired a stake in Fiscal 2010, and there can be no assurance that such existing management teams will remain with us or continue to operate the relevant Subsidiary or Joint Venture successfully, and this may affect our business, financial condition and results of operations.

5.

Our reputation is critical to our business. Any adverse impact on our reputation would have a material adverse impact on our business, results of operations and financial condition Our ability to raise funds from investors, and to deploy them in a timely and profitable manner, depends substantially on our reputation. We are relatively new entrants in the investment advisory business, and have a shorter track record than many of our competitors, inside and outside India. A better reputation may lead to a higher market standing, which may substantially assist in raising funds, and attracting good quality investments. Any adverse event relating to the funds advised by us or business (whether or not we or any of the Directors or employees are responsible for the same), or a perception of any such adverse event, including allegations in publicly accessible media (even if such adverse event, perception or allegation ultimately proves to be baseless and does not have any financial impact) may adversely affect our reputation, which would adversely affect our fund-raising ability for funds launched by us and may lead to reduction in AUMs on account of existing investors not fulfilling their capital commitments, which would have a material adverse effect on our business, results of operations and financial condition.

6.

We have not invested Seed Capital in any of the funds advised by us in the past. We propose to deploy Rs. 1,500.00 million from the Net Proceeds towards Seed Capital for the Infrastructure Fund and the SME Fund. We have not invested in the Seed Capital of any of the funds advised by us in the past. We do not have any past experience in investing Seed Capital in funds advised by us, and cannot assure investors that such investments would provide any returns at all, and whether whole or any part of our investment therein can be recovered.

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7.

Our business entails operational risks, which may have a material adverse effect upon our business, results of operation and financial condition. We rely heavily on our financial, accounting and management information systems. Accordingly, we are exposed to operational risk, which is the risk of loss resulting from inadequacy or failure of internal processes or systems or from external events. We have outsourced the entire back-office services including the generation of management information systems in relation to all of our funds and their schemes to Computer Age Management Services Private Limited (CAMS), which is a third party service provider, and are susceptible to risks arising from any errors or omissions of our third party service provider(s). We are susceptible to, among other things, frauds by employees or outsiders, unauthorised transactions by employees and operational errors, including clerical or record keeping errors, errors arising from operations of our third party service providers and errors resulting from faulty computer or telecommunications systems. In addition, we operate a business that is dependent on information systems and technology. Our information systems and technology, or those of our third party service providers, may not continue to be able to accommodate our growth, and the cost of maintaining such systems may increase from its current level. Such a failure to accommodate growth, or an increase in costs related to such information systems, could have a material adverse effect on us. Further, we currently have only one agreement with CAMS, i.e. an agreement dated September 1, 2007 between Indian Real Opportunity Venture Capital Fund (presently Milestone Real Estate Fund) and Milestone Propgain Realty Advisors Private Limited (presently IL&FS Milestone Realty Advisors Private Limited). While CAMS is currently servicing all of our funds and schemes on commercial terms and remuneration agreed on email between the parties, no further agreements with CAMS have been executed. Further, our agreement with CAMS does not provide for any indemnity in our favour for any errors which may be committed by them, and have clauses limiting or excluding their liability on certain grounds, including limiting their liability to a percentage of their fees. We may not have adequate contractual protection in case we suffer any losses on account of any error or mistake by CAMS. In addition, our insurance may not cover losses from unauthorised transactions and errors resulting from a failure of controls, including errors by our third party service providers. Any of the foregoing could have a material adverse effect on our business, results of operations or financial condition.

8.

We depend substantially on our senior management and key management personnel, the loss of whose services would have a material adverse effect on our business, results and financial condition. We depend on the efforts, skills, reputations and business contacts of our senior management and key management personnel. Accordingly, our success depends on the continued service of these individuals and the loss of the services of one or more of them could have a material adverse effect on our business and could harm our ability to maintain or grow AUM in existing funds or raise additional funds in the future. Our senior management and key management personnel possess substantial experience and expertise and have strong relationships, especially with the key investors in funds advised by us and other members of the business community. As a result, the loss of these personnel could jeopardize our relationships, especially with the key investors in funds advised by us and members of the business community and result in a reduction of AUM to the extent of uncalled or unpaid capital, adversely impacting the growth of our AUM and/or result in fewer investment opportunities. We do not carry any keyman insurance policies for our senior management and key management personnel, in the event of death or disability of any of such persons while in the service of the Company.

9.

We are substantially dependent on our risk management systems, and any shortcoming or deficiency in these systems or their implementation would have a material adverse impact upon our business, results of operation and financial condition. We believe that effective risk management is of primary importance to the success of our operations, and hence have developed a risk management process to monitor, evaluate and manage the principal risks we assume in conducting our operations. While we believe that we take all steps to ensure that the risk management process is effective and updated, we cannot assure that the same would assist in managing our risks effectively, or that we would be able to adapt and scale up these processes to meet the challenges posed by expansion of our business activities. The Blue Ocean Maritime Fund, which focuses on

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investments in the shipping sector, is currently open for investor subscriptions; however we currently do not have a risk management policy in place for investments in the shipping sector. Any shortcoming or deficiency in our risk management systems, or in implementing the systems while taking decisions, may expose us, or the funds advised by us, to significant unanticipated losses, which would have a material adverse effect on our ability to raise funds as also on our business, results of operations and financial condition. 10. We, our Directors and key management personnel are subject to third-party litigation risk which could result in significant liabilities and reputational harm which could materially adversely affect our results of operations, financial condition and liquidity In general, we will be exposed to the risk of litigation by investors in funds advised by us or in our PMS business if our advice of any fund or management of the PMS business is alleged to constitute negligence or fraud. Investors could sue us to recover amounts lost by the funds advised by us or our PMS business due to our alleged misconduct. Furthermore, we may be subject to litigation arising from investor dissatisfaction with the performance of the funds advised by us or our PMS business or from allegations that we improperly exercised control or influence over portfolio companies in which the funds advised by us have large investments. In addition, we are exposed to the risks of litigation or investigations relating to transactions which presented conflicts of interest that were not properly addressed. In such actions we would be obligated to bear legal, settlement and other costs. In addition to the above, we are exposed to the risk of litigation if the funds suffer substantial losses due to the failure of a particular investment strategy or due to the violation of applicable laws by employees. In addition, we face the risk of litigation from investors in funds advised by us or in our PMS business if we violate restrictions in such funds organizational documents (for example, by failing to adhere to the limits we have to set on maximum exposure by a fund to a single investment) or invest beyond the investment mandate of the relevant PMS schemes. We may also be exposed to other litigation risks arising from our contractual arrangements. For instance, for one of the funds advised by us, we are contractually bound to create a secondary pool of a specified size to facilitate transfer by investors who may wish to transfer their units (subject to compliance with certain conditions), and if we are not able to create such secondary pool, we may be subject to legal action by the relevant investor(s) who may want to transfer their units. Any litigation arising in such circumstances is likely to be protracted, expensive and surrounded by circumstances which are materially damaging to our reputation and our business, results of operation and financial condition, and may take up valuable time of senior management and key management personnel which could otherwise have been devoted for business growth. Any of the aforesaid litigations may be initiated outside India, where litigation costs could be substantially higher than what they would be in India, and we cannot assure that we would be able to recover such litigation costs from the respective fund. While we do endeavour to minimize this risk through contractual provisions, we cannot assure that the contractual provisions are adequate to cover our risks in this regard, or that such contractual protection would be upheld. We do not currently have any contractual indemnity from funds we advise towards litigation costs, neither do we have any insurance to cover such litigation costs. Further, our Directors and key management personnel are directors on the boards of our investee companies and are members of the investment committees of the funds advised by us. In the event the investee companies are subjected to legal proceedings, the same may involve us or our Directors and key management personnel in their capacity as directors of the investee companies or members of the investment committee, whose outcome can be unpredictable, and may otherwise lead to a negative impact on us. 11. Certain policies and procedures implemented to mitigate potential conflicts of interest and address certain regulatory requirements may reduce the synergies across our various businesses. Due to our various lines of business, we may be subject to a number of actual and potential conflicts of interest and subject to a greater regulatory oversight than that to which we would otherwise be subject if we had just one line of business. There may be conflicts of interest which may arise amongst our investment advisory business and PMS business going forward. In addressing these conflicts and regulatory requirements across our various businesses, we may implement certain policies and procedures that may

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reduce the positive synergies that we cultivate across these businesses. As a consequence, we may be precluded from providing such information or other ideas to our other businesses that might be of benefit to them. 12. We are highly dependent on our investment advisory business for our revenues and profitability. Any reduction in the revenues or profitability of our investment advisory business may have a material adverse impact on our consolidated results of operations and financial condition. We are highly dependent on our investment advisory business, and the investment advisory business accounted for 95.22 % of our consolidated revenues as at March 31, 2010. While we have a limited operating history on a consolidated basis, and most of our Subsidiaries were acquired with effect from December 31, 2009, we believe that we will continue to be substantially dependant on our investment advisory business going forward. Any reduction in the revenues or the profitability of our investment advisory business may have a material adverse effect on our consolidated results of operations and financial condition. 13. Our business activities are subject to extensive regulation and any non-compliance may create the potential for significant liabilities and penalties. Our business is subject to extensive regulation, both in India and overseas. Each new fund advised by us in India is required to be registered with SEBI under the SEBI VCF Regulations and overseas in accordance with applicable regulatory norms in such jurisdictions. Similarly, our PMS business is subject to extensive regulation by SEBI under the SEBI (Portfolio Managers) Regulations, 1993 and our NBFC business is subject to extensive RBI regulations. The regulators, in India and overseas, are empowered to conduct investigations and administrative proceedings that can result in fines, suspensions of personnel or other sanctions, including censure, the issuance of cease-and-desist orders or the suspension or expulsion of applicable licenses. Even if an investigation or proceeding does not result in a sanction or the sanction imposed against us or our personnel by a regulator were small in monetary amount, the adverse publicity relating to the investigation, proceeding or imposition of these sanctions could harm our reputation and cause us to lose existing clients and investors or fail to gain new clients and investors. 14. While the Company is currently debt-free, it may avail of debt to fund future growth, and there can be no assurance that the Company will be able to avail the same on competitive terms, or at all. Further, servicing debt may adversely affect our results of operations and financial condition While the Company does not currently have any debt on its books, it may avail debt to, inter alia, fund its expansion into current or new business areas or to fund its operations. Since the Company does not have a credit history with commercial lenders, there can be no assurance that the Company will be able to avail debt at competitive terms, or at all. Returns for investors in our Equity Shares may also be significantly reduced on account of the need to service the debt, which may adversely affect our results of operations and financial condition. 15. The Promoter and Managing Director of the Company, Ved Prakash Arya, is a whole time director on IL&FS Milestone Realty, and consequently may not be able to devote sufficient time for management of the Company or planning growth initiatives. The Promoter and Managing Director of the Company, Ved Prakash Arya, is a whole time director on the board of our joint venture, IL&FS Milestone Realty, and consequently may not be able to devote sufficient time for management of the Company or planning growth initiatives. This may adversely affect the management of the Company and planning of growth initiatives, which may adversely affect our results of operations and financial condition. 16. The Company has had negative cash flows in the past. The table below summarizes our cash flow for the periods indicated:

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Particulars Net cash generated from / (used in) operating activities Net cash generated from / (used in) investing activities Net cash generated from / (used in) financing activities Net cash increase / (decrease) at the end of the period

Fiscal 2010 8.13 (27.81) 35.00 15.32

Fiscal 2009 10.94 (8.25) (2.92) (0.24)

(In Rs million.) Fiscal 2008 (8.01) (1.04) 5.00 (4.06)

We have had negative cash flows during Fiscals 2010, 2009 and 2008, and cannot assure that we would not suffer negative cash flows in the future. In addition, the Companys ability to pay dividend or generate positive cash flows in the future will depend upon a number of factors including the Companys results of operations, capital requirements and surplus, general financial condition and other similar factors. 17. There are pending litigation against the Non-Executive Directors of the Company. Summons have been issued against Arvind Bansal, a Non-Executive Director, in relation to a proceeding alleging libel by letter and electronic mail. Additionally, summons have been issued against certain parties including Noel Naval Tata, a Non-Executive Director, alleging violation of Section 30 (1) (c) of Apprentices Act, 1961. For further details, see the section Outstanding Litigation and Material Developments on page 194. A. 18. Risks relating to our investment advisory business Our investment advisory business depends in large part on our ability to raise capital from third party investors for funds advised by us. If we are unable to raise capital, it would materially reduce our revenue and cash flow and adversely affect our financial condition. Our primary business is that of investment advisors in the alternative assets space, and although we propose to invest in certain select funds advised by us going forward, all the investments in funds advised by us in the past has come from third parties. Our business model substantially depends on our continued ability to raise capital from third parties in the funds to be advised by us. If we are unable to tap third parties for investments into funds advised by us, we may not be able to close funds advised by us with the desired level of subscription or at all. We would also lose out on substantial potential revenues in terms of fund setup fees, investment advisory fees and carried interest, and this may have a material adverse impact on our growth plans, business, results of operation and financial condition. 19. Our ability to raise funds depends substantially on being able to provide returns in excess of prevailing market interest rates offered by banks and financial institutions on term deposits, and other investments which may be perceived by investors to carry lesser risk than investing in funds advised by us. In the event interest rates offered on term deposits or other investments perceived by investors to carry lesser risk increase, or if such investments get any favourable tax treatment, it may adversely impact our ability to raise further funds. We are an investment advisor in the alternative assets space, and compete not only with other investment advisors but also with banks and financial institutions for investors funds. Investment in term deposits of banks and financial institutions is generally perceived by investors as an investment which carries substantially lesser risk than to invest with an investment advisor in the alternative assets space like the Company. Other instances of investments which may be perceived by investors to carry substantially lesser risks as opposed to investing in funds advised by us include investing in public provident fund accounts, term deposits and savings schemes issued by post offices as well as investments in national savings certificates among others, depending on the risk appetite of investors. We believe that we receive investments in funds advised by us inter alia on account of the substantial difference between the term deposit rates of banks and financial institutions, and interest rates offered by other investments perceived by investors to carry lesser risks, and targeted returns for funds advised by us. In the event interest rates offered on term deposits by banks and financial institutions or any of the other investment options perceived by investors to carry lesser risk as opposed to investing in a fund advised by us increase, or if any

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such investment options obtain a favourable tax treatment from the Government, it may prompt investors to invest in these deposits/investment options rather than invest in funds advised by us. Further, investors who are risk-averse or who have a lower risk appetite may invest in instruments perceived to carry lesser risk, even though they may offer lower returns. Any of the aforesaid may have a material adverse effect on our AUMs, including reduction of AUMs to the extent of uncalled or unpaid capital and our ability to raise further funds. 20. Our real estate funds are subject to the risks inherent in the ownership and operation of real estate and the construction and development of real estate. A substantial portion of our AUMs are specific to the real estate sector. As on March 31, 2010, approximately 83.00% of the AUMs of the funds advised by us are specific to the real estate sector. Investments by our real estate funds are subject to the risks inherent in the ownership and operation of real estate and real estate-related businesses and assets. These risks include those associated with the ownership of real property, general and local economic conditions, changes in the supply of and the demand for competing properties in an area (as a result, for instance, of overbuilding), the financial resources of tenants, changes in building, environmental and other laws, energy and supply shortages, various uninsured or uninsurable risks, natural disasters, changes in government regulations (such as rent control), changes in real property tax rates, changes in interest rates, the reduced availability of mortgage funds which may render the sale or refinancing of properties difficult or impracticable, negative developments in the economy that depress travel activity, environmental liabilities, contingent liabilities on disposition of assets, terrorist attacks, war and other factors that are beyond our control. For instance, the buildings that are leased out to third parties by investee companies of our schemes may not be able to withstand certain natural events, and such buildings may experience substantial damage. This may deprive investee companies of our schemes of rental income with regard to properties that may be rented to third parties, and expose the investee company to claims from the tenants or customers, which would lead to lower or no returns for our schemes, and consequently loss of carried interest. In addition, if our real estate funds acquire direct or indirect interests in undeveloped land or under development real property, which may often be non-income producing, they will be subject to the risks normally associated with such assets and development activities, including risks relating to the availability and timely receipt of zoning and other regulatory or environmental approvals, the cost and timely completion of construction (including risks beyond the control of the fund advised by us, such as weather or labour conditions or material shortages) and the availability of financing on favourable terms. Additionally, if the project is being executed by the project implementing entity without the assistance of a local developer the execution may be less efficient since a local developer may have local knowledge and expertise and hence may possess better expertise at managing the risks involved. Any of the aforesaid may adversely affect the returns of funds advised by us, which may adversely affect our Carried Interest and the ability to raise further funds. Further, it may also result in a reduction of AUMs from the relevant fund or other funds to the extent of uncalled or unpaid capital if investors do not fund their capital calls on drawdowns. 21. We compete with several other investment options for investments in funds advised by us, and cannot assure that we would be able to attract sufficient investments into such funds. We compete with several other investment options for investments in funds advised by us. These include other available options like debt and equity mutual funds, companys fixed deposits, gold, silver and other precious metals and direct investments in equity markets, amongst others. Many of these investment options may be more liquid and provide easier exit options as opposed to investments in funds advised by us. Thus, there can be no assurance that we would be able to attract sufficient investments into funds advised by us. This could affect our financial condition and results of operations. 22. Difficult market conditions can adversely affect our business in many ways, including by reducing the value or performance of the investments made by the funds that we advise or by reducing the ability of funds advised by us to raise or deploy capital and adversely affect the liquidity position of the funds advised by us, each of which could negatively impact our net income and cash flow and adversely affect our financial condition.

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Our business is materially affected by conditions in the financial markets and economic conditions or events, such as interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws (including laws relating to taxation) and national and international political circumstances. These factors are outside our control and may affect the liquidity and the value of investments made by the funds that we advice. In addition, we may not be able to or may choose not to manage our exposure to these conditions and/or events. Funds advised by us may be affected by reduced opportunities to exit and realise value from their investments or we may not be able to find suitable investments for the funds to effectively deploy capital, which could adversely affect our ability to raise new funds. In the event of poor performance by existing funds or in the absence of improvements in market or economic conditions, fund raising conditions are likely to remain challenging and pressures by investors for lower fees, different fee sharing arrangements or fee concessions will likely continue and could increase. The outcome of such negotiations could result in our agreement to terms that are materially less favourable to us than for prior funds we have advised or funds advised by our competitors. We might also choose in such circumstances to reduce the size of any new funds so as to include only those investors willing to participate on terms we view as acceptable, which could also reduce our revenues. During periods of difficult market or economic conditions or slowdowns (which may be across one or more industries, sectors or geographies), companies in which funds advised by us have invested may experience decreased revenues, financial losses, credit rating downgrades, difficulty in obtaining access to financing and increased funding costs. These companies may also have difficulty in expanding their businesses and operations or be unable to meet their debt service obligations or other expenses as they become due, including expenses payable to us. Negative financial results of / poor financial performance by portfolio companies of funds advised by us may result in lower investment returns for our funds, which could materially and adversely affect our operating results and cash flow. In the event that our liquidity needs exceed our sources of cash, we may not be able to meet our capital commitments and may need to look for alternate sources of funding. During such periods of economic difficulty, our investment funds portfolio companies may also have difficulty expanding their businesses and operations or meeting their debt service obligations or other expenses as they become due, including amounts payable to us, which would adversely affect our ability to receive carried interest, as also our ability to raise further funds. Even if economic and market conditions do improve broadly and significantly over the long term, adverse conditions in particular sectors may cause our performance to suffer. 23. We can provide no assurance that third party investors in schemes advised by us will satisfy their contractual obligation to fund capital calls on drawdowns, which may adversely affect a schemes operations and performance. Historically, the initial drawdown amounts in schemes advised by us for our third party investors have ranged from 10% to 100%. There can be no assurance that third party investors in the schemes advised by us would satisfy their contractual obligations to fund capital calls on drawdowns. There have been significant delays in payments by third party investors on some of the schemes advised by us in the past, and payments of capital calls on drawdowns made under certain schemes are currently pending. In case of payment delays, while we have discussions with the concerned third party investors to fund their capital calls for drawdowns, and in case the capital call is not funded, forfeiture may be effected by the trustee. We cannot assure that third party investors would satisfy their contractual obligations to fund capital calls on drawdowns when requested, which may lead to a substantial shortfall in the corpus of the relevant schemes, which would reduce the investible corpus and hence potential investment opportunities for the relevant scheme(s), adversely affect our carried interest in respect of those schemes, result in a reduction of our AUMs to the extent of uncalled or unpaid capital and consequently adversely affect our business, results of operations and financial condition. Further, in case a third party investor does not fund its contractual obligation, we forfeit the initial drawdown amount provided by the investor(s) concerned, and this would adversely affect our investor relationships and ability to raise further funds from investors whose initial drawdown amount(s) have been forfeited and other investors who may be affiliated to/advised by such investors, which may adversely affect our ability to raise funds for schemes which we may launch in the future.

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24.

We depend on various third parties, including our joint venture partners, over whom we may have no control. Our inability to protect our relations with our joint venture partners could have an adverse effect on our business prospects. Potential conflicts of interest may arise among our joint venture partner, its affiliates and the Company which may permit them to favour their own interests to the detriment of the Company. We believe that one of the principal factors that differentiate us from our competitors in this industry is our ability to execute joint ventures with some of the well-established players in this market. For details of our joint ventures, please see section Business on page 61. We believe our investments benefit from the experience and expertise of our joint venture partners in those sectors. We do not generally have any control over our joint venture parties. Whilst we seek to retain operational and management control of the joint venture company, there may exist inherent potential conflicts of interests with our joint venture partners, who may make significant decisions without our consent that could affect our interests. Conflict of interest may arise among our joint venture partner and its affiliates, on the one hand, and the Company on the other hand. As a result of these conflicts, our joint venture partner may favour its own interests and the interests of its affiliates. These conflicts may include, among others, conflict in identifying investment opportunities, wherein our joint venture partner or its affiliates may, directly or indirectly, invest in potential investment opportunities where funds advised by us (where we have a joint venture partner) may be eligible and willing to invest and our joint venture partners hiring any of our senior management or key management personnel. Our joint venture partners may also face financial, legal or other difficulties which may affect their ability to partner with us. Further, our joint venture agreements have non-compete clauses which may limit us from launching other funds for a specified time factor in the same sector, which may limit our options to launch funds with any other party for such specified period within the scope as covered by the relevant non compete clause. For details of these non-compete clauses, see section History and Certain Corporate Matters on page 83. We have in the past entered into joint ventures with IL&FS Investment Managers Limited and are in the process of entering into a similar arrangement offshore. We are in the process of entering into a joint venture with Mercator Lines (Singapore) Limited. We cannot assure investors that we will be able to enter into joint venture agreements/other arrangements with the respective parties on terms and conditions acceptable to us, or at all.

25.

An investment in our Equity Shares is not an investment in any of funds advised by us, and the assets and revenues of funds advised by us are not directly available to us. Further, returns generated by our various funds will not have any direct co-relation (i.e. indicative return) for the shareholders of the Company. This Draft Red Herring Prospectus solely relates to Equity Shares of the Company, and is not an offer directly or indirectly of any securities of any of the funds advised by us. The assets and revenues of funds advised by us are available to the funds and not to us or to our shareholders except to a limited extent through our investment as Seed Capital in the fund (if any), setup fees, investment advisory fees and carried interest, as discussed in further detail in Business on page 61. Hence, past or future returns, if any, generated by any of the funds managed by us would not be indicative of the returns, if any, for the shareholders of the Company.

26.

One of our key strategies is to increase the proportion of our Institutional Investor base, and if we are not able to achieve the same, we may not be able to grow our AUM as per growth rates envisaged by us.

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The proportion of our Institutional Investor base to our total investor base for funds advised by us (other than offshore funds advised by us) as on March 31, 2010 is 4.17% in terms of number and 19.47% in terms of percentage of funds committed. In order to further enhance our AUMs, we propose to focus on increasing the proportion of our Institutional Investor base, both by tapping existing institutional contacts for new fund initiatives and exploring our existing and new markets. In the event that we are not able to increase the proportion of our Institutional Investor base, we may not be able to grow our AUM as per growth rates envisaged by us, which may prejudicially affect our growth plans. Further, failure to implement our strategy may impact the growth of our AUMs, which would have a material adverse effect on our business, results of operation and financial condition. 27. Our AUMs may decline if we are not able to launch or close new funds. Funds advised by us have fixed life tenure, which is typically extendable for a few years. On the expiry of the life tenure of a fund, we will liquidate the fund assets and pay back the investors, which will result in the reduction of our AUMs. There can be no assurance that we will be able to launch or close any new funds at all, or before the expiry of the life tenure of the funds advised by us. Our income is substantially dependant on our AUMs, and any reduction in our AUMs would have a material adverse effect on our business, results of operations and financial condition. 28. We are substantially dependent on our distributors for the continued growth of our business. There can be no assurance that our distributors would be able to raise funds and the same could reduce our AUMs to the extent of uncalled or unpaid capital and materially impact the growth of our AUMs going forward. We are substantially dependant on our distributors for sustaining our existing investor relationships and for continued growth of our business. Our distributors are not exclusively bound to us, and can distribute products of our competitors as well. While we believe that we have developed strong relationships with our existing distributors, we cannot assure that they would continue to distribute schemes advised by us going forward. Our distributors may choose to discontinue distributing our products, or may choose to distribute products of our competitors, and this may be on account of several reasons including higher commissions provided by our competitors, superior quality of products which may be offered by them, better past track record of our competitors, losses or inferior returns on any of the schemes advised by us, which would adversely impact the growth of our AUMs going forward. Our contractual arrangements with our distributors typically do not render them liable or responsible if investors who are brought in by such distributors do not fund their capital calls on drawdowns, and some of our agreements with our key distributors do not obligate them to co-ordinate with the investors on capital calls. Further, in the event we are not able to sustain our distributor relationships, we may also face defaults on capital calls on drawdowns from investors who may have been brought in by those distributors. Any of the aforesaid would have an adverse effect on our business, results of operations and financial condition. 29. Certain acts of the distributors could increase our overall risk. Our recourse to the distributors for damage caused to the Company, and the liability of the distributors to the Company in respect of their default is limited. Further, we are liable to our distributors, primarily for the contents of the Private Placement Memorandum. We are liable to our distributors for untrue statements, misrepresentations or omissions of information in the Private Placement Memorandum for our relevant funds(s) and their schemes, and have, in certain instances, indemnified our distributors for losses arising to them in such regard. Further, our distributors are required to comply with the selling restrictions contained in our agreements with them, which include restricting extent of information which can be provided to potential investors, and not to distribute the PPM in any jurisdiction other than as may be agreed. Non-compliance of the selling restrictions by our distributors could render us liable for the same. While we endeavour to obtain contractual protection by way of indemnity, certain agreements with our distributors do not have an indemnity in our favour from our distributors, while certain other agreements cap the amount of liability of the distributor. We may be held liable for certain acts of our distributors, and are liable to our distributors in certain respects, and cannot assure that we have adequate contractual protection in respect of these liabilities, and if any of these

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liabilities materialise, they may have a material adverse effect on our business, results of operations and financial condition. 30. Funds advised by us may invest in relatively high-risk, illiquid assets, and we may fail to realize any profits from these activities for a considerable period of time or lose some or all of our principal investments invested in these funds as seed capital, as well as our income from these funds. While funds advised by us invest in equity and equity linked securities in accordance with the provisions of the SEBI VCF Regulations, these investments are high-risk and typically illiquid. A bulk of these investments, especially in the real estate sector, are in project-specific entities, which do not have any exit mechanism except for sale (or lease) of the relevant properties in the project, which would depend upon prevalent market prices, and there can no assurance of any sale (or lease) would occur, and the price at which the same may occur. While the option to sell the funds stake in the company to third parties does exist, such holdings are illiquid, may face valuation issues and there can be no assurance that a buyer would be found at all, or would be found at a price we are willing to sell. Even where the investments are not in project-specific companies (which currently form a small portion of the total investments by funds advised by us), while we endeavour to obtain protection for the returns of the investments, we cannot assure investors that such contractual protection would be available, enforceable or sufficient. Hence, there can be no assurance of realization of any profits or of recovery of the principal investment amount on investments by the respective funds. This would adversely affect amount, if any, invested by us as seed capital, and may adversely affect our ability to maintain or grow AUM in existing funds or raise additional funds in the future. 31. Poor performance of funds advised by us would cause a decline in our revenue, income and cash flow and could materially adversely affect our ability to raise additional funds and capital. In the event that any of funds advised by us were to perform poorly, our revenue, income and cash flow would decline because (i) the value of our AUM would decrease, which would result in us not getting carried interest; and (ii) to the extent we may have invested in these funds, as seed capital or otherwise, we may get considerably lower returns than anticipated, or no returns at all, and may even result in a loss of whole or part of our investment. Poor performance of funds advised by us could make it more difficult for us to raise new capital. Investors in funds advised by us and other potential investors might decline to invest in future funds we raise. 32. The due diligence process that we undertake in connection with the investments made by the funds advised by us may not reveal all facts that may be relevant in connection with an investment. In terms of our Investment Advisory Agreements, we conduct due diligence of the potential portfolio companies for the funds advised by us, that we deem reasonable and appropriate based on the facts and circumstances applicable to each investment. The objective of the due diligence process is to identify attractive investment opportunities based on the facts and circumstances surrounding an investment and to identify possible risks associated with that investment. During a due diligence, we typically evaluate a number of important business, financial, tax, accounting, environmental and legal issues in determining whether or not to proceed with an investment. Outside consultants, legal advisors, accountants and investment banks are involved in the due diligence process in varying degrees depending on the type of investment. Nevertheless, when conducting the due diligence process and making an assessment regarding an investment, we rely on resources available to us, including information provided by the target of the investment and, in some circumstances, third-party investigations. We cannot be certain that the due diligence investigation that we will carry out with respect to any investment opportunity will reveal or highlight all relevant facts (including fraud) that may be necessary or helpful in evaluating such investment opportunity, including the existence of contingent liabilities. We also cannot be certain that our due diligence investigations will result in investments being successful or that the actual financial performance of an investment will not fall short of the financial projections we used when evaluating that investment. In case any of the aforesaid risks materialise, this may adversely affect our ability to receive carried interest, as also our ability to raise further funds.

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33.

Funds advised by us have made and may continue to make investments in companies that such funds do not control, exposing such funds to the risk of decisions made by others with which the respective funds may not agree, consequently affecting our returns from such funds. Funds advised by us hold investments through equity and equity-linked securities of companies that such funds generally do not control. Those investments will be subject to the risk that the company in which the investment is made may make business, financial or management decisions with which such funds do not agree or that the majority stakeholders or the management of the company may take risks or otherwise act in a manner that does not serve such funds interests. If any of the foregoing were to occur, the value of investments by funds advised by us could decrease, resulting in a lower or nil carried interest and a reduction in value of our investments in the fund (if any), which would result in our financial condition, results of operations and cash flow being adversely affected. The aforesaid may also prejudicially affect our reputation amongst investors and consequently our ability to launch new schemes, which would adversely affect our growth prospects.

34.

Most of the funds advised by us are sector specific and make a limited number of investments, or investments that are concentrated in certain asset types, which could negatively affect their performance to the extent those concentrated investments perform poorly, consequently adversely affecting our results of operations and financial condition. Most of the funds advised by us are sector specific and make a limited number of investments, or investments that are concentrated in certain asset types like real estate or certain geographic regions within India. During periods of difficult market conditions or slowdowns in these sectors or geographic regions, decreased revenues, difficulty in obtaining access to financing and increased funding costs may be exacerbated by this concentration of investments, which would result in lower investment returns. Since a significant portion of a funds capital may be invested in a single investment or portfolio company, a loss with respect to such investment or a portfolio company could have a significant adverse impact on such funds capital. Accordingly, a lack of diversification on the part of a fund could adversely affect a funds performance and therefore, our financial condition and results of operations.

35.

Certain funds where we are the investment advisors have overlapping investment objectives, primarily on account of such funds investment objectives covering the same or similar sectors. This may lead to a potential conflict of interest for us while making investment decisions. As we have expanded the scope of our business, we increasingly confront actual and potential conflicts of interest relating to investment activities of funds advised by us. Funds advised by us may have overlapping investment objectives and potential conflicts may arise with respect to our decisions regarding how to allocate investment opportunities among those funds. For example, we manage multiple real estate funds involving common personnel, and conflict may arise with respect to selection of a fund to invest in a particular project, when more than one funds are eligible to invest and have the investible surplus. Such potential conflict situations may be further aggravated if any of the Directors, senior management or key management personnel invests in certain funds, and selection of a fund has to be made with respect to funds where such investments have been made by Directors, senior management or key management personnel, and funds where such investments have not been so made. It is possible that actual, potential or perceived conflicts could give rise to investor dissatisfaction or litigation or regulatory enforcement actions. Appropriately dealing with conflicts of interest is complex and difficult and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with one or more potential or actual conflicts of interest. Regulatory scrutiny of, or litigation in connection with, conflicts of interest would have a material adverse effect on our reputation which would materially adversely affect our business in a number of ways, including an inability to raise additional funds and a reluctance of counterparties to do business with us.

36.

Our revenue, net income and cash flow are all variable, which may make it difficult for us to achieve steady earnings growth on a quarterly basis and may cause the price of our equity shares to decline.

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Our revenue, net income and cash flow are all variable. This is on account of various factors, including due to the fact that we receive carried interest from the funds advised by us only when investments are realized. Our investment advisory fees can vary in case of launch of new fund or exit from an existing fund. We would receive fund set up fees only after initial closing of the fund, and if we are unable to raise any funds or the funds as raised by us are not sufficient to meet the expenses incurred in this regard, the expenses not recovered would be our account (and proportionately borne by our joint venture partners, if any, in case the fund is launched by a joint venture company). Schemes currently open for investor subscription are Special Opportunities Fund I, Offshore IBF, Core Fund and the Blue Ocean Maritime Fund, and we cannot assure that any of these schemes will close at all, or close with requisite level of investor subscriptions. Further, set up fees from funds have historically not recovered the expenses incurred by us. In addition, the investment return profiles of most of our investment funds are volatile. We may also experience fluctuations in our results from quarter to quarter due to a number of other factors, including changes in the value of our investments in the fund, changes in the amount of distributions or dividends paid in respect of investments (to the extent of our investments in the fund), changes in our operating expenses, the degree to which we encounter competition and general economic and market conditions. Such variability may lead to volatility in the trading price of our equity shares and cause our results for a particular period not to be indicative of our performance in a future period. It may be difficult for us to achieve steady growth in net income and cash flow on a quarterly basis, which could in turn lead to large adverse movements in the price of our common units or increased volatility in our equity shares price generally. 37. The historical returns attributable to the funds advised by us should not be considered as indicative of their future results or of our future results or of any returns expected on an investment. The historical results attributable to funds advised by us are based on several factors, including those beyond our control. Investment decisions are based on several parameters and on available information (which may or may not be complete) and are subject to substantial risks, thus historical results should not be considered by potential investors in our Equity Shares as indicative of the future results of our existing or future funds, or for considering the expected returns on an investment in Equity Shares of the Company. 38. The Company is subject to substantial competition in all aspects of our investment advisory business and there are few barriers to entry. The investment advisory business is intensely competitive, with competition based on a variety of factors, including investment performance, the quality of service provided to fund investors, brand recognition and business reputation. We compete for fund investors, talent and for investment opportunities with a number of hedge funds, private equity funds, specialized funds, traditional investment advisors, commercial banks, investment banks and other financial institutions, based both within and outside India. A number of factors serve to increase our competitive risks: a number of our competitors have greater financial, technical, marketing and other resources and more personnel than we do; several of our competitors have recently raised, or are expected to raise, significant amounts of capital, and many of them have similar investment objectives to ours, which may create additional competition for investment opportunities and may reduce the size and duration of pricing inefficiencies that many investment strategies for investment in the alternative assets space seek to exploit; some of our competitors have greater capital, lower targeted returns or greater sector or investment strategy specific expertise than we do, which creates competitive disadvantages with respect to investment opportunities; some of these competitors may also have a lower cost of capital and access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to investment opportunities;

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some of our competitors may have higher risk tolerances or different risk assessments which could allow them to consider a wider variety of investments and to bid more aggressively than us for investments that we want to make; there are relatively few barriers to entry impeding new funds, including a relatively low cost of entering this business, and the successful efforts of new entrants into our business, including former portfolio managers at large diversified financial institutions, major commercial and investment banks and other financial institutions, have resulted in increased competition; some investors in funds advised by us may perceive a higher disclosure risk with investment advisors which are publicly traded; investors in the funds advised by us may develop concerns that our interests may not necessarily correlate with the interest of the investors in the funds advised by us; other industry participants will from time to time seek to recruit our investment professionals and other employees. Competition may decrease available investment opportunities and drive up the cost of investments, which may deprive us of the opportunity to invest, or invest at the right price. Competition from other investment avenues including other investment advisors who may have lower fees and cost structures than ours may require us to materially reduce our charges to stay competitive. Fee or incentive income reductions on existing or future funds, without corresponding decreases in our cost structure, could materially adversely affect our revenues and profitability. Decreases in cost structures could lead to loss of talent. The aforesaid and other factors could reduce our earnings and revenues and materially adversely affect our business. 39. Investments by funds advised by us will in most cases rank subordinate to claims of other creditors or investors. Investments by funds advised by us may be in the form of equity and equity-linked instruments. In case of equity investments, or investments which are converted into equity, they would rank subordinate to all other indebtedness or preference share capital of the investee company. In case of investments in equitylinked instruments like convertible debentures or preference shares, the companies in which funds advised by us will invest will have indebtedness, or may be permitted to incur indebtedness, that ranks senior to our investment. By their terms, such instruments may provide that their holders are entitled to receive payments of dividends, interest or principal on or before the dates on which payments are to be made in respect of our investment. Also, in the event of insolvency, bankruptcy, liquidation, dissolution or re-organisation of a company in which an investment is made, holders of securities ranking senior to our investment would typically be entitled to receive payment in full before distributions could be made in respect of our investment. Also, during a period of financial distress or following insolvency, the ability of our investment funds to influence a companys affairs and to take actions to protect their investment may be substantially less than that of the senior creditors. 40. Investments through venture capital funds registered with SEBI have faced certain income tax issues in the past. The Finance Act, 2007 effected certain amendments to the provisions of Section 10(23FB) of the I.T.Act which raised questions on the taxation of venture capital funds at two levels, namely at the fund level as well in the hands of the investors in respect of the income from investments in companies not qualifying as venture capital undertakings. This uncertainty led to a slowdown in the venture capital funds industry in general for a few months, consequently affecting investments in funds advised by us during that period. While there has been no official clarification on the possibility of double taxation of the income of venture capital funds, pursuant to legal opinions obtained, the current tax position is believed to be that the taxation can be imposed only at one level, that is, either at the level of the venture capital fund (trust) or at the level

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of the investors (contributors to the trust). Dual taxation of income in the hands of venture capital funds and investors in the venture capital funds, or any other unfavourable tax treatment for income of venture capital funds or investors in venture capital funds would have a material adverse effect on investments in our schemes and may result in a reduction of our AUMs on account of the investors not funding their capital calls on drawdown, which would ultimately affect our Carried Interest and ability to raise further funds. This may have a material adverse effect on our business, results of operation and financial condition. 41. Our operations in foreign countries are subject to political, economic, regulatory and other risks of doing business in those countries. We have international operations in Mauritius and the Cayman Islands. We are subject to the jurisdiction of a significant number of tax authorities and regimes, as also additional risks, such as risks associated with uncertain political and economic environments and government instability, as well as legal systems, laws and regulations that are different from the legal systems, laws and regulations that we are familiar with in India, and which may be less established or predictable than those in more developed countries. In addition, we could be subject to expropriation or deprivation of assets or contract rights, foreign currency restrictions, exchange rate fluctuations and unanticipated taxes or encounter potential incompatibility with foreign joint venture partners. Our failure to manage successfully our geographically diverse operations, including our abilities to react quickly to changing business and market conditions and comply with a range of industry and legal standards and procedures, could adversely affect our business and operations. B. I. 42. Risks in relation to our Consulting Business Risks specific to consultancy services in sustainable development: The market for services offered by Milestone Ecofirst is currently at a nascent stage, and there can be no assurance that such market would develop at an acceptable level or at all, or that we would be able to grow to a level sufficient to sustain our operations. Milestone Ecofirst is engaged in the business of providing consultancy services in relation to sustainable development solutions from planning to monitoring execution of the plan, energy management strategies, integrated water management solutions, assist in obtaining green building certification and master planning. The market for such services in India is currently at a nascent stage, and there can be no assurance that a market for such services would develop at all or develop at a level sufficient to sustain our operations. In case a market for services provided by Milestone Ecofirst may not develop at all or develop to a level sufficient to sustain our operations, or if we are not able to sustain our business with the growth in the market, our operations in Milestone Ecofirst may not prove to be sustainable going forward, which would have a material adverse effect on our consolidated results of operations and financial condition. 43. The industry serviced by Milestone Ecofirst is fragmented, and currently has low entry barriers, requiring us to compete with others who may have lower costs and overheads. Since the industry in which Milestone Ecofirst currently operates is at a nascent stage, it currently has low entry barriers and has other persons/entities competing with Milestone Ecofirst to provide these services. Such persons/entities may have lower costs and overheads than Milestone Ecofirst, hence enabling them to offer services at lower costs, which adversely affects the ability of Milestone Ecofirst to attract business at prices which would recover its costs and provide a return on investment. The aforesaid may have a material adverse effect on our consolidated results of operations and financial condition. II. 44. Risks specific to Property and Project Management Services Our property and project management services are significantly dependent on in-house projects where we advise.

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Milestone Property is currently significantly dependant on real estate projects/companies in which funds managed by us have invested, and where we provide investment advisory services. While Milestone Property intends to focus on business from third party clients going forward, we cannot assure that Milestone Property would be able to attract sufficient business from third party clients or service such clients effectively going forward, which would adversely affect its growth plans and consequently our consolidated results of operations and financial condition. 45. Property and project management services in India are fragmented and the larger-sized and high end projects are currently dominated by international property consultants. Milestone Property provides property and project management services to real estate projects/companies in which funds managed by us have invested and where we provide investment advisory services, and other real estate development and investment companies. Property and project management services industry is fragmented, extremely competitive and the larger-sized projects and high end projects are currently dominated by international property consultants like Cushman & Wakefield, Knight Frank and Jones Lang Lasalle. We cannot assure that Milestone Property would be able to effectively compete with international property consultants for the larger-sized and high end projects, or would be able to scale up or sustain its operations to attract sufficient number of third party clients. There can also be no assurance that Milestone Property will be able to effectively service third party clients at a reasonable cost, or at all. Any of the aforesaid would adversely affect the growth plans of Milestone Property, and consequently our consolidated results of operations and financial condition. 46. Third party clients may prefer to obtain property and project management services from service providers based in areas where the relevant project(s) are located. The real estate industry is localized in nature, and while there are certain players which have operations in several regions of India, most real estate developers have their operations concentrated in one city, state or region. Milestone Property is based out of Mumbai, and does not have offices elsewhere in the country. Local developers may perceive that property and project management service providers which are based in the region where the property is situated would have better knowledge of local conditions, which is critical to the real estate industry, and hence may be able to provide better advice and quality of services at a lower cost. Hence, Milestone Property may not be able to generate business, especially in areas where it is not currently present, or areas where it does not have substantial presence in terms of projects it has advised or is currently advising. Any of the aforesaid would adversely affect the growth plans of Milestone Property, and consequently our consolidated results of operations and financial condition. C. 47. Risks in relation to our PMS Business Our PMS business is still at a nascent stage, and we currently offer only two broad product categories, one of which has been launched in May 2010. Our PMS business currently offers only two products, one of which, the Milestone Bullion Scheme, has been launched in May 2010 and is currently open for subscriptions. We started offering Nifty-linked structured products in September, 2009, which have a niche market and had AUMs of Rs. 325.50 million as at March 31, 2010. The debentures offered under Nifty-linked structured products are listed on one or more recognised stock exchanges, and have minimum trading lot of Rs. 30.00 million. We do not have any prior experience in handling large-scale PMS services, and cannot assure investors that we would be able to scale up our PMS operations, which currently form a small portion of our AUMs and turnover. 48. Our Nifty-linked structured products have an extremely low margin, and we cannot assure we would be able to scale up margins. We currently operate on extremely low margins on the Nifty-linked structured products, with a bulk of our margins currently going to our distributors, who bring in the investors to invest in our products. While we currently intend to reduce our dependence on distributors by offering services directly to investors to

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enhance our margins to a level to make the business sustainable, this would involve substantial investment on our part to strengthen our in-house distribution network to be able to reach out directly to investors. We cannot assure that we would be able to invest adequate amounts to strengthen our in-house distribution network, or that post such investment our in-house distribution network would be able to reach out and attract investments from investors for our Nifty-linked structured products at all, or attract investments to a level adequate to recover our costs or make a return on investment, which may lead to losses for our PMS business and consequently have a material adverse effect on our consolidated results of operations and financial condition. Risks in relation to our NBFC Business 49. Our NBFC business is currently minimal. There can be no assurance that we will be able to scale up the same, or sustain the same on a profitable basis going forward. Our NBFC business through Jevir L&F, which our corporate Promoter, Milestone Fincap, acquired in January 2009, is currently minimal. While we intend to scale up Jevir L&F to provide financing services to investors in relation to our products, we cannot assure that we would be able to raise sufficient financing in Jevir L&F to commence activities at a larger scale, or that Jevir L&F would be able to carry out its lending business at all, or on a profitable basis. Risks in relation to the Objects of the Issue 50. There can be no assurance that we will be able to close the Infrastructure Fund and the SME Fund with the desired level of funding, where the Net Proceeds are proposed to be invested, or as to the returns from these funds. We propose to deploy Rs. 1,500.00 million from the Net Proceeds towards Seed Capital for the Infrastructure Fund and the SME Fund. We cannot assure that we would be able to close these funds with the desired level of funding. In the event we are unable to close these funds with the requisite level of funding, we may not be able to avail investment opportunities available to a larger-sized fund. We also cannot assure whether these funds would provide any returns at all, and whether whole or any part of our investment therein can be recovered. For details regarding the Infrastructure Fund and SME Fund, please see section Objects of the Issue on page 34. Accordingly, investors will not have an opportunity to evaluate the economic, financial and other relevant information that will be considered by us in the determination of application of such Net Proceeds. 51. Our contribution from the Net Proceeds towards Seed Capital of the Infrastructure Fund and the SME Fund may reduce if the amount raised by us through this Issue is less than the amount proposed to be raised by us, requiring us to arrange for alternate sources of funding for the same. Further, we may be required to provide additional Seed Capital towards these funds. The amounts allocated by us as Seed Capital towards the Infrastructure Fund and the SME Fund may reduce if the amount raised by us through this Issue is less than the amount proposed to be raised by us. Further, market conditions or investor feedback may require us to contribute additional Seed Capital into one or both of the aforesaid funds. Any or both of the aforesaid may require us to explore alternative funding avenues for the seed capital, and we cannot assure you that we would be able to raise such additional funds on terms acceptable to us, or at all. 52. The objects of the Issue for which funds are being raised have not been appraised by any bank or financial institution. We have not appointed a monitoring agency to monitor the use of Issue proceeds. Our estimates for Seed Capital for the Infrastructure Fund and the SME Fund are based on management estimates, and have not been appraised by any bank or financial institution. We may have to revise our estimates of the Seed Capital required. Further, the deployment of the fund corpus of the Infrastructure Fund and the SME Fund, including the amounts invested by us as Seed Capital, would be entirely at the

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discretion of the board of trustees and the investment committees of the respective funds with our advice in our capacity as investment advisors to the aforesaid funds, and is not subject to monitoring by any external independent agency at the Companys level. Other Risks in relation to the Company 53. In case the Company invest in funds advised by us, and such investments and income therefrom exceeds regulatory limits, the Company may be classified as a NBFC, requiring registration with RBI which would entail substantial additional compliance requirements. As per applicable RBI regulations, a company would be identified as an NBFC if, as per its last audited balance sheet, its financial assets are more than 50.00% of its total assets (netted off by intangible assets) and income from financial assets is more than 50.00% of its gross income. Both these conditions are required to be satisfied for the business of a company to be classified as an NBFC. Presently, the Company does not fall within these limits and hence cannot be classified as an NBFC. However, pursuant to the Companys proposed investments in the Infrastructure Fund and the SME Fund, and any other investments that the Company may undertake into funds advised by us in the future if the Company was to exceed these limits, the Company may be classified as an NBFC in the future and require registration with the RBI. The Company may then be subject to additional compliance requirements, entailing additional compliance related costs, and such classification may adversely affect its business 54. Certain of our Subsidiaries, Joint Ventures and Group Companies have incurred losses in the preceding three years. The following is the list of our Subsidiaries, Joint Ventures and Group Companies which have made losses in the preceding three years, along with their respective financial results as per their audited standalone financial statements: (in Rs.million) Fiscal 2010

Name of company Group Companies Milestone Lotus Valley Buildwell Private Limited Accord Flower Valley Buildwell Private Limited Indusion Consultancy Private Limited

Fiscal 2008

Fiscal 2009

(0.02)

(0.04)

N.A.*

(0.02) (0.01) Subsidiaries Milestone Property Milestone PMS Milestone Trusteeship Milestone In vestment Joint Ventures Milestone Ecofirst Capstone Capital (0.02) (0.01) -

(0.02) Negligible** 0.12 (0.01) (0.03) (0.20) (7.09)*** -

N.A.* N.A. * 1.97 (0.18) (0.02) (0.01) (9.92)*** (2.01)

* - Audited financial results for Fiscal 2010 not available **- Loss is Rs. (0.004) million *** - Based on audited financial results for Fiscal 2010, more than 50% of the net worth of Milestone Ecofirst has been eroded.

For further details, see section Financial Statements on page 127.

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55.

If the Company is unable to obtain the requisite approvals, licenses, registrations and permits to develop and operate its businesses or is unable to renew them in a timely manner, it may adversely affect our operations. We require certain approvals, licenses, registrations and permissions for operating our current and future business for which we may have either made or are in the process of making an application for obtaining the approval. For more information, see the section titled Government Approvals on page 198. If we fail to obtain any of these approvals or licenses, or renewals thereof, in a timely manner, or at all, our business could be adversely affected. Further, to regulate investment advisory services, SEBI has drafted the draft SEBI (Investment Advisers) Regulations, 2007 (Draft Regulations) to bring investment advisers under the regulatory framework. While the Draft Regulations are yet to be notified, in the event they are notified in the current form or any modified form, they would significantly enhance regulatory requirements applicable to our business on an ongoing basis, whose impact we cannot currently predict, and which may substantially increase our costs of compliance and have a material adverse effect on our business, results of operations and financial condition.

56.

The Company does not own its Registered Office and its operations may be interrupted in case of any termination of/inability to renew the lease arrangement. The Company does not own its Registered Office. In terms of the lease arrangement with Fine Trade Exports Limited, the Company pays an annual rent of Rs. 15.56 million for these premises. The lease agreement with Fine Trade Exports Limited expires on January 6, 2014 and has provisions for early termination, and in case of such early termination or non-renewal, the Company will have to search for alternatives and there can be no assurance that the Company will be able to obtain the same on attractive terms or at all.

57.

The Companys management changed in 2007. The present Promoters of the Company will not be liable for the acts of its erstwhile promoters, and any negative publicity about its erstwhile promoters may negatively impact our operations. The Company was incorporated as Skyzen Investment Advisors Private Limited on June 7, 2005 by Skyzen Capital Advisors Private Limited. The original promoters of the Company were Skyzen Capital Advisors Private Limited and Arvind Bansal. The management and control of the Company was taken over by Milestone Fincap from Skyzen Capital Advisors Private Limited on April 9, 2007 by the transfer of 9,800 Equity Shares for a consideration of Rs. 98,000. The present Promoters will not be liable for the acts of the erstwhile promoters of the Company. Further, any negative publicity surrounding the erstwhile promoters may adversely impact our reputation, which is critical to our business, and any adverse impact on our reputation may have a material adverse impact on our business, results of operations and financial condition.

58.

The trademarks for the word Milestone and the logo on the cover page of the Draft Red Herring Prospectus are not owned by the Company, and have been licensed to us by Milestone Fincap, our Promoter. There can be no assurance that we would be able to continue using the trademarks, and any termination of the same may adversely affect our business. The trademarks for the word Milestone and the logo on the cover page of the Draft Red Herring Prospectus are not owned by us, but by Milestone Fincap, one of our Promoters. Milestone Fincap has applied for the registration of the trademarks in the word Milestone and the logo, which are currently pending. The Company has entered into a Licence Deed dated June 21, 2010 (Licence Deed) with Milestone Fincap for the use of the trademarks in the word Milestone and the logo for certain specified purposes, in the manner and subject to the conditions set out in the License Deed. The period of the license is not specified, and the license is valid until termination (in the manner specified in the Licence Deed), subject to re-negotiation of consideration after two years from the date of the Licence Deed. For details, please see section History and Certain Corporate Matters Material Agreements Licence Deed dated

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June 21, 2010 between the Company and Milestone Fincap on page 91. Any termination of such license to use the Milestone trademark or any inability to use this trademark in connection with our business may adversely affect our business, reputation, goodwill, results of operations and financial condition. 59. We may not declare dividends in the foreseeable future. We may retain all future earnings, if any, for use in the operations and expansion of the business. As a result, we may not declare dividends in the foreseeable future. Any future determination as to the declaration and payment of dividends will be at the discretion of our Board of Directors and will depend on factors that our Board of Directors deems relevant, including among others, our results of operations, financial condition, cash requirements, business prospects and any other financing arrangements. Our ability to pay dividends could also be restricted under certain financing arrangements that we may enter into. We may be unable to pay dividends in the near or medium term, and our future dividend policy will depend on our capital requirements and financing arrangements, financial condition and results of operations. Dividends distributed by us will attract dividend distribution tax at rates applicable from time to time. We cannot assure you that we will generate sufficient income to cover our operating expenses and pay dividends to our shareholders, or at all. Accordingly, realisation of a gain on shareholders investments will depend on the appreciation of the price of the Equity Shares. There is no guarantee that our Equity Shares will appreciate in value. 60. The Promoters will continue to retain majority shareholding in us after the Issue, which will allow them to exercise significant influence over us. We cannot assure you that our Promoters will always act in the Companys or your best interest. The substantial majority of the issued and outstanding Equity Shares are currently owned by the Promoters. Upon completion of the Issue, the Promoters and Promoter Group will own 8,700,000 Equity Shares, or 60.90% of our post-Issue Equity Share capital. Accordingly, the Promoters will continue to exercise significant influence over our business policies and affairs and all matters requiring shareholders approval, including the composition of the Board of Directors, the adoption of amendments to the MoA and Articles, the approval of mergers, strategic acquisitions or joint ventures or the sales of substantially all of our assets, and the policies for dividends, lending, investments and capital expenditures. This concentration of ownership also may delay, defer or even prevent a change in control of the Company and may make some transactions more difficult or impossible without the support of these stockholders. The interests of the Promoters and Promoter Group as the Companys controlling shareholders could conflict with the Companys interests or the interests of its other shareholders. There can be no assurance that the Promoters and Promoter Group will act to resolve any conflicts of interest in the Companys or its other shareholders favour. 61. Promoters of the Company and certain of our Directors may be subject to conflicts of interest because of their interests in other companies whose objects include the business activities of the Company. The Promoters of the Company and certain of our Directors hold interests in other companies whose objects may be similar to the business activities of the Company. Certain Group Companies/ Promoter Group companies, namely Milestone Strategy Consultants Private Limited, Milestone Bullion Opportunities Limited, Milestone Money Advisors Private Limited, Milestone Capfin Solutions Private Limited, Milestone Planners Proprietary Limited and Indusion Consultancy Private Limited, Milestone Bullion House Private Limited have similar main objects clauses as the Company in their respective memoranda of association. While the aforesaid companies currently have negligible business operations, we do not have any non-compete agreement or arrangement with the aforesaid companies, and hence the aforesaid companies may compete with us. Situations may therefore arise where such persons are presented with, or identify, opportunities that may be or are perceived to be in competition with us. They may also be subject to conflicts of interest with respect to decisions concerning the Companys operations, financial structure or commercial transactions. These or other conflicts of interest may not be resolved in an impartial manner and could have a material adverse affect on our operations.

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62.

The Promoters, Directors, and certain key management personnel would be interested in the Company in excess of their remuneration and reimbursement of expenses, to the extent of Equity Shares held by them in the Company, and to the extent of license fee for license of trademarks. The Promoters of the Company, its Directors and certain key management personnel hold Equity Shares in the Company. For details, see section Capital Structure on page 24 and Management on page 92. Further, Milestone Fincap has granted a non-exclusive, revocable license to the Company for the use of the trademarks in the word Milestone and the logo for certain specified purposes, for a consider of Re. 1.00, which consideration is to be re-negotiated after a period of two years from the dated of License Deed dated June 21, 2010. For details see section History and Certain Corporate Matters Material Agreements Licence Deed dated June 21, 2010 between the Company and Milestone Fincap on page 91. To the extent of such equity shareholding and the aforesaid license fee, the Promoters, Directors and key management personnel would be deemed to be interested in the Company in excess of their remuneration and reimbursement of expenses.

63.

We have entered into, and will enter into related party transactions. We have entered into, and may in future enter into, certain transactions with our Subsidiaries, Joint Ventures, Promoters, Group Companies and Promoter Group entities, which may include companies engaged in our lines of business or in related areas. These transactions were primarily made in the ordinary course of business at arms length basis. It is likely that we will continue to further related party transactions in the future.

64.

The Company has issued Equity Shares in the last one year at a price that may be lower than the Issue Price In the last one year, the Company has issued Equity Shares at a price that may be lower than the Issue Price, whose details are as follows: Date of allotment March 31, 2010 Number of Equity Shares 3,500,000 Face Value (Rs.) 10 Issue Price (Rs.) 10 Consideration Name of allottee(s)

Cash (rights issue in the ratio of 35:45)

June 19, 2010

2,000,000

10

10

Cash (rights issue in the ratio of 1:4)

Milestone Fincap Services Private Limited, Skyzen Capital Advisors Private Limited, Arvind Bansal, Milestone Strategy Consultants Private Limited Milestone Fincap Services Private Limited, Skyzen Capital Advisors Private Limited, Arvind Bansal, Ved Prakash Arya as trustee of VPA Sibbling Trust, Ved Prakash Arya as trustee of VPA BIL Trust, ILMS Constructions Private Limited, Milestone Strategy Consultants Private Limited

Risks in relation to the Indian Economy 65. Our business is substantially affected by prevailing economic conditions in India. We operate chiefly in India and the predominant portion of our investors comprises Indian companies or Indian nationals. As a result, we are highly dependent on prevailing economic conditions in India and our results of operation are significantly affected by factors influencing the Indian economy. Factors that may adversely affect the Indian economy, and hence our results of operations, include:

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any increase in Indian interest rates or inflation; any scarcity of credit or other financing in India, resulting in an adverse impact on economic conditions in India; prevailing income conditions among Indian clients and Indian companies; changes in Indias present tax, trade, fiscal or monetary policies; natural disasters, political instability, communal disturbances, riots, civil unrest, terrorism or military conflict in India or in countries in the region or globally, including in Indias various neighbouring countries; prevailing national, regional or global economic conditions, including in Indias principal export markets; and other significant regulatory or economic developments in or affecting India. Any event leading to the one of the above mentioned factors would affect us, financially and otherwise. 66. Natural or man-made disasters in India could have a negative impact on the Indian economy and cause our business to suffer. The occurrence of natural disasters, including hurricanes, floods (for example, the heavy floods in Mumbai on July 26, 2005), earthquakes, tornadoes, fires, explosions, pandemic diseases, such as the H5N1 avian flu virus and the H1N1 swine flu virus, and man-made disasters, including acts of terrorism and military actions, could adversely affect our results of operations or financial condition. Military activity or terrorist attacks in India as well as other acts of violence or war may adversely affect our operations, revenues and profitability. We may not be able to foresee events that could have an adverse effect on our business and results of operations. 67. Foreign investors are subject to foreign investment restrictions under Indian law. Under the foreign exchange regulations currently in force in India, transfers of shares between nonresidents and residents are freely permitted (subject to certain exceptions) if they comply with the pricing guidelines and reporting requirements specified by the RBI. If the transfer of shares is not in compliance with such pricing guidelines or reporting requirements or fall under any of the exceptions, then the prior approval of the RBI will be required. Additionally, shareholders who seek to convert the Rupee proceeds from a sale of shares in India into foreign currency and repatriate that foreign currency from India will require a no objection or a tax clearance certificate from the income tax authority. We cannot assure you that any required approval from the RBI or any other Government agency can be obtained on any particular terms or at all. 68. Restrictions and conditions with respect to foreign investment may limit our ability to raise debt or equity investment outside India. As an Indian company, we are subject to exchange controls that regulate borrowing in foreign currencies. Such regulatory restrictions limit our financing sources and hence could constrain our ability to obtain financing on competitive terms and refinance existing indebtedness. In addition, we cannot assure you that the required approvals will be granted to it without onerous conditions, if at all. Further any adverse revisions by international rating agencies to the credit ratings of the Indian national governments sovereign domestic and international debt may adversely affect our ability to raise financing by resulting in a change in the interest rates and other commercial terms at which we may obtain such financing. Limitations on raising foreign debt may have an adverse effect on our business growth, financial condition and results of

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operations. Indian laws constrain our ability to raise capital outside India through the issuance of equity or convertible debt securities and restrict the ability of non-Indian companies to acquire us. Generally, any foreign investment in, or an acquisition of, an Indian company requires approval from the relevant government authorities in India, including the RBI and the FIPB in certain cases. Foreign investment up to the prescribed ceiling in operating-cum-investing companies, like the Company, would not require approval of the FIPB as long as (a) more than 50% of the equity interest in the Company is beneficially owned by resident Indian citizens and Indian companies which are owned and controlled ultimately by resident Indian citizens; and (b) the power to appoint a majority of directors of the Company is ultimately with resident Indian citizens. Under the Portfolio Investment Scheme, FIIs and NRIs are permitted to invest in the shares of the Company up to certain percentages stipulated under the extant foreign exchange control regulations. Any adverse change to the existing policies may restrict our ability to raise capital. If the Government of India does not approve the investment or acquisition, or restricts foreign equity ownership of infrastructure companies, our ability to obtain investments and be acquired by foreign companies will be limited. In addition, making investments in, and the acquisition of, a foreign company by us requires various approvals from the RBI and the Government of India. We cannot assure you that we will be able to obtain such approval from the relevant Indian or foreign authorities. Failure to obtain such approvals, though not quantifiable monetarily, may have a material adverse effect on our growth, financial condition and results of operations. 69. Fluctuations in foreign currencies may have an adverse effect on our results of operations. Our business operations are spread across India, Mauritius and the Cayman Islands. A substantial portion of our revenues is denominated in Indian Rupees. We incur payment obligations denominated in foreign currencies in relation to foreign travel under various verticals. Accordingly, any depreciation of the Indian Rupee against these currencies will increase the Indian Rupee cost to us for servicing our payment obligations to international. This may adversely affect our results of operations and financial condition. We also derive a proportion of our revenues from our international operations in foreign currencies. These cash flows are mainly generated from our operations in Mauritius and the Cayman Islands. We do not currently engage in hedging to address our foreign currency exposure and any significant fluctuations in foreign currencies vis--vis the Indian Rupee may adversely affect our results of operations and financial condition. To the extent that our income and expenditure are not denominated in the same currency, exchange rate fluctuations could cause some of our costs to grow higher than the proportionate revenues on a given contract or could also result in some of our costs falling below budget resulting in higher profitability. 70. Instability in financial markets could materially and adversely affect our results of operations and financial condition. The Indian economy and financial markets are significantly influenced by worldwide economic, financial and market conditions. Any financial turmoil, especially in the U.S or Europe, may have a negative impact on the Indian economy. Although economic conditions differ in each country, investors reactions to any significant developments in one country can have adverse effects on the financial and market conditions in other countries. A loss in investor confidence in the financial systems, particularly in other emerging markets, may cause increased volatility in Indian financial markets. The global financial turmoil, an outcome of the sub-prime mortgage crisis which originated in the United States of America, led to a loss of investor confidence in worldwide financial markets. Indian financial markets have also experienced the contagion effect of the global financial turmoil, evident from the sharp decline in SENSEX, BSEs benchmark index. Any prolonged financial crisis may have an adverse impact

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on the Indian economy and us, thereby resulting in a material and adverse effect on our business, operations, financial condition, profitability and price of our Equity Shares. 71. Investors may have difficulty enforcing foreign judgments against the Company or its management. The Company is a limited liability company incorporated under the laws of India. All Directors and key management personnel are residents of India and a substantial portion of our assets and such persons are located in India. As a result, it may not be possible for investors to effect service of process upon the Company or such persons outside India, or to enforce judgments obtained against such parties outside India. Recognition and enforcement of foreign judgments is provided for under Section 13 of the Code of Civil Procedure, 1908, of India (the Civil Code) on a statutory basis. Section 13 of the Civil Code provides that foreign judgments shall be conclusive regarding any matter directly adjudicated upon, except: (i) where the judgment has not been pronounced by a court of competent jurisdiction; (ii) where the judgment has not been given on the merits of the case; (iii) where it appears on the face of the proceedings that the judgment is founded on an incorrect view of international law or a refusal to recognize the law of India in cases to which such law is applicable; (iv) where the proceedings in which the judgment was obtained were opposed to natural justice; (v) where the judgment has been obtained by fraud; and (vi) where the judgment sustains a claim founded on a breach of any law then in force in India. Under the Civil Code, a court in India shall, upon the production of any document purporting to be a certified copy of a foreign judgment, presume that the judgment was pronounced by a court of competent jurisdiction, unless the contrary appears on record. India is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments. Section 44A of the Civil Code provides that where a foreign judgment has been rendered by a superior court, within the meaning of that Section, in any country or territory outside India which the Government has by notification declared to be in a reciprocating territory, it may be enforced in India by proceedings in execution as if the judgment had been rendered by the relevant court in India. However, Section 44A of the Civil Code is applicable only to monetary decrees not being of the same nature as amounts payable in respect of taxes, other charges of a like nature or of a fine or other penalties. The United Kingdom has been declared by the Central Government to be a reciprocating territory for the purposes of Section 44A but the United States has not been so declared. A judgment of a court of a country which is not a reciprocating territory may be enforced only by a suit upon the judgment and not by proceedings in execution. Such a suit has to be filed in India within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil liability in India. Generally, there are considerable delays in the disposal of suits by Indian courts. It is unlikely that a court in India would award damages on the same basis as a foreign court if an action was brought in India. Furthermore, it is unlikely that an Indian court would enforce foreign judgments if that court were of the view that the amount of damages awarded was excessive or inconsistent with public policy. A party seeking to enforce a foreign judgment in India is required to obtain approval from RBI to execute such a judgment or to repatriate outside India any amount recovered. It is uncertain as to whether an Indian court would enforce foreign judgments that would contravene or violate Indian law. 72. We will be required to prepare our financial statements in accordance with IFRS effective from April 2013. There can be no assurance that our adoption of IFRS will not adversely affect our reported results of operations or financial condition and any failure to successfully adopt IFRS by April 2013 could have an adverse effect on the price of the Equity Shares. Based on current timeline announced for IFRS convergence for Indian companies, the Company estimates that the earliest that it would need to prepare annual and interim financial statements under IFRS would be the financial period commencing from April 1, 2013. There is currently a significant lack of clarity on the adoption of and convergence with IFRS and we currently do not have a set of established practices on which to draw on in forming judgments regarding its implementation and application, we have not determined with any degree of certainty the impact that such adoption will have on our financial reporting. There can be no assurance that our financial condition, results of operations, cash flows or changes in

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shareholders equity will not appear materially worse under IFRS than under Indian GAAP. As we transition to IFRS reporting, we may encounter difficulties in the ongoing process of implementing and enhancing our management information systems. Moreover, there is increasing competition for the small number of IFRS-experienced accounting personnel as more Indian companies begin to prepare IFRS financial statements. There can be no assurance that our adoption of IFRS will not adversely affect our reported results of operations or financial condition and any failure to successfully adopt IFRS by April 2011 could have an adverse effect on the price of the Equity Shares. 73. Significant differences exist between Indian GAAP and other accounting principles, such as U.S. GAAP and IFRS, which may be material to investors assessments of our financial condition. Our financial statements, including the restated financial statements provided in this Draft Red Herring Prospectus are prepared in accordance with Indian GAAP. We have not attempted to quantify the impact of U.S. GAAP or IFRS on the financial data included in this Draft Red Herring Prospectus, nor do we provide a reconciliation of our financial statements to those of U.S. GAAP or IFRS. Each of U.S. GAAP and IFRS differs in significant respects from Indian GAAP. Accordingly, the degree to which the Indian GAAP financial statements included in this Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with Indian accounting practices. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this Draft Red Herring Prospectus should accordingly be limited. Risks in relation to the Equity Shares and this Issue 74. The Equity Shares issued pursuant to the Issue may not be listed on the BSE and the NSE in a timely manner, or at all, and any trading closures at the BSE and the NSE may adversely affect the trading price of our Equity Shares. In accordance with Indian law and practice, permission for listing and trading of the Equity Shares issued pursuant to the Issue will not be granted until after the Equity Shares have been issued and allotted. Approval for listing and trading will require all relevant documents authorising the issuing of Equity Shares to be submitted and there could therefore be a failure or delay in listing the Equity Shares on the BSE and the NSE. Any failure or delay in obtaining such approval would restrict your ability to dispose of your Equity Shares. The regulation and monitoring of Indian securities markets and the activities of investors, brokers and other participants differ, in some cases significantly, from those in Europe and the U.S. The BSE and the NSE have in the past experienced problems, including temporary exchange closures, broker defaults, settlements delays and strikes by brokerage firm employees, which, if continuing or recurring, could affect the market price and liquidity of the securities of Indian companies, including the Equity Shares, in both domestic and international markets. A closure of, or trading stoppage on, either of the BSE and the NSE could adversely affect the trading price of the Equity Shares. 75. There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a shareholders ability to sell, or the price at which it can sell, the Equity Shares at a particular point in time. The price of our Equity Shares will be subject to a daily circuit breaker imposed by all stock exchanges in India which does not allow transactions beyond a certain level of volatility in the price of the Equity Shares. This circuit breaker operates independently of the index-based market-wide circuit breakers generally imposed by the SEBI on Indian stock exchanges. The percentage limit on our circuit breaker is set by the stock exchanges based on the historical volatility in the price and trading volume of the Equity Shares. The stock exchanges do not inform us of the percentage limit of the circuit breaker from time to time, and may change it without our knowledge. This circuit breaker effectively limits upward and downward movements in the price of the Equity Shares. As a result, shareholders ability to sell the Equity Shares, or the price at which they can sell the Equity Shares, may be adversely affected at a particular point in time.

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76.

The Equity Shares have never been publicly traded and the Issue may not result in an active or liquid market for the Equity Shares. Prior to the Issue, there has been no public market for the Equity Shares and an active public market for the Equity Shares may not develop or be sustained after the Issue. Listing and quotation does not guarantee that a trading market for the Equity Shares will develop or, if a market does develop, the liquidity of that market for the Equity Shares. Although we currently intend that the Equity Shares will remain listed on the BSE and NSE, there is no guarantee of the continued listing of the Equity Shares. Failure to maintain our listing on the BSE and the NSE or other securities markets could adversely affect the market value of the Equity Shares. The Issue Price of the Equity Shares is proposed to be determined following a book-building process by agreement between the BRLMs and the Company on the Pricing Date and may not be indicative of prices that will prevail in the trading market. You may not be able to resell your Equity Shares at a price that is attractive to you.

77.

The price of the Equity Shares may be volatile, which could result in substantial losses for investors acquiring the Equity Shares in the Issue. The market price of the Equity Shares may be volatile and could fluctuate significantly and rapidly in response to, among others, the following factors, some of which are beyond our control: volatility in the Indian and global securities market or in the value of the Rupee relative to the U.S. Dollar, the Euro and other foreign currencies; our profitability and performance; changes in financial analysts estimates of our performance or recommendations; perceptions about our future performance or the performance of Indian companies in general; performance of our competitors and the market perception ; adverse media reports about us or the Indian investment sector; significant developments in Indias economic liberalisation and deregulation policies; significant developments in Indias fiscal and environmental regulations; economic developments in India and in other countries; and any other political or economic factors. These fluctuations may be exaggerated if the trading volume of the Equity Shares is low. Volatility in the price of the Equity Shares may be unrelated or disproportionate to our results of operations. It may be difficult to assess our performance against either domestic or international benchmarks. Indian stock exchanges, including the BSE and the NSE, have experienced substantial fluctuations in the prices of listed securities and problems such as temporary exchange closures, broker defaults, settlement delays and strikes by brokers. The governing bodies of Indian stock exchanges have also, from time to time, imposed restrictions on trading in certain securities, limitations on price movements and margin requirements. Further, disputes have occurred between listed companies, stock exchanges and other regulatory bodies, which in some cases may have had a negative effect on market sentiment. If such or similar problems were to continue or recur, they could affect the market price and liquidity of the securities

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of Indian companies, including the Equity Shares. 78. Investors may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares. Under current Indian tax laws and regulations, capital gains arising from the sale of equity shares in an Indian company are generally taxable in India. Any gain realised on the sale of listed equity shares on a stock exchange held for more than 12 months will not be subject to capital gains tax in India if Securities Transaction Tax (STT) has been paid on the transaction. STT will be levied on and collected by a domestic stock exchange on which the equity shares are sold. Any gain realised on the sale of equity shares held for more than 12 months to an Indian resident, which are sold other than on a recognised stock exchange and on which no STT has been paid, will be subject to long term capital gains tax in India. Further, any gain realised on the sale of listed equity shares held for a period of 12 months or less will be subject to short term capital gains tax in India. Capital gains arising from the sale of the Equity Shares will be exempt from taxation in India in cases where the exemption from taxation in India is provided under a treaty between India and the country of which the seller is resident. Generally, Indian tax treaties do not limit Indias ability to impose tax on capital gains. As a result, residents of other countries may be liable for tax in India as well as in their own jurisdiction on a gain upon the sale of the Equity Shares. In addition, changes in the terms of tax treaties or in their interpretation, as a result of renegotiations or otherwise, may affect the tax treatment of capital gains arising from a sale of Equity Shares. 79. The book value of the Equity Shares may be significantly less than the Issue Price. The book value of our Equity Shares as at March 31, 2010 is Rs. 14.83 per Equity Share on a standalone basis and Rs. 25.62 on a consolidated basis and the Issue Price of our Equity Shares may be significantly higher than the book value of our Equity Shares. 80. Future issuances or sales of the Equity Shares could dilute your shareholding and significantly affect the trading price of the Equity Shares. The future issuance of Equity Shares by us, the disposal of Equity Shares by any of our major shareholders or the perception that such issuance or sales may occur, may lead to the dilution of your shareholding in the Company or significantly affect the trading price of the Equity Shares. These sales could also impair our ability to raise additional capital through the sale of our equity securities in the future. In particular, although Equity Shares allotted to Anchor Investors under the Anchor Investor Portion shall be locked-in for a period of 30 days from the date of Allotment of Equity Shares in the Issue, any substantial sale of our Equity Shares after the expiry of such lock-in period by the Anchor Investors could cause the trading price of the Equity Shares to fall. 81. A third party could be prevented from acquiring control of us because of anti-takeover provisions under Indian law. There are provisions in Indian law that may delay, deter or prevent a future takeover or change in control of the Company. Under the takeover regulations, an acquirer has been defined as any person who, directly or indirectly, acquires or agrees to acquire shares or voting rights or control over a company, whether individually or acting in concert with others. Although these provisions have been formulated to ensure that interests of investors/shareholders are protected, these provisions may also discourage a third party from attempting to take control of the Company. Consequently, even if a potential takeover of the Company would result in the purchase of the Equity Shares at a premium to their market price or would otherwise be beneficial to its shareholders, such a takeover may not be attempted or consummated because of Indian takeover regulations. Prominent Notes: a. Public issue of 4,285,715 Equity Shares of Rs. 10 each of the Company for cash at a price of Rs. [] per Equity Share including share premium of Rs. [] per Equity Share aggregating to Rs. [] million. The Issue

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will constitute 30.00% of the fully diluted post-Issue paid-up capital of the Company. b. Our net worth was Rs. 204.97 million as of March 31, 2010, as per our restated consolidated financial statements. The book value per Equity Share was Rs. 25.62 as of March 31, 2010, as per our restated consolidated financial statements. See section Financial Statements on page 127. The average cost of acquisition per Equity Share by the Promoter, Milestone Fincap, is Rs. 5.25. The average cost of acquisition has been calculated by dividing the aggregate amount paid by the Promoter to acquire the Equity Shares held by him with the aggregate number of Equity Shares held by the Promoter. For further details, see Capital Structure on page 24. The Company was originally incorporated as Skyzen Investment Advisors Private Limited on June 7, 2005 under the Companies Act. The name of the Company was changed to Milestone Capital Advisors Private Limited on April 12, 2007. For details of changes in the name and registered office of the Company, see section History and Certain Corporate Matters on page 83. For details of the related party transactions entered into by us, see section Related Party Transactions on page 125. Any clarification or information relating to the Issue shall be made available by the BRLMs and the Company to investors at large and no selective or additional information will be available for any subset of investors in any manner whatsoever. Investors may contact the BRLMs for any complaints pertaining to the Issue. During the period six months immediately preceding the date of filing of this Draft Red Herring Prospectus, no financing arrangement existed whereby the Promoter Group, the Directors of the Company and their relatives may have financed the purchase of Equity Shares by any other person, other than in the ordinary course of the business of such financing entity. The Company has not issued any Equity Shares for consideration other than cash, except as specified in Capital Structure on page 24. For details of transactions in the securities of the Company by the Promoters, Promoter Group, Directors of our Company and their relatives, directors of the corporate Promoter in the last six months, see section Capital Structure on 24. Except as disclosed in the chapters Capital Structure, Promoter and Promoter Group, Group Companies, Management and History and Certain Corporate Matters on pages 24, 117, 120, 92 and 83, respectively, none of the Promoters, the Directors or key management personnel has any interest in the Company.

c.

d.

e.

f.

g.

h.

i.

j.

k.

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SECTION III: INTRODUCTION SUMMARY OF INDUSTRY Introduction to Private Equity (PE) & Venture Capital (VC) in India Private Equity (PE) is money that is invested in a company that is not publicly traded on a stock exchange. PE funds usually invest in companies that already have some income and that can potentially be grown by restructuring, or by bringing new or superior products into existing or developing markets. Venture Capital (VC) is a type of PE that is invested in newly formed start-ups that may not yet generate income or have an idea for a product or service ready to sell. Private Investment in a Public Entity (PIPE) is a special case of PE which enables investment into publicly traded companies. PE investments happen through various stages of a company namely: early stage, growth, stage, late stage, pre-IPO and PIPE transactions. Each fund typically has a fixed duration post which they divest their investment in companies so as to make a return. PE and VC in India The concept of private equity financing was introduced in India in 1964, though it had evolved in developed markets such as the United States of America in the 1940s. Due to the virtual monopoly of public sector financial institutions in India in the pre-reforms period, the initiative on PE financing was lead by public sector undertakings like IDBI (Industrial Development Bank of India) and IFCI (Industrials Finance Corporation of India). In the initial years, PE financing mostly took the form of seed or startup capital. The first major initiative from the government of India came in 1985 when it launched its own VC fund to finance pilot projects involving application of new technologies. Post 1991, owing to the fundamental change in policies regarding foreign investment and development financing, India has experienced tremendous growth in the number of deals, average amount invested per deal and the number of foreign PE funds setting up offices in India. Since it emerged as an important asset class in the 1990s, PE has experienced two boom periods. Each upswing ended in abrupt downturns before PE firms rallied around new growth themes.

Source: VCCEdge, June 2010 During the period 1996-2003, several international and domestic PE firms raised capital internationally and started investing in India. Even though PE investment was only USD 20 million in 1996 and USD 80 million in 1997, the pace of growth was very healthy largely due to the worldwide dot-com boom. Pursuant to the dot-com bubble burst NASDAQ lost 60.00% of its value during the second quarter of 2000 leading to a substantial decline in other public markets (including those in India). As a result, during 2001-2003, there was a fall in PE investment in India.

Since 2004, PE has experienced phenomenal growth as institutional investors, seeking higher returns, embraced this alternative to traditional asset classes. The last few years was a boom period in terms of the size and number of deals, with 2007, being the cyclical peak period, with 510 deals at a value of US USD 15.90 billion primarily driven by buoyant credit markets. This boom came to an end with the mortgage-led debt crisis that froze credit markets in 2009 and triggered a global recession affecting nearly every industry. India weathered the global slowdown much better than others and was quick to rebound with the domestic story intact. According to the VCCircle Deal Outlook 2010, 62% of survey participants stated their willingness to do more deals in 2010. Investors are positive and bullish due to three factors: the number of investment opportunities (deal flow), the India growth investment thesis and a favourable exit environment. Infrastructure, education, healthcare and clean technology are at the top of the radar of PE investors while education, mobile value added services and consumer internet will be most favoured by VC funds. 65% of fund managers see the exit environment improving with the majority preferring the IPO route, followed by strategic sales and secondary sales. 41% of the respondents expect valuations to be realistic while 44% believed that valuations will remain overvalued in 2010. Unrealistic valuations are a key concern and may play spoilsport in deal-making as many investors feel Indian companies are already expensive. Market volatility may lead to further uncertainty over valuations and could delay deal closures.

SUMMARY OF BUSINESS Unless otherwise indicated, the financial information of the Company used in this section is derived from the Companys restated audited consolidated financial statements under Indian GAAP. Further, unless otherwise indicated, the details of AUM and the number of investors exclude AUM and the number of investors under our portfolio management services division. For risks related to our business, see section Risk Factors on page xii. In relation to the information discussed in this section, investors should note that any references to a fund, means a reference to a trust incorporated under the Indian Trusts Act, 1882, and registered as a venture capital fund with the Securities and Exchange Board of India and any references to a scheme includes schemes floated by the relevant fund. We have three funds registered as venture capital funds with SEBI and 12 schemes floated by the funds. Certain information in this section includes, or has been extracted from, publicly available documents prepared by governmental agencies, industry sources and VCCircle.com. We may have reclassified such data for the purposes of presentation in this section. Industry sources and publications generally state that the information contained therein has been obtained from sources generally believed to be reliable but there can be no assurance as to the accuracy and completeness of the information. While reasonable actions have been taken by the Company to ensure that the information is extracted accurately and in its proper context, we have not independently verified any of the data from third parties contained in this section and in the Draft Red Herring Prospectus. Overview We are a professionally managed company providing investment advisory services to various funds and schemes with AUM of approximately Rs. 31,194.50 million for approximately 12,700 fund investors across our various schemes as of March 31, 2010. We provide investment advisory services for investments in various sectors including real estate, logistics, health care and education and infrastructure ancillary activities. In real estate sector, we focus on investments in developmental real estate assets and Yield Driven Real Estate Investments. Currently, we advise eight schemes, including one offshore scheme, targeting an investor base of noninstitutional investors and institutional investors including inter alia insurance companies, banks, pension funds and corporates. Additionally, we have entered into investment advisory agreements with the funds in relation to four schemes which are currently raising funds for investments. One of the schemes is a domestic scheme and three schemes have been launched outside India. Funds advised by us invest in alternative assets, which tend to be less liquid than traditional investments, where the fund investors are primarily focused on long-term investments. We base our investment decisions on detailed, research-based analysis and thorough due diligence and risk management is a core foundation of our business and is a critical part of our investment process. We actively manage the investments of our various schemes and advise the schemes on various aspects through our expertise and knowledge. We also assist the funds advised by us and the companies in which the funds invest, in the areas of corporate governance and operational and financial management. For example, for our schemes that invest in real estate development projects we may be involved in various activities for managing the schemes, including, inter alia, for purchase of land, the approval of building plans and the appointment of contractors for construction. We may also be involved in the purchase of land, obtaining approvals, construction and letting for our logistics and warehousing schemes. We believe this enhances value and enables our schemes to manage risk better. We also provide portfolio management services (PMS) and had approximately Rs. 325.50 million of AUM under our PMS division as of March 31, 2010. Through our PMS division we provide services to our clients for Nifty-linked structured products. We have also recently launched Milestone Bullion Scheme I for investing in gold, silver and gold-linked structured products. We are also engaged in the business of providing project and property management services in relation to properties where the schemes we have advised have invested. Our project and property management

services division currently assists in managing properties in various cities in India including Chennai, Hyderabad, Mumbai, Nagpur, Pune and Rajkot. We also provide consultancy services in clean technology and sustainable development including water management solutions. Across the various schemes advised by us, we have primarily used third party distribution channels. Over the last three years we have had such distribution arrangements with 15 banks including, foreign banks. We have also had arrangements with 42 private wealth management groups and certain independent consultants to market our products. We have entered into arrangements with placement agents for our business operations outside India. We are led by our Board of Directors and a management team consisting of experienced professionals from the industry. We have a team of 20 investment professionals who, based on their expertise, are actively involved in managing our investments across the various schemes we advise. The Company is promoted by Ved Prakash Arya and Milestone Fincap. Ved Prakash Arya has over 17 years of experience in the real estate and retail sectors and has prior experience in setting up domestic and offshore funds. We are currently managed by a Board of eight Directors, out of which five are Independent Directors. We have also partnered with various companies to incorporate joint ventures for the purposes of investing in various sectors and derive benefit from the experience and expertise of our joint ventures partners in those sectors. Our returns from our operations and activities are aligned with the interest of fund investors and the returns they receive from their investments. Our primary sources of revenues are advisory fees or fund management fees earned pursuant to our contractual arrangements with the funds that we advise. We also receive set up fees for the purposes of setting up of the fund, including documentation, compliance with various regulations and fund marketing. Further, based on the performance and investment returns achieved by the funds we are also entitled to additional returns as a share of the net profits of the respective funds. Income from PMS and consultancy services also contribute to the results of our operations. Pursuant to a re-arrangement, the Company acquired stakes in certain Indian companies from its corporate Promoter, Milestone Fincap, which are now either its Subsidiaries or its Joint Ventures. The Company also acquired Omega Global in March 2010 and subsequent to the acquisition the Company controls its offshore business operations through the subsidiaries and joint ventures of Omega Global. For further details see section History and Certain Corporate Matters on page 83. For Fiscal 2010, our consolidated total income was Rs. 260.28 million and profit after tax was Rs. 49.27 million. Our AUMs for our investment advisory services and PMS have grown from Rs. 11,643.80 million as of March 31, 2008 to Rs. 18,230.10 million as of March 31, 2009 and Rs. 31,521.60 million as of March 31, 2010 (including, for each of the Fiscals specified above, the AUMs of those companies which became our Subsidiaries or Joint Ventures during Fiscal 2010). Our Strengths We believe that the following strengths help differentiate us from our competitors and enable us to compete successfully in our industry: Early Identifier of New Trends in the Market We believe that we have the ability to recognize investment opportunities, which helps us raise capital and deploy capital in a manner designed to maximize long-term value. Our investment team helps to identify new trends and investment opportunities in India. We are focused on offering investment products where we believe the application of our competencies and our investment philosophy and processes attracts investors. We continue to develop new investment products to offer to our investors/ clients, particularly through our research capabilities. Specific investment products are developed by our investment team and are evaluated and executed. Over the last three years, we have launched eight schemes, including series of Milestone Domestic Schemes and IL&FS Milestone Funds focused on real estate including Yield Driven Real Estate Investments, affordable housing segment and warehousing segment in India. IL&FS Milestone Fund I was the first fund to have a REIT-like structure. (Source: VCCedge) The fund invested in

properties which were rented out after construction, eliminating the risks attached to real estate development and also minimizing leasing risk. Currently, REIT regulations are awaited in India, although SEBI released the draft regulations in December 2007. (Source: VCCedge) We have also launched a series of India Build Out Schemes focused in investing in health care and education sector in India. India BuildOut Fund-I (IBF-I) is one of the first domestic funds with a sharp focus on education deals besides healthcare. (Source: VCCedge) Further, we have, through our PMS division, recently launched the Milestone Bullion Scheme I focused on investment in gold, silver and gold-linked structured products. We are the first to identify silver as an asset class for capital appreciation. (Source: VCCedge) Experienced Team of Professionals We are a professionally managed company led by our Board. We have a dedicated team of 20 investment professionals. Our investment professionals have an experience ranging between approximately three years to 20 years in various sectors in which we advise our schemes. We have a business strategy and development team of five people who assist us in identifying new opportunities in various sectors and a fund raising and investor relations team of four people. Our fund raising and investor relation team assists in maintaining relationships with our investors. Upon identification of the sector of focus for a fund, our investment professionals undertake research in sectors of their expertise. Our investment professionals, as researchers, help us in the operations of various schemes that we advise when they are launched and assist us in managing the investments made by the schemes. Additionally, we have a team of two people in our PMS division who provide assistance in structuring viable products considering aspects such as taxation and regulatory aspects and other relevant process issues. Our investment team plays a key role in creating investment products and maintaining relationships with companies in which we have invested. To motivate and retain our professionals in the future, we intend to provide our investment professionals benefits including a portion of our Carried Interest that we are entitled to receive in respect of the schemes we advise. Additionally, we also have a team of four architects and eight engineers who advise on various technical aspects of our business such as projects and property management services and consultancy services in sustainable development solutions. We share our experience in the investment advisory services across various sectors in which the schemes, advised by us, have invested and technical aspects of our business across our Joint Ventures and Subsidiaries, which we believe allows research, operational and marketing synergies and optimises our cost structure. Our Subsidiaries and Joint Ventures are also managed by professional boards of directors. We believe that the sectoral experience and financial acumen of our management and investment professionals provide us with a competitive advantage. Ability to Raise Funds through Various Distribution Channels from Wide Investor Base We have a wide investor base including non-institutional investors and institutional investors including insurance companies, banks, pension funds and corporates in India. We reach investors through a number of distribution channels, which consists of banks including foreign banks and several private wealth management groups and independent consultants. For our overseas fund investors we have arrangements with placement agents. Our widespread distribution network has attracted investors from approximately 80 cities and towns in India. We believe that the nature of our investors and distribution channels, has resulted in a stable and growing investor base. Our broad investor base also provides us with a number of opportunities, including cross-selling different funds. We have, as of March 31, 2010, raised an amount of Rs. 31,194.50 million across various schemes advised by us. We provide regular updates to our fund investors and distribution network on the status and operations of various schemes by way of newsletters. We believe that the strength of our relationships with banks, private wealth management groups and independent consultants helps us in attracting and retaining investors for our funds. Most of our investors have remained with us through economic and market cycles and a number of investors who have invested in one of the funds, we have advised, have gone on to invest in other funds advised by us. We believe that our deep investor relationships, disciplined and prudent management of our investors capital and risk management techniques provide us with a competitive advantage as we seek to grow our existing businesses and launch new businesses.

Investment Track Record We believe that schemes we have advised are consistent with some of the schemes investment objectives. We follow a disciplined and rigorous investment process backed by fundamental research and our approach to actively manage risks helps us improve our investment performance by consistently applying our investment philosophy while balancing risk and returns. We have advised on a range of investments made by the schemes. As of March 31, 2010 the Committed Corpus of Milestone Domestic Scheme-I and IL&FS Milestone Fund-I has been fully invested. For further details of investments we have advised on, see section Investments we have advised on on page 71, 73 and 75. We strive to maintain and enhance profitability while we grow our business and AUM. Ability to Forge New Relationships and form Joint Ventures We provide investment advisory services in relation to schemes investing in various sectors including real estate, logistics, health care, education and infrastructure ancillary activities. We have in the past entered into joint ventures with IL&FS Investment Managers Limited and are in the process of entering into a similar arrangement offshore. We have also been successful in forming joint ventures with various companies, which we believe have requisite experience and expertise in the sectors we invest in. We have set up joint ventures with companies such as Religare Venture Capital Limited and Religare Capital Markets Plc (formerly known as Religare Hichens Harrison Plc), whose promoters have expertise in the domain of healthcare, retail wellness and diagnostics. We have recently partnered with Money Matters Financial Services Limited (Money Matters) which is engaged in providing financial services and has expertise in the domain of institutional fund raising. We are in the process of entering into a joint venture with Mercator Lines (Singapore) Limited (Mercator Lines). Mercator Lines has expertise in the domain of managing operations in the shipping sector. We benefit from the experience and expertise of our joint venture partners in the operation and management of our schemes across various sectors. In addition, we benefit from the Seed Capital and commitment provided by Religare Venture Capital Limited and Money Matters. We believe that our ability to partner with companies and form joint ventures has also enabled us to increase and diversify our investor base. Additionally, in relation to our business of providing consultancy services in the sustainable development solutions, our joint venture with J Leon Trading Limited enables us to have access to relevant technology and training and personnel. Our Strategies Our business growth strategy comprises of following key elements: Increase Institutional Investor Base in India and Overseas Our investor base has grown significantly as we have continued to expand our business and enter new sectors. Many non-institutional investors have allocated capital in our various funds and have often invested in more than one of the funds advised by us. The proportion of our institutional investor base to our total investor base for funds advised by us (other than the offshore funds advised by us) as on March 31, 2010 is 4.17% in terms of number and 19.47% in terms of percentage of funds committed. Some of the institutional investors who have invested in the funds advised by us include Indian Overseas Bank, Bank of India and The Army Group Insurance Fund. We seek to increase AUM in India and overseas by accessing new markets, which we believe may be viable in the future, and intend to attract new capital and expand our base of investors, especially institutional investors. An increase in the institutional investor base will enable us to reduce our administrative costs and expenses and to manage the liquidity risks of the schemes we advise. We are committed to expanding our institutional investor base by strengthening our distribution channel. Increase the Scale of our Operations and Develop New Products We strive to increase the scale of our operations and focus on our vertical as well as horizontal expansion. We intend to continue to explore opportunities in the sectors we are currently present in and expand into

other sectors. We seek to develop and broaden our investment strategies and capabilities and diversify our investment platform to better identify investment opportunities in existing and new sectors and asset classes. We have recently launched three funds overseas in sectors focused on real estate, education and health care and shipping and we continue to explore strategic partnerships to help build our brand overseas and intend to capitalize on our experience in advising our existing overseas funds. Our investment teams are focused on identifying new complementary investment strategies and opportunities across various sectors including infrastructure and SME, where we propose to launch funds. To maximize flexibility, we manage our investment capital such that we are poised to pursue investment opportunities, as they arise, whether due to specific corporate events or general markets or economic changes or trends. We launch new products only after a thorough vetting process based upon our internal capabilities and risk assessments, providing our funds with further opportunities to deploy capital and enabling us to diversify our product offerings and sources of revenue. Further, leveraging our experience in the real estate sector, we strive to extend our project and property management services to other real estate developments and investment companies. In line with our strategy to diversify our product base, we also continue to explore opportunities to enter into further joint ventures and partnerships and build corporate relationships with entities having experience and expertise in other sectors. We will also evaluate opportunities to expand into new business areas including, setting up of REIT and similar structures and related business expansions. We will look to augment our current offering with fees based services to diversify our revenue streams, subject to the regulatory framework, from time to time. The Board has authorised the Company to file an application to SEBI to obtain relevant registrations to carry on activities of mutual fund. We intend to continue to actively manage the investments of schemes we advise across various sectors. Our success depends on our team of professional investment managers, researchers and product managers. We intend to increase in the scale of our operations by acquiring talent and skilled personnel with specialized experience in varied sectors. We are in the process of implementing a number of measures to further improve employee motivation and development. We intend to provide our investment professionals a portion of the Carried Interest we receive in respect of the schemes we advise. We also focus on training and development, with periodic reviews of the performance of employees. We believe that our emphasis on team oriented management will result in a shared sense of purpose with our investors and enable us to attract and retain people critical to our success. As we expand our investment platform, we believe our reputation and market position will attract new investors in India as well as overseas. As opportunities arise around the world, we expect to continue to open new offices and develop local teams to take advantage of those opportunities. Explore Exit Options Available to Maximize Returns and Provide Liquid Products Consistent with our investment philosophy of giving importance to the long term interest of our fund investors and to distribute returns on regular intervals, we intend to explore exit options to maximize returns to investors. Further, since the schemes we advise have a tenure varying from three to five years, optionally extendable for a period of one to two years, we intend to list our funds on the stock exchanges to provide opportunities for trading to our fund investors as and when a framework is provided by the regulatory authorities to list a venture capital fund on the Indian stock exchanges. Additionally, we also intend to list companies that the schemes have invested in, as and when practicable, keeping in mind factors such as growth, valuations and external market forces. We may also explore strategic sales of such companies and other exit opportunities. As part of our initiative to offer liquid products, we have recently launched the Milestone Bullion Scheme I focused on investment in silver, gold and gold-linked structured products. Advertising and Brand Building We intend to continue to invest in developing and enhancing the recognition of our brand and corporate name, through brand building efforts, communication and promotional initiatives such as interaction with industry research organizations, participation in industry events as well as investor relations efforts. We

believe that these initiatives will enhance the visibility of our brands and strengthen our recognition in the industry we operate in.

SUMMARY FINANCIAL INFORMATION The following tables set forth summary financial information derived from the audited restated standalone and consolidated financial statements as of and for the years ended March 31, 2006, 2007, 2008, 2009 and 2010. These financial statements have been prepared in accordance with the Indian GAAP, the Companies Act and the SEBI Regulations and presented under the section Financial Statements on page 127. The summary financial information presented below should be read in conjunction with the restated standalone and consolidated financial statements, the notes thereto and the sections Financial Statements and Managements Discussion and Analysis of Financial Condition and Results of Operations on pages 127 and 180 respectively. Summary Statement of Assets and Liabilities as restated of Milestone Capital Advisors Limited (Rs. In Million) As at March31, 2009 2008 2007 2006

Particulars 2010 A. FIXED ASSETS Gross Block Less : Depreciation / Amortisation Net Block Less : Revaluation Reserve Net Block after Revaluation Reserve B. INVESTMENTS C. CURRENT ASSETS, LOANS AND ADVANCES Sundry Debtors Cash and Bank Balances Loans and Advances

12.24 3.18 9.06 9.06 24.80

9.23 0.70 8.53 8.53 -

1.04 0.20 0.85 0.85 -

36.60 15.74 148.47 200.81

23.03 0.41 209.63 233.07

7.34 0.65 59.73 67.74

0.24 4.70 0.22 5.16

0.08 0.07

D. LIABILITIES AND PROVISIONS Secured Loans Unsecured Loans Current Liabilities Provisions

95.20 7.17 102.37 13.53

172.89 2.56 175.45 18.49

43.81 43.81 4.24

4.90 0.21 0.00 5.11 -

0.01 0.01 -

E. DEFERRED TAXLIABILITY / (ASSET)

F. NET WORTH 118.76 47.66 20.52 0.05 0.07 Represented by Equity Share Capital 80.00 10.00 10.00 0.10 0.10 Reserves and Surplus 38.76 37.66 10.54 Less : Revaluation Reserve Reserves and Surplus net of Revaluation Reserve 38.76 37.66 10.54 Less : Miscellaneous Expenditure (To the extent not written off or adjusted) -Debit balance in Profit & Loss Account - (0.02) (0.00) -Preliminary Expenses - (0.02) (0.03) (0.03) NET WORTH 118.76 47.66 20.52 0.05 0.07 NOTE: The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4

Summary Statement of Profits and Losses as restated of Milestone Capital Advisors Limited (Rs. In Million) As at March31, 2009 2008 2007 2006

Particulars 2010 INCOME Income from Fund Management Other Income Total Income (A) EXPENDITURE Personnel Costs Distributor Fees Administrative and Other Operating Costs Depreciation and Amortisation Total Expenditure(B) PROFIT / (LOSS) BEFORE TAX (A) - (B) Less : Current Tax Less : Deferred Tax Liabilities/ (Deferred Tax Assets) Less : Provision for Fringe Benefit Tax Add : MAT Credit Entitlement RESTATED PROFIT AFTER TAX Profit & Loss account at the beginning of the year Balance available for appropriations, as restated APPROPRIATIONS : Dividend Dividend Tax Amount transferred to General Reserve Capitalisation of Profit by way of issue of Bonus Shares Balance Carried forward, as restated

211.21 9.53 220.74

178.11 21.33 199.44

39.74 9.62 49.36

0.24 0.24

44.42 67.24 43.51 2.50 157.67 63.07 27.25 (4.95) 40.77 34.66 75.43 4.00 0.68 32.00 38.76

38.19 90.48 25.66 0.57 154.90 44.54 5.12 14.25 0.25 5.12 30.05 10.54 40.59 2.50 0.42 3.00 34.66

11.33 11.63 9.32 0.20 32.48 16.88 1.89 4.24 0.19 10.56 (0.02) 10.54 10.54

0.26 0.26 (0.02) 0.00 (0.02) (0.00) (0.02) (0.02)

0.00 0.00 (0.00) (0.00) (0.00) (0.00)

NOTE: 1) The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4 2) The reconciliation between the audited and restated Profit and Loss as at April 01, 2005 to March 31, 2010 is given in Annexure 13

10

Summary Statement of Cash Flow as restated of Milestone Capital Advisors Limited (Rs. In Million) For the year ended March31, 2010 2009 2008 2007 2006 63.07 2.50 (0.00) 65.57 (13.58) 55.18 (77.69) (0.03) 29.45 (21.32) 8.13 44.54 0.57 0.02 45.13 (15.68) (132.61) 129.08 2.53 28.44 (17.51) 10.94 16.88 0.20 0.01 17.08 (7.10) (51.64) 43.60 1.94 (9.95) (8.01) (0.02) 0.01 (0.01) (0.24) (0.22) 0.20 (0.27) (0.27) (0.00) (0.00) (0.00) (0.00)

Particulars CASH FLOWS FROM OPERATING ACTIVITIES Net Profit before Taxation Adjustments for : Depreciation Preliminary Expenses written off (Profit) / Loss on sale of fixed assets Operating Profit before Working Capital Changes Adjustments for : (Increase)/decrease in debtors (Increase)/decrease in advances Increase/(decrease) in creditors Increase/(decrease) in provisions Cash generated from Operations Income tax paid Net Cash Inflow/(Outflow) from Operating Activities (A) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets Sale of Fixed Assets Purchase of investments Net Cash Inflow/(Outflow) from Investing Activities (B) CASH FLOWS FROM FINANCING ACTIVITIES Dividend Paid Dividend Distribution Tax Paid Repayment of Loans Proceeds from Loan Payment for Incorporation Expenses Proceeds from Issue of Equity Share Capital Net Cash Inflow/(Outflow) from Financing Activities (C) Net Increase/(Decrease) in Cash and Cash Equivalents (A+B+C) Opening Cash and Cash Equivalents Closing Cash and Cash Equivalents

(3.19) 0.18 (24.80) (27.81)

(8.37) 0.12 (8.25)

(1.04) (1.04)

35.00 35.00

(2.50) (0.42) (2.92)

(34.96) 30.06 9.90 5.00

4.90 4.90

(0.02) 0.10 0.08

15.32 0.41 15.74

(0.24) 0.65 0.41

(4.06) 4.71 0.65

4.63 0.07 4.71

0.07 0.07

NOTE: 1) The cash flows Statements have been prepared under indirect method as set out in Accounting Standard -3 on Cash Flow Statement. 2) The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4

11

Consolidated Summary Statement Assets and Liabilities as restated, of Milestone Capital Advisors Limited (Rupees In Million) Particulars As at March 31, 2010 A. FIXED ASSETS Gross Block Less : Depreciation / Amortisation Net Block Less : Revaluation Reserve Net Block after Revaluation Reserve B. INVESTMENTS C. CURRENT ASSETS, LOANS AND ADVANCES Sundry Debtors Cash and Bank Balances Loans and Advances

13.25 3.45 9.80 9.80 13.26

99.76 22.65 306.33 428.74

D. LIABILITIES AND PROVISIONS Secured Loans Unsecured Loans Current Liabilities Provisions

0.78 214.71 8.51 224.00 22.83 204.97 80.00 124.97 124.97 -

E. DEFERRED TAX LIABILITY / (ASSET) F. NET WORTH Represented by Equity Share Capital Reserves and Surplus Less : Revaluation Reserve Reserves and Surplus net of Revaluation Reserve Less : Miscellaneous Expenditure (To the extent not written off or adjusted) NET WORTH NOTE: The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 3

204.97

12

Annexure 2: Consolidated Summery Statement of Profits and Losses, as restated, Milestone Capital Advisors Limited. (Rupees In Million) Particulars For the year ended 2009-10 INCOME Income from Fund Management 247.84 Other Income 12.44 Total Income EXPENDITURE Personnel Costs Distributor Fees Compensation Fees Administrative and Other Operating Costs Depreciation and Amortisation Total Expenditure PROFIT / (LOSS) BEFORE TAX(A) - (B) Provision for Taxation Less : Current Tax Less : Provision for Deferred Tax Add : MAT Credit Entitlement (B) (A) 260.28

52.87 78.16 0.50 48.66 2.77 182.96 77.32

30.56 (0.90) (1.61) 28.05 49.27 (0.02)

RESTATED PROFIT AFTER TAX Less: Transfer to Special Reserve Pursuant to Section 45-IC of the R.B.I. Act, 1934 Profit & Loss account at the beginning of the year Balance available for appropriations, as restated APPROPRIATIONS : Amount transferred to General Reserve Capitalisation of Profit by way of issue of Bonus Shares Dividend Tax on Dividend Balance Carried forward, as restated

34.66 83.91 32.00 4.00 0.68 47.23

NOTE: 1) The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 3 2) The reconciliation between the audited and restated Profit and Loss as at March 31, 2010 is given in Annexure 12

13

THE ISSUE

Issue by the Company

4,285,715 Equity Shares of Face Value of Rs. 10 each (1) aggregating upto Rs. [] million

Of which (2) A) QIB Portion Of which Anchor Investor Portion Balance available for allocation to QIBs other than the Anchor Investor Portion (assuming Anchor Investor Portion is fully subscribed) Of which Available for allocation to Mutual Funds only (5% of the QIB Portion (excluding the Anchor Investor Portion) Balance for all QIBs including Mutual Funds B) Non-Institutional Portion C) Retail Portion
(2) (2)

At least 2,142,858 Equity Shares Up to 642,857 Equity Shares Up to 1,500,001 Equity Shares

75,000 Equity Shares

1,425,001 Equity Shares Not less than 642,857 Equity Shares Not less than 1,500,000 Equity Shares 10,000,000 Equity Shares 14,285,715 Equity Shares See section Objects of the Issue on page 34 for information about use of the Net Proceeds

Equity Shares outstanding prior to the Issue Equity Shares outstanding after the Issue Use of Net Proceeds

(1)

The Company is considering a Pre-IPO Placement. If the Pre-IPO Placement is completed, the Issue size would be reduced by the extent of such Pre-IPO Placement, subject to a minimum Issue size of 25% of the post Issue paid-up equity capital.
(2)

If at least 50% of the Issue cannot be allocated to QIBs, then the entire application money will be refunded forthwith. Undersubscription, if any, in any category, except the QIB Portion, would be allowed to be met with spill-over from any other category or combination of categories at the discretion of the Company, in consultation with the BRLMs and the Designated Stock Exchange. The Company, in consultation with the BRLMs, may allocate up to 30% of the QIB Portion to Anchor Investors on a discretionary basis. One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the price at which allocation is being done to Anchor Investors. For further details, please see the section Issue Procedure on page 217. Allocation to all categories, except the Anchor Investor Portion, if any, shall be made on a proportionate basis.

14

GENERAL INFORMATION The Company was originally incorporated as Skyzen Investment Advisors Private Limited on June 7, 2005 under the Companies Act. For further details, see the section History and Certain Corporate Matters on page 83. The Company provides investment advisory services and manages various funds and schemes. For further details of the business of the Company, see the section Business on page 61. Registered and Corporate Office of the Company Milestone Capital Advisors Limited 602, Hallmark Business Plaza Sant Dyaneshwar Marg, Opp. Guru Nanak Hospital Bandra (East) Mumbai 400 051 Tel: +91 22 4235 7000 Fax: +91 22 4235 7077 Email: ipo.investor@milestonecapital.in Website: www.milestonecapital.in Company Identification Number and Registration Number: U67190MH2005PLC153819 Address of Registrar of Companies The Company is registered with the Registrar of Companies, Maharashtra, situated at the following address: Registrar of Companies Everest, 5th Floor 100, Marine Drive Mumbai 400 002 Board of Directors The Board of the Company comprises the following: Name Nawshir Dara Khurody Designation Non-Executive Chairman, Independent Director DIN 00007150 Address 12-A, Darbhanga Mansion Carmichael Road Opp. Hiramandari School Mumbai 400 026 Flat No. 701 Gladioli CHS (Off Yari Road) Versova, Andheri (West) Mumbai 400 063 31, Eden Bungalows Opp. Hiranandani School Powai Mumbai 400 076 291/301, Kalpatru Heights Agripada Mumbai 400 011 Windmere, Cuffe Parade Colaba

Ved Prakash Arya

Managing Director

00006205

Arvind Bansal

Non-Executive Director

00139337

Bhagyam Ramani

Nominee Director

00107097

Noel Naval Tata

Independent Director

00024713

15

Name

Designation

DIN

Address Mumbai 400 005 Suite 8, Jal Kiran Cuffe Parade Colaba Mumbai 400 005 402, Moksh Apartments Upper Govind Nagar Malad (East) Mumbai 400 097 Flat No. 4A, 4th Floor Harmony Tower, Dr. Moses Road Worli Naka, Worli Mumbai 400 018

Dr. Pravin Pranalal Shah

Independent Director

00112544

Raj Bhardwaj

Narain

Independent Director

01571764

Vijay Chopra

Kumar

Independent Director

02103940

E.

For further details of the Directors, see the section Management on page 92. Company Secretary and Compliance Officer Ravindra Gupta is the Company Secretary and the Compliance Officer of the Company. His contact details are as follows: 602, Hallmark Business Plaza Sant Dyaneshwar Marg Opp. Guru Nanak Hospital Bandra (East) Mumbai - 400 051 Tel: + 91 22 42357000 Fax: +91 22 42357077 Email: ipo.investor@milestonecapital.in Investors can contact the Compliance Officer or the Registrar to the Issue in case of any pre- or postIssue related problems, such as non-receipt of letters of Allotment, credit of Allotted shares in the respective beneficiary account and refund orders. All grievances relating to the Issue may be addressed to the Registrar to the Issue, giving full details such as name, address of the applicant, number of Equity Shares applied for, amount paid on application and the bank branch or collection centre where the application was submitted. All grievances relating to the ASBA process may be addressed to the Registrar to the Issue with a copy to the relevant SCSB, giving full details such as name, address of applicant, application number, number of Equity Shares applied for, amount paid on application and designated branch or the collection centre of the SCSB where the ASBA Bid cum Application Form was submitted by the ASBA Bidder. Book Running Lead Managers IDFC Capital Limited Naman Chambers, C-32 G-Block, Bandra Kurla Complex Bandra (East) Mumbai 400 051 EDELWEISS CAPITAL LIMITED 14th Floor, Express Towers Nariman Point Mumbai 400 021 Tel: +91 22 4086 3535

16

Tel: +91 22 6622 2600 Fax: +91 22 6622 2501 Email: milestone.ipo@idfc.com Investor grievance email: complaints@idfc.com Website: www.idfccapital.com Contact Person: Hiren Raipancholia SEBI Registration No.: INM000011336

Fax: +91 22 4086 3610 Email: milestone.ipo@edelcap.com Investor Grievance Email: customerservice.mb@edelcap.com Website: www.edelcap.com Contact Person: Sumeet Lath/Jibi Jacob SEBI Registration No.: INM0000010650

ICICI SECURITIES LIMITED ICICI Centre, H.T. Parekh Marg Churchgate Mumbai 400 020 Tel: +91 22 2288 2460 Fax: +91 22 2282 6580 Email: milestone.ipo@icicisecurities.com Investor Grievance Email: customercare@icicisecurities.com Website: www.icicisecurities.com Contact Person: Vishal Kanjani SEBI Registration No.: INM000011179 Legal Counsel to the Issue Amarchand & Mangaldas & Suresh A. Shroff & Co. Peninsula Chambers Peninsula Corporate Park Ganpatrao Kadam Marg, Lower Parel Mumbai 400 013 Tel: +91 22 2496 4455 Fax: +91 22 2496 3666 Auditors to the Company G.M. Kapadia & Co., Chartered Accountants 1001, Raheja Chambers 213, Free Press Journal Marg Nariman Point Mumbai 400 021 Tel: + 91 22 6611 6611 Fax: +91 22 6611 6600 Email: atul@gmkco.com Syndicate Members [] IPO Grading Agency This Issue has been graded by [] as [], indicating []. The rationale furnished by the grading agency for its grading will be updated at the time of filing the Red Herring Prospectus with the RoC. Experts Except the report of the Auditors dated June 21, 2010 and the statement of tax benefits dated June 15. 2010 provided by G.M. Kapadia & Co. and the report of [] in respect of the IPO grading of this Issue annexed herewith to this Draft Red Herring Prospectus, the Company has not obtained any expert opinions.

17

Registrar to the Issue Karvy Computershare Private Limited Plot No. 17-24, Vittal Rao Nagar Madhapur Hyderabad 500 081 Tel: +91 40 2342 0815 Fax: +91 40 2343 1551 Email: milestone@karvy,com Website: http://karisma.karvy.com Contact Person: Murali Krishna SEBI Registration No.: INR000000221 Bankers to the Issue and Escrow Collection Banks [] Self Certified Syndicate Banks The list of banks that have been notified by SEBI to act as SCSBs for the ASBA process is provided on the website of SEBI from time to time and for details on the Designated Branches of the SCSBs which shall collect ASBA Bid cum Application Forms, please refer to the above-mentioned link. Bankers to the Company HDFC Bank Limited 1201, Raheja Centre Free Press Journal Marg Mumbai 400 021 Tel: +91 22 3023 3255 Fax: +91 22 2204 9750 Email: kripa.kalro@hdfcbank.com Monitoring Agency There is no requirement to appoint a monitoring agency for the Issue, as this Issue is for an amount less than Rs. 5,000 million. Inter-se Allocation of Responsibilities between the BRLMs The following table sets forth the inter se allocation of responsibilities for various activities among the BRLMs for the Issue: Activity 1. Capital structuring with relative components and formalities etc. Due diligence of Companys operations/ management/ business plans/ legal etc. Drafting and design of Draft Red Herring Prospectus and of statutory advertisement including memorandum containing salient features of the Prospectus. The BRLMs shall ensure compliance with stipulated requirements and completion of prescribed formalities with the Stock Exchanges, RoC and SEBI including finalisation of Prospectus and RoC filing including coResponsibility IDFC Capital, Edelweiss, ISec IDFC Capital, Edelweiss, ISec Coordination IDFC Capital IDFC Capital Kotak Mahindra Bank Limited 5th Floor, Dani Corporate Park CST Road, Kalina Santa Cruz (East) Mumbai 400 098 Tel: +91 22 6759 5500 Fax: +91 22 6659 5364 Email: dev.sampat@kotak.com

2.

18

Activity ordination with Auditors for preparation of financials and drafting and approving all statutory advertisements. Drafting and approval of all publicity material other than statutory advertisement including corporate advertisement, brochure etc. Appointment of other intermediaries viz., Registrar(s), Printers, Escrow Collection Banks, Advertising Agency, IPO Grading Agency, Monitoring Agency (if required) Preparation of roadshow presentation and FAQs

Responsibility

Coordination

3.

4.

5.

6.

Institutional marketing strategy: International institutional Institutional Marketing strategy: Domestic institutional; and Retail/ HNI marketing strategy: Finalise centers for holding conference for brokers etc; Finalise media, marketing & PR Strategy; and Follow up on distribution of publicity and issue materials including form, prospectus and deciding on the quantum of the Issue material Finalise bidding centers Pricing, managing the book and coordination with Stock Exchanges

7.

8.

IDFC Capital, Edelweiss, ISec IDFC Capital, Edelweiss, ISec IDFC Capital, Edelweiss, ISec IDFC Capital, Edelweiss, ISec IDFC Capital, Edelweiss, ISec IDFC Capital, Edelweiss, ISec

IDFC Capital IDFC Capital Edelweiss

IDFC Capital Edelweiss

Edelweiss

9.

10.

The post bidding activities including management of escrow accounts, co-ordinate non-institutional and institutional allocation, intimation of allocation and dispatch of refunds to bidders, etc. The Post Issue activities for the Issue will involve essential follow up steps, which include the finalisation of basis of allotment, dispatch of refunds, demat and delivery of shares, finalisation of listing and trading of instruments with the various agencies connected with the work such as the Registrar(s) to the Issue and Escrow Collection Banks. (The BRLMs shall be responsible for ensuring that these agencies fulfill their functions and enable it to discharge this responsibility through suitable agreements with the Company)

IDFC Capital, Edelweiss, ISec IDFC Capital, Edelweiss, ISec

I-Sec

I-Sec

If any of these activities are handled by other intermediaries, the designated BRLMs shall be responsible for ensuring that these agencies fulfil their functions and enable them to discharge these responsibilities through suitable agreements with the Company. Credit Rating As this is an Issue of Equity Shares, there is no credit rating for this Issue. Trustees As this is an Issue of Equity Shares, the appointment of trustees is not required.

19

Book Building Process The book building, in the context of the Issue, refers to the process of collection of Bids on the basis of the Red Herring Prospectus within the Price Band, which will be decided by the Company, in consultation with the BRLMs, and advertised at least two days prior to the Bid/Issue Opening Date. The Issue Price is finalised after the Bid / Issue Closing Date. The principal parties involved in the Book Building Process are: the Company; the BRLMs; the Syndicate Members who are intermediaries registered with SEBI or registered as brokers with BSE/NSE and eligible to act as Underwriters. The Syndicate Members are appointed by the BRLMs; the SCSBs; the Registrar to the Issue; and the Escrow Collection Banks. In terms of Rule 19(2)(b)(i) of the SCRR, as amended and under the SEBI Regulations, where the Issue is being made through the 100% Book Building Process wherein at least 50% of the Issue shall be allocated on a proportionate basis to QIB Bidders. 5% of the QIB Portion (excluding Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. If at least 50% of the Issue cannot be allocated to QIBs, then the entire application money shall be refunded forthwith. In accordance with the SEBI Regulations, QIBs Bidding in the QIB Portion are not allowed to withdraw their Bid(s) after the Bid/Issue Closing Date. For further details, please see the section Terms of the Issue on page 210. We will comply with the SEBI Regulations and any other ancillary directions issued by SEBI for this Issue. In this regard, we have appointed the BRLMs to manage the Issue and procure subscriptions to the Issue. The process of Book Building under the SEBI Regulations is subject to change from time to time and the investors are advised to make their own judgment about investment through this process prior to making a Bid or application in the Issue. Illustration of Book Building and Price Discovery Process (Investors should note that this example is solely for illustrative purposes and is not specific to the Issue and excludes Anchor Investors.)

Bidders can bid at any price within the price band. For instance, assume a price band of Rs. 20 to Rs. 24 per share, issue size of 3,000 equity shares and receipt of five bids from bidders, details of which are shown in the table below. A graphical representation of the consolidated demand and price would be made available at the bidding centres during the bidding period. The illustrative book below shows the demand for the shares of the issuer company at various prices and is collated from bids received from various investors. Bid Quantity 500 1,000 1,500 2,000 Bid Amount (Rs.) 24 23 22 21 Cumulative Quantity 500 1,500 3,000 5,000 Subscription 16.67% 50.00% 100.00% 166.67%

20

Bid Quantity 2,500

Bid Amount (Rs.) 20

Cumulative Quantity 7,500

Subscription 250.00%

The price discovery is a function of demand at various prices. The highest price at which the issuer is able to issue the desired number of shares is the price at which the book cuts off, i.e., Rs. 22.00 in the above example. The issuer, in consultation with the book running lead managers, will finalise the issue price at or below such cut-off price, i.e., at or below Rs. 22.00. All bids at or above this issue price and cut-off bids are valid bids and are considered for allocation in the respective categories. Steps to be taken by the Bidders for Bidding: 1. Check eligibility for making a Bid (please see the section Issue Procedure Who Can Bid? on page 218); Ensure that you have a demat account and the demat account details are correctly mentioned in the Bid cum Application Form; Except for Bids on behalf of the Central or State Governments and the officials appointed by the courts, for Bids of all values, ensure that you have mentioned your PAN and (please see the section Issue Procedure Permanent Account Number on page 234): Ensure that the Bid cum Application Form and ASBA Bid cum Application Form is duly completed as per instructions given in this Draft Red Herring Prospectus and in the Bid cum Application Form and ASBA Bid cum Application Form; Bids by QIBs will only have to be submitted to the BRLMs and/or their affiliates; and Bids by ASBA Bidders will have to be admitted to the Designated Branches. ASBA Bidders should ensure that their bank accounts have adequate credit balance at the time of submission to the SCSB to ensure that the ASBA Bid cum Application Form is not rejected.

2.

3.

4.

5. 6.

Withdrawal of the Issue The Company, in consultation with the BRLMs, reserve the right not to proceed with the Issue anytime after the Bid/Issue Opening Date but before the Allotment of Equity Shares. In such an event the Company shall issue a public notice in the newspapers, in which the pre-Issue advertisements were published, within two days of the Bid/ Issue Closing Date, providing reasons for not proceeding with the Issue. The BRLMs, through the Registrar to the Issue, shall notify the SCSBs to unblock the bank accounts of the ASBA Bidders within one day from the day of receipt of such notification. The Company shall also inform the Stock Exchanges on which the Equity Shares are proposed to be listed. Any further issuances by the Company shall be undertaken in accordance with applicable law.

Bid/Issue Programme BID/ISSUE OPENS ON BID/ISSUE CLOSES ON

*

[]* []

The Company may consider participation by Anchor Investors. The Anchor Investor Bid/ Issue Period shall be one day prior to the Bid/ Issue Opening Date.

Bids and any revision in Bids shall be accepted only between 10.00 a.m. and 5.00 p.m. (Indian Standard Time IST) during the Bid/ Issue Period as mentioned above at the bidding centres mentioned on the Bid cum Application Form. On the Bid/Issue Closing date, the Bids (excluding ASBA Bidders) shall be

21

accepted only between 10.00 a.m. and 3.00 p.m. (IST) and shall be uploaded until (i) 4.00 p.m. (IST) in case of Bids by QIB Bidders, Non-Institutional Bidders where the Bid Amount is in excess of Rs. 100,000; and (ii) until 5.00 p.m. (IST) in case of Bids by Retail Individual Bidders where the Bid Amount is up to Rs. 100,000. It is clarified that Bids not uploaded in the book, would be rejected. Bids by ASBA Bidders shall be uploaded by the SCSB in the electronic system to be provided by the BSE and the NSE. In case of discrepancy in the data entered in the electronic book vis--vis the data contained in the physical Bid form, for a particular bidder, the details as per physical application form of that Bidder may be taken as the final data for the purpose of Allotment. In case of discrepancy in the data entered in the electronic book vis--vis the data contained in the physical or electronic Bid cum Application Form, for a particular ASBA Bidder, the Registrar to the Issue shall ask for rectified data from the SCSB. Due to the limitation of time available for uploading the Bids on the Bid/Issue Closing date, the Bidders are advised to submit their Bids one day prior to the Bid/Issue Closing Date and, in any case, no later than 3.00 p.m. (IST) on the Bid/Issue Closing Date. All times mentioned in the Draft Red Herring Prospectus are IST. Bidders are cautioned that in the event a large number of Bids are received on the Bid/Issue Closing Date, as is typically experienced in public offerings, some Bids may not get uploaded due to lack of sufficient time. Such Bids that cannot be uploaded will not be considered for allocation under the Issue. If such Bids are not uploaded, the Issuer, the BRLMs, Syndicate Members and the SCSBs will not be responsible. Bids will be accepted only on Business Days, i.e., Monday to Friday (excluding any public holidays). On the Bid/Issue Closing Date, extension of time will be granted by the Stock Exchanges only for uploading the Bids received by Retail Bidders after taking into account the total number of Bids received up to the closure of the time period for acceptance of Bid-cum-Application Forms as stated herein and reported by the BRLMs to the Stock Exchanges within half an hour of such closure. The Company, in consultation with the BRLMs, reserves the right to revise the Price Band during the Bid/Issue Period in accordance with the SEBI Regulations provided that the Cap Price is less than or equal to 120% of the Floor Price and the Floor Price cannot be less than the face value of the Equity Shares. The Floor Price can be revised up or down to a maximum of 20% of the Floor Price advertised at least one day before the Bid /Issue Opening Date. In case of revision of the Price Band, the Bid/ Issue Period will be extended for three additional Working Days after revision of the Price Band subject to the total Bid /Issue Period not exceeding 10 days. Any revision in the Price Band and the revised Bid/Issue Period, if applicable, will be widely disseminated by notification to the BSE and the NSE, by issuing a press release and also by indicating the changes on the web sites of the BRLMs and at the terminals of the Syndicate. In the event of any revision in the Price Band, whether upwards or downwards, the minimum application size shall remain [] Equity Shares irrespective of whether the Bid Amount payable on such minimum application is not in the range of Rs. 5,000 to Rs. 7,000. Underwriting Agreement After the determination of the Issue Price and allocation of Equity Shares, but prior to the filing of the Prospectus with the RoC, the Company will enter into an Underwriting Agreement with the Underwriters for the Equity Shares proposed to be offered through the Issue. It is proposed that pursuant to the terms of the Underwriting Agreement, the BRLMs shall be responsible for bringing in the amount devolved in the event that the Syndicate Members do not fulfil their underwriting obligations. The Underwriting Agreement is dated []. Pursuant to the terms of the Underwriting Agreement, the obligations of the Underwriters are several and are subject to certain conditions specified therein. The Underwriters have indicated their intention to underwrite the following number of Equity Shares: This portion has been intentionally left blank and will be filled in before filing of the Prospectus with the RoC.

22

Name and Address of the Underwriters []

Indicated Number of Equity Shares to be Underwritten

Amount Underwritten (Rs. In million) []

The above-mentioned is indicative underwriting and this will be finalised after pricing and actual allocation. In the opinion of the Board of Directors (based on certificates provided by the Underwriters), the resources of the above mentioned Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. The abovementioned Underwriters are registered with SEBI under Section 12(1) of the SEBI Act or registered as brokers with the Stock Exchange(s). The Board of Directors / Committee of Directors, at its meeting held on [], has accepted and entered into the Underwriting Agreement mentioned above on behalf of the Company. Allocation among the underwriters may not necessarily be in proportion to their underwriting commitment. Notwithstanding the above table, the BRLMs and the Syndicate Members shall be responsible for ensuring payment with respect to Equity Shares allocated to investors procured by them. In the event of any default in payment, the respective Underwriter, in addition to other obligations defined in the Underwriting Agreement, will also be required to procure/subscribe to Equity Shares to the extent of the defaulted amount. Notwithstanding the foregoing, the Issue is also subject to obtaining (i) final Listing and trading approvals of the Stock Exchanges, which the Company shall apply for after Allotment; and (ii) the final approval of the RoC after the Prospectus is filed with the RoC.

23

CAPITAL STRUCTURE The Equity Share capital of the Company as of the date of this Draft Red Herring Prospectus is set forth below: (In Rs. except share data) Aggregate Value at Issue Price

Aggregate Value at Face Value A AUTHORISED SHARE CAPITAL 20,000,000 Equity Shares of Rs. 10 each Total ISSUED, SUBSCRIBED AND PAID-UP CAPITAL BEFORE THE ISSUE 10,000,000 Equity Shares of Rs. 10 each PRESENT ISSUE IN TERMS OF THIS DRAFT RED HERRING PROSPECTUS 4,285,715 Equity Shares of Rs. 10 each SHARE PREMIUM ACCOUNT Before the Issue After the Issue EQUITY CAPITAL AFTER THE ISSUE 14,285,715 Equity Shares of Rs. 10 each

200,000,000 200,000,000

100,000,000

42,857,150

[]

Nil []

[]

142,857,150

[]

The Company is considering a Pre-IPO Placement. If the Pre-IPO Placement in completed, the Issue size would be reduced by the extent of such Pre-IPO Placement, subject to a minimum Issue size of 25% of the post Issue paid-up equity capital being offered to the public

The present Issue has been authorized by the Board of Directors and the shareholders of the Company, pursuant to their resolutions dated June 16, 2010. Changes in the Authorised Capital (1) The initial authorised share capital of Rs. 100,000 divided into 10,000 Equity Shares of Rs. 10 each was increased to Rs. 10,000,000 divided into 1,000,000 Equity Shares of Rs. 10 each pursuant to a resolution of the shareholders passed in an EGM held on December 22, 2007. The authorised share capital of Rs. 10,000,000 divided into 1,000,000 Equity Shares of Rs. 10 each was increased to Rs. 100,000,000 divided into 10,000,000 Equity Shares of Rs. 10 each pursuant to a resolution of the shareholders in an EGM held on March 23, 2010. The authorised share capital of Rs. 100,000,000 divided into 10,000,000 Equity Shares of Rs. 10 each was increased to Rs. 150,000,000 divided into 15,000,000 Equity Shares of Rs. 10 each pursuant to a resolution of the shareholders in an EGM held on June 3, 2010. The authorised share capital of Rs. 150,000,000 divided into 15,000,000 Equity Shares of Rs. 10 each was increased to Rs. 200,000,000 divided into 20,000,000 Equity Shares of Rs. 10 each pursuant to a resolution of the shareholders in an AGM held on June 16, 2010.

(2)

(3)

(4)

Notes to Capital Structure 1. Share Capital History of the Company

24

The following is the history of the equity share capital and securities premium account of the Company:
Date of Allotment of the Equity Shares June 7, 2005 Number of Equity Shares 10,000 Face value (Rs.) 10 Issue price (Rs.) 10 Consideration (cash, bonus, consideration other than cash) Cash Cumulative No. of Equity Shares 10,000 Cumulative paid-up equity capital (Rs.) 100,000 Cumulative share premium (Rs.) Nil

January 12, 2008 March 24, 2010 March 31, 2010 June 19, 2010

990,000* 3,500,000 3,500,000** 2,000,000***

10 10 10 10

10 10 10

Cash Bonus issue in the ratio of 35:10 Cash Cash

1,000,000 4,500,000 8,000,000 10,000,000

10,000,000 45,000,000 80,000,000 100,000,000

Nil Nil Nil Nil

* Rights issue in the ratio of 99:1 **Rights issue in the ratio of 35:45. In this issue the corporate Promoter, Milestone Fincap, renounced its right to entitlement of shares partly in favour of Milestone Strategy Consultant Private Limited, a Promoter Group company ***Rights issue in the ratio of 1:4. In this issue the corporate Promoter, Milestone Fincap, renounced its rights to entitlement of shares partly in favour of ILMS Constructions Private Limited, VPA BIL Trust and a Promoter Group company, Milestone Strategy Consultants Private Limited renounced part of its right to entitlement of shares partly in favour of VPA BIL Trust and VPA Sibbling Trust. VPA BIL Trust and VPA Sibbling Trust form part of the Promoter Group.

2.

Equity Shares allotted for consideration other than cash: Number of Equity Shares 3,500,000 Face value (Rs.) 10 Reason Allottees

Date of Allotment March 24, 2010

Bonus issue in the ratio of 35:10

Milestone Fincap Services Private Limited, Skyzen Capital Advisors Private Limited and Arvind Bansal

*Bonus Equity Shares have been issued to all shareholders, including the Promoter Group, out of general reserves and surplus in the profit and loss account by capitalising Rs. 35,000,000.

Other than as specified above, the Company has not issued any Equity Shares for consideration other than cash during the preceding one year from the date of this Draft Red Herring Prospectus. 3. History of the equity share capital held by the Promoters:

Details of the build up of the Promoters shareholding in the Company

Date of Nature of Number Face Allotmen Transactio of equity valu t of the n shares e Equity (Rs.) Shares Milestone Fincap Services Private Limited July 23, Transferred 9,800 10 2007 from Skyzen Capital Advisors Private Limited January Allotment 970,200 10 12, 2008 March 22, Transferred 1 10 2010 from Milestone Fincap to Milestone Fincap Issue price/ Consideration(Rs. ) Share capital Nature of Considerati on (cash, gift other than cash) Cash Cumulativ e number of Equity Shares Percentag e of total pre issue capital Percentag e of total post issue capital

10

98,000

9,800

0.10%

0.07%

10 10

9,702,000 10

Cash Cash

980,000 980,000

9.80% 9.80%

6.86% 6.86%

25

Date of Allotmen t of the Equity Shares

Nature of Transactio n

Number of equity shares

Face valu e (Rs.)

Issue price/ Consideration(Rs. )

Share capital

Nature of Considerati on (cash, gift other than cash)

Cumulativ e number of Equity Shares

Percentag e of total pre issue capital

Percentag e of total post issue capital

March 22,2010

March 22,2010

March 22,2010

March 24, 2010 March 31, 2010 June 19, 2010 June 21, 2010

jointly with Ved Prakash Arya Transferred from Milestone Fincap to Milestone Fincap jointly with Rubi Arya Transferred from Milestone Fincap to Milestone Fincap jointly with Sumit Somani Transferred from Milestone Fincap to Milestone Fincap jointly with Paritosh Kakkad Bonus Issue (in the ratio of 35:10) Allotment Allotment Transfer from Milestone Fincap to Axis Trustee Services Limited trustee of Milestone Employee Welfare Trust

10

10

10

Cash

980,000

9.80%

6.86%

10

10

10

Cash

980,000

9.80%

6.86%

10

10

10

Cash

980,000

9.80%

6.86%

3,430,000

10

34,300,000

4,410,000

44.10%

30.87%

1,470,000 1,345,000 (1,000,000 )

10 10 10

10 10 13.5

14,700,000 13,450,000 10,000,000

Cash Cash Cash

5,880,000 7,225,000 6,222,500

58.80% 72.25% 62.25%

41.16% 50.57% 43.57%

*None of the Equity Shares held by the Promoters have been pledged by them as of the date of this Draft Red Herring Prospectus. All pre-Issue Equity Shares were fully paid-up at the time of allotment of the Equity Shares. Rubi Arya is a director of Milestone Fincap, the corporate Promoter, and holds one Equity Share of the Company jointly with Milestone Fincap, as a second holder. 4. Details of Promoters Contribution and Lock-in: The Equity Shares, which are being locked-in, are not ineligible for computation of Promoters contribution under the SEBI Regulations. Equity Shares offered by the Promoters for the minimum Promoters contribution are not subject to pledge. (a) Details of Promoters contribution locked-in for three years Pursuant to the SEBI Regulations, an aggregate of 20% of the fully diluted post-Issue capital of the Company held by the Promoters shall be locked in for a period of three

26

years from the date of Allotment of the Equity Shares in the Issue. The details of such lock-in are set forth in the table below:
Sr. No. Date Of Acquisition And allotment Nature of Allotment/Tr ansfer Nature of conside ration No. of Equity Shares locked- in Face Value Issue/Acq uisition Price (Rs.) Percentage of PostIssue Paidup Capital

1.

Milestone Fincap Services Private Limited 1 March 24, Bonus Issue Nil 2010 Total

2,860,000

10

Nil

20.02% 20.02%

The minimum Promoters contribution has been brought to the extent of not less than the specified minimum lot and from persons defined as Promoter under the SEBI Regulations. The Promoters have through letters dated June 23, 2010 granted specific written consent for the lock-in of 20% of the post-Issue paid-up Equity Share capital of the Company, held by it, for three years from the date of Allotment and for lock-in of the balance pre-Issue Equity Share capital of the Company shall be locked in, held by it, for a period of one year from the date of Allotment. (b) Details of pre-Issue Equity Share capital locked-in for one year In addition to 20.02% of the post-Issue shareholding of the Company held by the Promoters and locked in for three years as specified above, the balance pre-Issue share capital of the Company will be locked in for a period of one year from the date of Allotment in this Issue. (c) Other Requirements in respect of lock-in The Equity Shares held by persons other than the Promoters prior to the Issue may be transferred to any other person holding the Equity Shares which are locked-in along with the Equity Shares proposed to be transferred, subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with the Takeover Regulations as applicable. Equity Shares held by the Promoters can be transferred to a new promoter or person in control of the Company, subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with the Takeover Regulations as applicable. The Equity Shares held by the Promoters, which are locked-in for a period of three years from the date of Allotment in the Issue can be pledged with any scheduled commercial bank or public financial institution as collateral security for loans granted by such banks or financial institutions, provided that the pledge of the Equity Shares can be created when the loan has been granted by such banks or financial institutions for financing one or more of the objects of the Issue and pledge of Equity Shares is one of the terms of sanction of the loan. The Equity Shares held by the Promoters which are locked-in for a period of one year from the date of Allotment in the Issue can be pledged with any scheduled commercial bank or public financial institution as collateral security for loans granted by such bank or financial institution, provided that pledge of Equity Shares is one of the terms of sanction of the loan. Any Equity Shares Allotted to Anchor Investors in the Anchor Investor Portion shall be locked-in for a period of 30 days from the date of Allotment of Equity Shares in the Issue.

27

5.

The shareholding pattern of the Company The table below presents the shareholding pattern of the Company before the proposed Issue and as adjusted for the Issue:

Category of shareholders

No. of Equity Shares

Pre-Issue Total shareholding as a percentage of total no. of Equity Shares

No. of Equity Shares held in dematerialised form

Post-Issue* No. of Total Equity shareholding Shares as a percentage of total no. of Equity Shares 6,225,000**

No. of Equity Shares pledged or otherwise encumbered

Promoter (A) Milestone Fincap Services Private Limited Sub Total (A)

6,225,000**

62.25%

Nil

43.57%

Nil

6,225,000**

62.25%

Nil

6,225,000**

43.57%

Nil

Promoter Group (B) Milestone Strategy Consultants Private Limited Ved Prakash Arya as trustee of VPA Sibbling Trust Ved Prakash Arya as trustee of VPA BIL Trust Sub Total (B)

2,100,000

21.00%

Nil

2,100,000

14.70%

Nil

325,000

3.25%

Nil

325,000

2.28%

Nil

50,000

0.50%

Nil

50,000

0.35%

Nil

2,475,000

24.75%

Nil

2,475,000

17.33%

Nil

Total Holding of Promoter and Promoter Group (C=A + B) Others (D) Arvind Bansal Skyzen Capital Advisors Private Limited ILMS Constructions Private Limited

8,700,000

87.00%

Nil

8,700,000

60.90%

Nil

100,000 100,000

1.00% 1.00%

Nil Nil

100,000 100,000

0.70% 0.70%

100,000

1.00%

Nil

100,000

0.70%

28

Category of shareholders

No. of Equity Shares

Pre-Issue Total shareholding as a percentage of total no. of Equity Shares 10.00%

No. of Equity Shares held in dematerialised form

Post-Issue* No. of Total Equity shareholding Shares as a percentage of total no. of Equity Shares 1,000,000 7.00%

No. of Equity Shares pledged or otherwise encumbered

Axis Trustee Services Limited as the trustee of Milestone Employee Welfare Trust Sub Total (D)

1,000,000

Nil

1,300,000

13.00%

Nil

1300,000

9.10%

Public (pursuant to the Issue) (E) Total (C+D+E)

Nil

Nil

Nil

4,285,715

30.00%

10,000,000

100.00%

Nil

14,285,715

100.00%

*Based on the assumption that the non-Promoter Group shareholders do not apply for, and are not Allotted Equity Shares in terms of the Issue. None of the Promoters and Promoter Group will participate in the Issue. ** Milestone Fincap jointly holds one share each with Ved Prakash Arya, Rubi Arya, Sumit Somani and Paritosh Kakkad.

6.

Top 10 Shareholders: The list of top 10 shareholders of the Company and the number of Equity Shares held by them is as under: (a) As on the date of this Draft Red Herring Prospectus: Shareholder Milestone Fincap Services Private Limited Milestone Strategy Consultants Private Limited Axis Trustee Services Limited as trustee of Milestone Employee Welfare Trust Ved Prakash Arya as trustee of VPA Sibbling Trust Arvind Bansal ILMS Constructions Private Limited Skyzen Capital Advisors Private Limited Ved Prakash Arya as trustee of VPA BIL Trust (b) No. of Equity Shares held 6,225,000 2,100,000 1,000,000 325,000 100,000 100,000 100,000 50,000 Percentage 62.25% 21.00% 10.00% 3.25% 1.00% 1.00% 1.00% 0.50%

As of 10 days prior to the date of this Draft Red Herring Prospectus i.e. June 13, 2010: Shareholder Milestone Fincap Services Private Limited Milestone Strategy Consultants Private Limited Arvind Bansal Skyzen Capital Advisors Private Limited No. of Equity Shares held 5,880,000* 1,960,000 80,000 80,000 Percenta ge 73.50% 24.50% 1.00% 1.00%

*Milestone Fincap jointly holds one share each with Ved Prakash Arya, Rubi Arya, Sumit Somani and Paritosh Kakkad

29

(c)

Two years prior to the date of this Draft Red Herring Prospectus i.e., June 23, 2008: No. of equity shares held 980,000 10,000 10,000 Percenta ge 98.00% 1.00% 1.00%

Shareholder Milestone Fincap Services Private Limited Arvind Bansal Skyzen Capital Advisors Private Limited 7. Milestone Employee Welfare Trust

The Milestone Employee Welfare Trust (Trust) was established by a deed of trust dated June 21, 2010 for the benefit of present and future permanent employees, including directors (other than directors who are promoters of the Company), of the Company, its subsidiaries and joint venture companies (the Beneficiaries). The Settlor of the Trust is Milestone Fincap, the corporate Promoter of the Company, which has established this Trust with an initial corpus of Rs. 10,000. The Trust currently holds 1,000,000 Equity Shares of the Company, which were transferred to it by Milestone Fincap on June 21, 2010. The trustees of this Trust are Axis Trustee Services Limited, Dhiren Bhogilal Kothary and Paritosh Kakkad. The Trust has been formed for the welfare of the aforesaid beneficiaries, (i) by giving the selected Beneficiaries (who are selected by the Trust on recommendations by a committee constituted by the Trust in consultation with the settlor, Milestone Fincap) an opportunity to participate in the growth and prosperity of the Company; and (ii) to also undertake such other activities so as to promote their welfare by providing assistance to such persons in various forms such as medical, education, housing, holiday homes, recreation facilities and activities related to sports. The Trustees are required to administer the property of the Trust in accordance with a policy to be framed by the Trustees on the recommendations of the committee in order to achieve the objects of the Trust. The Trustees are empowered to deal in the Equity Shares of the Company held by the Trust in accordance with the policy to be framed by Trustees on recommendation of the committee, and are empowered to pay themselves remuneration in consultation with the committee. The duration of the Trust is for 30 years, unless terminated earlier by the Trustees. Upon termination, the benefits shall accrue to the Beneficiaries of the Trust, in such proportion and in such manner as the Trustees deem fit. The Settlor, that is Milestone Fincap, does not have the power to dissolve the Trust. 8. The Company, the Promoters, the Directors and the BRLMs have not entered into any buy-back arrangements and/ or safety net facility for the purchase of Equity Shares from any person. Except as stated in sections Capital Structure and Management on page 24 and 92, respectively, none of the Directors or the key management personnel hold any Equity Shares in the Company. The following shares were allotted for a price lower than the Issue Price during the preceding one year: Date of Allotment and when made fully paid up March 31, 2010 Name of Allottee No. of shares allotted 35,000 Issue Price (Rs.) 10 Reason

9.

10.

Arvind Bansal

March 31, 2010

Skyzen Capital Advisors Private Limited

35,000

10

Rights issue in the ratio of 35:45 Rights issue in the ratio of 35:45

30

Date of Allotment and when made fully paid up March 31, 2010

Name of Allottee

No. of shares allotted 1,960,000

Issue Price (Rs.) 10

Reason

March 31, 2010

June 19, 2010

June 19, 2010

June 19, 2010

June 19, 2010 June 19, 2010

June 19, 2010

June 19, 2010

(1) (2)

Milestone Strategy Consultants Private Limited(1) Milestone Fincap Services Private Limited(1) Milestone Fincap Services Private Limited(1) Milestone Strategy Consultants Private Limited(1) Ved Prakash Arya as trustee of VPA Sibbling Trust(2) ILMS Constructions Private Limited(3) Ved Prakash Arya as trustee of VPA BIL Trust(4) Skyzen Capital Advisors Private Limited Arvind Bansal

1,470,000

10

1,345,000

10

Rights issue in the ratio of 35:45 Rights issue in the ratio of 35:45 Rights issue in the ratio of 1:4 Rights issue in the ratio of 1:4 Rights issue in the ratio of 1:4 Rights issue in the ratio of 1:4 Rights issue in the ratio of 1:4 Rights issue in the ratio of 1:4 Rights issue in the ratio of 1:4

140,000

10

325,000

10

100,000 50,000

10 10

20,000

10

20,000

10

Milestone Strategy Consultants Private Limited and Milestone Fincap form part of the Promoter Group. Milestone Strategy Consultants Private Limited renounced part of its right to entitlement of Equity Shares in favour of VPA Sibbling Trust. VPA Sibbling Trust forms part of Promoter Group. (3) Milestone Fincap renounced part of its right to entitlement of Equity Shares in favour of ILMS Constructions Private Limited (4) Milestone Fincap and Milestone Strategy Consultants Private Limited renounced part of their right to entitlement of Equity Shares in favour of Ved Prakash Arya as the trustee of VPA BIL Trust. VPA BIL Trust forms part of Promoter Group.

11.

Except as stated below, none of the Promoters, the directors of the corporate Promoter, Promoter Group, the Directors and their immediate relatives, have purchased or sold any Equity Shares during a period of six months preceding the date on which this Draft Red Herring Prospectus has been filed with SEBI: S. No. Name of the Director/ Promoters/ Promoter Group Milestone Fincap Services Private Limited Date of the Transaction No. of Equity Shares Transaction Price (in Rs.) Nature of Transaction

1.

March 22, 2010

40

Milestone Fincap Services Private Limited

June 21, 2010

1,000,000

10

Transfer of one share each to Milestone Fincap jointly with Ved Prakash Arya, Rubi Arya, Sumit Somani, Paritosh Kakkad* Transfer of shares from Milestone Fincap to Axis Trustee Services

31

Limited as the trustee of Milestone Employee Welfare Trust

*

The shares are held by Milestone Fincap Services Private Limited jointly with the individuals mentioned above.

12.

No person connected with the Issue shall offer any incentive, whether direct or indirect, in any manner, whether in cash, kind, services or otherwise, to any Bidder. At least 50% of the Issue shall be allocated to QIBs on a proportionate basis. 5% of the QIB Portion (excluding Anchor Investor Portion) shall be available for allocation to Mutual Funds only and the remaining QIB Portion shall be available for allocation to the QIB Bidders including Mutual Funds subject to valid Bids being received at or above the Issue Price. Further, not less than 15% of the Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue will be available for allocation to Retail Individual Bidders, subject to valid Bids being received from them at or above the Issue Price. Undersubscription, if any, in the Non-Institutional and Retail Individual categories would be allowed to be met with spill over from any other category at the discretion of the Company, the BRLMs, in consultation with the Designated Stock Exchange. A Bidder cannot make a Bid for more than the number of Equity Shares offered through the Issue, subject to the maximum limit of investment prescribed under relevant laws applicable to each category of investor. An oversubscription to the extent of 10% of the Issue can be retained for the purposes of rounding off to the nearer multiple of minimum Allotment lot. The Company has not raised any bridge loan against the proceeds of the Issue. For details on the use of proceeds, see the section Objects of the Issue on page 34. There are no outstanding warrants, options or rights to convert debentures, loans or other instruments convertible into the Equity Shares. Except the Pre-IPO Placement, there will be no further issue of Equity Shares, whether by way of issue of bonus shares, preferential allotment, rights issue or in any other manner during the period commencing from the submission of this Draft Red Herring Prospectus with SEBI until the Equity Shares have been listed. The Company presently does not intend or propose to alter the capital structure for a period of six months from the Bid/Issue Opening Date, 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 on a preferential basis or issue of bonus or rights or further public issue of specified securities or qualified institutions placement or otherwise. However, if the Company enters into acquisitions, joint ventures or other arrangements, the Company may, subject to necessary approvals, consider raising additional capital to fund such activity or use Equity Shares as currency for acquisitions or participation in such joint ventures. There shall be only one denomination of the Equity Shares, unless otherwise permitted by law. The Company shall comply with such disclosure and accounting norms as may be specified by SEBI from time to time. None of the Promoters and Promoter Group will participate in the Issue. The Company has eight members as of the date of filing of this Draft Red Herring Prospectus. The Company has not issued any Equity Shares out of revaluation reserves. Except as stated above, the Company has not issued any Equity Shares for consideration other than cash. The

13.

14.

15.

16.

17.

18.

19.

20.

21. 22. 23.

32

Company has not issued any Equity Shares in terms of any scheme approved under sections 391394 of the Companies Act. 24. All Equity Shares will be fully paid-up at the time of Allotment failing which no Allotment shall be made. There have been no financial arrangements whereby the Promoter Group, the Directors and their relatives have financed the purchase by any other person of securities of the Company, other than in the normal course of the business of the financing entity during a period of six months preceding the date of filing of this Draft Red Herring Prospectus.

25.

33

OBJECTS OF THE ISSUE The objects of the Issue are: 1. Providing initial investment (Seed Capital) for the infrastructure fund (the Infrastructure Fund) and the small and medium enterprises fund (the SME Fund) to be set up by the Company; Purchase of new office premises at Mumbai; and General corporate purposes.

2. 3.

Seed Capital is the initial investment done either by the Company or its joint venture partners in a fund to indicate to the prospective investors that they are committed to setting up and advising the proposed fund. The details of the Net Proceeds are summarised in the table below: (In Rs. million) Particulars Proceeds from the Issue Issue related expenses Net Proceeds* * To be finalised upon completion of the Issue. Amount [] [] []

We currently manage assets of approximately Rs. 31,194.50 million for approximately 12,700 fund investors as of March 31, 2010. The main objects and objects incidental and ancillary to the main objects set out in our Memorandum of Association enable the Company to undertake its existing activities and for providing Seed Capital to the Infrastructure Fund and the SME Fund. Utilisation of the Net Proceeds 1. The following table summarises the intended use of the Net Proceeds: (In Rs. million) Amount proposed to be financed from the Net Proceeds

S. Particulars No. 1. Providing Seed Capital to the funds to be set up by the Company Infrastructure Fund SME Fund Sub-Total 2. Purchase of new office premises 3. General corporate purposes Total

1,000.00 500.00 1,500.00 249.84 [ ] [ ]

The main focus of the Infrastructure Fund will be to invest in Indian infrastructure projects which include roads, rails, bridges, ports, airports, water supply, irrigation projects power, agriculture processing, industrial parks, SEZ, engineering, construction and telecommunication. The main focus of the SME Fund will be to invest in SMEs in various sectors including electronics, leather, textile and automobiles. The details of these funds are elaborated below. The above fund requirements are based on internal management estimates and have not been appraised by any bank or financial institution. These are based on current conditions and are subject to revisions in light of changes in external circumstances or costs, or other financial condition or business strategy, as discussed further below. In case of any variation in the actual utilisation of funds earmarked for the purposes set forth above, increased fund requirements for a particular purpose may be financed by surplus funds, if

34

any, available in respect of the other purposes for which funds are being raised in this Issue. 2. The following table details the schedule of utilisation of the Net Proceeds: Sr. No. 1. Particulars (In Rs. million) Estimated schedule of deployment of Net Proceeds Fiscal Fiscal Fiscal 2013 Total 2011 2012 0.00 0.00 51.41 [ ] [ ] 500.00 250.00 102.82 [ ] [ ] 500.00 250.00 95.61 1,000.00 500.00 249.84 [ ] [ ]

2. 3.

Providing Seed Capital Infrastructure Fund a. SME Fund Purchase of new office premises General corporate purposes Total

The entire requirements of the objects are intended to be funded from the proceeds of the Issue. Accordingly, there is no requirement to make firm arrangements of finance through verifiable means towards at least 75% of the stated means of finance, excluding the amounts to be raised through the Issue. We may have to revise our fund requirements as a result of a variety of factors such as changes in the economy, the regulatory environment and response of the investors and external factors which may not be within the control of our management and may entail rescheduling and revising the planned funding requirement and increasing or decreasing the funding requirement for a particular purpose at the discretion of our management. In case of any surplus after utilization of the Net Proceeds for the stated objects, we may use such surplus towards general corporate purposes. In the event of a shortfall in raising the requisite capital from the Net Proceeds towards meeting the objects of the Issue, the extent of the shortfall will be met by way of such means available to the Company, including by way of internal accruals. In the event the estimated utilisation of the Net Proceeds in a Fiscal is not completely met, the same shall be utilised in the next Fiscal. Details of the Objects 1. Providing Seed Capital for Funds The process of setting up of a fund up to initial closing of the same may take up to approximately 30 weeks. The sector in which a proposed fund is to be set up is identified pursuant to internal research done by our business strategy team and informal feedback received from the distributors. A new trust may be registered or a new scheme may be floated under an existing trust. The identified investment team undertakes various activities including inter alia, building up a deal pipeline, identifying distributors, preparation and filing of the PPM. For further details, see section Our Business Investment Advisory Services to Funds and Schemes Process of Setting up a Fund on page 67. We believe that investors gain confidence upon seeing that fund investment advisors (or the promoters of the fund investment advisors) have put in their own money in the fund. This initial investment by the fund investment advisor (or the promoters of the fund investment advisor) is referred to as Seed Capital. For the purposes of setting up and advising various funds, we have entered into joint ventures with different partners. Our joint venture partners include IL&FS Investment Managers Limited (for the joint venture company advising IL&FS Milestone Fund-I, IL&FS Milestone Fund II and IL&FS Milestone Fund -IIA), Religare Venture Capital Limited (for the joint venture company advising India Build-out Fund-I and India Build-out Fund-IA) and Money Matters Financial Services Limited (for the joint venture company advising Special Opportunities Fund-I). For some of the new funds launched by us and where we have entered into joint ventures to set up funds, the joint venture partners have committed to providing Seed Capital. Typically joint venture partners pick up stakes in the joint venture companies and in addition to

35

obtaining Seed Capital, the funds have benefited from the joint venture partners knowledge and expertise in their domain and their brand name. The funds entire activities, including fund raising and the day to day management of the advisory company, are the responsibility of the Company. The Company is seeking to invest a portion of the Net Proceeds as Seed Capital in the funds to reduce reliance on joint venture partners for funding Seed Capital requirements. a. Providing Seed Capital for the Infrastructure Fund The Company proposes to invest the Net Proceeds of Rs. 1,000.00 million as Seed Capital to partially fund the Infrastructure Fund to be set up by the Company. The preliminary placement memorandum which has been filed with SEBI provides that the main focus of the Infrastructure Fund will be to invest in Indian infrastructure projects which include roads, rails, bridges, ports, airports, water supply, irrigation projects power, agriculture processing, industrial parks, SEZ, engineering, construction and telecommunication as well as ancillary infrastructure companies. The target corpus of the Infrastructure Fund is Rs.8,000.00 million with an option to raise an additional Rs.2,000.00 million at the discretion of the trustees. The Infrastructure Fund has an initial tenure of six years, which is extendable by one year by the trustee or the investment advisors and further extendable by another one year, if required. The preliminary placement memorandum for the Infrastructure Fund has been included as part of the material documents available for inspection at the Companys office. The focus of the Infrastructure Fund will be to invest in the investee companies and to be utilised for the expansion of existing projects or initiating new projects. For details of our current investments in various funds, please see section Business on page 61. b. Providing Seed Capital for the SME Fund The Company proposes to invest the Net Proceeds of Rs. 500.00 million as Seed Capital to partially fund the SME Fund to be set up by the Company. The preliminary placement memorandum which has been filed with SEBI provides that the main focus of the SME Fund will be to invest into SMEs in various sectors including electronics, leather, textile and automobiles. The target corpus of the SME Fund is Rs.3,500.00 million with an option to raise an additional Rs.1,500.00 million at the discretion of the trustees. The SME Fund has an initial tenure of six years, which is extendable by one year by the trustee or the investment advisors and further extendable by another one year, if required. The preliminary placement memorandum for the SME Fund has been included as part of the material documents available for inspection at the Companys office. The focus of the SME Fund will be to invest in the investee companies and to be utilised for the expansion of existing projects or initiating new projects. For details of our current investments in various funds, please see section Business on page 61. The Company cannot assure investors of any returns, whether in the form of dividends or otherwise, on the Seed Capital invested by the Company into the Infrastructure and SME Funds. 2. Purchase of new office premises at Mumbai The Company proposes to purchase new office premises at Mumbai admeasuring approximately 20,000 sq. ft. at a rate of approximately Rs. 9,700.00 per sq. ft. The new office premises will augment our current office premises and will house our employees across various teams. The Company has entered into a memorandum of understanding dated June 21, 2010 to purchase the new office premises located at L.B.S Marg, Kurla (West), Mumbai. The Company expects to receive possession of these premises by Fiscal 2013. The Company expects to furnish the premises in Fiscal 2013 and the office is expected to be fully operational by Fiscal 2013.

36

The Company proposes to deploy the funds in the manner set forth in the table below: (in Rs. million) Sr. Particulars Amount No. 1. Office premises 205.64 2. Furniture and fixtures 19.70 3. Flooring and civil works 6.90 4. Electrical and mechanical works and equipments 13.70 5. Others 3.90 Total 249.84 3. General corporate purposes The Company intends to deploy the balance Net Proceeds aggregating Rs. [ ] million for general corporate purposes, including but not restricted to, exploring investment opportunities in our existing funds, strategic initiatives, partnerships, joint ventures and acquisitions and meeting exigencies, which the Company in the ordinary course of business may face, or any other purposes as approved by the Board. Monitoring of Utilization of Funds The Board will monitor the utilization of the Net Proceeds. The Company will disclose the utilization of the Net Proceeds under a separate head along with details, for such Net Proceeds that have not been utilized. The Company will indicate investments, if any, of unutilized Net Proceeds in the Balance Sheet of the Company for the relevant Fiscals subsequent to the Issue. Pursuant to Clause 49 of the Listing Agreement, the Company shall, on a quarterly basis, disclose to the Audit Committee the uses and applications of the Net Proceeds. On an annual basis, the Company shall prepare a statement of funds utilised for purposes other than those stated in this Draft Red Herring Prospectus and place it before the Audit Committee. Such disclosure shall be made only until such time that all the Net Proceeds have been utilised in full. The statement shall be certified by the statutory auditors of the Company. Furthermore, in accordance with Clause 43A of the Listing Agreement the Company shall furnish to the stock exchanges on a quarterly basis, a statement including material deviations if any, in the utilisation of the process of the Issue from the objects of the Issue as stated above. This information will also be published in newspapers simultaneously with the interim or annual financial results, after placing the same before the Audit Committee. Additionally, the Company will publicly disclose the investments made by the Infrastructure Fund and the SME Funds in addition to the disclosures made by the Company at the end of each quarter in compliance with the Listing Agreements with the Stock Exchanges. Therefore, the quantum invested by the Company into the Infrastructure and SME Funds would be disclosed quarterly to the shareholders of the Company. Additionally, all investments by the Company shall be in accordance with applicable laws and regulations. Additionally, the funds will comply with the SEBI VCF Regulations. Accordingly, the holding by any individual VCF in one company shall not exceed 25% of the corpus of the VCF. No part of the Net Proceeds will be paid by the Company as consideration to its Promoters, the Directors, the Companys key management personnel or companies promoted by its Promoters except in the usual course of business. Bridge Financing Facilities

37

The Company has not raised any bridge loans from any bank or financial institution as on the date of this Draft Red Herring Prospectus, which are proposed to be repaid from the Net Proceeds. Interim use of Net Proceeds The Company, in accordance with the policies formulated by the Board from time to time, will have flexibility in deploying the proceeds received from the Issue. The particular composition, timing and schedule of deployment of the Net Proceeds will be determined by the Company. Pending utilization of the Net Proceeds for the purposes described above, the Company intends to temporarily invest the funds in interest bearing liquid instruments including deposits with banks and investments in money market mutual funds and other financial products and investment grade interest bearing securities as may be approved by the Board. Issue Expenses The Issue related expenses consist of underwriting fees, fees payable to the BRLMs, fees payable to the legal counsels, Escrow Bankers and Registrars to the Issue, printing and stationery expenses, advertising and marketing expenses and all other incidental and miscellaneous expenses including listing fees for our Equity Shares on the Stock Exchanges. We intend to use about Rs. [] million towards these expenses for the Issue. All expenses with respect to the Issue will be borne out of the Issue Proceeds. The break-up for the Issue expenses is as follows: Activity Expenses* (In Rs. million) [] Percentage of the Issue Expenses* [] [] [] [] [] [] [] Percentage of the Issue size* [] [] [] [] [] [] []

Lead Management, Underwriting and Selling Commission SCSB Commission [] Advertising and marketing [] expenses Printing and stationery (including [] courier, transportation charges) Others (Registrar fees, legal fees, [] listing costs etc) Fees paid to rating agency [] [] Total * Will be incorporated after finalisation of the Issue Price.

38

BASIS FOR ISSUE PRICE The Issue Price will be determined by the Company, in consultation with the BRLMs, on the basis of the assessment of market demand for the offered Equity Shares by the Book Building Process. The face value of the Equity Shares is Rs. 10 each and the Issue Price is [] times of the face value at the lower end of the Price Band and [] times the face value at the higher end of the Price Band. Qualitative Factors Current AUMs of approximately Rs. 31,521.60 million for approximately 12,850 investors Ability to raise funds through various distribution channels from wide investor base Early identifier of new trends in the market Experienced team of professionals and experts Investment track record Ability to forge new relationships and form joint ventures For further details regarding some of the qualitative factors, which form the basis for computing the Issue Price, please see the sections Risk Factors and Business - Strengths on pages xii and 62, respectively. Quantitative Factors 1. Basic and Diluted Earnings per share (EPS)- Standalone Period ended 2010 2009 2008 Weighted Average
Note: (i)

Basic EPS (Rs.) 4.37 3.22 4.79 4.06

Diluted EPS (Rs.) 4.37 3.22 4.79 4.06

Weight 3 2 1

Basic EPS (Rs.) = Net Profit after Tax as Restated divided by the weighted average numbers of equity shares outstanding during the year Diluted EPS (Rs.) = Net Profit after Tax as Restated divided by the weighted average numbers of equity shares post dilution outstanding Earnings Per Share has been calculated in accordance with Accounting Standard 20 - Earnings Per Share The face value of each Equity Share is Rs.10.

(ii)

(iii) (iv)

2.

Price Earnings Ratio (P/E) in relation to the Issue price of Rs. [] per share S. No. a. b. c. d. e. f. Particulars P/E ratio based on basic EPS for the Fiscal 2010 at the Floor Price: P/E ratio based on diluted EPS for the Fiscal 2010 at the Floor Price: P/E ratio based on Weighted average EPS for the Fiscal 2010 at the Floor Price: P/E ratio based on basic EPS for the Fiscal 2010 at the Cap Price: P/E ratio based on diluted EPS for the Fiscal 2010 at the Cap Price: P/E ratio based on Weighted average EPS for the Fiscal 2010 at the Cap Price: Standalone [] [] [] [] [] []

Industry PE*: Highest: 436.80 Lowest: 0.90

39

Industry Composite: 21.60 * Since there is no appropriate industry, finance & investments has been taken for comparison purposes. Source: Capital Market Vol XXV/08 June 14-27, 2010 Industry: Finance & Investments 3. Return on Networth (RoNW) - Standalone Period ended 2010 2009 2008 Weighted Average 4. RoNW (%) 34.36 63.04 51.48 46.77 Weight 3 2 1

Minimum Return on Total Net Worth after Issue needed to maintain Pre-Issue Basic EPS for the year ended March 31, 2010 is [] a. b. c. d. At the Floor Price on basic EPS []% based on standalone financial statements. At the Cap Price on basic EPS - []% based on standalone financial statements. At the Floor Price on diluted EPS []% based on standalone financial statements. At the Cap Price on diluted EPS - []% based on standalone financial statements.

5.

Net Asset Value NAV (Consolidated) as at March 31, 2010 NAV (Standalone) as at March 31, 2010 Issue price Note: (i) : Rs. 25.62 per Equity Share : Rs. 14.83 per Equity Share : Rs. [] per Equity Share

Net Assets Value per Share (Rs.) = Net worth excluding revaluation reserve divided by the Number of Shares post dilution : Rs. [] per Equity Share : Rs. [] per Equity Share

NAV (Consolidated) after the Issue NAV (Standalone) after the Issue 6. Comparison with other listed companies
Name of the company Face Value (Rs) 10.00 EPS (Rs) 4.37

Milestone Capital Advisors Limited (Standalone) Peer Group IL&FS Investment Managers Limited

RONW% For Fiscal 2009 34.36%

Book Value as on March 31, 2010 14.83

P/E Multiple []

2.00

1.90

60.50%

3.60

23.10

Source: Source: Capital Market Vol XXV/08 June 14-27, 2010 The Issue Price of Rs. [ ] has been determined by the Company, in consultation with the BRLMs, on the basis of assessment of market demand for the Equity Shares offered through the Book Building Process and is justified in view of the above qualitative and quantitative parameters. For further details, please see the section Risk Factors on page xii and the financials of the Company including important profitability and return ratios, as set out in the section Financial Statements on page 127.

40

STATEMENT OF TAX BENEFITS I. A. Tax Benefits available to the Company Special tax benefits to the company There are no special tax benefits available to the Company (B) 1) General Benefits to the Company under the Income-Tax Act, 1961 (the Act) Under section 10(2A) of the Act, any share of profit of the Company in the total Income of the Firm in which the Company is a partner is exempt from tax. Under section 10(34) of the Act, any income by way of dividends referred to in section 115 O of the Act (i.e. dividends declared, distributed or paid by domestic companies) received on the shares held in such domestic company is exempt from tax. Under section 10(35) of the Act, any income received from units of a Mutual Fund specified under section 10(23D) of the Act, is exempt from tax. Under section 10(38) of the Act, any long-term capital gains arising to the Company from transfer of long-term capital asset, being equity shares in a company or a unit of an equity oriented fund (i.e. if the shares or units are held for more than twelve months) would not be liable to tax in the hands of the Company, if the transaction of sale of such equity share or unit is chargeable to securities transaction tax. [However, such income will be in considered in computing Minimum Alternate Tax (MAT) under section 115JB of the Act]. Provisions concerning expenditure incurred for exempt income Section 14A provides that no deduction shall be allowed in respect of expenditure incurred by the company in respect of income which does not form part of the total income under the Act. 6) Provision dealing with Business Income: a. Depreciation (section 32 of the Act) The Company is entitled to claim depreciation on block of assets comprising specified tangible assets (being buildings, machinery, plant, furniture); and intangible assets (being knowhow, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature acquired on or after 1st April, 1998) owned by it and used for the purpose of its business. Unabsorbed depreciation if any, can be carried forward & set off against any source of income in subsequent years in accordance with the provisions of the Act. b. Preliminary Expenditure: (section 35D of the Act) As per Section 35D, the Company is eligible for deduction in respect of preliminary expenditure incurred by the Company in connection with extension of its undertaking or in connection with setting up a new unit for an amount equal to 1/5th of such expenses over 5 successive years in accordance with provisions contained therein. c. Carry forward of business loss (section 72 of the Act) Unabsorbed business losses, if any, for any year can be carried forward and set off against business profits for subsequent years (upto 8 years).

2)

3)

4)

5)

41

7)

Under section 48 read with section 2(42A) of the Act, if the investments in shares are sold after being held for not less than twelve months, the gains [other than covered under section 10(38) of the Act], if any, will be treated as long-term capital gains and the gains will be calculated by deducting from the gross consideration, the indexed cost of acquisition. The indexed cost of acquisition/improvement adjusts the cost of acquisition/ improvement by the cost inflation index, as prescribed from time to time. Under section 112 of the Act, long term capital gains, are subject to tax at a rate of 20% after indexation, as provided in the second proviso to section 48 of the Act. However, in case of listed securities or units, the amount of such tax could be limited to 10% without indexation benefit, at the option of the Company in cases where securities transaction tax is not levied. Under section 54EC of the Act, and subject to the conditions and to the extent specified therein, long-term capital gains arising on the transfer of a long-term capital asset will be exempt from capital gains tax if the capital gains are invested in certain notified bonds (not exceeding Rs. 50 lakhs in a financial year) within a period of six months after the date of such transfer. However, if the company transfers or converts the notified bonds into money (as stipulated therein) within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the bonds are transferred or converted into money. The bonds specified for this section are bonds issued by the National Highways Authority of India (NHAI) and Rural Electrification Corporation Limited (RECL). Under section 111A of the Act, short-term capital gains (i.e., if the equity shares are held for a period not exceeding twelve months), arising on sale of equity shares are taxed at the rate of 15% in cases where securities transaction tax has been levied. Short term capital gains realised on transfer of shares on which securities transaction tax has not been paid are taxable at the normal rates applicable.

8)

9)

10)

11)

Under section 115JAA(1A) of the Act, credit is allowed in respect of any `MAT paid under section 115JB of the Act for any assessment year commencing on or after 1st April , 2006. Tax credit eligible to be carried forward will be the difference between MAT paid and the tax computed as per the normal provisions of the Act for that assessment year. Such MAT credit is allowed to be carried forward for set off purposes for up to 10 years succeeding the year in which the MAT credit becomes allowable. Tax Benefits available to the Shareholders of the Company Special benefits to the Shareholders of the Company There are no special tax benefits available to the share holders of the Company

II. (A)

(B)

General Benefits to the Shareholders of the Company under the Income-Tax Act, 1961: Resident Shareholders

12)

Under section 10(34) of the Act, any income by way of dividends referred to in section 115 O of the Act (i.e. dividends declared, distributed or paid) received on the shares of the Company is exempt from tax. Under section 10(38) of the Act, any long term capital gains arising to a shareholder from transfer of long term capital asset being an equity share in a Company will not be liable to tax in the hands of the shareholder if the transaction of sale of such equity share is chargeable to securities

13)

42

transaction tax.[However, in case of corporate shareholders, such income will be considered in computing MAT]. 14) As per Section 14A, no deduction shall be allowed in respect of expenditure incurred by the any person in relation to income which does not form part of the total income under this Act. Under section 36(xv) of the Act, securities transaction tax paid by a share holder in respect of the taxable securities transactions entered into in the course of his business, would be eligible for deduction in computing income under the head Profit and gains of business or profession arising from taxable securities transactions. Under section 48 of the Act, if the Companys shares are sold after being held for more than twelve months, the gains (in cases not covered under section 10(38) of the Act), if any, will be treated as long term capital gains and the gains shall be calculated by deducting from the gross consideration, the indexed cost of acquisition. The indexed cost of acquisition / improvement adjusts the cost of acquisition / improvement by the cost inflation index, as prescribed from time to time. Under section 112 of the Act, long-term capital gains are subject to tax at a rate of 20% after indexation as provided in the second proviso to section 48. However, in case of listed securities or units the amount of such tax could be limited to 10% without indexation benefit, at the option of the shareholder, in cases where securities transaction tax is not levied. In case of an individual or a HUF, being a resident, where the total income as reduced by such long term capital gains is below the maximum amount, which is not chargeable to income tax, then, such long term capital gain shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income tax and the tax on the balance of such long term capital gains shall be computed at the rate of 20% after claiming indexation benefit./or at the rate of 10% without claiming indexation benefit.. 18) Under section 54EC of the Act and subject to the conditions and to the extent specified therein, long-term capital gains arising on the transfer of a long term capital asset will be exempt from capital gains tax if the capital gains are invested in certain notified bonds (not exceeding Rs. 50 lakhs in a financial year) within a period of six months after the date of such transfer. However, if the holder transfers or converts the notified bonds into money (as stipulated therein) 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 the bonds are transferred or converted into money. The bonds specified for this section are bonds issued by National Highway Authority of India (NHAI) and Rural Electrification Corporation Limited (RECL). 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 tax, if the net consideration from such shares is 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. This is subject to certain conditions contained in the said section. Under section 111A of the Act, short-term capital gains (i.e. if equity shares are held for a period not exceeding twelve months) arising on transfer of an equity share, are taxed at the rate of 15% in cases where securities transaction tax has been levied. In case of an individual or a HUF, being a resident, where the total income as reduced by such short term capital gains is below the maximum amount, which is not chargeable to income tax, then, such short term capital gain shall be reduced by the amount by which the total income as so

15)

16)

17)

19)

20)

43

reduced falls short of the maximum amount which is not chargeable to income tax and the tax on the balance of such short term capital gains shall be computed at the rate of 15%. Short term capital gains realised on transfer of shares on which securities transaction tax has not been paid are taxable at the normal applicable rates. 21) Any Income received by any person for or an behalf of the New Pension System Trust established on 27/02/2008, under the Indian Trust Act, 1882 (2 of 1882) is exempt from tax under section 10(44) of the Income Tax Act,1961 and is also not liable for Dividend Distribution Tax and Security Transaction Tax.

Non-Resident Indians / Non Residents Shareholders (Other than FIIs and Foreign venture capital investors) 22) Under section 10(34) of the Act, any income by way of dividends referred to in section 115 O of the Act (i.e. dividends declared, distributed or paid) received by a non-resident Indian shareholder (i.e. an individual being a citizen of India or person of Indian origin who is not a `resident) on the shares of the company is exempt from tax. Under section 10(38) of the Act, any long term capital gains arising to a shareholder from transfer of long term capital asset being an equity share in a company or a unit of an equity oriented fund would not be liable to tax in the hands of the shareholder if the transaction of sale of such equity share is chargeable to securities transaction tax. As per Section 14A, no deduction shall be allowed in respect of expenditure incurred by the any person in relation to income which does not form part of the total income under this Act. Under section 36(xv) of the Act, the securities transaction tax paid by the shareholder in respect of the taxable securities transactions entered into in the course of his business would be eligible for deduction from income chargeable under the head Profit and gains of business or profession arising from taxable securities transactions. Under section 54EC of the Act and subject to the conditions and to the extent specified therein, long-term capital gains arising on the transfer of a long term capital asset will be exempt from capital gains tax if the capital gains are invested in certain notified bonds (not exceeding Rs. 50 lakhs in a financial year) within a period of six months after the date of such transfer. However, if the holder transfers or converts the notified bonds into money (as stipulated therein) 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 the bonds are transferred or converted into money. The bonds specified for this section are bonds issued by the NHAI and RECL. Under section 54F of the Act, long-term capital gains arising to an individual or HUF on transfer of shares of the Company will be exempt from tax, if the net consideration from such shares is 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. This is subject to certain condition contained in the said section. Under section 111A of the Act, short-term capital gains (i.e. if the equity shares are held for a period not exceeding twelve months) arising on sale of listed equity shares are taxed at the rate of 15% in cases where securities transaction tax has been levied. Under section 112 of the Act, long-term capital gains (i.e. if shares are held for a period exceeding twelve months), arising on transfer of shares in the Company, shall be taxed at a rate of 20%.

23)

24)

25)

26)

27)

28)

29)

44

30)

Under section 115 I of the Act, non-resident Indian shareholder (as defined therein) has an option to be governed by the provisions of Chapter XIIA of the Act, viz. Special Provisions Relating to Certain incomes of Non-Residents which interalia includes the following:a) Under the provisions of section 115F of the Act, long-term capital gains arising to a NonResident 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. Under section 115E of the Act, where the total income of a non-resident Indian includes any income from investment or income from long term capital gains of an asset, other than a specified asset, such income shall be taxed at a concessional rate of 20 percent. Also, where shares in the company are subscribed to in convertible foreign exchange by a non-resident Indian, long term capital gains arising to the non resident Indian shall be taxed at a concessional rate of 10 per cent. The benefit of indexation of cost would not be available. Under provisions of section 115G of the Act, Non-Resident Indians are not required to file a return of income under section 139(1) of the Act, if their only income is income from foreign exchange asset investments or long term capital gains in respect of those assets 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 XIIA shall continue to apply to him in relation to certain specified investment income derived from the specified assets for that year and subsequent assessment years until such assets are converted into money.

b)

c)

d)

31)

Under section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the double tax avoidance agreement (`tax treaty) entered between India and the country of fiscal domicile of the non-resident, if any, to the extent they are more beneficial to the non-resident. Thus, a non-resident (including NRIs) can opt to be governed by the provisions of the Act or the applicable tax treaty, whichever are more beneficial.

Foreign Institutional Investors (FIIs) 32) In terms of section 10(34) of the Act, any income by way of dividends referred to in section 115O of the Act (i.e. dividends declared, distributed or paid) received on the shares of the company is exempt from tax. In terms of section 10(38) of the Act, any long term capital gains arising to an investor from transfer of long-term capital asset being an equity share in a company or a unit of an equity oriented fund would not be liable to tax in the hands of the investor if the transaction of sale of such equity share is chargeable to securities transaction tax. As per Section 14A, no deduction shall be allowed in respect of expenditure incurred by the any person in relation to income which does not form part of the total income under this Act. In terms of section 36(xv) of the Act, the securities transaction tax paid by the shareholder in respect of taxable securities transactions entered into in the course of his business would be

33)

34)

35)

45

eligible for deduction from income chargeable under the head Profits and gains of business or profession arising from such taxable securities transactions. 36) The income by way of short-term capital gains / long-term capital gains realized by FIIs on sale of shares (held as investments) in the company would be taxed at 30% / 10% respectively, as per section 115AD of the Act. (However, in respect of short term capital gains referred to in section 111A, the tax rate applicable will be 15%. The benefit of indexation and foreign currency fluctuation protection as provided by section 48 of the Act are not applicable to FIIs. Under 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. Thus, a non-resident, including FIIs can opt to be governed by the provisions of the Act or the applicable tax treaty, whichever are more beneficial.

37)

Venture Capital Companies/Funds 38) Under 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 their income from investment in specific venture capital undertakings including dividend from and income from sale of shares of the company where investments are made in Specified Venture capital undertakings. Venture Capital Undertaking has been defined to means such domestic company whose shares are not listed in a recognized stock exchange in India and which is engaged in the. (i) business of. A. B. C. D. E. F. G. H. nanotechnology; information technology relating to hardware and software development; seed research and development; bio-technology; research and development of new chemical entities in the pharmaceutical sector; production of bio-fuels; building and operating composite hotel-cum-convention centre with seating capacity of more than three thousand; or developing or operating and maintaining or developing, operating and maintaining any infrastructure facility as defined in the Explanation to clause (i) of sub-section (4) of section 80-IA; or

(ii) Mutual Funds 39)

dairy or poultry industry;

Under section 10(23D) of the Act, any income of Mutual Funds set up by Public Sector Banks or Public Financial Institutions or Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 or regulations made there under or Mutual Funds authorized by the Reserve Bank of India, subject to the conditions specified, would be exempt from income tax. Benefits to shareholders of the company under the 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. Hence, shares are not liable to wealth tax.

(C) 40)

46

(D) 41)

Benefits to shareholders of the company under the Gift Tax Act, 1958 The Gift Tax Act, 1958 is now abolished. However, as per the provisions of section 2(24) of the Act read with section 56 (2)(vi) of the Act, income of an individual or HUF will include any sum of money the aggregate value of which exceeds Rs 50,000 received from any person or persons without corresponding consideration. On or after 1st October, 2009, as per the provisions of section 2(24) read with section 56(2)(vii) of the Act, where an Individual or HUF receives in a year from any person or persons , (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; any immovable property,without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; any property, other than immovable property, (i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property; for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration

(b)

(c)

(ii)

the same would be considered as income of such individual or HUF. The term any property also includes shares and securities. Where a firm or a company (other than a company in which public are substantially interested) receives on or after June 1, 2010 any property, being shares of a company (other than a company in which public are substantially interested) (i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property; for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration:

(ii)

would be treated as the income of such recipient firm/company However any transfer pursuant to a scheme of business orgenisation, amalgamation or demerger which are not regarded as transfer under certain specified clauses of section 47 will be excluded from the applicability of the aforesaid provision. There are some exceptions to this provision: (i) (ii) (iii) (iv) (v) amount received from any relative; amount received on the occasion of the marriage of the individual; amount received under a will or by way of inheritance; amount received in contemplation of death of the payer; amount received from any local authority as defined in the Explanation to clause (20) of section 10 of the Act;

47

(vi)

(vii) Notes: 1.

amount received from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10 of the Act; amount received from any trust or institution registered under section 12AA of the Act.

All the above benefits are as per the current tax law as amended by the Finance Act, 2010. Many of these benefits are subject to the Company and the Shareholders complying with various conditions specified in the relevant tax laws. All the rates of tax mentioned above are subject to applicable surcharge and education cess. The above Statement of possible tax benefits sets out the provisions of law in a summary manner only and is not a complete analysis or list of all potential tax consequences. This is not an opinion or assurance that the Company and/or shareholders will be eligible for any of the tax benefits. The stated benefits will be available only to the sole / First named holder in case the share is held by joint holders. 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. 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 consequences of his/her investments in the Company.

2. 3.

4.

5.

6.

For M/s.G. M. KAPADIA & CO. Chartered Accountants Firm Registration No. 104767W

Ashwin Damania Partner Membership No. 38976 Dated: 15th June, 2010

48

SECTION IV: ABOUT THE COMPANY INDUSTRY OVERVIEW The information in this section includes, or has been extracted from, publicly available documents prepared by governmental agencies, industry sources and VCCircle.com. We may have reclassified such data for the purposes of presentation in this section. Industry sources and publications generally state that the information contained therein has been obtained from sources generally believed to be reliable but there can be no assurance as to the accuracy and completeness of the information. While reasonable actions have been taken by the Company to ensure that the information is extracted accurately and in its proper context, we have not independently verified any of the data from third parties contained in this section and in the Draft Red Herring Prospectus. For the purposes of this section we have relied inter alia on a report prepared by VCCEdge. The Company commissioned the VCCEdge report for the purposes of confirming its understanding of the industry in connection with this Issue. VC Circle Disclaimer: VCCEdge (the research arm of VCCircle.com) has used due care and caution in preparing this report. Information has been obtained by VCCEdge from sources which it considers reliable. However, VCCEdge does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. No part of this report may be published/reproduced in any form without VCCEdges prior written approval. VCCEdge or its owner Mosaic Media Ventures Private Limited is not liable for investment decisions which may be based on the views expressed in this report. Overview of the Indian Economy India, the worlds largest democracy in terms of population (1,157 million people) had a GDP on a purchasing power parity basis of approximately USD 3,561 billion in 2009. This makes it the fourth largest economy in the world after the United States of America, China and Japan (Source: CIA World Factbook). In 1991, the Government of India initiated a series of comprehensive macroeconomic and structural reforms to promote economic stability and growth. The key policy reforms that were initiated by the Government were focused on implementing fundamental economic reforms, deregulation of industry, accelerating foreign investment and pushing forward a privatization program for disinvestment in public sector units. Consequent to the reforms, Indias economy registered robust growth with an average real GDP rate of approximately 8.50% over the period Fiscal 2004 to Fiscal 2009. For Fiscal 2009, India had a GDP real growth rate of 6.70%, as compared to 9.00% in Fiscal 2008 and 9.70% in Fiscal 2007. (Source: Planning Commission) Introduction to Private Equity (PE) & Venture Capital (VC) in India Private Equity (PE) is money that is invested in a company that is not publicly traded on a stock exchange. PE funds usually invest in companies that already have some income and that can potentially be grown by restructuring, or by bringing new or superior products into existing or developing markets. Venture Capital (VC) is a type of PE that is invested in newly formed start-ups that may not yet generate income or have an idea for a product or service ready to sell. Private Investment in a Public Entity (PIPE) is a special case of PE which enables investment into publicly traded companies. PE investments happen through various stages of a company namely: early stage, growth, stage, late stage, pre-IPO and PIPE transactions. Each fund typically has a fixed duration post which they divest their investment in companies so as to make a return.

49

PE and VC in India The concept of private equity financing was introduced in India in 1964, though it had evolved in developed markets such as the United States of America in the 1940s. Due to the virtual monopoly of public sector financial institutions in India in the pre-reforms period, the initiative on PE financing was lead by public sector undertakings like IDBI (Industrial Development Bank of India) and IFCI (Industrials Finance Corporation of India). In the initial years, PE financing mostly took the form of seed or startup capital. The first major initiative from the government of India came in 1985 when it launched its own VC fund to finance pilot projects involving application of new technologies. Post 1991, owing to the fundamental change in policies regarding foreign investment and development financing, India has experienced tremendous growth in the number of deals, average amount invested per deal and the number of foreign PE funds setting up offices in India. Since it emerged as an important asset class in the 1990s, PE has experienced two boom periods. Each upswing ended in abrupt downturns before PE firms rallied around new growth themes.

Source: VCCEdge, June 2010 During the period 1996-2003, several international and domestic PE firms raised capital internationally and started investing in India. Even though PE investment was only USD 20 million in 1996 and USD 80 million in 1997, the pace of growth was very healthy largely due to the worldwide dot-com boom. Pursuant to the dot-com bubble burst NASDAQ lost 60% of its value during the second quarter of 2000 leading to a substantial decline in other public markets (including those in India). As a result, during 2001-2003, there was a fall in PE investment in India. Since 2004, PE has experienced phenomenal growth as institutional investors, seeking higher returns, embraced this alternative to traditional asset classes. The last few years was a boom period in terms of the size and number of deals, with 2007, being the cyclical peak period, with 510 deals at a value of US USD 15.90 billion primarily driven by buoyant credit markets. This boom came to an end with the mortgage-led debt crisis that froze credit markets in 2009 and triggered a global recession affecting nearly every industry. India weathered the global slowdown much better than others and was quick to rebound with the domestic story intact. According to the VCCircle Deal Outlook 2010, 62% of survey participants stated their willingness to do more deals in 2010. Investors are positive and bullish due to three factors: the number of investment opportunities (deal flow), the India growth investment thesis and a favourable exit environment. Infrastructure, education, healthcare and clean technology are at the top of the radar of PE investors while education, mobile value added services and consumer internet will be most favoured by VC funds.

50

65% of fund managers see the exit environment improving with the majority preferring the IPO route, followed by strategic sales and secondary sales. 41% of the respondents expect valuations to be realistic while 44% believed that valuations will remain overvalued in 2010. Unrealistic valuations are a key concern and may play spoilsport in deal-making as many investors feel Indian companies are already expensive. Market volatility may lead to further uncertainty over valuations and could delay deal closures. Fund set up process The general process of setting up a fund is as follows: Sector Identification: The sector in which the proposed fund is to be set up is identified in conformance with the internal research done by the business strategy team which evaluates the feasibility of the recommended fund. The business strategy team studies the market, the number of funds existing in the sector and evaluates the investment philosophy and focus for that sector. Investor Appetite: The business strategy team obtains informal feedback from distributors and works towards an understanding of investor appetite for that sector. Structure Framework: The legal structure of the proposed fund is then reviewed and finalized. So, either a new fund is registered or a new scheme is floated by the existing trust. Management / Board Approval and appointment of intermediaries: Prior to the internal approval of the board of directors and managing director, additional documents are prepared and legal advisors, auditors and tax payers are appointed. Team Building and identification of JV partner, if required: An investment team is identified and is bought together with the potential joint venture partners for the fund. Deal Pipeline: The investment team begins the process of identifying investment opportunities and builds up a potential deal pipeline. Identifying Distributors and entering into distribution agreements: The fund identifies distributors through their existing relationships and also explores relationships with new distributors. Preparation of documents and SEBI filing of PPM: The fund prepares several key documents such as a presentation, a subscription agreement and the private placement memorandum (PPM). The PPM is subsequently filed with SEBI and, in the event of any clarification made by SEBI, a revised PPM is submitted. The PPM contains details of the fund size, seed capital, fund structure, investment philosophy and methodology, investment focus, key terms and details of the initial / final closing parameters such as date and amount. These parameters are discretionary and the trust may decide to close the fund at an amount lower than the parameters mentioned in the PPM. Also, an investment advisory agreement is entered between the investment advisor and the trust. Due diligence by the identified distributors and entering into a distribution agreement: Once the distributor is identified after initial discussions, a detailed due diligence of the fund is undertaken and the terms and conditions are decided for entering into commercial arrangements with the investment advisors. Once this is done the fund enters into agreements with distributors. Fund Raising Activities: The distributor arranges meetings between the fund raising and investment teams with the potential investors. One to one meetings are also arranged with specific

51

investors such as those with whom the fund has a direct relationship. The fund approaches potential institutional investors which include insurance companies, PSU banks, pension funds and corporate. Once their investment committee authorizes an investment in the fund and a sanction letter is issued, the prospective investor conducts a legal due diligence of the fund documents and meets with the product team of the fund. Initial closing: Subsequent to receipt of the initial closing amount for the fund as mentioned in the PPM, the trustee arranges the initial closing. Deployment of funds (After initial closing): The investment team identifies the potential opportunities and puts forward the proposal to the investment committee for approval. The investment advisor may carry out additional legal and financial due diligence. After the approval from the investment committee, the proposal is sent to the trustees for their approval and the amount raised is then deployed Private Equity Partnership Structure Private Equity funds take in general the form of Limited Partnerships. The investment manager of a Limited Partnership is called the General Partner (GP) and each investor a Limited Partner (LP). The GPs responsibilities include due diligence, structuring of financial contracts, monitoring investments, to provide resources for portfolio firms and to build exit strategies for investors.

Source: VCCEdge

The GPs typically charge a management fee around 1.50% - 2.50% of the committed capital plus a share of the fund's performance which is generally 20%-30% of profits and called the carried interest. The GPs generally seed the fund with 1% 100% of capital while LPs provide the remaining. Private equity funds in India can be categorized into the following groups:1. Promoted by the Central Government controlled development finance institutions, for example:IFCI Venture Capital Funds Limited (IVCF) SIDBI Venture Capital Limited (SVCL) 2. Promoted by State Government controlled development finance institutions, for example:Gujarat Venture Finance Limited (GVFL)

52

Kerala Venture Capital Fund Private Limited 3. Promoted by public banks, for example:Canbank Venture Capital Fund SBI Capital Markets Limited 4. Promoted by financial institutions, for example:IL&FS Investment Managers ICICI Ventures Limited 5. Those established as an overseas venture capital fund, for example:Walden International Investment Group SEAF India Investment & Growth Fund The top five PE firms headquartered in India (Domestic Asset Managers) have nearly USD 10.0 billion in assets under management with total assets under management by domestic funds being around USD 25.8 billion. Top Ten Domestic Asset Managers in India S.NO 1 2 3 4 5 6 7 8 9 10 Fund Name IL&FS Investment Managers Limited ICICI Venture Limited ChrysCapital Investment Advisors India Value Fund Advisors Private Limited IDFC Private Equity Urban Infrastructure Venture Capital Limited Everstone Capital IDFC Project Equity Company Limited Kotak Realty Funds Group Milestone Capital Advisors Limited AUM (USD Mn) 2800.00 2400.00 1955.00 1400.00 1332.00 1100.00 1015.00 927.00 771.00 710.00 Inception 1989 1989 1999 1999 2002 2006 2007 2005 2007

Source: VCCEdge, June 2010

Fund raising in India Domestic capital has emerged as an important source of capital for PE funds in the recent past with the emergence of Domestic LPs being the key trend of 2009. A dozen funds, mostly captive arms of institutions and corporate, such as ICICI Ventures, Reliance Private Equity, Milestone Religare Investment Advisors Private Limited, IL&FS Investment Managers Limited, Kotak Realty Fund, Tata Capital and Piramal real estate fund are raising domestic capital. TVS Capital Funds was the first PE fund to raise a USD 126 million all-rupee private equity fund. The fund, promoted by the Chennai based TVS Group and Shriram Transport Finance was raised in 2008. Although public sector banks and insurance companies account for most of the domestic fund raising, retail investors (HNIs) are increasingly becoming important with placement agents actively reaching out to them. The investment threshold for retail investment is Rs.1.00 million Rs. 2.50 million for most funds. Other LP segments like family offices and fund of funds are not yet a developed source of LP investment in India.

53

The biggest domestic LPs in India are General Insurance Corporation, Life Insurance Corporation, State Bank of India and UTI. These institutions are allowed to invest a percentage of their assets under management in PE funds.

Source: VCCEdge, June 2010

The fundraising environment remains extremely difficult with 14 funds with a focus on India raising a total of USD 2,993.00 million in 2009, the smallest amount of capital closed during the last three years.

Source: VCCEdge, June 2010

As LPs are still recovering, PE fundraising looks like it will remain at below-normal levels in the near future. Momentum might increase towards the end of the year as PE firms that have made a few exits and distributed returns to their LPs are able to raise new commitments. Regulatory Environment SEBI is the nodal agency for registration and regulation of both domestic and overseas PE funds. All funds must submit quarterly reports to SEBI in a pre-defined format. SEBI issued its regulations for Venture Capital in 1996, establishing its authority and laying down guidelines and procedures for establishment of venture capital funds, their management structure, set up and size and investment criteria. For further details, please see the section Regulations and Policies on page 80.) Deal Analysis Indian private equity deal volume for 2009 was down 42% from 2008 and 40% from 2007 to 301 completed deals. 2009 was dominated by lower and middle-market deals, which accounted for over 90% of the deal flow. Total invested capital declined from USD 12.20 billion in 2008 to USD 4.40 billion in 2009. The difference of USD 7.80 billion is due to the drop in deals over USD 100 million, as a direct result of

54

the credit crisis. However, these larger investments did begin to recover somewhat in the second half of 2009 with nine completed investments over USD 100 million versus just one in the first half of the year. PE investment jumped to the highest quarter total of the year at USD 1.44 billion. It subsequently jumped by USD 500 million to reach USD 1.94 billion in Q1 2010.

Source: VCCEdge, June 2010

The median deal amount in 2009 dropped to USD 8 million, similar to what was seen in 2005. Average deal value in 2009 dropped to USD 19 million as against USD 33 million and USD 43 million in 2008 and 2007 respectively as the volume of larger deals (particularly deals > USD 50 million) decreased. According to investors, private equity ticket size is likely to go down further. Private equity deal volume in the lower and middle-market segment (under USD 50 million) continued its upward trend, accounting for 90% of deal flow in 2009. No. of transaction by deal size USD Mn Undisclosed Under 5 5-25 25-50 50-100 100+ Total
Source: VCCEdge, June 2010

2005 59.00 58.00 82.00 168.00 8.00 375.00

2006 114.00 79.00 132.00 38.00 20.00 7.00 390.00

2007 161.00 82.00 161.00 50.00 36.00 30.00 520.00

2008 149.00 95.00 176.00 55.00 31.00 26.00 532.00

2009 52.00 103.00 111.00 21.00 14.00 8.00 309.00

Q1 2010 12.00 17.00 47.00 9.00 4.00 4.00 93.00

Total 547.00 434.00 709.00 341.00 113.00 75.00

Larger deals (USD 50 million and above) continued their retreat from the high-water mark of 2007 when they accounted for over 75% of total capital invested. The breakdown of investment by deal size shows that 2009 was closer to 2006, with a more even distribution. Total Investments by Deal Size (USD Mn) USD Mn Under 5 5-25 25-50 50-100 100+ Total 2005 117.00 978.00 561.00 598.00 2,254.00 2006 181.00 1,634.00 1,282.00 1,418.00 2,552.00 7,067.00 2007 174.00 2,101.00 1,738.00 2,601.00 9,563.00 16,177.00 2008 193.00 2,365.00 1,888.00 2,275.00 6,008.00 12,729.00 2009 213.00 1,269.00 747.00 949.00 1,239.00 4,417.00 Q1 2010 24.00 551.00 361.00 214.00 832.00 1,982.00 Total 902.00 8,898.00 6,577.00 8,055.00 20,194.00

Source: VCCEdge, June 2010

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On the whole, deals over USD 100 million continue to decline as investors shift their focus to middle and lower middle-market deals where all-equity transactions are more prevalent and financing is slightly easier to obtain. Sectoral Breakdown PE investments are driven by a long-term view, a sound investment valuation thesis and prudent exit strategies. Private equity investors have broadened their focus beyond consumer discretionary, information technology and industrials that have long been areas of PE interest. Sector Summary Consumer Discretionary IT Industrials Health Care Financials Materials Consumer Staples Energy Utilities Telecommunication Services Total
Source: VCCEdge, June 2010

2005 63 46 39 29 15 15 4 3 3 2

2006 80 88 69 33 63 21 19 6 4 5

2007 100 105 93 41 105 19 16 8 9 12

2008 104 122 94 33 104 21 14 6 13 10

2009 53 60 61 22 58 11 11 3 17 5

Q1 2010 21 24 11 9 28 2 7 3 8 4

Total Deal Volume 421 445 367 167 373 89 71 29 54 38 2,054

Deal Value, USD Mn 6,171.00 5,873.00 6,383.00 2,293.00 14,379.00 1,350.00 594.00 1,697.00 2,295.00 6,417.00 47,452.00

Utilities, consumer discretionary and financials were the most targeted sectors for investment with deals worth USD 484 million, USD 440 million and USD 403.00 million respectively in Q1 2010. (Source: VCCEdge, June 2010) Together, they accounted for more than 65% of total private equity deal value during the period. According to investors, education and healthcare will see significant levels of investment over the coming year. Both of these had been among industries that increased their share of total PE deal making during the rising PE market of 2005 to Q1 2010, and they look poised to further continue their growth. Sector Focus A) Healthcare Expanding demand for quality healthcare services and the recession-proof nature of the sector has made it attractive to investors. In addition, many players within Indias healthcare industry are currently planning major developments. These activities point to the potential of the industry, in terms of both, growth and return on investment. Many private equity investors have already identified the investment potential of the healthcare industry and have negotiated multi-million dollar deals. This infusion of private equity will strengthen the nations healthcare infrastructure. Private equity investment in the sector will have the added benefit of supporting related industries, like medical tourism and real estate. The public healthcare system is overcrowded and lacks adequate technological support, particularly in rural areas. India has 1.5 hospital beds per 1,000 people, compared with a ratio of 4.3 beds in other developing countries. Furthermore, the healthcare industry is not limited to patient treatment. The provision of medical services related to pharmaceuticals, nursing and medical education and diagnostics must also expand to meet the needs of Indias population. Demand for quality healthcare is unlikely to slow anytime soon. The inability of the public healthcare system to meet the needs of the population has driven the development of the private healthcare sector. Private healthcare providers have fared remarkably well within the economy.

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They enjoy the advantage of planning their locations and specialties to fit the needs of the local inhabitants. There were 22 deals in 2009 in healthcare with a total announced value of USD 237.00 million compared to 33 deals at an announced value of USD 555 million in the year 2008 and 43 deals with an announced value of USD 403 million in 2007. There are 58 domestic PE funds with approximately USD 6 billion under management which consider healthcare as an area of interest. However there might be many other sector agnostic funds that might invest in this sector as well. B) Education Indias educational system is amongst the largest in the world with a total of 480 universities and 22,000 colleges currently and about 460 million school-going children. The sector is expected to grow at a CAGR of 15%19% in 2009-2012. The fundamental factors driving growth are the growing middle class with the ability to afford a private education, demographic advantages, consumers preferring private to public schools and scope for higher penetration of multimedia content in schools. Private equity investment in the education sector is estimated to attract multifold deals, as fund managers would be focusing on this untapped segment to maximize returns. According to a survey by VCEdge, over 85% of private equity and venture capital investors intend to invest in education companies in the next 6-8 months (Source: VCCEdge Deal Outlook 2010). There were 10 deals in 2009 with a total announced value of USD 128 million compared to 9 deals at an announced value of USD 53 million in the year 2008 and 12 deals with an announced value of USD 103 million in 2007. There are 11 domestic PE funds with approximately USD 817 million under management which consider education as an area of interest. However there might be many other sector agnostic funds that might invest in this sector as well. Milestone's India Build-Out Fund-I is one of the first domestic funds with a sharp focus on education deals besides healthcare. C) Real Estate From 2005 till the first half of 2008, the Indian real estate sector enjoyed almost three years of boom and unprecedented growth. During this period, demand for various asset classes remained buoyant, leading to a sharp rise in real estate prices. Simultaneously, supply across certain asset classes like the commercial and luxury residential sectors also increased markedly. Rising income levels and easy availability of credit resulted in a continuous flow of transactions for developers and spiralling prices. During the second half of 2008, the onset of the economic slowdown made end-users apprehensive and developers became concerned about limited funding options and a substantial decline in aggregate demand. As the Indian economy begins to turn the corner from the market conditions of the last six to twelve months and UPA government announcing lucrative and beneficial schemes for the sector; Real Estate projects which have previously suffered from gaps in both debt and equity financing should once again become viable. There were 27 private equity deals in Real Estate in 2009 with a total announced value of USD 639 million compared to 50 deals at an announced value of USD 3,006 million in the year 2008 and 49 deals with an announced value of USD 3,448 million in 2007. REITs are a popular vehicle for investments in real estate and also offer tax benefits to investors in many countries. The objective of such funds is to pay out regular dividends to investors through rentals as well as provide long term capital appreciation benefits. According to data available, IL&FS Milestone Fund I was the first fund to have a REIT-like structure. The fund invested in

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properties which were rented out after construction, eliminating the risk attached to real estate development and also minimizing leasing risk. Currently REIT regulations are awaited in India, although SEBI released the draft regulations in December 2007. There are 36 domestic PE funds with approximately USD 5.90 billion under management which consider real estate as an area of interest. However there might be many other sector agnostic funds that might invest in this sector as well. D) Infrastructure The strong population growth in India and its growing economy are generating enormous pressures to modernize and expand Indias infrastructure. The creation of world class infrastructure would require large investments in addressing the deficit in quality and quantity. In the eleventh five year plan, planned infrastructure investment in highways, civil aviation, irrigation, ports, railways, telecom and power will be USD 384 billion. In addition to the above, investments to the tune of USD 91 billion has been planned in other infrastructure sectors like Tourism infrastructure, Urban infrastructure, Rural infrastructure, SEZs, water and sanitation infrastructure thus making the total infrastructure investments in the eleventh plan period 2007-08 to 2011-12 as USD 475 billion. The estimated infrastructure investments in India will create demand for power equipment, construction equipment, material handling equipment, electronic and IT systems, environment technologies, transport equipment, EPC contracts, infrastructure companies, financial services, real estate, education and training, design and planning services, infrastructure consultants, advisory and professional services and will provide opportunities for investors. There were 35 deals in 2009 with a total announced value of USD 764 million compared to 46 deals at an announced value of USD 1,408 million in the year 2008 and 42 deals with a announced value of USD 1,326 million in 2007. E) Small & Medium Enterprises (SMEs) In India, small and medium industries play a vital role in the growth of the economy. Small industries have a 40% share in industrial output, producing over 8000 value-added products. They contribute nearly 35% in direct export and 45% in the overall export from the country. They are one of the biggest employment-providing sectors after agriculture, providing employment to 28.28 million people. Despite its contribution to the nation's economy, the SME sector does not get the required support from the concerned Government departments, banking sector, financial institutions and corporate sector, which is a handicap in becoming more competitive in the National and International Markets. SME sector faces a number of problems - absence of adequate and timely banking finance, limited knowledge and non-availability of suitable technology, low production capacity, ineffective marketing and identification of new markets, constraints on modernization and expansions, non availability of highly skilled labour at affordable cost, follow up with various agencies in solving regular activities and lack of interaction with government agencies on various matters. SMEs in India in the year 2009 were handicapped as they not only had to face losses, but also had to encounter difficulties while accessing adequate equity capital from investors. Due to the sharp dip in private equity investment to USD 4.4 billion in 2009, it became difficult for small firms to seek safe financial support for executing their growth plans. According to a recent paper by Assocham, the total number of PE deals signed by SMEs in 2009 was 81 (worth USD 580 million in investments) as against 187 (worth USD 1,812 million) in 2008.

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F)

Bullion Bullion is defined as a bulk quantity of precious metals consisting of gold, silver and others that can be assessed by weight and cast as a lump. Bullion is valued by its purity and mass rather than its face value which is applicable in the case of money. Bullion in India India is the leading consumer and importer of gold in the world and hence the Indian bullion market has high potential. The gem and jewellery industry of India is one of the fastest growing sectors of the economy at an approximate rate of 15% (Source: VCCEdge June 2010). The Indian Bullion market is under the supervision of the Government as bullion is one of the major indicators of the wealth of the country. India is the largest investor in gold jewellery as a large number of people believe that investing in gold is beneficial. The domestic consumption of gold depends on factors like the wedding season, festive season, the performance of the harvest season and the monsoon of the country. India bullion market faces a number of problems - as there are a number of restrictions imposed on the import and export of gold as compared to any other commodities. The bullion market of the country is very fragmented and unorganized. The price of bullion varies in different parts of the country due to lack of proper benchmarks. Recently, Milestone Capital Advisors launched the Milestone Bullion Fund for making investments in silver, gold and gold linked structures. According to data available, it is the first such fund to identify silver as an asset class for capital appreciation. PE Exit Activity in India There were 95 private equity exits in 2009, which represents a 66% increase from 2008 and a 8% decline from 2007. The poor exit environment in 2008 and first half of 2009 was attributable to a number of credit crisis and recession-related factors, including declines in valuations tied to the public markets, poor portfolio company performance and lack of available leverage for all investors and a limited availability of capital for corporate acquirers. As these effects began to ease in second half of 2009, exit activity increased. During the slowdown, many investors opted to focus on improving portfolio company balance sheets and performance in preparation for better exit opportunities in 2010 and 2011. PE firms are currently feeling a great deal of pressure from their limited partners to provide distributions to help ease liquidity issues and to fund capital calls. Sector Consumer Discretionary IT Industrials Health Care Financials Materials Consumer Staples Energy Utilities Telecommunication Services Total
Source: VCCEdge, June 2010

No. of Exits 74 104 78 21 54 13 11 9 4 14 382

Value, USD Mn 1,181.00 2,913.00 1,824.00 970.00 3,036.00 200.00 568.00 80.00 1,969.00 12,741.00

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The biggest impact on 2009 exit activity was the 50% fall in M&A exits from 2008. This was a result of the fact that many strategic acquirers did not have the spare capital or ability to raise debt for acquisitions that they had in previous years.

Source: VCCEdge, June 2010

The return of the IPO market was one of the most notable stories in private equity during 2010. A total of five companies were taken public by PE firms during the year, raising USD 346 million. The open market exit activity remained the most common exit in 2010, which accounted for more than 40% of all exits.

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BUSINESS Unless otherwise indicated, the financial information of the Company used in this section is derived from the Companys restated audited consolidated financial statements under Indian GAAP. Further, unless otherwise indicated, the details of AUM and the number of investors exclude AUM and the number of investors under our portfolio management services division. For risks related to our business, see section Risk Factors on page xii. In relation to the information discussed in this section, investors should note that any references to a fund, means a reference to a trust incorporated under the Indian Trusts Act, 1882, and registered as a venture capital fund with the Securities and Exchange Board of India and any references to a scheme includes schemes floated by the relevant fund. We have three funds registered as venture capital funds with SEBI and 12 schemes floated by the funds. Certain information in this section includes, or has been extracted from, publicly available documents prepared by governmental agencies, industry sources and VCCircle.com. We may have reclassified such data for the purposes of presentation in this section. Industry sources and publications generally state that the information contained therein has been obtained from sources generally believed to be reliable but there can be no assurance as to the accuracy and completeness of the information. While reasonable actions have been taken by the Company to ensure that the information is extracted accurately and in its proper context, we have not independently verified any of the data from third parties contained in this section and in the Draft Red Herring Prospectus. Overview We are a professionally managed company providing investment advisory services to various funds and schemes with AUM of approximately Rs. 31,194.50 million for approximately 12,700 fund investors across our various schemes as of March 31, 2010. We provide investment advisory services for investments in various sectors including real estate, logistics, health care and education and infrastructure ancillary activities. In the real estate sector, we focus on investments in developmental real estate assets and Yield Driven Real Estate Investments. Currently, we advise eight schemes, including one offshore scheme, targeting an investor base of noninstitutional investors and institutional investors including inter alia insurance companies, banks, pension funds and corporates. Additionally, we have entered into investment advisory agreements with the funds in relation to four schemes which are currently raising funds for investments. One of the schemes is a domestic scheme and three schemes have been launched outside India. Funds advised by us invest in alternative assets, which tend to be less liquid than traditional investments, where the fund investors are primarily focused on long-term investments. We base our investment decisions on detailed, research-based analysis and thorough due diligence and risk management is a core foundation of our business and is a critical part of our investment process. We actively manage the investments of our various schemes and advise the schemes on various aspects through our expertise and knowledge. We also assist the funds advised by us and the companies in which the funds invest, in the areas of corporate governance and operational and financial management. For example, for our schemes that invest in real estate development projects we may be involved in various activities for managing the schemes, including, inter alia, for purchase of land, the approval of building plans and the appointment of contractors for construction. We may also be involved in the purchase of land, obtaining approvals, construction and letting for our logistics and warehousing schemes. We believe this enhances value and enables our schemes to manage risk better. We also provide portfolio management services (PMS) and had approximately Rs. 325.50 million of AUM under our PMS division as of March 31, 2010. Through our PMS division we provide services to our clients for Nifty-linked structured products. We have also recently launched Milestone Bullion Scheme I for investing in gold, silver and gold-linked structured products. We are also engaged in the business of providing project and property management services in relation to properties where the schemes we have advised have invested. Our project and property management

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services division currently assists in managing properties in various cities in India including Chennai, Hyderabad, Mumbai, Nagpur, Pune and Rajkot. We also provide consultancy services in clean technology and sustainable development including water management solutions. Across the various schemes advised by us, we have primarily used third party distribution channels. Over the last three years we have had such distribution arrangements with 15 banks including, foreign banks. We have also had arrangements with 42 private wealth management groups and certain independent consultants to market our products. We have entered into arrangements with placement agents for our business operations outside India. We are led by our Board of Directors and a management team consisting of experienced professionals from the industry. We have a team of 20 investment professionals who, based on their expertise, are actively involved in managing our investments across the various schemes we advise. The Company is promoted by Ved Prakash Arya and Milestone Fincap. Ved Prakash Arya has over 17 years of experience in the real estate and retail sectors and has prior experience in setting up domestic and offshore funds. We are currently managed by a Board of eight Directors, out of which five are Independent Directors. We have also partnered with various companies to incorporate joint ventures for the purposes of investing in various sectors and derive benefit from the experience and expertise of our joint ventures partners in those sectors. Our returns from our operations and activities are aligned with the interest of fund investors and the returns they receive from their investments. Our primary sources of revenues are advisory fees or fund management fees earned pursuant to our contractual arrangements with the funds that we advise. We also receive set up fees for the purposes of setting up of the fund, including documentation, compliance with various regulations and fund marketing. Further, based on the performance and investment returns achieved by the funds we are also entitled to additional returns as a share of the net profits of the respective funds. Income from PMS and consultancy services also contribute to the results of our operations. Pursuant to a re-arrangement, the Company acquired stakes in certain Indian companies from its corporate Promoter, Milestone Fincap, which are now either its Subsidiaries or its Joint Ventures. The Company also acquired Omega Global in March 2010 and subsequent to the acquisition the Company controls its offshore business operations through the subsidiaries and joint ventures of Omega Global. For further details see section History and Certain Corporate Matters on page 83. For Fiscal 2010, our consolidated total income was Rs. 260.28 million and profit after tax was Rs. 49.27 million. Our AUMs for our investment advisory services and PMS have grown from Rs. 11,643.80 million as of March 31, 2008 to Rs. 18,230.10 million as of March 31, 2009 and Rs. 31,521.60 million as of March 31, 2010 (including, for each of the Fiscals specified above, the AUMs of those companies which became our Subsidiaries or Joint Ventures during Fiscal 2010). Our Strengths We believe that the following strengths help differentiate us from our competitors and enable us to compete successfully in our industry: Early Identifier of New Trends in the Market We believe that we have the ability to recognize investment opportunities, which helps us raise capital and deploy capital in a manner designed to maximize long-term value. Our investment team helps to identify new trends and investment opportunities in India. We are focused on offering investment products where we believe the application of our competencies and our investment philosophy and processes attracts investors. We continue to develop new investment products to offer to our investors/ clients, particularly through our research capabilities. Specific investment products are developed by our investment team and are evaluated and executed. Over the last three years, we have launched eight schemes, including series of Milestone Domestic Schemes and IL&FS Milestone Funds focused on real estate including Yield Driven Real Estate Investments, affordable housing segment and warehousing segment in India. IL&FS Milestone Fund I was the first fund to have a REIT-like structure. (Source: VCCedge) The fund invested in

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properties which were rented out after construction, eliminating the risks attached to real estate development and also minimizing leasing risk. Currently, REIT regulations are awaited in India, although SEBI released the draft regulations in December 2007. (Source: VCCedge) We have also launched a series of India Build Out Schemes focused in investing in health care and education sector in India. India BuildOut Fund-I (IBF-I) is one of the first domestic funds with a sharp focus on education deals besides healthcare. (Source: VCCedge) Further, we have, through our PMS division, recently launched the Milestone Bullion Scheme I focused on investment in gold, silver and gold-linked structured products. We are the first to identify silver as an asset class for capital appreciation. (Source: VCCedge) Experienced Team of Professionals We are a professionally managed company led by our Board. We have a dedicated team of 20 investment professionals. Our investment professionals have an experience ranging between approximately three years to 20 years in various sectors in which we advise our schemes. We have a business strategy and development team of five people who assist us in identifying new opportunities in various sectors and a fund raising and investor relations team of four people. Our fund raising and investor relation team assists in maintaining relationships with our investors. Upon identification of the sector of focus for a fund, our investment professionals undertake research in sectors of their expertise. Our investment professionals, as researchers, help us in the operations of various schemes that we advise when they are launched and assist us in managing the investments made by the schemes. Additionally, we have a team of two people in our PMS division who provide assistance in structuring viable products considering aspects such as taxation and regulatory aspects and other relevant process issues. Our investment team plays a key role in creating investment products and maintaining relationships with companies in which we have invested. To motivate and retain our professionals in the future, we intend to provide our investment professionals benefits including a portion of our Carried Interest that we are entitled to receive in respect of the schemes we advise. Additionally, we also have a team of four architects and eight engineers who advise on various technical aspects of our business such as projects and property management services and consultancy services in sustainable development solutions. We share our experience in the investment advisory services across various sectors in which the schemes, advised by us, have invested and technical aspects of our business across our Joint Ventures and Subsidiaries, which we believe allows research, operational and marketing synergies and optimises our cost structure. Our Subsidiaries and Joint Ventures are also managed by professional boards of directors. We believe that the sectoral experience and financial acumen of our management and investment professionals provide us with a competitive advantage. Ability to Raise Funds through Various Distribution Channels from Wide Investor Base We have a wide investor base including non-institutional investors and institutional investors including insurance companies, banks, pension funds and corporates in India. We reach investors through a number of distribution channels, which consists of banks including foreign banks and several private wealth management groups and independent consultants. For our overseas fund investors we have arrangements with placement agents. Our widespread distribution network has attracted investors from approximately 80 cities and towns in India. We believe that the nature of our investors and distribution channels, has resulted in a stable and growing investor base. Our broad investor base also provides us with a number of opportunities, including cross-selling different funds. We have, as of March 31, 2010, raised an amount of Rs. 31,194.50 million across various schemes advised by us. We provide regular updates to our fund investors and distribution network on the status and operations of various schemes by way of newsletters. We believe that the strength of our relationships with banks, private wealth management groups and independent consultants helps us in attracting and retaining investors for our funds. Most of our investors have remained with us through economic and market cycles and a number of investors who have invested in one of the funds, we have advised, have gone on to invest in other funds advised by us. We believe that our deep investor relationships, disciplined and prudent management of our investors capital and risk management techniques provide us with a competitive advantage as we seek to grow our existing businesses and launch new businesses.

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Investment Track Record We believe that schemes we have advised are consistent with some of the schemes investment objectives. We follow a disciplined and rigorous investment process backed by fundamental research and our approach to actively manage risks helps us improve our investment performance by consistently applying our investment philosophy while balancing risk and returns. We have advised on a range of investments made by the schemes. As of March 31, 2010 the Committed Corpus of Milestone Domestic Scheme-I and IL&FS Milestone Fund-I has been fully invested. For further details of investments we have advised on, see section Investments we have advised on on page 71, 73 and 75. We strive to maintain and enhance profitability while we grow our business and AUM. Ability to Forge New Relationships and form Joint Ventures We provide investment advisory services in relation to schemes investing in various sectors including real estate, logistics, health care, education and infrastructure ancillary activities. We have in the past entered into joint ventures with IL&FS Investment Managers Limited and are in the process of entering into a similar arrangement offshore. We have also been successful in forming joint ventures with various companies, which we believe have requisite experience and expertise in the sectors we invest in. We have set up joint ventures with companies such as Religare Venture Capital Limited and Religare Capital Markets Plc (formerly known as Religare Hichens Harrison Plc), whose promoters have expertise in the domain of healthcare, retail wellness and diagnostics. We have recently partnered with Money Matters Financial Services Limited (Money Matters) which is engaged in providing financial services and has expertise in the domain of institutional fund raising. We are in the process of entering into a joint venture with Mercator Lines (Singapore) Limited (Mercator Lines). Mercator Lines has expertise in the domain of managing operations in the shipping sector. We benefit from the experience and expertise of our joint venture partners in the operation and management of our schemes across various sectors. In addition, we benefit from the Seed Capital and commitment provided by Religare Venture Capital Limited and Money Matters. We believe that our ability to partner with companies and form joint ventures has also enabled us to increase and diversify our investor base. Additionally, in relation to our business of providing consultancy services in the sustainable development solutions, our joint venture with J Leon Trading Limited enables us to have access to relevant technology and training and personnel. Our Strategies Our business growth strategy comprises of following key elements: Increase Institutional Investor Base in India and Overseas Our investor base has grown significantly as we have continued to expand our business and enter new sectors. Many non-institutional investors have allocated capital in our various funds and have often invested in more than one of the funds advised by us. The proportion of our institutional investor base to our total investor base for funds advised by us (other than the offshore funds advised by us) as on March 31, 2010 is 4.17% in terms of number and 19.47% in terms of percentage of funds committed. Some of the institutional investors who have invested in the funds advised by us include Indian Overseas Bank, Bank of India and The Army Group Insurance Fund. We seek to increase AUM in India and overseas by accessing new markets, which we believe may be viable in the future, and intend to attract new capital and expand our base of investors, especially institutional investors. An increase in the institutional investor base will enable us to reduce our administrative costs and expenses and to manage the liquidity risks of the schemes we advise. We are committed to expanding our institutional investor base by strengthening our distribution channel. Increase the Scale of our Operations and Develop New Products We strive to increase the scale of our operations and focus on our vertical as well as horizontal expansion. We intend to continue to explore opportunities in the sectors we are currently present in and expand into

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other sectors. We seek to develop and broaden our investment strategies and capabilities and diversify our investment platform to better identify investment opportunities in existing and new sectors and asset classes. We have recently launched three funds overseas in sectors focused on real estate, education and health care and shipping and we continue to explore strategic partnerships to help build our brand overseas and intend to capitalize on our experience in advising our existing overseas funds. Our investment teams are focused on identifying new complementary investment strategies and opportunities across various sectors including infrastructure and SME, where we propose to launch funds. To maximize flexibility, we manage our investment capital such that we are poised to pursue investment opportunities, as they arise, whether due to specific corporate events or general markets or economic changes or trends. We launch new products only after a thorough vetting process based upon our internal capabilities and risk assessments, providing our funds with further opportunities to deploy capital and enabling us to diversify our product offerings and sources of revenue. Further, leveraging our experience in the real estate sector, we strive to extend our project and property management services to other real estate developments and investment companies. In line with our strategy to diversify our product base, we also continue to explore opportunities to enter into further joint ventures and partnerships and build corporate relationships with entities having experience and expertise in other sectors. We will also evaluate opportunities to expand into new business areas including, setting up of REIT and similar structures and related business expansions. We will look to augment our current offering with fees based services to diversify our revenue streams, subject to the regulatory framework, from time to time. The Board has authorised the Company to file an application to SEBI to obtain relevant registrations to carry on activities of mutual fund. We intend to continue to actively manage the investments of schemes we advise across various sectors. Our success depends on our team of professional investment managers, researchers and product managers. We intend to increase in the scale of our operations by acquiring talent and skilled personnel with specialized experience in varied sectors. We are in the process of implementing a number of measures to further improve employee motivation and development. We intend to provide our investment professionals a portion of the Carried Interest we receive in respect of the schemes we advise. We also focus on training and development, with periodic reviews of the performance of employees. We believe that our emphasis on team oriented management will result in a shared sense of purpose with our investors and enable us to attract and retain people critical to our success. As we expand our investment platform, we believe our reputation and market position will attract new investors in India as well as overseas. As opportunities arise around the world, we expect to continue to open new offices and develop local teams to take advantage of those opportunities. Explore Exit Options Available to Maximize Returns and Provide Liquid Products Consistent with our investment philosophy of giving importance to the long term interest of our fund investors and to distribute returns on regular intervals, we intend to explore exit options to maximize returns to investors. Further, since the schemes we advise have a tenure varying from three to five years, optionally extendable for a period of one to two years, we intend to list our funds on the stock exchanges to provide opportunities for trading to our fund investors as and when a framework is provided by the regulatory authorities to list a venture capital fund on the Indian stock exchanges. Additionally, we also intend to list companies that the schemes have invested in, as and when practicable, keeping in mind factors such as growth, valuations and external market forces. We may also explore strategic sales of such companies and other exit opportunities. As part of our initiative to offer liquid products, we have recently launched the Milestone Bullion Scheme I focused on investment in silver, gold and gold-linked structured products. Advertising and Brand Building We intend to continue to invest in developing and enhancing the recognition of our brand and corporate name, through brand building efforts, communication and promotional initiatives such as interaction with industry research organizations, participation in industry events as well as investor relations efforts. We

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believe that these initiatives will enhance the visibility of our brands and strengthen our recognition in the industry we operate in. Our Corporate Structure The Company is engaged in the business of providing investment advisory services, which include investment analysis, research and recommendations, and provides investment advisory services in respect of Milestone Domestic Scheme I (MDS-I) and Milestone Domestic Scheme II (MDS-II). It has advised on a range of investments made by MDS-I and MDS-II, two schemes floated by the Milestone Real Estate Fund. It also has a sub-investment advisory arrangement with Milestone Capital Management LLC. It also provides portfolio management services. IL&FS Milestone Realty Advisors Private Limited, our joint venture, provides investment advisory services in respect of IL&FS Milestone Fund-I (IL&FS-I), IL&FS Milestone Fund-II (IL&FS-II), IL&FS Milestone Fund-II (A) (IL&FS-II (A)), three schemes floated by Milestone Real Estate Fund. It also provides investment advisory services to Milestone Army Navy Trust. We hold a 40% equity interest in IL&FS Milestone Realty. Milestone Religare Investment Advisors Private Limited, our joint venture, provides investment advisory services in respect of IBF-I and India Build-Out Fund-I (A) (IBF-IA) launched by Milestone Private Equity Fund. We hold a 50% equity interest in Milestone Religare. It also provides investment advisory services to Milestone Army Trust. Capstone Capital Services Private Limited, our joint venture, provides investment advisory services in respect of Special Opportunities Fund-I (SOF-I). We hold 50% equity interest in Capstone Capital. Milestone Ecofirst Advisory Services (India) Private Limited, our joint venture with J Leon Trading Limited, a company incorporated in U.K., which provides consultancy services in relation to sustainable development solutions. We hold 50% equity interest in Milestone Ecofirst. Milestone Projects and Property Management Private Limited, our wholly owned subsidiary, provides property and project management services to real estate funds advised by us. Milestone Portfolio Management Services Private Limited, Milestone Investment Advisory Services Private Limited, Milestone Trusteeship Services Private Limited and Jevir Leasing & Finance Limited are also our Indian subsidiaries. Omega Global Mauritius Ltd. is our wholly-owned subsidiary incorporated in Mauritius. Milestone Capital Management LLC, a wholly owned subsidiary of Omega Global, is engaged in the business of providing investment advisory and management services to Milestone Fund LLC. Milestone Religare Capital Management Ltd., (Milestone Religare- Mauritius) our joint venture with Religare Capital Markets Plc (formerly known as Religare Hichens Harrison Plc), provides investment advisory and management services to India Build Out Fund Limited (Offshore IBF). We, through Omega Global, hold 50% equity interest in Milestone Religare- Mauritius. Milestone Mercator Maritime Management Limited, a wholly owned subsidiary of Omega Global, provides investment advisory and management services to Blue Ocean Maritime Fund. IL&FS Milestone Capital Management LLC, (IL&FS Milestone - Mauritius), a wholly owned subsidiary of Omega Global, advises funds focused on Yield Driven Real Estate Investments.

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Our Business Operations We are a professionally managed company. We share our experience in the investment advisory services across our Joint Ventures and Subsidiaries, especially in the area of managing funds, marketing and distribution. We have divided our service offerings into the following broad categories: Investment Advisory Services to Funds and Schemes Portfolio Management Services Projects and Property Management Services Consultancy Services Trusteeship Services Financial Services These services provided by us are discussed in detail hereunder: Investment Advisory Services to Funds and Schemes We provide investment advisory services to various funds (organized as trusts under Indian law) and schemes with AUM of approximately Rs. 31,194.50 million for approximately12,700 fund investors across various schemes we have advised as of March 31, 2010. Typically we advise the funds, inter alia, on the following activities: Setting-up of the fund; Identifying appropriate investment and exit opportunities; Assisting the fund in capital raising activities; The issuance of units of the fund to investors and/ or contributors of capital to the fund in accordance with the contribution arrangement between the investors and the fund; Management of the investments of the funds; Assisting the funds in risk management; Ensuring regulatory compliances as applicable; Maintaining proper books of accounts for the funds and making books available to the trustees; and Providing fund investors with periodic annual reports of the funds as may be required under law Process of Setting up a Fund The general process of setting up a fund is described below. i. Sector Identification (Week 1 Week 7): The sector in which the proposed fund is to be set up is identified pursuant to internal research done by business strategy team which reviews the viability of the proposed fund idea. The business strategy team studies the market, the number of existing funds in that sector, the investment philosophy and investment focus for that sector. Investor Appetite (Week 4 Week 8): The business strategy team obtains informal feedback from distributors and works towards an understanding of investor appetite for that sector. Structure Framework (Week 8 Week 9): The legal structure of the fund is reviewed and finalized. Either a new trust is registered or a new scheme is floated by an existing trust. Management / Board Approval and appointment of intermediaries (Week 10): Internal approvals are obtained from the relevant board of directors and the managing director. Additionally, various documents are prepared and auditors, legal advisors and tax advisors are appointed. Team Building and identification of JV partner, if required(Week 10- Week 16): An investment team is identified and assembled along with any potential joint venture partners for the fund.

ii.

iii.

iv.

v.

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vi.

Deal Pipeline (Week 10 onwards): The investment team begins the process of identifying investment opportunities and build up a deal pipeline. Identifying Distributors (Week 10): The investment advisor of the fund identifies distributors through their existing relationships and explores relationships with new distributors for the distribution of their products. Preparation of documents and SEBI filing of PPM (Week 11- Week 15): Several documents such as a presentation, a subscription agreement and the private placement memorandum (PPM) are prepared. The PPM is subsequently filed with SEBI and, in the event of any comments from SEBI, a revised PPM is submitted to SEBI. The PPM contains details of the fund size, Seed Capital, fund structure, investment philosophy and methodology, investment focus, key terms and details of the initial / final closing parameters such as date and amount. These parameters are discretionary and the trust may decide to close the fund at an amount lower than the parameters mentioned in the PPM. Further, an investment advisory agreement is entered between the investment advisor and the trust. Due diligence by the identified distributors and entering into a distribution agreement (Week 15 Week 17): Once the distributor is identified after initial discussions, a detailed due diligence of the fund is undertaken by the distributors and the terms decided for entering into commercial arrangements with the investment advisors and the investment advisor enters into agreements with distributors. Fund Raising Activities (Week 17 Week 52): The distributor arranges meetings between the fund raising and investment teams with prospective investors. One to one meetings are also arranged with specific investors such as those with whom the investment advisory of the fund has a direct relationship. They also approach prospective institutional investors which include insurance companies, banks, pension funds and corporates. Once their investment committee sanction an investment in the fund and a sanction letter is issued, the prospective investor conducts a legal due diligence of the fund documents and meets with the product team of the fund. Initial closing (Week 17- Week 30): Subsequent to receipt of the initial closing amount for the fund as mentioned in the PPM, the trustee arranges the initial closing. Deployment of funds (After initial closing): The investment team identifies the potential opportunities and puts forward the proposal to the investment committee for approval. The investment advisor may carry out additional legal and financial due diligence. Post approval from the investment committee, the proposal is sent to the trustees for their approval and the amount raised is then deployed.

vii.

viii.

ix.

x.

xi.

xii.

The above timelines are indicative and in the event that the Seed Capital is not available then the entire process from point (vii) above may get delayed. Investment Process As an investment advisor we indentify and source projects, advise on decisions as to investment, divestment, drawdown of Committed Corpus and distribution of the funds money in relation to schemes floated by various funds, carry out appraisal and detailed legal, tax, business and financial due diligence of the investment proposals and/ or company in which the investment is proposed to be made (the Portfolio Company) and negotiate relevant shareholders and subscription agreements for the proposed investment in the Portfolio Company. The screening process begins when a new opportunity within the scope of the fund is identified. The investment advisor member who has relevant expertise in the area of the new opportunity makes an initial screening. The screening focuses on characteristics of management, market dynamics and opportunity and company performance. Companies which pass this initial screening are discussed amongst the investment advisors in order to leverage the teams collective experience in identifying potential issues and then presented to the investment committee for a preliminary approval.

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New investments by the fund and exit from any investments made by the fund are subject to approval by the investment committee comprising of investment professionals with requisite expertise in finance, business, management, law and relevant sectors in which the schemes we have advised have invested. Pursuant to preliminary due diligence, we refer an investment proposal to the investment committee, generally in the form of an investment memorandum, which examines such proposals. At this stage, an indicative non-binding term sheet is issued to the Portfolio Company subject to the satisfactory completion of detailed due diligence on the Portfolio Companys business operations. The investments are made primarily in equity and equity-related instruments including, inter alia, convertible debentures and preference shares and other permitted instruments in entities engaged in the relevant sectors. Considering the return of investments from the Committed Corpus and relevant risk profile, as applicable, we provide investment advice and recommend the appropriate instrument of investment based on the need and characteristics of the Portfolio Company. The companies which obtain preliminary approvals from investment committee are assigned members of the investment advisory team, who work together on the due diligence, along with building relationships with the company management. The due diligence process on each deal leverages both internal and external resources to ensure comprehensive review of such items as market factors, management team, long-term defensibility, customer satisfaction, analyst outlooks, financial analysis, accounting diligence, legal diligence and fund returns. Upon completion of due diligence and financial analysis of the potential deal, the investment advisor presents the proposal to the investment committee for their final approval. The investment committee reviews the analysis and the recommendation of the investment advisor and decides, by way of majority votes whether to recommend the investment proposal to the board of trustees. Upon approval by a majority, the proposal is recommended to the board of trustees of the fund. Upon approval of the board of trustees, legal documentation is drafted and executed. Upon investment in the Portfolio Companies, we provide assistance to the Portfolio Companies in financial, managerial and operational matters focused on improvement in the business expertise, productivity and profitability of the Portfolio Companies. The performance of the funds investment in the Portfolio Company is subject to periodic review of the investment committee. Based on the success of the proposed investment, the cost of the due diligence and documentation is either borne by us, the Portfolio Company or by the fund. Fees and Expenses In relation to our investment advisory services, we generate income principally from fees that is based on contractually specified percentages. We are entitled to: Fund management fees or advisory fees: We are entitled to advisory or management fees per annum in connection with the Committed Corpus towards the relevant scheme during the commitment period. It varies for the different funds and ranges from 1.5% to 2.0% per annum. Set up fees: We also receive set up fees which covers fees payable for the purpose of organizing the fund and obtaining contribution towards capital for the schemes. It is a one-time fee earned on the funds committed and is payable to us at the initial or final closing of the scheme based on receipt of an agreed amount of Committed Corpus. In terms of our investment advisory arrangements, the set up fees ranges from 1% to 2% of the committed amount. The set up fees is recognized over the life of the fund. Carried Interest: We are also entitled to receive a certain percentage of return (as Carried Interest) out of the net profits of the scheme, as may be specified in the private placement memorandum of each scheme. It is receivable on the income earned over and above the threshold rate of return. Under our current investment advisory arrangements the Carried Interest ranges from 10% to 30%. All reasonable expenses incurred by the Company in connection with the investment advisory services of various funds and schemes are also reimbursed.

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The investment advisory operations that we undertake either directly or through our Joint Ventures are described in the charts below:

Chart I: Investment advisory operations by the Company

Chart II: Investment advisory operations by the Joint Ventures

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The timing and approach for exiting an investment differs in each case and is based on factors including business cycle timing, the Portfolio Companys competitive position, the status of operating enhancements, in addition to general economic and capital market conditions. Investments that we advise on are primarily growth capital oriented. We provide investment advice to equity funds investing in various sectors including real estate, logistics, health care and education and infrastructure ancillary activities. Currently we advise eight schemes in various sectors. Additionally, we have also launched four schemes, one of which is a domestic scheme and three schemes have been launched outside India. Real Estate Sector Schemes focused on Real Estate Investments The Company has advised on a wide range of investments made by MDSI and MDSII focused on real estate investments. We have seven investment professionals who have expertise in the real estate sector. MDS-I and MDS-II are two schemes floated by the Milestone Real Estate Fund (formerly known as the India Real Opportunity Venture Capital Fund), a SEBI registered venture capital fund organized as a trust under Indian law. The Milestone Real Estate Fund has been constituted with tenure of 20 years to float various schemes. MDS-I was launched in June 2007. MDS-I is for a term of five years, extendable by one year at the option of the investment advisor or the trustee of the fund and further extendable for a period of one year, if required. MDS-I has a Committed Corpus of Rs. 2,292.75 million. 438 investors had invested in MDS-I. MDS-II was launched in April 2008. MDS-II is for a term of four years, extendable by one year at the option of the investment advisor or the trustee of the fund and further extendable for a period of one year, if required. MDS-II has a Committed Corpus of Rs. 5,033.65 million. As of March 31, 2010, 3,790 investors invested in MDS-II. Milestone Capital Management LLC provides investment advisory services to Milestone Fund LLC incorporated as a limited liability company with limited life in Mauritius and which holds a Category 1 Global Business Licence. Milestone Fund LLC is authorised as a Professional Collective Investment Scheme by the Mauritius Financial Services Commission. Milestone Fund LLC is focused on the real estate development sector in India for investment purposes. The Company has a sub-investment advisory arrangement with Milestone Capital Management LLC, whereby the Company acts as an Indian advisor and assists Milestone Fund LLC to make direct or indirect investments in companies in India. As a subinvestment advisor, the Company is responsible for undertaking due diligence of Indian portfolio companies, identifying investment opportunities and monitoring investments made by the fund. Milestone Fund LLC was launched in the year 2007 and has a Committed Corpus of US$ 81.46 million (i.e. Rs. 3,677.10 million). Investments we have advised on: 1. MDS-I has fully committed its capital across various cities in India. The details of certain investments we have advised on are as follows: City Location Nature of Project Name of the Developer Amounts committed (as of March 31, 2010) (In Rs. Million) 220.00

Chennai

Koyembedu, Shollinganallur, Pallavakkam, Thiruvanmiyur

Residential

Ramaniyam Group

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City

Location

Nature of Project

Name of the Developer

Amounts committed (as of March 31, 2010) (In Rs. Million) 104.00 64.00 32.00 400.00 300.00

Chennai Chennai Chennai Kolkata Mumbai

Siruseri Nelson Manickam Road Pallaikarnai Sodepur Kalina

Residential Commercial Mixed use Mixed use Residential

Ramaniyam Group Ramaniyam Group Ramaniyam Group Godrej Properties Limited Ultra Space Developers Private Limited (Dheeraj Realty Group)

2.

MDS-II has invested in three cities in India. As of March 31, 2010, approximately Rs. 2,285.40 million has been committed towards various investments and expenses. The details of certain investments we have advised on are as follows: City Location Nature of Project Name of the Developer Amounts committed (as of March 31, 2010) (In Rs. Million) 461.00 200.00

Kolkata Mumbai

Sodepur Kalina

Mixed use Residential

New Delhi 3.

Dharuhera

Warehousing and logistics

Godrej Properties Limited Ultra Space Developers Private Limited (Dheeraj Realty Group) Cochin India Logistics Private Limited

324.00

Details of investment made by Milestone Fund LLC are as follows: City Location Nature of Project Warehouse and logistics Name of the Developer Cochin India Logistics Private Limited Amounts committed (as of March 31, 2010) (In US$ million) 6.00

New Delhi Fees

Dharuhera

The details of fee income recognized by the Company in the last three Fiscals are set forth in the table below: (in Rs. million) Particulars Fiscal 2010 Fiscal 2009 Fiscal 2008 Management 166.44 125.70 30.57 fees Set up fees 34.47 52.42 9.17 Schemes focused on Yield driven Real Estate Investments Further, we through, IL&FS Milestone Realty, provide investment advisory services in relation to IL&FS Milestone Fund-I, IL&FS Milestone Fund-II, IL&FS Milestone Fund-II-(A). IL&FS-I, IL&FS-II and IL&FS II-(A) were also launched by Milestone Real Estate Fund. The main objective of the schemes are to invest in companies which own or lease assets including inter alia commercial offices, retail spaces, warehouses, and IT parks. These schemes are primarily focus

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Yield Driven Real Estate Investments across India. We invest in properties where construction has been completed and such property is leased out to a variety of tenants and earn lease rental income for a period of three to four years and subsequently intend to exit with a moderate to high capital appreciation. We, through IL&FS Milestone Realty, also advice the Milestone Army Navy Trust, a private Indian trust, which was formed in the year 2008 with a corpus of Rs. 350.00 million. In November 2007, Milestone Real Estate Fund and Milestone Army Navy Trust, entered into a coinvestment arrangement in terms of which the Milestone Army Navy Trust has co-invested with Milestone Real Estate Fund in entities under IL&FS-I. IL&FS-I was launched in the year 2007. IL&FS-I is for a term of four years, extendable by one year at the option of the investment advisor or the trustee of the fund and further extendable for a period of one year, if required. IL&FS-I has a Committed Corpus of Rs. 4,910.00 million. As of March 31, 2010, 3,163 investors had invested in IL&FS-I. IL&FS-II was launched in the year 2009. IL&FS-II is for a term of four years and extendable by one year at the option of the investment advisor or the trustee of the fund and further extendable for a period of one year, if required. IL&FS-II has a Committed Corpus of Rs. 4,785.30 million. As of March 31, 2010, 3,200 investors had invested in IL&FS-II. IL&FS II (A), which was launched in the year 2009. IL&FS-II (A) is for a period of four years, extendable by one year at the option of the investment advisor or the trustee of the fund and further extendable for a period of one year, if required. IL&FS-II (A) has a Committed Corpus of Rs. 235.00 million. For IL&FS-II (A), we are currently raising funds for investments. As of March 31, 2010, 24 investors had invested in IL&FS-II (A). IL&FS Milestone Mauritius, provides investment management services to IL&FS Milestone Core Fund LLC. The Core Fund is a public company with limited liability, incorporated in the Republic of Mauritius. The Core Fund is regulated by the Mauritian Financial Services Commission and is focused on investments in Indian commercial properties. The Core Fund is focused on Yield Driven Real Estate Investments. IL&FS Milestone Mauritius has entered into an arrangement with an investment advisor in Mauritius whereby the investor advisor provides investment advisory services to IL&FS Milestone Mauritius with respect to the Core Funds investments and divestments in ready to let real estate properties. Investments we have advised on 1. The corpus of IL&FS-I along with the corpus of Milestone Army Navy Trust, has also been fully invested as follows: City Location Nature of Project Amounts Committed (as of March 31, 2010) (In Rs. Million) 562.40 1,400.00 458.20 420.00 1,280.00 465.00

Kolkata Mumbai Mumbai New Delhi Pune Rajkot 2.

Salt Lake Bhiwandi Goregaon Dharuhera Kalyanainagar Nava Mava Road

IT/ Commercial Warehouse IT/ Commercial Warehouse IT/ Commercial Mixed used development

IL&FS-II began investing in April 2010 and as of April 30, 2010 a total of Rs. 1,090.00 million of the Committed Corpus of IL&FS-II had been invested.

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Returns The details of returns paid out to fund investors under IL&FS-I and IL&FS-II are as follows: IL&FS I Period Yield Percentage*

From October 2007 to January, 2008 10.90% From February 2008 to April 2008 11.90% From May 2008 to July 2008 12.00% From August 2008 to October 2008 12.00% From November 2008 to January 2009 12.00% From February 2009 to April 2009 12.00% From May 2009 to July 2009 11.00% From August 2009 to October 2009 11.00% From November 2009 to January 2010 11.00% February 2010 to April 2010 11.00% *Yield percentage has been calculated on pre-tax annualized basis, payable quarterly. IL&FS-II Period Yield Percentage* From February 2009 to April 2009 8.00% From May 2009 to July 2009 8.00% From August 2009 to October 2009 6.67% From November 2009 to January 2010 6.67% From February 2010 to April 2010 8.67% *Yield percentage has been calculated on pre-tax annualized basis, payable quarterly. IL&FS-II (A) Period Yield Percentage* From November 2009 to January 2010 6.67% From February 2010 to April 2010 8.67% *Yield percentage has been calculated on pre-tax annualized basis, payable quarterly Fees The details of fee income recognized by IL&FS Milestone Realty in the last three Fiscals is set forth in the table below: (in Rs. million) Particulars Fiscal 2010 Fiscal 2009 Fiscal 2008 Management fees 109.77 78.37 38.94 Set up fees 48.64 24.33 24.50 Healthcare and Education Sector We, through Milestone Religare, provide investment advisory services in relation to India BuildOut Fund-I and India Build-Out Fund-I (A) launched by Milestone Private Equity Fund. Milestone Private Equity Fund is a SEBI registered venture capital fund, organized as a trust under Indian law. We are currently raising funds for investments in IBF-I (A). Milestone Private Equity Fund has been constituted for a period of 20 years to float various schemes.

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IBF-I has made and intends to make equity and equity-linked investments in Indian companies, engaged primarily in industries such as education and skills, healthcare, allied services, wellness and infrastructure ancillary activities. Milestone Religare benefits from expertise of promoters of Religare Venture Capital Limited in the domain of healthcare, retail wellness and diagnostics. Milestone Religare Mauritius provides investment advisory services to Offshore IBF, incorporated as a limited liability company with limited life in Mauritius and which holds a Category 1 Global Business Licence. It is authorised as a Professional Collective Investment Scheme by the Mauritius Financial Services Commission. Offshore IBF is focused on the education and skills, healthcare, allied services, wellness and infrastructure ancillary activities in India for investment purposes. Further, Offshore IBF is under the process of raising funds and intends to raise up to US$ 250.00 Million (i.e. Rs. 11,285.00 million). Investments we have advised on 1. IBF-I was launched in the year 2008. IBF-I is for a term of five years, extendable by one year at the option of the investment advisor or the trustee of the fund and further extendable for a period of one year, if required. IBF-I has a Committed Corpus of Rs. 3,552.80 million. As of March 31, 2010, 2,086 investors had invested in IBF-I. Milestone Army Trust, with a corpus of Rs. 100.00 million has co-invested with IBF-I. The details of investment commitments of the same are as follows: Nature of segment Invested in Healthcare Healthcare Nature of subsegment Super specialty hospital Multi-specialty hospital Name of the Company invested in HealthCare Global Enterprises Limited Krishna Institute of Medical Science Limited Resonance Eduventures Private Limited IMS Resources Limited Learning Private Amounts committed (as of March 31, 2010) (In Rs. Million) 312.00 600.00

Education

Education

Coaching for engineering entrance examinations Coaching for MBA entrance examinations

600.00

250.00

Fees The details of fee income recognized by Milestone Religare in the last three Fiscals is set forth in the table below: (in Rs. million) Particulars Fiscal 2010 Fiscal 2009 Fiscal 2008 Management fees 71.86 Set up fees 10.61 Special Opportunities Fund We, through Capstone Capital, provide investment advisory services in respect of Special Opportunities Fund-I (SOF-I). Capstone Capital is a joint venture between Milestone Capital Advisors Limited and Money Matters Financial Services Limited. Money Matters is engaged in the business of providing investment banking financial advisory services. SOF-I is a scheme of floated by the Special Opportunities Fund, a SEBI registered venture capital fund, organized as a trust under Indian law. SOF-I intends to provide investors with the ability to invest in

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opportunities arising out of special, out-of-ordinary situations that companies and/or groups face at various points of time, with a special emphasis on the infrastructure sector. Such opportunities could arise out of temporary gaps in the capital structure, buy-backs or open offers, mergers or demergers, family settlements, distressed assets, acquisition financing, debt restructuring and management buyouts, among other situations. SOF-I was launched in February 2010. SOF-I is for a period of five years, extendable by one year at the option of the investment advisor or the trustee of the fund and further extendable for a period of one year, if required and intends to raise Rs. 4,000.00 million. SOF-I intends to make investments in equity, equity-linked instruments and secured debt with an equity upside. Shipping Sector We, through Milestone Mercator, provide investment advisory services in respect of Blue Ocean Maritime Fund. Milestone Mercator is a wholly owned subsidiary of Omega Global. The Blue Ocean Maritime Fund is incorporated as a Limited Partnership under Exempted Limited Partnership Law in the Cayman Islands. Blue Ocean Maritime Fund has been set up to pool contributions on a private placement basis primarily for the acquisition and operation of maritime vessels and to sell the same at an appropriate time. Blue Ocean Maritime Fund intends to maintain a diversified portfolio of long term and short term contracts and will deploy a majority of the assets on long term charter, which we believe will result in stable yield and deploy few vessels on spot term charter to ensure maximum overall returns and capitalize on market volatility. The Blue Ocean Maritime Fund was launched in the year 2010. The Blue Ocean Maritime Fund is for a period of five years, extendable by one year at the option of the investment advisor or the trustee of the fund and further extendable for a period of one year, if required. It has a target fund size up to USD 100.00 million (i.e. Rs. 4,514.00 million). We intend to leverage from the expertise and experience of Mercator Lines in the shipping industry. We are in the process of entering into a joint venture agreement with Mercator Lines. Portfolio Management Services The Company is a registered portfolio manager with SEBI and provides portfolio management services. We launched our portfolio management services in the year 2008. We provide portfolio management services to 173 clients for Nifty-linked structured products and had AUM amounting to Rs. 325.00 million as of March 31, 2010 under our PMS division. We have recently launched Milestone Bullion Scheme I focused on investments in silver, gold forward/ gold deposit schemes and gold-linked structured products Gold-linked structured products are nonconvertible debentures where interest rates are linked to the movement of gold spot prices. The scheme has been designed specifically to provide investors protection from adverse market movement and to provide risk adjusted returns. The fund investors have the option to take delivery of physical silver/ gold at the time of exit for the amount allocated to silver and gold assets. The scheme will be managed by our in-house research team. For the distribution of our PMS services to our target client base, we have entered into distribution arrangements with various banks and private wealth management groups whereby the distributors introduces the PMS offered by us and provides relevant marketing material to the prospective clients and reviews the prospective clients for the purposes of product suitability and risk profile. Projects and Property Management Services We, through Milestone Property, manage our project and property management division. Milestone Property is a wholly owned subsidiary of the Company. Our real estate projects and property management services include leasing and assets planning, operation and cost efficiency, facility management, rent and common area management and marketing and promotions of the property. Our project and property management division provides operational support in relation to properties where the schemes we have advised have invested to other real estate developments and investment companies.

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Consultancy Services Sustainable Development We hold 50% equity interest in Milestone Ecofirst and J Leon Trading Limited holds the balance 50%. Milestone Ecofirst was incorporated in the year 2008. We, through Milestone Ecofirst, are engaged in the business of providing consultancy services in relation to clean technology and sustainable development solutions from planning to monitoring execution of the plan, energy management strategies, integrated water management solutions, assist in obtaining green building certification and master planning. Trusteeship Services We, through Milestone Trusteeship, provide trusteeship services to funds we advise. We are the trustees for the Milestone Private Equity Fund and the Milestone Army Trust. Milestone Trusteeship is a wholly-owned subsidiary of the Company. Financial Services Jevir L&F is a non-deposit taking NBFC registered with RBI. The Company holds 74.82% equity interest in Jevir L&F. It is engaged in the business of lending and as of March 31, 2010 had disbursed loans of Rs. 2.50 million on which Jevir L&F received process fees and interest income. Human Resources As at May 31, 2010, we had over 49 personnel, with over 20 investment professionals, who are permanent employees of the Company. The Companys permanent employees include investment professionals and personnel engaged in human resources and administration, fund raising and investor relations, brand and corporate communication, business strategy and development, project and consulting teams, finance secretarial and legal functions. We strive to maintain a work environment that fosters professionalism, integrity, excellence and cooperation among our employees. We believe that our ability to grow depends to a significant extent on our ability to attract and retain the talent in the market place. A key element of our human resources strategy includes our proposal to pay benefits out of Carried Interest we are entitled to in respect of the schemes we advise. Risk Management Risk management is one of our key focus areas because effective risk management is critical to our business. We maintain a rigorous investment process and a comprehensive due diligence approach across all of the schemes we advise. Our investment professionals evaluate the risk management of each of the schemes we advise. Additionally, all investments by the schemes we advise are subject to a review and evaluation process by our investment committees. Upon identification of investment projects, the scheme considers the internal rate of return (IRR) as the key criterion. Market forecasts, price trends for specific market segments and macroeconomic performances, which are used to evaluate IRR, are provided by both our investment professionals and external analysts. We have adopted certain policies and procedures in managing the various risks application to our operations, including: Investments Related Risks: Risk of Portfolio Companies: The investment performance of the schemes we advise depends upon the performance of the Portfolio Companies. The performance of the Portfolio Companies and the value of the schemes interest in the Portfolio Companies may be adversely affected by numerous factors, including, for example (i) the supply of and demand for the goods and services produced, provided, or sold by the

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Portfolio Companies; (ii) changes and advances in technology, that may render goods and services sold by the Portfolio Company obsolete; in case of investment in pre-leased properties, the scheme may be exposed to direct risks in terms of the tenants ability to continue to occupy the premises and payment of rent as and when due; (iv) business, economic and political conditions in India; and (v) competition from other companies The investment professionals, while investing, are focused on diversification of the portfolio of projects, types of properties and geographical characteristics. While identifying properties for investments, we evaluate the quality of tenants and assess the balance lock-in period the tenants are subject to. We may also assist in obtaining a no-objection certificate in the event that the target property is subject to certain encumbrances. Further, our investment professionals continuously monitor the policy landscape affecting the sectors of focus. Availability of Investment Opportunities: The business of identifying and structuring investments is competitive in nature and involves a high degree of uncertainty. We share our experience in investment advisory services across various sectors and the technical aspects of our business across our Subsidiaries and Joint Ventures, which we believe allows research, operational and marketing synergies. Market Risks: We continuously monitor various sectors relevant to the schemes we have advised and focus on diversifying market risks. Financial Risks: The projects we have advised on may also be exposed to interest rate risks. Operational Excellence Initiatives Systems: On July 16, 2008, Astria, s.r.o. Nitra, Slovakia, awarded to us Management Quality Certificate No. QMS-383-2008 confirming to Quality Management System Standard ISO 9001:2000 in connection with managing funds for investment in various sectors, identifying and facilitating acquisition of assets in the real estate sector. Intellectual Property Brand name and logo recognition are important to our business. We have registered copyright for our trade name Milestone Capital Advisors Private Limited. The Company conducts its business using the Milestone brand. Our corporate Promoter, Milestone Fincap, has made three applications for registering the brand name Milestone which are currently pending before the Trade Mark Registry, Mumbai. The Company has entered into a licence deed dated June 21, 2010 with Milestone Fincap, whereby the Company has a non-exclusive, revocable licence to use and reproduce the Milestone trademark. For further details, see the section History and Certain Corporate Matters Material Agreements License Deed dated June 21, 2010 between the Company and Milestone Fincap on page 91. Insurance The Company currently maintains insurance cover, which covers fire and allied perils, burglary, fidelity guarantee and public liability. Further, we also have insurance cover in relation to special contingency insurance, group personal accident insurance for employees, laptop policy and group medi-claim policy. The Company paid Rs. 0.56 million in Fiscal 2010 in insurance premia. The Company maintains insurance on personnel and property in amounts believed to be consistent with industry practice. Notwithstanding the insurance coverage that the Company carries, the occurrence of an event/ accident that causes loss in excess of limits specified under the relevant policy, or losses arising from events not covered by insurance policies, could materially affect the Companys financial condition and future operating results.

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Competition We compete with many other firms in all aspects of our business, including raising funds, seeking investment opportunities and hiring and retaining professionals. In India, we compete with various mutual funds registered with SEBI, various private equity funds and PMS of several banks and insurance companies. Some of our competitors may have more experience than us and more resources than us. For additional information regarding the competitive risks that we face, see section Risk Factors on page xii. Regulatory Matters Our business and investment activities in India and overseas are subject to a variety of regulatory regimes. The extensive regulation of our business affects our activities and creates the potential for significant liabilities and penalties. Increased regulatory focus could result in additional burdens on our business. For further details of applicable laws in India, see section Regulations and Policies on page 80. Properties The Registered Office and main corporate office, located at 602, Hallmark Business Plaza, Sant Dyaneshwar Marg, Opp. Guru Nanak Hospital, Bandra (East), Mumbai 400 051, is not owned by the Company. The Company also has an additional corporate office, located at 605 and 606, Hallmark Business Plaza, Sant Dyaneshwar Marg, Opp. Guru Nanak Hospital, Bandra (East), Mumbai 400 051, which is not owned by it. In terms of the lease arrangements, the Company pays an annual rent of Rs. 15.56 million for these premises. We believe that our existing facilities are adequate to meet our current requirements and we anticipate that suitable additional or substitute space will be available, as necessary, upon favourable terms.

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REGULATIONS AND POLICIES The following description is a summary of the relevant regulations and policies, as prescribed by the GoI or State Governments which are applicable to the Company, its Subsidiaries and Joint Ventures. The information detailed in this chapter has been obtained from publications available in the public domain. The regulations set out below may not be exhaustive, and are only intended to provide general information to the investors and are neither designated not intended to substitute for professional legal advice. We are engaged in the business of providing varied financial services, including investment advisory services, financial services, wealth management and portfolio management services. We may be required to obtain licenses and approvals depending upon the prevailing laws and regulations as applicable. We have received the necessary consents, licenses, permissions and approvals from the Government and various governmental agencies required for our present business. For details of such approvals, please see the section Government Approvals on page 198. Investment Advisory Services Draft SEBI (Investment Advisory) Regulations, 2007 The SEBI has framed draft SEBI (Investment Advisers) Regulations, 2007 (Draft Regulations) to bring investment advisers under the regulatory framework. The Draft Regulations will applicable only after the Draft Regulations are brought into effect by SEBI through a notification. In terms of the Draft Regulations, an investment adviser is any person who, for consideration, is engaged in the business of providing investment advice to others and as part of regular business, issues or publishes reports or analyses containing investment advice The Draft Regulations provide inter alia the eligibility criteria and the procedure for obtaining a certificate of registration to carry on investment advisory services. It requires investment advisors to be members of a self-regulatory organization as defined therein. With regard to the general obligations and responsibilities as laid out in the Draft Regulations, an investment advisor would also be required to comply with certain disclosure norms and disclose inter alia all material information about itself and its business to a prospective client. Portfolio Management Services Portfolio Manager Regulations The Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993 (Portfolio Manager Regulations) provide that no person shall carry on activity as a portfolio manager unless he holds a certificate granted by SEBI under the Portfolio Manger Regulations. A portfolio manager has been defined as a person who, pursuant to a contract or arrangement with a client, advises or directs or undertakes on behalf of the client (whether as a discretionary portfolio manager or otherwise) the management or administration of a portfolio of securities or the funds of the client. The Portfolio Manger Regulations lay down inter alia the eligibility criteria, conditions for grant of certificate to a Portfolio Manager and their general responsibilities. Further, the Portfolio Manager Regulations prescribe a code of conduct which shall be followed by every Portfolio Manager. A Portfolio Manager must fulfil the prescribed capital adequacy requirement of net worth of not less than Rs. 20 million. NBFC Regulations The Reserve Bank of India Act, 1934 The RBI is entrusted with the responsibility of regulating and supervising activities of NBFCs by virtue of the power vested in it under Chapter III B of the Reserve Bank of India Act of 1934 (RBI Act). The company will be treated as an NBFC (a) if its financial assets are more than 50% of its total assets (netted

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off by intangible assets); and (b) income from financial assets should be more than 50% of the gross income. Both these tests are required to be satisfied as the determinant factor for principal business of a company. The RBI Act mandates that no NBFC shall commence or carry on the business of a nonbanking financial institution without obtaining a certificate of registration. In case an NBFC does not accept deposits from the public (NBFC-ND), it shall obtain a certificate of registration without authorisation to accept public deposits. The NBFC must also have a net owned fund of at least Rs. 2.5 million but not exceeding Rs. 20 million. Under Section 45 IC of the RBI Act, every NBFC must create a reserve fund and transfer thereto a sum not less than 20% of its net profit every year, as disclosed in the profit and loss account and before any dividend is declared. Such a fund is to be created by every NBFC irrespective of whether it is an NBFC-ND. Further, no appropriation can be made from the fund for any purpose without prior written approval of the RBI. As per the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998 (Notification No.DFC.118/DG(SPT)-98) dated January 31, 1998 (as amended from time to time and last amended on July 01, 2006) (Public Deposit Regulations), an NBFC-ND is entitled to certain exemptions from the norms and conditions stipulated on NBFCs taking deposits. In order to benefit from these exemptions, the board of directors of the NBFC-ND must pass a resolution for non-acceptance of public deposits and such NBFC-ND should not have accepted any public deposits during the relevant period/ year. Monitoring and Rating of non-deposit taking NBFCs The RBI has directed vide Notification No. RBI/2008-09/194 dated September 24, 2008 all non deposit taking NBFCs with an asset size between Rs. 500 million and Rs. 1000 million to file quarterly returns with basic information concerning the business of the NBFC. The RBI now mandates vide Notification No. RBI /2008-09 /372 dated February 04, 2009 that all NBFCs (both deposit taking and non-deposit taking) with an asset size of Rs 1,000 million and above will furnish information to the RBI, about downgrading / upgrading of assigned rating of any financial product issued by them, within 15 days of such a change in rating. Venture Capital Fund The SEBI (Venture Capital Fund) Regulations, 1996 defines a venture capital fund as a fund established in the form of a trust or a company including a body corporate having a dedicated pool of capital raised in the manner specified in the regulations and invests in accordance with the regulations. These entities are required to be registered under this regulation. The venture capital fund can raise money buy of issuing units to any person whether Indian, foreigner or NRI, provided such investment is less than Rs. 50.00 million. This restriction, however, does not apply to investment made by the employees, directors or the principal officers of the company or by the trustee where the venture capital fund is a trust. Further, the venture capital fund is mandated to invest in at least 66.67% of the fund raised in unlisted equity shares and only 33.33% of the fund shall be invested in initial public offers of companies. A venture capital fund is not cannot list the units issued on any recognized stock exchange till the expiry of thee years from the date of issue to the investors. A venture capital funds shall also not invite any member of the public by way of advertisement to subscribe to its units. It can receive investments only through private placements of its units. Miscellaneous Indian Trusts Act, 1882 The Indian Trusts Act, 1882 (Indian Trusts Act) defines law relating to private trusts and trustees. Under the Indian Trusts Act, a trust can be created for any lawful purpose and can be created by deed, will or even word of mouth. However, a trust of immovable property can be created only by a non-testamentary instrument signed by the author of the trust and is registered, or by the will of the author. The trustee cannot renounce the trust except with the permission of the civil court or the beneficiary, if the beneficiary is a major, or by virtue of special power in the instrument of trust. Once a trustee accepts the trust, he is bound

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to fulfil the purpose of the trust and to obey directions given at the time of creation of the trust. The duties of the trustee include protecting the title to trust property, converting perishable property to permanent and immediately profitable character, investing trust money in prescribed securities only and maintaining proper accounts and information. The trustee can be made liable for breach of trust under Section 23 of the Indian Trusts Act. The Indian Trusts Act vests certain powers on the trustee to perform his duties such as the power to covey property when authorised to sell, right to apply to the court for an opinion on the management of trust property, right to settlement of accounts and to perform all acts necessary and reasonable and proper for trust property or protection of beneficiary. The beneficiary is entitled to all the benefits arising out of the trust property and the proper management of the trust and is also granted the right to proper trustees and the right to compel trustee to perform an act of duty. Under the Indian Trusts Act, a trust created by a testament can be revoked at the pleasure of the testator. A trust created otherwise by will can be revoked either by the consent of all beneficiaries if they are competent to contract or in exercise of power of revocation expressly reserved by the author of the trust, if the trust has been declared by a nontestatory instrument or by word of mouth. Shops and Establishments legislations The provisions of various Shops and Establishments legislations, as applicable, regulate the conditions of work and employment in shops and commercial establishments and generally prescribe obligations in respect of inter alia registration, opening and closing hours, daily and weekly working hours, holidays, leave, health and safety measures and wages for overtime work.

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HISTORY AND CERTAIN CORPORATE MATTERS Brief History of the Company The Company was originally incorporated as Skyzen Investment Advisors Private Limited on June 7, 2005 as a private limited company under the Companies Act. The name of the Company was changed to Milestone Capital Advisors Private Limited and a fresh certificate of incorporation dated April 12, 2007 was issued by the RoC. The name of the Company was changed to indicate the change in the management of the Company. The name of the Company was further changed to Milestone Capital Advisors Limited consequent upon conversion of the Company to a public limited company and a fresh certificate of incorporation dated May 18, 2010 was issued by the RoC. Previously, Milestone Property, Milestone Trusteeship, Milestone Investment, Milestone PMS and Jevir L&F were direct subsidiaries of our Promoter, Milestone Fincap. Pursuant to a reorganization plan, the Company acquired the entire shareholding of Milestone PMS with effect from October 22, 2009 and the other subsidiaries, namely, Milestone Property, Milestone Trusteeship, Milestone Investment and Jevir L&F from Milestone Fincap with effect from December 31, 2009 and these companies became direct subsidiaries of the Company. Further, Milestone Fincap transferred all its shares in IL&FS Milestone Realty, Milestone Ecofirst and Milestone Religare to the Company with effect from December 31, 2009 in terms of the deeds of adherence entered into between the Company, Milestone Fincap and the respective joint venture partners. Further, Capstone Capital (formerly known as Milestone Wealth Advisors Private Limited) was incorporated as a wholly owned subsidiary of Milestone Fincap. Capstone Capital was acquired by the Company from Milestone Fincap with effect from December 15, 2009. By an agreement dated December 16, 2009, the Company entered into a joint venture agreement with Money Matters Private Limited (Money Matters). Money Matters, by subscription, acquired 50% equity interest in Capstone Capital making Capstone Capital a joint venture company of the Company and Money Matters. Pursuant to this, the name was changed from Milestone Wealth Advisors Private Limited to Capstone Capital Services Private Limited. For further details see the section History and Certain Corporate Matters Material Agreements on page 86. Pursuant to the reorganisation, from January 1, 2010 the Company has five direct subsidiaries and four joint ventures. The Company acquired Omega Global on March 22, 2010. Omega Global holds 100% stake in Milestone Capital Management LLC, 100% stake in IL&FS Milestone Capital Management LLC, 100% stake in Milestone Mercator Maritime Management Limited and 50% stake in Milestone Religare Capital Management Ltd. The Company provides investment advisory services and manages various funds and schemes. For further details, see the section Business on page 61. Changes in Registered Office The details of changes in the registered office of the Company are set forth below: Date of resolution April 23, 2007 January 29, 2009 Change of address of Registered Office Change in registered office from 5A, Tower B, Viceroy Park, Kandivali (East), Mumbai 400 061 to Flat No. 701, Gladioli, Off Yari Road, Versova, Andheri (West), Mumbai 400061 Change in registered office from Flat No. 701, Gladioli, Off Yari Road, Versova, Andheri (West), Mumbai 400061 to 602, Hallmark Business Plaza, Sant Dyaneshwar Marg, Opp. Guru Nanak Hospital, Bandra (East), Mumbai 400051 Reason For greater operational efficiency For greater operational efficiency

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The Main Objects of Company The main objects, inter alia, contained in the Memorandum of Association of the Company are as follows: To carry on the business of rendering consultancy services and portfolio management services for clients and to act as counsel to funds investing in debt, equity, equity linked instruments or any instruments permitted by law (including but not limited to venture capital funds and to the trustees, directors, beneficiaries and contributors of such funds), mutual funds, real estate funds, investment trusts, companies, joint ventures, institutional investment groups and individual investors relating to financial and investment advice, including but not limited to identifying, assessing, recommending and negotiating investment opportunities and structure, investment monitoring, facilitation, consultation and management services; and providing support for infrastructure (including but not limited to logistics, administrative, managerial, financial, communication and information technology facilities/services). To undertake the business of arranging, managing and/or providing venture capital, risk capital or promoters capital, loans, advances, guarantees, leasing and other means of financial intermediation with or without security to existing or proposed industrial, enterprises whether promoted by this Company or within the same management or not and to acquire, buy, underwrite, own, hold, sell or otherwise deal in shares, stocks, equity linked instruments, mutual funds, real estate funds, debentures, debenture-stock, bonds, units, certificates, obligations and securities issued lawfully or guaranteed by any company, corporation, firm, or person and to promote directly or indirectly, industry, either individually or in association, cooperation, collaboration or participation with other local or offshore entities and to provide financial counselling and services in connection with evaluation and/or identification of projects. To carry on the business of trading and/or investment in lands, buildings and other immoveable and moveable property and any estate or interest therein and sell, dispose and deal with the same. The main objects as contained in the Memorandum of Association enable the Company to carry on the business presently carried out as well as business proposed to be carried out and the activities proposed to be undertaken pursuant to the Objects of the Issue. Amendments to the Memorandum of Association Date of shareholders resolution March 26, 2007 December 22, 2007 December 22, 2007 Nature of Amendment

The name of the Company was changed from Skyzen Investment Advisory Services Private Limited to Milestone Capital Advisors Private Limited. The authorised share capital of Rs. 100,000 divided into 10,000 equity shares of Rs. 10 each was increased to Rs. 10,000,000 divided into 1,000,000 equity shares of Rs. 10 each. The main object of the Company stated in sub clause (A) Clause III of the Memorandum of Articles was amended to include the following: To carry on the business of rendering consultancy services and portfolio management services for clients and to act as counsel to funds investing in debt, equity, equity linked instruments or any instruments permitted by law (including but not limited to venture capital funds and to the trustees, directors, beneficiaries and contributors of such funds), mutual funds, real estate funds, investment trusts, companies, joint ventures, institutional investment groups and individual investors relating to financial and investment advice, including but not limited to identifying, assessing, recommending and negotiating investment opportunities and structure, investment monitoring, facilitation, consultation and management services; and providing support for infrastructure (including but not limited to logistics, administrative, managerial, financial, communication and information technology

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Date of shareholders resolution

Nature of Amendment

facilities/services). To undertake the business of arranging, managing and/or providing venture capital, risk capital or promoters capital, loans, advances, guarantees, leasing and other means of financial intermediation with or without security to existing or proposed industrial, enterprises whether promoted by this Company or within the same management or not and to acquire, buy, underwrite, own, hold, sell or otherwise deal in shares, stocks, equity linked instruments, mutual funds, real estate funds, debentures, debenture-stock, bonds, units, certificates, obligations and securities issued lawfully or guaranteed by any company, corporation, firm, or person and to promote directly or indirectly, industry, either individually or in association, co-operation, collaboration or participation with other local or offshore entities and to provide financial counselling and services in connection with evaluation and/or identification of projects. To carry on the business of trading and/or investment in lands, buildings and other immoveable and moveable property and any estate or interest therein and sell, dispose and deal with the same. March 23, 2010 The authorised share capital of Rs. 10,000,000 divided into 1,000,000 equity shares of Rs. 10 each was increased to Rs. 100,000,000 divided into 10,000,000 equity shares of Rs. 10 each. Conversion from a private limited company to a public limited company and change in name of the Company from Milestone Capital Advisors Private Limited to Milestone Capital Advisors Limited. The authorised share capital of Rs. 100,000,000 divided into 10,000,000 equity shares of Rs. 10 each was increased to Rs. 150,000,000 divided into 15,000,000 equity shares of Rs. 10 each. The authorised share capital of Rs. 150,000,000 divided into 15,000,000 equity shares of Rs. 10 each was increased to Rs. 200,000,000 divided into 20,000,000 equity shares of Rs. 10 each.

March 23, 2010

June 3, 2010

June 16, 2010

Major events of the Company The table below sets forth some of the key events in the history of the Company: Date August 4, 2005 July 23, 2007 December 27, 2007 April 8, 2008 April 25, 2008 December 16, 2009 December 31, 2009 Event Execution of Investment Advisory Agreement with Milestone Real Estate Fund for Milestone Domestic Scheme-I. The management and control of the Company was taken over by Milestone Fincap from Skyzen Capital Advisors Private Limited. Execution of Investment Advisory Agreement with Milestone Capital Management LLC for Milestone Fund LLC. Execution of Investment Advisory Agreement with Milestone Real Estate Fund for Milestone Domestic Scheme-II. The Company received Portfolio Management Services registration from SEBI. Formation of a joint venture with Money Matters Financial Services Limited for providing advisory services to Special Opportunities Fund-I. By the deeds of adherence, the Company replaced Milestone Fincap in the joint ventures with different partners and the joint venture companies were IL&FS Milestone Realty Advisors Private Limited, Milestone Religare Investment Advisors Private Limited and Milestone Ecofirst Advisory Services (India) Private Limited. Additionally, the Company acquired 100% shareholding of Jevir Leasing And Finance Limited, Milestone Investment Advisory Services Private Limited, Milestone Projects and Property Management Private Limited and Milestone Trusteeship Services Private Limited.

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Date March 22, 2010

May 18, 2010

Event The Company acquired Omega Global and subsequent to the acquisition it controls the offshore business of the Company. Omega Global holds 100% stake in Milestone Capital Management LLC, 100% stake in IL&FS Milestone Capital Management LLC, 100% stake in Milestone Mercator Maritime Management Limited and 50% stake in Milestone Religare Capital Management Ltd. Conversion from a private limited company to a public limited company and change in name of the Company from Milestone Capital Advisors Private Limited to Milestone Capital Advisors Limited

The Company has eight members as of the date of filing of this Draft Red Herring Prospectus. Subsidiaries and Joint Ventures For details regarding the Subsidiaries of the Company, see the section Subsidiaries and Joint Ventures on page 108. Material Agreements Shareholders agreement dated August 14, 2007 (Shareholders Agreement) between IL&FS Investment Managers Limited (IL&FS), Lantern Trading and Investment Private Limited (Lantern), Milestone Fincap Services Private Limited (Milestone Fincap) and IL&FS Milestone Realty Advisors Private Limited (IL&FS Milestone Realty) IL&FS, Lantern, Milestone Fincap (formerly known as Propgain Properties Private Limited) and IL&FS Milestone Realty (formerly known as Milestone Propgain Realty Advisors Private Limited) have entered into a Shareholders Agreement dated August 14, 2007. IL&FS Milestone Realty was incorporated as a joint venture company on July 23, 2007 to provide management, advisory and financial services to entities with a view of generating a high level of return through a Yield Driven Real Estate Fund (the Fund) focused on investing in entities that own ready to let real estate in India (rental income from such property being their main source of income) and privately negotiate investments in Indian entities engaged in the real estate sector specifically immovable properties as permitted by the SEBI VCF Regulations. Under the terms of the Shareholders Agreement, IL&FS, Milestone Fincap agreed to subscribe to 80,000 equity shares each and Lantern agreed to subscribe to 40,000 equity shares of IL&FS Milestone Realty representing 40%, 40% and 20%, respectively of the equity share capital of IL&FS Milestone Realty. Further, during the term of the Shareholders Agreement, majority shareholders of Milestone Fincap shall, either directly or indirectly, continue to hold more than fifty percent of the issued and outstanding shares in Milestone Fincap. The board of IL&FS Milestone Realty shall constitute of five directors nominated by IL&FS, Milestone Fincap and Lantern in proportion of their shareholding in IL&FS Milestone Realty. The chairman of the Board shall be appointed by IL&FS and day to day managerial, administrative affairs and other operations including appointment of chief executive officer and the first chief investment officer shall be managed and supervised by Milestone Fincap. An affirmative vote from at least one director of each shareholder or prior written consent of all shareholders would be required for approving the matters qualified as reserve matters under the Shareholders Agreement. In the event no agreeable decision can be reached between the shareholders in a reserved matter (Deadlock), the procedure for resolving the Deadlock shall be as provided in the Shareholders Agreement. Lock-in: The shares held by IL&FS, Milestone Fincap and Lantern are subject to lock-in (except transfer to permitted transferees as defined in the Shareholders Agreement or if agreed in writing by the other party) for a period of four years from the date of execution of this agreement. Further, on the expiry of the lock-in period, the transfer of shares of IL&FS Milestone Realty by shareholders to any person shall be subject to the right of first refusal and tag along rights of the other shareholders.

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Non-Compete and Confidentiality: In terms of the Shareholders Agreement, IL&FS Milestone Realty shall not and shall use reasonable measures to ensure that none of its affiliates enter into any arrangement relating to the launch of Yield Driven Real Estate Funds for four years from the date of execution of the Shareholders Agreement in any locality falling within India or any other country where IL&FS Milestone Realty carries on business or related activities. All information in relation to the Agreement shall be kept confidential and shall not be disclosed without the written consent of the other shareholders and IL&FS Milestone Realty. Termination: Upon occurrence of an event of default, the non-defaulting party may terminate the agreement or issue a notice to the defaulting party to either purchase all of the shares of the non-defaulting party or sell the shares of the defaulting party to the non-defaulting party or any person identified by the nondefaulting party at such price as provided in the Shareholders Agreement. Additionally, any shareholder may terminate the Agreement in the event that the other shareholders (cumulatively with the permitted transferees) cease to hold at least 20% of the shareholding of IL&FS Milestone Realty. Deed of Adherence: By a deed of adherence executed on December 31, 2009 between IL&FS, Lantern, Milestone Fincap, IL&FS Milestone Realty and the Company, Milestone Fincap has transferred all its shares in IL&FS Milestone Realty to the Company, a permitted transferee of Milestone Fincap. All rights, liabilities and obligations of Milestone Fincap under the Agreement have been transferred to the Company and shall be exercised by the Company with effect from December 31, 2009. Joint venture agreement dated June 12, 2008 (Joint Venture Agreement) between J Leon Trading Limited (J Leon Trading), Milestone Fincap Services Private Limited (Milestone Fincap) and Milestone Ecofirst Advisory Services (India) Private Limited (Milestone Ecofirst) On June 12, 2008 the Joint Venture Agreement was entered into between J Leon Trading, Milestone Fincap and Milestone Ecofirst. Milestone Ecofirst was incorporated for the purpose of carrying out the objectives of the joint venture. The business of Milestone Ecofirst is to, inter alia, provide consultancy and advice for the construction or conversion of existing buildings into environment friendly buildings, provide sustainable solutions on building designs, supplies and installations to ensure clean and green housing technologies and provide advisory services for the purpose of purchase, hold, lease, license, rights and activates relating to supervision and management of properties. Pursuant to the terms of the Joint Venture Agreement, J Leon Trading and Milestone Fincap agreed to subscribe to 1,000,000 equity shares of Milestone Ecofirst each (representing 50% of the equity share capital being held by each of them). It is further agreed that 20% of the shares of Milestone Ecofirst shall be available for architectural or M&E Partners, the advisory panel and the management immediately through dilution of the holding of J Leon Trading and Milestone. Milestone Fincap and respective officials shall be responsible inter alia for providing office space and necessary infrastructure and J Leon Trading shall provide inter alia transfer of technology and reasonable training of personnel of Milestone Ecofirst without any additional cost. The directors of the board of Milestone Ecofirst shall be nominated by J Leon Trading and Milestone Fincap upto to two directors each and will continue to maintain it in the same proportion as their shareholding in Milestone Ecofirst. The day to day managerial, administrative and operational affairs of Milestone Ecofirst shall be managed and supervised by Milestone Fincap. Prior written consent of J Leon Trading and Milestone Fincap would be required for approving the matters qualified as reserve matters under the Joint Venture Agreement. An event of deadlock occurs if a resolution, pertaining to the reserved matters, has not been passed due to the lack of an affirmative vote and a resolution is mandated for effective implementation for carrying it out. Lock-in: The shares held by the shareholders would be locked in and would be non-transferrable (except transfer to permitted transferees as defined in the Joint Venture Agreement) for a period of three years unless specifically agreed in writing by the parties to the Joint Venture Agreement. On the expiry of the

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lock-in period, any transfer of shares to any person subject to the right of first refusal and tag along right available to the other shareholders under the Agreement. Non-Compete and Confidentiality: J Leon Trading, Milestone Fincap, their respective promoters Paddy Walker and Ved Prakash Arya and the permitted transferees and affiliates shall not enter into any joint venture arrangement which shall compete with Milestone Ecofirst (technically, financially or otherwise), for as long as they hold interest in Milestone Ecofirst and for two years after they cease to have any interest in any locality falling within India and other countries where Milestone Ecofirst carries on business and related activities. All information in relation to the Agreement shall be kept confidential and shall not be disclosed without the written consent of the other shareholders and Milestone Ecofirst. Termination: Upon occurrence of an event of default, the non-defaulting party may terminate the Agreement or issue a notice to the defaulting party to either purchase all of the shares of the non-defaulting party at a purchase price equal to 120% of the fair market value of the shares as on the date of the notice or sell the shares of the defaulting party to the non-defaulting party or any person identified by the nondefaulting party at 80% of the fair market value as on the date of the notice. Additionally any shareholder may terminate the Agreement in the event that the other shareholder (cumulatively with the permitted transferees) ceases to hold at least 20% of the shareholding of Milestone Ecofirst. Milestone Ecofirst shall delete from appearance or sound of its name the word Ecofirst or Milestone at the request of J Leon Trading or Milestone Fincap respectively if their consolidated holding along with their corresponding affiliates is less than 25% of the issued and paid up capital. Deed of Adherence: A deed of adherence dated December 30, 2009 has been entered into between J Leon Trading, Milestone Fincap, Milestone Ecofirst and the Company and Milestone Fincap has transferred all its shares in Milestone Ecofirst to the Company, a permitted transferee of Milestone Fincap. All rights, liabilities and obligations of Milestone Fincap under the Agreement have been transferred to the Company and shall be exercised by the Company with effect from December 31, 2009. Shareholders agreement dated April 8, 2009 (Agreement) between Milestone Fincap Services Private Limited (Milestone Fincap), Religare Venture Capital Limited (Religare) and Milestone Religare Investment Advisors Private Limited (Milestone Religare) Shareholders agreement dated April 8, 2009 has been entered into between Milestone Fincap, Religare and Milestone Religare and pursuant to this Milestone Religare has been incorporated to provide investment advice to the schemes launched by India Build-Out Fund I in the education sector and healthcare sector. Milestone Private Equity Fund is registered with SEBI as a venture capital fund with effect from February 21, 2008 (Fund). The Fund has launched the India Build-Out Fund-I (IBF-I) which focuses in education and health care sectors on a private placement basis with a target size of Rs. 6000 million. Religare and Milestone Fincap subscribed to 494,999 equity shares each of Milestone Religare. Religare and Milestone Fincap agree that they shall, through the subsistence of the Agreement, keep the shareholding ratio unchanged. The Agreement stipulates certain conditions to be satisfied at the time of the issue of shares to Religare and Milestone Fincap by Milestone Religare. These conditions inter alia include execution of the new investment advisory agreement between Milestone Religare and the Fund whereby Milestone Religare would replace the Company as the investment advisor, appointment of the Religare nominee in the board of trustees of the Fund and execution of the contribution agreement with the Fund by Religare along with RHC Holdings Private Limited, an affiliate of Religare, for subscription of Class A Beneficiary Units of IBF-I. The day to day management of Milestone Religare will be the responsibility of Milestone Fincap. As long as Religare and Milestone Fincap hold shares representing at least 25% of the share capital of Milestone Religare, they shall have equal representation on the board. The board of directors of Milestone Religare shall also include independent directors who are jointly nominated by Milestone Fincap and Religare. Religare and Milestone Fincap intended to jointly provide investment advice to the Fund and assist in raising additional corpus apart from undertaking promotional activities.

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As long as Milestone Fincap and Religare hold at least 25% of the equity share capital of Milestone Religare, affirmative votes from Milestone Fincap and Religare would be required for approving the matters qualified as reserve matters under the Agreement. In the event the shareholding of either Religare or Milestone Fincap falls below 50% but not less than 25%, then that shareholder shall have the right to appoint only a quarter of the board of directors and the right to jointly nominate independent directors shall cease to exist. In case the shareholding falls below 25% but not less than 10% then the shareholders shall have the right to appoint only one director. In the event no agreeable decision was reached between the shareholders in a Reserved Matter (Deadlock), the procedure for resolving the Deadlock shall be as provided in the Agreement. An investment committee with equal representation of Milestone Fincap and Religare shall be constituted to evaluate and approve the investment proposals of IBF-I and other focus sectors schemes. All proposals require the approval from majority of the member of the investment committee including at least one member of Religare and Milestone Fincap as long as they hold more than 25% of the share capital. Lock-in: The shares issued to the shareholders shall be locked in and would be non-transferrable (except to permitted transferee as identified in respect of each shareholder) for a period of 18 months from the date of closing unless specifically agreed in writing by the parties to the Agreement. On the expiry of the lock-in period, the transfer of shares are subject to the right of first offer available to the other shareholders. Non-Compete and Confidentiality: Religare, Milestone Fincap and their affiliates shall not enter into any arrangement relating to launch of venture capital fund focusing on education or health care or render advise to any conflicting fund for two years from the date of issue of shares or till deployment 60% of the corpus of IBF-I or termination of this agreement whichever is earlier. All information in relation to the Agreement shall be kept confidential and shall not be disclosed without the written consent of the other shareholders and Milestone Religare. Termination: On the occurrence of a default, the non-defaulting party may issue a notice to the defaulting party instructing (a) the defaulting party to purchase all the shares held by the non-defaulting party at a price equal to 120% of the fair market value of the shares; or (b) the defaulting party sell all of its shares to the non-defaulting party or its affiliates or nominees at a price equal to 80% of the fair market price; or (c) pursuant to selling its own shares to a third party, the non-defaulting party may impose the defaulting party to sell such percentage of its holding to the third party to enable the third party to acquire the controlling interest in Milestone Religare. Deed of Adherence: By a deed of adherence executed on December 23, 2009 between Religare, Milestone Fincap, Milestone Religare and the Company, Milestone Fincap has transferred all its shares in Milestone Religare to the Company, a permitted transferee of Milestone Fincap. All rights, liabilities and obligations of Milestone Fincap under the Agreement are transferred to the Company and shall be exercised by the Company with effect from December 31, 2009. Shareholders agreement dated December 16, 2009 (Shareholders Agreement) between the Company, Money Matters Financial Services Limited (MMFSL) and Capstone Capital Services Private Limited (Capstone Capital) A shareholders agreement dated December 16, 2009 has been executed between the Company, Money Matters and Capstone Capital (formerly known as Milestone Wealth Advisors Private Limited). MMFSL intended to introduce a scheme under the Milestone Private Equity Fund targeting the distress assets sector and provide investment advisory services to the Distress Assets Fund (DAF) jointly with the Company. Further, MMFSL and Milestone shall assist in raising additional corpus for the DAF and undertake promotional activities in the domestic and international market. Milestone and MMFSL have jointly incorporated Capstone Capital as a joint venture company to perform all the above functions on their behalf in relation the Fund and DAF.

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The Agreement was amended on April 19, 2010 to replace the Milestone Private Equity Fund with the Special Opportunities Fund (Fund). The Special Opportunities Fund is an affiliate of Milestone Capital Advisors and is registered with SEBI as a venture capital fund. The Company hold 499,999 equity shares each totalling to 999,998 equity shares. The shareholders agree that they shall continue to keep the shareholding at the ratio of 50:50 through the continuance of this Agreement. The Agreement stipulates certain conditions to be satisfied at the time of issue of shares to MMFSL and the Company by Capstone Capital. These conditions include, amongst others execution of the new investment advisory agreement and constitution of the investment committee. Pursuant to closing, Capstone Capital shall enter into a contribution agreement with MMFSL for subscription of DAF units equivalent to Rs. 200 million and further MMFSL shall pay DAF an aggregate amount of Rs. 50 million. As long as MMFSL and the Company hold shares representing at least 25% of equity share capital of Capstone Capital, they shall have equal representation on the board and affirmative votes from the Company and MMFSL would be required for approving the matters qualified as reserve matters under the Agreement. In the event the shareholding of either MMFSL or the Company is less than 25% but greater than 10%, then that shareholder shall have the right to appoint only one director. In case the shareholding falls below 10% then the shareholder loses all rights under the agreement. However, irrespective of the percentage of shareholding, MMFSL shall be entitled to have one seat on the investment committee at all points of time during the life of DAF. In the event no agreeable decision is reached between the shareholders in a Reserved Matter an event of Deadlock occurs and the procedure for resolving the Deadlock is provided in the Agreement. An investment committee, with equal representation of the Company and MMFSL, shall be constituted to evaluate and approve the investment proposals of DAF. A proposal shall be considered to have been approved only if it is passed by majority of the member of the committee including at least one member of MMFSL and the Company as long as they hold more than 25% of the share capital. Lock-in: The shareholding of the joint venture partners shall be locked in and would be non-transferrable (except to permitted transferee as identified in respect of each shareholder) for a period of 18 months from the date of closing unless specifically agreed in writing by the parties to the Agreement. On the expiry of the lock-in period the shareholders may transfer their shares to any person subject to the right of first offer available to the other shareholders. Non-Compete and Confidentiality: MMFSL, the Company and their affiliates shall not enter into any arrangement relating to launch of venture capital fund focusing on distress assets sector or render advise to any conflicting fund for two years from the date of issue of shares or till deployment 60% of the corpus of DAF or termination of this agreement whichever is earlier. All information in relation to the Agreement shall be kept confidential and shall not be disclosed without the written consent of the other shareholders and Capstone Capital. Termination: On the occurrence of a default, the non-defaulting party may issue a notice to the defaulting party instructing (i) the defaulting party to purchase all the shares held by the non-defaulting party at a price equal to 120% of the fair market value of the shares; or (ii) the defaulting party sell all of its shares to the non-defaulting party or its affiliates or nominees at a price equal to 80% of the fair market price; or (iii) pursuant to selling its own shares to a third party, the non-defaulting party may impose the defaulting party to sell such percentage of its holding to the third party at the same price so as to enable the third party to acquire the controlling interest in Capstone Capital. Licence Deed dated June 21, 2010 between the Company and Milestone Fincap Milestone Fincap, the corporate Promoter of the Company has made an application for the registration of the trademark (the Milestone Trademark) on June 4, 2010. The Company has entered into a licence deed dated June 21, 2010 with Milestone Fincap, the corporate Promoter of the Company, granting the Company a non-exclusive, revocable licence to use and reproduce the Milestone Trademark. The licence

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deed grants the Company the right to grant a sub-licence in writing to its affiliates including Subsidiaries and Joint Ventures for the use of the Milestone Trademark without the prior written consent of Milestone Fincap. The Company does not pay any licence fee for the use of the Milestone Trademark. The licence deed can be terminated by Milestone Fincap by a written notice of six months. Additionally, the licence deed may be terminated if Milestone Fincap holds less than 25% of the shareholding of the Company. Financial and Strategic Partners Apart from the various Joint Venture partners, the Company does not have any other financial or strategic partners.

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MANAGEMENT Board of Directors Under the Articles of Association, the Company is required to have not less than three Directors and not more than 12 Directors. The Company currently has eight Directors. The following table sets forth details regarding the Board of Directors of the Company as of the date of filing the Draft Red Herring Prospectus: Name, Designation, Fathers Name, Address, Occupation, Nationality Term and DIN Nawshir Dara Khurody Non-Executive Chairman, Independent Director S/o Dara Khurody Address: 12-A, Darbhanga Mansion Carmichael Road Opp. Hiramandari School Mumbai 400 026 Occupation: Business Nationality: Indian Term: Liable to retire by rotation DIN: 00007150 Ved Prakash Arya Managing Director S/o Satyapal Arya Address: Flat No. 701, Gladioli CHS (Off Yari Road), Versova Andheri (West) Mumbai 400 058 Occupation: Business Nationality: Indian Term: Not liable to retire by rotation DIN: 00006205 Arvind Bansal Non-Executive Director S/o Gianchand Bansal 39 Public Companies Claris Lifesciences Limited Private Companies 40 Private Companies IL&FS Milestone Realty Advisors Private Limited Capstone Capital Services Private Limited Milestone Religare Investment Advisors Private Limited Foreign Companies Milestone Fund Jersey Ltd., Jersey Islands Milestone Religare General Partners Ltd., Jersey Islands Age (in years) 73 Other Directorships/Partnerships/Trusts in which the Director is a trustee Public Companies Voltas Limited Eureka Forbes Limited Vantech Investments Limited Forbes and Company Limited Tata Ceramics Limited Afcons Infrastructure Limited Aquamall Water Solutions Limited Forbes Aquamall Limited Private Companies Milestone Ecofirst Advisory Services (India) Private Limited Milestone Religare Investments Advisors Private Limited Khurody Technical Services Private Limited

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Name, Designation, Fathers Name, Address, Occupation, Nationality Term and DIN Address: 31, Eden Bungalows Opp. Hiranandani School Powai Mumbai 400 076 Occupation: Business Nationality: Indian Term: Liable to retire by rotation DIN: 00139337

Age (in years)

Other Directorships/Partnerships/Trusts in which the Director is a trustee Surajbari Windfarm Development Private Limited Skyzen Capital Advisors Private Limited Skyzen Infrabuild Private Limited Daiwik Hotels Private Limited Chitvan Consultants Sdn Bhd, Malaysia Clean Joules Pte. Ltd., Singapore Continuum Energy Pte. Ltd., Singapore Partnerships Pankaj Bansal & Associates Pankaj Bansal Partners

Bhagyam Ramani Nominee Director W/o Ganapathy Ramani Address: 291/301, Kalpatru Heights Agripada Mumbai 400 011 Occupation: Service Nationality: Indian Term: Not liable to retire by rotation DIN: 00107097 Noel Naval Tata Independent Director S/o Naval H. Tata Address: Windmere, Cuffe Parade Colaba Mumbai 400 005 Occupation: Business Nationality: Indian Term: Liable to retire by rotation DIN: 00024713

58

Public Companies General Insurance Corporation of India IDBI Trusteeship Services Limited Agricultural Insurance Company of India Limited National Stock Exchange of India Limited Larsen & Toubro Limited

53

Public Companies Trent Limited Landmark Limited Titan Industries Limited Voltas Limited Tata Investment Corporation Limited Trent Hypermarket Limited Kansai Nerolac Paints Limited Tata International Limited Private Companies DKI Travel Services Private Limited Lorimar Properties Private Limited IL&FS Milestone Realty Advisors Private Limited TREXA ADMC Private Limited Inditex Trent Retail India Private Limited

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Name, Designation, Fathers Name, Address, Occupation, Nationality Term and DIN Dr. Pravin Pranalal Shah Independent Director S/o Pranalal Shah Address: Suite 8, Jal Kiran Cuffe Parade Colaba Mumbai 400 005 Occupation: Business Nationality: Indian Term: Liable retire by rotation DIN: 00112544

Age (in years) 65

Other Directorships/Partnerships/Trusts in which the Director is a trustee Public Companies Adani Enterprises Limited Bombay Rayon Fashions Limited Claris Lifesciences Limited JM Financial Limited Jai Corp Limited Raheja Universal Limited Private Companies JM Financial Consultants Private Limited JM Financial and Investment Consultancy Services Private Limited JM Financial Services Private Limited Benchmark Trustee Company Private Limited Landmark Business Service Centre Private Limited Landmark eConsultants Private Limited Macro Investments and Financial Consultants Private Limited Section 25 Companies Health and Education Foundation Partnerships Pravin P. Shah & Co Sole proprietor Pravin P. Shah & Associates PPS & Associates

Raj Narain Bhardwaj Independent Director S/o Murarilal Bhardwaj Address: 402, Moksh Apartments Upper Govind Nagar Malad (East) Mumbai 400 097 Occupation: Business Nationality: Indian Term: Liable to retire by rotation DIN: 01571764

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Public Companies SREI Venture Capital Limited Jaiprakash Power Ventures Limited Jaiprakash Associates Limited Religare Trustee Company Limited Indian Railway Catering and Tourism Corporation Limited Money Matters Financial Services Limited Money Matters Securities Private Limited Microsec Financial Services Limited Reliance Infratel Limited Jaiprakash Infratech Limited Private Companies Samvridhi Advisors Private Limited Lanco Kondapalli Power Private Limited (Nominee Director)

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Name, Designation, Fathers Name, Address, Occupation, Nationality Term and DIN

Age (in years)

Other Directorships/Partnerships/Trusts in which the Director is a trustee Singhi Advisors Private Limited IL&FS Milestone Realty Advisors Private Limited Invent Assets Securitisations and Reconstructions Private Limited IIT Insurance Broking and Risk Management Private Limited Milestone Religare Investments Advisors Private Limited Capstone Capital Services Private Limited

Vijay Kumar Chopra Independent Director S/o Krishna Kumar Chopra Address: Flat No. 4A, 4th Floor Harmony Tower Dr. E. Moses Road Worli Naka, Worli Mumbai 400 018 Occupation: Professional Nationality: Indian Term: Liable to retire by rotation DIN: 02103940

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Public Companies Pantaloon Retail (India) Limited Rolta India Limited Deewan Housing and Finance Corporation Limited RFCL Limited FCH Centrum Direct Limited Landmark Property Development Limited Metlife Insurance Company Limited Havells India Limited Future Finance Limited Religare Asset Management Company Limited SIDBI Venture Capital Limited Reliance Capital Pension Fund Limited Jaiprakash Associates Limited Future Capital Financial Services Limited. Private Companies Pegasus Assets Reconstruction Private Limited Capstone Capital Services Private Limited

None of the Directors are related to each other. Brief Biographies 1. Nawshir Dara Khurody Nawshir Dara Khurody, aged 73 years, has been a Director of the Company since April 17, 2007, and is also the Non-Executive Chairman of the Company. He holds a masters degree in economics from Trinity College, Cambridge. He has been associated with the Tata group for a predominant part of his career and has held various administrative positions in the Tata group including the chief executive officer of Tata Pharmaceuticals and was associated with Tata

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Administrative Services for 18 years. He has also been associated with Manai Corporation, Doha. He was the managing director of Voltas Limited from 1997 to 2001. 2. Ved Prakash Arya Ved Prakash Arya, aged 40 years, is the Managing Director and Chief Executive Officer of the Company since April 9, 2007 and was re-appointed on June 16, 2010. He holds a bachelors degree in engineering from the College of Technology & Agricultural Engineering, Udaipur and a post graduate diploma in business administration from the Indian Institute of Management, Ahmedabad. He has also spent one year at ESSEC (France) and has also completed an advanced management programme from the Harvard Business School. Ved Prakash Arya has a total experience of 17 years. Prior to joining the Company, he was the chief operating officer and a director of Pantaloon Retail (India) Limited and managing director of Home Solutions Retail (India) Limited. In 1998, he established Globus Store Private Limited for the Rajan Raheja Group and was its chief executive officer till March 2004. He has also spent 10 years with the Rajan Raheja group. He is also the founder director of the Retailers Association of India. 3. Arvind Bansal Arvind Bansal, aged 39 years, has been a Director of the Company since its inception. He holds a bachelors degree in technology from the Indian Institute of Technology, New Delhi and a post graduate diploma in business administration from the Indian Institute of Management, Ahmedabad. He has experience in infrastructure, media, information technology, telecom and pharmaceutical sectors. He was an executive director of Mission New Energy Limited which is listed on the Australian Stock Exchange. He has a total experience of 17 years including experience as an investment banker for a period of 12 years in a variety of deal structures for financial/ strategic institutional investors. 4. Bhagyam Ramani Bhagyam Ramani, aged 58 years, has been a Director of the Company since June 30, 2009. She is a Nominee Director on the Board of the Company. She is an executive director of General Insurance Corporation of India. She holds a masters degree in economics from the University of Bombay. She has an experience of more than 30 years in the area of investment and accounts. She is one of the trustees of the Tariff Advisory Committee (Employees) Pension Fund, a member of the Insurance Institute of India and visiting faculty at the College of Insurance, Mumbai and the National Insurance Academy, Pune. 5. Noel Naval Tata Noel Naval Tata, aged 53 years, has been a Director of the Company since May 10, 2007. He holds a bachelors degree in economics from the University of Sussex and has completed the international executive programme from INSEAD. He was the product manager at Nestle S.A., U.K. for two years and was the senior general manager at Tata International Limited for 13 years. Noel Naval Tata is the managing director of Trent Limited, a Tata enterprise, since 1999. He has an experience of 26 years across various industries 6. Dr. Pravin Pranalal Shah Dr. Pravin Pranalal Shah, aged 65 years, has been a Director of the Company since August 29, 2007. He has a bachelors degree in commerce and a doctorate in Cost Accounting from the University of Mumbai. He is a chartered accountant from the Institute of Chartered Accountants in India and a cost accountant from the Institute of Cost and Works Accountants of India. He has an experience of more than 40 years in financial consultancy, tax advice, valuation, property matters, accounting and auditing and laws relating to foreign exchange.

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7.

Raj Narain Bhardwaj Raj Narain Bhardwaj, aged 65 years, has been a Director of the Company since June 12, 2007. He holds a bachelors degree and a masters degree in economics from the Delhi School of Economics, University of Delhi. He also holds a diploma in industrial relations and personnel management from Punjab University. He has served as a member of the Securities Appellate Tribunal and was the chief managing director and chairman of the Life Insurance Corporation of India. He has more than 37 years of experience.

8.

Vijay Kumar Chopra Vijay Kumar Chopra, aged 63 years, has been a Director of the Company since June 30, 2009. He is a chartered accountant by profession and is a member of the Institute of Chartered Accountants in India. He has an experience of about 36 years in the banking sector. He has served as the chief managing director of Corporation Bank and Small Industries Development Bank of India. He has also served as a whole time member of SEBI for two years till March 2008 and as an executive director at the Oriental Bank of Commerce.

Terms of Appointment of Managing Director Ved Prakash Arya, the Managing Director of the Company, was appointed on April 9, 2007 with a remuneration of Rs.10 million per annum, subject to the availability of surplus funds in the Company for a period of five years expiring on April 8, 2012. From April 1, 2008, he was entitled to Rs.10 million per annum for a period of five years. Subsequently, pursuant to the board resolution dated September 25, 2009, his remuneration was increased to an annual income of Rs.10 million plus 5% of the profit before tax for the remaining period of his tenure. The Company has, at its AGM, held on June 16, 2010 appointed Ved Prakash Arya as the Managing Director and Chief Executive Officer for a period of five years with effect from May 18, 2010. Subject to obtaining the relevant approval from the Central Government, the annual income of Ved Prakash Arya has been increased to Rs. 15 million. Particulars Basic Salary House Rent Allowance Special Allowance Gross Salary(A) Reimbursements Medical Reimbursement LTA Food Coupons Gross Reimbursements(B) Total Fixed Compensation (A+B) Amount (Rs.) per annum 9,300,000.00 4,650,000.00 890,000.00 14,840,000.00 15,000.00 100,000.00 45,000.00 160,000.00 15,000,000.00

Additionally he is also entitled to a commission of 5% of profit before tax per annum. Payment or benefit to Directors/ officers of the Company The sitting fees/other remuneration paid to the Directors for the Fiscal 2010 are as follows: 1. Remuneration to Managing Director: The aggregate value of salary and perquisites paid for the Fiscal 2010 to the Executive Directors is set forth in the table below:

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S. No 1. 2.

Name of the Director Ved Prakash Arya

Salary (In Rs. million) 10 (plus 5% profit before tax of the Company)

Remuneration to Non- Executive Directors: The details of the sitting fees and other payments paid to the Non-Executive Directors of the Company in Fiscal 2010 are set forth in the table below: S. No 1. 2. 3. 4. 5. 6. 7. Name of the Director Nawshir Dara Khurody Arvind Bansal Bhagyam Ramani Noel Naval Tata Dr. Pravin Pranalal Shah Raj Narain Bhardwaj Vijay Kumar Chopra Sitting Fees (In Rs. million) 0.08 0.13 0.06 0.08 0.08 0.13 0.11

Except for sitting fees, no other remuneration was paid to the Non-Executive Directors. Subject to approval from the Central Government, the Non-Executive Directors will be entitled to a commission at the aggregate rate of 1% per annum of the net profits of the Company from Fiscal 2011. Except as stated in this section Management on page 92 this, no amount or benefit has been paid within the two preceding years or is intended to be paid or given to any of the Companys officers including the Directors and key management personnel. None of the beneficiaries of loans, advances and sundry debtors are related to the Directors of the Company. Further, except statutory benefits upon termination of their employment in the Company or retirement, no officer of the Company, including the Directors and the key management personnel, are entitled to any benefits upon termination of employment. No loans have been availed by the Directors or the key management personnel from the Company. Shareholding of Directors The shareholding of the Directors as of the date of filing this Draft Red Herring Prospectus is set forth below: Name of Director Ved Prakash Arya(1) Ved Prakash Arya(2) Ved Prakash Arya(3) Arvind Bansal
(1) (2)

Number of Equity Shares held 1 325,000 50,000 100,000

Jointly with Milestone Fincap as second holder. Ved Prakash Arya is the promoter of Milestone Fincap In his capacity as a trustee of the VPA Sibbling Trust (3) In his capacity as a trustee of the VPA BIL Trust

Borrowing Powers of Board In accordance with the Article of Association, 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 purpose of the Company. Provided however, where the money to be borrowed together with the money already borrowed (apart from temporary loan obtained from the Company's bankers in the ordinary course of business) exceeds 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

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the Company in a General Meeting. The Board is authorised to borrow moneys in compliance with the limits specified under the Companies Act. Corporate Governance The provisions of the Listing Agreement to be entered into with the Stock Exchanges with respect to corporate governance will be applicable to the Company immediately upon the listing of the Equity Shares with the Stock Exchanges. Pursuant to listing, the Company shall comply with the requirements of the applicable regulations, including the Listing Agreement with the Stock Exchanges and the SEBI Regulations, in respect of corporate governance including constitution of the Board and committees thereof. The corporate governance framework is based on an effective independent Board, separation of the Boards supervisory role from the executive management team and constitution of the Board Committees, as required under law. We have a Board of Directors constituted in compliance with the Companies Act and the Listing Agreement with Stock Exchanges and in accordance with best practices in corporate governance. The Board of Directors functions either as a full board or through various committees constituted to oversee specific operational areas. Our executive management provides the Board of Directors detailed reports on its performance periodically. Currently the Board has eight Directors, and the Chairman of the Board is an Independent Director. In compliance with the requirements of Clause 49 of the Listing Agreement, the Board has one Executive Director and seven Non-Executive Directors, including five Independent Directors and one Nominee Director. Committees of the Board Audit Committee The members of the Audit Committee are: 1. 2. 3. Ved Prakash Arya, Managing Director ; Vijay Kumar Chopra, Independent Non-Executive Director; and Raj Narain Bhardwaj, Independent Non-Executive Director.

The Audit Committee was constituted by a meeting of the Board of Directors held on March 22, 2010. The chairman of the Audit Committee shall be an independent director and will be elected by its members. The scope and function of the Audit Committee is in accordance with Section 292A of the Companies Act and Clause 49 of the Listing Agreement and its terms of reference include the following: 1. Oversight of the companys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. Approval of payment to statutory auditors for any other services rendered by the statutory auditors. Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to: a. Matters required to be included in the directors responsibility statement to be included in the Boards report in terms of clause (2AA) of section 217 of the Companies Act;

2.

3.

4.

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b. c.

Changes, if any, in accounting policies and practices and reasons for the same; Major accounting entries involving estimates based on the exercise of judgment by management; Significant adjustments made in the financial statements arising out of audit findings; Compliance with listing and other legal requirements relating to financial statements; Disclosure of any related party transactions; Qualifications in the draft audit report.

d. e. f. g. 5.

Reviewing, with the management, the quarterly financial statements before submission to the Board for approval. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Discussion with internal auditors of any significant findings and follow up there on. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors. To review the functioning of the whistle blower mechanism, in case the same is existing. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

6.

7.

8.

9. 10.

11.

12.

13. 14.

The powers of the Audit Committee shall include the power to: 1. 2. 3. 4. Investigate any activity within its terms of reference. Seek information from any employee. Obtain outside legal or other professional advice. Secure attendance of outsiders with relevant expertise, if it considers necessary.

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The Audit Committee shall mandatorily review the following information: 1. 2. Management discussion and analysis of financial condition and results of operations; Statement of significant related party transactions (as defined by the audit committee), submitted by management; Management letters / letters of internal control weaknesses issued by the statutory auditors; Internal audit reports relating to internal control weaknesses; and The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee

3. 4. 5.

The Audit Committee is required to meet at least four times in a year under Clause 49 of the Listing Agreement. The Audit Committee last met on June 16, 2010. The Company Secretary of the Company shall be the Secretary to the Audit Committee. Remuneration Committee The members of the Remuneration Committee are: 1. 2. 3. Nawshir Dara Khurody, Independent Non-Executive Director; Raj Narain Bhardwaj, Independent Non-Executive Director ; and Bhagyam Ramani, Non-Executive Director.

The Remuneration Committee was constituted by a meeting of the Board of Directors held on March 22, 2010. The terms of reference of the Remuneration Committee include the following: 1. The Remuneration Committee shall be formed in compliance with section 269 read with Schedule XIII of the Companies Act. The Committee shall consist of Non Executive Directors. The Committee shall consider, recommend and approve remuneration of Executive, Whole time or Managing Director or Manager at the time of appointment or alteration thereof subsequent to the appointment and re-appointment thereof. Any two Directors present shall form quorum of the meeting of such Committee. The chairman of the Committee shall be elected by the members of committee among any one from the Independent Directors.

2. 3.

4. 5.

The Remuneration Committee last met on June 16, 2010. Shareholders Grievance Committee The members of the Shareholders Grievance Committee are: 1. 2. 3. Arvind Bansal, Non-Executive Director; Nawshir Dara Khurody, Independent Non-Executive Director; and Dr. Pravin Pranalal Shah, Independent Non-Executive Director.

101

The Shareholders Grievance Committee was constituted by the Board of Directors at their meeting held on March 22, 2010. This Committee is responsible for the redressal of shareholder grievances. The terms, role, responsibilities and duties of Shareholders Grievance Committee shall be same as defined in Clause 49 of the Listing Agreement. The chairman of the Committee shall be elected by the members of committee from among the Independent Directors. Transfer, Allotment and Management Committee The members of the Transfer, Allotment and Management Committee are: 1. 2. 3. Ved Prakash Arya, Managing Director; Arvind Bansal, Non-Executive Director; and Raj Narain Bhardwaj, Independent Non-Executive Director.

The Transfer, Allotment and Management Committee was constituted by the Board of Directors at their meeting held on March 22, 2010. The power of the Transfer, Allotment and Management Committee include: 1) 2) 3) 4) 5) 6) 7) Transfer of shares; Issue of duplicate share certificates; Issue of split share certificates; Allotment of shares in respect of which approval of members/ the board has already received; Opening of bank accounts / change in authorized signatories; Entering into advisory agreements with any schemes; To give authorisation for filing of applications forms or other documents for obtaining registration, licenses, permission from any authority for carry on business of the Company in any part of India and to represent before such authorities on behalf of the Company; To give authorisation to apply, file and avail the services / connectivity of any services for offices, or other places of the Company; To give authorisation to any persons to sign and file returns, forms and other documents with government authority in compliance with any statute applicable to company from time to time; To take any other decision on any matter to be arrived in day to day business activities of the Company.

8)

9)

10)

Any two Directors present shall form quorum of meeting of such Committee. The chairman of the Committee shall be elected by the members of committee. The Transfer, Allotment and Management Committee last met on June 19, 2010. IPO Committee The members of the IPO Committee are: 1. 2. 3. Vijay Kumar Chopra, Independent Non-Executive Director; Ved Prakash Arya, Managing Director; and Arvind Bansal, Non-Executive Director.

102

The IPO Committee was constituted by a meeting of the Board of Directors held on June 23, 2010. The terms of reference of the IPO Committee include the following: a) To decide on the timing, pricing and all the terms and conditions of the issue of the shares for the Public Issue, including the price, and to accept any amendments, modifications, variations or alterations thereto; To appoint and enter into arrangements with the book running lead managers, underwriters to the Public Issue, syndicate members to the Public Issue, brokers to the Public Issue, escrow collection bankers to the Public Issue, registrars, legal advisors and any other agencies or persons or intermediaries to the Public Issue and to negotiate and finalise the terms of their appointment, including but not limited to execution of the Book Running Lead Managers (BRLMs) mandate letter, negotiation, finalisation and execution of the memorandum of understanding with the BRLM etc.; To finalise, settle, execute and deliver or arrange the delivery of the syndicate agreement, underwriting agreement, escrow agreement and all other documents, deeds, agreements, memorandum of understanding and other instruments whatsoever with the Registrar to the Issue, Legal Advisors, Auditors, Stock Exchange(s), BRLMs and any other agencies/intermediaries in connection with the Issue with the power to authorise one or more officers of the company to execute all or any of the aforestated documents; To finalise, settle, approve and adopt the Draft Red Herring Prospectus, the Red Herring Prospectus, and the Prospectus for the issue of equity shares and take all such actions as may be necessary for filing of these documents including incorporating such alterations/corrections/ modifications as may be required by Securities and Exchange Board of India (SEBI) or any other relevant Governmental and Statutory authorities; To make applications, if necessary, to the Foreign Investment Promotion Board, or to any other Statutory or Governmental Authorities in connection with the Issue and, wherever necessary, incorporate such modifications / amendments / alterations/corrections as may be required in the Draft Red Herring Prospectus, the Red Herring Prospectus and the Prospectus To open and operate bank account(s) of the Company in terms of the escrow agreement for handling of refunds for the Issue and to authorise one or more officers of the company to execute all documents/deeds as may be necessary in this regard; To open and operate a bank account of the Company in terms of section 73(3) of the Companies Act and to authorise one or more officers of the company to execute all documents/deeds as may be necessary in this regard; To determine and finalise the floor price/price band for the Issue, approve the basis for allocation and confirm allocation of the equity shares to various categories of persons as disclosed in the Draft Red Herring Prospectus, the Red Herring Prospectus and the Prospectus, in consultation with the BRLMs and do all such acts and things as may be necessary and expedient for, and incidental and ancillary to, the Issue; To issue receipts/allotment letters/confirmations of allocation notes either in physical or electronic mode representing the underlying equity shares in the capital of the Company with such features and attributes as may be required and to provide for the tradability and free transferability thereof as per market practices and regulations, including listing on one or more stock exchange(s), with power to authorise one or more officers of the company to sign all or any of the aforestated documents;

b)

c)

d)

e)

f)

g)

h)

i)

103

j)

To make applications for listing of the shares in one or more stock exchange(s) for listing of the equity shares of the Company and to execute and to deliver or arrange the delivery of necessary documentation to the concerned stock exchange(s); To do all such deeds and acts as may be required to dematerialise the equity shares of the Company and to sign and/or modify, as the case may be, agreements and/or such other documents as may be required with National Securities Depository Limited, Central Depository Services (India) Limited, Registrar & Transfer Agents and such other agencies, as may be required in this connection with power to authorise one or more officers of the company to execute all or any of the aforestated documents; To authorize and approve the incurring of expenditure and payment of fees, commissions, remuneration and expenses in connection with the Public Issue; To do all such acts, deeds, matters and things and execute all such other documents, etc. as it may, in its absolute discretion, deem necessary or desirable for such purpose, including without limitation, finalise the basis of allocation and to allot the shares to the successful allottees as permissible in law, issue of share certificates in accordance with the relevant rules; To settle all questions, difficulties or doubts that may arise in regard to such issues or allotment as it may, in its absolute discretion deem fit. To delegate any of the powers mentioned in (a) to (n) to any member of the IPO Committee. To approve, adopt and file the prospectus for the Public Issue as required under Section 60 of the Companies Act with the Registrar of Companies, Maharashtra and to make any corrections or alterations therein. to issue notice convening the meeting of the shareholders authorising the issue of the shares, the Public Issue and to comply with all requirements of the Companies Act, 1956 in this regard.

k)

l)

m)

n)

o) p)

q)

Milestone Employee Welfare Trust For details please see the section Capital Structure on page 24. Interest of Directors All of the Directors may be deemed to be interested to the extent of fees payable to them for attending meetings of the Board of Directors or a Committee thereof as well as to the extent of other remuneration and reimbursement of expenses payable to them under the Articles of the Company, and to the extent of remuneration paid to them for services rendered as an officer or employee of the Company. Noel Naval Tata, one of the Directors of the Company, is a majority shareholder of Lantern Trading and Investment Private Limited (Lantern Trading), which holds 20% of IL&FS Milestone Realty. To the extent of his shareholding interest in Lantern Trading, he may receive benefits through Lantern Trading, which is a shareholder of IL&FS Milestone Realty. The Directors may also be regarded as interested in the Equity Shares, if any, held by them or that may be subscribed by or allotted to the companies, firms and trusts, in which they are interested as directors, members, partners, trustees and promoters, pursuant to this Issue. All of the Directors may also be deemed to be interested to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares. The Directors have no interest in any property acquired by the Company within two years from the date of this Draft Red Herring Prospectus.

104

Except as stated in the section Related Party Transactions on page 125 and described herein to the extent of shareholding in the Company, if any, the Directors do not have any other interest in our business. Appointment of Bhagyam Ramani Pursuant to the consent granted by General Insurance Corporation of India by its letter dated June 29, 2009, Bhagyam Ramani has been appointed as a Nominee Director on behalf of General Insurance Corporation of India on the Board of the Company for a period of two years. Changes in the Board of Directors in the last three years Name Raj Narain Bhardwaj Gopal Srinivasan Dr. Pravin Pranalal Shah Gopal Srinivasan Bhagyam Ramani Vijay Kumar Chopra Date of Appointment/ Change/ Cessation June 12, 2007 June 28, 2007 August 29, 2007 April 20, 2009 June 30, 2009 June 30, 2009 Reason Appointment Appointment Appointment Resignation Appointment Appointment

Management Organisation Structure Board of Directors of the Company

Ved Prakash Arya Managing Director and Chief Executive Officer

Business Strategy and Development

Finance, Accounts, Risk Management, Compliance and Legal

Real Estate Advisory

PMS Advisory

Human Resources and Administration

Fund Raising and Investor Relations

Brand Communications

Key Management Personnel Apart from Ved Prakash Arya, the details of the key management personnel, as of the date of this Draft Red Herring Prospectus, are as follows: Ashish Joshi, aged 40 years, is the managing partner, real estate investment. He holds a bachelors degree in commerce from Nagpur University and is a qualified chartered accountant and cost accountant. He oversees complete fund performance and asset valuation across all investments and holds the key responsibility for developer and partner relations. He has been associated with the Milestone group since October 2007 and has been transferred to the Company from April 1, 2010 from one of its joint ventures. Prior to joining the Milestone group, he was the chief finance officer of Peninsula Land Limited.

105

Navin Kumar, aged 43 years, is the country head, fund raising. He holds a bachelors degree in commerce from University of Bombay and masters degree in business administration from the University of Pune. He has been associated with the Milestone group since October 2007 and has been transferred to the Company from April 1, 2010 from one of its joint ventures. He has more than 19 years of experience in financial services and related industries in India and has been associated with the World Gold Council. Paritosh Kakkad, aged 41 years, is the chief financial officer and head of risk management. He has been associated with the Milestone group since August 2008 and has been transferred to the Company on April 1, 2010. He is a chartered accountant and has received a certificate in business management from Bayer Institute, Germany. He has more than 16 years of experience in accounts, treasury, finance, management information systems budgeting, taxation and internal audit. He was previously employed with Mercator Lines (Singapore) Limited as general manager finance. Ravindra Gupta, aged 33 years, is the company secretary and compliance officer of the Company. He holds a bachelors degree in commerce from University of Bombay and is a qualified company secretary. He has more than nine years of experience, and before joining the Company, he was a senior manager for corporate governance at Pantaloon Retail (India) Limited and was the company secretary of Home Solutions Retail (India) Limited. He has been associated with the Milestone group since December 2007 and has been transferred to the Company on April 1, 2010. None of the key management personnel are related to each other. All the key management personnel are permanent employees of the Company. Shareholding of key management personnel Paritosh Kakkad holds a 100% beneficial interest in ILMS Constructions Private Limited, which holds 100,000 Equity Shares in the Company. Additionally, he also jointly holds one Equity Share with Milestone Fincap, for which he is the second holder. None of the other key management personnel hold any Equity Shares in the Company. Bonus or profit sharing plan of the key management personnel Ved Prakash Arya is entitled upto 5% of the profit before tax of the Company and other key management personnel of the Company are entitled to bonus based on their performance. Interests of key management personnel The key management personnel of the Company do not have any interest in the Company other than to the extent of the remuneration or benefits to which they are entitled to as per their terms of appointment, gratuity benefits, reimbursement of expenses incurred by them during the ordinary course of business and the employee stock options held, if any. None of the key management personnel have been paid any consideration of any nature from the Company, other than their remuneration. Changes in the key management personnel The changes in the key management personnel in the last three years are as follows: Name Ashish Joshi Navin Kumar Paritosh Kakkad Designation Managing Partner Country Head, Fund Raising Chief Financial Officer Date of change April 1, 2010 April 1, 2010 April 1, 2010 Reason for change Appointment in the Company pursuant to transfer from a joint venture company Appointment in the Company pursuant to transfer from a joint venture company Appointment in the Company pursuant to transfer from a joint venture company

106

Name Ravindra Gupta

Designation Compliance Officer

Date of change April 1, 2010

Reason for change Appointment in the Company pursuant to transfer from a joint venture company

107

SUBSIDIARIES AND JOINT VENTURES The Company has six direct Subsidiaries and three indirect Subsidiaries. None of the Subsidiaries have made any public or rights issue in the last three years and have not become sick companies under the meaning of SICA and are not under winding up. Other than as disclosed in the section Promoters and Promoter Group on page 117, the Promoters have not disassociated from any of the companies during the preceding three years. The information provided in this section is as of the date of this Draft Red Herring Prospectus. Interest of the Subsidiaries in the Company None of the Subsidiaries hold any Equity Shares in the Company. Except as stated in the section Related Party Transactions on page 125, the Subsidiaries do not have any other interest in the Companys business. Common Pursuits Except as disclosed in this Draft Red Herring Prospectus, the Promoters do not have any interest in any venture that is involved in any activities similar to those conducted by the Company. The Company will adopt the necessary procedures and practices as permitted by law to address any conflict situation as and when they arise. SUBSIDIARIES The Company has the following direct Subsidiaries as of the date of this Draft Red Herring Prospectus: 1. 2. 3. 4. 5. 6. Milestone Projects and Property Management Private Limited Milestone Portfolio Management Services Private Limited Milestone Investment Advisory Services Private Limited Milestone Trusteeship Services Private Limited Jevir Leasing & Finance Limited Omega Global Mauritius Ltd.

The Company has the following indirect Subsidiaries: 1. 2. 3. 1. Milestone Capital Management LLC IL&FS Milestone Capital Management LLC Milestone Mercator Maritime Management Limited Milestone Projects and Property Management Private Limited (Milestone Property) Corporate Information: Milestone Property was incorporated as Milestone Propgain Mall Management Private Limited under the Companies Act on July 24, 2007, in Mumbai. On July 2, 2008 the name was changed to Milestone Project and Mall Management Limited and on October 1, 2008 its name was change to Milestone Property. Milestone Property is involved in the business of controlling, maintaining and marketing properties and assets (both immovable and movable) and related activities. Capital Structure: No. of equity shares of Rs.10 each Authorised capital Issued, subscribed and paid-up capital 10,000 10,000

108

Shareholding Pattern: The shareholding pattern of Milestone Property is as follows: Sr. No. 1. Name of the shareholder No. of equity shares of Rs.10 each 10,000 10,000 Percentage of total equity holding (%) 100.00% 100.00%

Milestone Capital * Limited Total

Advisors

*100 equity shares held jointly with Sumit Somani

2.

Milestone Portfolio Management Services Private Limited (Milestone PMS) Corporate Information: Milestone PMS was incorporated under the Companies Act on October 3, 2007, in Mumbai. Milestone PMS is involved in the business of providing consultancy services and portfolio management services. Capital Structure: No. of equity shares of Rs.10 each 1,000,000 10,000

Authorised capital Issued, subscribed and paid-up capital Shareholding Pattern:

The shareholding pattern of Milestone PMS is as follows: Sr. No. 1. Name of the shareholder No. of equity shares of Rs.10 each 10,000 10,000 Percentage of total equity holding (%) 100.00% 100.00%

Milestone Capital Advisors * Limited Total

*10 equity shares jointly with Ravindra Gupta

3.

Milestone Investment Advisory Services Private Limited (Milestone Investment) Corporate Information: Milestone Investment was incorporated under the Companies Act on April 1, 2008, in Mumbai. Milestone Investment is involved in the business of providing consultancy services and portfolio management services for clients and to act as counsel to various funds. Capital Structure: No. of equity shares of Rs.10 each 1,000,000 1,000,000

Authorised capital Issued, subscribed and paid-up capital

109

Shareholding Pattern: The shareholding pattern of Milestone Investment is as follows: Sr. No. 1. Name of the shareholder No. of equity shares of Rs.10 each 1,000,000 1,000,000 Percentage of total equity holding (%) 100.00% 100.00%

Milestone Capital Limited* Total

Advisors

*100 equity shares jointly with Ravindra Gupta.

4.

Milestone Trusteeship Services Private Limited (Milestone Trusteeship) Corporate Information: Milestone Trusteeship was incorporated under the Companies Act on May 26, 2008, in Mumbai. Milestone Trusteeship undertakes and manages the offices and duties of trustees and other related activities. Capital Structure: No. of equity shares of Rs.10 each Authorised capital Issued, subscribed and paid-up capital Shareholding Pattern: The shareholding pattern of Milestone Trusteeship is as follows: Sr. No. 1. Name of the shareholder No. of equity shares of Rs.10 each 50,000 50,000 Percentage of total equity holding (%) 100.00% 100.00% 50,000 50,000

Milestone Capital Advisors Limited* Total

*100 equity shares jointly with Ravindra Gupta.

5.

Jevir Leasing and Finance Limited (Jevir L&F) Corporate Information: Jevir L&F was incorporated under the Companies Act on July 25, 1996 in Ahmedabad by Vishnubhai Patel & Associates. Jevir L&F was purchased by Milestone Fincap on January 19, 2009. Subsequently, Jevir L&F was acquired by the Company with effect from December 31, 2009. Jevir L&F is a non-deposit taking NBFC registered with the RBI and is involved in the business of financing. Capital Structure: No. of equity shares of Rs.10 each Authorised capital Issued, subscribed and paid-up capital 400,000 345,200

110

Shareholding Pattern: The shareholding pattern of Jevir L&F is as follows: Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. Total 6. Omega Global Mauritius Ltd. (Omega Global) Corporate Information: Omega Global was incorporated under the laws of Mauritius on December 29, 2009 by Apex Fund Services (Mauritius) Limited (as a nominee of Robin Rastogi). Omega Global holds a Category I Global Business Licence and is involved in the business of investment holding and treasury management as regulated under the Financial Services Act, 2007 as enacted by the Republic of Mauritius. Omega Global has three subsidiaries, namely, Milestone Capital Management LLC, IL&FS Milestone Capital Management LLC, and Milestone Mercator Maritime Management Limited. It also has one joint venture, Milestone Religare Capital Management Ltd. Capital Structure: The issued and paid-up share capital of Omega Global is 1ordinary share of US$ 1 per ordinary share. Shareholding Pattern: The shareholding pattern of Omega is as follows: Sr. No. 1. Total Name of the shareholder No. of ordinary shares of US$ 1 each 1 1 Percentage of total equity holding (%) 100.00% 100.00% Name of the shareholder Milestone Capital Advisors Limited Ved Prakash Arya Ravindra Gupta jointly with Milestone Capital Advisors Limited Sumit Somani jointly with Milestone Capital Advisors Limited Reshma Joshi jointly with Milestone Capital Advisors Limited Ruchir Gandhi jointly with Milestone Capital Advisors Limited Paritosh Kakkad jointly with Milestone Capital Advisors Limited Ashish Karwa jointly with Milestone Capital Advisors Limited No. of equity shares of Rs.10 each 258,300 86,300 100 100 100 100 100 100 345,200 Percentage of total equity holding (%) 74.82% 25.00% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 100.00%

Milestone Capital Advisors Limited

111

7.

Milestone Capital Management LLC (MCM) Corporate Information: MCM was incorporated under the laws of Mauritius on November 16, 2007, in Port Louis, Mauritius. MCM holds a Category I Global Business Licence and is licensed to act as a CIS manager. It is involved in the business of investment management. Capital Structure: No. of shares of US$ 0.01 each Management shares Redeemable participating shares Shareholding Pattern: The shareholding pattern of MCM is as follows: Sr. No. 1. 2. Name of the shareholder Omega Global Mauritius Ltd. Management shares Omega Global Mauritius Ltd. Redeemable participating shares No. of shares of US$ 0.01 each 100 4,000,000 Percentage of total holding (%) 100.00% 100.00% 100 4,000,000

8.

IL&FS Milestone Capital Management LLC (IL&FS MCM) Corporate Information: IL&FS MCM was incorporated under the laws of Mauritius on February 11, 2010, in Port Louis, Mauritius. IL&FS MCM has received a Category I .Business Licence and is licensed to act as a CIS manager. It is involved in the business of investment management. Capital Structure: No. of shares of US$ 1 each Management Shares Shareholding Pattern: The shareholding pattern of IL&FS MCM is as follows: Sr. No. 1. Total Name of the shareholder Omega Global Mauritius Ltd. Management Shares No. of shares of US$ 1 each 1 1 Percentage of total equity holding (%) 100.00% 100.00% 1

9.

Milestone Mercator Maritime Management Limited (Milestone Mercator) Corporate Information:

112

Milestone Mercator was incorporated under the laws of Cayman Islands on December 7, 2009, in the Cayman Islands. Milestone Mercator is involved in the business of managing and advising maritime fund. Capital Structure: No. of equity shares of US$ 1 each Authorised capital Issued, subscribed and paid-up capital Shareholding Pattern: The shareholding pattern of Milestone Mercator is as follows: Sr. Name of the shareholder No. 1. Omega Global Mauritius Ltd. Total JOINT VENTURES The Company has the following five Joint Ventures including one Joint Venture entered into by Omega Global: 1. 2. 3. 4. 5. 1. IL&FS Milestone Realty Advisors Private Limited Milestone Ecofirst Advisory Services (India) Private Limited Milestone Religare Investment Advisors Private Limited Capstone Capital Services Private Limited Milestone Religare Capital Management Ltd. IL&FS Milestone Realty Advisors Private Limited(IL&FS Milestone Realty) Corporate Information: IL&FS Milestone Realty was incorporated under the Companies Act on July 23, 2007, in Mumbai. IL&FS Milestone Realty is involved in the business of providing investment advisory services to entities related to Yield Driven Real Estate Fund. Capital Structure: No. of equity shares of Rs.10 each 1,000,000 1,000,000 No. of shares of US$ 1 each 1,000 1,000 Percentage of total holding (%) 100.00% 100.00% 50,000 1,000

Authorised capital Issued, subscribed and paid-up capital Shareholding:

The Company holds 400,000 equity shares, aggregating to 40% of the issued equity share capital of IL&FS Milestone Realty. Shareholding Pattern: The shareholding pattern of IL&FS Milestone Realty is as follows:

113

Sr. No. 1. 2. 3.

Name of Shareholder IL&FS Investment Managers Limited Milestone Capital Advisors Limited Lantern Trading and Investment Private Limited Total

No. of equity shares of Rs.10 each 400,000 400,000 200,000 1,000,000

Percentage of total equity holding (%) 40.00% 40.00% 20.00% 100.00%

2.

Milestone Ecofirst Advisory Services (India) Private Limited (Milestone Ecofirst) Corporate Information: Milestone Ecofirst was incorporated under the Companies Act on May 15, 2008, in Mumbai. Milestone Ecofirst is involved in the business of providing consultancy services for the construction of or conversion of existing buildings into environment friendly buildings. Capital Structure: No. of equity shares of Rs.10 each 2,000,000 2,000,000

Authorised capital Issued, subscribed and paid-up capital Shareholding:

The Company holds 1,000,000 equity shares, aggregating to 50% of the issued equity share capital of Milestone Ecofirst. Shareholding Pattern: The shareholding pattern of Milestone Ecofirst is as follows: Sr. No. 1. 2. Name of Shareholder J Leon Trading Limited Milestone Capital Advisors Limited Total No. of equity shares of Rs.10 each 1,000,000 1,000,000 2,000,000 Percentage of total equity holding (%) 50.00% 50.00% 100.00%

3.

Milestone Religare Investment Advisors Private Limited (Milestone Religare) Corporate Information: Milestone Religare was incorporated under the Companies Act on April 6, 2009, in Mumbai. Milestone Religare is involved in the business of providing investment advisory services to funds. Capital Structure: No. of equity shares of Rs.10 each 1,000,000 999,998

Authorised capital Issued, subscribed and paid-up capital

114

Shareholding: The Company holds 499,999 equity shares, aggregating to 50% of the issued equity share capital of Milestone Religare. Shareholding Pattern: The shareholding pattern of Milestone Religare is as follows: Sr. No. 1. 2. Name of Shareholder Religare Venture Capital Limited Milestone Capital Advisors Limited* Total No. of equity shares of Rs.10 each 499,999 499,999 999,998 Percentage of total equity holding (%) 50.00% 50.00% 100.00%

* One equity share jointly held with Ravindra Gupta

4.

Capstone Capital Services Private Limited (Capstone Capital) Corporate Information: Capstone Capital was incorporated under the Companies Act on April 15, 2008, in Mumbai. Capstone Capital is in the business of investment advisory. Capital Structure: No. of equity shares of Rs.10 each 10,000,000 9,999,980

Authorised capital Issued, subscribed and paid-up capital Shareholding:

The Company holds 499,999 equity shares, aggregating to 50% of the issued equity share capital of Capstone Capital. Shareholding Pattern: The shareholding pattern of Capstone Capital is as follows: Sr. No. 1. 2. Name of Shareholder Money Matters Financial Services Limited Milestone Capital Advisors Limited* Total No. of equity shares of Rs.10 each 499,999 499,999 999,998 Percentage of total equity holding (%) 50.00% 50.00% 100.00%

* One equity share jointly held with Ravindra Gupta

5.

Milestone Religare Capital Management Ltd. (MRCM) Corporate Information: MRCM was incorporated under the laws of Mauritius on September 22, 2009, in Port Louis, Mauritius. The name of MCRM was changed to Milestone Religare Capital Management Limited

115

pursuant to a special resolution and fresh certificate of incorporation dated November 12, 2009. MRCM holds a Category I Global Business Licence and is licensed to act as a CIS manager. It is involved in the business of investment management. Capital Structure: The issued and paid-up share capital of MRCM is 200,000 ordinary shares of US$ 1 per ordinary share. Shareholding Pattern: The shareholding pattern of MRCM is as follows: Sr. No. 1. 2. Name of the shareholder Omega Global Mauritius Ltd. Religare Capital Markets Plc (previously known as Religare Hichens, Harrison Plc) No. of ordinary shares of Us$ 1 each 100,000 100,000 Percentage of total holding (%) 50.00% 50.00%

Total

200,000

100.00%

116

PROMOTERS AND PROMOTER GROUP The Promoters of the Company are Ved Prakash Arya and Milestone Fincap Services Private Limited. Ved Prakash Arya Ved Prakash Arya, aged 40 years, is the Managing Director and the Chief Executive Officer of the Company. For further details, see the section Management on page 92. His driving license number is T-5808/95.

We confirm that the permanent account number, bank account number and passport number of Ved Prakash Arya shall be submitted to the Stock Exchanges, at the time of filing the Draft Red Herring Prospectus with them. Milestone Fincap Services Private Limited Milestone Fincap was incorporated on November 21, 2005 as a private limited company under the Companies Act. The registered office of Milestone Fincap is situated at 602, Hallmark Business Plaza, Sant Dyaneshwar Marg, Opp. Guru Nanak Hospital, Bandra (East), Mumbai 400 051. Principal Business Milestone Fincap is an investment company and carries on the business of acquiring, buying, underwriting, owning, holding, selling or otherwise dealing with shares, stocks, equity linked instruments, mutual funds, real estate funds, debentures, debenture stock, bonds, units, certificates, obligations and other securities. Promoters of Milestone Fincap Ved Prakash Arya is the promoter of Milestone Fincap. Shareholding Pattern The shareholding pattern of Milestone Fincap is set forth below: Sr. No. 1. 2. 3. 4. Total Name of Shareholders Ved Prakash Arya Rubi Arya Tanu Arya* Dhruv Arya* No. of Shares held 5,200 1,600 1,600 1,600 10,000 % of Share holding 52.00% 16.00% 16.00% 16.00% 100.00%

* Holding shares through Ved Prakash Arya.

There has been no change in the control or the management of Milestone Fincap in the three years preceding the date of filing of this Draft Red Herring Prospectus. The Company confirms that the permanent account number, bank account number, company registration number and the address of the registrar of companies where Milestone Fincap is registered shall be

117

submitted to the Stock Exchanges at the time of filing the Draft Red Herring Prospectus. Interests of Promoters and Common Pursuits The Promoters are interested in the Company to the extent that they have promoted the Company and hold equity shares in the Company. For details on the shareholding of the Promoters in the Company, please see the section Capital Structure on page 24. Except for Rubi Arya, who is a director on the boards of Milestone Fincap and Milestone PMS, none of the directors or employees of Milestone Fincap, the corporate Promoter, are Directors or employees of the Company or the Subsidiaries. The Company has not entered into any contract, agreements or arrangements during the preceding two years from the date of this Draft Red Herring Prospectus in which the Promoters are directly or indirectly interested and no payments have been made to the Promoters in respect of the contracts, agreements or arrangements which are proposed to be made with the Promoters including the properties purchased by the Company other than in the normal course of business. Other than as disclosed, the Promoters do not have any interest in any venture that is involved in any activities similar to those conducted by the Company. The Company will adopt the necessary procedures and practices as permitted by law to address any conflict situation as and when they arise. Payment of benefits to the Promoters Except as stated in the section Related Party Transactions on page 125, there has been no payment of benefits to the Promoters during the two years preceding the filing of this Draft Red Herring Prospectus. Companies with which the Promoters have disassociated in the last three years The Promoters have not disassociated from any company during the preceding three years. Confirmations Further, the Promoters have not been declared wilful defaulter by the RBI or any other governmental authority and there are no violations of securities laws committed by the Promoters in the past or pending against them. Change in the management and control of the Issuer The Company was incorporated as Skyzen Investment Advisors Private Limited on June 7, 2005 by Skyzen Capital Advisors Private Limited. The original promoters of the Company were Skyzen Capital Advisors Private Limited and Arvind Bansal. The management and control of the Company was taken over by Milestone Fincap from Skyzen Capital Advisors Private Limited on July 23, 2007 by the transfer of 9,800 Equity Shares for a consideration of Rs. 98,000. The Promoter Group In addition to the Promoters named above, the following individuals and entities form a part of the Promoter Group: 1. Natural persons who are part of the Promoter Group The natural persons who are part of the Promoter Group (due to their relationship with Ved Prakash Arya), other than the Promoter, are as follows:

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Name Satyapal Arya Indra Arya Rubi Arya Dhruv Arya Tanu Arya Ashwein Arya Usha Agarwal Rajesh Gupta Beena Maithel Virendra Kumar Rastogi Ranjana Rastogi Robin Rastogi Ashish Rastogi 2.

Relationship with Promoter Father Mother Wife Son Daughter Brother Sister Sister Sister Father-in-Law Mother-in-Law Brother-in-law Brother-in-law

Corporate entities forming part of the Promoter Group In addition to Milestone Fincap, the following corporate entities form part of the Promoter Group: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Milestone Strategy Consultants Private Limited Milestone Lotus Valley Buildwell Private Limited Accord Flower Valley Buildwell Private Limited Indusion Consultancy Private Limited Milestone Bullion Opportunities Limited Milestone Planners Private Limited Milestone Capfin Solutions Private Limited Milestone Money Advisors Private Limited Greentech Knowledge Solutions Private Limited Milestone Bullion Trade Private Limited Milestone Bullion House Private Limited

3.

Trusts forming part of Promoter Group 1. 2. VPA Sibbling Trust VPA BIL Trust

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GROUP COMPANIES Companies forming part of the Group Companies Unless otherwise stated none of the companies forming part of the Group Companies is a sick company under the meaning of SICA and none of them are under winding up. Further, all the Group Companies are unlisted companies and they have not made any public issue of securities in the preceding three years. The information provided in this section is as of the date of this Draft Red Herring Prospectus. The Group Companies are as follows: Companies 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. A. 1. Milestone Lotus Valley Buildwell Private Limited Accord Flower Valley Buildwell Private Limited Indusion Consultancy Private Limited Milestone Strategy Consultants Private Limited Milestone Bullion Opportunities Limited Milestone Planners Private Limited Milestone Capfin Solutions Private Limited Milestone Money Advisors Private Limited Milestone Bullion Trade Private Limited Milestone Bullion House Private Limited Details of Group Companies Milestone Lotus Valley Buildwell Private Limited Corporate Information Milestone Lotus Valley Buildwell Private Limited was incorporated under the Companies Act on August 2, 2007, in Mumbai and currently holds certain real estate assets. Interest of the Promoter Ved Prakash Arya holds 5,000 equity shares, aggregating to 50% of the issued and paid up equity share capital and Rubi Arya holds 5,000 shares aggregating to 50% of the issued and paid up equity share capital in Milestone Lotus Valley Buildwell Private Limited. Financial Performance The summary audited financial information of Milestone Lotus Valley Buildwell Private Limited are as follows: (in Rs.) Sr. Particulars For the year ended No. March 31, 2009 March 31, 2008 1. Equity Capital 100,000.00 100,000.00 2. 3. 4. 5. 6. Reserves (excluding revaluation reserve) and surplus Income including other income Profit/ (Loss) after tax Earnings per share (basic and diluted) Net asset value 0.00 0.00 (40,597.00) (4.06) 43,678.00 0.00 0.00 (15,725.00) (2.37) 80,675.00

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2.

Accord Flower Valley Buildwell Private Limited Corporate Information Accord Flower Valley Buildwell Private Limited was incorporated under the Companies Act on August 2, 2007, in Mumbai and currently holds certain real estate assets. Interest of the Promoter Ved Prakash Arya holds 5,000 equity shares, aggregating to 50% of the issued and paid up equity share capital and Rubi Arya holds 5,000 shares aggregating to 50% of the issued and paid up equity share capital in Accord Flower Valley Buildwell Private Limited. Financial Performance The summary audited financial information of Accord Flower Valley Buildwell Private Limited are as follows: (in Rs.) For the year ended March 31, 2009 March 31, 2008 100,000.00 100,000.00 0.00 0.00 0.00 (23,003.00) (3.81) 61,882.00 0.00 (15,115.00) (2.27) 81,685.00

Sr. No. 1. 2. 3. 4. 5. 6. 3.

Particulars Equity Capital Reserves (excluding revaluation reserve) and surplus Income including other income Profit/ (Loss) after tax Earnings per share (basic and diluted) Net asset value

Indusion Consultancy Private Limited Indusion Consultancy Private Limited was incorporated under the Companies Act on June 8, 2007, in Mumbai. The main object of the company is to provide consultancy and advisory services. Interest of the Promoter Ved Prakash Arya holds 9,999 equity shares, aggregating to 99.99% of the issued and paid up equity share capital of Indusion Consultancy Private Limited. Financial Performance The summary audited financial information of Indusion Consultancy Private Limited are as follows: (in Rs.) Sr. Particulars For the year ended No. March 31, 2009 March 31, 2008 1. Equity Capital 100,000.00 100,000.00 2. Reserves (excluding revaluation 0.00 0.00 reserve) and surplus 3. Income including other income 0.00 0.00 4. Profit/ (Loss) after tax (4,412.00) (11,812.00) 5. Earnings per share (basic and (0.44) (1.45) diluted)

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Sr. No. 6. 4.

Particulars Net asset value

For the year ended March 31, 2009 March 31, 2008 83,776.00 88,188.00

Milestone Strategy Consultants Private Limited Milestone Strategy Consultants Private Limited was incorporated under the Companies Act on July 10, 2009, in Mumbai. The main object of the company is to provide consultancy and advisory services. Interest of the Promoter Ved Prakash Arya holds 9,999 equity shares aggregating to 99.99% of the issued and paid up equity share capital of Milestone Strategy Consultants Private Limited. Financial Performance Since Milestone Strategy Consultants Private Limited was incorporated less than a year ago, the audited financial information is not available.

5.

Milestone Bullion Opportunities Limited Milestone Bullion Opportunities Limited was incorporated under the Companies Act on February 25, 2010, in Mumbai. The main object of the company is to deal in bullion and precious stone. Interest of the Promoter Milestone Fincap holds 50,000 equity shares aggregating to 100% of the issued and paid up equity share capital of Milestone Bullion Opportunities Limited. Financial Performance Since Milestone Bullion Opportunities Limited was incorporated less than a year ago, the financial information is not available.

6.

Milestone Planners Private Limited Milestone Planners Private Limited was incorporated under the Companies Act on April 13, 2010, in Mumbai. The main object of the company is to provide consultancy and advisory services. Interest of the Promoter Milestone Fincap holds 10,000 equity shares, aggregating to 100% of the issued and paid up equity share capital of Milestone Planners Private Limited. Financial Performance Since Milestone Planners Private Limited was incorporated less than a year ago, the financial information is not available.

7.

Milestone Capfin Solutions Private Limited Milestone Capfin Solutions Private Limited was incorporated under the Companies Act on April 17, 2010, in Mumbai. The main object of the company is to provide consultancy and advisory services.

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Interest of the Promoter Milestone Fincap holds 10,000 equity shares aggregating to 100% of the issued and paid up equity share capital of Milestone Capfin Solutions Private Limited. Financial Performance Since Milestone Capfin Solutions Private Limited was incorporated less than a year ago, the financial information is not available. 8. Milestone Money Advisors Private Limited Milestone Money Advisors Private Limited was incorporated under the Companies Act on April 21, 2010, in Mumbai. The main object of the company is to provide consultancy and advisory services. Interest of the Promoter Milestone Fincap holds 10,000 equity shares, aggregating to 100% of the issued and paid up equity share capital of Milestone Money Advisors Private Limited. Financial Performance Since Milestone Money Advisors Private Limited was incorporated less than a year ago, the financial information is not available. 9. Milestone Bullion Trade Private Limited Milestone Bullion Trade Private Limited was incorporated under the Companies Act on June 12, 2010, in Mumbai. The main object of the company is to deal in bullion and precious stones. Interest of the Promoter Milestone Fincap holds 10,000 equity shares, aggregating to 100% of the issued and paid up equity share capital of Milestone Bullion Trade Private Limited. Financial Performance Since Milestone Bullion Trade Private Limited was incorporated less than a year ago, the financial information is not available. 10. Milestone Bullion House Private Limited Milestone Bullion House Private Limited was incorporated under the Companies Act on June 19, 2010, in Mumbai. The main object of the company is to deal in bullion and precious metals. Interest of the Promoter Milestone Fincap holds 10,000 equity shares, aggregating to 100% of the issued and paid up equity share capital of Milestone Bullion House Private Limited.

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Financial Performance Since Milestone Bullion House Private Limited was incorporated less than a year ago, the financial information is not available. Nature and Extent of Interest of Group Companies (a) In the promotion of the Company Except for Milestone Strategy Consultants Private Limited, none of the Group Companies have any interest in the promotion of the Company. (b) In the properties acquired in the past two years before filing the Draft Red Herring Prospectus with SEBI or proposed to be acquired by the Company The Company has not acquired nor does it propose to acquire any properties from its Group Companies. (c) In transactions for acquisition of land, construction of building and supply of machinery None of the Group Companies have any interest in any transactions for acquisition of land, construction of building and supply of machinery by the Company. Common Pursuits amongst the Group Companies with the Company Other than as disclosed, none of our Group Companies are in the business of the Company and there are no common pursuits. Related Business Transactions within the Group Companies and Significance on the Financial Performance of the Company For details, please see the section Related Party Transactions on page 125. Sale/Purchase between Group Companies and Subsidiaries For details, please see the section Related Party Transactions on page 125. Business Interest of Group Companies and Subsidiaries in the Company None of the Group Companies and Subsidiaries have any business interest in the Company.

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RELATED PARTY TRANSACTIONS For details of the related party transactions, see the sections Standalone Financial Statements Related Party Transactions and Consolidated Financial Statements Related Party Transactions on pages 137 and 166, respectively.

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DIVIDEND POLICY The declaration and payment of dividends will be recommended by the Board of Directors and approved by the shareholders, at their discretion, subject to the provision of the Articles of Association and the Companies Act. The dividend, if any will depend on a number of factors, including but not limited to the earnings, capital requirements and overall financial condition of the Company. The Board may also, from time to time, pay interim dividends. The dividends declared by the Company during the last five Fiscals has been presented below: (Rs. In Million) Particulars Face Value (in Rs.) 10 2010 80.00 8,000,000 As at March31, 2009 2008 10.00 1,000,000 10.00 1,000,000 2007 0.10 10,000 2006 0.10 10,000

Equity Share Capital Number of Equity Shares outstanding at the year end Interim Dividend Rate of Dividend per Share (Rs.)

2.50 Refer Note 2

Final Dividend Rate of Dividend per Share (Rs.)

0.50 Refer Note 3 4.00 0.68

Amount of Dividend on Equity Shares Tax Paid on Dividend

2.50 0.42

NOTE: 1) The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4. 2) Interim dividend in 2008-2009 was declared for 1,000,000 number of shares of Rs. 10 each outstanding at the time of declaring dividend at 25% of the face value (first Interim dividend). Rate of Dividend per share Rs. 2.50 3) Final dividend for the year ended March 31, 2010 was declared for 8,000,000 number of shares of Rs. 10 each outstanding at the time of declaring dividend at 5% of the face value Rate of Dividend per share Rs. 0.50 The amounts paid as dividend in the past are not necessarily indicative of the Companys dividend policy or dividend amounts, if any, in the future.

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SECTION V: FINANCIAL INFORMATION FINANCIAL STATEMENTS Auditors Report on Restated Standalone Financial Information To The Board of Directors, Milestone Capital Advisors Limited, 602, Hallmark Business Plaza, Dnyaneshwar Marg, Opp. Guru Nanak Hospital, Bandra (East), Mumbai 400051. Dear Sirs, 1. We have examined the attached restated standalone financial information of Milestone Capital Advisors Limited (formerly known as Milestone Capital Advisors Pvt. Ltd.), (the Company) as approved by the Board of Directors of the Company, prepared in terms of the requirements of Paragraph B of Part II of Schedule II to the Companies Act, 1956 (the Act) and amendments thereof and the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and pursuant to Section 11 of the Securities and Exchange Board of India Act, 1992, and related clarifications and the amendments made thereto from time to time(the SEBI Regulations) and in terms of our engagement agreed upon with you in accordance with our engagement letter dated April 6, 2010 in connection with the proposed Initial Public Issue of Equity shares of the Company. The restated standalone financial information of the Company have been extracted by the Management from the financial statements for the years ended March 31, 2006, March 31, 2007, March 31, 2008, March 31, 2009 and March 31, 2010. Audits for the financial year ended March 31, 2006 and March 31, 2007 were conducted by previous auditors, M/s Bhavan Patel & Co., a nd accordingly reliance has been placed on the financial information examined by them for the said years. The financial report included for these years, i.e., March 31, 2006 and March 31, 2007 are based solely on the report submitted by them. The audited financial statements for the years ended March 31, 2008, March 31, 2009 and March 31, 2010; have been approved by the Board of directors and audited by us. The aforesaid annual financial statements have been adopted by the Members of the Company at the respective Annual General Meetings. The restated standalone financial information for the above period was examined to the extent practicable, for the purpose of audit of financial information in accordance with the Standard on Quality Control and Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we plan and perform our audit to obtain reasonable assurance, whether the financial information under examination is free of material misstatement. Based on the above, we report that in our opinion and according to the information and explanations given to us, we have found the same to be correct and the same have been accordingly used in the financial information appropriately. 4. In accordance with the requirements of Paragraph B of Part II of Schedule II to the Act, the SEBI Regulations and terms of our engagement agreed with you, based on our examination, we further report that: a. The Summary Statement of Assets and Liabilities, as restated of the Company, a s at March 31, 2006, March 31, 2007, March 31, 2008, March 31, 2009 and March 31, 2010 examined by us, as set out in Annexure 1 to this report are after making material adjustments and

2.

3.

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regrouping as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes (Refer Annexure 4); b. The Summary Statement of Profits or Losses, as restated of the Company for the years ended March 31, 2006, March 31, 2007, March 31, 2008 and March 31, 2009; and March 31, 2010 examined by us, as set out in Annexure 2 to this report are after making material adjustments and regrouping as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes (Refer Annexure 4); The Statement of Cash Flow, as restated of the Company for the years ended March 31, 2006, March 31, 2007, March 31, 2008, March 31, 2009; and March 31, 2010 examined by us, as set out in Annexure 3 to this report are after making material adjustments and regrouping as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes (Refer Annexure 4); Based on above, we are of the opinion that that the restated financial information have been made after incorporating: i. material adjustments for the changes in accounting policies retrospectively in respective financial years to reflect the same accounting treatment as per changed accounting policy for all the reporting periods; adjustments for the material amounts in the respective financial years to which they relate; there are no extra-ordinary items that need to be disclosed separately in the accounts and qualification requiring adjustments; and there are no qualifications in the Auditors Report, which would require corrective adjustments in the restated financial information.

c.

d.

ii.

iii.

iv

e.

We have also examined the following other restated financial information set out in Annexures prepared by the Management and approved by the Board of Directors relating to the Company for the years ended March 31, 2006, March 31, 2007, March 31, 2008, March 31, 2009; and March 31, 2010 i. ii. iii. iv. v. vi. vii. viii. ix. x. Statement of Investment included in Annexure 5; Statement of Sundry Debtors included in Annexure 6; Statement of Loans & Advances included in Annexure 7; Statement of Unsecured Loans included in Annexure 8; Statement of Other Income included in Annexure 9; Statement of Dividend Paid/Proposed included in Annexure 10; Statement of Accounting Ratios included in Annexure 11; Statement of Capitalisation included in Annexure 12; Reconciliation Profits included in Annexure 13; Statement of Tax Shelter included in Annexure 14;

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xi. xii.

Statement of Changes in Share Capital included in Annexure 15; and Statement of Changes in Reserves & Surplus included in Annexure 16.

In our opinion the financial information contained in Annexure 5 to 16 of this report read along with the Significant Accounting Policies and Notes (Refer Annexure 4) prepared after making material adjustments and regrouping as considered appropriate have been prepared in accordance with Part IIB of Schedule II to the Act and the SEBI Guidelines. 5. Our report is intended solely for use of the Management and for inclusion in the offer document in connection with the proposed issue of equity shares of the Company. Our report and should not be used for any other purpose except with our consent in writing. For G. M. KAPADIA & CO. Chartered Accountants Firm Registration No. 104767W (ATUL SHAH) Partner (Membership No. 39569)

Mumbai Dated: June 21, 2010

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Annexure 1: Summary Statement of Assets and Liabilities as restated of Milestone Capital Advisors Limited (Rs. In Million) As at March31, 2009 2008 2007 2006

Particulars 2010 A. FIXED ASSETS Gross Block Less : Depreciation / Amortisation Net Block Less : Revaluation Reserve Net Block after Revaluation Reserve B. INVESTMENTS C. CURRENT ASSETS, LOANS AND ADVANCES Sundry Debtors Cash and Bank Balances Loans and Advances

12.24 3.18 9.06 9.06 24.80

9.23 0.70 8.53 8.53 -

1.04 0.20 0.85 0.85 -

36.60 15.74 148.47 200.81

23.03 0.41 209.63 233.07

7.34 0.65 59.73 67.74

0.24 4.70 0.22 5.16

0.08 0.08

D. LIABILITIES AND PROVISIONS Secured Loans Unsecured Loans Current Liabilities Provisions

95.20 7.17 102.37 13.53 118.76 80.00 38.76 38.76 118.76

172.89 2.56 175.45 18.49 47.66 10.00 37.66 37.66 47.66

43.81 43.81 4.24 20.52 10.00 10.54 10.54 (0.02) 20.52

4.90 0.21 0.00 5.11 0.05 0.10 (0.02) (0.03) 0.05

0.01 0.01 0.07 0.10 (0.00) (0.03) 0.07

E. DEFERRED TAXLIABILITY / (ASSET) F. NET WORTH Represented by Equity Share Capital Reserves and Surplus Less : Revaluation Reserve Reserves and Surplus net of Revaluation Reserve Less : Miscellaneous Expenditure (To the extent not written off or adjusted) -Debit balance in Profit & Loss Account -Preliminary Expenses NET WORTH

NOTE: The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4

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Annexure 2: Summary Statement of Profits and Losses as restated of Milestone Capital Advisors Limited (Rs. In Million) As at March31, 2009 2008 2007 2006

Particulars 2010 INCOME Income from Fund Management Other Income Total Income (A) EXPENDITURE Personnel Costs Distributor Fees Administrative and Other Operating Costs Depreciation and Amortisation Total Expenditure(B) PROFIT / (LOSS) BEFORE TAX (A) - (B) Less : Current Tax Less : Deferred Tax Liabilities/ (Deferred Tax Assets) Less : Provision for Fringe Benefit Tax Add : MAT Credit Entitlement RESTATED PROFIT AFTER TAX Profit & Loss account at the beginning of the year Balance available for appropriations, as restated APPROPRIATIONS : Dividend Dividend Tax Amount transferred to General Reserve Capitalisation of Profit by way of issue of Bonus Shares Balance Carried forward, as restated

211.21 9.53 220.74

178.11 21.33 199.44

39.74 9.62 49.36

0.24 0.24

44.42 67.24 43.51 2.50 157.67 63.07 27.25 (4.95) 40.77 34.66 75.43 4.00 0.68 32.00 38.76

38.19 90.48 25.66 0.57 154.90 44.54 5.12 14.25 0.25 5.12 30.05 10.54 40.59 2.50 0.42 3.00 34.66

11.33 11.63 9.32 0.20 32.48 16.88 1.89 4.24 0.19 10.56 (0.02) 10.54 10.54

0.26 0.26 (0.02) 0.00 (0.02) (0.00) (0.02) (0.02)

0.00 0.00 (0.00) (0.00) (0.00) (0.00)

NOTE: 1) The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4 2) The reconciliation between the audited and restated Profit and Loss as at April 01, 2005 to March 31, 2010 is given in Annexure 13

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Annexure 3: Summary Statement of Cash Flow as restated of Milestone Capital Advisors Limited (Rs. In Million) For the year ended March31, 2010 2009 2008 2007 2006 63.07 2.50 (0.00) 65.57 (13.58) 55.18 (77.69) (0.03) 29.45 (21.32) 8.13 44.54 0.57 0.02 45.13 (15.68) (132.61) 129.08 2.53 28.44 (17.51) 10.94 16.88 0.20 0.01 17.08 (7.10) (51.64) 43.60 1.94 (9.95) (8.01) (0.02) 0.01 (0.01) (0.24) (0.22) 0.20 (0.27) (0.27) (0.00) (0.00) (0.00) (0.00)

Particulars CASH FLOWS FROM OPERATING ACTIVITIES Net Profit before Taxation Adjustments for : Depreciation Preliminary Expenses written off (Profit) / Loss on sale of fixed assets Operating Profit before Working Capital Changes Adjustments for : (Increase)/decrease in debtors (Increase)/decrease in advances Increase/(decrease) in creditors Increase/(decrease) in provisions Cash generated from Operations Income tax paid Net Cash Inflow/(Outflow) from Operating Activities (A) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets Sale of Fixed Assets Purchase of investments Net Cash Inflow/(Outflow) from Investing Activities (B) CASH FLOWS FROM FINANCING ACTIVITIES Dividend Paid Dividend Distribution Tax Paid Repayment of Loans Proceeds from Loan Payment for Incorporation Expenses Proceeds from Issue of Equity Share Capital Net Cash Inflow/(Outflow) from Financing Activities (C) Net Increase/(Decrease) in Cash and Cash Equivalents (A+B+C) Opening Cash and Cash Equivalents Closing Cash and Cash Equivalents

(3.19) 0.18 (24.80) (27.81)

(8.37) 0.12 (8.25)

(1.04) (1.04)

35.00 35.00 15.32 0.41 15.74

(2.50) (0.42) (2.92) (0.24) 0.65 0.41

(34.96) 30.06 9.90 5.00 (4.06) 4.71 0.65

4.90 4.90 4.63 0.07 4.71

(0.02) 0.10 0.08 0.07 0.07

NOTE: 1) The cash flows Statements have been prepared under indirect method as set out in Accounting Standard -3 on Cash Flow Statement. 2) The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4

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Annexure 4 - Significant Accounting Policies and Notes Forming Part of Restated Standalone Financial Information BACKGROUND Milestone Capital Advisors Limited (hereinafter referred to as the Company or Milestone) was incorporated on June 7, 2005. The Company is engaged in the business of providing investment advisory services, portfolio management services, management of various funds and schemes and providing project & property management services in relation to properties in which the funds and schemes have invested. The Companys name was changed from Skyzen Investment Advisors Private Limited to Milestone Capital Advisors Private Limited by a special resolution passed at the Extra-Ordinary General Meeting of the shareholders of the Company held on March 26, 2007 and approved by the Registrar of Company on April 12, 2007. The name was further changed to Milestone Capital Advisors Limited by a special resolution passed at the Extra-Ordinary General Meeting of the shareholders of the Company held on March 23, 2010 and approved by the Registrar of Company on May 18, 2010. These restated standalone financial information are for five years from 2005-06 to 2009-10. A. 1. Significant Accounting Policies METHOD OF ACCOUNTING The Financial statements are prepared under the historical cost convention, on the accrual basis of accounting and comply with the Accounting Standards as notified by the Companies (Accounting Standard) Rules, 2006 and in accordance with the Generally Accepted Accounting Principles (GAAP) and the provisions of the Companies Act, 1956 consistently adopted by the Company. 2. USE OF ESTIMATES The preparation of financial statement in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of the assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results get materialized. 3. REVENUE RECOGNITION Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Income from fund under management are recognized based on contractual arrangements. Set up fees are recognized over the life of the managed scheme. 4. FIXED ASSETS Fixed Assets are valued at cost, less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the assets to its working condition for its intended use. 5. DEPRECIATION AND AMORTISATION a) Depreciation is provided on Written Down Value method at the rates prescribed in Schedule XIV to the Companies Act, 1956. In case of addition during the year depreciation is provided on pro rata basis. Depreciation on assets costing less than Rs. 5000 is provided at 100 per cent.

b)

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c)

Assets acquired during the year towards improvement and or renovation of lease hold premise is amortized / depreciated at Straight Line Method over the lease term. Computer software cost is amortised over the expected useful life of the asset and mobile phones are fully depreciated in the year of capitalisation.

d)

6.

FOREIGN CURRENCY TRANSACTIONS a) Transactions in foreign currency are recorded at the rates of exchange prevailing at the date of the transaction. Any exchange difference either on settlement or on translation at the balance sheet date is recognized in Profit & Loss Account.

b)

7.

INVESTMENTS Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. Diminution in value, other than temporary, is recognised in the accounts. Profit / loss on sale of investments are computed with reference to the average cost of investment.

8.

LEASES: Assets acquired under leases where substantial risks and rewards of ownership are not transferred to the Company are classified as operating leases. Such assets are not capitalised. The lease rentals paid are charged to Profit & Loss Account

9.

TAXATION a) Income Tax for the current period is determined on the basis of taxable income computed in accordance with the provision of the Income Tax Act, 1961. Deferred Tax asset is recognized on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable for reversal in one or more subsequent periods. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence of realization of such assets. Other deferred tax assets are recognized only to the extent that there is a reasonable certainty of realization in future.

b)

10.

EARNINGS PER SHARE Basic earnings per share are calculated by dividing the net profit or loss after tax for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. The period during which, number of dilutive potential equity shares change frequently, weighted average number of shares are computed based on a mean date in the quarter, as impact is immaterial on Earnings per Share.

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11.

PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS Provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on management estimates required to settle the obligations at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates. Contingent liabilities are disclosed when the Company has possible obligation or a present obligation and it is probable that a cash outflow will not be required to settle the obligation.

12.

EMPLOYEE BENEFITS a) The Provisions of Provident Fund Act are not applicable to the Company since its staff strength is below the threshold limit specified under the statue. Premium paid to an insurance company under Group Accident Policy and Group Mediclaim Policy, which is a defined contribution scheme, are charged to the Profit & Loss account on prorata basis. Gratuity liability is defined benefit obligations and is provided for on the basis of an actuarial valuation made at the end of each financial year. Long term compensated absences are provided for based on actuarial valuation. Actuarial gains / losses are immediately recognized as income / expenses and are not deferred.

b)

c)

d) e) 13.

DISTRIBUTOR FEES Distributor fees payable for arranging of Contribution subscription for Milestone Domestic Scheme I & II are deferred and charged to Profit and Loss Account for every financial year equally over the life of the scheme as defined in the respective Information Memorandum of the schemes.

B. 1.

Notes on Accounts SHARE CAPITAL a) During the year 2009-10, on March 23, 2010, 3,500,000 Equity Shares of Rs. 10 each were issued and allotted as fully paid bonus shares in proportion of 10:35 by capitalising Rs. 3.00 million from General Reserve and Rs.32.00 million from Profits of the Company and thereafter 3,500,000 Equity Shares of Rs. 10 each were offered on as Right Shares in ratio of 45:35 for consideration in cash. During the year 2007-08, 990,000 Equity Shares of Rs. 10 each were issued as Right Shares in ratio of 99:1 for consideration in cash.

b)

2.

CONTINGENT LIABILITIES Capital Commitment i) Towards partly paid up equity shares of Milestone Trusteeship Services Private Limited ii) Towards partly paid up equity shares of Milestone Investment Advisory Services Private Limited March 31, 2010 0.40 March 31, 2009 Nil March 31, 2008 Nil (Amount in Millions) March March 31, 2007 31, 2006 Nil Nil

9.80

Nil

Nil

Nil

Nil

135

Capital Commitment Total 3.

March 31, 2010 10.20

March 31, 2009 Nil

March 31, 2008 Nil

March 31, 2007 Nil

March 31, 2006 Nil

There are no Micro and Small Enterprises to whom the Company owes dues which are outstanding for more than 45 days at the Balance Sheet date Foreign Currency Exposure that is hedged/not hedged by Derivative instruments or otherwise as on 31 st March 2010 is Nil. EMPLOYEE BENEFIT : The principal actuarial assumptions used in determining gratuity for the Companys plans are shown below: I. Assumptions: Discount Rate Current Year Salary Escalation Current Year Attrition Rate Current Year II. Table Showing Change in Benefit Obligation Liability at the beginning of the year Current Service Cost Settlement Actuarial (gain)/ loss on obligations Liability at the end of the year III. Amount Recognised in the Balance Sheet: Liability at the end of the year Fair Value of Plan Assets at the end of the year Difference Amount Recognised in the Balance Sheet IV. Expenses Recognised in the Income Statement Current Service Cost / (Income) Expected Return on Plan Assets Expenses / (Income) Recognised In Profit & Loss Account V. Balance Sheet Reconciliation Opening Net Liability Expenses / (Income) as above Amount Recognised in Balance Sheet VI. Other Details Gratuity is payable in accordance with provisions of the Payment of Gratuity Act. The estimates of future salary increases, considered in actuarial valuation, takes into account the inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. No of Members Salary per month April 09- March 10 8.25% 5.00% 2.00% April 09 March 10 (Rupees in Million) 1.06 (0.45) Nil Nil 0.60 0.60 Nil (0.60) (0.60) (0.45) Nil (0.45) 1.06 (0.45) 0.60

4.

5.

17 1.39

6.

SEGMENT REPORTING The Company is in the business of providing asset management and other related service. As such, there are no separate reportable business segments or geographical segment as per Accounting Standard 17 on Segment Reporting. It is considered appropriate by the Management to have a single segment i.e. Fund Management and other related service.

136

7.

RELATED PARTY DISCLOSURES For the year 2009-2010 a) Disclosure as required by the Accounting Standard 18 Related Party Disclosure is given below Related Party who exercises control over the Company Milestone Fincap Services Private Ownership of more than one half of the voting power Limited Milestone Strategy Consultants Company along with another company holds more than Private Limited one half of the voting power (w.e.f.31 March 2010) Milestone Projects and Property Subsidiary (w.e.f.31 December 2009) Management Private Limited Milestone Portfolio Management Subsidiary (w.e.f.22 October 2009) Services Private Limited Jevir Leasing and Finance Limited Subsidiary (w.e.f.31 December 2009) Milestone Trusteeship Services Subsidiary (w.e.f.31 December 2009) Private Limited Milestone Investment Advisory Subsidiary (w.e.f.31 December 2009) Services Private Limited Omega Global Mauritius Limited Subsidiary (w.e.f.22 March 2010) Milestone Capital Management LLC Subsidiary (w.e.f.29 March 2010) IL&FS Milestone Capital Subsidiary (w.e.f.29 March 2010) Management LLC Milestone Mercator MaritimeLimited Subsidiary (w.e.f.22 March 2010) Capstone Capital Advisors Private Subsidiary (From 31 December 2009 to 7 February Limited 2010) Joint Venture (w.e.f.8 February 2010) Milestone Religare Investment Joint Venture (w.e.f.31 December 2009) Advisors Private Limited IL&FS Milestone Realty Advisors Joint Venture (w.e.f.31 December 2009) Private Limited Milestone Ecofirst Advisory Services Joint Venture (w.e.f.31 December 2009) (India) Private Limited Other Related Parties: Mr. Ved Prakash Arya Key Management Personnel b) The nature and volume of transactions: Particulars Rupees in Million Issue of Equity Shares Milestone Fincap Services Private Limited 14.70 Milestone Strategy Consultants Private Limited 19.60 Issue of Bonus Shares Milestone Fincap Services Private Limited 34.30 Consideration paid to Milestone Fincap Services Private Limited for Purchase of Investments in Equity Shares of : Milestone Projects and Property Management Private Limited 0.10 Milestone Porfolio Management Services Private Limited 0.10 Jevir Leasing and Finance Limited 2.59 Milestone Trusteeship Services Private Limited 0.10 Milestone Investment Advisory Services Private Limited 0.10 Milestone Wealth Advisors Private Limited 0.10 Milestone Religare Investment Advisors Private Limited 5.00

137

Particulars IL&FS Milestone Realty Advisors Private Limited Milestone Ecofirst Advisory Services (India) Private Limited Investment In Equity Shares Capstone Capital Services Private Limited Milestone Ecofirst Advisory Services (India) Private Limited Omega Global Mauritius Limited Loan Given Capstone Capital Services Private Limited Loan Given Was Repaid Capstone Capital Services Private Limited Loan Outstanding Receivable Capstone Capital Services Private Limited Rent Income IL&FS Milestone Realty Advisors Private Limited Milestone Ecofirst Advisory Services (India) Private Limited Rent Receivable at the year end IL&FS Milestone Realty Advisors Private Limited Milestone Ecofirst Advisory Services (India) Private Limited Salary Ved Prakash Arya Salary payable at year end Ved Prakash Arya

Rupees in Million 0.80 6.52 4.90 3.48 0.91 0.35 0.26 0.09 1.72 0.46 0.55 0.14 13.66 3.66

The above excludes those transactions which are in the nature of reimbursement. For the year 2008-2009 a) Disclosure as required by the Accounting Standard 18 Related Party Disclosure is given below Related Party who exercises control over the Company Milestone Fincap Services Private Ownership of more than one half of the voting power Limited Other Related Parties: Mr. Ved Prakash Arya Key Management Personnel Milestone Religare Investment Advisors Private Limited b) The nature and volume of transactions: Particulars Dividend Milestone Fincap Services Private Limited Compensation Income Milestone Religare Investment Advisors Private Limited Compensation Receivable at the year end Milestone Religare Investment Advisors Private Limited Salary Ved Prakash Arya Rupees in Million 2.50 22.24 22.24 10.00 Fellow Subsidiary

The above excludes those transactions which are in the nature of reimbursement.

138

For the year 2007-2008 a) Disclosure as required by the Accounting Standard 18 Related Party Disclosure is given below Related Party who exercises control over the Company Milestone Fincap Services Private Ownership of more than one half of the voting Limited power Other Related Parties: Mr. Ved Prakash Arya Key Management Personnel Mrs. Rubi Arya Relative to Key Management Personnel b) The nature and volume of transactions: Particulars Loan Taken Repaid Rubi Arya Issue of Equity Shares Milestone Fincap Services Private Limited For the year 2006-2007 a) Disclosure as required by the Accounting Standard 18 Related Party Disclosure is given below Related Party who exercises control over the Company Skyzen Capital Advisors Private Ownership of more than one half of the voting power Limited Other Related Parties: Mr. Ved Prakash Arya Key Management Personnel Mrs. Rubi Arya Relative to Key Management Personnel b) The nature and volume of transactions: Particulars Loan Taken Rubi Arya Skyzen Capital Advisors Private Limited Loan Taken Outstanding during the year Rubi Arya Skyzen Capital Advisors Private Limited Rupees in Million 2.50 2.40 2.50 2.40 Rupees in Million 2.50 9.70

The above excludes those transactions which are in the nature of reimbursement. For the year 2005-2006 1) Disclosure as required by the Accounting Standard 18 Related Party Disclosure is given below Related Party who exercises control over the Company Skyzen Capital Advisors Private Limited Ownership of more than one half of the voting power 8. LEASES: Operating Lease comprise of office premises taken by Company on Leave & License basis for a period of five years. This arrangement is non cancellable for a period of three years and may be renewed based on mutual understanding. Parts of such premises have been rented out to some group concerns on cancellable

139

arrangement basis. The payment made to lessor and received from group companies are recognized separately in profit and loss account. The minimum future payments during non-cancellable periods under the foregoing arrangements in the aggregate for (i) (ii) (iii) Not later than one year Rs. 12.24 million Later than one year and not later than five years Rs. 9.36 million Later than five years Rs. Nil

During the current year ended March 31, 2010 the lease payments recognised in the Profit and Loss account for the aforesaid arrangement amounts to Rs. 11.32 million. 9. During the year 2008-2009 company had paid an Interim Dividend of Rs. 2.50 per equity share of Rs. 10.00 each on the number of shares outstanding as on that record date which was 1,000,000 equity shares of Rs. 10.00 each. Tax provision has been made in accordance with the requirements under the Accounting Standard 22 Accounting for Taxes on Income. (Rupees in Million) As at 31st March 2010 1 Deferred Tax Liability Timing Difference on account of difference between book depreciation and depreciation under Income Tax Act, 1961 Distributor Fees Total Deferred Tax Assets Timing Difference on account of disallowance of provision / expenses Setup Fees Unabsorbed Losses Total Net Deferred Tax Liability 11. EARNINGS PER SHARE Particulars Profit \ (Loss) after tax (Rupees In Million) Weighted Average no. of Shares(No.s) Nominal value of ordinary shares (Rupees) Basic & Diluted Earnings per share (Rupees) 20092010 40.77 9,325,768 10 4.37 20082009 30.05 9,324,575 10 3.22 20072008 10.56 2,206,424 10 4.79 20062007 (0.02) 72,524 10 (0.31) 20052006 (0.00) 72,524 10 (0.01) 2009 2008 2007 2006

10.

Particulars

(0.07) 39.07 39.00

0.22 59.89 60.11

0.08 16.63 16.71

2.59 22.88 25.47 13.53

0.86 35.13 5.63 41.62 18.49

12.47 12.47 4.24

140

12.

JOINT VENTURE : The Company has entered into Joint Ventures in the capacity of a venturer into the following entities: i) ii) iii) iv) Milestone Ecofirst Advisory Services India Private Limited Milestone Religare Investment Advisors Private Limited Capstone capital Services Private Limited IL&FS Milestone Realty Advisors Private Limited

The required disclosures in respect of the same for the year 2009-10 are as under:Joint Venture Company of Incorporation % of Share holders Proportionate Share of Income (Rupees in Million) Milestone Ecofirst Advisory Services India Private Limited Milestone Religare Investment Advisors Private Limited Capstone capital Services Private Limited IL&FS Milestone Realty Advisors Private Limited 15/05/2008 50% 3.09 Proportionate Share of Expense (Rupees in Million) 8.07 Proportionate Share of Assets (Rupees in Million) 2.55 Proportionate Share of Liabilities (Rupees in Million) 1.06

06/04/2009

50%

41.27

27.17

54.97

40.56

15/04/2009

50%

0.03

0.103

4.10

0.10

23/07/2007

40%

64.06

50.42

71.32

55.63

13.

Prior Period Items In the financial statements for the years ended March 31, 2008 certain items of income / expenses have been identified as prior period items. For the purpose of this statement, such prior period items have been appropriately adjusted in the respective year. Similarly, the excess provision for income tax reversed in the year 2009-10 has been appropriately adjusted in the respective year

141

Annexure 5 - Standalone Statement of Investments, as restated, Milestone Capital Advisors Limited (Rs. In Million) 31-Mar31-Mar07 06 No. Amt No. Amt

Face Value Rupees Per Unit Long Term Trade (Unquoted) Equity Shares of Subsidiary Companies Milestone Investment Advisory Services Pvt. Ltd. Milestone Portfolio Management Services Pvt. Ltd. Milestone Trusteeship Services Pvt. Ltd. Jevir Leasing and Finance Limited Milestone Projects & Property Management Private Limited Omega Global Mauritius Limited Equity Shares of Joint Venture Companies IL&FS Milestone Realty Advisors Private Limited Milestone Religare Investment Advisors Private Limited Milestone Ecofirst Advisory Services (India) Private Limited Capstone Capital Advisors Private Limited

31-Mar-10 No. Amt

31-Mar09 No. Amt

31-Mar08 No. Amt

10

1,000,000

0.20

10

10,000

0.10

10 10 10

50,000 258,900 10,000

0.10 2.59 0.10

0.91

10 10

400,000 499,999

0.80 5.00

10

1,000,000

10.00

10

499,999

5.00 24.80 24.80 24.80 24.80

Less : Provision for diminution in value Total Investments Total of Quoted Investments Total of Unquoted Investments * Face Value is USD 1.

NOTE: The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4

142

Annexure 6 - Standalone Summary Statement of Sundry Debtors, as restated, Milestone Capital Advisors Limited (Rs. In Million) As at March31, 2009 2008 2007 2006

PARTICULARS 2010

Debts outstanding for a period exceeding six months Debts due from directors / promoters / subsidiary company / Joint Venture Debts due from persons related to directors / promoters / Issuer Company / Subsidiary Company / Joint Venture Other Debts Debts outstanding for a period less than six months Debts due from directors / promoters / subsidiary company / Joint Venture Debts due from persons related to directors / promoters / Issuer Company / Subsidiary Company / Joint Venture Other Debts Total Debts Less: Provision for Bad and Doubtful Debts TOTAL

1.02

0.69

22.24 0.24 0.24 0.24 -

35.91 36.60 36.60

0.79 23.03 23.03

6.33 7.34 7.34

NOTE: The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4.

143

Annexure 7 - Standalone Statement of Loans & Advances, as restated, Milestone Capital Advisors Limited (Rs. In Million) As at March31, 2009 2008 2007 2006 5.05 2.96 20.05 5.12 176.45 209.63 209.63 0.72 2.03 7.87 0.17 48.94 59.73 59.73 0.18 0.02 0.02 0.22 0.22 -

PARTICULARS 2010 Sundry Deposits Debts due from directors / promoters / subsidiary company / Joint Venture Debts due from persons related to directors / promoters / Issuer Company / Subsidiary Company / Joint Venture Other Direct Taxes Paid (Net of Provision) Income Tax Refund receivable CENVAT Receivable MAT Credit Entitlement Distributors' Fees Total Less: Provision for doubtful advances Total Loans & Advances 5.06 0.09 1.39 14.07 8.80 1.42 117.63 148.47 148.47

NOTE: The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4.

144

Annexure 8 - Standalone Summary Statement of Unsecured Loans, as restated, Milestone Capital Advisors Limited (Rs. In Million) PARTICULARS As at March31, 2010 2009 2008 2007 2006 2.50 Loan from relative of a director Total 2.50 NOTE: 1) The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4. 2) Loan given by Ms. Ruby Arya was non interest bearing and repayble on demand

145

Annexure 9 - Standalone Statement of Other Income, as restated, Milestone Capital Advisors Limited (Rs. In Million) For the year ended March31, 2009 2008 2007 2006 21.33 9.62 0.24 44.54 16.88 (0.02) (0.00) 47.88 56.95 NA For the year ended March31, 2010 2009 2008 2007 2006

PARTICULARS Other income as restated Profit before tax, as restated Percentage of Profit (%) PARTICULARS 2010 9.53 63.07 15.11

Related / Non Related to business

Recurring Income Rent Total ( A) Non -Recurring Interest on Income Tax Refund Excess Provision Written BackGratuity Reimbursement received Miscellaneous Income Total ( B) TOTAL (A)+(B)

Non Related

7.91 7.91

0.52 0.52

Related Non Related Related Related

0.94 0.46 0.22 1.62 9.53

20.52 0.29 20.81 21.33

9.37 0.25 9.62 9.62

0.24 0.24 0.24

NOTE: The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4

146

Annexure 10 - Standalone Statement of Dividend Paid /Proposed, as restated, Milestone Capital Advisors Limited (Rs. In Million) Particulars Face Value As at March31, (in Rs.) 2010 2009 2008 2007 2006 Equity Share Capital Number of Equity Shares outstanding at the year end Interim Dividend Rate of Dividend per Share (Rs.) 10 80.00 8,000,000 10.00 1,000,000 10.00 1,000,000 0.10 10,000 0.10 10,000

2.50 Refer Note 2 0.50 Refer Note 3 4.00 0.68

Final Dividend Rate of Dividend per Share (Rs.)

Amount of Dividend on Equity Shares Tax Paid on Dividend

2.50 0.42

NOTE: 1) The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4. 2) Interim dividend in 2008-2009 was declared for 1,000,000 number of shares of Rs. 10 each outstanding at the time of declaring dividend at 25% of the face value (first Interim dividend). Rate of Dividend per share Rs. 2.50 3) Final dividend for the year ended March 31, 2010 was declared for 8,000,000 number of shares of Rs. 10 each outstanding at the time of declaring dividend at 5% of the face value Rate of Dividend per share Rs. 0.50

147

Annexure 11 - Standalone Statement of Accounting Ratios, as restated, Milestone Capital Advisors Limited (Rs. In Million) For the year ended March 31, 2010 2009 2008 2007 2006 40.77 30.05 10.56 (0.02) (0.00)

Particulars 1 Adjusted Net Profit/ (Loss) after tax, as restated for Basic EPS Profit / (loss) attributable to equity shareholders* Nominal value of equity shares # Weighted Average number of ordinary shares for (a) (b) 5 Basic EPS Diluted EPS No. of outstanding shares at the end of the period Net Worth Accounting Ratios Earnings/ (loss) per share Basic [(2) / (4) (a)] Diluted [(2) / (4) (b)] Return on Net Worth [(2) / (6)] * 100 (iii) Net asset value per share [(6) / (5)] Rupees Numbers Numbers Numbers Rupees

Rupees

40.77

30.05

10.56

(0.02)

(0.00)

Rupees

10

10

10

10

10

9,325,768 9,325,768 8,000,000

9,324,575 9,324,575 1,000,000

2,206,424 2,206,424 1,000,000

72,524 72,524 10,000

72,524 72,524 10,000

6 7 (i) (a)

Rupees

118.67

47.66

20.52

0.05

0.07

Rupees

4.37

3.22

4.79

(0.31)

(0.01)

(b)

Rupees

4.37

3.22

4.79

(0.31)

(0.01)

(ii)

34.36%

63.04%

51.48%

44.45%

1.52%

14.83

47.66

20.52

5.00

6.56

Definition of ratios: The Ratios have been calculated as below: o Earnings Per Share (Rs) = Net Profit / (Loss) after tax, as restated Weighted Average Number of Equity Shares Outstanding during the year Net Profit / (Loss) after tax, as restated Weighted Average Number of Equity Shares Post Dilution Outstanding

Diluted EPS

148

Net Asset Value Per Share

Net Worth Excluding Revaluation Preference Share Capital Number of Equity Shares Post Dilution

Reserve,

Return on Net Worth (%)

Net Profit / (Loss) after tax, as restated X 100 Net Worth Excluding Revaluation Reserve

Earnings Per Share has been calculated in accordance with Accounting Standard 20 - Earnings Per Share Ratios have been computed on the basis of the restated summary statements for the respective years The effect of bonus share has been considered for dilution for the financial years 2005-2006, 2006-2007, 2007-2008, 2008-2009 and 2009-2010 The date of dilution of potential equity share is taken to have been issued on the first day of the financial year NOTE: The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4.

149

Annexure 12 - Capitalisation Statement, Milestone Capital Advisors Limited Particulars Pre-Issue As on 31.03.2010 (Rs. In Million) Post-Issue

Long Term Debt Short Term Debt Total Debt Share Capital Equity Share Capital Reserves, as restated General Reserve Profit and Loss Account Total Shareholders Funds Total Capitalisation Long Term Debt / Equity ratio Total Debt / Shareholders' Funds

80.00 38.67 118.67 118.67 NA NA See Note 1 below

NOTE: 1) Post Capitalisation will be determined after finalisation of Issue Price 2) The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4

150

Annexure 13 - Standalone Reconciliation Profits, as restated , Milestone Capital Advisors Limited (Rs. In Million) Below mentioned is the summary of results of restatement made in the audited accounts for the respective years and its impact on the profits of the company. PARTICULARS 2010 Profit as per Profit and Loss account before Re-statement Adjustments for Prior Period Items (Net) (refer note B(13) to Annexure 4) Excess Provision for Taxation Impact on Profit and Loss Account Total 40.79 As at March31, 2009 2008 2007 30.05 10.53 0.00

2006 (0.00)

(0.01) (0.01) 40.77

30.05

0.02 0.01 0.04 10.56

(0.02) (0.02) (0.02)

(0.00)

NOTE: The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4

151

Annexure 14 - Statement of Tax Shelter, as restated, Milestone Capital Advisors Limited (Rs. In Million) For the year ended March31, 2010 2009 2008 2007 2006 63.07 44.29 16.69 (0.02) (0.00)

PARTICULARS PROFIT / (LOSS) BEFORE CURRENT AND DEFERRED TAXES, AS RESTATED Normal Tax Rate (including surcharge) (%) MAT Tax Rate(including surcharge) (%) Tax impact at applicable Tax Rate on restated profits Adjustments A Permanent Differences Profit / (Loss) on disposal of Assets Preliminiary Expenses Expenses u/s 40 (a) Service Tax Penalty Share Issue Expenses Prior Period Expenses Fringe Benefit Tax Total(A) B Timing Differences Difference between Tax & Book Depreciation Gratuity Difference Leave Encashment Difference Difference between Tax & Book Mobilisation Expenses Difference between Tax & Book Set up fees income Bonus Difference Disallowed Expenses u/s 40 (a) Unabsorbed Business Loss Total (B) Net Adjustments (A) + (B) Tax Savings thereon, as restated Net Tax Payable ( C ) Tax as per MAT (D ) Tax Payable higher of ( C ) or (D) Total Tax (without interest) Add :- Interest u/s 234 A/B/C Less: Tax saving due to rebate u/s 88E Total Tax, as restated

33.99% 17.00% 21.44

33.99% 11.33% 15.06

33.99% 11.33% 5.67

33.66%

33.66%

(0.01)

0.00 (0.63) (0.63)

(0.12) (0.02) (0.25) (0.39)

(0.01) (0.05) (0.00) (0.15) 0.00 (0.19) (0.39)

(0.02) (0.02)

(0.78) 0.46 (0.42) (58.82) 34.47 (5.30) 14.00 (16.39) (17.02) (5.78) 27.22 9.46 27.22 27.22 27.22

0.39 (1.06) (1.46) 127.51 (66.67) (0.02) 58.68 58.29 19.81 (4.76) 5.02 5.02 5.02 5.02

0.23 48.94 (36.69) 12.48 12.09 4.11 1.57 1.89 1.89 1.89 1.89

(0.02) (0.01) 0.00 0.00 0.00 0.00

NOTE: 1) The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4 2) The information pertaining to the 2005-06 to 2008-09 are as per the Return of Income filed by the Company. The information pertaining to 2009-10 are as per provisional computation of Income Tax.

152

Annexure 15 - Standalone Statement of Changes in Share Capital, as restated, Milestone Capital Advisors Limited (Rs. In Million) As at March31, 2009 2008 2007 2006

PARTICULARS 2010 Authorised Share Capital Equity Shares Number of Shares of Rs. 10/- each Amount (Rs. In Million) Issued, Subscribed and Paid up Share Capital No. of Equity Shares at the beginning of the year (in Mn) Add: Bonus Shares (in Mn) Add: Fresh issue of Equity Shares (in Mn.) No. of Equity Shares at the end of the year (in Mn) Total 1.00 3.50 3.50 8.00 8.00

10.00 100.00

1.00 10.00

1.00 10.00

0.01 0.10

0.01 0.10

1.00 1.00 1.00

0.01 0.99 1.00 1.00

0.01 0.01 0.01

0.01 0.01 0.01

NOTE: Of the above 3,500,000 shares of Rs.10 each allotted during the year 2009-10 as fully paid up bonus shares by capitalising balance in General Reserve and Profit and Loss Account

153

Annexure 16 - Standalone Statement of Changes in Reserves & Surplus, as restated, Milestone Capital Advisors Limited (Rs. In Million) As at March31, 2009 2008 2007 2006

PARTICULARS 2010 A. General Reserve As per last balance sheet Add : Transfer from Profit & loss account Less: Capitalised for issue of bonus shares Total C. Surplus in Profit & Loss account, as restated Total

3.00 (3.00) 0.00 38.67 38.67

0.00 3.00 3.00 34.66 37.66

0.00 0.00 10.54 10.54

(0.00) (0.00) (0.02) (0.02)

(0.00) (0.00) (0.00) (0.00)

NOTE: The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 4

154

Auditors Report on Restated Consolidated Financial Information To, The Board of Directors, Milestone Capital Advisors Limited, 602, Hallmark Business Plaza, Dnyaneshwar Marg, Opp. Guru Nanak Hospital, Bandra (East), Mumbai 400051. Dear Sirs, 1. We have examined the attached restated consolidated financial information of Milestone Capital Advisors Limited (formerly known as Milestone Capital Advisors Private. Limited.), (the Company) and its subsidiaries and its joint ventures (collectively described as the Group), prepared in terms of the requirements of Paragraph B of Part II of Schedule II to the Companies Act, 1956 (the Act) and the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and pursuant to Section 11 of the Securities and Exchange Board of India Act, 1992 (the SEBI Regulations) and in terms of our engagement agreed upon with you in accordance with our engagement letter dated April 6, 2010 in connection with the proposed Initial Public Issue of Equity shares of the Company. The restated consolidated financial information of the Group has been extracted b y the Management from the audited consolidated financial statements for the year ended March 31, 2010 which have been approved by the Board of directors and audited by us. Since, this was the first year of preparation of Consolidated Financial Statements, as stated in note no. 14 in Annexure 3 to the financial statements, Consolidated Cash Flow statement was not prepared. Accordingly, restated consolidated financial information does not include restated consolidated cash flow statement. We did not audit the financial statements of certain subsidiaries viz Milestone Portfolio Management Services Private Limited; Milestone Trusteeship Services Private Limited; Milestone Investment Advisory Services Private Limited and certain joint ventures viz Milestone E cofirst Advisory Services (India) Private Limited; IL&FS Milestone Realty Advisors Private Limited; for the financial year ended March 31, 2010 whose Financial Statements reflects the Groups share in total assets Rs. 30.29 million and total revenue Rs. 67.15 million for the year then ended. The financial statements of the subsidiaries and joint ventures in India have been audited by other auditors whose reports have been furnished to us. The consolidated financial statements of the foreign subsidiary Omega Global Mauritius Ltd. are prepared in accordance with International Financial Reporting Standard and have been audited by other auditor as appointed under the local laws and restated by the management into Indian GAAP by adopting recognized accounting policies followed by the Group to make it fit for consolidation with the financial statements of the holding company. The procedures of these restatements into Indian GAAP that neither constituted an audit nor review of these financial statements was done for identification of differences in accounting policies of the foreign subsidiary company as compared to the accounting policies of the Group by a firm of chartered accountants in India. The consolidated financial statements and other financial information of this subsidiary have been included in the consolidated financial statement of the Group on the basis of fit for consolidation report received from such firm of chartered accountants. Our opinion on the figures included in the aforesaid results relating to subsidiaries and joint ventures to the extent not audited by us have been formed based on reports received from other auditors and fit for consolidation report received from a firm of chartered accountants. The restated consolidated financial information for the above period was examined to the extent practicable, for the purpose of audit of financial information in accordance with the Standard on Quality Control and Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we plan and perform our audit to obtain reasonable assurance, whether the financial information under examination is free of material misstatement.

2.

3.

4.

155

Based on the above, we report that in our opinion and according to the information and explanations given to us, we have found the same to be correct and the same have been accordingly used in the financial information appropriately. 5. In accordance with the requirements of Paragraph B of Part II of Schedule II to the Act, the SEBI Regulations and terms of our engagement agreed with you, based on our examination, we further report that: a. The Summary Statement of Assets and Liabilities as restated of the Company, as at March 31, 2010 examined by us, as set out in Annexure 1 to this report are after making material adjustments and regrouping as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes (Refer Annexure 3); The Summary Statement of Profits or Losses, as restated of the Compa ny for the year ended March 31, 2010 examined by us, as set out in Annexure 2 to this report are after making adjustments and regrouping as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes (Refer Annexure 3); Based on above, we confirm that the restated financial information has been made after incorporating: i. material adjustments for the changes in accounting policies retrospectively in respective financial years to reflect the same accounting treatment as per changed accounting policy for all the reporting periods; adjustments for the material amounts in the respective financial years to which they relate; there are no extra-ordinary items, other than those disclosed, that need to be disclosed separately in the accounts; and there are no qualifications in the Auditors Report, which would require corrective adjustments in the restated financial information.

b.

d.

ii.

iii.

iv.

e.

We have also examined the following other restated financial information set out in Annexures prepared by the Management and approved by the Board of Directors relating to the Group for the year ended March 31, 2010. i. ii. iii. iv. v. vi. vii. viii. ix. Statement of Investments included in Annexure 4; Statement of Sundry Debtors included in Annexure 5; Statement of Loans and Advances included in Annexure 6; Statement of Unsecured Loans included in Annexure 7; Statement of Other Income included in Annexure 8; Statement of Dividend Paid/ Proposed included in Annexure 9; Statement of Accounting Ratios included in Annexure 10; Statement of Capitalisation as at March 31, 2010 included in Annexure 11; Reconciliation Profits included in Annexure 12;

156

x. xi.

Statement of Changes in Share Capital included in Annexure 13; and Statement of Changes in Reserves & Surplus included in Annexure 14.

In our opinion the financial information contained in Annexure 4 to 14 of this report read along with the Significant Accounting Policies and Notes (Refer Annexure 3) prepared after making material adjustments and regrouping as considered appropriate have been prepared in accordance with Part IIB of Schedule II to the Act and the SEBI Regulations. 6. Our report is intended solely for use of the Management and for inclusion in the offer d ocument in connection with the proposed issue of equity shares of the Company. Our report and should not be used for any other purpose except with our consent in writing. For G. M. KAPADIA & CO. Chartered Accountants Firm Registration No. 104767W

Mumbai Dated: June 21, 2010

ATUL SHAH Partner (Membership No. 39569)

157

Annexure 1: Consolidated Summary Statement Assets and Liabilities as restated, of Milestone Capital Advisors Limited (Rupees In Million) As at March 31, 2010

Particulars A. FIXED ASSETS Gross Block Less : Depreciation / Amortisation Net Block Less : Revaluation Reserve Net Block after Revaluation Reserve B. INVESTMENTS C. CURRENT ASSETS, LOANS AND ADVANCES Sundry Debtors Cash and Bank Balances Loans and Advances

13.25 3.45 9.80 9.80 13.26

99.76 22.65 306.33 428.74

D. LIABILITIES AND PROVISIONS Secured Loans Unsecured Loans Current Liabilities Provisions

0.78 214.71 8.51 224.00 22.83 204.97 80.00 124.97 124.97 -

E. DEFERRED TAX LIABILITY / (ASSET) F. NET WORTH Represented by Equity Share Capital Reserves and Surplus Less : Revaluation Reserve Reserves and Surplus net of Revaluation Reserve Less : Miscellaneous Expenditure (To the extent not written off or adjusted) NET WORTH

204.97

NOTE: The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 3

158

Annexure 2: Consolidated Summery Statement of Profits and Losses, as restated, Milestone Capital Advisors Limited. (Rupees In Million) For the year ended 200910 247.84 12.44 (A) 260.28

Particulars INCOME Income from Fund Management Other Income Total Income EXPENDITURE Personnel Costs Distributor Fees Compensation Fees Administrative and Other Operating Costs Depreciation and Amortisation Total Expenditure PROFIT / (LOSS) BEFORE TAX(A) - (B) Provision for Taxation Less : Current Tax Less : Provision for Deferred Tax Add : MAT Credit Entitlement (B)

52.87 78.16 0.50 48.66 2.77 182.96 77.32

30.56 (0.90) (1.61) 28.05 49.27 (0.02)

RESTATED PROFIT AFTER TAX Less: Transfer to Special Reserve Pursuant to Section 45-IC of the R.B.I. Act, 1934 Profit & Loss account at the beginning of the year Balance available for appropriations, as restated APPROPRIATIONS : Amount transferred to General Reserve Capitalisation of Profit by way of issue of Bonus Shares Dividend Tax on Dividend Balance Carried forward, as restated

34.66 83.91 32.00 4.00 0.68 47.23

NOTE: 1) The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 3 2) The reconciliation between the audited and restated Profit and Loss as at March 31, 2010 is given in Annexure 12

159

Annexure 3: Significant Accounting Policies and Notes Forming Part of Restated Consolidated Accounts A. 1. SIGNIFICANT ACCOUNTING POLICIES Basis for preparation of Financial Statements The Consolidated Financial Statement relates to Milestone Capital Advisors Limited (the Holding Company), its subsidiaries and jointly controlled entities, which constitute the Group. The financial statements are prepared under the historical cost convention in accordance with the applicable Accounting Standards pursuant to Companies (Accounting Standard) Rules, 2006. All income and expenditure having material bearing on the financial statements are recognised on an accrual basis. 2. Basis of Accounting These financial statements are prepared on accrual basis of accounting, following historical cost convention, in accordance with the provisions of the Companies Act, 1956 (the Act), accounting principles generally accepted in India and comply with the accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards, to the extend applicable. 3. Principles of consolidation The Consolidated Financial Statements are prepared in accordance with Accounting Standard 21 Consolidated Financial Statements and Accounting Standard 27 Financial Reporting of Interest in Joint Ventures as notified by the Companies (Accounting Standard) Rules, 2006. The excess of the cost to the Company of its investment, over the Companys portion of net assets at the time of acquisition of shares is recognized in the financial statements as Goodwill. The excess of Companys portion of net assets over the cost of investment therein is treated as Capital Reserve. The Consolidated Financial Statements are prepared using uniform accounting policies for like transactions and events in similar circumstances and necessary adjustments required for deviation, if any to the extent possible, are made in the consolidated financial statements and are presented in the same manner as the Companys standalone financial statements. The financial statement of the subsidiary companies used in the consolidation are drawn up to the same reporting date as of the Holding Company. Subsidiaries Omega Global Mauritius Ltd., one of the wholly owned subsidiaries of the Company has its own three wholly owned subsidiaries and an investment in a joint venture. For the purposes of consolidation, Consolidated Financial Statements of these subsidiaries, prepared in accordance with Indian GAAP are considered. The financial statements of the Company and its subsidiaries have been combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses after fully eliminating intra-group balances and intra-group transactions. The unrealised profits or losses resulting from the intra-group transactions have been eliminated. Since all the subsidiaries are wholly owned subsidiaries, there are no minority shareholders.

160

Joint Venture Interest in joint venture has been accounted by using the proportionate consolidation method as per Accounting Standard 27 Financial Reporting of Interest in Joint Venture as notified by the Rules. The Consolidated Financial Statements are presented, to the extent possible, in the same format as that adopted by the Company for its independent financial statements 4. Use of Estimates The preparation of financial statement in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of the assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results get materialized. 5. Revenue recognition i. The income on fund under management fee income is recognized based on contractual arrangements. Set up fees are recognized over the life of the managed scheme. Consultancy fees are recognized as and when services are rendered. Income from financing activities is recognized on accrual basis. Dividend income is recognised once the unconditional right to receive dividend is established

ii. iii. iv. v. 6.

Fixed assets Fixed Assets are valued at cost, less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the assets to its working condition for its intended use.

7.

Depreciation and Amortisation i. Depreciation is provided on Written Down Value method at the rates prescribed in Schedule XIV to the Companies Act, 1956. In case of addition during the year depreciation is provided on pro rata basis. Depreciation on assets costing less than Rs. 5000 is provided at 100 per cent. Assets acquired during the year towards improvement and or renovation of lease hold premise is amortized / depreciated at Straight Line Method over the lease term. Computer software cost is amortised over the expected useful life of the asset and mobile phones are fully depreciated in the year of capitalisation.

ii. iii.

iv.

8.

Foreign currency transactions i. Transactions in foreign currency are recorded at the rates of exchange prevailing at the date of the transaction. Any exchange difference either on settlement or on translation at the balance sheet date is recognized in Profit & Loss Account.

ii.

161

9.

Investments i. Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. Diminution in value, other than temporary, is recognised in the accounts. Profit / loss on sale of investments are computed with reference to the average cost of investment.

ii.

10.

Leases Assets acquired under leases where substantial risks and rewards of ownership are not transferred to the Company are classified as operating leases. Such assets are not capitalised. The lease rentals paid are charged to Profit & Loss Account

11.

Taxation i. ii. Income Tax for the current period is determined in accordance with applicable laws. Deferred tax liabilities and assets are recognized at substantively enacted tax rates, subject to the consideration of prudence, on timing difference.

12.

Earning per shares Basic earnings per share are calculated by dividing the net profit or loss after tax for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

13.

Provisions, contingent liabilities & contingent assets Provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on management estimates required to settle the obligations at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates. Contingent liabilities are disclosed when the Company has possible obligation or a present obligation and it is probable that a cash outflow will not be required to settle the obligation.

14.

Employee benefits i. The Provisions of Provident Fund Act are not applicable to the Group since the staff strength of the standalone companies in the group is below the threshold limit specified under the statue. Premium paid to an insurance company under Group Accident Policy and Group Mediclaim Policy, which is a defined contribution scheme, are charged to the Profit & Loss account on prorata basis.

ii.

162

iii.

Gratuity liability is defined benefit obligations and is provided for on the basis of an actuarial valuation made at the end of each financial year. Long term compensated absences are provided for based on actuarial valuation. Actuarial gains / losses are immediately recognized as income / expenses and are not deferred.

iv. v. 15.

Distributor fees Distributor fees payable for arranging of Contribution subscription for schemes under management are recognised in Profit and Loss Account for every financial year equally over the life of the scheme as defined in the respective Information Memorandum of the schemes.

B. 1.

NOTES TO ACCOUNTS List of subsidiaries which are included in the Consolidation and the companys effective holdings therein as under: Name of the subsidiary Date on which it became subsidiary 31 December 2009 22 October 2009 Country of Incorporation Amount Invested (In Million) 0.10 Percentage of voting power as on 31 March 2010 100

Milestone Projects and Property Management Private Limited Milestone Portfolio Management Services Private Limited Jevir Leasing and Finance Limited Milestone Trusteeship Services Private Limited Milestone Investment Advisory Services Private Limited Omega Global Mauritius Ltd. 2.

India

India

0.10

100

31 December 2009 31 December 2009 31 December 2009 22 March 2010

India India India

2.59 0.10 0.20

100 100 100

Mauritius

0.91

100

List of joint venture which are included in the Consolidated and the Companys effective holdings therein as under: Name of the subsidiary Date on which it became Joint Venture Subsidiary (From 31 December 2009 to 7 February 2010) Joint Venture (w.e.f.8 February 2010) 31 December 2009 Country of Incorporation Amount Invested (In Million) 0.10 Companies effective ownership 100

Capstone Capital Service Private Limited (formerly known as Milestone Wealth Advisors Private Limited) Milestone Religare Investment Advisors Private Limited IL&FS Milestone Realty

India

4.90

50

India

5.00

50

w.e.f.31 December

India

0.80

40

163

Name of the subsidiary

Date on which it became Joint Venture 2009 w.e.f.31 December 2009

Country of Incorporation

Amount Invested (In Million) 10.00

Companies effective ownership

Advisors Private Limited Milestone Ecofirst Advisory Services India Private Limited 3.

India

50

List of Subsidiaries held indirectly and Companys effective Ownership are as under Subsidiaries of Omega Global Mauritius Ltd. Milestone Capital Management LLC IL&FS Milestone Capital Management LLC Milestone Mercator Maritime Limited Date on which it became Subsidiaries March 29, 2010 March 29, 2010 March 22, 2010 Country of Incorporation Mauritius Mauritius Cayman Islands Companies effective ownership 100% 100% 100%

4.

List of Joint Ventures held indirectly and Companys effective Ownership therein Joint Venture of Omega Global Mauritius Ltd. Milestone Religare Capital Management Ltd. Date on which it became Joint venture March 22, 2010 Country of Incorporation Mauritius Companies effective ownership 50%

5.

Details of the Companys share in Joint Ventures (after Inter Company eliminations). Particulars Assets Fixed assets Investments Deferred Tax Asset Cash and bank balances Sundry Debtors Loans and Advances Liabilities Unsecured Loans Deferred Tax Liabilities Current Liabilities Provisions Particulars Income from Fund Management Income from Consultancy Other Income Total Income Personnel Costs Distributor Fees Compensation fees Administrative and Other Operating Costs 2009-2010 (In Million) 46.89 1.62 0.67 49.18 10.36 14.50 0.50 6.79 2009-2010 (In Million) 0.54 14.85 0.01 1.49 15.56 13.68 11.57 11.29 0.88

164

Particulars Depreciation and Amortisation Total Expenditure 6. Share capital

2009-2010 (In Million) 0.28 32.,43

On March 23, 2010, 3,500,000 Equity Shares of Rs. 10/- each were issued and allotted as fully paid bonus shares in the ratio of 10:35 by capitalising 3.00 million from General Reserve and Rs. 31.99 million from Profits of the Holding Company of the Group and thereafter 3,500,000 Equity Shares of Rs. 10 each were offered on as Right Shares in ratio of 45:35 for consideration in cash. 7. Contingent liabilities Capital Commitment Towards partly paid up equity shares of Milestone Trusteeship Services Pvt. Ltd. ii) Towards partly paid up equity shares of Milestone Investment Advisory Services Pvt. Ltd. Total i) 8. Employee benefit : The principal actuarial assumptions used in determining gratuity for the Groups plans are shown below: I. Assumptions : Discount Rate Current Year Salary Escalation Current Year Attrition Rate Current Year II. Table Showing Change in Benefit Obligation Liability at the beginning of the year Current Service Cost Settlement Actuarial (gain)/ loss on obligations Liability at the end of the year III.Amount Recognised in the Balance Sheet: Liability at the end of the year Fair Value of Plan Assets at the end of the year Difference Amount Recognised in the Balance Sheet IV. Expenses Recognised in the Income Statement Current Service Cost / (Income) Expected Return on Plan Assets Expenses / (Income) Recognised In Profit and Loss V. Balance Sheet Reconciliation Opening Net Liability Expenses / (Income) as above Amount Recognised in Balance Sheet April 09- March 10 8.25% 5.00% 2.00% April 09 March 10 (In Million) 1.49 (0.33) Nil Nil 1.16 1.16 Nil (1.16) (1.16) (0.33) 0 (0.33) 1.49 (0.33) 1.16 (In Million) 0.40 9.80 10.20

165

9.

Related party disclosures a) Disclosure as required by the Accounting Standard 18 Related Party Disclosure is given below Related Party who exercises control over the Company Milestone Fincap Services Ownership of more than one half of the voting power Private Limited Milestone Strategy Consultants Company along with another company holds more than one Private Limited half of the voting power (w.e.f.31 March 2010) Key Management Personnel Mr. Ved Prakash Arya Managing Director b) The nature and volume of transactions: Particulars Current Year Issue of Equity Shares Milestone Fincap Services Private Limited 14.70 Milestone Strategy Consultants Private Limited 19.60 Issue of Bonus Shares Milestone Fincap Services Private Limited 34.30 Consideration paid to Milestone Fincap Services Private Limited for Purchase of Investments in Equity Shares of : Milestone Projects and Property Management Private Limited 0.10 Milestone Portfolio Management Services Private Limited 0.10 Jevir Leasing and Finance Limited 2.56 Milestone Trusteeship Services Private Limited 0.10 Milestone Investment Advisory Services Private Limited 0.20 Capstone Capital Services Private Limited 0.10 (formerly known as Milestone Wealth Advisors Private Limited) Milestone Religare Investment Advisors Private Limited 5.00 IL&FS Milestone Realty Advisors Private Limited 0.80 Milestone Ecofirst Advisory Services (India) Private Limited 6.52 Salary Ved Prakash Arya 15.65 Salary payable at year end Ved Prakash Arya 3.65 The above excludes those transactions which are in the nature of reimbursement.

10.

Operating Lease comprise of office premises taken by the Holding Company on Leave & License basis for a period of five years. This arrangement is non cancellable for a period of three years and may be renewed based on Mutual Understanding. Parts of such premises have been rented out to some group concerns on cancellable arrangement basis. The payment made to lessor and received from group companies are recognized separately in profit and loss account. The minimum future payments during non-cancellable periods under the foregoing arrangements in the aggregate for (i) (ii) (iii) Not later than one year 12.24 million Later than one year and not later than five years - Rs.9.36 million Later than five years - Rs. Nil

During the current year ended March 31, 2010 the lease payments recognised in the Profit and Loss account for the aforesaid arrangement amounts to 11.32 million

166

11.

Tax provision has been made in accordance with the requirements under the Accounting Standard 22 Accounting for Taxes on Income. a) Current tax provision is made in accordance with applicable laws. MAT credit entitlement for current has been recognized as an asset under the head Loans and Advances The deferred tax liability recognized in the accounts as of March 31, 2010 is as follows: Nature of Timing Differences Depreciation Distribution Fees Setup Fees Unabsorbed Losses Provision for Bonus Provision for Gratuity Provision for Leave Encashment Deferred Tax Liability c) Deferred Tax Asset/(Liability) (Opening balance) (0.28) (78.94) 47.68 5.78 2.40 1.06 (0.06) 0.43 0.15 0.52 0.90 (23.74) (22.84) 0.67 0.37 3.47 Adjustment during the Year (F.Y 2009-2010) 0.30 8.28 (4.69) (5.48) Deferred Tax Assets/(Liability) (Closing Balance) 0.02 (70.66) 42.99 0.30

b)

The deferred tax asset recognized in the accounts as of March 31, 2010 is as follows Nature of Timing Differences Depreciation Deferred Tax Asset/(Liability) (Opening balance) 0.01 Adjustment during the Year (F.Y 2009-2010) 0 Deferred Tax Assets/(Liability) (Closing Balance) 0.01

12.

SEGMENT REPORTING a. Primary Segment Activities Investment Advisory Segment income Segment expense Inter Segment Profit before tax Tax Profit after tax Capital Employed Segment Assets Segment Liabilities Net Assets 433.94 221.92 212.03 2.64 0.03 2.61 5.42 1.28 4.14 0.00 0.00 442.00 223.22 218.78 256.98 180.44 76.54 0.00 0.00 Financing Activity 0.08 0.00 0.08 0.00 0.00 Consultancy Services 3.22 2.52 0.70 0.00 0.00 Unallocated 0.00 0.00 0.00 28.04 0.00 Total 260.28 182.97 77.31 28.04 49.28

167

Investment Advisory 0.00 Capital Expenditure Depreciation Non Cash Expenditure Loans b. Secondary Segment Geographical India 260.28 182.97 77.31 0.00 0.00 0.00 339.30 190.88 148.42 13.81 4.01 22.83 0.78 12.89 3.56 22.81 0.00

Financing Activity 0.00 0.00

Consultancy Services 0.00 0.92 0.45 0.02 0.78

Unallocated 0.00 0.00 0.00 0.00 0.00

Total 0.00 13.81 4.01 22.83 0.78

Segment income Segment expense Inter Segment Profit before tax Tax Profit after tax Capital Employed Segment Assets Segment Liabilities Net Assets Capital Expenditure Depreciation Non Cash Expenditure Loans 13. EARNINGS PER SHARE Particulars Profit \ (Loss) after tax Weighted Average no. of Shares (No.s) Nominal value of ordinary shares (Rs.) Basic & Diluted Earnings per share (Rs.) 14.

Outside India 0.00 0.00 0.00 102.70 32.34 70.36 0.00

Unallocated 0.00 0.00 0.00 28.04 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total 260.28 182.97 77.31 28.04 49.28 0.00 442.00 223.22 218.78 13.81 4.01 22.83 0.78

Current Year 49.27 9,604,802 10.00 5.13

This is the first year of presentation of Consolidated Financial Statements in terms of Accounting Standard 21 Consolidated Financial Statements; Consolidated Cash Flow Statement has not been prepared under Indirect Method as prescribed in Accounting Standard 3 on Cash Flow Statements as it is impractical to compile balances which are relevant for compilation of the Cash flow during the period.

168

Annexure 4 : Consolidated Statement of Investments, as restated, Milestone Capital Advisors Limited Particulars Face Value Per Unit Quantity As at March 31, 2010

Current - Unquoted USD Management Shares in - Milestone Fund LLC - India Build Out Fund Ltd. Redeemable Participating Class "B" Redeemable Participating Class "B" shares of Milestone Fund LLC Investment in Mutual Fund - ICICI Prudential Flexible Income Plan premium- Daily Dividend - Religare Ultra Short Term Fund - Institutional - Daily Dividend Reinvestment - ICICI Prudential Flexible Income Plan Premium - ICICI Prudential Flexible Income Plan 0.01 1 100 1 0.00 0.00

0.01 Rupees 100 10 100 100

100,000

0.05

94,576 998,543 3,248 72,878

4.00 5.00 0.36 3.85 13.26 13.26 13.26

Less : Provision for diminution in value Total Investments Total of Quoted Investments Total of Unquoted Investments

Note The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 3

169

Annexure 5: Consolidated Summary Statement of Sundry Debtors, as restated, Milestone Capital Advisors Limited (Rupees in Million) As at March 31, 2010

Particulars

Debts outstanding for a period exceeding six months Debts due from directors / promoters / subsidiary company / Joint Venture Debts due from persons related to directors / promoters / Issuer Other Debts Debts outstanding for a period less than six months Debts due from directors / promoters / subsidiary company / Joint Venture Debts due from persons related to directors / promoters / Issuer Company / Subsidiary Company / Joint Venture Other Debts Total Debts Less: Provision for Bad and Doubtful Debts TOTAL

0.85

0.40 98.50 99.75 99.75

NOTE : The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 3

170

Annexure 6: Consolidated Statement of Loans & Advances, as restated, Milestone Capital Advisors Limited (Rupees in Million) As at March 31, 2010 5.06 0.04 19.07 8.80 2.60 2.85 261.51 6.40 306.33 306.33

Particulars

Security Deposits Debts due from directors / promoters / subsidiary company / Joint Venture Direct Taxes Paid (Net of Provision) Income Tax Refund receivable CENVAT Receivable MAT Credit Entitlement Distributors' Fees Other Advances TOTAL Less: Provision for doubtful advances Total Loans & Advances

NOTE : The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 3

171

Annexure 7: Consolidated Summary Statement of Unsecured Loans, as restated, Milestone Capital Advisors Limited (Rupees in Million) As at March 31, 2010 0.78 0.78

Particulars Loan from holding company Total

NOTE : The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 3

172

Annexure 8: Consolidated Statement of Other Income, as restated, Milestone Capital Advisors Limited (Rupees in Million) For the year ended March31, 2010 12.44 77.32 16.09 (Rupees in Million) For the year ended March31, 2010

Particulars Other income as restated Profit before tax, as restated Percentage of Profit (%)

Particulars

Related/Non Related to business

Recurring Income Rent Income from Consultancy Income from Financing Activity Total Non -Recurring Interest on Income Tax Refund Excess Provision Written BackGratuity Miscellaneous Income Total TOTAL (B) (A)

Non related Related Related

7.08 3.20 0.05 10.33

Related Non related Related

0.39 0.46 1.26 2.11 12.44

NOTE : The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 3

173

Annexure 9: Consolidated Statement of Accounting Ratios, as restated, Milestone Capital Advisors Limited (Rupees in Million) For the year ended March 31, 2010 49.27

Particulars 1 Adjusted Net Profit/ (Loss) after tax, as restated for Basic EPS Profit / (loss) attributable to equity shareholders* Nominal value of equity shares # Weighted Average number of ordinary shares for (a) (b) 5 6 Basic EPS Diluted EPS No. of outstanding shares at the end of the period Net Worth Numbers Numbers Numbers Rupees in Million Rupees in Million Rupees in Million Rupees

49.27

3 4

10

9,604,802 9,604,802 8,000,000 204.97

7 (i) (a)

Accounting Ratios Earnings/ (loss) per share Basic [(2) / (4) (a)] Diluted [(2) / (4) (b)] Return on Net Worth [(2) / (6)] * 100 Net asset value per share [(6) / (5)]

Rupees

5.13

(b)

Rupees

5.13

(ii)

24.04%

(iii)

Rupees

25.62

Definition of ratios: The Ratios have been calculated as below: Earning Per Share (Rs) = Net Profit / (Loss) after tax, as restated Weighted Average Number of Equity Shares Outstanding during the year Net Profit / (Loss) after tax, as restated Weighted Average Number of Equity Shares Post Dilution Outstanding Net Worth Excluding Revaluation Reserve, Preference Share Capital Number of Equity Shares Post Dilution Net Profit / (Loss) after tax, as restated X 100 Net Worth Excluding Revaluation Reserve

Diluted EPS

Net Asset Value Per Share =

Return on Net Worth (%) =

174

Earnings Per Share has been calculated in accordance with Accounting Standard 20 - Earnings Per Share Ratios have been computed on the basis of the restated summary statements NOTE : The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 3

175

Annexure 10: Consolidated Capitalisation Statement, as restated, Milestone Capital Advisors Limited (Rupees in Million) Post-Issue

Particulars

Pre-Issue As on 31.03.2010 0.78 0.78

Long Term Debt Short Term Debt Total Debt Share Capital Equity Share Capital Reserves, as restated General Reserve Capital Reserve Special Reserve Translation Reserve Profit and Loss Account Total Shareholders Funds Total Capitalisation Long Term Debt / Equity ratio Total Debt / Shareholders' Funds Note: 1. 2.

80.00

77.57 0.11 0.06 47.23 204.97 204.97 NA NA

See Note 1 below

Post Capitalisation will be determined after finalisation of Issue Price The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 3

176

Annexure 11: Consolidated Reconciliation Profits, as restated, Milestone Capital Advisors Limited (Rupees in Million) Below mentioned is the summary of results of restatement made in the audited accounts for the respective years and its impact on the profits of the company. PARTICULARS Profit as per Profit and Loss account before Re-statement Adjustments for Excess Provision for Taxation of earlier years Impact on Profit and Loss Account Total For the year ended March 31, 2010 49.28

(0.01) (0.01) 49.27

Note: The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 3

177

Annexure 12: Consolidated Statement of Changes in Share Capital, as restated, Milestone Capital Advisors Limited (Rupees in Millions) As at March 31, 2010

Particulars

Authorised Share Capital Equity Shares Number of Shares of Rs. 10/- each Amount (Rs. In Million) Issued, Subscribed and Paid up Share Capital Number of Shares of Rs. 10/- each fully paid up Amount (Rs. In Million)

10,000,000 10.00

8,000,000 80.00

Total Notes:

80.00

Out of the above shares :Of the above 3,500,000 shares of Rs.10 each allottedduring the year as fully paid up bonus shares by capitalising balance in General Reserve and Profit and Loss Account.

178

Annexure 13: Consolidated Statement of Changes in Reserves and Surplus, as restated, Milestone Capital Advisors Limited (Rupees in Millions) As at March 31, 2010 A. Special Reserve Fund As per RBI Act Balance at the beginning Add : Transfer from Current Year Profit @ 20% Total B. General Reserve Balance at the beginning Add : Transfer from Profit & loss account Less: Capitalised for issue of bonus shares Total C. Capital Redemption Reserve D. Capital Reserve on Consolidation E. Foreign Currency Translation Reserve F. Surplus in Profit & Loss account, as restated

0.09 0.02 0.11

3.00 (3.00) 0.00 Nil 77.57 0.06 47.23

Total

124.97

Note: The above statement should be read with the Significant Accounting Policies and Notes to Accounts as appearing in Annexure 3

179

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION You should read the following discussion of our financial condition and results of operations together with our restated audited consolidated and standalone financial statements including the notes thereto and the examination reports thereon, which appear elsewhere in this Draft Red Herring Prospectus. This discussion contains forwardlooking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in the section Risk Factors, which discusses a number of factors and contingencies that could impact our financial condition and results of operations. The Company acquired stakes of Capstone Capital from Milestone Fincap on December 15, 2009. Subsequently, Capstone Capital became a joint venture between the Company and Money Matters Private Limited on December 16, 2009. Further, the Companys acquisition of its Indian Subsidiaries was completed on December 31, 2009. Additionally, the Company acquired Omega Global Mauritius Ltd. along with its subsidiaries and joint venture in the last quarter of Fiscal 2010. Accordingly, the consolidated financial condition and results of operations of the Company discussed below for the year ended March 31, 2010 include the financial results of its Milestone PMS October 23, 2009, the financial results of the other Indian Subsidiaries and the three Joint Ventures from January 1, 2010 and the financial results of Omega Global Mauritius Ltd. and its subsidiaries and joint venture from March 26, 2010. Unless otherwise indicated, references in this discussion and analysis to our results of operations or financial condition for a specified year are to our Fiscal Year ended March 31 of such year. In this section, any reference to we, us, our, unless the context otherwise implies, refers to the Company, its Subsidiaries and Joint Ventures on a consolidated basis. Overview We are a professionally managed company providing investment advisory services to various funds and schemes with AUM of approximately Rs. 31,194.50 million for approximately 12,700 fund investors across our various schemes as of March 31, 2010. We provide investment advisory services for investments in various sectors including real estate, logistics, health care and education and infrastructure ancillary activities. In the real estate sector, we focus on investments in developmental real estate assets and Yield Driven Real Estate Investments. Currently, we advise eight schemes, including one offshore scheme, targeting an investor base of non-institutional investors and institutional investors including inter alia insurance companies, banks, pension funds and corporates. Additionally, we have entered into investment advisory agreements with the funds in relation to four schemes which are currently raising funds for investments. One of the schemes is a domestic scheme and three schemes have been launched outside India. Funds advised by us invest in alternative assets, which tend to be less liquid than traditional investments, where the fund investors are primarily focused on long-term investments. We base our investment decisions on detailed, research-based analysis and thorough due diligence and risk management is a core foundation of our business and is a critical part of our investment process. We actively manage the investments of our various schemes and advise the schemes on various aspects through our expertise and knowledge. We also assist the funds advised by us and the companies in which the funds invest, in the areas of corporate governance and operational and financial management. For example, for our schemes that invest in real estate development projects we may be involved in various activities for managing the schemes, including, inter alia, for purchase of land, the approval of building plans and the appointment of contractors for construction. We may also be involved in the purchase of land, obtaining approvals, construction and letting for our logistics and warehousing schemes. We believe this enhances value and enables our schemes to manage risk better. We also provide portfolio management services (PMS) and had approximately Rs. 325.50 million of AUM under our PMS division as of March 31, 2010. Through our PMS division we provide services to our clients for Niftylinked structured products. We have also recently launched Milestone Bullion Scheme I for investing in gold, silver and gold-linked structured products.

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We are also engaged in the business of providing project and property management services in relation to properties where the schemes we have advised have invested. Our project and property management services division currently assists in managing properties in various cities in India including Chennai, Hyderabad, Mumbai, Nagpur, Pune and Rajkot. We also provide consultancy services in clean technology and sustainable development including water management solutions. Across the various schemes advised by us, we have primarily used third party distribution channels. Over the last three years we have had such distribution arrangements with 15 banks including, foreign banks. We have also had arrangements with 42 private wealth management groups and certain independent consultants to market our products. We have entered into arrangements with placement agents for our business operations outside India. We are led by our Board of Directors and a management team consisting of experienced professionals from the industry. We have a team of 20 investment professionals who, based on their expertise, are actively involved in managing our investments across the various schemes we advise. The Company is promoted by Ved Prakash Arya and Milestone Fincap. Ved Prakash Arya has over 17 years of experience in the real estate and retail sectors and has prior experience in setting up domestic and offshore funds. We are currently managed by a Board of eight Directors, out of which five are Independent Directors. We have also partnered with various companies to incorporate joint ventures for the purposes of investing in various sectors and derive benefit from the experience and expertise of our joint ventures partners in those sectors. Our returns from our operations and activities are aligned with the interest of fund investors and the returns they receive from their investments. Our primary sources of revenues are advisory fees or fund management fees earned pursuant to our contractual arrangements with the funds that we advise. We also receive set up fees for the purposes of setting up of the fund, including documentation, compliance with various regulations and fund marketing. Further, based on the performance and investment returns achieved by the funds we are also entitled to additional returns as a share of the net profits of the respective funds. Income from PMS and consultancy services also contribute to the results of our operations. Pursuant to a re-arrangement, the Company acquired stakes in certain Indian companies from its corporate Promoter, Milestone Fincap, which are now either its Subsidiaries or its Joint Ventures. The Company also acquired Omega Global in March 2010 and subsequent to the acquisition the Company controls its offshore business operations through the subsidiaries and joint ventures of Omega Global. For further details see section History and Certain Corporate Matters on page 83. For Fiscal 2010, our consolidated total income was Rs. 260.28 million and profit after tax was Rs. 49.27 million. Our AUMs for our investment advisory services and PMS have grown from Rs. 11,643.80 million as of March 31, 2008 to Rs. 18,230.10 million as of March 31, 2009 and Rs. 31,521.60 million as of March 31, 2010 (including, for each of the Fiscals specified above, the AUMs of those companies which became our Subsidiaries or Joint Ventures during Fiscal 2010). For Fiscal 2010, the standalone income and total profit after tax of the Company was Rs. 220.74 million and Rs. 40.77 million, respectively, compared to our standalone income and total profit after tax of Rs.199.44 million and Rs. 30.05 million for Fiscal 2009, representing an increase of 10.68% and 35.67%, respectively. Factors Affecting Results of Operations Set forth below is a discussion of some of the important factors affecting our results of operations: Expansion of AUM Our principle business activity is providing investment advisory services and the management of various funds and schemes. We also provide portfolio management services. We have AUM of Rs. 31,521.60 million for approximately 12,850 investors across our various schemes under investment advisory division including our portfolio management services division as of March 31, 2010. We earn fund management and set up fees as revenues on AUM. Accordingly, our results of operations and financial condition have been, and will continue to be, directly impacted by the AUM.

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Economic and Market Conditions in India Our investment advisory activities are focused on Indian assets. Accordingly, our results of operations and financial condition have been, and will continue to be, influenced by macro-economic, market and other conditions and developments in India. Factors affecting our results of operations include levels of, and growth rates in, GDP and per capita GDP as well as the rate of inflation. Other service industry sub-sectors, such as banking and retail, have also contributed to growth in the economy. Growth in the services industry has led to significant job generation, which in turn has led to rising disposable incomes. In addition to growth in the service sector, Indias manufacturing sector has also contributed to economic growth (Source: RBI). Consumption levels in the economy will also depend on the level of inflation. Changes in government policies and regulations The financial services industry in India is subject to regulation by governmental and self-regulatory organizations. These regulations address issues such as investor protection, capital adequacy, market conduct, margin requirements, foreign investment and foreign exchange. In recent years, existing rules and regulations have been modified, new rules and regulations have been enacted and reforms have been implemented which are intended to provide tighter control and more transparency in Indias financial sector. Any change in policy relating to appointing of distributors for our products may adversely impact our growth and our results of operations. Changes in governmental and regulatory policies affecting the financial services industry could require changes to our systems and business operations and could involve additional costs and management time. Other general changes in economic and regulatory policies may also affect our business, as they affect the businesses, financial condition and investment policies of our customers. India has been charting a course of economic liberalization and deregulation in recent years. Some policy changes may be beneficial to our business, while others may have a negative impact. We currently have operations in India, Mauritius and the Cayman Islands. Consequently, we are subject to the jurisdiction of a number of tax authorities and regimes. The revenues recorded and income earned in these various jurisdictions are taxed on differing bases, including net income actually earned, net income deemed earned and revenue-based tax withholding. The final determination of our tax liabilities involves the interpretation of local tax laws in each jurisdiction as well as the significant use of estimates and assumptions regarding the scope of future operations, results achieved and the timing and nature of income earned and expenditures incurred. Performance of funds Our primary source of revenue is from consideration paid as a percentage of the AUM and carried interest on investment returns from exiting investments. We actively manage our investments into projects, properties or companies. If an investment proves to be unprofitable or fails to generate returns in accordance with our expectations, then this may impact our results of operations. Competitive environment We operate in a competitive environment. We raise funds from institutional and non-institutional investors and compete with other investment options including equity instruments, debt instruments, mutual funds and insurance products. Specifically, we compete with other funds and schemes that raise funds for investment activities. We continuously strive to identify new trends, introduce new products and recognize investment opportunities, which helps us raise capital and deploy capital in a manner designed to maximize long-term value. We also compete with other funds and institutions for investing the amount raised in target companies. Certain of our distributors and placement agents are engaged on a non-exclusive basis to distribute our products. In such a competitive environment, we may not be able to get the desired results of our business operations which may impact our results of operations. Changes in interest and foreign exchange rates Our ability to raise funds may be impacted by any changes in the prevailing interest rates. Additionally, to the extent that we derive revenue from our operations overseas, any movements in the foreign exchange rates may also impact our results. Any impact on our brand or reputation Our business is based on the trust placed by our clients/investors in us and therefore it is heavily dependent on our reputation and brand name. We believe that our clients/investors have made contributions to various schemes maintained by us primarily due to our success

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rate and ability to perform. Any threat or actual damage to our reputation or brand name may impact our results of operation. Change in our key managerial personnel We depend on the efforts, skills, reputations and business contacts of our senior management and key management personnel. Accordingly, our success depends on the continued service of these individuals and the loss of the services of one or more of them could have a material adverse effect on our revenues and could harm our ability to maintain or grow AUM in existing funds or raise additional funds in the future. Significant Developments after March 31, 2010 The schemes advised by IL&FS Milestone Realty have acquired a 74% stake in the special purpose vehicle, Vikhroli Corporate Park, an associate of the HCC group, which owns 247 Corporate Park, a commercial property in Vikhroli, Mumbai. This property is valued at Rs. 7,750 million and has a total area of 1.8 million sq. ft. including a leasable area of 1.1 million sq. ft. and car park space of 0.7 million sq. ft. Except as stated elsewhere in this Draft Red Herring Prospectus, to our knowledge no circumstances have arisen since March 31, 2010, which is the date of the most recent financial statements included in this Draft Red Herring Prospectus, which materially and adversely affect or are likely to affect our profitability, our financial condition or our ability to pay our material liabilities within the next 12 months. Basis and Method of Preparation of Consolidated Financial Statements The consolidated financial statement relates to the Company, its subsidiaries and jointly controlled entities, which constitute the Group. The financial statements are prepared under the historical cost convention in accordance with the applicable Accounting Standards pursuant to Companies (Accounting Standard) Rules, 2006. All income and expenditure having material bearing on the financial statements are recognised on an accrual basis. Critical Accounting Policies of the Company The Financial statements are prepared under the historical cost convention, on the accrual basis of accounting and comply with the Accounting Standards as notified by the Companies (Accounting Standard) Rules, 2006 and in accordance with the Generally Accepted Accounting Principles and the provisions of the Companies Act consistently adopted by the Company. The preparation of financial statement in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of the assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results get materialized. For details in relation to critical accounting policies that are relevant to the Companys business and operations and changes in accounting policies in the past three years, see the section Financial Statements on page 127. Revenue Recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The income from funds under management is recognized based on contractual arrangements. Set up fees are recognized over the life of the managed scheme. Fixed Assets Fixed assets are valued at cost, less accumulated depreciation. Cost comprises the purchase price and any cost attributable to bringing the asset to its working condition for its intended use.

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Depreciation and Amortisation Depreciation is provided on written down value method at the rates prescribed in Schedule XIV to the Companies Act. In case of any addition during the year depreciation is provided on a pro rata basis. Depreciation on assets costing less than Rs. 5,000 is provided at 100 %. Assets acquired during the year towards the improvement and/or renovation of leasehold premises is amortized/depreciated according to the straight line method over the lease term. Computer software cost is amortised over the expected useful life of the asset and mobile phones are fully depreciated in the year of capitalisation. Foreign Currency Transactions Transactions in foreign currency are recorded at the rates of exchange prevailing at the date of the transaction. Any exchange difference either on settlement or on conversion at the balance sheet date is recognized in the profit and loss account. Investments Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at the lower of cost and the fair value determined on an individual investment basis. Long-term investments are carried at cost. Diminution in value, other than temporary, is recognised in the accounts. Profit or loss on sale of investments is computed with reference to the average cost of investment. Leases Assets acquired under leases where substantial risks and rewards of ownership are not transferred to the Company are classified as operating leases. Such assets are not capitalised. The lease rentals paid are charged to the profit and loss account. Employee Benefits The provisions of the Provident Fund Act, 1972 are not applicable to the Company since its staff strength is below the threshold limit specified under this statue. Premia paid to an insurance company under group accident policy and group mediclaim policy, which is a defined contribution scheme, are charged to the profit and loss account on a pro-rata basis. Gratuity liability is defined as benefit obligations and is provided for on the basis of an actuarial valuation made at the end of each fiscal year. Long term compensated absences are provided for based on actuarial valuation. Actuarial gains or losses are immediately recognized as income or expenses and are not deferred. Distributor Fees Distributor fees payable for arranging of contribution/subscription for MDS-I and MDS-II are deferred and charged to the profit and loss account for every fiscal year equally over the life of the scheme as defined in the respective information memoranda of the schemes.

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Description of Income and Expenditure on consolidated basis The Companys acquisition of its Indian subsidiaries was completed on December 31, 2009. Further, it acquired Omega Global Mauritius Ltd. along with its subsidiaries and joint venture in the last quarter of Fiscal 2010. Accordingly, the consolidated financial statements and results of operations of the Company and its Indian subsidiaries are available only for the period from January 1, 2010 to March 31, 2010 except for Milestone PMS which has been consolidated from October 23, 2009. Additionally, these include Omega Global Mauritius Ltd. and its subsidiaries and joint ventures from March 22, 2010 to March 31, 2009. The consolidation, which was done for the first time during Fiscal 2010, covers only the partial operations of the entities that came under the Companys fold, as Subsidiaries or Joint Ventures. (In Rs. million) Percentage of Total Income 95.22% 4.78% 100.00% 20.31% 30.03% 0.19% 18.70% 1.06% 70.29% 29.71% 11.74% (0.35)% (0.62)% 18.93%

Particulars Income Income from Fund Management Other Income Total Income (A) Expenditure Personnel Costs Distributor Fees Compensation Fees Administrative and Other Operating Costs Depreciation and Amortisation Total Expenditure (B) Profit / (Loss) before tax (A) - (B) Less : Taxation Less : Provision for Deferred Tax Less : Provision for Fringe Benefit Tax Add : MAT Credit Entitlement Restated Profit after tax Income

Fiscal 2010 247.84 12.44 260.28 52.87 78.16 0.50 48.66 2.77 182.96 77.32 30.56 (0.90) (1.61) 49.27

Our total income consists of income from fund management, consultancy fees, income from financing activities and other income. Our income is primarily driven by the AUM and to some extent on the amount invested or committed by the funds in various projects or companies. Income from Fund Management This consists of: Fund Management Fee which is calculated on the AUM for venture capital funds and funds managed under PMS. It is accrued in advance at the beginning of the period. It varies for the different venture capital funds and ranges from 1.50% to 2.00% per annum and for funds under PMS it ranges from 1% to 6%. Setup Fee is a one-time fee earned, on the funds committed, for setting up of the fund including documentation, compliance with various regulations and fund marketing. Under our current fund management agreements, the setup fees ranges from 1% to 2% of the committed amount. It is earned from both venture capital funds and the schemes under PMS. The setup fees are recognized over the life of the fund.

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Carried Interest is the share of profits based on the performance of the funds and schemes. It is receivable on income earned over and above the threshold rate of return. Under our current agreements the Carried Interest ranges from 10% to 30%. Other Income Other income primarily includes consultancy fees, income from financing activities and rental income on shared premises from joint venture companies, which is recurring in nature. We provide consultancy services in relation to real estate projects and properties management through our Subsidiary, Milestone Property, and clean technology and sustainable development solutions through our Joint Venture company, Milestone Ecofirst. The revenues from our NBFC activities are also accounted under this head. In addition it includes dividend income and miscellaneous income that is non-recurring in nature including interest on income tax refund, excess provisioning written back. Expenditure Our total expenditure consists of personnel costs, distributor fees, administrative and other operating expenses, and depreciation and amortization. Personnel Costs Personnel costs consist of salary, allowances, bonus and other employee related expenses like gratuity, leave encashment and staff welfare. Our personnel cost constituted 20.31% of our total income for Fiscal 2010 on a consolidated basis. Distributor Fees We raise funds and commitments for various funds and schemes managed by us through distributor tie-ups. For all the amounts committed through the distributors, fee is mostly paid to the distributors after the fund closing. Similar to Setup Fees, the distributor fee is recognized over the life of the fund/scheme. Distributor fees as a percentage of total income stood at 30.03% for the Fiscal 2010. Compensation Fees We entered into a joint venture agreement with Religare group and Milestone Religare pursuant to which the advisory and the management of India Build-Out Fund-I was transferred to Milestone Religare and hence the balance of distributor fees was also transferred to joint venture company. The same is being recognised over the life of the scheme. Administrative and Other Operating Costs Our administration expenses consist primarily of payment of rent, legal and professional fees, travelling and conveyance, business promotion expenses and other operating expenses. Our administration expenses were 18.70 % of our total income for the Fiscal 2010. Depreciation and Amortisation Depreciation primarily relates to leasehold improvements, computers and furniture and fixtures. For further details, see section Critical Accounting Policies-Depreciation on page 184. In addition to these, the Company books additional revenues and expenses which are in the nature of apportionment of expenses on corporate and shared resources. Description of Income and Expenditure on standalone basis (In Rs. million) Particulars Amount INCOME Income from Fund Management Other Income Total Income (A) EXPENDITURE Personnel Costs Distributor Fees 2010 Percentage of Total Income 95.68% 4.32% 100.00% 20.12% 30.46% For the Fiscal 2009 Amount Percentage of Total Income 178.11 21.33 199.44 38.19 90.48 89.31% 10.69% 100.00% 19.15% 45.37% 2008 Percentage of Total Income 80.52% 19.48% 100.00% 22.95% 23.57%

Amount

211.21 9.53 220.74 44.42 67.24

39.74 9.62 49.36 11.33 11.63

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Particulars Amount Administrative and Other Operating Costs Depreciation and Amortisation Total Expenditure (B) PROFIT / (LOSS) BEFORE TAX (A) (B) Less: Restated Provision for tax RESTATED PROFIT AFTER TAX 43.51 2.50 157.67 63.07 2010 Percentage of Total Income 19.71% 1.13% 71.43% 28.57%

For the Fiscal 2009 Amount Percentage of Total Income 25.66 12.87% 0.57 154.90 44.54 0.28% 77.67% 22.33%

Amount 9.32 0.20 32.48 16.88

2008 Percentage of Total Income 18.88% 0.40% 65.79% 34.21%

22.30 40.77

10.10% 18.47%

14.49 30.05

7.27% 15.07%

6.32 10.56

12.81% 21.40%

On a standalone basis, the Company has AUM of Rs 7,837.50 million including funds under PMS schemes of Rs 325.50 million. On a standalone basis, the Company accounts income on account of shared resources including office rent which is recovered from its Subsidiaries and Joint Ventures. This income is accounted as Reimbursements under Other income, which is of recurring nature for the Company. Results of Operations Results of Operations on a consolidated basis Pursuant to the restructuring, consolidation has been done for the first time for the respective period since the companies became Subsidiaries or Joint Ventures. The consideration was paid in cash by the Company and the shares were transferred by the previous owner, Milestone Fincap, the corporate Promoter of the Company. The overseas funds are managed through Omega Global, the offshore Subsidiary of the Company. The AUMs of the Company are indicated (in parenthesis) in the chart below:

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Milestone Capital Advisors (Rs 7,838 mn)*

40%

50%

50%

100%

100%

50%
Milestone Ecofirst Advisory (Clean technology and sustainable development

75% Jevir Leasing and Finance (NBFC)

IL&FS Milestone (Rs 11,216 mn)

Milestone Religare (Rs 4,023 mn)

Capstone Capital (Rs 700 mn)

Omega Global Mauritius (Holding company)

Milestone Projects and Property (Consultancy)

consultancy)

100% IL&FS Milestone Capital Management (Rs 2,475 mn)

50% Milestone Religare Capital Management (Rs 450 mn)

100% Milestone Capital Management LLC (Rs 4,100 mn) million)

100%** Milestone Mercator Maritime Management (Rs 720 mn)

* including Rs 325.50 million under PMS division **We are in the process of entering into a joint venture agreement with Mercator Lines (Singapore) Ltd.

Subsequent to the restructuring, we have funds under management of Rs. 31,520 million as on March 31, 2010 through eight schemes and under PMS. We would earn fund management fees including advisory fees, setup fees and carried interest and would incur the distributor fees on the funds under management. The share in Joint Ventures would be paid out to our partners in the respective companies. The funds are managed by us as per the investment advisory agreement. In addition to fund management we also have consultancy services business. We engage in property management services and real estate project execution through Milestone Property. We are also providing consultancy services for sustainable development solutions for businesses through Milestone Ecofirst, the Joint Venture company. One of our Subsidiaries, Jevir L&F, is a non-deposit taking NBFC registered with RBI. Standalone Financial Statements The following table sets forth select financial data from the profit and loss account of the Companys audited restated standalone financial statements, for Fiscals 2010, 2009 and 2008, the components of which are also expressed as percentages of total income for such periods. (In Rs. million ) Particulars For the Fiscal 2010 2009 2008 Amount Percentage Increase / Amount Percentage Increase / Amount (Decrease) over (Decrease) over Previous Year Previous Year INCOME Income from Fund 211.21 18.58% 178.11 348.19% 39.74 Management Other Income 9.53 (55.32)% 21.33 121.73% 9.62 Total Income (A) 220.74 10.68% 199.44 304.05% 49.36 EXPENDITURE Personnel Costs 44.42 16.31% 38.19 237.07% 11.33 Distributor Fees 67.24 (25.69)% 90.48 677.99% 11.63

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Particulars Amount

Administrative and Other Operating Costs Depreciation and Amortisation Total Expenditure (B) PROFIT / (LOSS) BEFORE TAX (A) (B) Less: Restated Provision for tax RESTATED PROFIT AFTER TAX

43.51 2.50 157.67 63.07

For the Fiscal 2010 2009 Percentage Increase / Amount Percentage Increase / (Decrease) over (Decrease) over Previous Year Previous Year 69.56% 25.66 175.32% 338.60% 1.79% 41.60% 0.57 154.9 44.54 185.00% 376.91% 163.86%

2008 Amount

9.32 0.20 32.48 16.88

22.30 40.77

53.90% 35.67%

14.49 30.05

129.27% 184.56%

6.32 10.56

Fiscal 2010 compared to Fiscal 2009 Income. The Companys total income increased, by 10.68%, to Rs. 220.74 million in Fiscal 2010 from Rs. 199.44 million in Fiscal 2009 due to an increase in the income from fund management. Of Rs. 220.74 million of our total income, Rs. 211.21 million was attributable to income from fund management, whilst Rs. 9.53 million was attributable to other income. Income from Fund Management. The Companys income from fund management increased by 18.58% to Rs. 211.21 million in Fiscal 2010 from Rs. 178.11 million in Fiscal 2009. The fund management fees was booked for proportionate period in Fiscal 2009 for MDS-II, with AUM of Rs 5,019.20 million as on March 31, 2010, which achieved initial closing in May 2009. In addition during the year we launched a nifty-linked product under our PMS portfolio which had Rs 325.50 million under management as on March 31, 2010. We also booked an income of Rs 34.47 million as setup fees, which is being accrued over the life of the funds MDS I and MDS II. During Fiscal 2009, the Company also advised India Build-Out Fund-I fund with a corpus of Rs 898.20 million on account of which the Company received fund management and setup fees of Rs 10.48 million and Rs 17.96 million respectively. The advisory business of India Build-Out Fund-I was transferred to Milestone Religare from April 2009. Other Income. The Companys other income decreased by 55.32% to Rs. 9.53 million in Fiscal 2010 from Rs. 21.33 million in Fiscal 2009. During Fiscal 2009 the Company received a one-time consideration for the transfer of India Build-Out Fund-I to Milestone Religare Rs 20.16 million. The Companys corporate office was shifted to the present location in March 2009. During Fiscal 2010, the Company received reimbursement income from its Subsidiaries and Joint Ventures for the use of office space and rent collected from Group Companies increased for their use of the new office. Expenditure. The Companys total expenditure increased, by 1.79 %, to Rs. 157.67 million in Fiscal 2010 from Ra. 154.90 million in Fiscal 2009. Costs in relation to costs of personnel. The Companys costs of personnel increased by 16.31 % to Rs. 44.42 million in Fiscal 2010 from Rs. 38.19 million in Fiscal 2009. The number of employees increased from 16 as on March 31, 2009 to 17 as on March 31, 2010 in line with the growth of operations and the launch of new products like those launched by the PMS division. In addition the employees were granted annual increments in salary levels. Distributor fees. The distributors fees decreased by 25.69 % to Rs.67.24 million in Fiscal 2010 from Rs. 90.48 million in Fiscal 2009. During Fiscal 2009, the Company paid Rs 34.32 million on account of fund raised for India Build-Out Fund-I. We entered into a joint venture agreement with Religare group and Milestone Religare pursuant to which the advisory and the management of India Build-Out Fund-I was transferred to Milestone Religare and

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hence the balance of distributor fees was also transferred to joint venture company and consequently no expense was booked in Fiscal 2010 on this account. Costs of administration and operations. The cost of administration and operations increased by 69.56 %, to Rs. 43.51 million in Fiscal 2010 from Rs. 25.66 million in Fiscal 2009, primarily due to increase in rent from Rs 3.81 million to Rs 11.32 million, legal and professional fees from Rs 3.89 million to Rs 18.73 million. We paid Rs 10 million for professional service received for system and process development during Fiscal 2010. The rent increased on account of shift of our office to the current location. Depreciation and amortization. . Depreciation and amortisation expenses increased by 338.60 % to Rs. 2.50 million in Fiscal 2010 from Rs. 0.57 million in Fiscal 2009 primarily due to the additions in leasehold improvements and increase in assets for the expansion of operations. Provision for Tax. The restated provision for tax increased by 53.90% to Rs. 22.30 million in Fiscal 2010 from Rs. 14.49 million in Fiscal 2009. Net Profit/ (Loss) after tax. The Companys net restated profit after tax increased by 35.67% to Rs. 40.77 million in Fiscal 2010 from Rs. 30.05 million in Fiscal 2009. Fiscal 2009 compared to Fiscal 2008 Income. The Companys total income increased, by 304.05%, to Rs. 199.44 million in Fiscal 2009 from Rs. 49.36 million in Fiscal 2008 primarily due to an increase in income from fund management. Of Rs. 199.44 million of our total income, Rs. 178.11 million was attributable to income from fund management, whilst Rs. 21.33 million was attributable to other income. Income from Fund Management. The Companys income from fund management increased by 348.19%% to Rs. 178.11 million in Fiscal 2009 from Rs. 39.74 million in Fiscal 2008. The Company launched MDS-II during the Fiscal 2009 and raised Rs 5,019.20 million under commitments. The Company accrued the fund management fees as well as proportionate setup fees during the Fiscal 2009 on MDS-II in addition to MDS-I which was existing from Fiscal 2008. In addition, as explained earlier, during Fiscal 2009 the Company booked an income of Rs 28.44 million on account of India Build-Out Fund-I which was launched in Fiscal 2009. Other Income. The Companys other income increased by 121.73% to Rs. 21.33 million in Fiscal 2009 from Rs. 9.62 million in Fiscal 2008. The Company received Rs 20.16 million as compensation for the termination of the investment advisory agreement with respect to India Build-Out Fund-I during Fiscal 2009. In April 2009, India Build-Out Fund-I entered into an investment advisory agreement with Milestone Religare. Expenditure. The Companys total expenditure increased by 376.91% to Rs. 154.90 million in Fiscal 2009 from Rs 32.48 million in Fiscal 2008. This was mainly on account of an increase in the distributors fees which increased by 677.99% to Rs 90.48 million in Fiscal 2009. The expenditure for Fiscal 2009 included expenses on account of India Build-Out Fund-I which was launched in Fiscal 2009. Costs in relation to costs of personnel. The Companys costs of personnel increased by 237.07% to Rs. 38.19 million in Fiscal 2009 from Rs. 11.33 million in March 2008 with increase in operations. The increase was primarily due to an expansion of the team and an increase in the number of employees from 10 as on March 31, 2008 to 16 as on March 31, 2009. Distributor fees. The distributors fees increased by 677.99% to Rs. 90.48 million in Fiscal 2009 from Rs. 11.63 million in Fiscal 2008. Proportionate distributor fees were accounted for paid for the amounts committed under MDS-II and India Build-Out Fund-I during Fiscal 2009. Costs of administration and operations. The cost of administration and operations increased by 175.32% to from Rs. 25.66 million in Fiscal 2009 from Rs. 9.32 million in Fiscal 2008 due to an increase in operational activities.

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Depreciation and amortization. Depreciation and amortisation expenses increased by 185.00% to Rs. 0.57 million in Fiscal 2009 from Rs. 0.20 million in Fiscal 2008 primarily due to additions of furniture and fixture and leasehold improvements. Provision for Tax. The restated provision for tax increased by 129.32% to Rs. 14.49 million in Fiscal 2009 from Rs. 6.32 million in Fiscal 2008. Net Profit/ (Loss) after tax. The Companys net restated profit after tax increased by 184.56% to Rs. 30.05 million in Fiscal 2009 from Rs. 10.56 million in Fiscal 2008. Financial Condition, Liquidity and Capital Resources Liquidity Historically, our primary liquidity requirements have been to finance our working capital needs. To fund these costs, we have relied primarily on cash flows from operations and, to some extent, on equity capital. Going forward, we intend to invest significant amounts into funds and schemes which we plan to launch. We believe that our anticipated cash flow from operations, together with proceeds from the Issue and our existing cash, will be sufficient to meet our operating and capital expenditure and investment requirements for Fiscal 2011 and Fiscal 2012. Cash Flows The table below summarizes our cash flow for the periods indicated: Particulars Net cash generated from / (used in) operating activities Net cash generated from / (used in) investing activities Net cash generated from / (used in) financing activities Net cash increase / (decrease) at the end of the period Fiscal 2010 8.13 (27.81) 35.00 15.32 (In Rs. million ) Fiscal 2009 Fiscal 2008 10.94 (8.01) (8.25) (1.04) (2.92) 5.00 (0.24) (4.06)

Net cash generated from operating activities in Fiscal 2010 was Rs. 8.13 million which primarily consisted of net profit before taxation of Rs. 63.07 million, cash used in working capital Rs 36.12 million and taxes paid of Rs 21.32 million. Net cash generated from operating activities in Fiscal 2009 was Rs. 10.94 million which primarily consisted of net profit before taxation of Rs. 44.54 million, cash used in working capital Rs. 16.68 million and taxes paid of Rs.17.51 million. Net cash used in operating activities in Fiscal 2008 was Rs 8.01 million which primarily consisted of net profit before taxation Rs. 16.88 million, cash used in working capital of Rs. 15.15 million and taxes paid of Rs.9.95 million. Cash Flows from Investment Activities Net cash used in investing activities in Fiscal 2010 was Rs. 27.81 million which primarily consisted of the purchase of fixed assets for Rs. 3.19 million, purchase of equity shares, pursuant to the corporate group restructuring, amounting to Rs. 24.80 million and proceeds from sale of fixed assets of Rs. 0.18 million. Net cash used in from investing activities in Fiscal 2009 was Rs. 8.25 million which primarily consisted of purchase of fixed assets for Rs. 8.37 million and proceeds from the sale of fixed assets of Rs. 0.12 million. Net cash used from investing activities in Fiscal 2008 was Rs. 1.04 million which consisted of purchase of fixed assets for that amount.

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Cash Flows from Financing Activities Net cash generated from financing activities for Fiscal 2010 was Rs. 35.00 million which was pursuant to rights issue of equity shares by the Company. Net cash used in financing activities for Fiscal 2009 was Rs. 2.92 million which primarily consisted of dividends paid of Rs. 2.50 million and dividends distribution tax of Rs. 0.42 million. Net cash generated from financing activities for Fiscal 2008 was Rs. 5.00 million which primarily consisted of the proceeds from a rights issue of Rs. 9.90 million. Indebtedness The Company does not have any outstanding loans as on March 31, 2010. Contingent Liabilities As of March 31, 2010, the Company did not have any contingent liability. Capital Commitments and Contractual Obligations As of March 31, 2010, the Company had the following capital commitments: (In Rs. million) 0.40 9.80 10.20

Towards partly paid up equity shares of Milestone Trusteeship Towards partly paid up equity shares of Milestone Investment Total

For details in relation to our contingent liabilities, please see the section Financial Statements on page 127. Quantitative and Qualitative Disclosure about Market Risk Market risk is the risk of loss related to adverse changes in market prices, including interest rate and foreign exchange rates of financial instruments. We are exposed to various types of market risks, in the normal course of our business. The following discussion and analysis, which constitute forward-looking statements that involve risk and uncertainties, summarise our exposure to different market risks. Foreign Exchange Risk We are exposed to foreign currency exchange rate fluctuations and exchange rate risks to the extent of our income from offshore funds. Currently, we manage eight schemes, including one offshore scheme, targeting an investor base of companies, banks, insurance companies, institutional and non-institutional investors, which entitles us to advisory fees. Additionally, we have entered into investment advisory agreements with four schemes, of which three are offshore schemes, which are currently raising funds for investments. Interest Rate Risk We do not have any borrowings or deposits as at March 31, 2010. We raise funds from investors and provide alternative investment avenues in addition to traditional deposits and other investment options. Any movement in interest rates may impact the return expectations of fund investors and our ability to raise funds. Operational Risk Operational risk is the risk of loss or adverse consequences resulting from inadequate or failed internal processes, people or systems, or from external events.

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Information required as per Clause IX. E. 5 of Schedule VIII of the SEBI Regulations 1. Unusual or Infrequent Events or Transactions Except as described in this Draft Red Herring Prospectus, there have been no other events or transactions that, to our knowledge, may be described as unusual or infrequent. 2. Significant Economic Changes that Materially Affected or are likely to Affect Income From Continuing Operations Other than as mentioned under the paragraph Factors Affecting Results of Performance in the section Managements Discussion and Analysis of Financial Condition and Results of Operations on page 180, to our knowledge, there are no other significant economic changes that materially affect or are likely to affect income from continuing operations. 3. Known Trends or Uncertainties Except as described in the sections Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Draft Red Herring Prospectus, to our knowledge, there are no known trends or uncertainties that are expected to have a material adverse impact on our revenues or income. 4. Future Changes in Relationship between Costs and Revenues, in case of Events such as Future Increase in Labour or Material Costs or Prices that will cause a Material Change are known Not applicable 5. The extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices Not applicable 6. Total turnover of each major industry segment in which the issuer company operated The Company provides investment advisory services and manages various funds and schemes. The Company operates only under one industry segment. 7. Status of any publicly announced new products or business segment Other than as described in this Draft Red Herring Prospectus, we do not have any new products or business segment. 8. The Extent to which Business is seasonal Our business is not seasonal in nature. 9. Any Significant Dependence on a Single or few Suppliers or Customers Dependence on investors and clients for our businesses has been disclosed under the sections Risk Factors and Business on pages xii and 61, respectively. 10. Competitive conditions Competitive conditions are as described under the sections Risk Factors and Industry on pages xii and 49 respectively.

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SECTION VI: LEGAL AND OTHER INFORMATION OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS Except as stated below there are no outstanding litigation, suits, criminal or civil prosecutions, proceedings or tax liabilities against the Company, its Promoters, its Directors, Subsidiaries and Joint Ventures there are no defaults, non-payment of statutory dues, over-dues to banks/financial institutions, defaults against banks/financial institutions, defaults in dues payable to holders of any debenture, bonds and fixed deposits and arrears of preference shares issued by the Company and its Subsidiaries, its Joint Ventures defaults in creation of full security as per terms of issue/other liabilities, proceedings initiated for economic/civil/any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (I) of Part 1 of Schedule XIII of the Companies Act) other than unclaimed liabilities of the Company, its Promoters, its Directors, Subsidiaries and Joint Ventures and no disciplinary action has been taken by SEBI or any stock exchanges against the Company, its Promoters, its Directors, Subsidiaries and Joint Ventures. The Company, its Promoters, its Directors, Subsidiaries and Joint Ventures have not been detained as wilful defaulters by the RBI or any government authority and there have been no violation of securities laws in the past or any proceeding involving the violation of securities laws pending against them. The Company does not owe any small scale industries any amounts exceeding Rs.100,000. For details of contingent liabilities of the Company and its Subsidiaries, refer to the financial statements of the Company and the Subsidiaries on page 127. A. Litigation involving the Company Litigation against the Company Nil Litigation by the Company Nil B. Litigation involving the Subsidiaries Litigation against the Subsidiaries Nil Litigation by the Subsidiaries Nil C. Litigation involving the Joint Ventures Litigation against the Joint Ventures Nil Litigation by the Joint Ventures Nil

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D. I.

Litigation involving the Directors Ved Prakash Arya Litigation against Ved Prakash Arya Criminal Cases 1. The Municipal Authority of Delhi has filed case no. 220/2007 before the Metropolitan Magistrate, Karkardooma, New Delhi, against Pantaloon Retail (India) Limited (PRIL) and its directors. It has been alleged that PRIL has not obtained the health trade license from the Municipal Corporation of Delhi, Health and Trade Department for one of its retail outlets carrying on business in Rohini, New Delhi. PRIL has challenged the proceeding before the Sessions Court, New Delhi on the grounds that the application for the grant of the heath trade license has been made to the Municipal Corporation of Delhi and the business in the outlet was started pending the receipt of the license. The matter is pending. The local health authority, Government of Delhi has filed case no. 94/PFA/DA/09 before the Additional Chief Metropolitan Magistrates Court, Patiala House against the directors of PRIL. The Municipal Corporation of Delhi, on inspection, found products which were non-compliant with various provisions of the Prevention of Food Adulteration Act, 1954 and the Prevention of Food Adulteration Rules, 1955 being sold by PRIL. PRIL has filed a writ petition no. 3837/2009 before the High Court of Delhi challenging the summons issued against PRIL and its directors in this matter. The High Court has stayed the summons issued against all the directors of PRIL. The matter is pending. The Municipal Corporation of Indore, through the local heath authority, has filed a criminal case no. 20668 of 2008 before the Judicial Magistrate First Class, Indore against the directors of PRIL. The Municipal Corporation has seized samples of products from the stores of PRIL which contain synthetic substances thereby violating the Prevention of Food Adulteration Rules, 1955 and Prevention of Food Adulteration Act, 1954. PRIL has filed a criminal miscellaneous petition before the High Court of Madhya Pradesh for quashing the complaint. The High Court has granted exemption to all the directors of the Company till the final disposal of the case in the lower court. The matter is pending. The Municipal Corporation of Indore, through the local health authority, has filed a criminal case no. 28669 of 2008) before the Special Judicial Magistrate, Indore against the directors of PRIL. The Municipal Corporation of Indore, on inspection, found products which were non-compliant with various provisions of the Prevention of Food Adulteration Act 1954 and the Prevention of Food Adulteration Rules, 1955 being sold by PRIL. PRIL has filed a criminal miscellaneous petition before the High Court of Madhya Pradesh Bench for quashing the Complaint. The High Court has granted exemption to all the directors of the Company till the final disposal of the matter. The matter is pending. The Municipal Corporation of Kamrup, through the local health authority, has filed criminal cases bearing nos. 4557/2008 and 4556/2008 before the Chief Judicial Magistrate, Guwahati against the directors of PRIL in relation to adulteration of food products. The Municipal Corporation, on inspection, found products which were non-compliant with various provisions of the Prevention of Food Adulteration Act 1954 and the Prevention of Food Adulteration Rules, 1955 being sold by Prelate matter is currently pending.

2.

3.

4.

5.

Notice 1. The food inspector had conducted an inspection at an outlet of PRIL on December 29, 2009 and the samples were sent for examination by a public analyst appointed under the Prevention of Food

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Adulteration Act, 1954 (Prevention of Food Adulteration Act). The report of the public analyst under section 13 (2) of the Prevention of Food Adulteration Act indicated that the samples did not bear the name and address of the manufacturer and this amounted to misbranding under the provisions of the Prevention of Food Adulteration Act. Pursuant to this report the municipal health department has issued a notice dated June 14, 2010 to Ved Prakash Arya in his capacity as a director of PRIL amongst others. Litigation by Ved Prakash Arya Nil

II.

Arvind Bansal Litigation against Arvind Bansal 1. A suit has been filed by Dario Amara, Guy Burnett and others before the Supreme Court of Western Australia against Arvind Bansal alleging libel by letter and electronic mail. The plaintiffs have sought an injunction against him from publishing defamatory statements and damages with interest. Summons have been issued and Arvind Bansal has been granted 42 days to appear before the court. The matter is pending.

Litigation by Arvind Bansal Nil III. Noel Naval Tata Litigation against Noel Naval Tata Notice 1. A notice dated April 29, 2010 has been issued by the Assistant Superintendent, Metropolitan Magistrate, Ahmedabad against certain parties including Noel Naval Tata alleging violation of section 30 (1) (c) of the Apprentices Act, 1961. The parties against whom the notice was issued were directed to appear before the Metropolitan Magistrate, Ahmedbad on May 29, 2010. The matter has been adjourned to July 3, 2010.

Litigation by Noel Naval Tata Nil IV. Vijay Kumar Chopra Litigation against Vijay Kumar Chopra 1. SEBI, pursuant to an inspection of the books of the portfolio management division of Religare Securities Limited (RSL), initiated an enquiry for a period from September 2004 to December 2005. RSL has denied the charges in its reply submitted reply to SEBI along with relevant documents. SEBI conducted a hearing and pursuant to this to above SEBI has issued a showcause notice dated October 22, 2009 under Regulation 28 of SEBI (Intermediaries) Regulations 2008. A hearing was granted to RSL on January 8, 2010. In the mean time, the certificate of registration under the Portfolio Manager Regulations was transferred to Religare Asset Management Company Limited (RAMC) from RSL. Consequently, RAMC has made an application on January 12, 2010 seeking a consent order. SEBI directed RAMC to pay Rs.5,00,000 towards settlement charges to SEBI by May 7, 2010. However, SEBI has intimated the board of directors of RAMC

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that the terms of the consent order are not acceptable. Accordingly, RAMC has now filed an application for a consent order with revised terms of settlement on May 21, 2010. The matter is currently pending. Litigation by Vijay Kumar Chopra Nil Except for Ved Praksh Arya, Arvind Bansal and Vijay Kumar Chopra, none of the other Directors are involved in any litigation. E. I. Litigation involving the Promoters Ved Prakash Arya Litigation against Ved Prakash Arya For details of litigation involving Ved Prakash Arya, please see the section Litigation involving the Directors Ved Prakash Arya on page 195. Litigation by Ved Prakash Arya Nil II. Litigation involving Milestone Fincap Litigation against the Milestone Fincap Nil Litigation by the Milestone Fincap Nil F. Litigation involving the Group Companies Litigation against the Group Companies Nil Litigation by the Group Companies Nil

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GOVERNMENT APPROVALS We have received the necessary consents, licenses, permissions and approvals from the Government and various governmental agencies required for its present business and except as mentioned below, no further approvals are required for carrying on the Companys present business. In view of the approvals listed below, the Company can undertake this Issue and its current business activities and no further major approvals from any governmental or regulatory authority or any other entity are required to undertake the Issue or continue its business activities. We will also apply to the concerned governmental authorities for approvals as required to be obtained to continue our activities. Unless otherwise stated, these approvals are valid as of the date of this Draft Red Herring Prospectus. I. Approvals in relation to the Issue

Corporate Approvals 1. The Board of Directors has, pursuant to a resolution dated June 16, 2010, authorised the Issue, subject to the approval by the shareholders of the Company under Section 81(1A) of the Companies Act. The shareholders have, pursuant to a resolution dated June 16, 2010, under Section 81(1A) of the Companies Act, authorised the Issue.

2.

Approval from the Stock Exchanges 1. 2. II. In-principle approval from the BSE dated []. In-principle approval from the NSE dated []. Approvals for the Companys business

The Company requires various approvals to carry on its business in India. The approvals that the Company requires include the following. Approvals and Registrations in India Company Certificate of registration as portfolio manager having registration code INP000002643 issued by SEBI at Mumbai on April 25, 2008. A fresh certificate, pursuant to a change in the registered address, was issued on April 17, 2009. The registration is valid for a period of three years expiring on April 25, 2011. Jevir L&F NBFC licence no. B.01.00443 dated December 30, 2002 issued by RBI, Ahmedabad to carry on nonbanking financial activities without taking deposits. Intellectual Property Related Approvals Certificate of registration bearing registration no. A-82475/2008 dated March 28, 2008 issued by the Deputy Registrar of Copyrights for the copyright over Milestone Capital Advisors Private Limited with logo.

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Tax- Related and Other Approvals (a) Described below are the permanent account number (PAN), tax deduction account number (TAN) and profession tax certificate number obtained by the Company and its Subsidiaries. Company name PAN TAN Professional Tax Employer certificate no. 998016212278 Professional Tax Employee certificate no. 27745206113P

Milestone Capital Advisors Limited Milestone Investments Milestone PMS Milestone Property Milestone Trusteeship Jevir L&F (b)

AAJCS1377C

MUMM32573C

AAFCM4921J AAFCM6808E AAFCM3327E AAFCM6451M AAACJ3852A

MUMM34767F MUMM34885E MUMM34417F MUMM34648F -

993116539438 -

27805212288P -

Described below are the service tax numbers obtained by the Company and its Subsidiary. Company name Milestone Capital Advisors Limited Milestone Property Service tax no.
AAJCS1377CST001 AAFCM3327EST002

Effective date October 22, 2007 October 16, 2008

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OTHER REGULATORY AND STATUTORY DISCLOSURES Authority for the Issue The Board of Directors has, pursuant to a resolution dated June 16, 2010 authorised the Issue subject to the approval by the shareholders of the Company under Section 81(1A) of the Companies Act, and such other authorities as may be necessary. The shareholders of the Company have authorised the Issue pursuant to a special resolution dated June 16, 2010 under Section 81(1A) of the Companies Act. Prohibition by SEBI The Company, its Promoters, its Directors, Promoter Group entities and Group Companies have not been prohibited from accessing or operating in the capital markets or restrained from buying, selling or dealing in securities under any order or direction passed by SEBI or any other authorities. Except for Dr. Pravin Pranalal Shah (a director on the board of JM Financial Services Private Limited and JM Financial Consultants Private Limited which are registered with SEBI), Arvind Bansal (associated with Milestone Realty Estate Fund, a venture capital fund registered with SEBI, Raj Narain Bhardwaj (a director on the board of SREI Ventures Capital Limited, Money Matter Securities Private Limited and Religare Trustee Company Limited) and Vijay Kumar Chopra (a director on the board of Religare Asset Management Company Limited) none of the Directors are in any manner associated with the securities market. There has been no action taken by the SEBI against any of the Directors or any entity the Directors are involved in as promoters or directors. Prohibition by RBI Neither the Company nor its Promoter, the relatives of Promoter (as defined under the Companies Act) or the Group Companies have been identified as wilful defaulters by the RBI or any other governmental authority. There are no violations of securities laws committed by any of them in the past or pending against them. Eligibility for the Issue The Company is eligible for the Issue in accordance with the Regulation 26(2) of the SEBI Regulations, which states as follows: (2) An issuer not satisfying any of the conditions stipulated in sub-regulation (1) may make an initial public offer if: (a) (i) the issue is made through the book building process and the issuer undertakes to allot at least fifty per cent. of the net offer to public to qualified institutional buyers and to refund full subscription monies if it fails to make allotment to the qualified institutional buyers ; OR (ii) at least fifteen per cent. of the cost of the project is contributed by scheduled commercial banks or public financial institutions, of which not less than ten per cent. shall come from the appraisers and the issuer undertakes to allot at least ten per cent. of the net offer to public to qualified institutional buyers and to refund full subscription monies if it fails to make the allotment to the qualified institutional buyers; AND (b) (i) the minimum post-issue face value capital of the issuer is ten crore rupees;

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OR (ii) the issuer undertakes to provide market-making for at least two years from the date of listing of the specified securities, subject to the following: (A) the market makers offer buy and sell quotes for a minimum depth of three hundred specified securities and ensure that the bid-ask spread for their quotes does not, at any time, exceed ten per cent.; the inventory of the market makers, as on the date of allotment of the specified securities, shall be at least five per cent. of the proposed issue.

(B)

We are an unlisted company not complying with the conditions specified in the Regulations 26(1) SEBI Regulations and are therefore required to meet both the conditions detailed in Clause (a) and Clause (b) of Regulation 26(2) of the SEBI Regulations. We are complying with Regulation 26(a)(i) of the SEBI Regulations and at least 50% of the Issue are proposed to be allocated to QIBs (in order to comply with the requirements of Rule 19(2)(b) of the SCRR) and in the event we fail to do so, the full subscription monies shall be refunded to the Bidders. We are complying with Regulation 43(2) of the SEBI Regulations and Non-Institutional Bidders and Retail Individual Bidders will be allocated 15% and 35% of the Issue respectively. We are also complying with Regulation 26(2)(b)(i) of the SEBI Regulations and the post-issue face value capital of the Company shall be Rs. 142.86 million, which is more than the minimum requirement of Rs. 10 Crore (Rs. 100 million). Hence, we are eligible for the Issue under Regulation 26(2) of the SEBI Regulations. Disclaimer Clause AS REQUIRED, A COPY OF THE DRAFT RED HERRING PROSPECTUS HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE DRAFT RED HERRING PROSPECTUS TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT RED HERRING PROSPECTUS. THE BOOK RUNNING LEAD MANAGERS HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS 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. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT RED HERRING PROSPECTUS, THE BOOK RUNNING LEAD MANAGERS ARE EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE BOOK RUNNING LEAD MANAGERS, HAVE FURNISHED TO SEBI, A DUE DILIGENCE CERTIFICATE DATED JUNE 23, 2010 WHICH READS AS FOLLOWS: WE, THE LEAD MERCHANT BANKER(S) TO THE ABOVE MENTIONED FORTHCOMING ISSUE, STATE AND CONFIRM AS FOLLOWS:

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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 THE DRAFT RED HERRING PROSPECTUS (IN CASE OF A BOOK BUILT ISSUE) / DRAFT PROSPECTUS (IN CASE OF A FIXED PRICE ISSUE) / LETTER OF OFFER (IN CASE OF A RIGHTS ISSUE) PERTAINING TO THE SAID ISSUE; ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE ISSUER, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, AND INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER PAPERS FURNISHED BY THE ISSUER, WE CONFIRM THAT: (A) THE DRAFT RED HERRING PROSPECTUS FILED WITH THE BOARD IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE; 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 THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT, 1956, THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AND OTHER APPLICABLE LEGAL REQUIREMENTS.

2.

(B)

(C)

3.

WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT RED HERRING PROSPECTUS ARE REGISTERED WITH THE BOARD AND THAT TILL DATE SUCH REGISTRATION IS VALID. WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS. NOTED FOR COMPLIANCE WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTER HAS BEEN OBTAINED FOR INCLUSION OF THEIR SPECIFIED SECURITIES AS PART OF PROMOTERS CONTRIBUTION SUBJECT TO LOCK-IN AND THE SPECIFIED SECURITIES PROPOSED TO FORM PART OF PROMOTERS CONTRIBUTION SUBJECT TO LOCK-IN SHALL NOT BE DISPOSED / SOLD / TRANSFERRED BY THE PROMOTER DURING THE PERIOD STARTING FROM THE DATE OF FILING THE DRAFT RED HERRING PROSPECTUS WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT RED HERRING PROSPECTUS. WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, WHICH RELATES TO SPECIFIED SECURITIES INELIGIBLE FOR COMPUTATION OF PROMOTER CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS. WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C) AND (D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS,

4.

5.

6.

7.

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2009 SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS CONTRIBUTION SHALL BE RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITORS CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE 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. WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF SUB-SECTION (3) OF SECTION 73 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 PROSPECTUS. WE FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION. NOTED FOR COMPLIANCE. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR PHYSICAL MODE. NOT APPLICABLE. AS THE OFFER SIZE IS MORE THAN 100 MILLION, HENCE UNDER SECTION 68B OF THE COMPANIES ACT, 1956, THE EQUITY SHARES ARE TO BE ISSUED IN DEMAT ONLY. 11. WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN ADDITION TO DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE INVESTOR TO MAKE A WELL INFORMED DECISION. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS: (A) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME, THERE SHALL BE ONLY ONE DENOMINATION FOR THE EQUITY SHARES OF THE ISSUER AND AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME.

9.

10.

12.

(B)

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. 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 OF

14.

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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 SECURITIES AND EXCHANGE BOARD OF INDIA (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 RED HERRING PROSPECTUS WHERE THE REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.

The filing of the Draft Red Herring Prospectus does not, however, absolve the Company from any liabilities under Section 63 or Section 68 of the Companies Act or from the requirement of obtaining such statutory and/or other clearances as may be required for the purpose of the proposed issue. SEBI further reserves the right to take up at any point of time, with the Book Running Lead Manager, any irregularities or lapses in the Draft Red Herring Prospectus. All legal requirements pertaining to the issue will be complied with at the time of filing of the Red Herring Prospectus with the Registrar of Companies, Mumbai at Maharashtra, in terms of Section 56, Section 60 and Section 60B of the Companies Act. Caution - Disclaimer from the Company, the Directors and the BRLMs The Company, the Directors and the BRLMs accept no responsibility for statements made otherwise than in this Draft Red Herring Prospectus or in the advertisements or any other material issued by or at our instance and anyone placing reliance on any other source of information, including the Companys web site www.milestonecapital.in, would be doing so at his or her own risk. The BRLMs accept no responsibility, save to the limited extent as provided in the Issue Agreement entered into between the BRLMs and the Company and the Underwriting Agreement to be entered into between the Underwriters and the Company. All information shall be made available by the Company, the BRLMs to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner whatsoever including at road show presentations, in research or sales reports, at bidding centres or elsewhere. Neither the Company nor the Underwriters are liable for any failure in downloading the Bids due to faults in any software/hardware system or otherwise. Investors that Bid in the Issue will be required to confirm and will be deemed to have represented to the Company, the Underwriters and their respective directors, officers, agents, affiliates, and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of the Company and will not Issue, sell, pledge, or transfer the Equity Shares of the Company to any person who is not eligible under any applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of the Company. The Company, the Underwriters and their respective directors, officers, agents, affiliates, and representatives accept no responsibility or liability for advising any investor on whether such investor is eligible to acquire Equity Shares of the Company. The BRLMs and their respective associates and affiliates may engage in transactions with, and perform services for, the Company, affiliates or associates or third parties in the ordinary course of business and have engaged, or may in future engage, in commercial banking and investment banking transactions with the Company, affiliates or associates or third parties, for which they have received, and may in future receive, compensation.

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Disclaimer in respect of Jurisdiction This Issue is being made in India to persons resident in India (including Indian nationals resident in India who are not minors, HUFs, companies, corporate bodies and societies registered under the applicable laws in India and authorised to invest in shares, Indian Mutual Funds registered with SEBI, Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI permission), or trusts under applicable trust law and who are authorised under their constitution to hold and invest in shares, permitted insurance companies and pension funds) and to FIIs, eligible NRIs and other eligible foreign investors (viz. FVCIs, multilateral and bilateral development financial institutions). This Draft Red Herring Prospectus does not, however, constitute an invitation to purchase shares offered hereby in any jurisdiction other than India to any person to whom it is unlawful to make an offer or invitation in such jurisdiction. Any person into whose possession this Draft Red Herring Prospectus comes is required to inform himself or herself about, and to observe, any such restrictions. Any dispute arising out of this Issue will be subject to the jurisdiction of appropriate court(s) in Mumbai, India only. No action has been, or will be, taken to permit a public offering in any jurisdiction where action would be required for that purpose, except that this Draft Red Herring Prospectus has been filed with SEBI for its observations and SEBI shall give its observations in due course. Accordingly, the Equity Shares represented thereby may not be offered or sold, directly or indirectly, and this Draft Red Herring Prospectus may not be distributed, in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of this Draft Red Herring Prospectus nor any sale hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date hereof or that the information contained herein is correct as of any time subsequent to this date. The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. The Equity Shares have not been and will not be registered under the US Securities Act of 1933 (the Securities Act). In addition, the Company has not been and will not be registered under the US Investment Company Act of 1940, as amended (the Investment Company Act). Therefore, the Equity Shares may not be offered or sold within the United States (as defined in Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the Investment Company Act. Accordingly, the Equity Shares are only being offered and sold outside the United States in offshore transactions in compliance with Regulation S under the Securities Act and the applicable laws of the jurisdiction where those offers and sales occur. Disclaimer Clause of the BSE As required, a copy of the Draft Red Herring Prospectus had been submitted to the BSE. The Disclaimer Clause as intimated by the BSE to the Company, post scrutiny of this Draft Red Herring Prospectus, shall be included in the Red Herring Prospectus prior to the RoC filing. Disclaimer Clause of the NSE As required, a copy of the Draft Red Herring Prospectus had been submitted to the NSE. The Disclaimer Clause as intimated by the NSE to the Company, post scrutiny of this Draft Red Herring Prospectus, shall be included in the Red Herring Prospectus prior to the RoC filing. Filing A copy of the Draft Red Herring Prospectus has been filed with SEBI at Corporation Finance Department, Plot No.C4-A,'G' Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051.

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A copy of the Red Herring Prospectus, along with the documents required to be filed under Section 60B of the Companies Act, would be delivered for registration to the RoC and a copy of the Prospectus to be filed under Section 60 of the Companies Act would be delivered for registration with the RoC at the Office of the Registrar of Companies, Everest, 5th Floor, 100, Marine Drive, Mumbai 400 002. Listing Applications have been made to the BSE and NSE for permission to deal in and for an official quotation of the Equity Shares, [] will be the Designated Stock Exchange with which the Basis of Allotment will be finalised. If the permissions to deal in and for an official quotation of the Equity Shares are not granted by any of the Stock Exchanges mentioned above, the Company will forthwith repay, without interest, all moneys received from the applicants in pursuance of this Draft Red Herring Prospectus. If such money is not repaid within eight days after the Company becomes liable to repay it, i.e. from the date of refusal or within ten weeks from the Bid/Issue Closing Date, whichever is earlier, then the Company and every Director of the Company who is an officer in default shall, on and from such expiry of eight days, be liable to repay the money, with interest at the rate of 15% per annum on application money, as prescribed under Section 73 of the Companies Act. The Company shall ensure that all steps for the completion of the necessary formalities for listing and commencement of trading at all the Stock Exchanges mentioned above are taken within 12 Working Days of finalisation of the Bid/ Issue Closing Date. Impersonation Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Companies Act, which is reproduced below: Any person who: (a) 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,

(b)

shall be punishable with imprisonment for a term which may extend to five years. Consents Consents in writing of: (a) the Directors, the Company Secretary and Compliance Officer, the Auditors, Bankers to the Company and Bankers to the Issue; and (b) Book Running Lead Managers and Syndicate Members, Escrow Collection Bankers, Registrar to the Issue, the Legal Advisor to the Issue, to act in their respective capacities, will be obtained and will be filed along with a copy of the Red Herring Prospectus with the RoC, as required under Sections 60 and 60B of the Companies Act and such consents shall not be withdrawn up to the time of delivery of the Red Herring Prospectus for registration with the RoC. In accordance with the Companies Act and SEBI Regulations, G.M. Kapadia & Co, Chartered Accountants, the Companys statutory auditors, have given their written consent to the inclusion of their standalone and consolidated reports both dated June 21, 2010 and statement of the tax benefits dated June 15, 2010 in the form and context in which it appears in this Draft Red Herring Prospectus and such consent has not be withdrawn up to the time of submission of the Draft Red Herring Prospectus with SEBI.

206

Experts to the Issue Except the report of the Auditors dated June 21, 2010 and the statement of tax benefits dated June 15, 2010 provided by G.M. Kapadia & Co. and the report of [] in respect of the IPO grading of this Issue annexed herewith to this Draft Red Herring Prospectus, the Company has not obtained any expert opinions. Expenses of the Issue The total expenses of the Issue are estimated to be approximately Rs.[] million. The expenses of this Issue include, among others, underwriting and management fees, selling commission, printing and distribution expenses, legal fees, statutory advertisement expenses and listing fees. The estimated Issue expenses are as under: Particulars Amounts* [] [] [] [] [] [] [] [] [] As % of total expenses [] [] [] [] [] [] [] [] [] As a percentage of Issue Size [] [] [] [] [] [] [] [] []

Lead merchant bankers (including, underwriting commission, brokerage and selling commission) Registrars to the Issue Bankers to the Issue Others: - Printing and stationery - Listing fees - Advertising and marketing expenses - IPO Grading fees - Others Total Estimated Issue Expenses * Will be incorporated after finalisation of Issue Price Fees Payable to the BRLMs and the Syndicate

The total fees payable to the BRLMs and the Syndicate will be as per the letter of appointment issued by the Company, a copy of which is available for inspection at the Registered Office. Fees Payable to the Registrar to the Issue The fees payable by the Company to the Registrar to the Issue for processing of application, data entry, printing of CAN/refund order, preparation of refund data on magnetic tape, printing of bulk mailing register will be as per the MoU between the Company and the Registrar to the Issue dated June 22, 2010, a copy of which is available for inspection at the Registered Office of the Company. The Registrar to the Issue will be reimbursed for all out of pocket expenses including cost of stationery, postage, stamp duty, and communication expenses. Adequate funds will be provided to the Registrar to the Issue to enable them to send refund orders or allotment advice by registered post/speed post/under certificate of posting. Underwriting Commission, Brokerage and Selling Commission on Previous Issues Since this is the initial public offer of the Company, no sum has been paid or has been payable as commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any of the Equity Shares since our inception. Particulars regarding public or rights issue during the last five years We have not made any public or rights issue during the last five years.

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Previous capital issue during the previous three years by listed Subsidiaries, Group Companies and associates of the Company None of the Group Companies, associates or Subsidiaries of the Company is listed on any stock exchange. Promise vis--vis Performance Public/ Rights Issue of the Company and/ or listed Subsidiaries, Group Companies and associates of the Company The Company has not undertaken any previous public or rights issue. None of the Group Companies, associates or Subsidiaries of the Company is listed on any stock exchange. Previous issues of shares otherwise than for cash Except as stated in the section Capital Structure on page 24, the Company has not issued Equity Shares for consideration otherwise than for cash. Outstanding Debentures or Bonds The Company does not have any outstanding debentures or bonds as of the date of filing this Draft Red Herring Prospectus. Outstanding Preference Shares The Company does not have any outstanding preference shares as of the date of filing this Draft Red Herring Prospectus. Stock Market Data for the Equity Shares of the Company This being an initial public offering of the Company, the Equity Shares of the Company are not listed on any stock exchange. Mechanism for Redressal of Investor Grievances The agreement between the Registrar to the Issue and the Company will provide for retention of records with the Registrar to the Issue for a period of at least one year from the last date of despatch of the letters of allotment, demat credit and refund orders to enable the investors to approach the Registrar to the Issue for redressal of their grievances. All grievances relating to the Issue may be addressed to the Registrar to the Issue, giving full details such as name, address of the applicant, number of Equity Shares applied for, amount paid on application and the bank branch or collection centre where the application was submitted. All grievances relating to the ASBA process may be addressed to the Registrar to the Issue with a copy to the relevant SCSB, giving full details such as name, address of applicant, application number, number of Equity Shares applied for, amount paid on application and designated branch or the collection centre of the SCSB where the ASBA Bid cum Application Form was submitted by the ASBA Bidders. Disposal of Investor Grievances The Company estimates that the average time required by the Company, or the Registrar to the Issue or the SCSBs in case of ASBA Bidders for the redressal of routine investor grievances shall be 10 Working Days from the date of receipt of the complaint. In case of non-routine complaints and complaints where external agencies are involved, the Company will seek to redress these complaints as expeditiously as possible.

208

The Company has appointed a Shareholders Grievance Committee comprising of Arvind Bansal, Nawshir Dara Khurody and Dr. Pravin Pranalal Shah as members. We have also appointed Ravindra Gupta, Company Secretary of the Company as the Compliance Officer for this Issue and he may be contacted in case of any pre-Issue or post-Issue related problems, at the following address: Ravindra Gupta 602, Hallmark Business Plaza Sant Dyaneshwar Marg Opp. Guru Nanak Hospital Bandra (East) Mumbai - 400 051 Tel: + 91 22 42357000 Fax: +91 22 42357077 Email: ipo.investor@milestonecapital.in Changes in Auditors in the last three years There has been no change in the auditors of the Company during the last three years. Capitalisation of Reserves or Profits The Company has not capitalised its reserves or profits during the last five years, except as stated in the section Capital Structure on page 24. Revaluation of Assets The Company has not revalued its assets in the last five years.

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SECTION VII: ISSUE INFORMATION TERMS OF THE ISSUE The Equity Shares being issued are subject to the provisions of the Companies Act, the SCRR, the Memorandum and Articles of Association, the terms of this Draft Red Herring Prospectus, the Red Herring Prospectus and the Prospectus, Bid cum Application Form, ASBA Bid cum Application Form, the Revision Form, ASBA Revision Form, the CAN and other terms and conditions as may be incorporated in the allotment advices and other documents/ certificates that may be executed in respect of the Issue. The Equity Shares shall also be subject to laws, guidelines, notifications and regulations relating to the issue of capital and listing of securities issued from time to time by SEBI, the Government of India, Stock Exchanges, RoC, RBI and/or other authorities, as in force on the date of the Issue and to the extent applicable. Ranking of Equity Shares The Equity Shares being issued shall be subject to the provisions of the Memorandum and Articles of Association and shall rank pari-passu with the existing Equity Shares of the Company including rights in respect of dividend. The Allotees in receipt of Allotment of Equity Shares under this Issue will be entitled to dividends and other corporate benefits, if any, declared by the Company after the date of Allotment. For further details, please see the section Main Provisions of the Articles of Association on page 247. Mode of Payment of Dividend The Company shall pay dividends to the shareholders in accordance with the provisions of the Companies Act, the Articles and the provision of the Listing Agreements. Face Value and Issue Price The face value of the Equity Shares is Rs.10 each and the Issue Price is Rs. [] per Equity Share. The Anchor Investor Issue Price is Rs. [] per Equity Share. At any given point of time there shall be only one denomination for the Equity Shares. Compliance with SEBI Regulations The Company shall comply with all disclosure and accounting norms as specified by SEBI from time to time. Rights of the Equity Shareholder Subject to applicable laws, the equity shareholders shall have the following rights: Right to receive dividend, if declared; Right to attend general meetings and exercise voting powers, unless prohibited by law; Right to vote on a poll either in person or by proxy; Right to receive offers for rights shares and be allotted bonus shares, if announced; Right to receive surplus on liquidation; Right of free transferability; and Such other rights, as may be available to a shareholder of a listed public company under the Companies Act, the terms of the listing agreement executed with the Stock Exchanges, and the Companys

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Memorandum and Articles of Association. For a detailed description of the main provisions of the Articles relating to voting rights, dividend, forfeiture and lien and/or consolidation/splitting, see the section Main Provisions of the Articles of Association on page 247. Market Lot and Trading Lot The Equity Shares shall be Allotted only in dematerialised form and trading shall only be in dematerialised form. Since trading of the Equity Shares is in dematerialised form, the tradable lot is one Equity Share. Allotment in this Issue will be only in electronic form in multiples of one Equity Share subject to a minimum Allotment of [ ] Equity Shares. The Price Band and the minimum Bid lot size for the Issue will be decided by the Company, in consultation with the BRLMs, and advertised in [] edition of [] in the English language, [] edition of [] in the Hindi language and [] edition of [] in the Marathi language at least two Working Days prior to the Bid/ Issue Opening Date. Jurisdiction Exclusive jurisdiction for the purpose of this Issue is with the competent courts/authorities in Mumbai. Nomination Facility to Investor The sole or First Bidder, along with other joint Bidders, may nominate any one person in whom, in the event of the death of sole Bidder or in case of joint Bidders, death of all the Bidders, as the case may be, the Equity Shares Allotted, if any, shall vest. A person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall be entitled to the same advantages to which he or she would be entitled if he or she were the registered holder of the Equity Share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled to Equity Share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale/transfer/alienation of equity share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made only on the prescribed form available on request at the Registered Office or to the Registrar. Further, any person who becomes a nominee shall, upon the production of such evidence as may be required by the Board, elect either: To register himself or herself as the holder of the Equity Shares; or To make such transfer of the Equity Shares, as the deceased holder could have made. Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or to transfer the Equity Shares, and if the notice is not complied with within a period of 90 days, the Board may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the Equity Shares, until the requirements of the notice have been complied with. Since the Allotment of Equity Shares in the Issue will be made only in dematerialised form, there is no need to make a separate nomination with the Company. Nominations registered with respective depository participants of the applicant would prevail. If the investors want to change their nomination, they are requested to inform their respective depository participants. Minimum Subscription If the Company does not receive the minimum subscription of 90% of the Issue, including devolvement of underwriters within 60 days from the Bid/Issue Closing Date, the Company shall forthwith refund the entire subscription amount received. If there is a delay beyond eight days after the Company becomes liable to pay the amount, the Company shall pay interest prescribed under Section 73 of the Companies Act.

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If at least 50% of the Issue cannot be allocated to QIBs, then the entire application money will be refunded forthwith. Further, the Company shall ensure that the number of prospective Allotees to whom Equity Shares will be Allotted shall not be less than 1,000. The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction. Arrangement for disposal of Odd Lots There is no arrangement for the disposal of odd lots. Restriction on transfer of shares Except for lock-in of the pre-Issue Equity Shares and Promoters minimum contribution in the Issue as detailed in the section Capital Structure on page 24, and except as provided in the Articles of Association, there are no restrictions on transfers of Equity Shares. There are no restrictions on transfers of debentures except as provided in the Articles of Association. There are no restrictions on transmission of shares/ debentures and on their consolidation/ splitting except as provided in the Articles of Association. For further details, see section Main Provisions of the Articles of Association on page 247.

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ISSUE STRUCTURE Issue of 4,285,715 Equity Shares for cash at a price of Rs. [] per Equity Share (including share premium of Rs. [] per Equity Share) aggregating to Rs. [] million. The Issue will constitute 30.00 % of the post-Issue paid-up capital of the Company. The Company is considering a Pre-IPO Placement of up to714,200 Equity Shares and/or aggregating up to Rs.400.00 million with certain investors. If the Pre-IPO Placement is completed, the Issue size would be reduced by the extent of such Pre-IPO Placement, subject to a minimum Issue size of 25% of the post Issue paid-up equity capital being offered to the public. The Issue is being made through the 100% Book Building Process. QIBs# Number Shares* of Equity At least 2,142,858 Equity Shares Non-Institutional Bidders Not less than 642,857 Equity Shares available for allocation or Issue less allocation to QIB Bidders and Retail Individual Bidders. Retail Individual Bidders Not less than 1,500,000 Equity Shares available for allocation or Issue less allocation to QIB Bidders and Non-Institutional Bidders. Not less than 35% of the Issue or the Issue less allocation to QIB Bidders and Non-Institutional Bidders. Proportionate

Percentage of Issue Size available for Allotment/allocation

At least 50% of the Issue Size being allocated. However, 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation proportionately to Mutual Funds only. Proportionate as follows: (a) 75,000 Equity Shares shall be allocated on a proportionate basis to Mutual Funds; and (b) 1,425,001 Equity Shares shall be Allotted on a proportionate basis to all QIBs including Mutual Funds receiving allocation as per (a) above. Such number of Equity Shares that the Bid Amount exceeds Rs.100,000 and in multiples of [] Equity Shares thereafter.

Not less than 15% of Issue or the Issue less allocation to QIB Bidders and Retail Individual Bidders.

Basis of Allotment/Allocation if respective category is oversubscribed

Proportionate

Minimum Bid

Maximum Bid

Such number of Equity Shares not exceeding the Issue, subject to applicable limits.

Such number of Equity Shares that the Bid Amount exceeds Rs.100,000 and in multiples of [] Equity Shares thereafter. Such number of Equity Shares not exceeding the Issue subject to applicable limits.

[] Equity Shares

Such number of Equity Shares whereby the Bid Amount does not exceed Rs.100,000. Compulsorily in

Mode of Allotment

Compulsorily

in

dematerialised

Compulsorily

in

213

QIBs# form. Bid Lot [] Equity Shares and in multiples of [] Equity Shares thereafter. [] Equity Shares and in multiples of one Equity Share thereafter.

Non-Institutional Bidders dematerialised form. [] Equity Shares and in multiples of [] Equity Shares thereafter. [] Equity Shares and in multiples of one Equity Share thereafter.

Retail Individual Bidders dematerialised form. [] Equity Shares and in multiples of [] Equity Shares thereafter. [] Equity Shares and in multiples of one Equity Share thereafter. One Equity Share Resident Indian individuals, Eligible NRIs and HUF (in the name of Karta)

Allotment Lot

Trading Lot Who can Apply **

One Equity Share Public financial institutions as specified in Section 4A of the Companies Act, scheduled commercial banks, mutual funds registered with SEBI, FIIs and subaccounts registered with SEBI, other than a sub-account which is a foreign corporate or foreign individual, multilateral and bilateral development financial institutions, venture capital funds registered with SEBI, foreign venture capital investors registered with SEBI, state industrial development corporations, insurance companies registered with Insurance Regulatory and Development Authority, provident funds (subject to applicable law) with minimum corpus of Rs.250 million, pension funds with minimum corpus of Rs.250 million in accordance with applicable law, and National Investment Fund and insurance funds set up and managed by the army, navy or air force of the Union of India. Amount shall be payable at the time of submission of Bid cum Application Form to the Syndicate Members. (including for Anchor Investors*#)## Full Bid Amount on Bidding

One Equity Share Resident Indian individuals, Eligible NRIs, HUF (in the name of Karta), companies, corporate bodies, scientific institutions societies and trusts, sub-accounts of FIIs registered with SEBI, which are foreign corporates or foreign individuals.

Terms of Payment

Amount shall be payable at the time of submission of Bid cum Application Form. ##

Amount shall be payable at the time of submission of Bid cum Application Form.## Full Bid Amount on Bidding

Margin Amount

Full Bid Bidding

Amount

on

The Company may allocate up to 30% of the QIB Portion to Anchor Investors on a discretionary basis. One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the price at which allocation is being done to Anchor Investors. For further details,

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please see the section Issue Procedure on page 217.

##

In case of ASBA Bidders, the SCSB shall be authorised to block such funds in the bank account of the ASBA Bidder that are specified in the ASBA Bid cum Application Form.

Subject to valid Bids being received at or above the Issue Price. This Issue is being made in accordance with Rule 19(2)(b)(i) of the SCRR, as amended under the SEBI Regulations, where the Issue will be made through the 100% Book Building Process wherein at least 50% of the Issue will be allocated on a proportionate basis to QIBs, out of the QIB Portion (excluding the Anchor Investor Portion), 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for allocation on a proportionate basis to QIBs and Mutual Funds, subject to valid Bids being received from them at or above the Issue Price. If at least 50% of the Issue cannot be allocated to QIBs, then the entire application money will be refunded forthwith. However, if the aggregate demand from Mutual Funds is less than [] Equity Shares, the balance Equity Shares available for Allotment in the Mutual Fund Portion will be added to the QIB Portion and allocated proportionately to the QIB Bidders in proportion to their Bids. Further, not less than 15% of the Issue will be available for allocation on a proportionate basis to NonInstitutional Bidders and not less than 35% of the Issue will be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Under-subscription, if any, in any category except in QIB category, would be met with spill-over from other categories at sole discretion of the Company, in consultation with the BRLMs. If at least 50% of the Issue is not allocated to the QIBs, the entire subscription monies shall be refunded.

**

In case the Bid cum Application Form is submitted in joint names, the Bidders should ensure that the demat account is also held in the same joint names and are in the same sequence in which they appear in the Bid cum Application Form. Bid Amount shall be payable by the Anchor Investors at the time of submission of the Bid cum Application Forms. The balance, if any, shall be paid within the two Working Days of the Bid/Issue Closing Date.

*#

Withdrawal of the Issue The Company, in consultation with the BRLMs, reserves the right not to proceed with the Issue anytime after the Bid/Issue Opening Date but before the Allotment of Equity Shares. In such an event the Company would issue a public notice in the newspapers, in which the pre-Issue advertisements were published, within two days of the Bid/ Issue Closing Date, providing reasons for not proceeding with the Issue. The Company shall also inform the Stock Exchanges on which the Equity Shares are proposed to be listed. . Any further issue of Equity Shares by the Company shall be in compliance with applicable laws. Bid/ Issue Programme BID/ISSUE OPENS ON BID/ISSUE CLOSES ON
*

[]* []

The Company may consider participation by Anchor Investors. The Anchor Investor Bid/ Issue Period shall be one Working Day prior to the Bid/ Issue Opening Date.

Bids and any revision in Bids shall be accepted only between 10.00 a.m. and 5.00 p.m. (Indian Standard Time, IST) during the Bid/ Issue Period as mentioned above at the bidding centres mentioned on the Bid cum Application Form. On the Bid/ Issue Closing Date, the Bids (excluding the ASBA Bids) shall be accepted only between 10.00 p.m. and 3.00 p.m. (IST) and uploaded until (i) 4.00 p.m. (IST) in case of Bids by QIB Bidders and Non-Institutional Bidders, and (ii) until 5.00 p.m. (IST) or such extended time as permitted by the BSE and the NSE, in case of Bids by Retail Individual Bidders. It is clarified that the Bids not uploaded in the Book would be rejected. Bids by the Bidders applying through ASBA process shall be uploaded by the SCSBs in the electronic system to be provided by the Stock Exchanges.

215

In case of discrepancy in the data entered in the electronic book vis--vis the data contained in the physical Bid cum Application Form, for a particular Bidder, the details as per the physical Bid cum Application Form of the Bidder may be taken as the final data for the purpose of Allotment. In case of discrepancy in the data entered in the electronic book vis--vis the data contained in the physical or electronic Bid cum Application Form, for a particular Bidder applying through ASBA process, the Registrar to the Issue shall ask for rectified data from the SCSB. Due to limitation of time available for uploading the Bids on the Bid/ Issue Closing Date, the Bidders are advised to submit their Bids one day prior to the Bid/ Issue Closing Date and, in any case, no later than 3.00 p.m. (IST) on the Bid/ Issue Closing Date. Bidders are cautioned that in the event a large number of Bids are received on the Bid/ Issue Closing Date, as is typically experienced in public offerings, some Bids may not get uploaded due to lack of sufficient time. Such Bids that cannot be uploaded will not be considered for allocation under the Issue. Bids will be accepted only on Business Days, i.e., Monday to Friday (excluding any public holiday). On the Bid/ Issue Closing Date, extension of time will be granted by the Stock Exchanges only for uploading the Bids received by Retail Individual Bidders after taking into account the total number of Bids received up to the closure of time period for acceptance of Bid cum Application Forms as stated herein and reported by the BRLMs to the Stock Exchange within half an hour of such closure. The Company, in consultation with the BRLMs, reserves the right to revise the Price Band during the Bid/ Issue Period, provided that the Cap Price shall be less than or equal to 120% of the Floor Price and the Floor Price shall not be less than the face value of the Equity Shares. The revision in Price Band shall not exceed 20% on the either side i.e. the floor price can move up or down to the extent of 20% of the floor price disclosed at least two Working Days prior to the Bid/ Issue Opening Date and the Cap Price will be revised accordingly. In case of revision of the Price Band, the Bid/Issue Period will be extended for three additional Working Days after revision of Price Band subject to the Bid/ Issue Period not exceeding 10 Days. Any revision in the Price Band and the revised Bid/ Issue Period, if applicable, will be widely disseminated by notification to the Stock Exchanges, by issuing a press release and also by indicating the changes on the websites of the BRLMs and at the terminals of the Syndicate.

216

ISSUE PROCEDURE This section applies to all Bidders. Please note that all Bidders can participate in the Issue through the ASBA process. ASBA Bidders should note that the ASBA process involves application procedures that are different from the procedure applicable to Bidders other than the ASBA Bidders. Bidders applying through the ASBA process should carefully read the provisions applicable to such applications before making their application through the ASBA process. Please note that all the Bidders are required to make payment of the full Bid Amount along with the Bid cum Application Form. Book Building Procedure The Issue is being made through the 100% Book Building Process wherein at least 50% of the Issue shall be allocated to QIBs on a proportionate basis. Out of the QIB Portion (excluding Anchor Investor Portion), 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for allocation on a proportionate basis to QIBs and Mutual Funds, subject to valid Bids being received from them at or above the Issue Price. If at least 50% of the Issue cannot be allocated to QIBs, then the entire application money will be refunded forthwith. Further, not less than 15% of the Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue will be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Allocation to Anchor Investors shall be on a discretionary basis and not on a proportionate basis. All Bidders, other than the ASBA Bidders, are required to submit their Bids through the Syndicate. ASBA Bidders are required to submit their Bids to the SCSBs. Bids by QIBs shall be submitted only to the BRLMs, other than Bids by QIBS who Bid through the ASBA process, who shall submit the Bids to the Designated Branch of the SCSBs. Investors should note that the Equity Shares will be Allotted to all successful Bidders only in dematerialised form. The Bid cum Application Forms which do not have the details of the Bidders depository account shall be treated as incomplete and rejected. Bidders will not have the option of being Allotted Equity Shares in physical form. The Equity Shares on Allotment shall be traded only in the dematerialised segment of the Stock Exchanges. Bid cum Application Form The prescribed colour of the Bid cum Application Form for the various categories is as follows: Category Colour of Bid cum Application Form [] []

Resident Indians and Eligible NRIs applying on a non-repatriation basis Eligible NRIs, FIIs or Foreign Venture Capital Funds, registered Multilateral and Bilateral Development Financial Institutions applying on a repatriation basis Resident ASBA Bidders [] Non-Resident ASBA Bidders [] Anchor Investors* [] * Bid cum Application forms for Anchor Investors have been made available at the offices of the BRLMs.

Bidders are required to submit their Bids through the Syndicate. Bidders shall only use the specified Bid cum Application Form bearing the stamp of a member of the Syndicate for the purpose of making a Bid in terms of the Red Herring Prospectus. The Bidder shall have the option to make a maximum of three Bids in the Bid cum Application Form and such options shall not be considered as multiple Bids. On filing of the Prospectus with the RoC, the Bid cum Application Form shall be considered as the Application Form. Upon completion and submission of the Bid cum Application Form to a member of the Syndicate, the Bidder is deemed to have authorised the Company to make the necessary changes in the Red Herring Prospectus as would be required for filing the Prospectus with the RoC and as would be required by RoC after such filing, without prior or subsequent notice of such changes to the Bidder.

217

ASBA Bidders shall submit an ASBA Bid cum Application Form to the SCSB authorising blocking of funds that are available in the bank account specified in the ASBA Bid cum Application Form. Only QIBs can participate in the Anchor Investor Portion. Who can Bid? Indian nationals resident in India who are not minors in single or joint names (not more than three); Hindu Undivided Families or HUFs, in the individual name of the Karta. The Bidder should specify that the Bid is being made in the name of the HUF in the Bid cum Application Form as follows: Name of Sole or First bidder: XYZ Hindu Undivided Family applying through XYZ, where XYZ is the name of the Karta. Bids by HUFs would be considered at par with those from individuals; Companies, corporate bodies and societies registered under the applicable laws in India and authorised to invest in equity shares; Mutual Funds registered with SEBI; Eligible NRIs on a repatriation basis or on a non repatriation basis subject to applicable laws; Indian financial institutions, commercial banks (excluding foreign banks), regional rural banks, cooperative banks (subject to RBI regulations and the SEBI Regulations and other laws, as applicable); FIIs and sub-accounts registered with SEBI, other than a sub-account which is a foreign corporate or foreign individual; Sub-accounts of FIIs registered with SEBI, which are foreign corporates or foreign individuals only under the Non-Institutional Bidders category. Venture Capital Funds registered with SEBI; Foreign Venture Capital Funds registered with SEBI; Multilateral and bilateral development financial institutions; State Industrial Development Corporations; Trusts/societies registered under the Societies Registration Act, 1860, as amended, or under any other law relating to trusts/societies and who are authorised under their respective constitutions to hold and invest in equity shares; Scientific and/or industrial research organisations authorised to invest in equity shares; Insurance Companies registered with Insurance Regulatory and Development Authority; Provident Funds with a minimum corpus of Rs.250 million and who are authorised under their constitution to hold and invest in equity shares; Pension Funds with a minimum corpus of Rs.250 million and who are authorised under their constitution to hold and invest in equity shares; National Investment Fund; and Insurance funds set up and managed by the army, navy or air force of the Union of India

218

As per the existing regulations, OCBs cannot participate in this Issue. Participation by associates and affiliates of BRLMs and Syndicate Members The BRLMs and the Syndicate Members shall not be allowed to subscribe to this Issue in any manner except towards fulfilling their underwriting obligations. However, the associates and affiliates of the BRLMs and Syndicate Members may subscribe to or purchase Equity Shares in the Issue, either in the QIB Portion or in Non-Institutional Portion as may be applicable to such Bidders, where the allocation is on a proportionate basis. The BRLMs and any persons related to the BRLMs or the Promoters and the Promoter Group cannot apply in the Issue under the Anchor Investor Portion. Bids by Mutual Funds An eligible Bid by a Mutual Fund shall first be considered for allocation proportionately in the Mutual Fund Portion. In the event that the demand is greater than [] Equity Shares, allocation shall be made to Mutual Funds proportionately, to the extent of the Mutual Fund Portion. The remaining demand by the Mutual Funds shall, as part of the aggregate demand by QIBs, be available for allocation proportionately out of the remainder of the QIB Portion, after excluding the allocation in the Mutual Fund Portion. One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the price at which allocation is being done to other Anchor Investors. In case of a Mutual Fund, a separate Bid can be made in respect of each scheme of the Mutual Fund registered with SEBI and such Bids in respect of more than one scheme of the Mutual Fund will not be treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid has been made. No Mutual Fund scheme shall invest more than 10% of its net asset value in equity shares or equity related instruments of any single company provided that the limit of 10% shall not be applicable for investments in index funds or sector or industry specific funds. No Mutual Fund under all its schemes should own more than 10% of any companys paid-up share capital carrying voting rights. Bids by Eligible NRIs 1. Bid cum Application Forms have been made available for Eligible NRIs applying on a repatriation basis ([] in colour) at the Registered Office of the Company and with the members of the Syndicate. Eligible NRI applicants should note that only such applications as are accompanied by payment in free foreign exchange shall be considered for Allotment. Eligible NRIs who intend to make payment through Non-Resident Ordinary (NRO) accounts should use the form meant for Resident Indians ([] in colour).

2.

Bids by FIIs As per the current regulations, the following restrictions are applicable for investments by FIIs: The issue of Equity Shares to a single FII should not exceed 10% of our post-Issue issued capital (i.e. 10% of [] Equity Shares). In respect of an FII investing in the Equity Shares on behalf of its sub-accounts, the investment on behalf of each sub-account shall not exceed 10% of our total issued capital or 5% of our total issued capital in case such sub-account is a foreign corporate or an individual. Pursuant to approval of Board and the shareholders of the Company by way of a special resolution dated June 16, 2010, the aggregate FII holding in the Company cannot exceed 49% of its total issued capital. With the approval of the board and the shareholders by way of a special resolution, the aggregate FII holding can go up to 100%.

219

Subject to compliance with all applicable Indian laws, rules, regulations guidelines and approvals in terms of regulation 15A(1) of the SEBI FII Regulations, an FII, as defined in the SEBI FII Regulations, or its sub-account may issue, deal or hold, offshore derivative instruments (defined under the SEBI FII Regulations as any instrument, by whatever name called, which is issued overseas by an FII against securities held by it that are listed or proposed to be listed on any recognised stock exchange in India, as its underlying) directly or indirectly, only in the event (i) such offshore derivative instruments are issued only to persons who are regulated by an appropriate regulatory authority; and (ii) such offshore derivative instruments are issued after compliance with know your client norms. The FII or sub-account is also required to ensure that no further issue or transfer of any offshore derivative instrument is made by or on behalf of it to any persons that are not regulated by an appropriate foreign regulatory authority as defined under the SEBI FII Regulations. Associates and affiliates of the underwriters including the BRLMs and the Syndicate Members that are FIIs may issue offshore derivative instruments against Equity Shares Allotted to them in the Issue. Any such Offshore Derivative Instrument does not constitute any obligation of claim on or an interest in, the Company. Bids by SEBI registered Venture Capital Funds and Foreign Venture Capital Funds The SEBI (Venture Capital Funds) Regulations, 1996 and SEBI (Foreign Venture Capital Investor) Regulations, 2000 inter alia prescribe the investment restrictions on venture capital funds and foreign venture capital investors registered with SEBI. Accordingly, the holding by any individual Venture Capital fund registered with SEBI in one company should not exceed 25% of the corpus of the Venture Capital Fund. Further, venture capital funds and foreign venture capital investors can invest only up to 33.33% of the investible funds by way of subscription to an IPO of a venture capital undertaking whose shares are proposed to be listed. The above information is given for the benefit of the Bidders. The Company and the BRLMs are not liable for any amendments or modification or changes in applicable laws or regulations, which may occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make their independent investigations and are advised to ensure that any Bid from them does not exceed the investment limits or maximum number of Equity Shares that can be held by them under applicable law or regulation or as specified in this Draft Red Herring Prospectus. Maximum and Minimum Bid Size (a) For Retail Individual Bidders: The Bid must be for a minimum of [ ] Equity Shares and in multiples of [ ] Equity Share thereafter, so as to ensure that the Bid Amount payable by the Bidder does not exceed Rs. 100,000. In case of revision of Bids, the Retail Individual Bidders have to ensure that the Bid Amount does not exceed Rs. 100,000. In case the Bid Amount is over Rs. 100,000 due to revision of the Bid or revision of the Price Band or on exercise of Cut-off option, the Bid would be considered for allocation under the Non-Institutional Portion. The Cut-off option is an option given only to the Retail Individual Bidders indicating their agreement to Bid and purchase at the final Issue Price as determined at the end of the Book Building Process. For Other Bidders (Non-Institutional Bidders and QIBs, excluding Anchor Investors): The Bid must be for a minimum of such number of Equity Shares in multiples of [] such that the Bid Amount exceeds Rs. 100,000. A Bid cannot be submitted for more than the Issue Size. However, the maximum Bid by a QIB investor should not exceed the investment limits prescribed for them by applicable laws. A QIB Bidder cannot withdraw its Bid after the Bid/Issue Closing Date. In case of revision in Bids, the Non-Institutional Bidders, who are individuals, have to ensure that the Bid Amount is greater than Rs. 100,000 for being considered for allocation in the Non-Institutional Portion. In case the Bid Amount reduces to Rs. 100,000 or less due to a revision in Bids or revision of the Price Band, Bids by Non-Institutional Bidders who are eligible for allocation in the Retail Portion would be considered for allocation under the Retail Portion. Non-Institutional Bidders and QIBs are not allowed to Bid at Cutoff.

(b)

220

(c)

For Bidders in the Anchor Investor Portion: The Bid must be for a minimum of such number of Equity Shares in multiples of [] such that the Bid Amount exceeds Rs. 100 million. Bids by Anchor Investors under the Anchor Investor Portion and the QIB Portion shall not be considered as multiple Bids. A Bid cannot be submitted for more than 30% of the QIB Portion. Anchor Investors cannot withdraw their Bids after the Anchor Investor Bid/ Issue Period.

Information for the Bidders: (a) The Company and the BRLMs shall declare the Bid/Issue Opening Date and Bid/Issue Closing Date in the Red Herring Prospectus to be registered with the RoC and also publish the same in two national newspapers (one each in English national daily and Hindi national daily) and in one Marathi newspaper with wide circulation. This advertisement shall be in the prescribed format. The Company will file the Red Herring Prospectus with the RoC at least three days before the Bid/Issue Opening Date. The Company may decide to close Bidding by QIBs one day prior to the Bid/Issue Closing Date provided that Bidding shall be kept open for a minimum of three days for all categories of Bidders. The Companys decision to close Bidding by QIBs one day prior to the Bid/Issue Closing Date shall be disclosed in the Red Herring Prospectus to be filed with the RoC. Copies of the Bid cum Application Form and copies of the Red Herring Prospectus will be available with the Syndicate. The SCSBs shall ensure that the abridged prospectus is made available on their websites. Any Bidder (who is eligible to invest in the Equity Shares) who would like to obtain the Red Herring Prospectus and/ or the Bid cum Application Form can obtain the same from the Registered Office of the Company. Eligible Bidders who are interested in subscribing for the Equity Shares should approach any of the BRLMs or Syndicate Members or their authorised agent(s) to register their Bids. Bidders who wish to use the ASBA process should approach the Designated Branches of the SCSBs to register their Bids. The Bids should be submitted on the prescribed Bid cum Application Form only. Bid cum Application Forms (other than the ASBA Bid cum Application Forms) should bear the stamp of the members of the Syndicate, otherwise they will be rejected. Bids by ASBA Bidders shall be accepted by the Designated Branches of the SCSBs in accordance with the SEBI Regulations and any circulars issued by SEBI in this regard. Bidders applying through the ASBA process also have an option to submit the ASBA Bid cum Application Form in electronic form.

(b)

(c)

(d)

(e)

(f)

(g)

Bidders should note that in case the PAN, the DP ID and Client ID mentioned in the Bid cum Application form and entered into the electronic bidding system of the Stock Exchanges by the Syndicate Members do not match with PAN, the DP ID and Client ID available in the depository database, the Bid cum Application form is liable to be rejected. Method and Process of Bidding (a) The Company, in consultation with the BRLMs, will decide the Price Band and the minimum Bid lot size for the Issue and the same shall be advertised in all editions of the English national daily, [], New Delhi and Mumbai editions of the Hindi national daily, [] and the Mumbai edition of the regional language newspaper, [] at least two Working Days prior to the Bid/ Issue Opening Date. The members of the Syndicate and the SCSBs shall accept Bids from the Bidders during the Bid/Issue Period. The Bid/Issue Period shall be for a minimum of three Working Days and shall not exceed 10 Working Days. The Bid/ Issue Period maybe extended, if required, by an additional three Working Days, subject to the total Bid/Issue Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bid/ Issue Period, if applicable, will be published in two national newspapers (one each in English and

(b)

221

Hindi) and one Marathi newspaper with wide circulation and also by indicating the change on the websites of the BRLMs and at the terminals of the members of the Syndicate. (c) During the Bid/Issue Period, Bidders, other than QIBs, who are interested in subscribing for the Equity Shares should approach the Syndicate or their authorised agents to register their Bids. The Syndicate shall accept Bids from all Bidders and have the right to vet the Bids during the Bid/ Issue Period in accordance with the terms of the Red Herring Prospectus. Bidders who wish to use the ASBA process should approach the Designated Branches of the SCSBs to register their Bids. Each Bid cum Application Form will give the Bidder the choice to bid for up to three optional prices (for details refer to the paragraph Bids at Different Price Levels below) within the Price Band and specify the demand (i.e., the number of Equity Shares Bid for) in each option. The price and demand options submitted by the Bidder in the Bid cum Application Form will be treated as optional demands from the Bidder and will not be cumulated. After determination of the Issue Price, the maximum number of Equity Shares Bid for by a Bidder at or above the Issue Price will be considered for allocation/Allotment and the rest of the Bid(s), irrespective of the Bid Amount, will become automatically invalid. The Bidder cannot bid on another Bid cum Application Form after Bids on one Bid cum Application Form have been submitted to any member of the Syndicate or the SCSBs. Submission of a second Bid cum Application Form to either the same or to another member of the Syndicate or SCBS will be treated as multiple Bids and is liable to be rejected either before entering the Bid into the electronic bidding system, or at any point of time prior to the allocation or Allotment of Equity Shares in this Issue. However, the Bidder can revise the Bid through the Revision Form, the procedure for which is detailed under the paragraph Build up of the Book and Revision of Bids. Except in relation to Bids received from the Anchor Investors, the members of the Syndicate/the SCSBs will enter each Bid option into the electronic bidding system as a separate Bid and generate a Transaction Registration Slip, (TRS), for each price and demand option and give the same to the Bidder. Therefore, a Bidder can receive up to three TRSs for each Bid cum Application Form. The BRLMs shall accept the Bids from the Anchor Investors during the Anchor Investor Bid/ Issue Period i.e. one Working Day prior to the Bid/ Issue Opening Date. Bids by QIBs under the Anchor Investor Portion and the QIB Portion shall not be considered as multiple Bids. Along with the Bid cum Application Form, all Bidders (other than ASBA Bidders) will make payment in the manner described in the section Issue Procedure - Escrow Mechanism - Terms of payment and payment into the Escrow Accounts on page 223. Upon receipt of the ASBA Bid cum Application Form, submitted whether in physical or electronic mode, the Designated Branch of the SCSB shall verify if sufficient funds equal to the Bid Amount are available in the ASBA Account, as mentioned in the ASBA Bid cum Application Form, prior to uploading such Bids with the Stock Exchanges. If sufficient funds are not available in the ASBA Account, the Designated Branch of the SCSB shall reject such Bids and shall not upload such Bids with the Stock Exchanges. If sufficient funds are available in the ASBA Account, the SCSB shall block an amount equivalent to the Bid Amount mentioned in the ASBA Bid cum Application Form and will enter each Bid option into the electronic bidding system as a separate Bid and generate a TRS for each price and demand option. The TRS shall be furnished to the ASBA Bidder on request.

(d)

(e)

(f)

(g)

(h)

(i)

(j)

(k)

Bids at Different Price Levels and Revision of Bids (a) The Company, in consultation with the BRLMs, reserves the right to revise the Price Band during the Bid/ Issue Period, provided that the Cap Price shall be less than or equal to 120% of the Floor Price and the Floor Price shall not be less than the face value of the Equity Shares. The revision in Price Band shall not

222

exceed 20% on the either side i.e. the floor price can move up or down to the extent of 20% of the floor price disclosed at least two Working Days prior to the Bid/ Issue Opening Date and the Cap Price will be revised accordingly. (b) The Company, in consultation with the BRLMs, will finalise the Issue Price within the Price Band in accordance with this clause, without the prior approval of, or intimation, to the Bidders. The Company, in consultation with the BRLMs, can finalise the Anchor Investor Issue Price within the Price Band in accordance with this clause, without the prior approval of, or intimation, to the Anchor Investors. The Company, in consultation with the BRLMs, shall decide the minimum number of Equity Shares for each Bid to ensure that the minimum application value is within the range of Rs. 5,000 to Rs. 7,000 The Bidders can bid at any price within the Price Band. The Bidder has to bid for the desired number of Equity Shares at a specific price. Retail Individual Bidders may bid at the Cut-off Price. However, bidding at Cut-off Price is prohibited for QIB and Non-Institutional Bidders and such Bids from QIB and NonInstitutional Bidders shall be rejected. Retail Individual Bidders, who Bid at Cut-off Price agree that they shall purchase the Equity Shares at any price within the Price Band. Retail Individual Bidders, shall submit the Bid cum Application Form along with a cheque/demand draft for the Bid Amount based on the Cap Price with the members of the Syndicate. In case of ASBA Bidders bidding at Cut-off Price, the ASBA Bidders shall instruct the SCSBs to block an amount based on the Cap Price.

(c)

(d)

(e)

(f)

Escrow mechanism, terms of payment and payment into the Escrow Accounts For details of the escrow mechanism and payment instructions, please see the section Issue Procedure - Payment Instructions on page 231. Electronic Registration of Bids (a) The members of the Syndicate and the SCSBs will register the Bids using the on-line facilities of the Stock Exchanges. There will be at least one on-line connectivity facility in each city, where a stock exchange is located in India and where Bids are being accepted. The BRLMs, the Company and the Registrar are not responsible for any acts, mistakes or errors or omission and commissions in relation to, (i) the Bids accepted by the Syndicate Members and the SCSBs, (ii) the Bids uploaded by the Syndicate Members and the SCSBs, (iii) the Bids accepted but not uploaded by the Syndicate Members and the SCSBs or (iv) with respect to ASBA Bids, Bids accepted and uploaded without blocking funds in the ASBA Accounts. However, the members of the Syndicate and/or the SCSBs shall be responsible for any error in the Bid details uploaded by them. It shall be presumed that for Bids uploaded by the SCSBs, the Bid Amount has been blocked in the relevant ASBA Account. The Stock Exchanges will offer an electronic facility for registering Bids for the Issue. This facility will be available with the Syndicate and their authorised agents and the SCSBs during the Bidding/ Issue Period. The Syndicate Members and the Designated Branches can also set up facilities for off-line electronic registration of Bids subject to the condition that they will subsequently upload the off-line data file into the on-line facilities for Book Building on a regular basis. On the Bid/ Issue Closing Date, the members of the Syndicate and the Designated Branches shall upload the Bids till such time as may be permitted by the Stock Exchanges. This information will be available with the BRLMs on a regular basis. Based on the aggregate demand and price for Bids registered on the electronic facilities of the Stock Exchanges, a graphical representation of consolidated demand and price as available on the websites of the Stock Exchanges would be made available at the bidding centres during the Bid/Issue Period.

(b)

(c)

223

(d)

At the time of registering each Bid, the members of the Syndicate shall enter the following details of the Bidder in the on-line system: Application number. Investor Category Individual, Corporate, FII, NRI, Mutual Fund, etc. PAN. DP ID. Beneficiary account number of the Bidder. Numbers of Equity Shares Bid for. Price Option. Cheque Details. With respect to ASBA Bids, at the time of registering each Bid, the Designated Branches of the SCSBs shall enter the following information pertaining to the Bidder into the on-line system: Name of the Bidder(s); Application Number; PAN (of First Bidder, if more than one Bidder); Investor Category and Sub-Category: Retail (No sub category) Non- Institutional Individual Corporate Other QIB Mutual Funds Financial Institutions Insurance companies Foreign Institutional Investors other than corporate and individual sub-accounts Others

Employee/shareholder (if reservation); DP ID; Beneficiary Account Number or client ID; Number of Equity Shares bid for; Price; Bank Account Number; Cheque Amount; Cheque number. (e) A system generated TRS will be given to the Bidder as a proof of the registration of each of the bidding options. It is the Bidders responsibility to obtain the TRS from the members of the Syndicate or the Designated Branches of the SCSBs. The registration of the Bid by the member of the Syndicate or the Designated Branches of the SCSBs does not guarantee that the Equity Shares shall be allocated/Allotted either by the members of the Syndicate or the Company. Such TRS will be non-negotiable and by itself will not create any obligation of any kind. In case of QIB Bidders, members of the Syndicate have the right to accept the Bid or reject it. However, such rejection shall be made at the time of receiving the Bid and only after assigning a reason for such rejection in writing. In case of Non-Institutional Bidders and Retail Individual Bidders, Bids will be rejected on technical grounds. The members of the Syndicate may also reject Bids if all the information required is not provided and the Bid cum Application Form is incomplete in any respect. The SCSBs shall have no right to reject Bids, except on technical grounds.

(f) (g)

224

(h)

The permission given by the Stock Exchanges to use their network and software of the online IPO system should not in any way be deemed or construed to mean that the compliance with various statutory and other requirements by the Company and/or the BRLMs are cleared or approved by the Stock Exchanges; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the compliance with the statutory and other requirements nor does it take any responsibility for the financial or other soundness of the Company, the Promoters, the management or any scheme or project of the Company; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Draft Red Herring Prospectus; nor does it warrant that the Equity Shares will be listed or will continue to be listed on the Stock Exchanges. Only Bids that are uploaded on the online IPO system of the Stock Exchanges shall be considered for allocation/ Allotment. Members of the Syndicate will be given up to one day after the Bid/Issue Closing Date to verify the DP ID and Client ID uploaded in the online IPO system during the Bid/Issue Period, after which the Registrar to the Issue shall proceed with the Allotment of Equity Shares. Details of Bids in the Anchor Investor Portion will not be registered on the on-line facilities of electronic facilities of the Stock Exchanges. However, Anchor Investors who use the ASBA facility will have to submit the ASBA Bid cum Application Form to the BRLMs along with a confirmation from the SCSBs that the Bid Amount has been blocked in their respective bank accounts in terms of the ASBA process. In the event such Bid Amount has not been blocked, the Anchor Investors Bid shall be rejected.

(i)

(j)

Build up of the Book and revision of Bids (a) Bids received from various Bidders through the members of the Syndicate and the SCSBs shall be electronically uploaded to the Stock Exchanges mainframe on a regular basis. The book gets built up at various price levels. This information will be available with the BRLMs on a regular basis at the end of the Bid/Issue Period. During the Bid/Issue Period, any Bidder who has registered his or her interest in the Equity Shares at a particular price level is free to revise his or her Bid within the Price Band using the printed Revision Form, which is a part of the Bid cum Application Form. Revisions can be made in both the desired number of Equity Shares and the Bid Amount by using the Revision Form. Apart from mentioning the revised options in the Revision Form, the Bidder must also mention the details of all the options in his or her Bid cum Application Form or earlier Revision Form. For example, if a Bidder has Bid for three options in the Bid cum Application Form and such Bidder is changing only one of the options in the Revision Form, he must still fill the details of the other two options that are not being revised, in the Revision Form. The members of the Syndicate and the Designated Branches of the SCSBs will not accept incomplete or inaccurate Revision Forms. The Bidder can make this revision any number of times during the Bid/Issue Period. However, for any revision(s) in the Bid, the Bidders will have to use the services of the same member of the Syndicate or the SCSB through whom such Bidder had placed the original Bid. Bidders are advised to retain copies of the blank Revision Form and the revised Bid must be made only in such Revision Form or copies thereof. In case of an upward revision in the Price Band announced as above, Retail Individual Bidders who had Bid at Cut-off Price could either (i) revise their Bid or (ii) shall make additional payment based on the cap of the revised Price Band (such that the total amount i.e., original Bid Amount plus additional payment does not exceed Rs. 100,000 if the Bidder wants to continue to Bid at Cut-off Price), with the members of the Syndicate to whom the original Bid was submitted. In case the total amount (i.e., original Bid Amount plus additional payment) exceeds Rs. 100,000, the Bid will be considered for allocation under the NonInstitutional Portion in terms of this Red Herring Prospectus. If, however, the Bidder does not either revise the Bid or make additional payment and the Issue Price is higher than the cap of the Price Band prior to revision, the number of Equity Shares Bid for shall be adjusted downwards for the purpose of allocation, such that no additional payment would be required from the Bidder and the Bidder is deemed to have

(b)

(c)

(d)

(e)

(f)

225

approved such revised Bid at Cut-off Price. (g) In case of a downward revision in the Price Band, announced as above, Retail Individual Bidders, who have bid at Cut-off Price could either revise their Bid or the excess amount paid at the time of bidding would be refunded from the Escrow Account. The Company, in consultation with the BRLMs, shall decide the minimum number of Equity Shares for each Bid to ensure that the minimum application value is within the range of Rs. 5,000 to Rs. 7,000. Any revision of the Bid shall be accompanied by payment in the form of cheque or demand draft for the incremental amount, if any, to be paid on account of the upward revision of the Bid. With respect to the ASBA Bids, if revision of the Bids results in an incremental amount, the relevant SCSB shall block the additional Bid Amount. In case of Bids, other than ASBA Bids, the members of the Syndicate shall collect the payment in the form of cheque or demand draft if any, to be paid on account of the upward revision of the Bid at the time of one or more revisions. In such cases, the members of the Syndicate will revise the earlier Bid details with the revised Bid and provide the cheque or demand draft number of the new payment instrument in the electronic book. The Registrar will reconcile the Bid data and consider the revised Bid data for preparing the Basis of Allotment. When a Bidder revises his or her Bid, he or she shall surrender the earlier TRS and may get a revised TRS from the members of the Syndicate or the SCSB, as applicable. It is the responsibility of the Bidder to request for and obtain the revised TRS, which will act as proof of his or her having revised the previous Bid.

(h)

(i)

(j)

Price Discovery and Allocation (a) Based on the demand generated at various price levels, the Company, in consultation with the BRLMs, shall finalise the Issue Price. Under-subscription, if any, in any category, except the QIB Portion, would be allowed to be met with spillover from any other category or combination of categories at the sole discretion of the Company, in consultation with the BRLMs. If at least 50% of the Issue is not allocated to the QIBs, the entire subscription monies shall be refunded. Allocation to Non-Residents, including Eligible NRIs and FIIs registered with SEBI, applying on repatriation basis will be subject to applicable law, rules, regulations, guidelines and approvals. QIB Bidders shall not be allowed to withdraw their Bid after the Bid/Issue Closing Date. The Basis of Allotment shall be put up on the website of the Registrar to the Issue.

(b)

(c)

(d) (e)

Signing of Underwriting Agreement and RoC Filing (a) The Company, the BRLMs and the Syndicate Members shall enter into an Underwriting Agreement on or immediately after the finalisation of the Issue Price. After signing the Underwriting Agreement, the Company will update and file the updated Red Herring Prospectus with the RoC in accordance with the applicable law, which then would be termed as the Prospectus. The Prospectus will contain details of the Issue Price, Issue size, underwriting arrangements and will be complete in all material respects.

(b)

Pre-Issue Advertisement Subject to Section 66 of the Companies Act, the Company shall, after registering the Red Herring Prospectus with the RoC, publish a pre-Issue advertisement, in the form prescribed by the SEBI Regulations, in one English language national daily newspaper, one Hindi language national daily newspaper and one Marathi language daily

226

newspaper, each with wide circulation. Advertisement regarding Issue Price and Prospectus The Company will issue a statutory advertisement after the filing of the Prospectus with the RoC. This advertisement, in addition to the information that has to be set out in the statutory advertisement, shall indicate the Issue Price and the Anchor Investor Issue Price. Any material updates between the date of the Red Herring Prospectus and the date of Prospectus will be included in such statutory advertisement. Issuance of Confirmation of Allocation Note (CAN) (a) Upon approval of the Basis of Allotment by the Designated Stock Exchange and on Allotment by the Board of Directors or any committee constituted thereof, the Registrar shall send to the members of the Syndicate a list of their Bidders who have been allocated/allotted Equity Shares in the Issue. The Registrar will then dispatch a CAN to their Bidders who have been allocated Equity Shares in the Issue. The dispatch of CAN shall be deemed a valid, binding and irrevocable contract for the Bidder. The Issuance of CAN is subject to Notice to Anchor Investors - Allotment Reconciliation and Revised CANs as set forth under section Issue Procedure on page 227.

(b)

(c)

Notice to Anchor Investors: Allotment Reconciliation and Revised CANs A physical book will be prepared by the Registrar on the basis of the Bid cum Application Forms received from Anchor Investors. Based on the physical book and at the discretion of the Company and the BRLMs, select Anchor Investors may be sent a CAN, within two Working Days of the Anchor Investor Bid/ Issue Period, indicating the number of Equity Shares that may be allocated to them. This provisional CAN and the final allocation is subject to the physical application being valid in all respect along with receipt of stipulated documents, the Issue Price being finalised at a price not higher than the Anchor Investor Issue Price and Allotment by the Board of Directors. In the event that the Issue Price is higher than the Anchor Investor Issue Price, a revised CAN will be sent to Anchor Investors. The price of Equity Shares in such revised CAN shall be different from that specified in the earlier CAN. Anchor Investors should note that they shall be required to pay additional amounts, being the difference between the Issue Price and the Anchor Investor Issue Price, as indicated in the revised CAN within two Working Days after the Bid/ Issue Closing Date. Any revised CAN, if issued, will supersede in entirety the earlier CAN. Designated Date and Allotment of Equity Shares (a) The Company will ensure that (i) the Allotment of Equity Shares; and (ii) credit to the successful Bidders depositary account will be completed within 12 Working Days of the Bid/Issue Closing Date. In accordance with the SEBI Regulations, Equity Shares will be issued and Allotment shall be made only in the dematerialised form to the Allottees. Allottees will have the option to re-materialise the Equity Shares so Allotted as per the provisions of the Companies Act and the Depositories Act.

(b)

(c)

Investors are advised to instruct their Depository Participant to accept the Equity Shares that may be allocated/ Allotted to them pursuant to this Issue. GENERAL INSTRUCTIONS Dos: (a) (b) Check if you are eligible to apply; Ensure that you have Bid within the Price Band;

227

(c) (d)

Read all the instructions carefully and complete the Bid cum Application Form; Ensure that the details about Depository Participant and the beneficiary account are correct as Allotment of Equity Shares will be in the dematerialised form only; Ensure that the bank account details are entered only in the space provided specifically for this purpose. Bids submitted which do not have the bank details are liable to be rejected. Ensure that the Bids are submitted at the bidding centres only on forms bearing the stamp of a member of the Syndicate or with respect to ASBA Bidders, ensure that your Bid is submitted at a Designated Branch of the SCSB where the ASBA Bidder or the person whose bank account will be utilised by the Bidder for Bidding has a bank account; With respect to ASBA Bids ensure that the ASBA Bid cum Application Form is signed by the account holder in case the applicant is not the account holder. Ensure that you have mentioned the correct bank account number in the ASBA Bid cum Application Form; Ensure that you request for and receive a TRS for all your Bid options; Ensure that full Bid Amount is paid for the Bids submitted to the members of the Syndicate and funds equivalent to Bid Amount are blocked in case of Bids submitted through SCSBs; Ensure that you have funds equal to the Bid Amount in your bank account maintained with the SCSB before submitting the ASBA Bid cum Application Form to the respective Designated Branch of the SCSB; Instruct your respective banks to not release the funds blocked in the bank account under the ASBA process; Submit revised Bids to the same member of the Syndicate through whom the original Bid was placed and obtain a revised TRS; Except for Bids submitted on behalf of the Central Government or the State Government and officials appointed by a court, all Bidders should mention their PAN allotted under the Income Tax Act; Ensure that the Demographic Details (as defined herein below) are updated, true and correct in all respects; Ensure that the name(s) given in the Bid cum Application Form is exactly the same as the name(s) in which the beneficiary account is held with the Depository Participant. In case the Bid cum Application Form 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 Bid cum Application Form.

(e)

(f)

(g)

(h) (i)

(j)

(k)

(l)

(m)

(n) (o)

Donts: (a) (b) Do not Bid for lower than the minimum Bid size; Do not Bid/ revise Bid Amount to less than the lower end of the Price Band or higher than the higher end of the Price Band; Do not Bid on another Bid cum Application Form after you have submitted a Bid to the members of the Syndicate or the SCSB, as applicable; Do not pay the Bid Amount in cash, by money order or by postal order or by stockinvest; Do not send Bid cum Application Forms by post; instead submit the same to a member of the Syndicate or the SCSB, as applicable;

(c)

(d) (e)

228

(f) (g) (h)

Do not bid at Cut-off Price (for QIB Bidders and Non-Institutional Bidders); Do not Bid for a Bid Amount exceeding Rs. 100,000 (for Bids by Retail Individual Bidders); Do not fill up the Bid cum Application Form such that the Equity Shares bid for exceeds the Issue Size and/ or investment limit or maximum number of Equity Shares that can be held under the applicable laws or regulations or maximum amount permissible under the applicable regulations; Do not submit the GIR number instead of the PAN as the Bid is liable to be rejected on this ground; and Do not submit the Bids without the full Bid Amount.

(i) (j)

INSTRUCTIONS FOR COMPLETING THE BID CUM APPLICATION FORM Bids must be:

1. 2.

Made only in the prescribed Bid cum Application Form or Revision Form, as applicable. Completed in full, in BLOCK LETTERS in ENGLISH and in accordance with the instructions contained herein, in the Bid cum Application Form or in the Revision Form. Incomplete Bid cum Application Forms or Revision Forms are liable to be rejected. Bidders should note that the members of the Syndicate and / or the SCSBs, as appropriate, will not be liable for errors in data entry due to incomplete or illegible Bid cum Application Forms or Revision Forms. Information provided by the Bidders will be uploaded in the online IPO system by the members of the Syndicate and the SCSBs, as the case may be, and the electronic data will be used to make allocation/ Allotment. Please ensure that the details are correct and legible. For Retail Individual Bidders, the Bid must be for a minimum of [] Equity Shares and in multiples of [] thereafter subject to a maximum Bid Amount of Rs. 100,000. For Non-Institutional Bidders and QIB Bidders, Bids must be for a minimum of such number of Equity Shares in multiples of [] that the Bid Amount exceeds Rs. 100,000. Bids cannot be made for more than the Issue. Bidders are advised to ensure that a single Bid from them should not exceed the investment limits or maximum number of Equity Shares that can be held by them under the applicable laws or regulations. For Anchor Investors, Bids must be for a minimum of such number of Equity Shares that the Bid Amount exceeds or equal to Rs. 100 million and in multiples of [] Equity Shares thereafter. In single name or in joint names (not more than three, and in the same order as their Depository Participant details). Thumb impressions and signatures other than in the languages specified in the Eighth Schedule to the Constitution of India must be attested by a Magistrate or a Notary Public or a Special Executive Magistrate under official seal.

3.

4. 5.

6. 7. 8.

Bidders Depository Account and Bank Account Details Bidders should note that on the basis of PAN of the Sole/First Bidder, Depository Participants name, Depository Participant-Identification number and Beneficiary Account Number provided by them in the Bid cum Application Form, the Registrar to the Issue will obtain from the Depository the demographic details including category, age, address, Bidders bank account details, MICR code and occupation (hereinafter referred to as Demographic Details). These Bank Account details would be used for giving refunds allocation advice (including through physical refund warrants, direct credit, NECS, NEFT and RTGS) to the

229

Bidders. Hence, Bidders are advised to immediately update their bank account details as appearing on the records of the Depository Participant. Please note that failure to do so could result in delays in despatch/ credit of refunds to Bidders at the Bidders sole risk and neither the BRLMs or the Registrar to the Issue or the Escrow Collection Banks or the SCSBs nor the Company shall have any responsibility and undertake any liability for the same. Hence, Bidders should carefully fill in their Depository Account details in the Bid cum Application Form. IT IS MANDATORY FOR ALL THE BIDDERS TO GET THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL BIDDERS SHOULD MENTION THEIR DEPOSITORY PARTICIPANTS NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE BID CUM APPLICATION FORM. INVESTORS MUST ENSURE THAT THE NAME GIVEN IN THE BID CUM APPLICATION FORM IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE BID CUM APPLICATION FORM 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 BID CUM APPLICATION FORM. These Demographic Details would be used for all correspondence with the Bidders including mailing of the CANs/Allocation Advice and printing of Bank particulars on the refund orders or for refunds through electronic transfer of funds, as applicable. The Demographic Details given by Bidders in the Bid cum Application Form would not be used for any other purpose by the Registrar to the Issue. By signing the Bid cum Application Form, the Bidder 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. Refund Orders/Allocation Advice/CANs would be mailed at the address of the Bidder as per the Demographic Details received from the Depositories. Bidders may note that delivery of refund orders/allocation advice/CANs 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 Bidder in the Bid cum Application Form would be used only to ensure dispatch of refund orders. Please note that any such delay shall be at such Bidders sole risk and neither the Company, the Escrow Collection Banks nor the BRLMs nor the Registrar to the Issue shall be liable to compensate the Bidder for any losses caused to the Bidder due to any such delay or liable to pay any interest for such delay. In case no corresponding record is available with the Depositories, which matches the three parameters, namely, PAN of the sole/first Bidder, the Depository Participants identity (DP ID) and the beneficiarys identity, then such Bids are liable to be rejected. Bids by Non Residents including NRIs, FIIs and Foreign Venture Capital Funds on a repatriation basis Bids and revision to Bids must be made in the following manner: 1. On the Bid cum Application Form or the Revision Form, as applicable (blue in colour), and completed in full in BLOCK LETTERS in ENGLISH in accordance with the instructions contained therein. In a single name or joint names (not more than three and in the same order as their Depositary Participant Details). Bids on a repatriation basis shall be in the names of individuals, or in the name of FIIs but not in the names of minors, OCBs, firms or partnerships, foreign nationals (excluding NRIs) or their nominees.

2.

3.

Bids by Eligible NRIs for a Bid Amount of up to Rs. 100,000 would be considered under the Retail Portion for the purposes of allocation and Bids for a Bid Amount of more than Rs. 100,000 would be considered under NonInstitutional Portion for the purposes of allocation.

230

Refunds, dividends and other distributions, if any, will be payable in Indian Rupees only and net of bank charges and / or commission. In case of Bidders who remit money through Indian Rupee drafts purchased abroad, such payments in Indian Rupees will be converted into US Dollars or any other freely convertible currency as may be permitted by the RBI at the rate of exchange prevailing at the time of remittance and will be dispatched by registered post or if the Bidders so desire, will be credited to their NRE accounts, details of which should be furnished in the space provided for this purpose in the Bid cum Application Form. The Company will not be responsible for loss, if any, incurred by the Bidder on account of conversion of foreign currency. There is no reservation for Eligible NRIs and FIIs and all Bidders will be treated on the same basis with other categories for the purpose of allocation. Bids under Power of Attorney In case of Bids (including ASBA Bids) made pursuant to a power of attorney or by limited companies, corporate bodies, registered societies, FIIs, Mutual Funds, insurance companies and provident funds with a minimum corpus of Rs. 250 million (subject to applicable law) and pension funds with a minimum corpus of Rs. 250 million, a certified copy of the power of attorney or the relevant resolution or authority, as the case may be, along with a certified copy of the memorandum of association and articles of association and/or bye laws must be lodged along with the Bid cum Application Form. Failing this, the Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason therefor. In addition to the above, certain additional documents are required to be submitted by the following entities: (a) With respect to Bids by FIIs and Mutual Funds, a certified copy of their SEBI registration certificate must be lodged along with the Bid cum Application Form. With respect to Bids by insurance companies registered with the Insurance Regulatory and Development Authority, in addition to the above, a certified copy of the certificate of registration issued by the Insurance Regulatory and Development Authority must be lodged along with the Bid cum Application Form. With respect to Bids made by provident funds with a minimum corpus of Rs. 250 million (subject to applicable law) and pension funds with a minimum corpus of Rs. 250 million, a certified copy of a certificate from a chartered accountant certifying the corpus of the provident fund/pension fund must be lodged along with the Bid cum Application Form.

(b)

(c)

The Company in its absolute discretion, reserves the right to relax the above condition of simultaneous lodging of the power of attorney along with the Bid cum Application form, subject to such terms and conditions that the Company and the BRLMs may deem fit. PAYMENT INSTRUCTIONS Escrow Mechanism for Bidders other than ASBA Bidders The Company and the Syndicate shall open Escrow Accounts with one or more Escrow Collection Bank(s) in whose favour the Bidders shall make out the cheque or demand draft in respect of his or her Bid and/or revision of the Bid. Cheques or demand drafts received for the full Bid Amount from Bidders in a certain category would be deposited in the Escrow Account. The Escrow Collection Banks will act in terms of the Red Herring Prospectus and the Escrow Agreement. The Escrow Collection Banks for and on behalf of the Bidders shall maintain the monies in the Escrow Account until the Designated Date. The Escrow Collection Banks shall not exercise any lien whatsoever over the monies deposited therein and shall hold the monies therein in trust for the Bidders. On the Designated Date, the Escrow Collection Banks shall transfer the funds represented by allocation of Equity Shares (other than ASBA funds with the SCSBs) from the Escrow Account, as per the terms of the Escrow Agreement, into the Public Issue Account with the Bankers to the Issue. The balance amount after transfer to the Public Issue Account shall be transferred to the

231

Refund Account. Payments of refund to the Bidders shall also be made from the Refund Account as per the terms of the Escrow Agreement and the Draft Red Herring Prospectus. Bidders should note that the escrow mechanism is not prescribed by SEBI and has been established as an arrangement between the Company, the Syndicate, the Escrow Collection Banks and the Registrar to facilitate collection from the Bidders. Payment mechanism for ASBA Bidders The ASBA Bidders shall specify the bank account number in the ASBA Bid cum Application Form and the SCSB shall block an amount equivalent to the Bid Amount in the bank account specified in the ASBA Bid cum Application Form. The SCSB shall keep the Bid Amount in the relevant bank account blocked until withdrawal/ rejection of the ASBA Bid or receipt of instructions from the Registrar to unblock the Bid Amount. In the event of withdrawal or rejection of the ASBA Bid cum Application Form or for unsuccessful ASBA Bid cum Application Forms, the Registrar shall give instructions to the SCSB to unblock the application money in the relevant bank account within one day of receipt of such instruction. The Bid Amount shall remain blocked in the ASBA Account until finalisation of the Basis of Allotment in the Issue and consequent transfer of the Bid Amount to the Public Issue Account, or until withdrawal/ failure of the Issue or until rejection of the ASBA Bid, as the case may be. Payment into Escrow Account for Bidders other than ASBA Bidders Each Bidder shall draw a cheque or demand draft or, for Anchor Investor, remit the funds electronically through the RTGS mechanism for the amount payable on the Bid and/or on allocation/Allotment as per the following terms: 1. All Bidders would be required to pay the full Bid Amount at the time of the submission of the Bid cum Application Form. The Bidders shall, with the submission of the Bid cum Application Form, draw a payment instrument for the Bid Amount in favour of the Escrow Account and submit the same to the members of the Syndicate. If the payment is not made favouring the Escrow Account along with the Bid cum Application Form, the Bid of the Bidder shall be rejected. The payment instruments for payment into the Escrow Account should be drawn in favour of: (a) (b) (c) (d) 4. In case of Resident QIB Bidders: [] In case of Non-Resident QIB Bidders: [] In case of Resident Retail and Non-Institutional Bidders: [] In case of Non-Resident Retail and Non-Institutional Bidders: []

2.

3.

Anchor Investors would be required to pay the Bid Amount at the time of submission of the application form. In the event of the Issue Price being higher than the price at which allocation is made to Anchor Investors, the Anchor Investors shall be required to pay such additional amount to the extent of shortfall between the price at which allocation is made to them and the Issue Price within two Working Days of the Bid/Issue Closing Date. If the Issue Price is lower than the price at which allocation is made to Anchor Investors, the amount in excess of the Issue Price paid by Anchor Investors shall not be refunded to them. For Anchor Investors, the payment instruments for payment into the Escrow Account should be drawn in favour of: (a) (b) In case of resident Anchor Investors: [] In case of non-resident Anchor Investors: []

5.

232

6.

In case of Bids by NRIs applying on repatriation basis, the payments may be made out of an NRO Account of a Non-Resident Bidder. In case of Bids by NRIs applying on non-repatriation basis, the payments must be made through Indian Rupee Drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted through normal banking channels or out of funds held in Non-Resident External (NRE) Accounts or Foreign Currency Non-Resident (FCNR) Accounts, maintained with banks authorised to deal in foreign exchange in India, along with documentary evidence in support of the remittance or out of a Non-Resident Ordinary (NRO) Account of a Non-Resident Bidder bidding on a non-repatriation basis. Payment by drafts should be accompanied by a bank certificate confirming that the draft has been issued by debiting an NRE or FCNR or NRO Account. In case of Bids by FIIs, the payment should be made out of funds held in a Special Rupee Account along with documentary evidence in support of the remittance. Payment by drafts should be accompanied by a bank certificate confirming that the draft has been issued by debiting the Special Rupee Account. The monies deposited in the Escrow Account will be held for the benefit of the Bidders till the Designated Date. On the Designated Date, the Escrow Collection Banks shall transfer the funds from the Escrow Account as per the terms of the Escrow Agreement into the Public Issue Account with the Bankers to the Issue. On the Designated Date and no later than 10 days from the Bid/Issue Closing Date, all refund amounts payable to unsuccessful Bidders shall be dispatched and also the excess amount paid on Bidding, if any, after adjusting for allocation/Allotment to the Bidders. Payments should be made by cheque, or a demand draft drawn on any Bank (including a Co-operative Bank), which is situated at, and is a member of or sub-member of the bankers clearing house located at the centre where the Bid cum Application Form is submitted. Outstation cheques/bank drafts drawn on banks not participating in the clearing process will not be accepted and applications accompanied by such cheques or bank drafts are liable to be rejected. Cash/ Stockinvest/Money Orders/Postal orders will not be accepted.

7.

8.

9.

10.

11.

12.

13.

Submission of Bid cum Application Form All Bid cum Application Forms or Revision Forms duly completed and accompanied by account payee cheques or drafts shall be submitted to the members of the Syndicate at the time of submission of the Bid. With respect to the ASBA Bidders, the ASBA Bid cum Application Form or the ASBA Revision Form shall be submitted to the Designated Branches of the SCSBs. No separate receipts shall be issued for the money payable on the submission of Bid cum Application Form or Revision Form. However, the collection centre of the members of the Syndicate will acknowledge the receipt of the Bid cum Application Forms or Revision Forms by stamping and returning to the Bidder the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the Bid cum Application Form for the records of the Bidder. OTHER INSTRUCTIONS Joint Bids in the case of Individuals Bids may be made in single or joint names (not more than three). In the case of joint Bids, all payments will be made out in favour of the First Bidder in the Bid cum Application Form or Revision Form. All communications will be addressed to the First Bidder and will be dispatched to his or her address as per the Demographic Details received from the Depository.

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Multiple Bids A Bidder should submit only one Bid (and not more than one) for the total number of Equity Shares required. Two or more Bids will be deemed to be multiple Bids if the sole or First Bidder is one and the same. In case of a mutual fund, a separate Bid can be made in respect of each scheme of the mutual fund registered with SEBI and such Bids in respect of more than one scheme of the mutual fund will not be treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid has been made. Bids by QIBs under the Anchor Investor Portion and QIB Portion (excluding Anchor Investor Portion) will not be considered as multiple Bids. The Company reserves the right to reject, in its absolute discretion, all or any multiple Bids in any or all categories: 1. All applications will be checked for common PAN and will be accumulated and taken to a separate process file which would serve as a multiple master. In this master, a check will be carried out for the same PAN. In cases where the PAN is different, the same will be deleted from this master. The Registrar to the Issue will obtain, from the depositories, details of the applicants address based on the DP ID and Beneficiary Account Number provided in the Bid data and create an address master. The addresses of all the applications in the multiple master will be strung from the address master. This involves putting the addresses in a single line after deleting non-alpha and non-numeric characters i.e. commas, full stops, hash etc. Sometimes, the name, the first line of address and pin code will be converted into a string for each application received and a photo match will be carried out amongst all the applications processed. A print-out of the addresses will be taken to check for common names. The Bids with the same name and same address will be treated as multiple Bids. The Bids will be scrutinised for DP ID and Beneficiary Account Numbers. In case applications bear the same DP ID and Beneficiary Account Numbers, these will be treated as multiple applications.

2.

3.

4.

5.

Permanent Account Number or PAN The Bidders, or in the case of a Bid in joint names, each of the Bidders, should mention his/ her PAN allotted under the Income Tax Act. In accordance with the SEBI Regulations, the PAN would be the sole identification number for participants transacting in the securities market, irrespective of the amount of transaction. Any Bid cum Application Form without the PAN is liable to be rejected. It is to be specifically noted that Bidders should not submit the GIR number instead of the PAN as the Bid is liable to be rejected on this ground. REJECTION OF BIDS In case of QIB Bidders, the Company, in consultation with the BRLMs, may reject Bids provided that the reasons for rejecting the same shall be provided to such Bidders in writing. In case of Non-Institutional Bidders and Retail Individual Bidders, the Company has a right to reject Bids based on technical grounds. Consequent refunds shall be made by RTGS/NEFT/NES/Direct Credit/cheque or pay order or draft and will be sent to the Bidders address at the Bidders risk. With respect to ASBA Bids, the Designated Branches of the SCSBs shall have the right to reject ASBA Bids if at the time of blocking the Bid Amount in the Bidders bank account, the respective Designated Branch ascertains that sufficient funds are not available in the Bidders bank account maintained with the SCSB. Subsequent to the acceptance of the ASBA Bid by the SCSB, the Company would have a right to reject the ASBA Bids only on technical grounds. Grounds for Technical Rejections Bidders should note that incomplete Bid cum Application Forms and Bid cum Application Forms that are not legible will be rejected by the members of the Syndicate of the SCSBs. Bidders are advised to note that Bids are liable to be

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rejected inter alia on the following technical grounds either at the time of acceptance of Bid or prior to Allotment: Amount paid does not tally with the amount payable for the highest value of Equity Shares Bid for. With respect to ASBA Bids, the amounts mentioned in the ASBA Bid cum Application Form does not tally with the amount payable for the value of the Equity Shares Bid for; In case of partnership firms, Equity Shares may be registered in the names of the individual partners and no firm as such shall be entitled to apply; Bid by persons not competent to contract under the Indian Contract Act, 1872 including minors; PAN not mentioned in the Bid cum Application Form; GIR number furnished instead of PAN; Bids for lower number of Equity Shares than specified for that category of investors; Bids at a price less than the lower end of the Price Band; Bids at a price more than the higher end of the Price Band; Submission of more than five ASBA Bid cum Application Forms per bank account; Bids at Cut-off Price by Non-Institutional and QIB Bidders; Bids for number of Equity Shares which are not in multiples of [ ]; Category not ticked; Multiple Bids as defined in the Draft Red Herring Prospectus; In case of Bids under power of attorney or by limited companies, corporate, trust etc., relevant documents are not submitted; Bids accompanied by Stockinvest/money order/postal order/cash; Bid cum Application Forms does not have the stamp of the BRLMs or Syndicate Members or the SCSBs; Bid cum Application Form does not have the Bidders depository account details; Bid cum Application Forms are not delivered by the Bidders within the time prescribed as per the Bid cum Application Forms, Bid/Issue Opening Date advertisement and the Draft Red Herring Prospectus and as per the instructions in the Draft Red Herring Prospectus and the Bid cum Application Forms; In case no corresponding record is available with the Depositories that matches three parameters namely, PAN of the Bidders, the Depositary Participants identity (DP ID) and the beneficiarys account number; With respect to ASBA Bids, inadequate funds in the bank account to block the Bid Amount specified in the ASBA Bid cum Application Form at the time of blocking such Bid Amount in the bank account; Bids for amounts greater than the maximum permissible amounts prescribed by the regulations; Bids where clear funds are not available in Escrow Accounts as per final certificate from the Escrow Collection Banks;

235

Bids by persons in the United States; Bids by any person outside India if not in compliance with applicable foreign and Indian Laws; and Bids by persons prohibited from buying, selling or dealing in the shares directly or indirectly by SEBI or any other regulatory authority. Bidders should note that in case the PAN, the DP ID and Client ID mentioned in the Bid cum Application form and entered into the electronic bidding system of the Stock Exchanges by the Syndicate Members do not match with PAN, the DP ID and Client ID available in the depository database, the Bid cum Application form is liable to be rejected. EQUITY SHARES IN DEMATERIALISED FORM WITH NSDL OR CDSL As per the provisions of Section 68B of the Companies Act, the Allotment of Equity Shares in this Issue shall be only in a de-materialised form, (i.e., not in the form of physical certificates but be fungible and be represented by the statement issued through the electronic mode). In this context, two agreements have been signed among the Company, the respective Depositories and the Registrar: Agreement dated [] between NSDL, the Company and the Registrar to the Issue; Agreement dated [], between CDSL, the Company and the Registrar to the Issue. All Bidders can seek Allotment only in dematerialised mode. Bids from any Bidder without relevant details of his or her depository account are liable to be rejected. (a) A Bidder applying for Equity Shares must have at least one beneficiary account with either of the Depository Participants of either NSDL or CDSL prior to making the Bid. The Bidder must necessarily fill in the details (including the PAN, the Beneficiary Account Number and Depository Participants identification number) appearing in the Bid cum Application Form or Revision Form. Allotment to a successful Bidder will be credited in electronic form directly to the beneficiary account (with the Depository Participant) of the Bidder. Names in the Bid cum Application Form or Revision Form should be identical to those appearing in the account details in the Depository. In case of joint holders, the names should necessarily be in the same sequence as they appear in the account details in the Depository. If incomplete or incorrect details are given under the heading Bidders Depository Account Details in the Bid cum Application Form or Revision Form, it is liable to be rejected. The Bidder is responsible for the correctness of his or her Demographic Details given in the Bid cum Application Form vis--vis those with his or her Depository Participant. Equity Shares in electronic form can be traded only on the Stock Exchanges having electronic connectivity with NSDL and CDSL. All the Stock Exchanges where the Equity Shares are proposed to be listed have electronic connectivity with CDSL and NSDL. The trading of the Equity Shares of the Company would be in dematerialised form only for all Bidders in the demat segment of the respective Stock Exchanges.

(b)

(c)

(d)

(e)

(f)

(g)

(h)

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Communications All future communications in connection with Bids made in this Issue should be addressed to the Registrar quoting the full name of the sole or First Bidder, Bid cum Application Form number, the Bidders Depository Account Details, number of Equity Shares applied for, date of Bid cum Application Form, name and address of the member of the Syndicate or the Designated Branch of the SCSBs where the Bid was submitted and cheque or draft number and issuing bank thereof or with respect to ASBA Bids, bank account number in which the amount equivalent to the Bid Amount was blocked. Investors can contact the Compliance Officer or the Registrar in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of Allotment, credit of allotted shares in the respective beneficiary accounts, refund orders etc. In case of ASBA Bids submitted with the Designated Branches of the SCSBs, Bidders can contact the Designated Branches of the SCSBs. PAYMENT OF REFUND Bidders other than ASBA Bidders must note that on the basis of the names of the Bidders, Depository Participants name, DP ID, Beneficiary Account number provided by them in the Bid cum Application Form, the Registrar to the Issue will obtain, from the Depositories, the Bidders bank account details, including the nine digit Magnetic Ink Character Recognition (MICR) code as appearing on a cheque leaf. Hence, Bidders are advised to immediately update their bank account details as appearing on the records of the Depository Participant. Please note that failure to do so could result in delays in despatch of refund order or refunds through electronic transfer of funds, as applicable, and any such delay shall be at the Bidders sole risk and neither the Company, the Registrar to the Issue, Escrow Collection Bank(s), Bankers to the Issue, nor the BRLMs shall be liable to compensate the Bidders for any losses caused to the Bidder due to any such delay or liable to pay any interest for such delay. Mode of making refunds for Bidders other than ASBA Bidders The payment of refund, if any, for Bidders other than ASBA Bidders would be done through various modes in the following modes: 1. NECS Payment of refund would be done through NECS for applicants having an account at any of the centres 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. Direct Credit Applicants having bank accounts with the Refund Bank (s), per the Demographic details received from the Depositories shall be eligible to receive refunds through direct credit. Charges, if any, levied by the Refund Bank(s) for the same would be borne by the Company. RTGS Applicants having a bank account at any of the abovementioned centres and whose refund amount exceeds Rs. 5 million, have the option to receive refund through RTGS provided the Demographic Details downloaded from the Depositories contain the nine digit MICR code of the Bidders bank which can be mapped with the RBI data to obtain the corresponding IFSC code. Charges, if any, levied by the Refund Bank(s) for the same would be borne by the Company. Charges, if any, levied by the applicants bank receiving the credit would be borne by the applicant. NEFT Payment of refund shall be undertaken through NEFT wherever the applicants bank has been assigned the Indian Financial System Code (IFSC), which can be linked to a Magnetic Ink Character Recognition (MICR), if any, available to that particular bank branch. IFSC Code 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 applicants 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 Code of that particular bank branch and the payment of refund will be made to the applicants through this method. The process flow in respect of refunds by way of NEFT is at an evolving stage and hence use of

2.

3.

4.

237

NEFT is subject to operational feasibility, cost and process efficiency. The process flow in respect of refunds by way of NEFT is at an evolving stage, hence use of NEFT is subject to operational feasibility, cost and process efficiency. In the event that NEFT is not operationally feasible, the payment of refunds would be made through any one of the other modes as discussed in the sections. 5. For all other applicants, 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 upto 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 on the Escrow Collection Banks and payable at par at places where Bids are received. Bank charges, if any, for cashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders.

Mode of making refunds for ASBA Bidders In case of ASBA Bidders, the Registrar shall instruct the relevant SCSB to unblock the funds in the relevant ASBA Account to the extent of the Bid Amount specified in the ASBA Bid cum Application Forms for withdrawn, rejected or unsuccessful or partially successful ASBA Bids within 12 Working Days of the Bid/Issue Closing Date. DISPOSAL OF APPLICATIONS AND APPLICATION MONEYS AND INTEREST IN CASE OF DELAY With respect to Bidders other than ASBA Bidders, the Company shall ensure dispatch of Allotment advice, refund orders (except for Bidders who receive refunds through electronic transfer of funds) and give benefit to the beneficiary account with Depository Participants and submit the documents pertaining to the Allotment to the Stock Exchanges within two Working Days from the date of Allotment of Equity Shares. In case of applicants who receive refunds through NECS, direct credit or RTGS, the refund instructions will be given to the clearing system within 12 Working Days from the Bid/ Issue Closing Date. A suitable communication shall be sent to the Bidders receiving refunds through this mode within 12 Working Days of Bid Closing Date, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund. The Company shall use best efforts to ensure that all steps for completion of the necessary formalities for listing and commencement of trading at all the Stock Exchanges where the Equity Shares are proposed to be listed, are taken within 12 Working Days of the Bid/Issue Closing Date. In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI Regulations, the Company further undertakes that: Allotment of Equity Shares shall be made only in dematerialised form within 12 Working Days of the Bid/Issue Closing Date; With respect to Bidders other than ASBA Bidders, dispatch of refund orders or in a case where the refund or portion thereof is made in electronic manner, the refund instructions are given to the clearing system within 12 days of the Bid/Issue Closing Date would be ensured. With respect to the ASBA Bidders, instructions for unblocking of the ASBA Bidders Bank Account shall be made within 12 Working Days from the Bid/Issue Closing Date; and The Company shall pay interest at 15% per annum for any delay beyond the 15 days as mentioned above, if Allotment is not made and if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given to the clearing system in the disclosed manner and/or demat credits are not made to investors within the 12 Working Days prescribed above. If such money is not repaid within eight days from the day the Company becomes liable to repay, 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 the applicable law.

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IMPERSONATION Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68 A of the Companies Act, which is reproduced below: Any person who: (a) 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,

(b)

shall be punishable with imprisonment for a term which may extend to five years. BASIS OF ALLOTMENT A. For Retail Individual Bidders Bids received from the Retail Individual Bidders at or above the Issue Price shall be grouped together to determine the total demand under this category. The Allotment to all the successful Retail Individual Bidders will be made at the Issue Price. The Issue size less Allotment to Non-Institutional and QIB Bidders shall be available for Allotment to Retail Individual Bidders who have bid in the Issue at a price that is equal to or greater than the Issue Price. If the aggregate demand in this category is less than or equal to [] Equity Shares at or above the Issue Price, full Allotment shall be made to the Retail Individual Bidders to the extent of their valid Bids. If the aggregate demand in this category is greater than [] Equity Shares at or above the Issue Price, the Allotment shall be made on a proportionate basis up to a minimum of [ ] Equity Shares. For the method of proportionate Basis of Allotment, refer below. B. For Non-Institutional Bidders Bids received from Non-Institutional Bidders at or above the Issue Price shall be grouped together to determine the total demand under this category. The Allotment to all successful NonInstitutional Bidders will be made at the Issue Price. The Issue size less Allotment to QIBs and Retail Portion shall be available for Allotment to NonInstitutional Bidders who have bid in the Issue at a price that is equal to or greater than the Issue Price. If the aggregate demand in this category is less than or equal [] Equity Shares at or above the Issue Price, full Allotment shall be made to Non-Institutional Bidders to the extent of their demand. In case the aggregate demand in this category is greater than [] Equity Shares at or above the Issue Price, Allotment shall be made on a proportionate basis up to a minimum of [ ] Equity Shares. For the method of proportionate Basis of Allotment refer below.

239

C.

For QIBs Bids received from the QIB Bidders at or above the Issue Price shall be grouped together to determine the total demand under this portion. The Allotment to all the QIB Bidders will be made at the Issue Price. The QIB Portion shall be available for Allotment to QIB Bidders who have bid in the Issue at a price that is equal to or greater than the Issue Price. Allotment shall be undertaken in the following manner: (a) In the first instance allocation to Mutual Funds for up to 5% of the QIB Portion (excluding Anchor Investor Portion) shall be determined as follows: (i) In the event that Mutual Fund Bids exceeds 5% of the QIB Portion (excluding Anchor Investor Portion), allocation to Mutual Funds shall be done on a proportionate basis for up to 5% of the QIB Portion (excluding Anchor Investor Portion). In the event that the aggregate demand from Mutual Funds is less than 5% of the QIB Portion (excluding Anchor Investor Portion) then all Mutual Funds shall get full Allotment to the extent of valid Bids received above the Issue Price. Equity Shares remaining unsubscribed, if any, not allocated to Mutual Funds shall be available for Allotment to all QIB Bidders as set out in (b) below;

(ii)

(iii)

(b)

In the second instance Allotment to all QIBs shall be determined as follows:

1.

In the event that the oversubscription in the QIB Portion, all QIB Bidders (excluding Anchor Investors) who have submitted Bids above the Issue Price shall be allotted Equity Shares on a proportionate basis for up to 95% of the QIB Portion. Mutual Funds, who have received allocation as per (a) above, for less than the number of Equity Shares Bid for by them, are eligible to receive Equity Shares on a proportionate basis along with other QIB Bidders (excluding Anchor Investors). Under-subscription below 5% of the QIB Portion (excluding Anchor Investor Portion), if any, from Mutual Funds, would be included for allocation to the remaining QIB Bidders on a proportionate basis.

2.

3.

The aggregate Allotment to QIB Bidders shall not be less than [] Equity Shares. D. For Anchor Investor Portion Allocation of Equity Shares to Anchor Investors at the Anchor Investor Issue Price will be at the discretion of the Company, in consultation with the BRLMs, subject to compliance with the following requirements: o o not more than 30% of the QIB Portion will be allocated to Anchor Investors; one-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the price at

240

which allocation is being done to other Anchor Investors; o

allocation to Anchor Investors shall be on a discretionary basis and subject to a minimum number of two Anchor Investors for allocation upto Rs. 2,500 million and minimum number of five Anchor Investors for allocation more than Rs. 2,500 million.

The number of Equity Shares Allotted to Anchor Investors and the Anchor Investor Issue Price, shall be made available in the public domain by the BRLMs before the Bid/ Issue Opening Date by intimating the same to the Stock Exchanges. Method of Proportionate Basis of Allotment in the Issue In the event of the Issue being over-subscribed, the Company shall finalise the Basis of Allotment in consultation with the Designated Stock Exchange. The Executive Director (or any other senior official nominated by them) of the Designated Stock Exchange along with the BRLMs and the Registrar to the Issue shall be responsible for ensuring that the Basis of Allotment is finalised in a fair and proper manner. Except in relation to Anchor Investors, the Allotment shall be made in marketable lots, on a proportionate basis as explained below: a) b) Bidders will be categorised according to the number of Equity Shares applied for. The total number of Equity Shares to be allotted to each category as a whole shall be arrived at on a proportionate basis, which is the total number of Equity Shares applied for in that category (number of Bidders in the category multiplied by the number of Equity Shares applied for) multiplied by the inverse of the over-subscription ratio. Number of Equity Shares to be allotted to the successful Bidders will be arrived at on a proportionate basis, which is total number of Equity Shares applied for by each Bidder in that category multiplied by the inverse of the over-subscription ratio. In all Bids where the proportionate Allotment is less than [ ] Equity Shares per Bidder, the Allotment shall be made as follows: The successful Bidders out of the total Bidders for a category shall be determined by draw of lots in a manner such that the total number of Equity Shares allotted in that category is equal to the number of Equity Shares calculated in accordance with (b) above; and Each successful Bidder shall be allotted a minimum of [ ] Equity Shares. e) If the proportionate Allotment to a Bidder is a number that is more than [ ] but is not a multiple of one (which is the marketable lot), the decimal would be rounded off to the higher whole number if that decimal is 0.5 or higher. If that number is lower than 0.5 it would be rounded off to the lower whole number. Allotment to all in such categories would be arrived at after such rounding off. If the Equity Shares allocated on a proportionate basis to any category are more than the Equity Shares allotted to the Bidders in that category, the remaining Equity Shares available for Allotment shall be first adjusted against any other category, where the allotted shares are not sufficient for proportionate Allotment to the successful Bidders in that category. The balance Equity Shares, if any, remaining after such adjustment will be added to the category comprising Bidders applying for minimum number of Equity Shares. Subject to valid Bids being received, allocation of Equity Shares to Anchor Investors shall be at the sole discretion of the Company, in consultation with the BRLMs.

c)

d)

f)

g)

241

Illustration of Allotment to QIBs and Mutual Funds (MF) A. Issue Details Sr. No. 1. 2. 3. 4. Particulars Issue size Allocation to QIB (50%)* Anchor Investor Portion Portion available to QIBs other than Anchor Investors [(2) minus (3)] Of which: a. Allocation to MF (5%) b. Balance for all QIBs including MFs No. of QIB applicants No. of shares applied for Issue details 2000 million equity shares 1,000 million equity shares 300 million equity shares 700 million equity shares

5. 6.
*

35 million equity shares 665 million equity shares 10 5000 million equity shares

Where 50% of the issue size is required to be alloted to QIBs.

B.

Details of QIB Bids Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Type of QIB bidders# A1 A2 A3 No. of shares bid for (in million) 500 200 1,300 500 500 400 400 800 200 200 5,000

A4 A5 MF1 MF2 MF3 MF4 MF5 Total # A1-A5: (QIB bidders other than MFs), MF1-MF5 (QIB bidders which are Mutual Funds) C. Details of Allotment to QIB Bidders/ Applicants

Type of QIB bidders (I) A1 A2 A3 A4 A5 MF1

Shares bid for

(II) 500 200 1,300 500 500 400

Allocation of 35 million Equity Shares to MF proportionately (please see note 2 below) (III) 0 0 0 0 0 7

(Number of equity shares in million) Allocation of balance 665 Aggregate million Equity Shares to QIBs allocation to proportionately (please see MFs note 4 below) (IV) (V) 66.50 26.60 172.90 66.50 66.50 53.20 0 0 0 0 0 60.20

242

Type of QIB bidders MF2 MF3 MF4 MF5

Shares bid for

400 800 200 200 5,000

Allocation of 35 million Equity Shares to MF proportionately (please see note 2 below) 7 14 3.50 3.50 35

Allocation of balance 665 million Equity Shares to QIBs proportionately (please see note 4 below) 53.20 106.40 26.60 26.60 665

Aggregate allocation to MFs 60.20 120.40 30.10 30.10 301

Please note: 1. The illustration presumes compliance with the requirements specified in this Draft Red Herring Prospectus in the section Issue Structure on page 213. Out of 700 million equity shares allocated to QIBs, 35 million (i.e. 5%) will be allocated on proportionate basis among five Mutual Fund applicants who applied for 200 million equity shares in QIB category. The balance 665 million equity shares (i.e. 700-35 (available for MFs)) will be allocated on proportionate basis among 10 QIB applicants who applied for 500 million equity shares (including five MF applicants who applied for 200 million equity shares). The figures in the fourth column Allocation of balance 665 million Equity Shares to QIBs proportionately in the above illustration are arrived as under: For QIBs other than Mutual Funds (A1 to A5)= No. of shares bid for (i.e. in column II) X 665 / 4,965. For Mutual Funds (MF1 to MF5)= [(No. of shares bid for (i.e. in column II of the table above) less Equity Shares allotted (i.e., column III of the table above)] X 79.80 / 495.80. The numerator and denominator for arriving at allocation of 665 million shares to the 10 QIBs are reduced by 35 million shares, which have already been allotted to Mutual Funds in the manner specified in column III of the table above. Letters of Allotment or Refund Orders or instructions to the SCSBs The Company shall give credit to the beneficiary account with depository participants within three Working Days from the date of the finalisation of Basis of Allotment. The Company shall ensure dispatch of refund orders, if any, of value up to Rs. 1,500, by Under Certificate of Posting, and shall dispatch refund orders above Rs. 1,500, if any, by registered post or speed post at the sole or First Bidders sole risk within 12 Working Days of the Bid/Issue Closing Date. Bidders to whom 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 12 Working Days of closure of Bid/ Issue Closing Date. In case of ASBA Bidders, the Registrar to the Issue shall instruct the relevant SCSBs to unblock the funds in the relevant ASBA Account to the extent of the Bid Amount specified in the ASBA Bid cum Application Forms for withdrawn, rejected or unsuccessful or partially successful ASBA Bids within 12 Working Days of the Bid/Issue Closing Date. Interest in case of delay in despatch of Allotment Letters or Refund Orders/ instruction to the SCSB by the Registrar The Company will ensure that (i) the Allotment of Equity Shares; and (ii) credit to the successful Bidders depositary accounts will be completed within 12 Working Days of the Bid/ Issue Closing Date. The Company further agrees that it shall pay interest at the rate of 15% p.a. if the Allotment letters or refund orders have not been

2.

3.

4.

243

despatched to the applicants or if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given in the disclosed manner within 15 days from the Bid/ Issue Closing Date. The Company will provide adequate funds required for dispatch of refund orders or Allotment advice to the Registrar. Refunds will be made by cheques, pay-orders or demand drafts drawn on a bank appointed by the Company as a Refund Bank and payable at par at places where Bids are received. Bank charges, if any, for encashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders. UNDERTAKINGS BY THE COMPANY The Company undertakes the following: That the complaints received in respect of this Issue shall be attended to by the Company expeditiously and satisfactorily; That all steps for completion of the necessary formalities for listing and commencement of trading at all the Stock Exchanges where the Equity Shares are proposed to be listed within 12 Working Days of the Bid/Issue Closing Date; That funds required for making refunds to unsuccessful applicants as per the mode(s) disclosed shall be made available to the Registrar to the Issue by the Issuer; That where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicant within 12 Working Days of the Bid/ Issue Closing Date, as the case may be, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund; That the Promoters contribution in full has already been brought in; That the certificates of the securities/ refund orders to Eligible NRIs shall be despatched within specified time; That no further issue of Equity Shares shall be made till the Equity Shares offered through the Red Herring Prospectus are listed or until the Bid monies are refunded on account of non-listing, under-subscription etc.; and That adequate arrangements shall be made to collect all ASBA Bid cum Application Forms and to consider them similar to non-ASBA applications while finalising the Basis of Allotment. The Company shall not have recourse to the Issue proceeds until the final approval for listing and trading of the Equity Shares from all the Stock Exchanges where listing is sought, has been received. Withdrawal of the Issue The Company, in consultation with the BRLMs, reserves the right not to proceed with the Issue anytime after the Bid/Issue Opening Date but before the Allotment of Equity Shares. In such an event, the Company would issue a public notice in the newspapers, in which the pre-Issue advertisements were published, within two days of the Bid/ Issue Closing Date, providing reasons for not proceeding with the Issue. The Company shall also inform the same to Stock Exchanges on which the Equity Shares are proposed to be listed. Any further issue of Equity Shares by the Company shall be in compliance with applicable laws.

244

Utilisation of Issue Proceeds The Board of Directors certifies that: All monies received out of the Issue shall be credited/transferred to a separate bank account other than the bank account referred to in sub-section (3) of Section 73 of the Companies Act; Details of all monies utilised out of Issue shall be disclosed, and continue to be disclosed till the time any part of the issue proceeds remains unutilised, under an appropriate head in our balance sheet indicating the purpose for which such monies have been utilised; Details of all unutilised monies out of the Issue, if any shall be disclosed under an appropriate separate head in the balance sheet indicating the form in which such unutilised monies have been invested; The utilisation of monies received under Promoters contribution shall be disclosed, and continue to be disclosed till the time any part of the Issue proceeds remains unutilised, under an appropriate head in the balance sheet of the Company indicating the purpose for which such monies have been utilised ; and The details of all unutilised monies out of the funds received under Promoters contribution shall be disclosed under a separate head in the balance sheet of the issuer indicating the form in which such unutilised monies have been invested.

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RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES Foreign investment in Indian securities is regulated through the Industrial Policy, 1991 of the GoI, as notified through press notes and press releases issued from time to time, and FEMA and circulars and notifications issued thereunder. While the Industrial Policy, 1991 prescribes the limits and the conditions subject to which foreign investment can be made in different sectors of the Indian economy, FEMA regulates the precise manner in which such investment may be made. Under the Industrial Policy, unless specifically restricted, foreign investment is freely permitted in all sectors of the Indian economy up to any extent and without any prior approvals, but the foreign investor is required to follow certain prescribed procedures and reporting requirements for making such investment. The government bodies responsible for granting foreign investment approvals are FIPB and the RBI. Subscription by foreign investors (NRIs/FIIs) FIIs are permitted to subscribe to shares of an Indian company in a public offer without the prior approval of the RBI, so long as the price of the shares is not less than the price at which the shares are issued to residents. The transfer of shares between an Indian resident and a non-resident does not require the prior approval of the FIPB or the RBI, provided that (i) the activities of the investee company are under the automatic route under the FDI Policy and transfer does not attract the provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as amended; (ii) the non-resident shareholding is within the sectoral limits under the FDI policy; and (iii) the pricing is in accordance with the guidelines prescribed by the SEBI/RBI. As per the existing policy of the Government of India, OCBs cannot participate in this Issue. The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. The Equity Shares have not been and will not be registered under the US Securities Act of 1933 (the Securities Act). In addition, the Company has not been and will not be registered under the US Investment Company Act of 1940, as amended (the Investment Company Act). Therefore, the Equity Shares may not be offered or sold within the United States (as defined in Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the Investment Company Act. Accordingly, the Equity Shares are only being offered and sold outside the United States in offshore transactions in compliance with Regulation S under the Securities Act and the applicable laws of the jurisdiction where those offers and sales occur. The above information is given for the benefit of the Bidders. The Company and the BRLM are not liable for any amendments or modification or changes in applicable laws or regulations, which may occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make their independent investigations and ensure that the Bids are not in violation of laws or regulations applicable to them.

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SECTION VIII: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION Capitalised terms used in this section have the meaning that has been given to such terms in the Articles of Association of the Company. Pursuant to Schedule II of the Companies Act and the SEBI Regulations, the main provisions of the Articles of Association of the Company are detailed below: Authorised Share Capital Article 3(a) provides that the Authorised Share Capital of the Company is same as mentioned in Clause V of the Memorandum of Association., with power to increase modify the said capital and to divide the Shares for the time being of the Company into several classes and attach thereto preferential, deferred, qualified or special rights or conditions, as may be determined by or in accordance with the Articles of Association of the Company and subject to applicable legislative provisions for the time being in force, and to vary, modify or abrogate any such rights, privileges or conditions in such manner as may for the time being be provided for by the Articles of Association of the Company and subject to applicable legislative provisions for the time being in force. The Company shall be entitled to dematerialise its existing shares, reconvert its shares held by the depositories electronically to physical form and/or to offer its fresh shares in electronic form pursuant to the Depositories Act, 1996 and the rules framed there under, if any. In addition, Article 3(b) provides that the minimum Paid-up Share Capital of the Company shall be Rs. 5,00,000/(Rupees Five Lacs only). Redeemable Preference shares Article 8 provides that subject to the provisions of Sections 80, 85 and other applicable provisions of the Act, the Company shall have power to issue Preference Shares which are or at the option of the Company are liable to be redeemed and the resolution authorising such issue shall prescribe the manner, terms and conditions of redemption thereof. Buy back of shares Article 6 provides that notwithstanding anything contained in these articles, in accordance with the provisions of Sections 77A, 77AA and 77B of the Act or any statutory modification thereto and such other regulations and guidelines as may be issued in this regard by the relevant authorities, the Board of Directors may, if and when deem fit, buy back such of the Companys own shares, stocks or securities, whether or not they are redeemable, as it may decide, subject to such limits, upon such terms and conditions, and subject to such approval, as are specified in this regard. Article 6B provides that the article shall not be deemed to affect the power of the Company to enforce repayment of loans to members or to exercise a lien conferred by Article 40. Increase of Capital by the Company and how carried into effect Article 4 provides that the Company at the General Meeting may, from time to time, increase the capital by 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. Subject to the provisions of the Act, any share of the original or increased capital shall be issued upon such terms and conditions and with such rights and privileges annexed thereto, as the general meeting resolving upon the creation thereof, shall direct, and if no direction be given, as the Directors shall determine, and in particular, such shares may be issued with a preferential or qualified right to dividends, and in the distribution of assets of the Company, and with, and if the act allows without, 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 Article, the Directors shall comply with the provisions of Section 97 of the Act.

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Reduction of Capital Article 10 provides that the Company may (subject to the provisions of Sections 78,80,100 to 105 of the Act) from time to time by Special Resolution, reduce its capital and any Capital Redemption Reserve Account or Share Premium Account in any manner for the time being authorised by law by following the procedure prescribed by the Act. Sub-division, consolidation and cancellation of shares Article 11 provides that 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 subdivided, may determine that, as between the holders of the shares 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 other or others. 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. Further Issue of Capital Article 7(a) provides that where at any 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, then (i) 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 nearly as circumstances admit, to the capital paid up on those shares at that date; The offer aforesaid shall be made by a notice specifying the number of shares offered and limiting a time not being less than thirty days from the date of offer within which the offer, if not accepted, will be deemed to have been declined; The offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to him in favour of any other person and the notice referred to in sub-clause (ii) shall contain a statement of this right; After the expiry of the time specified in the notice aforesaid 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 may dispose of them in such manner as it thinks most beneficial to the Company.

(ii)

(iii)

(iv)

Article 7(d) provides that Nothing contained in this article shall apply to the increase of the subscribed capital of the Company caused by the exercise of an option attached to the debentures issued by the Company: (i) (ii) To convert such debentures or loans into shares in the Company; or To subscribe for shares in the Company.

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 debentures or the raising of the loans or is in conformity with Rules, if any, made by that Government in this behalf ; and

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b.

In the case of debentures or loans or other than debentures issued to, or loans obtained from the Government or any institution specified by the Central Government in this behalf, has also been approved by the special resolution passed by the company in General Meeting before the issue of the loans.

Commission Article 13(a) provides that subject to the provisions of Section 76 of the Act, the Company may at any time pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally) for any shares in or debentures of the Company, or procuring, or agreeing to procure, subscriptions (whether absolute or conditional) for any shares in or debentures of the Company, but so that the commission shall not exceed, in the case of shares five per cent of the price at which the shares are issued, and in the case of debentures two and half per cent of the price at which the debentures are issued. Article 13(b) provides that the Company may pay such sum for brokerage as may be lawful and reasonable. Shares under control of Directors Article 17 provides that subject to the provisions of Section 81 of the Act and these Articles, the shares (including any shares forming part of any increased capital of the Company) in the capital of the Company for the time being shall be under the control of the Board of Directors, who may issue, allot or otherwise dispose of the same or any of them to such persons in such proportion on such terms and conditions and either at a premium or at par or (subject to compliance with the provisions of section 79 of the Act) at a discount and at such time as the Board of Directors may think fit and subject to the sanction of the Company in General Meeting to give 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 Board of 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 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. The Board shall cause to be filed the returns as to allotment provided for in Section 75 of the Act. Directors may make calls Article 30 provides that the Board may, from time to time, subject to the terms on which any shares may have been issued and subject to the conditions of allotment by a resolution passed at a meeting of the Board in respect of all moneys unpaid on the shares held by them respectively and each member shall pay the amount of every call so made on him to the person or persons and at the times and places appointed by the Board. A call may be made payable by instalments. Power of Board to extend time for payment of calls Article 35 provides that the Board may, from time to time at its discretion, extend the time fixed for the payment of any calls under Article 29. Sums deemed to be calls Article 37 provides that any sum, which by the terms of issue of a share becomes payable on allotment or on any fixed date, whether on account of the nominal value of the share or by way of premium shall for the purpose of these Articles be deemed to be a call duly made and payable on the date on which by the terms of issue the same becomes payable, and in case of non-payment all the relevant provisions of these Articles as to payment of interest and expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified. Calls to carry interest Article 36 provides that if any member fails to pay any call due from him on the day appointed for payment thereof, or any such extension thereof as aforesaid, he shall be liable to pay interest on the same from the day

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appointed for the payment thereof to time of actual payment at such rate as shall, from time to time, be fixed by the Board not exceeding 9 per cent per annum but nothing in this Article shall render it obligatory for the Board to demand or recover any interest from any such member. Payment in anticipation of calls may carry interest Article 40(a) provides that the Board may, if it thinks fit, subject to the provisions of Section 92 of the Act, agree to and receive from any member willing to advance the same, all or any part of the moneys due upon the shares held by him beyond the sums actually called for, and upon the amount so paid or satisfied in advance, or so much thereof as from time to time exceeds the amount of the calls then made upon the shares in respect of which such advances has been made, the Company may pay interest, at such rate, as the members paying such sum in advance and the Directors agree upon provided that money paid in advance of calls shall not confer a right to participate in profits or dividend. The Board may at any time repay the amount so advanced. Article 40(b) provides that the members shall not be entitled to any voting rights in respect of the moneys so paid by him until the same would but for such payment, become presently payable. If money payable on share not paid notice to be given to members Article 44 provides that if any member fails to pay any call or instalment 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 instalment remains unpaid, give notice to him requiring him to pay the same together with any interest that may have accrued by the Company by reason of such non-payment. Article 46 provides that 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 time thereafter before payment of all calls or instalments, 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 forfeiture. Forfeited share to be property of the Company and may be sold, etc. Article 48 provides that any share so forfeited shall be deemed to be the property of the Company, and may be sold, reallotted, or otherwise disposed off, either to the original holder thereof or to any other person, upon such terms and in such manner as the Board shall think fit. Power to annul forfeiture Article 54 provides that 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. Company to have lien on shares Article 41 provides that the Company shall have a first and paramount lien upon all shares/debentures (other than fully paid up shares/debentures) 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/debentures, and no equitable interest in any shares shall be created except upon the footing and upon the conditions that this Article will have full effect and such lien shall extend to all dividends and bonuses from time to time declared in respect of such shares/debentures. 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/debentures. The Board may at any time declare any shares/debentures wholly or in part to be exempt from the provisions of this clause. As to enforcing lien by sale Article 42 provides that for the purpose of enforcing such lien the Board may sell the shares subject thereto in such manner as they shall think fit and for this purpose may cause to be issued duplicate certificate in respect of such

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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 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 fulfilment, or discharge of such debts, liabilities or engagement for fourteen days after such notice. Instrument of Transfer Article 57 provides that the instrument of transfer shall be in writing and all provisions of Section 108 of the Companies Act, 1956 and statutory modification thereof for the time being shall be duly compiled with in respect of all transfer of shares and registration thereof. Transfer of Securities Article 56 provides that Subject to the provisions of Section 111A, these Articles and other applicable provisions of the Act or any other law for the time being in force, the Board may refuse whether in pursuance of any power of the Company under these Articles or otherwise to register the transfer of, or the transmission by operation of law of the right to, any shares or interest of a Member in or debentures of the Company. The Company shall within one month from the date on which the instrument of transfer, or the intimation of such transmission, as the case may be, was delivered to Company, send notice of the refusal to the transferee and the transferor or to the person giving intimation of such transmission, as the case may be, giving reasons for such refusal. Provided that the registration of a 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 where the Company has a lien on shares. Nomination of Securities Article 64(a) provides that In accordance with and subject to the provisions of Section 109A of the Act, every holder of shares in or holder of debentures of, a company may, at any time nominate, in the prescribed manner, a person to whom his shares in or debentures of the Company shall vest in the event of his death. Article 64(b) provides that Where the shares in or debentures of, the Company are held by more than one person jointly, the joint holders may together nominate, in the prescribed manner, a person to whom all the rights in the shares or debentures of the Company shall vest in the event of death of all the joint holders. Article 64(c) provides that 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 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. Registration of persons entitled to share otherwise than by transfer Article 70 provides that Subject to the provisions of the Act and Articles 60 and 61 any person becoming entitled to shares in consequences of the death, lunacy, bankruptcy or insolvency of any member or by any lawful means other than by transfer in accordance with these articles may with the consent of the Board (which it shall not be under any obligation to give), upon producing such evidence that he sustains the character in respect of which he proposes to act under this Article or of such title as the Board thinks sufficient, either be registered himself as the holder of the shares or elect to have some person nominated by him and approved by the Board registered as such holder provided nevertheless, that if such person shall elect to have his nominee registered, he shall testify the election by executing in favour of his nominee an instrument of transfer in accordance with the provisions herein contained and until he does so, he shall not be freed from any liability in respect of the shares.

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Further Article 71 provides that 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, is entitled to receive and may be given a discharge for, any dividends or other moneys payable in respect of the share. Powers to borrow Article 75 provides that Subject to the provision of Section 292 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 purpose of the Company. Provided however, where the moneys to be borrowed together with the moneys already borrowed (apart from temporary loan 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. In addition Article 76 provides that Subject to the provisions of Articles 69 hereof, the payment or repayment of moneys borrowed as aforesaid may be secured in such manner and upon such terms and conditions in all respects as the Ordinary Resolution shall prescribe including by the issue of debentures or debenture-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, debenture-stock and other securities may be made assignable from any equities between the Company and the person to whom the same may be issued. Shares may be converted into stock. Article 84 provides that The Company in General Meeting may convert any paid-up shares into stocks and when any shares shall have been converted into stock, the several holders of such stock may thenceforth 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 arise 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. Annual General Meeting Article 86 provides that The Company shall in each year hold a General Meeting as its Annual General Meeting in addition to any other meetings in that year. All General Meetings, other than Annual General Meetings shall be called Extraordinary General Meetings. The first Annual General Meeting shall be held within six months after the expiry of the financial year in which the Company was established and thereafter an Annual General Meeting of the Company shall be held within six months after the expiry of each financial year provided that not more than fifteen months shall lapse between the date of one Annual General Meeting and that of the next. Nothing contained in the foregoing provisions shall be taken as affecting the right conferred upon the Registrar under the provisions of Section 166(1) of the Act to extend the time within which any Annual General Meeting may be held. Every Annual General Meeting shall be called for a time during business hours, on a day that is not a public holiday, and shall be held at the Office of the Company or at some other place within the city in which the office of the Company is situate as the Board may determine and the Notices calling the Meeting shall specify it as the Annual General Meeting. The Company may in any one Annual General Meeting fix the time for its subsequent Annual General Meetings. Every member of the Company shall be entitled to attend either in person or by proxy and the Auditor of the Company shall have the right to attend and to be heard at any General Meeting which he attends on any part of the business which concerns him as Auditor. At every Annual General Meeting of the Company, there shall be laid on the table the Director's Report and Audited Statement of Accounts, Auditor's Report (if not already incorporated in the Audited Statement of Accounts), the Proxy Register with proxies and the Register of Directors' share holdings which latter register shall remain open and accessible during the continuance of the meeting. The Board shall cause to be prepared the Annual List of members, Summary of the Share Capital, Balance Sheet and Profit and Loss Account and forward the same to the Registrar in accordance with Sections 159, 161 and 220 of the Act.

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Extraordinary General Meeting Article 87 provides that The Board may, whenever it thinks fit, call an Extra ordinary General Meeting and it shall do so upon a requisition in writing by any member or members holding in the aggregate not less than one-tenth of such of the paid up capital as at that date carries the right of voting in regard to the matter in respect of which the requisition has been made. Passing of resolutions by postal ballot Article 105 provides that Subject to the provisions of Section 192A of the Act read with the Companies (passing of resolutions by postal ballot) rules, 2001, the Company may pass resolutions by way of postal ballot from time to time. Quorum at General Meeting Article 94 provides that Five Members present in person shall form a quorum for a General Meeting. Questions at General Meeting how decided Article 99 provides that Before or on the declaration of the result of the voting on any resolution on a show of hands, a poll may be ordered to be taken by the Chairman of the meeting of his own motion and shall be ordered to be taken by him on a demand made in that behalf by any member or members present in person or by proxy, and holding shares in the Company, which confer a power to vote on the resolution not being less than one-tenths of the total voting power in respect of the Resolution or on which an aggregate sum of not less than fifty thousand rupees has been paid up. The demand for a poll may be withdrawn at any time by the person or persons making the demand, unless a poll is so demanded a declaration by the Chairman that a resolution has, on show of hands, been carried or carried unanimously or by a particular majority or lost; and an entry to that effect in the Minutes Book of the Company shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution. Chairman's casting vote Article 100 provides that In the case of an equality of votes, the Chairman shall both on show hands and at a poll (if any) have a casting vote in addition to the vote or votes to which he may be entitled as a member. Members in arrears not to vote Article 106 provides that No member shall be entitled to vote either personally or by proxy at any General Meeting or meetings of 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. Appointment of proxy Article 113 provides that 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 corporate body under the common seal of such corporation, or be signed by an officer or any attorney duly authorised by it, and any committee or guardian may appoint such proxy. The proxy so appointed shall not have any right to speak at the meetings. Deposit of instrument of appointment Article 116 provides that the instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed or notarised/certified copy of that power or 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 the 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 expiration of twelve months from the date of its execution.

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Number of Directors Article 122 provides that until otherwise determined by a General Meeting of the Company and subject to the provisions of Section 252 of the Act, the number of the Directors shall not be less than three nor more than twelve. Article 125 provides that Whenever Directors enter into a contract with any Government, Central, State or Local, any bank or financial institution or any person or persons (hereinafter referred to as the appointer) for borrowing any money or for providing any guarantee or security or for technical collaboration or assistance or for underwriting or entering into any other arrangement whatsoever, the Directors shall have, subject to the provisions of Section 255 of the Act, the power to agree that such appointer shall have the right to appoint or nominate by a notice in writing addressed to the Company one or more Directors on the Board for such period and upon such conditions as may be mentioned in the agreement and that such Director or Directors may not be liable to retire by rotation nor be required to hold any qualification shares. The Directors may also agree that any such Director or Directors may be removed from time to time by the appointer entitled to appoint or nominate them and the appointer may fill any vacancy that may occur as a result of any such Director or Directors ceasing to hold that office for any reason whatsoever. The Directors appointed or nominated under this Article shall be entitled to exercise and enjoy all or any of the rights and privileges exercised and enjoyed by the Directors of the Company including payment, remuneration and travelling expenses to such Director or Directors as may be agreed by the Company with the appointer. If it is provided by the debenture trust deed / loan agreement, securing or otherwise, in connection with any issue of debentures of the Company / obtaining of loan from banks/ financial institutions, that any person or persons shall have power to nominate a Director of the Company, then in the case of any and every such issue of debentures / obtaining of loan, the person or persons having such power may exercise such power from time to time and appoint a Director accordingly. Any Director so appointed is herein referred to as Debenture Director / Nominee Director. A Debenture Director / Nominee Director may be removed from office at any time by the person or persons in whom for the time being is vested the power under which he was appointed and another Director may be appointed in his place. A Debenture Director / Nominee Director shall not be bound to hold any qualification shares. Appointment of Alternate Director Article 126 provides that The Board may appoint an Alternate Director to act for a Director (hereinafter called the Original Director) during his absence for a period of not less than three months from the state in which the meetings of the Board are ordinarily held. An Alternate Director appointed under this Article shall not hold office for a period longer than that permissible to the Original Director in whose place he has been appointed and shall vacate the office if and when the Original Director returns to the State. If the term of office of the Original Director is determined before he so returns to that State, any provisions in the Act or in these Articles for the automatic reappointment of retiring Director in default of another appointment shall apply to the Original Director and not to the Alternate Director. Directors power to add to the Board Article 127 provides that Subject to the provisions of Section 260, 261 and 264, the Board shall have power at any time and from time to time to appoint any other qualified person to be an additional Director, but so that the total number of Directors shall not at any time exceed the minimum fixed under Article 115. Any such additional Director shall hold office only up to the date of the next Annual General Meeting. Remuneration of Directors Article 129(a) provides that Subject to the provisions of the Act, the Executive Chairman or a Managing Director or 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. Article 129(b) provides that Subject to the provisions of the Act, a Director other than the Executive Chairman or a Director in the whole-time employment or a Managing Director may be paid remuneration either:

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i) ii) iii)

by way of monthly, quarterly or annual payment with the approval of the Central Government; or By way of commission if the Company by a special resolution authorised such payment. The fee payable to a Director (including the Executive Chairman or a Managing or Whole time Director, if any) for attending a meeting of the Board or Committee thereof shall be decided by the Board of Directors from time to time within the minimum limit of such a fee that may be prescribed by the Central Government under the proviso to section 310 of the Companies Act, 1956.

Board may appoint Executive Chairman and Managing Directors Article 150 provides that Subject to the provisions of the Act and of these Articles, the Board shall have power to appoint from time to time any of its members as Executive Chairman, Managing Director or Managing Directors of the Company for a fixed term not exceeding five years at a time and upon such terms and conditions as the Board thinks fit, and subject to the provisions of Article 143, the Board may by resolution vest in such Executive Chairman, Managing Director or Managing Directors such of the powers hereby vested in the Board generally as it thinks fit, and such powers may be made exercisable for such period or periods, and upon such conditions and subject to such restrictions as it may determine. The remuneration of the Executive Chairman, Managing Director or Managing Directors may be by way of monthly payment, fee for each meeting or participation in profits, or by any or all these modes, or any other mode not expressly prohibited by the Act. The Executive Chairman and the Managing Director shall not be required to retire by Rotation under Article 132. Notwithstanding anything contained in this Article where no Executive Chairman is appointed as such, the Board of Director may elect, from time to time, any of its members, as Chairman who shall be subject to retirement by rotation. Subject to the provisions of the Act and of this Article, the Board shall have the power to nominate from time to time, any of its members as Vice-Chairman on such terms and conditions as the Board thinks fit. The Directors may whenever they appoint more than one Managing Director, designate one or more of them as Joint Managing Director or Joint Managing Directors or Deputy Managing Director or Deputy Managing Directors, as the case may be, and accordingly the expression Managing Director shall also include and be deemed to include Joint Managing Director or Deputy Managing Director as the case may be. Managing Directors and Whole-time Directors to report to Executive Chairman Article 151 provides that The Managing Director or Managing Director or Directors who are in the whole time employment in the Company shall subject to supervision and control of the Executive Chairman, exercise such powers as are vested in them by the Board. Restriction on management Article 152 provides that The Executive Chairman or Managing Director or Managing Directors shall not exercise the powers to: (a) (b) make calls on shareholders in respect of money unpaid on the shares in the Company; issue debentures; and except to the extent mentioned in the resolution passed at the Board meeting under Section 292 of the Act shall also not exercise the powers to; borrow moneys otherwise than on debentures; invest the funds of the Company; and make loans.

(c) (d) (e)

Certain persons not to be appointed as Executive Chairman or Managing Director or Whole-time Director Article 153 provides that The Company shall not appoint or employ, or continue the appointment or employment of a person as its Executive Chairman or Managing or Whole-time Director who,

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(a) (b)

is an undischarged insolvent, or has any time been adjudged an insolvent; suspends, or has at any time suspended payment to his creditors, or makes, or has at any time made, a composition with them, or is, or has at any time, been, convicted by a Court of an offence involving moral turpitude.

(c)

Director may contract with Company Article 133(a) provides that A Director or his relative, a firm in which such Director or relative is a partner, or any other partner in such firm or a private company of which the Director is a member or director may enter into any contract with the Company for the sale, purchase or supply of any goods, materials, or services, or for underwriting the subscription of any shares in, or debentures of the Company subject to the provisions of the Section 297 of the Act. Quorum Article 157 provides that Subject to Section 287 of the Act, the Quorum for a meeting of the Board shall be one third of its total strength (excluding Directors, if any, whose places may be vacant at the time and any fraction contained in that one-third being rounded off as one) or two Directors, whichever is higher provided that where at any time the number of interested Directors exceeds or is equal to two-thirds of the total strength the number of the remaining Directors, that is to say, the number of Directors who are not interested, present at the meeting being not less than two, shall be the quorum during such time. Powers of Board Meeting Article 162 provides that A meeting of the Board for the time being at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretion which by or under the Act or the Articles of the Company are for the time being vested in or exercisable by the Board generally. Directors may appoint Committee Article 163 provides that Subject to the restriction contained in Section 292 of the Act the Board may delegate any of their powers to Committees of the Board consisting of such Member or Members of its body as it thinks fit, and it may from time to time revoke and discharge any such committee of the Board either wholly or in part and either as to persons or purposes, but every committee of the Board so formed shall in the exercise of the powers so delegated conform to any regulations that may from time to time be imposed on it by the Board. All acts done by any such Committee of the Board in conformity with such regulations and in fulfilment of the purpose of their appointment but not otherwise, shall have the like force and effect as if done by the Board. Resolution by circulation Article 165 provides that No resolution shall be deemed to have been duly passed by the Board or by a Committee thereof by circulation unless the resolution has been circulated in draft, by the Secretary of the Company, if any, or by any person or persons nominated by the Executive Chairman, together with the necessary papers if any to all the Directors or to all the Members of the Committee, then in India (not being less in number than the quorum fixed for a meeting of the Board or Committee, as the case may be), and to all other Directors or Members of the Committee at their usual address in India and has been approved by such of the Directors or Members of the Committee as are then in India, or by a majority of such of them, as are entitled to vote on the resolution. The Company in General Meeting may declare a dividend Article 175 provides that The Company in General Meeting may declare dividends to be paid to members according to their respective rights, but no dividends shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.

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Dividends only to be paid out of profits Article 176 provides that No dividends 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 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; 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 that 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 profits of the Company for any previous financial year or years arrived at in both cases after providing for depreciation in accordance with the provisions of sub-section (2) of Section 205 of the Act or against both.

(b)

Interim dividend Article 177 provides that The Board may from time to time, pay to the Members such interim dividends as in their judgement the position of the Company justifies. Capital paid up in advance to interest but not to earn dividend Article 178 provides that 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 participate in profits. Capitalization Article 188(a) provides that The Company in General Meeting may by a special resolution resolve that any moneys, investments or other assets forming part of the undivided profits of the Company standing to the credit of the Reserve Account or Fund, or any Capital Redemption Reserve Account, or in the hands of the Company and available for dividend (or representing premium received on the issue of shares and standing to the credit of the Shares Premium Account) be capitalised and distributed amongst such of the shareholders as would be entitled to receive the same if distributed by way of dividend and in the same proportions on the footing that they become entitled thereto as capital and that all or any part of such capitalised value or sum or fund be applied on behalf of such shareholders in paying up in full either at par or at such premium as the resolution may provide, any unissued shares or debentures or debenture stock of the Company which shall be distributed accordingly or in or towards payment of the uncalled liability on any issued shares or debentures or debenture-stock and that such distribution or payment shall be accepted by such shareholders in full satisfaction of their interest in the said capitalised sum, provided that a Share Premium account and a Capital Redemption Reserve Account may, for the purpose of this Article, only be applied in the paying of any unissued shares to be issued to members of the Company as fully paid bonus shares. Article 188(b) provides that A General Meeting may resolve that any surplus moneys arising from the realisation of any capital assets of the Company, or any investments representing the same, or any other undistributed profits of the Company not subject to charge may be distributed among the members on the footing that they receive the same as capital. Article 188(c) provides that For the purpose of giving effect to any resolution under the preceding paragraphs of this article, the Board may settle any difficulty which may arise in regard to the distribution as it thinks expedient and in particular may issue fractional certificates and may fix the value for distribution of any specific assets, and may determine that such cash payments shall be made to any members upon the footing of the value so fixed or that fraction of less value than Rs. 10/- may be disregarded in order to adjust the rights of all parties and may vest any such cash or the specific assets in trustees upon such trusts for the person entitled to the dividends or capitalised funds as may seem

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expedient to the Board. Where requisite, a proper contract shall be delivered to the Registrar for registration in accordance with Section 75 of the Act, and the Board may appoint any person to sign such contract on behalf of the persons entitled to the dividend or capitalised fund, and such appointment shall be effective. Liquidator may divide assets in specie Article 203 provides that The Liquidator on any winding-up (whether voluntary, under supervision or compulsory) may with the sanction of a Special Resolution, but subject to the rights attached to any preference shares capital, divide among the contributors in specie any part of the assets of the Company and may with the like sanction, vest any part of the assets of the Company in trustees upon such trust for the benefit of the contributors as the liquidator, with the like sanction, shall think fit. Directors and others' right of indemnity Article 204 provides that Every officer or Agent for the time being of the Company shall be indemnified out of the assets of the Company against all liability incurred by him in defending any proceedings, whether civil or criminal, in which judgement is given in his favour or in which he is acquitted or discharged or in connection with any application under Section 633 of the Act, in which relief is granted to him by the Court. Secrecy Clause Article 205(a) provides that Every Director, Manager, Auditor, Treasurer, member of a Committee, servant, agent, accountant or other person employed in the business of the Company shall, if so required by the Directors, before entering upon his duties, sign a declaration pledging himself to observe strict secrecy respecting all transactions and affairs of the Company with the customers and the state of accounts with individuals and in matters relating thereto, and shall by such declaration pledge himself not to reveal any of the matters which may come to his knowledge in the discharge of his duties except when required so to do by the Directors or by law or by the person to whom such matters relate and except and so far as may be necessary in order to comply with any of the provisions in these presents contained. Article 205(b) provides that No members shall be entitled to visit or inspect any works of the Company without the permission of the Directors or to require discovery of or any information respecting any details of the Company's trading, or any matter which is or may be in the nature of a trade secret mystery of trade, secret process of any other matter which may relate to the conduct of the business of the Company and which in the opinion of the Directors, it would be inexpedient in the interest of the Company to disclose.

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SECTION IX: OTHER INFORMATION MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION The following contracts which are or may be deemed material have been entered into or will be entered into by the Company. These contracts, copies of which have been attached to the copy of this Draft Red Herring Prospectus, will be delivered to the RoC for registration and also the documents for inspection referred to hereunder, will be available for inspection at the Registered Office of the Company from 10.00 am to 4.00 pm on Working Days from the date of this Draft Red Herring Prospectus until the Bid/Issue Closing Date. Material Contracts to the Issue 1. 2. 3. 4. Engagement Letter between the Company and the BRLMs dated June 23, 2010. Issue Agreement between the Company and the BRLMs dated June 23, 2010. Memorandum of Understanding between the Company and the Registrar to the Issue dated June 22, 2010. Escrow Agreement dated [] between the Company, the BRLMs, the Escrow Banks and the Registrar to the Issue. Syndicate Agreement dated [] between the Company, the BRLMs and the Syndicate Members. Underwriting Agreement dated [] between the Company, the BRLMs and the Syndicate Members.

5. 6.

Material Documents 1. 2. 3. 4. 5. 6. 7. 8. The Memorandum and Articles of Association as amended. The certificate of incorporation of the Company. Board resolutions in relation to the Issue. Shareholders Resolutions in relation to the Issue. Shareholders Resolutions for the appointment and remuneration of whole-time Directors. Statement of Tax Benefits from G.M. Kapadia & Co., Chartered Accountants dated June 15, 2010. Copies of annual reports of the Company for the years ended March 31, 2006, 2007, 2008, 2009 and 2010. Consent of G.M. Kapadia & Co., our Auditors for inclusion of their Auditors Report dated June 21, 2010 with audited standalone and consolidated financial statements, as restated and statement of tax benefits dated June 15, 2010 in the form and context in which they appear in the Draft Red Herring Prospectus. Consents of Bankers to the Company, BRLMs, Syndicate Members, Registrar to the Issue, Escrow Collection Bank(s), Bankers to the Issue, Legal Advisors to the Issue, IPO Grading Agency, Directors of the Company, the Company Secretary and Compliance Officer, as referred to, in their respective capacities. Listing Agreement dated [ ] with [ ]. Initial listing applications dated [] filed with BSE and NSE respectively. In-principle listing approval dated [] and [] from BSE and NSE respectively. Tripartite Agreement between NSDL, the Company and the Registrar to the Issue dated [].

9.

10. 11. 12. 13.

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14. 15. 16. 17.

Tripartite Agreement between CDSL, the Company and the Registrar to the Issue dated []. Preliminary Placement Memorandum of Milestone Infrastructure Fund- I. Preliminary Placement Memorandum of Milestone SME Fund-I. Shareholders agreement dated August 14, 2007 between IL&FS Investment Managers Limited, Lantern Trading and Investment Private Limited, Milestone Fincap Services Private Limited and IL&FS Milestone Realty Advisors Private Limited. Joint venture agreement dated June 12, 2008 between J Leon Trading Limited, Milestone Fincap Services Private Limited and Milestone Ecofirst Advisory Services (India) Private Limited. Shareholders agreement dated April 8, 2009 between Milestone Fincap Services Private Limited, Religare Venture Capital Limited and Milestone Religare Investment Advisors Private Limited. Shareholders agreement dated December 16, 2009 between the Company, Money Matters Financial Services Limited and Capstone Capital Services Private Limited. Licence Deed dated June 21, 2010 between the Company and Milestone Fincap. Due diligence certificate dated June 23, 2010 to SEBI from the BRLMs. SEBI observation letter No. [] dated [].

18.

19.

20.

21. 22. 23.

Any of the contracts or documents mentioned in this Draft Red Herring Prospectus may be amended or modified at any time if so required in the interest of the Company or if required by the other parties, without reference to the shareholders subject to compliance of the provisions contained in the Companies Act and other relevant statutes.

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DECLARATION We, hereby declare that all relevant provisions of the Companies Act and the guidelines issued by the Government or the regulations or guidelines issued by SEBI established under Section 3 of the SEBI Act as the case may be, have been complied with and no statement made in this Draft Red Herring Prospectus is contrary to the provisions of the Companies Act or the SEBI Act or Rules or regulations made there under or guidelines issued, as the case may be. We further certify that all statements in this Draft Red Herring Prospectus are true and correct. SIGNED BY THE DIRECTORS OF THE COMPANY Name Signature

Ved Prakash Arya (Managing Director)

_____________________

Arvind Bansal (Non-Executive Director)

_____________________

Bhagyam Ramani (Nominee Director)

_____________________

Nawshir Dara Khurody (Independent Director)

_____________________

Noel Naval Tata (Independent Director)

_____________________

Dr. Pravin Pranalal Shah (Independent Director)

_____________________

Raj Narain Bharadwaj (Independent Director)

_____________________

Vijay Kumar Chopra (Independent Director)

_____________________

SIGNED BY THE CHIEF FINANCIAL OFFICER Name: Paritosh Kakkad Signature _____________________

Date: June 23, 2010 Place: Mumbai

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